[Federal Register Volume 88, Number 145 (Monday, July 31, 2023)]
[Proposed Rules]
[Pages 49552-49921]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-14768]



[[Page 49551]]

Vol. 88

Monday,

No. 145

July 31, 2023

Part II





Department of Health and Human Services





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 Centers for Medicare & Medicaid Services





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42 CFR Parts 405, 410, 416, et al.

45 CFR Part 180





Medicare Program: Hospital Outpatient Prospective Payment and 
Ambulatory Surgical Center Payment Systems; Quality Reporting Programs; 
Payment for Intensive Outpatient Services in Rural Health Clinics, 
Federally Qualified Health Centers, and Opioid Treatment Programs; 
Hospital Price Transparency; Changes to Community Mental Health Centers 
Conditions of Participation, Proposed Changes to the Inpatient 
Prospective Payment System Medicare Code Editor; Rural Emergency 
Hospital Conditions of Participation Technical Correction; Proposed 
Rule

  Federal Register / Vol. 88 , No. 145 / Monday, July 31, 2023 / 
Proposed Rules  

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 405, 410, 416, 419, 424, 485, 488, 489

Office of the Secretary

45 CFR Part 180

[CMS-1786-P]
RIN 0938-AV09


Medicare Program: Hospital Outpatient Prospective Payment and 
Ambulatory Surgical Center Payment Systems; Quality Reporting Programs; 
Payment for Intensive Outpatient Services in Rural Health Clinics, 
Federally Qualified Health Centers, and Opioid Treatment Programs; 
Hospital Price Transparency; Changes to Community Mental Health Centers 
Conditions of Participation, Proposed Changes to the Inpatient 
Prospective Payment System Medicare Code Editor; Rural Emergency 
Hospital Conditions of Participation Technical Correction

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

ACTION: Proposed rule.

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SUMMARY: This proposed rule would revise the Medicare hospital 
outpatient prospective payment system (OPPS) and the Medicare 
ambulatory surgical center (ASC) payment system for calendar year 2024 
based on our continuing experience with these systems. In this proposed 
rule, we describe the changes to the amounts and factors used to 
determine the payment rates for Medicare services paid under the OPPS 
and those paid under the ASC payment system. This proposed rule also 
would update and refine the requirements for the Hospital Outpatient 
Quality Reporting (OQR) Program, the ASC Quality Reporting (ASCQR) 
Program, and the Rural Emergency Hospital Quality Reporting (REHQR) 
Program. This proposed rule would also establish payment for certain 
intensive outpatient services under Medicare, beginning January 1, 
2024. In addition, this proposed rule would update and refine 
requirements for hospitals to make public their standard charge 
information and enforcement of hospital price transparency. We also 
propose to codify provisions of the Consolidated Appropriations Act, 
2023, in Community Mental Health Centers Conditions of Participation 
(CoPs). We propose to revise the personnel qualifications of Mental 
Health Counselors and add personnel qualifications for Marriage and 
Family Therapists in the CMHC CoPs. We also seek comment on separate 
payment under the Inpatient Prospective Payment System (IPPS) for 
establishing and maintaining access to a buffer stock of essential 
medicines to foster a more reliable, resilient supply of these 
medicines. Finally, we propose to address any future revisions to the 
IPPS Medicare Code Editor (MCE), including any additions or deletions 
of claims edits, as well as the addition or deletion of ICD-10 
diagnosis and procedure codes to the applicable MCE edit code lists, 
outside of the annual IPPS rulemakings. Additionally, we propose a 
technical correction to the Rural Emergency Hospital Conditions of 
Participation.

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below, by September 11, 2023.

ADDRESSES: In commenting, please refer to file code CMS-1786-P.
    Comments, including mass comment submissions, must be submitted in 
one of the following three ways (please choose only one of the ways 
listed):
    1. Electronically. You may submit electronic comments on this 
regulation to https://www.regulations.gov. Follow the ``Submit a 
comment'' instructions.
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-1786-P, P.O. Box 8010, 
Baltimore, MD 21244-1810.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address ONLY: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-1786-P, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: 
    Elise Barringer, [email protected] or 410-786-9222.
    Advisory Panel on Hospital Outpatient Payment (HOP Panel), contact 
the HOP Panel mailbox at [email protected].
    Ambulatory Surgical Center (ASC) Payment System, contact Scott 
Talaga via email at [email protected] or Mitali Dayal via email 
at [email protected].
    Ambulatory Surgical Center Quality Reporting (ASCQR) Program 
policies, contact Anita Bhatia via email at [email protected].
    Ambulatory Surgical Center Quality Reporting (ASCQR) Program 
measures, contact Marsha Hertzberg via email at 
[email protected].
    Biosimilars Packaging Exception, contact Gil Ngan via email at 
[email protected].
    Blood and Blood Products, contact Josh McFeeters via email at 
[email protected].
    Cancer Hospital Payments, contact Scott Talaga via email at 
[email protected].
    Cardiac Rehabilitation, Intensive Cardiac Rehabilitation and 
Pulmonary Rehabilitation Services, contact Nate Vercauteren via email 
at [email protected].
    CMS Web Posting of the OPPS and ASC Payment Files, contact Chuck 
Braver via email at [email protected].
    Community Mental Health Centers (CMHC) Conditions of Participation, 
contact Mary Rossi-Coajou via email at [email protected] or 
Cara Meyer via email at [email protected].
    Composite APCs (Multiple Imaging and Mental Health), via email at 
Mitali Dayal via email at [email protected].
    Comprehensive APCs (C-APCs), contact Mitali Dayal via email at 
[email protected].
    COVID-19 Final Rules, contact Elise Barringer via email at 
[email protected].
    Hospital Outpatient Quality Reporting (OQR) Program policies, 
contact Kimberly Go via email [email protected].
    Hospital Outpatient Quality Reporting (OQR) Program measures, 
contact Janis Grady via email [email protected].
    Hospital Outpatient Visits (Emergency Department Visits and 
Critical Care Visits), contact Elise Barringer via email at 
[email protected].
    Hospital Price Transparency (HPT), contact Terri Postma via email 
at [email protected].
    Inpatient Only (IPO) Procedures List, contact Abigail Cesnik via 
email at [email protected].
    Inpatient Prospective Payment System (IPPS) Medicare Code Editor, 
contact Mady Hue via email at [email protected].
    Mental Health Services Furnished Remotely by Hospital Staff to

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Beneficiaries in Their Homes, contact Emily Yoder via email at 
[email protected].
    Method to Control Unnecessary Increases in the Volume of Clinic 
Visit Services Furnished in Excepted Off-Campus Provider-Based 
Departments (PBDs), contact Elise Barringer via email at 
[email protected].
    New Technology Intraocular Lenses (NTIOLs), contact Scott Talaga 
via email at [email protected].
    No Cost/Full Credit and Partial Credit Devices, contact Scott 
Talaga via email at [email protected].
    Opioid Treatment Program (OTP) Intensive Outpatient Services (IOP) 
contact Lindsey Baldwin via email at [email protected] and 
Ariana Pitcher at [email protected].
    OPPS Brachytherapy, contact Scott Talaga via email at 
[email protected].
    OPPS Data (APC Weights, Conversion Factor, Copayments, Cost-to-
Charge Ratios (CCRs), Data Claims, Geometric Mean Calculation, Outlier 
Payments, and Wage Index), contact Erick Chuang via email at 
[email protected], or Scott Talaga via email at 
[email protected], or Josh McFeeters via email at 
[email protected].
    OPPS Dental Policy, contact Nicole Marcos via email at 
[email protected].
    OPPS Drugs, Radiopharmaceuticals, Biologicals, and Biosimilar 
Products, contact Josh McFeeters via email at 
[email protected], or Gil Ngan via email at 
[email protected], or Cory Duke via email at [email protected], 
or Au'Sha Washington via email at [email protected].
    OPPS New Technology Procedures/Services, contact the New Technology 
APC mailbox at [email protected].
    OPPS Packaged Items/Services, contact Mitali Dayal via email at 
[email protected] or Cory Duke via email at 
[email protected].
    OPPS Pass-Through Devices, contact the Device Pass-Through mailbox 
at [email protected].
    OPPS Status Indicators (SI) and Comment Indicators (CI), contact 
Marina Kushnirova via email at [email protected].
    Partial Hospitalization Program (PHP), Intensive Outpatient (IOP), 
and Community Mental Health Center (CMHC) Issues, contact the PHP 
Payment Policy Mailbox at [email protected].
    Request for Public Comments on Potential Payment under the IPPS for 
Establishing and Maintaining Access to Essential Medicines, contact 
[email protected].
    Rural Emergency Hospital Conditions of Participation, contact 
Kianna Banks via email [email protected].
    Rural Emergency Hospital Quality Reporting (REHQR) Program 
policies, contact Anita Bhatia via email at [email protected].
    Rural Emergency Hospital Quality Reporting (REHQR) Program 
measures, contact Melissa Hager via email [email protected].
    Rural Health Clinic (RHC) and Federally Qualified Health Center 
(FQHC) Intensive Outpatient Services (IOP), contact Michele Franklin 
via email at [email protected].
    Separate Payment for High-Cost Drugs Provided by Indian Health 
Service and Tribally-Owned Facilities, contact Elise Barringer via 
email at [email protected].
    Skin Substitutes, contact Josh McFeeters via email at 
[email protected].
    All Other Issues Related to Hospital Outpatient Payments Not 
Previously Identified, contact the OPPS mailbox at 
[email protected].
    All Other Issues Related to the Ambulatory Surgical Center Payments 
Not Previously Identified, contact the ASC mailbox at 
[email protected].

SUPPLEMENTARY INFORMATION: 
    Inspection of Public Comments: All comments received before the 
close of the comment period are available for viewing by the public, 
including any personally identifiable or confidential business 
information that is included in a comment. We post all comments 
received before the close of the comment period on the following 
website as soon as possible after they have been received: https://www.regulations.gov. Follow the search instructions on that website to 
view public comments. CMS will not post on Regulations.gov public 
comments that make threats to individuals or institutions or suggest 
that the individual will take actions to harm the individual. CMS 
continues to encourage individuals not to submit duplicative comments. 
We will post acceptable comments from multiple unique commenters even 
if the content is identical or nearly identical to other comments.

Addenda Available Only Through the Internet on the CMS Website

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

Current Procedural Terminology (CPT) Copyright Notice

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

Table of Contents

I. Executive Summary of This Document
II. Proposed Updates Affecting OPPS Payments
    A. Recalibration of APC Relative Payment Weights
    B. Conversion Factor Update
    C. Proposed Wage Index Changes
    D. Proposed Statewide Average Default Cost-to-Charge Ratios 
(CCRs)
    E. Proposed Adjustment for Rural Sole Community Hospitals (SCHs) 
and Essential Access Community Hospitals (EACHs) Under Section 
1833(t)(13)(B) of the Act for CY 2024
    F. Proposed Payment Adjustment for Certain Cancer Hospitals for 
CY 2024
    G. Proposed Hospital Outpatient Outlier Payments
    H. Proposed Calculation of an Adjusted Medicare Payment From the 
National Unadjusted Medicare Payment
    I. Proposed Beneficiary Copayments
III. Proposed OPPS Ambulatory Payment Classification (APC) Group 
Policies
    A. Proposed OPPS Treatment of New and Revised HCPCS Codes
    B. Proposed OPPS Changes--Variations Within APCs
    C. Proposed New Technology APCs
    D. Universal Low Volume APC Policy for Clinical and 
Brachytherapy APCs
    E. Proposed APC-Specific Policies
IV. Proposed OPPS Payment for Devices
    A. Proposed Pass-Through Payment for Devices
    B. Proposed Device-Intensive Procedures

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V. Proposed OPPS Payment for Drugs, Biologicals, and 
Radiopharmaceuticals
    A. Proposed OPPS Transitional Pass-Through Payment for 
Additional Costs of Drugs, Biologicals, and Radiopharmaceuticals
    B. Proposed OPPS Payment for Drugs, Biologicals, and 
Radiopharmaceuticals Without Pass-Through Payment Status
    C. Requirement in the Physician Fee Schedule CY 2024 Proposed 
Rule for HOPDs and ASCs To Report Discarded Amounts of Certain 
Single-Dose or Single-Use Package Drugs
VI. Proposed Estimate of OPPS Transitional Pass-Through Spending for 
Drugs, Biologicals, Radiopharmaceuticals, and Devices
    A. Amount of Additional Payment and Limit on Aggregate Annual 
Adjustment
    B. Proposed Estimate of Pass-Through Spending for CY 2024
VII. Proposed OPPS Payment for Hospital Outpatient Visits and 
Critical Care Services
VIII. Payment for Partial Hospitalization and Intensive Outpatient 
Services
    A. Partial Hospitalization
    B. Intensive Outpatient Program Services
    C. Coding and Billing for PHP and IOP Services Under the OPPS
    D. Proposed Payment Rate Methodology for PHP and IOP
    E. Proposed Outlier Policy for CMHCs
    F. Rural Health Clinics (RHCs) and Federally Qualified Health 
Centers (FQHCs)
    G. Modifications Related to Medicare Coverage for Opioid Use 
Disorder (OUD) Treatment Services Furnished by Opioid Treatment 
Programs (OTPs)
    H. Payment Rates Under the Medicare Physician Fee Schedule for 
Nonexcepted Items and Services Furnished by Nonexcepted Off-Campus 
Provider-Based Departments of a Hospital
IX. Services That Will Be Paid Only as Inpatient Services
    A. Background
    B. Changes to the Inpatient Only (IPO) List
    C. Solicitation of Public Comments on the Services Described by 
CPT Codes 43775, 43644, 43645, and 44204
X. Proposed Nonrecurring Policy Changes
    A. Supervision by Nurse Practitioners, Physician Assistants and 
Clinical Nurse Specialists of Cardiac Rehabilitation, Intensive 
Cardiac Rehabilitation and Pulmonary Rehabilitation Services 
Furnished to Outpatients
    B. Payment for Intensive Cardiac Rehabilitation Services (ICR) 
Provided by an Off-Campus, Non-Excepted Provider Based Department 
(PBD) of a Hospital
    C. OPPS Payment for Specimen Collection for COVID-19 Tests
    D. Remote Services
    E. OPPS Payment for Dental Services
    F. Use of Claims and Cost Report Data for CY 2024 OPPS and ASC 
Payment System Ratesetting Due to the PHE
    G. Comment Solicitation on Payment for High-Cost Drugs Provided 
by Indian Health Service and Tribally-Owned Facilities
XI. Proposed CY 2024 OPPS Payment Status and Comment Indicators
    A. Proposed CY 2024 OPPS Payment Status Indicator Definitions
    B. Proposed CY 2024 Comment Indicator Definitions
XII. MedPAC Recommendations
    A. OPPS Payment Rates Update
    B. Medicare Safety Net Index
    C. ASC Cost Data
XIII. Proposed Updates to the Ambulatory Surgical Center (ASC) 
Payment System
    A. Background, Legislative History, Statutory Authority, and 
Prior Rulemaking for the ASC Payment System
    B. Proposed ASC Treatment of New and Revised Codes
    C. Payment Policies Under the ASC Payment System
    D. Proposed Additions to ASC Covered Surgical Procedures and 
Covered Ancillary Services Lists
    E. ASC Payment Policy for Non-Opioid Post-Surgery Pain 
Management Drugs, Biologicals, and Devices
    F. Comment Solicitation on Access to Non-Opioid Treatments for 
Pain Relief Under the OPPS and ASC Payment System
    G. Proposed New Technology Intraocular Lenses (NTIOLs)
    H. Proposed Calculation of the ASC Payment Rates and the ASC 
Conversion Factor
XIV. Hospital Outpatient Quality Reporting (OQR) Program 
Requirements, Proposals, and Requests for Comment
    A. Background
    B. Hospital OQR Program Quality Measures
    C. Hospital OQR Program Quality Measure Topics for Potential 
Future Consideration
    D. Administrative Requirements
    E. Form, Manner, and Timing of Data Submitted for the Hospital 
OQR Program
    F. Payment Reduction for Hospitals That Fail To Meet the 
Hospital OQR Program Requirements for the CY 2024 Payment 
Determination
XV. Requirements for the Ambulatory Surgical Center Quality 
Reporting (ASCQR) Program
    A. Background
    B. ASCQR Program Quality Measure
    C. Administrative Requirements
    D. Form, Manner, and Timing of Data Submitted for the ASCQR 
Program
    E. Payment Reduction for ASCs That Fail To Meet the ASCQR 
Program Requirements
XVI. Proposed Requirements for the Rural Emergency Hospital Quality 
Reporting (REHQR) Program
    A. Background
    B. REHQR Program Quality Measures
    C. Administrative Requirements
    D. Form, Manner, and Timing of Data Submitted for the REHQR 
Program
XVII. Changes to Community Mental Health Center (CMHC) Conditions of 
Participation (CoPs)
    A. Background and Statutory Authority
    B. Provisions of the Proposed Rule
XVIII. Proposed Updates to Requirements for Hospitals To Make Public 
a List of Their Standard Charges
    A. Introduction and Overview
    B. Proposal To Modify the Requirements for Making Public 
Hospital Standard Charges at 45 CFR 180.50
    C. Proposals To Improve and Enhance Enforcement
    D. Seeking Comment on Consumer-Friendly Displays and Alignment 
With Transparency in Coverage and No Surprises Act
XIX. Proposed Changes to the Inpatient Prospective Payment System 
Medicare Code Editor
XX. Proposed Technical Edits for REH Conditions of Participation
XXI. Rural Emergency Hospitals (REHs): Proposal Regarding Payment 
For Rural Emergency Hospitals (REHs)
    A. Background on Rural Emergency Hospitals
    B. REH Payment Methodology
    C. Background on the IHS Outpatient All-Inclusive Rate (AIR) for 
Tribal and IHS Hospitals
    D. Proposal To Pay IHS and Tribal Hospitals That Convert to an 
REH Under the AIR
    E. Exclusion of REHs From the OPPS
XXII. Request for Public Comments on Potential Payment Under the 
IPPS and OPPS for Establishing and Maintaining Access to Essential 
Medicines
    A. Overview
    B. Establishing and Maintaining a Buffer Stock of Essential 
Medicines
    C. Potential Separate Payment Under IPPS and OPPS for 
Establishing and Maintaining Access to a Buffer Stock Essential 
Medicines
    D. Comment Solicitation on Additional Considerations
XXIII. Files Available to the Public via the internet
XXIV. Collection of Information Requirements
    A. ICRs Related to Proposed Intensive Outpatient Physician 
Certification Requirements
    B. ICRs Related to the Hospital OQR Program
    C. ICRs Related to the ASCQR Program
    D. ICRs Related to the REHQR Program
    E. ICRs Related to Conditions of Participation (CoPs): 
Admission, Initial Evaluation, Comprehensive Assessment, and 
Discharge or Transfer of the Client (Sec.  485.914)
    F. ICR's Related to Conditions of Participation (CoPs): 
Treatment Team, Person-Centered Active Treatment Plan, and 
Coordination of Services (Sec.  485.916)
    G. ICR's Related to Conditions of Participation (CoPs): 
Organization, Governance, Administration of Services, Partial 
Hospitalization Services (Sec.  485.918)
    H. ICRs Related to Hospital Price Transparency
XXV. Response to Comments
XXVI. Economic Analyses
    A. Statement of Need
    B. Overall Impact of Provisions of This Proposed Rule
    C. Detailed Economic Analyses
    D. Regulatory Review Cost Estimation
    E. Regulatory Flexibility Act (RFA) Analysis

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    F. Unfunded Mandates Reform Act Analysis
    G. Federalism
    H. Conclusion

I. Summary and Background

A. Executive Summary of This Document

1. Purpose
    In this proposed rule, we propose to update the payment policies 
and payment rates for services furnished to Medicare beneficiaries in 
hospital outpatient departments (HOPDs) and ambulatory surgical centers 
(ASCs), beginning January 1, 2024. Section 1833(t) of the Social 
Security Act (the Act) requires us to annually review and update the 
payment rates for services payable under the Hospital Outpatient 
Prospective Payment System (OPPS). Specifically, section 1833(t)(9)(A) 
of the Act requires the Secretary of the Department of Health and Human 
Services (the Secretary) to review certain components of the OPPS not 
less often than annually, and to revise the groups, the relative 
payment weights, and the wage and other adjustments that take into 
account changes in medical practice, changes in technology, and the 
addition of new services, new cost data, and other relevant information 
and factors. In addition, under section 1833(i)(D)(v) of the Act, we 
annually review and update the ASC payment rates. This proposed rule 
also includes additional policy changes made in accordance with our 
experience with the OPPS and the ASC payment system and recent changes 
in our statutory authority. We describe these and various other 
statutory authorities in the relevant sections of this proposed rule. 
In addition, this proposed rule would update and refine the 
requirements for the Hospital Outpatient Quality Reporting (OQR) 
Program, the ASC Quality Reporting (ASCQR) Program, and Rural Emergency 
Hospital Quality Reporting (REHQR) Program. In addition, this proposed 
rule would establish payment for intensive outpatient services under 
Medicare, beginning January 1, 2024. This proposed rule would also 
update and refine the requirements for hospitals to make public their 
standard charges and CMS enforcement of hospital price transparency 
regulations. In addition, this proposed rulemaking would also update 
the Community Mental Health Center (CMHC) Conditions of Participation 
(CoPs). We propose to revise the personnel qualifications of Mental 
Health Counselor's (MHCs) and add personnel qualifications for Marriage 
and Family Therapists (MFTs) in the CMHC CoP. Finally, we propose to 
remove discussion of the IPPS Medicare Code Editor (MCE) from the 
annual IPPS rulemakings, beginning with the FY 2025 rulemaking. 
Additionally, we propose a technical correction to the Rural Emergency 
Hospital (REH) CoPs under the standard for the designation and 
certification of REHs.
2. Summary of the Major Provisions
     OPPS Update: For 2024, we propose to increase the payment 
rates under the OPPS by an Outpatient Department (OPD) fee schedule 
increase factor of 2.8 percent. This proposed increase factor is based 
on the proposed inpatient hospital market basket percentage increase of 
3.0 percent for inpatient services paid under the hospital inpatient 
prospective payment system (IPPS) reduced by a proposed productivity 
adjustment of 0.2 percentage point. Based on this update, we estimate 
that total payments to OPPS providers (including beneficiary cost 
sharing and estimated changes in enrollment, utilization, and case mix) 
for calendar year (CY) 2024 would be approximately $88.6 billion, an 
increase of approximately $6.0 billion compared to estimated CY 2023 
OPPS payments.
    We propose to continue to implement the statutory 2.0 percentage 
point reduction in payments for hospitals that fail to meet the 
hospital outpatient quality reporting requirements by applying a 
reporting factor of 0.9805 to the OPPS payments and copayments for all 
applicable services.
     Data used in Proposed CY 2024 OPPS/ASC Ratesetting: To set 
proposed OPPS and ASC payment rates, we normally use the most updated 
claims and cost report data available. The best available claims data 
is the most recent set of data which would be from 2 years prior to the 
calendar year that is the subject of rulemaking. Cost report data 
usually lags the claims data by a year and we believe that using the 
most updated cost report extract available from the Healthcare Cost 
Report Information System (HCRIS) is appropriate for CY 2024 OPPS 
ratesetting. Therefore, we propose to resume our typical data process 
of using the most updated cost reports and claims data available for CY 
2024 OPPS ratesetting.
     Partial Hospitalization Update: For CY 2024, we propose 
changes to our methodology used to calculate the Community Mental 
Health Center (CMHC) and hospital-based PHP (HB PHP) geometric mean per 
diem costs, as well as proposing changes to expand PHP payment from two 
APCs to four APCs.
     Proposed Medicare Payment for Intensive Outpatient 
Programs: Beginning in CY 2024, we propose to establish payment for 
intensive outpatient programs (IOPs) under Medicare. We propose the 
scope of benefits, physician certification requirements, coding and 
billing, and payment rates under the IOP benefit. IOP services may be 
furnished in hospital outpatient departments, community mental health 
centers (CMHCs), federally qualified health centers (FQHC), and rural 
health clinics (RHC). We also propose to establish payment for 
intensive outpatient services provided by opioid treatment programs 
(OTPs) under the existing OTP benefit.
     Changes to the Inpatient Only (IPO) List: For 2024, we are 
not proposing to remove any services from the IPO list.
     340B-Acquired Drugs: For CY 2024, we propose to continue 
to apply the default rate, generally average sales price (ASP) plus 6 
percent, to 340B acquired drugs and biologicals. Therefore, drugs and 
biologicals acquired under the 340B program would be paid at the same 
payment rate as those drugs and biologicals not acquired under the 340B 
program.
     Biosimilar Packaging Exception: For CY 2024, we propose to 
except biosimilars from the OPPS threshold packaging policy when their 
reference biologicals are separately paid. In addition, if a reference 
product's per-day cost falls below the threshold packaging policy, we 
propose that all the biosimilars related to the reference product would 
be similarly packaged.
     Proposal to Pay IHS and Tribal Hospitals that Convert to a 
Rural Emergency Hospital (REH) Under the IHS All-Inclusive Rate (AIR): 
For CY 2024, we propose that IHS and tribal hospitals that convert to 
an REH be paid for hospital outpatient services under the same all-
inclusive rate that would otherwise apply if these services were 
performed by an IHS or tribal hospital that is not an REH. We also 
propose that IHS and tribal hospitals that convert to an REH would 
receive the REH monthly facility payment consistent with how this 
payment is applied to REHs that are not tribally or IHS operated.
     Device Pass-Through Payment Applications: For CY 2024, we 
received 6 applications for device pass-through payments. We solicit 
public comment on these applications and will make final determinations 
on these applications in the CY 2024 OPPS/ASC final rule with comment 
period.

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     Cancer Hospital Payment Adjustment: For CY 2024, we 
propose to continue providing additional payments to cancer hospitals 
so that a cancer hospital's payment-to-cost ratio (PCR) after the 
additional payments is equal to the weighted average PCR for the other 
OPPS hospitals using the most recently submitted or settled cost report 
data. Section 16002(b) of the 21st Century Cures Act requires that this 
weighted average PCR be reduced by 1.0 percentage point. In light of 
the PHE impact on claims and cost data used to calculate the target 
PCR, we have maintained the CY 2021 target PCR of 0.89 through CYs 2022 
and 2023. In this proposed rule, we propose to reduce the target PCR by 
1.0 percentage point each calendar year until the target PCR equals the 
PCR of non-cancer hospitals using the most recently submitted or 
settled cost report data. For CY 2024, we propose to use a target PCR 
of 0.88 to determine the CY 2024 cancer hospital payment adjustment to 
be paid at cost report settlement. That is, the payment adjustments 
will be the additional payments needed to result in a PCR equal to 0.88 
for each cancer hospital.
     ASC Payment Update: For CYs 2019 through 2023, we adopted 
a policy to update the ASC payment system using the hospital market 
basket update. In light of the impact of the COVID-19 PHE on healthcare 
utilization, we propose to extend our policy to update the ASC payment 
system using the hospital market basket update an additional two 
years--through CYs 2024 and 2025. Using the hospital market basket 
methodology, for CY 2024, we propose to increase payment rates under 
the ASC payment system by 2.8 percent for ASCs that meet the quality 
reporting requirements under the ASCQR Program. This increase is based 
on a hospital market basket percentage increase of 3.0 percent reduced 
by a productivity adjustment of 0.2 percentage point. Based on this 
proposed update, we estimate that total payments to ASCs (including 
beneficiary cost sharing and estimated changes in enrollment, 
utilization, and case-mix) for CY 2024 will be approximately $6.0 
billion, an increase of approximately $170 million compared to 
estimated CY 2023 Medicare payments.
     Changes to the List of ASC Covered Surgical Procedures: 
For CY 2024, we propose to add 26 dental surgical procedures to the ASC 
covered procedures list (CPL) based upon existing criteria at Sec.  
416.166.
     Hospital Outpatient Quality Reporting (OQR) Program: For 
the Hospital OQR Program measure set, we propose to: (1) remove the 
Left Without Being Seen measure beginning with the CY 2024 reporting 
period/2026 payment determination; (2) modify the COVID-19 Vaccination 
Coverage Among Healthcare Personnel (HCP) measure beginning with the CY 
2024 reporting period/CY 2026 payment determination; (3) modify the 
Cataracts: Improvement in Patient's Visual Function Within 90 Days 
Following Cataract Surgery measure beginning with the voluntary CY 2024 
reporting period; (4) modify the Appropriate Follow-Up Interval for 
Normal Colonoscopy in Average Risk Patients measure beginning with the 
CY 2024 reporting period/CY 2026 payment determination; (5) re-adopt 
with modification the Hospital Outpatient Volume Data on Selected 
Outpatient Procedures measure beginning with the voluntary CY 2025 
reporting period and mandatory reporting beginning with the CY 2026 
reporting period/CY 2028 payment determination; (6) adopt the Risk-
Standardized Patient-Reported Outcome-Based Performance Measure (PRO-
PM) Following Elective Primary Total Hip Arthroplasty (THA) and/or 
Total Knee Arthroplasty (TKA) in the HOPD Setting (THA/TKA PRO-PM) 
beginning with the voluntary CYs 2025 and 2026 reporting periods, and 
mandatory reporting beginning with the CY 2027 reporting period/CY 2030 
payment determination; (7) adopt the Excessive Radiation Dose or 
Inadequate Image Quality for Diagnostic Computed Tomography (CT) in 
Adults (Hospital Level--Outpatient) measure, beginning with the 
voluntary CY 2025 reporting period and mandatory reporting beginning 
with the CY 2026 reporting period/CY 2028 payment determination; and 
(8) amend multiple codified regulations to replace references to 
``QualityNet'' with ``CMS-designated information system'' or ``CMS 
website,'' and to make other conforming technical edits, to accommodate 
recent and future systems requirements and mitigate confusion for 
program participants. We are also requesting public comment on: (1) 
patient and workforce safety (including sepsis); (2) behavioral health 
(including suicide prevention); and (3) telehealth as potential future 
measurement topic areas in the Hospital OQR Program.
     Ambulatory Surgical Center Quality Reporting (ASCQR) 
Program: For the ASCQR Program measure set, we propose to: (1) modify 
the COVID-19 Vaccination Coverage Among Health Care Personnel (HCP) 
measure beginning with the CY 2024 Reporting Period/CY 2026 payment 
determination; (2) modify the Cataracts: Improvement in Patient's 
Visual Function Within 90 Days Following Cataract Surgery measure 
beginning with the voluntary CY 2024 reporting period; (3) modify the 
Endoscopy/Polyp Surveillance: Appropriate Follow-Up Interval for Normal 
Colonoscopy in Average Risk Patients measure beginning with the CY 2024 
reporting period/CY 2026 payment determination; (4) re-adopt with 
modification the ASC Facility Volume Data on Selected ASC Surgical 
Procedures measure beginning with the voluntary CY 2025 reporting 
period and mandatory reporting beginning with the CY 2026 reporting 
period/CY 2028 payment determination; (5) adopt the Risk Standardized 
Patient-Reported Outcome-Based Performance Measure (PRO-PM) Following 
Elective Primary Total Hip Arthroplasty (THA) and/or Total Knee 
Arthroplasty (TKA) in the ASC Setting (THA/TKA PRO-PM) beginning with 
the voluntary CYs 2025 and 2026 reporting periods, and mandatory 
reporting beginning with the CY 2027 reporting period/CY 2030 payment 
determination; and (6) amend multiple codified regulations to replace 
references to ``QualityNet'' with ``CMS-designated information system'' 
or ``CMS website,'' and to make other conforming technical edits, to 
accommodate recent and future systems requirements and mitigate 
confusion for program participants.
     Rural Emergency Hospital Quality Reporting (REHQR) 
Program: For the REHQR Program, we propose to: (1) codify the statutory 
authority for the REHQR Program; (2) adopt and codify policies related 
to measure retention, measure removal, and measure modification; (3) 
adopt one chart-abstracted measure and three claims-based measures for 
the REHQR Program measure set and establish related reporting 
requirements beginning with the CY 2024 reporting period; (4) adopt and 
codify policies related to public reporting of data; (5) codify 
foundational requirements related to REHQR Program participation; (6) 
adopt and codify policies related to the form, manner, and timing of 
data submission under the REHQR Program; (7) adopt and codify a review 
and corrections period for submitted data; and (8) adopt and codify an 
Extraordinary Circumstances Exception (ECE) process for data submission 
requirements. We are also requesting comment on the following potential 
measures and approaches for implementing quality reporting under the 
REHQR Program: (1) electronic clinical quality measures (eCQMs); (2) 
care coordination

[[Page 49557]]

measures; and (3) a tiered quality measure approach.
     Mental Health Services Furnished Remotely by Hospital 
Staff to Beneficiaries in Their Homes: For CY 2024, we propose 
technical refinements to the existing coding for remote mental health 
services to allow for multiple units to be billed daily. We also 
propose to create a new, untimed code to describe group psychotherapy. 
Finally, we propose to delay any in-person visit requirements until the 
end of CY 2024.
    Proposed OPPS Payment for Dental Services: For CY 2024, we propose 
to assign 229 HCPCS codes describing dental services to various 
clinical APCs to align with Medicare payment provisions regarding 
dental services in the CY 2023 PFS final rule.
    Comment Solicitation on Payment for High-Cost Drugs Provided by 
Indian Health Service and Tribally-Owned Facilities: We are seeking 
comment on whether Medicare should pay separately for high-cost drugs 
provided by IHS and tribally-owned facilities.
     Supervision by Nurse Practitioners, Physician Assistants 
and Clinical Nurse Specialists of Cardiac, Intensive Cardiac and 
Pulmonary Rehabilitation Services Furnished to Outpatients: For CY 
2024, to comply with section 51008 of the Bipartisan Budget Act of 2018 
and to ensure consistency with proposed revisions to Sec.  410.47 and 
Sec.  410.49 in the CY 2024 PFS proposed rule, we propose to revise 
Sec.  410.27(a)(1)(iv)(B)(1) to expand the practitioners who may 
supervise cardiac rehabilitation (CR), intensive cardiac rehabilitation 
(ICR), and pulmonary rehabilitation (PR) services to include nurse 
practitioners (NPs), physician assistants (PAs), and clinical nurse 
specialists (CNSs). We also propose to allow for the direct supervision 
requirement for CR, ICR, and PR to include virtual presence of the 
physician through audio-video real-time communications technology 
(excluding audio-only) through December 31, 2024 and extend this policy 
to the nonphysician practitioners, that is NPs, PAs, and CNSs, who are 
eligible to supervise these services in CY 2024. Payment for Intensive 
Cardiac Rehabilitation Services (ICR) Provided by an Off-Campus, Non-
Excepted Provider Based Department (PBD) of a Hospital: For CY 2024, to 
address an unintended reimbursement disparity created by application of 
the off-campus, non-excepted payment rate to intensive cardiac 
rehabilitation services (ICR), we propose to pay for ICR services 
furnished by an off-campus, non-excepted PBD of a hospital at 100 
percent of the OPPS rate, which is the amount paid for these services 
under the PFS.
     Proposed Updates to Requirements for Hospitals to Make 
Public a List of Their Standard Charges: We propose to amend several of 
our hospital price transparency (HPT) requirements in order to improve 
our monitoring and enforcement capabilities by way of improving access 
to, and the usability of, hospital standard charge information; reduce 
the compliance burden on hospitals by providing CMS templates and 
technical guidance for display of hospital standard charge information; 
align, where feasible, certain hospital price transparency requirements 
and processes with requirements and processes we have implemented in 
the Transparency in Coverage (TIC) initiative; and make other 
modifications to our monitoring and enforcement capabilities that will, 
among other things, increase its transparency to the public. 
Specifically, we propose to: (1) add definitions for ``CMS template'', 
``consumer-friendly expected allowed charges'', ``encode'', and 
``machine-readable file'' (MRF); (2) require hospitals to affirm the 
accuracy and completeness of data in their MRF; (3) revise and expand 
the data elements hospitals must include in the MRF; (4) require 
hospitals to conform to a CMS template layout and other technical 
specifications for encoding standard charge information in the MRF; (5) 
require hospitals to establish and maintain a txt file and footer as 
specified by CMS; and (6) revise our enforcement process by updating 
our methods to assess hospital compliance, requiring hospitals to 
acknowledge receipt of warning notices, working with health system 
officials to address noncompliance issues in one or more hospitals that 
are part of a health system, and publicizing more information about CMS 
enforcement activities related to individual hospital compliance. 
Additionally, we are seeking comment on additional considerations for 
improving compliance and aligning consumer-friendly policies and 
requirements with other federal price transparency initiatives.
     Community Mental Health Center (CMHC) Conditions of 
Participation (CoPs): We propose to update the CMHC CoPs to implement 
the provisions of the Consolidated Appropriations Act (CAA), 2023 (Pub. 
L. 117-238) by establishing coverage of intensive outpatient services 
(IOP) in CMHCs. The CAA, 2023 also established a new Medicare benefit 
category for services furnished and directly billed by Mental Health 
Counselors (MHCs) and Marriage and Family Therapists (MFTs). We propose 
to revise the personnel qualifications of MHCs and add personnel 
qualifications for MFTs in the CMHC CoPs.
     Proposed Changes to the Inpatient Prospective Payment 
System Medicare Code Editor: Consistent with the process that is used 
for updates to the Integrated Outpatient Code Editor (I/OCE) and other 
Medicare claims editing systems, we propose to remove discussion of the 
IPPS Medicare Code Editor (MCE) from the annual IPPS rulemakings, 
beginning with the FY 2025 rulemaking, and to generally address future 
changes or updates to the MCE through instruction to the MACs.
     Request for Public Comments on Potential Payment under the 
IPPS and OPPS for Establishing and Maintaining Access to Essential 
Medicines: We are seeking comment on, and may consider finalizing based 
on the review of comments received, as early as for cost reporting 
periods beginning on or after January 1, 2024, separate payment under 
IPPS, for establishing and maintaining access to a buffer stock of 
essential medicines to foster a more reliable, resilient supply of 
these medicines. An adjustment under OPPS could be considered for 
future years.
     Rural Emergency Hospital (REH) Conditions of Participation 
(CoPs): We propose a technical correction to the REH CoPs under the 
standard for the ``Designation and certification of REHs.
3. Summary of Costs and Benefits
    In section XXVI of this proposed rule, we set forth a detailed 
analysis of the regulatory and federalism impacts that the changes 
would have on affected entities and beneficiaries. Key estimated 
impacts are described below.
a. Impacts of all OPPS Changes
    Table 100 in section XXVI.C of this proposed rule displays the 
distributional impact of all the OPPS changes on various groups of 
hospitals and CMHCs for CY 2024 compared to all estimated OPPS payments 
in CY 2023. We estimate that the proposed policies in this proposed 
rule would result in a 2.9 percent overall increase in OPPS payments to 
providers. We estimate that total OPPS payments for CY 2024, including 
beneficiary cost-sharing, to the approximately 3,600 facilities paid 
under the OPPS (including general acute care hospitals, children's 
hospitals, cancer hospitals, and CMHCs) would increase by approximately 
$1.9 billion compared to CY 2023 payments, excluding our estimated 
changes in enrollment, utilization, and case-mix. We estimated the 
isolated impact of our

[[Page 49558]]

OPPS policies on CMHCs because CMHCs have historically only been paid 
for partial hospitalization services under the OPPS. Beginning in CY 
2024, they will also be paid for new intensive outpatient program (IOP) 
services under the OPPS. Continuing the provider-specific structure we 
adopted beginning in CY 2011, and basing payment fully on the type of 
provider furnishing the service, we estimate a 5.8 percent increase in 
CY 2024 payments to CMHCs relative to their CY 2023 payments.
b. Impacts of the Updated Wage Indexes
    We estimate that our update of the wage indexes based on the fiscal 
year (FY) 2024 IPPS proposed rule wage indexes would result in no 
change for urban hospitals under the OPPS and a 1.4 percent increase 
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 proposed rule.
c. Impacts of the Rural Adjustment and the Cancer Hospital Payment 
Adjustment
    We are implementing the reduction to the cancer hospital payment 
adjustment for CY 2024 required by section 1833(t)(18)(C) of the Act, 
as added by section 16002(b) of the 21st Century Cures Act, and the 
proposed target payment-to-cost ratio (PCR) for CY 2024 cancer hospital 
adjustment of 0.89. However, as Section 16002 requires that we reduce 
the target PCR by 0.01, that brings the proposed target PCR to 0.88 
instead. This is 0.01 less than the target PCR of 0.89 from CY 2021 
through CY 2023, which was previously held at the pre-PHE target.
d. Impacts of the OPD Fee Schedule Increase Factor
    For the CY 2024 OPPS/ASC, we propose an OPD fee schedule increase 
factor of 2.8 percent and applying that proposed increase factor to the 
conversion factor for CY 2024. As a result of the OPD fee schedule 
increase factor and other budget neutrality adjustments, we estimate 
that urban hospitals would experience an increase in payments of 
approximately 2.8 percent and that rural hospitals would experience an 
increase in payments of 4.4 percent. Classifying hospitals by teaching 
status, we estimate non-teaching hospitals would experience an increase 
in payments of 3.5 percent, minor teaching hospitals would experience 
an increase in payments of 3.0 percent, and major teaching hospitals 
would experience an increase in payments of 2.4 percent. We also 
classified hospitals by the type of ownership. We estimate that 
hospitals with voluntary ownership would experience an increase of 3.0 
percent in payments, while hospitals with government ownership would 
experience an increase of 2.8 percent in payments. We estimate that 
hospitals with proprietary ownership would experience an increase of 
3.4 percent in payments.
e. Impacts of the Proposed ASC Payment Update
    For impact purposes, the surgical procedures on the ASC covered 
surgical procedure list are aggregated into surgical specialty groups 
using CPT and HCPCS code range definitions. The percentage change in 
estimated total payments by specialty groups under the CY 2024 payment 
rates, compared to estimated CY 2023 payment rates, generally ranges 
between a decrease of 6 percent and an increase of 7 percent, depending 
on the service, with some exceptions. We estimate the impact of 
applying the proposed inpatient hospital market basket update to ASC 
payment rates would increase payments by $170 million under the ASC 
payment system in CY 2024.
f. Impacts of Hospital Price Transparency
    We propose to enhance automated access to hospital MRFs and 
aggregation and use of MRF data are estimated to increase burden on 
hospitals, including a one-time mean of $2,787 per hospital, and a 
total national cost of $19,784,539 ($2,787 x 7,098 hospitals). The cost 
estimate reflects estimated costs ranging from $1,274 and $4,181 per 
hospital, and a total national cost ranging from $9,040,620 to 
$29,676,809. As discussed in detail in section XXVI of this proposed 
rule, we believe that the benefits to the public (and to hospitals 
themselves) outweigh the burden imposed on hospitals.

B. Legislative and Regulatory Authority for the Hospital OPPS

    When Title XVIII of the Act was enacted, Medicare payment for 
hospital outpatient services was based on hospital-specific costs. In 
an effort to ensure that Medicare and its beneficiaries pay 
appropriately for services and to encourage more efficient delivery of 
care, the Congress mandated replacement of the reasonable cost-based 
payment methodology with a prospective payment system (PPS). The 
Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33) added section 
1833(t) to the Act, authorizing implementation of a PPS for hospital 
outpatient services. The OPPS was first implemented for services 
furnished on or after August 1, 2000. Implementing regulations for the 
OPPS are located at 42 CFR parts 410 and 419.
    The Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 
1999 (BBRA) (Pub. L. 106-113) made major changes in the hospital OPPS. 
The following Acts made additional changes to the OPPS: the Medicare, 
Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 
(BIPA) (Pub. L. 106-554); the Medicare Prescription Drug, Improvement, 
and Modernization Act of 2003 (MMA) (Pub. L. 108-173); the Deficit 
Reduction Act of 2005 (DRA) (Pub. L. 109-171), enacted on February 8, 
2006; the Medicare Improvements and Extension Act under Division B of 
Title I of the Tax Relief and Health Care Act of 2006 (MIEA-TRHCA) 
(Pub. L. 109-432), enacted on December 20, 2006; the Medicare, 
Medicaid, and SCHIP Extension Act of 2007 (MMSEA) (Pub. L. 110-173), 
enacted on December 29, 2007; the Medicare Improvements for Patients 
and Providers Act of 2008 (MIPPA) (Pub. L. 110-275), enacted on July 
15, 2008; the Patient Protection and Affordable Care Act (Pub. L. 111-
148), enacted on March 23, 2010, as amended by the Health Care and 
Education Reconciliation Act of 2010 (Pub. L. 111-152), enacted on 
March 30, 2010 (these two public laws are collectively known as the 
Affordable Care Act); the Medicare and Medicaid Extenders Act of 2010 
(MMEA, Pub. L. 111-309); the Temporary Payroll Tax Cut Continuation Act 
of 2011 (TPTCCA, Pub. L. 112-78), enacted on December 23, 2011; the 
Middle Class Tax Relief and Job Creation Act of 2012 (MCTRJCA, Pub. L. 
112-96), enacted on February 22, 2012; the American Taxpayer Relief Act 
of 2012 (Pub. L. 112-240), enacted January 2, 2013; the Pathway for SGR 
Reform Act of 2013 (Pub. L. 113-67) enacted on December 26, 2013; the 
Protecting Access to Medicare Act of 2014 (PAMA, Pub. L. 113-93), 
enacted on March 27, 2014; the Medicare Access and CHIP Reauthorization 
Act (MACRA) of 2015 (Pub. L. 114-10), enacted April 16, 2015; the 
Bipartisan Budget Act of 2015 (Pub. L. 114-74), enacted November 2, 
2015; the Consolidated Appropriations Act, 2016 (Pub. L. 114-113), 
enacted on December 18, 2015, the 21st Century Cures Act (Pub. L. 114-
255), enacted on December 13, 2016; the Consolidated Appropriations 
Act, 2018 (Pub. L. 115-

[[Page 49559]]

141), enacted on March 23, 2018; the Substance Use Disorder- Prevention 
that Promotes Opioid Recovery and Treatment for Patients and 
Communities Act (Pub. L. 115-271), enacted on October 24, 2018; the 
Further Consolidated Appropriations Act, 2020 (Pub. L. 116-94), enacted 
on December 20, 2019; the Coronavirus Aid, Relief, and Economic 
Security Act (Pub. L. 116-136), enacted on March 27, 2020; the 
Consolidated Appropriations Act, 2021 (Pub. L. 116-260), enacted on 
December 27, 2020; the Inflation Reduction Act, 2022 (Pub. L. 117-169), 
enacted on August 16, 2022; and Consolidated Appropriations Act (CAA), 
2023 (Pub. L. 117-238), enacted December 29, 2022.
    Under the OPPS, we generally pay for hospital Part B services on a 
rate-per-service basis that varies according to the APC group to which 
the service is assigned. We use the Healthcare Common Procedure Coding 
System (HCPCS) (which includes certain Current Procedural Terminology 
(CPT) codes) to identify and group the services within each APC. The 
OPPS includes payment for most hospital outpatient services, except 
those identified in section I.C of this proposed rule. Section 
1833(t)(1)(B) of the Act provides for payment under the OPPS for 
hospital outpatient services designated by the Secretary (which 
includes partial hospitalization services furnished by CMHCs), and 
certain inpatient hospital services that are paid under Medicare Part 
B.
    The OPPS rate is an unadjusted national payment amount that 
includes the Medicare payment and the beneficiary copayment. This rate 
is divided into a labor-related amount and a nonlabor-related amount. 
The labor-related amount is adjusted for area wage differences using 
the hospital inpatient wage index value for the locality in which the 
hospital or CMHC is located.
    All services and items within an APC group are comparable 
clinically and with respect to resource use, as required by section 
1833(t)(2)(B) of the Act. In accordance with section 1833(t)(2)(B) of 
the Act, subject to certain exceptions, items and services within an 
APC group cannot be considered comparable with respect to the use of 
resources if the highest median cost (or mean cost, if elected by the 
Secretary) for an item or service in the APC group is more than 2 times 
greater than the lowest median cost (or mean cost, if elected by the 
Secretary) for an item or service within the same APC group (referred 
to as the ``2 times rule''). In implementing this provision, we 
generally use the cost of the item or service assigned to an APC group.
    For new technology items and services, special payments under the 
OPPS may be made in one of two ways. Section 1833(t)(6) of the Act 
provides for temporary additional payments, which we refer to as 
``transitional pass-through payments,'' for at least 2 but not more 
than 3 years for certain drugs, biological agents, brachytherapy 
devices used for the treatment of cancer, and categories of other 
medical devices. For new technology services that are not eligible for 
transitional pass-through payments, and for which we lack sufficient 
clinical information and cost data to appropriately assign them to a 
clinical APC group, we have established special APC groups based on 
costs, which we refer to as New Technology APCs. These New Technology 
APCs are designated by cost bands which allow us to provide appropriate 
and consistent payment for designated new procedures that are not yet 
reflected in our claims data. Similar to pass-through payments, an 
assignment to a New Technology APC is temporary; that is, we retain a 
service within a New Technology APC until we acquire sufficient data to 
assign it to a clinically appropriate APC group.

C. Excluded OPPS Services and Hospitals

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

D. Prior Rulemaking

    On April 7, 2000, we published in the Federal Register a final rule 
with comment period (65 FR 18434) to implement a prospective payment 
system for hospital outpatient services. The hospital OPPS was first 
implemented for services furnished on or after August 1, 2000. Section 
1833(t)(9)(A) of the Act requires the Secretary to review certain 
components of the OPPS, not less often than annually, and to revise the 
groups, the relative payment weights, and the wage and other 
adjustments to take into account changes in medical practices, changes 
in technology, the addition of new services, new cost data, and other 
relevant information and factors.Since initially implementing the OPPS, 
we have published final rules in the Federal Register annually to 
implement statutory requirements and changes arising from our 
continuing experience with this system. These rules can be viewed on 
the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html.

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

1. Authority of the Panel
    Section 1833(t)(9)(A) of the Act, as amended by section 201(h) of 
Public Law 106-113, and redesignated by section 202(a)(2) of Public Law 
106-113, requires that we consult with an expert outside advisory panel 
composed of an appropriate selection of representatives of providers to 
annually review (and

[[Page 49560]]

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). The HOP Panel is not restricted to using data compiled 
by CMS, and in conducting its review, it may use data collected or 
developed by organizations outside the Department.
2. Establishment of the Panel
    On November 21, 2000, the Secretary signed the initial charter 
establishing the Panel, and, at that time, named the APC Panel. This 
expert panel is composed of appropriate representatives of providers 
(currently employed full-time, not as consultants, in their respective 
areas of expertise) who review clinical data and advise CMS about the 
clinical integrity of the APC groups and their payment weights. Since 
CY 2012, the Panel also is charged with advising the Secretary on the 
appropriate level of supervision for individual hospital outpatient 
therapeutic services. The Panel is technical in nature, and it is 
governed by the provisions of the Federal Advisory Committee Act 
(FACA). The current charter specifies, among other requirements, that 
the Panel--
     May advise on the clinical integrity of Ambulatory Payment 
Classification (APC) groups and their associated weights;
     May advise on the appropriate supervision level for 
hospital outpatient services;
     May advise on OPPS APC rates for ASC covered surgical 
procedures;
     Continues to be technical in nature;
     Is governed by the provisions of the FACA;
     Has a Designated Federal Official (DFO); and
     Is chaired by a Federal Official designated by the 
Secretary.
    The Panel's charter was amended on November 15, 2011, renaming the 
Panel and expanding the Panel's authority to include supervision of 
hospital outpatient therapeutic services and to add critical access 
hospital (CAH) representation to its membership. The Panel's charter 
was also amended on November 6, 2014 (80 FR 23009), and the number of 
members was revised from up to 19 to up to 15 members. The Panel's 
current charter was approved on November 21, 2022, for a 2-year period.
    The current Panel membership and other information pertaining to 
the Panel, including its charter, Federal Register notices, membership, 
meeting dates, agenda topics, and meeting reports, can be viewed on the 
CMS website at: https://www.cms.gov/Regulations-and-Guidance/Guidance/FACA/AdvisoryPanelonAmbulatoryPaymentClassificationGroups.html.
3. Panel Meetings and Organizational Structure
    The Panel has held many meetings, with the last meeting taking 
place on August 22, 2022. Prior to each meeting, we publish a notice in 
the Federal Register to announce the meeting, new members, and any 
other changes of which the public should be aware. Beginning in CY 
2017, we have transitioned to one meeting per year (81 FR 31941). In CY 
2018, we published a Federal Register notice requesting nominations to 
fill vacancies on the Panel (83 FR 3715). CMS is currently accepting 
nominations at: https://mearis.cms.gov.
    In addition, the Panel has established an administrative structure 
that, in part, currently includes the use of three subcommittee 
workgroups to provide preparatory meeting and subject support to the 
larger panel. The three current subcommittees include the following:
     APC Groups and Status Indicator Assignments Subcommittee, 
which advises and provides recommendations to the Panel on the 
appropriate status indicators to be assigned to HCPCS codes, including 
but not limited to whether a HCPCS code or a category of codes should 
be packaged or separately paid, as well as the appropriate APC 
assignment of HCPCS codes regarding services for which separate payment 
is made;
     Data Subcommittee, which is responsible for studying the 
data issues confronting the Panel and for recommending options for 
resolving them; and
     Visits and Observation Subcommittee, which reviews and 
makes recommendations to the Panel on all technical issues pertaining 
to observation services and hospital outpatient visits paid under the 
OPPS.
    Each of these workgroup subcommittees was established by a majority 
vote from the full Panel during a scheduled Panel meeting, and the 
Panel recommended at the August 22, 2022, meeting that the 
subcommittees continue. We accepted this recommendation.
    For discussions of earlier Panel meetings and recommendations, we 
refer readers to previously published OPPS/ASC proposed and final 
rules, the CMS website mentioned earlier in this section, and the FACA 
database at https://facadatabase.gov.

F. Public Comments Received on the CY 2023 OPPS/ASC Final Rule With 
Comment Period

    We received approximately 12 timely pieces of correspondence on the 
CY 2023 OPPS/ASC final rule with comment period that appeared in the 
Federal Register on November 4, 2022 (87 FR 71748). In-scope comments 
related to the interim APC assignments and/or status indicators of new 
or replacement Level II HCPCS codes (identified with comment indicator 
``NI'' in OPPS Addendum B, ASC Addendum AA, and ASC Addendum BB to that 
final rule).

II. Proposed Updates Affecting OPPS Payments

A. Recalibration of APC Relative Payment Weights

1. Database Construction
a. Database Source and Methodology
    Section 1833(t)(9)(A) of the Act requires that the Secretary review 
not less often than annually and revise the relative payment weights 
for Ambulatory Payment Classifications (APCs). In the April 7, 2000 
OPPS final rule with comment period (65 FR 18482), we explained in 
detail how we calculated the relative payment weights that were 
implemented on August 1, 2000 for each APC group.
    For the CY 2024 OPPS, we propose to recalibrate the APC relative 
payment weights for services furnished on or after January 1, 2024, and 
before January 1, 2025 (CY 2024), using the same basic methodology that 
we described in the CY 2023 OPPS/ASC final rule with comment period (86 
FR 63466), using CY 2022 claims data. That is, we propose to 
recalibrate the relative payment weights for each APC based on claims 
and cost report data for hospital outpatient department (HOPD) services 
to construct a database for calculating APC group weights. For the 
purpose of recalibrating the proposed APC relative payment weights for 
CY 2024, we began with approximately 180 million final action claims 
(claims for which all

[[Page 49561]]

disputes and adjustments have been resolved and payment has been made) 
for HOPD services furnished on or after January 1, 2022, and before 
January 1, 2023, 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 2024 OPPS payment weights. For exact 
numbers of claims used and additional details on the claims accounting 
process, we refer readers to the claims accounting narrative under 
supporting documentation for this proposed rule on the CMS website at: 
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
    Addendum N to this proposed rule (which is available via the 
internet on the CMS website at: http://www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html) includes the proposed list of bypass 
codes for CY 2024. The proposed list of bypass codes contains codes 
that are reported on claims for services in CY 2022 and, therefore, 
includes codes that were in effect in CY 2022 and used for billing. We 
propose to retain deleted bypass codes on the proposed CY 2024 bypass 
list because these codes existed in CY 2022 and were covered OPD 
services in that period, and CY 2022 claims data were used to calculate 
proposed CY 2024 payment rates. Keeping these deleted bypass codes on 
the bypass list potentially allows us to create more ``pseudo'' single 
procedure claims for ratesetting purposes. ``Overlap bypass codes'' 
that are members of the proposed multiple imaging composite APCs are 
identified by asterisks (*) in the third column of Addendum N to the 
proposed rule. HCPCS codes that we propose to add for CY 2024 are 
identified by asterisks (*) in the fourth column of Addendum N.
b. Proposed Calculation and Use of Cost-to-Charge Ratios (CCRs)
    For CY 2024, we propose to continue to use the hospital-specific 
overall ancillary and departmental cost-to-charge ratios (CCRs) to 
convert charges to estimated costs through application of a revenue 
code-to-cost center crosswalk. To calculate the APC costs on which the 
proposed CY 2024 APC payment rates are based, we calculated hospital-
specific departmental CCRs for each hospital for which we had CY 2022 
claims data by comparing these claims data to the most recently 
available hospital cost reports, which, in most cases, are from CY 
2021. For the proposed CY 2024 OPPS payment rates, we used the set of 
claims processed during CY 2022. 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 2022 (the year 
of claims data we used to calculate the proposed CY 2024 OPPS payment 
rates) and updates to the National Uniform Billing Committee (NUBC) 
2022 Data specifications Manual. That crosswalk is available for review 
and continuous comment on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
    In the CY 2023 OPPS/ASC final rule with comment period, a few 
commenters recommended that we revise our revenue code-to-cost center 
crosswalk to provide consistency with the NUBC definitions and to 
improve the accuracy of cost data for OPPS ratesetting with respect to 
chimeric antigen receptor therapy (CAR-T) administration services (87 
FR 71758). In that final rule with comment period, we stated that we 
intend to explore the implications of this recommendation further and 
may consider such changes in future rulemaking. For this CY 2024 OPPS/
ASC proposed rule, we explored the impacts of the commenters' 
recommendation from the CY 2023 OPPS/ASC final rule with comment period 
that we assign primary cost centers to certain CAR-T-related revenue 
codes that were not previously assigned cost centers. Specifically, for 
this CY 2024 OPPS/ASC proposed rule, we explored the commenter's 
recommendations regarding changes to the revenue code-to-cost center 
crosswalk, which included:
     Revising revenue codes 0870 (Cell/Gene Therapy General 
Classification) and 0871 (Cell Collection) to be mapped to a primary 
cost center of 9000 (Clinic);
     Revising revenue codes 0872 (Specialized Biologic 
Processing and Storage--Prior to Transport) and 0873 (Storage and 
Processing After Receipt of Cells from Manufacturer) to be mapped to a 
primary cost center of 3350 (Hematology);
     Revising revenue codes 0874 (Infusion of Modified Cells) 
and 0875 (Injection of Modified Cells) to be mapped to a primary cost 
center of 6400 (Intravenous Therapy), and;
     Revising revenue codes 0891 (Special Processed Drugs--FDA 
Approved Cell Therapy) and 0892 (Special Processed Drugs--FDA Approved 
Gene Therapy) to be mapped to a primary cost center of 7300 (Drugs 
Charged to Patients).
    After reviewing the impact of these crosswalk revisions on our 
proposed CY 2024 OPPS APC geometric mean costs, we only observed an 
increase in the geometric mean cost of CPT code 0540T (Chimeric antigen 
receptor t-cell (car-t) therapy; car-t cell administration, 
autologous)--from $148.31 to $294.17 for this proposed rule--as a 
result of the revenue code for CPT code 0540T being assigned to a new 
cost center and the new corresponding cost-to-charge ratio. We did not 
observe any significant impact on APC geometric mean costs or payment 
as a result of these revisions. We believe these revisions would 
provide greater consistency with the NUBC definitions (which already 
adopted these revenue code revisions) and more accurately account for 
the costs of CAR-T administration services under the OPPS. Therefore, 
for CY 2024 and subsequent years, we propose to adopt the 
aforementioned revisions to revenue codes 0870, 0871 0872, 0873, 0874, 
0875, 0891, and 0892 in our revenue code-to-cost center crosswalk.
    We solicit comment on our proposed changes to the revenue code-to-
cost center crosswalk for CY 2024. In accordance with our longstanding 
policy, similar to our finalized policy for CY 2023 OPPS ratesetting, 
we propose 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.
    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. 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 2024, we propose not 
to include the nonstandard cost centers

[[Page 49562]]

reported in this way in the OPPS ratesetting database construction.
2. Proposed Data Development and Calculation of Costs Used for 
Ratesetting
    In this section of this proposed rule, we discuss the use of claims 
to calculate the OPPS payment rates for CY 2024. The Hospital OPPS page 
on the CMS website on which this proposed rule is posted (https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html) provides an accounting of claims used 
in the development of the proposed payment rates. That accounting 
provides additional detail regarding the number of claims derived at 
each stage of the process. In addition, later in this section we 
discuss the file of claims that comprises the data set that is 
available upon payment of an administrative fee under a CMS data use 
agreement. The CMS website, https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html, includes 
information about obtaining the ``OPPS Limited Data Set,'' which now 
includes the additional variables previously available only in the OPPS 
Identifiable Data Set, including ICD-10-CM diagnosis codes and revenue 
code payment amounts. This file is derived from the CY 2022 claims that 
are used to calculate the proposed payment rates for this proposed 
rule.
    Previously, the OPPS established the scaled relative weights on 
which payments are based using APC median costs, a process described in 
the CY 2012 OPPS/ASC final rule with comment period (76 FR 74188). 
However, as discussed in more detail in section II.A.2.f of the CY 2013 
OPPS/ASC final rule with comment period (77 FR 68259 through 68271), we 
finalized the use of geometric mean costs to calculate the relative 
weights on which the CY 2013 OPPS payment rates were based. While this 
policy changed the cost metric on which the relative payments are 
based, the data process in general remained the same under the 
methodologies that we used to obtain appropriate claims data and 
accurate cost information in determining estimated service cost.
    We used the methodology described in sections II.A.2.a through 
II.A.2.c of this proposed rule to calculate the costs we used to 
establish the proposed relative payment weights used in calculating the 
OPPS payment rates for CY 2024 shown in Addenda A and B to this 
proposed rule (which are available via the internet on the CMS website 
at: https://www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html). We refer readers to section II.A.4 of this proposed rule 
for a discussion of the conversion of APC costs to scaled payment 
weights.
    We note that under the OPPS, CY 2019 was the first year in which 
the claims data used for setting payment rates (CY 2017 data) contained 
lines with the modifier ``PN,'' which indicates nonexcepted items and 
services furnished and billed by off-campus provider-based departments 
(PBDs) of hospitals. Because nonexcepted items and services are not 
paid under the OPPS, in the CY 2019 OPPS/ASC final rule with comment 
period (83 FR 58832), we finalized a policy to remove those claim lines 
reported with modifier ``PN'' from the claims data used in ratesetting 
for the CY 2019 OPPS and subsequent years. For the CY 2024 OPPS, we 
propose to continue to remove claim lines with modifier ``PN'' from the 
ratesetting process.
    For details of the claims accounting process used in this CY 2024 
OPPS/ASC proposed rule, we refer readers to the claims accounting 
narrative under supporting documentation for this proposed rule on the 
CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
a. Proposed Calculation of Single Procedure APC Criteria-Based Costs
(1) Blood and Blood Products
    Since the implementation of the OPPS in August 2000, we have made 
separate payments for blood and blood products through APCs rather than 
packaging payment for them into payments for the procedures with which 
they are administered. Hospital payments for the costs of blood and 
blood products, as well as for the costs of collecting, processing, and 
storing blood and blood products, are made through the OPPS payments 
for specific blood product APCs.
    We propose to continue to establish payment rates for blood and 
blood products using our blood-specific CCR methodology, which utilizes 
actual or simulated CCRs from the most recently available hospital cost 
reports to convert hospital charges for blood and blood products to 
costs. This methodology has been our standard ratesetting methodology 
for blood and blood products since CY 2005. It was developed in 
response to data analysis indicating that there was a significant 
difference in CCRs for those hospitals with and without blood-specific 
cost centers and past public comments indicating that the former OPPS 
policy of defaulting to the overall hospital CCR for hospitals not 
reporting a blood-specific cost center often resulted in an 
underestimation of the true hospital costs for blood and blood 
products. To address the differences in CCRs and to better reflect 
hospitals' costs, our methodology simulates 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 and 
applies this mean ratio to the overall CCRs of hospitals not reporting 
costs and charges for blood cost centers on their cost reports. We 
propose to calculate the costs upon which the proposed 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.
    Because this proposed hospital-specific, simulated, blood-specific 
CCR methodology takes into account the unique charging and cost 
accounting structure of each hospital, it 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. This 
methodology also yields more accurate estimated costs for these 
products and results in payment rates for blood and blood products that 
appropriately reflect the relative estimated costs of these products 
for hospitals without blood cost centers and for these blood products 
in general.
    We refer readers to Addendum B to this proposed rule (which is 
available via the internet on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices) for the proposed CY 2024 
payment rates for blood and blood products (which are generally 
identified with status indicator ``R'').
    For a more detailed discussion of payments for blood and blood 
products through APCs, we refer readers to:
     the CY 2005 OPPS proposed rule (69 FR 50524 through 50525) 
for a more comprehensive discussion of the blood-specific CCR 
methodology;
     the CY 2008 OPPS/ASC final rule with comment period (72 FR 
66807 through 66810) for a detailed history of the OPPS payment for 
blood and blood products; and

[[Page 49563]]

     the CY 2015 OPPS/ASC final rule with comment period (79 FR 
66795 through 66796) for additional discussion of our policy not to 
make separate payments for blood and blood products when they appear on 
the same claims as services assigned to a C-APC. We propose to continue 
to establish payment rates for blood and blood products using our 
blood-specific CCR methodology.
(2) Brachytherapy Sources
    Section 1833(t)(2)(H) of the Act mandates the creation of 
additional groups of covered OPD services that classify devices of 
brachytherapy--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 2024, except where otherwise indicated, we propose to use 
the costs derived from CY 2022 claims data to set the proposed CY 2024 
payment rates for brachytherapy sources because CY 2022 is the year of 
data we propose to use to set the proposed payment rates for most other 
items and services that would be paid under the CY 2024 OPPS. We 
proposed this methodology for CY 2024 and subsequent years. With the 
exception of the proposed payment rate for brachytherapy source C2645 
(Brachytherapy planar source, palladium-103, per square millimeter) and 
the proposed payment rates for low-volume brachytherapy APCs discussed 
in section III.D of this proposed rule, we propose to base the payment 
rates for brachytherapy sources on the geometric mean unit costs for 
each source, consistent with the methodology that we propose for other 
items and services paid under the OPPS, as discussed in section II.A.2 
of this proposed rule. We also propose for CY 2024 and subsequent 
years, 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). For CY 2024 and subsequent 
years, we propose to pay for the stranded and nonstranded not otherwise 
specified (NOS) codes, HCPCS codes C2698 (Brachytherapy source, 
stranded, not otherwise specified, per source) and C2699 (Brachytherapy 
source, non-stranded, not otherwise specified, per source), at a rate 
equal to the lowest stranded or nonstranded prospective payment rate 
for such sources, respectively, on a per-source basis (as opposed to, 
for example, per mCi), which is based on the policy we established in 
the CY 2008 OPPS/ASC final rule with comment period (72 FR 66785). For 
CY 2024 and subsequent years, we also propose to continue the policy we 
first implemented in the CY 2010 OPPS/ASC final rule with comment 
period (74 FR 60537) regarding payment for new brachytherapy sources 
for which we have no claims data, based on the same reasons we 
discussed in the CY 2008 OPPS/ASC final rule with comment period (72 FR 
66786; which was delayed until January 1, 2010, by section 142 of Pub. 
L. 110-275). Specifically, this policy is intended to enable us to 
assign new HCPCS codes for new brachytherapy sources to their own APCs, 
with prospective payment rates set based on our consideration of 
external data and other relevant information regarding the expected 
costs of the sources to hospitals. The proposed CY 2024 payment rates 
for brachytherapy sources are included on Addendum B to this proposed 
rule (which is available via the internet on the CMS website) and 
identified with status indicator ``U.''
    For CY 2018, we assigned status indicator ``U'' (Brachytherapy 
Sources, Paid under OPPS; separate APC payment) to HCPCS code C2645 
(Brachytherapy planar source, palladium-103, per square millimeter) in 
the absence of claims data and established a payment rate using 
external data (invoice price) at $4.69 per mm\2\ for the brachytherapy 
source's APC--APC 2648 (Brachytx planar, p-103). For CY 2019, in the 
absence of sufficient claims data, we continued to establish a payment 
rate for C2645 at $4.69 per mm\2\ for APC 2648 (Brachytx planar, p-
103). Our CY 2018 claims data available for the CY 2020 OPPS/ASC final 
rule with comment period included two claims with a geometric mean cost 
for HCPCS code C2645 of $1.02 per mm\2\. In response to comments from 
interested parties, we agreed that, given the limited claims data 
available and a new outpatient indication for C2645, a payment rate for 
HCPCS code C2645 based on the geometric mean cost of $1.02 per mm\2\ 
may not adequately reflect the cost of HCPCS code C2645. In the CY 2020 
OPPS/ASC final rule with comment period, we finalized our policy to use 
our equitable adjustment authority under section 1833(t)(2)(E) of the 
Act, which states that the Secretary shall establish, in a budget 
neutral manner, other adjustments as determined to be necessary to 
ensure equitable payments, to maintain the CY 2019 payment rate of 
$4.69 per mm\2\ for HCPCS code C2645 for CY 2020. Similarly, in the 
absence of sufficient claims data to establish an APC payment rate, in 
the CY 2021, CY 2022, and CY 2023 OPPS/ASC final rules with comment 
period (85 FR 85879 through 85880, 86 FR 63469, and 87 FR 71760 through 
71761), we finalized our policy to use our equitable adjustment 
authority under section 1833(t)(2)(E) of the Act to maintain the CY 
2019 payment rate of $4.69 per mm\2\ for HCPCS code C2645 for CY 2021, 
for CY 2022, and for CY 2023.
    After reviewing CY 2022 claims data available for this proposed 
rule, we observed three claims that reported HCPCS code C2645. Each 
claim reported one unit of HCPCS code C2645 and the geometric mean unit 
cost from these three claims yielded $168.67. We are unable to use 
these claims for ratesetting purposes given the reporting of only one 
unit per claim and the high geometric mean cost. Therefore, we propose 
to use our equitable adjustment authority under section 1833(t)(2)(E) 
of the Act to maintain the CY 2023 payment rate of $4.69 per mm\2\ for 
HCPCS code C2645, which is assigned to APC 2648 (Brachytx planar, p-
103), for CY 2024.

[[Page 49564]]

    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. Brachytherapy APCs that have fewer than 
100 single claims used for ratesetting purposes are designated as Low 
Volume APCs unless an alternative payment rate is applied, such as the 
use of our equitable adjustment authority under Section 1833(t)(2)(E) 
of the Act in the case of APC 2648 (Brachytx planar, p-103), for which 
HCPCS code C2645 (Brachytherapy planar source, palladium-103, per 
square millimeter) is the only code assigned as discussed previously in 
this section.
    For CY 2024, we propose to designate five 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 propose 
to designate as Low Volume APCs, see section III.D of this proposed 
rule.
    We invite interested parties to submit recommendations for new 
codes to describe new brachytherapy sources. Such recommendations 
should be directed via email to [email protected] or by mail to 
the Division of Outpatient Care, Mail Stop C4-01-26, Centers for 
Medicare and Medicaid Services, 7500 Security Boulevard, Baltimore, MD 
21244. We will continue to add new brachytherapy source codes and 
descriptors to our systems for payment on a quarterly basis.
b. Comprehensive APCs (C-APCs) for CY 2024
(1) Background
    In the CY 2014 OPPS/ASC final rule with comment period (78 FR 74861 
through 74910), we finalized a comprehensive payment policy that 
packages payment for adjunctive and secondary items, services, and 
procedures into the most costly primary procedure under the OPPS at the 
claim level. The policy was finalized in CY 2014 but the effective date 
was delayed until January 1, 2015, to allow additional time for further 
analysis, opportunity for public comment, and systems preparation. The 
comprehensive APC (C-APC) policy was implemented effective January 1, 
2015, with modifications and clarifications in response to public 
comments received regarding specific provisions of the C-APC policy (79 
FR 66798 through 66810).
    A C-APC is defined as a classification for the provision of a 
primary service and all adjunctive services provided to support the 
delivery of the primary service. We established C-APCs as a category 
broadly for OPPS payment and implemented 25 C-APCs beginning in CY 2015 
(79 FR 66809 through 66810). We have gradually added new C-APCs since 
the policy was implemented beginning in CY 2015, with the number of C-
APCs now totaling 70 (80 FR 70332; 81 FR 79584 through 79585; 83 FR 
58844 through 58846; 84 FR 61158 through 61166; 85 FR 85885; 86 FR 
63474; and 87 FR 71769).
    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 proposed rule 
(which is available via the internet on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices). If 
a service does not appear on this list of excluded services, payment 
for it will be packaged into the payment for the primary C-APC service 
when it appears on an outpatient claim with a primary C-APC service.
    The C-APC policy payment methodology set forth in the CY 2014 OPPS/
ASC final rule with comment period and modified and implemented 
beginning in CY 2015 is summarized as follows (78 FR 74887 and 79 FR 
66800):
    Basic Methodology. As stated in the CY 2015 OPPS/ASC final rule 
with comment period, we define the C-APC payment policy as including 
all covered OPD services on a hospital outpatient claim reporting a 
primary service that is assigned to status indicator ``J1,'' \1\ 
excluding services that are not covered OPD services or that cannot by 
statute be paid for under the OPPS. Services and procedures described 
by HCPCS codes assigned to status indicator ``J1'' are assigned to C-
APCs based on our usual APC assignment methodology by evaluating the 
geometric mean costs of the primary service claims to establish 
resource similarity and the clinical characteristics of each procedure 
to establish clinical similarity within each APC.
---------------------------------------------------------------------------

    \1\ Status indicator ``J1'' denotes Hospital Part B Services 
Paid Through a Comprehensive APC. Further information can be found 
in CY 2024 Addendum D1.
---------------------------------------------------------------------------

    In the CY 2016 OPPS/ASC final rule with comment period, we expanded 
the C-APC payment methodology to qualifying extended assessment and 
management encounters through the ``Comprehensive Observation 
Services'' C-APC (C-APC 8011). Services within this APC are assigned 
status indicator ``J2.'' \2\ Specifically, we make a payment through C-
APC 8011 for a claim that:
---------------------------------------------------------------------------

    \2\ Status indicator ``J2'' denotes Hospital Part B Services 
That May Be Paid Through a Comprehensive APC. Further information 
can be found in CY 2024 Addendum D1.
---------------------------------------------------------------------------

     Does not contain a procedure described by a HCPCS code to 
which we have assigned status indicator ``T'';
     Contains 8 or more units of services described by HCPCS 
code G0378

[[Page 49565]]

(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 
outpatient department services that are reported with therapy codes and 
provided with a comprehensive service is included in the payment for 
the packaged complete comprehensive service. We note that these 
services, even though they are reported with therapy codes, are 
hospital outpatient department services and not therapy services. We 
refer readers to the July 2016 OPPS Change Request 9658 (Transmittal 
3523) for further instructions on reporting these services in the 
context of a C-APC service.
    Items included in the packaged payment provided in conjunction with 
the primary service also include all drugs, biologicals, and 
radiopharmaceuticals, regardless of cost, except those drugs with pass-
through payment status and SADs, unless they function as packaged 
supplies (78 FR 74868 through 74869, and 74909, and 79 FR 66800). We 
refer readers to Section 50.2M, Chapter 15, of the Medicare Benefit 
Policy Manual for a description of our policy on SADs treated as 
hospital outpatient supplies, including lists of SADs that function as 
supplies and those that do not function as supplies.\3\
---------------------------------------------------------------------------

    \3\ https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/bp102c15.pdf.
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    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

[[Page 49566]]

to status indicator ``J1'' to the most appropriate C-APCs based on both 
single and multiple procedure claims reporting these services and 
clinical and resource homogeneity.
    Complexity Adjustments. We use complexity adjustments to provide 
increased payment for certain comprehensive services. We apply a 
complexity adjustment by promoting qualifying paired ``J1'' service 
code combinations or paired code combinations of ``J1'' services and 
certain add-on codes (as described further below) from the originating 
C-APC (the C-APC to which the designated primary service is first 
assigned) to the next higher paying C-APC in the same clinical family 
of C-APCs. We apply this type of complexity adjustment when the paired 
code combination represents a complex, costly form or version of the 
primary service according to the following criteria:
     Frequency of 25 or more claims reporting the code 
combination (frequency threshold); and
     Violation of the 2 times rule, as stated in section 
1833(t)(2) of the Act and section III.B.2 of this proposed rule, in the 
originating C-APC (cost threshold).
    These criteria identify paired code combinations that occur 
commonly and exhibit materially greater resource requirements than the 
primary service. The CY 2017 OPPS/ASC final rule with comment period 
(81 FR 79582) included a revision to the complexity adjustment 
eligibility criteria. Specifically, we finalized a policy to 
discontinue the requirement that a code combination (that qualifies for 
a complexity adjustment by satisfying the frequency and cost criteria 
thresholds described above) also not create a 2 times rule violation in 
the higher level or receiving APC.
    After designating a single primary service for a claim, we evaluate 
that service in combination with each of the other procedure codes 
reported on the claim assigned to status indicator ``J1'' (or certain 
add-on codes) to determine if there are paired code combinations that 
meet the complexity adjustment criteria. For a new HCPCS code, we 
determine initial C-APC assignment and qualification for a complexity 
adjustment using the best available information, crosswalking the new 
HCPCS code to a predecessor code(s) when appropriate.
    Once we have determined that a particular code combination of 
``J1'' services (or combinations of ``J1'' services reported in 
conjunction with certain add-on codes) represents a complex version of 
the primary service because it is sufficiently costly, frequent, and a 
subset of the primary comprehensive service overall according to the 
criteria described above, we promote the claim including the complex 
version of the primary service as described by the code combination to 
the next higher cost C-APC within the clinical family, unless the 
primary service is already assigned to the highest cost APC within the 
C-APC clinical family or assigned to the only C-APC in a clinical 
family. We do not create new APCs with a comprehensive geometric mean 
cost that is higher than the highest geometric mean cost (or only) C-
APC in a clinical family just to accommodate potential complexity 
adjustments. Therefore, the highest payment for any claim including a 
code combination for services assigned to a C-APC would be the highest 
paying C-APC in the clinical family (79 FR 66802).
    We package payment for all add-on codes into the payment for the C-
APC. However, certain primary service add-on combinations may qualify 
for a complexity adjustment. As noted in the CY 2016 OPPS/ASC final 
rule with comment period (80 FR 70331), all add-on codes that can be 
appropriately reported in combination with a base code that describes a 
primary ``J1'' service are evaluated for a complexity adjustment.
    To determine which combinations of primary service codes reported 
in conjunction with an add-on code may qualify for a complexity 
adjustment for CY 2024, we apply the frequency and cost criteria 
thresholds discussed above, testing claims reporting one unit of a 
single primary service assigned to status indicator ``J1'' and any 
number of units of a single add-on code for the primary ``J1'' service. 
If the frequency and cost criteria thresholds for a complexity 
adjustment are met and reassignment to the next higher cost APC in the 
clinical family is appropriate (based on meeting the criteria outlined 
above), we make a complexity adjustment for the code combination; that 
is, we reassign the primary service code reported in conjunction with 
the add-on code to the next higher cost C-APC within the same clinical 
family of C-APCs. As previously stated, we package payment for add-on 
codes into the C-APC payment rate. If any add-on code reported in 
conjunction with the ``J1'' primary service code does not qualify for a 
complexity adjustment, payment for the add-on service continues to be 
packaged into the payment for the primary service and is not reassigned 
to the next higher cost C-APC. We list the complexity adjustments for 
``J1'' and add-on code combinations for CY 2024, along with all of the 
other proposed complexity adjustments, in Addendum J to this proposed 
rule (which is available via the internet on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices).
    Addendum J to this proposed rule includes the cost statistics for 
each code combination that would qualify for a complexity adjustment 
(including primary code and add-on code combinations). Addendum J to 
this proposed rule also contains summary cost statistics for each of 
the paired code combinations that describe a complex code combination 
that would qualify for a complexity adjustment and be reassigned to the 
next higher cost C-APC within the clinical family. The combined 
statistics for all proposed reassigned complex code combinations are 
represented by an alphanumeric code with the first four digits of the 
designated primary service followed by a letter. For example, the 
proposed geometric mean cost listed in Addendum J for the code 
combination described by complexity adjustment assignment 3320R, which 
is assigned to C-APC 5224 (Level 4 Pacemaker and Similar Procedures), 
includes all paired code combinations that will be reassigned to C-APC 
5224 when CPT code 33208 is the primary code. Providing the information 
contained in Addendum J to this proposed rule allows 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.
(2) Exclusion of Procedures Assigned to New Technology APCs From the C-
APC Policy
    Services that are assigned to New Technology APCs are typically new 
procedures that do not have sufficient claims history to establish an 
accurate payment for them. Beginning in CY 2002, we retain services 
within New Technology APC groups until we gather sufficient claims data 
to enable us to assign the service to an appropriate clinical APC. This 
policy allows us to move a service from a New Technology APC in less 
than 2 years if sufficient data are available. It also allows us to 
retain a service in a New Technology APC for more than 2 years if 
sufficient data upon which to base a decision for reassignment have not 
been collected (82 FR 59277).

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    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).
(3) Exclusion of Drugs and Biologicals Described by HCPCS Code C9399 
(Unclassified Drugs or Biologicals) From the C-APC Policy
    Section 1833(t)(15) of the Act, as added by section 621(a)(1) of 
the Medicare Prescription Drug, Improvement, and Modernization Act of 
2003 (Pub. L. 108-173), provides for payment under the OPPS for new 
drugs and biologicals until HCPCS codes are assigned. Under this 
provision, we are required to make payment for a covered outpatient 
drug or biological that is furnished as part of covered outpatient 
department services but for which a HCPCS code has not yet been 
assigned in an amount equal to 95 percent of average wholesale price 
(AWP) for the drug or biological.
    In the CY 2005 OPPS/ASC final rule with comment period (69 FR 
65805), we implemented section 1833(t)(15) of the Act by instructing 
hospitals to bill for a drug or biological that is newly approved by 
the FDA and that does not yet have a HCPCS code by reporting the 
National Drug Code (NDC) for the product along with the newly created 
HCPCS code C9399 (Unclassified drugs or biologicals). We explained that 
when HCPCS code C9399 appears on a claim, the Outpatient Code Editor 
(OCE) suspends the claim for manual pricing by the Medicare 
Administrative Contractor (MAC). The MAC prices the claim at 95 percent 
of the drug or biological's AWP, using Red Book or an equivalent 
recognized compendium, and processes the claim for payment. We 
emphasized that this approach enables hospitals to bill and receive 
payment for a new drug or biological concurrent with its approval by 
the FDA. The hospital does not have to wait for the next quarterly 
release or for approval of a product specific HCPCS code to receive 
payment for a newly approved drug or biological or to resubmit claims 
for adjustment. We instructed that hospitals would discontinue billing 
HCPCS code C9399 and the NDC upon implementation of a product specific 
HCPCS code, status indicator, and appropriate payment amount with the 
next quarterly update. We also note that HCPCS code C9399 is paid in a 
similar manner in the ASC setting, as 42 CFR 416.171(b) outlines that 
certain drugs and biologicals for which separate payment is allowed 
under the OPPS are considered covered ancillary services for which the 
OPPS payment rate, which is 95 percent of AWP for HCPCS code C9399, 
applies. Since the implementation of the C-APC policy in 2015, payment 
for drugs and biologicals described by HCPCS code C9399 has been 
included in the C-APC payment when these products appear on a claim 
with a primary C-APC service. Packaging payment for these drugs and 
biologicals that appear on a hospital outpatient claim with a primary 
C-APC service is consistent with our C-APC packaging policy under which 
we make payment for all items and services, including all non-pass-
through drugs, reported on the hospital outpatient claim as being 
integral, ancillary, supportive, dependent, and adjunctive to the 
primary service and representing components of a complete comprehensive 
service, with certain limited exceptions (78 FR 74869). It has been our 
position that the total payment for the C-APC with which payment for a 
drug or biological described by HCPCS code C9399 is packaged includes 
payment for the drug or biological at 95 percent of its AWP.
    However, we have determined that in certain instances, drugs and 
biologicals described by HCPCS code C9399 are not being paid at 95 
percent of their AWPs when payment for them is packaged with payment 
for a primary C-APC service. In order to ensure payment for new drugs, 
biologicals, and radiopharmaceuticals described by HCPCS code C9399 at 
95 percent of their AWP, for CY 2023 and subsequent years, we finalized 
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 Addendum J for the CY 2024 
comprehensive APC payment policy exclusions.
    In the CY 2023 OPPS/ASC final rule with comment period, we 
finalized the proposal in section XI ``CY 2023 OPPS Payment Status and 
Comment Indicators'' to add a new definition to status indicator ``A'' 
to include unclassified drugs and biologicals that are reportable with 
HCPCS code C9399 (87 FR 72051). The definition, found in Addendum D1, 
would ensure the MAC prices claims for drugs, biologicals or 
radiopharmaceuticals billed with HCPCS code C9399 at 95 percent of the 
drug or biological's AWP and pays separately for the drug, biological, 
or radiopharmaceutical under the OPPS when it appears on the same claim 
as a primary C-APC service.
(4) Additional C-APCs for CY 2024
    For CY 2024 and subsequent years, we propose to continue to apply 
the C-APC payment policy methodology. We refer readers to the CY 2017 
OPPS/ASC final rule with comment period (81 FR 79583) for a discussion 
of the C-APC payment policy methodology and revisions. Each year, in 
accordance with section 1833(t)(9)(A) of the Act, we review and revise 
the services within each APC group and the APC assignments under the 
OPPS. As a result of our annual review of the services and the APC 
assignments under the OPPS, we are not proposing to convert any 
standard APCs to C-APCs in CY 2024, but we are creating two new APCs 
that will both be C-APCs. Thus, we propose that the number of C-APCs 
for CY 2024 would be 72 C-APCs.
    For this proposed rule, we propose to split the Level 2 Intraocular 
APC (APC 5492) into two and assign the higher cost procedures 
previously within this

[[Page 49568]]

APC to a new Level 3 Intraocular APC (APC 5493). The previous Level 3, 
Level 4, and Level 5 Intraocular APCs (APCs 5493, 5494, and 5495) will 
be renamed the Level 4, Level 5, and Level 6 Intraocular APC (APCs 
5494, 5495, and 5496), respectively. We refer readers to section III.E 
of this proposed rule for more information regarding this proposal.
    We also propose to add a new Level 2 Abdominal/Peritoneal/Biliary 
and Related Procedures APC (APC 5342) to improve clinical and resource 
homogeneity in the Level 1 Abdominal/Peritoneal/Biliary and Related 
Procedures APC (APC 5341).
    Table 1 lists the proposed C-APCs for CY 2024. All C-APCs are 
displayed in Addendum J to this proposed rule (which is available via 
the internet on the CMS website). Addendum J to this proposed rule also 
contains all the data related to the C-APC payment policy methodology, 
including the list of complexity adjustments and other information for 
CY 2024.
BILLING CODE 4120-01-P

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BILLING CODE 4120-01-C
c. Calculation of Composite APC Criteria-Based Costs
    As discussed in the CY 2008 OPPS/ASC final rule with comment period 
(72 FR 66613), we believe it is important that the OPPS enhance 
incentives for hospitals to provide necessary, high quality care as 
efficiently as possible. For CY 2008, we developed composite APCs to 
provide a single payment for groups of services that are typically 
performed together during a single clinical encounter and that result 
in the provision of a complete service. Combining payment for multiple, 
independent services into a single OPPS payment in this way enables 
hospitals to manage their resources with maximum flexibility by 
monitoring and adjusting the volume and efficiency of services 
themselves. An additional advantage to the composite APC model is that 
we can use data from correctly coded multiple procedure claims to 
calculate payment rates for the specified combinations of services, 
rather than relying upon single procedure claims which may be low in 
volume and/or incorrectly coded. Under the OPPS, we currently have 
composite policies for mental health services and multiple imaging 
services. We refer readers to the CY 2008 OPPS/ASC final rule with 
comment period (72 FR 66611 through 66614 and 66650 through 66652) for 
a full discussion of the development of the composite APC methodology, 
and the CY 2012 OPPS/ASC final rule with comment period (76 FR 74163) 
and the CY 2018 OPPS/ASC final rule with comment period (82 FR 59241 
through 59242 and 59246 through 52950) for more recent background.
(1) Mental Health Services Composite APC
    We propose to continue our longstanding policy of limiting the 
aggregate payment for specified less resource-intensive mental health 
services furnished on the same date to the payment for a day of partial 
hospitalization services provided by a hospital, which we consider to 
be the most resource-intensive of all outpatient mental health 
services. We refer readers to the April 7, 2000 OPPS final rule with 
comment period (65 FR 18452 through 18455) for the initial discussion 
of this longstanding policy and the CY 2012 OPPS/ASC final rule with 
comment period (76 FR 74168) for more recent background.
    In the CY 2018 OPPS/ASC proposed rule and final rule with comment 
period (82 FR 33580 through 33581 and 59246 through 59247, 
respectively), we proposed and finalized the policy for CY 2018 and 
subsequent years that, when the aggregate payment for specified mental 
health services provided by one hospital to a single beneficiary on a 
single date of service, based on the payment rates associated with the 
APCs for the individual services, exceeds the maximum per diem payment 
rate for partial hospitalization services provided by a hospital, those 
specified mental health services will be paid through composite APC 
8010 (Mental Health Services Composite). In addition, we set the 
payment rate for composite APC 8010 for CY 2018 at the same payment 
rate that will be paid for APC 5863, which is the maximum partial 
hospitalization per diem payment rate for a hospital, and finalized a 
policy that the hospital will continue to be paid the payment rate for 
composite APC 8010. Under this policy, the 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.
    We propose that when the aggregate payment for specified mental 
health services provided by one hospital to a single beneficiary on a 
single date of service, based on the payment rates associated with the 
APCs for the individual services, exceeds the per diem payment rate for 
3 partial hospitalization services provided in a day by a hospital, 
those specified mental health services would be paid

[[Page 49572]]

through composite APC 8010 for CY 2024. In addition, we propose to set 
the payment rate for composite APC 8010 at the same payment rate that 
we propose for APC 5863, which is a partial hospitalization per diem 
payment rate for 3 partial hospitalization services furnished in a day 
by a hospital, and that the hospital continue to be paid the proposed 
payment rate for composite APC 8010. While APC 5863 is no longer the 
maximum partial hospitalization per diem payment rate for a hospital, 
due to proposed APC 5864, which is 4 or more hospital-based PHP 
services per day, discussed in section VIII.B of this proposed rule, we 
believe it is still appropriate to apply the APC 5863 per diem payment 
amount as the upper limit on payment per day for individual OPPS mental 
health services. This is because the daily mental health cap would not 
be expected to reach a level of intensity beyond 3 services per day, as 
described by APC 5863. The PHP is meant to be the most intensive mental 
health services program, requiring inpatient care if PHP is not 
received. We would not anticipate more than three services per patient 
on a given day, as patients needing additional services in one day 
would potentially require an inpatient admission., as described by APC 
5863. Thus, setting the mental health cap at APC 5863, rather than the 
4 service per day APC 5864, is more consistent with our longstanding 
policy, which has been for the 3 service per day APC. We note that the 
proposed CY 2024 payment amount for APC 5863 would be comparable to the 
CY 2023 payment amount for APC 5863, which is the PHP APC used to set 
the daily mental health cap for CY 2023.
    However, as we have historically set the daily mental health cap 
for composite APC 8010 at the maximum partial hospitalization per diem 
payment rate for a hospital, we are also soliciting comment on whether 
the next higher level APC, proposed APC 5864, which is for four 
hospital-based PHP services per day, would be appropriate to use as the 
daily mental health cap.
(2) Multiple Imaging Composite APCs (APCs 8004, 8005, 8006, 8007, and 
8008)
    Effective January 1, 2009, we provide a single payment each time a 
hospital submits a claim for more than one imaging procedure within an 
imaging family on the same date of service, to reflect and promote the 
efficiencies hospitals can achieve when performing multiple imaging 
procedures during a single session (73 FR 41448 through 41450). We 
utilize three imaging families based on imaging modality for purposes 
of this methodology: (1) ultrasound; (2) computed tomography (CT) and 
computed tomographic angiography (CTA); and (3) magnetic resonance 
imaging (MRI) and magnetic resonance angiography (MRA). The HCPCS codes 
subject to the multiple imaging composite policy and their respective 
families are listed in Table 2 below.
    While there are three imaging families, there are five multiple 
imaging composite APCs due to the statutory requirement under section 
1833(t)(2)(G) of the Act that we differentiate payment for OPPS imaging 
services provided with and without contrast. While the ultrasound 
procedures included under the policy do not involve contrast, both CT/
CTA and MRI/MRA scans can be provided either with or without contrast. 
The five multiple imaging composite APCs established in CY 2009 are:
     APC 8004 (Ultrasound Composite);
     APC 8005 (CT and CTA without Contrast Composite);
     APC 8006 (CT and CTA with Contrast Composite);
     APC 8007 (MRI and MRA without Contrast Composite); and
     APC 8008 (MRI and MRA with Contrast Composite).
    We define the single imaging session for the ``with contrast'' 
composite APCs as having at least one or more imaging procedures from 
the same family performed with contrast on the same date of service. 
For example, if the hospital performs an MRI without contrast during 
the same session as at least one other MRI with contrast, the hospital 
will receive payment based on the payment rate for APC 8008, the ``with 
contrast'' composite APC.
    We make a single payment for those imaging procedures that qualify 
for payment based on the composite APC payment rate, which includes any 
packaged services furnished on the same date of service. The standard 
(noncomposite) APC assignments continue to apply for single imaging 
procedures and multiple imaging procedures performed across families. 
For a full discussion of the development of the multiple imaging 
composite APC methodology, we refer readers to the CY 2009 OPPS/ASC 
final rule with comment period (73 FR 68559 through 68569).
    For CY 2024, we propose to continue to pay for all multiple imaging 
procedures within an imaging family performed on the same date of 
service using the multiple imaging composite APC payment methodology. 
We continue to believe that this policy would reflect and promote the 
efficiencies hospitals can achieve when performing multiple imaging 
procedures during a single session.
    For CY 2024, except where otherwise indicated, we propose to use 
the costs derived from CY 2022 claims data to set the proposed CY 2024 
payment rates. Therefore, for CY 2024, 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 2022 
claims available for this proposed rule that qualify for composite 
payment under the current policy (that is, those claims reporting more 
than one procedure within the same family on a single date of service). 
To calculate the proposed geometric mean costs, we 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 
proposed rule (which is available via the internet on the CMS website) 
and are discussed in more detail in section II.A.1.b of this proposed 
rule.
    For CY 2024, 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 2024 geometric mean costs for the 
multiple imaging composite APCs. Table 2 of this proposed rule lists 
the proposed HCPCS codes that would be subject to the multiple imaging 
composite APC policy and their respective families and approximate 
composite APC proposed geometric mean costs for CY 2024.

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3. Proposed Changes to Packaged Items and Services
a. Background and Rationale for Packaging in the OPPS
    Like other prospective payment systems, the OPPS relies on the 
concept of averaging to establish a payment rate for services. The 
payment may be more or less than the estimated cost of providing a 
specific service or a bundle of specific services for a particular 
beneficiary. The OPPS packages payments for multiple interrelated items 
and services into a single payment to create incentives for hospitals 
to furnish services most efficiently and to manage their resources with 
maximum flexibility. Our packaging policies support our strategic goal 
of using larger payment bundles in the OPPS to maximize hospitals' 
incentives to provide care in the most efficient manner. For example, 
where there are a variety of devices, drugs, items, and supplies that 
could be used to furnish a service, some of which are more costly than 
others, packaging encourages hospitals to use the most cost-efficient 
item that meets the patient's needs, rather than to routinely use a 
more expensive item, which may occur if separate payment is provided 
for the item.
    Packaging also encourages hospitals to effectively negotiate with 
manufacturers and suppliers to reduce the purchase price of items and 
services or to explore alternative group purchasing arrangements, 
thereby encouraging the most economical health care delivery. 
Similarly, packaging encourages hospitals to establish protocols that 
ensure that necessary services are furnished, while scrutinizing the 
services ordered by practitioners to maximize the efficient use of 
hospital resources. Packaging payments into larger payment bundles 
promotes the predictability and accuracy of payment for services over 
time. Finally, packaging may reduce the importance of refining service-
specific payment because packaged payments include costs associated 
with higher cost cases requiring many ancillary items and services and 
lower cost cases requiring fewer ancillary items and services. Because 
packaging encourages efficiency and is an essential component of a 
prospective payment system, packaging payments for items and services 
that are typically integral, ancillary, supportive, dependent, or 
adjunctive to a primary service has been a fundamental part of the OPPS 
since its implementation in August 2000. As we continue to develop 
larger payment groups that more broadly reflect services provided in an 
encounter or episode of care, we have expanded the OPPS packaging 
policies. Most, but not necessarily all, categories of items and 
services currently packaged in the OPPS are listed in 42 CFR 419.2(b). 
Our overarching goal is to make payments for all services under the 
OPPS more consistent with those of a prospective payment system and 
less like those of a per-service fee schedule, which pays separately 
for each coded item. As a part of this effort, we have continued to 
examine the payment for items and services provided under the OPPS to 
determine which OPPS services can be packaged to further achieve the 
objective of advancing the OPPS toward a more prospective payment 
system.
b. Proposal and Comment Solicitation on Packaged Items and Services
    For CY 2024, 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 2024, we do not propose any changes to the overall packaging 
policy previously discussed. We propose to continue to conditionally 
package the costs of selected newly identified ancillary services into 
payment for a primary service where we believe that the packaged item 
or service is integral, ancillary, supportive, dependent, or adjunctive 
to the provision of care that was reported by the primary service HCPCS 
code.
    While we do not propose any changes to the overall packaging policy 
above, we solicit comments on potential modifications to our packaging 
policy as described in the following sections.
c. Comment Solicitation on Access to Non-Opioid Treatments for Pain 
Relief
    The Consolidated Appropriations Act (CAA), 2023 (Pub. L. 117-328), 
was signed into law on December 29, 2022. Section 4135(a) and (b) of 
the CAA, 2023, titled Access to Non-Opioid Treatments for Pain Relief, 
amended sections 1833(t)(16) and 1833(i) of the Social Security Act, 
respectively, to provide for temporary additional payments for non-
opioid treatments for pain relief (as that term is defined in section 
1833(t)(16)(G)(i) of the Act). In particular, section 1833(t)(16)(G) of 
the Act provides that with respect to a non-opioid treatment for pain 
relief furnished on or after January 1, 2025, and before January 1, 
2028, the Secretary shall not package payment for the non-opioid 
treatment for pain relief into payment for a covered OPD service (or 
group of services) and shall make an additional payment for the non-
opioid treatment for pain relief as specified in clause (ii) of that 
section. Clauses (ii) and (iii) of section 1833(t)(16)(G) of the Act 
provide for the amount of additional payment and set a limitation on 
that amount, respectively. Because the additional payments are required 
to begin on January 1, 2025, we will include our proposals to implement 
the CAA, 2023 section 4135 amendments in the CY 2025 OPPS/ASC proposed 
rule. We discuss section 4135 of CAA, 2023 at length in section XIII.F 
of this proposed rule, where we solicit comment on numerous aspects of 
this future policy. While we expect this policy to operate similarly in 
the ASC and HOPD settings, we welcome comment on whether there are any 
HOPD specific payment issues we should take into consideration as we 
plan to implement section 1833(t)(16)(G) of the Act for CY 2025.
d. Comment Solicitation on OPPS Packaging Policy for Diagnostic 
Radiopharmaceuticals
(i) Background on OPPS Packaging Policy for Diagnostic 
Radiopharmaceuticals
    Under the OPPS, we package several categories of nonpass-through 
drugs, biologicals, and radiopharmaceuticals, regardless of the cost of 
the products. As the products are packaged according to the policies in 
Sec.  419.2(b), we refer to these packaged drugs, biologicals, and 
radiopharmaceuticals as ``policy-packaged'' drugs, biologicals, and 
radiopharmaceuticals. In particular, under Sec.  419.2(b)(15), payment 
for drugs, biologicals, and radiopharmaceuticals that function as 
supplies when used in a diagnostic test or procedure is packaged with 
the payment for the related procedure or service. Packaging costs into 
a single aggregate payment for a service, encounter, or episode of care 
is a fundamental principle that distinguishes a prospective payment 
system from a fee schedule. In general, packaging the costs of 
supportive items and services into the payment for the primary 
procedure or service with which they are associated encourages

[[Page 49578]]

hospital efficiencies and enables hospitals to manage their resources 
with maximum flexibility.
    Diagnostic radiopharmaceuticals, which include contrast agents, 
stress agents, and other products, are one specific type of product 
that is policy packaged under the category described by Sec.  
419.2(b)(15). Since we implemented this policy in CY 2008, interested 
parties have raised concerns regarding policy packaging of diagnostic 
radiopharmaceuticals. In previous rulemaking (87 FR 71962 through 
71963), commenters recommended that CMS always pay separately for 
diagnostic radiopharmaceuticals paid under the OPPS, not just when the 
products have pass-through payment status. Many of these commenters 
mentioned that pass-through payment status helps the diffusion of new 
diagnostic radiopharmaceuticals into the market. However, commenters 
believe the packaged payment rate is often inadequate after pass-
through status expires, especially in cases where the diagnostic 
radiopharmaceutical is high-cost and has low utilization.
    CMS has previously heard from interested parties regarding 
alternative payment methodologies, such as subjecting diagnostic 
radiopharmaceuticals to the drug packaging threshold and creating 
separate APC payments for diagnostic radiopharmaceuticals with a per-
day cost greater than $500. Interested parties have also recommended 
that we analyze our nuclear medicine APC structure and consider 
establishing additional nuclear medicine APCs to more accurately 
reflect the costs of diagnostic radiopharmaceuticals. Historically, 
commenters opposed incorporating the cost of diagnostic 
radiopharmaceuticals into the associated nuclear medicine APC as the 
nuclear medicine APCs are sometimes paid at a lower rate than the 
payment rate for the diagnostic radiopharmaceutical itself when it has 
pass-through payment status (87 FR 71962 through 71963).
    Importantly, commenters historically have also been concerned that 
packaging payment for precision diagnostic radiopharmaceuticals in the 
outpatient setting creates barriers to beneficiary access for safety 
net hospitals serving a high proportion of Medicare beneficiaries and 
hospitals serving underserved communities (87 FR 71962 through 71963). 
Commenters specified that certain populations, such as those with 
Alzheimer's disease, depend on the use of certain high-cost diagnostic 
radiopharmaceuticals. Commenters discussed difficulties enrolling 
hospitals in clinical studies due to OPPS packaging policies. 
Commenters also suggested that CMS pay separately under the OPPS 
specifically for radiopharmaceuticals that are used for Alzheimer's 
disease. Additionally, commenters have recommended that CMS continue to 
apply radiolabeled product edits to the nuclear medicine procedures to 
ensure that all packaged costs are included on nuclear medicine claims 
in order to establish appropriate payment rates in the future. Many of 
these comments and our responses have been discussed in rulemaking 
since the policy to package diagnostic radiopharmaceuticals was 
adopted. We refer readers to the CY 2023 OPPS/ASC final rule with 
comment period (87 FR 71962 through 71963) for the most recent 
discussion of this subject.
    We continue to believe that diagnostic radiopharmaceuticals are an 
integral component of many nuclear medicine and imaging procedures and 
charges associated with them should be reported on hospital claims to 
the extent they are used. Accordingly, the payment for the 
radiopharmaceuticals should be reflected within the payment for the 
primary procedure. We note that ratesetting uses the geometric mean of 
reported procedure costs based on data submitted to CMS from all 
hospitals paid under the OPPS to set the payment rate for the service. 
The costs that are calculated by Medicare reflect the average costs of 
items and services that are packaged into a primary procedure and will 
not necessarily equal the sum of the cost of the primary procedure and 
the average sales price of the specific items and services used in the 
procedure in each case. Furthermore, the costs are based on the 
reported costs submitted to Medicare by the hospitals and not the list 
price established by the manufacturer. Claims data that include the 
radiopharmaceutical packaged with the associated procedure reflect the 
combined cost of the procedure and the radiopharmaceutical used in the 
procedure.
    As CMS has reiterated over the years, we believe these packaging 
policies are inherent principles of the OPPS and are essential to a 
prospective payment system. We are also committed to ensuring 
beneficiary access to diagnostic radiopharmaceuticals while also 
ensuring the availability of new and innovative diagnostic tools for 
Medicare beneficiaries. Therefore, we are seeking public comments on 
potential modifications to our packaging policy for diagnostic 
radiopharmaceuticals in order to ensure equitable payment and continued 
beneficiary access.
    Depending on the comments we receive in response to this comment 
solicitation, we may adopt as final alternative payment mechanisms for 
radiopharmaceuticals for CY 2024 in the CY 2024 OPPS/ASC final rule 
with comment period.
(ii) Comment Solicitation on Potential Issues Caused by Current Payment 
of Diagnostic Radiopharmaceuticals Under the OPPS
    We are soliciting comment on how the OPPS packaging policy for 
diagnostic radiopharmaceuticals has impacted beneficiary access, 
including whether there are specific patient populations or clinical 
disease states for whom this issue is especially critical. We seek 
information on specific cost-prohibitive diagnostic 
radiopharmaceuticals that commenters believe are superior to 
alternative diagnostic modalities. We are interested to learn the 
specific clinical scenarios that exist for which it is only clinically 
appropriate to use the more expensive diagnostic radiopharmaceutical, 
rather than a lower cost alternative, as well as what clinical 
scenarios exist in which the only diagnostic modality is a high-cost 
radiopharmaceutical. We are seeking information or evidence that these 
high-cost diagnostic radiopharmaceuticals have unique clinical value, 
and access has been negatively impacted by our packaging policy. We are 
also seeking information about whether commenters believe these high-
cost and low-utilization diagnostic radiopharmaceuticals are being 
appropriately utilized according to their clinical treatment algorithm, 
meaning the stepwise procedures generally accepted by the medical 
community for diagnosis, or clinical practice guidelines.
    We are also interested in learning more about whether there is a 
difference in outcomes for patients, or patient quality of care, based 
on the radiopharmaceutical used as well as whether there is a 
difference for hospitals, such as in terms of financial outcomes, based 
on the radiopharmaceutical that used.
(iii) Comment Solicitation on New Approaches to Payment of Diagnostic 
Radiopharmaceuticals Under the OPPS
    In addition, we are soliciting comment on the following potential 
approaches that would enhance beneficiary access, while also 
maintaining the principles of the outpatient prospective payment 
system. These approaches include: (1) paying separately for diagnostic 
radiopharmaceuticals with per-day costs

[[Page 49579]]

above the OPPS drug packaging threshold of $140; (2) establishing a 
specific per-day cost threshold that may be greater or less than the 
OPPS drug packaging threshold; (3) restructuring APCs, including by 
adding nuclear medicine APCs for services that utilize high-cost 
diagnostic radiopharmaceuticals; (4) creating specific payment policies 
for diagnostic radiopharmaceuticals used in clinical trials; and (5) 
adopting codes that incorporate the disease state being diagnosed or a 
diagnostic indication of a particular class of diagnostic 
radiopharmaceuticals.
    To expand upon the first listed option on which we solicit 
comments, we are specifically seeking comments about whether we should 
use our statutory authority for separately payable drugs, biologicals, 
and radiopharmaceuticals under 1833(t)(14)(A)(iii)(II) of the Act in 
order to pay separately for diagnostic radiopharmaceuticals and subject 
those diagnostic radiopharmaceuticals to the longstanding OPPS drug 
packaging threshold policy, proposed to be $140 for CY 2023. Or said 
another way, payment for diagnostic radiopharmaceuticals with per-day 
costs greater than $140 would not be packaged and would be paid 
separately based on available average sales price (ASP), wholesale 
acquisition cost (WAC), or average wholesale price (AWP) data with the 
applicable add-on. This would be similar to payment for therapeutic 
radiopharmaceuticals and other drugs and biologicals as discussed in 
section V.B. of this proposed rule. We believe this could be a 
reasonable first step as this threshold is well understood and known to 
commenters as therapeutic drugs, biologicals, and radiopharmaceuticals 
are currently paid separately if they have a calculated per-day cost 
above this threshold and are not policy-packaged. However, it is also 
our longstanding belief that diagnostic radiopharmaceuticals should 
have their payment packaged as they function as supplies during a 
diagnostic test or procedure and enable the provision of an independent 
service and are not themselves the primary therapeutic modality. We 
seek additional information from interested parties on this approach.
    Regarding the second listed option, we seek comment on whether to 
pay separately for a diagnostic radiopharmaceutical with a specific 
per-day cost threshold that may be greater or less than the OPPS drug 
packaging threshold. Specifically, we are interested to learn why 
interested parties believe a threshold-based policy is important as 
well as interested parties' rationale for creating a threshold that 
would be different from the OPPS drug packaging threshold.
    Regarding the third listed option, we have heard from some 
interested parties that they believe APC restructuring, including 
adding additional nuclear medicine APCs for services utilizing high-
cost diagnostic radiopharmaceuticals, would be appropriate. We seek 
comment as to how these interested parties specifically envision 
operationalizing this approach and what advantage this approach would 
have for beneficiaries, hospitals, and CMS over other options.
    For the fourth listed option, we recently became aware that some 
interested parties believe that CMS packaging policies could influence 
participation of beneficiaries and testing sites in clinical trials, 
particularly those studying Alzheimer's disease, and are interested to 
learn more about these concerns. While we believe there could be a 
multitude of reasons for difficulty in recruiting study sites and 
beneficiaries for clinical trials, including the COVID-19 PHE, we are 
requesting comment as to whether CMS should consider creating payment 
policies for diagnostic radiopharmaceuticals used in clinical trials. 
Specifically, we are interested to learn what commenters believe an 
appropriate payment mechanism would be for these diagnostic 
radiopharmaceuticals, whether there are certain disease states or 
categories of trials for which we should target our payment policies, 
ways in which this policy could help promote equitable recruitment and 
diverse participation, and the method by which CMS should determine 
which clinical trial diagnostic radiopharmaceuticals should be subject 
to this policy.
    Finally, for approach five, we are seeking comment on new codes 
that CMS could adopt that may incorporate the disease state being 
diagnosed or a diagnostic indication of a particular class of 
diagnostic radiopharmaceuticals. CMS could create indication-specific 
coding to reflect the imaging procedure and the target of the imaging 
procedure. For example, CMS could create a code to represent a PET scan 
that detects a specific protein. If multiple diagnostic 
radiopharmaceuticals are available to use during this PET scan to 
detect this specific protein, then their payment would be packaged into 
the payment for this newly created code and reflected in the payment 
for this code. Therefore, if there is a specific clinical indication 
for which only very costly diagnostic radiopharmaceuticals are 
available, our data would appropriately reflect their utilization. 
Alternatively, if there is a specific clinical indication in which a 
wide variety of diagnostic radiopharmaceuticals can be used, all with 
varying costs, then our data would reflect this and our payment rates 
would not incentivize a higher-cost diagnostic radiopharmaceutical when 
there is a lower-cost, but clinically similar, diagnostic 
radiopharmaceutical alternative. This coding approach could be coupled 
with the restructuring of the nuclear medicine APC family. We believe 
this approach of more granular coding could allow for more specific 
data to be reported and thus more targeted and appropriate payment 
rates to be developed. This approach would also help to maintain the 
principles of a prospective payment system by maintaining current 
packaging policies as payment for the diagnostic radiopharmaceutical 
would continue to be packaged into the payment for the procedure in 
which the diagnostic radiopharmaceutical is used.
    We also seek additional explanation from interested parties as to 
why they believe their suggested approach is the best policy approach 
to ensure beneficiary access to diagnostic radiopharmaceuticals and 
equitable payment for innovative and effective technologies. We welcome 
comment regarding ideas discussed in this section, discussed in prior 
rulemaking, or new ideas for payment for diagnostic 
radiopharmaceuticals in OPPS.
    Finally, we are interested in hearing from stakeholders how the 
discussed policy modifications might impact our overarching goal of 
utilizing packaging policies to better align OPPS policies with that of 
a prospective payment system rather than a fee schedule. We would also 
like to know if making any of the policy changes discussed previously 
could have negative consequences for beneficiaries, such as 
unintentionally influencing clinical practice decisions, increasing 
beneficiary cost-sharing obligations, or inadvertently encouraging the 
use of higher-cost diagnostic radiopharmaceuticals over lower cost, but 
equally effective, diagnostic options.
    We note that depending on the comments received, we may adopt as 
final one or more alternative payment mechanisms for 
radiopharmaceuticals for CY 2024.
4. Calculation of OPPS Scaled Payment Weights
    We established a policy in the CY 2013 OPPS/ASC final rule with 
comment period (77 FR 68283) of using geometric mean-based APC costs to

[[Page 49580]]

calculate relative payment weights under the OPPS. In the CY 2023 OPPS/
ASC final rule with comment period (87 FR 71778 through 71780), we 
applied this policy and calculated the relative payment weights for 
each APC for CY 2023 that were shown in Addenda A and B of the CY 2023 
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 2023 OPPS/ASC final rule with 
comment period (87 FR 71757 through 71777). For CY 2024, as we did for 
CY 2023, we propose to continue to apply the policy established in CY 
2013 and calculate relative payment weights for each APC for CY 2024 
using geometric mean-based APC costs.
    For CY 2012 and CY 2013, outpatient clinic visits were assigned to 
one of five levels of clinic visit APCs, with APC 0606 representing a 
mid-level clinic visit. In the CY 2014 OPPS/ASC final rule with comment 
period (78 FR 75036 through 75043), we finalized a policy that created 
alphanumeric HCPCS code G0463 (Hospital outpatient clinic visit for 
assessment and management of a patient), representing any and all 
clinic visits under the OPPS. HCPCS code G0463 was assigned to APC 0634 
(Hospital Clinic Visits). We also finalized a policy to use CY 2012 
claims data to develop the CY 2014 OPPS payment rates for HCPCS code 
G0463 based on the total geometric mean cost of the levels one through 
five CPT Evaluation or Assessment and Management (E/M) codes for clinic 
visits previously recognized under the OPPS (CPT codes 99201 through 
99205 and 99211 through 99215). In addition, we finalized a policy to 
no longer recognize a distinction between new and established patient 
clinic visits.
    For CY 2016, we deleted APC 0634 and reassigned the outpatient 
clinic visit HCPCS code G0463 to APC 5012 (Level 2 Examinations and 
Related Services) (80 FR 70372). For CY 2024, as we did for CY 2023, we 
propose to continue to standardize all of the relative payment weights 
to APC 5012. We believe that standardizing relative payment weights to 
the geometric mean of the APC to which HCPCS code G0463 is assigned 
maintains consistency in calculating unscaled weights that represent 
the cost of some of the most frequently provided OPPS services. For CY 
2024, as we did for CY 2023, we propose to assign APC 5012 a relative 
payment weight of 1.00 and to divide the geometric mean cost of each 
APC by the geometric mean cost for APC 5012 to derive the unscaled 
relative payment weight for each APC. The choice of the APC on which to 
standardize the relative payment weights does not affect payments made 
under the OPPS because we scale the weights for budget neutrality.
    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 2024 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 2023 scaled relative payment 
weights to the estimated aggregate weight using the proposed CY 2024 
unscaled relative payment weights.
    For CY 2023, we multiplied the CY 2023 scaled APC relative payment 
weight applicable to a service paid under the OPPS by the volume of 
that service from CY 2022 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 2024, we 
propose to apply the same process using the estimated CY 2024 unscaled 
relative payment weights rather than scaled relative payment weights. 
We propose to calculate the weight scalar by dividing the CY 2023 
estimated aggregate weight by the unscaled CY 2024 estimated aggregate 
weight.
    For a detailed discussion of the weight scalar calculation, we 
refer readers to the OPPS claims accounting document available on the 
CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html. Click on the link labeled 
``CY 2024 OPPS/ASC Notice of Proposed Rulemaking'', which can be found 
under the heading ``Hospital Outpatient Prospective Payment System 
Rulemaking'' and open the claims accounting document link at the bottom 
of the page, which is labeled ``2024 NPRM OPPS Claims Accounting 
(PDF)''.
    We propose to compare the estimated unscaled relative payment 
weights in CY 2024 to the estimated total relative payment weights in 
CY 2023 using CY 2022 claims data, holding all other components of the 
payment system constant to isolate changes in total weight. Based on 
this comparison, we propose to adjust the calculated CY 2024 unscaled 
relative payment weights for purposes of budget neutrality. We propose 
to adjust the estimated CY 2024 unscaled relative payment weights by 
multiplying them by a proposed weight scalar of 1.4529 to ensure that 
the proposed CY 2024 relative payment weights are scaled to be budget 
neutral. The proposed CY 2024 relative payment weights listed in 
Addenda A and B to this proposed rule (which are available via the 
internet on the CMS website) are scaled and incorporate the 
recalibration adjustments discussed in sections II.A.1 and II.A.2 of 
this proposed rule.
    Section 1833(t)(14) of the Act provides the payment rates for 
certain specified covered outpatient drugs (SCODs). Section 
1833(t)(14)(H) of the Act provides that additional expenditures 
resulting from this paragraph shall not be taken into account in 
establishing the conversion factor, weighting, and other adjustment 
factors for 2004 and 2005 under paragraph (9) but shall be taken into 
account for subsequent years. Therefore, the cost of those SCODs (as 
discussed in section V.B.2 of this proposed rule) is included in the 
budget neutrality calculations for the CY 2024 OPPS.

B. Proposed Conversion Factor Update

    Section 1833(t)(3)(C)(ii) of the Act requires the Secretary to 
update the conversion factor used to determine the payment rates under 
the OPPS on an annual basis by applying the OPD rate increase factor. 
For purposes of section 1833(t)(3)(C)(iv) of the Act, subject to 
sections 1833(t)(17) and 1833(t)(3)(F) of the Act, the OPD rate 
increase factor is equal to the hospital inpatient market basket 
percentage increase applicable to hospital discharges under section 
1886(b)(3)(B)(iii) of the Act. In the FY 2024 IPPS/Long Term Care 
Hospital (LTCH) PPS proposed rule (88 FR 27004 through 27005), 
consistent with current law, based on IHS Global, Inc.'s fourth quarter 
2022 forecast, the proposed FY 2024 IPPS market basket percentage 
increase was 3.0 percent. We note that under our regular process for 
the CY 2024 OPPS/ASC final rule, we would use the market basket update 
for the FY 2024 IPPS/LTCH PPS final rule, which would be based on IHS 
Global, Inc.'s second quarter 2023 forecast of the FY 2024 IPPS market 
basket percentage increase. If that forecast is different than the IPPS 
market basket percentage increase used for this proposed rule, the CY 
2024 OPPS/ASC final rule OPD rate increase factor would reflect that 
updated forecast of the market basket percentage increase.
    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

[[Page 49581]]

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 ``productivity 
adjustment''). In the FY 2012 IPPS/LTCH PPS final rule (76 FR 51689 
through 51692), we finalized our methodology for calculating and 
applying the productivity adjustment, and then revised this 
methodology, as discussed in the FY 2016 IPPS/LTCH PPS final rule (80 
FR 49509). The U.S. Department of Labor's Bureau of Labor Statistics 
(BLS) publishes the official measures of private nonfarm business 
productivity for the U.S. economy. We note that previously the 
productivity measure referenced in section 1886(b)(3)(B)(xi)(II) of the 
Act was published by BLS as private nonfarm business multifactor 
productivity. Beginning with the November 18, 2021 release of 
productivity data, BLS replaced the term multifactor productivity (MFP) 
with total factor productivity (TFP). BLS noted that this is a change 
in terminology only and will not affect the data or methodology. As a 
result of the BLS name change, the productivity measure referenced in 
section 1886(b)(3)(B)(xi)(II) of the Act is now published by BLS as 
private nonfarm business total factor productivity. However, as 
mentioned, the data and methods are unchanged. Please see www.bls.gov 
for the BLS historical published TFP data. A complete description of 
IGI's TFP projection methodology is available on the CMS website at 
https://www.cms.gov/Research-Statistics-Dataand-Systems/Statistics-Trends-andReports/MedicareProgramRatesStats/ MarketBasketResearch. In 
addition, we note that beginning with the FY 2022 IPPS/LTCH PPS final 
rule, we refer to this adjustment as the productivity adjustment rather 
than the MFP adjustment to more closely track the statutory language in 
section 1886(b)(3)(B)(xi)(II) of the Act. We note that the adjustment 
continues to rely on the same underlying data and methodology. In the 
FY 2024 IPPS/LTCH PPS proposed rule (88 FR 27005), the proposed 
productivity adjustment for FY 2024 was 0.2 percentage point.
    Therefore, we propose that the productivity adjustment for the CY 
2024 OPPS would be 0.2 percentage point. We also propose that if more 
recent data subsequently become available after the publication of this 
proposed rule (for example, a more recent estimate of the market basket 
percentage increase and/or the productivity adjustment), we would use 
such updated data, if appropriate, to determine the CY 2024 market 
basket update and the productivity 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 propose for CY 2024 an OPD fee schedule increase factor of 
2.8 percent for the CY 2024 OPPS (which is the proposed estimate of the 
hospital inpatient market basket percentage increase of 3.0 percent, 
less the proposed 0.2 percentage point productivity adjustment).
    We propose that hospitals that fail to meet the Hospital OQR 
Program reporting requirements would be subject to an additional 
reduction of 2.0 percentage points from the OPD fee schedule increase 
factor adjustment to the conversion factor that would be used to 
calculate the OPPS payment rates for their services, as required by 
section 1833(t)(17) of the Act. For further discussion of the Hospital 
OQR Program, we refer readers to section XIV of this proposed rule.
    To set the OPPS conversion factor for 2024, we propose to increase 
the CY 2023 conversion factor of $85.585 by 2.8 percent reflecting the 
proposed IPPS hospital market basket update. In accordance with section 
1833(t)(9)(B) of the Act, we propose further to adjust the conversion 
factor for CY 2024 to ensure that any revisions made to the wage index 
and rural adjustment are made on a budget neutral basis. We propose to 
calculate an overall budget neutrality factor of 0.9974 for wage index 
changes by comparing proposed total estimated payments from our 
simulation model using the proposed FY 2024 IPPS wage indexes to those 
payments using the FY 2023 IPPS wage indexes, as adopted on a calendar 
year basis for the OPPS. We further propose to calculate an additional 
budget neutrality factor of 0.9975 to account for our proposed policy 
to cap wage index reductions for hospitals at 5 percent on an annual 
basis.
    For the CY 2024 OPPS, we propose to maintain the current rural 
adjustment policy, as discussed in section II.E of this proposed rule. 
Therefore, the proposed budget neutrality factor for the rural 
adjustment is 1.0000.
    We propose to calculate a CY 2024 budget neutrality adjustment 
factor for the cancer hospital payment adjustment by transitioning from 
the target PCR of 0.89 we finalized for CYs 2020 through 2023 (which 
included the 1.0 percentage point reduction as required by section 
16002(b) of the 21st Century Cures Act) and incrementally reducing the 
target PCR by an additional 1.0 percentage point for each calendar 
year, beginning with CY 2024, until the target PCR equals the PCR of 
non-cancer hospitals calculated using the most recent data minus 1.0 
percentage point as required by section 16002(b) of the 21st Century 
Cures Act. Therefore, we propose to apply a budget neutrality 
adjustment factor of 1.0005 to the conversion factor for the cancer 
hospital payment adjustment. In accordance with section 1833(t)(18)(C) 
of the Act, as added by section 16002(b) of the 21st Century Cures Act 
(Pub. L. 114-255), requires that we reduce the target PCR by 0.01, 
which brings the proposed target PCR to 0.88. This is 0.01 less than 
the target PCR of 0.89 from CY 2021 through CY 2023, which was held at 
the pre-PHE target.
    For this proposed rule, we estimated that proposed pass-through 
spending for drugs, biologicals, and devices for CY 2024 would equal 
approximately $234.1 million, which represents 0.26 percent of total 
projected CY 2024 OPPS spending. Therefore, the proposed conversion 
factor would be adjusted by the difference between the 0.16 percent 
estimate of pass-through spending for CY 2023 and the 0.26 percent 
estimate of proposed pass-through spending for CY 2024, resulting in a 
proposed decrease to the conversion factor for CY 2024 of 0.1 percent.
    Proposed estimated payments for outliers would remain at 1.0 
percent of total OPPS payments for CY 2024. We estimated for this 
proposed rule that outlier payments would be approximately 0.78 percent 
of total OPPS payments in CY 2023; the 1.00 percent for proposed 
outlier payments in CY 2024 would constitute a 0.22 percent increase in 
payment in CY 2024 relative to CY 2023.
    For CY 2024, we also propose that hospitals that fail to meet the 
reporting requirements of the Hospital OQR Program would continue to be 
subject to a further reduction of 2.0 percentage points to the OPD fee 
schedule increase factor. For hospitals that fail to meet the

[[Page 49582]]

requirements of the Hospital OQR Program, we propose to make all other 
adjustments discussed above, but use a reduced OPD fee schedule update 
factor of 0.8 percent (that is, the proposed OPD fee schedule increase 
factor of 2.8 percent further reduced by 2.0 percentage points). This 
would result in a proposed reduced conversion factor for CY 2024 of 
$85.782 for hospitals that fail to meet the Hospital OQR Program 
requirements (a difference of -1.706 in the conversion factor relative 
to hospitals that met the requirements).
    In summary, for 2024, we propose to use a reduced conversion factor 
of $85.782 in the calculation of payments for hospitals that fail to 
meet the Hospital OQR Program requirements (a difference of -1.706 in 
the conversion factor relative to hospitals that met the requirements).
    For 2024, we propose to use a conversion factor of $87.488 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 
2.8 percent for CY 2024, the required proposed wage index budget 
neutrality adjustment of approximately 0.9974, the proposed 5 percent 
annual cap for individual hospital wage index reductions adjustment of 
approximately 0.9975, the proposed cancer hospital payment adjustment 
of 1.0005, and the proposed adjustment of an decrease of 0.1 percentage 
point of projected OPPS spending for the difference in pass-through 
spending, which results in a proposed conversion factor for CY 2024 of 
$87.488. The calculations we performed to determine the CY 2024 
proposed conversion factor are shown in Table 3.
BILLING CODE 4120-01-P

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[[Page 49584]]


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BILLING CODE 4120-01-C

C. Proposed Wage Index Changes

    Section 1833(t)(2)(D) of the Act requires the Secretary to 
determine a wage adjustment factor to adjust the portion of payment and 
coinsurance attributable to labor-related costs for relative 
differences in labor and labor-related costs across geographic regions 
in a budget neutral manner (codified at 42 CFR 419.43(a)). This portion 
of the OPPS payment rate is called the OPPS labor-related share. Budget 
neutrality is discussed in section II.B of this proposed rule.
    The OPPS labor-related share is 60 percent of the national OPPS 
payment. This labor-related share is based on a regression analysis 
that determined that, for all hospitals, approximately 60 percent of 
the costs of services paid under the OPPS were attributable to wage 
costs. We confirmed that this labor-related share for outpatient 
services is appropriate during our regression analysis for the payment 
adjustment for rural hospitals in the CY 2006 OPPS final rule with 
comment period (70 FR 68553). We propose to continue this policy for 
the CY 2024 OPPS. We refer readers to section II.H of this proposed 
rule for a description and an example of how the wage index for a 
particular hospital is used to determine payment for the hospital.
    As discussed in the claims accounting narrative included with the 
supporting documentation for this proposed rule (which is available via 
the internet on the CMS website (https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices)), for estimating APC costs, we would 
standardize 60 percent of estimated claims costs for geographic area 
wage variation using the same FY 2024 pre-reclassified wage index that 
we use under the IPPS to standardize costs. This standardization 
process removes the effects of differences in area wage levels from the 
determination of a national unadjusted OPPS payment rate and copayment 
amount.
    Under 42 CFR 419.41(c)(1) and 419.43(c) (published in the OPPS 
April 7, 2000 final rule with comment period (65 FR 18495 and 18545)), 
the OPPS adopted the final fiscal year IPPS post-reclassified wage 
index as the calendar year wage index for adjusting the OPPS standard 
payment amounts for labor market differences. Therefore, the wage index 
that applies to a particular acute care, short-stay hospital under the 
IPPS also applies to that hospital under the OPPS. As initially 
explained in the September 8, 1998 OPPS proposed rule (63 FR 47576), we 
believe that using the IPPS wage index as the source of an adjustment 
factor for the OPPS is reasonable and logical, given the inseparable, 
subordinate status of the HOPD within the hospital overall. In 
accordance with section 1886(d)(3)(E) of the Act, the IPPS wage index 
is updated annually.
    The Affordable Care Act contained several provisions affecting the 
wage index. These provisions were discussed in the CY 2012 OPPS/ASC 
final rule with comment period (76 FR 74191). Section 10324 of the 
Affordable Care Act added section 1886(d)(3)(E)(iii)(II) to the Act, 
which defines a frontier State and amended section 1833(t) of the Act 
to add paragraph (19), which requires a frontier State wage index floor 
of 1.00 in certain cases, and states that the frontier State floor 
shall not be applied in a budget neutral manner. We codified these 
requirements at Sec.  419.43(c)(2) and (3) of our regulations. For 
2024, we propose to implement this provision in the same manner as we 
have since CY 2011. Under this policy, the frontier State hospitals 
would receive a wage index of 1.00 if the otherwise applicable wage 
index (including reclassification, the rural floor, and rural floor 
budget neutrality) is less than 1.00. Because the HOPD receives a wage 
index based on the geographic location of the specific inpatient 
hospital with which it is associated, the frontier State wage index 
adjustment applicable for the inpatient hospital also would apply for 
any

[[Page 49585]]

associated HOPD. We refer readers to the FY 2011 through FY 2023 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; for FY 2022, 86 FR 45178; and for FY 
2023, 87 FR 49006.
    In addition to the changes required by the Affordable Care Act, we 
note that the proposed FY 2024 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 the permanent 5-percent cap on any 
decrease to a hospital's wage index from its wage index in a prior FY. 
Beginning with FY 2024, we proposed to include hospitals with Sec.  
412.103 reclassification along with geographically rural hospitals in 
all rural wage index calculations, and to exclude ``dual reclass'' 
hospitals (hospitals with simultaneous Sec.  412.103 and Medicare 
Geographic Classification Review Board (MGCRB) reclassifications) 
implicated by the hold harmless provision at section 1886(d)(8)(C)(ii) 
of the Act (88 FR 26973 through 26974). We also propose to continue the 
low wage index hospital policy, under which we increase the wage index 
for hospitals with a wage index value below the 25th percentile wage 
index value for a fiscal year by half the difference between the 
otherwise applicable final wage index value for a year for that 
hospital and the 25th percentile wage index value for that year across 
all hospitals. We refer readers to the FY 2024 IPPS/LTCH PPS proposed 
rule (88 FR 26963 through 26986) for a detailed discussion of all 
proposed changes to the FY 2024 IPPS wage indexes.
    We note that in the FY 2023 IPPS/LTCH PPS final rule (87 FR 49018 
through 49021), we finalized a permanent approach to smooth year-to-
year decreases in hospitals' wage indexes. Specifically, for FY 2023 
and subsequent years, we 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, a hospital's wage 
index for FY 2024 would not be less than 95 percent of its final wage 
index for FY 2023, 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. 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 (in accordance with 
42 CFR 419.41(c)(1) and 419.43(c), as noted above).
    Core Based Statistical Areas (CBSAs) are made up of one or more 
constituent counties. Each CBSA and constituent county has its own 
unique identifying codes. The FY 2018 IPPS/LTCH PPS final rule (82 FR 
38130) discussed the two different lists of codes to identify counties: 
Social Security Administration (SSA) codes and Federal Information 
Processing Standard (FIPS) codes. Historically, CMS listed and used SSA 
and FIPS county codes to identify and crosswalk counties to CBSA codes 
for purposes of the IPPS and OPPS wage indexes. However, the SSA county 
codes are no longer being maintained and updated, although the FIPS 
codes continue to be maintained by the U.S. Census Bureau. The Census 
Bureau's most current statistical area information is derived from 
ongoing census data received since 2010; the most recent data are from 
2015. The Census Bureau maintains a complete list of changes to 
counties or county equivalent entities on the website at: https://www.census.gov/geo/reference/county-changes.html (which, as of May 6, 
2019, migrated to: https://www.census.gov/programs-surveys/geography.html). In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38130), 
for purposes of crosswalking counties to CBSAs for the IPPS wage index, 
we finalized our proposal to discontinue the use of the SSA county 
codes and begin using only the FIPS county codes. Similarly, for the 
purposes of crosswalking counties to CBSAs for the OPPS wage index, in 
the CY 2018 OPPS/ASC final rule with comment period (82 FR 59260), we 
finalized our proposal to discontinue the use of SSA county codes and 
begin using only the FIPS county codes. For CY 2024, under the OPPS, we 
are continuing to use only the FIPS county codes for purposes of 
crosswalking counties to CBSAs.
    We propose to use the FY 2024 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 2024. Therefore, any policies and adjustments for the FY 2024 
IPPS post-reclassified wage index would be reflected in the final CY 
2024 OPPS wage index beginning on January 1, 2024. We refer readers to 
the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 26963 through 26986) and 
the proposed FY 2024 hospital wage index files posted on the CMS 
website at https://www.cms.gov/medicare/acute-inpatient-pps/fy-2024-ipps-proposed-rule-home-page. With regard to budget neutrality for the 
CY 2024 OPPS wage index, we refer readers to section II.B of this 
proposed rule. We continue to believe that using the IPPS post-
reclassified wage index as the source of an adjustment factor for the 
OPPS is reasonable and logical, given the inseparable, subordinate 
status of the HOPD within the hospital overall.
    Hospitals that are paid under the OPPS, but not under the IPPS, do 
not have an assigned hospital wage index under the IPPS. Therefore, for 
non-IPPS hospitals paid under the OPPS, it is our longstanding policy 
to assign the wage index that would be applicable if the hospital was 
paid under the IPPS, based on its geographic location and any 
applicable wage index policies and adjustments. We propose to continue 
this policy for CY 2024. We refer readers to the FY 2024 IPPS/LTCH PPS 
proposed rule (88 FR 26963 through 26986) for a detailed discussion of 
the proposed changes to the FY 2024 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)).

[[Page 49586]]

Applying this adjustment is consistent with our policy of adopting IPPS 
wage index policies for hospitals paid under the OPPS. We note that, 
because non-IPPS hospitals cannot reclassify, they are eligible for the 
out-migration wage index adjustment if they are located in a section 
505 out-migration county. This is the same out-migration adjustment 
policy that would apply if the hospital were paid under the IPPS. For 
CY 2024, we propose to continue our policy of allowing non-IPPS 
hospitals paid under the OPPS to qualify for the outmigration 
adjustment if they are located in a section 505 out-migration county 
(section 505 of the MMA). Furthermore, we propose that the wage index 
that would apply for CY 2024 to non-IPPS hospitals paid under the OPPS 
would continue to include the rural floor adjustment and any policies 
and adjustments applied to the IPPS wage index to address wage index 
disparities. In addition, the wage index that would apply to non-IPPS 
hospitals paid under the OPPS would include the 5-percent cap on wage 
index decreases.
    For CMHCs, for CY 2024, we propose to continue to calculate the 
wage index by using the post-reclassification IPPS wage index based on 
the CBSA where the CMHC is located. Furthermore, we propose that the 
wage index that would apply to a CMHC for CY 2024 would continue to 
include the rural floor adjustment and any policies and adjustments 
applied to the IPPS wage index to address wage index disparities. In 
addition, the wage index that would apply to CMHCs would include the 5-
percent cap on wage index decreases. Also, we propose that the wage 
index that would apply to CMHCs would not include the outmigration 
adjustment because that adjustment only applies to hospitals.
    Table 4A associated with the FY 2024 IPPS/LTCH PPS proposed rule 
(available via the internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index) 
identifies counties that would be eligible for the out-migration 
adjustment. Table 2 associated with the FY 2024 IPPS/LTCH PPS proposed 
rule (available for download via the website above) identifies IPPS 
hospitals that would receive the out-migration adjustment for FY 2024. 
We are including the outmigration adjustment information from Table 2 
associated with the FY 2024 IPPS/LTCH PPS proposed rule as Addendum L 
to this proposed rule, with the addition of non-IPPS hospitals that 
would receive the section 505 outmigration adjustment under this 
proposed rule. Addendum L is available via the internet on the CMS 
website. We refer readers to the CMS website for the OPPS at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index. At this link, readers will find a link to 
the proposed FY 2024 IPPS wage index tables and Addendum L.

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

    In addition to using CCRs to estimate costs from charges on claims 
for ratesetting, we use overall hospital-specific CCRs calculated from 
the hospital's most recent cost report (OMB NO: 0938-0050 for Form CMS-
2552-10) to determine outlier payments, payments for pass-through 
devices, and monthly interim transitional corridor payments under the 
OPPS during the PPS year. For certain hospitals, under the regulations 
at 42 CFR 419.43(d)(5)(iii), we use the statewide average default CCRs 
to determine the payments mentioned earlier if it is not possible to 
determine an accurate CCR for a hospital in certain circumstances. This 
includes hospitals that are new, hospitals that have not accepted 
assignment of an existing hospital's provider agreement, and hospitals 
that have not yet submitted a cost report. We also use the statewide 
average default CCRs to determine payments for hospitals whose CCR 
falls outside the predetermined ceiling threshold for a valid CCR or 
for hospitals in which the most recent cost report reflects an all-
inclusive rate status (Medicare Claims Processing Manual (Pub. 100-04), 
Chapter 4, Section 10.11).
    We discussed our policy for using default CCRs, including setting 
the ceiling threshold for a valid CCR, in the CY 2009 OPPS/ASC final 
rule with comment period (73 FR 68594 through 68599) in the context of 
our adoption of an outlier reconciliation policy for cost reports 
beginning on or after January 1, 2009. For details on our process for 
calculating the statewide average CCRs, we refer readers to the CY 2024 
OPPS proposed rule Claims Accounting Narrative that is posted on our 
website. We propose to calculate the default ratios for CY 2024 using 
the most recent cost report data. We will update these ratios in the 
final rule with comment period if more recent cost report data are 
available.
    We no longer publish a table in the Federal Register containing the 
statewide average CCRs in the annual OPPS proposed rule and final rule 
with comment period. These CCRs with the upper limit will be available 
for download with each OPPS CY proposed rule and final rule on the CMS 
website. We refer readers to our website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html; click on the link on 
the left of the page titled ``Hospital Outpatient Regulations and 
Notices'' and then select the relevant regulation to download the 
statewide CCRs and upper limit in the downloads section of the web 
page.

E. Proposed Adjustment for Rural Sole Community Hospitals (SCHs) and 
Essential Access Community Hospitals (EACHs) Under Section 
1833(t)(13)(B) of the Act for CY 2024

    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 provides the 
Secretary the authority to make an adjustment to OPPS payments for 
rural hospitals, effective January 1, 2006, if justified by a study of 
the difference in costs by APC between hospitals in rural areas and 
hospitals in urban areas. Our analysis showed a difference in costs for 
rural SCHs. Therefore, for the CY 2006 OPPS, we finalized a payment 
adjustment for rural SCHs of 7.1 percent for all services and 
procedures paid under the OPPS, excluding separately payable drugs and 
biologicals, brachytherapy sources, items paid at charges reduced to 
costs, and devices paid under the pass-through payment policy, in 
accordance with section 1833(t)(13)(B) of the Act.
    In the CY 2007 OPPS/ASC final rule with comment period (71 FR 68010 
and 68227), for purposes of receiving this rural adjustment, we revised 
our regulations at Sec.  419.43(g) to clarify that essential access 
community hospitals (EACHs) are also eligible to receive the rural SCH 
adjustment, assuming these entities otherwise meet the rural adjustment 
criteria. Currently, two hospitals are classified as EACHs, and as of 
CY 1998, under section 4201(c) of the Balanced Budget Act of 1997 (BBA) 
(Pub. L. 105-33), a hospital can no longer become newly classified as 
an EACH.
    This adjustment for rural SCHs is budget neutral and applied before

[[Page 49587]]

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 2023.
    For CY 2024, we propose to continue the current policy of a 7.1 
percent payment adjustment for rural SCHs, including EACHs, for all 
services and procedures paid under the OPPS, excluding separately 
payable drugs and biologicals, brachytherapy sources, items paid at 
charges reduced to costs, and devices paid under the pass-through 
payment policy, applied in a budget neutral manner.

F. Proposed Payment Adjustment for Certain Cancer Hospitals for CY 2024

1. Background
    Since the inception of the OPPS, which was authorized by the 
Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33), Medicare has paid 
the 11 hospitals that meet the criteria for cancer hospitals identified 
in section 1886(d)(1)(B)(v) of the Act under the OPPS for covered 
outpatient department 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 department 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 department services occurring in the current year and the 
base payment-to-cost ratio (PCR) for the hospital defined in section 
1833(t)(7)(F)(ii) of the Act. The ``pre-BBA amount'' and the 
determination of the base PCR are defined at Sec.  419.70(f). TOPs are 
calculated on Worksheet E, Part B, of the Hospital Cost Report or the 
Hospital Health Care Complex Cost Report (Form CMS-2552-96 or Form CMS-
2552-10 (OMB NO: 0938-0050), respectively), as applicable each year. 
Section 1833(t)(7)(I) of the Act exempts TOPs from budget neutrality 
calculations.
    Section 3138 of the Affordable Care Act (Pub. L. 111-148) 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 4 displays the target PCR for purposes of the cancer 
hospital adjustment for CY 2012 through CY 2023.

[[Page 49588]]

[GRAPHIC] [TIFF OMITTED] TP31JY23.009

2. Proposed Policy for CY 2024
    Section 16002(b) of the 21st Century Cures Act (Pub. L. 114-255) 
amended section 1833(t)(18) of the Act by adding subparagraph (C), 
which requires that in applying Sec.  419.43(i) (that is, the payment 
adjustment for certain cancer hospitals) for services furnished on or 
after January 1, 2018, the target PCR adjustment be reduced by 1.0 
percentage point less than what would otherwise apply. Section 16002(b) 
also provides that, in addition to the percentage reduction, the 
Secretary may consider making an additional percentage point reduction 
to the target PCR that takes into account payment rates for applicable 
items and services described under section 1833(t)(21)(C) of the Act 
for hospitals that are not cancer hospitals described under section 
1886(d)(1)(B)(v) of the Act. Further, in making any budget neutrality 
adjustment under section 1833(t) of the Act, the Secretary shall not 
take into account the reduced expenditures that result from application 
of section 1833(t)(18)(C) of the Act.
    We propose to provide additional payments to the 11 specified 
cancer hospitals so that each cancer hospital's proposed PCR is equal 
to the weighted average PCR (or ``target PCR'') for the other OPPS 
hospitals, generally using the most recent submitted or settled cost 
report data that are available, reduced by 1.0 percentage point, to 
comply with section 16002(b) of the 21st Century Cures Act, and 
adjusted by the proposed post-Public Health Emergency transition as 
described later in this section. We are not proposing an additional 
reduction beyond the 1.0 percentage point reduction required by section 
16002(b) of the 21st Century Cures Act for CY 2024.
    To calculate the proposed CY 2024 target PCR, we would use the same 
extract of cost report data from HCRIS used to estimate costs for the 
CY 2024 OPPS which, in most cases, would be the most recently available 
hospital cost reports. Using these cost report data, we included data 
from Worksheet E, Part B, for each hospital, using data from each 
hospital's most recent cost report, whether as submitted or settled.
    We then limited the dataset to the hospitals with CY 2022 claims 
data that we used to model the impact of the proposed CY 2024 APC 
relative payment weights (3,406 hospitals) because it is appropriate to 
use the same set of hospitals that are being used to calibrate the 
modeled CY 2024 OPPS. The cost report data for the hospitals in this 
dataset were from cost report periods with fiscal year ends ranging 
from 2017 to 2022; however, the cost reporting periods were 
predominantly from fiscal years ending in 2021 and 2022. We then 
removed the cost report data of the 47 hospitals located in Puerto Rico 
from our dataset because we did not believe their cost structure 
reflected the costs of most hospitals paid under the OPPS, and, 
therefore, their inclusion may bias the calculation of hospital-
weighted statistics. We also removed the cost report data of 14 
hospitals because these hospitals had cost report data that were not 
complete (missing aggregate OPPS payments, missing aggregate cost data, 
or missing both), so that all cost reports in the study would have both 
the payment and cost data necessary to calculate a PCR for each 
hospital, leading to a proposed analytic file of 3,345 hospitals with 
cost report data.
    Using this smaller dataset of cost report data, we estimate that, 
on average, the OPPS payments to other hospitals furnishing services 
under the OPPS were approximately 86 percent of reasonable cost 
(weighted average PCR of .86). Therefore, after applying the 1.0 
percentage point reduction, as required by section 16002(b) of the 21st 
Century Cures Act, using our standard process the payment amount 
associated with the cancer hospital payment adjustment to be determined 
at cost report settlement would be the additional payment needed to 
result in a target PCR equal to 0.85 for each cancer hospital.
    However, we note that a proposed cancer hospital target PCR of 0.85 
for CY 2024 is dramatically lower than the target PCR from previous 
years. Historically, as shown in Table 4, the target PCR for cancer 
hospitals has been between 0.88 and 0.92. In light of our concerns 
about the impact of the COVID-19 PHE on CY 2020 claims and cost data, 
we finalized a policy to continue the target PCR of 0.89 from CY 2021 
for CY 2022 and for CY 2023 as an appropriate cancer hospital 
adjustment under our authority described in section 1833(t)(2)(E) of 
the Act. We believe the impact of the COVID-19 PHE claims and cost data 
used to calculate the target PCR of 0.85 may continue to have some 
limited influence on our target PCR calculations. However, we believe 
we should begin to take into consideration the PCR of non-cancer 
hospitals based on the most recently available data for calculating the 
target PCR. We do not

[[Page 49589]]

know if the changes in the data that have yielded a significantly lower 
PCR for non-cancer hospitals using the most recently available data are 
likely to continue in future years or if, when data from after the PHE 
is available, we will see the target PCR increase toward its historical 
norm. We are concerned that using the 0.85 target PCR calculated from 
the most recent data could lead to instability in cancer hospital 
adjustment payments and volatility in the PCR as we transition to 
utilizing post-PHE data. Therefore, in this CY 2024 OPPS/ASC proposed 
rule, we propose to transition from the target PCR of 0.89 we finalized 
for CYs 2020 through 2023 (which included the 1.0 percentage point 
reduction as required by section 16002(b) of the 21st Century Cures 
Act) and incrementally reduce the target PCR by an additional 1.0 
percentage point for each calendar year, beginning with CY 2024, until 
the target PCR equals the PCR of non-cancer hospitals calculated using 
the most recent data minus 1.0 percentage point as required by section 
16002(b) of the 21st Century Cures Act. Therefore, utilizing this 
methodology for this CY 2024 OPPS/ASC proposed rule, we propose to 
reduce the CY 2023 target PCR of 0.89 by 1 percentage point and propose 
a cancer hospital target PCR of 0.88 for CY 2024.
    Table 5 shows the estimated percentage increase in OPPS payments to 
each cancer hospital for CY 2024, due to the cancer hospital payment 
adjustment policy. The actual, final amount of the CY 2024 cancer 
hospital payment adjustment for each cancer hospital would be 
determined at cost report settlement and would depend on each 
hospital's CY 2024 payments and costs from the settled CY 2024 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.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TP31JY23.010

BILLING CODE 4120-01-C

G. Proposed Hospital Outpatient Outlier Payments

1. Background
    The OPPS provides outlier payments to hospitals to help mitigate 
the financial risk associated with high-cost and complex procedures, 
where a very costly service could present a hospital with significant 
financial loss. As explained in the CY 2015 OPPS/ASC final rule with 
comment period (79 FR 66832 through 66834), we set our projected target 
for aggregate outlier payments at 1.0 percent of the estimated 
aggregate total payments under the OPPS for the prospective year. 
Outlier payments are provided on a service-by-service basis when the 
cost of a service exceeds the APC payment amount multiplier threshold 
(the APC payment amount multiplied by a certain amount) as well as the 
APC payment amount plus a fixed-dollar amount threshold (the APC 
payment plus a certain dollar amount). In CY 2023, the outlier 
threshold was met when the hospital's cost of furnishing a service 
exceeded 1.75 times the APC payment amount (the multiplier threshold) 
and exceeded the APC payment amount plus $8,625 (the fixed-dollar 
amount threshold) (87 FR 71788 through 71790). If the hospital's cost 
of furnishing a service exceeds both the multiplier threshold

[[Page 49590]]

and the fixed-dollar threshold, the outlier payment is calculated as 50 
percent of the amount by which the hospital's cost of furnishing the 
service exceeds 1.75 times the APC payment amount. Beginning with CY 
2009 payments, outlier payments are subject to a reconciliation process 
similar to the IPPS outlier reconciliation process for cost reports, as 
discussed in the CY 2009 OPPS/ASC final rule with comment period (73 FR 
68594 through 68599).
    It has been our policy to report the actual amount of outlier 
payments as a percent of total spending in the claims being used to 
model the OPPS. Our estimate of total outlier payments as a percent of 
total CY 2022 OPPS payments, using CY 2022 claims available for this CY 
2024 OPPS proposed rule, is approximately 0.88 percent. Therefore, for 
CY 2022, we estimate that we did not meet the outlier target by 0.12 
percent of total aggregated OPPS payments.
    For this proposed rule, using CY 2022 claims data and CY 2023 
payment rates, we estimate that the aggregate outlier payments for CY 
2023 would be approximately 0.78 percent of the total CY 2023 OPPS 
payments. We provide estimated CY 2024 outlier payments for hospitals 
and CMHCs with claims included in the claims data that we used to model 
impacts in the Hospital-Specific Impacts--Provider-Specific Data file 
on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
2. Outlier Calculation for CY 2024
    For CY 2024, we propose to continue our policy of estimating 
outlier payments to be 1.0 percent of the estimated aggregate total 
payments under the OPPS. We propose that a portion of that 1.0 percent, 
an amount equal to less than 0.01 percent of outlier payments (or 
0.0001 percent of total OPPS payments), would be allocated to CMHCs for 
PHP outlier payments. This is the amount of estimated outlier payments 
that would result from the proposed CMHC outlier threshold as a 
proportion of total estimated OPPS outlier payments. In this CY 2024 
OPPS/ASC proposed rule, we propose to modify our outlier policy and 
which APCs are eligible for an outlier payment if a CMHC's cost for 
services exceeds 3.40 times the APC payment rate. The outlier payment 
would be calculated as 50 percent of the amount by which the cost 
exceeds 3.40 times the proposed APC payment rate.
    For further discussion of CMHC outlier payments, we refer readers 
to section VIII.C of this proposed rule.
    To ensure that the estimated CY 2024 aggregate outlier payments 
would equal 1.0 percent of estimated aggregate total payments under the 
OPPS, we propose that the hospital outlier threshold be set so that 
outlier payments would be triggered when a hospital's cost of 
furnishing a service exceeds 1.75 times the APC payment amount and 
exceeds the APC payment amount plus $8,350.
    We calculated the proposed fixed-dollar threshold of $8,350 using 
the standard methodology most recently used for CY 2023 (87 FR 71788 
through 71790). For purposes of estimating outlier payments for CY 
2024, we use the hospital-specific overall ancillary CCRs available in 
the April 2023 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 2024 hospital outlier payments, we 
inflate the charges on the CY 2022 claims using the same proposed 
charge inflation factor of 1.118412 that we used to estimate the IPPS 
fixed-loss cost threshold for the FY 2024 IPPS/LTCH PPS proposed rule 
(88 FR 27220). We used an inflation factor of 1.05755 to estimate CY 
2023 charges from the CY 2022 charges reported on CY 2022 claims before 
applying CY 2023 CCRs to estimate the percent of outliers paid in CY 
2023. The proposed methodology for determining these charge inflation 
factors is discussed in the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 
27219 through 27220). As we stated in the CY 2005 OPPS final rule with 
comment period (69 FR 65844 through 65846), we believe that the use of 
the same charge inflation factors is appropriate for the OPPS because, 
with the exception of the inpatient routine service cost centers, 
hospitals use the same ancillary and cost centers to capture costs and 
charges for inpatient and outpatient services.
    As noted in the CY 2007 OPPS/ASC final rule with comment period (71 
FR 68011), we are concerned that we could systematically overestimate 
the OPPS hospital outlier threshold if we did not apply a CCR inflation 
adjustment factor. Therefore, we propose to apply the same CCR 
adjustment factor that we proposed to apply for the FY 2024 IPPS 
outlier calculation to the CCRs used to simulate the proposed CY 2024 
OPPS outlier payments to determine the fixed-dollar threshold. 
Specifically, for CY 2024, we propose to apply an adjustment factor of 
0.977799 to the CCRs that were in the April 2023 OPSF to trend them 
forward from CY 2023 to CY 2024. 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 2024 IPPS/LTCH PPS 
proposed rule (88 FR 27221).
    To model hospital outlier payments for the CY 2024 proposed rule, 
we apply the overall CCRs from the April 2023 OPSF after adjustment 
(using the proposed CCR inflation adjustment factor of 0.977799 to 
approximate CY 2024 CCRs) to charges on CY 2022 claims that were 
adjusted (using the proposed charge inflation factor of 1.118412 to 
approximate CY 2024 charges). We simulated aggregated CY 2022 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 2024 OPPS payments. We 
estimated that a proposed fixed-dollar threshold of $8,350, combined 
with the proposed multiplier threshold of 1.75 times the APC payment 
rate, would allocate 1.0 percent of aggregated total OPPS payments to 
outlier payments. For CMHCs, we propose that, if a CMHC's cost for 
partial hospitalization or intensive outpatient services exceeds 3.40 
times the APC payment rate, the outlier payment would be calculated as 
50 percent of the amount by which the cost exceeds 3.40 times the APC 
payment rate.
    Section 1833(t)(17)(A) of the Act, which applies to hospitals, as 
defined under section 1886(d)(1)(B) of the Act, requires that hospitals 
that fail to report data required for the quality measures selected by 
the Secretary, in the form and manner required by the Secretary under 
section 1833(t)(17)(B) of the Act, incur a 2.0 percentage point 
reduction to their OPD fee schedule increase factor; that is, the 
annual payment update factor. The application of a reduced OPD fee 
schedule increase factor results in reduced national unadjusted payment 
rates that would apply to certain outpatient items and services 
furnished by hospitals that are required to report outpatient quality 
data and that fail to meet the Hospital Outpatient Quality Reporting 
(OQR) Program requirements. For hospitals that fail to meet the 
Hospital OQR

[[Page 49591]]

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 this proposed rule.

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

    The national unadjusted payment rate is the payment rate for most 
APCs before accounting for the wage index adjustment or any applicable 
adjustments. The basic methodology for determining prospective payment 
rates for HOPD services under the OPPS is set forth in existing 
regulations at 42 CFR part 419, subparts C and D. For this CY 2024 
OPPS/ASC proposed rule, the payment rate for most services and 
procedures for which payment is made under the OPPS is the product of 
the conversion factor calculated in accordance with section II.B and 
the relative payment weight described in section II.A of this proposed 
rule. The national unadjusted payment rate for most APCs contained in 
Addendum A to this proposed rule (which is available via the CMS 
website ``Hospital Outpatient Regulations and Notices'' and for most 
HCPCS codes to which separate payment under the OPPS has been assigned 
in Addendum B to this proposed rule (which is available on the CMS 
website link above) is calculated by multiplying the proposed CY 2024 
scaled weight for the APC by the CY 2024 conversion factor.
    We note that section 1833(t)(17) of the Act, which applies to 
hospitals, as defined under section 1886(d)(1)(B) of the Act, requires 
that hospitals that fail to submit data required to be submitted on 
quality measures selected by the Secretary, in the form and manner and 
at a time specified by the Secretary, incur a reduction of 2.0 
percentage points to their OPD fee schedule increase factor, that is, 
the annual payment update factor. The application of a reduced OPD fee 
schedule increase factor results in reduced national unadjusted payment 
rates that apply to certain outpatient items and services provided by 
hospitals that are required to report outpatient quality data and that 
fail to meet the Hospital OQR Program requirements. For further 
discussion of the payment reduction for hospitals that fail to meet the 
requirements of the Hospital OQR Program, we refer readers to section 
XIV of this proposed rule.
    Below we demonstrate the steps used to determine the APC payments 
that will be made in a CY under the OPPS to a hospital that fulfills 
the Hospital OQR Program requirements and to a hospital that fails to 
meet the Hospital OQR Program requirements for a service that has any 
of the following status indicator assignments: ``J1'', ``J2'', ``P'', 
``Q1'', ``Q2'', ``Q3'', ``Q4'', ``R'', ``S'', ``T'', ``U'', or ``V'' 
(as defined in Addendum D1 to this proposed rule, which is available 
via the internet on the CMS website), in a circumstance in which the 
multiple procedure discount does not apply, the procedure is not 
bilateral, and conditionally packaged services (status indicator of 
``Q1'' and ``Q2'') qualify for separate payment. We note that, although 
blood and blood products with status indicator ``R'' and brachytherapy 
sources with status indicator ``U'' are not subject to wage adjustment, 
they are subject to reduced payments when a hospital fails to meet the 
Hospital OQR Program requirements.
    Individual providers interested in calculating the payment amount 
that they would receive for a specific service from the national 
unadjusted payment rates presented in Addenda A and B to this proposed 
rule (which are available via the internet on the CMS website) should 
follow the formulas presented in the following steps. For purposes of 
the payment calculations below, we refer to the national unadjusted 
payment rate for hospitals that meet the requirements of the Hospital 
OQR Program as the ``full'' national unadjusted payment rate. We refer 
to the national unadjusted payment rate for hospitals that fail to meet 
the requirements of the Hospital OQR Program as the ``reduced'' 
national unadjusted payment rate. The reduced national unadjusted 
payment rate is calculated by multiplying the reporting ratio of 0.9805 
times the ``full'' national unadjusted payment rate. The national 
unadjusted payment rate used in the calculations below is either the 
full national unadjusted payment rate or the reduced national 
unadjusted payment rate, depending on whether the hospital met its 
Hospital OQR Program requirements to receive the full CY 2024 OPPS fee 
schedule increase factor.
    Step 1. Calculate 60 percent (the labor-related portion) of the 
national unadjusted payment rate. Since the initial implementation of 
the OPPS, we have used 60 percent to represent our estimate of that 
portion of costs attributable, on average, to labor. We refer readers 
to the April 7, 2000 OPPS/ASC final rule with comment period (65 FR 
18496 through 18497) for a detailed discussion of how we derived this 
percentage. During our regression analysis for the payment adjustment 
for rural hospitals in the CY 2006 OPPS final rule with comment period 
(70 FR 68553), we confirmed that this labor-related share for hospital 
outpatient services is appropriate.
    The formula below is a mathematical representation of Step 1 and 
identifies the labor-related portion of a specific payment rate for a 
specific service.
    X is the labor-related portion of the national unadjusted payment 
rate.

X = .60 * (national unadjusted payment rate).

    Step 2. Determine the wage index area in which the hospital is 
located and identify the wage index level that applies to the specific 
hospital. The wage index values assigned to each area would reflect the 
geographic statistical areas (which are based upon OMB standards) to 
which hospitals are assigned for FY 2024 under the IPPS, 
reclassifications through the Medicare Geographic Classification Review 
Board (MGCRB), section 1886(d)(8)(B) ``Lugar'' hospitals, and 
reclassifications under section 1886(d)(8)(E) of the Act, as 
implemented in Sec.  412.103 of the regulations. We propose to continue 
to apply for the CY 2024 OPPS wage index any adjustments for the FY 
2024 IPPS post-reclassified wage index, including, but not limited to, 
the rural floor adjustment, a wage index floor of 1.00 in frontier 
states, in accordance with section 10324 of the Affordable Care Act of 
2010, and an adjustment to the wage index for certain low wage index 
hospitals. For further discussion of the wage index we propose to apply 
for the CY 2024 OPPS, we refer readers to section II.C of this proposed 
rule.
    Step 3. Adjust the wage index of hospitals located in certain 
qualifying counties that have a relatively high percentage of hospital 
employees who reside in the county, but who work in a different county 
with a higher wage index, in accordance with section 505 of the 
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 
(Pub. L. 108-173). Addendum L to this proposed rule (which is available 
via the internet on the CMS website) contains the qualifying counties 
and the associated wage index increase developed for the proposed FY 
2024 IPPS wage index, which are listed in Table 3 associated with the 
FY 2024 IPPS proposed rule and available via the internet on the CMS 
website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. (Click on the link on the left 
side of the screen titled ``FY 2024 IPPS Proposed Rule Home

[[Page 49592]]

Page'' and select ``FY 2024 Proposed Rule Tables.'') This step is to be 
followed only if the hospital is not reclassified or redesignated under 
section 1886(d)(8) or section 1886(d)(10) of the Act.
    Step 4. Multiply the applicable wage index determined under Steps 2 
and 3 by the amount determined under Step 1 that represents the labor-
related portion of the national unadjusted payment rate.
    The formula below is a mathematical representation of Step 4 and 
adjusts the labor-related portion of the national unadjusted payment 
rate for the specific service by the wage index.
    Xa is the labor-related portion of the national unadjusted payment 
rate (wage adjusted).

Xa = labor-portion of the national unadjusted payment rate * applicable 
wage index.

    Step 5. Calculate 40 percent (the nonlabor-related portion) of the 
national unadjusted payment rate and add that amount to the resulting 
product of Step 4. The result is the wage index adjusted payment rate 
for the relevant wage index area.
    The formula below is a mathematical representation of Step 5 and 
calculates the remaining portion of the national payment rate, the 
amount not attributable to labor, and the adjusted payment for the 
specific service.
    Y is the nonlabor-related portion of the national unadjusted 
payment rate.

Y = .40 * (national unadjusted payment rate).

    Step 6. If a provider is an SCH, as set forth in the regulations at 
Sec.  412.92, or an EACH, which is considered to be an SCH under 
section 1886(d)(5)(D)(iii)(III) of the Act, and located in a rural 
area, as defined in Sec.  412.64(b), or is treated as being located in 
a rural area under Sec.  412.103, multiply the wage index adjusted 
payment rate by 1.071 to calculate the total payment.
    The formula below is a mathematical representation of Step 6 and 
applies the rural adjustment for rural SCHs.

Adjusted Medicare Payment (SCH or EACH) = Adjusted Medicare Payment * 
1.071.

    Step 7. The adjusted payment rate is the sum of the wage adjusted 
labor-related portion of the national unadjusted payment rate and the 
nonlabor-related portion of the national unadjusted payment rate.
    Xa is the labor-related portion of the national unadjusted payment 
rate (wage adjusted).
    Y is the nonlabor-related portion of the national unadjusted 
payment rate.

Adjusted Medicare Payment = Xa + Y

    We are providing examples below of the calculation of both the full 
and reduced national unadjusted payment rates that would 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 proposed CY 2024 
full national unadjusted payment rate for APC 5071 is $675.15. The 
proposed reduced national adjusted payment rate for APC 5071 for a 
hospital that fails to meet the Hospital OQR Program requirements is 
$661.98. This reduced rate is calculated by multiplying the reporting 
ratio of 0.9805 by the full unadjusted payment rate for APC 5071.
    Step 1. The labor-related portion of the proposed full national 
unadjusted payment is approximately $405.09 (.60 * $675.15). The labor-
related portion of the proposed reduced national adjusted payment is 
approximately $397.19 (.60 * $675.15).
    Step 2 & 3. The FY 2024 wage index for a provider located in CBSA 
35614 in New York, which includes the adoption of the proposed IPPS 
2024 wage index policies, is 1.3631.
    Step 4. The wage adjusted labor-related portion of the proposed 
full national unadjusted payment is approximately $522.18 ($405.09 
*1.3631). The wage adjusted labor-related portion of the proposed 
reduced national adjusted payment is approximately $541.41 ($397.19 * 
1.3631).
    Step 5. The nonlabor-related portion of the proposed full national 
unadjusted payment is approximately $270.06 (.40 * $675.15). The 
nonlabor-related portion of the proposed reduced national adjusted 
payment is approximately $264.79 (.40 * $661.98).
    Step 6. For this example of a provider located in Brooklyn, New 
York, the rural adjustment for rural SCHs does not apply.
    Step 7. The sum of the labor-related and nonlabor-related portions 
of the proposed full national unadjusted payment is approximately 
$822.24 ($552.18 + $270.06). The sum of the portions of the proposed 
reduced national adjusted payment is approximately $806.20 ($541.41 + 
$264.79).
[GRAPHIC] [TIFF OMITTED] TP31JY23.011

I. Proposed Beneficiary Copayments

1. Background
    Section 1833(t)(3)(B) of the Act requires the Secretary to set 
rules for determining the unadjusted copayment amounts to be paid by 
beneficiaries for covered OPD services. Section 1833(t)(8)(C)(ii) of 
the Act specifies that the Secretary must reduce the national 
unadjusted copayment amount for a covered OPD service (or group of such 
services) furnished in a year in a manner so that the effective 
copayment rate (determined on a national unadjusted basis) for that 
service in the year does not exceed a specified percentage. As 
specified in section 1833(t)(8)(C)(ii)(V) of the Act, the effective 
copayment rate for a covered OPD service paid under the OPPS in CY 
2006, and in CYs thereafter, shall not exceed 40 percent of the APC 
payment rate.
    Section 1833(t)(3)(B)(ii) of the Act provides that, for a covered 
OPD service (or group of such services) furnished in a year, the 
national unadjusted copayment amount cannot be less than 20 percent of 
the OPD fee schedule amount. However, section 1833(t)(8)(C)(i) of the 
Act limits the amount of beneficiary copayment that may be collected 
for a procedure (including items such as drugs and biologicals) 
performed in a year to the amount of the inpatient hospital deductible 
for that year.
    Section 4104 of the Affordable Care Act eliminated the Medicare 
Part B

[[Page 49593]]

coinsurance for preventive services furnished on and after January 1, 
2011, that meet certain requirements, including flexible 
sigmoidoscopies and screening colonoscopies, and waived the Part B 
deductible for screening colonoscopies that become diagnostic during 
the procedure. For a discussion of the changes made by the Affordable 
Care Act with regard to copayments for preventive services furnished on 
and after January 1, 2011, we refer readers to section XII.B of the CY 
2011 OPPS/ASC final rule with comment period (75 FR 72013).
    Section 122 of the Consolidated Appropriations Act (CAA) of 2021 
(Pub. L. 116-260), Waiving Medicare Coinsurance for Certain Colorectal 
Cancer Screening Tests, amends section 1833(a) of the Act to offer a 
special coinsurance rule for screening flexible sigmoidoscopies and 
screening colonoscopies, regardless of the code that is billed for the 
establishment of a diagnosis as a result of the test, or for the 
removal of tissue or other matter or other procedure, that is furnished 
in connection with, as a result of, and in the same clinical encounter 
as the colorectal cancer screening test. We refer readers to section 
X.B, ``Changes to Beneficiary Coinsurance for Certain Colorectal Cancer 
Screening Tests,'' of the CY 2022 OPPS/ASC final rule with comment 
period for the full discussion of this policy (86 FR 63740 through 
63743). Under the regulation at 42 CFR 410.152(l)(5)(i)(B), the 
Medicare Part B payment percentage for colorectal cancer screening 
tests described in the regulation at Sec.  410.37(j) that are furnished 
in CY 2023 through 2026 (and the corresponding reduction in 
coinsurance) is 85 percent (with beneficiary coinsurance equal to 15 
percent).
    On August 16, 2022, the Inflation Reduction Act of 2022 (IRA) (Pub. 
L. 117-169) was signed into law. Section 11101(a) of the IRA amended 
section 1847A of the Act by adding a new subsection (i), which requires 
the payment of rebates into the Supplementary Medical Insurance Trust 
Fund for Part B rebatable drugs if the payment limit amount exceeds the 
inflation-adjusted payment amount, which is calculated as set forth in 
section 1847A(i)(3)(C) of the Act. The provisions of section 11101 of 
the IRA are currently being implemented through program instruction, as 
permitted under section 1847A(c)(5)(C) of the Act. As such, we issued 
final guidance for the computation of inflation-adjusted beneficiary 
coinsurance under section 1847A(i)(5) of the Act and amounts paid under 
section 1833(a)(1)(EE) of the Act on February 9, 2023.4 5 
For additional information regarding implementation of section 11101 of 
the IRA, please see the inflation rebates resources page at https://www.cms.gov/inflation-reduction-act-and-medicare/inflation-rebates-medicare. We also refer readers to the CY 2024 Medicare Physician Fee 
Schedule (PFS) proposed rule for a detailed discussion of proposals 
related to inflation-adjusted beneficiary coinsurance and Medicare 
payment for Medicare Part B rebatable drugs.
---------------------------------------------------------------------------

    \4\ https://www.cms.gov/files/document/medicare-part-b-inflation-rebate-program-initial-guidance.pdf.
    \5\ In addition, beginning with the April 2023 ASP Drug Pricing 
file, the file includes the coinsurance percentage for each drug and 
specifies ``inflation-adjusted coinsurance'' in the ``Notes'' column 
if the coinsurance for a drug is less than 20 percent of the 
Medicare Part B payment amount. Drug pricing files are available at 
https://www.cms.gov/medicare/medicare-fee-for-service-part-b-drugs/mcrpartbdrugavgsalesprice.
---------------------------------------------------------------------------

    Section 11101(b) of the IRA amended sections 1833(i) and 1833(t)(8) 
of the Act by adding a new paragraph (9) and subparagraph (F), 
respectively. Section 1833(i)(9) requires under the ASC payment system 
that in the case of a Part B rebatable drug, in lieu of calculation of 
coinsurance that would otherwise apply under the ASC payment system, 
the provisions of section 1847A(i)(5) of the Act shall, as determined 
appropriate by the Secretary, apply for calculation of beneficiary 
coinsurance in the same manner as the provisions of section 1847A(i)(5) 
of the Act apply under that section. Similarly, section 1833(t)(8)(F) 
of the Act requires under the OPPS that in the case of a Part B 
rebatable drug (except for a drug that has no copayment applied under 
subparagraph (E) of such section or for which payment is packaged into 
the payment for a covered OPD service or group of services), in lieu of 
the calculation of the copayment amount that would otherwise apply 
under the OPPS, the provisions of section 1847A(i)(5) of the Act shall, 
as determined appropriate by the Secretary, apply in the same manner as 
the provisions of section 1847A(i)(5) of the Act apply under that 
section. Section 1847A(i)(5) of the Act requires that for Part B 
rebatable drugs, as defined in section 1847A(i)(2)(A) of the Act, 
furnished on or after April 1, 2023, in calendar quarters in which the 
amount specified in section 1847A(i)(3)(A)(ii)(I) of the Act (or, in 
the case of selected drugs described under section 1192(c) of the Act, 
the amount specified in section 1847A(b)(1)(B) of the Act), exceeds the 
inflation-adjusted payment amount determined in accordance with section 
1847A(i)(3)(C) of the Act, the coinsurance will be 20 percent of the 
inflation-adjusted payment amount for such quarter (hereafter, the 
inflation-adjusted coinsurance amount). This inflation-adjusted 
coinsurance amount is applied as a percent, as determined by the 
Secretary, to the payment amount that would otherwise apply for such 
calendar quarter in accordance with section 1847A(b)(1)(B) or (C) of 
the Act, as applicable, including in the case of a selected drug.
    Paragraph (9) of section 1833(i) o the Act and subparagraph (F) of 
section 1833(t)(8) of the Act, as added by section 11101(b) of the IRA, 
also provide that in lieu of the amounts of payment otherwise 
applicable under the ASC payment system and OPPS, the provisions of 
paragraph (1)(EE) of subsection (a) of section 1833 of the Act shall 
apply, as determined appropriate by the Secretary. Section 11101(b) of 
the IRA amended section 1833(a)(1) of the Act by adding a new 
subparagraph (EE), which requires that if the inflation-adjusted 
payment amount of a Part B rebatable drug exceeds the payment amount 
described in section 1847A(i)(3)(A)(ii)(I) of the Act (or, in the case 
of a selected drug, the payment amount described in section 
1847A(b)(1)(B) of the Act), the Part B payment will, subject to the 
deductible and sequestration, equal the difference between such payment 
amount and the inflation-adjusted coinsurance amount.
    In this proposed rule, we propose to codify the OPPS program 
payment and cost sharing amounts for Part B rebatable drugs as required 
by section 1833(t)(8)(F) by adding a new paragraph (e) to Sec.  419.41, 
which cross-references the regulations proposed in the CY 2024 PFS 
proposed rule (Sec. Sec.  410.152(m) and 489.30(b)(6)). We also propose 
to amend the regulation text to reflect our longstanding policies for 
calculating the Medicare program payment and cost sharing amounts for 
separately payable drugs and biologicals by adding a new paragraph (d) 
to Sec.  419.41. Similarly, we propose to codify the ASC cost sharing 
amounts for Part B rebatable drugs as required by section 1833(i)(9) of 
the Act by revising Sec.  416.172(d) to include a cross-reference to 42 
CFR 489.30(b)(6), as proposed in the CY 2024 PFS proposed rule to 
codify the cost sharing amounts for Part B rebatable drugs with prices 
increasing at a rate faster than inflation. We are not proposing any 
changes to the ASC regulations at 42 CFR part 416 to reflect the 
Medicare payment amount for Part B rebatable drugs with prices 
increasing at a rate faster than inflation, because 42 CFR

[[Page 49594]]

416.171(b) already incorporates, for the ASC payment system, the 
payment amounts that apply for the OPPS under 42 CFR part 419. Part 419 
would include our proposed new Sec.  419.41(e), which addresses 
Medicare payment for Part B rebatable drugs under the OPPS.
2. Proposed OPPS Copayment Policy
    For CY 2024, we propose to determine copayment amounts for new and 
revised APCs using the same methodology that we implemented beginning 
in CY 2004. (We refer readers to the November 7, 2003 OPPS final rule 
with comment period for a discussion of that methodology (68 FR 
63458).) In addition, we propose to use the same standard rounding 
principles that we have historically used in instances where the 
application of our standard copayment methodology would result in a 
copayment amount that is less than 20 percent and cannot be rounded, 
under standard rounding principles, to 20 percent. (We refer readers to 
the CY 2008 OPPS/ASC final rule with comment period (72 FR 66687) in 
which we discuss our rationale for applying these rounding principles.) 
The proposed national unadjusted copayment amounts for services payable 
under the OPPS that would be effective January 1, 2024 are included in 
Addenda A and B to this proposed rule (which are available via the 
internet on the CMS website).
    As discussed in section XIV.E of this proposed rule, for CY 2024, 
the Medicare beneficiary's minimum unadjusted copayment and national 
unadjusted copayment for a service to which a reduced national 
unadjusted payment rate applies will equal the product of the reporting 
ratio and the national unadjusted copayment, or the product of the 
reporting ratio and the minimum unadjusted copayment, respectively, for 
the service.
    We note that OPPS copayments may increase or decrease each year 
based on changes in the calculated APC payment rates, due to updated 
cost report and claims data, and any changes to the OPPS cost modeling 
process. However, as described in the CY 2004 OPPS final rule with 
comment period, the development of the copayment methodology generally 
moves beneficiary copayments closer to 20 percent of OPPS APC payments 
(68 FR 63458 through 63459).
    In the CY 2004 OPPS final rule with comment period (68 FR 63459), 
we adopted a new methodology to calculate unadjusted copayment amounts 
in situations including reorganizing APCs, and we finalized the 
following rules to determine copayment amounts in CY 2004 and 
subsequent years.
     When an APC group consists solely of HCPCS codes that were 
not paid under the OPPS the prior year because they were packaged or 
excluded or are new codes, the unadjusted copayment amount would be 20 
percent of the APC payment rate.
     If a new APC that did not exist during the prior year is 
created and consists of HCPCS codes previously assigned to other APCs, 
the copayment amount is calculated as the product of the APC payment 
rate and the lowest coinsurance percentage of the codes comprising the 
new APC.
     If no codes are added to or removed from an APC and, after 
recalibration of its relative payment weight, the new payment rate is 
equal to or greater than the prior year's rate, the copayment amount 
remains constant (unless the resulting coinsurance percentage is less 
than 20 percent).
     If no codes are added to or removed from an APC and, after 
recalibration of its relative payment weight, the new payment rate is 
less than the prior year's rate, the copayment amount is calculated as 
the product of the new payment rate and the prior year's coinsurance 
percentage.
     If HCPCS codes are added to or deleted from an APC and, 
after recalibrating its relative payment weight, holding its unadjusted 
copayment amount constant results in a decrease in the coinsurance 
percentage for the reconfigured APC, the copayment amount would not 
change (unless retaining the copayment amount would result in a 
coinsurance rate less than 20 percent).
     If HCPCS codes are added to an APC and, after 
recalibrating its relative payment weight, holding its unadjusted 
copayment amount constant results in an increase in the coinsurance 
percentage for the reconfigured APC, the copayment amount would be 
calculated as the product of the payment rate of the reconfigured APC 
and the lowest coinsurance percentage of the codes being added to the 
reconfigured APC.
    We noted in the CY 2004 OPPS final rule with comment period that we 
would seek to lower the copayment percentage for a service in an APC 
from the prior year if the copayment percentage was greater than 20 
percent. We noted that this principle was consistent with section 
1833(t)(8)(C)(ii) of the Act, which accelerates the reduction in the 
national unadjusted coinsurance rate so that beneficiary liability will 
eventually equal 20 percent of the OPPS payment rate for all OPPS 
services to which a copayment applies, and with section 1833(t)(3)(B) 
of the Act, which achieves a 20-percent copayment percentage when fully 
phased in and gives the Secretary the authority to set rules for 
determining copayment amounts for new services. We further noted that 
the use of this methodology would, in general, reduce the beneficiary 
coinsurance rate and copayment amount for APCs for which the payment 
rate changes as the result of the reconfiguration of APCs and/or 
recalibration of relative payment weights (68 FR 63459).
3. Proposed Calculation of an Adjusted Copayment Amount for an APC 
Group
    Individuals interested in calculating the national copayment 
liability for a Medicare beneficiary for a given service provided by a 
hospital that met or failed to meet its Hospital OQR Program 
requirements should follow the formulas presented in the following 
steps.
    Step 1. Calculate the beneficiary payment percentage for the APC by 
dividing the APC's national unadjusted copayment by its proposed 
payment rate. For example, using APC 5071, $135.03 is approximately 20 
percent of the full national unadjusted payment rate of $675.15. For 
APCs with only a minimum unadjusted copayment in Addenda A and B to 
this proposed rule with comment period (which are available via the 
internet on the CMS website), the beneficiary payment percentage is 20 
percent.
    The formula below is a mathematical representation of Step 1 and 
calculates the national copayment as a percentage of national payment 
for a given service.
    B is the beneficiary payment percentage.

B = National unadjusted copayment for APC/national unadjusted payment 
rate for APC.

    Step 2. Calculate the appropriate wage-adjusted payment rate for 
the APC for the provider in question, as indicated in Steps 2 through 4 
under section II.H of this proposed rule. Calculate the rural 
adjustment for eligible providers, as indicated in Step 6 under section 
II.H of this proposed rule.
    Step 3. Multiply the percentage calculated in Step 1 by the payment 
rate calculated in Step 2. The result is the wage-adjusted copayment 
amount for the APC.
    The formula below is a mathematical representation of Step 3 and 
applies the beneficiary payment percentage to the adjusted payment rate 
for a service calculated under section II.H of this proposed rule, with 
and without the

[[Page 49595]]

rural adjustment, to calculate the adjusted beneficiary copayment for a 
given service.

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

    Step 4. For a hospital that failed to meet its Hospital OQR Program 
requirements, multiply the copayment calculated in Step 3 by the 
reporting ratio of 0.9805.
    The unadjusted copayments for services payable under the OPPS that 
would be effective January 1, 2024 are shown in Addenda A and B to this 
proposed rule (which are available via the CMS website). We note that 
the proposed national unadjusted payment rates and copayment rates 
shown in Addenda A and B to this proposed rule reflect the proposed CY 
2024 OPD increase factor discussed in section II.B of this proposed 
rule.
    In addition, as noted earlier, section 1833(t)(8)(C)(i) of the Act 
limits the amount of beneficiary copayment that may be collected for a 
procedure performed in a year to the amount of the inpatient hospital 
deductible for that year.

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

A. Proposed OPPS Treatment of New and Revised HCPCS Codes

    Payments for OPPS procedures, services, and items are generally 
based on medical billing codes, specifically, HCPCS codes, that are 
reported on HOPD claims. HCPCS codes are used to report surgical 
procedures, medical services, items, and supplies under the hospital 
OPPS. The HCPCS is divided into two principal subsystems, referred to 
as Level I and Level II of the HCPCS. Level I is comprised of CPT 
(Current Procedural Terminology) codes, a numeric and alphanumeric 
coding system that is established and maintained by the American 
Medical Association (AMA), and consists of Category I, II, III, MAAA, 
and PLAA CPT codes. Level II, which is established and maintained by 
CMS, is a standardized coding system that is used primarily to identify 
products, supplies, and services not included in the CPT codes. 
Together, Level I and II HCPCS codes are used to report procedures, 
services, items, and supplies under the OPPS payment system. 
Specifically, we recognize the following codes on OPPS claims:
     Category I CPT codes, which describe surgical procedures, 
diagnostic and therapeutic services, and vaccine codes;
     Category III CPT codes, which describe new and emerging 
technologies, services, and procedures;
     MAAA CPT codes, which describe laboratory multianalyte 
assays with algorithmic analyses (MAA);
     PLA CPT codes, which describe proprietary laboratory 
analyses (PLA) services; and
     Level II HCPCS codes (also known as alpha-numeric codes), 
which are used primarily to identify drugs, devices, supplies, 
temporary procedures, and services not described by CPT codes.
    The codes are updated and changed throughout the year. CPT and 
Level II HCPCS code changes that affect the OPPS are published through 
the annual rulemaking cycle and through the OPPS quarterly update 
Change Requests (CRs). Generally, these code changes are effective 
January 1, April 1, July 1, or October 1. CPT code changes are released 
by the AMA (via their website) while Level II HCPCS code changes are 
released to the public via the CMS HCPCS website. CMS recognizes the 
release of new CPT and Level II HCPCS codes outside of the formal 
rulemaking process via OPPS quarterly update CRs. Based on our review, 
we assign the new codes to interim status indicators (SIs) and APCs. 
These interim assignments are finalized in the OPPS/ASC final rules. 
This quarterly process offers hospitals access to codes that more 
accurately describe the items or services furnished and provides 
payment for these items or services in a timelier manner than if we 
waited for the annual rulemaking process. We solicit public comments on 
the new CPT and Level II HCPCS codes, status indicators, and APC 
assignments through our annual rulemaking process.
    We note that, under the OPPS, the APC assignment determines the 
payment rate for an item, procedure, or service. The items, procedures, 
or services not exclusively paid separately under the hospital OPPS are 
assigned to appropriate status indicators. Certain payment status 
indicators provide separate payment while other payment status 
indicators do not. In section XI ``Proposed CY 2024 Payment Status and 
Comment Indicators'' of this proposed rule, we discuss the various 
status indicators and comment indicators used under the OPPS. We also 
provide a complete list of the proposed status indicators and their 
definitions in Addendum D1 to this proposed rule.
1. April 2023 HCPCS Codes Proposed Rule Comment Solicitation
    For the April 2023 update, 67 new HCPCS codes were established and 
made effective on April 1, 2023. Through the April 2023 OPPS quarterly 
update CR (Transmittal 11937, Change Request 13136, dated March 31, 
2023), we recognized several new HCPCS codes for payment under the 
OPPS. In this proposed rule, we solicit public comments on the proposed 
APC and status indicator assignments for the codes listed in Table 6 
(New HCPCS Codes Effective April 1, 2023). The proposed status 
indicator, APC assignment, and payment rate for each HCPCS code can be 
found in Addendum B to this proposed rule. The new codes effective 
April 1, 2023, are assigned to comment indicator ``NP'' in Addendum B 
to this proposed rule to indicate that the codes are assigned to an 
interim APC assignment and comments will be accepted on their interim 
APC assignments. The complete list of proposed status indicators and 
definitions used under the OPPS can be found in Addendum D1 to this 
proposed rule, while the complete list of proposed comment indicators 
and definitions can be found in Addendum D2. We note that OPPS Addendum 
B (OPPS payment file by HCPCS code), Addendum D1 (OPPS Status 
Indicators), and Addendum D2 (OPPS Comment Indicators) are available 
via the internet on the CMS website.
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2. July 2023 HCPCS Codes Proposed Rule Comment Solicitation
    For the July 2023 update, 97 new codes were established and made 
effective July 1, 2023. Through the July 2023 OPPS quarterly update CR 
(Transmittal 12077, Change Request 13210, dated June 13, 2023), we 
recognized several new codes for payment and assigned them to 
appropriate interim OPPS status indicators and APCs. In this proposed 
rule, we solicit public comments on the proposed APC and status 
indicator assignments for the codes listed in Table 7 (New HCPCS Codes 
Effective July 1, 2023). The proposed status indicator, APC assignment, 
and payment rate for each HCPCS code can be found in Addendum B to this 
proposed rule. The complete list of proposed status indicators and 
corresponding definitions used under the OPPS can be found in Addendum 
D1 to this proposed rule. In addition, the new codes are assigned to 
comment indicator ``NP'' in Addendum B to this proposed rule to 
indicate that the codes are assigned to an interim APC assignment and 
comments will be accepted on their interim APC assignments. The 
complete list of proposed comment indicators and definitions used under 
the OPPS can be found in Addendum D2 to this proposed rule. We note 
that OPPS Addendum B (OPPS payment file by HCPCS code), Addendum D1 
(OPPS Status Indicators), and Addendum D2 (OPPS Comment Indicators) are 
available via the internet on the CMS website.

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3. October 2023 HCPCS Codes Final Rule Comment Solicitation
    As has been our practice in the past, we will solicit comments on 
the new CPT and Level II HCPCS codes that will be effective October 1, 
2023, in the CY 2024 OPPS/ASC final rule with comment period, thereby 
allowing us to finalize the status indicators and APC assignments for 
the codes in the CY 2025 OPPS/ASC final rule with comment period. The 
HCPCS codes will be released to the public through the October 2023 
OPPS Update CR and the CMS HCPCS website while the CPT codes will be 
released to the public through the AMA website.
    For CY 2024, we propose to continue our established policy of 
assigning comment indicator ``NI'' in Addendum B to the OPPS/ASC final 
rule with comment period to those new HCPCS codes that will be 
effective October 1, 2023, to indicate that we are assigning them an 
interim status indicator, which is subject to public comment. We will 
be inviting public comments in the CY 2024 OPPS/ASC final rule with 
comment period on the status indicator and APC assignments, which would 
then be finalized in the CY 2025 OPPS/ASC final rule with comment 
period.
4. January 2024 HCPCS Codes
a. New Level II HCPCS Codes Final Rule Comment Solicitation
    Consistent with past practice, we will solicit comments on the new 
Level II HCPCS codes that will be effective January 1, 2024, in the CY 
2024 OPPS/ASC final rule with comment period, thereby allowing us to 
finalize the status indicators and APC assignments for the codes in the 
CY 2025 OPPS/ASC final rule with comment period. Unlike the CPT codes 
that are effective January 1 and are included in the OPPS/ASC proposed 
rules, and except for the proposed new C-codes and G-codes listed in 
Addendum O of this proposed rule, most Level II HCPCS codes are not 
released until sometime around November to be effective January 1. 
Because these codes are not available until November, we are unable to 
include them in the OPPS/ASC proposed rules. Consequently, for CY 2024, 
we propose to include the new Level II HCPCS codes effective January 1, 
2024, in Addendum B to the CY 2024 OPPS/ASC final rule with comment 
period, which would be incorporated in the January 2024 OPPS quarterly 
update CR. Specifically, for CY 2024, we propose to continue our 
established policy of assigning comment indicator ``NI'' in Addendum B 
to the OPPS/ASC final rule with comment period to the new HCPCS codes 
that will be effective January 1, 2024, to indicate that we are 
assigning them an interim status indicator, which is subject to public 
comment. We will be inviting public comments in the CY 2024 OPPS/ASC 
final rule with comment period on the status indicator and APC 
assignments, which would then be finalized in the CY 2025 OPPS/ASC 
final rule with comment period.
b. New CPT Codes Proposed Rule Comment Solicitation
    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.

[[Page 49606]]

    For the CY 2024 OPPS update, we received the CPT codes that will be 
effective January 1, 2024, from the AMA in time to be included in this 
proposed rule. The new, revised, and deleted CPT codes can be found in 
Addendum B to this proposed rule (which is available via the internet 
on the CMS website). We note that the new and revised CPT codes are 
assigned to comment indicator ``NP'' in Addendum B of this proposed 
rule to indicate that the code is new for the next calendar year or the 
code is an existing code with substantial revision to its code 
descriptor in the next calendar year as compared to the current 
calendar year with a proposed APC assignment, and that comments will be 
accepted on the proposed APC assignment and status indicator. Further, 
we note that the CPT code descriptors that appear in Addendum B are 
short descriptors and do not accurately describe the complete 
procedure, service, or item described by the CPT code. Therefore, we 
are including the 5-digit placeholder codes and the long descriptors 
for the new and revised CY 2024 CPT codes in Addendum O, specifically 
under the column labeled ``CY 2024 OPPS/ASC Proposed Rule 5-Digit AMA/
CMS Placeholder Code.'' The final HCPCS code numbers will be included 
in the CY 2024 OPPS/ASC final rule with comment period. In summary, we 
solicit public comments on the proposed CY 2024 status indicators and 
APC assignments for the new and revised CPT codes that will be 
effective January 1, 2024. Because the CPT codes listed in Addendum B 
appear with short descriptors only, we list them again in Addendum O to 
this proposed rule with long descriptors. In addition, we propose to 
finalize the status indicator and APC assignments for these codes (with 
their final CPT code numbers) in the CY 2024 OPPS/ASC final rule with 
comment period. The proposed status indicator and APC assignment for 
these codes can be found in Addendum B to this proposed rule. In 
addition, the complete list of proposed comment indicators and 
definitions used under the OPPS can be found in Addendum D2 to this 
proposed rule. We note that OPPS Addendum B (OPPS payment file by HCPCS 
code), Addendum D1 (OPPS Status Indicators), and Addendum D2 (OPPS 
Comment Indicators) are available via the internet on the CMS website.
    Finally, in Table 8 (Comment and Finalization Timeframes for New 
and Revised OPPS-Related HCPCS Codes) below, we summarize our current 
process for updating codes through our OPPS quarterly update CRs, 
seeking public comments, and finalizing the treatment of these codes 
under the OPPS.
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B. Proposed OPPS Changes--Variations Within APCs

1. Background
    Section 1833(t)(2)(A) of the Act requires the Secretary to develop 
a classification system for covered hospital outpatient department 
services. In addition, section 1833(t)(2)(B) of the Act provides that 
the Secretary may establish groups of covered OPD services within this 
classification system, so that services classified within each group 
are comparable clinically and with respect to the use of resources. In 
accordance with these provisions, we developed a grouping 
classification system, referred to as Ambulatory Payment 
Classifications (APCs), as set forth in regulations at 42 CFR 419.31. 
We use Level I (also known as CPT codes) and Level II HCPCS codes (also 
known as alphanumeric codes) to identify and group the services within 
each APC. The APCs are organized such that each group is homogeneous 
both clinically and in terms of resource use. Using this classification 
system, we have established distinct groups of similar services. We 
also have developed separate APC groups for certain medical devices, 
drugs, biologicals, therapeutic radiopharmaceuticals, and brachytherapy 
devices that are not packaged into the payment for the procedure.
    We have packaged into the payment for each procedure or service 
within an APC group the costs associated with those items and services 
that are typically ancillary and supportive to a primary diagnostic or 
therapeutic modality and, in those cases, are an integral part of the 
primary service they support. Therefore, we do not make separate 
payment for these packaged items or services. In general, packaged 
items and services include, but are not limited to, the items and 
services listed in regulations at 42 CFR 419.2(b). A further discussion 
of packaged services is included in section II.A.3 of this proposed 
rule.
    Under the OPPS, we generally pay for covered hospital outpatient 
services on a rate-per-service basis, where the service may be reported 
with one or more HCPCS codes. Payment varies according to the APC group 
to which the independent service or combination of services is 
assigned. For CY 2024, we propose that each APC relative payment weight 
represents the hospital cost of the services included in that APC, 
relative to the hospital cost of the services included in APC 5012 
(Clinic Visits and Related Services). The APC relative payment weights 
are scaled to APC 5012 because it is the hospital clinic visit APC and 
clinic visits are among the most frequently furnished services in the 
hospital outpatient setting.
2. Application of the 2 Times Rule
    Section 1833(t)(9)(A) of the Act requires the Secretary to review, 
not less often than annually, and revise the APC groups, the relative 
payment weights, and the wage and other adjustments described in 
paragraph (2) to take into account changes in medical practice, changes 
in technology, the addition of new services, new cost data, and other 
relevant information and factors. Section 1833(t)(9)(A) of the Act also 
requires the Secretary to consult with an expert outside advisory panel 
composed of an appropriate selection of representatives of providers to 
review (and advise the Secretary concerning) 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 
2024 OPPS update will be discussed in the relevant specific sections 
throughout the CY 2024 OPPS/ASC final rule with comment period.
    In addition, section 1833(t)(2) of the Act provides that, subject 
to certain exceptions, the items and services within an APC group 
cannot be considered comparable with respect to the use of resources if 
the highest cost for an item or service in the group is more than 2 
times greater than the lowest cost for an item or service within the 
same group (referred to as the ``2 times rule''). The statute 
authorizes the Secretary to make exceptions to the 2 times rule in 
unusual cases, such as for low-volume items and services (but the 
Secretary may not make such an exception in the case of a drug or 
biological that has been designated as an orphan drug under section 526 
of the Federal Food, Drug, and Cosmetic Act). In determining the APCs 
with a 2 times rule violation, we consider only those HCPCS codes that 
are significant based on the number of claims. We note that, for 
purposes of identifying significant procedure codes for examination 
under the 2 times rule, we consider procedure codes that have more than 
1,000 single major claims or procedure codes that both have more than 
99 single major claims and contribute at least 2 percent of the single 
major claims used to establish the APC cost to be significant (75 FR 
71832). This longstanding definition of when a procedure code is 
significant for purposes of the 2 times rule was selected because we 
believe that a subset of 1,000 or fewer claims is negligible within the 
set of approximately 100 million single procedure or single session 
claims we use for establishing costs. Similarly, a procedure code for 
which there are fewer than 99 single claims and that comprises less 
than 2 percent of the single major claims within an APC will have a 
negligible impact on the APC cost (75 FR 71832). In this section of 
this proposed rule, for CY 2024, we propose to make exceptions to this 
limit on the variation of costs within each APC group in unusual cases, 
such as for certain low-volume items and services.
    For the CY 2024 OPPS update, we identified the APCs with violations 
of the 2 times rule and we propose changes to the procedure codes 
assigned to these APCs (with the exception of those APCs for which we 
propose a 2 times rule exception) in Addendum B to this proposed rule. 
We note that Addendum B does not appear in the printed version of the 
Federal Register as part of this proposed rule. Rather, it is published 
and made available via the internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices. To 
eliminate a violation of the 2 times rule and improve clinical and 
resource homogeneity in the APCs for which we are not proposing a 2 
times rule exception, we propose to reassign these procedure codes to 
new APCs that contain services that are similar with regard to both 
their clinical and resource characteristics. In many cases, the 
proposed HCPCS code reassignments and associated APC reconfigurations 
for CY 2024 included in this proposed rule are related to changes in 
costs of services that were observed in the CY 2022 claims data 
available for CY 2024 ratesetting. Addendum B to this proposed rule 
identifies with a comment indicator ``CH'' those procedure codes for 
which we propose a change to the APC assignment or status indicator, or 
both, that were initially assigned in the July 1, 2023, OPPS Addendum B 
Update, which is available via the internet on the CMS website at: 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Addendum-A-and-Addendum-B-Updates.
3. Proposed APC Exceptions to the 2 Times Rule
    Taking into account the APC changes that we propose to make for CY 
2024, we reviewed all of the APCs for which we identified 2 times rule 
violations to

[[Page 49608]]

determine whether any of the APCs would qualify for an exception. We 
used the following criteria to evaluate whether to propose exceptions 
to the 2 times rule for affected APCs:
     Resource homogeneity;
     Clinical homogeneity;
     Hospital outpatient setting utilization;
     Frequency of service (volume); and
     Opportunity for upcoding and code fragments.
    For a detailed discussion of these criteria, we refer readers to 
the April 7, 2000 final rule (65 FR 18457 through 18458).
    Based on the CY 2022 claims data available for this proposed rule, 
we found 21 APCs with violations of the 2 times rule. We applied the 
criteria as described above to identify the APCs for which we propose 
to make exceptions under the 2 times rule for CY 2024 and found that 
all of the 21 APCs we identified meet the criteria for an exception to 
the 2 times rule based on the CY 2022 claims data available for this 
proposed rule. We note that, on an annual basis, based on our analysis 
of the latest claims data, we identify violations to the 2 times rule 
and propose changes when appropriate. Those APCs that violate the 2 
times rule are identified and appear in Table 9 below. In addition, we 
did not include in that determination those APCs where a 2 times rule 
violation was not a relevant concept, such as APC 5401 (Dialysis), 
which only has two HCPCS codes assigned to it that have similar 
geometric mean costs and do not create a 2 times rule violation. 
Therefore, we have only identified those APCs, including those with 
criteria-based costs, such as device-dependent CPT/HCPCS codes, with 
violations of the 2 times rule, where a 2 times rule violation is a 
relevant concept.
    Table 9 of this proposed rule lists the 21 APCs for which we 
propose to make an exception under the 2 times rule for CY 2024 based 
on the criteria cited above and claims data submitted between January 
1, 2022 and December 31, 2022, and processed on or before December 31, 
2022, and CCRs, if available. The proposed geometric mean costs for 
covered hospital outpatient services for these and all other APCs that 
were used in the development of this proposed rule can be found on the 
CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.
[GRAPHIC] [TIFF OMITTED] TP31JY23.023

C. Proposed New Technology APCs

1. Background
    In the CY 2002 OPPS final rule (66 FR 59903), we finalized changes 
to the time period in which a service can be eligible for payment under 
a New Technology APC. Beginning in CY 2002, we retain services within 
New Technology APC groups until we gather sufficient claims data to 
enable us to assign the service to an appropriate clinical APC. This 
policy allows us to move a service from

[[Page 49609]]

a New Technology APC in less than 2 years if sufficient data are 
available. It also allows us to retain a service in a New Technology 
APC for more than 2 years if sufficient data upon which to base a 
decision for reassignment have not been collected.
    We also adopted in the CY 2002 OPPS final rule the following 
criteria for assigning a complete or comprehensive service to a New 
Technology APC: (1) the service must be truly new, meaning it cannot be 
appropriately reported by an existing HCPCS code assigned to a clinical 
APC and does not appropriately fit within an existing clinical APC; (2) 
the service is not eligible for transitional pass-through payment 
(however, a truly new, comprehensive service could qualify for 
assignment to a new technology APC even if it involves a device or drug 
that could, on its own, qualify for a pass-through payment); and (3) 
the service falls within the scope of Medicare benefits under section 
1832(a) of the Act and is reasonable and necessary in accordance with 
section 1862(a)(1)(A) of the Act (66 FR 59898 through 59903). For 
additional information about our New Technology APC policy, we refer 
readers to https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/passthrough_payment on the CMS website 
and then follow the instructions to access the MEARISTM system for OPPS 
New Technology APC applications.
    In the CY 2004 OPPS final rule with comment period (68 FR 63416), 
we restructured the New Technology APCs to make the cost intervals more 
consistent across payment levels and refined the cost bands for these 
APCs to retain two parallel sets of New Technology APCs: one set with a 
status indicator of ``S'' (Significant Procedures, Not Discounted when 
Multiple. Paid under OPPS; separate APC payment) and the other set with 
a status indicator of ``T'' (Significant Procedure, Multiple Reduction 
Applies. Paid under OPPS; separate APC payment). These current New 
Technology APC configurations allow us to price new technology services 
more appropriately and consistently.
    For CY 2023, 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.
    Some services assigned to New Technology APCs have very low annual 
volume, which we consider to be fewer than 100 claims (86 FR 63528). 
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 
finalized 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). Specifically, in the CY 2019 OPPS/ASC final rule with comment 
period (83 FR 58893), we established that, in each of our annual 
rulemakings, we would calculate and present the result of each 
statistical methodology (arithmetic mean, geometric mean, and median) 
based on up to 4 years of claims data and solicit public comment on 
which methodology should be used to establish the payment rate for the 
low-volume new technology service. In the CY 2022 OPPS/ASC final rule 
(86 FR 63529), we replaced the New Technology APC low volume policy 
with the universal low volume APC policy. Unlike the New Technology APC 
low volume policy, the universal low volume APC policy applies to 
clinical APCs and brachytherapy APCs, in addition to 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 set the payment rate for the APC. We refer readers to the CY 2022 
OPPS/ASC final rule with comment period (86 FR 63529) for further 
discussion regarding this policy.
    Finally, 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 2024, 
we included the

[[Page 49610]]

proposed payment rates for New Technology APCs 1491 to 1599 and 1901 
through 1908 in Addendum A to this proposed rule (which is available on 
the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.
2. Procedures Assigned to New Technology APC Groups for CY 2024
    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 2024, we propose to 
retain services within New Technology APC groups until we obtain 
sufficient claims data to justify reassignment of the service to an 
appropriate clinical APC. The flexibility associated with this policy 
allows us to reassign a service from a New Technology APC in less than 
2 years if we have obtained sufficient claims data. It also allows us 
to retain a service in a New Technology APC for more than 2 years if we 
have not obtained sufficient claims data upon which to base a 
reassignment decision (66 FR 59902).
a. Administration of Subretinal Therapies Requiring Vitrectomy (APC 
1563)
    Effective January 1, 2021, CMS established HCPCS code C9770 
(Vitrectomy, mechanical, pars plana approach, with subretinal injection 
of pharmacologic/biologic agent) and assigned it to a New Technology 
APC based on the geometric mean cost of CPT code 67036 (Vitrectomy, 
mechanical, pars plana approach) due to similar resource utilization. 
For CY 2021, HCPCS code C9770 was assigned to APC 1561 (New 
Technology--Level 24 ($3001-$3500)). This code may be used to describe 
the administration of HCPCS code J3398 (Injection, voretigene 
neparvovec-rzyl, 1 billion vector genomes). This procedure was 
previously discussed in depth in the CY 2021 OPPS/ASC final rule with 
comment period (85 FR 85939 through 85940). For CY 2022, we maintained 
the APC assignment of APC 1561 (New Technology--Level 24 ($3001-$3500)) 
for HCPCS code C9770 (86 FR 63531 through 63532).
    HCPCS code J3398 (Injection, voretigene neparvovec-rzyl, 1 billion 
vector genomes) is for a gene therapy product indicated for a rare 
mutation-associated retinal dystrophy. Voretigene neparvovec-rzyl 
(Luxturna[supreg]) was approved by FDA in December of 2017 and is an 
adeno-associated virus vector-based gene therapy indicated for the 
treatment of patients with confirmed biallelic RPE65 mutation-
associated retinal dystrophy.\6\ This therapy is administered through a 
subretinal injection, which interested parties describe as an extremely 
delicate and sensitive surgical procedure. The FDA package insert 
describes one of the steps for administering Luxturna as, ``after 
completing a vitrectomy, identify the intended site of administration. 
The subretinal injection can be introduced via pars plana.''
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    \6\ Luxturna. FDA Package Insert. Available: https://www.fda.gov/media/109906/download.
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    Interested parties, including the manufacturer of Luxturna[supreg], 
recommended CPT code 67036 (Vitrectomy, mechanical, pars plana 
approach) for the administration of the gene therapy.\7\ However, the 
manufacturer previously contended the administration was not accurately 
described by any existing codes as CPT code 67036 (Vitrectomy, 
mechanical, pars plana approach) does not account for the 
administration itself.
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    \7\ LUXTURNA REIMBURSEMENT GUIDE FOR TREATMENT CENTERS. https://mysparkgeneration.com/pdf/Reimbursement_Guide_for_Treatment_Centers_Interactive_010418_FINAL.pdf.
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    CMS recognized the need to accurately describe the unique 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 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.
    CY 2023 was the first year that claims data were available for 
HCPCS code C9770; so we proposed and finalized a policy 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 designated HCPCS code C9770 as a low 
volume procedure under our universal low volume APC policy and used the 
greater of the geometric mean, arithmetic mean, or median cost 
calculated based on the available claims data to calculate an 
appropriate payment rate for purposes of assigning HCPCS code C9770 to 
a New Technology APC.
    Based on the claims data available for the CY 2023 OPPS/ASC final 
rule, we found 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 finalized 
our proposal to assign HCPCS code C9770 to APC 1562 for CY 2023.
    CPT code 0810T 9Subretinal injection of a pharmacologic agent, 
including vitrectomy and 1 or more retinotomies) will be effective July 
1, 2023. We recognize the similarity between HCPCS

[[Page 49611]]

code C9770 and CPT code 0810T; therefore, we propose to delete HCPCS 
code C9770 effective December 31, 2023, and to recognize CPT code 0810T 
starting January 1, 2024. We propose to determine the payment rate for 
the procedure using the claims data for HCPCS code C9770. Similar to CY 
2023, for CY 2024, given that there are only 10 single frequency claims 
available for ratesetting, we propose to designate CPT code 0810T as a 
low volume procedure under our universal low volume APC policy and to 
use the greater of the geometric mean, arithmetic mean, or median cost 
calculated based on the available claims data for HCPCS code C9770 to 
calculate an appropriate payment rate for purposes of assigning CPT 
code 0810T to a New Technology APC.
    Using all available claims from the 4-year lookback period, we 
determined the geometric mean cost to be $3,944, the arithmetic mean 
cost to be $4,192, and the median cost to be $4,148. Because the 
arithmetic mean is the statistical methodology that estimated the 
highest cost for the service, we propose to use this cost to determine 
the New Technology APC placement. The arithmetic mean of $4,192 falls 
within the cost band for New Technology APC 1563 (New Technology--Level 
26 ($4001-$4500)). Therefore, we propose to assign CPT code 0810T to 
APC 1563 for CY 2024. Additionally, we propose to perform a similar 
analysis using updated claims data in the CY 2024 OPPS/ASC final rule 
with comment period and update the APC placement as needed.
    Please refer to Table 10 below for the proposed OPPS New Technology 
APC and status indicator assignments for HCPCS code C9770 and CPT code 
0810T for CY 2024. The proposed CY 2024 payment rates can be found in 
Addendum B to this proposed rule via the internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TP31JY23.024

b. Bronchoscopy With Transbronchial Ablation of Lesion(s) by Microwave 
Energy (APC 1562)
    Effective January 1, 2019, CMS established HCPCS code C9751 
(Bronchoscopy, rigid or flexible, transbronchial ablation of lesion(s) 
by microwave energy, including fluoroscopic guidance, when performed, 
with computed tomography acquisition(s) and 3-D rendering, computer-
assisted, image-guided navigation, and endobronchial ultrasound (EBUS) 
guided transtracheal and/or transbronchial sampling (for example, 
aspiration[s]/biopsy[ies]) and all mediastinal and/or hilar lymph node 
stations or structures and therapeutic intervention(s)). This microwave 
ablation procedure utilizes a flexible catheter to access the lung 
tumor via a working channel and may be used as an alternative procedure 
to a percutaneous microwave approach. Based on our review of the New 
Technology APC application for this service and the service's clinical 
similarity to existing services paid under the OPPS, we estimated the 
likely cost of the procedure would be between $8,001 and $8,500.
    In claims data available for CY 2019 for the CY 2021 OPPS/ASC final 
rule with comment period, there were four claims reported for 
bronchoscopy with transbronchial ablation of lesions by microwave 
energy. Given the low volume of claims for the service, we proposed for 
CY 2021 to apply the universal low volume APC 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 determine 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. Because 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

[[Page 49612]]

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, CY 2021, or CY 2022 for 
HCPCS code C9751. Therefore, for CY 2024, 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, CY 2022, and CY 2023 OPPS/ASC final rules with comment 
period. Given the low number of claims for this procedure, we propose 
to continue to designate this procedure as a low volume procedure 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 APC. Because our proposal uses the same claims as we used 
for CY 2021, CY 2022, and CY 2023, the same values for the geometric 
mean cost, arithmetic mean cost, and the median cost are used to 
propose a payment rate for CY 2024. 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 propose 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 2024.
    Please refer to Table 11 below for the proposed OPPS New Technology 
APC and status indicator assignment for HCPCS code C9751 for CY 2024. 
The proposed CY 2024 payment rates can be found in Addendum B to this 
proposed rule via the internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TP31JY23.025

c. Cardiac Positron Emission Tomography (PET)/Computed Tomography (CT) 
Studies (APCs 1518, 1521, and 1522)
    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 used CY 2021 claims data to determine the payment 
rates for CPT codes 78431, 78432, and 78433. Based on our analysis of 
the available claims data, for CY 2023, we assigned CPT code 78431 to 
APC 1523 (New Technology--Level 23 ($2501-$3000)) with a payment rate 
of $2,750.50; CPT code 78432 to APC 1520 (New Technology--Level 20 
($1801-$1900)) with a payment rate of $1,850.50 based on the 
application of the universal low-volume policy; and CPT code 78433 to 
APC 1521 (New Technology--Level 21 ($1901-$2000)) with a payment rate 
of $1,950.50.
    For CY 2024, the OPPS payment rates are proposed to be based on 
available CY 2022 claims data. CPT code 78431 had over 22,000 single 
frequency claims in CY 2022. The geometric mean for CPT code 78431 was 
approximately $2,300, 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 propose, for CY 2024, that CPT code 
78431 be reassigned to APC 1522 (New Technology--Level 22 ($2001-
$2500)) with a payment rate of $2,250.50. Please refer to Table 12 
below for the proposed New Technology APC and status indicator 
assignments for CPT code 78431.
    There were only six single frequency claims in CY 2022 for CPT code 
78432. As this is below the threshold of 100 claims for a service 
within a year, we propose to apply our universal low volume APC policy 
and use the highest of the geometric mean cost, arithmetic mean cost, 
or median cost based on up to 4 years of claims data to assign CPT code 
78432 to the appropriate New Technology APC. Using available claims 
data from CY 2021 and CY 2022, our analysis found the geometric mean 
cost of the service is approximately $1,658, the arithmetic mean cost 
of the service is approximately $1,445, and the median cost of the 
service is approximately $1,562. The geometric mean was the statistical 
methodology that estimated the highest cost for the service. The 
geometric mean cost of $1,658, is an amount that is below the

[[Page 49613]]

cost band for APC 1520 (New Technology--Level 20 ($1801-$1900)), where 
the procedure is currently assigned. Therefore, we propose, for CY 
2024, to assign CPT code 78432 to APC 1518 (New Technology--Level 18 
($1601-$1700)) with a payment rate of $1,650.50. Please refer to Table 
12 for the proposed New Technology APC and status indicator assignments 
for CPT code 78432.
    There were over 1200 single frequency claims for CPT code 78433 in 
CY 2022. The geometric mean for CPT code 78433 was approximately 
$1,960, which is an amount that is within the cost band for APC 1521 
(New Technology--Level 21 ($1901-$2000)), to which it is currently 
assigned. Therefore, for CY 2024, we propose to continue to assign CPT 
code 78433 to APC 1521 with a payment rate of $1,950.50.
    Please refer to Table 12 below for the proposed OPPS New Technology 
APC and status indicator assignment for CPT codes 78431, 78432, and 
78433 for CY 2024. The proposed CY 2024 payment rates can be found in 
Addendum B to this proposed rule via the internet on the CMS website.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TP31JY23.026

BILLING CODE 4120-01-C
d. V-Wave Medical Interatrial Shunt Procedure (APC 1590)
    A randomized, double-blinded, controlled IDE study is currently in 
progress for the V-Wave interatrial shunt. The V-Wave interatrial shunt 
is for patients with severe symptomatic heart failure and is designed 
to regulate left atrial pressure in the heart. All participants who 
passed initial screening for the study receive a right heart 
catheterization procedure described by CPT code 93451 (Right heart 
catheterization including measurement(s) of oxygen saturation and 
cardiac output, when performed). Participants assigned to the 
experimental group also receive the V-Wave interatrial shunt procedure 
while participants assigned to the control group only receive right 
heart catheterization. The developer of V-

[[Page 49614]]

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)) 
with a payment rate of $12,500.50.
    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 (New Technology--Level 39 ($15,001-$20,000)), 
which reflects the cost of 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 the 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 we used claims data from CY 2019 through CY 2022. 
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 2023.
    For CY 2024, the OPPS payment rates are proposed to be based on 
available CY 2022 claims data. Although HCPCS code C9758 was effective 
January 1, 2020, we have no claims data at this time. Because we have 
no claims data, for CY 2024, we propose to continue to assign HCPCS 
code C9758 to New Technology APC 1590 with a proposed payment rate of 
$17,500.50.
    Please refer to Table 13 below for the proposed OPPS New Technology 
APC and status indicator assignment for HCPCS code C9758 for CY 2024. 
The proposed CY 2024 payment rates can be found in Addendum B to this 
proposed rule via the internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TP31JY23.027

e. Corvia Medical Interatrial Shunt Procedure (APC 1592)
    On July 1, 2020, we established HCPCS code C9760 (Non-randomized, 
non-blinded procedure for nyha class ii, iii, iv heart failure; 
transcatheter implantation of interatrial shunt or placebo control, 
including right and left heart catheterization, transeptal puncture, 
trans-esophageal echocardiography (tee)/intracardiac echocardiography 
(ice), and all imaging with or without guidance (for example, 
ultrasound, fluoroscopy), performed in an approved investigational 
device exemption (ide) study) to facilitate payment for the 
implantation of the Corvia Medical interatrial shunt.
    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. But 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

[[Page 49615]]

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 used claims data from CY 2021 through CY 2022 to determine the 
payment rate for HCPCS code C9760. Because there were no claims for 
this service, we continued to assign HCPCS code C9760 to New Technology 
APC 1592 in CY 2023.
    For CY 2024, the OPPS payment rates are proposed to be based on 
available CY 2022 claims data. There was only one claim for HCPCS code 
C9760 within this time period. As this is below the threshold of 100 
claims for a service within a year, we would designate C9760 as a low 
volume service and apply our universal low volume APC policy. Under 
this policy, we would 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 HCPCS code C9760 to the appropriate New Technology APC. 
Using the only one claim available for HCPCS code C9760, the geometric 
mean, arithmetic mean, and median costs are estimated to be 
approximately $7945 for this service. However, because there is only a 
single claim for HCPCS code C9760, its payment rate appears to be an 
outlier based on the cost information we received from the 
manufacturer. Therefore, we have concerns that the universal low volume 
APC policy calculations do not accurately capture the cost of the 
service. Therefore, we propose to continue assigning HCPCS code C9760 
to New Technology APC 1592.
    Please refer to Table 14 below for the proposed OPPS New Technology 
APC and status indicator assignment for HCPCS code C9760 for CY 2024. 
The proposed CY 2024 payment rates can be found in Addendum B to this 
proposed rule via the internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TP31JY23.028

f. Supervised Visits for Esketamine Self-Administration (APCs 1513 and 
1518)
    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. 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.
    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 require either two devices (for a 56 mg dose) or 
three devices (for an 84 mg dose) per treatment.
    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 who 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. For CY 2020, 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. For CY 2020, HCPCS code G2083 was 
assigned to New Technology APC 1511 (New Technology--Level 11 ($901-
$1000)) with a payment rate of $950.50. Please see the CY 2021 OPPS/

[[Page 49616]]

ASC final rule with comment period (85 FR 85948), CY 2022 OPPS/ASC 
final rule with comment period (86 FR 63538), and the CY 2023 OPPS/ASC 
final rule with comment period (87 FR 71816-71817) for the updates to 
the APC assignments for G2082 and G2083 we have made in past rules.
    For CY 2024, the OPPS payment rates are proposed to be based on 
available CY 2022 claims data as the available single frequency claims 
exceed the 100 claims threshold generally used for our universal low 
volume policy. Therefore, for CY 2024, we propose to assign HCPCS codes 
G2082 and G2083 to New Technology APCs based on the codes' geometric 
mean costs. Specifically, we propose to assign HCPCS code G2082 to New 
Technology APC 1513 (New Technology--Level 13 ($1101-$1200)) with a 
payment rate of $1,150.50 based on its geometric mean cost of $1,138, 
which was calculated using the available 294 single frequency claims 
from CY 2022 claims data. We also propose to assign HCPCS code G2083 to 
New Technology APC 1518 (New Technology--Level 18 ($1601-$1700)) with a 
payment rate of $1,650.50 based on its geometric mean cost of $1,693, 
which was calculated using the available 1581 single frequency claims 
from CY 2022 claims data. We note, as we have begun to gather adequate 
claims data on these codes, we are considering placing HCPCS codes 
G2082 and G2083 in clinical APCs through future rulemaking.
    The proposed New Technology APC and status indicator assignments 
for HCPCS codes G2082 and G2083 are shown in Table 15. The proposed CY 
2024 payment rates for these HCPCS codes can be found in Addendum B to 
this proposed rule.
[GRAPHIC] [TIFF OMITTED] TP31JY23.029

g. DARI Motion Procedure (APC 1505)
    Effective January 1, 2022, CPT code 0693T (Comprehensive full body 
computer-based markerless 3D kinematic and kinetic motion analysis and 
report) is associated with the DARI Motion Procedure, a service that 
provides human motion analysis to aid clinicians in pre- and post-
operative surgical intervention and in making other treatment 
decisions, including selecting the best course of physical therapy and 
rehabilitation. The technology consists of eight cameras that surround 
a patient, which 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. For CY 2022, we assigned CPT code 0693T to 
New Technology APC 1505 (New Technology--Level 5 ($301-$400)). For CY 
2023, the OPPS payment rates were based on claims submitted between 
January 1, 2021, and December 31, 2021, processed through June 30, 
2022. Due to its effective date of January 1, 2022, there were no 
claims available for CPT code 0693T for rate setting in CY 2023. 
Therefore, in CY 2023, we continued to assign CPT code 0693T to New 
Technology APC 1505.
    For CY 2024, the OPPS payment rates are proposed to be based on 
available CY 2022 claims data. Although CPT code 0693T was effective 
January 1,

[[Page 49617]]

2022, we have no claims data at this time. Because we have no claims 
data, for CY 2024, we propose to continue to assign CPT code 0693T to 
APC 1505 with a proposed payment rate of $350.50.
    Please refer to Table 16 below for the proposed OPPS New Technology 
APC and status indicator assignment for CPT code 0693T for CY 2024. The 
proposed CY 2024 payment rates can be found in Addendum B to this 
proposed rule via the internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TP31JY23.030

h. Liver Histotripsy Service (APC 1575)
    CPT code 0686T (Histotripsy (i.e., non-thermal ablation via 
acoustic energy delivery) of malignant hepatocellular tissue, including 
image guidance) was first effective July 1, 2021, and describes the 
histotripsy service associated with the use of the HistoSonics system. 
Histotripsy is a non-invasive, non-thermal, mechanical process that 
uses a focused beam of sonic energy to destroy cancerous liver tumors 
and is currently in a non-randomized, prospective clinical trial to 
evaluate the efficacy and safety of the device for the treatment of 
primary or metastatic tumors located in the liver.\8\ When HCPCS code 
0686T was first effective, the histotripsy procedure was designated as 
a Category A IDE clinical study (NCT04573881). Since devices in 
Category A IDE studies are excluded from Medicare payment, payment for 
CPT code 0686T only reflected the cost of the service that is performed 
each time it is reported on a claim. For CY 2023, we assigned CPT code 
0686T to New Technology APC 1575 (New Technology--Level 38 ($10,000-
$15,000) with a payment rate of $12,500. However, on March 2, 2023, the 
histotripsy IDE clinical study was re-designated as a Category B (Non-
experimental/Investigational) IDE study. Due to this new designation, 
the proposed payment for CPT code 0686T in CY 2024 would reflect 
payment for both the service that is performed and the device used each 
time it is reported on a claim.
---------------------------------------------------------------------------

    \8\ ClinicalTrials.gov. ``The HistoSonics System for Treatment 
of Primary and Metastatic Liver Tumors Using Histotripsy 
(#HOPE4LIVER) (#HOPE4LIVER).'' Accessed May 10, 2022. https://clinicaltrials.gov/ct2/show/study/NCT04573881.
---------------------------------------------------------------------------

    For CY 2024, the OPPS payment rates are proposed to be based on 
available CY 2022 claims data. There are only two claims for CPT code 
0686T within this time period. We note that 0686T was still designated 
as a Category A IDE study for these claims and therefore, the payment 
for these claims only included payment for the cost of the service. As 
the available claims data is below the threshold of 100 claims for a 
service within a year, we could propose to designate CPT code 0686T as 
a low volume service under our universal low volume APC policy, and use 
the highest of the geometric mean cost, arithmetic mean cost, or median 
cost to assign CPT code 0686T to the appropriate New Technology APC. 
Based on the two available claims in CY 2022, when CPT code 0686T was 
still designated as a Category A IDE study, the geometric mean is 
estimated to be: $4,466; the median is estimated to be: $4,480; and the 
arithmetic mean is estimated to be: $4,480. Because $4,480 is the 
greatest of these methodologies, we would use this value to set the 
payment rate for CPT code 0686T. However, we have concerns that the 
available claims data and universal low volume APC policy calculations 
would not accurately capture the cost of the service following its 
approval as a Category B IDE study in March of 2023. If 0686T were 
still designated as a Category A IDE study, then the two claims 
available would be appropriate to set its payment rate, as the claims 
reflect the cost of the service and exclude the cost of the device. 
However, because CPT code 0686T was approved as a Category B IDE study, 
meaning Medicare coverage and payment of the device is no longer 
statutorily prohibited, the two CY 2022 claims available would not 
accurately capture the cost of 0686T for CY 2024.
    Therefore, based on the service costs reflected in the available 
claims and our estimates of the cost of the Category B device, for CY 
2024, we propose to maintain CPT code 0686T's current APC assignment. 
Specifically, we propose to assign CPT code 0686T to APC 1575 (New 
Technology--Level 38 ($10,001-$15,000)) with a payment rate of 
$12,500.50.
    Please refer to Table 17 below for the proposed OPPS New Technology 
APC and status indicator assignment for CPT code 0686T for CY 2024. The 
proposed CY 2024 payment rates can be found in Addendum B to this 
proposed rule via the internet on the CMS website.

[[Page 49618]]

[GRAPHIC] [TIFF OMITTED] TP31JY23.031

i. Liver Multiscan Service (APC 1505)
    Effective July 1, 2021, CPT codes 0648T (Quantitative magnetic 
resonance for analysis of tissue composition (e.g., fat, iron, water 
content), including multiparametric data acquisition, data preparation 
and transmission, interpretation and report, obtained without 
diagnostic mri examination of the same anatomy (e.g., organ, gland, 
tissue, target structure) during the same session; single organ) and 
0649T (Quantitative magnetic resonance for analysis of tissue 
composition (e.g., fat, iron, water content), including multiparametric 
data acquisition, data preparation and transmission, interpretation and 
report, obtained with diagnostic mri examination of the same anatomy 
(e.g., organ, gland, tissue, target structure); single organ (list 
separately in addition to code for primary procedure)) are associated 
with the Liver MultiScan service. LiverMultiScan is a Software as a 
medical Service (SaaS) that is intended to aid the diagnosis and 
management of chronic liver disease, the most prevalent of which is 
Non-Alcoholic Fatty Liver Disease (NAFLD). It provides standardized, 
quantitative imaging biomarkers for the characterization and assessment 
of inflammation, hepatocyte ballooning, and fibrosis, as well as 
steatosis, and iron accumulation. LiverMultiScan receives MR images 
acquired from patients' providers and analyzes the images using their 
proprietary Artificial Intelligence (AI) algorithms. It then sends the 
providers a quantitative metric report of the patient's liver fibrosis 
and inflammation. For CY 2023, we assigned CPT codes 0648T and 0649T to 
New Technology APC 1511 (New Technology--Level 11 ($901-$1,000) with a 
payment rate of $950.50.
    For CY 2024, the OPPS payment rates are proposed to be based on 
available CY 2022 claims data. We identified only 39 claims each for 
CPT code 0648T and CPT code 0649T during this time period. As this is 
below the threshold of 100 claims for a service within a year, we 
propose to apply our universal low volume APC policy and use the 
highest of the geometric mean cost, arithmetic mean cost, or median 
cost based on up to 4 years of claims data to assign CPT codes 0648T 
and 0649T to the appropriate New Technology APC. There are available 
claims data from CY 2021 and CY 2022 for CPT codes 0648T and 0649T. Our 
analysis of the data for CPT code 0648T found the geometric mean cost 
of the service is approximately $269, the arithmetic mean cost of the 
service is approximately $320, and the median cost of the service is 
approximately $313. Our analysis of the data for CPT code 0649T found 
the geometric mean cost of the service is approximately $102, the 
arithmetic mean cost of the service is approximately $136, and the 
median cost of the service is approximately $83. The arithmetic mean 
was the statistical methodology that estimated the highest cost for CPT 
codes 0648T and 0649T. In accordance to our SaaS Add-on Codes policy 
(87 FR 72032 to 72033), SaaS CPT add-on codes are assigned to the 
identical APCs and the same status indicator assignments as their 
standalone codes. Consistent with our SaaS Add-on Codes policy, CPT 
code 0649T, the add-on code for LiverMultiScan would be assigned to the 
identical APC and status indicator to CPT code 0648T, the standalone 
code for the same service. Therefore, we propose, for CY 2024, to 
assign CPT codes 0648T and 0649T to APC 1505 (New Technology--Level 5 
($301-$400)) with a payment rate of $350.50.
    Please refer to Table 18 below for the proposed OPPS New Technology 
APC and status indicator assignments for CPT codes 0648T and 0649T for 
CY 2024. The proposed CY 2024 payment rates can be found in Addendum B 
to this proposed rule via the internet on the CMS website.

[[Page 49619]]

[GRAPHIC] [TIFF OMITTED] TP31JY23.032

j. Minimally Invasive Glaucoma Surgery (MIGS) (APC 5493)
    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 
(Extracapsular cataract removal w/IOL insertion, complex; with 
insertion of intraocular (e.g., trabecular meshwork, supraciliary, 
suprachoroidal) anterior segment aqueous drainage device, without 
extraocular reservoir, internal approach, one or more) and 66991 
(Extracapsular cataract removal w/IOL insertion; with insertion of 
intraocular (e.g., trabecular meshwork, supraciliary, suprachoroidal) 
anterior segment aqueous drainage device, without extraocular 
reservoir, internal approach, one or more); 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 ($4,001-
$4,500)). We stated that we believed that the change in coding for MIGS 
is

[[Page 49620]]

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 maintained these APC 
assignments for CY 2023.
    For CY 2023, the payment rates were based on claims data submitted 
between January 1, 2021, and December 31, 2021, and processed on or 
before June 30, 2022, and CCRs, if available. Because CPT codes 66989 
and 66991 were effective January 1, 2022, and we had no claims data for 
CY 2022, we finalized continued assignment of CPT codes 66989 and 66991 
to New Technology APC 1563.
    For CY 2024, the OPPS payment rates are proposed to be based on 
available CY 2022 claims data. For CY 2024, based on our analysis of 
claims data, we found a total of 898 single frequency claims and an 
estimated geometric mean cost of $5,241.55 for CPT code 66989 and a 
total of 5,576 single frequency claims and an estimated geometric mean 
cost of $4,957.01 for CPT code 66991. Given the claims volume, 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. Upon review, we determined that the most appropriate 
clinical APC family for CPT codes 66989 and 66991 would be the 
Intraocular Procedures APC family (APC 5491 through 5495). However, 
there was a large payment rate difference between the level 2 
Intraocular Procedures APC (APC 5492), which has a payment rate of 
$3,970.62, and the level 3 Intraocular Procedures APC (APC 5493), which 
has a payment rate of $14,067.62. Assigning CPT codes 66989 and 66991 
to either APC 5492 or 5493 would result in a payment rate that would 
not reflect the cost for these procedures.
    Therefore, given the significant difference in payment between APC 
5492 and APC 5493, we believe it is appropriate to restructure the 
Intraocular Procedures APC family. Specifically, we propose to create a 
sixth level in the Intraocular Procedures APC family by dividing APC 
5492 into two APCs--an APC for services with a geometric mean cost of 
less than $5,000 and an APC for services with a geometric mean cost of 
greater than, or equal to, $5,000. We believe that the creation of an 
additional level in the Intraocular APC family will create a smoother 
distribution of the costs between the different levels based on their 
resource costs and clinical characteristics. See section III.E. (OPPS 
APC-Specific Policies: Intraocular Procedures) of this proposed rule 
for a detailed discussion of our proposal to restructure the 
Intraocular Procedures APC family. Reorganizing the Intraocular 
Procedures APCs would create a proposed Level 3 APC to be referred to 
as ``Proposed APC 5493'' with a payment rate of approximately $5,110.58 
which is closer to the geometric mean of CPT codes 66989 and 66991. We 
note that, although these services have different estimated geometric 
mean costs, interested parties have indicated that it is preferable 
that they be placed within the same APC due to clinical similarity; 
therefore, we propose to reassign CPT codes 66989 and 66991 to Proposed 
APC 5493 for CY 2024.
    The proposed clinical APC and status indicator assignments for CPT 
codes 66989 and 66991 are found in Table 19. The proposed CY 2024 
payment rates can be found in Addendum B to this proposed rule.
[GRAPHIC] [TIFF OMITTED] TP31JY23.033


[[Page 49621]]


k. Scalp Cooling (APC 1514)
    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, for example, 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 
($1,801-$1,900)) with a payment rate of $1,850.50. For CY 2023, we did 
not have any claims data; so we continued to assign CPT code 0662T to 
APC 1520.
    For CY 2024, the OPPS payment rates are proposed to be based on 
available CY 2022 claims data. The Scalp Cooling service became 
effective in the OPPS in CY 2022, and we have identified 11 single 
frequency paid claims for CPT code 0662T for CY 2022. As this is below 
the threshold of 100 claims for a service within a year, we propose to 
designate CPT code 0662T as a low volume service under our universal 
low volume APC policy and to 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 service to the appropriate New Technology 
APC. Based on our review of the available claims, the geometric mean 
cost for CPT code 0662T is $831.16; the median is $797.63; and the 
arithmetic mean is $1,284.59. Therefore, for CY 2024, we propose to 
designate this service as a low volume service under our universal low 
volume APC policy and reassign CPT code 0662T to APC 1514 (New 
Technology--Level 14 ($1,201-$1,300)) with a payment rate of $1,250.50 
for CY 2024 based on the arithmetic mean of $1,284.59.
    Please refer to Table 20 below for the proposed OPPS New Technology 
APC and status indicator assignment for CPT code 0662T. The proposed CY 
2024 payment rates can be found in Addendum B to this proposed rule via 
the internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TP31JY23.034

1. Optellum Lung Cancer Prediction (LCP) (APC 1508)
    CPT codes 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) and 0722T (Quantitative computed 
tomography (ct) tissue characterization, including interpretation and 
report, obtained with concurrent ct examination of any structure 
contained in the concurrently acquired diagnostic imaging dataset (list 
separately in addition to code for primary procedure)) became effective 
July 1, 2022, and are associated with the Optellum LCP technology. 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 physician uses the 
risk score to quantify the risk of lung cancer and to determine what 
the next management step should be for the patient (e.g., CT 
surveillance versus invasive procedure). For CY 2023, we assigned CPT 
codes 0721T and 0722T to APC New Technology 1508 (New Technology--Level 
8 ($601-$700)).
    For CY 2024, the OPPS payment rates are proposed to be based on 
available CY 2022 claims data. There are no claims available for CPT 
codes 0721T and 0722T. Therefore, for CY 2024, we propose to continue 
assigning CPT codes 0721T and 0722T to New Technology APC 1508.
    Please refer to Table 21 below for the proposed OPPS New Technology 
APC and status indicator assignment for HCPCS codes 0721T and 0722T for 
CY 2024. The proposed CY 2024 payment rates can be found in Addendum B 
to this proposed rule via the internet on the CMS website.

[[Page 49622]]

[GRAPHIC] [TIFF OMITTED] TP31JY23.035

m. Quantitative Magnetic Resonance Cholangiopancreatography (QMRCP) 
(APC 1511)
    Effective July 1, 2022, CPT codes 0723T (Quantitative magnetic 
resonance cholangiopancreatography (QMRCP) including data preparation 
and transmission, interpretation and report, obtained without 
diagnostic magnetic resonance imaging (MRI) examination of the same 
anatomy (e.g., organ, gland, tissue, target structure) during the same 
session) and 0724T (Quantitative magnetic resonance 
cholangiopancreatography (qmrcp), including data preparation and 
transmission, interpretation and report, obtained with diagnostic 
magnetic resonance imaging (mri) examination of the same anatomy (e.g., 
organ, gland, tissue, target structure) (list separately in addition to 
code for primary procedure)) are associated with the QMRCP Software as 
a medical Service (SaaS). The service performs quantitative assessment 
of the biliary tree and gallbladder. It uses a proprietary algorithm 
that produces a three-dimensional reconstruction of the biliary tree 
and pancreatic duct and also provides precise quantitative information 
of biliary tree volume and duct metrics. For CY 2023, we assigned CPT 
codes 0723T and 0724T to New Technology APC 1511 (New Technology--Level 
11 ($900-$1,000)).
    For CY 2024, the OPPS payment rates are proposed to be based on 
available CY 2022 claims data. For CPT code 0723T, there were no claims 
during this time period. Because there are no claims available, we 
propose to continue to assign CPT code 0723T to New Technology APC 1511 
with a payment rate of $950.50.
    For CPT code 0724T, there was only one claim for CY 2022. As this 
is below the threshold of 100 claims for a service within a year, we 
could propose to designate CPT code 0724T as a low volume service under 
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 the service to an appropriate New 
Technology APC. Because there is only one claim available, the 
geometric mean, arithmetic mean, and median costs are estimated to be 
$26 for this service. However, because there is only a single claim for 
CPT code 0724T, the single claim available appears to be an outlier 
based on the cost information we received from the manufacturer. 
Therefore, we have concerns that the universal low volume APC policy 
calculations do not accurately capture the cost of the service. 
Therefore, for CY 2024, we propose to continue assigning CPT code 0724T 
to New Technology APC 1511 with a payment rate of $950.50.
    Please refer to Table 22 below for the proposed OPPS New Technology 
APC and status indicator assignment for HCPCS code 0724T for CY 2024. 
The proposed CY 2024 payment rates can be found in Addendum B to this 
proposed rule via the internet on the CMS website.

[[Page 49623]]

[GRAPHIC] [TIFF OMITTED] TP31JY23.036

n. CardiAMP (APC 1590)
    The CardiAMP cell therapy IDE studies are two randomized, double-
blinded, controlled IDE studies: The CardiAMP Cell Therapy Chronic 
Myocardial Ischemia Trial \9\ and the CardiAMP Cell Therapy Heart 
Failure Trial.\10\ The two trials are designed to investigate the 
safety and efficacy of autologous bone marrow mononuclear cells 
treatment for the following: (1) Patients with medically refractory and 
symptomatic ischemic cardiomyopathy; and (2) patients with refractory 
angina pectoris and chronic myocardial ischemia. On April 1, 2022, we 
established HCPCS code C9782 to describe the CardiAMP cell therapy IDE 
studies and assigned HCPCS code C9782 to APC 1574 (New Technology--
Level 37 ($9,501-$10,000)) with the status indicator ``T.'' We 
subsequently revised the descriptor for HCPCS code C9782 to: (Blinded 
procedure for New York Heart Association (NYHA) Class II or III heart 
failure, or Canadian Cardiovascular Society (CCS) Class III or IV 
chronic refractory angina; transcatheter intramyocardial 
transplantation of autologous bone marrow cells (e.g., mononuclear) or 
placebo control, autologous bone marrow harvesting and preparation for 
transplantation, left heart catheterization including ventriculography, 
all laboratory services, and all imaging with or without guidance 
(e.g., transthoracic echocardiography, ultrasound, fluoroscopy), all 
device(s), performed in an approved Investigational Device Exemption 
(IDE) study) to clarify the inclusion of the Helix transendocardial 
injection catheter device in the descriptor. Additionally, we 
determined that APC 1590 (New Technology--Level 39 ($15,001-$20,000)) 
most accurately accounted for the resources associated with furnishing 
the procedure described by HCPCS code C9782.
---------------------------------------------------------------------------

    \9\ ClinicalTrials.gov. ``Randomized Controlled Pivotal Trial of 
Autologous Bone Marrow Cells Using the CardiAMP Cell Therapy System 
in Patients With Refractory Angina Pectoris and Chronic Myocardial 
Ischemia.'' Accessed May 10, 2022. https://clinicaltrials.gov/ct2/show/NCT03455725?term=NCT03455725&rank=1.
    \10\ ClinicalTrials.gov. ``Randomized Controlled Pivotal Trial 
of Autologous Bone Marrow Mononuclear Cells Using the CardiAMP Cell 
Therapy System in Patients With Post Myocardial Infarction Heart 
Failure.'' Accessed May 10, 2022. https://clinicaltrials.gov/ct2/show/NCT02438306.
---------------------------------------------------------------------------

    For CY 2024, the OPPS payment rates are proposed to be based on 
available CY 2022 claims data. There are no available claims for 
ratesetting for CY 2024. Therefore, for CY 2024, we propose to continue 
assigning HCPCS code C9782 to New Technology APC 1590 with a payment 
rate of $17,050.50.
    Please refer to Table 23 below for the proposed OPPS New Technology 
APC and status indicator assignment for HCPCS code C9782 for CY 2024. 
The proposed CY 2024 payment rates can be found in Addendum B to this 
proposed rule via the internet on the CMS website.

[[Page 49624]]

[GRAPHIC] [TIFF OMITTED] TP31JY23.037

o. Surfacer[supreg] Inside-Out[supreg] Access Catheter System (APC 
1534)
    HCPCS code C9780 (Insertion of central venous catheter through 
central venous occlusion via inferior and superior approaches (e.g., 
inside-out technique), including imaging guidance) describes the 
procedure associated with the use of the Surfacer[supreg] Inside-
Out[supreg] Access Catheter System that is designed to address central 
venous occlusion. HCPCS code C9780 was established on October 1, 2021, 
and since its establishment the code has been assigned to New 
Technology APC 1534 (New Technology--Level 34 ($8,001-$8,500)).
    For CY 2024, the OPPS payment rates are proposed to be based on 
available CY 2022 claims data. Although HCPCS code C9780 was effective 
October 1, 2021, we have no claims data at this time. Because we have 
no claims data available, for CY 2024, we propose to continue to assign 
HCPCS code C9780 to APC 1534 with a proposed payment rate of $8,250.50.
    Please refer to Table 24 below for the proposed OPPS New Technology 
APC and status indicator assignment for HCPCS code C9780 for CY 2024. 
The proposed CY 2024 payment rates can be found in Addendum B to this 
proposed rule via the internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TP31JY23.038

p. Insertion or Replacement of Neurostimulator System for Treatment of 
Central Sleep Apnea; Complete System (APC 1580)
    HCPCS code 0424T (Insertion or replacement of a neurostimulator 
system for treatment of central sleep apnea; complete system 
(transvenous placement of right or left stimulation lead, sensing lead, 
implantable pulse generator)) is associated with the use of the 
Remede[supreg] System, which is used to treat adult patients with 
moderate to severe Central Sleep Apnea. HCPCS code 0424T was first 
effective in January 1, 2016, and subsequently assigned to 
Comprehensive APC 5464 (Neurostimulator and Related Procedures APC--
Level 4). For CY 2021, we created a 5-level structure for the 
Neurostimulator and Related Procedure

[[Page 49625]]

APC series, and consequently, assigned HCPCS code 0424T to the highest 
level in the series: Comprehensive APC 5465 (Neurostimulator & Related 
Procedures APC--Level 5). For CY 2023, we proposed to continue the 5-
level structure for the Neurostimulator and Related Procedure APC 
series, while also soliciting comment on the creation of an additional 
Level 6 APC in the series. In the CY 2023 final rule with comment 
period, we finalized our proposal to continue the 5-level APC structure 
based on a determination that the existing structure remained 
appropriate based on clinical and cost characteristics. However, we 
also recognized that CPT code 0424T was not appropriately assigned to 
the Comprehensive APC 5465 based on a significant difference between 
its geometric mean cost and that of the APC. Therefore, for CY 2023, we 
finalized the assignment of HCPCS code 0424T to New Technology APC 1581 
(New Technology--Level 44 ($50,001-$60,000)).
    For CY 2024, the OPPS payment rates are proposed to be based on 
available CY 2022 claims data. There are only 30 claims for HCPCS code 
0424T available during this time period. As this is below the threshold 
of 100 claims for a service within a year, we propose to apply our 
universal low volume APC policy and use the highest of the geometric 
mean cost, arithmetic mean cost, or median cost based on up to 4 years 
of claims data to assign HCPCS code 0424T to the appropriate New 
Technology APC. Considering the available claims data for HCPCS code 
0424T, the arithmetic mean is $49,468; the median is $48,285; and the 
geometric mean cost is $44,287. Of these, the arithmetic mean is the 
statistical methodology that estimates the highest cost for the 
service. The payment rate calculated using this methodology falls 
within the cost band for New Technology APC 1580 (New Technology--Level 
43 ($40,001-$50,000)) with a payment rate of $45,000.50. Therefore, for 
CY 2024, we propose to assign HCPCS code 0424T to New Technology APC 
1580. We note that for the CY 2024 update, the CPT Editorial Panel is 
deleting HCPCS code 0424T and replacing it with placeholder code 3X008 
effective January 1, 2024. Consequently, we propose to assign HCPCS 
code 0424T to status indicator ``D'' to indicate the code will be 
deleted and assigning its replacement code, specifically, placeholder 
code 3X008, to APC 1580 for CY 2024. For placeholder code 3X008, the 
final 5-digit CPT code number will be listed in the CY 2024 OPPS/ASC 
final rule with comment period.
    Please refer to Table 25 below for the proposed OPPS New Technology 
APC and status indicator assignment for placeholder code 3X008 for CY 
2024. The proposed CY 2024 payment rates can be found in Addendum B to 
this proposed rule via the internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TP31JY23.039

q. Cleerly Labs (APC 1511)
    Cleerly Labs is a Software as a Service (SaaS) that assesses the 
extent of coronary artery disease severity using Atherosclerosis 
Imaging-Quantitative Computer Tomography (AI-QCT). This procedure is 
performed to quantify the extent of coronary plaque and stenosis in 
patients who have undergone coronary computed tomography analysis 
(CCTA). The AMA CPT Editorial Panel established the following four 
codes associated with this service, effective January 1, 2021:
    0623T: Automated quantification and characterization of coronary 
atherosclerotic plaque to assess severity of coronary disease, using 
data from coronary computed tomographic. angiography; data preparation 
and transmission, computerized analysis of

[[Page 49626]]

data, with review of computerized analysis output to reconcile 
discordant data, interpretation and report.
    0624T: Automated quantification and characterization of coronary 
atherosclerotic plaque to assess severity of coronary disease, using 
data from coronary computed tomographic angiography; data preparation 
and transmission.
    0625T: Automated quantification and characterization of coronary 
atherosclerotic plaque to assess severity of coronary disease, using 
data from coronary computed tomographic angiography; computerized 
analysis of data from coronary computed tomographic angiography.
    0626T: Automated quantification and characterization of coronary 
atherosclerotic plaque to assess severity of coronary disease, using 
data from coronary computed tomographic angiography; review of 
computerized analysis output to reconcile discordant data, 
interpretation and report.
    In the CY 2021 OPPS/ASC final rule with comment period, we assigned 
the CPT codes 0623T, 06234T, 0625T, 0626T 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.
    For the October 2022 update, based on our review of the New 
Technology application submitted to CMS for OPPS payment 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. 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-$1,000)) with a 
payment rate of $950.50, effective October 1, 2022, following our 
review of the manufacturer's New Technology APC application.
    For CY 2024, the OPPS payment rates are proposed to be based on 
available CY 2022 claims data. There are 90 claims for CPT code 0625T 
during this time period. As this is below the threshold of 100 claims 
for a service within a year, we could propose to designate CPT code 
0625T as a low volume service under 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 code 
0625T to the appropriate New Technology APC. We found the geometric 
mean cost for the service to be approximately $3.70, the arithmetic 
mean cost to be approximately $4.10, and the median cost to be 
approximately $3.50. Under our universal low volume APC policy, we 
would use the greatest of the statistical methodologies, the arithmetic 
mean, to assign CPT code 0625T to New Technology 1491 (New Technology--
Level 1A (0-$10)) with a payment rate of $5.00. However, we acknowledge 
that, because CPT code 0625T was only made separately payable as part 
of the OPPS in October 2022, and, therefore, the claims available only 
reflect two months of data, we have concerns that we do not have 
sufficient claims data to justify reassignment to another New 
Technology APC (66 FR 69902). Therefore, consistent with our current 
policy to retain services within New Technology APC groups until we 
obtain sufficient claims data to justify reassignment (66 FR 59902), 
for CY 2024 we propose to maintain CPT code 0625T's current assignment. 
Specifically, for CY 2024, we propose to continue to assign CPT code 
0625T to New Technology APC 1511 with a payment rate of $950.50.
    Please refer to Table 26 below for the proposed OPPS New Technology 
APC and status indicator assignment for CPT code 0625T for CY 2024. The 
proposed CY 2024 payment rates can be found in Addendum B to this 
proposed rule via the internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TP31JY23.040

D. Universal Low Volume APC Policy for Clinical and Brachytherapy APCs

    In the CY 2022 OPPS/ASC final rule with comment period (86 FR 63743 
through 63747), we adopted a policy to designate clinical and 
brachytherapy APCs as low volume APCs if they have fewer than 100 
single claims that can be used for ratesetting purposes in the claims 
year used for ratesetting for the prospective year. For this proposed 
rule, CY 2022 claims are generally the claims used for ratesetting; and 
clinical and brachytherapy APCs with fewer than 100 single claims from 
CY 2022 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

[[Page 49627]]

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 this proposed rule, we propose 
to designate five brachytherapy APCs and five clinical APCs as low 
volume APCs under the OPPS. The five brachytherapy APCs and five 
clinical APCs meet our criteria of having fewer than 100 single claims 
in the claims year used for ratesetting (CY 2022 for this proposed 
rule). Eight of the ten APCs were designated as low volume APCs in CY 
2023. Based on data for this CY 2024 OPPS/ASC proposed rule, APC 2642 
(Brachytx, stranded, C-131) now meets our criteria to be designated a 
Low Volume APC; and we propose to designate it as such for CY 2024. 
Further, with the proposed addition of Level 6 Intraocular APC (APC 
5496), as discussed in section III.E of this proposed rule, and the 
reassignment of certain intraocular procedures from Level 2 to Level 3, 
the Level 4 Intraocular APC (which was the Level 3 Intraocular APC in 
CY 2023), now meets our criteria to be designated a Low Volume APC; and 
we propose to designate it as such for CY 2024.
    Table 27 includes the APC geometric mean cost without the low 
volume APC designation, that is, if we calculated the geometric mean 
cost based on CY 2022 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 propose to use to determine the APC's 
cost for ratesetting purposes for CY 2024. As discussed in our CY 2022 
OPPS/ASC final rule with comment period (86 FR 63751 through 63754), 
given our concerns with CY 2020 claims data as a result of the PHE, the 
four years of claims data we proposed to use to calculate the costs for 
these APCs are CYs 2018, 2019, 2021, and 2022.

[[Page 49628]]

[GRAPHIC] [TIFF OMITTED] TP31JY23.041


[[Page 49629]]



E. Proposed APC-Specific Policies: Intraocular Procedures

    In reviewing the claims data available for the CY 2024 OPPS 
proposed rule, we believed that it was appropriate to create an 
additional Intraocular Procedures level, between the current Level 2 
and 3 APCs. We last adjusted the number of APCs in the Intraocular 
Procedures family in CY 2020, when we reestablished APC 5495 (Level 5 
Intraocular Procedures) to accommodate the procedure described by CPT 
code 0308T (Insertion of ocular telescope prosthesis including removal 
of crystalline lens or intraocular lens prosthesis) based on its 
estimated cost (84 FR 61249 through 61250). Creating a new APC in the 
Intraocular Procedures family will allow for a smoother distribution of 
the costs between the different levels based on their resource costs 
and clinical characteristics. Therefore, for the CY 2024 OPPS, we 
propose to establish a six-level APC structure for the Intraocular 
Procedures series. We noted that in addition to creating the new level, 
we also proposed to assign CPT codes 66989 (Extracapsular cataract 
removal w/IOL insertion, complex; with insertion of intraocular (e.g., 
trabecular meshwork, supraciliary, suprachoroidal) anterior segment 
aqueous drainage device, without extraocular reservoir, internal 
approach, one or more) and 66991 (Extracapsular cataract removal w/IOL 
insertion; with insertion of intraocular (e.g., trabecular meshwork, 
supraciliary, suprachoroidal) anterior segment aqueous drainage device, 
without extraocular reservoir, internal approach, one or more) to the 
new Level 3 APC, as discussed in further detail in section III.C.2.j. 
(Minimally Invasive Glaucoma Surgery (MIGS) (APC 5493)) of this 
proposed rule.

IV. Proposed OPPS Payment for Devices

A. Proposed Pass-Through Payment for Devices

1. Beginning Eligibility Date for Device Pass-Through Status and 
Quarterly Expiration of Device Pass-Through Payments
a. Background
    The intent of transitional device pass-through payment, as 
implemented at Sec.  419.66, is to facilitate access for beneficiaries 
to the advantages of new and truly innovative devices by allowing for 
adequate payment for these new devices while the necessary cost data is 
collected to incorporate the costs for these devices into the procedure 
APC rate (66 FR 55861). Under section 1833(t)(6)(B)(iii) of the Act, 
the period for which a device category eligible for transitional pass-
through payments under the OPPS can be in effect is at least 2 years 
but not more than 3 years. Prior to CY 2017, our regulation at Sec.  
419.66(g) provided that this pass-through payment eligibility period 
began on the date CMS established a particular transitional pass-
through category of devices, and we based the pass-through status 
expiration date for a device category on the date on which pass-through 
payment was effective for the category. In the CY 2017 OPPS/ASC final 
rule with comment period (81 FR 79654), in accordance with section 
1833(t)(6)(B)(iii)(II) of the Act, we amended Sec.  419.66(g) to 
provide that the pass-through eligibility period for a device category 
begins on the first date on which pass-through payment is made under 
the OPPS for any medical device described by such category.
    In addition, prior to CY 2017, our policy was to propose and 
finalize the dates for expiration of pass-through status for device 
categories as part of the OPPS annual update. This means that device 
pass-through status would expire at the end of a calendar year when at 
least 2 years of pass-through payments had been made, regardless of the 
quarter in which the device was approved. In the CY 2017 OPPS/ASC final 
rule with comment period (81 FR 79655), we changed our policy to allow 
for quarterly expiration of pass-through payment status for devices, 
beginning with pass-through devices approved in CY 2017 and subsequent 
calendar years, to afford a pass-through payment period that is as 
close to a full 3 years as possible for all pass-through payment 
devices. We also have an established policy to package the costs of the 
devices that are no longer eligible for pass-through payments into the 
costs of the procedures with which the devices are reported in the 
claims data used to set the payment rates (67 FR 66763).
    We refer readers to the CY 2017 OPPS/ASC final rule with comment 
period (81 FR 79648 through 79661) for a full discussion of the current 
device pass-through payment policy.\11\
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    \11\ To apply for OPPS transitional device pass-through status, 
applicants complete an application that is subject to the Paperwork 
Reduction Act (PRA). This collection (CMS-10052) has an OMB control 
number of 0938-0857 and an expiration date of November 30, 2025.
---------------------------------------------------------------------------

    In the CY 2023 OPPS/ASC final rule with comment period, we 
finalized our policy to publicly post online OPPS device pass-through 
applications received on or after March 1, 2023, beginning with the 
issuance of the CY 2025 proposed rule and for each OPPS rulemaking 
thereafter. We refer readers to the CY 2023 OPPS/ASC final rule with 
comment period (87 FR 71934 through 71938) for a full discussion of the 
policy to publicly post OPPS device pass-through applications.
b. Expiration of Transitional Pass-Through Payments for Certain Devices
    As stated earlier, section 1833(t)(6)(B)(iii) of the Act requires 
that, under the OPPS, a category of devices be eligible for 
transitional pass-through payments for at least 2 years, but not more 
than 3 years. Currently, there are 15 device categories eligible for 
pass-through payment. These devices are listed in Table 28 of this 
proposed rule where we detail the expiration dates of pass-through 
payment status for each of the 15 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).
    Section 4141(a)(2) of the Consolidated Appropriations Act, 2023 
(CAA, 2023) (Pub. L. 117-328) amended section 1833(t)(6) by adding a 
new subparagraph (K), which extended the device pass-through status 
under paragraph (6) for a 1-year period beginning January 1, 2023, for 
device categories whose period of pass-through status would have ended 
on December 31, 2022. There are five device categories for which pass-
through status would have ended on December 31, 2022, but which will 
now end on December 31, 2023. Pass-through status began for these 
device categories on January 1, 2020.

[[Page 49630]]

[GRAPHIC] [TIFF OMITTED] TP31JY23.042

2. New Device Pass-Through Applications for CY 2024
a. Background
    Section 1833(t)(6) of the Act provides for pass-through payments 
for devices, and section 1833(t)(6)(B) of the Act requires CMS to use 
categories in determining the eligibility of devices for pass-through 
payments. As part of implementing the statute through regulations, we 
have continued to believe that it is important for hospitals to receive 
pass-through payments for devices that offer substantial clinical 
improvement in the treatment of

[[Page 49631]]

Medicare beneficiaries to facilitate access by beneficiaries to the 
advantages of the new technology. Conversely, we have noted that the 
need for additional payments for devices that offer little or no 
clinical improvement over previously existing devices is less apparent. 
In such cases, these devices can still be used by hospitals, and 
hospitals will be paid for them through appropriate APC payment. 
Moreover, a goal is to target pass-through payments for those devices 
where cost considerations are most likely to interfere with patient 
access (66 FR 55852; 67 FR 66782; and 70 FR 68629).
    As specified in regulations at Sec.  419.66(b)(1) through (3), to 
be eligible for transitional pass-through payment under the OPPS, a 
device must meet the following criteria:
     If required by FDA, the device must have received FDA 
approval or clearance and FDA marketing authorization (except for a 
device that has received an FDA investigational device exemption (IDE) 
and has been classified as a Category B device by FDA), or meet another 
appropriate FDA exemption; and the pass-through payment application 
must be submitted within 3 years from the date of the initial FDA 
marketing authorization, if required, unless there is a documented, 
verifiable delay in U.S. market availability after FDA marketing 
authorization is granted, in which case CMS will consider the pass-
through payment application if it is submitted within 3 years from the 
date of market availability;
     The device is determined to be reasonable and necessary 
for the diagnosis or treatment of an illness or injury or to improve 
the functioning of a malformed body part, as required by section 
1862(a)(1)(A) of the Act; and
     The device is an integral part of the service furnished, 
is used for one patient only, comes in contact with human tissue, and 
is surgically implanted or inserted (either permanently or 
temporarily), or applied in or on a wound or other skin lesion.
    In addition, according to Sec.  419.66(b)(4), a device is not 
eligible to be considered for device pass-through payment if it is any 
of the following: (1) equipment, an instrument, apparatus, implement, 
or item of this type for which depreciation and financing expenses are 
recovered as depreciation assets as defined in Chapter 1 of the 
Medicare Provider Reimbursement Manual (CMS Pub. 15-1); or (2) a 
material or supply furnished incident to a service (for example, a 
suture, customized surgical kit, or clip, other than a radiological 
site marker).
    Separately, we use the following criteria, as set forth under Sec.  
419.66(c), to determine whether a new category of pass-through payment 
devices should be established. The device to be included in the new 
category must--
     Not be appropriately described by an existing category or 
by any category previously in effect established for transitional pass-
through payments, and was not being paid for as an outpatient service 
as of December 31, 1996;
     Have an average cost that is not ``insignificant'' 
relative to the payment amount for the procedure or service with which 
the device is associated as determined under Sec.  419.66(d) by 
demonstrating: (1) the estimated average reasonable cost of devices in 
the category exceeds 25 percent of the applicable APC payment amount 
for the service related to the category of devices; (2) the estimated 
average reasonable cost of the devices in the category exceeds the cost 
of the device-related portion of the APC payment amount for the related 
service by at least 25 percent; and (3) the difference between the 
estimated average reasonable cost of the devices in the category and 
the portion of the APC payment amount for the device exceeds 10 percent 
of the APC payment amount for the related service (with the exception 
of brachytherapy and temperature-monitored cryoablation, which are 
exempt from the cost requirements as specified at Sec.  419.66(c)(3) 
and (e)); and
     Demonstrate a substantial clinical improvement, that is, 
substantially improve the diagnosis or treatment of an illness or 
injury or improve the functioning of a malformed body part compared to 
the benefits of a device or devices in a previously established 
category or other available treatment, or, for devices for which pass-
through payment status will begin on or after January 1, 2020, as an 
alternative pathway to demonstrating substantial clinical improvement, 
a device is part of the FDA's Breakthrough Devices Program and has 
received marketing authorization for the indication covered by the 
Breakthrough Device designation.
    Beginning in CY 2016, we changed our device pass-through evaluation 
and determination process. Device pass-through applications are still 
submitted to CMS through the quarterly subregulatory process, but the 
applications are subject to notice and comment rulemaking in the next 
applicable OPPS annual rulemaking cycle. Under this process, all 
applications that are preliminarily approved upon quarterly review will 
automatically be included in the next applicable OPPS annual rulemaking 
cycle, while submitters of applications that are not approved upon 
quarterly review will have the option of being included in the next 
applicable OPPS annual rulemaking cycle or withdrawing their 
application from consideration. Under this notice-and-comment process, 
applicants may submit new evidence, such as clinical trial results 
published in a peer-reviewed journal or other materials, for 
consideration during the public comment process for the proposed rule. 
This process allows those applications that we are able to determine 
meet all of the criteria for device pass-through payment under the 
quarterly review process to receive timely pass-through payment status, 
while still allowing for a transparent, public review process for all 
applications (80 FR 70417 through 70418).
    In the CY 2020 annual rulemaking process, we finalized an 
alternative pathway for devices that are granted a Breakthrough Device 
designation (84 FR 61295) and receive FDA marketing authorization for 
the indication covered by the Breakthrough Device designation. Under 
this alternative pathway, devices that are granted an FDA Breakthrough 
Device designation are not evaluated in terms of the current 
substantial clinical improvement criterion at Sec.  419.66(c)(2) for 
the purposes of determining device pass-through payment status, but do 
need to meet the other requirements for pass-through payment status in 
our regulation at Sec.  419.66. Devices that are part of the 
Breakthrough Devices Program, have received FDA marketing authorization 
for the indication covered by the Breakthrough Devices designation, and 
meet the other criteria in the regulation can be approved through the 
quarterly process and announced through that process (81 FR 79655). 
Proposals regarding these devices and whether pass-through payment 
status should continue to apply are included in the next applicable 
OPPS rulemaking cycle. This process promotes timely pass-through 
payment status for innovative devices, while also recognizing that such 
devices may not have a sufficient evidence base to demonstrate 
substantial clinical improvement at the time of FDA marketing 
authorization.
    More details on the requirements for device pass-through payment 
applications are included on the CMS website in the application form 
itself at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/passthrough_payment.html, in the 
``Downloads'' section. In addition, CMS is amenable to

[[Page 49632]]

meeting with applicants or potential applicants to facilitate 
information sharing to support the evaluation of an OPPS device pass-
through payment application or discuss general application criteria, 
including the substantial clinical improvement criterion.
b. Applications Received for Device Pass-Through Status for CY 2024
    We received six complete applications by the March 1, 2023 
quarterly deadline, which was the last quarterly deadline for 
applications to be received in time to be included in this proposed 
rule. We received three of the applications in the second quarter of 
2022, one of the applications in the third quarter of 2022, no 
applications in the fourth quarter of 2022, and two of the applications 
in the first quarter of 2023. One of the applications was approved for 
device pass-through status during the quarterly review process: MY01 
Continuous Compartmental Pressure Monitor, which was submitted on May 
31, 2022 and conditionally approved as HCPCS code C1834 on October 1, 
2022. However, after further review, we determined that the conditional 
approval was in error, and consequently, we deleted code C1834 on March 
31, 2023.
    Applications received for the later deadlines for the remaining 
2023 quarters (the quarters beginning June 1, September 1, and December 
1 of 2023), if any, will be discussed in the CY 2025 OPPS/ASC proposed 
rule. We note that the quarterly application process and requirements 
have not changed because of the addition of rulemaking review. Detailed 
instructions on submission of a quarterly device pass-through payment 
application are included on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Downloads/catapp.pdf.
    Discussions of the applications we received by the March 1, 2023 
deadline are included below.
(1) Alternative Pathway Device Pass-Through Applications
    We received two device pass-through applications by the March 2023 
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.
(a) CavaClear Inferior Vena Cava (IVC) Filter Removal Laser Sheath
    Phillips North America, LLC submitted an application for a new 
device category for transitional pass-through payment status for 
CavaClear Inferior Vena Cava (IVC) Filter Removal Laser Sheath 
(CavaClear) for CY 2024. Per the applicant, CavaClear is a breakthrough 
device intended for tissue ablation in the removal of embedded IVC 
filters that have failed a previous retrieval method. IVC filters are 
used to capture blood clots and prevent them from moving to the lungs 
in patients with venous thromboembolism. Per the applicant, research 
has shown that IVC filters may have long-term complications, including 
device migration, filter fracture, and IVC occlusion; as a result, FDA 
issued a safety notice that recommends that physicians remove 
retrievable IVC filters as soon as they are no longer needed. The 
applicant stated that CavaClear facilitates the detachment of firmly 
adherent IVC filters using ultraviolet laser energy. The applicant 
explained that CavaClear uses circumferential tissue ablation that can 
aid in capturing the filter within seconds of laser activation, which 
can help increase physician efficiency, and may help lower costs by 
reducing the number of retrieval attempts to remove an embedded IVC 
filter.
    According to the applicant, CavaClear is a 14F or 16F laser 
catheter used for the intra-operative removal of IVC filters. The 
applicant further explained that CavaClear consists of optical fibers 
arranged in a circle, sandwiched between inner and outer polymer 
tubing. The fibers terminate at the distal end within a polished tip 
and at the proximal end within a coupler that mates with the excimer 
laser. According to the applicant, inner and outer stainless-steel 
bands, which form a radiopaque marker, protect the optical fibers at 
the distal tip. The applicant also stated that CavaClear was designed 
to slide through an introducer sheath and with an inner lumen to allow 
an appropriate traction platform to pass through it. Per the applicant, 
the device facilitates detachment of IVC filters from the IVC wall 
using ultraviolet laser energy and subsequent collapse of the filter, 
partially within the laser sheath and entirely within the introducer 
sheath. The laser sheath was designed for use with the CVX-300[supreg] 
Excimer Laser or Philips Laser System (PLS), which allows the 
multifiber laser sheaths to transmit ultraviolet energy to the tissue 
at the distal tip of the device. The applicant further explained that, 
when activated, the laser ablates the tissue and frees the IVC filter 
from overgrowth in a controllable fashion. The applicant stated that by 
using cool ultraviolet laser energy around the embedded IVC filter, 
CavaClear can assist in fast filter capture with low force.
    As stated previously, to be eligible for transitional pass-through 
payment under the OPPS, a device must meet the criteria at Sec.  
419.66(b)(1) through (4). With respect to the newness criterion at 
Sec.  419.66(b)(1), CavaClear received FDA Breakthrough Device 
designation effective April 23, 2021, for the ablation of tissue in the 
removal of IVC filters that have failed a previous retrieval method. 
FDA granted the applicant De Novo classification for CavaClear (laser-
powered IVC filter retrieval catheter) on December 21, 2021, 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 CavaClear on May 30, 2022, 
which is within 3 years of the date of the initial FDA marketing 
authorization.
    We are inviting public comment on whether CavaClear meets the 
newness criterion at Sec.  419.66(b)(1).
    With respect to the eligibility criterion at Sec.  419.66(b)(3), 
according to the applicant, CavaClear is integral to the service 
provided, is used for one patient only, comes in contact with human 
tissue, and is surgically implanted or inserted into the patient 
through the insertion of a laser catheter temporarily for the 
interoperative removal of IVC filters as required at Sec.  
419.66(b)(3).
    We are inviting public comment on whether CavaClear meets the 
eligibility criterion at Sec.  419.66(b)(3).
    With respect to the exclusion criterion at Sec.  419.66(b)(4), the 
applicant also claimed that CavaClear meets the criterion because it is 
not equipment, an instrument, apparatus, implement, or item of this 
type for which depreciation and financing expenses are recovered, and 
it is not a supply or material furnished incident to a service.
    We are inviting public comment on whether CavaClear meets the 
exclusion criterion at Sec.  419.66(b)(4).
    In addition to the criteria at Sec.  419.66(b)(1) through (4), the 
criteria for establishing new device categories are specified at Sec.  
419.66(c). The first criterion, at Sec.  419.66(c)(1), provides that 
CMS determines that a device to be included in the category is not 
appropriately described by any of the existing categories or by any 
category previously in effect, and was not being paid for as an 
outpatient service as of

[[Page 49633]]

December 31, 1996. The applicant described CavaClear as an IVC filter 
removal device that uses a laser to ablate tissue and is intended to 
facilitate detaching and removing indwelling IVC filters. Per the 
applicant, CavaClear is the first and only FDA-cleared solution for 
advanced IVC filter removal, and the applicant claimed that no previous 
device categories for pass-through payment appropriately describe 
CavaClear. Per the applicant, the possible existing pass-through code--
HCPCS code C2629 (Introducer/sheath, other than guiding, other than 
intracardiac electrophysiological, laser)--does not appropriately 
describe CavaClear because CavaClear uses a unique laser mechanism of 
action, unlike the snag, snare, and forcep method to remove IVC 
filters; CavaClear is not intended to remove pacemaker and 
defibrillator leads like the products described by C2629; and CavaClear 
impacts different anatomy than the products described by C2629. 
Specifically, the applicant asserted that C2629 includes devices that 
are indicated to remove implanted pacemaker and defibrillator leads and 
devices via a catheter inserted into the vascular system. In addition, 
the applicant noted that FDA granted CavaClear De Novo classification, 
reflecting that there is no legally marketed predicate device for 
CavaClear.
    We note, based on the description the applicant provided, that 
CavaClear is a laser sheath intended for use in the IVC, which is not 
intracardiac, and thus could be encompassed by the descriptor of C2629. 
We also note that another existing pass-through payment category may 
appropriately describe CavaClear. Specifically, we believe that C1773 
(Retrieval device, insertable (used to retrieve fractured medical 
devices)) may appropriately describe CavaClear. Pass-through payment 
category C1773 is a broad category descriptor for a device that 
retrieves another device within a patient's vascular system. Based on 
the description the applicant provided, CavaClear is a device (a laser-
powered sheath that uses a laser to ablate tissue in the IVC) used to 
retrieve another medical device (an IVC filter device), which is 
consistent with the descriptor for C1773. In this context, we believe 
CavaClear may be similar to the devices currently described by C2629 
and C1773, and therefore, CavaClear may also be appropriately described 
by C2629 and C1773.
    We are inviting public comment on whether CavaClear meets the 
device category criterion at Sec.  419.66(c)(1).
    The second criterion for establishing a device category, at Sec.  
419.66(c)(2), provides that CMS determines either of the following: (i) 
that a device is included in the category that has demonstrated that it 
will substantially improve the diagnosis or treatment of an illness or 
injury or improve the functioning of a malformed body party 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. CavaClear has a Breakthrough Device 
designation and marketing authorization from FDA for the indication 
covered by the Breakthrough Device designation, and therefore, appears 
to meet the criterion at Sec.  419.66(c)(2)(ii) and is not evaluated 
for substantial clinical improvement.
    The third criterion for establishing a device category, at Sec.  
419.66(c)(3), requires us to determine if the cost of the device is not 
insignificant, as described in Sec.  419.66(d). Section 419.66(d) 
includes three cost significance criteria that must each be met. The 
applicant provided the following information in support of cost 
significance requirements. The applicant stated that CavaClear would be 
reported with HCPCS code listed in Table 29.
[GRAPHIC] [TIFF OMITTED] TP31JY23.043

    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 5183, which had a CY 2022 payment rate of 
$2,923.63 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 37193 had a device 
offset amount of $762.48 at the time the application was received.\12\ 
According to the applicant, the cost of CavaClear is $3,165.00.
---------------------------------------------------------------------------

    \12\ We note that the applicant selected a value of $537.36 for 
the device offset amount. However, the value selected is 
inconsistent with the device offset amount related to HCPCS 37193 in 
APC 5183 found in Addendum P to the CY 2022 OPPS/ASC final rule with 
comment period, as corrected in the 2022 Correction Notice OPPS 
Addendum (87 FR 2060). We selected the value of $762.48, which we 
believe is the accurate value. Based on our initial assessment for 
this proposed rule, using the device offset amount of $762.48 would 
result in CavaClear meeting the cost significance requirement.
---------------------------------------------------------------------------

    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 $3,165.00 for CavaClear is 108.26 percent of 
the applicable APC payment amount for the service related to the 
category of devices of $2,923.63 (($3,165.00/$2,923.63) x 100 = 108.26 
percent). Therefore, we

[[Page 49634]]

believe CavaClear meets the first cost significance requirement.
    The second cost significance requirement, at Sec.  419.66(d)(2), 
provides that the estimated average reasonable cost of the devices in 
the category must exceed the cost of the device-related portion of the 
APC payment amount for the related service by at least 25 percent, 
which means that the device cost needs to be at least 125 percent of 
the offset amount (the device-related portion of the APC found on the 
offset list). The estimated average reasonable cost of $3,165 for 
CavaClear is 415.09 percent of the cost of the device-related portion 
of the APC payment amount for the related service of $762.48 
(($3,165.00/$762.48) x 100 = 415.09 percent). Therefore, we believe 
CavaClear meets the second cost significance requirement.
    The third cost significance requirement, at Sec.  419.66(d)(3), 
provides that the difference between the estimated average reasonable 
cost of the devices in the category and the portion of the APC payment 
amount for the device must exceed 10 percent of the APC payment amount 
for the related service. The difference between the estimated average 
reasonable cost of $3,165.00 for CavaClear and the portion of the APC 
payment amount for the device of $762.48 is 82.18 percent of the APC 
payment amount for the related service of $2,923.63 ((($3,165.00-
762.48)/$2,923.63) x 100 = 82.18 percent). Therefore, we believe that 
CavaClear meets the third cost significance requirement.
    We are inviting public comment on whether CavaClear meets the 
device pass-through payment criteria discussed in this section, 
including the cost criterion for device pass-through payment status.
(b) CERAMENT[supreg] G
    BONESUPPORT AB submitted an application for a new device category 
for transitional pass-through payment status for CERAMENT[supreg] G for 
CY 2024. Per the applicant, CERAMENT[supreg] G is a single-use 
implantable bone void filler combination device/drug that remodels into 
bone and elutes gentamicin. The applicant further explained that 
CERAMENT[supreg] G is an adjunct to systematic antibiotic therapy as 
part of the surgical treatment of osteomyelitis (i.e., bone infection) 
in the extremities and is used where there is a need for supplemental 
bone void filler material. The applicant asserted that CERAMENT[supreg] 
G can reduce the recurrence of chronic osteomyelitis from gentamicin-
sensitive microorganisms to protect bone healing and augment 
provisional hardware to help support bone fragments during the surgical 
procedure. The applicant stated that CERAMENT[supreg] G is the first 
on-label solution for a one-stage surgical approach to treating bone 
infections with its unique dual mode of action: (1) promote bone 
healing (bone remodeling), and (2) protect bone healing (elution of a 
local broad-spectrum antibiotic). According to the applicant, once 
implanted, CERAMENT[supreg] G resorbs overtime and remodels into bone 
in 6 to 12 months.
    Per the applicant, CERAMENT[supreg] G is comprised of three key 
compounds: (1) hydroxyapatite (HA), (2) calcium sulfate (CaS), and (3) 
gentamicin sulfate. According to the applicant, by combining calcium 
sulfate and hydroxyapatite, a balance is achieved between implant 
resorption rate and bone remodeling rate. The applicant further 
explained that the CaS acts as a resorbable carrier for HA. The 
applicant described that HA has a slow resorption rate and high 
osteoconductivity promoting bone remodeling and thus gives long-term 
structural support to the newly-formed bone. The gentamicin sulfate is 
a broad-spectrum aminoglycoside antibiotic that is sensitive to a 
spectrum of aerobic bacteria, particularly gram-negative bacilli, as 
well as aerobic gram-positive cocci, in particular Staphylococcus 
aureus, some coagulase negative staphylococci (CoNS) (e.g., 
Staphylococcus epidermidis), and some strains of streptococci. 
According to the applicant, the gentamicin sulfate is present in the 
bone void filler to prevent colonization from gentamicin-sensitive 
microorganisms to protect bone healing.
    Per the applicant, CERAMENT[supreg] G is comprised of eight 
components (these components contain the three key compounds as well as 
other parts for the successful application of CERAMENT[supreg] G): (1) 
CERAMENT[supreg] CMI, a closed mixing injection system pre-packed with 
ceramic bone substitute (CBS), is a mixture of the CaS (60 wt percent) 
and HA (40 wt percent). The applicant further explained that the mixing 
device is comprised of a 60 mL syringe, which in its proximal part is 
equipped with a movable combined plunger and mixing paddle, and in its 
distal part with a luer-lock connection. The movable mixing paddle 
allows effective mixing of the material inside the syringe. Calcium 
Sulfate and Hydroxyapatite (CSH) are the setting component of the bone 
void filler, and per the applicant, this component will react to 
calcium sulfate dihydrate (CSD) and will be resorbed over time, giving 
place for natural bone to grow into the bone graft. The applicant 
described that CSD is added as a seeding agent to accelerate the 
setting reaction of CSH to CSD, and that HA is an osteoconductive 
mineral similar to natural bone (this part of the bone graft substitute 
will not be resorbed and does not need to be surgically removed). The 
applicant stated that CSH and CSD conform to specifications based on 
the monograph Calcium Sulfate Dihydrate 0982, European Pharmacopoeia 
(EP) and the Official Monograph for Calcium Sulfate U.S. Pharmacopoeia/
National Formulary (USP) as well as internal requirements; (2) 
CERAMENT[supreg] ID, an injection device used to inject the paste into 
the bone void or gap; (3) Valve, a needleless valve needed for the 
transfer of the ceramic paste from the CERAMENT[supreg] CMI to the 
CERAMENT[supreg] ID; (4) Tip Extenders, which are sterile, plastic 
needles with an inner diameter of 2.55 mm and two lengths (50 and 100 
mm), that are connected to the CERAMENT[supreg] ID to facilitate 
placement of the paste at the debridement site; (5) CERAMENT[supreg] 
GENTAMICIN, the gentamicin sulfate in a glass vial equipped with a 
stopper and a cap. The gentamicin sulfate subcomponent has a potency 
equivalent to >=590[mu]g gentamicin/mg (anhydrous substance) and is 
dissolved in the 0.9 percent sterile sodium chloride solution and mixed 
with the CBS powder. Per the applicant, the prepared paste sets to a 
calcium sulfate dihydrate matrix with embedded hydroxyapatite 
particles, and gentamicin sulfate. The applicant further explained that 
it delivers 17.5 mg gentamicin per mL paste. Per the applicant, the 
gentamicin sulfate subcomponent complies with the EP monograph for 
gentamicin sulfate; (6) CERAMENT[supreg] MIXING LIQUID, a sterile 
sodium chloride, (NaCl) solution, 9 mg per mL in a glass vial. Per the 
applicant, it is the liquid component of CERAMENT[supreg] G. This 
component contains water which is needed for the calcium sulfate 
reaction to occur. The liquid meets requirements of the compendial 
excipient of USP/EP grade and is also registered in the inactive 
ingredient database; (7) BONESUPPORT DP, which includes two ventilated 
dispensing pins to facilitate easy handling when preparing the 
gentamicin solution; and (8) BONESUPPORT SYRINGE, a single packed, 
sterile 10 mL syringe with a male/female rotator assembly, and is used 
when preparing the gentamicin solution.
    According to the applicant, after the surgical site has been 
prepared and any dead bone is debrided (i.e., removed),

[[Page 49635]]

the CERAMENT[supreg] G paste is prepared by the surgeon or surgical 
technician by: (1) mixing the gentamicin powder with the provided 
saline to make a gentamicin liquid; (2) adding the gentamicin liquid to 
the powder in the CERAMENT[supreg] CMI syringe and mixing the 
gentamicin liquid and powder; and (3) transferring the resulting paste 
to a smaller delivery syringe. Four minutes after the start of mixing, 
the paste is ready to be used as a bone void filler. Per the applicant, 
it can be injected using the tip extenders provided in the kit or by 
attaching a needle to the delivery syringe, or it can be placed into a 
bead mold to form beads. Fifteen minutes after the start of mixing, 
CERAMENT[supreg] G can be drilled into, if required. At 20 minutes, it 
is fully set, at which time the wound can be closed.
    As stated previously, to be eligible for transitional pass-through 
payment under the OPPS, a device must meet the criteria at Sec.  
419.66(b)(1) through (4). With respect to the newness criterion at 
Sec.  419.66(b)(1), CERAMENT[supreg] G received FDA Breakthrough Device 
designation effective March 12, 2020, as a resorbable, gentamicin-
eluting ceramic bone graft substitute intended for use as a bone void 
filler as an adjunct to systemic antibiotic therapy and surgical 
debridement (standard treatment approach to a bone infection) as part 
of the surgical treatment of osteomyelitis. By eluting gentamicin, 
CERAMENT[supreg] G can inhibit the colonization of gentamicin-sensitive 
microorganisms to protect bone healing. CERAMENT[supreg] G can augment 
provisional hardware to help support bone fragments during the surgical 
procedure and is resorbed and replaced by bone during the healing 
process. FDA granted the applicant De Novo classification for 
CERAMENT[supreg] G under the generic name, resorbable calcium salt bone 
void filler containing a single approved aminoglycoside antibacterial 
substance on May 17, 2022, 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 
CERAMENT[supreg] G on May 31, 2022, which is within 3 years of the date 
of the initial FDA marketing authorization.
    We are inviting public comment on whether CERAMENT[supreg] G meets 
the newness criterion at Sec.  419.66(b)(1).
    With respect to the integral part of the service criterion at Sec.  
419.66(b)(3), the applicant did not indicate whether CERAMENT[supreg] G 
is integral to the service provided. However, per the applicant, 
CERAMENT[supreg] G is used for one patient only, comes in contact with 
human tissue, and is surgically implanted or inserted into the patient 
as required at Sec.  419.66(b)(3).
    We are inviting public comment on whether CERAMENT[supreg] G meets 
the eligibility criterion at Sec.  419.66(b)(3).
    With respect to the exclusion criterion at Sec.  419.66(b)(4), the 
applicant did not address whether CERAMENT[supreg] G is equipment, an 
instrument, apparatus, implement, or item of this type for which 
depreciation and financing expenses are recovered, or if 
CERAMENT[supreg] G is a supply or material furnished incident to a 
service.
    We are inviting public comment on whether CERAMENT[supreg] G meets 
the exclusion criterion at Sec.  419.66(b)(4).
    In addition to the criteria at Sec.  419.66(b)(1) through (4), the 
criteria for establishing new device categories are specified at Sec.  
419.66(c). The first criterion, at Sec.  419.66(c)(1), provides that 
CMS determines that a device to be included in the category is not 
appropriately described by any of the existing categories or by any 
category previously in effect, and was not being paid for as an 
outpatient service as of December 31, 1996. The applicant described 
CERAMENT[supreg] G as a single-use implantable bone void filler 
combination device/drug that remodels into bone and elutes gentamicin. 
The applicant asserted that there are no existing bone void filler 
devices cleared or approved for use in the U.S. for single stage 
surgical reconstruction of bone defects that provide stability, promote 
bone formation, and effectively support the surgical treatment of 
infection by antibiotic elution. However, for comparison purposes, the 
applicant listed HCPCS code C1734 (Orthopedic/device/drug matrix for 
opposing bone-to-bone or soft-tissue-to-bone (implantable)), as a 
device category that it considers similar to CERAMENT[supreg] G's 
device category.\13\
---------------------------------------------------------------------------

    \13\ HCPCS code C1734 is a device category for which pass-
through status was extended for a 1-year period beginning January 1, 
2023, by section (a)(2) of the Consolidated Appropriations Act, 2023 
(CAA, 2023) (Pub. L. 117-328), titled Extension of Pass-Through 
Status Under the Medicare Program for Certain Devices Impacted by 
COVID-19. https://www.cms.gov/files/document/r11801cp.pdf
---------------------------------------------------------------------------

    The applicant stated that CERAMENT[supreg] G differs from the bone 
substitutes AUGMENT[supreg] and AUGMENT[supreg] Injectable (devices 
described by HCPCS code C1734). We note that CMS approved an 
application for AUGMENT[supreg] Bone Graft as a new device category for 
transitional pass-through payment status and established HCPCS code 
C1734 as a new device category beginning in CY 2020. We refer readers 
to the CY 2019 OPPS/ASC final rule with comment period (84 FR 61292 
through 61294) for a full discussion of the AUGMENT[supreg] Bone Graft 
application and decision.\14\ The applicant asserted that 
CERAMENT[supreg] G and AUGMENT[supreg] differ in terms of the product 
composition and mechanism of action, or intended use. In addition, the 
applicant asserted that the products are intended for different groups 
of patients. With respect to composition, per the applicant, 
CERAMENT[supreg] G consists of HA, CaS, and gentamicin sulfate. In 
contrast, the applicant stated that AUGMENT[supreg] consists of beta-
tricalcium phosphate ([beta]-TCP) and recombinant human platelet-
derived growth factor (rhPDGF-BB), and AUGMENT[supreg] Injectable 
consists of [beta]-TCP, rhPDGF-BB, and a collagen matrix. With respect 
to the mechanism of action, the applicant stated that CaS in 
CERAMENT[supreg] G acts as a resorbable carrier for HA, which has a 
slow resorption rate and high osteoconductivity, providing a scaffold 
for new bone generation. The applicant further explained that by 
combining CaS and HA, a balance is achieved between implant resorption 
rate and bone remodeling rate, and by eluting gentamicin, 
CERAMENT[supreg] G can reduce the recurrence of chronic osteomyelitis 
from gentamicin-sensitive microorganisms to protect bone healing. In 
contrast, according to the applicant, the rhPDGF-BB in AUGMENT[supreg] 
acts as a chemo-attractant and mitogen for cells involved in wound 
healing and through its promotion of angiogenesis at the site of 
healing, and the [beta]- TCP acts as a bone void filler to prevent soft 
tissue from collapsing into the void.
---------------------------------------------------------------------------

    \14\ https://www.govinfo.gov/content/pkg/FR-2019-11-12/pdf/2019-24138.pdf
---------------------------------------------------------------------------

    Per the applicant, CERAMENT[supreg] G is indicated for use as a 
bone void filler in skeletally mature patients as an adjunct to 
systemic antibiotic therapy and surgical debridement (standard 
treatment approach to a bone infection) as part of the surgical 
treatment of osteomyelitis in defects in the extremities. In contrast, 
per the applicant, AUGMENT[supreg] and AUGMENT[supreg] Injectable \15\ 
are indicated

[[Page 49636]]

for use as an alternative to autograft in arthrodesis in patients who 
require a bone fusion, such as patients who have arthritis, avascular 
necrosis, joint instability or deformity, or joint arthroplasty of the 
ankle and/or hindfoot. Further, the applicant asserted that 
AUGMENT[supreg] cannot be used in the patients for whom 
CERAMENT[supreg] G is indicated because AUGMENT[supreg] is specifically 
contraindicated in patients with an active infection at the operative 
site.
---------------------------------------------------------------------------

    \15\ The applicant differentiates itself from AUGMENT[supreg] 
and AUGMENT[supreg] Injectable, but does not use the term 
``AUGMENT[supreg] Bone Graft'' in the application. However, the link 
provided in the application goes to the AUGMENT[supreg] web page 
that describes AUGMENT[supreg] Regenerative Solutions, 
AUGMENT[supreg] Bone Graft and AUGMENT[supreg] Injectable. We use 
the term ``AUGMENT[supreg]'' to collectively refer to the 
AUGMENT[supreg] products described herein and those listed on the 
AUGMENT[supreg] website. The applicant provided web page (in 
footnote): AUGMENT BONE GRAFT website: http://www.augmentbonegraft.com/healthcare-professionals/.
---------------------------------------------------------------------------

    We note that, based on the description of the device provided by 
the applicant, CERAMENT[supreg] G and AUGMENT[supreg] differ in terms 
of composition and intended use, but also note that device categories 
are not intended to be device specific. Rather, device categories are 
intended to encompass any device that can be appropriately described by 
the category. As such, when we evaluate a potential pass-through device 
to determine whether it meets the device category criterion at Sec.  
419.66(c)(1), we compare the subject device to the device category 
descriptor rather than to the specific device for which the device 
category was created. Specifically, C1734 describes any device that 
meets the following descriptor: Orthopedic/device/drug matrix for 
opposing bone-to-bone or soft-tissue-to-bone (implantable), and per the 
applicant, CERAMENT[supreg] G is described as an implantable device/
drug matrix that, with its intended use, will oppose soft-tissue-to-
bone. In this context, we believe CERAMENT[supreg] G may be similar to 
the devices currently described by C1734, and therefore 
CERAMENT[supreg] G may also be appropriately described by C1734.
    We are inviting public comment on whether CERAMENT[supreg] G meets 
the device category criterion at Sec.  419.66(c)(1).
    The second criterion for establishing a device category, at Sec.  
419.66(c)(2), provides that CMS determines either of the following: (i) 
that a device to be included in the category has demonstrated that it 
will substantially improve the diagnosis or treatment of an illness or 
injury or improve the functioning of a malformed body part compared to 
the benefits of a device or devices in a previously established 
category or other available treatment; or (ii) for devices for which 
pass-through status will begin on or after January 1, 2020, as an 
alternative to the substantial clinical improvement criterion, the 
device is part of the FDA's Breakthrough Devices Program and has 
received FDA marketing authorization for the indication covered by the 
Breakthrough Device designation. CERAMENT[supreg] G has a Breakthrough 
Device designation and marketing authorization from FDA for the 
indication covered by the Breakthrough Device designation (as explained 
in more detail in the discussion of the newness criterion) and 
therefore appears to meet the criterion at Sec.  419.66(c)(2)(ii) and 
is not evaluated for substantial clinical improvement.
    The third criterion for establishing a device category, at Sec.  
419.66(c)(3), requires us to determine that the cost of the device is 
not insignificant, as described in Sec.  419.66(d). Section 419.66(d) 
includes three cost significance criteria that must each be met. The 
applicant provided the following information in support of the cost 
significance requirements. The applicant stated that CERAMENT[supreg] G 
would be reported with HCPCS codes listed in Table 30.
BILLING CODE 4120-01-P

[[Page 49637]]

[GRAPHIC] [TIFF OMITTED] TP31JY23.044


[[Page 49638]]


[GRAPHIC] [TIFF OMITTED] TP31JY23.045

BILLING CODE 4120-01-C
    To meet the cost criterion for device pass-through payment status, 
a device must pass all three tests of the cost criterion for at least 
one APC. As we explained in the CY 2005 OPPS final rule with comment 
period (69 FR 65775), we generally use the lowest APC payment rate 
applicable for use with the nominated device when we assess whether a 
device meets the cost significance criterion, thus increasing the 
probability the device will pass the cost significance test. For our 
calculations, we used APC 5112, which had a CY 2022 payment rate of 
$1,422.51 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 23035 had a device 
offset amount of $217.36 at the time the application was received. We 
note that the applicant submitted cost information for two different 
device sizes (5 ml and 10 ml) for CERAMENT[supreg] G. Per the 
applicant, the average patient will require approximately 10 ml per 
procedure, with a weighted cost of $7,567.00 per patient.
    Section 419.66(d)(1), the first cost significance requirement, 
provides that the estimated average reasonable cost of devices in the 
category must exceed 25 percent of the applicable APC payment amount 
for the service related to the category of devices. The estimated 
average reasonable cost of $7,567.00 for CERAMENT[supreg] G is 531.95 
percent of the applicable APC payment amount for the service related to 
the category of devices of $1,422.51 (($7,567.00/$1,422.51) x 100 = 
531.95 percent). Therefore, we believe CERAMENT[supreg] G meets the 
first cost significance requirement.
    The second cost significance requirement, at Sec.  419.66(d)(2), 
provides that the estimated average reasonable cost of the devices in 
the category must exceed the cost of the device-related portion of the 
APC payment amount for the related service by at least 25 percent, 
which means that the device cost needs to be at least 125 percent of 
the offset amount (the device-related portion of the APC found on the 
offset list). The estimated average reasonable cost of $7,567.00 for 
CERAMENT[supreg] G is 3,481.32 percent of the cost of the device-
related portion of the APC payment amount for the related service of 
$217.36 (($7,567.00/$217.36) x 100 = 3,481.32 percent). Therefore, we 
believe that CERAMENT[supreg] G meets the second cost significance 
requirement.
    The third cost significance requirement, at Sec.  419.66(d)(3), 
provides that the difference between the estimated average reasonable 
cost of the devices in the category and the portion of the APC payment 
amount for the device must exceed 10 percent of the APC payment amount 
for the related service. The difference between the estimated average 
reasonable cost of $7,567.00 for CERAMENT[supreg] G and the portion of 
the APC payment amount for the device of $217.36 is 516.67 percent of 
the APC payment amount for the related service of $1,422.51 
((($7,567.00-$217.36)/$1,422.51) x 100 = 516.67 percent). Therefore, we 
believe

[[Page 49639]]

that CERAMENT[supreg] G meets the third cost significance requirement.
    We are inviting public comment on whether the CERAMENT[supreg] G 
meets the device pass-through payment criteria discussed in this 
section, including the cost criterion for device pass-through payment 
status.
(2) Traditional Device Pass-Through Applications
(a) Ambu[supreg] aScopeTM 5 Broncho HD
    Ambu Inc. submitted an application for a new device category for 
transitional pass-through payment status for the Ambu[supreg] 
aScopeTM 5 Broncho HD for CY 2024. Per the applicant, the 
Ambu[supreg] aScopeTM 5 Broncho HD is one component of the 
Ambu[supreg] aScopeTM 5 Broncho HD System which consists of: 
(1) the Ambu[supreg] aScopeTM 5 Broncho HD (5.0/2.2 or 5.6/
2.8), a sterile, single-use, disposable flexible/rigid bronchoscope; 
and (2) Ambu[supreg] aBoxTM 2, a compatible, reusable 
display unit. The applicant is only seeking a new device category for 
transitional pass-through payment status for the Ambu[supreg] 
aScopeTM 5 Broncho HD component.
    Per the applicant, the Ambu[supreg] aScopeTM 5 Broncho 
HD, consists of: (1) a handle, to hold the scope (designed for left and 
right hand); (2) a control lever, to move the distal tip up or down in 
a single plane; (3) a working channel and working channel port, for 
instillation of fluids and insertion of endotherapy instruments; (4) a 
biopsy valve, to be attached to the working channel port, for insertion 
of endotherapy instruments or attachment of a syringe; (5) a suction 
connector, for connection of suction tubing; (6) a suction button, to 
activate suction when pressed; (7) endoscope buttons 1 and 2 (depending 
on settings in display unit the two remote switches allow for direct 
activation on handle of four different functionalities such as image 
and video capturing, initiate advanced red contrast (ARC), and zoom); 
(8) a rotation control ring, for rotation of the insertion cord during 
procedure; (9) a tube connection, for fixation of tubes with standard 
connector during procedure; (10) an insertion cord and insertion 
portion, flexible airway insertion cord; (11) bending section, 
maneuverable part; (12) distal tip, which contains the camera, light 
source (two light-emitting diodes (LEDs)), and the working channel 
exit; (13) display unit connector, to connect to the port on the 
Ambu[supreg] aBoxTM 2 display unit; (14) a cable, to 
transmit the image signal to the Ambu[supreg] aBoxTM 2 
display unit; (15) a protective handle cover, to protect the control 
lever during transport and storage; (16) a protective pipe, to protect 
the insertion cord during transport and storage; and (17) an 
introducer, to facilitate introduction of luer lock syringes.
    The applicant stated that the Ambu[supreg] aScopeTM 5 
Broncho HD is an imaging/illumination bronchoscope device that uses an 
integrated camera module and built-in dual LED illumination to provide 
access to, and imaging of, the lungs for diagnostic and therapeutic 
purposes for pulmonology patients. The device is intended for endoscopy 
and endoscopic surgery within the lungs, also known as bronchoscopy. 
According to the applicant, the Ambu[supreg] aScopeTM 5 
Broncho HD was designed to perform a wide array of diagnostic and 
interventional pulmonology procedures. The applicant noted that the 
Ambu[supreg] aScopeTM 5 Broncho HD is a single-use 
bronchoscope designed to be used with the Ambu[supreg] 
aBoxTM 2 display unit, endotherapy instruments, and other 
ancillary equipment for bronchoscopic procedures and examination within 
the airways and the tracheobronchial tree. It is intended to provide 
visualization via the compatible display unit, the Ambu[supreg] 
aBoxTM 2, and to allow passage of endotherapy instruments 
via its working channel.
    Per the applicant, the Ambu[supreg] aScopeTM 5 Broncho 
HD bronchoscope is inserted into the patient airway through either the 
mouth, nose, or via a tracheostomy, if present. The applicant explained 
that when the Ambu[supreg] aScopeTM 5 Broncho HD 
bronchoscope has reached the correct position, endotherapy instruments 
can be inserted into the working channel system of the bronchoscope. 
Per the applicant, an introducer supplied with the bronchoscope can be 
attached to the working channel port via a luer lock adaptor, while the 
bronchoscope is in use. The applicant noted that the suction system may 
be used to remove blood, saliva, and mucus from the airway. The 
applicant indicated that a bronchoscope operator monitors the field of 
view via the integrated camera of the Ambu[supreg] aScopeTM 
5 Broncho HD bronchoscope and the procedure is finished when the device 
is pulled out completely.
    As stated previously, to be eligible for transitional pass-through 
payment under the OPPS, a device must meet the criteria at Sec.  
419.66(b)(1) through (4). With respect to the newness criterion at 
Sec.  419.66(b)(1), on July 25, 2022, the applicant received 510(k) 
clearance from FDA for the Ambu[supreg] aScopeTM 5 Broncho 
HD as a device to be used for endoscopic procedures and examination 
within the airways and tracheobronchial tree. We received the 
application for a new device category for transitional pass-through 
payment status for the Ambu[supreg] aScopeTM 5 Broncho HD on 
February 28, 2023, which is within 3 years of the date of the initial 
FDA marketing authorization.
    We are inviting public comment on whether the Ambu[supreg] 
aScopeTM 5 Broncho HD meets the newness criterion at Sec.  
419.66(b)(1).
    With respect to the eligibility criterion at Sec.  419.66(b)(3), 
according to the applicant, the Ambu[supreg] aScopeTM 5 
Broncho HD is integral to the service provided, is used for one patient 
only, comes in contact with human tissue, and is surgically inserted as 
required by Sec.  418.66(b)(3).
    We are inviting public comment on whether the Ambu[supreg] 
aScopeTM 5 Broncho HD meets the criterion at Sec.  
419.66(b)(3).
    With respect to the exclusion criterion at Sec.  419.66(b)(4), the 
applicant did not address whether the Ambu[supreg] aScopeTM 
5 Broncho HD is equipment, an instrument, apparatus, implement, or item 
of this type for which depreciation and financing expenses are 
recovered, or if the Ambu[supreg] aScopeTM 5 Broncho HD is a 
supply or material furnished incident to a service.
    We are inviting public comment on whether the Ambu[supreg] 
aScopeTM 5 Broncho HD meets the exclusion criterion at Sec.  
419.66(b)(4).
    In addition to the criteria at Sec.  419.66(b)(1) through (4), the 
criteria for establishing new device categories are specified at Sec.  
419.66(c). The first criterion, at Sec.  419.66(c)(1), provides that 
CMS determines that a device to be included in the category is not 
appropriately described by any of the existing categories or by any 
category previously in effect, and was not being paid for as an 
outpatient service as of December 31, 1996. The applicant described the 
Ambu[supreg] aScopeTM 5 Broncho HD as a single-use, 
disposable, digital flexible/rigid bronchoscope that is used in 
pulmonary procedures (bronchoscopy) to diagnose and treat conditions of 
the lungs, including tumors or bronchial cancer, airway blockage 
(obstruction), narrowed areas in airways (strictures), inflammation, 
and infections such as tuberculosis (TB), pneumonia, fungal or 
parasitic lung infections, interstitial pulmonary disease, causes of 
persistent cough, causes of coughing up blood, spots seen on chest X-
rays, and vocal cord paralysis. The applicant claimed that the 
Ambu[supreg] aScopeTM 5 Broncho HD is different from other 
endoscopes because it is a single-use endoscope indicated

[[Page 49640]]

for use in the respiratory system, the device records snapshots or 
video of images, and the device is temporarily inserted into the 
patient airway to diagnose and treat lung problems. According to the 
applicant, there are two possible existing pass-through device 
categories, represented by the following codes: C1748 (Endoscope, 
single-use (i.e., disposable), upper gastrointestinal tract (GI), 
imaging/illumination device (insertable)); and C1747 (Endoscope, 
single-use (i.e., disposable), urinary tract, imaging/illumination 
device (insertable)). The applicant noted that while these two codes 
are for single-use endoscopic devices, they are only appropriate for GI 
and urinary tract imaging, respectively. Therefore, the applicant 
asserted that these two codes would not apply to a single-use, 
disposable, bronchoscopy for use in pulmonary procedures. We note that 
while C1748 and C1747 are intended to be used in different anatomical 
areas of the patient, the codes for both device categories describe 
devices that are single use and have imaging capabilities.
    We are inviting public comment on whether the Ambu[supreg] 
aScopeTM 5 Broncho HD meets the device category criterion at 
Sec.  419.66(c)(1).
    The second criterion for establishing a device category, at Sec.  
419.66(c)(2), provides that CMS determines either of the following: (i) 
that a device to be included in the category has demonstrated that it 
will substantially improve the diagnosis or treatment of an illness or 
injury or improve the functioning of a malformed body part compared to 
the benefits of a device or devices in a previously established 
category or other available treatment; or (ii) for devices for which 
pass-through status will begin on or after January 1, 2020, as an 
alternative to the substantial clinical improvement criterion, the 
device is part of the FDA's Breakthrough Devices Program and has 
received FDA marketing authorization for the indication covered by the 
Breakthrough Device designation. The applicant claimed that the 
Ambu[supreg] aScopeTM 5 Broncho HD represents a substantial 
clinical improvement over existing technologies by: (1) elimination of 
complex cleaning/reprocessing procedures, (2) reduction of microbial 
transmission and infection since it is single-use, (3) elimination of 
the need for continuous training of reprocessing staff, (4) 
minimization of the risk of patient cross-contamination, (5) assurance 
that a sterilized scope will be used each time, and (6) assurance that 
there will be no biofilm from endoscope channels. The applicant 
provided four articles, an FDA guidance letter, and an FDA safety 
notice specifically for the purpose of addressing the substantial 
clinical improvement criterion.
    In support of its claim that the use of the Ambu[supreg] 
aScopeTM 5 Broncho HD eliminates complex cleaning/
reprocessing procedures because it is a single-use device, the 
applicant referenced an FDA Reprocessing Final Guidance document \16\ 
issued March 17, 2015. This FDA document provides guidance to medical 
device manufacturers on the complex activities involved in crafting and 
validating reprocessing instructions that ensure that the device can be 
used safely and for the purpose for which it is intended. The guidance 
document is limited to reusable medical devices and single-use medical 
devices that are initially supplied as non-sterile to the user and 
require the user to process the device prior to its use. In this 
guidance document, FDA identifies a subset of reusable medical devices 
(including bronchoscopes and accessories) that pose a greater 
likelihood of microbial transmission and represent a high risk of 
infection (subclinical or clinical) if they are not adequately 
reprocessed and indicates design features which may pose a challenge to 
adequate reprocessing for arthroscopes, laparoscopic instruments, and 
electrosurgical instruments, and their respective accessories. However, 
the FDA guidance does not mention sterile, single-use medical devices 
in this document.
---------------------------------------------------------------------------

    \16\ FDA Guidance March 17 2015 ``Reprocessing Medical Devices 
in Health Care Settings: Validation Methods and Labeling: Guidance 
for Industry and Food and Drug Administration Staff'' https://www.fda.gov/downloads/medicaldevices/deviceregulationandguidance/guidancedocuments/ucm253010.pdf.
---------------------------------------------------------------------------

    In support of its claim that the use of the Ambu[supreg] 
aScopeTM 5 Broncho HD reduces microbial transmission and 
infection because it is single-use, the applicant referenced an FDA 
safety notice \17\ issued on September 17, 2015 (2015 FDA safety 
notice). The FDA notice discussed the findings of an investigation into 
infections associated with reprocessed reusable medical devices, 
including an analysis of Medical Device Reports (MDRs) submitted to FDA 
from manufacturers and health care facilities. The notice provided that 
between January 2010 and June 2015, FDA received 109 MDRs concerning 
infections or device contamination associated with flexible 
bronchoscopes. However, FDA noted that, when compared to the number of 
bronchoscopy procedures performed in the U.S. each year, this is 
considered a small number of MDRs. In 2014, FDA received 50 MDRs that 
mentioned infections or device contamination associated with 
reprocessed flexible bronchoscopes, which prompted additional 
investigation of this issue. FDA indicated that a small number of the 
reported infections were from persistent device contamination despite 
following the manufacturer's reprocessing instructions, however, most 
of the infections were the result of the failure to meticulously follow 
manufacturer instructions for reprocessing, or continued use of devices 
despite integrity, maintenance, and mechanical issues. FDA provides 
additional recommendations for health care facilities and staff that 
reprocess flexible bronchoscopes and patients considering bronchoscopy 
procedures, but does not reference single-use bronchoscopes in the 
notice.
---------------------------------------------------------------------------

    \17\ FDA Safety Communications, Infections Associated with 
Reprocessed Flexible Bronchoscopes: FDA Safety Communication, issued 
September 17, 2015. https://www.fdanews.com/ext/resources/files/09-15/092115-safety-notice.pdf?1442508647.
---------------------------------------------------------------------------

    In support of its claim that the use of the Ambu[supreg] 
aScopeTM 5 Broncho HD eliminates the need for continuous 
training of reprocessing staff, the applicant referenced a study by 
Ch[acirc]teauvieux et al.,\18\ which assessed the organizational and 
economic impacts of the introduction of a single[hyphen]use flexible 
bronchoscope (FB) (Ambu[supreg] aScopeTM, versions 2 and 3) 
in comparison with a reusable FB (Pentax[supreg]) at the hospital 
level. The study took place between May 2016 and October 2016 in the 
Georges Pompidou European Hospital, an 800-bed university hospital in 
France. Ch[acirc]teauvieux et al. noted that the introduction of 
single[hyphen]use FBs led to a more simplified process, less stress for 
medical and paramedical staff in emergency situations, teaching 
benefits, and easier management of transport, in comparison with 
reusable FBs. However, the authors recommended limiting the use of 
single-use FBs to specific situations, and to prioritize the use of 
reusable devices for most of the bronchoscopies for cost savings.
---------------------------------------------------------------------------

    \18\ Ch[acirc]teauvieux, C., Farah, L., Gu[eacute]rot, E., 
Wermert, D., Pineau, J., Prognon, P., Borget, I., & Martelli, N. 
(2018). Single-use flexible bronchoscopes compared with reusable 
bronchoscopes: Positive organizational impact but a costly solution. 
Journal of evaluation in clinical practice, 24(3), 528-535. https://doi.org/10.1111/jep.12904.
---------------------------------------------------------------------------

    The applicant referred to a meta study by Barron and Kennedy \19\ 
to support its

[[Page 49641]]

claim that the use of Ambu[supreg] aScopeTM 5 Broncho HD 
minimizes the risk of patient cross-contamination, ensuring that health 
care providers have taken optimal steps to safeguard their patients. 
Barron and Kennedy summarized the major advantages of single-use FBs 
over the standard reusable FBs in clinical scenarios. The authors noted 
that single-use FBs offer a safer alternative to standard reusable FBs 
in specific scenarios where reduced risk of cross infection was 
critical in the immunocompromised patient and in rare cases of prior 
contamination due to transmissible spongiform encephalopathies.
---------------------------------------------------------------------------

    \19\ Barron, S.P., & Kennedy, M.P. (2020). Single-Use 
(Disposable) Flexible Bronchoscopes: The Future of Bronchoscopy? 
Advances in therapy, 37(11), 4538-4548. https://doi.org/10.1007/s12325-020-01495-8.
---------------------------------------------------------------------------

    The applicant referred to a self-sponsored study \20\ by Ofstead et 
al.\21\ in 2019, in support of its claim that the use of the 
Ambu[supreg] aScopeTM 5 Broncho HD ensures a sterilized 
scope is available for each procedure while reusable endoscopes may not 
be sterile even if manufacturers' cleaning protocols are followed. The 
study first referenced Ofstead et al.'s 2017 \22\ evaluation of the 
effectiveness of bronchoscope processing in three large hospitals where 
every bronchoscope had visible defects, protein was detected on 100 
percent of high-level disinfected bronchoscopes, and bacteria or mold 
were found on 58 percent of the patient-ready bronchoscopes. Then, in 
2019, Ofstead et al. conducted the study to determine the time and cost 
of acquiring, maintaining, and reprocessing bronchoscopes in four 
hospitals (two in the Midwest and two in the West Coast). Three 
hospitals had obtained single-use Ambu[supreg] bronchoscopes (2018, 
version unspecified) for procedures done in certain departments, after 
hours, or in emergency situations. Per Ofstead et al. (2019), the cost 
for procedures with reusable bronchoscopes ($281 to $803) were 
comparable or higher than the cost of single-use bronchoscopes ($220 to 
$315), due to acquisition and maintenance of large inventories of 
bronchoscopes to ensure real-time availability for various hospital 
departments. Ofstead et al. (2019) suggested the use of single-use 
bronchoscopes and accessories for after hours and emergency situations 
and any procedures that do not require advanced bronchoscopy 
capabilities. Ofstead et al. (2019) summarized the steps that can be 
taken to reduce risks related to bronchoscope contamination and to 
focus on implementing quality management systems to improve personnel 
competence, bronchoscope inventory management, maintenance, 
reprocessing effectiveness, and storage. In addition to following 
manufacturer's steps for reprocessing the devices, Ofstead et al. 
(2019) suggest the use of single-use bronchoscopes and accessories for 
after hours and emergency situations and any procedures that do not 
require advanced bronchoscopy capabilities, which are currently 
available in the list of recommendations.
---------------------------------------------------------------------------

    \20\ Ofstead et al. acknowledged that this study was supported 
by an unrestricted research grant from Ambu Inc. The study sponsor 
did not participate in designing the study, identifying sites, 
collecting data, compiling results, interpreting the findings, or 
writing this article.
    \21\ Ofstead, C.L., Hopkins, K.M., Eiland, J.E., & Wetzler, H.P. 
Managing Bronchoscope Quality and Cost: Results of a Real-world 
Study. https://www.ambu.com/Files/Files/Ambu/Investor/News/English/2019/Managing%20Bronchoscope%20cost%20a%20real%20world%20study.pdf.
    \22\ Ofstead CL, Quick MR, Wetzler HP, et al. Effectiveness of 
reprocessing for flexible bronchoscopes and endobronchial ultrasound 
bronchoscopes. Chest. 2018;154(5):1024-34.
---------------------------------------------------------------------------

    The applicant referenced a review article by Kovaleva et al.\23\ in 
support of its claim that the Ambu[supreg] aScopeTM 5 
Broncho HD's single-use feature is free of biofilm from endoscope 
channels since routine cleaning procedures do not remove biofilm 
reliably from endoscope channels. This review presents an overview of 
the infections and cross-contaminations related to flexible 
gastrointestinal endoscopy and bronchoscopy and illustrates the impact 
of biofilm on endoscope reprocessing and post-endoscopic infection. 
Kovaleva et al. noted that the use of antibiofilm-oxidizing agents with 
an antimicrobial coating inside washer disinfectors could reduce 
biofilm build-up inside endoscopes and automated endoscope re-
processors and decrease the risk of transmitting infections.\24\ Per 
Kovaleva et al. while sterilization can be helpful to destroy 
microorganisms within biofilms, ethylene oxide sterilization may fail 
in the presence of organic debris after an inadequate cleaning 
procedure before reprocessing of flexible endoscopes. There was no 
mention of single-use bronchoscopes in the study.
---------------------------------------------------------------------------

    \23\ Kovaleva, J., Peters, F.T., van der Mei, H.C., & Degener, 
J.E. (2013). Transmission of infection by flexible gastrointestinal 
endoscopy and bronchoscopy. Clinical microbiology reviews, 26(2), 
231-254. https://doi.org/10.1128/CMR.00085-12.
    \24\ Kovaleva, J., Peters, F.T., van der Mei, H.C., & Degener, 
J.E. (2013). Transmission of infection by flexible gastrointestinal 
endoscopy and bronchoscopy. Clinical microbiology reviews, 26(2), 
231-254. https://doi.org/10.1128/CMR.00085-12.
---------------------------------------------------------------------------

    The applicant cited a self-sponsored, laboratory study by Kurman et 
al.,\25\ in general support of its application. Kurman et al. evaluated 
and assessed four different manufacturers' single-use flexible 
bronchoscopes (SFB), including the nominated device and its prior 
model, against their reusable flexible bronchoscopes (RFB) on a cadaver 
(i.e., corpse) model, benchtop fixturing, and artificial plastic lung 
model. The study compared the Ambu[supreg] aScopeTM 5 
Broncho HD with four devices: (1) Olympus H-SteriScope; (2) Verathon 
BFLEX; (3) Boston Scientific Exalt-B; and (4) Ambu[supreg] 
aScopeTM 4 Broncho (the prior model of the nominated 
device). The study concluded that the Ambu[supreg] aScopeTM 
5 Broncho HD has the highest overall performance, the highest overall 
rating for sampling, and highest maneuverability in difficult segmental 
airways among the comparator devices.
---------------------------------------------------------------------------

    \25\ Kurman, J., Wagh, A., Benn, B., & Islam, S., (2023). A 
Comparison of Single-use Bronchoscopes and Reusable Bronchoscopes 
for Interventional Pulmonology Applications. Confidential. Ambu 
Inc., funded evaluation and testing.
---------------------------------------------------------------------------

    The applicant indicated that the Ambu[supreg] aScopeTM 5 
Broncho HD differs from these comparator devices as it is the only 
device that is compatible with argon gas plasma coagulation, 
cryotherapy, and laser, with an HD (1200x800) chip, has more degrees of 
articulation with tools, and provides image and video capture from the 
scope handle with multiple programmable functions including capture 
photo, start/end video, enable zoom, and initiate ARC. In addition, the 
applicant stated that the nominated device is superior to its earlier 
legally marketed device in terms of maneuverability into difficult 
segmental airways, overall performance, and overall sampling 
assessment. The applicant asserted that the nominated device differs 
from the predicate device due to a rotation mechanism on the handle and 
its superior articulation, which allow for more complicated procedures 
to be performed such as cryotherapy and coagulation. The applicant 
stated that the nominated device is equipped with an HD image chip and 
increased depth-of-field and field-of-view, which allow interventional 
pulmonologists to perform inspections, biopsies, and debulking. The 
applicant also stated that the nominated device's programmable buttons 
allow for superior documentation than the earlier bronchoscope device.
    We note that the nominated device was determined to be 
substantially equivalent to the earlier device that the applicant had 
previously legally marketed. The FDA 510(k) summary indicated that both 
devices share similar technological characteristics such as optical 
system, bending section, diameter of insertion cord and distal

[[Page 49642]]

end, and insertion portion length. Furthermore, the 510(k) summary 
indicated that both have the same technical characteristics, which 
include maneuverable tip controlled by the user, flexible insertion 
cord, camera and LED light source at the distal tip, sterilized by 
ethylene oxide, single-use devices, ability for aspiration and sample 
collection in bronchoalveolar lavage, and bronchial wash procedures.
    We note that in its application, the applicant provided a 
comparison of certain devices or device categories that it believed are 
most closely related or similar to the Ambu[supreg] aScopeTM 
5 Broncho HD. The applicant identified six reusable devices that it 
believed are most closely related: (1) Olympus Evis Exera Iii 
Bronchovideoscope Bf-h190; (2) Pentax EB-J10 Video Bronchoscope; (3) 
Fujifilm EB-580S Video Bronchoscope; (4) Olympus BF-Q190; (5) Olympus 
BF-1TH190; and (6) Olympus BF-XT190. According to the applicant, these 
devices are used during the same specific procedure(s) and/or services 
with which the Ambu[supreg] aScopeTM 5 Broncho HD is used. 
The applicant stated that the Ambu[supreg] aScopeTM 5 
Broncho HD's single-use feature is unique among the comparators. 
According to the applicant, the single-use feature eliminates 
bronchoscope reprocessing. The applicant further submitted several 
articles reporting results on the prevalence of infection due to 
incomplete or inadequate processing for reusable bronchoscopes, which 
we summarize as follows. An article by Shimizu et al.\26\ concluded 
that patients with larger lesions, presence of endobronchial lesions, 
histology of small-cell lung cancer, and advanced-disease stage tended 
to develop pulmonary infectious complications more often than other 
patients. A 2020 systematic literature review and meta-analysis by 
Travis et al.\27\ reported an estimated average reusable FB cross-
contamination rate of 8.69 percent  1.86 (standard division 
[SD]) (95 percent confidence interval [CI]: 5.06-12.33 percent) among 
eight studies from the U.S. and four European countries. Travis et 
al.\28\ attributed the infection rate to the differences in the study 
design and sampling methods, geography, low number of data points, 
clinical settings, and an aversion towards publishing negative findings 
among the eight studies. Furthermore, the applicant submitted a 2019 
systematic review and cost-effective analysis by Mouritsen et al.,\29\ 
which reported an average 2.8 percent cross-contamination rate from 
reusable, flexible bronchoscopes among 16 studies from the United 
Kingdom, U.S., France, Spain, Australia, and Taiwan. Mouristen et al. 
identified that the single-use flexible bronchoscopes were cost 
effective and associated with a reduction of infection risk of 
approximately 1.71-4.07 percent compared with reusable flexible 
bronchoscopes. Lastly, the applicant again cited the meta study by 
Barron and Kennedy \30\ referencing the findings from Ofstead et 
al.\31\, the review by Mouristen et al., and the Emergency Care 
Research Institute's (ECRI's) report.\32\ Of note, ECRI highlighted the 
recontamination of flexible endoscopes due to mishandling or improper 
storage as one of the top 10 health technology hazards.
---------------------------------------------------------------------------

    \26\ Shimizu, T., Okachi, S., Imai, N., Hase, T., Morise, M., 
Hashimoto, N., Sato, M., & Hasegawa, Y. (2020). Risk factors for 
pulmonary infection after diagnostic bronchoscopy in patients with 
lung cancer. Nagoya journal of medical science, 82(1), 69-77. 
https://doi.org/10.18999/nagjms.82.1.69.
    \27\ Travis, H.S., Russell, R.V., & Kovaleva, J. (2023). Cross-
contamination rate of reusable flexible bronchoscopes: A systematic 
literature review and meta-analysis. Journal of Infection 
Prevention, 17571774231158203.
    \28\ Id.
    \29\ Mouritsen, J.M., Ehlers, L., Kovaleva, J., Ahmad, I., & 
El[hyphen]Boghdadly, K. (2020). A systematic review and cost 
effectiveness analysis of reusable vs. single-use flexible 
bronchoscopes. Anaesthesia, 75(4), 529-540.
    \30\ Barron, S. P., & Kennedy, M.P. (2020). Single-Use 
(Disposable) Flexible Bronchoscopes: The Future of Bronchoscopy? 
Advances in therapy, 37(11), 4538-4548. https://doi.org/10.1007/s12325-020-01495-8.
    \31\ Ofstead CL, Quick MR, Wetzler HP, et al. Effectiveness of 
reprocessing for flexible bronchoscopes and endobronchial ultrasound 
bronchoscopes. Chest. 2018;154(5):1024-34.
    \32\ ECRI. Top 10 health technology hazards. Executive brief. 
Pennsylvania: ECRI Institute, Health devices; 2019. p. 2019.
---------------------------------------------------------------------------

    Based on the evidence submitted with the application, we note the 
following concerns: We are concerned about whether the Ambu[supreg] 
aScopeTM 5 Broncho HD can be distinguished from similar 
devices on the market and the earlier versions of the nominated device 
on the market sufficiently to demonstrate substantial clinical 
improvement. Four of the studies the applicant submitted, 
Ch[acirc]teauvieux et al.,\33\ Barron and Kennedy,\34\ Kurman et 
al.,\35\ and Ofstead et al.,\36\ investigated and provided data on the 
applicant's earlier models of the device, but did not provide 
comparisons to the nominated device. In addition, we note that the 
studies provided also did not compare the nominated device to an 
appropriate comparator such as a single-use bronchoscope from a 
different manufacturer or a standard reusable bronchoscope in a 
clinical setting. In addition, we note that the applicant's self-
sponsored study by Kurman, et al.\37\ was conducted in the laboratory 
(i.e., on cadaver, benchtop fixturing, and artificial plastic lung) and 
not in the clinical setting. In order to demonstrate substantial 
clinical improvement over currently available treatments, we consider 
supporting evidence, preferably published peer-reviewed clinical 
trials, that shows improved clinical outcomes, such as reduction in 
mortality, complications, subsequent interventions, future 
hospitalizations, recovery time, pain, or a more rapid beneficial 
resolution of the disease process compared to the standard of care.
---------------------------------------------------------------------------

    \33\ Ch[acirc]teauvieux, C., Farah, L., Gu[eacute]rot, E., 
Wermert, D., Pineau, J., Prognon, P., Borget, I., & Martelli, N. 
(2018). Single-use flexible bronchoscopes compared with reusable 
bronchoscopes: Positive organizational impact but a costly solution. 
Journal of evaluation in clinical practice, 24(3), 528-535. https://doi.org/10.1111/jep.12904.
    \34\ Barron, S.P., & Kennedy, M.P. (2020). Single-Use 
(Disposable) Flexible Bronchoscopes: The Future of Bronchoscopy? 
Advances in therapy, 37(11), 4538-4548. https://doi.org/10.1007/s12325-020-01495-8.
    \35\ Kurman, J., Wagh, A., Benn, B., & Islam, S., (2023). A 
Comparison of Single-use Bronchoscopes and Reusable Bronchoscopes 
for Interventional Pulmonology Applications. Confidential. Ambu 
Inc., funded evaluation and testing.
    \36\ Ofstead, C.L., Hopkins, K.M., Eiland, J.E., & Wetzler, H.P. 
Managing Bronchoscope Quality and Cost: Results of a Real-world 
Study. https://www.ambu.com/Files/Files/Ambu/Investor/News/English/2019/Managing%20Bronchoscope%20cost%20a%20real%20world%20study.pdf.
    \37\ Kurman, J., Wagh, A., Benn, B., & Islam, S., (2023). A 
Comparison of Single-use Bronchoscopes and Reusable Bronchoscopes 
for Interventional Pulmonology Applications. Confidential. Ambu 
Inc., funded evaluation and testing.
---------------------------------------------------------------------------

    Furthermore, we note that the Ch[acirc]teauvieux et al.\38\ and 
Barron and Kennedy \39\ studies suggested limiting the use of single-
use bronchoscope device to specific situations (i.e., after hours or 
emergency), immunocompromised patients, and in rare cases of preventing 
prior contamination in the inpatient setting. We believe that further 
investigation with comparators in these specified cases would be 
particularly helpful to determine whether the device demonstrates 
substantial clinical improvements over currently available

[[Page 49643]]

treatments in the clinical setting where it is most likely to be used.
---------------------------------------------------------------------------

    \38\ Ch[acirc]teauvieux, C., Farah, L., Gu[eacute]rot, E., 
Wermert, D., Pineau, J., Prognon, P., Borget, I., & Martelli, N. 
(2018). Single-use flexible bronchoscopes compared with reusable 
bronchoscopes: Positive organizational impact but a costly solution. 
Journal of evaluation in clinical practice, 24(3), 528-535. https://doi.org/10.1111/jep.12904.
    \39\ Barron, S.P., & Kennedy, M.P. (2020). Single-Use 
(Disposable) Flexible Bronchoscopes: The Future of Bronchoscopy? 
Advances in therapy, 37(11), 4538-4548. https://doi.org/10.1007/s12325-020-01495-8.
---------------------------------------------------------------------------

    We note concern that the application and all the articles submitted 
as evidence of substantial clinical improvement discuss potential 
adverse events from reusable bronchoscope procedures, but do not 
directly show any clinical improvement that results from the use of the 
Ambu[supreg] aScopeTM 5 Broncho HD. We note that Shimizu et 
al.,\40\ Travis et al.,\41\ Barron and Kennedy,\42\ and Ofstead et 
al.\43\ provided information about the risks associated with 
reprocessing reusable devices and reported mixed results.
---------------------------------------------------------------------------

    \40\ Shimizu, T., Okachi, S., Imai, N., Hase, T., Morise, M., 
Hashimoto, N., Sato, M., & Hasegawa, Y. (2020). Risk factors for 
pulmonary infection after diagnostic bronchoscopy in patients with 
lung cancer. Nagoya journal of medical science, 82(1), 69-77. 
https://doi.org/10.18999/nagjms.82.1.69.
    \41\ Travis, H.S., Russell, R.V., & Kovaleva, J. (2023). Cross-
contamination rate of reusable flexible bronchoscopes: A systematic 
literature review and meta-analysis. Journal of Infection 
Prevention, 17571774231158203.
    \42\ Barron, S.P., & Kennedy, M.P. (2020). Single-Use 
(Disposable) Flexible Bronchoscopes: The Future of Bronchoscopy? 
Advances in therapy, 37(11), 4538-4548. https://doi.org/10.1007/s12325-020-01495-8.
    \43\ Ofstead, C.L., Hopkins, K.M., Eiland, J.E., & Wetzler, H.P. 
Managing Bronchoscope Quality and Cost: Results of a Real-world 
Study. https://www.ambu.com/Files/Files/Ambu/Investor/News/English/2019/Managing%20Bronchoscope%20cost%20a%20real%20world%20study.pdf.
---------------------------------------------------------------------------

    We also note that the 2015 FDA safety notice \44\ provided 
preliminary information regarding infections associated with the use of 
reprocessed flexible bronchoscopes, but did not discuss or recommend 
the use of disposable, single-use devices in the notice. Furthermore, 
we note the following concerns about studies on the prevalence of 
infection due to incomplete/inadequate reprocessing of reusable 
bronchoscopes. The studies authored by Ch[acirc]teauvieux et al.,\45\ 
Shimizu et al.,\46\ Travis et al.,\47\ and Mouritsen et al.\48\ have 
small sample sizes. Furthermore, the Barron and Kennedy,\49\ Travis et 
al.,\50\ and Mouritsen et al.\51\ studies used different study designs 
and sampling methodologies, or were performed in various clinical 
settings other than outpatient, which may affect the quality and 
reliability of the data provided in support of the applicant's 
assertions. We do not believe that we have sufficient information on 
the prevalence of infection to evaluate the applicant's substantial 
clinical improvement claims for the nominated device. We are seeking 
comments on the prevalence of infection due to incomplete/inadequate 
processing for bronchoscopes in the U.S. and whether single-use 
bronchoscopes reduce the infection rate in patients to identify the 
extent of the problem with existing technologies.
---------------------------------------------------------------------------

    \44\ FDA Safety Communications, Infections Associated with 
Reprocessed Flexible Bronchoscopes: FDA Safety Communication, issued 
September 17, 2015. https://www.fdanews.com/ext/resources/files/09-15/092115-safety-notice.pdf?1442508647.
    \45\ Ch[acirc]teauvieux, C., Farah, L., Gu[eacute]rot, E., 
Wermert, D., Pineau, J., Prognon, P., Borget, I., & Martelli, N. 
(2018). Single-use flexible bronchoscopes compared with reusable 
bronchoscopes: Positive organizational impact but a costly solution. 
Journal of evaluation in clinical practice, 24(3), 528-535. https://doi.org/10.1111/jep.12904.
    \46\ Shimizu, T., Okachi, S., Imai, N., Hase, T., Morise, M., 
Hashimoto, N., Sato, M., & Hasegawa, Y. (2020). Risk factors for 
pulmonary infection after diagnostic bronchoscopy in patients with 
lung cancer. Nagoya journal of medical science, 82(1), 69-77. 
https://doi.org/10.18999/nagjms.82.1.69.
    \47\ Travis, H.S., Russell, R.V., & Kovaleva, J. (2023). Cross-
contamination rate of reusable flexible bronchoscopes: A systematic 
literature review and meta-analysis. Journal of Infection 
Prevention, 17571774231158203.
    \48\ Mouritsen, J.M., Ehlers, L., Kovaleva, J., Ahmad, I., & El-
Boghdadly, K. (2020). A systematic review and cost effectiveness 
analysis of reusable vs. single[hyphen]use flexible bronchoscopes. 
Anaesthesia, 75(4), 529-540.
    \49\ Barron, S.P., & Kennedy, M.P. (2020). Single-Use 
(Disposable) Flexible Bronchoscopes: The Future of Bronchoscopy? 
Advances in therapy, 37(11), 4538-4548. https://doi.org/10.1007/s12325-020-01495-8.
    \50\ Travis, H.S., Russell, R.V., & Kovaleva, J. (2023). Cross-
contamination rate of reusable flexible bronchoscopes: A systematic 
literature review and meta-analysis. Journal of Infection 
Prevention, 17571774231158203.
    \51\ Mouritsen, J.M., Ehlers, L., Kovaleva, J., Ahmad, I., & 
El[hyphen]Boghdadly, K. (2020). A systematic review and cost 
effectiveness analysis of reusable vs. single-use flexible 
bronchoscopes. Anaesthesia, 75(4), 529-540.
---------------------------------------------------------------------------

    The applicant provided evidence which seemed to rely on indirect 
inferences from other sources of data. We question the relevance of the 
2015 FDA safety notice \52\ to the nominated device because as stated 
above, the guidance applies to reprocessed flexible bronchoscopes 
broadly, but not to disposable, single-use devices comparable to the 
nominated device. We are concerned that many of the applicant's 
substantial clinical improvement claims rely on an assumption that 
inadequate reprocessing of reusable bronchoscopes is positively 
correlated with heightened risk of infection, providing studies with 
small sample sizes and other limitations as described above as their 
only support. We note that the applicant provided background 
information on the established reprocessing guidelines \53\ for 
reusable devices; however, the existence of reprocessing guidelines 
does not provide evidence on the prevalence of infection rates, 
establish a relationship between infection risk and reprocessing 
procedures, or substantiate that single-use disposable scopes, or the 
nominated device specifically, would be a substantial clinical 
improvement over currently available treatments.
---------------------------------------------------------------------------

    \52\ FDA Safety Communications, Infections Associated with 
Reprocessed Flexible Bronchoscopes: FDA Safety Communication, issued 
September 17, 2015. https://www.fdanews.com/ext/resources/files/09-15/092115-safety-notice.pdf?1442508647.
    \53\ FDA Guidance March 17, 2015, ``Reprocessing Medical Devices 
in Health Care Settings: Validation Methods and Labeling: Guidance 
for Industry and Food and Drug Administration Staff.''
---------------------------------------------------------------------------

    We are inviting public comment on whether the Ambu[supreg] 
aScopeTM 5 Broncho HD meets the substantial clinical 
improvement criterion at Sec.  419.66(c)(2)(i).
    The third criterion for establishing a device category, at Sec.  
419.66(c)(3), requires us to determine that the cost of the device is 
not insignificant, as described in Sec.  419.66(d). Section 419.66(d) 
includes three cost significance criteria that must be met. The 
applicant provided the following information in support of the cost 
significance requirements. The applicant stated that the Ambu[supreg] 
aScopeTM 5 Broncho HD would be reported with HCPCS codes 
listed in Table 31.
BILLING CODE 4120-01-P

[[Page 49644]]

[GRAPHIC] [TIFF OMITTED] TP31JY23.046


[[Page 49645]]


[GRAPHIC] [TIFF OMITTED] TP31JY23.047


[[Page 49646]]


[GRAPHIC] [TIFF OMITTED] TP31JY23.048

BILLING CODE 4120-01-C
    To meet the cost criterion for device pass-through payment status, 
a device must pass all three tests of the cost criterion for at least 
one APC. As we explained in the CY 2005 OPPS final rule with comment 
period (69 FR 65775), we generally use the lowest APC payment rate 
applicable for use with the nominated device when we assess whether a 
device meets the cost significance criterion, thus increasing the 
probability the device will pass the cost significance test. For our 
calculations, we used APC 5152, which had a CY 2022 payment rate of 
$383.33 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). We note that the HCPCS code 
31646 identified by the applicant had a device offset amount of $0.00 
at the time the application was received. Accordingly, we are 
evaluating the cost significance requirements using $0.00 as the 
appropriate device offset amount. According to the applicant, the cost 
of the Ambu[supreg] aScopeTM 5 Broncho HD is $799.00.
    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 $799.00 for the Ambu[supreg] 
aScopeTM 5 Broncho HD is 208.44 percent of the applicable 
APC payment amount for the service related to the category of devices 
of $383.33 (($799.00/$383.33) x 100 = 208.44 percent). Therefore, we 
believe the Ambu[supreg] aScopeTM 5 Broncho HD meets the 
first cost significance requirement.
    The second cost significance requirement, at Sec.  419.66(d)(2), 
provides that the estimated average reasonable cost of the devices in 
the category must exceed the cost of the device-related portion of the 
APC payment amount for the related service by at least 25 percent, 
which means that the device cost needs to be at least 125 percent of 
the offset amount (the device-related portion of the APC found on the 
offset list). Given that there are no device-related costs in the APC 
payment amount, and the Ambu[supreg] aScopeTM 5 Broncho HD 
has an estimated average reasonable cost of $799.00, we believe that 
the Ambu[supreg] aScopeTM 5 Broncho HD meets the second cost 
significance requirement.
    The third cost significance requirement, at Sec.  419.66(d)(3), 
provides that the difference between the estimated average reasonable 
cost of the devices in the category and the portion of the APC payment 
amount for the device must exceed 10 percent of the APC payment amount 
for the related service. The difference between the estimated average 
reasonable cost of $799.00 for the Ambu[supreg] aScopeTM 5 
Broncho HD and the portion of the APC payment amount for the device of 
$0.00 exceeds the APC payment amount for the related service of $799.00 
by 208.44 percent ((($799.00-$0.00)/$383.33) x 100 = 208.44 percent). 
Therefore, we believe that the Ambu[supreg] aScopeTM 5 
Broncho HD meets the third cost significance requirement.
    We are inviting public comment on whether the Ambu[supreg] 
aScopeTM 5 Broncho HD meets the device pass-through payment 
criteria discussed in this section, including the cost criterion for 
device pass-through payment status.
(b) Praxis Medical CytoCore
    Praxis Medical, LLC submitted an application for a new device 
category for transitional pass-through payment status for Praxis 
Medical CytoCore (CytoCore) for CY 2024. Per the applicant, CytoCore is 
a single-use disposable biopsy instrument. Per the

[[Page 49647]]

applicant, at the time of biopsy, the motorized CytoCore device 
contains gears and an internal motor that spins a minimally invasive 
needle to increase cellular yields in fewer passes. The applicant 
further explained that CytoCore is vacuum-assisted and can easily be 
operated using one hand. According to the applicant, the primary use is 
for biopsy of any suspicious thyroid nodule.
    The applicant stated that the CytoCore Biopsy Instrument device 
package includes: (1) five CytoCore Biopsy Instruments, each containing 
three luer adapters in a sterile pouch, a syringe-holding device, 
equipped with a scissor-slide mechanism for drawing back the syringe 
plunger to create suction, an internal motor that rotates a needle, and 
an internal alkaline type battery; (2) five 5-mL syringes; and (3) 
instructions for use (IFU) booklets. Per the applicant, the CytoCore is 
compatible with disposable needles of 22-to-25-gauge and 4-to-10-cm 
length that are intended for soft tissue biopsy procedures (needles are 
not included in the device package). The applicant further explained 
that only the CytoCore luer adapters and syringes provided by Praxis 
can be used on CytoCore and that the CytoCore luer adapters can only be 
used with the CytoCore Biopsy Instrument.
    Per the applicant, the operator of CytoCore can direct the needle 
and draw back the plunger with only one hand, thereby diminishing the 
need to move the needle in an in-and-out motion to harvest cells. As 
with other types of biopsies, the sample collected can help make a 
diagnosis or rule out conditions such as cancer. The applicant claimed 
that CytoCore enables the physician to collect more cellular material 
in fewer passes and reduce the number of repeat biopsies and surgeries 
related to inadequate cellular samples using the standard fine needle 
aspiration (FNA) biopsy. According to the applicant, CytoCore is 
designed to collect enough DNA for pathology to definitively rule in or 
out cancer and inform subsequent treatment at the time of the first 
biopsy. Per the applicant, studies report nondiagnostic rates for 
thyroid biopsies to be as high as 30 to 50 percent using standard FNA 
biopsy.
    As stated previously, to be eligible for transitional pass-through 
payment under the OPPS, a device must meet the criteria at Sec.  
419.66(b)(1) through (4). With respect to the newness criterion at 
Sec.  419.66(b)(1), on March 31, 2020, the applicant received 510(k) 
clearance from FDA for CytoCore for use as a device to hold a syringe 
for performing a biopsy of an identified mass with one hand. We 
received the application for a new device category for transitional 
pass-through payment status for CytoCore on August 31, 2022, which is 
within 3 years from the date of the initial FDA marketing 
authorization.
    We are inviting public comments on whether CytoCore meets the 
newness criterion at Sec.  419.66(b)(1).
    With respect to the eligibility criterion at Sec.  419.66(b)(3), 
the applicant did not assert whether CytoCore is integral to the 
service provided. According to the applicant, CytoCore is used for one 
patient only. Per the applicant, CytoCore comes into contact with human 
tissue and is surgically inserted via the syringe attached to the 
motorized CytoCore device. Per the applicant, CytoCore is used with a 
22-to-25-gauge standard fine needle (not included in the device 
package), which is inserted into human tissue to collect cellular 
samples. The applicant stated that the fine needle is attached to 
CytoCore, inserted into the nodule, and cellular material is collected 
through the needle into the syringe. The applicant further explained 
that the cellular material is visible in the hub of the needle or the 
luer adapter. However, we note that the motorized CytoCore device 
itself is not surgically implanted or inserted (either permanently or 
temporarily) or applied in or on a wound or other skin lesion, as 
required at Sec.  419.66(b)(3). Further, we note that according to the 
FDA 510(k) Summary and Indication for Use, CytoCore is a device to hold 
a syringe for performing a biopsy of an identified mass with one hand 
and that the device never comes in contact with the patient. With 
respect to the exclusion criterion at Sec.  419.66(b)(4), the applicant 
did not address whether CytoCore is equipment, an instrument, 
apparatus, implement, or item of this type for which depreciation and 
financing expenses are recovered as depreciable assets. The applicant 
also did not address whether CytoCore is a supply or material furnished 
incident to a service. However, in the CY 2000 OPPS interim final rule 
with comment period (65 FR 67798, 65 FR 67804 through 67805), we 
explained how we interpreted Sec.  419.43(e)(4)(iv). We stated that we 
consider a device to be surgically implanted or inserted if it is 
surgically inserted or implanted via a natural or surgically created 
orifice, or inserted or implanted via a surgically created incision. We 
also stated that we do not consider an item used to cut or otherwise 
create a surgical opening to be a device that is surgically implanted 
or inserted. We consider items used to create incisions, such as 
scalpels, electrocautery units, biopsy apparatuses, or other commonly 
used operating room instruments, to be supplies or capital equipment 
not eligible for transitional pass-through payments. We stated that we 
believe the function of these items is different and distinct from that 
of devices that are used for surgical implantation or insertion. 
Finally, we stated that, generally, we would expect that surgical 
implantation or insertion of a device occurs after the surgeon uses 
certain primary tools, supplies, or instruments to create the surgical 
path or site for implanting the device. In the CY 2006 OPPS final rule 
with comment period (70 FR 68516, 70 FR 68629 and 68630), we adopted as 
final our interpretation that the surgical insertion or implantation 
criterion can be met by devices that are surgically inserted or 
implanted via a natural or surgically created orifice, as well as those 
devices that are inserted or implanted via a surgically created 
incision. We reiterated that we maintain all of the other criteria in 
Sec.  419.66 of the regulations, namely, that we do not consider an 
item used to cut or otherwise create a surgical opening to be a device 
that is surgically implanted or inserted.
    We are inviting public comments on whether CytoCore meets the 
exclusion criterion at Sec.  419.66(b).
    In addition to the criteria at Sec.  419.66(b)(1) through (4), the 
criteria for establishing new device categories are specified at Sec.  
419.66(c). The first criterion, at Sec.  419.66(c)(1), provides that 
CMS determines that a device to be included in the category is not 
appropriately described by any of the existing categories or by any 
category previously in effect, and was not being paid for as an 
outpatient service as of December 31, 1996. The applicant described 
CytoCore as a motorized, single-use disposable biopsy instrument that 
contains gears and an internal motor that spins a minimally invasive 
needle during biopsy to increase cellular yields in fewer passes. Per 
the applicant, no previous device categories for pass-through payment 
have encompassed the device.
    We have not identified an existing pass-through payment category 
that describes CytoCore. We are inviting public comment on whether 
CytoCore meets the device category criterion at Sec.  419.66(c)(1).
    The second criterion for establishing a device category, at Sec.  
419.66(c)(2), provides that CMS determines either of the following: (i) 
that a device to be included in the category has demonstrated that it 
will substantially improve the diagnosis or treatment of an

[[Page 49648]]

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 
CytoCore results in substantial clinical improvement over existing 
technologies by: (1) reducing tissue trauma, bleeding; (2) increasing 
cellular harvest; (3) reducing passes required, clinical invasiveness; 
and (4) reducing nondiagnostic biopsy results follow up. The applicant 
provided one article and one conference poster in support of these 
claims.
    In support of the claims that using CytoCore reduced tissue trauma 
and/or bleeding, and that it increased cellular harvest, the applicant 
submitted a conference poster of a study performed to evaluate the 
consistency and diagnostic quality of cellular material obtained with a 
22-to-25-gauge fine needle using CytoCore as compared to FNA without 
using CytoCore and to traditional core biopsy. In the study,\54\ 
samples utilizing FNA syringe (n = 14) and core biopsy (n = 12) were 
obtained and compared to biopsy samples obtained with CytoCore. The 
samples were analyzed in pathology separately for diagnostic adequacy. 
Using the Fisher exact test statistic, the study authors found no 
significant difference (p < .05) between FNA and CytoCore. Similarly, 
using the Fisher exact test statistic, the study authors found no 
significant difference (p < . 05) between core biopsy and CytoCore. 
Specifically, the study authors reported that CytoCore was successful 
in obtaining a diagnosis in 78 percent of biopsies, which was unchanged 
from FNA; however, the authors reported that the cellular yield of 
samples obtained with CytoCore were superior to FNA biopsy samples. The 
study authors also reported that when compared to traditional core 
samples, CytoCore specimens were similar to traditional core biopsy in 
yielding a diagnosis, with CytoCore yielding a diagnosis 99 percent of 
the time and core biopsy 100 percent of the time. The authors concluded 
that CytoCore provides a reliably high amount of cellular material with 
significantly less tissue damage, which is especially useful for 
vascular tissue such as lymph nodes and breast tissue.
---------------------------------------------------------------------------

    \54\ Rey, E., Huber, J., Risam, R., Shahzad, R., Gonzalez, A., 
Acosta, A. (2022, April). Making the Diagnosis: Increasing the 
Cellular Yield of Pathology Samples Through a Motorized Rotating, 
Aspirating Device. Poster presented at the Daniel Manganaro Memorial 
2022 Annual Scientific Poster Symposium, Elmira, NY. Retrieved from 
https://www.arnothealthgme.org/_files/ugd/c76666_083113203de449a8a6054cf7b81aac82.pdf.
---------------------------------------------------------------------------

    In support of the claims that using CytoCore reduces the number of 
passes required and the clinical invasiveness of a thyroid biopsy, and 
that it reduces nondiagnostic biopsy results and follow-up, the 
applicant provided an unpublished article that described the 
performance of CytoCore on the number of passes required to obtain an 
adequate sample and diagnostic biopsy in comparison to using 
traditional ultrasound-guided FNA (US-FNA) biopsy rates reported in the 
literature.\55\ The study authors performed a retrospective chart 
review of consecutive US-FNA thyroid biopsies performed with CytoCore 
between August 2020 and March 2021. The chart records included 
ultrasound and pathology data points, including exam code, name of 
operator, biopsy tool, number of passes required for adequacy, and 
pathological diagnosis using the Bethesda System for Reporting Thyroid 
Cytopathology. The authors stated that the study included a total of 
100 FNA biopsies from 69 patients, and a total of nine different 
operators performed these biopsies. At the time of biopsy, most (88 
percent) of the patients were women, and, on average, were 65 years of 
age at the time of biopsy. In addition, the study authors stated that 
the number of nodules biopsied ranged from one to three on average, but 
most patients (65 percent) had only one nodule biopsied. The operators' 
years of experience ranged from 4 to 39 years of practice, with most 
(76 percent) performed by an operator with 5 years of practice 
experience (the study authors noted that this operator was never the 
sole operator for the procedure). In addition, a cytotechnologist was 
present for all procedures and rapid on-site evaluation (ROSE) was done 
on the smears to determine if the sample met the criteria for adequacy. 
All biopsies were performed using a 25 gauge, 1\1/2\ inch BD 
TM needle attached to CytoCore. The Bethesda System 
classification categories include Category I (nondiagnostic), Category 
II (benign), Category III (atypia), Category IV (suspicious for 
neoplasm), Category V (suspicious for malignancy), and Category VI 
(malignant). The study authors defined determinant diagnoses as the sum 
total of biopsies classified in Categories II (benign) and IV 
(malignant). The authors compared their study results to 20 published 
articles with publication dates between 2012 and 2022 that reported 
results for thyroid US-FNA biopsy. The study used descriptive 
statistics (averages and frequencies) and a single sample proportion 
test to compare the adequacy of the biopsy sample for each pass and the 
percentage of nondiagnostic, indeterminant, and determinant diagnosis 
classifications to conventional US-FNA techniques results reported in 
literature. According to the study authors, the number of passes 
required to attain an adequate sample using CytoCore ranged from one to 
four and was statistically significantly lower than using conventional 
FNA technique as reported in the 20 articles. Specifically, to obtain 
an adequate sample of a thyroid nodule using CytoCore compared to the 
conventional FNA technique, 65 percent required only one pass compared 
to 36 percent, 93 percent required two or fewer passes compared to 60 
percent, 97 percent required three or fewer passes compared to 72 
percent, and 100 percent required four or fewer passes compared to 75 
percent, respectively. The authors stated that restricting the analyses 
to only one nodule per patient did not result in a change in 
significance. In addition, the authors stated that for their study 
group, pathology was able to make a determinant diagnosis (Category II 
and Category VI) for 91 percent of the samples. Specifically, of the 
100 samples included in the study, 3 percent were nondiagnostic 
(Category I), 88 percent were benign (Category II), 4 percent were 
atypia (Category III), 2 percent were suspicious for neoplasm (Category 
IV), 0 percent were suspicious for malignancy (Category V), and 3 
percent were malignant (Category VI). According to the authors, this 
was significantly better than the median nondiagnostic (Category I) and 
determinant diagnosis rates reported in the literature, 10% (p = 0.02) 
and 65% (p < 0.001), respectively. The rate of indeterminant 
classifications (Category III) was also lower in their study population 
but was not statistically significant (p = 0.17). The study authors 
concluded that if their study sample of 100 thyroid biopsies using 
CytoCore had the same median results as FNA thyroid biopsies reported 
in the literature, an additional 11 patients would have a

[[Page 49649]]

biopsy classified as Category I or Category III (nondiagnostic and 
atypia) and would have required at least one more US-FNA to make a 
diagnosis, and an additional four patients would have a biopsy 
classified as Category IV (suspicious neoplasm) and would have required 
a partial lobectomy to determine malignancy. The study authors further 
concluded that in addition to the higher cost associated with 
additional biopsies and/or surgical intervention, there may be a 
greater impact on a patient's quality of life due to potential surgical 
complications, vocal cord palsy (VCP), lifetime hormonal replacement, 
and cosmetic scarring. Furthermore, the authors concluded that CytoCore 
resulted in more than a three-fold decrease in nondiagnostic (Category 
III) biopsies and significant increase in definitive diagnoses. The 
management of an initially indeterminant biopsy can range from a repeat 
US-FNA (Categories I and III) to lobectomy or thyroidectomy (Categories 
IV and V). The actual risk of malignancy can be as low as 1 percent to 
15 percent for Categories I and III, but as high as 75 percent for 
Category V. Therefore, the authors concluded that initially 
indeterminant diagnosis can result in unnecessary procedures and 
increased costs for the healthcare system and patients for false 
positives, but for true malignancies, indeterminant biopsies could also 
delay diagnosis and treatment.
---------------------------------------------------------------------------

    \55\ Authors unknown. Motorized rotating fine needle biopsy 
device reduces number of passes needed for cytological adequacy and 
improves diagnostic accuracy, not published; uses a retrospective 
study type.
---------------------------------------------------------------------------

    We note that the nominated device was determined to be 
substantially equivalent to a legally marketed device, the TAO 
Aspirator and Plastic Finger. The FDA 510(k) summary indicated that the 
devices share similar technological characteristics such as a device to 
hold a syringe for performing fine needle aspiration, a needle is 
connected to the syringe and inserted into a lesion, and a syringe 
plunger is retracted to create suction. The FDA 510(k) summary 
indicated that CytoCore differs in that a battery powers a motor that 
rotates the needle. In addition, the applicant provided a comparison of 
certain devices that it believed are most closely related or similar to 
CytoCore. Specifically, the applicant identified two devices with 
related HCPCS procedure codes that it believes are most closely related 
to CytoCore: (1) HCPCS code 10005 (fine needle aspiration biopsy, 
including ultrasound guidance, first lesion) and the Benton [sic] 
DickinsonTM (BDTM) device; and (2) HCPCS code 60100 (biopsy thyroid, 
percutaneous core needle) and the BioPince device. According to the 
applicant, the BDTM is a single-use 25-gauge 1-inch basic needle with 
no syringe and is the standard fine needle used most often in thyroid 
biopsy procedures. In contrast, the applicant stated that CytoCore is a 
motorized vacuum assisted device that applies vacuum during biopsy and 
rotates the [fine] needle. Per the applicant, BioPince is a full core 
firing biopsy device with a 16-to-18-gauge needle, and it is not 
recommended for head/neck biopsies due to sensitive structures in the 
head/neck area (e.g., nerves, carotid, vessels, trachea). The applicant 
further explained that medical society guidelines, including those of 
the American Thyroid Association (ATA), recommend fine needle 
aspiration for biopsy of thyroid nodules. In contrast, the applicant 
stated that CytoCore is designed to obtain core comparable specimens, 
but using the safe fine needle (25-to-22-gauge), obviating the need for 
this more invasive procedure for thyroid biopsies.
    Based on the evidence submitted, we note the following concerns: 
The first study is an undated conference poster presentation and it is 
not clear whether it has been submitted for publication in a peer-
reviewed journal. We also have concerns with the generalizability and 
validity of the findings. The authors did not report their sampling 
methodology used to obtain the study samples, calling into question the 
validity of the comparison groups and any inferences made. In addition, 
the authors did not describe how they addressed important confounding 
variables that may affect the quality of the biopsy specimen (e.g., 
ultrasound guided, nature, and location of nodule biopsied), calling 
into question whether the FNA and core biopsy samples can validly be 
compared to CytoCore biopsy samples. The study used small sample sizes, 
a sample of 14 biopsies for the comparison to FNA and a sample of 12 
biopsies for the comparison to core biopsies, within one radiology 
department location, limiting the generalizability of the findings. In 
addition, it is not clear that the study is limited to thyroid biopsies 
and the authors did not report any information on patient 
characteristics (e.g., age or sex) or the nature of the nodule. 
Furthermore, the study authors reported that there was no significant 
difference in obtaining a diagnosis between CytoCore and FNA, and 
CytoCore and core biopsy, which calls into question any claim of the 
superiority (versus equivalency) of the CytoCore biopsy samples. The 
study authors reported that the cellular yield of samples obtained with 
CytoCore were overall superior to FNA biopsy samples, but the metrics 
to evaluate this and whether this difference was statistically 
significant were not reported. We note that we are unable to determine 
the validity of this finding. We also note that, as presented in the 
poster, the study authors presented two different rates of diagnosis 
when using CytoCore with no explanation. Specifically, the study 
authors stated that CytoCore was able to obtain a successful diagnosis 
in 78 percent of biopsies when compared to FNA and in 99 percent of 
biopsies when compared to core biopsy. Additionally, the purpose of the 
study did not include an evaluation of whether CytoCore reduced trauma 
or increased cellular harvest, but rather sought to evaluate the 
consistency and diagnostic quality of cellular material obtained with 
CytoCore using a 22-to-25-gauge fine needle compared to traditional 
core biopsy. The study authors did not present metrics that might be 
used to evaluate the amount of trauma as a result of the biopsy 
procedures (e.g., bleeding or bruising after the biopsy procedures). We 
note that we are unable to determine the validity of this finding 
(i.e., using CytoCore compared to core biopsy reduces tissue damage).
    The second document submitted with the application as evidence of 
substantial clinical improvement is an article that is undated and does 
not list the authors or location of the study. The applicant did not 
provide any further details regarding the status of the article. The 
study authors did not use a direct comparison group; rather, they 
compared their study results to those found in published literature. 
The paper did not describe the approach used to select the articles 
used to compare the performance of CytoCore and there is no indication 
that a systematic literature review was conducted. We note that we are 
not able to determine if the literature reported rates included in the 
study are representative of FNA thyroid biopsy results. Similarly, 
beyond selecting articles that reported US-FNA thyroid biopsies, the 
paper did not describe whether the study authors assessed the quality 
of the study designs in the selected literature. We note the paper did 
not control for confounding factors the study authors stated may impact 
the adequacy of a biopsy sample, including the skill and knowledge of 
the person performing the biopsy, the preparation of the specimens, and 
the nature of the nodule (e.g., size, composition, vascularity). 
Similarly, we note the study authors did not account for other 
important potential confounders including the skill and knowledge of 
the

[[Page 49650]]

pathologist and having a cytotechnologist present to perform ROSE on 
the specimens during the biopsy.
    We further note that none of the evidence submitted by the 
applicant provides conclusive evidence that the use of CytoCore reduces 
tissue trauma and/or bleeding, increases cellular yield, reduces the 
number of passes required or clinical invasiveness, or reduces the 
number of nondiagnostic biopsy results or follow-up. In order to 
demonstrate substantial clinical improvement over currently available 
treatments, we consider supporting evidence, preferably published peer-
reviewed clinical trials, that shows improved clinical outcomes, such 
as reduction in mortality, complications, subsequent interventions, 
future hospitalizations, recovery time, pain, or a more rapid 
beneficial resolution of the disease process compared to the standard 
of care. Additional supporting evidence, preferably published peer-
reviewed clinical trials, that shows these improved clinical outcomes 
would help inform our assessment of whether CytoCore demonstrates 
substantial clinical improvement over existing technologies.
    Finally, we are concerned that CytoCore may not demonstrate that it 
substantially improves the diagnosis or treatment of an illness when 
compared to the benefits of other available treatments. CytoCore was 
determined to be substantially equivalent to a legally marketed device, 
the TAO Aspirator and Plastic Finger, which received 510(k) clearance 
on December 9, 1997. The FDA 510(k) summary for CytoCore indicated that 
the devices share similar technological characteristics. In fact, the 
FDA 510(k) summary indicated that CytoCore differs only in that a 
battery powers a motor that rotates the needle, while the TAO Aspirator 
is moved manually in an in-and-out motion. In addition, while the 
applicant distinguishes CytoCore from a comparator device, BioPince, it 
is our understanding that BioPince is a large gauge full core firing 
biopsy device that is not recommended for use in the head/neck, the 
anatomic region for which CytoCore has primary use, according to the 
application. Therefore it remains unclear how such a comparison with 
BioPince supports the argument of substantial clinical improvement.
    We are inviting public comments on whether CytoCore meets the 
substantial clinical improvement criterion at Sec.  419.66(c)(2)(i).
    The third criterion for establishing a device category, at Sec.  
419.66(c)(3), requires us to determine that the cost of the device is 
not insignificant, as described in Sec.  419.66(d). Section 419.66(d) 
includes three cost significance criteria that must each be met. The 
applicant provided the following information in support of the cost 
significance requirements. The applicant stated that CytoCore would be 
reported with HCPCS codes in Table 32.
[GRAPHIC] [TIFF OMITTED] TP31JY23.049

    To meet the cost criterion for device pass-through payment status, 
a device must pass all three tests of the cost criterion for at least 
one APC. 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 5071, which had a CY 2022 payment rate of 
$635.54 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 10005 had a device 
offset amount of $0.89 at the time the application was received.\56\ 
According to the applicant, the cost of the CytoCore is $175.00.
---------------------------------------------------------------------------

    \56\ We note that the applicant selected a value of $32.16 for 
the device offset amount. However, the value selected is 
inconsistent with the device offset amount related to HCPCS 10005 in 
APC 5071 found in Addendum P to the CY 2022 OPPS/ASC final rule with 
comment period, as corrected in the 2022 Correction Notice OPPS 
Addendum (87 FR 2060). We selected the value of $0.89, which we 
believe is the accurate value. Based on our initial assessment for 
this proposed rule, using the device offset amount of $0.89 would 
result in CytoCore meeting the cost significance requirement.
---------------------------------------------------------------------------

    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 $175.00 for CytoCore is 27.54 percent of the 
applicable APC payment amount for the service related to the category 
of devices of $635.54 (($175.00/$635.54) x 100 = 27.54 percent). 
Therefore, we believe CytoCore meets the first cost significance 
requirement.
    The second cost significance requirement, at Sec.  419.66(d)(2), 
provides that the estimated average reasonable cost of the devices in 
the category must exceed the cost of the device-related portion of the 
APC payment amount for the related service by at least 25 percent, 
which means that the device cost needs to be at least 125 percent of 
the offset amount (the device-related portion of the APC found on the 
offset list). The estimated average reasonable cost of $175.00 for 
CytoCore is 19,662.92 percent of the cost of the device-related portion 
of the APC payment amount for the related service of $0.89 (($175.00/
$0.89) x 100 = 19,662.92 percent).

[[Page 49651]]

Therefore, we believe that CytoCore meets the second cost significance 
requirement.
    The third cost significance requirement, at Sec.  419.66(d)(3), 
provides that the difference between the estimated average reasonable 
cost of the devices in the category and the portion of the APC payment 
amount for the device must exceed 10 percent of the APC payment amount 
for the related service. The difference between the estimated average 
reasonable cost of $175.00 for CytoCore and the portion of the APC 
payment amount for the device of $0.89 is 27.40 percent of the APC 
payment amount for the related service of $635.54 or ((($175.00-$0.89)/
$ 635.54) x 100 = 27.40 percent). Therefore, we believe that CytoCore 
meets the third cost significance requirement.
    We are inviting public comment on whether CytoCore meets the device 
pass-through payment criteria discussed in this section, including the 
cost criterion for device pass-through payment status.
(c) EchoTip[supreg]
    Cook Medical submitted an application for a new device category for 
transitional pass-through payment status for the EchoTip[supreg] 
Insight Portosystemic Pressure Gradient Measurement System[supreg] 
(EchoTip[supreg]) for CY 2024. According to the applicant, 
EchoTip[supreg] is used in the diagnosis and management of patient 
populations with chronic liver diseases (CLDs), and especially with 
non-alcoholic fatty liver Disease (NAFLD). The applicant stated that 
EchoTip[supreg] directly measures pressures in the hepatic and portal 
venous vasculatures and is used in conjunction with an ultrasound 
endoscope. The applicant provided that a physician measures the 
portosystemic pressure gradient via endoscopic ultrasound guidance, a 
curvilinear array echoendoscope is advanced to the stomach, and the 
portal and hepatic veins are visualized under ultrasound guidance. A 
25-gauge needle (which is prepared prior to the procedure by attaching 
it to connection tubing and a disposable transducer) is advanced 
through the echoendoscope which then punctures the hepatic vein through 
the liver parenchyma, and a pressure measurement is obtained. Per the 
applicant, a total of three measurements are obtained, after which the 
needle is retracted in the scope and the echoendoscope is repositioned 
for portal vein access. The needle is then advanced to the portal vein 
where another set of three pressure measurements is obtained. The 
portosystemic pressure gradient is calculated by determining the 
difference between the two averaged measurements.
    According to the applicant, EchoTip[supreg] is a single-use, 
disposable device comprised of the EchoTip[supreg] Insight Needle, a 
connecting tube, and a Compass CT transducer. EchoTip[supreg] is 
supplied with a 10 ml syringe. Once assembled, EchoTip[supreg] is used 
with an ultrasound endoscope and directly measures pressures in the 
hepatic and portal venous vasculatures. The EchoTip[supreg] Insight 
Needle is stainless steel, has a handle and protective outer sheath, 
and attaches to the accessory channel of the endoscope. The 
polyethylene connecting tube consists of a 90 cm tube, a female luer 
fitting, a male luer fitting, and a stopcock. The connecting tube is 
used to attach the transducer to the needle handle. The stopcock is 
used to aid priming of the assembled components. The Compass CT 
transducer is a self-calibrating disposable pressure transducer with 
integrated digital display. EchoTip[supreg] is intended for direct 
measurement and monitoring of physiological pressure, including during 
the infusion of fluids and therapeutic and diagnostic agents.
    As stated previously, to be eligible for transitional pass-through 
payment under the OPPS, a device must meet the criteria at Sec.  
419.66(b)(1) through (4). With respect to the newness criterion at 
Sec.  419.66(b)(1), on November 20, 2019, FDA granted De Novo 
classification for EchoTip[supreg] as a device to directly measure 
pressures in the hepatic and portal venous vasculatures and is used in 
conjunction with an ultrasound endoscope. We received the application 
for a new device category for transitional pass-through payment status 
for the EchoTip[supreg] on June 29, 2022, which is within 3 years of 
the date of the initial FDA marketing authorization.
    We are inviting public comment on whether the EchoTip[supreg] meets 
the newness criterion at Sec.  419.66(b)(1).
    With respect to the eligibility criterion at Sec.  419.66(b)(3), 
the applicant stated that EchoTip[supreg] is integral to the service 
provided, is used for one patient only, comes in contact with human 
skin, and is applied in or on a wound or other skin lesion. According 
to the applicant, the hepatic vein and portal vein are punctured 
through the liver parenchyma to obtain pressure measurements.
    We are inviting public comment on whether EchoTip[supreg] meets the 
integral part of the service criterion at Sec.  419.66(b)(3).
    With respect to the exclusion criterion at Sec.  419.66(b)(4), the 
applicant claimed that EchoTip[supreg] meets the device eligibility 
requirements because it is not equipment, an instrument, apparatus, 
implement, or item of this type for which depreciation and financing 
expenses are recovered, and it is not a supply or material furnished 
incident to a service.
    We are inviting public comment on whether EchoTip[supreg] meets the 
exclusion criterion at Sec.  419.66(b)(4).
    In addition to the criteria at Sec.  419.66(b)(1) through (4), the 
criteria for establishing new device categories are specified at Sec.  
419.66(c). The first criterion, at Sec.  419.66(c)(1), provides that 
CMS determines that a device to be included in the category is not 
appropriately described by any of the existing categories or by any 
category previously in effect, and was not being paid for as an 
outpatient service as of December 31, 1996. The applicant described 
EchoTip[supreg] as the only device authorized by the FDA with an 
indication to directly access and measure pressure in the hepatic and 
portal venous vasculatures in conjunction with an ultrasound endoscope. 
Per the applicant, FDA established there is no recognized predicate 
product, or other similar approved device with a similar mechanism of 
action. Per the applicant, no previous device categories for pass-
through payment have encompassed EchoTip[supreg] and there are no 
similar device categories. Upon review, it does not appear that there 
are any existing pass-through payment categories that might apply to 
EchoTip[supreg].
    We are inviting public comment on whether EchoTip[supreg]meets the 
device category criterion at Sec.  419.66(c)(1).
    The second criterion for establishing a device category, at Sec.  
419.66(c)(2), provides that CMS determines either of the following: (i) 
that a device to be included in the category has demonstrated that it 
will substantially improve the diagnosis or treatment of an illness or 
injury or improve the functioning of a malformed body part compared to 
the benefits of a device or devices in a previously established 
category or other available treatment; or (ii) for devices for which 
pass-through status will begin on or after January 1, 2020, as an 
alternative to the substantial clinical improvement criterion, the 
device is part of the FDA's Breakthrough Devices Program and has 
received FDA marketing authorization for the indication covered by the 
Breakthrough Device designation. The applicant claimed that 
EchoTip[supreg] represents a substantial clinical improvement over

[[Page 49652]]

existing technologies in the diagnosis and management of chronic liver 
disease because: (1) Endoscopic ultra-sound-guided direct portal-
systemic pressure gradient measurement (EUS-PPG)-guided measurement is 
clinically safer and more accurate than the current standard 
transjugular endovascular indirect measurement, referred to as the 
hepatic venous pressure gradient (HVPG); (2) EUS-PPG is technically 
feasible and superior to HVPG; (3) EUS-PPG has benefits in non-
cirrhotic patients; and (4) EUS-PPG has utility in the evaluation of 
ESRD patients and kidney transplant candidacy. The applicant provided 
four articles specifically for the purpose of addressing the 
substantial clinical improvement criterion claims. The applicant also 
included one background article that discussed social determinants of 
health and disparities in liver disease.\57\
---------------------------------------------------------------------------

    \57\ Kardashian, A., Wilder, J., Terrault, N. Price, J. (2021). 
Addressing Social Determinants of Liver Disease During the COVID-19 
Pandemic and Beyond: A Call to Action. Hepatology 73 (2): 811-820.
---------------------------------------------------------------------------

    In support of the first claim, the applicant submitted an article 
on a prospective, single-armed, single-academic center study.\58\ 
Patients with suspected liver disease or cirrhosis were enrolled 
prospectively from 2020 to 2021. EUS-PPG was measured by calculating 
the difference between the mean portal pressure and the mean hepatic 
vein pressure. PH was defined as PPG >5 mm Hg and clinically 
significant PH as PPG <10 mm Hg. The primary outcomes were procedural 
technical success rate and correlation of EUS-PPG with fibrosis stage 
obtained from concurrent EUS-guided liver biopsy sampling and the 
correlation of EUS-PPG with patients' imaging, clinical, and laboratory 
findings. The secondary outcome was occurrence of procedural adverse 
events. EUS-PPG measurement was successful in 23 patients, leading to a 
technical success rate of 96 percent. The authors reported that there 
was no statistically significant correlation between the fibrosis stage 
on histology and measured PPG (P = .559). According to the authors, 
this did not change after excluding three patients without established 
chronic liver disease from the analysis. The authors reported that one 
patient experienced a mild adverse event with postprocedural abdominal 
pain resulting in an emergency department visit. The authors also 
reported that five patients (28 percent) received oral acetaminophen in 
the post anesthesia care unit for mild abdominal pain after the 
procedure, which resolved in all cases before discharge without the 
need for further pharmacotherapy.
---------------------------------------------------------------------------

    \58\ Hajifathalian, K., Westerveld, D., Kaplan, A. et. al. 
(2022). Simultaneous EUS-guided portosystemic pressure measurement 
and liver biopsy sampling correlate with clinically meaningful 
outcomes. Gastrointestinal Endoscopy 95(4): 703-710.
---------------------------------------------------------------------------

    In support of its second claim, the applicant submitted a single-
center retrospective study on patients with various CLDs undergoing 
EUS-PPG and EUS-guided liver biopsy (EUS-bx) to assess correlation with 
histological hepatic fibrosis stage and various clinical, laboratory, 
endoscopic and imaging variables indicative of advanced liver 
disease.\59\ Cases with EUS-PPG were identified at the University of 
California Irvine, a tertiary endoscopy center, between January 2014 
and March 2020. Three different ways of evaluating the EUS-PPG outcomes 
were assessed: (1) success rate of the EUS-PPG measurement; (2) 
performance; and (3) safety profile. The primary outcome evaluated was 
the association between EUS-PPG and the presence of histologic liver 
fibrosis, stage >=3. EUS-PPG procedures were successfully completed in 
all 64 cases. On multivariate analysis, EUS-PPG >=5 mmHg was 
significantly associated with fibrosis stage >=3 on EUG-liver biopsy 
(LR 27.0, 95% CI = 1.653-360.597, p = 0.004), independent from C-
cirrhosis, clinical portal hypertension, thrombocytopenia, 
splenomegaly, aspartate aminotransferase to platelet ration index score 
>2, and fibrosis-4 score >3.25. There were six complications in total, 
including abdominal pain (n = 3) and sore throat (n = 3). The authors 
reported that there were no subjects who had post-EUS-PPG emergency 
room (ER) visits or hospital admissions.
---------------------------------------------------------------------------

    \59\ Choi, A., Chang, K., Samaransena, J. et. al. (2022). 
Endoscopic Ultrasound[hyphen]Guided Porto[hyphen]systemic Pressure 
Gradient Measurement Correlates with Histological Hepatic Fibrosis. 
Digestive Diseases and Sciences. https://doi.org/10.1007/s10620-022-07418-7.
---------------------------------------------------------------------------

    In support of its third claim, the applicant submitted a review of 
endoscopic ultrasound guided interventions. The article \60\ discussed 
the diagnosis and treatment of portal hypertension and treatment of 
gastric varices (GV) and compared liver biopsy, HVPG, and EUS-PPG. With 
respect to the utility of HVPG, the authors explained that in the 
absence of fibrosis/nodules (i.e., cirrhosis) the pressure equalizes 
throughout the interconnected sinusoidal network, and results in 
minimal gradient (i.e., normal; up to 4 mmHg). Thus, according to the 
authors, HVPG does not provide useful information regarding prehepatic 
or presinusoidal portal hypertension (PH) (i.e., non-cirrhotic causes 
of PH). In comparison, EUS-guided portal pressure gradient (PPG) 
measurements employ a direct sampling technique. Thus, the study 
authors found direct measurement of the portal vein pressure could be 
considered the gold standard because it is not an estimate of 
sinusoidal pressure as is HVPG. The difference in the mean measurement 
of these pressures is termed the PPG which is analogous to the HVPG, 
with the caveat that direct portal vein measurement also allows for the 
assessment of prehepatic/presinusoidal PH; a limitation of the 
transjugular approach. The study authors cited a study by Huang et 
al.\61\ that used a porcine animal model with a novel EUS-guided system 
which included a manometer attached to a 25-gauge fine needle 
aspiration (FNA) needle for directly measuring pressures in the hepatic 
and portal veins. The purpose of this animal study was to assess 
clinical feasibility and assess correlation with the standard of care: 
HVPG measurement through transjugular approach. The study authors 
further cited a pilot study involving 28 patients between the age of 
18-75 years with a history of liver disease or suspected cirrhosis that 
underwent EUS-PPG measurements using the technique and equipment in the 
animal study. The portal vein and hepatic vein were targeted via a 
transgastric-transduodenal approach (inferior vena cava (IVC) was 
substituted for hepatic vein when not technically feasible). The 
technical success rate of EUS-PPG measurement was 100 percent without 
any adverse events. The study authors concluded that EUS-PPG 
measurement was a safe and feasible alternative to HVPG measurement.
---------------------------------------------------------------------------

    \60\ Rudnick, S., Conway, J., Russo, M. (2021). Current state of 
endohepatology: Diagnosis and treatment of portal hypertension and 
its complications with endoscopic ultrasound. World Journal of 
Hepatology 13(8): 887-895.
    \61\ Huang JY, Samarasena JB, Tsujino T, Chang KJ. EUS-guided 
portal pressure gradient measurement with a novel 25-gauge needle 
device versus standard transjugular approach: a comparison animal 
study. Gastrointest Endosc 2016; 84: 358-362 [PMID: 26945557 DOI: 
10.1016/j.gie.2016.02.032].
---------------------------------------------------------------------------

    In support of its fourth claim, the applicant submitted a letter in 
which the author described a retrospective, single-center study to 
determine feasibility, safety, and utility of EUS-PPG using EUS-liver 
biopsy as comparison in patients with end stage renal disease (ESRD) 
and suspected portal hypertension.\62\ According to the

[[Page 49653]]

letter author, the purpose of the study was to investigate the use of 
EUS-PPG to assess pressure and the recommendation to decide between 
kidney transplant (KT) or combined liver KT. According to the letter 
author, the study suggested that new endoscopic and EUS findings were 
discovered with successful/reproducible EUS-PPG in 10 out of 11 (91 
percent) subjects. The author stated there were no significant adverse 
events such as bleeding related to venous punctures, transfusions, or 
EUS-PPG-related hospitalizations. The author referenced conclusions 
from the study citing the need for further studies correlating EUS-PPG 
with wedged hepatic vein pressure gradient (WHVPG), assess patient 
experience, and analyze cost/benefit of one-stop versus piecemeal 
procedures. It is also noted in the letter that WHVPG may not always be 
feasible in ESRD patients due to catheter-related suprapubic 
thromboses. We note that this source did not include the original 
retrospective study, only a letter referencing it and highlighting its 
potential value to further research.
---------------------------------------------------------------------------

    \62\ Rubin, R., Mehta, M., Rossi, A., Joeslon, D., Shrestha, R. 
(2021). Letter to the Editor: Endoscopic ultrasound guided portal-
systemic pressure gradient measurement to determine candidacy for 
kidney transplant alone versus combined liver kidney transplant in 
patients with advanced fibrosis or cirrhosis. Transplant 
International 2021 (34): 2903-2904.
---------------------------------------------------------------------------

    Based on the evidence submitted with the application, we note the 
following concerns: a lack of direct comparison of EUS-PPG with HVPG 
and non-invasive methods, a lack of consistent correlation with liver 
biopsy, the reliance on non-peer reviewed studies, and small sample 
sizes.
    In the first two claims, the applicant asserted EUS-PPG is 
clinically safer and more accurate than HVPG and technically superior 
to HVPG. However, the applicant did not directly compare EUS-PPG and 
HVPG. The Hajifathalian et. al. study,\63\ which supported the first 
claim, stated EUS-PPG offers an alternative and potentially superior 
methodology to measure PPG regardless of liver disease etiology, 
without showing evidence of a direct comparison between EUS-PPG and 
HVPG. The Choi study,\64\ in support of the second claim, directly 
compared EUS-PPG with EUS-liver biopsy, but it did not compare EUS-PPG 
with HVPG. The authors cited the lack of direct comparison between EUS-
PPG and HVPG as a limitation in the study. Further these two studies 
had small sample sizes and were conducted at a single site; the 
Hajifathalian et. al. study included 24 patients while the Choi study 
included 64 patients.
---------------------------------------------------------------------------

    \63\ Hajifathalian, K., Westerveld, D., Kaplan, A. et. al. 
(2022). Simultaneous EUS-guided portosystemic pressure measurement 
and liver biopsy sampling correlate with clinically meaningful 
outcomes. Gastrointestinal Endoscopy 95(4): 703-710.
    \64\ Choi, A., Chang, K., Samaransena, J. et. al. (2022). 
Endoscopic Ultrasound[hyphen]Guided Porto[hyphen]systemic Pressure 
Gradient Measurement Correlates with Histological Hepatic Fibrosis. 
Digestive Diseases and Sciences. P.7. https://doi.org/10.1007/s10620-022-07418-7.
---------------------------------------------------------------------------

    In addition, we note that the Hajifathalian et. al. study results 
did not achieve correlation with fibrosis stage obtained from 
concurrent EUS-guided liver biopsy sampling. According to the authors, 
there was no statistically significant correlation between the fibrosis 
stage on histology and measured PPG ( P= .559). We are concerned that 
the lack of correlation would not support the claim that EUS-guided PPG 
measurement is more accurate than the current method using an indirect 
measurement with the use of HVPG.
    In support of its fourth claim, we note the applicant relied on a 
letter to the editor that provides a study description rather than 
submitting the study directly as evidence for its claim.\65\ In the 
enclosed letter, the author also noted that future studies are needed 
to correlate EUS-PPG with WHVPG. Lastly, the article the applicant 
provided in support of social determinants of health and disparities 
did not directly discuss the device. Additional supporting evidence, 
preferably published peer-reviewed clinical trials that show improved 
clinical outcomes would help with our assessment of whether 
EchoTip[supreg] demonstrates substantial clinical improvement over 
existing technologies.
---------------------------------------------------------------------------

    \65\ Rubin, R., Mehta, M., Rossi, A., Joeslon, D., Shrestha, R.. 
(2021). Letter to the Editor: Endoscopic ultrasound guided portal-
systemic pressure gradient measurement to determine candidacy for 
kidney transplant alone versus combined liver kidney transplant in 
patients with advanced fibrosis or cirrhosis. Transplant 
International 2021 (34): 2903-2904.
---------------------------------------------------------------------------

    We are inviting public comment on whether EchoTip[supreg] meets the 
substantial clinical improvement criterion at Sec.  419.66(c)(2)(i)
    The third criterion for establishing a device category, at Sec.  
419.66(c)(3), requires us to determine that the cost of the device is 
not insignificant, as described in Sec.  419.66(d). Section 419.66(d) 
includes three cost significance criteria that must each be met. The 
applicant provided the following information in support of the cost 
significance requirements. The applicant stated that EchoTip[supreg] 
would be reported with HCPCS codes listed in Table 33.
[GRAPHIC] [TIFF OMITTED] TP31JY23.050

    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 with comment period (69 FR 65775), we generally use the lowest 
APC payment rate applicable for use with the

[[Page 49654]]

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 
5302, which had a CY 2022 payment rate of $1,658.81 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 43238 had a device offset amount of $19.08 at the 
time the application was received.\66\ According to the applicant, the 
cost of the EchoTip[supreg] is $1,965.00.
---------------------------------------------------------------------------

    \66\ We note that the applicant selected a value of $156.43 for 
the device offset amount. However, the value selected is 
inconsistent with the device offset amount related to HCPCS 43238 in 
APC 5302 found in Addendum P to the CY 2022 OPPS/ASC final rule with 
comment period, as corrected in the 2022 Correction Notice OPPS 
Addendum (87 FR 2060). We selected the value of $19.08, which we 
believe is the accurate value. Based on our initial assessment for 
this proposed rule, using the device offset amount of $19.08 would 
result in EchoTip[supreg] meeting the cost significance requirement.
---------------------------------------------------------------------------

    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 $1,965.00 for EchoTip[supreg] is 118.46 
percent of the applicable APC payment amount for the service related to 
the category of devices of $1,658.81 (($1,965.00/$1,658.81) x 100 = 
118.46 percent). Therefore, we believe EchoTip[supreg] meets the first 
cost significance requirement.
    The second cost significance requirement, at Sec.  419.66(d)(2), 
provides that the estimated average reasonable cost of the devices in 
the category must exceed the cost of the device-related portion of the 
APC payment amount for the related service by at least 25 percent, 
which means that the device cost needs to be at least 125 percent of 
the offset amount (the device-related portion of the APC found on the 
offset list). The estimated average reasonable cost of $1,965.00 for 
EchoTip[supreg] is 10,298.74 percent of the cost of the device-related 
portion of the APC payment amount for the related service of $19.08 
(($1,965.00/$19.08) x 100 = 10,298.74. Therefore, we believe that 
EchoTip[supreg] meets the second cost significance requirement.
    The third cost significance requirement, at Sec.  419.66(d)(3), 
provides that the difference between the estimated average reasonable 
cost of the devices in the category and the portion of the APC payment 
amount for the device must exceed 10 percent of the APC payment amount 
for the related service. The difference between the estimated average 
reasonable cost of $1,965.00 for EchoTip[supreg] and the portion of the 
APC payment amount for the device of $19.08 is 117.31 percent of the 
APC payment amount for the related service of $1,658.81 ((($1,965.00-
$19.08)/$1,658.81) x 100 = 117.31 percent). Therefore, we believe that 
EchoTip[supreg] meets the third cost significance requirement.
    We are inviting public comment on whether the EchoTip[supreg] meets 
the device pass-through payment criteria discussed in this section, 
including the cost criterion for device pass-through payment status.
(d) FLEX Vessel Prep TM System
    Venture Med Group, Inc. submitted an application for a new device 
category for transitional pass-through payment status for FLEX Vessel 
Prep TM System (FLEX VP TM) for CY 2024. Per the 
applicant, FLEX VP TM is an endovascular, over-the-wire, 
retractable, sheathed catheter with a three-strut treatment element at 
the distal tip used to help resolve stenoses occluding vascular access 
in patients with End-Stage Renal Disease (ESRD) on hemodialysis. 
According to the applicant, FLEX VP TM is used with 
percutaneous transluminal angioplasty (PTA) catheters and for the 
treatment of in-stent restenosis of balloon expandable and self-
expanding stents in the peripheral vasculature. The applicant asserted 
that FLEX VP TM consists of three integrated components: (1) 
control handle, which includes the flush and guidewire ports and sheath 
and treatment element actuators; (2) catheter shaft; and (3) treatment 
element, which includes three proximally mounted micro-surgical blades 
on protective skids. The struts are radially opposed, and the proximal 
portion of each strut includes a micro-surgical blade. A radiopaque 
marker is located distally to assist in the positioning of the 
catheter.
    According to the applicant, when deployed, FLEX VP TM's 
struts independently engage with neointimal hyperplastic stenoses 
occluding an arteriovenous fistula or graft used for hemodialysis. As 
the device is pulled back through the lesion, the blades create three 
continuous, parallel micro-incisions, approximately 250 microns in 
depth, along the lesion's entire length. The applicant provided that 
this is a non-balloon-based device where the struts exert a consistent 
force of approximately one atmosphere on the vessel wall. Per the 
applicant, additional micro-incisions may be created by using several 
passes of the device. According to the applicant, the device breaks the 
lesion surface to facilitate the effectiveness of a percutaneous 
transluminal balloon angioplasty, which immediately follows use of the 
device in restoring patency to the vascular access.
    The applicant asserted that the micro-incisions improve acute 
luminal gain and vessel compliance by releasing circumferential tension 
in the lesion. The applicant asserted that this preparation can help 
reduce vessel trauma and complications (including severe dissection and 
need for a bail-out stent) and the need for high pressure balloons 
(which risk barotrauma). Per the applicant, the interventionalist 
advances FLEX VP TM past the lesion, then unsheathes and 
expands the treatment element and slowly draws the catheter back, 
allowing each micro-surgical blade to simultaneously and independently 
engage with the lesion. This step produces three continuous, parallel 
micro-incisions along the lesion's length. According to the applicant, 
this process may be repeated several times; once the lesion is crossed 
on the first pass, the treatment element is re-sheathed, advanced again 
through the lesion, and rotated approximately 30 to 90 degrees. The 
treatment element is then re-deployed and the process is repeated.
    As stated previously, to be eligible for transitional pass-through 
payment under the OPPS, a device must meet the criteria at Sec.  
419.66(b)(1) through (4). With respect to the newness criterion at 
Sec.  419.66(b)(1), on September 11, 2020, the applicant received 
510(k) clearance from FDA for FLEX VP TM for use with PTA 
catheters to facilitate dilation of stenoses in the femoral and 
popliteal arteries and treatment of obstructive lesions of native or 
synthetic arteriovenous dialysis fistulae. The device is also indicated 
for treatment of in-stent restenosis of balloon expandable and self-
expanding stents in the peripheral vasculature. We received the 
application for a new device category for transitional pass-through 
payment status for FLEX VP TM on February 28, 2023, which is 
within 3 years of the date of the initial FDA marketing authorization.
    We are inviting public comment on whether FLEX VP TM 
meets the newness criterion at Sec.  419.66(b)(1).
    With respect to the eligibility criterion at Sec.  419.66(b)(3), 
according to the applicant, FLEX VP TM is integral to the 
service provided, is used for one patient only, comes in contact with 
human skin, and is applied through an incision (for hemodialysis 
patients, the incision is in the wrist or arm area). FLEX VP 
TM

[[Page 49655]]

is inserted through the incision over a guidewire until distal to the 
lesion to be treated and prior to the angioplasty procedure.
    We are inviting public comment on whether FLEX VP TM 
meets the integral part of the service criterion at Sec.  419.66(b)(3).
    With respect to the exclusion criterion at Sec.  419.66(b)(4), the 
applicant claimed that FLEX VP TM meets the device 
eligibility requirements of Sec.  419.66(b)(4) because it is not 
equipment, an instrument, apparatus, implement, or item of this type 
for which depreciation and financing expenses are recovered, and it is 
not a supply or material furnished incident to a service.
    We are inviting public comment on whether FLEX VPTM 
meets the exclusion criterion at Sec.  419.66(b)(4).
    In addition to the criteria at Sec.  419.66(b)(1) through (4), the 
criteria for establishing new device categories are specified at Sec.  
419.66(c). The first criterion, at Sec.  419.66(c)(1), provides that 
CMS determines that a device to be included in the category is not 
appropriately described by any of the existing categories or by any 
category previously in effect, and was not being paid for as an 
outpatient service as of December 31, 1996. The applicant described 
FLEX VPTM as an endovascular, over-the-wire, retractable, 
sheathed catheter with a three-strut treatment element at the distal 
tip used to help resolve stenoses occluding vascular access in patients 
with ESRD on hemodialysis. Per the applicant, no previous device 
categories for pass-through payment have encompassed FLEX 
VPTM and there are no similar device categories. Upon 
review, it does not appear that there are any existing pass-through 
payment categories that might apply to FLEX VPTM.
    We are inviting public comment on whether FLEX VPTM 
meets the device category criterion at Sec.  419.66(c)(1).
    The second criterion for establishing a device category, at Sec.  
419.66(c)(2), provides that CMS determines either of the following: (i) 
that a device to be included in the category has demonstrated that it 
will substantially improve the diagnosis or treatment of an illness or 
injury or improve the functioning of a malformed body part compared to 
the benefits of a device or devices in a previously established 
category or other available treatment; or (ii) for devices for which 
pass-through status will begin on or after January 1, 2020, as an 
alternative to the substantial clinical improvement criterion, the 
device is part of FDA's Breakthrough Devices Program and has received 
FDA marketing authorization for the indication covered by the 
Breakthrough Device designation. The applicant stated that FLEX 
VPTM represents a substantial clinical improvement over 
existing technologies by: (1) improving clinical outcomes for the 
hemodialysis patient population with dysfunctional arteriovenous (AV) 
access; and (2) reducing the rate of device-related complications. The 
applicant cited two studies describing the findings of a single 
clinical trial specifically for the purpose of addressing the 
substantial clinical improvement criterion.
    The first study presented findings 6 months after patients were 
treated with FLEX VPTM followed by balloon angioplasty 
(Aruny, et al.),\67\ and the second study presented findings at 12 
months post-treatment with FLEX VPTM followed by balloon 
angioplasty (author not identified in the manuscript for the 12-month 
follow up).\68\ Both studies focused on results from methods used to 
show the durability of the treatments of blocked vascular accesses with 
FLEX VPTM. The trial was a prospective, observational 
controlled clinical trial. A total of 148 lesions or blockages were 
treated with FLEX VPTM prior to a PTA in 114 subjects (the 
population was 53.5 percent female; 65.8 percent Black or African 
American (B/AA)), treated at eight clinical sites. All subjects were 
hemodialysis patients with vascular blockages. Of the 114 subjects, 104 
patients had prior treatments to correct stenoses before enrolling in 
the trial. A primary endpoint was anatomic success, defined as 
angiographic confirmation of <30 percent residual stenosis post-
procedure without adverse event. Additional assessments included 
dialysis circuit primary patency or vascular openness, clinical success 
and procedural success. The trial also measured the target lesion 
primary patency (TLPP) and freedom from target lesion restenosis 
(FFTLR) to determine if there is a decreased rate of subsequent 
therapeutic interventions. The two studies of the single clinical trial 
also examined the rate of device-related complications. No serious 
adverse events were reported initially (Aruny et al.), or in the 12-
month follow-up (author not identified in the manuscript for the 12-
month follow-up). The studies looked at differences in outcomes based 
on race and sex and found no significant differences. Per the 
applicant, the results suggest that FLEX VPTM followed by 
angioplasty can substantially reduce the number and burden of 
maintenance procedures for hemodialysis patients with arteriovenous 
fistula (AVF), arteriovenous graft (AVG), and AV disfunctions that 
cause cephalic arch stenoses.
---------------------------------------------------------------------------

    \67\ Aruny et al., Real-World Results of a Novel Vessel 
Preparation Device Prior to Balloon Angioplasty for Arteriovenous 
Access Repair in Diverse Populations on Dialysis, under review, JVA, 
Feb. 2023.
    \68\ Durability of Arteriovenous Access Repair Involving Vessel 
Preparation by Longitudinal Micro-Incisions Before Balloon 
Angioplasty; unpublished manuscript (no author identified).
---------------------------------------------------------------------------

    In support of its first claim, that FLEX VPTM improves 
clinical outcomes for the hemodialysis patient population with 
dysfunctional AV access, the applicant asserted that FLEX 
VPTM decreased both the rates of therapeutic interventions 
and subsequent therapeutic interventions. The applicant provided the 
following evidence from the clinical trial and two studies. FLEX 
VPTM treatment prior to angioplasty benefits hemodialysis 
patients by improving the level of openness of blocked (or stenosed) 
arteriovenous access; a recurring issue that occurs because of the 
fistulas created to facilitate hemodialysis. The use of FLEX 
VPTM also allows the site with prior blockage (also known as 
lesions) to stay opened for a longer period of time, reducing the 
frequency of future angioplasty procedures. The applicant discussed how 
the initial study (Aruny et al.), found that patients treated with FLEX 
VPTM prior to PTA (FLEX+PTA) had 6 months TLPP of 63.7 
percent openness, versus the 15.6 percent to 50.5 percent rates of 
vascular openness after PTA alone observed in other publications. This 
study also presented results for FFTLR, a calculation to determine an 
average number of days of durability of the percentage of the patency 
or lesion openness reported; for the overall hemodialysis population 
studied it was 206.7 days. The applicant also described results for 
patients with only AVFs or AVGs. For FLEX+PTA in AVF patients, TLPP was 
70.6 percent and FFTLR was 219.7 days. For FLEX+PTA in AVG patients, 
TLPP was 46.6 percent and FFTLR was 173.9 days. Confirmation of 
reliability of the findings was shown by dialysis access circuit 
primary patency: 54.3 percent (AVF 54.1 percent; AVG 47.4 percent). 
According to the applicant, results of dialysis access circuit primary 
patency derived from the literature with only angioplasty performed 
ranged from 0 percent to 48 percent. The applicant also presented 
results 12 months post-treatment (author not identified in the 
manuscript for the 12-month follow up) supporting the durability of the 
FLEX+PTA. Per the applicant, results generally accord with Aruny et 
al.'s 6-month results and exceed PTA-only

[[Page 49656]]

results from the literature. Overall, TLPP was 45.7 percent (versus 
62.2 percent at 6 months) and FFTLR was 250.9 days (versus literature 
(PTA only), 131.4 days). Per the applicant, this result suggests that 
compared to the durability of PTA only, FTA+PTA would result in a lower 
frequency of treatments to remove stenosis in overall hemodialysis 
patients. For AVFs, TLPP was 47.4 percent (versus 67.5 percent at 6 
months); FFTLR was 258.5 days (versus literature, 156.9 days). For 
AVGs, TLPP was 43.8 percent (versus 52.4 percent at 6 months); FFTLR 
was 239.4 days (versus literature, 76.6 days). Overall, 12 months 
circuit primary patency was 36.5 percent (versus 54.3 percent at 6 
months).\69\
---------------------------------------------------------------------------

    \69\ Durability of Arteriovenous Access Repair Involving Vessel 
Preparation by Longitudinal Micro-Incisions Before Balloon 
Angioplasty; unpublished manuscript (no author identified).
---------------------------------------------------------------------------

    In further support of the applicant's first claim, the applicant 
presented results from the clinical trial comparing B/AA patients to 
non-B/AA patients. In support of FLEX VPTM prior to PTA 
improving clinical outcomes for B/AA hemodialysis patient population 
with dysfunctional AV access, the applicant discussed the initial Aruny 
et al. study, in which B/AA patients had better results with FLEX 
VPTM intervention than did non-B/AA patients. The B/AA 
cohort (65.8 percent of sample) had TLPP of 63.76 percent versus 58.8 
percent for the non-B/AA cohort after treatment with FLEX+PTA. FFTLR 
was 207.8 days for B/AA versus 192.2 days for non-B/AA. For B/AA 
patients with cephalic arch lesions, TLPP was 78.6 percent versus 58.3 
percent for non-B/AA. The applicant asserted that these results were 
achieved despite pre-existing disparities in patient's experience with 
AV access care. B/AA patients had more years since they started 
hemodialysis (p<0.01), suggesting a possibility of increased severity 
or complexity of lesions in the B/AA patients.\70\ The applicant also 
presented results 12 months post-treatment.\71\ In terms of B/AA 
patient outcomes comparable to the overall sample, the B/AA cohort 
(65.8 percent of sample) had TLPP of 45.9 percent versus 45.7 percent 
overall patients and FFTLR was 257.8 days for B/AA versus 250.9 days 
overall patients. In B/AA patients with cephalic arch lesions, TLPP was 
71.8 percent versus 59.7 percent overall patients.
---------------------------------------------------------------------------

    \70\ Aruny et al., Real-World Results of a Novel Vessel 
Preparation Device Prior to Balloon Angioplasty for Arteriovenous 
Access Repair in Diverse Populations on Dialysis, under review, JVA, 
Feb. 2023.
    \71\ Durability of Arteriovenous Access Repair Involving Vessel 
Preparation by Longitudinal Micro-Incisions Before Balloon 
Angioplasty; unpublished manuscript (no author identified).
---------------------------------------------------------------------------

    Furthermore, in support of the applicant's first claim, the 
applicant provided the following evidence from the clinical trial. In 
support of FLEX VPTM improving clinical outcomes for a 
female hemodialysis patient population with dysfunctional AV access, 
the applicant stated that in the initial Aruny et al. study, females 
differed from males significantly in their pre-existing experiences 
with AV care. Female patients had more years since they started 
hemodialysis (p<0.01) and since AV access creation (p<0.01) and more 
prior AV access interventions (p<0.05); according to the applicant, 
this potentially suggests that female patients are more prone to 
complexity of lesions or recurrence of stenosis. However, no 
statistically significant differences in results of TLPP and FFTLR 
measures at 6 months post treatment were observed between females and 
males treated with FLX VPTM followed by PTA. Therefore, 
females receiving a FLEX VPTM intervention prior to PTA 
achieved results comparable to males, notwithstanding pre-existing 
disparities.\72\
---------------------------------------------------------------------------

    \72\ Aruny et al., Real-World Results of a Novel Vessel 
Preparation Device Prior to Balloon Angioplasty for Arteriovenous 
Access Repair in Diverse Populations on Dialysis, under review, JVA, 
Feb. 2023.
---------------------------------------------------------------------------

    In further support of the applicant's first claim, the applicant 
explained that cephalic arch (CA) stenoses are notoriously difficult to 
treat effectively and have some of the worst results in dialysis access 
results and recurrence of the lesions in a short amount of time. The 
applicant explained that complications are also high. In this sample, 
the target stenosis was in the CA in 25/114 patients (21.9 percent). 
TLPP following FLEX+PTA at 6 months (Aruny et al.) was 70.6 percent 
overall patients, and 76.8 percent in the B/AA cohort. According to the 
applicant comparable figures in the literature ranged from 0 percent to 
51.6 percent. Access dialysis circuit primary patency gathered from the 
literature for PTA only was 66.4 percent for CA cases.\73\ The 
applicant also presented results 12-month post-treatment (author not 
identified in the manuscript for the 12-month follow up). TLPP for 
these patients following FLEX+PTA at 12 months was 59.7 percent for 
overall patients and 71.8 percent in the B/AA cohort. According to the 
applicant, comparable figures in the clinical literature ranged from 0 
percent to 33.9 percent and access dialysis circuit primary patency was 
55.3 percent for CA cases.\74\
---------------------------------------------------------------------------

    \73\ Aruny et al., Real-World Results of a Novel Vessel 
Preparation Device Prior to Balloon Angioplasty for Arteriovenous 
Access Repair in Diverse Populations on Dialysis, under review, JVA, 
Feb. 2023.
    \74\ Durability of Arteriovenous Access Repair Involving Vessel 
Preparation by Longitudinal Micro-Incisions Before Balloon 
Angioplasty; unpublished manuscript (no author identified).
---------------------------------------------------------------------------

    In support of the applicant's second claim, the applicant asserted 
that no serious adverse events were reported from the initial study 
(Aruny et al.). Five procedural complications and one dissection 
related to the FLEX VPTM device were recorded. Three 
dissections were associated with PTA.\75\ The applicant also presented 
results 12 months post-treatment (author not identified in the 
manuscript for the 12-month follow-up), noting that no serious adverse 
events were reported during 12-month follow-up.
---------------------------------------------------------------------------

    \75\ Aruny et al., Real-World Results on a Novel Vessel 
Preparation Device Prior to Balloon Angioplasty for Arteriovenous 
Access Repair in Diverse Populations on Dialysis, under review, JVA, 
Feb. 2023.
---------------------------------------------------------------------------

    According to the applicant, these findings confirm the safety 
record for FLEX VPTM, which is better when compared to the 
Journal of Vascular and Interventional Radiology (JVIR) Quality 
Improvement Guidelines thresholds for AVF and AVG. According to the 
applicant, in the literature, up to 15% cephalic arch lesions result in 
vessel rupture and about 12% of PTAs in B/AA patients are reported to 
result in major complications.\76\
---------------------------------------------------------------------------

    \76\ Durability of Arteriovenous Access Repair Involving Vessel 
Preparation by Longitudinal Micro-Incisions Before Balloon 
Angioplasty; unpublished manuscript (no author identified).
---------------------------------------------------------------------------

    Ultimately, the applicant concluded that FLEX VPTM is 
safe and effective, notably in patients with AVGs and those with CA 
stenoses, and furthermore, despite observed differences in time since 
hemodialysis onset, clinical success was similar across sex and race, 
suggesting an opportunity to enhance health equity.\77\ The applicant 
also added that FLEX VPTM, when used with PTA, provides 
sustained clinical improvement over existing technologies by increasing 
the patency and time to reintervention of PTA procedures in AVFs and 
AVGs at 12 months (author not identified in the manuscript for the 12-
month follow-up), while reducing the potential for serious 
complications, such as perforations and vessel rupture. Favorable 
results at 6 months for the B/AA cohort reported in Aruny et al.'s 
article were sustained in the 12 month

[[Page 49657]]

results. Further, according to the applicant, the use of FLEX 
VPTM offers the prospect of improved treatment of 
unresponsive or difficult to treat stenosis in the cephalic arch.\78\
---------------------------------------------------------------------------

    \77\ Aruny et al., Real-World Results of a Novel Vessel 
Preparation Device Prior to Balloon Angioplasty for Arteriovenous 
Access Repair in Diverse Populations on Dialysis, under review, JVA, 
Feb. 2023.
    \78\ Durability of Arteriovenous Access Repair Involving Vessel 
Preparation by Longitudinal Micro-Incisions Before Balloon 
Angioplasty; unpublished manuscript (no author identified).
---------------------------------------------------------------------------

    Based on the evidence submitted in the application, we note the 
following concerns: The applicant presented two studies (Aruny et al. 
[a 6-month follow up], and an unpublished manuscript which did not 
identify an author [12-month follow up] submitted with the application) 
that are based on a single clinical trial of 114 patients followed for 
12 months. Per the applicant, the results from the 6-months follow up 
are not yet published, and the results from 12-months post-treatment 
are also unpublished and only available at the FLEX VPTM 
registry. Therefore, we note that the evidence presented on benefits to 
patients in hemodialysis is not peer-reviewed and this may reduce the 
strength of the evidence presented and the opinion of peers on study 
quality. In order to demonstrate substantial clinical improvement over 
currently available treatments, we consider supporting evidence, 
preferably published peer-reviewed clinical trials, that shows improved 
clinical outcomes, such as reduction in mortality, complications, 
subsequent interventions, future hospitalizations, recovery time, pain, 
or a more rapid beneficial resolution of the disease process compared 
to the standard of care. We also note that, due to the clinical trial 
design, there is insufficient data on the impact of angioplasty with 
the drug-coated balloon option. The drug in these balloons may play a 
role in the improvement of patency or openness durability and 
additional studies to strengthen the initial observations presented by 
the applicant would be helpful.
    Lastly, we note the applicant did not show a clear crosswalk of 
findings or data in terms of device-related complications (including 
dissection and embolectomy) observed in the trial and compared to those 
referenced in literature. For example, procedural complications and 
dissection were mentioned in the FLEX VPTM group while 
rupture and major complications were mentioned in the literature. The 
clinical trial results presented one dissection attributed to FLEX 
VPTM after 148 lesions were treated with FLEX 
VPTM plus PTA. Per the applicant, there are approximately 
732,000 interventions per year in the U.S. to maintain lifesaving 
arteriovenous access and FLEX VPTM could be potentially used 
in a fraction of those; this increases the concern for frequency of 
complications and therefore, additional studies may be needed to 
strengthen the second substantial clinical improvement claim.
    We are inviting public comment on whether FLEX VPTM 
meets the substantial clinical improvement criterion at Sec.  
419.66(c)(2)(i).
    The third criterion for establishing a device category, at Sec.  
419.66(c)(3), requires us to determine that the cost of the device is 
not insignificant, as described in Sec.  419.66(d). Section 419.66(d) 
includes three cost significance criteria that must each be met. The 
applicant provided the following information in support of the cost 
significance requirements. The applicant stated that FLEX 
VPTM would be reported with HCPCS codes listed in Table 34.
[GRAPHIC] [TIFF OMITTED] TP31JY23.051

    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 5192, which had a CY 2022 payment rate of 
$5,061.89 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 36902 had a device 
offset amount of $1,271.04 at the time the application was 
received.\79\ According to the applicant, the cost of FLEX VP 
TM is $1,995.00.
---------------------------------------------------------------------------

    \79\ We note that the applicant selected a value of $1,391.99 
for the device offset amount. However, the value selected is 
inconsistent with the device offset amount related to HCPCS 36902 in 
APC 5192 found in Addendum P to the CY 2022 OPPS/ASC final rule with 
comment period, as corrected in the 2022 Correction Notice OPPS 
Addendum (87 FR 2060). We selected the value of $1,271.04, which we 
believe is the accurate value. Based on our initial assessment for 
this proposed rule, using the device offset amount of $1,271.04 
would result in FLEX VP TM meeting the cost significance 
requirement.
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    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 $1,995.00 for FLEX VP TM is 39.41 
percent of the applicable APC payment amount for the

[[Page 49658]]

service related to the category of devices of $5,061.89 (($1,995.00/
$5,061.89) x 100 = 39.41 percent). Therefore, we believe FLEX VP 
TM meets the first cost significance requirement.
    The second cost significance requirement, at Sec.  419.66(d)(2), 
provides that the estimated average reasonable cost of the devices in 
the category must exceed the cost of the device-related portion of the 
APC payment amount for the related service by at least 25 percent, 
which means that the device cost needs to be at least 125 percent of 
the offset amount (the device-related portion of the APC found on the 
offset list). The estimated average reasonable cost of $1,995.00 for 
FLEX VP TM is 156.96 percent of the cost of the device-
related portion of the APC payment amount for the related service of 
$1,271.04 (($1,995.00/$1,271.04) x 100 = 156.96 percent). Therefore, we 
believe that FLEX VP TM meets the second cost significance 
requirement.
    The third cost significance requirement, at Sec.  419.66(d)(3), 
provides that the difference between the estimated average reasonable 
cost of the devices in the category and the portion of the APC payment 
amount for the device must exceed 10 percent of the APC payment amount 
for the related service. The difference between the estimated average 
reasonable cost of $1,995.00 for FLEX VP TM and the portion 
of the APC payment amount for the device of $1,271.04 is 14.30 percent 
of the APC payment amount for the related service of $5,061.89 
((($1,995.00-$1,271.04)/$5,061.89) x 100 = 14.30 percent). Therefore, 
we believe that FLEX VP TM meets the third cost significance 
requirement.
    We are inviting public comment on whether FLEX VP TM 
meets the device pass-through payment criteria discussed in this 
section, including the cost criterion for device pass-through payment 
status.

B. Proposed Device-Intensive Procedures

1. Background
    Under the OPPS, prior to CY 2017, device-intensive status for 
procedures was determined at the APC level for APCs with a device 
offset percentage greater than 40 percent (79 FR 66795). Beginning in 
CY 2017, CMS began determining device-intensive status at the HCPCS 
code level. In assigning device-intensive status to an APC prior to CY 
2017, the device costs of all the procedures within the APC were 
calculated and the geometric mean device offset of all of the 
procedures had to exceed 40 percent. Almost all of the procedures 
assigned to device-intensive APCs utilized devices, and the device 
costs for the associated HCPCS codes exceeded the 40-percent threshold. 
The no cost/full credit and partial credit device policy (79 FR 66872 
through 66873) applies to device-intensive procedures and is discussed 
in detail in section IV.B.4 of this proposed rule. A related device 
policy was the requirement that certain procedures assigned to device-
intensive APCs require the reporting of a device code on the claim (80 
FR 70422) and is discussed in detail in section IV.B.3 of this proposed 
rule. For further background information on the device-intensive APC 
policy, we refer readers to the CY 2016 OPPS/ASC final rule with 
comment period (80 FR 70421 through 70426).
a. HCPCS Code-Level Device-Intensive Determination
    As stated earlier, prior to CY 2017, under the device-intensive 
methodology we assigned device-intensive status to all procedures 
requiring the implantation of a device that were assigned to an APC 
with a device offset greater than 40 percent and, beginning in CY 2015, 
that met the three criteria listed below. Historically, the device-
intensive designation was at the APC level and applied to the 
applicable procedures within that APC. In the CY 2017 OPPS/ASC final 
rule with comment period (81 FR 79658), we changed our methodology to 
assign device-intensive status at the individual HCPCS code level 
rather than at the APC level. Under this policy, a procedure could be 
assigned device-intensive status regardless of its APC assignment, and 
device-intensive APC designations were no longer applied under the OPPS 
or the ASC payment system.
    We believe that a HCPCS code-level device offset is, in most cases, 
a better representation of a procedure's device cost than an APC-wide 
average device offset based on the average device offset of all of the 
procedures assigned to an APC. Unlike a device offset calculated at the 
APC level, which is a weighted average offset for all devices used in 
all of the procedures assigned to an APC, a HCPCS code-level device 
offset is calculated using only claims for a single HCPCS code. We 
believe that this methodological change results in a more accurate 
representation of the cost attributable to implantation of a high-cost 
device, which ensures consistent device-intensive designation of 
procedures with a significant device cost. Further, we believe a HCPCS 
code-level device offset removes inappropriate device-intensive status 
for procedures without a significant device cost that are granted such 
status because of their APC assignment.
    Under our existing policy, procedures that meet the criteria listed 
in section IV.C.1.b of this proposed rule are identified as device-
intensive procedures and are subject to all the policies applicable to 
procedures assigned device-intensive status under our established 
methodology, including our policies on device edits and no cost/full 
credit and partial credit devices discussed in sections IV.C.3 and 
IV.C.4 of this proposed rule.
b. Use of the Three Criteria To Designate Device-Intensive Procedures
    We clarified our established policy in the CY 2018 OPPS/ASC final 
rule with 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.

[[Page 49659]]

2. Device-Intensive Procedure Policy for CY 2019 and Subsequent Years
    As part of our effort to better capture costs for procedures with 
significant device costs, in the CY 2019 OPPS/ASC final rule with 
comment period (83 FR 58944 through 58948), for CY 2019, we modified 
our criteria for device-intensive procedures. We had heard from 
interested parties that the criteria excluded some procedures that 
interested parties believed should qualify as device-intensive 
procedures. Specifically, we were persuaded by interested party 
arguments that procedures requiring expensive surgically inserted or 
implanted devices that are not capital equipment should qualify as 
device-intensive procedures, regardless of whether the device remains 
in the patient's body after the conclusion of the procedure. We agreed 
that a broader definition of device-intensive procedures was warranted, 
and made two modifications to the criteria for CY 2019 (83 FR 58948). 
First, we allowed procedures that involve surgically inserted or 
implanted single-use devices that meet the device offset percentage 
threshold to qualify as device-intensive procedures, regardless of 
whether the device remains in the patient's body after the conclusion 
of the procedure. We established this policy because we no longer 
believe that whether a device remains in the patient's body should 
affect a procedure's designation as a device-intensive procedure, as 
such devices could, nonetheless, comprise a large portion of the cost 
of the applicable procedure. Second, we modified our criteria to lower 
the device offset percentage threshold from 40 percent to 30 percent, 
to allow a greater number of procedures to qualify as device intensive. 
We stated that we believe allowing these additional procedures to 
qualify for device-intensive status will help ensure these procedures 
receive more appropriate payment in the ASC setting, which will help 
encourage the provision of these services in the ASC setting. In 
addition, we stated that this change would help to ensure that more 
procedures containing relatively high-cost devices are subject to the 
device edits, which leads to more correctly coded claims and greater 
accuracy in our claims data. Specifically, for CY 2019 and subsequent 
years, we finalized that device-intensive procedures will be subject to 
the following criteria:
     All procedures must involve implantable devices assigned a 
CPT or HCPCS code;
     The required devices (including single-use devices) must 
be surgically inserted or implanted; and
     The device offset amount must be significant, which is 
defined as exceeding 30 percent of the procedure's mean cost (83 FR 
58945).
    In addition, to further align the device-intensive policy with the 
criteria used for device pass-through payment status, we finalized, for 
CY 2019 and subsequent years, that for purposes of satisfying the 
device-intensive criteria, a device-intensive procedure must involve a 
device that:
     Has received FDA marketing authorization, has received an 
FDA investigational device exemption (IDE), and has been classified as 
a Category B device by FDA in accordance with Sec. Sec.  405.203 
through 405.207 and 405.211 through 405.215, or meets another 
appropriate FDA exemption from premarket review;
     Is an integral part of the service furnished;
     Is used for one patient only;
     Comes in contact with human tissue;
     Is surgically implanted or inserted (either permanently or 
temporarily); and
     Is not either of the following:
    (a) Equipment, an instrument, apparatus, implement, or item of the 
type for which depreciation and financing expenses are recovered as 
depreciable assets as defined in Chapter 1 of the Medicare Provider 
Reimbursement Manual (CMS Pub. 15-1); or
    (b) A material or supply furnished incident to a service (for 
example, a suture, customized surgical kit, scalpel, or clip, other 
than a radiological site marker) (83 FR 58945).
    In addition, for new HCPCS codes describing procedures requiring 
the implantation of devices that do not yet have associated claims 
data, in the CY 2017 OPPS/ASC final rule with comment period (81 FR 
79658), we finalized a policy for CY 2017 to apply device-intensive 
status with a default device offset set at 41 percent for new HCPCS 
codes describing procedures requiring the implantation or insertion of 
a device that did not yet have associated claims data until claims data 
are available to establish the HCPCS code-level device offset for the 
procedures. This default device offset amount of 41 percent was not 
calculated from claims data; instead, it was applied as a default until 
claims data were available upon which to calculate an actual device 
offset for the new code. The purpose of applying the 41-percent default 
device offset to new codes that describe procedures that implant or 
insert devices was to ensure ASC access for new procedures until claims 
data become available.
    As discussed in the CY 2019 OPPS/ASC proposed rule and final rule 
with comment period (83 FR 37108 through 37109 and 58945 through 58946, 
respectively), in accordance with our policy stated previously to lower 
the device offset percentage threshold for procedures to qualify as 
device-intensive from greater than 40 percent to greater than 30 
percent, for CY 2019 and subsequent years, we modified this policy to 
apply a 31-percent default device offset to new HCPCS codes describing 
procedures requiring the implantation of a device that do not yet have 
associated claims data until claims data are available to establish the 
HCPCS code-level device offset for the procedures. In conjunction with 
the policy to lower the default device offset from 41 percent to 31 
percent, we continued our current policy of, in certain rare instances 
(for example, in the case of a very expensive implantable 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

[[Page 49660]]

clinical differences and use the same devices as the new HCPCS code. In 
addition, clinically related and similar codes for purposes of this 
policy are codes that either currently or previously describe the 
procedure described by the new HCPCS code. Under this policy, claims 
data from clinically related and similar codes are included as 
associated claims data for a new code, and where an existing HCPCS code 
is found to be clinically related or similar to a new HCPCS code, we 
apply the device offset percentage derived from the existing clinically 
related or similar HCPCS code's claims data to the new HCPCS code for 
determining the device offset percentage. We stated that we believe 
that claims data for HCPCS codes describing procedures that have minor 
differences from the procedures described by new HCPCS codes will 
provide an accurate depiction of the cost relationship between the 
procedure and the device(s) that are used, and will be appropriate to 
use to set a new code's device offset percentage, in the same way that 
predecessor codes are used. If a new HCPCS code has multiple 
predecessor codes, the claims data for the predecessor code that has 
the highest individual HCPCS-level device offset percentage is used to 
determine whether the new HCPCS code qualifies for device-intensive 
status. Similarly, in the event that a new HCPCS code does not have a 
predecessor code but has multiple clinically related or similar codes, 
the claims data for the clinically related or similar code that has the 
highest individual HCPCS level device offset percentage is used to 
determine whether the new HCPCS code qualifies for device-intensive 
status.
    As we indicated in the CY 2019 OPPS/ASC proposed rule and final 
rule with comment period, additional information for our consideration 
of an offset percentage higher than the default of 31 percent for new 
HCPCS codes describing procedures requiring the implantation (or, in 
some cases, the insertion) of a device that do not yet have associated 
claims data, such as pricing data or invoices from a device 
manufacturer, should be directed to the Division of Outpatient Care, 
Mail Stop C4-01-26, Centers for Medicare & Medicaid Services, 7500 
Security Boulevard, Baltimore, MD 21244-1850, or electronically at 
[email protected]. Additional information can be submitted 
prior to issuance of an OPPS/ASC proposed rule or as a public comment 
in response to an issued OPPS/ASC proposed rule. Device offset 
percentages will be set in each year's final rule.
    The full listing of the proposed CY 2024 device-intensive 
procedures can be found in Addendum P to this proposed rule (which is 
available via the internet on the CMS website). Further, our claims 
accounting narrative contains a description of our device offset 
percentage calculation. Our claims accounting narrative for this 
proposed rule can be found under supporting documentation for the CY 
2024 OPPS/ASC proposed rule on our website at: https://www.cms.gov/medicare/medicare-fee-for-service-payment/hospitaloutpatientpps.
3. Device Edit Policy
    In the CY 2015 OPPS/ASC final rule with comment period (79 FR 
66795), we finalized a policy and implemented claims processing edits 
that require any of the device codes used in the previous device-to-
procedure edits to be present on the claim whenever a procedure code 
assigned to any of the APCs listed in Table 5 of the CY 2015 OPPS/ASC 
final rule with comment period (the CY 2015 device-dependent APCs) is 
reported on the claim. In addition, in the CY 2016 OPPS/ASC final rule 
with comment period (80 FR 70422), we modified our previously existing 
policy and applied the device coding requirements exclusively to 
procedures that require the implantation of a device that are assigned 
to a device-intensive APC. In the CY 2016 OPPS/ASC final rule with 
comment period, we also finalized our policy that the claims processing 
edits are such that any device code, when reported on a claim with a 
procedure assigned to a device-intensive APC (listed in Table 42 of the 
CY 2016 OPPS/ASC final rule with comment period (80 FR 70422)) will 
satisfy the edit.
    In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79658 
through 79659), we changed our policy for CY 2017 and subsequent years 
to apply the CY 2016 device coding requirements to the newly defined 
device-intensive procedures. For CY 2017 and subsequent years, we also 
specified that any device code, when reported on a claim with a device-
intensive procedure, will satisfy the edit. In addition, we created 
HCPCS code C1889 to recognize devices furnished during a device-
intensive procedure that are not described by a specific Level II HCPCS 
Category C-code. Reporting HCPCS code C1889 with a device-intensive 
procedure will satisfy the edit requiring a device code to be reported 
on a claim with a device-intensive procedure. In the CY 2019 OPPS/ASC 
final rule with comment period, we revised the description of HCPCS 
code C1889 to remove the specific applicability to device-intensive 
procedures (83 FR 58950). For CY 2019 and subsequent years, the 
description of HCPCS code C1889 is ``Implantable/insertable device, not 
otherwise classified''. In the CY 2023 OPPS/ASC final rule with comment 
period (87 FR 71830), we described a commenter's concern about the 
potentially inadequate payment rate for APC 5495 (Level 5 Intraocular 
Procedures) and their recommendation that we use our equitable 
adjustment authority to limit the potential reduction in the CY 2023 
APC payment rate by applying a 10 percent cap on the reduction in 
relative weights for Low Volume APCs in CY 2023. While we did not 
accept the commenter's recommendation to limit a Low Volume APC's 
decline in relative weight to no more than 10 percent, we stated we 
would 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.
    In our review of claims data for CPT code 0308T (Insertion of 
ocular telescope prosthesis including removal of crystalline lens or 
intraocular lens prosthesis), we noticed unusual coding, charge, and 
cost data in the claims data from CY 2017, CY 2018, CY 2019, and CY 
2021. Some claims did not report the correct device code--HCPCS code 
C1840 (Lens, intraocular (telescopic))--and such claims had 
substantially lower cost than claims that reported the correct device 
code. In particular, claims that reported the correct device code had 
an average device cost of $15,030.04, while claims that did not report 
the correct device code had an average device cost of $430.72. The vast 
majority of claims for CPT code 0308T in our 4-year analysis did report 
the correct device code; however, the limited number of claims that 
either reported the wrong procedure code or reported the wrong device 
code had an outsized impact on the APC payment rate because of the very 
low volume of claims for this APC. Because payment stability for this 
Low Volume APC relies so critically on accurate reporting of the 
procedure's associated costs, we believe this APC would benefit from a 
procedure-to-device edit--a claims processing edit that requires a 
certain device code to be included on the claim when hospitals report a 
specific procedure code. The procedures associated with the Level 5 
Intraocular APC, which we propose to reassign to a new Level 6 
Intraocular APC (APC 5496) in section III.E of this proposed

[[Page 49661]]

rule, describe the implantation of a specific device codes:
     CPT code 0308T (Insertion of ocular telescope prosthesis 
including removal of crystalline lens or intraocular lens prosthesis) 
describes the implantation of device HCPCS code C1840 (Lens, 
intraocular (telescopic));
     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) describes the implantation of device HCPCS code C1839 
(Iris prosthesis);
     CPT code 0617T (Insertion of iris prosthesis, including 
suture fixation and repair or removal of iris, when performed; with 
removal of crystalline lens and insertion of intraocular lens) 
describes the implantation of device HCPCS code C1839 (Iris 
prosthesis); or
     CPT code 0618T (Insertion of iris prosthesis, including 
suture fixation and repair or removal of iris, when performed; with 
secondary intraocular lens placement or intraocular lens exchange) also 
describes the implantation of device HCPCS code C1839 (Iris 
prosthesis).
    We propose to establish a procedure-to-device edit for the four 
aforementioned procedures assigned to APC 5496 (Level 6 Intraocular 
Procedures) and require hospitals to report the correct device HCPCS 
codes when reporting any of the four procedures. While some interested 
parties have previously recommended in past rulemaking that we 
reestablish all of our previous procedure-to-device edits, we do not 
expect to extend this policy beyond the procedures assigned to APC 5496 
(Level 6 Intraocular Procedures). We continue to rely on hospitals' 
accurate reporting and believe our current device edits policy of 
requiring device-intensive procedures to be subject to an additional 
device reporting edit has improved our ratesetting for hospital 
outpatient department procedures without placing an undue burden on 
hospitals. However, we believe this APC represents a unique situation--
the APC (which was the Level 5 Intraocular APC in previous years) has 
been a Low Volume APC (fewer than 100 claims in a claims year) since we 
established our Low Volume APC policy, the procedures associated with 
this APC have significant procedure costs often greater than $15,000, 
and the procedures associated with this APC require the implantation of 
a high-cost intraocular device. We believe requiring a procedure-to-
device edit for procedures assigned to the APC 5496 (Level 6 
Intraocular Procedures), would not be administratively burdensome to 
hospitals given the low volume of services associated for this APC and 
will have a meaningful and significant impact on the payment rate for 
this APC and the stability of the payment rate in the future.
    We are soliciting comments on our proposal to modify our device 
edits policy to require a procedure-to-device edit for procedures 
assigned to APC 5496 (Level 6 Intraocular Procedures) for CY 2024.
4. Adjustment to OPPS Payment for No Cost/Full Credit and Partial 
Credit Devices
a. Background
    To ensure equitable OPPS payment when a hospital receives a device 
without cost or with full credit, in CY 2007, we implemented a policy 
to reduce the payment for specified device-dependent APCs by the 
estimated portion of the APC payment attributable to device costs (that 
is, the device offset) when the hospital receives a specified device at 
no cost or with full credit (71 FR 68071 through 68077). Hospitals were 
instructed to report no cost/full credit device cases on the claim 
using the ``FB'' modifier on the line with the procedure code in which 
the no cost/full credit device is used. In cases in which the device is 
furnished without cost or with full credit, hospitals were instructed 
to report a token device charge of less than $1.01. In cases in which 
the device being inserted is an upgrade (either of the same type of 
device or to a different type of device) with a full credit for the 
device being replaced, hospitals were instructed to report as the 
device charge the difference between the hospital's usual charge for 
the device being implanted and the hospital's usual charge for the 
device for which it received full credit. In CY 2008, we expanded this 
payment adjustment policy to include cases in which hospitals receive 
partial credit of 50 percent or more of the cost of a specified device. 
Hospitals were instructed to append the ``FC'' modifier to the 
procedure code that reports the service provided to furnish the device 
when they receive a partial credit of 50 percent or more of the cost of 
the new device. We refer readers to the CY 2008 OPPS/ASC final rule 
with comment period for more background information on the ``FB'' and 
``FC'' modifiers payment adjustment policies (72 FR 66743 through 
66749).
    In the CY 2014 OPPS/ASC final rule with comment period (78 FR 75005 
through 75007), beginning in CY 2014, we modified our policy of 
reducing OPPS payment for specified APCs when a hospital furnishes a 
specified device without cost or with a full or partial credit. For CY 
2013 and prior years, our policy had been to reduce OPPS payment by 100 
percent of the device offset amount when a hospital furnishes a 
specified device without cost or with a full credit and by 50 percent 
of the device offset amount when the hospital receives partial credit 
in the amount of 50 percent or more of the cost for the specified 
device. For CY 2014, we reduced OPPS payment, for the applicable APCs, 
by the full or partial credit a hospital receives for a replaced 
device. Specifically, under this modified policy, hospitals are 
required to report on the claim the amount of the credit in the amount 
portion for value code ``FD'' (Credit Received from the Manufacturer 
for a Replaced Device) when the hospital receives a credit for a 
replaced device that is 50 percent or greater than the cost of the 
device. For CY 2014, we also limited the OPPS payment deduction for the 
applicable APCs to the total amount of the device offset when the 
``FD'' value code appears on a claim. For CY 2015, we continued our 
policy of reducing OPPS payment for specified APCs when a hospital 
furnishes a specified device without cost or with a full or partial 
credit and to use the three criteria established in the CY 2007 OPPS/
ASC final rule with comment period (71 FR 68072 through 68077) for 
determining the APCs to which our CY 2015 policy will apply (79 FR 
66872 through 66873). In the CY 2016 OPPS/ASC final rule with comment 
period (80 FR 70424), we finalized our policy to no longer specify a 
list of devices to which the OPPS payment adjustment for no cost/full 
credit and partial credit devices would apply and instead apply this 
APC payment adjustment to all replaced devices furnished in conjunction 
with a procedure assigned to a device-intensive APC when the hospital 
receives a credit for a replaced specified device that is 50 percent or 
greater than the cost of the device.
b. Policy for No Cost/Full Credit and Partial Credit Devices
    In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79659 
through 79660), for CY 2017 and subsequent years, we finalized a policy 
to reduce OPPS payment for device-intensive procedures, by the full or 
partial credit a provider receives for a replaced device, when a 
hospital furnishes a specified device without cost or with a full or 
partial credit.

[[Page 49662]]

Under our current policy, hospitals continue to be required to report 
on the claim the amount of the credit in the amount portion for value 
code ``FD'' when the hospital receives a credit for a replaced device 
that is 50 percent or greater than the cost of the device.
    In the CY 2014 OPPS/ASC final rule with comment period (78 FR 75005 
through 75007), we adopted a policy of reducing OPPS payment for 
specified APCs when a hospital furnishes a specified device without 
cost or with a full or partial credit by the lesser of the device 
offset amount for the APC or the amount of the credit. We adopted this 
change in policy in the preamble of the CY 2014 OPPS/ASC final rule 
with comment period and discussed it in subregulatory guidance, 
including Chapter 4, Section 61.3.6 of the Medicare Claims Processing 
Manual. Further, in the CY 2021 OPPS/ASC final rule with comment period 
(85 FR 86017 through 86018, 86302), we made conforming changes to our 
regulations at Sec.  419.45(b)(1) and (2) that codified this policy.
    We are not proposing any changes to our policies regarding payment 
for no cost/full credit and partial credit devices for CY 2024.

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

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

1. Background
    Section 1833(t)(6) of the Act provides for temporary additional 
payments or ``transitional pass-through payments'' for certain drugs 
and biologicals. Throughout the proposed rule, the term ``biological'' 
is used because this is the term that appears in section 1861(t) of the 
Act. A ``biological'' as used in the proposed rule includes (but is not 
necessarily limited to) a ``biological product'' or a ``biologic'' as 
defined under section 351 of the PHS Act. As enacted by the Medicare, 
Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 (BBRA) (Pub. 
L. 106-113), this pass-through payment provision requires the Secretary 
to make additional payments to hospitals for: current orphan drugs for 
rare diseases and conditions, as designated under section 526 of the 
Federal Food, Drug, and Cosmetic Act; current drugs and biologicals and 
brachytherapy sources used in cancer therapy; and current 
radiopharmaceutical drugs and biologicals. ``Current'' refers to those 
types of drugs or biologicals mentioned above that are hospital 
outpatient services under Medicare Part B for which transitional pass-
through payment was made on the first date the hospital OPPS was 
implemented.
    Transitional pass-through payments also are provided for certain 
``new'' drugs and biologicals that were not 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 2024 pass-through drugs and 
biologicals and their designated APCs are assigned status indicator 
``G'' in Addenda A and B to this proposed rule (which are available on 
the CMS website).\80\
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    Section 1833(t)(6)(D)(i) of the Act specifies that the pass-through 
payment amount, in the case of a drug or biological, is the amount by 
which the amount determined under section 1842(o) of the Act for the 
drug or biological exceeds the portion of the otherwise applicable 
Medicare OPD fee schedule that the Secretary determines is associated 
with the drug or biological. The methodology for determining the pass-
through payment amount is set forth in regulations at 42 CFR 419.64. 
These regulations specify that the pass-through payment equals the 
amount determined under section 1842(o) of the Act minus the portion of 
the APC payment that CMS determines is associated with the drug or 
biological.
    Section 1847A of the Act establishes the average sales price (ASP) 
methodology, which is used for payment for drugs and biologicals 
described in section 1842(o)(1)(C) of the Act furnished on or after 
January 1, 2005. The ASP methodology, as applied under the OPPS, uses 
several sources of data as a basis for payment, including the ASP, the 
wholesale acquisition cost (WAC), and the average wholesale price 
(AWP). In the proposed rule, the term ``ASP methodology'' and ``ASP-
based'' are inclusive of all data sources and methodologies described 
therein. Additional information on the ASP methodology can be found on 
our website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice/index.html.
    The pass-through application and review process for drugs and 
biologicals is described on our website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/passthrough_payment.html.
2. Transitional Pass-Through Payment Period for Pass-Through Drugs, 
Biologicals, and Radiopharmaceuticals and Quarterly Expiration of Pass-
Through Status
    As required by statute, transitional pass-through payments for a 
drug or biological described in section 1833(t)(6)(C)(i)(II) of the Act 
can be made for a period of at least 2 years, but not more than 3 
years, after the payment was first made for the drug or biological as a 
hospital outpatient service under Medicare Part B. Our current policy 
is to accept pass-through applications on a quarterly basis and to 
begin pass-through payments for approved pass-through drugs and 
biologicals on a quarterly basis through the next available OPPS 
quarterly update after the approval of a drug's or biological's pass-
through status. However, prior to CY 2017, we expired pass-through 
status for drugs and biologicals on an annual basis through notice-and-
comment rulemaking (74 FR 60480). In the CY 2017 OPPS/ASC final rule 
with comment period (81 FR 79662), we finalized a policy change, 
beginning with pass-through drugs and biologicals approved in CY 2017 
and subsequent calendar years, to allow for a quarterly expiration of 
pass-through payment status for drugs, biologicals, and 
radiopharmaceuticals to afford a pass-through payment period that is as 
close to a full 3 years as possible for all pass-through drugs, 
biologicals, and radiopharmaceuticals.
    This change eliminated the variability of the pass-through payment 
eligibility period, which previously varied based on when a particular 
application was initially received. We adopted this change for pass-
through approvals beginning on or after CY 2017, to allow, on a 
prospective basis, for the maximum pass-through payment period for each 
pass-through drug without exceeding the statutory limit of 3 years. 
Notice of drugs for which pass-through payment status is ending during 
the calendar year is included in the quarterly OPPS Change Request 
transmittals.

[[Page 49663]]

3. Drugs and Biologicals With Expiring Pass-Through Payment Status in 
CY 2023
    There are 43 drugs and biologicals for which pass-through payment 
status expires by December 31, 2023, as listed in Table 35. These drugs 
and biologicals will have received OPPS pass-through payment for 3 
years during the period of April 1, 2020 through December 31, 2023. In 
accordance with the policy finalized in CY 2017 and described earlier, 
pass-through payment status for drugs and biologicals approved in CY 
2017 and subsequent years will expire on a quarterly basis, with a 
pass-through payment period as close to 3 years as possible.
    With the exception of those groups of drugs and biologicals that 
are always packaged when they do not have pass-through payment status 
(specifically, anesthesia drugs; drugs, biologicals, and 
radiopharmaceuticals that function as supplies when used in a 
diagnostic test or procedure (including diagnostic 
radiopharmaceuticals, contrast agents, and stress agents); and drugs 
and biologicals that function as supplies when used in a surgical 
procedure), our standard methodology for providing payment for drugs 
and biologicals with expiring pass-through payment status in an 
upcoming calendar year is to determine the product's estimated per day 
cost and compare it with the OPPS drug packaging threshold for that 
calendar year (which is proposed to be $140 for CY 2024), as discussed 
further in section V.B.1 of this proposed rule. If the estimated per 
day cost for the drug or biological is less than or equal to the 
applicable OPPS drug packaging threshold, we 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 
provide separate payment at the applicable ASP methodology-based 
payment amount (which is generally ASP plus 6 percent), as discussed 
further in section V.B.2 of this proposed rule.
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4. Proposed Drugs, Biologicals, and Radiopharmaceuticals With Pass-
Through Payment Status Expiring in CY 2024
    We propose to end pass-through payment status in CY 2024 for 25 
drugs and biologicals. These drugs and biologicals, which were 
initially approved for pass-through payment status between April 1, 
2021, and January 1, 2022, are listed in Table 36. The APCs and HCPCS 
codes for these drugs and biologicals, which have pass-through payment 
status that will end by December 31, 2024, are assigned status 
indicator ``G'' (Pass-Through Drugs and Biologicals) in Addenda A and B 
to this proposed rule (which are available on the CMS website).\81\ The 
APCs and HCPCS codes for these drugs and biologicals, which have pass-
through payment status, are assigned status indicator ``G'' only for 
the duration of their pass-through status.
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    Section 1833(t)(6)(D)(i) of the Act sets the amount of pass-through 
payment for pass-through drugs and biologicals (the pass-through 
payment amount) as the difference between the amount authorized under 
section 1842(o) of the Act and the portion of the otherwise

[[Page 49667]]

applicable OPD fee schedule that the Secretary determines is associated 
with the drug or biological. For CY 2024 and subsequent years, we 
propose to continue to pay for pass-through drugs and biologicals using 
the ASP methodology, meaning a payment rate based on ASP, WAC, or AWP. 
This payment rate is generally ASP plus 6 percent, equivalent to the 
payment rate these drugs and biologicals would receive in the 
physician's office setting in CY 2024. 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 propose that a $0 pass-
through payment amount would be paid for pass-through drugs and 
biologicals under the CY 2024 OPPS, and in subsequent years, because 
the difference between the amount authorized under section 1842(o) of 
the Act, which is generally ASP plus 6 percent, and the portion of the 
otherwise applicable OPD fee schedule that the Secretary determines is 
appropriate, which is also proposed to be the same payment rate, which 
is generally ASP plus 6 percent, is $0. We propose that this policy and 
the other policies proposed in this section would apply in both CY 2024 
and subsequent years as they have been our longstanding policies under 
the OPPS. Therefore, we do not believe the policies need to be re-
proposed annually and should apply for subsequent years until such time 
as we propose to change them.
    In the case of policy-packaged drugs (which include the following: 
anesthesia drugs; drugs, biologicals, and radiopharmaceuticals that 
function as supplies when used in a diagnostic test or procedure 
(including contrast agents, diagnostic radiopharmaceuticals, and stress 
agents); and drugs and biologicals that function as supplies when used 
in a surgical procedure), we propose that their pass-through payment 
amount would be equal to a payment rate calculated using the ASP 
methodology, meaning a payment rate based on ASP, WAC, or AWP. This 
proposed payment rate would generally be ASP plus 6 percent for CY 2024 
and subsequent years, minus a payment offset for the portion of the 
otherwise applicable OPD fee schedule that the Secretary determines is 
associated with the drug or biological as described in section V.A.6 of 
this proposed rule. We propose this policy because, if not for the 
pass-through payment status of these policy-packaged products, payment 
for these products would be packaged into the associated procedure and 
therefore, there are associated OPD fee schedule amounts for them.
    We propose to continue to update pass-through payment rates on a 
quarterly basis on the CMS website during CY 2024 and subsequent years 
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 2024 and subsequent years, consistent with our CY 2023 
policy for diagnostic and therapeutic radiopharmaceuticals, we propose 
to continue to provide payment for both diagnostic and therapeutic 
radiopharmaceuticals that are granted pass-through payment status based 
on the ASP methodology. As stated earlier, for purposes of pass-through 
payment, we consider radiopharmaceuticals to be drugs under the OPPS. 
Therefore, if a diagnostic or therapeutic radiopharmaceutical receives 
pass-through payment status during CY 2024 or subsequent years, we 
propose to follow the standard ASP methodology to determine the pass-
through payment rate that drugs receive under section 1842(o) of the 
Act, which is generally ASP plus 6 percent. If ASP data are not 
available for a radiopharmaceutical, we propose to provide pass-through 
payment at WAC plus 3 percent (consistent with our policy in section 
V.B.2.b of this proposed rule), the equivalent payment provided for 
pass-through drugs and biologicals without ASP information. Additional 
detail on the WAC plus 3 percent payment policy can be found in section 
V.B.2.b of this proposed rule). If WAC information also is not 
available, we propose to provide payment for the pass-through 
radiopharmaceutical at 95 percent of its most recent AWP.
    We refer readers to Table 36 below for the list of drugs and 
biologicals with pass-through payment status expiring during CY 2024.
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5. Proposed Drugs, Biologicals, and Radiopharmaceuticals With Pass-
Through Payment Status Continuing Through CY 2024
    We propose to continue pass-through payment status in CY 2024 for 
42 drugs and biologicals. These drugs and biologicals, which were 
approved for pass-through payment status with effective dates beginning 
between April 1, 2022, and April 1, 2023, are listed in Table 37. The 
APCs and HCPCS codes for these drugs and biologicals, which have pass-
through payment status that would continue after December 31, 2024, are 
assigned status indicator ``G'' in Addenda A and B to this proposed 
rule (which are available on the CMS website).\82\
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    Section 1833(t)(6)(D)(i) of the Act sets the amount of pass-through 
payment for pass-through drugs and biologicals (the pass-through 
payment amount) as the difference between the amount authorized under 
section 1842(o) of the Act and the portion of the otherwise applicable 
OPD fee schedule that the Secretary determines is associated with the 
drug or biological. For CY 2024 and subsequent years, we propose to 
continue to pay for pass-through drugs and biologicals at a payment 
rate based on the ASP methodology, which may be based on ASP, WAC, or 
AWP, but is generally ASP plus 6 percent, which is equivalent to the 
payment rate these drugs and biologicals would receive in the 
physician's office setting in CY 2024. We propose that a $0 pass-
through payment amount would be paid for pass-through drugs and 
biologicals that are not policy-packaged as described in section 
V.B.1.c of this proposed rule under the CY 2024 OPPS and in subsequent 
years, because the difference between the amount authorized under 
section 1842(o) of the Act, which would generally be ASP plus 6 
percent, and the portion of the otherwise applicable OPD fee schedule 
that the Secretary determines is appropriate, which would also 
generally be 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 propose that their pass-through payment 
amount would be equal to a payment rate based on the ASP methodology, 
which may be based on ASP, WAC, or AWP, but would generally be ASP plus 
6 percent for CY 2024, minus a payment offset for any predecessor drug 
products contributing to the pass-through payment as described in 
section V.A.6 of this proposed rule). We propose this policy because, 
if not for the pass-through payment status of these policy-packaged 
products, payment for these products would be packaged into the 
associated procedure and therefore,

[[Page 49671]]

there are associated OPD fee schedule amounts for them.
    We propose to continue to update pass-through payment rates on a 
quarterly basis on our website during CY 2024, and in subsequent years, 
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 2024 and subsequent years, consistent with our CY 2023 
policy for diagnostic and therapeutic radiopharmaceuticals, we propose 
to continue to provide payment for both diagnostic and therapeutic 
radiopharmaceuticals that are granted pass-through payment status based 
on the ASP methodology. As stated earlier, for purposes of pass-through 
payment, we consider radiopharmaceuticals to be drugs under the OPPS. 
Therefore, if a diagnostic or therapeutic radiopharmaceutical receives 
pass-through payment status during CY 2024, we will continue to follow 
the standard ASP methodology to determine the pass-through payment rate 
that drugs receive under section 1842(o) of the Act, which would 
generally be ASP plus 6 percent. If ASP data are not available for a 
radiopharmaceutical, we would provide pass-through payment at WAC plus 
3 percent (consistent with our policy in section V.B.2.b of this 
proposed rule), the equivalent payment provided to pass-through drugs 
and biologicals without ASP information. Additional detail on the WAC 
plus 3 percent payment policy can be found in section V.B.2.b of this 
proposed rule). If WAC information also is not available, we would 
provide payment for the pass-through radiopharmaceutical at 95 percent 
of its most recent AWP.
    We propose that the other policies proposed in this section would 
apply in both CY 2024 and subsequent years as they have been our 
longstanding policies under the OPPS. Therefore, we do not believe the 
policies need to be re-proposed annually and should apply for 
subsequent years until such time as we propose to change them.
    The drugs and biologicals that we propose would have pass-through 
payment status expire after December 31, 2024, are shown in Table 37.
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6. Proposed Provisions for Reducing Transitional Pass-Through Payments 
for Policy-Packaged Drugs, Biologicals, and Radiopharmaceuticals To 
Offset Costs Packaged Into APC Groups
    Under the regulation at 42 CFR 419.2(b)(15), nonpass-through drugs, 
biologicals, and radiopharmaceuticals that function as supplies when 
used in a diagnostic test or procedure are packaged in the OPPS. This 
category includes diagnostic radiopharmaceuticals, contrast agents, 
stress agents, and other diagnostic drugs. Also, under the regulation 
at 42 CFR 419.2(b)(16), nonpass-through drugs and biologicals that 
function as supplies in a surgical procedure are packaged in the OPPS. 
This category includes skin substitutes and other surgical-supply drugs 
and biologicals. Finally, under the regulation at 42 CFR 419.2(b)(4), 
anesthesia drugs are packaged in the OPPS. As described earlier, 
section 1833(t)(6)(D)(i) of the Act specifies that the transitional 
pass-through payment amount for pass-through drugs and biologicals is 
the difference between the amount paid under section 1842(o) of the Act 
and the otherwise applicable OPD fee schedule amount. Because a payment 
offset is necessary in order to provide an appropriate transitional 
pass-through payment, we deduct from the pass-through payment for 
policy-packaged drugs, biologicals, and radiopharmaceuticals an amount 
reflecting the portion of the APC payment associated with predecessor 
products in order to ensure no duplicate payment is made. This amount 
reflecting the portion of the APC payment associated with predecessor 
products is called the payment offset.

[[Page 49676]]

    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 2024 and subsequent years, as we did in CY 2023, we 
propose to continue to apply the same policy-packaged offset policy to 
payment for pass-through diagnostic radiopharmaceuticals, pass-through 
contrast agents, pass-through stress agents, and pass-through skin 
substitutes. We propose that these policies would apply in both CY 2024 
and subsequent years as they are our longstanding policies under the 
OPPS, and we do not believe they need to be re-proposed annually. 
Instead, we believe they should apply for subsequent years until such 
time as we propose to change them or until such time as the APCs to 
which a payment offset may be applicable for certain products change. 
The APCs to which a payment offset may be applicable for pass-through 
diagnostic radiopharmaceuticals, pass-through contrast agents, pass-
through stress agents, and pass-through skin substitutes are identified 
in Table 38.
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    We propose to continue to post annually on our website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Annual-Policy-Files.html a file that contains the 
APC offset amounts that will be used for that year for purposes of both 
evaluating cost significance for candidate pass-through payment device 
categories and drugs and biologicals and establishing any appropriate 
APC offset amounts. Specifically, the file will continue to provide the 
amounts and percentages of APC payment associated with packaged 
implantable devices, policy-packaged drugs, and threshold packaged 
drugs and biologicals for every OPPS clinical APC.

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

1. Proposed Criteria for Packaging Payment for Drugs, Biologicals, and 
Radiopharmaceuticals
a. Proposed Packaging Threshold
    In accordance with section 1833(t)(16)(B) of the Act, the threshold 
for establishing separate APCs for 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 $135 for CY 
2023 (87 FR 71960 through 71961).
    Following the CY 2007 methodology, for this proposed rule, we use 
the most recently available four quarter moving average PPI levels to 
trend the $50 threshold forward from the third quarter of CY 2005 to 
the third quarter of CY 2024 and round the resulting dollar amount 
($138.44) to the nearest $5 increment, which yielded a figure of $140. 
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 
IHS Global, Inc. IGI is a nationally recognized economic and financial 
forecasting firm with which CMS contracts to forecast the various price

[[Page 49677]]

indexes including the PPI Pharmaceuticals for Human Use (Prescription). 
Based on these calculations using the CY 2007 OPPS methodology, we 
propose a packaging threshold for CY 2024 of $140.
b. Packaging of Payment for HCPCS Codes That Describe Certain Drugs, 
Certain Biologicals, and Certain Therapeutic Radiopharmaceuticals Under 
the Cost Threshold (``Threshold-Packaged Drugs'')
    To determine the proposed CY 2024 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 2022 and were paid (via packaged or separate payment) 
under the OPPS. We used data from CY 2022 claims processed through June 
30, 2022, for this calculation. However, we did not perform this 
calculation for those drugs and biologicals with multiple HCPCS codes 
that include different dosages, as described in section V.B.1.d of this 
proposed rule, or for the following policy-packaged items that we 
propose to continue to package in CY 2024: 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 2024, 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 based on the ASP methodology, which is 
generally ASP plus 6 percent (which is the payment rate we proposed for 
separately payable drugs and biologicals) for CY 2024, as discussed in 
more detail in section V.B.2.b of this proposed rule) to calculate the 
CY 2024 proposed rule per day costs. We used the manufacturer-submitted 
ASP data from the fourth quarter of CY 2022 (data that were used for 
payment purposes in the physician's office setting, effective April 1, 
2023) to determine the proposed rule per day cost.
    As is our standard methodology, for CY 2024 we propose to use 
payment rates based on the ASP data from the fourth quarter of CY 2022 
for budget neutrality estimates, packaging determinations, impact 
analyses, and completion of Addenda A and B to this proposed rule 
(which are available via the internet on the CMS website) because these 
are the most recent data available for use at the time of development 
of the CY 2024 OPPS/ASC proposed rule. These data also were the basis 
for drug payments in the physician's office setting, effective April 1, 
2023. 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 2022 hospital claims data to determine their per 
day cost.
    We propose to package items with a per day cost less than or equal 
to $140 and identify items with a per day cost greater than $140 as 
separately payable unless they are policy-packaged. Consistent with our 
past practice, we cross-walked historical OPPS claims data from the CY 
2022 HCPCS codes that were reported to the CY 2023 HCPCS codes that we 
display in Addendum B to this proposed rule (which is available on the 
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    Our policy during previous cycles of OPPS rulemaking has been to 
use updated ASP and claims data to make final determinations of the 
packaging status of HCPCS codes for drugs, biologicals, and therapeutic 
radiopharmaceuticals for the OPPS/ASC final rule with comment period. 
We note that it is also our policy to make an annual packaging 
determination for a HCPCS code only when we develop the OPPS/ASC final 
rule with comment period for the update year. Only HCPCS codes that are 
identified as separately payable in the final rule with comment period 
are subject to quarterly updates. For our calculation of per day costs 
of HCPCS codes for drugs and biologicals in this proposed rule, we 
propose to use ASP data from the fourth quarter of CY 2022, 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, 2023, along with updated hospital claims data from CY 2022. We 
note that we also propose to use these data for budget neutrality 
estimates and impact analyses for this proposed rule.
    Payment rates for HCPCS codes for separately payable drugs and 
biologicals included in Addenda A and B of this proposed rule are based 
on ASP data from the second quarter of CY 2023. 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, 2023. These payment rates would then be updated in the January 2024 
OPPS update, based on the most recent ASP data to be used for 
physicians' office and OPPS payment as of January 1, 2024. For items 
that do not currently have an ASP-based payment rate, we calculated 
their mean unit cost from all of the CY 2022 claims data and updated 
cost report information available for this proposed rule to determine 
their final per day cost.
    Consequently, the packaging status of some HCPCS codes for drugs, 
biologicals, and therapeutic radiopharmaceuticals in this OPPS/ASC 
proposed rule may be different from the same drugs' HCPCS codes' 
packaging status determined based on the data used for the final rule 
with comment period. Under such circumstances, we propose to continue 
to follow the established policies initially adopted for the CY 2005 
OPPS (69 FR 65780) in order to more equitably pay for those drugs whose 
costs fluctuate relative to the proposed CY 2024 OPPS drug packaging 
threshold and the drug's payment status (packaged or separately 
payable) in CY 2023. 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 2024 and 
subsequent years, consistent with our historical practice, we propose 
to apply the following policies to those HCPCS codes for drugs, 
biologicals, and therapeutic radiopharmaceuticals whose relationship to 
the drug packaging threshold changes based on the updated drug 
packaging threshold and on the final updated data:
     HCPCS codes for drugs and biologicals that were paid 
separately in CY 2023 and that are proposed for separate payment in CY 
2024, and that then have per day costs equal to or less than the CY 
2024 final rule drug packaging threshold, based on the updated ASPs and 
hospital claims data used for the CY 2024 final rule, would continue to 
receive separate payment in CY 2024.
     HCPCS codes for drugs and biologicals that were packaged 
in CY 2023 and that are proposed for separate payment in CY 2024, and 
that then have per day costs equal to or less than the CY 2024 final 
rule drug packaging threshold, based on the updated ASPs and hospital 
claims data used for the CY 2024 final rule, would remain packaged in 
CY 2024.
     HCPCS codes for drugs and biologicals for which we 
proposed

[[Page 49678]]

packaged payment in CY 2024 but that then have per-day costs greater 
than the CY 2024 final rule drug packaging threshold, based on the 
updated ASPs and hospital claims data used for the CY 2024 final rule, 
would receive separate payment in CY 2024.
c. Policy-Packaged Drugs, Biologicals, and Radiopharmaceuticals
    As mentioned earlier in this section, under the OPPS, we package 
several categories of nonpass-through drugs, biologicals, and 
radiopharmaceuticals, regardless of the cost of the products. Because 
the products are packaged according to the policies in 42 CFR 419.2(b), 
we refer to these packaged drugs, biologicals, and radiopharmaceuticals 
as ``policy-packaged'' drugs, biologicals, and radiopharmaceuticals. 
These policies are either longstanding or based on longstanding 
principles and inherent to the OPPS and are as follows:
     Anesthesia, certain drugs, biologicals, and other 
pharmaceuticals; medical and surgical supplies and equipment; surgical 
dressings; and devices used for external reduction of fractures and 
dislocations (Sec.  419.2(b)(4));
     Intraoperative items and services (Sec.  419.2(b)(14));
     Drugs, biologicals, and radiopharmaceuticals that function 
as supplies when used in a diagnostic test or procedure (including, but 
not limited to, diagnostic radiopharmaceuticals, contrast agents, and 
pharmacologic stress agents) (Sec.  419.2(b)(15)); and
     Drugs and biologicals that function as supplies when used 
in a surgical procedure (including, but not limited to, skin 
substitutes and similar products that aid wound healing and implantable 
biologicals) (Sec.  419.2(b)(16)).
    The policy at Sec.  419.2(b)(16) is broader than that at Sec.  
419.2(b)(14). As we stated in the CY 2015 OPPS/ASC final rule with 
comment period: ``We consider all items related to the surgical outcome 
and provided during the hospital stay in which the surgery is 
performed, including postsurgical pain management drugs, to be part of 
the surgery for purposes of our drug and biological surgical supply 
packaging policy'' (79 FR 66875). The category described by Sec.  
419.2(b)(15) is large and includes diagnostic radiopharmaceuticals, 
contrast agents, stress agents, and some other products. The category 
described by Sec.  419.2(b)(16) includes skin substitutes and some 
other products. We believe it is important to reiterate that cost 
consideration is not a factor when determining whether an item is a 
surgical supply (79 FR 66875).
    We welcome ongoing dialogue and engagement from interested parties 
regarding suggestions for payment changes for consideration in future 
rulemaking.
d. Packaging Determination for HCPCS Codes That Describe the Same Drug 
or Biological But Different Dosages
    In the CY 2010 OPPS/ASC final rule with comment period (74 FR 60490 
through 60491), we finalized a policy to make a single packaging 
determination for a drug, rather than an individual HCPCS code, when a 
drug has multiple HCPCS codes describing different dosages because we 
believe that adopting the standard HCPCS code-specific packaging 
determinations for these codes could lead to inappropriate payment 
incentives for hospitals to report certain HCPCS codes instead of 
others. We continue to believe that making packaging determinations on 
a drug-specific basis eliminates payment incentives for hospitals to 
report certain HCPCS codes for drugs and allows hospitals flexibility 
in choosing to report all HCPCS codes for different dosages of the same 
drug or only the lowest dosage HCPCS code. Therefore, we propose to 
continue our policy to make packaging determinations on a drug-specific 
basis, rather than a HCPCS code-specific basis, for those HCPCS codes 
that describe the same drug or biological but different dosages in CY 
2024.
    For CY 2024, 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 2022 claims data 
and our pricing information, which is based on the ASP methodology, 
which is generally 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 this 
proposed rule; and, as is our current policy for determining the 
packaging status of other drugs, we used the mean unit cost available 
from the CY 2022 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 1,000 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 methodology based payment rate, which is generally 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 2024 drug packaging threshold 
of $140 (in which case all HCPCS codes for the same drug or biological 
would be packaged) or greater than the proposed CY 2024 drug packaging 
threshold of $140 (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 2024 is displayed in Table 39.
BILLING CODE 4120-01-P

[[Page 49679]]

[GRAPHIC] [TIFF OMITTED] TP31JY23.063

BILLING CODE 4120-01-C
2. Proposed Payment for Drugs and Biologicals Without Pass-Through 
Status That Are Not Packaged
a. Proposed Payment for Specified Covered Outpatient Drugs (SCODs) and 
Other Separately Payable Drugs and Biologicals
    Section 1833(t)(14) of the Act defines certain separately payable 
radiopharmaceuticals, drugs, and biologicals and mandates specific 
payments for these items. Under section 1833(t)(14)(B)(i) of the Act, a 
``specified covered outpatient drug'' (known as a SCOD) is defined as a 
covered outpatient drug, as defined in section 1927(k)(2) of the Act, 
for which a separate APC has been established and that either is a 
radiopharmaceutical agent or a drug or biological for which payment was 
made on a pass-through basis on or before December 31, 2002.
    Under section 1833(t)(14)(B)(ii) of the Act, certain drugs and 
biologicals are designated as exceptions and are not included in the 
definition of SCODs. These exceptions are--
     A drug or biological for which payment is first made on or 
after January 1, 2003, under the transitional pass-through payment 
provision in section 1833(t)(6) of the Act.
     A drug or biological for which a temporary HCPCS code has 
not been assigned.

[[Page 49680]]

     During CYs 2004 and 2005, an orphan drug (as designated by 
the Secretary).
    Section 1833(t)(14)(A)(iii) of the Act requires that payment for 
SCODs in CY 2006 and subsequent years be equal to the average 
acquisition cost for the drug for that year as determined by the 
Secretary, subject to any adjustment for overhead costs and taking into 
account the hospital acquisition cost survey data collected by the 
Government Accountability Office (GAO) in CYs 2004 and 2005, and later 
periodic surveys conducted by the Secretary as set forth in the 
statute. If hospital acquisition cost data are not available, the law 
requires that payment be equal to payment rates established under the 
methodology described in section 1842(o), section 1847A, or section 
1847B of the Act, as calculated and adjusted by the Secretary as 
necessary for purposes of paragraph (14). We refer to this alternative 
methodology as the ``statutory default.'' Most physician Part B drugs 
are paid at ASP plus 6 percent in accordance with section 1842(o) and 
section 1847A of the Act.
    Section 1833(t)(14)(E)(ii) of the Act provides for an adjustment in 
OPPS payment rates for SCODs to take into account overhead and related 
expenses, such as pharmacy services and handling costs. Section 
1833(t)(14)(E)(i) of the Act required MedPAC to study pharmacy overhead 
and related expenses and to make recommendations to the Secretary 
regarding whether, and if so how, a payment adjustment should be made 
to compensate hospitals for overhead and related expenses. Section 
1833(t)(14)(E)(ii) of the Act authorizes the Secretary to adjust the 
weights for ambulatory procedure classifications for SCODs to take into 
account the findings of the MedPAC study.\84\
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    \84\ Medicare Payment Advisory Committee. June 2005 Report to 
the Congress. Chapter 6: Payment for pharmacy handling costs in 
hospital outpatient departments. Available at: https://www.medpac.gov/wp-content/uploads/import_data/scrape_files/docs/default-source/reports/June05_ch6.pdf.
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    It has been our policy since CY 2006 to apply the same treatment to 
all separately payable drugs and biologicals, which include SCODs, and 
drugs and biologicals that are not SCODs. Therefore, we apply the 
payment methodology in section 1833(t)(14)(A)(iii) of the Act to SCODs, 
as required by statute, but we also apply it to separately payable 
drugs and biologicals that are not SCODs, which is a policy 
determination rather than a statutory requirement. For CY 2023 and 
subsequent years, we finalized a policy 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 2023.
    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). Since CY 2020, we have continued 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 (84 FR 61318 and 85 FR 86039), 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 apply this provision to non-SCOD separately payable drugs. 
Because we 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 
policy to pay for drugs and biologicals at WAC plus 3 percent, rather 
than WAC plus 6 percent, applies whenever WAC-based pricing is used for 
a drug or biological under 1847A(c)(4). We refer readers to the CY 2019 
PFS final rule (83 FR 59661 to 59666) for additional background on this 
policy.
    Consistent with our current policy, payments for separately payable 
drugs and biologicals are included in the budget neutrality 
adjustments, under the requirements in section 1833(t)(9)(B) of the 
Act. Also, the budget neutral weight scalar is not applied in 
determining payments for these separately payable drugs and 
biologicals.
    We note that separately payable drug and biological payment rates 
listed in Addenda A and B to this proposed rule (available on the CMS 
website \85\), which illustrate the proposed CY 2024 payment based on 
the ASP methodology for separately payable nonpass-through drugs and 
biologicals and the ASP methodology for pass-through drugs and 
biologicals, reflect either ASP information that is the basis for 
calculating payment rates for drugs and biologicals in the physician's 
office setting effective April 1, 2023, or WAC, AWP, or mean unit cost 
from CY 2022 claims data and updated cost report information available 
for this CY 2024 OPPS/ASC proposed rule. In general, these published 
payment rates are not the same as the actual January 2024 payment 
rates. This is because payment rates for drugs and biologicals with ASP 
information for January 2024 will be determined through the standard 
quarterly process where ASP data submitted by manufacturers for the 
third quarter of CY 2023 (July 1, 2023, through September 30, 2023) 
will be used to set the payment rates that are released for the quarter 
beginning in January 2024 in December 2023. In addition, payment rates 
for drugs and

[[Page 49681]]

biologicals in Addenda A and B to this proposed rule, for which there 
was no ASP, WAC, or AWP information available for April 2023, are based 
on mean unit cost in the available CY 2022 claims data. If new pricing 
information becomes available for payment for the quarter beginning in 
January 2024, we will price payment for these drugs and biologicals 
based on their newly available information. Finally, there may be drugs 
and biologicals that have ASP, WAC, or AWP information available for 
the CY 2024 OPPS/ASC proposed rule (reflecting April 2023 ASP data) 
that do not have ASP, WAC, or AWP information available for the quarter 
beginning in January 2024. These drugs and biologicals would then be 
paid based on mean unit cost data derived from CY 2022 hospital claims. 
Therefore, the proposed payment rates listed in Addenda A and B to this 
proposed rule are not for January 2024 payment purposes and are only 
illustrative of the CY 2024 OPPS payment methodology using the most 
recently available information at the time of issuance of this proposed 
rule.
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    \85\ https://www.cms.gov/medicare/medicare-fee-for-service-payment/hospitaloutpatientpps.
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    For CY 2024, we are not proposing any changes to our policies for 
payment for separately payable drugs and biologicals; and we are 
continuing our payment policy that has been in effect since CY 2013 to 
pay for separately payable drugs and biologicals in accordance with 
section 1833(t)(14)(A)(iii)(II) of the Act (the statutory default).
    We are, however, proposing to amend the regulation text to reflect 
our longstanding policies for calculating the Medicare program payment 
and copayment amounts for separately payable drugs and biologicals by 
adding a new paragraph (d) to Sec.  419.41.
b. Biosimilar Biological Products
(1) Provisions of the Inflation Reduction Act Relating to Biologicals
    The Inflation Reduction Act (Pub. L. 117-169, August 16, 2022) 
(hereinafter referred to as ``IRA'') contains two provisions that 
affect payment limits for biosimilar biological products (hereinafter 
referred to as ``biosimilars''): section 11402 of the IRA amends the 
payment limit for new biosimilars furnished on or after July 1, 2024, 
during the initial period when ASP data is not available. Section 11403 
of the IRA makes changes to the payment limit for certain biosimilars 
with an ASP that is not more than the ASP of the reference biological 
for a period of 5 years. We implemented section 11403 of the IRA under 
program instruction 86 87, as permitted under section 
1847A(c)(5)(C) of the Act.
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    \86\ https://www.cms.gov/files/document/r11496cp.pdf.
    \87\ https://www.cms.gov/medicare/medicare-fee-for-service-part-b-drugs/mcrpartbdrugavgsalesprice.
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    Section 11402 of the IRA amended section 1847A(c)(4) of the Act by 
adding subparagraph (B), which limits the payment amount for 
biosimilars during the initial period described in section 
1847A(c)(4)(A). The provision requires that for new biosimilars 
furnished on or after July 1, 2024, during the initial period when ASP 
data is not available, the payment limit for the biosimilar is the 
lesser of (1) an amount not to exceed 103 percent of the WAC of the 
biosimilar or the Medicare Part B drug payment methodology in effect on 
November 1, 2003, or (2) 106 percent of the lesser of the WAC or ASP of 
the reference biological, or in the case of a selected drug during a 
price applicability period, 106 percent of the maximum fair price of 
the reference biological. We refer readers to the CY 2024 PFS proposed 
rule for the discussion of the proposed changes to the regulation at 
Sec.  414.904 to codify section 11402 of the IRA.
    Section 11403 of the IRA amended section 1847A(b)(8) of the Act by 
establishing a temporary payment increase for qualifying biosimilar 
biological products (hereinafter referred to as ``qualifying 
biosimilars'') furnished during the applicable 5-year period.\88\ 
Section 1847(b)(8)(B)(iii) of the Act defines ``qualifying biosimilar 
biological product'' as a biosimilar biological product (as described 
in section 1847A(b)(1)(C) of the Act) with an ASP (as described in 
section 1847A(b)(8)(A)(i) of the Act) less than the ASP of the 
reference biological for a calendar quarter during the applicable 5-
year period. Section 11403 of the IRA requires that a qualifying 
biosimilar be paid at ASP plus 8 percent of the reference biological's 
ASP rather than 6 percent during the applicable 5-year period. Section 
1847A(b)(8)(B)(ii) of the Act defines the applicable 5-year period for 
a qualifying biosimilar for which payment has been made using ASP (that 
is, payment under section 1847A(b)(8) of the Act) as of September 30, 
2022, as the 5-year period beginning on October 1, 2022. For a 
qualifying biosimilar for which payment is first made using ASP during 
the period beginning October 1, 2022, and ending December 31, 2027, the 
statute defines the applicable 5-year period as the 5-year period 
beginning on the first day of such calendar quarter of such payment. We 
refer readers to the CY 2024 PFS proposed rule for the discussion of 
the proposed changes to the regulations at Sec. Sec.  414.902 and 
414.904 to codify section 11403 of the IRA.
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    \88\ https://www.congress.gov/bill/117th-congress/house-bill/5376/text?q=%7B%22search%22%3A%5B%22inflation+reduction+act%22%2C%22inflation%22%2C%22reduction%22%2C%22act%22%5D%7D&r=1&s=1.
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    Section 1833(t)(14)(A)(iii) of the Act provides for payment of 
separately covered outpatient drugs (SCODs), and currently, CMS pays 
under the OPPS for SCODs consistent with the payment methodology set 
forth in section 1833(t)(14)(A)(iii)(II) of the Act (the statutory 
default). Through rulemaking, CMS adopted a policy to apply the 
statutory default payment methodology to separately payable drugs and 
biologicals that are not SCODs (70 FR 68715 through 68716). Under this 
authority, the payment rate for SCODs and applicable separately payable 
drugs and biologicals is determined in accordance with sections 1842(o) 
and 1847A of the Act, as calculated and adjusted by the Secretary as 
necessary for purposes of paragraph (14). Because our current policy is 
to pay for separately payable drugs and biologicals at payment amounts 
determined under section 1847A, we propose that, for a separately 
payable biosimilar that is new for purposes of section 1847A(c)(4)(A), 
the OPPS payment amount would be the amount determined under section 
1847A, subject to the payment limit in section 1847A(c)(4)(A). We also 
propose that, for a separately payable biosimilar that meets the 
definition of a ``qualifying biosimilar biological product'' for 
purposes of section 1847A(b)(8)(B)(iii) of the Act, the OPPS payment 
amount for the biosimilar would be the amount determined under section 
1847A, subject to the temporary payment increase under section 
1847A(b)(8)(B)(iii). We propose to codify OPPS payment for biosimilars 
consistent with sections 1847A(c)(4)(A) and 1847A(b)(8)(B)(iii) by 
adding new paragraphs (f) and (g) to the regulation at Sec.  419.41. 
The proposed regulation text cross-references the regulation text 
included in the PFS proposed rule, which proposes to codify the 
requirements in sections 1847A(c)(4)(A) and 1847A(b)(8)(B)(iii). We 
refer readers to the PFS proposed rule for more information about those 
proposed regulations.
(2) Proposal to Except Biosimilars From the OPPS Packaging Threshold 
When Their Reference Biologicals Are Separately Paid
    Medicare Part B spending for biologicals and biosimilars has

[[Page 49682]]

significantly outpaced the spending for non-biologic drugs for the past 
16 years. According to a 2020 report from the Assistant Secretary for 
Planning and Evaluation (ASPE), the spending for biologicals and 
biosimilars represented 77 percent of Medicare Part B prescription drug 
spending in CY 2017.\89\ In a 2020 MedPAC report, the top 10 Part B 
drugs based on spending were all biologicals, and spending on them in 
the HOPD represented 39 percent of total HOPD drug spending in CY 
2019.\90\ Although Part B drug spending for biologicals and biosimilars 
has grown tremendously in the past 16 years, we also recognize that 
there is evidence that the entry of biosimilars into the market has 
contributed to lower aggregate spending for the Medicare program.\91\
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    \89\ Assistant Secretary for Planning and Evaluation. ``Medicare 
Part B Drugs: Trends in Spending and Utilization, 2006-2017.'' 
November, 2020. Available at https://aspe.hhs.gov/sites/default/files/private/pdf/264416/Part-B-Drugs-Trends-Issue-Brief.pdf.
    \90\ Medicare Payment Advisory Commission. July 2021 Data Book: 
Health Care Spending and the Medicare Program. July 2021. Available 
at https://www.medpac.gov/wp-content/uploads/import_data/scrape_files/docs/default-source/data-book/july2021_medpac_databook_sec.pdf.
    \91\ Medicare Payment Advisory Commission. July 2022 Data Book: 
Health Care Spending and the Medicare Program. July 2022. Available 
at https://www.medpac.gov/wp-content/uploads/2022/07/July2022_MedPAC_DataBook_Sec10_v2_SEC.pdf.
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    Congress has made legislative changes related to payment for 
biosimilars. First, it amended the Social Security Act to provide for 
payment of biosimilars in the Affordable Care Act (ACA) and more 
recently, in the IRA, to update payment for certain biosimilars. In 
particular, section 3139 of the ACA amended section 1847A(b) by adding 
a new paragraph (8), which provides that the payment amount for a 
biosimilar biological product is the biosimilar's ASP and 6 percent of 
the reference biological's ASP.\92\ And as explained previously, 
section 11402 of the IRA changed the payment limit for biosimilars 
during the initial period when ASP data is not available and section 
11403 of the IRA temporarily increased the payment limit for certain 
biosimilars.
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    \92\ https://www.congress.gov/111/plaws/publ148/PLAW-111publ148.pdf.
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    Our overarching policy goal is to create incentives for efficiency 
and selection of the least costly products while still meeting a 
beneficiary's clinical needs and to protect the long-term solvency of 
the Part B Trust Fund. When we established a policy to pay for 
biosimilars, we intended to promote the use of biosimilars as a less 
expensive alternative to their reference biologicals. 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 explained that, consistent with our established OPPS drug, 
biological, and radiopharmaceutical payment policy, HCPCS coding for 
biosimilar biological products will be based on policy established 
under the CY 2018 PFS final rule with comment period (82 FR 53182 to 
53187), where CMS finalized a policy to implement separate HCPCS codes 
for biosimilar biological products. We also clarified that all 
biosimilar biological products will be eligible for pass-through 
payment and not just the first biosimilar biological product for a 
reference product.
    Our threshold packaging policy's intent is to create incentives for 
efficiency, but we have concerns that packaging biosimilars when the 
reference biological or other marketed biosimilars are separately paid 
may create financial incentives for providers to select more expensive, 
but clinically similar, products. In most cases, a biosimilar either 
has pass-through status or is separately payable. However, there have 
been a few instances where biosimilars are packaged. For example, in CY 
2021, we noted that HCPCS code Q5105 (Injection, epoetin alfa-epbx, 
biosimilar, (Retacrit) (for esrd on dialysis), 100 units), was on pass-
through status through September 2021. HCPCS code Q5105 is a biosimilar 
for HCPCS code Q4081 (injection, epoetin alfa, 1000 units (for esrd on 
dialysis)) and HCPCS code Q4081 is currently packaged under the OPPS. 
After HCPCS code Q5105's pass-through status expired, payment for HCPCS 
code Q5105 was packaged because its per day cost fell below our 
packaging threshold of $130 for CY 2021. In CY 2023, payment for HCPCS 
code Q5101 (Injection, filgrastim-sndz, biosimilar, (zarxio), 1 
microgram) is packaged because its per day cost fell below our 
packaging threshold of $135 for CY 2023. HCPCS code Q5101 is the 
biosimilar for HCPCS code J1442 (Injection, filgrastim (g-csf), 
excludes biosimilars, 1 microgram), which is currently separately 
payable with a status indicator ``K.''
    Packaging payment for both of these biosimilars is consistent with 
our policy since CY 2018 to subject non-pass through biosimilars to the 
OPPS threshold-packaging policy. However, we believe this policy may 
create incentives to use the more expensive reference product or 
biosimilars that are separately payable, as hospitals would be paid 
less for using the threshold-packaged biosimilar. For example, the CY 
2023 threshold packaging of the biosimilar described by HCPCS code 
Q5101 (Injection, filgrastim-sndz, biosimilar, (zarxio), 1 microgram) 
may have created a financial incentive for providers to select the 
separately paid reference biological or the separately paid filgrastim 
biosimilar over the packaged filgrastim biosimilar, which is 
inconsistent with our policy goal of encouraging efficiency and 
promoting use of biosimilars as lower cost alternatives to their 
reference biologicals. Accordingly, for CY 2024, we propose to except 
biosimilars from the OPPS threshold packaging policy when their 
reference biologicals are separately paid, meaning we would pay 
separately for these biosimilars even if their per-day cost is below 
the threshold packaging policy. We believe the threshold packaging 
exception for biosimilars when their reference biologicals are 
separately paid would preserve our policy intent to promote biosimilar 
use as a lower cost alternative to higher cost reference biologicals.
    In addition, if a reference product's per-day cost falls below the 
threshold packaging policy, we propose that all the biosimilars related 
to the reference product would be similarly packaged regardless of 
whether their per-day costs are above the threshold. This would allow 
for consistent treatment of similar biological products in the unusual 
circumstance in which a biosimilar is priced above the reference 
biological. For the purpose of identifying biosimilar(s) related to a 
reference biological product, we would rely on the product's FDA 
approval under section 351(k) of the Public Health Service Act. For 
example, filgrastim-sndz (Zarxio), filgrastim-aafi (Nivestym), and 
filgrastim-ayow (Releuko) are biosimilars related to filgrastim 
(Neupogen).\93\
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    \93\ https://purplebooksearch.fda.gov/results?query=filgrastim&title=Zarxio.
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    (3) Comment Solicitation on Packaging Policy for Reference 
Biologicals and Biosimilars

[[Page 49683]]

    While we have proposed to except threshold packaging of biosimilars 
when their reference biologicals are separately paid in this proposed 
rule, we are also soliciting comment on the packaging of payment for a 
reference biological and its biosimilar(s) into the payment for the 
associated service or procedure when the per-day cost of the reference 
biological, or any of its biosimilar(s), is less than or equal to the 
applicable OPPS drug packaging threshold. While both our proposed 
policy and the policy described by this comment solicitation share the 
goal of consistent treatment of similar biologic products, the method 
to achieve that goal differs. Our proposed policy would result in 
biosimilars being paid separately if their reference biologic is paid 
separately, whereas here we seek comment on a policy that would result 
in packaged payment for a biologic if the reference biologic or any of 
its biosimilars have per day costs below the drug packaging threshold.
    For example, for purposes of this comment solicitation, if a 
biosimilar's per-day cost is above the threshold and separately paid 
but its reference product is packaged, the biosimilar (and all its 
related biosimilar(s)) would be packaged.
    Additionally, we seek comment on other ways to structure payment 
for biologicals and biosimilars that would encourage efficiency while 
maintaining beneficiary access.
3. Payment Policy for Therapeutic Radiopharmaceuticals
    In the CY 2023 OPPS/ASC final rule with comment period, we adopted 
as final our proposal to continue our longstanding payment policy for 
therapeutic radiopharmaceuticals for CY 2023 and subsequent years. 
Accordingly, we are continuing this payment policy for therapeutic 
radiopharmaceuticals in CY 2024. We pay for separately payable 
therapeutic radiopharmaceuticals under the ASP methodology adopted for 
separately payable drugs and biologicals. If ASP methodology (ASP, WAC, 
and AWP) information is unavailable for a therapeutic 
radiopharmaceutical, we base therapeutic radiopharmaceutical payment on 
mean unit cost data derived from hospital claims. 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. Therefore, we are paying for all nonpass-through, 
separately payable therapeutic radiopharmaceuticals at ASP plus 6 
percent (or applicable WAC or AWP amount) 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).
    Consistent with the policy we adopted for CY 2023 and subsequent 
years, for CY 2024 we will rely on the most recently available mean 
unit cost data derived from hospital claims data for payment rates for 
therapeutic radiopharmaceuticals for which ASP methodology (ASP, WAC, 
and AWP) 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 methodology 
(ASP, WAC, and AWP) 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 2024 payment rates for nonpass-through, separately 
payable therapeutic radiopharmaceuticals are included in Addenda A and 
B of this proposed rule (which are available on the CMS website).\94\
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4. Payment for Blood Clotting Factors
    For CY 2023, we provided payment for blood clotting factors under 
the same methodology as other nonpass-through separately payable drugs 
and biologicals under the OPPS and continued paying an updated 
furnishing fee (87 FR 71969 through 71970). That is, for CY 2023, we 
provided payment for blood clotting factors under the OPPS at ASP plus 
6 percent, plus an additional payment for the furnishing fee. We note 
that when blood clotting factors are provided in physicians' offices or 
other settings for which Medicare makes payment under Part B, a 
furnishing fee is also applied to the payment. The CY 2023 updated 
furnishing fee was $0.250 per unit.
    In the CY 2023 OPPS/ASC final rule with comment period, we adopted 
as final our proposal for CY 2023 and subsequent years to pay for blood 
clotting factors at ASP plus 6 percent, consistent with our payment 
policy for other nonpass-through, separately payable drugs and 
biologicals, and to pay an updated furnishing fee. 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 will announce 
the actual figure for the percent change in the applicable CPI and the 
updated furnishing fee calculated based on that figure through 
applicable program instructions and posting on our website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice/index.html.
5. Payment for Nonpass-Through Drugs, Biologicals, and 
Radiopharmaceuticals with HCPCS Codes But Without OPPS Hospital Claims 
Data
    In the CY 2023 OPPS/ASC final rule with comment period, we adopted 
as final our proposal to continue our longstanding payment policy for 
nonpass-through drugs, biologicals, and radiopharmaceuticals with HCPCS 
codes but without OPPS hospital claims data for CY 2023 and subsequent 
years. For CY 2024, we will continue to use the same payment policy as 
in CY 2023 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). Consistent with our policy, because we 
have no claims data and must determine if these products exceed the 
per-day cost threshold, we estimated the average number of units of 
each product that would typically be furnished to a patient during 1 
day in the hospital

[[Page 49684]]

outpatient setting and utilized the ASP methodology to determine their 
proposed payment status indicators. We refer readers to Table 40 below 
for the proposed CY 2024 status indicator for each of the nonpass-
through drugs, biologicals, and radiopharmaceuticals with HCPCS codes 
but without OPPS hospital claims data which are also listed in Addendum 
B to this proposed rule, which is available on the CMS website.\95\
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6. Proposed OPPS Payment Methodology for 340B Purchased Drugs and 
Biologicals
a. Overview
    Under the OPPS, we generally set payment rates for separately 
payable drugs and biologicals under section 1833(t)(14)(A) of the Act. 
Section 1833(t)(14)(A)(iii)(II) of the Act 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) 
of the Act, which cross-references section 1847A of the Act, which 
generally sets a default rate of ASP plus 6 percent for certain drugs 
and biologicals. The provision also provides that the average price for 
the drug or biological in the year as established under section 1847A 
of the Act 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 and 
biologicals, which was based on findings of the GAO \96\ and MedPAC 
\97\ that 340B hospitals were acquiring drugs and biologicals at a 
significant discount under HRSA's 340B Drug Pricing Program. We direct 
readers to the CY 2018 OPPS/ASC final rule with comment period for a 
more detailed discussion of the 340B drug payment policy (82 FR 52493 
to 52511).
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    \96\ Government Accountability Office. ``Medicare Part B Drugs: 
``Action Needed to Reduce Financial Incentives to Prescribe 340B 
Drugs at Participating Hospitals.'' June 2015. Available at https://www.gao.gov/assets/gao-15-442.pdf.
    \97\ Medicare Payment Advisory Commission. March 2016 Report to 
the Congress: Medicare Payment Policy. March 2016. Available at 
Medicare Payment Advisory Commission. March 2016 Report to the 
Congress: Medicare Payment Policy. March 2016. Available at https://www.medpac.gov/document/http-www-medpac-gov-docs-default-source-reports-may-2015-report-to-the-congress-overview-of-the-340b-drug-pricing-program-pdf/.
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    This policy has been the subject of extensive litigation, including 
before the Supreme Court of the United States. On June 15, 2022, the 
Supreme Court held in American Hospital Association v. Becerra, 142 S. 
Ct. 1896, that if CMS has not conducted a survey of hospitals' 
acquisition costs, it may not vary the payment rates for outpatient 
prescription drugs by hospital group. While the Supreme Court's 
decision addressed payment rates for CYs 2018 and 2019, it had 
implications for subsequent payment rates. Therefore, for CY 2023, we 
finalized a policy to revert to the default payment rate, which is 
generally ASP plus 6 percent, for 340B acquired drugs and biologicals 
and finalized a policy to 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 also finalized a budget 
neutrality adjustment to the CY 2023 OPPS conversion factor of 0.9691 
percent rather than the 0.9596 percent adjustment we had proposed. This 
adjustment offset 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 neutral manner and ensured the CY 2023 conversion 
factor was equivalent to the conversion factor that would be in place 
if the 340B drug payment policy had never been implemented.
    After the publication of the proposed CY 2023 OPPS rule, on 
September 28, 2022, the District Court issued a final judgment vacating 
the 340B reimbursement rate for the remainder of 2022, which the 
District Court explained would automatically reestablish the default 
rate for 340B-acquired drugs and biologicals. The agency took the 
necessary steps, including issuing instructions to

[[Page 49687]]

Medicare contractors and updating drug payment files, to implement that 
September 28, 2022 decision and has since paid the default rate, which 
is generally ASP plus 6 percent, for 340B acquired drugs and 
biologicals.\98\
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    \98\ Vacating Differential Payment Rate for 340B-Acquired Drugs 
in 2022 Outpatient Prospective Payment System Final Rule with 
Comment Period. https://www.cms.gov/medicare/medicare-fee-for-service-payment/hospitaloutpatientpps.
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b. Payment for 340B Drugs and Biologicals in CYs 2018 Through 2022
    For full descriptions of our OPPS payment policy for drugs and 
biologicals acquired under the 340B program beginning in CY 2018, 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); the CY 2022 OPPS/
ASC final rule with comment period (86 FR 63640 through 63649); and the 
CY 2023 OPPS/ASC final rule with comment period (87 FR 71970 through 
71976).
    In July, 2023, CMS published a proposed rule, referred to as 
``remedy proposed rule'' to address the reduced payment amounts to 340B 
hospitals under the reimbursement rates in the final OPPS rules for CYs 
2018 through 2022 and to comply with the statutory requirement to 
maintain budget neutrality under the OPPS. The remedy proposed rule 
does not propose changes to our CY 2024 OPPS drug payment policy nor 
the CY 2024 OPPS conversion factor, but it does propose changes to the 
calculation of the OPPS conversion factor beginning in CY 2025. We 
believe our proposed remedy rule is consistent with the Supreme Court's 
decision in American Hospital Association and the District Court's 
remand order. We refer readers to the 340B remedy proposed rule for a 
full description of this proposed remedy policy as well as for when 
comments are due to that proposed rule. This document can be found in 
the Federal Register and on the CMS website.\99\
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c. CY 2024 Proposed 340B Drug Payment Policy
    For CY 2024, consistent with our policy finalized for CY 2023, we 
propose to continue to pay the statutory default rate, which is 
generally ASP plus 6 percent, for 340B acquired drugs and biologicals. 
The payment for 340B acquired drugs and biologicals will not differ 
from the payment rate for drugs and biologicals not acquired through 
the 340B program. We believe this policy is appropriate given the 
Supreme Court decision discussed previously.
    In the CY 2023 OPPS/ASC final rule with comment period, we 
maintained the requirement that 340B hospitals report the ``JG'' (Drug 
or biological acquired with 340B drug pricing program discount, 
reported for informational purposes) or ``TB'' (Drug or biological 
acquired with 340B drug pricing program discount, reported for 
informational purposes for select entities) modifiers to identify drugs 
and biologicals acquired through the 340B Program for informational 
purposes (87 FR 71974). We explained that we believed maintaining both 
modifiers would reduce provider burden compared to shifting to a single 
modifier, as all providers can continue utilizing the modifier (either 
``JG'' or ``TB'') that they had been using for the previous five 
calendar years. On December 20, 2022, we issued ``Part B Inflation 
Rebate Guidance: Use of 340B Modifiers,'' which, in accordance with 
section 1847A(i) of the Act, requires all 340B covered entities, 
including hospital-based and non-hospital-based entities, to report the 
applicable modifier for separately payable drugs and biologicals 
acquired through the 340B Program.\100\ Section 1847A(i) of the Act, as 
added by the Inflation Reduction Act, requires the Secretary to 
establish a Part B inflation rebate by manufacturers of certain single 
source drugs and biologicals with prices increasing faster than the 
rate of inflation. Section 1847A(i)(3)(B)(ii)(I) of the Act 
specifically excludes units of drugs and biologicals for which the 
manufacturer provides a discount under the 340B program from the units 
of drugs and biologicals for which a manufacturer otherwise may have a 
Part B inflation rebate liability. Effective implementation of the Part 
B inflation rebate requires CMS to identify units of drugs and 
biologicals acquired through the 340B Program so they can be subtracted 
from the total number of otherwise rebatable units as applicable. This 
guidance explained that the ``JG'' and ``TB'' modifiers provide an 
existing mechanism to identify drugs and biologicals acquired through 
the 340B Program that is familiar to most 340B covered entities paid 
under the OPPS, and stated that it did not change the requirements in 
the CY 2023 OPPS/ASC final rule with comment period (i.e., that 340B 
covered entity hospitals should continue to use the modifiers they used 
previously to identify 340B drugs and biologicals). For claims with 
dates of service beginning no later than January 1, 2024, the guidance 
instructed all 340B covered entities to report the appropriate 
modifier, including those not currently reporting the ``JG'' or ``TB'' 
modifier, such as Ryan White clinics and hemophilia clinics, which 
should report the ``JG'' modifier on separately payable Part B claim 
lines for drugs and biologicals acquired through the 340B Program.
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    \100\ https://www.cms.gov/files/document/part-b-inflation-rebate-guidance340b-modifierfinal.pdf.
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    Although we stated in the CY 2023 OPPS/ASC final rule with comment 
period and in the ``Part B Inflation Rebate Guidance: Use of 340B 
Modifiers'' that hospital-based 340B covered entities should continue 
to use the modifier they used previously (either the ``JG'' or ``TB'' 
modifier), we now believe utilizing a single modifier will allow for 
greater simplicity, especially because both modifiers are used for the 
same purpose: to identify separately payable drugs and biologicals 
acquired under the 340B Program. Requiring hospitals to report a single 
modifier would allow CMS to continue to identify and exclude 340B-
acquired drugs and biologicals from the definition of units for the 
purpose of Part B inflation rebate liability, while eliminating the 
need to use two modifiers for the same purpose. Additionally, we 
believe this proposal would lessen the burden on providers as they 
would only have to report one modifier for all scenarios in which a 
340B drug is acquired. Accordingly, we propose that all 340B covered 
entity hospitals paid under the OPPS would report the ``TB'' modifier 
effective January 1, 2025, even if the hospital previously reported the 
``JG'' modifier.
    The ``JG'' modifier would remain effective through December 31, 
2024. Hospitals that currently report the ``JG'' modifier could choose 
to continue to use it in CY 2024 or choose to transition to use of the 
``TB'' modifier during that year. Beginning on January 1, 2025, the 
``JG'' modifier would be deleted and hospitals would be required to 
report drugs and biologicals acquired through the 340B program using 
the ``TB'' modifier. Additionally, beginning January 1, 2025, we would 
revise the ``TB'' modifier descriptor (Drug or biological acquired with 
340B drug pricing program discount, reported for informational purposes 
for select entities) to no longer include ``. . . for select entities'' 
as all entities would report this modifier after this date. We note 
that this proposal, if finalized, would update the December 20, 2022, 
guidance titled ``Part B Inflation Rebate Guidance: Use of the 340B

[[Page 49688]]

Modifiers.'' \101\ Additionally, CMS plans to further update this 
guidance to align the modifier requirements for 340B covered entity 
providers and suppliers not paid under the OPPS with proposed modifier 
requirement changes for 340B covered entity hospitals paid under the 
OPPS.
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    \101\ https://www.cms.gov/files/document/part-b-inflation-rebate-guidance340b-modifierfinal.pdf.
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    For more information on the Medicare Part B inflation rebate 
program, please visit ``Inflation Rebates in Medicare.''
7. High Cost/Low Cost Threshold for Packaged Skin Substitutes
a. Background
    In the CY 2014 OPPS/ASC final rule with comment period (78 FR 
74938), we unconditionally packaged skin substitute products into their 
associated surgical procedures as part of a broader policy to package 
all drugs and biologicals that function as supplies when used in a 
surgical procedure. As part of the policy to package skin substitutes, 
we also finalized a methodology that divides the skin substitutes into 
a high-cost group and a low-cost group, 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 2023, the payment rate for APC 
5053 (Level 3 Skin Procedures) was $580.95, the payment rate for APC 
5054 (Level 4 Skin Procedures) was $1,725.86, and the payment rate for 
APC 5055 (Level 5 Skin Procedures) was $3,253.04. This information is 
also available in Addenda A and B of the CY 2023 final rule with 
comment period (87 FR 71748) (the final rule and Addenda A and B are 
available on the CMS website (https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices)).
    We have continued the high cost/low cost categories policy since CY 
2014, and we propose to continue it for CY 2024. 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 
did not exceed either the MUC threshold or the PDC threshold to the 
low-cost group (87 FR 71976).
    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 
interested parties were concerned that the inclusion of cost data from 
skin substitutes with pass-through payment status in the MUC and PDC 
calculations would artificially inflate the thresholds. Skin substitute 
interested parties requested that CMS consider alternatives to the 
current methodology used to calculate the MUC and PDC thresholds and 
whether it might be appropriate to establish a new cost group in 
between the low-cost group and the high-cost group to allow for 
assignment of moderately priced skin substitutes to a newly created 
middle group.
    We share the goal of promoting payment stability for skin 
substitute products and their related procedures as price stability 
allows hospitals using such products to more easily anticipate future 
payments associated with these products. We have attempted to limit 
year-to-year shifts for skin substitute products between the high-cost 
and low-cost groups through multiple initiatives implemented since CY 
2014, including: establishing separate skin substitute application 
procedure codes for low-cost skin substitutes (78 FR 74935); using a 
skin substitute's MUC calculated from outpatient hospital claims data 
instead of an average of ASP plus 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 
interested parties 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

[[Page 49689]]

59347); CY 2019 OPPS/ASC final rule with comment period (83 FR 58967 to 
58968); and the CY 2020 OPPS/ASC final rule with comment period (84 FR 
61328 to 61331).
b. Proposals for Packaged Skin Substitutes for CY 2024
    For CY 2024, consistent with our policy since CY 2016, we propose 
to continue to determine the high-cost/low-cost status for each skin 
substitute product based on either a product's geometric MUC exceeding 
the geometric MUC threshold or the product's PDC (the total units of a 
skin substitute multiplied by the MUC and divided by the total number 
of days) exceeding the PDC threshold. Consistent with the methodology 
as established in the CY 2014 OPPS/ASC through CY 2018 OPPS/ASC final 
rules with comment period, we analyzed CY 2022 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 2024 MUC threshold is $47 per cm\2\ (rounded to 
the nearest $1) and the proposed CY 2024 PDC threshold is $817 (rounded 
to the nearest $1). Also, the availability of a HCPCS code for a 
particular human cell, tissue, or cellular or tissue-based product 
(HCT/P) does not mean that that product is appropriately regulated 
solely under section 361 of the PHS Act and the FDA regulations in 21 
CFR part 1271. Manufacturers of HCT/Ps should consult with the FDA 
Tissue Reference Group (TRG) or obtain a determination through a 
Request for Designation (RFD) on whether their HCT/Ps are appropriately 
regulated solely under section 361 of the PHS Act and the regulations 
in 21 CFR part 1271.
    For CY 2024, as we did for CY 2023, we propose to assign each skin 
substitute that exceeds either the MUC threshold or the PDC threshold 
to the high-cost group. In addition, we propose to assign any skin 
substitute that does not exceed either the MUC threshold or the PDC 
threshold to the low-cost group except that we propose that any skin 
substitute product that was assigned to the high-cost group in CY 2023 
would be assigned to the high-cost group for CY 2024, regardless of 
whether it exceeds or falls below the CY 2024 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 2024, we propose to continue to assign skin substitutes with 
pass-through payment status to the high-cost category. We propose to 
assign skin substitutes with pricing information but without claims 
data to calculate a geometric MUC or PDC to either the high-cost or 
low-cost category based on the product's ASP plus 6 percent payment 
rate as compared to the MUC threshold. If ASP is not available, we 
propose to use WAC plus 3 percent to assign a product to either the 
high-cost or low-cost category. Finally, if neither ASP nor WAC is 
available, we propose to use 95 percent of AWP to assign a skin 
substitute to either the high-cost or low-cost category. We propose to 
continue to use WAC plus 3 percent instead of WAC plus 6 percent to 
conform to our proposed policy described in section V.B.2.b of this 
proposed rule to establish a payment rate of WAC plus 3 percent for 
separately payable drugs and biologicals that do not have ASP data 
available. We propose that any skin substitute product that is assigned 
a code in the HCPCS A2XXX series would be assigned to the high-cost 
skin substitute group including new products without pricing 
information. New skin substitutes without pricing information that are 
not assigned a code in the HCPCS A2XXX series would be assigned to the 
low-cost category until pricing information is available to compare to 
the CY 2024 MUC and PDC thresholds. For a discussion of our existing 
policy under which we assign skin substitutes without pricing 
information that are not assigned a code in the HCPCS A2XXX series 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).
    Table 41 includes the proposed CY 2024 cost category assignment for 
each skin substitute product.
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8. Radioisotopes Derived From Non-Highly Enriched Uranium (Non-HEU) 
Sources
    Radioisotopes are widely used in modern medical imaging, 
particularly for cardiac imaging and predominantly for the Medicare 
population. Some of the Technetium-99 (Tc-99m), the radioisotope used 
in the majority of such diagnostic imaging services, has been produced 
in legacy reactors outside of the United States using highly enriched 
uranium (HEU).
    The United States wanted to eliminate domestic reliance on these 
reactors and has been promoting the conversion of all medical 
radioisotope production to non-HEU sources. Alternative methods for 
producing Tc-99m without HEU are technologically and economically 
viable, but it was expected that this change in the supply source for 
the radioisotope used for modern medical imaging would introduce new 
costs into the payment system that were not accounted for in the 
historical claims data.
    Therefore, beginning in CY 2013, we finalized a policy to provide 
an additional payment of $10 for the marginal cost for radioisotopes 
produced by non-HEU sources (77 FR 68323). Under this policy, hospitals 
report HCPCS code Q9969 (Tc-99m from non-highly enriched uranium 
source, full cost recovery add-on per study dose) once per dose along 
with any diagnostic scan or scans furnished using Tc-99m as long as the 
Tc-99m doses used can be certified by the hospital to be at least 95 
percent derived from non-HEU sources (77 FR 68323).
    We stated in the CY 2013 OPPS/ASC final rule with comment period 
(77 FR 68321) that our expectation was that this additional payment 
would be needed for the duration of the industry's conversion to 
alternative methods of producing Tc-99m without HEU. We

[[Page 49694]]

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.\102\ However, the 
Secretary of Energy issued a certification effective January 2, 2020, 
stating that there continued to be an insufficient global supply of 
molybdenum-99 (Mo-99), which is the source of Tc-99m, produced without 
the use of HEU, available to satisfy the domestic U.S. market (85 FR 
3362). The January 2, 2020 certification was to remain in effect for up 
to 2 years.
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    \102\ National Academies of Sciences, Engineering, and Medicine. 
2016. Molybdenum-99 for Medical Imaging. Washington, DC: The 
National Academies Press. Available at: https://doi.org/10.17226/23563.
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    The Secretary of Energy issued a new certification regarding the 
supply of non-HEU-sourced Mo-99 effective January 2, 2022 (86 FR 
73270). This certification stated that there was 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 
expected that the last HEU reactor that produces Mo-99 for medical 
providers in the United States would finish its conversion to a non-HEU 
reactor by December 31, 2022. In CY 2019, we stated that we would 
reassess the non-HEU incentive payment policy once conversion to non-
HEU sources is closer to completion or has been completed (83 FR 
58979). There is now a sufficient supply of non-HEU-sourced Mo-99 in 
the United States, and there is no available supply of HEU-sourced Mo-
99 in the United States. In the CY 2023 OPPS/ASC final rule with 
comment period, we stated that we believed the conversion to non-HEU 
sources of Tc-99m had reached a point where it was necessary to 
reassess our policy of providing an additional payment of $10 for the 
marginal cost for radioisotopes produced by non-HEU sources (87 FR 
71987).
    In the OPPS, diagnostic radiopharmaceuticals are packaged into the 
cost of the associated diagnostic imaging procedure no matter the per 
day cost 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 2 years prior to the payment year.
    As we explained in the CY 2023 OPPS/ASC final rule with comment 
period (87 FR 71987), the claims data we would use to set payment rates 
for CY 2024 (likely CY 2022 claims data) contain claims for diagnostic 
radiopharmaceuticals that 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, we explained that 
providers who use radiopharmaceuticals in CY 2024 that contain only 
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 believed 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, we believed the Medicare claims data utilized to set 
payment rates (likely CY 2023 claims data) would only include claims 
for diagnostic radiopharmaceuticals that utilized non-HEU-sourced Tc-
99m, meaning the data would reflect the full cost of the Tc-99m 
diagnostic radiopharmaceuticals that would be used by providers in CY 
2025. As a result, we believed there would no longer be a need for the 
additional $10 add-on payment for CY 2025 or future years.
    This policy was based on the Secretary of Energy's certification 
that the last HEU reactor that produces Mo-99 for medical providers in 
the United States would finish its conversion to a non-HEU reactor by 
December 31, 2022, and that all Tc-99m used for radiopharmaceuticals in 
2023 would be produced from non-HEU sources. However, we understand 
that the conversion of the last HEU reactor that produces Tc-99m to a 
non-HEU reactor did not occur until March 2023, so it is possible that 
some claims for diagnostic radiopharmaceuticals in CY 2023 would report 
the cost of HEU-sourced Tc-99m. This means that in CY 2025, as in CY 
2024, there is the possibility that the payment rate for procedures 
using diagnostic radiopharmaceuticals could be lower than the costs 
providers will face for these procedures because providers will only 
have access to non-HEU-sourced Tc-99m.
    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 2025 rather than the end of CY 2024, as we previously 
finalized, would ensure adequate payment for non-HEU-sourced Tc-99m now 
that the conversion from HEU-sourced Tc-99m to non-HEU-sourced Tc-99m 
is complete. Starting in CY 2026, the Medicare claims data utilized to 
set payment rates (likely CY 2024 claims data) will only include claims 
for diagnostic radiopharmaceuticals that utilized non-HEU-sourced Tc-
99m, which means the data will more closely reflect the cost of the Tc-
99m diagnostic radiopharmaceuticals that will be used by providers in 
CY 2026. As a result, there will no longer be a need for the additional 
$10 add-on payment for CY 2026 or future years.
    We propose to continue the additional $10 payment through December 
31, 2025, as beginning in CY 2026, the Medicare claims data used to set 
payment rates will reflect the full cost of non-HEU-sourced Tc-99m.

C. Requirement in the Physician Fee Schedule CY 2024 Proposed Rule for 
HOPDs and ASCs To Report Discarded Amounts of Certain Single-Dose or 
Single-Use Package Drugs

    Section 90004 of the Infrastructure Investment and Jobs Act (Pub. 
L. 117-9, November 15, 2021) (``the Infrastructure Act'') amended 
section 1847A of the Act to re-designate subsection (h) as subsection 
(i) and insert a new subsection (h), which requires manufacturers to 
provide a refund to CMS for certain discarded amounts from a refundable 
single-dose container or single-use package drug. The CY 2024 PFS 
proposed rule includes proposals to operationalize section 90004 of the 
Infrastructure Act, including a proposal that impacts hospital 
outpatient departments (HOPDs) and ambulatory surgical centers (ASCs). 
Similar to our CY 2023 notice in the OPPS/ASC proposed rule (87 FR 
71988), we want to ensure interested parties are aware of these 
proposals and know to refer to the Physician Fee Schedule (PFS) 
proposed rule for a full description of the proposed policy. Interested 
parties are asked to submit comments on any proposals related to 
implementation of section 90004 of the Infrastructure Act on the CY 
2024 PFS proposed rule. Public comments on these proposals will be 
addressed in the CY 2024 PFS final rule with comment period. We note 
that this same notice appears in section XIII.D.3 of this proposed 
rule.

[[Page 49695]]

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

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

    Section 1833(t)(6)(E) of the Act limits the total projected amount 
of transitional pass-through payment for drugs, biologicals, and 
categories of devices for a given year to an ``applicable percentage,'' 
currently not to exceed 2.0 percent of total program payments estimated 
to be made for all covered services under the OPPS furnished for that 
year. If we estimate before the beginning of the calendar year that the 
total amount of pass-through payments in that year would exceed the 
applicable percentage, section 1833(t)(6)(E)(iii) of the Act requires a 
uniform prospective reduction in the amount of each of the transitional 
pass-through payments made in that year to ensure that the limit is not 
exceeded. We estimate the pass-through spending to determine whether 
payments exceed the applicable percentage and the appropriate pro rata 
reduction to the conversion factor for the projected level of pass-
through spending in the following year to ensure that total estimated 
pass-through spending for the prospective payment year is budget 
neutral, as required by section 1833(t)(6)(E) of the Act.
    For devices, developing a proposed estimate of pass-through 
spending in CY 2024 entails estimating spending for two groups of 
items. The first group of items consists of device categories that are 
currently eligible for pass-through payment and that will continue to 
be eligible for pass-through payment in CY 2024. The CY 2008 OPPS/ASC 
final rule with comment period (72 FR 66778) describes the methodology 
we have used in previous years to develop the pass-through spending 
estimate for known device categories continuing into the applicable 
update year. The second group of items consists of devices that we know 
are newly eligible, or project may be newly eligible, for device pass-
through payment in the remaining quarters of CY 2023 or beginning in CY 
2024. The sum of the proposed CY 2024 pass-through spending estimates 
for these two groups of device categories equals the proposed total CY 
2024 pass-through spending estimate for device categories with pass-
through payment status. We determined the device pass-through estimated 
payments for each device category based on the amount of payment as 
required by section 1833(t)(6)(D)(ii) of the Act, and as outlined in 
previous rules, including the CY 2014 OPPS/ASC final rule with comment 
period (78 FR 75034 through 75036). We note that, beginning in CY 2010, 
the pass-through evaluation process and pass-through payment 
methodology for implantable biologicals newly approved for pass-through 
payment beginning on or after January 1, 2010, that are surgically 
inserted or implanted (through a surgical incision or a natural 
orifice) use the device pass-through process and payment methodology 
(74 FR 60476). As has been our past practice (76 FR 74335), in the 
proposed rule, we proposed to include an estimate of any implantable 
biologicals eligible for pass-through payment in our estimate of pass-
through spending for devices. Similarly, we finalized a policy in CY 
2015 that applications for pass-through payment for skin substitutes 
and similar products be evaluated using the medical device pass-through 
process and payment methodology (76 FR 66885 through 66888). Therefore, 
as we did beginning in CY 2015, for CY 2024, we also propose to include 
an estimate of any skin substitutes and similar products in our 
estimate of pass-through spending for devices.
    For drugs and biologicals eligible for pass-through payment, 
section 1833(t)(6)(D)(i) of the Act establishes the pass-through 
payment amount as the amount by which the amount authorized under 
section 1842(o) of the Act (or, if the drug or biological is covered 
under a competitive acquisition contract under section 1847B of the 
Act, an amount determined by the Secretary equal to the average price 
for the drug or biological for all competitive acquisition areas and 
year established under such section as calculated and adjusted by the 
Secretary) exceeds the portion of the otherwise applicable fee schedule 
amount that the Secretary determines is associated with the drug or 
biological. Consistent with current policy, we propose to apply a rate 
of ASP plus 6 percent to most drugs and biologicals for CY 2024, and 
therefore our estimate of drug and biological pass-through payment for 
CY 2024 for this group of items is $100 million.
    Payment for certain drugs, specifically diagnostic 
radiopharmaceuticals and contrast agents without pass-through payment 
status, is packaged into payment for the associated procedures, and 
these products are not separately paid. In addition, we policy-package 
all non pass-through drugs, biologicals, and radiopharmaceuticals that 
function as supplies when used in a diagnostic test or procedure, drugs 
and biologicals that function as supplies when used in a surgical 
procedure, drugs and biologicals used for anesthesia, and other 
categories of drugs and biologicals, as discussed in section V.B.1.c of 
this proposed rule. Consistent with current policy, propose that all of 
these policy-packaged drugs and biologicals with pass-through payment 
status would generally be paid at ASP plus 6 percent, like other pass-
through drugs and biologicals, for CY 2024, less the policy-packaged 
drug APC offset amount described below. Our estimate of passthrough 
payment for policy-packaged drugs and biologicals with pass-through 
payment status approved prior to CY 2024 is not $0. This is because the 
pass-through payment amount and the fee schedule amount associated with 
the drug or biological will not be the same, unlike for separately 
payable drugs and biologicals. In section V.A.6 of this proposed rule, 
we discuss our policy to determine if the costs of certain policy-
packaged drugs or biologicals are already packaged into the existing 
APC structure. If we determine that a policy-packaged drug or 
biological approved for pass-through payment resembles predecessor 
drugs or biologicals already included in the costs of the APCs that are 
associated with the drug receiving passthrough payment, we propose to 
offset the amount of pass-through payment for the policy-packaged drug 
or biological. For these drugs or biologicals, the APC offset amount is 
the portion of the APC payment for the specific procedure performed 
with the pass-through drug or biological, which we refer to as the 
policy-packaged drug APC offset amount. Consistent with current policy, 
if we determine that an offset is appropriate for a specific policy-
packaged drug or biological receiving pass-through payment, we propose 
to reduce our estimate of pass-through payments for these drugs or 
biologicals by the APC offset amount.
    Similar to pass-through spending estimates for devices, the first 
group of drugs and biologicals requiring a pass-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 2024. 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 2023 or beginning in CY 2024. 
The sum of the CY 2024 pass-through spending estimates for these two 
groups of drugs and biologicals equals the total CY 2024 pass-through 
spending estimate for

[[Page 49696]]

drugs and biologicals with pass-through payment status.

B. Proposed Estimate of Pass-Through Spending for CY 2024

    For CY 2024, we propose to set the applicable pass-through payment 
percentage limit at 2.0 percent of the total projected OPPS payments 
for CY 2024, consistent with section 1833(t)(6)(E)(ii)(II) of the Act 
and our OPPS policy from CY 2004 through CY 2023 (87 FR 719889). The 
pass-through payment percentage limit is calculated using pass-through 
spending estimates for devices and for drugs and biologicals.
    For the first group of devices, consisting of device categories 
that are currently eligible for pass-through payment and will continue 
to be eligible for pass-through payment in CY 2024, there are 7 active 
categories for CY 2024. The active categories are described by HCPCS 
codes C1747, C1761, C1826, C1827, C1831, C1832, and C1833. Based on the 
information from the device manufacturers, we estimate that HCPCS code 
C1747 will cost $37.5 million in pass-through expenditures in CY 2024, 
HCPCS code C1761 will cost $19.6 million in pass-through expenditures 
in CY 2024, HCPCS code C1826 will cost $7.4 million in pass-through 
expenditures in CY 2024, HCPCS code C1827 will cost $28.8 million in 
pass-through expenditures in CY 2024, HCPCS code C1831 will cost 
$163,436 in pass-through expenditures in CY 2024, HCPCS code C1832 will 
cost $37,603 in pass-through expenditures in CY 2024, and HCPCS code 
C1833 will cost $281,238 in pass-through expenditures in CY 2024. 
Therefore, we propose an estimate for the first group of devices of 
$93.7 million.
    In estimating our proposed CY 2024 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 2024; additional device 
categories that we estimated could be approved for pass-through status 
after the development of this proposed rule and before January 1, 2024; 
and contingent projections for new device categories established in the 
second through fourth quarters of CY 2024. For CY 2024, we propose to 
use the general methodology described in the CY 2008 OPPS/ASC final 
rule with comment period (72 FR 66778), while also taking into account 
recent OPPS experience in approving new pass-through device categories. 
For this proposed rule, the proposed estimate of CY 2024 pass-through 
spending for this second group of device categories is $40.4 million.
    To estimate proposed CY 2024 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 2024, we propose to use the CY 2022 Medicare hospital outpatient 
claims data regarding their utilization, information provided in the 
respective pass-through applications, other historical hospital claims 
data, pharmaceutical industry information, and clinical information 
regarding these drugs and biologicals to project the CY 2024 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 2024, we estimate the pass-
through payment amount as the difference between ASP plus 6 percent and 
the payment rate for non pass-through drugs and biologicals that will 
be separately paid. Because we propose to apply a payment rate of ASP 
plus 6 percent to most drugs and biologicals in this proposed rule, the 
proposed payment rate difference between the pass-through payment 
amount and the non pass-through payment amount is $0 for this group of 
drugs.
    Because payment for policy-packaged drugs and biologicals is 
packaged if the product is not paid separately due to its pass-through 
payment status, we propose to include in the CY 2024 pass-through 
estimate the difference between payment for the policy-packaged drug or 
biological at ASP plus 6 percent (or WAC plus 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 2024 for the first group of policy-packaged 
drugs to be $90 million.
    To estimate proposed CY 2024 pass-through spending for drugs and 
biologicals in the second group (that is, drugs and biologicals that we 
knew at the time of development of this proposed rule were newly 
eligible or recently became eligible for pass-through payment in CY 
2023, additional drugs and biologicals that we estimated could be 
approved for pass-through status subsequent to the development of this 
proposed rule and before January 1, 2024, and projections for new drugs 
and biologicals that could be initially eligible for pass-through 
payment in the second through fourth quarters of CY 2024), we propose 
to use utilization estimates from pass-through applicants, 
pharmaceutical industry data, clinical information, recent trends in 
the per-unit ASPs of hospital outpatient drugs, and projected annual 
changes in service volume and intensity as our basis for making the CY 
2024 pass-through payment estimate. We also propose to consider the 
most recent OPPS experience in approving new pass-through drugs and 
biologicals. Using our proposed methodology for estimating CY 2024 
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 estimate for this proposed rule that the amount of pass-through 
spending for the device categories and the drugs and biologicals that 
are continuing to receive pass-through payment in CY 2024 and those 
device categories, drugs, and biologicals that first become eligible 
for pass-through payment during CY 2024 would be approximately $234.1 
million (approximately $134.1 million for device categories and 
approximately $100 million for drugs and biologicals) which represents 
0.26 percent of total projected OPPS payments for CY 2024 
(approximately $88.6 billion). Therefore, we estimate that pass-through 
spending in CY 2024 would not amount to 2.0 percent of total projected 
OPPS CY 2024 program spending.

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

    For CY 2024, we propose to continue our current clinic and 
emergency department (ED) hospital outpatient visits payment policies. 
For a description of these policies, we refer readers to the CY 2016 
OPPS/ASC final rule with comment period (80 FR 70448). We also propose 
to continue our payment policy for critical care services for CY 2024. 
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

[[Page 49697]]

rule with comment period (78 FR 75043).
    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) applies for 
CY 2023 and subsequent years. More specifically, we finalized a policy 
to continue to utilize a PFS-equivalent payment rate for the hospital 
outpatient clinic visit service described by HCPCS code G0463 when it 
is furnished by these departments for CY 2023 and beyond. The PFS-
equivalent rate for CY 2024 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 2024.
    In the CY 2023 OPPS/ASC final rule with comment period (87 FR 
71748), we finalized a policy 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, are 
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 policy, we refer readers to the CY 2023 OPPS/ASC final rule 
with comment period (87 FR 72047 through 72051). For CY 2024, we 
propose to continue to exempt excepted off-campus PBDs of rural SCHs 
from the clinic visit payment policy. We will continue to monitor the 
effect of this change in Medicare payment policy, including on the 
volume of these types of OPD services.

VIII. Payment for Partial Hospitalization and Intensive Outpatient 
Services

    This section discusses proposed payment for partial hospitalization 
services as well as intensive outpatient services. Since CY 2000, 
Medicare has paid for partial hospitalization services under the OPPS. 
Beginning in CY 2024, as authorized by section 4124 of the Consolidated 
Appropriations Act (CAA), 2023 (Pub. L. 117-328), Medicare will begin 
paying for intensive outpatient services furnished by hospital 
outpatient departments, community mental health centers, federally 
qualified health centers and rural health clinics. Additional 
background on the partial hospitalization and intensive outpatient 
benefits is included in the following paragraphs.

A. Partial Hospitalization

1. Background
    A partial hospitalization program (PHP) is an intensive outpatient 
program of psychiatric services provided as an alternative to inpatient 
psychiatric care for individuals who have an acute mental illness, 
which includes, but is not limited to, conditions such as depression, 
schizophrenia, and substance use disorders. Section 1861(ff)(1) of the 
Act defines partial hospitalization services as the items and services 
described in paragraph (2) prescribed by a physician and provided under 
a program described in paragraph (3) under the supervision of a 
physician pursuant to an individualized, written plan of treatment 
established and periodically reviewed by a physician (in consultation 
with appropriate staff participating in such program), which sets forth 
the physician's diagnosis, the type, amount, frequency, and duration of 
the items and services provided under the plan, and the goals for 
treatment under the plan. Section 1861(ff)(2) of the Act describes the 
items and services included in partial hospitalization services. 
Section 1861(ff)(3)(A) of the Act specifies that a PHP is a program 
furnished by a hospital to its outpatients or by a community mental 
health center (CMHC), as a distinct and organized intensive ambulatory 
treatment service, offering less than 24-hour-daily care, in a location 
other than an individual's home or inpatient or residential setting. 
Section 1861(ff)(3)(B) of the Act defines a CMHC for purposes of this 
benefit. We refer readers to sections 1833(t)(1)(B)(i), 1833(t)(2)(B), 
1833(t)(2)(C), and 1833(t)(9)(A) of the Act and 42 CFR 419.21, for 
additional information regarding PHP.
    Partial hospitalization program policies and payment have been 
addressed under OPPS since CY 2000. 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

[[Page 49698]]

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, respectively).
    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 a 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 
were 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. In the CY 2023 OPPS/ASC 
final rule (87 FR 72247), we confirmed these provisions as final, 
including that they apply only for the duration of the COVID-19 PHE. On 
May 11, 2023, the COVID-19 PHE ended, and accordingly, these 
flexibilities ended as well.
    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 the CY 2023 OPPS/ASC final rule with comment period (87 FR 
71995), we explained that we continued to observe a decrease in the 
number of hospital-based and CMHC PHP days in our trimmed dataset due 
to the continued effects of COVID-19, however, the Medicare outpatient 
service volumes appeared to be returning to more normal, pre-pandemic 
levels. Therefore, we finalized our proposal 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. 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. Therefore, in the interest of accurately paying for 
CMHC PHP services, under the unique circumstances of budget 
neutralizing all other OPPS policy changes for CY 2023, 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 finalized utilizing the equitable adjustment authority of 
section 1833(t)(2)(E) of the Act to appropriately pay for CMHC PHP 
services at the same payment rate as for CY 2022, that is, $142.70. In 
addition, we clarified the 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 would 
not be recognized as PHP services, however, 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 (87 FR 72001 and 72002).
    Section 4124(a) of Division FF of the CAA, 2023 amends section 
1861(ff)(1) of the Act to modify the definition of partial 
hospitalization services furnished on or after January 1, 2024. 
Specifically, section 4124(a) of the CAA, 2023 amends section 
1861(ff)(1) of the Act by adding to the current definition that partial 
hospitalization services are ``for an individual determined (not less 
frequently than monthly) by a physician to have a need for such 
services for a minimum of 20 hours per week.'' We discuss these 
revisions to the definition of partial hospitalization services in the 
following section, section VIII.A.2, of this proposed rule.
2. Revisions to PHP Physician Certification Requirements
    As amended by section 4124(a) of the CAA, 2023, section 1861(ff)(1) 
requires that a physician determine that each patient needs a minimum 
of 20 hours of PHP services per week, and this determination must occur 
no less frequently than monthly. We propose to codify this requirement 
in regulation as an additional requirement for the physician 
certification applicable for PHP services that we would add to Sec.  
424.24(e)(1)(i). We are not proposing any changes to the existing 
physician certification requirements for PHP, including that the 
patient would require inpatient hospitalization if they did not

[[Page 49699]]

receive PHP services, which would remain at Sec.  424.24(e)(1)(i).
    Existing regulations at Sec.  410.43 set forth conditions and 
exclusions that apply for partial hospitalization services. Under Sec.  
410.43(a)(3), partial hospitalization services are services that are 
furnished in accordance with a physician certification and plan of care 
as specified under Sec.  424.24(e). Additionally, current patient 
eligibility criteria at Sec.  410.43(c)(1) state that partial 
hospitalization programs are intended for patients who require a 
minimum of 20 hours per week of therapeutic services as evidenced in 
their plan of care. Because partial hospitalization services are 
already required to be furnished in accordance with a physician 
certification and plan of care, we believe it is appropriate to include 
this 20-hour minimum weekly requirement as a physician certification 
requirement at Sec.  424.24(e)(1)(i). We note that we do not believe 
this proposed change to the regulation would create a new requirement 
for PHPs from a practical perspective, as the change to the definition 
of partial hospitalization services made by the CAA, 2023 is consistent 
with the longstanding 20-hour minimum weekly regulatory requirement at 
Sec.  410.43(c)(1) that Medicare has applied to PHP.
    We propose to modify the regulation at Sec.  424.24(e)(1)(i) to 
require the physician certification for PHP services include a 
certification that the patient requires such services for a minimum of 
20 hours per week. Current regulations at Sec.  424.24(e)(3)(ii) 
require an initial recertification after 18 days, with subsequent 
recertifications of PHP services no less frequently than every 30 days. 
We believe this interval is consistent with the CAA, 2023 requirement 
that the physician's determination of the need for PHP services at 
least 20 hours per week must occur no less frequently than monthly.

B. Intensive Outpatient Program Services

1. Establishment of Intensive Outpatient Services Benefit by Section 
4124 of the CAA, 2023
    Section 4124(b) of the CAA, 2023 established Medicare coverage for 
intensive outpatient services effective for items and services 
furnished on or after January 1, 2024. Section 4124(b)(1)(A) of the 
CAA, 2023 amended section 1832(a)(2)(J) of the Act to add intensive 
outpatient services to the scope of covered benefits provided by CMHCs, 
and section 4124(b)(1)(B) amended section 1861(s)(2)(B) to add 
intensive outpatient services to the definition of ``medical and other 
health services'', specifically, as a service furnished ``incident to a 
physicians' services.''
    Intensive outpatient services are furnished under an intensive 
outpatient program (IOP). Similar to PHP, an IOP is a distinct and 
organized outpatient program of psychiatric services provided for 
individuals who have an acute mental illness, which includes, but is 
not limited to, conditions such as depression, schizophrenia, and 
substance use disorders. Generally speaking, an IOP is thought to be 
less intensive than a PHP, and the statutory definition of IOP services 
reflects this difference in intensity. Specifically, section 
4124(b)(2)(B) of the CAA, 2023 amended section 1861(ff) of the Act to 
add a new paragraph (4) to define the term ``intensive outpatient 
services'' as having the same meaning as ``partial hospitalization 
services'' in paragraph (1). In particular, intensive outpatient 
services are the items and services described in paragraph (2) 
prescribed by a physician for an individual determined (not less 
frequently than once every other month) by a physician to have a need 
for such services for a minimum of 9 hours per week 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. For patients of an IOP, section 
1835(a)(2)(F)(i) of the Act does not apply, that is, individuals 
receiving IOP would not require inpatient psychiatric care in the 
absence of such services. Lastly, section 4124(b)(2)(B) of the CAA, 
2023 further added to section 1861(ff)(4)(C), which cross-references 
paragraph (3), that an IOP is a program furnished by a hospital to its 
outpatients, or by a community mental health center (CMHC), a Federally 
qualified health center (FQHC), or a rural health clinic (RHC), 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 4124(c) of the CAA, 
2023 amends section 1834 of the Act by adding a new paragraph (5) to 
subsection (o) and a new paragraph (3) to subsection (y), which include 
special payment rules for intensive outpatient services furnished in 
FQHCs and RHCs, which are discussed in greater detail in section VIII.F 
of this proposed rule.
    This proposed rule includes proposals to establish payment and 
program requirements for the IOP benefit in all of the above-described 
settings. Section VIII.B.2 of this proposed rule discusses the proposed 
scope of benefits for IOP services, and section VIII.B.3 of this 
proposed rule discusses proposed physician certification requirements. 
Section VIII.C of this proposed rule discusses proposed coding and 
billing for both PHP and IOP services under the OPPS beginning in CY 
2024. Section VIII.D of this proposed rule discusses the proposed 
payment methodology. Section VIII.E of this proposed rule discusses 
proposed outlier policy for CMHCs. Section VIII.F of this proposed rule 
discusses proposed payment for IOP in FQHCs and RHCs, and Section 
VIII.G of this proposed rule discusses proposed payment for IOP in 
Opioid Treatment Programs (OTPs).
2. IOP Scope of Benefits
    Section 1861(ff)(2) of the Act describes the items and services 
available under the IOP benefit. These items and services include: 
individual and group therapy with physicians or psychologists (or other 
mental health professionals to the extent authorized under State law); 
occupational therapy requiring the skills of a qualified occupational 
therapist; services of social workers, trained psychiatric nurses, and 
other staff trained to work with psychiatric patients; drugs and 
biologicals furnished for therapeutic purposes (which cannot, as 
determined in accordance with regulations, be self-administered); 
individualized activity therapies that are not primarily recreational 
or diversionary; family counseling (the primary purpose of which is 
treatment of the individual's condition); patient training and 
education (to the extent that training and educational activities are 
closely and clearly related to individual's care and treatment); 
diagnostic services; and such other items and services as the Secretary 
may provide (excluding meals and transportation) that are reasonable 
and necessary for the diagnosis or active treatment of the individual's 
condition, reasonably expected to improve or maintain the individual's 
condition and functional level and to prevent relapse or 
hospitalization, and furnished pursuant to such guidelines relating to 
frequency and duration of services as the Secretary shall by regulation 
establish, taking into account accepted norms of medical practice and 
the

[[Page 49700]]

reasonable expectation of patient improvement.
    Consistent with the statutory definition of intensive outpatient 
services under section 1861(ff)(2) of the Act, we propose to add 
regulations at 42 CFR 410.44 to set forth the conditions and exclusions 
that would apply for intensive outpatient services. Consistent with the 
existing regulations for partial hospitalization services, we propose 
to require that intensive outpatient services must be furnished in 
accordance with a physician certification and plan of care. However, 
where partial hospitalization requires the physician to certify that 
the services are instead of inpatient hospitalization, intensive 
outpatient program services are not intended for those who otherwise 
need an inpatient level of care. That is, section 1861(ff)(4)(A) of the 
Act, as added by section 4124 of the CAA, 2023, states that for 
intensive outpatient services, section 1835(a)(2)(F)(i) shall not 
apply. As further discussed in section VIII.B.3 of this proposed rule, 
we propose to add language to the regulation at Sec.  424.24(d), which 
is currently reserved, that would set forth the physician certification 
and plan of care requirements for intensive outpatient services.
    Additionally, we propose to revise certain existing regulations at 
Sec.  410.2, Sec.  410.3, Sec.  410.10, Sec.  410.27, Sec.  410.150, 
and Sec.  419.21 to add a regulatory definition of intensive outpatient 
services and to include intensive outpatient services in the 
regulations for medical and other health services paid for under 
Medicare Part B, and in the case of Sec.  419.21, under the OPPS. We 
propose to create regulations at Sec.  410.111 to establish the 
requirements for coverage of IOP services furnished in CMHCs, and at 
Sec.  410.173 to establish conditions of payment for IOP services 
furnished in CMHCs. Lastly, we propose to revise Sec.  410.155 to 
exclude IOP services from the outpatient mental health treatment 
limitation, consistent with the statutory requirement of section 
1833(c)(2) of the Act, as amended by section 4124(b)(3) of the CAA, 
2023. We discuss these proposed changes in the following paragraphs.
a. Proposed Definition of Intensive Outpatient Services
    We propose the following definition at Sec.  410.2 for intensive 
outpatient services: Intensive outpatient services means a distinct and 
organized intensive ambulatory treatment program that offers less than 
24-hour daily care other than in an individual's home or in an 
inpatient or residential setting and furnishes the services as 
described in Sec.  410.44. Intensive outpatient services are not 
required to be provided in lieu of inpatient hospitalization. We note 
that the proposed definition for intensive outpatient services is 
consistent with the statutory requirements of section 1861(ff)(3)(A), 
which apply to both IOP and PHP services. Accordingly, the proposed 
definition is largely consistent with the existing regulatory 
definition of partial hospitalization services. However, in accordance 
with section 1861(ff)(4)(A) of the Act, as added by the CAA, 2023, we 
are including a clarification in the regulatory definition of 
``intensive outpatient services'' that they are not required to be 
provided in lieu of inpatient hospitalization. We are including this 
clarification in order to more clearly differentiate between the 
definitions of partial hospitalization and intensive outpatient at 
Sec.  410.2.
    The conditions and exclusions for partial hospitalization services 
are included in the regulation at Sec.  410.43. We propose that the 
conditions and exclusions for intensive outpatient services would be 
included in new regulations at Sec.  410.44.
    At new Sec.  410.44, we propose to establish regulatory language 
for intensive outpatient services that is consistent with the existing 
language for partial hospitalization conditions and exclusions and the 
statutory definition of intensive outpatient services. Specifically, 
under Sec.  410.44(a) we propose that IOP services are services that: 
(1) are reasonable and necessary for the diagnosis or active treatment 
of the individual's condition; (2) are reasonably expected to improve 
or maintain the individual's condition and functional level and to 
prevent relapse or hospitalization; (3) are furnished in accordance 
with a physician certification and plan of care as specified under new 
regulations at Sec.  424.24(d); and include any of the services listed 
in Sec.  410.44(a)(4). Under Sec.  410.44(a)(4), we include a list of 
the types of services that we propose would be covered as intensive 
outpatient services:
     Individual and group therapy with physicians or 
psychologists or other mental health professionals to the extent 
authorized under State law.
     Occupational therapy requiring the skills of a qualified 
occupational therapist, provided by an occupational therapist, or under 
appropriate supervision of a qualified occupational therapist by an 
occupational therapy assistant as specified in part 484 of this 
chapter.
     Services of social workers, trained psychiatric nurses, 
and other staff trained to work with psychiatric patients.
     Drugs and biologicals furnished for therapeutic purposes, 
subject to the limitations specified in Sec.  410.29.
     Individualized activity therapies that are not primarily 
recreational or diversionary.
     Family counseling, the primary purpose of which is 
treatment of the individual's condition.
     Patient training and education, to the extent the training 
and educational activities are closely and clearly related to the 
individual's care and treatment.
     Diagnostic services.
    The proposed list at Sec.  410.44(a)(4) is based on the list of 
items and services described in section 1861(ff)(2) of the Act. We note 
that 1861(ff)(2) of the Act also provides that intensive outpatient 
services may include such other items and services as the Secretary may 
provide (but in no event to include meals and transportation). As 
discussed in section VIII.C of this proposed rule, we solicit comments 
on whether additional codes should be added to the list of services 
recognized as appropriate for PHP and IOP.
    We further note that both the statute at section 1861(ff)(2)(C) of 
the Act and our proposed regulation at Sec.  410.44(a)(4)(iii) refer to 
``trained psychiatric nurses, and other staff trained to work with 
psychiatric patients.'' Under our longstanding policy for partial 
hospitalization services, we have considered nurses and other staff 
trained to work with patients within their state scope of practice who 
are receiving treatment for substance use disorder (SUD) to be included 
under this statutory definition and the regulatory definition of PHP at 
Sec.  410.43(a)(4). We have heard from interested parties that there 
could be a misconception that Medicare does not cover PHP for the 
treatment of SUD. We are clarifying that, in general, notwithstanding 
the requirement that PHP services are provided in lieu of inpatient 
hospitalization, Medicare covers PHP for the treatment of SUD, and we 
consider services that are for the treatment of SUD and behavioral 
health generally to be consistent with the statutory and regulatory 
definition of PHP. We are taking this opportunity to clarify that the 
terms ``trained psychiatric nurses, and other staff trained to work 
with psychiatric patients,'' as used in Sec.  410.43(a)(4) and Sec.  
410.44(a)(4) would include trained SUD nurses and other staff trained 
to work with SUD patients. Under Sec.  410.44(b), we propose that the 
following services are separately covered and not paid as intensive

[[Page 49701]]

outpatient services: (1) physician services; (2) physician assistant 
services; (3) nurse practitioner and clinical nurse specialist 
services; (4) qualified psychologist services; and (5) services 
furnished to residents of a skilled nursing facility (SNF). We note 
that these proposed exclusions are consistent with the services 
excluded from payment as partial hospitalization program services at 
Sec.  410.43(b). The services listed under Sec. Sec.  410.43(b) and 
410.44(b) would be paid under the applicable systems for such services.
    Lastly, under Sec.  410.44(c), we propose to establish patient 
eligibility criteria for intensive outpatient services. Specifically, 
we propose that intensive outpatient services are intended for patients 
who: (1) require a minimum of 9 hours per week of therapeutic services 
as evidenced in their plan of care; (2) are likely to benefit from a 
coordinated program of services and require more than isolated sessions 
of outpatient treatment; (3) do not require 24-hour care; (4) have an 
adequate support system while not actively engaged in the program; (5) 
have a mental health diagnosis; (6) are not judged to be dangerous to 
self or others; and (7) have the cognitive and emotional ability to 
participate in the active treatment process and can tolerate the 
intensity of the intensive outpatient program.
    We note that these proposed patient eligibility criteria at Sec.  
410.44(c) are consistent with the existing partial hospitalization 
patient eligibility criteria at Sec.  410.43(c). With respect to the 
proposed criterion of a ``mental health diagnosis'', we are clarifying 
that a mental health diagnosis would include SUD and behavioral health 
diagnoses generally under both the existing partial hospitalization 
regulation at Sec.  410.43(c)(5) and the proposed intensive outpatient 
services regulation at Sec.  410.44(c)(5). As discussed earlier in this 
section, this inclusion of SUD and behavioral health diagnoses as among 
the patient eligibility criteria for PHP services is consistent with 
our longstanding policy. However, we have noted that interested parties 
have raised concerns that this policy may not be clear. Therefore, we 
are clarifying that the term ``mental health diagnosis'' as used at 
both Sec. Sec.  410.43(c)(5) and 410.44(c)(5) would include SUD and 
behavioral health diagnoses.
b. Coverage of IOP as Medical and Other Health Services Paid Under Part 
B
    We propose to amend the regulation at Sec.  410.10(c) to add a 
reference to ``intensive outpatient services'' to the list of services 
that are covered as medical and other health services under Part B, 
when furnished as hospital or CAH services incident to a physician's 
professional services. We believe this is consistent with section 
1861(s)(2)(B) of the Act, as amended by section 4124(b)(1)(B) of the 
CAA, 2023 to include ``intensive outpatient services'' under the 
definition of medical and other health services; specifically, hospital 
services incident to a physicians' services. We note that the services 
described at Sec.  410.10(c) are furnished by a hospital or CAH. 
Accordingly, we propose conforming changes to the regulations at 
Sec. Sec.  410.27(a)(2) and paragraph (e) introductory text to include 
references to intensive outpatient services.
c. Technical Changes To Codify Requirements for IOP at CMHCs
    We propose technical changes to the regulations at 42 CFR parts 488 
and 489.
    First, we propose to add the statutory basis for IOP at CMHCs at 
Sec.  488.2. The proposed technical revision would add section 
1832(a)(2)(J) of the Act, which sets forth the statutory basis of 
intensive outpatient services provided by CMHCs at Sec.  488.2.
    We also propose to revise the provision at 42 CFR 489.2(c)(2) so 
that CMHCs may enter into provider agreements to furnish intensive 
outpatient services. We propose to revise the current requirement that 
allows for CMHCs to enter into provider agreements only for the 
provision of partial hospitalization services. The proposed revisions 
to this provision would allow CMHCs to enter into provider agreements 
only to furnish partial hospitalization services and intensive 
outpatient services.
d. Technical Changes To Codify Coverage of IOP at CMHCs
    We propose several technical changes and additions to the 
regulations at Sec. Sec.  410.2, 410.3, 410.111, and 410.150.
    First, we propose to revise the definition of ``Community Mental 
Health Center (CMHC)'' at Sec.  410.2 to refer to intensive outpatient 
services. Specifically, we propose to revise the regulation to state 
that a CMHC is an entity that provides day treatment or other partial 
hospitalization services or intensive outpatient services, or 
psychosocial rehabilitation services. Second, we propose to revise the 
definition of ``Participating'' at Sec.  410.2 to refer to intensive 
outpatient services as services that CMHCs can provide. Specifically, 
we propose that ``Participating'' refers to a CMHC that has in effect 
an agreement to participate in Medicare, but only for the purposes of 
providing partial hospitalization services and intensive outpatient 
services. We are clarifying that this proposed definition would allow a 
CMHC to be considered a participating provider of both partial 
hospitalization services and intensive outpatient services, but would 
not require a CMHC to provide both types of services in order to be 
considered participating.
    In addition, we propose to revise the scope of benefits provision 
at Sec.  410.3(a)(2) to provide that the covered services for which the 
Medicare Part B supplementary medical insurance (SMI) program helps pay 
include partial hospitalization services and intensive outpatient 
services provided by CMHCs. We believe these proposed changes are 
consistent with the scope of benefits provision at section 
1832(a)(2)(J) of the Act, as amended by section 4124(b)(1)(A) of the 
CAA, 2023 to include intensive outpatient services, as well as the 
proposed CMHC conditions of participation at Sec.  485.918(b)(1)(iii). 
We refer readers to section XVII.B.5 of this proposed rule for 
discussion on the proposed amendments to regulations at Sec.  
485.918(b)(1)(iii).
    In addition, subpart E of Sec.  410 includes requirements for 
Community Mental Health Centers (CMHCs) Providing Partial 
Hospitalization Services. We propose to modify the Subpart E heading to 
include a reference to intensive outpatient services as well. Under 
subpart E, we propose to add a new Sec.  410.111 to set forth 
Requirements for coverage of intensive outpatient services furnished in 
CMHCs. We propose that Medicare Part B would cover IOP services 
furnished by or under arrangements made by a CMHC if the CMHC has in 
effect a provider agreement and the services are prescribed by a 
physician and furnished under the general supervision of a physician, 
and subject to the proposed physician certification and plan of care 
requirements under Sec.  424.24(d).
    Additionally, we propose to revise Sec.  410.150(b)(13) to include 
a reference to intensive outpatient services. Specifically, we propose 
that payment would be made to a CMHC on an individual's behalf for 
partial hospitalization services or intensive outpatient services 
furnished by or under arrangements made by the CMHC.
    Lastly, we propose to amend Sec.  419.21(c) to refer to intensive 
outpatient services provided by CMHCs as services for which payment is 
made under the OPPS. This proposed amendment would be consistent with 
current regulations at Sec.  419.21(c), which include partial 
hospitalization services provided by CMHCs. We note that further 
discussion of our proposed

[[Page 49702]]

payment methodology under the OPPS for intensive outpatient services is 
found in section VIII.D of this proposed rule.
e. Exclusion of Intensive Outpatient Services From the Outpatient 
Mental Health Treatment Limitation
    Section 1833(c)(2) of the Act, as amended by section 4124(b)(3) of 
the CAA, 2023, excludes intensive outpatient services that are not 
directly provided by a physician from the term ``treatment'' for the 
purposes of the outpatient mental health treatment limitation under 
section 1833(c)(1) of the Act, similar to partial hospitalization 
services. Accordingly, we propose to amend the regulations at Sec.  
410.155(b)(2)(iii) to state that intensive outpatient services not 
directly provided by a physician are not subject to the outpatient 
mental health treatment limitation.
3. IOP Certification and Plan of Care Requirements
    Section 4124(b)(2)(B) of the CAA, 2023 amended section 1861(ff) of 
the Act by adding a new paragraph (4) to define intensive outpatient 
services as the items and services prescribed by a physician for an 
individual determined (not less frequently than once every other month) 
by a physician to have a need for such services for a minimum of 9 
hours per week. This certification must occur no less frequently than 
once every other month, and there is no requirement to certify that IOP 
patients would need inpatient hospitalization if they did not receive 
such services, which is required for PHP patients.
    We propose to codify the content of the certification and plan of 
treatment requirements for intensive outpatient services at Sec.  
424.24(d). Specifically, we propose to mirror the PHP content of 
certification and plan of care treatment requirements at Sec.  
424.24(e), with the following exceptions: require the content of 
certification to include documentation that the individual requires 
such services for a minimum of 9 hours per week (with no requirement 
for the patient to need inpatient psychiatric care if the IOP services 
were not provided). The physician's certification of the patient's need 
for either IOP or PHP services should be based on the physician's 
determination of the patient's needs and whether the patient meets the 
IOP or PHP patient eligibility criteria under Sec.  410.44(c) or Sec.  
410.43(c), respectively. We note that the physician's certification 
should certify the patient's need for either IOP or PHP, and that 
patients participating in an IOP or PHP should not be under any other 
IOP or PHP plan of care for the same date of service. The patient's 
individualized plan of treatment should address all of the conditions 
that are being treated by the IOP or PHP.
    Additionally, we propose to require in the regulation at Sec.  
424.24(d)(3)(ii) that the recertification of IOP services occur no less 
frequently than every 60 days. We believe the IOP recertification 
timing of no less frequently than every 60 days is consistent with the 
requirement in the statute that an individual be determined by a 
physician to have a need for IOP services ``not less frequently than 
once every other month'' because the minimum number of days for two 
consecutive months is 59 days. We believe that a consistent 60-day 
interval would be the most appropriate way to implement the statutory 
recertification requirement for IOP.
    We are soliciting public comments on whether it would be 
appropriate to consider finalizing a shorter interval for the first 
recertification and for subsequent recertification for IOP patients. 
For example, we request comments on whether we should consider 
requiring an initial recertification by the 30th day of IOP services, 
and no less frequently than every 60 days thereafter. We request that 
commenters provide as much detail as possible about the rationale for a 
shorter recertification interval, if appropriate.
    Lastly, we would make conforming changes to Sec.  424.24(b) to add 
a reference to paragraph (d)(1) in the list of paragraphs that specify 
the content for which physician certification is required for medical 
and other health services furnished by providers (and not exempted 
under Sec.  424.24(a)) which are paid for under Medicare Part B.

C. Coding and Billing for PHP and IOP Services Under the OPPS

    We considered the similarities between the types of items and 
services covered by both PHP and IOP, and the larger continuum of care, 
when developing the proposed list of services that we believe would 
appropriately identify the range of services that IOPs provide to 
Medicare beneficiaries. Since the statutory definitions of both IOP and 
PHP generally include the same types of items and services covered, we 
believe it is appropriate to align the programs using a consistent list 
of services, so that level of intensity would be the only 
differentiating factor between partial hospitalization services and 
intensive outpatient services.
    Currently, hospital outpatient departments use condition code 41 to 
indicate that a claim is for partial hospitalization services. CMHCs do 
not currently use a condition code on the bill type used--that is, 
76X--to indicate that a claim is for partial hospitalization services, 
because they are only considered a provider of services for partial 
hospitalization; and therefore, partial hospitalization services are 
identified by the 76X bill type. In order to differentiate between IOP 
and PHP for billing purposes, the National Uniform Billing Committee 
(NUBC) is has approved a new condition code, condition code 92, to 
identify intensive outpatient claims. Therefore, we propose to require 
hospitals and CMHCs to report condition code 92 on claims to indicate 
that a claim is for intensive outpatient services. We propose to 
continue to require hospitals to report condition code 41 for partial 
hospitalization claims. Additionally, because CMHCs would be permitted 
to provide both PHP and IOP beginning January 1, 2024, we also propose 
to require CMHCs to report condition code 41 for partial 
hospitalization claims. We believe that this requirement would better 
allow us to identify which claims are for PHP and which are for IOP. We 
are soliciting comment on these proposed reporting requirements for PHP 
and IOP.
    Under current policy, PHPs submit claims with HCPCS codes to 
identify the services provided during each PHP day. Therefore, we 
worked in conjunction with physicians to develop a proposed 
consolidated list of all HCPCS codes that we believe would 
appropriately identify the full range of services that both IOPs and 
PHPs provide to Medicare beneficiaries. For reference, Table 42 
includes the current list of HCPCS codes that are recognized for PHP 
payment. For CY 2024, we propose to add certain codes to the list, 
change the descriptions of other codes, and remove one code from the 
list. The list of proposed consolidated HCPCS codes is included in 
Table 43.
    We recognize that the level of intensity of mental health services 
a patient requires may vary over time; therefore, we believe utilizing 
a consolidated list of HCPCS codes to identify services under both the 
IOP and PHP benefits would ensure a smooth transition for patients when 
a change in the intensity or their services is necessary to best meet 
their needs. For example, a patient receiving IOP services may 
experience an acute mental health need that necessitates more intense 
services through a PHP. Alternatively, an IOP patient that no longer 
requires the level of intensity provided by the IOP can access less 
intense mental health services, such as

[[Page 49703]]

individual mental health services. Therefore, we propose to add several 
HCPCS codes to the list in Table 43 that are currently recognized as 
mental health codes under the OPPS, but are not recognized for PHP 
payment.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TP31JY23.070

    We propose to maintain all of the codes in Table 42, except for one 
code. We propose to remove 90865 Narcosynthesis, because we do not 
believe this code is widely used in the provision of PHP, and we do not 
anticipate it would be widely used in the provision of IOP in the 
future. We propose that the HCPCS codes listed in Table 43 would be 
payable when furnished by PHPs or IOPs.

[[Page 49704]]

[GRAPHIC] [TIFF OMITTED] TP31JY23.071


[[Page 49705]]


[GRAPHIC] [TIFF OMITTED] TP31JY23.072

BILLING CODE 4120-01-C
    We propose to add 18 codes to the list of recognized PHP/IOP codes, 
as shown in Table 43. These codes are currently recognized as mental 
health codes under the OPPS, and we believe it would be appropriate to 
recognize them for PHP and IOP as well. Additionally, we propose to 
update the descriptions of five existing Level II HCPCS codes that are 
currently recognized for PHP to also refer to IOP.
    As shown in Table 43, we propose to add CPT code 90853 Group 
psychotherapy to the list of service codes recognized for PHP and IOP. 
We believe there could be overlap between 90853 and two existing Level 
II HCPCS codes for PHP group psychotherapy, specifically G0410 and 
G0411. We are considering whether it would be appropriate to remove 
G0410 and G0411 from the list of recognized service codes for PHP and 
IOP, and retain only CPT code 90853. We are soliciting comments on this 
topic, and we are interested in hearing specific reasons commenters 
believe support either keeping G0410 and G0411 on the list or removing 
them. We are particularly interested in understanding whether it would 
be appropriate to maintain these codes on a temporary basis to provide 
a transition for existing PHPs that are using these codes.
    We propose to use the list of HCPCS in Table 43 to determine the 
number of services per PHP or IOP day, and therefore to determine the 
APC per diem payment amount for each day, as discussed in section 
VIII.D of this proposed rule. In addition, as discussed in section 
VIII.D of this proposed rule, we propose to calculate the costs for 3-
service and 4-service days based on the list of HCPCS in Table 43. We 
remind readers that currently, to qualify for payment at the applicable 
PHP APC (5853 or 5863) one service must be from the Partial 
Hospitalization Primary list. Table 44 identifies the services that are 
currently included in the Partial Hospitalization Primary list and 
those which we propose to add based on our analysis of the services 
included on days with three and four services from the proposed list in 
Table 43. We propose to maintain this requirement for CY 2024 and 
subsequent years to qualify for payment at the PHP or IOP APC. Thus, we 
propose that to qualify for payment for an IOP APC, at least one 
service must be from the Partial Hospitalization and Intensive 
Outpatient Primary list. Specifically, we propose that to qualify for 
payment for the IOP APC (5851, 5852, 5861 or 5862) or the PHP APC 
(5853, 5854, 5863, or 5864) one service must be from the Partial 
Hospitalization and Intensive Outpatient Primary list.
BILLING CODE 4120-01-P

[[Page 49706]]

[GRAPHIC] [TIFF OMITTED] TP31JY23.073

BILLING CODE 4120-01-C
    In the future, in the event there are new codes that represent the 
PHP and IOP services described under Sec.  410.43(a)(4) and Sec.  
410.44(a)(4), respectively, we propose that we would add such codes to 
Table 43 through sub-regulatory guidance, and that these codes would be 
payable when furnished by a PHP or IOP. We note that coding updates 
frequently occur outside of the standard rulemaking timeline. We 
propose this sub-regulatory process in order to pay expeditiously when 
new codes are created that describe any of the services enumerated at 
Sec.  410.43(a)(4) and Sec.  410.44(a)(4), which PHPs and IOPs, 
respectively, would provide. We would identify codes to be added sub-
regulatorily if a new code is cross-walked to a previously included 
code, or if the code descriptor is substantially similar to a 
descriptor for a code on the list or describes a service on the list. 
Any additional services not described at Sec.  410.43(a)(4) or Sec.  
410.44(a)(4) would be added to the lists in regulation through notice 
and comment rulemaking.
    We invite public comment on the proposed consolidated list of HCPCS 
codes that would be payable when furnished in a PHP and IOP; and any 
additional codes that we should consider adding. Specifically, we are 
interested in hearing from commenters if there are any other existing 
codes that CMS should consider adding to the list, or new codes that 
CMS should consider creating, to describe specific services not 
appropriately described by the codes in Table 43. For example, we are 
particularly interested in and are soliciting comment on whether it 
would be appropriate to include caregiver-focused services in the list 
of recognized services for PHP and IOP. We have identified the 
following HCPCS codes describing services related to caregivers:
     96202 multiple-family group behavior management/
modification training for parents(s) guardians(s) caregivers(s) with a 
mental or physical health diagnosis, administered by a physician or 
other QHP without the patient present, face to face up to 60 minutes.
     96203 each additional 15 minutes.
     96161 administration of caregiver-focused health risk 
assessment instrument (that is, depression inventory) for the benefit 
of the patient, with scoring and documentation, per standardized 
instrument.

 9X015 CAREGIVER TRAING 1ST 30 MIN
 9X016 CAREGIVER TRAING EA ADDL 15
 9X017 GROUP CAREGIVER TRAINING

    We note that the CMHC conditions of participation at Sec.  
485.916(b) and (c) already include references to the role of

[[Page 49707]]

caregivers in the development and implementation of the individualized 
treatment plan for PHP patients, and we refer readers to section 
XVII.B.4 of this proposed rule for discussion of proposed amendments to 
the regulations at Sec.  485.916(d). We are soliciting comments on 
whether it would be appropriate to include costs for such services in 
the calculation of PHP and IOP per diem payment rates. We note that if 
we were to include such services, we believe it would be appropriate to 
exclude them from the determination of the number of services provided 
per day, but we could include such services in the calculation of cost 
per day for determining the PHP and IOP payment rates.
    Additionally, we are soliciting comments on peer services, and 
whether these would be appropriate to include for PHPs and IOPs. Peer 
support workers are people who have been successful in the recovery 
process who help others experiencing similar situations. Through shared 
understanding, respect, and mutual empowerment, peer support workers 
help people become and stay engaged in the recovery process and reduce 
the likelihood of relapse. Peer support services can effectively extend 
the reach of treatment beyond the clinical setting into the everyday 
environment of those seeking a successful, sustained recovery process. 
Peer support workers typically engage in a wide range of activities, 
including: advocating for people in recovery; sharing resources and 
building skills; building community and relationships; leading recovery 
groups; and mentoring and setting goals.\103\ We are interested in 
information about any available codes that would appropriately describe 
such services.
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    \103\ https://www.samhsa.gov/brss-tacs/recovery-support-tools/peers.
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    In addition, we are soliciting comments on whether it would be 
appropriate to add services related to coordinating a patient's 
discharge from a PHP or IOP, or their transition from one level of care 
to another. We note that current regulations require physicians, 
hospitals, and CMHCs to address discharge planning for PHP patients, 
and we would propose the same requirements for IOP patients. 
Specifically, physician recertification requirements for PHP at Sec.  
424.24(e)(3)(iii)(C) state that the physician's recertification must 
address treatment goals for coordination of services to facilitate 
discharge from the partial hospitalization program. We propose the same 
requirement for IOP at Sec.  424.24(d)(3)(iii)(C). Additionally, 
hospital CoPs at Sec.  482.43, which apply to hospital outpatient 
departments providing PHP and IOP, and CMHC CoPs at Sec.  485.914(e) 
require appropriate discharge planning to meet each patient's needs. We 
are soliciting comments on whether the codes proposed in Table 43 
represent the services that PHPs and IOPs provide to support transition 
and discharge planning for their patients, or whether we should 
consider additional codes. We ask commenters to provide as much detail 
as possible about the nature of any additional services, and whether 
there are any existing codes that could describe such services.
    Lastly, we note that our analysis of PHP claims showed that the 
provision of testing and diagnostic services is very low among PHPs, 
although such services are covered under the PHP benefit and we propose 
to include them in Table 43 and cover such services under the IOP 
benefit as well. We note that our analysis of non-PHP days with 3 and 4 
services, which we believe could represent IOP days in the future, 
shows a higher provision of testing and diagnostic services than is 
found among PHP days. We believe that testing and diagnostic services 
would be included as component services of PHPs and IOPs, and we are 
interested in information from the public about why PHPs are not more 
frequently billing for these services. In particular, we welcome 
information from commenters about whether there are specific challenges 
that PHPs face in providing these services, as well as whether there 
are different codes, other than those proposed in Table 43 that could 
better describe the testing and diagnostic services that are provided 
to PHP patients. In addition, we are interested in understanding 
whether these services are typically provided by an entity other than 
the PHP, such as by a referring provider.

D. Proposed Payment Rate Methodology for PHP and IOP

    In summary, we propose for CY 2024 to revise our methodology for 
calculating PHP payment rates. We propose to establish four separate 
PHP APC per diem payment rates: one for CMHCs for 3-service days and 
another for CMHCs for 4-service days (APC 5853 and APC 5854, 
respectively), and one for hospital-based PHPs for 3-service days and 
another for hospital-based PHPs for 4-service days (APC 5863 and APC 
5864, respectively). In addition, for hospital-based PHPs, we propose 
to calculate payment rates using the broader OPPS data set, instead of 
hospital-based PHP data only, because we believe using the broader OPPS 
data set would allow CMS to capture data from claims not identified as 
PHP, but that also include the service codes and intensity required for 
a PHP day. Because we propose to establish consistent coding and 
payment between the PHP and IOP benefits, we propose to consider all 
OPPS data for PHP days and non-PHP days that include 3 or more of the 
same service codes. We propose to establish four separate IOP APC per 
diem payment rates at the same rates we propose for PHP APCs: one for 
CMHCs for 3-service days and another for CMHCs for 4-service days (APC 
5851 and APC 5852, respectively), and one for hospital-based IOPs for 
3-service days and another for hospital-based IOPs for 4-service days 
(APC 5861 and APC 5862, respectively).
1. Background
    The standard PHP day is typically four services or more per day. We 
currently provide payment for three services a day for extenuating 
circumstances when a beneficiary would be unable to complete a full day 
of PHP treatment. As we stated in the CY 2008 OPPS/ASC final rule with 
comment period (72 FR 66672), it was never our intention that days with 
only three units of service should represent the number of services 
provided in a typical PHP day. Our intention was to cover days that 
consisted of three units of service only in certain limited 
circumstances. For example, as we noted in the CY 2009 OPPS/ASC 
proposed rule (73 FR 41513), we believe 3-service days may be 
appropriate when a patient is transitioning towards discharge (or days 
when a patient who is transitioning at the beginning of his or her PHP 
stay). Another example of when it may be appropriate for a program to 
provide only three units of service in a day is when a patient is 
required to leave the PHP early for the day due to an unexpected 
medical appointment.
2. Current Payment Rate Methodology for PHP
    Since CY 2017, our longstanding policy has been to pay PHP on a per 
diem basis for days that include three or more PHP services, which are 
identified using a defined list of codes in the Healthcare Common 
Procedure Coding System (HCPCS). We currently (for CY 2023) utilize two 
separate PHP APC per diem payment rates: CMHC PHP APC 5853 (Partial 
Hospitalization (three or More Services Per Day)) using only CMHC data, 
and hospital-based PHP APC 8563 (Partial Hospitalization (three

[[Page 49708]]

or More Services Per Day)) using only hospital-based PHP data.
    Under longstanding OPPS policy, the hospital-based PHP APC per diem 
payment amount is also applied as a daily mental health cap, which 
serves as an upper limit on payment per day for individual OPPS mental 
health services. Under the current methodology, for CY 2023, hospital-
based PHPs are paid a per diem rate of $268.22 for three or more PHP 
services per day, and CMHCs are paid a per diem rate of $142.70 for 
three or more PHP services per day. We refer readers to 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) for 
information on the current calculation of geometric mean per diem costs 
and payment rates for PHP APCs 5853 and 5863, and 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) for information on modifications incorporated into the PHP 
ratesetting methodology.
    We note that under our current methodology, we have historically 
prepared the data by first applying PHP-specific trims and data 
exclusions and assessing CCRs. We direct the reader to the CY 2016 
OPPS/ASC final rule with comment period (80 FR 70463 through 70465) for 
a more complete discussion of these trims, data exclusions, and CCR 
adjustments. In prior rules, we have typically included a discussion of 
PHP-specific data trims, exclusions, and CCR adjustments; we are not 
including that discussion in this proposed rule. These PHP-specific 
data trims and exclusions addressed limitations as well as anomalies in 
the PHP data. However, as discussed in the following section, we 
propose for CY 2024 to calculate hospital-based PHP payment rates for 3 
services per day and 4 services per day based on cost per day using the 
broader OPPS data set. Accordingly, we propose not to apply PHP-
specific trims and data exclusions, but rather to apply the same trims 
and data exclusions consistent with the OPPS. Additional information 
about the data trims, data exclusions, and CCR adjustments applicable 
to the data used for this proposed rule can be found online at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html).\104\
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    \104\ Click on the link labeled ``CY 2024 OPPS/ASC Notice of 
Proposed Rulemaking'', which can be found under the heading 
``Hospital Outpatient Prospective Payment System Rulemaking'' and 
open the claims accounting document link at the bottom of the page, 
which is labeled ``2024 NPRM OPPS Claims Accounting (PDF)''.
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3. Proposed CY 2024 Payment Rate Methodology for PHP and IOP
    As noted previously, the CAA, 2023 established IOP within the 
continuum of care, and the statute makes reference to weekly hour 
requirements. Specifically, IOP patients are required to be certified 
by a physician as needing at least 9 hours of services per week; while 
PHP patients are required to be certified by a physician as needing at 
least 20 hours of services per week.
    While no IOP benefit existed prior to the CAA, 2023, we note that 
the types of items and services included in IOP have been, and are, 
paid for by Medicare either as part of the PHP benefit or under the 
OPPS more generally. Additionally, prior to the CAA, 2023, CMS had 
begun gathering information from interested parties on IOP under 
Medicare. In the CY 2023 OPPS/ASC proposed rule (87 FR 44679), we 
issued a comment solicitation on intensive outpatient mental health 
treatment, including SUD treatment furnished by IOPs, to collect 
information regarding 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, and specific information 
about IOP services, such as the settings of care in which these 
programs typically furnish services, the range of services typically 
offered, and the range of practitioner types that typically furnish 
these services.
    Along with the requirements for IOP mandated by the CAA, 2023, we 
took into consideration information we received from the comment 
solicitation to construct an appropriate data set to develop proposed 
rates for IOP. Since IOPs furnish the same types of services as PHP, 
just at a lower intensity, we believe it is appropriate to use the same 
data and methodology for calculating payment rates for both PHP and IOP 
for CY 2024. At this time, although PHP claims can be specifically 
identified, there is no specific identifier or billing code to indicate 
IOP services. However, hospitals are permitted to furnish and bill for 
many of these services as outpatient services under the OPPS. Thus, we 
analyzed a broader set of data that includes both PHP and non-PHP days 
with 3 or more services in order to calculate proposed payment for PHP 
services. In order to establish consistent payment between PHP and IOP, 
we propose to set IOP payment rates at the same rates as PHP. The 
primary goal in developing the proposed payment rate methodology for 
IOP and PHP services is to pay providers an appropriate amount relative 
to the patients' needs, and to avoid cost inversion in future years.
    For CY 2024, we propose to calculate hospital-based PHP payment 
rates for 3 services per day and 4 services per day based on cost per 
day using the broader OPPS data set, a change from the current 
methodology of using only PHP data. We believe using the broader OPPS 
data set would allow us to capture data from claims not identified as 
PHP, but that include the service codes and intensity required for a 
PHP day. The larger data set would expand the sample size to allow for 
more precise rate calculations. In addition, we propose to calculate 
the 3 services per day and 4 services per day PHP rates for CMHCs and 
hospital-based programs separately. We propose to set IOP payment rates 
for 3 services per day and 4 services per day equal to the PHP payment 
rates.
    We also propose to set payment rates for IOP APCs at amounts equal 
to the payment rates for PHP APCs. We believe setting the IOP payment 
rates equal to the PHP payments would be appropriate because IOP is a 
newly established benefit, and we do not have definitive data on 
utilization. However, both programs utilize the same services, but 
furnish them at different levels of intensity, with different numbers 
of services furnished per day and per week. depending on the program. 
Therefore, we believe it is appropriate to pay the same per diem rates 
for IOP and PHP services unless future data analysis supports 
calculating rates independently.
    For beneficiaries in a PHP or IOP, we propose applying the four-
service payment rate (that is, payment for PHP APCs 5854 for CMHCs and 
5864 for hospitals, and IOP APCs 5852 for CMHCs and 5862 for hospitals) 
for days with 4 or more services. For days with three or fewer 
services, we propose to apply the three-service payment rate (that is, 
payment for PHP APCs 5853 for CMHCs and 5863 for hospitals, and IOP 
APCs 5851 for CMHCs and 5861 for hospitals), which we note would be a 
departure from our current policy. Under our current policy, we do not 
make payment for any PHP days with fewer than three services, and we 
have heard from interested parties that this policy could discourage 
treatment of PHP patients when, due to extenuating circumstances, they 
cannot complete a full day. We believe that paying for a day with three 
or fewer services would allow us to more easily monitor the actual 
utilization of services, particularly IOP. Specifically, we believe 
utilizing the three-service

[[Page 49709]]

payment rate (that is, payment for PHP APCs 5853 for CMHCs and 5863 for 
hospitals, and IOP APCs 5851 for CMHCs and 5861 for hospitals) for days 
with three or fewer service would accommodate occasional instances when 
a patient is unable to complete a full day of PHP or IOP. We expect 
that days with fewer than three services would be very infrequent, and 
we intend to monitor the provision of these days among providers and 
individual patients.
    Additionally, we propose that the 3 service per day hospital-based 
PHP APC per diem payment amount for APC 5863 would also be applied as 
the daily mental health cap, which serves as the upper limit on payment 
per day for individual OPPS mental health services. We believe setting 
the 3 service per day hospital-based PHP APC per diem payment amount as 
the daily mental health cap is appropriate because currently the daily 
mental health cap is equal to the payment amount for hospital-based PHP 
APC 5863, which is payment for 3 or more services per day. Therefore, 
consistency with the current daily mental health cap would be 
maintained. Additionally, PHP is meant to be the most intensive mental 
health services program, requiring inpatient care if PHP is not 
received, and the daily mental health cap is not expected to reach such 
level of intensity. We believe applying the 3 service per day hospital-
based PHP APC per diem payment amount for APC 5863 as the daily mental 
health cap would preserve the difference of intensity between PHP and 
individual OPPS mental health services to not incentivize one over the 
other. We note that the proposed CY 2024 payment amount for APC 5863 
would be comparable to the CY 2023 payment amount for APC 5863, which 
is currently applied as the daily mental health cap.
    Lastly, we note that section 4124(c) of the CAA, 2023 requires that 
the payment amount for intensive outpatient services furnished in FQHCs 
and RHCs be equal to the payment amount that would have been paid for 
the same service furnished by a hospital outpatient department, thus 
establishing site-neutral payment for hospital outpatient departments, 
FQHCs, and RHCs. The CAA, 2023 is silent with respect to the payment 
methodology for IOP services provided by CMHCs. Based on our analysis 
of CMHC costs, we continue to observe that CMHCs incur significantly 
different costs than hospitals in the provision of PHP services, and we 
anticipate that in the future there will be significant differences 
between CMHCs' and hospitals' costs of furnishing IOP services as well. 
We believe it is appropriate to continue to recognize the differences 
in cost structures for different providers of PHP. This is of 
particular importance not only to the Medicare program, but also for 
the Medicare beneficiaries that CMHCs serve, who incur a 20 percent 
copay on all PHP services under Part B. Therefore, we propose to 
continue calculating CMHC payment rates based solely on CMHC claims, 
but we are also considering whether establishing a site-neutral payment 
for all providers of IOP using data from all providers of IOP would be 
more appropriate in an effort to increase access to mental health 
services. In order to inform public awareness, we have calculated 
combined payment rates by using the broader OPPS data from both 
hospitals and CMHCs to estimate the costs associated with providing 
days with three and four services from the list of services in Table 
43. These alternative cost calculations are found in Table 46 in 
section VIII.D.3.b of this proposed rule. We are soliciting comments on 
whether this approach would be more appropriate to consider for 
establishing payment beginning in CY 2024. Specifically, we are 
interested in any information from commenters on how IOPs may structure 
their service days, and how the differences in cost structures of CMHCs 
might affect a site-neutral payment for IOP services. We are also 
soliciting comments on any ways IOP days could differ from PHP days, 
and considerations that could affect payment. The following paragraphs 
describe our data analysis, and proposals for PHP and IOP APCs 
beginning in CY 2024.
a. Proposed PHP APC Changes and Effects on Geometric Mean Per Diem 
Costs
    For CY 2024 and subsequent years, we propose a revision to our 
existing methodology to calculate the CMHC and hospital-based PHP 
geometric mean per diem costs to incorporate the larger data set under 
the OPPS, including PHP and non-PHP hospital claims for mental health 
services. We propose to use the latest available CY 2022 claims data, 
and CY 2021 cost data. This proposal is consistent with the overall 
proposed use of cost data for the OPPS, which is discussed in section 
II.A.1.a. of this proposed rule. In addition, we propose to establish 
four separate PHP APC per diem payment rates: two for CMHCs (APC 5853 
and APC 5854) and two for hospital-based PHPs (APC 5863 and APC 5864). 
Following this proposed methodology, we propose to use the geometric 
mean per diem cost of $97.59 for CMHCs providing 3-service days (APC 
5853), and the geometric mean per diem cost of $153.09 for CMHCs 
providing 4-service days (APC 5854), as the basis for developing the CY 
2024 CMHC PHP APC per diem rates. Additionally, we propose to use the 
geometric mean per diem cost of $284.00 for hospital-based providers 
providing 3-service days (APC 5863), and the geometric mean per diem 
cost of $368.18 for hospital-based providers providing 4-service days 
(APC 5864) as the basis for developing the CY 2024 hospital-based PHP 
APC per diem rates. Lastly, we propose to establish four separate IOP 
APC per diem payment rates: two for CMHCs (APC 5851 and APC 5852 for 3-
service days and 4-service days, respectively) and two for hospital-
based IOPs (APC 5861 and APC 5862 for 3-service days and 4-service 
days, respectively) using the same above 3-service day and 4-service 
day geometric mean per diem costs proposed for the PHP APC per diem 
rates.
b. Development of the PHP and IOP APC Geometric Mean Per Diem Costs
    The types of items and services paid as PHP (and that will be paid 
as IOP) can also be provided outside of those benefits by hospitals; 
therefore, we sought to understand the costs of those services in our 
preliminary analysis to consider options for the proposed payment rates 
for IOP services. In preparation for CY 2024, in collaboration with 
physicians, we developed a consolidated list of all HCPCS codes that 
would be appropriate for identifying IOP and PHP services for analytic 
purposes. We refer readers to section VIII.C of this proposed rule for 
more detailed information on the proposed consolidated list of HCPCS 
codes applicable for IOP and PHP services.
    We conducted a preliminary ratesetting analysis of all CMHC and 
hospital claims for patients that had 9 or more hours of behavioral 
health services per week. We then identified IOP as weeks with between 
9 and 19 hours of services, and PHP as weeks with 20 hours or more of 
services. The relationship we observed between cost per day and cost 
per week suggests that typical IOP days include about three services, 
and typical PHP days include about four services, which as we noted 
previously, is also consistent with the typical service intensity for 
PHP.
    Next, with this data set, we calculated the proposed payment rates 
for hospital-based providers based on costs for days with three 
services and days with four

[[Page 49710]]

services using the data from all OPPS claims for hospitals, and 
calculated the proposed payment rates for CMHCs based on costs for days 
with three services and days with four services using only the data 
from CMHC claims. 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. Although we anticipate that IOP weeks would 
generally include 9-19 hours of services and PHP weeks would generally 
include 20 or more hours of services, we did not restrict the data for 
this analysis by weekly hours. Because IOP is a new benefit, we do not 
have definitive data on utilization. However, if IOP utilization is 
similar to the data we analyzed for beneficiary weeks with 9 to 19 
hours of mental health services, then we expect that IOP days will 
mostly include three services or fewer, but may sometimes include four 
or more. Given the uncertainty about how IOPs will structure their 
service days in the future, we believe it is appropriate to propose 3-
service day and 4-service day APCs for IOP with payment rates that are 
the same as the rates for the 3-service day and 4-service day APCs we 
propose for PHP.
    We analyzed all CMHC and hospital claims data under the OPPS used 
to set proposed rates for this CY 2024 proposed rule as described 
earlier in this section of this proposed rule. We identified all 
patient days that included three or more services from the list in 
Table 43. As discussed in section VIII.D.3 of this proposed rule, we 
propose to calculate PHP payment rates for days with three services and 
days with four services, and we propose to utilize these proposed PHP 
payment rates for the proposed IOP APCs as well. We propose to 
calculate separate rates for hospitals and CMHCs.
c. Proposed CY 2024 PHP and IOP APC Geometric Mean Per Diem Costs
    Following this proposed structure, the calculated CY 2024 PHP 
geometric mean per diem cost for all CMHCs for providing 3 services per 
day is $97.59, which we propose to use for calculating the payment rate 
for the 3-service day APC, CMHC APC 5853. The calculated CY 2024 
geometric mean per diem cost for all CMHCs for providing four or more 
services per day is $153.09, which we propose to use for calculating 
the payment rate for the 4-service day APC, CMHC APC 5854. As noted, 
the calculated CY 2024 hospital-based PHP APC geometric mean per diem 
cost for hospital-based PHP providers that provide 3 services per 
service day is $284.00, which we propose to use for calculating the 
payment rate for the 3-service day hospital-based PHP APC 5863. The 
calculated CY 2024 hospital-based PHP APC geometric mean per diem cost 
for hospital-based PHP providers that provide 4 services per day is 
$368.18, which we propose to use for calculating the payment rate for 
the 4-service day hospital-based PHP APC 5864.
    Similarly, the calculated CY 2024 IOP geometric mean per diem cost 
for all CMHCs for providing 3 services per day is $97.59, which we 
propose to use for calculating the payment rate for the 3-service day 
APC, CMHC APC 5851. The calculated CY 2024 geometric mean per diem cost 
for all CMHCs for providing 4 or more services per day is $153.09, 
which we propose to use for calculating the payment rate for the 4-
service day APC, CMHC APC 5852. The calculated CY 2024 hospital-based 
IOP APC geometric mean per diem cost for hospital-based IOP providers 
that provide 3 services per service day is $284.00, which we propose to 
use for calculating the payment rate for the 3-service day hospital-
based IOP APC 5861. The calculated CY 2024 hospital-based IOP APC 
geometric mean per diem cost for hospital-based IOP providers that 
provide 4 services per day is $368.18, which we propose to use for 
calculating the payment rate for the 4-service day hospital-based IOP 
APC 5862.
    We intend to monitor the provision of services in both PHP and IOP 
programs to better understand utilization patterns, and propose to set 
equal payment rates for PHP and IOP services until actual IOP 
utilization data becomes available for CY 2026 ratesetting, at which 
point we anticipate reevaluating our payment rate methodology if 
necessary.
    In addition, we are soliciting comments on the service mix used to 
develop the per diem amounts for both PHP and IOP. We are interested in 
whether the proposed approach is appropriate, and any feedback 
commenters have on the service mix provided within each program.
    The proposed CY 2024 PHP geometric mean per diem costs are shown in 
Table 45 and are used to derive the proposed CY 2024 PHP APC per diem 
rates for CMHCs and hospital-based PHPs. As stated in section VIII.D.3 
of this proposed rule, we propose to use the same 3-service day and 4-
service day geometric mean per diem PHP costs for the CY 2024 CMHC and 
hospital-based IOP APCs. The proposed CY 2024 PHP and IOP APC per diem 
rates are included in Addendum A to this proposed rule (which is 
available on our website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html) and in Table 45.

[[Page 49711]]

[GRAPHIC] [TIFF OMITTED] TP31JY23.074

    Alternatively, as discussed earlier in this section, we are 
considering establishing combined payment rates for hospitals and CMHCs 
based on the calculated costs per day for days with 3 services and 4 or 
more services, using all OPPS claims. These alternative CY 2024 PHP 
geometric mean per diem costs are shown in Table 46.
[GRAPHIC] [TIFF OMITTED] TP31JY23.075

E. Proposed Outlier Policy for CMHCs

    For CY 2024, we propose to update the calculations of the CMHC 
outlier percentage, cutoff point and percentage payment amount, outlier 
reconciliation, outlier payment cap, and fixed dollar threshold 
according to previously established policies to include intensive 
outpatient services. These topics are discussed in more detail. We 
refer readers to section II.G.1 of this proposed rule for our general 
policies for hospital outpatient outlier payments.
1. Background
    As discussed in the CY 2004 OPPS final rule with comment period (68 
FR 63469 through 63470), we noted a significant difference in the 
amount of outlier payments made to hospitals and CMHCs for PHP 
services. Given the difference in PHP charges between hospitals and 
CMHCs, we did not believe it was appropriate to make outlier payments 
to CMHCs using the outlier percentage target amount and threshold 
established for hospitals. Therefore, beginning in CY 2004, we created 
a separate outlier policy specific to the estimated costs and OPPS 
payments provided to CMHCs. We designated a portion of the estimated 
OPPS outlier threshold specifically for CMHCs, consistent with the 
percentage of projected payments to CMHCs under the OPPS each year, 
excluding outlier payments, and established a separate outlier 
threshold for CMHCs. This separate outlier threshold for CMHCs resulted 
in $1.8 million in outlier payments to CMHCs in CY 2004 and $0.5 
million in outlier payments to CMHCs in CY 2005 (82 FR 59381). In 
contrast, in CY 2003, more than $30 million was paid to CMHCs in 
outlier payments (82 FR 59381).
2. CMHC Outlier Percentage
    In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59267 
through 59268), we described the current outlier policy for hospital 
outpatient payments and CMHCs. We note that we also discussed our 
outlier policy for CMHCs in more detail in section VIII.C of that same 
final rule (82 FR 59381). We set our projected target for all OPPS 
aggregate outlier payments at 1.0 percent of the estimated aggregate 
total payments under the OPPS (82 FR 59267). This same policy was also 
reiterated in the CY 2019 OPPS/ASC final rule with comment period (83 
FR 58996), the CY 2020 OPPS/ASC final rule with comment period (84 FR 
61350), and the CY 2021 OPPS/ASC final rule with comment period (85 FR 
86082).
    We estimated CMHC per diem payments and outlier payments for this 
proposed rule by using the most recent available utilization and 
charges from CMHC claims, updated CCRs, and the proposed payment rates 
for PHP APCs 5853 and 5854. We recognize that

[[Page 49712]]

CMHCs would be permitted to provide and bill for IOP beginning in CY 
2024, and would be paid under IOP APCs 5851 and 5852. However, we have 
not included estimates of utilization for these APCs, because the 
latest available claims from CY 2022 do not reflect the provision of 
IOP services. For increased transparency, we are providing a more 
detailed explanation of the existing calculation process for 
determining the CMHC outlier percentages. To calculate the CMHC outlier 
percentage, we follow three steps:
     Step 1: We multiply the OPPS outlier threshold, which is 
1.0 percent, by the total estimated OPPS Medicare payments (before 
outliers) for the prospective year to calculate the estimated total 
OPPS outlier payments:

(0.01 x Estimated Total OPPS Payments) = Estimated Total OPPS Outlier 
Payments.

     Step 2: We estimate CMHC outlier payments by taking each 
provider's estimated costs (based on their allowable charges multiplied 
by the provider's CCR) minus each provider's estimated CMHC outlier 
multiplier threshold (we refer readers to section VIII.C.3 of the CY 
2022 OPPS/ASC proposed rule). That threshold is determined by 
multiplying the provider's estimated paid days by 3.4 times the total 
of CMHC PHP APC and CMHC IOP payment rates. If the provider's costs 
exceed the threshold, we multiply that excess by 50 percent, as 
described in section VIII.E.3 of this proposed rule, to determine the 
estimated outlier payments for that provider. CMHC outlier payments are 
capped at 8 percent of the provider's estimated total per diem payments 
(including the beneficiary's copayment), as described in section 
VIII.E.5 of this proposed rule, so any provider's costs that exceed the 
CMHC outlier cap will have its payments adjusted downward. After 
accounting for the CMHC outlier cap, we sum all of the estimated 
outlier payments to determine the estimated total CMHC outlier 
payments.

(Each Provider's Estimated Costs--Each Provider's Estimated Multiplier 
Threshold) = A. If A is greater than 0, then (A x 0.50) = Estimated 
CMHC Outlier Payment (before cap) = B. If B is greater than (0.08 x 
Provider's Total Estimated Per Diem Payments), then cap adjusted B = 
(0.08 x Provider's Total Estimated Per Diem Payments); otherwise, B = 
B. Sum (B or cap- adjusted- B) for Each Provider = Total CMHC Outlier 
Payments.

     Step 3: We determine the percentage of all OPPS outlier 
payments that CMHCs represent by dividing the estimated CMHC outlier 
payments from Step 2 by the total OPPS outlier payments from Step 1:

(Estimated CMHC Outlier Payments/Total OPPS Outlier Payments).

    We propose to continue to calculate the CMHC outlier percentage 
according to previously established policies. However, beginning in CY 
2024, CMHCs will be permitted to provide and bill for intensive 
outpatient services for Medicare patients. Therefore, we propose to 
expand the calculation of the CMHC outlier percentage to include PHP 
and IOP, because we anticipate that total payments will increase for 
CMHCs in CY 2024. We propose to maintain our current methodology for 
calculating the CMHC outlier percentage, but to apply it to payments 
for IOP services as well as PHP services beginning in CY 2024. 
Therefore, based on our CY 2024 payment estimates, including our 
estimates of both PHP and IOP services, CMHCs are projected to receive 
0.01 percent of total hospital outpatient payments in CY 2024, 
excluding outlier payments. We propose to designate approximately less 
than 0.01 percent of the estimated 1.0 percent hospital outpatient 
outlier threshold for CMHCs. This percentage is based upon the formula 
given in Step 3.
3. Cutoff Point and Percentage Payment Amount
    As described in the CY 2018 OPPS/ASC final rule with comment period 
(82 FR 59381), our policy has been to pay CMHCs for outliers if the 
estimated cost of the day exceeds a cutoff point. In CY 2006, we set 
the cutoff point for outlier payments at 3.4 times the highest CMHC PHP 
APC payment rate implemented for that calendar year (70 FR 68551). For 
CY 2018, the highest CMHC PHP APC payment rate was 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 exceeded 
3.4 times the CY 2018 payment rate for CMHC PHP APC 5853, the outlier 
payment would be calculated as 50 percent of the amount by which the 
cost exceeds 3.4 times the CY 2018 payment rate for CMHC PHP APC 5853 
[0.50 x (CMHC Cost -(3.4 x APC 5853 rate))]. This same policy was also 
reiterated in the CY 2019 OPPS/ASC final rule with comment period (83 
FR 58996 through 58997), CY 2020 OPPS/ASC final rule with comment 
period (84 FR 61351), the CY 2021 OPPS/ASC final rule with comment 
period (85 FR 86082 through 86083), the CY 2022 OPPS/ASC final rule 
with comment period (86 FR 63670), and the CY 2023 OPPS/ASC final rule 
with comment period (87 FR 72004). For CY 2024, we propose to continue 
to pay for partial hospitalization services that exceed 3.4 times the 
proposed CMHC PHP APC payment rate at 50 percent of the CMHC PHP APC 
geometric mean per diem costs over the cutoff point. In addition, we 
propose to extend this policy to intensive outpatient services. That 
is, for CY 2024, if a CMHC's cost for partial hospitalization services 
paid under CMHC PHP APCs 5853 or 5854 exceeds 3.4 times the payment 
rate for the APC (either CMHC APC 5853 or 5854), the outlier payment 
would be calculated as:

[0.50 x (CMHC cost - (3.4 x (PHP APC payment)))].

    Similarly, if a CMHC's cost for intensive outpatient services paid 
under CMHC IOP APCs 5851 or 5852 exceeds 3.4 times the payment rate for 
the APC (either CMHC APCs 5851 or 5852), the outlier payment would be 
calculated as:

[0.50 x (CMHC cost - (3.4 x (IOP APC payment)))].

4. Outlier Reconciliation
    In the CY 2009 OPPS/ASC final rule with comment period (73 FR 68594 
through 68599), we established an outlier reconciliation policy to 
address charging aberrations related to OPPS outlier payments. We 
addressed vulnerabilities in the OPPS outlier payment system that led 
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 2023 OPPS/ASC and CY 2019 OPPS/ASC final rules with 
comment

[[Page 49713]]

period (83 FR 58874 through 58875 and 81 FR 79678 through 79680).
    We propose to continue these policies for partial hospitalization 
services provided through PHPs for CY 2024. In addition, since CMHCs 
will be permitted to provide and bill for intensive outpatient services 
for Medicare patients we propose to extend these policies to include 
intensive outpatient services in order to encompass the full scope of 
services that CMHCs will be permitted to furnish. The current outlier 
reconciliation policy requires that providers whose outlier payments 
meet a specified threshold 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 (as established in the CY 2009 OPPS/ASC final rule with comment 
period (73 FR 68596 through 68599)). We note that the current threshold 
for outlier reconciliation for hospitals is $500,000, and there is no 
threshold for CMHCs (that is, all outlier payments are subject to 
reconciliation for CMHCs whose overall ancillary CCRs change by plus or 
minus 10 percentage points or more). 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 at: https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c04.pdf).
5. Outlier Payment Cap
    In the CY 2017 OPPS/ASC final rule with comment period, we 
implemented a CMHC outlier payment cap to be applied at the provider 
level, such that in any given year, an individual CMHC will receive no 
more than a set percentage of its CMHC total per diem payments in 
outlier payments (81 FR 79692 through 79695). Our analysis of CY 2014 
claims data found that CMHC outlier payments began to increase 
similarly to the way they had prior to CY 2004. This was due to 
inflated cost from three CMHCs that accounted for 98 percent of all 
CMHC outlier payments that year and received outlier payments that 
ranged from 104 percent to 713 percent of their total per diem 
payments. To balance our concern about disadvantaging CMHCs with our 
interest in protecting the benefit from excessive outlier payments and 
to mitigate potential inappropriate outlier billing vulnerabilities, we 
finalized the CMHC outlier payment cap at 8 percent of the CMHC's total 
per diem payments (81 FR 79694 through 79695) to limit the impact of 
inflated CMHC charges on outlier payments. 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. We propose to maintain the 8 percent outlier payment cap for CY 
2024 and apply it to both PHP and IOP payments. We note that the 8 
percent would be calculated as 8 percent of total per diem PHP and IOP 
payments for CY 2024. As discussed earlier in this proposed rule, 
beginning in CY 2024, CMHCs will be permitted to provide and bill for 
intensive outpatient services for Medicare patients. Therefore, we 
propose to expand the calculation of the CMHC outlier cap to include 
both PHP and IOP, because we anticipate that total payments will 
increase for CMHCs in CY 2024. Therefore, we propose to calculate the 8 
percent outlier payment cap for each CMHC in a way that would encompass 
the full scope of services that CMHCs will be permitted to furnish in 
CY 2024.
6. Fixed-Dollar Threshold
    In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59267 
through 59268), for the hospital outpatient outlier payment policy, we 
set a fixed-dollar threshold in addition to an APC multiplier 
threshold. Fixed-dollar thresholds are typically used to drive outlier 
payments for very costly items or services, such as cardiac pacemaker 
insertions. Currently, for CY 2023, 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), the CY 2022 
OPPS/ASC final rule with comment period (86 FR 63508), and the CY 2023 
OPPS/ASC final rule with comment period (87 FR 72004). We propose to 
continue this policy for CY 2024 and not set a fixed-dollar threshold 
for the CMHC PHP APCs (5853 or 5854) or IOP APCs (5851 or 5852).

F. Rural Health Clinics (RHCs) and Federally Qualified Health Centers 
(FQHCs)

1. Background
a. Statutory Background
    The Rural Health Clinic Services Act of 1977 (Pub. L. 95-210, 
December 13, 1977), amended the Act by enacting section 1861(aa)(1) of 
the Act to extend Medicare and Medicaid entitlement and payment for 
primary and emergency care services furnished at a rural health clinic 
(RHC) by physicians and certain nonphysician practitioners, and for 
services and supplies incidental to their services. ``Nonphysician 
practitioners'' included nurse practitioners and physician assistants. 
(Subsequent legislation extended the definition of covered RHC services 
to include the services of clinical psychologists, clinical social 
workers, certified nurse midwives, marriage and family therapist, and 
mental health counselors). The statutory payment requirements for RHC 
services are set forth at section 1833(a)(3) of the Act, which states 
that RHCs are paid reasonable costs, less the amount a provider may 
charge as described in clause of section 1866(a)(2)(A) of the Act, but 
in no case may the payment exceed 80 percent of such costs.
    Section 4161 of the Omnibus Budget Reconciliation Act of 1990 (Pub. 
L. 101-508, November 5, 1990) (OBRA 90) established Federally Qualified 
Health Centers (FQHCs) in 1990 to be effective beginning on October 1, 
1991. The law mandated that FQHCs furnish services that are typically 
furnished in an outpatient setting.
    Section 1861(aa)(3) of the Act extends Medicare and Medicaid 
entitlement and payment for those services defined as RHC services 
under section 1861(aa)(1) of the Act, preventive services defined under 
section 1861(ddd)(3) of the Act, and preventive primary health services 
that a center is required to provide under section 330 of the Public 
Health Service Act furnished at a FQHC. Section 1861(aa)(4) of the Act 
describes the statutory requirements that FQHCs must meet to qualify 
for Medicare payment. Section 10501(i)(3)(A) of the

[[Page 49714]]

Affordable (Pub. L. 111-148) added section 1834(o) of the Act to 
establish a new system of payment for the costs of FQHC services under 
Medicare Part B (Supplemental Medical Insurance) based on prospectively 
set rates. Section 1834(o)(2)(A) of the Act, the FQHC prospective 
payment system (PPS) was effective beginning on October 1, 2014. In 
addition, section 10501(i)(3)(B) of the Affordable Care Act added 
section 1833(a)(1)(Z) to the Act to specify that Medicare payment for 
FQHC services under section 1834(o) of the Act shall be 80 percent of 
the lesser of the actual charge or the amount determined under section 
1834(o) of the Act.
    Regulations pertaining to RHC and FQHC benefits are codified at 42 
CFR part 405 subpart X.
b. Medicare Part B Payment of RHC and FQHC Services
    As provided in 42 CFR part 405, subpart X of our regulations, RHC 
and FQHC visits generally are face-to-face encounters between a patient 
and one or more RHC or FQHC practitioners during which one or more RHC 
or FQHC qualifying services are furnished. RHC and FQHC practitioners 
are physicians, NPs, PAs, CNMs, clinical psychologists (CPs), and 
clinical social workers, and under certain conditions, a registered 
nurse or licensed practical nurse furnishing care to a homebound RHC or 
FQHC patient in an area with a shortage of home health agencies. We 
note, effective January 1, 2024, marriage and family therapist and 
mental health counselor services are considered RHC services in 
accordance with section 1861(aa)(1)(B) of the Act as amended by section 
4121(b) of CAA, 2023, which is incorporated into FQHC services through 
section 1861(aa)(3)(A) of the Act. In the CY 2024 PFS proposed rule, we 
propose to codify payment for MFTs and MHCs at Sec.  405.2411. Only 
medically necessary medical, mental health, or qualified preventive 
health services that require the skill level of an RHC or FQHC 
practitioner are RHC or FQHC billable visits. Services furnished by 
auxiliary personnel (for example, nurses, medical assistants, or other 
clinical personnel acting under the supervision of the RHC or FQHC 
practitioner) are considered incident to the visit and are included in 
the per-visit payment.
    Section 130 of the Consolidated Appropriations Act, 2021 (CAA, 
2021) (Pub. L. 116-260, December 27, 2020), updated section 1833(f) of 
the Act by restructuring the payment limits for RHCs beginning April 1, 
2021. As of April 1, 2021, all RHCs are subject to payment limits on 
the all-inclusive rate (AIR), and this limit will be determined for 
each RHC in accordance with section 1833(f) of the Act. RHCs generally 
are paid an AIR for all medically necessary medical and mental health 
services and qualified preventive health services furnished on the same 
day (with some exceptions). The AIR is subject to a payment limit, 
meaning that an RHC will not receive any payment beyond the specified 
limit amount.
    FQHCs were paid under the same AIR methodology until October 1, 
2014. Subsequently, FQHCs began to transition to the FQHC PPS system, 
in which they are paid based on the lesser of the FQHC PPS rate or 
their actual charges. The FQHC PPS rate is adjusted for geographic 
differences in the cost of services by the FQHC PPS geographic 
adjustment factor (GAF). The rate is increased by 34 percent when an 
FQHC furnishes care to a patient that is new to the FQHC, or to a 
beneficiary receiving an initial preventive physical examination (IPPE) 
or has an annual wellness visit (AWV).
    Both the RHC AIR and FQHC PPS payment rates were designed to 
reflect the cost of all services and supplies that an RHC or FQHC 
furnishes to a patient in a single day. The rates are not adjusted for 
the complexity of the patient health care needs, the length of the 
visit, or the number or type of practitioners involved in the patient's 
care. RHCs and FQHCs are required to file a cost report annually to 
determine their payment rate, which reflects adjustments for GME 
payments, bad debt, and influenza, pneumococcal and COVID-19 vaccines 
and covered monoclonal antibody products used as pre-exposure 
prophylaxis prevention of COVID-19 and their administration.
    There are additional payments for non-face-to-face services for 
care management services including chronic care management (CCM), 
principal care management (PCM), chronic pain management (CPM), general 
behavior health integration (GBHI), psychiatric collaborative care 
model (CoCM), and virtual communications (Sec.  405.2464(c)).
    Additionally, for FQHCs, Sec.  405.2462(d) describes a 
``grandfathered tribal FQHC'' as a FQHC that is operated by a tribe or 
tribal organization under the ISDEAA; was billing as if it were a 
provider-based to an Indian Health Service (IHS) hospital on or before 
April 7, 2000 and is not currently operating as a provider-based 
department of an IHS hospital. We refer to these tribal FQHCs as 
``grandfathered tribal FQHCs'' to distinguish them from freestanding 
tribal FQHCs that are currently being paid the lesser of their charges 
or the adjusted national FQHC PPS rate, and from provider-based tribal 
clinics that may have begun operations subsequent to April 7, 2000.
    Under the authority in section 1834(o) of the Act to include 
adjustments determined appropriate by the Secretary, we revised 
Sec. Sec.  405.2462 and 405.2464 to pay these grandfathered tribal 
FQHCs on the Medicare outpatient per visit rate as set annually by the 
IHS, and not the FQHC PPS payment rates (80 FR 71089). Such payment 
rates for outpatient medical care (also referred to as outpatient 
hospital services) furnished by the IHS and tribal facilities is set 
annually by the IHS under the authority of sections 321(a) and 322(b) 
of the Public Health Service Act (the PHS Act) (42 U.S.C. 248 and 
249(b)) (Pub. L. 83-568 (42 U.S.C. 2001(a)), and the IHCIA, based on 
the previous year cost reports from Federal and tribal hospitals. The 
outpatient per visit rate is only applicable for those IHS or tribal 
facilities that meet the definition of a provider-based department as 
described at Sec.  413.65(m), or a ``grandfathered'' tribal FQHC as 
described at Sec.  405.2462(d)(1). There is a higher outpatient per 
visit rate for IHS and tribal Medicare visits in Alaska and a lower 
general outpatient per visit rate for IHS/tribal Medicare visits in the 
lower 48 States (IHS does not operate any hospitals or facilities in 
Hawaii or the territories, and thus, no rates are set in those 
localities). For CY 2023, the outpatient per visit rate for Medicare 
visits in Alaska is $801 and $620 in the lower 48 States.\105\
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    \105\ https://www.govinfo.gov/content/pkg/FR-2023-02-27/padf/2023-03896.pdf.
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2. Establishment of Intensive Outpatient Services Benefit by Section 
4124 of the CAA, 2023
a. Section 4124 of the Consolidated Appropriations Act of 2023
    As discussed in section VIII.B.1 of this proposed rule, section 
4124 of Division FF of the CAA, 2023, entitled ``Ensuring Adequate 
Coverage of Outpatient Mental Health Services Under the Medicare 
Program,'' established Medicare coverage for intensive outpatient 
program (IOP) services furnished by a hospital to its outpatients, or 
by a community mental health center (CMHC)), a FQHC or a RHC, 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, effective January 1, 2024.
    An IOP is a distinct and organized outpatient program of 
psychiatric services provided for individuals who

[[Page 49715]]

have an acute mental illness, which includes, but is not limited to 
conditions such as depression, schizophrenia, and substance use 
disorders. Generally speaking, an IOP is thought to be less intensive 
than a partial hospitalization program (PHP).
    This new provision mandated several changes to the RHC and FQHC 
policies, including scope of benefits and services, certification and 
plan of care requirements, and special payment rules for IOP services 
in RHCs and FQHCs, all of which are discussed in the paragraphs below.
3. IOP Scope of Benefits and Scope of Services in RHC and FQHC Settings
a. Background
    As described in section 1861(aa) of the Act and codified under 
Sec. Sec.  405.2411 and 405.2446, the current scope of benefits for RHC 
and FQHC services are those services covered in a RHC, FQHC, or other 
outpatient setting, including a patient's place of residence, or a 
Medicare-covered Part A skilled nursing facility (SNF) when provided by 
a physician, nurse practitioner, physician assistant, certified nurse 
midwife, clinical psychologist, or a clinical social worker. RHC/FQHC 
services may also be covered for individuals who have elected hospice 
when provided by an RHC/FQHC physician, nurse practitioner, or 
physician assistant employed or under contract with the RHC or FQHC at 
the time the services are furnished, who has been designated by the 
patient as his or her attending physician. Starting January 1, 2024, 
services of a marriage and family therapist (MFT) or mental health 
counselor (MHC) are covered under RHC/FQHC services if such MFT or MHC 
is employed or under contract with the RHC or FQHC at the time the 
services are furnished.
    As defined in Sec.  405.2415, RHCs and FQHCs furnish physicians' 
services; services and supplies ``incident to'' the services of 
physicians: Nurse practitioner (NP), physician assistant (PA), 
certified nurse-midwife (CNM), clinical psychologist (CP), and clinical 
social worker (CSW) services; and services and supplies incident to the 
services of NPs, PAs, CNMs, CPs, and CSWs. They may also furnish 
diabetes self-management training and medical nutrition therapy (DSMT/
MNT), transitional care management (TCM) services, and in some cases, 
visiting nurse services furnished by a registered professional nurse or 
a licensed practical nurse.
    Only medically necessary medical, mental health, or qualified 
preventive health services that require the skill level of an RHC or 
FQHC practitioner are RHC or FQHC billable visits. Services furnished 
by auxiliary personnel (for example, nurses, medical assistants, or 
other clinical personnel acting under the supervision of the RHC or 
FQHC practitioner) are considered incident to the visit and are 
included in the per-visit payment.
    RHC and FQHC services also include certain preventive services when 
specified in statute or when established through the National Coverage 
Determination (NCD) process. RHCs and FQHCs are paid for the 
professional component of allowable preventive services when all of the 
program requirements are met and frequency limits (where applicable) 
have not been exceeded.
    Section 4124(b)(4) of the CAA, 2023, amended section 1861(aa)(1) of 
the Act by adding subparagraph (D) to establish Medicare Part B 
coverage for IOP services as defined in section 1861(ff)(4) of the Act 
when these services are furnished by RHCs, which is incorporated for 
FQHCs by reference in section 1861(aa)(3)(A) of the Act, effective 
January 1, 2024. Section 1861(ff)(2) of the Act describes the items and 
services available under the PHP and IOP benefits. These items and 
services include: individual and group therapy with physicians or 
psychologists (or other mental health professionals to the extent 
authorized under State law); occupational therapy requiring the skills 
of a qualified occupational therapist; services of social workers, 
trained psychiatric nurses, and other staff trained to work with 
psychiatric patients; drugs and biologicals furnished for therapeutic 
purposes (which cannot, as determined in accordance with regulations, 
be self-administered); individualized activity therapies that are not 
primarily recreational or diversionary; family counseling (the primary 
purpose of which is treatment of the individual's condition); patient 
training and education (to the extent that training and educational 
activities are closely and clearly related to individual's care and 
treatment); diagnostic services; and such other items and services as 
the Secretary may provide (excluding meals and transportation) that are 
reasonable and necessary for the diagnosis or active treatment of the 
individual's condition, reasonably expected to improve or maintain the 
individual's condition and functional level and to prevent relapse or 
hospitalization, and furnished pursuant to such guidelines relating to 
frequency and duration of services as the Secretary shall by regulation 
establish, taking into account accepted norms of medical practice and 
the reasonable expectation of patient improvement.
    To be consistent with the scope of benefits required for IOP 
services, we propose to adopt the same standards for IOP services 
furnished in RHCs and FQHCs as described in section VIII.B.2 ``IOP 
Scope of Benefits'' of this proposed rule. Specifically, this would 
include individual and group therapy, occupational therapy, drugs and 
biologicals furnished for therapeutic purposes, which cannot be self-
administered, family counseling, beneficiary education, and diagnostic 
services. In order to expand access to behavioral health treatment for 
Medicare beneficiaries and to ensure continuity of care for IOP 
services to best meet patient needs, we propose to make conforming 
regulatory changes to applicable RHC and FQHC regulations at 42 CFR 
part 405, subpart X, specifically,
     At Sec.  405.2401, Scope and definitions, we propose to 
amend the section to add IOP services.
     At Sec.  405.2411, Scope of benefits, we propose to amend 
the section to include IOP services.
     At Sec.  405.2446, Scope of services, we propose to amend 
this section to include IOP services.
b. Certification and Plan of Care Requirements for IOPs in RHC and FQHC 
Settings
    Section 4124(b)(2)(B) of the CAA, 2023 amended section 1861(ff) of 
the Act to add paragraph (4) to define intensive outpatient services as 
the items and services prescribed by a physician for an individual 
determined (not less frequently than once every other month) by a 
physician to have a need for such services for a minimum of 9 hours per 
week and provided under a program described in paragraph (3) (that is, 
an outpatient program of mostly mental health related services and 
therapies provided by a hospital or CMHC on an outpatient basis) under 
the supervision of a physician. The services must be provided 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. For patients of an IOP, section 1835(a)(2)(F)(i) of the Act does 
not apply, that is, individuals receiving IOP would not require

[[Page 49716]]

inpatient psychiatric care in the absence of such services.
    In order to be consistent with physician certification and plan of 
care requirements required for IOP furnished in different care 
settings, we propose to adopt the same standards for RHCs and FQHCs 
providing such services as described in section VIII.B.3 ``IOP 
Certification and Plan of Care Requirements'' of this proposed rule. 
Specifically, this would require physicians to certify that an 
individual needs IOP services for a minimum of 9 hours per week and no 
more than 19 hours per week, as set out in section 4124 of CAA, 2023. 
This certification would require documentation to include that the 
individual requires such services for a minimum of 9 hours per week; 
require the first certification as of the 30th day of IOP services; and 
require that the certification of IOP services occur no less frequently 
than every other month. Accordingly, we propose to revise our 
regulations at 42 CFR part 405, subpart X to specify that for the 
purpose of furnishing IOP services RHCs and FQHCs must similarly meet 
the certification and plan of care requirements at proposed Sec.  
424.24(d).
    Lastly, we propose to establish the same patient eligibility 
criteria for intensive outpatient services as described in proposed 
Sec.  410.44(c). Specifically, we propose that intensive outpatient 
services are intended for patients who: (1) require a minimum of 9 
hours per week of therapeutic services as evidenced in their plan of 
care; (2) are likely to benefit from a coordinated program of services 
and require more than isolated sessions of outpatient treatment; (3) do 
not require 24-hour care; (4) have an adequate support system while not 
actively engaged in the program; (5) have a mental health diagnosis; 
(6) are not judged to be dangerous to self or others; and (7) have the 
cognitive and emotional ability to participate in the active treatment 
process and can tolerate the intensity of the intensive outpatient 
program.
4. Special Payment Rules for Intensive Outpatient Services
    Under Medicare Part B, payment to RHCs for services (defined in 
Sec.  405.2411) furnished to beneficiaries is made on the basis of an 
all-inclusive payment methodology subject to a maximum payment per-
visit and annual reconciliation. Our regulations at Sec.  405.2470 
provide that RHCs are required to submit cost reports to allow the 
Medicare Administrative Contractor (MAC) to determine payment in 
accordance with 42 CFR part 405, subpart X, and instructions issued by 
CMS. The beneficiary is responsible for the Medicare Part B deductible 
and coinsurance amounts. Section 1866(a)(2)(A)(ii) of the Act and 
implementing regulations at Sec.  405.2410(b) establish beneficiary 
coinsurance at an amount not to exceed 20 percent of the clinic's 
reasonable charges for covered services.
    Under Medicare Part B, FQHCs are paid under the FQHC PPS for 
services (defined in Sec.  405.2446) furnished to beneficiaries. The 
statutory payment requirements for FQHC services are set forth at 
section 1834(o) of the Act. In addition, section 1833(a)(1)(Z) to the 
Act requires Medicare payment for FQHC services, determined under 
section 1834(o) of the Act, to be 80 percent of the lesser of the 
actual charge or the amount determined under section 1834(o) of the 
Act. Under the FQHC PPS, FQHCs are paid based on the lesser of the 
FQHC's actual charge for the service or the PPS rate (Sec.  
405.2462(g)(1)). The FQHC PPS rate is subsequently adjusted for certain 
circumstances as described under Sec.  405.2464(b)(2). The Medicare 
Part B deductible does not apply to FQHC services. The beneficiary is 
responsible for a coinsurance amount of 20 percent of the lesser of the 
FQHC's actual charge for the service or the adjusted PPS rate.
    As we discuss in the CY 2021 PFS final rule (85 FR 84699 through 
84710), the FQHC PPS base payment is annually increased by the 
percentage increase in the FQHC market basket, which reflects the 
operating and capital cost structures for freestanding FQHC facilities. 
Beginning with CY 2017, FQHC PPS payments were updated using a 2013-
based FQHC market basket. A complete discussion of the 2013-based FQHC 
market basket can be found in the CY 2017 PFS final rule (81 FR 80393 
through 80403). In the CY 2021 PFS final rule, we finalized the 
rebasing and revising of the FQHC market basket to reflect a 2017 base 
year. The 2017-based FQHC market basket is primarily based on Medicare 
cost report data for freestanding FQHCs for 2017, which are for cost 
reporting periods beginning on and after October 1, 2016, and prior to 
September 31, 2017. We explained that we used data from cost reports 
beginning in FY 2017 because these data were the latest available, 
complete data for calculating the major cost weights for the market 
basket at the time of rulemaking. We also explained that CMS updates 
the market basket periodically so that the cost weights reflect a 
current mix of goods and services purchased in providing FQHC services.
    Seven FQHCs that have been determined to be grandfathered tribal 
FQHCs and due to this designation are paid based on the lesser of the 
outpatient per visit rate or their actual charges, as set out at Sec.  
405.2462(f). As stated above, these grandfathered tribal FQHCs are paid 
the outpatient per visit rate for furnishing FQHC services.
    In addition to the normal package of services, RHCs and FQHCs 
receive payment for certain additional services. In the CY 2022 PFS 
final rule (86 FR 65205 through 65206), we implemented section 132 of 
CAA, 2021, which amended section 1834(o) of the Act and added a new 
section 1834(y) to the Act, to provide statutory authority for FQHCs 
and RHCs, respectively, to receive payment for hospice attending 
physician services. In the CY 2023 PFS final rule (87 FR 69463, 69737 
through 69739) we implemented sections 304(b) and (c) of division P of 
the CAA, 2022 (Pub. L. 117-103, March 15, 2022). Those subsections 
modified sections 1834(y) and 1834(o)(4) of the Act, respectively, to 
delay in-person visit requirements in order to for RHCs and FQHCs to 
receive payment for mental health visits furnished via 
telecommunications technology.
    Section 4124(c) of the CAA, 2023 further amended section 1834(o) of 
the Act and section 1834(y) of the Act, to provide special payment 
rules for both FQHCs and RHCs, respectively, for furnishing intensive 
outpatient services. Section 4124(c)(1) of the CAA, 2023 amended 
section 1834(o) of the Act to add a new paragraph (5)(A) to require 
that payment for IOP services furnished by FQHCs be equal to the amount 
that would have been paid under Medicare for IOP services had they been 
covered outpatient department services furnished by a hospital. In 
addition, section 4124(c)(2) of the CAA, 2023 amended section 1834(y) 
of the Act to add a new paragraph (3)(A) to require that payment for 
IOP services furnished by RHCs be equal to the amount that would have 
been paid under Medicare for IOP services had they been covered 
outpatient department services furnished by a hospital.
    Section VIII.D.3 of this proposed rule discusses the proposed CY 
2024 payment rate methodology for IOP. We propose to establish two IOP 
APC per diem payment rates for hospital-based IOPs (APC 5861 and APC 
5862 for 3-service days and 4-service days, respectively). We believe 
that it is appropriate to provide a payment structure that supports 
beneficiaries in an IOP where the utilization is typically structured 
to be days with three or fewer services. Therefore, we propose that the

[[Page 49717]]

rate determined for APC 5861 (Intensive Outpatient (3 services per day) 
for hospital-based IOPs) would be the payment rate for IOP services 
furnished in an RHC. For IOP services furnished in FQHCs, we propose 
that that payment is based on the lesser of a FQHC's actual charges or 
the rate determined for APC 5861. Additionally, we propose that 
grandfathered tribal FQHCs will continue to have their payment based on 
the outpatient per visit rate when furnishing IOP services. That is, 
payment is based on the lesser of a grandfathered tribal FQHC's actual 
charges or the outpatient per visit rate. We propose to revise 
Sec. Sec.  405.2410, 405.2462 and 405.2464 in the regulations to 
reflect the payment amount for IOP services and how the Medicare Part B 
deductible and coinsurance are applied.
    We solicit comment on whether the payment rate for IOP services 
furnished in RHCs and FQHCs should be adjusted to reflect the 
variations in costs of furnishing services in different geographic 
areas and what approaches would be appropriate for determining the 
value of the adjustment. We also solicit comment on whether the 
hospital-based IOP APC 5862 for 4-service days would be appropriate for 
RHCs and FQHCs.
    In section VIII.C of this proposed rule, we discuss coding and 
billing for PHP and IOP services under the OPPS. We explain that 
beginning January 1, 2024, the hospital outpatient department and CMHCs 
will be able to furnish items and services of both PHPs and IOPs. We 
state that we believe it is appropriate to align these programs by 
using a consolidated list of HCPCS codes would identify the full range 
of services that both IOPs and PHPs provide to Medicare beneficiaries 
for billing purposes. We explain that those settings paid under the 
OPPS and that can furnish either PHP or IOP when submitting a claim to 
CMS for payment would be required to report a new condition code 92 to 
differentiate between PHP and IOP.
    While RHCs and FQHCs are not authorized to furnish PHP services, we 
propose to also require RHCs and FQHCs to report condition code 92 to 
identify intensive outpatient claims. Since RHCs and FQHCs are paid 
outside of the RHC AIR methodology and FQHC PPS, respectively, for IOP 
services we believe the condition code reporting approach would allow 
us to operationalize a 3 service per day payment amount using the final 
list of HCPCS codes used to identify the full range of services for 
IOP. The list of proposed HCPCS codes is included in Table 43. In 
addition, we propose to align with the requirement under the OPPS, 
which is in order to qualify for IOP payment, at least one service must 
be from the Intensive Outpatient Primary list. Table 44 identifies the 
proposed list of intensive outpatient primary services.
    Section 4124(c)(1) of the CAA, 2023 amended section 1834(o) of the 
Act to add a new paragraph (5)(B) to require that costs associated with 
intensive outpatient services not be used to determine the amount of 
payment for FQHC services under the FQHC PPS. Likewise, section 
4124(c)(2) of the CAA, 2023 amended section 1834(y) of the Act to add a 
new paragraph (3)(B) to require that costs associated with intensive 
outpatient services not be used to determine the amount of payment for 
RHC services under the methodology for all-inclusive rates (established 
by the Secretary) under section 1833(a)(3) of the Act. We propose 
conforming revisions under Sec.  405.2468. In addition, conforming 
revisions will be made to the cost reporting instructions to account 
for these changes.
c. FQHC Supplemental Payments
    As discussed in the May 2, 2014 final rule with comment period (79 
FR 25461), section 1833(a)(3)(B)(i)(II) of the Act requires that FQHCs 
that contract with MA organizations be paid at least the same amount 
they would have received for the same service under the FQHC PPS. This 
provision ensures FQHCs are paid at least the Medicare amount for FQHC 
services. Therefore, if the MA organization contract rate is lower than 
the amount Medicare would otherwise pay for FQHC services, FQHCs that 
contract with MA organizations would receive a wrap-around payment from 
Medicare to cover the difference (see Sec.  422.316). If the MA 
organization contract rate is higher than the amount Medicare would 
otherwise pay for FQHC services, there is no additional payment from 
Medicare. We believe that the special payment rule, is also included in 
the FQHC PPS rate as described in section 1834(o) of the Act and 
therefore, IOP services are included in the wrap-around payment. We 
propose to make revisions under Sec.  405.2469 to reflect these 
changes.
5. Multiple Visits
a. Background
    Currently, RHC and FQHC encounters with more than one health 
professional and multiple encounters with the same health professional 
that take place on the same day and a single location constitute a 
single visit, with the following exceptions:
     A patient has a medical visit and a mental health visit on 
the same day; or
     A patient has an initial preventive physical exam visit 
and a separate medical or mental health visit on the same day.
    Since IOP services are behavioral health services, we do not 
believe it would be appropriate to pay for a mental health visit and 
IOP services on the same day. In the case of a medical visit, an 
encounter can include a medical visit and a mental health visit or a 
medical visit and IOP services. An encounter cannot include two mental 
health visits on the same day. As such, we propose to make amend Sec.  
405.2463(c) in the regulations to clarify that we will permit a mental 
health visit or IOP services on the same day as a medical visit.
6. Other Regulatory Updates
    In addition to the regulatory changes described in this section of 
the rule, we propose a revision to Sec.  405.2400 to reflect that 42 
CFR part 405, subpart X is based not only on the provisions of sections 
1833, 1861(aa), 1834(o) of the Act but also the provisions under 
section 1834(y) of the Act. We believe we inadvertently did not revise 
the regulations when the CAA, 2021 amended section 1834 of the Act to 
add new paragraph (y), as we discuss in the CY 2022 PFS final rule (86 
FR 65205 through 65206).

G. Modifications Related to Medicare Coverage for Opioid Use Disorder 
(OUD) Treatment Services Furnished by Opioid Treatment Programs (OTPs)

1. Background
    Section 2005 of the Substance Use-Disorder Prevention that Promotes 
Opioid Recovery and Treatment (SUPPORT) for Patients and Communities 
Act (SUPPORT Act) (Pub. L. 115-271, October 24, 2018) established a new 
Medicare Part B benefit category for OUD treatment services furnished 
by OTPs during an episode of care beginning on or after January 1, 
2020. In the CY 2020 Physician Fee Schedule (PFS) final rule (84 FR 
62630 through 62677 and 84 FR 62919 through 62926), we implemented 
Medicare coverage and provider enrollment requirements and established 
a methodology for determining the bundled payments for episodes of care 
for the treatment of OUD furnished by OTPs. We established new codes 
for and finalized bundled payments for weekly episodes of care that 
include methadone, oral

[[Page 49718]]

buprenorphine, implantable buprenorphine, injectable buprenorphine or 
naltrexone, and non-drug episodes of care, as well as add-on codes for 
intake and periodic assessments, take-home dosages for methadone and 
oral buprenorphine, and additional counseling. For CY 2024, we propose 
modifications to the regulations and policies governing Medicare 
coverage and payment for OUD treatment services furnished by OTPs in 
both this proposed rule as well as the CY 2024 PFS proposed rule.
2. Statutory Authority for Coverage of Opioid Use Disorder Treatment 
Services Provided by OTPs
    Intensive outpatient programs (IOPs) [American Society of Addiction 
Medicine (ASAM) Level 2.1 of Care] are diverse and flexible programs 
that can provide both a step-up and step-down level of care for the 
treatment of substance use disorders. IOPs may offer a step-down level 
of care in cases where a patient has been stabilized in a hospital 
facility or residential treatment program but continues to need 
services to maintain or achieve further treatment progress. IOPs also 
offer a step-up level of care in cases where a patient may need a 
higher level of care that is more structured or intensive than what can 
be provided in a typical outpatient treatment setting that offers care 
on a less frequent basis.\106\ IOPs can be housed in an OTP, specialty 
addiction treatment facility, community mental health center (CHMC), or 
another setting.\107\ According to the National Substance Use and 
Mental Health Services Survey, as of 2021, approximately 557 OTPs offer 
IOP services nationwide (30.1 percent of SUD treatment facilities 
offering OTPs).\108\ Section 4124 of the CAA, 2023, which was enacted 
on December 29, 2022, provides for Medicare coverage and payment for 
IOP services in HOPDs, CMHCs, RHCs, and FQHCs. However, section 4124 of 
the CAA, 2023 did not address coverage for IOP services furnished in 
OTP settings.
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    \106\ https://www.ncbi.nlm.nih.gov/books/NBK64088/.
    \107\ The ASAM National Guideline for the Treatment of Opioid 
Use Disorder (2020): https://sitefinitystorage.blob.core.windows.net/sitefinity-production-blobs/docs/default-source/guidelines/npg-jam-supplement.pdf?sfvrsn=a00a52c2_2.
    \108\ Substance Abuse and Mental Health Services Administration, 
National Substance Use and Mental Health Services Survey (N-SUMHSS), 
2021: Annual Detailed Tables. Rockville, MD: Substance Abuse and 
Mental Health Services Administration, 2023. Weblink: https://www.samhsa.gov/data/sites/default/files/reports/rpt39450/2021%20N-SUMHSS%20Annual%20Detailed%20Tables_508_Compliant_2_8_2023.pdf.
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    Section 1861(jjj)(1) of the Act defines Opioid Use Disorder (OUD) 
treatment services as items and services that are furnished by an OTP 
for the treatment of opioid use disorder, including FDA-approved opioid 
agonist and antagonist medications, dispensing and administration of 
such medications, substance use counseling, individual and group 
therapy, toxicology testing, and other items and services that the 
Secretary determines are appropriate (not including meals or 
transportation). For matters related to payment for OUD treatment 
services, section 1834(w) of the Act establishes that the Secretary 
shall pay bundled payments to OTPs when they furnish OUD treatment 
services to an individual during an episode of care. Section 1834(w)(2) 
of the Act states that for purposes of making payments to OTPs, the 
Secretary may establish one or more bundles based on the type of 
medication provided (such as buprenorphine, methadone, naltrexone, or a 
new innovative drug), the frequency of services, the scope of services 
furnished, characteristics of the individuals furnished such services, 
or other factors as the Secretary determine[s] appropriate. We 
interpret the statutory language at sections 1861(jjj) and 1834(w) of 
the Act to grant the Secretary authority to establish more than one 
bundled payment to OTPs for OUD treatment services furnished during an 
episode of care provided that the scope of services is medically 
reasonable and necessary for the treatment of OUD. In the CY 2020 PFS 
final rule (84 FR 62644), we finalized a definition of OUD treatment 
services as those items and services that are specifically enumerated 
in section 1861(jjj)(1) of the Act and finalized the weekly bundled 
payment for an episode of care. After considering public comments, 
under the discretion granted to the Secretary under section 
1861(jjj)(1)(F) of the Act, we also included additional items and 
services, including intake activities and periodic assessments within 
the definition of OUD treatment services specified in 42 CFR 410.67(b) 
(84 FR 62634). In addition, under our authority under section 1834(w) 
to create one or more bundled payments, we finalized that we would 
utilize add-on codes as a way to operationalize the creation of more 
than one bundled payment by making payment adjustments to the weekly 
bundled payment for the additional items and services.
    Furthermore, CMS aims to ensure that Medicare beneficiaries have 
appropriate access to high quality care for the treatment of OUD, and 
that services provided to treat SUD under the Medicare OTP benefit are 
consistent with the services that are available in other settings 
covered under Medicare Part B. For example, when CMS first established 
payment policy for OTPs under Medicare Part B in the CY 2020 PFS final 
rule (84 FR 62630 through 62677 and 84 FR 62919 through 62926), we 
considered the available benefits payable under Medicare at that time 
in determining what items to propose to include in the bundled payment 
for OUD treatment services furnished by OTPs. In light of new 
legislation (CAA, 2023) granting authority for Medicare payment of IOP 
services provided by other types of health care providers, we believe 
it is appropriate to revisit the range of services covered under the 
current benefit for OUD treatment services furnished by OTPs.
    In the CY 2023 PFS proposed rule, we solicited comments on whether 
there is a gap in coding under the PFS or other Medicare payment 
systems that may be limiting access to needed levels of care for 
treatment of mental health or substance use disorder treatment for 
Medicare beneficiaries (87 FR 45943 through 45944). Specifically, we 
sought information on multiple issues, including whether there is a gap 
in coding under Medicare payment systems that may be limiting access to 
needed levels of care for treatment of SUD; the extent to which 
potential gaps would best be addressed by the creation of new codes or 
billing rules; additional information related to IOP services, 
including their settings, scope and types of offered services, and 
practitioners involved; and, other relevant information to the extent 
it would inform our ability to ensure Medicare beneficiaries have 
access to this care. In response, many commenters noted that IOPs serve 
as a ``step-up'' level of care for individuals in need of more 
services/supports, close monitoring, and structured therapy, but who 
cannot stabilize at a lower level of care provided in an office 
setting. Commenters also noted that IOPs simultaneously serve as a 
``step-down'' level of care for individuals who have more stabilized 
biomedical conditions and may no longer need to be hospitalized, but 
cannot be discharged safely. Commenters mentioned that IOPs are 
tailorable to patient characteristics and are often flexible in the 
length, frequency, and days of treatment, but that typically patients 
receive at least 9 hours a week of care. Moreover, commenters stated 
that IOPs may be provided at stand-alone IOP facilities, OTPs, partial 
hospitalization

[[Page 49719]]

programs, residential treatment centers, detoxification centers, or 
within a private outpatient office setting. Commenters further 
encouraged CMS to allow coverage for IOP services across the full 
continuum of care settings, so that patients can receive the care they 
need in the setting that is most clinically appropriate. Furthermore, 
several commenters emphasized the importance of ensuring access to care 
for IOP services provided in OTP settings. For example, one commenter 
recommended ``that CMS also consider whether the agency has regulatory 
authority to extend coverage of any new IOP billing codes to OTPs.'' 
Other commenters also preferred the IOP payment methodology to be 
amenable and complementary to the weekly bundled payment of OTPs, 
including a building block methodology with drug and non-drug 
components, and add-on codes for greater clinical complexity. As a 
whole, commenters were very receptive to expanding access to IOP 
services in multiple settings of care, including within OTPs.
    Addressing the opioid crisis by expanding coverage for quality 
treatment options and reducing barriers to care continues to remain a 
high priority for CMS. Across the U.S, the rates of OUD have increased 
more than threefold and opioid-related mortality has increased by 
almost 18 percent amongst older adults in the past decade.\109\ From 
2015-2019, nearly 1.7 million (3 percent of all) Medicare beneficiaries 
had a SUD, though only 11 percent of those beneficiaries received 
treatment for their condition in a given year.\110\ Among Medicare 
beneficiaries with a SUD, one-third reported that financial barriers 
were a reason for not receiving treatment. Research from ASPE indicates 
that health plans that offer coverage for a greater number of IOP 
services per enrollee experience higher rates of SUD treatment 
initiation and continued engagement within their enrollee 
populations.\111\ This suggests that IOP services could result in an 
increased rate of SUD treatment initiation and continued engagement. 
Therefore, expanding access to IOP services in other settings and 
reducing financial barriers to access to IOP services through coverage 
could potentially increase the number of Medicare beneficiaries seeking 
and completing treatment for a SUD, including among Medicare 
beneficiaries who are members of populations that have historically 
been less likely to receive such treatment. Studies have shown that 
among individuals in need of SUD treatment, Hispanic, Black, and Asian 
populations are less likely to receive outpatient SUD treatment for 
their condition than their White counterparts, suggesting greater 
barriers to treatment access for these populations.\112\ Other evidence 
indicates that Black Americans significantly underutilize specialty SUD 
treatment and are also less likely to complete their SUD treatment 
programs compared to White Americans, but these disparities are reduced 
when Black Americans have access to health insurance.\113\ This 
evidence suggests that financial barriers impede initiation and 
completion of SUD treatment; in turn, providing health insurance 
coverage for SUD treatment services (such as IOP services) may lessen 
the impact of these financial barriers for all Medicare beneficiaries, 
including those who are more likely to experience these barriers. Some 
evidence also shows that zip codes in the U.S. within which there is at 
least one OTP tend to have a higher proportion of residents who are 
minorities (Black and Hispanic) and a lower proportion of White 
residents, compared to zip codes in the U.S without any OTPs,\114\ and 
surveys of services provided by OTPs demonstrate that the majority of 
OTPs (82.6 percent) conduct community outreach services to those in 
need of treatment for OUD.\115\ This suggests that OTPs may be uniquely 
positioned to reach minority populations in need of IOP services, which 
would improve their access to SUD treatment services. In addition, from 
2015 to 2019 and prior to implementation of the OTP benefit, Medicare 
beneficiaries younger than 65 years old were more likely to receive SUD 
treatment than those aged 65 years old or greater, due to more 
beneficiaries over age 65 reporting they could not afford treatment or 
that the treatment was not covered by Medicare or other insurance.\116\ 
Even after implementation of the OTP benefit, eliminating health 
disparities in access to SUD treatment for this older age bracket 
remains a priority. Therefore, we believe that expanding access to 
coverage and payment under Medicare for IOP services provided by OTPs 
may have a meaningful and positive impact on health equity, including 
for Medicare beneficiaries that may face barriers in accessing 
treatment, such as racial/ethnic minorities and/or beneficiaries aged 
65 or older. Lastly, CMS' Behavioral Health Strategy includes multiple 
stated goals and objectives to promote person-centered behavioral 
health care.\117\ Expanding access to coverage and payment under 
Medicare for IOP services provided by OTPs may help strengthen access 
to SUD prevention, evidence-based treatment, and recovery services, as 
well as advance the equity and quality of behavioral health services, 
which are consistent with the goals of CMS' Behavioral Health Strategy.
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    \109\ https://www.sciencedirect.com/science/article/pii/S0749379721000921?via%3Dihub.
    \110\ https://doi.org/10.15585/mmwr.mm675152e1.
    \111\ https://aspe.hhs.gov/sites/default/files/private/pdf/260791/BestSUD.pdf.
    \112\ https://www.samhsa.gov/data/sites/default/files/reports/rpt35326/2021NSDUHSUChartbook102221B.pdf.
    \113\ https://www.sciencedirect.com/science/article/pii/S0376871619302443.
    \114\ https://pubmed.ncbi.nlm.nih.gov/36645315/.
    \115\ https://www.samhsa.gov/data/sites/default/files/reports/rpt39450/2021%20N-SUMHSS%20Annual%20Detailed%20Tables_508_Compliant_2_8_2023.pdf.
    \116\ https://www.sciencedirect.com/science/article/pii/S0749379722001040.
    \117\ https://www.cms.gov/cms-behavioral-health-strategy.
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3. Proposal To Provide Coverage of IOP Services Furnished by OTPs
a. Proposal To Include IOP Services Furnished by OTPs in the Definition 
of Opioid Use Disorder Treatment Services
    In recognition of the evidence provided in the discussion above, we 
understand that some Medicare beneficiaries may continue to face 
barriers in accessing treatment for their OUD. Additionally, we note 
that many OTPs nationwide already provide IOP services and that IOP 
services can be effective in promoting greater treatment initiation and 
engagement, which may improve health outcomes. For these reasons, and 
in order to expand access to behavioral health treatment for Medicare 
beneficiaries with OUD and ensure continuity of care between different 
treatment settings and levels of care, CMS is proposing to establish 
payment under Part B for IOP services furnished by OTPs for the 
treatment of OUD for CY 2024 and subsequent years.
    As explained previously, section 1861(jjj)(1) of the Act defines 
Opioid Use Disorder (OUD) treatment services as items and services that 
are furnished by an OTP for the treatment of opioid use disorder, 
including FDA-approved opioid agonist and antagonist medications, 
dispensing and administration of such medications, substance use 
counseling, individual and group therapy, toxicology testing, and other 
items and services that the Secretary determines are appropriate (not 
including meals or transportation). IOP services are intended to treat 
individuals with an acute mental illness and/or substance use disorder,

[[Page 49720]]

including those with an OUD. We believe that IOP services are similar 
to the specific services enumerated in section 1861(jjj)(1) of the Act, 
and the services and intensity of care required to provide intensive 
outpatient services under Level 2.1 of the ASAM continuum of care are a 
step-up from the services within the existing OTP benefit. The ASAM 
criteria's strength-based multidimensional assessment takes into 
account a patient's needs, obstacles and liabilities, as well as their 
strengths, assets, resources, and support structure; this information 
is used to determine the appropriate level of care across a 
continuum.\118\ OTP services that are currently covered under the OTP 
benefit are at the Outpatient (Level 1) level of care, whereas IOP 
services are classified as Level 2.1 on ASAM's continuum of care. 
Individuals who meet the criteria for IOP services generally require 
more frequent and intensive services.
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    \118\ https://www.asam.org/asam-criteria/about-the-asam-criteria.
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    Because the Secretary has discretion under section 1861(jjj)(1)(F) 
of the Act to add other items and services furnished by an OTP for the 
treatment of OUD, as appropriate, we propose to add a new paragraph 
(ix) to Sec.  410.67(b) defining a new category of services called 
``OTP intensive outpatient services'' and incorporate OTP intensive 
outpatient services in the definition of OUD treatment services that 
are covered under the Part B OTP benefit. Specifically, we propose to 
define OTP intensive outpatient services as those services specified in 
proposed 42 CFR 410.44(a)(4) when furnished by an OTP as part of a 
distinct and organized intensive ambulatory treatment program for the 
treatment of Opioid Use Disorder and that offers less than 24-hour 
daily care other than in an individual's home or in an inpatient or 
residential setting. OTP intensive outpatient services are services 
that are reasonable and necessary for the diagnosis or active treatment 
of the individual's condition; are reasonably expected to improve or 
maintain the individual's condition and functional level and to prevent 
relapse or hospitalization; and are furnished in accordance with a 
physician certification and plan of care. We propose that in order to 
qualify as ``OTP intensive outpatient services,'' a physician must 
certify that the individual has a need for such services for a minimum 
of 9 hours per week and requires a higher level of care intensity 
compared to existing OTP services. The specific services that we 
propose would be considered OTP intensive outpatient services would 
include any of the following:
     Individual and group therapy with physicians or 
psychologists or other mental health professionals to the extent 
authorized under State law.
    Occupational therapy requiring the skills of a qualified 
occupational therapist, provided by an occupational therapist, or under 
appropriate supervision of a qualified occupational therapist by an 
occupational therapy assistant as specified in part 484 of this 
chapter.
     Services of social workers, trained psychiatric nurses, 
and other staff trained to work with psychiatric patients.
     Drugs and biologicals furnished for therapeutic purposes, 
subject to the limitations specified in Sec.  410.29, excluding opioid 
agonist and antagonist medications that are FDA-approved for use in 
treatment of OUD or opioid antagonist medications for the emergency 
treatment of known or suspected opioid overdose.
     Individualized activity therapies that are not primarily 
recreational or diversionary.
     Family counseling, the primary purpose of which is 
treatment of the individual's condition.
     Patient training and education, to the extent the training 
and educational activities are closely and clearly related to the 
individual's care and treatment.
     Diagnostic services that are reasonable and necessary for 
the diagnosis or active treatment of the individual's condition, with 
the exception of toxicology testing.
    We propose to exclude FDA-approved opioid agonist or antagonist 
medications for the treatment of OUD or opioid antagonist medications 
for the emergency treatment of known or suspected opioid overdose, 
specifically, methadone, buprenorphine, naltrexone and naloxone, from 
the definition of OTP intensive outpatient services because these 
medications are already included as part of the weekly bundled payment 
for an episode of care or as an adjustment to the bundled payment. 
However, we are soliciting comment on the types of drugs and 
biologicals that are furnished as part of an IOP program (for example, 
whether IOPs furnish drugs used for emergent interventions), and the 
extent to which these drugs overlap with medications included in the 
existing weekly bundles described by HCPCS codes G2067 through G2073 
and/or add-on codes described by G2078 (take-home supply of methadone), 
G2079 (take-home supply of oral buprenorphine), G2215 (take-home supply 
of nasal naloxone), G2216 (take-home supply of injectable naloxone), 
and G1028 (take-home supply of nasal naloxone; 2-pack of 8mg per 0.1 mL 
nasal spray). This information will help to inform our consideration of 
the extent to which the drugs and biologicals furnished as part of an 
IOP program would already be covered under the drug component of the 
weekly bundled payment and the existing add-on payments or would need 
to be reflected in the proposed IOP add-on payment adjustment discussed 
in the next section. Similarly, we propose to exclude toxicology 
testing from the types of diagnostic services that would be included in 
the definition of OTP intensive outpatient services because toxicology 
testing is already included within the definition of opioid use 
disorder treatment services and paid for as part of the weekly bundled 
payment for an episode of care.
b. Proposal To Establish a Weekly Payment Adjustment for IOP Services 
Furnished by OTPs
    Section 1834(w)(2) of the Act provides discretion to implement one 
or more payment bundles based on the frequency, scope and 
characteristics of the individuals, and other factors as determined 
appropriate. Currently, ASAM classifies OTP services as outpatient 
treatment services (under Level 1 of the continuum of care), which are 
typically provided for less than 9 hours a week, or as a step down from 
intensive outpatient services, whereas intensive outpatient services 
(under Level 2.1 of the continuum of care) are typically provided for 
more than 9 hours a week and no more than 20 hours a week for adults 
with more severe needs than those for whom treatment provided according 
to Level 1 of the continuum of care is clinically appropriate.\119\ In 
order to appropriately reflect the more intensive treatment profile for 
those individuals receiving IOP services versus OTP services, we 
propose to establish a weekly payment adjustment via an add-on code for 
OTP intensive outpatient services, which is consistent with the weekly 
bundled payment structure under the existing Medicare OTP benefit. We 
believe that a code billed on a weekly basis may allow greater 
flexibility with respect to how IOP services are rendered and how 
service hours may be distributed over a given week to best meet patient 
needs. Under this proposal, we propose that an OTP could bill for the 
weekly add-on code for OTP intensive services in the same week for the 
same beneficiary as

[[Page 49721]]

the existing coding describing a weekly OTP bundle, so long as all 
applicable billing requirements for each code are met. However, we note 
that under this proposal, each OTP intensive outpatient service must be 
medically reasonable and necessary and not duplicative of any 
service(s) for which OTPs received a bundled payments for an episode of 
care in a given week.
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    \119\ https://americanaddictioncenters.org/rehab-guide/asam-criteria-levels-of-care.
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    For OTP intensive outpatient services, we propose to permit OTPs to 
bill new HCPCS code GOTP1 (Intensive outpatient services; minimum of 
nine services over a 7-contiguous day period, which can include 
individual and group therapy with physicians or psychologists (or other 
mental health professionals to the extent authorized under State law); 
occupational therapy requiring the skills of a qualified occupational 
therapist; services of social workers, trained psychiatric nurses, and 
other staff trained to work with psychiatric patients; individualized 
activity therapies that are not primarily recreational or diversionary; 
family counseling (the primary purpose of which is treatment of the 
individual's condition); patient training and education (to the extent 
that training and educational activities are closely and clearly 
related to individual's care and treatment); diagnostic services; list 
separately in addition to code for primary procedure.
    We propose to value HCPCS code GOTP1 based on an assumption of a 
typical case of three IOP services furnished per day for approximately 
3 days per week. In response to the comment solicitation on IOP 
services in the CY 2023 PFS proposed rule, many commenters stated that 
a typical IOP treatment plan requires at least 9 hours of skilled 
treatment services per week, which would follow both the treatment 
protocol advised by SAMHSA and ASAM level placement criteria.\120\ 
Moreover, the definition of intensive outpatient services in section 
4124(b)(2)(B) of the CAA, 2023 specifies that in community mental 
health centers, hospital-based IOPs, RHCs, and FQHCs, an individual in 
need of IOP services must be certified by a physician to have a need 
for such services for a minimum of 9 hours per week compared to a 
minimum of 20 hours per week in a partial hospitalization service 
treatment program. Thus, we believe that our assumption of 9 services 
rendered per week would be consistent with the minimum requirement in 
other care settings and existing clinical guidance. Therefore, we 
propose to calculate the payment rate for add-on code GOTP1 based on 9 
services per week. We welcome comments on whether an assumption of 9 
services per week is representative of the typical number of services 
furnished to patients with an OUD who receive IOP services at OTPs. We 
propose that by billing HCPCS code GOTP1, the OTP would be attesting to 
the fact that it has furnished at least nine services for that week 
that would otherwise qualify as OTP intensive outpatient services as 
discussed in section VIII.G.3.a of this proposed rule. We acknowledge 
that not all OTP intensive outpatient services will necessarily be 60 
minutes in duration, or be a time-based service, therefore, we propose 
that furnishing nine OTP intensive outpatient services, regardless of 
the length of each service, would meet the threshold to bill for HCPCS 
code GOTP1. We note that this aspect of our proposal differs from the 
proposed requirement for physician certification, discussed in section 
VIII.G.3.c., Certification and Plan of Care Requirements for IOPs in 
OTP settings, of this proposed rule, pursuant to which a physician must 
certify that the individual requires nine hours of OTP intensive 
outpatient services, and not simply nine OTP intensive outpatient 
services.
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    \120\ https://www.ncbi.nlm.nih.gov/books/NBK64088/;https://store.samhsa.gov/product/TIP-47-Substance-Abuse-Clinical-Issues-in-Intensive-Outpatient-Treatment/SMA13-4182.
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    Under this proposal to establish a weekly add-on payment for OTP 
intensive outpatient services, no single service may be counted more 
than once for the purpose of meeting the criteria for billing for any 
given code. In other words, the same service could not be used to 
qualify to bill both the weekly bundle and the add-on payment 
adjustment for OTP intensive outpatient services. Additionally, we 
recognize that some services furnished as part of OTP intensive 
outpatient services may be required multiple times a week (e.g., 
occupational therapy, patient education, family counseling, activity 
therapies) to meet individual patient needs and varying clinical 
complexity. Such services of the same type would be allowable to meet 
the minimum of 9 services per week, provided that all services are 
medically reasonable and necessary.
    This proposal for the calculation of the payment rate for HCPCS 
code GOTP1 is similar to the payment methodology proposed for IOP 
services furnished in other settings. Please see a more detailed 
discussion regarding this payment methodology at section VIII.D 
``Proposed Payment Rate Methodology for PHP and IOP'' of this proposed 
rule. We believe that calculating the payment rate for the proposed 
add-on payment adjustment for OTP intensive outpatient services based 
on the rate provided in a hospital setting would promote greater 
consistency, site neutrality, and parity with payment rates proposed 
for IOPs in a majority of other settings, including hospital-based 
IOPs, FQHCs, and RHCs.
    Since IOP services have not been covered or paid under Medicare to 
date, CMS does not have direct data to estimate utilization and costs 
of IOP services. However, many of the items and services included in 
IOP services have been and are currently paid for by Medicare as part 
of the PHP benefit or under the OPPS more generally. Therefore, in our 
preliminary ratesetting exercise, we identified, in consultation with 
clinicians, a list of HCPCS codes for services that would be reasonably 
included as part of IOP services. Please see a more comprehensive list 
of these HCPCS codes used to inform the payment methodology during our 
preliminary ratesetting exercise in Table 43 within section VIII.C 
``Coding and Billing for PHP and IOP Services under the OPPS'' of this 
proposed rule. The inclusion of many of these services was informed by 
comments we received in response to comment solicitations in the CY 
2023 OPPS/ASC and PFS proposed rules. For example, some of these codes 
correspond to services for individual and group therapy, occupational 
therapy, individualized activity therapies, family counseling, and 
patient training and education.
    For the majority of these identified HCPCS codes, the most recent 
utilization data available was for OPPS claims paid for dates of 
service in CY 2022, and the most recent cost data available was from 
the cost reports in CY 2021. Based on this cost and utilization data 
from CY 2021 and CY 2022, respectively, the estimated payment rate for 
3-services per day based on APC 5861 (Intensive Outpatient (1-3 
services) for Hospital-based IOPs) was $280.80; 3 services per day for 
3 days a week would therefore be equal to $842.40. Because we are 
proposing that OTP intensive outpatient services include individual and 
group therapy, which are also already included in the non-drug 
component of the OTP bundled payments for an episode of care, we 
propose to subtract the amount that corresponds to the individual and 
group therapy proposed rate in the non-drug component of the OTP 
bundled payment from our estimate of $842.40 in order to establish the 
amount of the OTP intensive outpatient services add-on payment. 
Specifically, in the CY 2020 PFS final rule (84 FR 62658), we finalized 
a

[[Page 49722]]

building block methodology to calculate the rate for the non-drug 
component based on established non-facility rates for similar services 
under the Medicare PFS, the Medicare CLFS, and state Medicaid programs. 
For group therapy, we used CPT code 90853 (Group psychotherapy (other 
than of a multiple-family group)) as a reference code, which at the 
time of drafting the CY 2020 PFS final rule, in CY 2019, was assigned a 
non-facility rate of $27.39. In order to account for the application of 
the annual update to the non-drug component, the adjusted amount for 
group psychotherapy is currently $28.36. For individual therapy, in the 
CY 2023 PFS final rule (87 FR 69773), we finalized an update to the 
reference code used in the non-drug component to be based on the CY 
2019 non-facility rate for CPT code 90834 (Psychotherapy, 45 minutes 
with patient), which was $91.18, and which we adjusted to account for 
the application of the annual update in the intervening years, 
resulting in $94.37. Therefore, we propose an add-on payment adjustment 
of approximately $719.67 for HCPCS code GOTP1 ($842.40-($28.36 + 
$94.37)). We seek comment on whether the proposed add-on payment 
adjustment accurately reflects the typical resource costs involved in 
furnishing IOP services at OTPs. We also seek comment on our proposal 
to adjust the proposed add-on payment adjustment to account for 
individual and group therapy included in the non-drug component of OTP 
bundled payments for an episode of care.
    In accordance with the methodology used to update the payment rate 
for other services payable under the OTP benefit, we propose to apply 
an annual update based on the percentage increase in the Medicare 
Economic Index (MEI) to the payment rate HCPCS code GOTP1, as described 
in Sec.  414.30. Additionally, consistent with the methodology used to 
determine payment for non-drug services furnished under the OTP 
benefit, we propose to apply a geographic adjustment to the payment for 
HCPCS code GOTP1 based on the Geographic Adjustment Factor, as 
described in Sec.  414.26. Furthermore, consistent with the policy that 
applies for other OUD treatment services furnished by OTPs, a 
beneficiary copayment amount of zero would apply for OTP intensive 
outpatient services. Lastly, we are also seeking comment on the impact 
this proposal may have on dually eligible individuals, specifically, 
the extent to which this expanded coverage and payment may supplant 
Medicaid coverage for dually eligible individuals, versus the extent to 
which it would supplement Medicaid if it were fundamentally different 
from what Medicaid covers in a given state.
    We recognize that in this proposed rule, we propose to adopt per 
diem rates for IOP services furnished in other settings, including 
CMHCs, hospital-based settings, FQHCs, and RHCs, and that per diem 
rates are used in the payment methodology for IOP services in some 
state Medicaid programs. Therefore, we are also seeking comment on 
whether a daily per diem rate based on 3 service hours per day would be 
more appropriate for OTP settings, especially if one payment 
methodology over the other would be less disruptive to OTPs as it 
relates to coordination of benefits. Lastly, we are seeking feedback 
about the experiences of furnishing IOP services within OTP settings, 
including the extent to which it is similar to or different than 
furnishing IOP services in other settings. We believe this additional 
information may be helpful to understand the clinical complexity of 
patients enrolled in OTPs who are in need of IOP services for OUD and 
to compare the level of care and type of services that may supplement 
and/or exceed those ordinarily provided under the existing OTP benefit, 
in order to help inform potential future rulemaking on this topic.
    We propose to add a new paragraph (iv) to Sec.  410.67(d)(4)(i)(F) 
in order to describe the new adjustment to the bundled payment for OTP 
intensive outpatient services. Additionally, we propose to amend Sec.  
410.67(d)(4)(ii) to add that the payment amounts for OTP intensive 
outpatient services will be geographically adjusted using the 
Geographic Adjustment Factor described in Sec.  414.26. Lastly, we 
propose to amend Sec.  410.67(d)(4)(iii) to add that payment for OTP 
intensive outpatient services will be updated annually using the 
Medicare Economic Index described in Sec.  405.504(d).
c. Certification and Plan of Care Requirements for IOPs in OTP Settings
    In order to be consistent with physician certification and plan of 
care requirements for IOP services furnished in other settings of care 
and to ensure, to the extent possible, that IOP services are only 
provided and paid for when medically necessary and appropriate for the 
beneficiary, we propose to adopt the same standards set forth in Sec.  
424.24(d)(1) through (3) for OTPs providing OTP intensive outpatient 
services (please see more detailed discussions of these proposed 
standards in section VIII.B.3, IOP Certification and Plan of Care 
Requirements, of this proposed rule. Specifically, under this proposal, 
a physician would be required to certify that an individual needs OTP 
intensive outpatient services for a minimum of 9 hours per week, which 
is consistent with treatment standards specified by SAMHSA and minimum 
hour standards described by ASAM's Level 2.1 of care for IOP 
services.\121\ This certification would require documentation in the 
patient's medical record to include that the individual requires such 
services for a minimum of 9 hours per week; require the first 
recertification as of the 30th day of IOP services; and require that 
the certification of IOP services occur no less frequently than every 
other month. Accordingly, we propose to revise Sec.  410.67(c) of our 
regulations to add a paragraph (5) to specify that OTPs must furnish 
OTP intensive outpatient services consistent with the requirements 
regarding content of certification, plan of treatment requirements, and 
recertification requirements as set forth under proposed Sec.  
424.24(d)(1) through (3).
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    \121\ https://www.ncbi.nlm.nih.gov/books/NBK64088/; https://store.samhsa.gov/product/TIP-47-Substance-Abuse-Clinical-Issues-in-Intensive-Outpatient-Treatment/SMA13-4182.
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    Regarding the recertification requirements, given that OTP services 
are billed on a weekly basis, we propose that the required 
recertification could occur any time during an episode of care in which 
the 30th day from the start of IOP services (and every other month 
thereafter) falls. We note that in the CY 2020 PFS final rule (84 FR 
62641), we defined an episode of care as a 1-week (contiguous 7-day) 
period at Sec.  410.67(b). In the CY 2021 PFS final rule (85 FR 84691), 
we clarified that OTPs may choose to apply a standard billing cycle by 
setting a particular day of the week to begin all episodes of care, or 
they may choose to adopt weekly billing cycles that vary across 
patients, and we propose to adopt the same approach here. We welcome 
comments on these proposals.
    We note that this proposal requires that the physician certify a 
need for at least 9 hours of services per week, which differs from our 
proposal that in order to bill for the add-on payment adjustment for 
OTP intensive outpatient services, the OTP must attest that it provided 
9 such services to the beneficiary in a week. Given that services can 
vary in duration and that some services are not time-based, we believe 
it would be administratively simpler for OTPs to count the number of 
services furnished rather than to

[[Page 49723]]

count the number of hours for purposes of billing the add-on payment 
adjustment for OTP intensive outpatient services. Additionally, as 
described in Section VIII.G.3.b., our proposed payment rate is based on 
the number of services furnished per day, rather than the number of 
hours, consistent with the proposals for IOP payment in other settings. 
In contrast, for the purposes of certification and plan of care 
requirements for IOPs in OTP settings, we believe that requiring a 
physician to certify that a beneficiary requires a minimum of 9 hours 
of services per week is consistent with existing clinical guidance 
describing the intensity of care for IOP services.\122\ Additionally, a 
minimum of 9 hours of services per week is consistent with proposals 
for the certification and plan of care requirements for IOPs in other 
care settings. We welcome comments on both of these proposals, 
including whether this distinction accurately reflects the practice 
patterns of OTPs furnishing IOP services.
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    \122\ https://www.ncbi.nlm.nih.gov/books/NBK64088/; https://store.samhsa.gov/product/TIP-47-Substance-Abuse-Clinical-Issues-in-Intensive-Outpatient-Treatment/SMA13-4182.
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d. Correction to the OTP Regulation Text
    We also propose to correct a typographical error at Sec.  
410.67(d)(3), which currently states ``At least one OUD treatment 
service described in paragraphs (b)(1) through (5) of this section must 
be furnished to bill for the bundled payment for an episode of care.'' 
This provision should refer to paragraphs (i) through (v) of the 
definition of OUD treatment service in paragraph (b). Accordingly, we 
propose to correct this sentence to read, ``At least one OUD treatment 
service described in paragraphs (i) through (v) of the definition of 
Opioid use disorder treatment service in paragraph (b) of this section 
must be furnished to bill for the bundled payment for an episode of 
care.''

H. Payment Rates Under the Medicare Physician Fee Schedule for 
Nonexcepted Items and Services Furnished by Nonexcepted Off-Campus 
Provider-Based Departments of a Hospital

1. Background
    In the CY 2017 OPPS/ASC final rule with comment period (81 FR 
79727) in the discussion of the proposed implementation of section 603 
of the Bipartisan Budget Act (BBA) of 2015 (Pub. L. 114-74, November 2, 
2015), we established the PHP payment rate under the Medicare Physician 
Fee Schedule (MPFS) for nonexcepted off-campus PBDs as equivalent to 
the level of payment made to CMHCs for furnishing three or more PHP 
services per day. We noted that when a beneficiary received outpatient 
services in an off-campus department of a hospital, the total Medicare 
payment for those services is generally higher than when those same 
services are provided in a physician's office. Similarly, when partial 
hospitalization services are provided in a hospital-based PHP, Medicare 
pays more than when those same services are provided by a CMHC. Our 
rationale for adopting the CMHC per diem rate for APC 5853 as the MPFS 
payment amount for nonexcepted PBDs providing PHP services was because 
CMHCs are freestanding entities that are not part of a hospital, but 
they provide the same PHP services as hospital-based PHPs. This is 
similar to the differences between freestanding entities paid under the 
MPFS that furnish other services also provided by hospital-based 
entities. Similar to other entities currently paid for their technical 
component services under the MPFS, we believe CMHCs would typically 
have lower cost structures than hospital-based PHPs, largely due to 
lower overhead costs and other indirect costs such as administration, 
personnel, and security. We explained that we believe that paying for 
nonexcepted hospital-based partial hospitalization services at the 
lower CMHC per diem rate aligns with section 603 of the BBA of 2015, 
while also preserving access to PHP services.
2. Proposed Payment for PHP and IOP Furnished by Nonexcepted Off-Campus 
Hospital Outpatient Departments
    As discussed in section VIII.D of this proposed rule, we propose to 
change our methodology for calculating PHP payment rates by 
establishing separate payment rates for 3-service and 4-service days. 
We also propose to establish IOP payment rates for 3-service and 4-
service days beginning in CY 2024. Because CMHCs have different cost 
structures than hospitals, we propose to establish separate CMHC and 
hospital rates for 3-service and 4-service PHP and IOP days. We propose 
to utilize the CMHC rates for PHP and IOP as the payment rates for PHP 
and IOP services furnished by nonexcepted off-campus hospital 
outpatient departments. Specifically, we propose to utilize the 
separate CMHC rates for 3-service and 4-service PHP days as the MPFS 
rates, depending upon whether a nonexcepted off-campus hospital 
outpatient department furnishes 3 or 4 PHP services in a day. 
Similarly, we also propose to utilize the CMHC rates for 3-service and 
4-service IOP days as the MPFS rates, depending upon whether a 
nonexcepted hospital outpatient department furnishes 3 or 4 IOP 
services in a day.
    As discussed in section VIII.D of this proposed rule, we are 
soliciting comment on our proposed payment rates for PHP and IOP 
services, as well as whether commenters believe it would be appropriate 
to consider establishing a combined rate for 3-service days in 
hospitals and CMHCs, and a combined rate for 4-service days in 
hospitals and CMHCs. We are considering whether it would be appropriate 
to apply a different methodology for calculating the PHP and IOP rates 
for nonexcepted off-campus hospital outpatient departments and we 
solicit comments on alternative methodologies commenters believe would 
be appropriate. For example, we are considering whether it would be 
appropriate to apply the PFS Relativity Adjuster of 40 percent, which 
was established in the CY 2018 PFS rule (82 FR 53030) and which applies 
to most other nonexcepted OPPS services furnished by a nonexcepted off-
campus hospital outpatient department. Depending on the comments we 
receive, we may finalize an alternative methodology such as the PFS 
Relativity Adjuster. We note that if we were to adopt such a 
methodology, we would apply it to both PHP and IOP services.

IX. Services That Will Be Paid Only as Inpatient Services

A. Background

    Established in rulemaking as part of the initial implementation of 
the OPPS, the inpatient only (IPO) list identifies services for which 
Medicare will only make payment when the services are furnished in the 
inpatient hospital setting because of the invasive nature of the 
procedure, the underlying physical condition of the patient, or the 
need for at least 24 hours of postoperative recovery time or monitoring 
before the patient can be safely discharged (70 FR 68695). The IPO list 
was created based on the premise (rooted in the practice of medicine at 
that time), that Medicare should not pay for procedures furnished as 
outpatient services that are performed on an inpatient basis virtually 
all of the time for the Medicare population, for the reasons described 
above, because performing these procedures on an outpatient basis would 
not be safe or appropriate, and therefore not reasonable and necessary 
under Medicare rules (63 FR 47571). Services

[[Page 49724]]

included on the IPO list were those determined to require inpatient 
care, such as those that are highly invasive, result in major blood 
loss or temporary deficits of organ systems (such as neurological 
impairment or respiratory insufficiency), or otherwise require 
intensive or extensive postoperative care (65 FR 67826). There are some 
services designated as inpatient only that, given their clinical 
intensity, would not be expected to be performed in the hospital 
outpatient setting. For example, we have traditionally considered 
certain surgically invasive procedures on the brain, heart, and 
abdomen, such as craniotomies, coronary-artery bypass grafting, and 
laparotomies, to require inpatient care (65 FR 18456). Designation of a 
service as inpatient only does not preclude the service from being 
furnished in a hospital outpatient setting but rather means that 
Medicare will not make payment for the service if it is furnished to a 
Medicare beneficiary in the hospital outpatient setting (65 FR 18443). 
Conversely, the fact that a procedure is not on the IPO list should not 
be interpreted to mean the procedure is only appropriately performed in 
the hospital outpatient setting (70 FR 68696).
    As part of the annual update process, we have historically worked 
with interested parties, including professional societies, hospitals, 
surgeons, hospital associations, and beneficiary advocacy groups, to 
evaluate the IPO list and to determine whether services should be added 
to or removed from the list. Interested parties are encouraged to 
request reviews for a particular code or group of codes; and we have 
asked that their requests include evidence that demonstrates that the 
procedure was performed on an outpatient basis in a safe and 
appropriate manner in a variety of different types of hospitals--
including but not limited to--operative reports of actual cases, peer-
reviewed medical literature, community medical standards and practice, 
physician comments, outcome data, and post-procedure care data (67 FR 
66740).
    We traditionally have used five longstanding criteria to determine 
whether a procedure should be removed from the IPO list. As noted in 
the CY 2012 OPPS/ASC final rule with comment period (76 FR 74353), we 
assessed whether a procedure or service met these criteria to determine 
whether it should be removed from the IPO list and assigned to an APC 
group for payment under the OPPS when provided in the hospital 
outpatient setting. We have explained that while we only require a 
service to meet one criterion to be considered for removal, satisfying 
only one criterion does not guarantee that the service will be removed; 
instead, the case for removal is strengthened with the more criteria 
the service meets. The criteria for assessing procedures for removal 
from the IPO list are the following:
    1. Most outpatient departments are equipped to provide the services 
to the Medicare population.
    2. The simplest procedure described by the code may be furnished in 
most outpatient departments.
    3. The procedure is related to codes that we have already removed 
from the IPO list.
    4. A determination is made that the procedure is being furnished in 
numerous hospitals on an outpatient basis.
    5. A determination is made that the procedure can be appropriately 
and safely furnished in an ASC and is on the list of approved ASC 
services or has been proposed by us for addition to the ASC covered 
procedures list.
    In the past, we have requested that interested parties submit 
corresponding evidence in support of their claims that a code or group 
of codes met the longstanding criteria for removal from the IPO list 
and was safe to perform on the Medicare population in the hospital 
outpatient setting--including, but not limited to case reports, 
operative reports of actual cases, peer-reviewed medical literature, 
medical professional analysis, clinical criteria sets, and patient 
selection protocols. Our clinicians then thoroughly review all 
information submitted within the context of the established criteria 
and if, following this review, we determine that there is sufficient 
evidence to confirm that the code could be safely and appropriately 
performed on an outpatient basis, we assign the service to an APC and 
include 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.

B. Changes to the Inpatient Only (IPO) List

    As stated above, we encourage interested parties to request reviews 
for a particular code or group of codes for removal from the IPO list. 
For CY 2024, we received several requests from interested parties 
recommending particular services to be removed from the IPO list. 
Following our clinical review, we did not find sufficient evidence 
that, using the five criteria listed above, these services meet the 
criteria to be removed from the IPO list for CY 2024. Therefore, we are 
not proposing to remove any services from the IPO list for CY 2024.
    We propose to add nine services for which codes were newly created 
by the AMA CPT Editorial Panel for CY 2024 to the IPO list. These new 
services are described by the placeholder CPT codes X114T, 2X002, 
2X003, 2X004, 619X1, 7X000, 7X001, 7X002, and 7X003, which will be 
effective on January 1, 2024. After clinical review of these services, 
we found that they require a hospital inpatient admission or stay and 
thus, we believe they are not appropriate for payment under the OPPS. 
We propose to assign these services to status indicator ``C'' 
(Inpatient Only) for CY 2024. Additionally, we propose to reassign CPT 
code 0646T from status indicator ``E1'' (not payable by Medicare) to 
``C,'' effective CY 2024. The CPT codes, long descriptors, and the 
proposed CY 2024 payment indicators are displayed in Table 47.
    Table 47 below contains the proposed changes to the IPO list for CY 
2024. The

[[Page 49725]]

complete list of codes describing services that are proposed to be 
designated as inpatient only services beginning in CY 2024 is also 
included as Addendum E to this proposed rule, which is available via 
the internet on the CMS website.
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[[Page 49726]]


BILLING CODE 4120-01-C

C. Solicitation of Public Comments on the Services Described by CPT 
Codes 43775, 43644, 43645, and 44204

    We are soliciting comments regarding whether the services described 
by CPT codes 43775 (Laparoscopy, surgical, gastric restrictive 
procedure; longitudinal gastrectomy (i.e., sleeve gastrectomy)), 43644 
(Laparoscopy, surgical, gastric restrictive procedure; with gastric 
bypass and roux-en-y gastroenterostomy (roux limb 150 cm or less)), 
43645 (Laparoscopy, surgical, gastric restrictive procedure; with 
gastric bypass and small intestine reconstruction to limit absorption), 
and 44204 (Laparoscopy, surgical; colectomy, partial, with anastomosis) 
are appropriate to be removed from the IPO list. At this time, we do 
not believe that we have adequate information to determine whether the 
services described by CPT codes 43775, 43644, 43645, and 44204 can be 
safely performed in the hospital outpatient department setting on the 
Medicare population. Therefore, we are specifically requesting 
information on evidence that these services can be performed safely on 
the Medicare population in the outpatient setting. We are also seeking 
public comments on whether the services described by CPT codes 43775, 
43644, 43645, and 44204 specifically meet any of the five criteria to 
be removed from the IPO list mentioned above.

X. Proposed Nonrecurring Policy Changes

A. Supervision by Nurse Practitioners, Physician Assistants, and 
Clinical Nurse Specialists of Cardiac Rehabilitation, Intensive Cardiac 
Rehabilitation, and Pulmonary Rehabilitation Services Furnished to 
Hospital Outpatients

1. Background
    Section 51008(a) of the Bipartisan Budget Act of 2018 (BBA of 2018) 
(Pub. L. 115-123) amended section 1861(eee)(1) and (2) of the Act to 
revise the definitions of cardiac rehabilitation (CR) program and 
intensive cardiac rehabilitation (ICR) program, respectively, to 
provide that services these programs furnish can be under the 
supervision of a physician assistant (PA), nurse practitioner (NP), or 
clinical nurse specialist (CNS). Section 51008(b) of the BBA of 2018 
amended section 1861(fff)(1) of the Act similarly to revise the 
definition of a pulmonary rehabilitation (PR) program to provide that 
PR services can be furnished under the supervision of these same types 
of practitioners. Section 51008(c) of the BBA of 2018 provides that 
these amendments apply to items and services furnished on or after 
January 1, 2024. Before the effective date of these amendments, only 
physicians could supervise services furnished as part of CR, ICR, and 
PR programs.
    To implement these amendments, we propose in the CY 2024 PFS 
proposed rule to revise the regulations at 42 CFR 410.47 and 410.49, 
which describe the conditions of coverage for the CR, ICR and PR 
programs, to provide that physician assistants, nurse practitioners, 
and clinical nurse specialists can supervise CR, ICR and PR program 
services. Specifically, the CY 2024 PFS proposed rule proposes to amend 
Sec. Sec.  410.47 and 410.49 to provide that supervision of pulmonary 
rehabilitation, cardiac rehabilitation and intensive cardiac 
rehabilitation services can be provided by a physician, PA, NP, or CNS.
2. Proposed Conforming Revisions to Sec.  410.27
    Correspondingly, to implement the amendments to section 
1861(eee)(1) and (2) and (fff) of the Act, and to be consistent with 
the proposed revisions to Sec.  410.47 and Sec.  410.49, we propose to 
make conforming revisions to Sec.  410.27, which describes the 
conditions for coverage for therapeutic outpatient hospital or CAH 
services and supplies provided incident to a physician's or 
nonphysician practitioner's service.
    Currently, Sec.  410.27(a)(1)(iv)(B)(1) provides that for PR, CR, 
and ICR services, direct supervision must be furnished by a doctor of 
medicine or osteopathy as specified in Sec. Sec.  410.47 and 410.49. We 
propose to delete the reference to a doctor of medicine or osteopathy 
and retain the cross-reference to Sec. Sec.  410.47 and 410.49. As the 
text remaining following this deletion would consist solely of cross-
references to the newly revised Sec. Sec.  410.47 and 410.49, this 
would have the effect of expanding who may provide supervision for CR, 
ICR and PR to include PAs, NPs, and CNSs for purposes of supervision of 
PR, CR, and ICR services under Sec.  410.27.
    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 42 CFR 400.200, the presence of the physician for 
purposes of the direct supervision requirement for PR, CR, and ICR 
services includes virtual presence through audio/video real-time 
communications technology when use of such technology is indicated to 
reduce exposure risks for the beneficiary or health care provider. 
Specifically, the required direct physician supervision can be provided 
through virtual presence using audio/video real-time communications 
technology (excluding audio-only) subject to the clinical judgment of 
the supervising practitioner. We further amended Sec.  
410.27(a)(1)(iv)(D) in the CY 2021 OPPS/ASC final rule with comment 
period to provide that this flexibility continues until the later of 
the end of the calendar year in which the PHE as defined in Sec.  
[thinsp]400.200 ends or December 31, 2021 (85 FR 86113 and 86299). In 
the CY 2021 OPPS/ASC final rule with comment period we also clarified 
that this flexibility excluded the presence of the supervising 
practitioner via audio-only telecommunications technology (85 FR 
86113).
    In the CY 2022 PFS final rule, CMS added CPT codes 93797 (Physician 
or other qualified health care professional services for outpatient 
cardiac rehabilitation; without continuous ECG monitoring (per 
session)) and 93798 (Physician or other qualified health care 
professional services for outpatient cardiac rehabilitation; with 
continuous ECG monitoring (per session)) and HCPCS codes G0422 
(Intensive cardiac rehabilitation; with or without continuous ecg 
monitoring with exercise, per session) and G0423 (Intensive cardiac 
rehabilitation; with or without continuous ecg monitoring; without 
exercise, per session) to the Medicare Telehealth Services List on a 
Category 3 basis (86 FR 65055).
    In order to effectuate a similar policy under the OPPS, where PR, 
CR, and ICR rehabilitation services could 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, in the CY 
2023 OPPS/ASC final rule with comment period, we finalized a policy to 
extend the revised definition of direct supervision to include the 
presence of the supervising practitioner through two-way, audio/video 
telecommunications technology until December 31, 2023 (87 FR 72019 
through 72020). Under the telehealth flexibilities extended in the CAA, 
2023, these services will remain on the Medicare Telehealth Services 
List through the end of CY 2024. In the interest of maintaining similar 
policies for direct supervision of PR, CR, and

[[Page 49727]]

ICR under the OPPS and PFS, we propose to further revise Sec.  
410.27(a)(1)(iv)(B)(1) to allow for the direct supervision requirement 
for CR, ICR, and PR to include virtual presence of the physician 
through audio-video real-time communications technology (excluding 
audio-only) through December 31, 2024 and extend this policy to the 
nonphysician practitioners, that is NPs, PAs, and CNSs, who are 
eligible to supervise these services in CY 2024. We are also soliciting 
comments on whether there are safety and/or quality of care concerns 
regarding adopting this policy beyond the current or proposed 
extensions and what policies CMS could adopt to address those concerns 
if the policy were extended beyond 2023.
    For the complete discussion of the proposed revisions to Sec.  
410.47 and Sec.  410.49, we refer readers to the CY 2024 PFS proposed 
rule that is published elsewhere in the Federal Register.

B. Payment for Intensive Cardiac Rehabilitation Services (ICR) Provided 
by an Off-Campus, Non-Excepted Provider Based Department (PBD) of a 
Hospital

1. Background on Intensive Cardiac Rehabilitation
    Section 144(a) of the Medicare Improvements for Patients and 
Providers Act of 2008 (MIPPA) (Pub. L. 110-275) made a number of 
changes to the Act related to coverage and payment for pulmonary and 
cardiac rehabilitation services furnished to beneficiaries with chronic 
obstructive pulmonary disease and certain other conditions, effective 
January 1, 2010. Specifically, section 144(a)(1)(A) of MIPPA amended 
section 1861(s)(2) of the Act by adding new subparagraphs (CC) and (DD) 
to provide for Medicare Part B coverage of items and services furnished 
under a cardiac rehabilitation (CR) program (as defined in a new 
section 1861(eee)(1) of the Act); a pulmonary rehabilitation (PR) 
program (as defined in a new section 1861(fff)(1) of the Act); and an 
intensive cardiac rehabilitation (ICR) program (as defined in a new 
section 1861(eee)(4) of the Act). The amendments made by section 144(a) 
of MIPPA provide for coverage of CR, PR, and ICR program services 
provided in a physician's office, in a hospital on an outpatient basis, 
and in other settings determined appropriate by the Secretary.
    Section 144(a)(2) of MIPPA amended section 1848(j)(3) of the Act to 
provide for payment for services furnished in an ICR program under the 
PFS and also added a new paragraph (5) to section 1848(b) of the Act. 
Section 1848(b)(5)(A) requires the Secretary for ICR program services 
to substitute the Medicare OPD fee schedule amount established under 
the OPPS for cardiac rehabilitation (under HCPCS codes 93797 and 93798 
for calendar year 2007, or any succeeding HCPCS codes for cardiac 
rehabilitation). For a full discussion of implementation of the MIPPA 
amendments related to coverage and payment for PR, CR, and ICR programs 
under the OPPS, we refer readers to the CY 2010 OPPS/ASC final rule 
with comment period (74 FR 60566 through 60574).
2. Background on Section 603 of the Bipartisan Budget Act of 2015 and 
the PFS Relativity Adjuster
    Section 603 of the Bipartisan Budget Act of 2015 (Pub. L. 114-74) 
(BBA, 2015) (hereinafter referred to as ``section 603'') amended 
section 1833(t) of the Act by adding a new clause (v) to paragraph 
(1)(B) and adding a new paragraph (21). As a general matter, under 
sections 1833(t)(1)(B)(v) and (t)(21) of the Act, applicable items and 
services furnished by certain off-campus outpatient departments of a 
provider on or after January 1, 2017, are not considered covered OPD 
services as defined under section 1833(t)(1)(B) of the Act for purposes 
of payment under the OPPS and are instead paid ``under the applicable 
payment system'' under Medicare Part B if the requirements for such 
payment are otherwise met. Section 603 amended section 1833(t)(1)(B) of 
the Act by adding a new clause (v), which excludes from the definition 
of ``covered OPD services'' applicable items and services (defined in 
paragraph (21)(A) of the section) that are furnished on or after 
January 1, 2017, by an off-campus PBD, as defined in paragraph (21)(B) 
of the section.
    In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79699 
through 79719), we adopted a number of policies to implement section 
603. 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. To do so, we 
finalized policies that define whether certain items and services 
furnished by a given off-campus PBD may be considered excepted and, 
thus, continue to be paid under the OPPS; established the requirements 
for the off-campus PBDs to maintain excepted status (both for the 
excepted off-campus PBDs and for the items and services furnished by 
such excepted off-campus PBDs); and described the applicable payment 
system for nonexcepted items and services (generally, the PFS).
    To effectuate payment for nonexcepted items and services, in the CY 
2017 interim final rule with comment period (81 FR 79720 through 
79729), we established a new set of payment rates under the PFS that 
reflected the relative resource costs of furnishing the technical 
component of a broad range of services to be paid under the PFS 
specific to the nonexcepted off-campus PBDs of a hospital. 
Specifically, we established a PFS Relativity Adjuster that is applied 
to the OPPS rate for the billed nonexcepted items and services 
furnished in a nonexcepted off-campus PBD in order to calculate payment 
rates under the PFS. The PFS Relativity Adjuster reflects the estimated 
overall difference between the payment that would otherwise be made to 
a hospital under the OPPS for the nonexcepted items and services 
furnished in nonexcepted off-campus PBDs and the resource-based payment 
under the PFS for the technical aspect of those services with reference 
to the difference between the facility and nonfacility (office) rates 
and policies under the PFS. 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 (that is, 60 percent less than the OPPS rate) (82 FR 53030).
    In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79719 
and 79725), we created modifier ``PN'' to collect data for purposes of 
implementing section 603 but also to trigger payment under the newly 
adopted PFS-equivalent rates for nonexcepted items and services. 
Nonexcepted off-campus PBDs bill for nonexcepted items and services on 
the institutional claim utilizing modifier ``PN'' to indicate that an 
item or service is a nonexcepted item or service.
    For a full discussion of our initial implementation of section 603, 
we refer readers to the CY 2017 OPPS/ASC final rule with comment period 
(81 FR 79699 through 79719) and the interim final rule with comment 
period (79720

[[Page 49728]]

through 79729). For a detailed discussion of the current PFS Relativity 
Adjuster related to payments under section 603, we refer readers to the 
CY 2018 OPPS/ASC final rule with comment period (82 FR 52356 through 
52637) and the CY 2019 PFS final rule with comment period (82 FR 59505 
through 59513).
3. Proposal To Modify Claims Processing of HCPCs Codes G0422 and G0423 
To Address an Unintended Payment Disparity Caused by Application of the 
PFS Relativity Adjuster to ICR Services Furnished by Off-Campus Non-
Excepted PBDs Hospitals
    Since 2010, ICR services provided in the physician's office have 
been paid at 100 percent of the OPPS rate for CR services as required 
by 1848(b)(5). Since 2017, ICR services provided by an off-campus, non-
excepted PBD of a hospital have been paid at the above-described ``PFS-
equivalent'' rate through application of the PFS Relativity Adjuster, 
which was 50 percent of the OPPS rate in CY 2017 and 40 percent of the 
OPPS rate in CY 2018 and thereafter, consistent with the above-
described implementation of section 603.
    This has produced an outcome inconsistent with the text of section 
1848(a)(5)(A) and at odds with the intent of section 603, which was to 
remove the significant disparity in payment rates for the same services 
depending on whether they were furnished in a physician's office or an 
off-campus, non-excepted PBD of a hospital. When the PFS Relativity 
Adjuster was implemented in 2017, payment for the ICR service provided 
in a physician's office and a PBD of an off-campus, non-excepted 
hospital was already the same pursuant to section 1848(b)(5)(A), which 
explicitly requires ICR services provided in a physician's office to be 
paid at the OPPS rate for cardiac rehabilitation. Consequently, 
application of the 40 percent PFS Relativity Adjuster to payment for 
ICR provided by an off-campus, non-excepted PBD has resulted in an 
unintended reimbursement disparity between the two sites of the 
service, as shown in Table 48.
[GRAPHIC] [TIFF OMITTED] TP31JY23.077

    This disparity creates a significant barrier to beneficiary access 
to an already underutilized service. To eliminate this unintended 
outcome and for consistency with the requirement in section 
1848(b)(5)(A) of the Act to substitute the OPPS rate for CR services 
for the PFS rate for ICR services, we propose to pay for ICR services 
provided by an off-campus, non-excepted provider-based department of a 
hospital at 100 percent of the OPPS rate for CR services (which is also 
100 percent of the PFS rate) rather than at 40 percent of the OPPS 
rate. Effective January 1, 2024, we propose to exclude ICR from the 40 
percent Relativity Adjuster policy at the code level by modifying the 
claims processing of 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) so that 100 percent of the OPPS rate for CR is paid 
irrespective of the presence of the ``PN'' modifier (signifying a 
service provided in a non-excepted off-campus provider-based department 
of a hospital) on the claim. We solicit comment on whether there are 
other services for which the OPPS rate is unconditionally used under 
the PFS, such that these services should be treated similarly for 
purposes of payment to off-campus, non-excepted provider-based 
departments of hospitals.

C. OPPS Payment for Specimen Collection for COVID-19 Tests

    In the May 8th, 2020 COVID-19 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'', we created a new E/M code to support COVID-19 testing during 
the PHE: HCPCS code C9803 (Hospital outpatient clinic visit specimen 
collection for severe acute respiratory syndrome coronavirus 2 (sars-
cov-2) (coronavirus disease [covid-19]), any specimen source) (85 FR 
27604). In our review of available HCPCS and CPT codes for the May 8th, 
2020 COVID-19 IFC, we did not identify a prior code that explicitly 
described the exact services of symptom assessment and specimen 
collection that HOPDs were undertaking to facilitate widespread testing 
for COVID-19. We believed that HCPCS code C9803 was necessary to meet 
the resource requirements for HOPDs to provide extensive testing for 
the duration of the COVID-19 PHE. This code was created only to meet 
the need of the COVID-19 PHE and we stated that we expected to retire 
this code at the conclusion of the COVID-19 PHE (85 FR 27604).
    We assigned HCPCS code C9803 to APC 5731--Level 1 Minor Procedures 
effective March 1, 2020 for the duration of the COVID-19 PHE. In 
accordance with Section 1833(t)(2)(B) of the Act, APC 5731--Level 1 
Minor Procedures contains services similar to HCPCS code C9803. APC 
5731--Level 1 Minor Procedures has a payment rate of $24.96 for CY 
2023. HCPCS code C9803 was

[[Page 49729]]

also assigned a status indicator of ``Q1.'' The Q1 status indicator 
indicates that the OPPS will package services billed under HCPCS code 
C9803 when billed with a separately payable primary service in the same 
encounter. When HCPCS code C9803 is billed without another separately 
payable primary service, we explained that we will make separate 
payment for the service under the OPPS. The OPPS also makes separate 
payment for HCPCS code C9803 when it is billed with a clinical 
diagnostic laboratory test with a status indicator of ``A'' on Addendum 
B of the OPPS. On May 11, 2023, the COVID-19 PHE concluded.\123\ As 
stated above, we created HCPCS code C9803 to meet the need of the 
COVID-19 PHE and the resource requirements for HOPDs during the PHE, 
and planned to retire the code following the conclusion of the PHE. 
While the code will remain active for the remainder of CY 2023 for 
technical reasons, we do not believe it is necessary for the code 
remain active in CY 2024 now that the PHE has concluded. Therefore, we 
propose to delete HCPCS code C9803 effective January 1, 2024. We 
solicit comment on our proposal to delete this code for CY 2024.
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D. Remote Services

1. Mental Health Services Furnished Remotely by Hospital Staff to 
Beneficiaries in Their Homes
    In the CY 2023 OPPS final rule with comment period (87 FR 72012 
through 72017), we finalized creation of three HCPCS C-codes to 
describe mental health services furnished by hospital staff to 
beneficiaries in their homes through communications technology. See 
Table 49 for the C-code numbers and their descriptors.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TP31JY23.078

    When we created HCPCS codes C7900 through C7902, we did not specify 
whether they should be used for individual or group services, 
preferring to keep the coding more general while we gathered 
information about the use of these new codes. However, we have heard 
from interested parties that, in instances when a beneficiary is 
receiving multiple units of group therapy a day, it is administratively 
burdensome to report and document each unit of time using multiple 
codes. Instead, interested parties requested that we create a single, 
untimed code that can be reported when a beneficiary receives multiple 
hours of group therapy per day. In order to reduce administrative 
burden and enhance access to these services, we propose to create a 
new, untimed, HCPCS C-code describing group therapy. Please see Table 
50 for the proposed C-code and long descriptor.
[GRAPHIC] [TIFF OMITTED] TP31JY23.079


[[Page 49730]]


    As we stated in the CY 2023 OPPS final rule with comment period, 
when beneficiaries are in their homes and not physically within the 
hospital, the hospital is not accruing all the costs associated with an 
in-person service; and the full OPPS rate would not accurately reflect 
these reduced 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 (87 FR 72015).
    In keeping with that methodology, we propose to assign HCPCS code 
C79XX to an APC based on the facility payment amount for a clinically 
similar service, CPT code 90853 (Group psychotherapy (other than of a 
multiple-family group)) under the PFS. See Table 51 for the proposed SI 
and APC assignments and payment rates for HCPCS code C79XX.
[GRAPHIC] [TIFF OMITTED] TP31JY23.080

    We seek comment on whether HCPCS code C79XX sufficiently describes 
group psychotherapy to the extent that group psychotherapy would no 
longer be reported with HCPCS codes C7900-C7902, in which case we would 
need to refine the code descriptors for HCPCS codes C7900-C7902 to 
stipulate that they are solely for services furnished to an individual 
beneficiary. Alternatively, we are seeking comment on whether or there 
are circumstances where interested parties believe it would be 
appropriate to bill for group services using HCPCS codes C7900-C7902. 
We also seek comment on any further refinements to the code 
descriptors, valuation, or billing guidance.
    We have also heard from interested parties that there is confusion 
about the presence of the word ``initial'' in the descriptors for HCPCS 
codes C7900 and C7901 and that this is preventing billing for remote 
behavioral health services furnished subsequent to either the first 15 
to 29 minutes or 30 to 60 minutes. In order to facilitate accurate 
billing, regardless of whether the remote mental health service is 
being furnished as an initial or subsequent service, we propose to 
revise the code descriptors to remove the word ``initial.'' We also 
propose to revise the descriptor for HCPCS code C7902 to limit billing 
with HCPCS code C7901. See Table 52 for revised code descriptors.
[GRAPHIC] [TIFF OMITTED] TP31JY23.081

BILLING CODE 4120-01-C
2. Periodic In-Person Visits
    In the CY 2023 OPPS final rule with comment period (87 FR 72017), 
we finalized a requirement 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 
finalized 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

[[Page 49731]]

of it. We stated that 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. We 
also finalized that hospitals must 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. We finalized that these requirements would not go 
into effect until the 152nd day after the PHE for COVID-19 ends to 
maintain consistency with similar policies implemented for professional 
services paid under the PFS, and for RHCs/FQHCs (87 FR 72018).
    Section 4113(d) of the Consolidated Appropriations Act (CAA), 2023, 
(Pub. L. 117-328) extended the delay in implementing the in-person 
visit requirements until January 1, 2025, for both professionals 
billing for mental health services via Medicare telehealth and for 
RHCs/FQHCs furnishing remote mental health visits. As previously 
stated, we believe it is important to maintain consistent requirements 
for these policies across payment systems; therefore we propose to 
delay the in-person visit requirements for mental health services 
furnished remotely by hospital staff to beneficiaries in their homes 
until January 1, 2025.
3. Payment for Outpatient Therapy Services, Diabetes Self-Management 
Training, and Medical Nutrition Therapy When Furnished by Hospital 
Staff to Beneficiaries in Their Homes Through Communication Technology
    The CAA, 2023 extended most flexibilities for Medicare telehealth 
services, including retention of physical and occupational therapists 
and speech-language pathologists as telehealth distant site 
practitioners, through the end of CY 2024. In the CY 2024 PFS proposed 
rule, we propose to continue to make payment for outpatient therapy 
(physical therapy, occupational therapy, and speech-language pathology) 
services, Diabetes Self-Management Training, and Medical Nutrition 
Therapy when furnished via telehealth by qualified employed staff of 
institutional providers through the end of CY 2024. We note that this 
proposal includes outpatient therapy, DSMT, and MNT services furnished 
via telehealth by staff of hospital outpatient departments. For further 
discussion, please see the CY 2024 PFS proposed rule.

E. OPPS Payment for Dental Services

Background
    Section 1862(a)(12) of the Act generally precludes payment under 
Medicare Parts A or B for any expenses incurred for services in 
connection with the care, treatment, filling, removal, or replacement 
of teeth or structures directly supporting teeth. (Collectively here, 
we will refer to ``the care, treatment, filling, removal, or 
replacement of teeth or structures directly supporting teeth'' as 
``dental services.'') In the CY 2023 Physician Fee Schedule (PFS) final 
rule (87 FR 69663), we explained that we believe there are instances 
where dental services are so integral to other medically necessary 
services that they are not in connection with the care, treatment, 
filling, removal, or replacement of teeth or structures directly 
supporting teeth within the meaning of section 1862(a)(12) of the Act. 
Rather, such dental services are inextricably linked to the clinical 
success of an otherwise covered medical service, and therefore, are 
instead substantially related and integral to that primary medical 
service. To provide greater clarity to our current policies and respond 
to issues raised by interested parties, in the CY 2023 PFS final rule, 
we finalized: (1) a clarification of our interpretation of section 
1862(a)(12) of the Act to permit payment for dental services that are 
inextricably linked to, and substantially related and integral to the 
clinical success of, other covered medical services (hereafter in this 
discussion, ``inextricably linked to other covered services''); (2) 
clarification and codification of certain longstanding Medicare FFS 
payment policies for inextricably linked dental services; (3) that, 
beginning for CY 2023, Medicare Parts A and B payment can be made for 
certain dental services inextricably linked to Medicare-covered organ 
transplant, cardiac valve replacement, or valvuloplasty procedures; (4) 
for CY 2024, that Medicare Part A and B payment can be made for certain 
dental services inextricably linked to Medicare-covered services for 
treatment of head and neck cancers; and (5) beginning for CY 2023, the 
establishment of a process to submit for our consideration and review 
additional dental services that are inextricably linked to other 
covered medical services (87 FR 69670 through 69671). The CY 2023 PFS 
final rule specified that Medicare payment for these dental services 
may be made regardless of whether the services are furnished in an 
inpatient or outpatient setting. We direct readers to the CY 2023 PFS 
final rule (87 FR 69663 through 69688) for a full discussion of these 
policies as well as to the CY 2024 PFS proposed rule for proposals 
related to dental services.
    In the CY 2023 PFS final rule, CMS identified various examples of 
HCPCS codes, mostly Current Dental Terminology (CDT[supreg]) codes, 
that could be used to describe the types of dental services identified 
in the CY 2023 PFS final rule for which Medicare payment can be made 
when coverage and payment policy requirements are met (87 FR 69667). We 
refer readers to the PFS Relative Value Files that are released 
quarterly on the CMS website for a comprehensive list of HCPCS codes, 
including D-codes, that may be payable under the PFS, available at 
https://www.cms.gov/medicare/medicare-fee-for-service-payment/physicianfeesched/pfs-relative-value-files.
    The policies adopted in the CY 2023 PFS final rule allow payment 
for certain dental services performed in outpatient settings. However, 
the current dental codes assigned to APCs for CY 2023 do not fully 
describe the dental services that may be inextricably linked to covered 
medical services and payable under Medicare Part B. Specifically, for 
the OPPS for CY 2023, only 57 CDT codes are assigned to APCs and 
payable under the OPPS when coverage and payment conditions are met. In 
addition to the small number of CDT codes assigned to APCs for CY 2023, 
there is also a limited number of CPT codes that may describe dental 
services, including CPT code 41899 (Unlisted px dentalvlr strux), that 
are currently assigned to APCs and payable under the OPPS.
    In the CY 2023 OPPS/ASC final rule with comment period, we created 
HCPCS code G0330 to describe facility services for dental 
rehabilitation procedure(s) furnished to patients who require monitored 
anesthesia (e.g., general, intravenous sedation (monitored anesthesia 
care)) and use of an operating room. We finalized this code based on 
extensive public comments expressing the need for a coding and payment 
mechanism to improve access to covered dental procedures under 
anesthesia, especially dental rehabilitation procedures, an issue that 
commenters to the CY 2023 OPPS proposed rule explained is caused by 
barriers to securing sufficient operating room time to furnish these 
services. We further noted that HCPCS code G0330 must only be used to 
describe facility fees for dental

[[Page 49732]]

rehabilitation services that meet Medicare payment and coverage 
requirements as interpreted in the CY 2023 PFS final rule. We explained 
that HCPCS code G0330 cannot be used to describe or bill the facility 
fee for noncovered dental professional services. We assigned HCPCS code 
G0330 to APC 5871 (Dental Procedures) for CY 2023. We direct readers to 
the CY 2023 OPPS/ASC final rule with comment period for a full 
discussion on HCPCS code G0330 (87 FR 71882 through 71883). For CY 
2024, we do not propose to change the APC assignment for HCPCS code 
G0330. However, we refer readers to the section XIII of this proposed 
rule for a proposal regarding payment for HCPCS code G0330 under the 
ASC payment system.
2. Proposed OPPS Payment for Additional Dental Codes Beginning in CY 
2024
    To ensure that dental services can be paid under the OPPS when 
consistent with the policies and clarifications included in the CY 2023 
PFS final rule, we propose to assign additional dental codes to APCs 
for CY 2024. Specifically, for CY 2024, we propose to assign 229 
additional dental codes to clinical APCs to enable them to be paid for 
under the OPPS when payment and coverage requirements are met. 
Assigning additional dental codes to clinical APCs would result in 
greater consistency in Medicare payment for different sites of service 
and help ensure patient access to dental services for which payment can 
be made when performed in the hospital outpatient setting.
    Prior to detailing our proposals, we note two things for readers' 
awareness. First, OPPS payment will only be made for a dental code that 
we propose to assign to an APC for CY 2024 if it is among the types of 
dental services for which payment can be made as described in the 
regulation at Sec.  411.15(i)(3)(i). As we have consistently stated in 
past rules (87 FR 71879) and quarterly change requests to assign new 
codes to APCs (see, e.g., Pub 100-04 Medicare Claims Processing, 
Transmittal 11937), 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 and 
conditions for coverage and payment. Accordingly, we emphasize that 
HOPDs would only receive payment for a dental service assigned to an 
APC when the appropriate MAC determines that the service meets the 
relevant conditions for coverage and payment.
    Second, we anticipate that we would continue to assess our policies 
for OPPS payment for dental services in future rulemaking. We believe 
that as we collect claims data, gather input from the public and 
interested parties, and learn more about the services performed in the 
HOPD setting, we will be able to make more informed decisions regarding 
payment rates, APC assignments, and status indicators for dental 
services.
    The dental services for which we propose APC assignments in this 
proposed rule are those dental services described in the CY 2023 PFS 
final rule for which Medicare Part B payment can be made when they are 
inextricably linked to other covered services. Based on the dental 
services identified in that final rule, we generated a list of codes 
that describe those services for which we believe we need to propose 
APC assignments to ensure payment is available under the OPPS. To 
generate this list, we reviewed the dental codes that were specifically 
listed as examples of payable dental services in the CY 2023 PFS final 
rule (87 FR 69676). We also reviewed the clinical vignettes provided in 
the CY 2023 PFS final rule to identify whether there are other dental 
codes in addition to the dental code examples already identified for 
which we should propose APC assignments.
    The CY 2023 PFS final rule amended Sec.  411.15(i)(3)(i) to allow 
for payment under Medicare Part A and Part B for dental services, 
furnished in an inpatient or outpatient setting, that are inextricably 
linked to, and substantially related and integral to the success of, 
certain other covered medical services, including, but not limited to: 
(1) dental or oral examination as part of a comprehensive workup prior 
to a Medicare covered organ transplant, cardiac valve replacement, or 
valvuloplasty procedures; and the necessary diagnostic and treatment 
services to eliminate an oral or dental infection prior to, or 
contemporaneously with, the organ transplant, cardiac valve 
replacement, or valvuloplasty procedure; (2) reconstruction of a dental 
ridge performed as a result of, and at the same time as, the surgical 
removal of a tumor; (3) the stabilization or immobilization of teeth in 
connection with the reduction of a jaw fracture, and dental splints 
only when used in conjunction with covered treatment of a covered 
medical condition such as dislocated jaw joints; and (4) the extraction 
of teeth to prepare the jaw for radiation treatment of neoplastic 
disease. For CY 2024, we established that Medicare Parts A and B 
payment may also be made for dental services, such as dental 
examinations, including necessary treatments, performed as part of a 
comprehensive workup prior to treatment for head and neck cancers. We 
include a proposal in the CY 2024 PFS proposed rule to codify this 
example under Sec.  411.15(i)(3)(i). We identified dental services 
described in the regulation at Sec.  411.15(i)(3)(i) and those that may 
be part of a comprehensive workup prior to treatment for head and neck 
cancers that could be payable under the OPPS if payment and coverage 
requirements are met. For example, consistent with Sec.  
411.15(i)(3)(A), which describes dental or oral examinations as part of 
a comprehensive workup prior to a Medicare covered organ transplant, 
cardiac valve replacement, or valvuloplasty procedure, we identified 
several codes describing dental examinations for which we propose APC 
assignments (e.g., D0120, D0140, D0150, D0160, D0170, D0180, D0191, 
D0171). Section 411.15(i)(3)(C) describes services for the 
stabilization or immobilization of the teeth in connection with the 
reduction of a jaw fracture, and dental splints only when used with a 
covered treatment of a covered medical condition. We identified an 
additional 16 dental codes (e.g., D7670-D7671; D4322; D5988) that we 
believe identify these services and for which we propose APC 
assignments.
    While it is appropriate for CMS to assign certain dental codes to 
APCs for payment under the OPPS, we do not believe that every dental 
code should be assigned to an APC and made payable under the OPPS. For 
instance, there are services described by CDT codes that may already be 
described by existing CPT codes assigned to clinical APCs. When this is 
the case, we propose that HOPDs would use the existing CPT codes to 
bill for the services performed. We also are not proposing APC 
assignments for all dental codes, even if they describe dental services 
that are payable consistent with the policies and clarifications 
included in the CY 2023 PFS final rule. This is because under our 
regulation at 42 CFR 419.22, the following services are not paid under 
the OPPS (except when packaged as part of a bundled payment): physician 
services that meet the requirements of 42 CFR 415.102(a); nurse 
practitioner or clinical nurse specialist services, as defined in 
section 1861(s)(2)(K)(ii) of the Act; physician assistant services, as

[[Page 49733]]

defined in section 1861(s)(2)(K)(i) of the Act; and services of an 
anesthetist as defined in Sec.  410.9. We note that dentists are 
considered physicians for purposes of Medicare payment policy, 
including this regulation. There are a number of existing CDT codes 
that describe the professional services of dentists that could be paid 
under the PFS (e.g., D9990-D9997), but that we do not believe are 
appropriate for payment under the OPPS. Therefore, we do not propose to 
assign CDT codes that describe professional services of dentists and 
other dental professionals to clinical APCs.
    Finally, there are dental codes that we believe would not meet our 
current interpretation of dental services that may be inextricably 
linked to other covered medical services. For instance, there are CDT 
codes that describe removable prosthodontic procedures, including codes 
that describe complete or partial denture procedures (e.g., D5110; 
D5120; D5211-D5214). Because denture procedures are not covered medical 
procedures under Medicare, we are not proposing to assign any dental 
codes describing denture procedures to clinical APCs.
    In sum, in consultation with medical experts, we identified 229 
dental codes as appropriate for payment under the OPPS when relevant 
conditions for payment and coverage are met. In addition to the dental 
codes already assigned to APCs, we propose to assign the 229 additional 
dental codes listed in Table 53 below to various clinical APCs for CY 
2024:
BILLING CODE 4120-01-P

[[Page 49734]]

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[[Page 49739]]


[GRAPHIC] [TIFF OMITTED] TP31JY23.087

BILLING CODE 4120-01-C
    We request comments on the list of 229 dental codes that we propose 
to assign to APCs for OPPS payment for CY 2024. We also request 
comments on any additional dental codes that may fall within the scope 
of dental services for which payment is permitted as explained in the 
CY 2023 PFS final rule and provided in Sec.  411.14(i)(3)(i), and for 
which payment should be made available under the OPPS when payment and 
coverage requirements are met.
3. Proposed APC Assignments for Additional Dental Codes
    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. Accordingly, when considering the 
appropriateness of an APC assignment for a code, we consider the 
clinical characteristics and resource costs of the service described by 
the code compared to other services in a clinical APC.
    Consistent with our existing processes, we were able to crosswalk 
many of the dental codes to existing CPT codes assigned to APCs for 
purposes of assessing clinical similarity. For instance, we crosswalked 
certain tissue graft procedures (e.g., D4270) to CPT code 41870 (gum 
graft). Because both are surgical procedures where gum tissue near the 
area of recession is used to cover and protect the exposed tooth root, 
the codes are clinically similar and we believe are appropriate for 
grouping within the same clinical APC (i.e., APC 5163 (Level 3 ENT 
Procedures)). We also found clinical similarities between several 
dental imaging services and the services assigned to the various levels 
of the Imaging without Contrast APC series (i.e., APCs 5521 (Level 1, 
Imaging without Contrast); 5522 (Level 2, Imaging without Contrast); 
and 5523 (Level 3, Imaging without Contrast)). For example, we 
crosswalked D0210 (Intraor complete film series) to CPT code 70320 
(Full mouth x-ray of teeth) and therefore propose to assign D0210 to 
APC 5523 based on the crosswalk analysis.
    With regard to resource similarity, because the 229 dental codes we 
propose to assign to APCs for CY 2024 were not previously paid under 
the OPPS, we do not have existing claims information to inform proposed 
APC placements based on resource costs. We considered gathering cost 
information from several non-Medicare data sources to aid in assigning 
the dental codes to APCs. For instance, we considered requesting cost 
information from the Department of Veterans Affairs (VA). However, the 
VA's dental reimbursement rates are proprietary and are not publicly 
available.
    We also considered requesting data from State Medicaid agencies but 
found the available data too inconsistent and limited to be useful 
given that payment rates vary between states. Additionally, not every 
State Medicaid Agency provides the same dental benefits, so not every 
state would have cost information for each of the dental codes we 
propose for OPPS payment. Lastly, while many State Medicaid Agencies 
provide robust information on the dental benefits covered for Medicaid 
beneficiaries in their state, the fee schedules published by State 
Medicaid Agencies most likely include payments to practitioners only 
and would not be informative for our purposes of assigning payment 
rates under the OPPS.
    Finally, we considered analyzing private insurance claims from 
third-party databases but determined that the cost information 
available would also not be relevant for OPPS ratesetting. For example, 
because most dental services covered by private insurance are provided 
in the office setting, there is a very limited number of claims that 
would be relevant for OPPS ratesetting purposes. Of the limited dental 
claims performed in the hospital setting, we learned that many of the 
dental services are performed in combination with several other 
services; therefore, it would be extremely difficult to isolate the 
facility fee payment for the dental services performed.
    Although specific cost information is informative for making 
proposed APC assignments, it is not essential. For example, each 
quarter, after consultation with clinical experts, CMS assigns new CPT 
codes for which no cost information is available to APCs using 
crosswalk code analyses. Similar to our process for assigning new codes 
to APCs, we used a crosswalk code analysis and consulted with clinical 
experts to propose appropriate APC assignments for the 229 dental 
codes. In our conversations with the clinical experts, we discussed the 
clinical aspects of each dental service and learned about the 
resources, including supplies, used to perform each dental service, in 
order to more accurately identify crosswalk codes and propose APC 
assignments for them. We solicit comments regarding the proposed APC 
assignments for the dental codes for CY 2024. We refer readers to 
Addendum B to this proposed rule for the proposed CY 2024 APC 
assignments and associated payment rates for the dental codes. Addendum 
B is available via the internet on the CMS website.

[[Page 49740]]

4. Proposed Packaged Payment and Associated Status Indicators for 
Dental Codes
    For CY 2024, we propose to package payments for dental services 
when they are performed with another covered dental or medical service 
to promote clinical resource efficiencies, a strategic goal of the 
OPPS. Given our understanding of the nature of dental practice and in 
consultation with our clinical experts, we believe packaged payments 
are appropriate for dental services paid under the OPPS. We are aware 
that it is common for several dental services to be performed together, 
or alongside other medical services, and submitted on one claim. Unlike 
medical specialties where often only one procedure is performed at a 
time, it is our understanding that it is common for a patient to 
undergo several surgical and non-surgical dental procedures on multiple 
teeth in one day, or for dental services to be performed 
contemporaneously with other medical services. For example, there are 
several non-invasive, non-surgical dental services, including a dental 
exam or X-ray, which would most likely be performed together with other 
more invasive dental services in the HOPD setting, rather than on their 
own. Because a dental exam or X-ray is likely to be performed in 
addition to other more invasive dental services in the HOPD setting, we 
believe packaging payment for dental codes describing dental exams and 
X-rays (e.g., D0380-D0386) when performed with another service is 
appropriate and would further our strategic goal of encouraging 
hospitals to furnish services most efficiently and to manage their 
resources with maximum flexibility. We also are aware that there are 
several dental services that are performed as part of a primary 
service, and therefore, we believe would also result in resource 
efficiencies if paid under the OPPS as a packaged payment. For example, 
CDT codes D3110 (pulp cap-direct (excluding final restoration)) and 
D3120 (pulp cap-indirect (excluding final restoration)) are typically 
performed as part of a restorative procedure (e.g., a crown or 
amalgam). Thus, we believe it is appropriate to propose to package 
payment for CDT codes D3110 and D3120 with payment for the associated 
restorative procedures.
    We believe our proposal to package payment for dental services 
under the OPPS is consistent with existing packaging payment principles 
in the OPPS. The OPPS regularly packages payments for multiple 
interrelated items and services into a single payment to create 
incentives for hospitals to furnish services most efficiently and to 
manage their resources with maximum flexibility. We believe applying 
these principles to the furnishing of dental services in the OPPS is 
appropriate and would incentivize clinical resource efficiencies.
    In addition to proposing to package payment for dental services to 
promote clinical resource efficiencies, there are also several dental 
services that would nevertheless be packaged under our regulation at 42 
CFR 419.2(b). For example, payment for dental services described by 
add-on codes, like CDT code D2953 (each addtnl cast post) would be 
packaged under the OPPS consistent with Sec.  419.2(b)(18). Therefore, 
we propose to package payment for CDT code D2953 with the procedures 
with which it is performed. We refer readers to the regulation at Sec.  
419.2(b) for a full list of items and services for which payment is 
packaged or conditionally packaged.
    For CY 2024, we propose packaging payment for dental services under 
the OPPS by assigning the dental codes to packaged status indicators. 
We believe there are clinical resource efficiencies to be gained by 
packaging payments rather than separately paying for each dental 
service performed. We refer readers to Addendum B to this proposed rule 
for the proposed CY 2024 status indicators for the dental codes. 
Addendum B is available via the internet on the CMS website. For more 
information on all of the proposed status indicators for CY 2024, 
including explanations of the payment status for each proposed status 
indicator, we refer readers to Addendum D1 to this proposed rule.
5. Summary of OPPS Dental Proposal and Requests for Comments
    In summary, we propose to assign an additional 229 dental codes 
describing various dental services to APCs for CY 2024. We are 
requesting comments on the list of codes we have identified for APC 
assignment and payment under the OPPS, including whether any of the 229 
dental codes do not meet the requirements for payment for dental 
services included in the CY 2023 PFS final rule and regulation at Sec.  
411.15(i)(3)(i). Additionally, we are requesting comments on the 
proposed APC assignments for the dental codes for CY 2024. Finally, we 
propose to make packaged payments for dental services under the OPPS by 
assigning the dental codes describing those dental services to packaged 
status indicators. We believe packaging payment for dental services 
will incentivize clinical resource efficiencies, and we request 
comments on our proposal.

F. Use of Claims and Cost Report Data for CY 2024 OPPS and ASC Payment 
System Ratesetting Due to the PHE

    As described in section I.A of this proposed rule, section 1833(t) 
of the Act requires the Secretary to annually review and update the 
payment rates for services payable under the Hospital OPPS. 
Specifically, section 1833(t)(9)(A) of the Act requires the Secretary 
to review not less often than annually and to revise the groups, the 
relative payment weights, and the wage and other adjustments described 
in paragraph (2) of the Act to take into account changes in medical 
practice, changes in technology, the addition of new services, new cost 
data, and other relevant information and factors.
    When updating the OPPS payment rates and system for each rulemaking 
cycle, we primarily use two sources of information: the outpatient 
Medicare claims data and Healthcare Cost Report Information System 
(HCRIS) cost report data. The claims data source is the Outpatient 
Standard Analytic File, which includes final action Medicare outpatient 
claims for services furnished in a given calendar year. For the OPPS 
ratesetting process, our goal is to use the best available data for 
ratesetting to accurately estimate the costs associated with furnishing 
outpatient services and to 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 2024 OPPS/
ASC proposed rule ratesetting, the best available claims data would 
typically be the CY 2022 calendar year outpatient claims data processed 
through December 31, 2022. 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 CY 
2024 OPPS ratesetting, that would be cost report data from HCRIS 
extracted in December 2022, 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/ASC 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

[[Page 49741]]

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 have 
used for ratesetting, likely as a result of the PHE. These changes 
included overall aggregate decreases in claims volume (particularly 
those associated with visits); significant increases in HCPCS code 
Q3014 (Telehealth originating site facility fee) in the hospital 
outpatient claims; and increases in certain PHE-related services, such 
as HCPCS code C9803, which describes COVID-19 specimen collection, and 
services assigned to APC 5801 (Ventilation Initiation and Management). 
As a result of the effects we observed from COVID-19 PHE-related 
factors in our claims and cost report data, as well as the increasing 
number of Medicare beneficiaries vaccinated against COVID-19, which we 
believed might make the CY 2022 outpatient experience closer to CY 2019 
rather than CY 2020, we believed that CY 2020 data were not the best 
overall approximation of expected outpatient hospital services in CY 
2022. Instead, we believed that CY 2019 data, as the most recent 
complete calendar year of data prior to the COVID-19 PHE, were a better 
approximation of expected CY 2022 hospital outpatient services. 
Therefore, in the CY 2022 OPPS/ASC final rule with comment period, we 
established a policy of using CY 2019 claims data and cost reports 
prior to the PHE in ratesetting for the CY 2022 OPPS with certain 
limited exceptions, such as where CY 2019 data were not available (86 
FR 63753 through 63754).
    For the CY 2023 OPPS proposed rule ratesetting, we conducted a 
review similar to the one we conducted for the 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 saw that the PHE had limited effect on the service and 
aggregate levels of volume as well as changes in the site of service of 
care, suggesting that, while clinical and billing patterns had not 
quite returned to their pre-PHE levels, they were beginning to do so.
    For the CY 2023 OPPS/ASC final rule, while the effects of the 
COVID-19 PHE remained at both the aggregate and service levels for 
certain services, as discussed in that final rule with comment period 
(87 FR 48795 through 48798) and in 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 
believed it was 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 and finalized the use of CY 2021 claims for CY 2023 OPPS 
ratesetting.
    We also used cost report data for the CY 2023 OPPS/ASC final rule 
(87 FR 72021) from the same set of cost reports we originally used in 
the CY 2021 OPPS/ASC final rule for ratesetting, which included cost 
reporting periods beginning in CY 2018 in most cases. We typically 
would have used the most updated available cost reports available in 
HCRIS in determining the CY 2023 OPPS/APC relative weights, which would 
have included cost reports with reporting periods that overlap with 
parts of CY 2020. However, noting that we observed significant impact 
at the service level when incorporating these cost reports into 
ratesetting and the effects on billing/clinical patterns, we finalized 
a policy to continue to use the same set of cost reports that we used 
in developing CY 2022 OPPS ratesetting.
    For CY 2024 OPPS rulemaking, we continue to observe some 
differences at the aggregate and service level volumes in the CY 2022 
claims data, relative to the pre-PHE period. However, we believe that 
it is reasonable to assume that there will be minor variations as a 
result of the COVID-19 PHE in claims data we use for ratesetting for 
the foreseeable future. As we have found that the effects are less 
pronounced, even relative to CY 2021 claims data used in CY 2023 OPPS 
ratesetting, we anticipate that most of the changes we observe 
represent a moderate continued return to pre-PHE volume and ongoing 
changes in clinical practice. As a result, we believe the CY 2022 
claims data are appropriate for setting CY 2024 OPPS rates.
    For CY 2024, we also evaluated the impact of using our standard 
update for cost reports. If we were to resume our typical process of 
using the most updated cost reports available, we would predominantly 
use cost report data from CY 2021, with some portion of the cost 
reports including cost reporting periods from prior years. While there 
are some differences compared to pre-PHE data, we generally observed 
limited impacts. Similar to the claims data approach, we believe it is 
reasonable to assume there will continue to be a limited influence of 
the COVID-19 PHE on the cost report data. However, as we continue to 
receive more updated cost report data, we believe that data will better 
reflect changes in provider charge and cost reporting structures. Given 
these factors, we believe that using the most recent cost report data 
available and resuming our regular cost report update process is 
appropriate for CY 2024 OPPS ratesetting.
    As a result of our expectation that the CY 2022 claims that we 
would typically use are appropriate for establishing the CY 2024 OPPS 
rates, we propose to use the CY 2022 claims for the CY 2024 OPPS/ASC 
ratesetting process. In addition, we propose to resume our typical cost 
report update process of including the most recently available cost 
report data (primarily including cost reports with cost reporting 
periods including CY 2021). For the reasons previously discussed, we 
are generally not proposing any modifications to our usual OPPS 
ratesetting methodologies with regards to the use of updated claims and 
cost report data to account for the impact of COVID-19 on the 
ratesetting data.

G. Comment Solicitation on Payment for High-Cost Drugs Provided by 
Indian Health Service and Tribally-Owned Facilities

    In the CY 2000 Final Rule (65 FR 18433), CMS implemented the 
prospective payment system for hospital outpatient services furnished 
to Medicare beneficiaries, as set forth in section 1833(t) of the Act. 
In this rule, we noted that the Outpatient Prospective Payment System 
(OPPS) applies to covered hospital outpatient services furnished by all 
hospitals participating in the Medicare program with a few exceptions. 
We identified one of these exceptions as ``outpatient services provided 
by hospitals of the Indian Health Service (IHS).'' While we stated that 
these services would ``continue to be paid under separately established 
rates which are published annually in the Federal Register,'' we 
indicated that our intent was ``to develop a plan that will help these 
facilities transition to the [O]PPS and will consult with the IHS to 
develop this plan.'' In the CY 2002 Final Rule (66 FR 59855), we 
finalized our revision to Sec.  419.20 (Hospitals subject to the 
hospital outpatient prospective payment system) by adding paragraph 
(b)(4) specifying that hospitals of the IHS are excluded from the OPPS. 
However, we reiterated that this exclusion would only be in place until 
we developed a plan to include IHS hospitals under the OPPS.

[[Page 49742]]

    In the intervening years, IHS and tribally-owned facilities have 
been paid under the separately established All-Inclusive Rate (AIR). On 
an annual basis, the IHS calculates and publishes, in the Federal 
Register, calendar year reimbursement rates. Due to the higher cost of 
living in Alaska, separate rates are calculated for Alaska and the 
lower 48 States. For CY 2023, the Medicare Outpatient per Visit Rate 
for the lower 48 States is $654 and $862 for Alaska.
    IHS and tribally-owned facilities have continued to expand the 
breadth of services that they provide to their communities. 
Increasingly, this has meant providing higher-cost drugs along with 
more complex and expensive services. While the majority of IHS and 
tribally-owned facilities appear to be well served by the AIR, there 
are specialty facilities where the AIR might not be an adequate 
representation of the Medicare share of costs. If providing a drug or 
service costs a specialty facility exponentially more than the payment 
they receive through the AIR, it may not be financially feasible for 
these facilities to provide that drug or service. For example, the cost 
of providing expensive cancer drugs or oncology services could greatly 
exceed payment a specialty IHS facility receives through the AIR. We 
are concerned that, if payments under the AIR are inadequate for high-
cost drugs, this could potentially threaten the viability of the few 
IHS and tribally-owned hospital outpatient specialty programs currently 
in operation and provide less incentive to IHS hospitals and tribally-
owned facilities not currently offering specialty services to begin 
doing so.
    Consequently, we seek comment on a number of potential policies to 
address payment to IHS and tribally-owned facilities for certain high-
cost drugs and services. We are seeking comment on whether Medicare 
should pay separately for high-cost drugs provided by IHS and tribally-
owned facilities. We would like input on:
     What universe of drugs would be appropriate for separate 
payment? How could CMS maintain that list and add or remove drugs from 
it?
     Would paying separately for all drugs over a certain cost 
threshold be easier to operationalize than paying separately for a 
specified list of drugs, while achieving the same policy objective? If 
so, what would be an appropriate cost threshold and how should it be 
updated?
     What would be the appropriate payment rate for any 
separately paid drugs? How should these rates be updated and should 
these rates be updated on an annual basis?
     Would the standard OPPS Average Sales Price (ASP) plus 6 
percent payment methodology rate be too high of a payment rate if 
tribal and IHS facilities are able to acquire drugs at a discounted 
rate through the Federal Supply Schedule? Would a payment rate 
equivalent to the acquisition cost of the drug through the Federal 
Supply Schedule be a more appropriate approximation of the cost of 
these drugs?
     Should IHS remove the cost of any separately paid drugs 
from the calculation of the AIR? If the cost of these drugs was not 
removed from the AIR, would the government be paying twice for these 
drugs?
     How would IHS and tribally-owned facilities bill for 
separately paid drugs? Could they use the UB-04 form like standard OPPS 
hospitals?
    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. We seek comment on whether an outlier policy might be 
an appropriate mechanism for addressing high-cost drugs and services 
provided by IHS and tribally-owned facilities.
    We welcome input from interested parties on these policy ideas and 
any additional payment approaches that would enhance our ability to 
provide equitable payment for high-cost drugs and services provided by 
IHS and tribally-owned facilities.

XI. Proposed CY 2024 OPPS Payment Status and Comment Indicators

A. Proposed CY 2024 OPPS Payment Status Indicator Definitions

    Payment status indicators (SIs) that we assign to HCPCS codes and 
APCs serve an important role in determining payment for services under 
the OPPS. They indicate whether a service represented by a HCPCS code 
is payable under the OPPS or another payment system and whether 
particular OPPS policies apply to the code.
    For CY 2024, we propose to change the definition of status 
indicator ``P'' from ``Partial Hospitalization'' to ``Partial 
Hospitalization or Intensive Outpatient Program'' in order to account 
for the proposed payment of intensive outpatient services beginning 
January 1, 2024, as discussed in section VIII.B of this proposed rule. 
We are not proposing to make any other changes to the existing 
definitions of status indicators that were listed in Addendum D1 to the 
CY 2023 OPPS/ASC final rule with comment period, which is available on 
the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.
    We solicit public comments on the proposed definitions of the OPPS 
payment status indicators for 2024.
    The complete list of proposed CY 2024 payment status indicators and 
their definitions is displayed in Addendum D1 to this proposed rule, 
which is available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.
    The proposed CY 2024 payment status indicator assignments for APCs 
and HCPCS codes are shown in Addendum A and Addendum B, respectively, 
to this proposed rule, which are available on the CMS website at: 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.

B. Proposed CY 2024 Comment Indicator Definitions

    We propose to use four comment indicators for the CY 2024 OPPS. 
These comment indicators, ``CH,'' ``NC,'' ``NI,'' and ``NP,'' are in 
effect for CY 2023; and we propose to continue their use in CY 2024. 
The proposed CY 2024 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 
request comments in the proposed rule, final APC assignment; comments 
will not be accepted on the final APC assignment for the new code.
     ``NI''--New code for the next calendar year or existing 
code with substantial revision to its code descriptor in the next 
calendar year, as compared to current calendar year, interim APC 
assignment; comments will be accepted on the interim APC assignment for 
the new code.
     ``NP''--New code for the next calendar year or existing 
code with substantial revision to its code descriptor in the next 
calendar year, as compared to current calendar year, proposed APC 
assignment; comments will be accepted on the proposed APC assignment 
for the new code.
    The definitions of the proposed OPPS comment indicators for CY 2024 
are

[[Page 49743]]

listed in Addendum D2 to this proposed rule, which is available on the 
CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
    We solicit public comments on our proposed definitions of the OPPS 
comment indicators for 2024.

XII. MedPAC Recommendations

    The Medicare Payment Advisory Commission (MedPAC) was established 
under section 1805 of the Act in large part to advise the U.S. Congress 
on issues affecting the Medicare program. As required under the 
statute, MedPAC submits reports to the Congress no later than March and 
June of each year that present its Medicare payment policy 
recommendations. The March report typically provides discussion of 
Medicare payment policy across different payment systems and the June 
report typically discusses selected Medicare issues. We are including 
this section to make stakeholders aware of certain MedPAC 
recommendations for the OPPS and ASC payment systems as discussed in 
its March 2023 report.

A. OPPS Payment Rates Update

    The March 2023 MedPAC ``Report to the Congress: Medicare Payment 
Policy,'' recommended that Congress update Medicare OPPS payment rates 
by the amount specified in current law plus 1 percent. We refer readers 
to the March 2023 report for a complete discussion of this 
recommendation.\124\ We appreciate MedPAC's recommendation and, as 
discussed further in section II.B of this proposed rule, we propose to 
increase the OPPS payment rates by the amount specified in current law.
---------------------------------------------------------------------------

    \124\ Medicare Payment Advisory Committee. March 2023 Report to 
the Congress. Chapter 3: Hospital inpatient and outpatient services, 
p. 57. Available at: https://www.medpac.gov.
---------------------------------------------------------------------------

B. Medicare Safety Net Index

    The March 2023 MedPAC ``Report to the Congress: Medicare Payment 
Policy,'' recommended that Congress should begin a transition to 
redistribute disproportionate share hospital and uncompensated care 
payments through the Medicare Safety-Net Index (MSNI). Additionally, 
MedPAC recommended that Congress add $2 billion to the MSNI pool of 
funds and distribute such funds through a percentage add-on to payments 
under the IPPS and OPPS.
    In light of these recommendations, and in particular those 
concerning safety net hospitals, we look forward to working with 
Congress and seek comments on approaches CMS could take.

C. ASC Cost Data

    In the March 2023 MedPAC ``Report to the Congress: Medicare Payment 
Policy,'' MedPAC reiterated its longstanding recommendation 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. MedPAC suggested 
that such cost data would allow CMS 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, stating both the 
CPI-U and hospital market basket update likely do not reflect an ASC's 
cost structure. MedPAC contended that it is feasible for small 
facilities, such as ASCs, to provide cost information since other small 
facilities, such as home health agencies, hospices, and rural health 
clinics, currently furnish cost data to CMS. Further, ASCs in 
Pennsylvania submit cost and revenue data annually to a state agency to 
estimate margins for those ASCs, and that, as businesses, ASCs keep 
records of their costs for filing taxes and other purposes.\125\
---------------------------------------------------------------------------

    \125\ Medicare Payment Advisory Committee. March 2023 Report to 
the Congress. Chapter 5: Ambulatory surgical center services, p. 
163. Available at: https://www.medpac.gov/wp-content/uploads/2023/03/Ch5_Mar23_MedPAC_Report_To_Congress_SEC.pdf.
---------------------------------------------------------------------------

    While we recognize that the submission of cost data could place 
additional administrative burden on most ASCs, and we are not proposing 
any cost reporting requirements for ASCs in this proposed rule, we 
continue to seek public comment on methods that would mitigate the 
burden of reporting costs on ASCs while also collecting enough data to 
reliably use such data in the determination of ASC costs. Such cost 
data would be beneficial in establishing an ASC-specific market basket 
index for updating payment rates under the ASC payment system.

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

A. Background, Legislative History, Statutory Authority, and Prior 
Rulemaking for the ASC Payment System

    For a detailed discussion of the legislative history and statutory 
authority related to payments to ASCs under Medicare, we refer readers 
to the CY 2012 OPPS/ASC final rule with comment period (76 FR 74377 
through 74378) and the June 12, 1998 proposed rule (63 FR 32291 through 
32292). For a discussion of prior rulemaking on the ASC payment system, 
we refer readers to the CYs 2012 to 2023 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; 86 FR 63761 through 63815; and 87 FR 72054 through 72096).

B. Proposed ASC Treatment of New and Revised Codes

1. Background on Process for New and Revised HCPCS Codes
    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 systems (Sec.  416.173; 72 FR 42535). We base ASC 
payment and policies for most covered surgical procedures, drugs, 
biologicals, and certain other covered ancillary services on the OPPS 
payment policies and we use quarterly change requests (CRs) to update 
services paid for under the OPPS. We also provide quarterly update CRs 
for ASC covered surgical procedures and covered ancillary services 
throughout the year (January, April, July, and October). We release new 
and revised Level II HCPCS codes and recognize the release of new and 
revised CPT codes by the American Medical Association (AMA) and make 
these codes effective (that is, the codes are recognized on Medicare 
claims) via these ASC quarterly update CRs. We recognize the release of 
new and revised Category III CPT codes in the July and January CRs. 
These updates implement newly created and revised Level II HCPCS and 
Category III CPT codes for ASC payments and update the payment rates 
for separately paid drugs and biologicals based on the most recently 
submitted ASP data. New and revised Category I CPT codes, except 
vaccine codes, are released only once a year, and are implemented only 
through the January quarterly CR update. New and revised Category I CPT 
vaccine codes are released twice a year and are implemented through the 
January and July quarterly CR updates. We refer readers to Table 41 in 
the CY 2012 OPPS/ASC proposed rule for an example of how this process 
is used to update HCPCS and CPT codes, which we finalized in the CY 
2012 OPPS/ASC

[[Page 49744]]

final rule with comment period (76 FR 42291; 76 FR 74380 through 
74384).
    In our annual updates to the ASC list of, and payment rates for, 
covered surgical procedures and covered ancillary services, we 
undertake a review of excluded surgical procedures, new codes, and 
codes with revised descriptors, to identify any that we believe meet 
the criteria for designation as ASC covered surgical procedures or 
covered ancillary services. Updating the lists of ASC covered surgical 
procedures and covered ancillary services, as well as their payment 
rates, in association with the annual OPPS rulemaking cycle, is 
particularly important because the OPPS relative payment weights and, 
in some cases, payment rates, are used as the basis for the payment of 
many covered surgical procedures and covered ancillary services under 
the revised ASC payment system. This joint update process ensures that 
the ASC updates occur in a regular, predictable, and timely manner.
    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. 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, and 
III 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 final rule (72 FR 42533 
through 42535) to evaluate each year all new and revised Category I and 
Category III CPT codes and Level II HCPCS codes that describe surgical 
procedures, and to make preliminary determinations during the annual 
OPPS/ASC rulemaking process regarding whether or not they meet the 
criteria for payment in the ASC setting as covered surgical procedures 
and, if so, whether or not they are office-based procedures. In 
addition, we identify new and revised codes as ASC covered ancillary 
services based upon the final payment policies of the revised ASC 
payment system. In prior rulemakings, we refer to this process as 
recognizing new codes. However, this process has always involved the 
recognition of new and revised codes. We consider revised codes to be 
new when they have substantial revision to their code descriptors that 
necessitate a change in the current ASC payment indicator. To clarify, 
we refer to these codes as new and revised in this CY 2024 OPPS/ASC 
proposed rule.
    We have separated our discussion below based on when the codes are 
released and whether we propose to solicit public comments in this 
proposed rule (and respond to those comments in the CY 2024 OPPS/ASC 
final rule with comment period) or whether we will be soliciting public 
comments in the CY 2024 OPPS/ASC final rule with comment period (and 
responding to those comments in the CY 2025 OPPS/ASC final rule with 
comment period).
2. April 2023 HCPCS Codes Proposed Rule Comment Solicitation
    For the April 2023 update, there were no new CPT codes; however, 
there were several new Level II HCPCS codes. In the April 2023 ASC 
quarterly update (Transmittal 11927, dated March 24, 2023, CR 13143), 
we added several new Level II HCPCS codes to the list of covered 
ancillary services. Table 54 (New Level II HCPCS Codes for Ancillary 
Services Effective April 1, 2023) of this proposed rule, lists the new 
Level II HCPCS codes that were implemented April 1, 2023. The proposed 
comment indicators, payment indicators and payment rates, where 
applicable, for these April codes can be found in Addendum BB to this 
proposed rule. The list of ASC payment indicators and corresponding 
definitions can be found in Addendum DD1 to this proposed rule. These 
new codes that are effective April 1, 2023, are assigned to comment 
indicator ``NP'' in Addendum BB to this proposed rule to indicate that 
the codes are assigned to an interim APC assignment and that comments 
will be accepted on their interim APC assignments. The list of comment 
indicators and definitions used under the ASC payment system can be 
found in Addendum DD2 to this proposed rule. We note that the following 
ASC addenda are available via the internet on the CMS website.
     ASC Addendum AA: Proposed ASC Covered Surgical Procedures 
for CY 2024 (Including Surgical Procedures for Which Payment is 
Packaged),
     ASC Addendum BB: Proposed ASC Covered Ancillary Services 
Integral to Covered Surgical Procedures for CY 2024 (Including 
Ancillary Services for Which Payment is Packaged),
     ASC Addendum DD1: Proposed ASC Payment Indicators (PI) for 
CY 2024,
     ASC Addendum DD2: Proposed ASC Comment Indicators (CI) for 
CY 2024,
     ASC Addendum EE: Proposed Surgical Procedures to be 
Excluded from Payment in ASC for CY 2024, and
     ASC Addendum FF: Proposed ASC Device Offset Percentages 
for CY 2024
     Addendum O: Long Descriptors for New Category I CPT Codes, 
Category III CPT Codes, C-codes, and G-Codes Effective January 1, 2024
    We are inviting public comments on the proposed payment indicators 
for the new HCPCS codes that were recognized as ASC covered ancillary 
services in April 2023 through the quarterly update CRs, as listed in 
Table 54 (New Level II HCPCS Codes for Ancillary Services Effective 
April 1, 2023) of this proposed rule. We propose to finalize their 
payment indicators in the CY 2024 OPPS/ASC final rule with comment 
period.
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3. July 2023 HCPCS Codes Proposed Rule Comment Solicitation
    In the July 2023 ASC quarterly update (Transmittal 12099, Change 
Request 13216, dated June 22, 2023), we added several separately 
payable CPT and Level II HCPCS codes to the list of covered surgical 
procedures and covered ancillary services. Table 55 (New HCPCS Codes 
for Covered Surgical Procedures and Covered Ancillary Services 
Effective July 1, 2023) of this proposed rule, lists the new HCPCS 
codes that are effective July 1, 2023. The proposed comment indicators, 
payment indicators, and payment rates for the codes can be found in 
Addendum AA and Addendum BB to this proposed rule. The list of ASC 
payment indicators and corresponding definitions can be found in 
Addendum DD1 to this proposed rule. These new codes that are effective 
July 1, 2023, are assigned to comment indicator ``NP'' in Addendum AA 
and BB to this proposed rule to indicate that the codes are assigned to 
an interim APC assignment and that comments will be accepted on their 
interim APC assignments. The list of comment indicators and definitions 
used under the ASC payment system can be found in Addendum DD2 to this 
proposed rule. We note that ASC Addenda AA, BB, DD1, and DD2 are 
available via the internet on the CMS website.

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    We are inviting public comments on the proposed payment indicators 
for the new HCPCS codes newly recognized as ASC covered surgical 
procedures and covered ancillary services effective April 1, 2023, and 
July 1, 2023, through the quarterly update CRs, as listed in Tables 54 
and 55. We propose to finalize the payment indicators in the CY 2024 
OPPS/ASC final rule with comment period.
4. October 2023 HCPCS Codes Final Rule Comment Solicitation
    For CY 2024, consistent with our established policy, we propose 
that the Level II HCPCS codes that will be effective October 1, 2023, 
would be flagged with comment indicator ``NI'' in Addendum BB to the CY 
2024 OPPS/ASC final rule with comment period to indicate that we have 
assigned the codes an interim ASC payment status for CY 2023. We will 
invite public comments in the CY 2024 OPPS/ASC final rule with comment 
period on the interim payment indicators, which would then be finalized 
in the CY 2025 OPPS/ASC final rule with comment period.
5. January 2024 HCPCS Codes
a. Level II HCPCS Codes Final Rule Comment Solicitation
    As has been our practice in the past, we incorporate those new 
Level II HCPCS codes that are effective January 1 in the final rule 
with comment period, thereby updating the ASC payment system for the 
calendar year. We note that unlike the CPT codes that are effective 
January 1 and are included in the OPPS/ASC proposed rules, and except 
for the G-codes listed in Addendum O to this proposed rule, most Level 
II HCPCS codes are not released until sometime around November to be 
effective January 1. Because these codes are not available until 
November, we are unable to include them in the OPPS/ASC proposed rules. 
Therefore, these Level II HCPCS codes will be released to the public 
through the CY 2024 OPPS/ASC final rule with comment period, January 
2024 ASC Update CR, and the CMS HCPCS website.
    In addition, for CY 2024, 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, 2024, to 
indicate that we are assigning them an interim payment indicator, which 
is subject to public comment. We will be inviting public comments in 
the CY 2024 OPPS/ASC final rule with comment period on the payment 
indicator assignments, which would then be finalized in the CY 2025 
OPPS/ASC final rule with comment period.
b. CPT Codes Proposed Rule Comment Solicitation
    For the CY 2024 ASC update, we received the CPT codes that will be 
effective January 1, 2024, from the AMA in time to be included in this 
proposed rule. The new, revised, and deleted CPT codes can be found in 
ASC Addendum AA and Addendum BB to this proposed rule (which are 
available via the internet on the CMS website). We note that the new 
and revised CPT codes are assigned to comment indicator ``NP'' in ASC 
Addendum AA and Addendum BB of this proposed rule to indicate that the 
code is new for the next calendar year or the code is an existing code 
with substantial revision to its code descriptor in the next calendar 
year as compared to the current calendar year with a proposed payment 
indicator assignment. We will accept comments and finalize the payment 
indicators in the CY 2024 OPPS/ASC final rule with comment period. 
Further, we remind readers that the CPT code descriptors that appear in 
Addendum AA and Addendum BB are short descriptors and do not describe 
the complete procedure, service, or item described by the CPT code. 
Therefore, we include the 5-digit placeholder codes and their long 
descriptors for the new CY 2024 CPT codes in Addendum O to this 
proposed rule (which is available via the internet on the CMS website) 
so that the public can comment on our proposed payment indicator 
assignments. The 5-digit placeholder codes can be found in Addendum O 
to this proposed rule, specifically under the column labeled ``CY 2024 
OPPS/ASC Proposed Rule 5-Digit AMA/CMS Placeholder Code.'' We intend to 
include the final CPT code numbers the CY 2024 OPPS/ASC final rule with 
comment period.
    In summary, we are soliciting public comments on the proposed CY 
2024 payment indicators for the new Category I and III CPT codes that 
will be effective January 1, 2024. Because these codes are listed in 
Addendum AA and Addendum BB with short descriptors only, we are listing 
them again in Addendum O with the long descriptors. We also propose to 
finalize the payment indicator for these codes (with their final CPT 
code numbers) in the CY 2024 OPPS/ASC final rule with comment period. 
The proposed payment indicators and comment indicators for these codes 
can be found in Addendum AA and BB to this proposed rule. The list of 
ASC payment indicators and corresponding definitions can be found in 
Addendum DD1 to this proposed rule. The new CPT codes that will be 
effective January 1, 2024, are assigned to comment indicator ``NP'' in 
Addendum AA and BB to this proposed rule to indicate that the codes are 
assigned to an interim payment indicator and that comments will be 
accepted on their interim ASC payment assignments. The list of comment 
indicators and definitions used under the ASC payment system can be 
found in Addendum DD2 to this proposed rule. We note that ASC Addenda 
AA, BB, DD1, and DD2 are available via the internet on the CMS website.
    Finally, in Table 56, we summarize our process for updating codes 
through our ASC quarterly update CRs, seeking public comments, and 
finalizing the treatment of these new codes under the ASC payment 
system.
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6. ASC Payment and Comment Indicators
a. Background
    In addition to the payment indicators that we introduced in the 
August 2, 2007 ASC final rule, we created final comment indicators for 
the ASC payment system in the CY 2008 OPPS/ASC final rule with comment 
period (72 FR 66855). We created Addendum DD1 to define ASC payment 
indicators that we use in Addenda AA and BB to provide payment 
information regarding covered surgical procedures and covered ancillary 
services, respectively, under the revised ASC payment system. The ASC 
payment indicators in Addendum DD1 are intended to capture policy-
relevant characteristics of HCPCS codes that may receive packaged or 
separate payment in ASCs, such as whether they were on the ASC CPL 
prior to CY 2008; payment designation, such as device-intensive or 
office-based, and the corresponding ASC payment methodology; and their 
classification as separately payable ancillary services, including 
radiology services, brachytherapy sources, OPPS pass-through devices, 
corneal tissue acquisition services, drugs or biologicals, or NTIOLs.
    We also created Addendum DD2 that lists the ASC comment indicators. 
The ASC comment indicators included in Addenda AA and BB to the 
proposed rules and final rules with comment period serve to identify, 
for the revised ASC payment system, the status of a specific HCPCS code 
and its payment indicator with respect to the timeframe when comments 
will be accepted. The comment indicator ``NI'' is used in the OPPS/ASC 
final rule with comment period to indicate new codes for the next 
calendar year for which the interim payment indicator assigned is 
subject to comment. The comment indicator ``NI'' also is assigned to 
existing codes with substantial revisions to their descriptors such 
that we consider them to be describing new services, and the interim 
payment indicator assigned is subject to comment, as discussed in the 
CY 2010 OPPS/ASC final rule with comment period (74 FR 60622).
    The comment indicator ``NP'' is used in the OPPS/ASC proposed rule 
to indicate new codes for the next calendar year for which the proposed 
payment indicator assigned is subject to comment. The comment indicator 
``NP'' also is assigned to existing codes with substantial revisions to 
their descriptors, such that we consider them to be describing new 
services, and the proposed payment indicator assigned is subject to 
comment, as discussed in the CY 2016 OPPS/ASC final rule with comment 
period (80 FR 70497).
    The ``CH'' comment indicator is used in Addenda AA and BB to the 
proposed rule (these addenda are available via the internet on the CMS 
website) to indicate that the payment indicator assignment has changed 
for an active HCPCS code in the current year and the next calendar 
year, for example, if an active HCPCS code is newly recognized as 
payable in ASCs or an active HCPCS code is discontinued at the end of 
the current calendar year. The ``CH'' comment indicators that are 
published in the final rule 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.

[[Page 49749]]

    In the CY 2021 OPPS/ASC final rule with comment period, we 
finalized the addition of ASC payment indicator ``K5''--Items, Codes, 
and Services for which pricing information and claims data are not 
available. No payment made.--to ASC Addendum DD1 (which is available 
via the internet on the CMS website) to indicate those services and 
procedures that CMS anticipates will become payable when claims data or 
payment information becomes available.
b. Proposed ASC Payment and Comment Indicators for CY 2024
    For CY 2024, we propose new and revised Category I and III CPT 
codes as well as new and revised Level II HCPCS codes. Proposed 
Category I and III CPT codes that are new and revised for CY 2024 and 
any new and existing Level II HCPCS codes with substantial revisions to 
the code descriptors for CY 2024, compared to the CY 2023 descriptors, 
are included in ASC Addenda AA and BB to this proposed rule and labeled 
with comment indicator ``NP'' to indicate that these CPT and Level II 
HCPCS codes are open for comment as part of this CY 2024 OPPS/ASC 
proposed rule.
    For CY 2024, we propose to add two ASC payment indicators for new 
proposed dental codes. Section XIII.D of this proposed rule describes 
the proposed addition of dental codes to the ASC CPL and ancillary 
services list for CY 2024. We propose to add specific dental payment 
indicators for more streamlined claims processing of the new dental 
codes, as these codes would require different billing mechanisms than 
non-dental procedures currently on the CPL. Separate payment indicators 
would allow MACs to more quickly and easily distinguish how these codes 
need to be processed. Proposed ASC payment indicators ``D1'' and ``D2'' 
are for the new dental codes that would be paid in CY 2024 and 
subsequent calendar years and would be added to Addendum DD1 (which is 
available via the internet on the CMS website) to indicate potentially 
payable dental services and procedures in the ASC setting. The first 
proposed payment indicator is ``D1''--``Ancillary dental service/item; 
no separate payment made.'' The ``D1'' indicator would indicate an 
ancillary dental procedure that would be performed integral to a 
separately payable dental surgical procedure with a payment indicator 
of ``D2.'' The second proposed payment indicator is ``D2''--``Non 
office-based dental procedure added in CY 2024 or later.'' The ``D2'' 
payment indicator would indicate a separately payable dental surgical 
procedure that would be subject to the multiple procedure reduction, 
but would not be designated as an office-based covered surgical 
procedure. Section XIII.D.2 of this proposed rule describes how these 
payment indicators would be used in claims processing for dental 
services. We solicit comment on these proposed new payment indicators, 
including whether their descriptors are appropriate and any 
considerations interested parties believe we should take into account 
when structuring payment for the procedures for which we propose to use 
payment indicators D1 and D2.
    We refer readers to Addenda DD1 and DD2 of this proposed rule 
(these addenda are available via the internet on the CMS website) for 
the complete list of ASC payment and comment indicators proposed for 
the CY 2024 update.

C. Payment Policies Under the ASC Payment System

1. Proposed ASC Payment for Covered Surgical Procedures
a. Background
    Our ASC payment policies for covered surgical procedures under the 
revised ASC payment system are described in the CY 2008 OPPS/ASC final 
rule with comment period (72 FR 66828 through 66831). Under our 
established policy, we use the ASC standard ratesetting methodology of 
multiplying the ASC relative payment weight for the procedure by the 
ASC conversion factor for that same year to calculate the national 
unadjusted payment rates for procedures with payment indicators ``G2'' 
and ``A2.'' Payment indicator ``A2'' was developed to identify 
procedures that were included on the list of ASC covered surgical 
procedures in CY 2007 and, therefore, were subject to transitional 
payment prior to CY 2011. Although the 4-year transitional period has 
ended and payment indicator ``A2'' is no longer required to identify 
surgical procedures subject to transitional payment, we have retained 
payment indicator ``A2'' because it is used to identify procedures that 
are exempted from the application of the office-based designation.
    Payment rates for office-based procedures (payment indicators 
``P2,'' ``P3,'' and ``R2'') are the lower of the PFS nonfacility PE 
RVU-based amount or the amount calculated using the ASC standard rate 
setting methodology for the procedure. As detailed in section 
XIII.C.3.b of this CY 2024 OPPS/ASC proposed rule, we update the 
payment amounts for office-based procedures (payment indicators ``P2,'' 
``P3,'' and ``R2'') using the most recent available MPFS and OPPS data. 
We compare the estimated current year rate for each of the office-based 
procedures, calculated according to the ASC standard rate setting 
methodology, to the PFS nonfacility PE RVU-based amount to determine 
which is lower and, therefore, would be the current year payment rate 
for the procedure under our final policy for the revised ASC payment 
system (Sec.  416.171(d)).
    The rate calculation established for device-intensive procedures 
(payment indicator ``J8'') is structured so only the service (non-
device) portion of the rate is subject to the ASC conversion factor. We 
update the payment rates for device-intensive procedures to incorporate 
the most recent device offset percentages calculated under the ASC 
standard ratesetting methodology, as discussed in section XIII.C.4 of 
this proposed rule.
    In the CY 2014 OPPS/ASC final rule with comment period (78 FR 
75081), we finalized our proposal to calculate the CY 2014 payment 
rates for ASC covered surgical procedures according to our established 
methodologies, with the exception of device removal procedures. For CY 
2014, we finalized a policy to conditionally package payment for device 
removal procedures under the OPPS. Under the OPPS, a conditionally 
packaged procedure (status indicators ``Q1'' and ``Q2'') describes a 
HCPCS code where the payment is packaged when it is provided with a 
significant procedure but is separately paid when the service appears 
on the claim without a significant procedure. Because ASC services 
always include a covered surgical procedure, HCPCS codes that are 
conditionally packaged under the OPPS are always packaged (payment 
indicator ``N1'') under the ASC payment system. Under the OPPS, device 
removal procedures are conditionally packaged and, therefore, would be 
packaged under the ASC payment system. There is no Medicare payment 
made when a device removal procedure is performed in an ASC without 
another surgical procedure included on the claim; therefore, no 
Medicare payment would be made if a device was removed but not 
replaced. To ensure that the ASC payment system provides separate 
payment for surgical procedures that only involve device removal--
conditionally packaged in the OPPS (status indicator ``Q2'')--we have 
continued to provide separate payment since CY 2014 and assign the 
current ASC payment indicators associated with these procedures.

[[Page 49750]]

b. Update to ASC Covered Surgical Procedure Payment Rates for CY 2024
    We propose to update ASC payment rates for CY 2024 and subsequent 
years using the established rate calculation methodologies under Sec.  
416.171 and using our definition of device-intensive procedures, as 
discussed in section XIII.C.4 of this proposed rule. As the proposed 
OPPS relative payment weights are generally based on geometric mean 
costs, we propose that the ASC payment system will generally use the 
geometric mean cost to determine proposed relative payment weights 
under the ASC standard methodology. We propose to continue to use the 
amount calculated under the ASC standard ratesetting methodology for 
procedures assigned payment indicators ``A2'' and ``G2.''
    We propose to calculate payment rates for office-based procedures 
(payment indicators ``P2,'' ``P3,'' and ``R2'') and device-intensive 
procedures (payment indicator ``J8'') according to our established 
policies and to identify device-intensive procedures using the 
methodology discussed in section XIII.C.4 of this proposed rule. 
Therefore, we propose to update the payment amount for the service 
portion (the non-device portion) of the device-intensive procedures 
using the standard ASC ratesetting methodology and the payment amount 
for the device portion based on the proposed CY 2024 device offset 
percentages that have been calculated using the standard OPPS APC 
ratesetting methodology. We propose that payment for office-based 
procedures would be at the lesser of the proposed CY 2024 MPFS 
nonfacility PE RVU-based amount or the proposed CY 2024 ASC payment 
amount calculated according to the ASC standard ratesetting 
methodology.
    As we did for CYs 2014 through 2023, for CY 2024, we propose to 
continue our policy for device removal procedures, such that device 
removal procedures that are conditionally packaged in the OPPS (status 
indicators ``Q1'' and ``Q2'') will be assigned the current ASC payment 
indicators associated with those procedures and will continue to be 
paid separately under the ASC payment system.
c. Proposed Payment for ASC Add-On Procedures Eligible for Complexity 
Adjustments Under the OPPS
    In this section, we discuss the 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.
(1) OPPS C-APC Complexity Adjustment Policy
    Under the OPPS, complexity adjustments are utilized to provide 
increased payment for certain comprehensive services. As discussed in 
section II.A.2.b of this proposed rule, we apply a complexity 
adjustment by promoting qualifying paired ``J1'' service code 
combinations or paired code combinations of ``J1'' services and add-on 
codes from the originating Comprehensive APC (C-APC) (the C-APC to 
which the designated primary service is first assigned) to the next 
higher paying C-APC in the same clinical family of C-APCs. A ``J1'' 
status indicator refers to a hospital outpatient service paid through a 
C-APC. We package payment for all add-on codes, which are codes that 
describe a procedure or service always performed in addition to a 
primary service or procedure, into the payment for the C-APC. However, 
certain combinations of primary service codes and add-on codes may 
qualify for a complexity adjustment.
    We apply complexity adjustments when the paired code combination 
represents a complex, costly form or version of the primary service 
when the frequency and cost thresholds are met. The frequency threshold 
is met when there are 25 or more claims reporting the code combination, 
and the cost threshold is met when there is a violation of the 2 times 
rule, as specified in section 1833(t)(2) of the Act and described in 
section III.A.2.b of this proposed rule, in the originating C-APC. 
These paired code combinations that meet the frequency and cost 
threshold criteria represent those that exhibit materially greater 
resource requirements than the primary service. After designating a 
single primary service for a claim, we evaluate that service in 
combination with each of the other procedure codes reported on the 
claim that are either assigned to status indicator ``J1'' or add-on 
codes to determine if there are paired code combinations that meet the 
complexity adjustment criteria. Once we have determined that a 
particular combination of ``J1'' services, or combinations of a ``J1'' 
service and add-on code, represents a complex version of the primary 
service because it is sufficiently costly, frequent, and a subset of 
the primary comprehensive service overall according to the criteria 
described above, we promote the claim to the next higher cost C-APC 
within the clinical family unless the primary service is already 
assigned to the highest cost APC within the C-APC clinical family or 
assigned to the only C-APC in a clinical family. We do not create new 
C-APCs with a comprehensive geometric mean cost that is higher than the 
highest geometric mean cost (or only) C-APC in a clinical family just 
to accommodate potential complexity adjustments. Therefore, the highest 
payment for any claim including a code combination for services 
assigned to a C-APC would be the highest paying C-APC in the clinical 
family (79 FR 66802).
    As previously stated, we package payment for add-on codes into the 
C-APC payment rate. If any add-on code reported in conjunction with the 
``J1'' primary service code does not qualify for a complexity 
adjustment, payment for the add-on service continues to be packaged 
into the payment for the primary service and the primary service code 
reported with the add-on code is not reassigned to the next higher cost 
C-APC. We list the proposed complexity adjustments for ``J1'' and add-
on code combinations for CY 2024, along with all of the other proposed 
complexity adjustments, in Addendum J to this proposed rule (which is 
available via the internet on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices).
(2) CY 2023 ASC Special Payment Policy for OPPS Complexity-Adjusted C-
APCs
    Comprehensive APCs cannot be adopted in the ASC payment system due 
to limitations of the ASC claims processing systems. Thus, we do not 
use the OPPS comprehensive services ratesetting methodology in the ASC 
payment system. Under the standard ratesetting methodology used for the 
ASC payment system, comprehensive ``J1'' claims that exist under the 
OPPS are treated the same as other claims that contain separately 
payable procedure codes. As comprehensive APCs do not exist under the 
ASC payment system, there is not a process similar to the OPPS 
complexity adjustment policy in the ASC payment system to provide 
higher payment for more complex code combinations. In the ASC payment 
system, when multiple procedures are performed together in a single 
operative session, most covered surgical procedures are subject to a 
50-percent reduction for the lower-paying procedure (72 FR 66830). This 
multiple procedure reduction gives providers additional payment when 
they perform multiple procedures during the same session, while still 
encouraging providers to provide necessary services

[[Page 49751]]

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 a service corresponding to an add-
on code in the ASC payment system.
    Before CY 2023 rulemaking, we 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.
    In the CY 2023 OPPS/ASC final 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. 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 
significantly lower than 55 percent. We recognized 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 policy did 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 represented a more 
complex and costly version of the service, and we believed 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, in the CY 2023 OPPS/ASC final rule 
(87 FR 72079 to 72080), we finalized 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 finalized adding new regulatory text at 
Sec.  416.172(h) to codify this policy.
    We finalized 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 payment 
policy in the ASC setting. Specifically, we finalized that the ASC 
payment system code combinations eligible for additional payment under 
this 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 were 
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 finalized 
that we would assign each eligible code combination a new C-code, which 
we will refer to as an ``ASC complexity adjustment 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 policy, we add these ASC 
complexity adjustment codes to the ASC CPL and the ancillary services 
list, and when ASCs bill an ASC complexity adjustment code, they 
receive a higher payment rate that reflects that the code combination 
is a more complex and costlier version of the primary procedure 
performed. We anticipated that the ASC complexity adjustment codes 
eligible for this payment policy would change slightly each year, as 
the complexity adjustment assignments change under the OPPS; and we 
expect we would add new ASC complexity adjustment codes each year 
accordingly. In the CY 2023 OPPS/ASC final rule with comment period (87 
FR 72079 to 72080), we finalized new ASC complexity adjustment codes to 
add to the ASC CPL, which were listed in the ASC addenda. We also 
finalized adding new regulatory text at Sec.  416.172(h)(1), titled 
``Eligibility,'' to codify this policy.
    We finalized the following payment methodology for this policy, 
which we reflected in new Sec.  416.172(h)(2), titled ``Calculation of 
Payment.'' The ASC complexity adjustment codes are subject to all ASC 
payment policies, including the standard ASC payment system ratesetting 
methodology, meaning, they are 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 ASC complexity adjustment code are 
performed with another separately payable covered surgical procedure in 
the ASC setting. We finalized using 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 used 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 scaled 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 multiplied 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).
    We also finalized using the OPPS complexity-adjusted C-APC rate for 
each corresponding code combination to calculate the OPPS relative 
weight for each corresponding ASC complexity adjustment code, which we 
believed would appropriately reflect the complexity and resource 
intensity of

[[Page 49752]]

these ASC procedures being performed together. For ASC complexity 
adjustment codes that are not assigned device-intensive status 
(discussed below), we multiply the OPPS relative weight by the ASC 
budget neutrality adjustment (or ASC weight scalar) to determine the 
ASC relative weight. We then multiply the ASC relative weight by the 
ASC conversion factor to determine the ASC payment rate for each ASC 
complexity adjustment code. In short, we apply the standard ASC 
ratesetting process to the ASC complexity adjustment codes. We 
finalized adding new Sec.  416.172(h)(2)(i) to codify this policy.
    As discussed in section XIII.C.1.b of the CY 2023 OPPS/ASC final 
rule with comment period (87 FR 44708), certain ASC complexity 
adjustment codes under our 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 an ASC complexity adjustment code created under this 
proposal, we believe it is appropriate for the ASC complexity 
adjustment 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 has a device offset percentage of 31 
percent (a 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, ASC complexity adjustment 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 apply our standard ASC payment system ratesetting methodology 
to the non-device portion of the OPPS complexity-adjusted APC rate of 
the ASC complexity adjustment codes; that is, we 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 ASC complexity adjustment 
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 ASC complexity adjustment 
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 an ASC 
complexity adjustment code. As is the case for all device-intensive 
procedures, we apply the ASC standard ratesetting methodology to the 
OPPS relative weights of the non-device portion for any ASC complexity 
adjustment 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 finalized adding 
new Sec.  416.172(h)(2)(ii) to codify this policy.
    In order to include these ASC complexity adjustment codes in the 
budget neutrality calculations for the ASC payment system, we estimated 
the potential utilization for these ASC complexity adjustment 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 finalized estimating CY 2023 ASC utilization based upon 
how often these combinations are performed in the HOPD setting. 
Specifically, we used the ratio of the primary procedure volume to add-
on procedure volume from CY 2021 OPPS claims and applied that ratio 
against ASC primary procedure utilization to estimate the increased 
spending as a result of our proposal for budget neutrality purposes. We 
believed 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 
anticipated that we would continue this estimation process until we 
have sufficient claims data for the ASC complexity adjustment codes 
that can be used to more accurately calculate code combination 
utilization in ASCs, likely for the CY 2025 rulemaking.
    For CY 2024, we propose to continue the special payment policy and 
methodology for OPPS complexity-adjusted C-APCs that was finalized in 
the CY 2023 OPPS/ASC final rule with comment period (87 FR 72078 
through 72080). The full list of the proposed ASC complexity adjustment 
codes for CY 2024 can be found in the ASC addenda and the supplemental 
policy file, which also includes both the existing ASC complexity 
adjustment codes and proposed additions, is published with the proposed 
rule on the CMS website at https://www.cms.gov/medicare/medicare-fee-for-service-payment/ascpayment/asc-regulations-and-notices. Because the 
complexity adjustment assignments change each year under the OPPS, the 
proposed list of ASC complexity adjustment codes eligible for this 
proposed payment policy has changed slightly from the previous year.
d. Proposed Low Volume APCs and Limit on ASC Payment Rates for 
Procedures Assigned to Low Volume APCs
    As stated in section XIII.D.1.b of this proposed rule, the ASC 
payment system generally uses OPPS geometric mean costs under the 
standard methodology to determine proposed relative payment weights 
under the standard ASC ratesetting methodology. In the CY 2022 OPPS/ASC 
final rule with comment period (86 FR 63743 through 63747), we adopted 
a universal Low Volume APC policy for CY 2022 and subsequent calendar 
years. Under our policy, we expanded the low volume adjustment policy 
that is applied to procedures assigned to New Technology APCs to also 
apply to clinical and brachytherapy APCs. Specifically, a clinical APC 
or brachytherapy APC with fewer than 100 claims per year would be 
designated as a Low Volume APC. For items or services assigned to a Low 
Volume APC, we use up to four years of claims data to establish a 
payment rate for the APC as we currently do for low volume services 
assigned to New Technology APCs. The payment rate for a Low Volume APC 
or a low volume New Technology procedure would be based on the highest 
of the median cost, arithmetic mean cost, or geometric mean cost 
calculated using multiple years of claims data.
    Based on claims data available for this proposed rule, we propose 
to designate four clinical APCs and five brachytherapy APCs as Low 
Volume APCs under the ASC payment system. The four clinical APCs and 
five brachytherapy APCs shown in Table 57 of this proposed rule met our 
criteria of having fewer than 100 single claims in the claims year (CY 
2022 for this proposed rule) and therefore, we propose that they would 
be subject to our universal Low Volume APC policy and the APC cost 
metric would be based on the greater of the median cost, arithmetic 
mean cost, or geometric mean cost using up to 4 years of claims data. 
Eight of the nine APCs were designated as low volume APCs in CY 2023. 
In

[[Page 49753]]

addition, based on data for this CY 2024 OPPS/ASC proposed rule, APC 
2642 (Brachytx, stranded, C-131) meets our criteria to be designated a 
Low Volume APC, and we propose to designate it as such for CY 2024.
[GRAPHIC] [TIFF OMITTED] TP31JY23.092

2. Payment for Covered Ancillary Services
a. Background
    Our payment policies under the ASC payment system for covered 
ancillary services generally vary according to the particular type of 
service and its payment policy under the OPPS. Our overall policy 
provides separate ASC payment for certain ancillary items and services 
integrally related to the provision of ASC covered surgical procedures 
that are paid separately under the OPPS and provides packaged ASC 
payment for other ancillary items and services that are packaged or 
conditionally packaged (status indicators ``N,'' ``Q1,'' and ``Q2'') 
under the OPPS.
    In the CY 2013 OPPS/ASC rulemaking (77 FR 45169 and 77 FR 68457 
through 68458), we further clarified our policy regarding the payment 
indicator assignment for procedures that are conditionally packaged in 
the OPPS (status indicators ``Q1'' and ``Q2''). Under the OPPS, a 
conditionally packaged procedure describes a HCPCS code where the 
payment is packaged when it is provided with a significant procedure 
but is separately paid when the service appears on the claim without a 
significant procedure. Because ASC services always include a surgical 
procedure, HCPCS codes that are conditionally packaged under the OPPS 
are generally packaged (payment indictor ``N1'') under the ASC payment 
system (except for device removal procedures, as discussed in the CY 
2022 OPPS/ASC proposed rule (86 FR 42083)). Thus, our policy generally 
aligns ASC payment bundles with those under the OPPS (72 FR 42495). In 
all cases, in order for ancillary items and services also to be paid, 
the ancillary items and services must be provided integral to the 
performance of ASC covered surgical procedures for which the ASC bills 
Medicare.
    Our ASC payment policies generally provide separate payment for 
drugs and biologicals that are separately paid under the OPPS at the 
OPPS rates and package payment for drugs and biologicals for which 
payment is packaged under the OPPS. However, as discussed in the CY 
2022 OPPS/ASC final rule with comment period, for CY 2022, we finalized 
a policy to unpackage and pay separately at ASP plus 6 percent for the 
cost of non-opioid pain management drugs and biologicals that function 
as a supply when used in a surgical procedure as determined by CMS 
under Sec.  416.174 (86 FR 63483).
    We generally pay for separately payable radiology services at the 
lower

[[Page 49754]]

of the PFS nonfacility PE RVU-based (or technical component) amount or 
the rate calculated according to the ASC standard ratesetting 
methodology (72 FR 42497). However, as finalized in the CY 2011 OPPS/
ASC final rule with comment period (75 FR 72050), payment indicators 
for all nuclear medicine procedures (defined as CPT codes in the range 
of 78000 through 78999) that are designated as radiology services that 
are paid separately when provided integral to a surgical procedure on 
the ASC list are set to ``Z2'' so that payment is made based on the ASC 
standard ratesetting methodology rather than the MPFS nonfacility PE 
RVU amount (``Z3''), regardless of which is lower (Sec.  
416.171(d)(1)).
    Similarly, we also finalized our policy to set the payment 
indicator to ``Z2'' for radiology services that use contrast agents so 
that payment for these procedures will be based on the OPPS relative 
payment weight using the ASC standard ratesetting methodology and, 
therefore, will include the cost for the contrast agent (Sec.  
416.171(d)(2)).
    ASC payment policy for brachytherapy sources mirrors the payment 
policy under the OPPS. ASCs are paid for brachytherapy sources provided 
integral to ASC covered surgical procedures at prospective rates 
adopted under the OPPS or, if OPPS rates are unavailable, at 
contractor-priced rates (72 FR 42499). Since December 31, 2009, ASCs 
have been paid for brachytherapy sources provided integral to ASC 
covered surgical procedures at prospective rates adopted under the 
OPPS.
    Our ASC policies also provide separate payment for: (1) certain 
items and services that CMS designates as contractor-priced, including, 
but not limited to, the procurement of corneal tissue; and (2) certain 
implantable items that have pass-through payment status under the OPPS. 
These categories do not have prospectively established ASC payment 
rates according to ASC payment system policies (72 FR 42502 and 42508 
through 42509; Sec.  416.164(b)). Under the ASC payment system, we have 
designated corneal tissue acquisition and hepatitis B vaccines as 
contractor-priced. Corneal tissue acquisition is contractor-priced 
based on the invoiced costs for acquiring the corneal tissue for 
transplantation. Hepatitis B vaccines are contractor-priced based on 
invoiced costs for the vaccine.
    Devices that are eligible for pass-through payment under the OPPS 
are separately paid under the ASC payment system and are contractor-
priced. Under the revised ASC payment system (72 FR 42502), payment for 
the surgical procedure associated with the pass-through device is made 
according to our standard methodology for the ASC payment system, based 
on only the service (non-device) portion of the procedure's OPPS 
relative payment weight if the APC weight for the procedure includes 
other packaged device costs. We also refer to this methodology as 
applying a ``device offset'' to the ASC payment for the associated 
surgical procedure. This ensures that duplicate payment is not provided 
for any portion of an implanted device with OPPS pass-through payment 
status.
    In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66933 
through 66934), we finalized that, beginning in CY 2015, certain 
diagnostic tests within the medicine range of CPT codes for which 
separate payment is allowed under the OPPS are covered ancillary 
services when they are integral to an ASC covered surgical procedure. 
We finalized that diagnostic tests within the medicine range of CPT 
codes include all Category I CPT codes in the medicine range 
established by CPT, from 90000 to 99999, and Category III CPT codes and 
Level II HCPCS codes that describe diagnostic tests that crosswalk or 
are clinically similar to procedures in the medicine range established 
by CPT. In the CY 2015 OPPS/ASC final rule with comment period, we also 
finalized our policy to pay for these tests at the lower of the PFS 
nonfacility PE RVU-based (or technical component) amount or the rate 
calculated according to the ASC standard ratesetting methodology (79 FR 
66933 through 66934). We finalized that the diagnostic tests for which 
the payment is based on the ASC standard ratesetting methodology be 
assigned to payment indicator ``Z2'' and revised the definition of 
payment indicator ``Z2'' to include a reference to diagnostic services 
and those for which the payment is based on the PFS nonfacility PE RVU-
based amount be assigned payment indicator ``Z3,'' and revised the 
definition of payment indicator ``Z3'' to include a reference to 
diagnostic services.
b. Proposed Payment for Covered Ancillary Services for CY 2024
    We propose to update the ASC payment rates and to make changes to 
ASC payment indicators, as necessary, to maintain consistency between 
the OPPS and ASC payment system regarding the packaged or separately 
payable status of services and the proposed CY 2024 OPPS and ASC 
payment rates and subsequent years' payment rates. We also propose to 
continue to set the CY 2024 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 2024 and 
subsequent years' payment rates.
    Covered ancillary services and their proposed payment indicators 
for CY 2024 are listed in Addendum BB of this proposed rule (which is 
available via the internet on the CMS website). For those covered 
ancillary services where the payment rate is the lower of the rate 
under the ASC standard rate setting methodology and the PFS proposed 
rates (similar to our office-based payment policy), the proposed 
payment indicators and rates set forth in this proposed rule are based 
on a comparison using the proposed PFS rates effective January 1, 2024. 
For a discussion of the PFS rates, we refer readers to the CY 2024 PFS 
proposed rule, which is available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
3. Covered Surgical Procedures Designated as Office-Based Procedures
a. Background
    In the August 2, 2007 ASC final rule, we finalized our policy to 
designate as ``office-based'' those procedures that are added to the 
ASC Covered Procedures List (CPL) in CY 2008 or later years that we 
determine are furnished predominantly (more than 50 percent of the 
time) in physicians' offices based on consideration of the most recent 
available volume and utilization data for each individual procedure 
code and/or, if appropriate, the clinical characteristics, utilization, 
and volume of related codes. In that rule, we also finalized our policy 
to exempt all procedures on the CY 2007 ASC list from application of 
the office-based classification (72 FR 42512). The procedures that were 
added to the ASC CPL beginning in CY 2008 that we determined were 
office-based were identified in Addendum AA to that rule with payment 
indicator ``P2'' (Office-based surgical procedure added to ASC list in 
CY 2008 or later with MPFS nonfacility PE RVUs; payment based on OPPS 
relative payment weight); ``P3'' (Office-based surgical procedures 
added to ASC list in CY 2008 or later with MPFS nonfacility PE RVUs; 
payment based on MPFS nonfacility PE RVUs); or ``R2'' (Office-based 
surgical procedure added to ASC list in CY 2008 or later

[[Page 49755]]

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.
b. CY 2024 Proposed Office-Based Procedures
    In developing this CY 2024 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 proposed rule), including their potential 
designation as office-based. Historically, we would also review the 
most recent claims volume and utilization data (CY 2022 claims) and the 
clinical characteristics for all covered surgical procedures that are 
currently assigned a payment indicator in CY 2023 of ``G2'' (Non 
office-based surgical procedure added in CY 2008 or later; payment 
based on OPPS relative payment weight) as well as for those procedures 
assigned one of the temporary office-based payment indicators, 
specifically ``P2,'' ``P3,'' or ``R2'' in the CY 2022 OPPS/ASC final 
rule with comment period (86 FR 63769 through 63773).
    In our CY 2022 OPPS/ASC final rule with comment period (86 FR 
63770), we discussed that we, historically, review the most recent 
claims volume and utilization data and clinical characteristics for all 
covered surgical procedures that were assigned a payment indicator of 
``G2'' for CY 2021. For the CY 2022 OPPS/ASC final rule with comment 
period, the most recent claims volume and utilization data was CY 2020 
claims. However, given our concerns with the use of CY 2020 claims data 
as a result of the COVID-19 PHE as further discussed in the CY 2022 
OPPS/ASC final rule with comment period (86 FR 63751 through 63754), we 
adopted a policy to not review CY 2020 claims data and did not assign 
permanent office-based designations to covered surgical procedures that 
were assigned a payment indicator of ``G2'' in CY 2021 (86 FR 63770 
through 63771).
    As discussed further in section X.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 2022 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 two 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 the services are of a level of complexity 
consistent with other procedures performed routinely in physicians' 
offices. The CPT codes that we propose to permanently designate as 
office-based for CY 2024 are listed in Table 58.
[GRAPHIC] [TIFF OMITTED] TP31JY23.093

    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

[[Page 49756]]

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 2022 volume and utilization data for nine surgical 
procedures designated as temporarily office-based in the CY 2023 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 59, for four of the nine surgical procedures, 
there were greater than 50 claims available and the volume and 
utilization data indicated these four procedures were performed 
predominantly in the office setting. Therefore, we propose to no longer 
designate the four procedures as temporarily office-based but to 
permanently designate these procedures as office-based and assign one 
of the office-based payment indicators, specifically ``P2,'' ``P3,'' or 
``R2.''
    Additionally, for one of the nine surgical procedures, there were 
greater than 50 claims available; and the volume and utilization data 
indicated that this procedure--CPT code 64454 (Injection(s), anesthetic 
agent(s) and/or steroid; genicular nerve branches, including imaging 
guidance, when performed)--is not performed predominantly in the office 
setting. Therefore, as shown in Table 59, we propose to no longer 
designate this procedure as temporarily office-based. For CY 2024, we 
propose to assign this procedure a payment indicator of ``G2'' (Non 
office-based surgical procedure added in CY 2008 or later; payment 
based on OPPS relative payment weight).
[GRAPHIC] [TIFF OMITTED] TP31JY23.094

    For four of the nine procedures that were designated as temporarily 
office-based in the CY 2023 OPPS/ASC final rule with comment period and 
temporarily assigned one of the office-based payment indicators, 
specifically ``P2,'' ``P3,'' or ``R2,'' there were fewer than 50 
claims; therefore, there was an insufficient amount to determine if the 
office setting was the predominant setting of care for these 
procedures. Therefore, as shown in Table 60, we propose to continue to 
designate such procedures as temporarily office-based for CY 2024 and 
assign one of the office-based payment indicators.
    For CY 2024, we propose to designate three new CY 2024 CPT codes 
for ASC covered surgical procedures as temporarily office-based--CPT 
placeholder codes 6X000, 64XX4, and X170T. After reviewing the clinical 
characteristics, utilization, and volume of related procedure codes or 
predecessor codes, we determined that the predecessor code for CPT 
placeholder code 6X000 (Suprachoroidal space injection of pharmacologic 
agent (separate procedure)) is CPT code 0465T (Suprachoroidal injection 
of a pharmacologic agent (does not include supply of medication)), 
which was

[[Page 49757]]

designated as an office-based procedure. Additionally, CPT placeholder 
code 64XX4 (Revision or removal of neurostimulator electrode array, 
peripheral nerve, with integrated neurostimulator) is most similar to 
CPT code 0588T (Revision or removal of integrated single device 
neurostimulation system including electrode array and receiver or pulse 
generator, including analysis, programming, and imaging guidance when 
performed, posterior tibial nerve), which is also designated as 
temporarily office-based. Lastly, CPT placeholder code X170T (Low-
intensity extracorporeal shock wave therapy involving corpus 
cavernosum, low energy) is most similar to CPT code 0101T 
(Extracorporeal shock wave involving musculoskeletal system, not 
otherwise specified) which is designated as an office-based surgical 
procedure. Therefore, as shown in Table 60, we propose to designate 
these three new CPT codes as temporarily office-based for CY 2024.
    The procedures for which the proposed office-based designation for 
CY 2024 is temporary are indicated by an asterisk in Addendum AA to 
this proposed rule (which is available via the internet on the CMS 
website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/ASC-Regulations-and-Notices).
[GRAPHIC] [TIFF OMITTED] TP31JY23.095


[[Page 49758]]


4. Device-Intensive ASC Covered Surgical Procedures
a. Background
    We refer readers to the CY 2019 OPPS/ASC final rule with comment 
period (83 FR 59040 through 59041), for a summary of our existing 
policies regarding ASC covered surgical procedures that are designated 
as device-intensive.
b. CY 2024 Proposed Device Intensive Procedures
    In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59040 
through 59043), for CY 2019, we modified our criteria for device-
intensive procedures to better capture costs for procedures with 
significant device costs. We adopted a policy to allow procedures that 
involve surgically inserted or implanted, high-cost, single-use devices 
to qualify as device-intensive procedures. In addition, we modified our 
criteria to lower the device offset percentage threshold from 40 
percent to 30 percent. The device offset percentage is the percentage 
of device costs within a procedure's total costs. Specifically, for CY 
2019 and subsequent years, we adopted a policy that device-intensive 
procedures would be subject to the following criteria:
     All procedures must involve implantable or insertable 
devices assigned a CPT or HCPCS code;
     The required devices (including single-use devices) must 
be surgically inserted or implanted; and
     The device offset amount must be significant, which is 
defined as exceeding 30 percent of the procedure's mean cost. 
Corresponding to this change in the cost criterion, we adopted a policy 
that the default device offset for new codes that describe procedures 
that involve the implantation of medical devices will be 31 percent 
beginning in CY 2019. For new codes describing procedures that are 
payable when furnished in an ASC and involve the implantation of a 
medical device, we adopted a policy that the default device offset 
would be applied in the same manner as the policy we adopted in section 
IV.B.2 of the CY 2019 OPPS/ASC final rule with comment period (83 FR 
58944 through 58948). We amended Sec.  416.171(b)(2) of the regulations 
to reflect these new device criteria.
    In addition, as also adopted in section IV.B.2 of the CY 2019 OPPS/
ASC final rule with comment period, to further align the device-
intensive policy with the criteria used for device pass-through status, 
we specified, for CY 2019 and subsequent years, that for purposes of 
satisfying the device-intensive criteria, a device-intensive procedure 
must involve a device that:
     Has received FDA marketing authorization, has received an 
FDA investigational device exemption (IDE) and has been classified as a 
Category B device by FDA in accordance with 42 CFR 405.203 through 
405.207 and 405.211 through 405.215, or meets another appropriate FDA 
exemption from premarket review;
     Is an integral part of the service furnished;
     Is used for one patient only;
     Comes in contact with human tissue;
     Is surgically implanted or inserted (either permanently or 
temporarily); and
     Is not any of the following:
    ++ Equipment, an instrument, apparatus, implement, or item of this 
type for which depreciation and financing expenses are recovered as 
depreciable assets as defined in Chapter 1 of the Medicare Provider 
Reimbursement Manual (CMS Pub. 15-1); or
    ++ A material or supply furnished incident to a service (for 
example, a suture, customized surgical kit, scalpel, or clip, other 
than a radiological site marker).
    In the CY 2022 OPPS/ASC final rule with comment period (86 FR 63773 
through 63775), we modified our approach to assigning device-intensive 
status to surgical procedures under the ASC payment system. First, we 
adopted a policy of assigning device-intensive status to procedures 
that involve surgically inserted or implanted, high-cost, single-use 
devices if their device offset percentage exceeds 30 percent under the 
ASC standard ratesetting methodology, even if the procedure is not 
designated as device-intensive under the OPPS. Second, we adopted a 
policy that if a procedure is assigned device-intensive status under 
the OPPS, but has a device offset percentage below the device-intensive 
threshold under the standard ASC ratesetting methodology, the procedure 
will be assigned device-intensive status under the ASC payment system 
with a default device offset percentage of 31 percent. The policies 
were adopted to provide consistency between the OPPS and ASC payment 
system and provide a more appropriate payment rate for surgical 
procedures with significant device costs under the ASC payment system.
    In the CY 2023 OPPS/ASC final rule with comment period (87 FR 72078 
through 72080), we finalized our policy to create certain C-codes, or 
ASC complexity adjustment codes that describe certain combinations of a 
primary covered surgical procedure as well as a packaged (payment 
indicator = ``N1'') procedure that are otherwise eligible for a 
complexity adjustment under the OPPS (as listed in Addendum J). Each 
ASC complexity adjustment code's APC assignment is based on its 
corresponding OPPS complexity adjustment code's APC assignment. In the 
CY 2023 OPPS/ASC final rule with comment period, we stated our belief 
that it would be appropriate for these ASC complexity adjustment codes 
to qualify for device-intensive status under the ASC payment system if 
the primary procedure of the code was also designated as device-
intensive. Under our current policy, the ASC complexity adjustment code 
would retain the device portion of the primary procedure (also called 
the ``device offset amount'') and not the device offset percentage. 
Therefore, for device-intensive ASC complexity adjustment codes, we set 
the device portion of the combined procedure equal to the device 
portion of the primary procedure and calculate the device offset 
percentage by dividing the device portion by the ASC complexity 
adjustment code's APC payment rate. Further, we apply our standard ASC 
payment system ratesetting methodology to the non-device portion of the 
ASC complexity adjustment code's APC payment rate; that is, we 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 are not proposing any changes related to designating surgical 
procedures as device-intensive under the ASC payment system for CY 
2024.
c. Adjustment to ASC Payments for No Cost/Full Credit and Partial 
Credit Devices
    Our ASC payment policy for costly devices implanted or inserted in 
ASCs at no cost/full credit or partial credit is set forth in Sec.  
416.179 of our regulations, and is consistent with the OPPS policy that 
was in effect until CY 2014. We refer readers to the CY 2008 OPPS/ASC 
final rule with comment period (72 FR 66845 through 66848) for a full 
discussion of the ASC payment adjustment policy for no cost/full credit 
and partial credit devices. ASC payment is reduced by 100 percent of 
the device offset amount when a hospital furnishes a specified device 
without cost or with a full credit and by 50 percent of the device 
offset amount when the hospital receives partial credit in the amount 
of 50 percent or more of the cost for the specified device.
    Effective CY 2014, under the OPPS, we finalized our proposal to 
reduce

[[Page 49759]]

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 appends 
the HCPCS ``FB'' modifier on the line in the claim with the procedure 
to implant or insert the device. The contractor reduces payment to the 
ASC by the device offset amount that we estimate represents the cost of 
the device when the necessary device is furnished without cost or with 
full credit to the ASC. We continue to believe that the reduction of 
ASC payment in these circumstances is necessary to pay appropriately 
for the covered surgical procedure furnished by the ASC.
    In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59043 
through 59044) we adopted a policy to reduce the payment for a device-
intensive procedure for which the ASC receives partial credit by one-
half of the device offset amount that would be applied if a device was 
provided at no cost or with full credit if the credit to the ASC is 50 
percent or more (but less than 100 percent) of the cost of the new 
device. The ASC will append the HCPCS ``FC'' modifier to the HCPCS code 
for the device-intensive surgical procedure when the facility receives 
a partial credit of 50 percent or more (but less than 100 percent) of 
the cost of a device. To report that the ASC received a partial credit 
of 50 percent or more (but less than 100 percent) of the cost of a new 
device, ASCs have the option of either: (1) submitting the claim for 
the device-intensive procedure to their Medicare contractor after the 
procedure's performance, but prior to manufacturer acknowledgment of 
credit for the device, and subsequently contacting the contractor 
regarding a claim adjustment, once the credit determination is made; or 
(2) holding the claim for the device implantation or insertion 
procedure until a determination is made by the manufacturer on the 
partial credit and submitting the claim with the ``FC'' modifier 
appended to the implantation procedure HCPCS code if the partial credit 
is 50 percent or more (but less than 100 percent) of the cost of the 
device. Beneficiary coinsurance would be based on the reduced payment 
amount. As finalized in the CY 2015 OPPS/ASC final rule with comment 
period (79 FR 66926), to ensure our policy covers any situation 
involving a device-intensive procedure where an ASC may receive a 
device at no cost or receive full credit or partial credit for the 
device, we apply our ``FB''/``FC'' modifier policy to all device-
intensive procedures.
    In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59043 
through 59044) we stated we would reduce the payment for a device-
intensive procedure for which the ASC receives partial credit by one-
half of the device offset amount that would be applied if a device was 
provided at no cost or with full credit, if the credit to the ASC is 50 
percent or more (but less than 100 percent) of the cost of the device. 
In the CY 2020 OPPS/ASC final rule with comment period, we finalized 
continuing our existing policies for CY 2020. We note that we 
inadvertently omitted language that this policy would apply not just in 
CY 2019 but also in subsequent calendar years. We intended to apply 
this policy in CY 2019 and subsequent calendar years. Therefore, we 
finalized our proposal 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 (86 FR 
63775 through 63776). Specifically, for CY 2022 and subsequent calendar 
years, we would reduce the payment for a device-intensive procedure for 
which the ASC receives partial credit by one-half of the device offset 
amount that would be applied if a device was provided at no cost or 
with full credit, if the credit to the ASC is 50 percent or more (but 
less than 100 percent) of the cost of the device. To report that the 
ASC received a partial credit of 50 percent or more (but less than 100 
percent) of the cost of a device, ASCs have the option of either: (1) 
submitting the claim for the device intensive procedure to their 
Medicare contractor after the procedure's performance, but prior to 
manufacturer acknowledgment of credit for the device, and subsequently 
contacting the contractor regarding a claim adjustment, once the credit 
determination is made; or (2) holding the claim for the device 
implantation or insertion procedure until a determination is made by 
the manufacturer on the partial credit and submitting the claim with 
the ``FC'' modifier appended to the implantation procedure HCPCS code 
if the partial credit is 50 percent or more (but less than 100 percent) 
of the cost of the device. Beneficiary coinsurance would be based on 
the reduced payment amount. We are not proposing any changes to our 
policies related to no/cost full credit or partial credit devices for 
CY 2024.
5. Requirement in the Physician Fee Schedule CY 2024 Proposed Rule for 
HOPDs and ASCs To Report Discarded Amounts of Certain Single-Dose or 
Single-Use Package Drugs
    Section 90004 of the Infrastructure Investment and Jobs Act (Pub. 
L. 117-9, November 15, 2021) (``the Infrastructure Act'') amended 
section 1847A of the Act to re-designate subsection (h) as subsection 
(i) and insert a new subsection (h), which requires manufacturers to 
provide a refund to CMS for certain discarded amounts from a refundable 
single-dose container or single-use package drug. The CY 2024 PFS 
proposed rule includes proposals to operationalize section 90004 of the 
Infrastructure Act, including a proposal that impacts hospital 
outpatient departments (HOPDs) and ambulatory surgical centers (ASCs). 
Similar to our CY 2023 notice in the OPPS/ASC proposed rule (87 FR 
71988), we wanted to ensure interested parties were aware of these 
proposals and knew to refer to the CY 2024 Physician Fee Schedule 
proposed rule for a full description of the proposed policy. Interested 
parties are asked to submit comments on any proposals to implement 
Section 90004 of the Infrastructure Act to the CY 2024 PFS proposed 
rule. Public comments on these proposals will be addressed in the CY 
2024 PFS final rule with comment period. We note that this same notice 
appears in section V.C of this proposed rule.

[[Page 49760]]

6. Payment Amount and Beneficiary Coinsurance for Part B Rebatable 
Drugs
    On August 16, 2022, the Inflation Reduction Act of 2022 (IRA) (Pub. 
L. 117-169) was signed into law. Section 11101 of the IRA requires a 
Part B inflation rebate for a Part B rebatable drug if the Medicare 
payment amount, which is generally ASP plus 6 percent, if the drug 
rises at a rate that is faster than the rate of inflation. It also 
establishes changes to the Medicare payment rate and beneficiary 
coinsurance for such drugs under the ASC payment system. We refer the 
reader to the discussion of this proposed policy and proposed changes 
to the regulatory text, which are discussed in further detail in 
section II.H.I of this proposed rule.

D. Proposed Additions to ASC Covered Surgical Procedures and Covered 
Ancillary Services Lists

1. Additions to the List of ASC Covered Surgical Procedures
    Section 1833(i)(1) of the Act requires us, in part, to specify, in 
consultation with appropriate medical organizations, surgical 
procedures that are appropriately performed on an inpatient basis in a 
hospital but that can also be safely performed in an ASC, a CAH, or an 
HOPD, and to review and update the list of ASC covered surgical 
procedures at least every 2 years. We evaluate the ASC covered 
procedures list (ASC CPL) each year to determine whether procedures 
should be added to or removed from the list, and changes to the list 
are often made in response to specific concerns raised by stakeholders.
    Under our regulations at Sec. Sec.  416.2 and 416.166, covered 
surgical procedures furnished on or after January 1, 2022, are surgical 
procedures that meet the general standards specified in Sec.  
416.166(b) and are not excluded under the general exclusion criteria 
specified in Sec.  416.166(c). Specifically, under Sec.  416.166(b), 
the general standards provide that covered surgical procedures are 
surgical procedures specified by the Secretary and published in the 
Federal Register and/or via the internet on the CMS website that are 
separately paid under the OPPS, that would not be expected to pose a 
significant safety risk to a Medicare beneficiary when performed in an 
ASC, and for which standard medical practice dictates that the 
beneficiary would not typically be expected to require active medical 
monitoring and care at midnight following the procedure.
    Section 416.166(c) sets out the general exclusion criteria used 
under the ASC payment system to evaluate the safety of procedures for 
performance in an ASC. The general exclusion criteria provide that 
covered surgical procedures do not include those surgical procedures 
that: (1) generally result in extensive blood loss; (2) require major 
or prolonged invasion of body cavities; (3) directly involve major 
blood vessels; (4) are generally emergent or life-threatening in 
nature; (5) commonly require systemic thrombolytic therapy; (6) are 
designated as requiring inpatient care under Sec.  419.22(n); (7) can 
only be reported using a CPT unlisted surgical procedure code; or (8) 
are otherwise excluded under Sec.  411.15.
    In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59029 
through 59030), 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.
    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, CY 
2022, and CY 2023 OPPS/ASC final rules with comment period (85 FR 86143 
through 86145; 86 FR 63777 through 63805, 87 FR 72068 through 72076).
2. Proposed Changes to the List of ASC Covered Surgical Procedures for 
CY 2024
    Our current policy, which includes consideration of the general 
standards and exclusion criteria we have historically used to determine 
whether a surgical procedure should be added to the ASC CPL, is 
intended to ensure that surgical procedures added to the ASC CPL can be 
performed safely in the ASC setting on the typical Medicare 
beneficiary. In the CY 2023 OPPS/ASC final rule with comment period, we 
received requests to add dental surgeries furnished in the ASC setting 
to the ASC CPL (87 FR 71882). In response to these public comments, we 
noted that if a dental service is covered under Medicare Part B and 
meets the criteria for the ASC CPL (set forth at 42 CFR 416.166), then 
it could be added to the ASC CPL, and that we would take additional 
dental procedures into consideration for future rulemaking. For CY 
2024, we conducted a review of procedures that currently are paid under 
the OPPS and not included on the ASC CPL. We also assessed procedures 
against our regulatory safety criteria at Sec.  416.166. Based upon 
this review, we propose to update the ASC CPL by adding 26 dental 
surgical procedures to the list for CY 2024, as shown in Table 61 
below.
    After reviewing the clinical characteristics of these procedures, 
as well as consulting with stakeholders and multiple clinical advisors, 
we determined that these procedures are 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. These procedures are clinically similar to procedures in 
the CPT surgical range that we determined met the general standards for 
addition to the ASC CPL. These procedures are not excluded from being 
included on the ASC CPL because they do not generally result in 
extensive blood loss, require major or prolonged invasion of body 
cavities, commonly require systemic thrombolytic therapy, or directly 
involve major blood vessels; are not generally emergent or life-
threatening in nature or designated as requiring inpatient care; or can 
only be reported using a CPT unlisted surgical procedure code or are 
otherwise excluded under Medicare. Therefore, we believe these 
procedures may all be appropriately performed in an ASC and propose to 
include them on the ASC CPL for CY 2024.
    We note that there are statutory and regulatory limitations 
regarding Medicare coverage and payment for dental services. Section 
1862(a)(12) of the Act generally precludes Medicare Part A or Part B 
payment for services in connection with the care, treatment, filling, 
removal, or replacement of teeth or structures directly supporting 
teeth (collectively referred to in this section as ``dental 
services''). The regulation at Sec.  411.15(i) similarly prohibits 
payment for dental services. In the CY 2023 PFS final rule (87 FR 
69663), we explained that there are certain instances where dental 
services are so integral to other medically necessary services that 
they are not in connection with dental services within the meaning of 
section 1862(a)(12) of the Act. Rather, such dental services are 
inextricably linked to, and substantially related to the clinical 
success of, other covered services (hereafter in this section, 
``inextricably linked''). To provide greater clarity to current 
policies, the CY

[[Page 49761]]

2023 PFS final rule finalized: (1) a clarification of our 
interpretation of section 1862(a)(12) of the Act to permit payment for 
dental services that are inextricably linked to other covered services; 
(2) clarification and codification of certain longstanding Medicare FFS 
payment policies for dental services that are inextricably linked to 
other covered services; (3) that, beginning for CY 2023, Medicare Parts 
A and B payment can be made for certain dental services inextricably 
linked to Medicare-covered organ transplant, cardiac valve replacement, 
or valvuloplasty procedures; and, (4) beginning for CY 2024, that 
Medicare Parts A and B payment can be made for certain dental services 
inextricably linked to Medicare-covered services for treatment of head 
and neck cancers (87 FR 69670 through 69671). For the ASC setting, 
services must meet all applicable Medicare conditions for coverage and 
payment to be paid by Medicare, including those as specified under the 
CY 2023 PFS final rule (87 FR 69687 through 69688) and Sec.  
411.15(i)(3). Medicare payment may be made in the ASC setting for 
dental services for which payment may be made under Medicare Part B, 
paid under the OPPS, and that meet the ASC CPL criteria. The fact that 
a drug, device, procedure, or service is assigned a HCPCS code and a 
payment rate under the ASC payment system indicates only how the 
product, procedure, or service may be paid if covered by the program. 
MACs will be involved in the final decision regarding whether a drug, 
device, procedure, or other service meets all program requirements and 
conditions for coverage and payment. Therefore, even if a code 
describing a dental service has an associated payment rate on the ASC 
CPL, Medicare will only make payment for the service if it meets 
applicable requirements. We also clarify that adding dental procedures 
to the ASC CPL does not serve as a coverage determination for dental 
services under general anesthesia. We direct readers to the CY 2024 PFS 
proposed rule for additional discussion of Medicare coverage and 
payment for dental services, which is available on the CMS website at: 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
    HCPCS code G0330 covers facility services for dental rehabilitation 
procedure(s) performed on a patient who requires monitored anesthesia 
(e.g., general, intravenous sedation (monitored anesthesia care)) and 
use of an operating room. While G0330 has a broader code descriptor 
than most of the dental codes proposed to be added to the ASC CPL, we 
propose to add G0330 to the ASC CPL. We also propose that it can only 
be billed when accompanied by at least one covered ancillary dental 
service on a specific and definitive list of CDT codes, which can be 
found in ASC Addendum BB with payment indicator ``D1.'' \126\ 
Performance of at least one of these covered ancillary services is 
integral to each of the surgical procedures that correspond to G0330. 
For example, if a patient requires a full mouth debridement to enable a 
comprehensive periodontal evaluation and diagnosis on a subsequent 
visit, as described by covered ancillary code CDT code D4355, or to 
enable excision of a gum lesion, as described by CPT 41827, and this 
procedure needs to be performed under anesthesia due to patient-
specific circumstances, the ASC would bill G0330 with covered ancillary 
code D4355 to perform the debridement under anesthesia or G0330 with 
covered ancillary code 41827 to perform the excision service under 
anesthesia. Additionally, as previously noted, when G0330 is billed on 
a claim, MACs would determine whether payment can be made for the 
procedure under Sec.  411.15(i)(3), and whether the procedure was 
reasonable and medically necessary before providing payment for the 
procedure. This claims processing mechanism is discussed in further 
detail in the covered ancillary services section (section XIII.D.2 of 
this proposed rule). Procedures assigned to payment indicator ``D2'', 
other than HCPCS code G0330, are not required to be billed with a 
covered ancillary procedure assigned to payment indicator ``D1'' in 
order to receive payment for the procedure.
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    \126\ See section XIII.B.6.b for a detailed discussion of 
payment indicators ``D1'' and ``D2.''
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    We continue to focus on maximizing patient access to care by adding 
procedures to the ASC CPL when appropriate. While expanding the ASC CPL 
offers benefits, such as preserving the capacity of hospitals to treat 
more acute patients and promoting site neutrality, we also believe that 
any additions to the CPL should be added in a carefully calibrated 
fashion to ensure that the procedure is safe to be performed in the ASC 
setting for a typical Medicare beneficiary. We expect to continue to 
gradually expand the ASC CPL, as medical practice and technology 
continue to evolve and advance in future years. We encourage 
stakeholders to submit procedure recommendations to be added to the ASC 
CPL, particularly if there is evidence that these procedures meet our 
criteria and can be safely performed in the ASC setting.
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3. Covered Ancillary Services
    Covered ancillary services are specified in Sec.  416.164(b) and, 
as stated previously, are eligible for separate ASC payment. As 
provided at Sec.  416.164(b), we make separate ASC payments for 
ancillary items and services when they are provided integral to ASC 
covered surgical procedures that include the following: (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.
    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

[[Page 49763]]

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 2023, but will be 
packaged under the CY 2024 OPPS, we would also package the ancillary 
service under the ASC payment system for CY 2024 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 2024.
    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 2024 
can be found in section XIII.B of this proposed rule. All ASC covered 
ancillary services and their proposed payment indicators for CY 2024 
are also included in Addendum BB to this proposed rule (which is 
available via the internet on the CMS website).
Claims Processing Limitations for Covered Ancillary Procedures 
Performed With G0330
    HCPCS code G0330 (Facility services for dental rehabilitation 
procedure(s) performed on a patient who requires monitored anesthesia 
(e.g., general, intravenous sedation (monitored anesthesia care) and 
use of an operating room)) is a proposed addition to the ASC CPL for CY 
2024, as discussed in section XIII.D.1 of this proposed rule. In ASC 
Addendum BB, there is a specific and definitive list of covered 
ancillary dental services with proposed payment indicator of ``D1.'' 
For CY 2024, we propose that G0330 could only be billed with a covered 
ancillary procedure that has the proposed payment indicator of ``D1,'' 
indicating an ancillary dental service or item with no separate payment 
made. This limitation would ensure that only covered ancillary services 
we have evaluated for safety in the ASC setting can be performed with 
G0330. While HCPCS code G0330 must be billed with a covered ancillary 
procedure with a proposed payment indicator of ``D1'', these covered 
ancillary procedures can be billed with procedures other than G0330. 
When billed with procedures other than G0330, these procedures would be 
packaged in accordance with our policy for covered ancillary 
procedures. The fact that a drug, device, procedure, or service is 
assigned a HCPCS code and a payment rate under the ASC payment system 
indicates only how the product, procedure, or service may be paid if 
covered by the program. MACs will be involved in the final decision 
regarding whether a drug, device, procedure, or other service meets all 
program requirements and conditions for coverage and payment. 
Therefore, even if a code describing a dental service has an associated 
payment rate on the ASC CPL, Medicare will only make payment for the 
service if it meets applicable requirements. More detail on the 
proposed ASC dental indicators can be found in section XIII.B.6 of this 
proposed rule.

E. ASC Payment Policy for Non-Opioid Post-Surgery Pain Management 
Drugs, Biologicals, and Devices

1. Background on OPPS/ASC Non-Opioid Pain Management Packaging Policies
    On October 24, 2018, the Substance Use-Disorder Prevention that 
Promotes Opioid Recovery and Treatment for Patients and Communities 
(SUPPORT) Act (Pub. L. 115-271) was enacted. Section 1833(t)(22)(A)(i) 
of the Act, as added by section 6082(a) of the SUPPORT Act, states that 
the Secretary must review payments under the OPPS for opioids and 
evidence based non-opioid alternatives for pain management (including 
drugs and devices, nerve blocks, surgical injections, and 
neuromodulation) with a goal of ensuring that there are not financial 
incentives to use opioids instead of non-opioid alternatives. As part 
of this review, under section 1833(t)(22)(A)(iii) of the Act, the 
Secretary must consider the extent to which revisions to such payments 
(such as the creation of additional groups of covered outpatient 
department (OPD) services to separately classify those procedures that 
utilize opioids and non-opioid alternatives for pain management) would 
reduce the payment incentives for using opioids instead of non-opioid 
alternatives for pain management. In conducting this review and 
considering any revisions, the Secretary must focus on covered OPD 
services (or groups of services) assigned to C-APCs, APCs that include 
surgical services, or services determined by the Secretary that 
generally involve treatment for pain management. If the Secretary 
identifies revisions to payments pursuant to section 
1833(t)(22)(A)(iii) of the Act, section 1833(t)(22)(C) of the Act 
requires the Secretary to, as determined appropriate, begin making 
revisions for services furnished on or after January 1, 2020. Revisions 
under this paragraph are required to be treated as adjustments for 
purposes of paragraph (9)(B) of the Act, which requires any adjustments 
to be made in a budget neutral manner. Section 1833(i)(8) of the Act, 
as added by section 6082(b) of the SUPPORT Act, requires the Secretary 
to conduct a similar type of review as required for the OPPS and to 
make revisions to the ASC payment system in an appropriate manner, as 
determined by the Secretary.
    For a detailed discussion of rulemaking on non-opioid alternatives 
prior to CY 2020, we refer readers to the CYs 2018 and 2019 OPPS/ASC 
final rules with comment period (82 FR 59345; 83 FR 58855 through 
58860).
    For the CY 2020 OPPS/ASC proposed rule (84 FR 39423 through 39427), 
as required by section 1833(t)(22)(A)(i) of the Act, we reviewed 
payments under the OPPS for opioids and evidence-based non-opioid 
alternatives for pain management (including drugs and devices, nerve 
blocks, surgical injections, and neuromodulation) with a goal of 
ensuring that there are not financial incentives to use opioids instead 
of non-opioid alternatives. For the CY 2020 OPPS/ASC proposed rule (84 
FR 39423 through 39427), we proposed to continue our policy to pay 
separately at ASP plus 6 percent for non-opioid pain management drugs 
that function as surgical supplies in the performance of surgical 
procedures when they are furnished in the ASC setting and to continue 
to package payment for non-opioid pain management drugs that function 
as surgical supplies in the performance of surgical procedures in the 
hospital outpatient department setting.
    In the CY 2020 OPPS/ASC final rule with comment period (84 FR 61173 
through 61180), after reviewing data from stakeholders and Medicare 
claims data, we did not find compelling evidence to suggest that 
revisions to our OPPS payment policies for non-opioid pain management 
alternatives were necessary for CY 2020. We finalized our proposal to 
continue to unpackage and pay separately at ASP plus 6 percent for non-
opioid pain management drugs that function as surgical supplies when 
furnished in the ASC setting for CY 2020. Under this policy, for CY 
2020, the only drug that qualified for separate payment in the ASC 
setting as a non-opioid pain management drug that

[[Page 49764]]

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.
    In the CY 2023 OPPS/ASC final rule with comment period (87 FR 
72089), we determined that five 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 62 lists the five 
drugs that met our finalized criteria established in CY 2022 to receive 
separate payment under the ASC payment system when furnished in the ASC 
setting for CY 2023 as described in the CY 2023 final rule with comment 
period (86 FR 63496).
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2. Proposed CY 2024 Qualification Evaluation for Separate Payment of 
Non-Opioid Pain Management Drugs and Biologicals That Function as a 
Surgical Supply
    As noted above, in the CY 2022 OPPS/ASC final rule with comment 
period, we finalized a policy to unpackage and pay separately at ASP 
plus 6 percent for non-opioid pain management drugs that function as 
surgical supplies when they are furnished in the ASC setting, are FDA-
approved, have an FDA-approved indication for pain management or as an 
analgesic, and have a per-day cost above the OPPS drug packaging 
threshold beginning on or after January 1, 2022. For CY 2024, the OPPS 
drug packaging threshold is proposed to be $140. For more information 
on the drug packaging threshold, see section V.B.1.a of this CY 2024 
OPPS/ASC proposed rule.
    In the CY 2023 OPPS/ASC final rule, we finalized a clarification of 
our policy by codifying the two additional criteria for separate 
payment for non-opioid pain management drugs and biologicals that 
function as surgical supplies in the regulatory text at Sec.  416.174 
as a technical change. First, we finalized at

[[Page 49765]]

new Sec.  416.174(a)(3) that non-opioid pain management drugs or 
biologicals that function as a supply in a surgical procedure are 
eligible for separate payment if the drug or biological does not have 
transitional pass-through payment status under Sec.  419.64. In the 
case where a drug or biological otherwise meets the requirements under 
Sec.  416.174 and has transitional pass-through payment status that 
will expire during the calendar year, the drug or biological would 
qualify for separate payment under Sec.  416.174 during such calendar 
year on the first day of the next calendar year quarter after its pass-
through status expires. Second, we finalized that new Sec.  
416.174(a)(4) would reflect that the drug or biological must not 
already be separately payable in the OPPS or ASC payment system under a 
policy other than the one specified in Sec.  416.174.
    The following sections include the non-opioid alternatives of which 
we are aware and our evaluations of whether these non-opioid 
alternatives meet the criteria established at Sec.  416.174. We welcome 
stakeholder comment on these evaluations.
(a) Proposed Annual Eligibility Re-Evaluations of Non-Opioid 
Alternatives That Were Separately Paid in the ASC Setting During CY 
2023
    In the CY 2023 final rule with comment period, we finalized that 
five drugs would receive separate payment in the ASC setting for CY 
2023 under the policy for non-opioid pain management drugs and 
biologicals that function as surgical supplies (86 FR 63496). These 
drugs are described by HCPCS code C9290 (Injection, bupivacaine 
liposome, 1 mg), J1096 (Dexamethasone, lacrimal ophthalmic insert, 0. 
mg), HCPCS code J1097 (Phenylephrine 10.16 mg/ml and ketorolac 2.88 mg/
ml ophthalmic irrigation solution, 1 ml), HCPCS code C9089 
(Bupivacaine, collagen-matrix implant, 1 mg), and HCPCS code C9144 
(Injection, bupivacaine (posimir), 1 mg)).
    We re-evaluated these products outlined in the previous paragraph 
against the criteria specified in Sec.  416.174, including the 
technical clarifications we proposed to that section, to determine 
whether they continue to qualify for separate payment in CY 2024. Based 
on our evaluation, we propose that the drugs described by HCPCS codes 
C9290, J1096, J1097, and C9089 continue to meet the required criteria 
and should receive separate payment in the ASC setting. We propose that 
the drug described by HCPCS code C9144 would not receive separate 
payment in the ASC setting under this policy, as this drug will be 
separately payable during CY 2024 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 2024 OPPS/ASC proposed rule for additional details on the 
pass-through status of HCPCS code C9144. We welcome comment on our 
evaluations below.
(b) Proposed Eligibility Evaluation for the Separate Payment of Exparel
    Based on our internal review, we believe that Exparel, described by 
HCPCS code C9290 (Injection, bupivacaine liposome, 1 mg), meets the 
criteria described at Sec.  416.174; and we propose to continue paying 
separately for it under the ASC payment system for CY 2024. Exparel was 
approved by the FDA with a New Drug Application (NDA #022496) under 
section 505(c) of the Federal Food, Drug, and Cosmetic Act on October 
28, 2011.\127\ Exparel's FDA-approved indication is ``in patients 6 
years of age and older for single-dose infiltration to produce 
postsurgical local analgesia'' and ``in adults as an interscalene 
brachial plexus nerve block to produce postsurgical regional 
analgesia.'' \128\ No component of Exparel is opioid-based. 
Accordingly, we propose that Exparel meets the criterion described at 
Sec.  416.174(a)(1). Under the methodology described at V.B.1.a. of 
this proposed rule, the per-day cost of Exparel exceeds the proposed 
$140 per-day cost threshold. Therefore, we propose that Exparel meets 
the criterion described at Sec.  416.174(a)(2). Additionally, Exparel 
will not have transitional pass-through payment status under Sec.  
419.64 in CY 2024, nor will it be otherwise separately payable in the 
OPPS or ASC payment system in CY 2024 under a policy other than the one 
specified in Sec.  416.174. Therefore, we propose that Exparel meets 
the criteria in the regulation text at Sec.  416.174(a)(3) and (4).
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    \127\ Exparel. FDA Letter. 28 October 2011. https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2011/022496s000ltr.pdf.
    \128\ Exparel. FDA Package Insert. 22 March 2021. https://www.accessdata.fda.gov/drugsatfda_docs/label/2021/022496s035lbl.pdf.
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    Based on the above discussion, we believe that Exparel meets the 
criteria described at Sec.  416.174; and we propose to continue making 
separate payment for it as a non-opioid pain management drug that 
functions as a supply in a surgical procedure under the ASC payment 
system for CY 2024.
(c) Proposed Eligibility Evaluation for the Separate Payment of Omidria
    Based on our internal review, we believe that Omidria, described by 
HCPCS code J1097 (Phenylephrine 10.16 mg/ml and ketorolac 2.88 mg/ml 
ophthalmic irrigation solution, 1 ml), meets the criteria described at 
Sec.  416.174(a), and we propose to continue paying separately for it 
under the ASC payment system for CY 2024. Omidria was approved by the 
FDA with a New Drug Application (NDA #205388) under section 505(c) of 
the Federal Food, Drug, and Cosmetic Act on May 30, 2014.\129\ 
Omidria's FDA-approved indication is as ``an alpha 1-adrenergic 
receptor agonist and nonselective cyclooxygenase inhibitor indicated 
for: Maintaining pupil size by preventing intraoperative miosis; 
Reducing postoperative pain.'' \130\ No component of Omidria is opioid-
based. Accordingly, we propose that Omidria meets the criterion 
described at Sec.  416.174(a)(1). Under the methodology described at 
V.B.1.a. of this proposed rule, the per-day cost of Omidria exceeds the 
proposed $140 per-day cost threshold. Therefore, we propose that 
Omidria meets the criterion described at Sec.  416.174(a)(2). 
Additionally, we believe that Omidria will not have transitional pass-
through payment status under Sec.  419.64 in CY 2024, nor will it be 
otherwise separately payable in the OPPS or ASC payment system in CY 
2024 under a policy other than the one specified in Sec.  416.174. 
Therefore, we propose that Omidria meets the criteria in the regulation 
text at Sec.  416.174(a)(3) and (4).
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    \129\ Omidria. FDA Letter. 30 May 2014. https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2014/205388Orig1s000ltr.pdf.
    \130\ Omidria. FDA Package Insert. December 2017. https://www.accessdata.fda.gov/drugsatfda_docs/label/2017/205388s006lbl.pdf.
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    Based on the above discussion, we propose that Omidria meets the 
criteria described at Sec.  416.174 and should receive separate payment 
as a non-opioid pain management drug that functions as a supply in a 
surgical procedure under the ASC payment system for CY 2024.
(d) Proposed Eligibility Evaluation for the Separate Payment of 
Xaracoll
    Based on our internal review, we believe Xaracoll, described by 
C9089 (Bupivacaine, collagen-matrix implant, 1 mg), meets the criteria 
described at Sec.  416.174(a), and we propose to continue paying 
separately for it under the ASC payment system for CY 2023. Xaracoll 
was approved by the FDA with a New Drug Application (NDA #

[[Page 49766]]

209511) under section 505(c) of the Federal Food, Drug, and Cosmetic 
Act on August 28, 2020.\131\ Xaracoll is ``indicated in adults for 
placement into the surgical site to produce postsurgical analgesia for 
up to 24 hours following open inguinal hernia repair.'' \132\ No 
component of Xaracoll is opioid-based. Accordingly, we propose that 
Xaracoll meets the criterion described at Sec.  416.174(a)(1). Under 
the methodology described at V.B.1.a. of this proposed rule, the per-
day cost of Xaracoll exceeds the proposed $140 per-day cost threshold. 
Therefore, we propose that Xaracoll meets the criterion described at 
Sec.  416.174(a)(2). Additionally, at this time we do not believe that 
Xaracoll will have transitional pass-through payment status under Sec.  
419.64 in CY 2024, nor do we believe it will otherwise be separately 
payable in the OPPS or ASC payment system under a policy other than the 
one specified in Sec.  416.174. Therefore, we propose that Xaracoll 
meets the criteria in the regulation text at Sec.  416.174(a)(3) and 
(4).
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    \131\ Xaracoll. FDA Letter. August 2020. https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2020/209511Orig1s000ltr.pdf.
    \132\ Xaracoll. FDA Labeling. August 2020. https://www.accessdata.fda.gov/drugsatfda_docs/label/2020/209511s000lbl.pdf.
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    Based on the above discussion, we propose that Xaracoll meets the 
criteria described at Sec.  416.174 and should receive separate payment 
as a non-opioid pain management drug that functions as a supply in a 
surgical procedure under the ASC payment system for CY 2024.
(e) Proposed Eligibility Evaluation for the Separate Payment of 
Dextenza
    Based on our internal review, we believe Dextenza, described by 
HCPCS code J1096 (Dexamethasone, lacrimal ophthalmic insert, 0.1 mg), 
meets the criteria described at Sec.  416.174; and we propose to 
provide separate payment for it under the ASC payment system for CY 
2024. Dextenza was approved by the FDA with a New Drug Application (NDA 
# 208742) under section 505(c) of the Federal Food, Drug, and Cosmetic 
Act on November 30, 2018.\133\ Dextenza's FDA-approved indication is as 
``a corticosteroid indicated for the treatment of ocular pain following 
ophthalmic surgery'' and ``the treatment of ocular itching associated 
with allergic conjunctivitis.'' \134\ No component of Dextenza is 
opioid-based. Accordingly, we propose that Dextenza meets the criterion 
described at Sec.  416.174(a)(1). Under the methodology described at 
V.B.1.a. of this proposed rule, the per-day cost of Dextenza exceeds 
the proposed $140 per-day cost threshold. Therefore, we propose that 
Dextenza meets the criterion described at Sec.  416.174(a)(2). 
Additionally, we believe that Dextenza will not have transitional pass-
through payment status under Sec.  419.64 in CY 2024, nor do we believe 
it will otherwise be separately payable in the OPPS or ASC payment 
system under a policy other than the one specified in Sec.  416.174. 
Therefore, we propose that Dextenza meets the criteria in the 
regulation text at Sec.  416.174(a)(3) and (4).
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    \133\ Dextenza. FDA Letter. November 2018. https://www.accessdata.fda.gov/drugsatfda_docs/nda/2018/208742Orig1s000Approv.pdf.
    \134\ Dextenza. FDA Labeling. October 2021. https://www.accessdata.fda.gov/drugsatfda_docs/label/2021/208742s007lbl.pdf.
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    Based on the above discussion, we propose that Dextenza meets the 
criteria described at Sec.  416.174 and should receive separate payment 
as a non-opioid pain management drug that functions as a supply in a 
surgical procedure under the ASC payment system for CY 2024.
(f) Proposed Eligibility Evaluation for the Separate Payment of Posimir
    Based on our internal review, we do not believe that Posimir, 
described by HCPCS code C9144 (Injection, bupivacaine (Posimir), 1 mg), 
meets the criteria described at Sec.  416.174(a); and we do not propose 
to continue paying separately for it under the ASC payment system for 
CY 2024. Posimir was approved by the FDA with a New Drug Application 
(NDA # 204803) under section 505(c) of the Federal Food, Drug, and 
Cosmetic Act on February 1, 2021.\135\ Posimir contains an amide local 
anesthetic and is indicated in adults for administration into the 
subacromial space under direct arthroscopic visualization to produce 
post-surgical analgesia for up to 72 hours following arthroscopic 
subacromial decompression.'' \136\
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    \135\ Posimir. FDA Approval Letter. https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2021/204803Orig1s000ltr.pdf.
    \136\ [thinsp]Posimir. FDA Package Insert. https://www.accessdata.fda.gov/drugsatfda_docs/label/2022/204803Orig1s001lbl.pdf.
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    No component of Posimir is opioid-based. Accordingly, we propose 
that Posimir meets the criterion described at Sec.  416.174(a)(1). 
Under the methodology described at V.B.1.a. of this proposed rule, the 
per-day cost of Posimir exceeds the proposed $140 per-day cost 
threshold. Therefore, we propose that Posimir meets the criterion 
described at Sec.  416.174(a)(2). However, Posimir will have 
transitional pass-through payment status under Sec.  419.64 in CY 2024, 
and it will be otherwise separately payable in the OPPS or ASC payment 
system in CY 2024 under a policy other than the one specified in Sec.  
416.174. Therefore, we propose that Posimir does not meet the criteria 
at the regulation text at Sec.  416.174(a)(3) and (4).
    Based on the above discussion, we propose that Posimir does not 
meet the criteria in the regulation text at Sec.  416.174(a)(3) and 
(4), and should not 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 2024. However, HCPCS code C9144 
will continue to receive separate payment under its pass-through status 
as outlined in section V of this proposed rule.
    Table 63 below lists the four drugs that we propose 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 2024.

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3. Comment Solicitation on New Products That Meet the Criteria
    We solicit comment on additional non-opioid pain management drugs 
and biologicals that function as surgical supplies that may meet the 
criteria specified in Sec.  416.174 and qualify for separate payment 
under the ASC payment system. We encouraged commenters to include an 
explanation of how the drug or biological meets the eligibility 
criteria in Sec.  416.174. If we find that any additional drugs or 
biologicals described by commenters do satisfy the criteria established 
at Sec.  416.174, we will finalize their separate payment status for CY 
2024 in the ASC setting in the CY 2024 OPPS/ASC final rule with comment 
period.

F. Comment Solicitation on Access to Non-Opioid Treatments for Pain 
Relief Under the OPPS and ASC Payment System

1. Background on Access to Non-Opioid Treatments for Pain Relief
    The Consolidated Appropriations Act (CAA), 2023 (Pub. L. 117-328), 
was signed into law on December 29, 2022. Section 4135(a) and (b) of 
the CAA, 2023, titled Access to Non-Opioid Treatments for Pain Relief, 
amended section 1833(t)(16) and section 1833(i) of the Social Security 
Act, respectively, to provide for temporary additional payments for 
non-opioid treatments for pain relief (as that term is defined in 
section 1833(t)(16)(G)(i) of the Act). In particular, section 
1833(t)(16)(G) provides that with respect to a non-opioid treatment for 
pain relief furnished on or after January 1, 2025, and before January 
1, 2028, the Secretary shall not package payment for the non-opioid 
treatment for pain relief into payment for a covered OPD service (or 
group of services) and shall make an additional payment for the non-
opioid treatment for pain relief as specified in clause (ii) of that 
section. Clauses (ii) and (iii) of section 1833(t)(16)(G) of the Act 
provide for the amount of additional payment and set a limitation on 
that amount.
    Paragraph (10) of section 1833(i) of the Act cross-references the 
OPPS provisions about the additional payment amount and payment 
limitation for non-opioid treatments for pain relief and applies them 
to payment under the ASC payment system. In particular, subparagraph 
(A) of paragraph (10) of section 1833(i) of the Act, as added by 
section 4135(b) of the CAA, 2023, provides that in the case of surgical 
services furnished on or after January 1, 2025, and before January 1, 
2028, additional payments shall be made under the ASC payment system 
for non-opioid treatments for pain relief in the same amount provided 
in clause (ii) and subject to the limitation in clause (iii) of section 
1833(t)(16)(G) of the Act for the OPPS. Subparagraph (B) of section 
1833(i)(10) of the Act provides that a drug or biological that meets 
the requirements of 42 CFR 416.174 and is a non-opioid treatment for 
pain relief shall also receive additional payment in the amount 
provided in clause (ii) and subject to the limitation in clause (iii) 
of section 1833(t)(16)(G) of the Act.
    Because the additional payments are required to begin on January 1, 
2025, we plan to include our proposals to implement the section 4135 
amendments in the CY 2025 OPPS/ASC proposed rule. We specifically seek 
comment on the issues discussed in the following sections as well as 
comments on the implementation of all facets of this provision.
2. CY 2025 Comment Solicitation
a. Potential Qualifying Drugs, Biologicals, and Devices
    In preparation for implementing section 4135 of the CAA, 2023, for 
CY 2025, we seek comment on any drug, biological, or medical device 
that a commenter believes would meet the definition of a non-opioid 
treatment for pain relief under section

[[Page 49768]]

1833(t)(16)(G)(iv) of the Act. We encourage commenters to submit 
appropriate FDA documentation, published peer-reviewed literature, or 
other evidence-based support, if applicable, to illustrate why the 
commenters believe the drug, biological, or medical device meets the 
definition of a non-opioid treatment for pain relief. For these 
products, we also solicit comment on appropriate codes and descriptors 
if no HCPCS codes currently exist for the product. We note that we will 
evaluate these products, including the information submitted by 
commenters, and propose additional payments, subject to the payment 
limitation, for those that meet the definition of a non-opioid 
treatment for pain relief in the CY 2025 OPPS/ASC rulemaking cycle, 
rather than during the CY 2024 OPPS/ASC final rule with comment period.
b. Evidence Requirement for Medical Devices
    Section 1833(t)(16)(G)(iv)(II)(bb) of the Act specifies an 
additional requirement for medical devices to meet the definition of 
non-opioid treatment for pain relief. This section requires that a 
medical device demonstrate the ability to replace, reduce, or avoid 
intraoperative or postoperative opioid use or the quantity of opioids 
prescribed in a clinical trial or through data published in a peer-
reviewed journal.
    As the statute requires information from a clinical trial or data 
published in a peer-reviewed journal, we seek comment on the best way 
to obtain and evaluate that information. We also seek comment on how we 
should assess information from a clinical trial or data published in a 
peer-reviewed journal, including how to assess for conflicts of 
interest or integrity concerns, whether to focus on outcomes rather 
than surrogate endpoints, and whether to require that all decreases in 
opioid use be statistically and clinically significant compared to the 
usual standard of care (rather than placebo).
c. Amount of Payment
    Section 1833(t)(16)(G)(ii)(I) of the Act states that, subject to 
the limitation in clause (iii), the amount of payment for a non-opioid 
treatment for pain relief that is a drug or biological product is the 
amount of payment for such drug or biological determined under section 
1847A of the Act that exceeds the portion of the otherwise applicable 
Medicare OPD fee schedule that the Secretary determines is associated 
with the drug or biological. As this language is very similar to the 
transitional pass-through language at section 1833(t)(6)(D)(i) of the 
Act, we anticipate implementing a similar payment methodology for drugs 
and biologicals under this future policy.
    Section 1833(t)(16)(G)(ii)(II) of the Act states that the amount of 
payment for a non-opioid treatment for pain relief that is a medical 
device is the amount of the hospital's charges for the device, adjusted 
to cost, that exceeds the portion of the otherwise applicable Medicare 
OPD fee schedule that the Secretary determines is associated with the 
device. As this language is very similar to the transitional pass-
through language at section 1833(t)(6)(D)(ii) of the Act, we anticipate 
implementing a similar payment methodology for medical devices under 
this future policy.
    Section 1833(i)(10) of the Act provides that the same payment rate 
shall apply in the ASC setting as the rates described in section 
1833(t)(16)(G)(ii) of the Act for hospital outpatient departments, 
subject to the limitation in section 1833(t)(16)(G)(iii) of the Act.
d. Payment Limitation
    Section 1833(t)(16)(G)(iii) of the Act states that the additional 
payment amount specified in clause (ii), and as described in the 
previous section, shall not exceed the estimated average of 18 percent 
of the OPD fee schedule amount for the OPD service (or group of 
services) with which the non-opioid treatment for pain relief is 
furnished, as determined by the Secretary. We are seeking comment on 
how we should determine the OPD service or groups of services with 
which non-opioid treatments for pain relief are furnished for purposes 
of calculating the payment limitation for each treatment. Specifically, 
we seek comment on the scenarios outlined below.
    Additionally, we welcome other recommendations from interested 
parties consistent with the statutory requirements.
Scenario 1: Payment Limitation Based on the Top Five Services by Volume 
With Known Claims Data
    As demonstrated in this example (Table 64), one possible approach 
is to use the top five services associated with a hypothetical drug, 
biological, or medical device, to determine the volume-weighted payment 
rate and the payment limit, based on the most recent claims data 
available. For the non-opioids that are currently separately paid, we 
predict that the majority of utilization is focused in the top five 
mostly frequently performed services, thus using the top five services 
would provide a representative estimate for the payment limit. However, 
we solicit comment on this prediction and welcome input from commenters 
if they believe another number of procedures, or another metric, would 
be appropriate to determine the list of procedures in which the payment 
limitation would be calculated.
    For this example, we would begin by identifying the top five 
services by volume that package this drug, biological, or device into 
their payment rate. Second, we would calculate the volume-weighted 
payment rate per claim, which would be $700 in the example below. 
Third, we would apply the 18 percent payment limit per clinical dose, 
rather than per HCPCS dosage unit, which is $126 in the case below. We 
would apply this payment limit to the clinical dose received by the 
beneficiary as the payment limit applies to the total amount of 
payment, rather than the HCPCS dosage unit payment, which may only 
represent a small fraction of the total amount of payment. This means 
that even if the non-opioid treatment for pain relief had an amount of 
additional payment under section 1833(t)(16)(G)(ii) of the Act that was 
greater than $126 per dose, it would be limited to $126 by 
1833(t)(16)(G)(iii) of the Act. In this example, this non-opioid 
treatment for pain relief would not be subject to the threshold 
packaging policy in section V.B.1.a. of this proposed rule even though 
its payment falls below the proposed CY 2024 drug packaging threshold 
of $140, per section 1833(t)(16)(G)(i) of the Act, and would also be 
separately paid when used during a comprehensive APC (C-APC) procedure 
in the HOPD setting.

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    We welcome comments on this approach. We seek comment on whether 
utilizing the top five services by volume is an appropriate method by 
which to establish this payment limit. We also seek comment on 
additional methodologies, such as determining the payment limit based 
on the top 10 services by volume, by total payment rather than volume, 
or any number of services with more than a certain percentage of 
overall utilization, such as 10 percent.
Scenario 2: Payment Limit Without Claims Data
    Additionally, we seek comment on the best approach for determining 
a payment limit, pursuant to section 1833(t)(16)(G)(iii) of the Act for 
drugs, biologicals, and devices when there are no known claims data, 
such as for newly FDA-approved and marketed products. CMS could propose 
the services with which a product would be expected to be furnished and 
would typically be packaged absent this policy during calendar year 
rulemaking, based on expected clinical use patterns. Determining the 
service, or group of services, to use to calculate the payment limit 
could be accomplished through engagement with interested parties and a 
review by CMS Medical Officers and clinical staff. Absent engagement 
from interested parties, CMS could make its determination of the 
service, or group of services, to use to calculate the payment limit 
based on expected clinical use patterns. CMS could then adjust the 
services that are used to calculate the payment limit as claims data 
becomes available in subsequent years. We seek comment on this approach 
as well as other approaches of interest to commenters.
    We welcome comment from interested parties on the implementation of 
all facets of section 4135. We will include proposals to implement the 
section 4135 amendments in the CY 2025 OPPS/ASC proposed rule.

G. Proposed New Technology Intraocular Lenses (NTIOLs)

    New Technology Intraocular Lenses (NTIOLs) are intraocular lenses 
that replace a patient's natural lens that has been removed in cataract 
surgery and that also meet the requirements listed in Sec.  416.195.
1. NTIOL Application Cycle
    Our process for reviewing applications to establish new classes of 
NTIOLs is as follows:
     Applicants submit their NTIOL requests for review to CMS 
by the annual deadline. For a request to be considered complete, we 
require submission of the information requested in the guidance 
document titled ``Application Process and Information Requirements for 
Requests for a New Class of New Technology Intraocular Lenses (NTIOLs) 
or Inclusion of an IOL in an Existing NTIOL Class'' posted on the CMS 
website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/NTIOLs.html.
     We announce annually, in the proposed rule updating the 
ASC and OPPS payment rates for the following calendar year, a list of 
all requests to establish new NTIOL classes accepted for review during 
the calendar year in which the proposal is published. In accordance 
with section 141(b)(3) of Public Law 103-432 and our regulations at 
Sec.  416.185(b), the deadline for receipt of public comments is 30 
days following publication of the list of requests in the proposed 
rule.
     In the final rule with comment period updating the ASC and 
OPPS payment rates for the following calendar year, we--
    ++ Provide a list of determinations made as a result of our review 
of all new NTIOL class requests and public comments.
    ++ When a new NTIOL class is created, identify the predominant 
characteristic of NTIOLs in that class that sets them apart from other 
IOLs (including those previously approved as members of other expired 
or active NTIOL classes) and that is associated with an improved 
clinical outcome.
    ++ Set the date of implementation of a payment adjustment in the 
case of approval of an IOL as a member of a new NTIOL class 
prospectively as of 30 days after publication of the ASC payment update 
final rule, consistent with the statutory requirement.
    ++ Announce the deadline for submitting requests for review of an 
application for a new NTIOL class for the following calendar year.
2. Requests To Establish New NTIOL Classes for CY 2024
    We did not receive any requests for review to establish a new NTIOL 
class for CY 2024 by March 1, 2023, the due date published in the CY 
2023 OPPS/ASC final rule with comment period (87 FR 72091).

[[Page 49770]]

3. Payment Adjustment
    The current payment adjustment for a 5-year period from the 
implementation date of a new NTIOL class is $50 per lens. Since 
implementation of the process for adjustment of payment amounts for 
NTIOLs in 1999, we have not revised the payment adjustment amount, and 
we do not propose to revise the payment adjustment amount for CY 2024.

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

1. Background
    In the August 2, 2007 ASC final rule (72 FR 42493), we established 
our policy to base ASC relative payment weights and payment rates under 
the revised ASC payment system on APC groups and the OPPS relative 
payment weights. Consistent with that policy and the requirement at 
section 1833(i)(2)(D)(ii) of the Act that the revised payment system be 
implemented so that it would be budget neutral, the initial ASC 
conversion factor (CY 2008) was calculated so that estimated total 
Medicare payments under the revised ASC payment system in the first 
year would be budget neutral to estimated total Medicare payments under 
the prior (CY 2007) ASC payment system (the ASC conversion factor is 
multiplied by the relative payment weights calculated for many ASC 
services in order to establish payment rates). That is, application of 
the ASC conversion factor was designed to result in aggregate Medicare 
expenditures under the revised ASC payment system in CY 2008 being 
equal to aggregate Medicare expenditures that would have occurred in CY 
2008 in the absence of the revised system, taking into consideration 
the cap on ASC payments in CY 2007, as required under section 
1833(i)(2)(E) of the Act (72 FR 42522). We adopted a policy to make the 
system budget neutral in subsequent calendar years (72 FR 42532 through 
42533; Sec.  416.171(e)).
    We note that we consider the term ``expenditures'' in the context 
of the budget neutrality requirement under section 1833(i)(2)(D)(ii) of 
the Act to mean expenditures from the Medicare Part B Trust Fund. We do 
not consider expenditures to include beneficiary coinsurance and 
copayments. This distinction was important for the CY 2008 ASC budget 
neutrality model that considered payments across the OPPS, ASC, and 
MPFS payment systems. However, because coinsurance is almost always 20 
percent for ASC services, this interpretation of expenditures has 
minimal impact for subsequent budget neutrality adjustments calculated 
within the revised ASC payment system.
    In the CY 2008 OPPS/ASC final rule with comment period (72 FR 66857 
through 66858), we set out a step-by-step illustration of the final 
budget neutrality adjustment calculation based on the methodology 
finalized in the August 2, 2007 ASC final rule (72 FR 42521 through 
42531) and as applied to updated data available for the CY 2008 OPPS/
ASC final rule with comment period. The application of that methodology 
to the data available for the CY 2008 OPPS/ASC final rule with comment 
period resulted in a budget neutrality adjustment of 0.65.
    For CY 2008, we adopted the OPPS relative payment weights as the 
ASC relative payment weights for most services and, consistent with the 
final policy, we calculated the CY 2008 ASC payment rates by 
multiplying the ASC relative payment weights by the final CY 2008 ASC 
conversion factor of $41.401. For covered office-based surgical 
procedures, covered ancillary radiology services (excluding covered 
ancillary radiology services involving certain nuclear medicine 
procedures or involving the use of contrast agents, as discussed in 
section XIII.D.2 of the CY 2023 OPPS/ASC proposed rule (87 FR 44715 
through 44716)), and certain diagnostic tests within the medicine range 
that are covered ancillary services, the established policy is to set 
the payment rate at the lower of the MPFS unadjusted nonfacility PE 
RVU-based amount or the amount calculated using the ASC standard 
ratesetting methodology. Further, as discussed in the CY 2008 OPPS/ASC 
final rule with comment period (72 FR 66841 through 66843), we also 
adopted alternative ratesetting methodologies for specific types of 
services (for example, device-intensive procedures).
    As discussed in the August 2, 2007 ASC final rule (72 FR 42517 
through 42518) and as codified at Sec.  416.172(c) of the regulations, 
the revised ASC payment system accounts for geographic wage variation 
when calculating individual ASC payments by applying the pre-floor and 
pre-reclassified IPPS hospital wage indexes to the labor-related share, 
which is 50 percent of the ASC payment amount based on a GAO report of 
ASC costs using 2004 survey data. Beginning in CY 2008, CMS accounted 
for geographic wage variation in labor costs when calculating 
individual ASC payments by applying the pre-floor and pre-reclassified 
hospital wage index values that CMS calculates for payment under the 
IPPS, using updated Core Based Statistical Areas (CBSAs) issued by OMB 
in June 2003.
    The reclassification provision in section 1886(d)(10) of the Act is 
specific to hospitals. We believe that using the most recently 
available pre-floor and pre-reclassified IPPS hospital wage indexes 
results in the most appropriate adjustment to the labor portion of ASC 
costs. We continue to believe that the unadjusted hospital wage 
indexes, which are updated yearly and are used by many other Medicare 
payment systems, appropriately account for geographic variation in 
labor costs for ASCs. Therefore, the wage index for an ASC is the pre-
floor and pre-reclassified hospital wage index under the IPPS of the 
CBSA that maps to the CBSA where the ASC is located.
    Generally, OMB issues major revisions to statistical areas every 10 
years, based on the results of the decennial census. On February 28, 
2013, OMB issued OMB Bulletin No. 13-01, which provides the 
delineations of all Metropolitan Statistical Areas, Metropolitan 
Divisions, Micropolitan Statistical Areas, Combined Statistical Areas, 
and New England City and Town Areas in the United States and Puerto 
Rico based on the standards published on June 28, 2010, in the Federal 
Register (75 FR 37246 through 37252) and 2010 Census Bureau data. (A 
copy of this bulletin may be obtained at: https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/bulletins/2013/b13-01.pdf.) In the FY 
2015 IPPS/LTCH PPS final rule (79 FR 49951 through 49963), we 
implemented the use of the CBSA delineations issued by OMB in OMB 
Bulletin 13-01 for the IPPS hospital wage index beginning in FY 2015.
    OMB occasionally issues minor updates and revisions to statistical 
areas in the years between the decennial censuses. On July 15, 2015, 
OMB issued OMB Bulletin No. 15-01, which provides updates to and 
supersedes OMB Bulletin No. 13-01 that was issued on February 28, 2013. 
OMB Bulletin No. 15-01 made changes that are relevant to the IPPS and 
ASC wage index. We refer readers to the CY 2017 OPPS/ASC final rule 
with comment period (81 FR 79750) for a discussion of these changes and 
our implementation of these revisions. (A copy of this bulletin may be 
obtained at https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/bulletins/2015/15-01.pdf.)
    On August 15, 2017, OMB issued OMB Bulletin No. 17-01, which 
provided updates to and superseded OMB Bulletin No. 15-01 that was 
issued on July 15, 2015. We refer readers to the

[[Page 49771]]

CY 2019 OPPS/ASC final rule with comment period (83 FR 58864 through 
58865) for a discussion of these changes and our implementation of 
these revisions. (A copy of this bulletin may be obtained at https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/bulletins/2017/b-17-01.pdf.)
    On April 10, 2018, OMB issued OMB Bulletin No. 18-03, which 
superseded the August 15, 2017 OMB Bulletin No. 17-01. On September 14, 
2018, OMB issued OMB Bulletin 18-04, which superseded the April 10, 
2018 OMB Bulletin No. 18-03. A copy of OMB Bulletin No. 18-03 may be 
obtained at https://www.whitehouse.gov/wp-content/uploads/2018/04/OMB-BULLETIN-NO.-18-03-Final.pdf. A copy of OMB Bulletin No. 18-04 may be 
obtained at https://www.whitehouse.gov/wpcontent/uploads/2018/90/Bulletin-18-04.pdf.
    On March 6, 2020, OMB issued Bulletin No. 20-01, which provided 
updates to and superseded OMB Bulletin No. 18-04 that was issued on 
September 14, 2018. (For a copy of this bulletin, we refer readers to 
the following website: https://www.whitehouse.gov/wp-content/uploads/2020/03/Bulletin-20-01.pdf.)
    The proposed CY 2024 ASC wage indexes fully reflect the OMB labor 
market area delineations (including the revisions to the OMB labor 
market delineations discussed above, as set forth in OMB Bulletin Nos. 
13-01, 15-01, 17-01, 18-03, 18-04, and 20-01). We note that, in certain 
instances, there might be urban or rural areas for which there is no 
IPPS hospital that has wage index data that could be used to set the 
wage index for that area. For these areas, our policy has been to use 
the average of the wage indexes for CBSAs (or metropolitan divisions as 
applicable) that are contiguous to the area that has no wage index 
(where ``contiguous'' is defined as sharing a border). For example, for 
CY 2024, we are applying a proxy wage index based on this methodology 
to ASCs located in CBSA 25980 (Hinesville-Fort Stewart, GA).
    When all of the areas contiguous to the urban CBSA of interest are 
rural and there is no IPPS hospital that has wage index data that could 
be used to set the wage index for that area, we determine the ASC wage 
index by calculating the average of all wage indexes for urban areas in 
the State (75 FR 72058 through 72059). In other situations, where there 
are no IPPS hospitals located in a relevant labor market area, we apply 
our current policy of calculating an urban or rural area's wage index 
by calculating the average of the wage indexes for CBSAs (or 
metropolitan divisions where applicable) that are contiguous to the 
area with no wage index.
2. Calculation of the ASC Payment Rates
a. Updating the ASC Relative Payment Weights for CY 2024 and Future 
Years
    We update the ASC relative payment weights each year using the 
national OPPS relative payment weights (and PFS nonfacility PE RVU-
based amounts, as applicable) for that same calendar year and uniformly 
scale the ASC relative payment weights for each update year to make 
them budget neutral (72 FR 42533). The OPPS relative payment weights 
are scaled to maintain budget neutrality for the OPPS. We then scale 
the OPPS relative payment weights again to establish the ASC relative 
payment weights. To accomplish this, we hold estimated total ASC 
payment levels constant between calendar years for purposes of 
maintaining budget neutrality in the ASC payment system. That is, we 
apply the weight scalar to ensure that projected expenditures from the 
updated ASC payment weights in the ASC payment system are equal to what 
would be the current expenditures based on the scaled ASC payment 
weights. In this way, we ensure budget neutrality and that the only 
changes to total payments to ASCs result from increases or decreases in 
the ASC payment update factor.
    Where the estimated ASC expenditures for an upcoming year are 
higher than the estimated ASC expenditures for the current year, the 
ASC weight scalar is reduced, in order to bring the estimated ASC 
expenditures in line with the expenditures for the baseline year. This 
frequently results in ASC relative payment weights for surgical 
procedures that are lower than the OPPS relative payment weights for 
the same procedures for the upcoming year. Therefore, over time, even 
if procedures performed in the HOPD and ASC receive the same update 
factor under the OPPS and ASC payment system, payment rates under the 
ASC payment system would increase at a lower rate than payment for the 
same procedures performed in the HOPD as a result of applying the ASC 
weight scalar to ensure budget neutrality.
    As discussed in section II.A.1.a of this proposed rule, we are 
using the CY 2022 claims data to be consistent with the OPPS claims 
data for this proposed rule. Consistent with our established policy, we 
propose to scale the CY 2024 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 2022, we 
propose to compare the estimated total payment using the CY 2023 ASC 
relative payment weights with the estimated total payment using the CY 
2024 ASC relative payment weights to take into account the changes in 
the OPPS relative payment weights between CY 2023 and CY 2024.
    Additionally, in light of our policy to provide a higher ASC 
payment rate through the use of ASC complexity adjustment codes for 
certain primary procedures when performed with add-on packaged 
services, we incorporate estimated total spending and estimated 
utilization for these codes in our budget neutrality calculation. We 
estimated in the CY 2023 OPPS/ASC final rule with comment period (87 FR 
72094) that the impact on CY 2023 estimated total payments from our 
proposed CY 2023 ASC complexity adjustment codes would be $5 million in 
spending and we propose to incorporate this $5 million in estimated CY 
2023 total payments for the budget neutrality calculation of this 
proposed rule. For estimated CY 2024 total payments, we propose to 
incorporate the estimated total spending and estimated utilization 
related to our proposed CY 2024 ASC complexity adjustment codes. In 
this proposed rule, we estimate the additional CY 2024 spending related 
to our proposed ASC complexity adjustment codes will be $5 million.
    We propose to use the ratio of estimated CY 2023 to estimated CY 
2024 total payments (the weight scalar) to scale the ASC relative 
payment weights for CY 2024. The proposed CY 2024 ASC weight scalar is 
0.8649. Consistent with historical practice, we propose to scale, using 
this method, 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.
    We propose that we would not scale ASC payment for separately 
payable covered ancillary services that have a predetermined national 
payment amount (that is, their national ASC payment amounts are not 
based on OPPS relative payment weights), such as drugs and biologicals 
that are separately paid or services that are contractor-priced or paid 
at reasonable cost in ASCs. Any service with a predetermined national 
payment amount would be included in the ASC budget neutrality 
comparison, but scaling of the ASC relative payment weights would not 
apply to those

[[Page 49772]]

services. The ASC payment weights for those services without 
predetermined national payment amounts (that is, those services with 
national payment amounts that would be based on OPPS relative payment 
weights) would be scaled to eliminate any difference in the total 
payment between the current year and the update year.
    For any given year's ratesetting, we typically use the most recent 
full calendar year of claims data to model budget neutrality 
adjustments. We propose to use the CY 2022 claims data to model our 
budget neutrality adjustment for CY 2024.
b. Updating the ASC Conversion Factor
    Under the OPPS, we typically apply a budget neutrality adjustment 
for provider-level changes, most notably a change in the wage index 
values for the upcoming year, to the conversion factor. Consistent with 
our final ASC payment policy, for the CY 2017 ASC payment system and 
subsequent years, in the CY 2017 OPPS/ASC final rule with comment 
period (81 FR 79751 through 79753), we finalized our policy to 
calculate and apply a budget neutrality adjustment to the ASC 
conversion factor for supplier-level changes in wage index values for 
the upcoming year, just as the OPPS wage index budget neutrality 
adjustment is calculated and applied to the OPPS conversion factor. For 
CY 2024, we calculated the proposed adjustment for the ASC payment 
system by using the most recent CY 2022 claims data available and 
estimating the difference in total payment that would be created by 
introducing the proposed CY 2024 ASC wage indexes. Specifically, 
holding CY 2022 ASC utilization, service-mix, and the proposed CY 2024 
national payment rates after application of the weight scalar constant, 
we calculated the total adjusted payment using the CY 2023 ASC wage 
indexes and the total adjusted payment using the proposed CY 2024 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 2023 ASC wage indexes to the total 
adjusted payment calculated with the proposed CY 2024 ASC wage indexes 
and applied the resulting ratio of 1.0017 (the proposed CY 2024 ASC 
wage index budget neutrality adjustment) to the CY 2023 ASC conversion 
factor to calculate the proposed CY 2024 ASC conversion factor.
    Section 1833(i)(2)(D)(v) of the Act requires that the ASC 
conversion factor be reduced by a productivity adjustment in each 
calendar year. 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 2024 was projected 
to be 0.2 percentage point, as published in the FY 2024 IPPS/LTCH PPS 
proposed rule (88 FR 27005) based on IGI's 2022 fourth quarter 
forecast.
    Section 1833(i)(2)(C)(i) of the Act requires that, if the Secretary 
has not updated amounts established under the revised ASC payment 
system in a calendar year, the payment amounts shall be increased by 
the percentage increase in the Consumer Price Index for all urban 
consumers (CPI-U), U.S. city average, as estimated by the Secretary for 
the 12-month period ending with the midpoint of the year involved. The 
statute does not mandate the adoption of any particular update 
mechanism, but it requires the payment amounts to be increased by the 
CPI-U in the absence of any update. Because the Secretary updates the 
ASC payment amounts annually, we adopted a policy, which we codified at 
Sec.  416.171(a)(2)(ii), to update the ASC conversion factor using the 
CPI-U for CY 2010 and subsequent calendar years.
    In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59075 
through 59080), we finalized a policy 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. The most recent available full 
year of claims data to assess the expected migration applying the 
hospital market basket update during the interim period would fall 
within the period from CY 2019 through CY 2022. However, the impact of 
the COVID-19 PHE on health care utilization, in particular in CY 2020, 
was tremendously profound, particularly for elective surgeries, because 
many beneficiaries avoided healthcare settings when possible to avoid 
possible infection from the SARS-CoV-2 virus. As a result, it is nearly 
impossible to disentangle the effects from the COVID-19 PHE in our 
analysis of whether the higher update factor for the ASC payment system 
caused increased migration to the ASC setting. To analyze whether 
procedures migrated from the hospital setting to the ASC setting, we 
need to use claims data from a period during which the COVID-19 PHE had 
less of an impact on health care utilization. Therefore, for this CY 
2024 OPPS/ASC proposed rule, we propose to extend the 5-year interim 
period an additional 2 years, that is, through CY 2024 and CY 2025. We 
believe hospital outpatient and ASC utilization data from CYs 2023 and 
2024 will enable us to more accurately analyze whether the application 
of the hospital market basket update to the ASC payment system had an 
effect on the migration of services from the hospital setting to the 
ASC setting. We propose to revise our regulations at 42 CFR 
416.171(a)(2)(iii) and (iv), which establish the annual update to the 
ASC conversion factor, to reflect this 2-year extension. We also 
propose to revise our regulations at Sec.  416.171(a)(2)(vi) and (vii), 
which establish the 2.0 percentage point reduction for ASCs that fail 
to meet the standards for reporting ASC quality measures, and Sec.  
416.171(a)(2)(viii)(B) and (C), which establish the productivity 
adjustment, to reflect this 2-year extension.
    For CY 2024, in accordance with our proposed revisions to Sec.  
416.171(a)(2)(iii), (vi), and (viii)(B), we propose to utilize the 
hospital market basket update of 3.0 percent reduced by the 
productivity adjustment of 0.2 percentage point, resulting in a 
proposed productivity-adjusted hospital market basket update factor of 
2.8 percent for ASCs meeting the quality reporting requirements. 
Therefore, we propose to apply a 2.8 percent productivity-adjusted 
hospital market basket update factor to the CY 2023 ASC conversion 
factor for ASCs meeting the quality reporting requirements to determine 
the CY 2024 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

[[Page 49773]]

comment period (83 FR 59138 through 59139) and section XIV.E of this 
proposed rule for a detailed discussion of our policies regarding 
payment reduction for ASCs that fail to meet ASCQR Program 
requirements. We propose to utilize the inpatient hospital market 
basket percentage increase of 3.0 percent reduced by 2.0 percentage 
points for ASCs that do not meet the quality reporting requirements and 
then reduced by the 0.2 percentage point productivity adjustment. 
Therefore, we propose to apply a 0.8 percent productivity-adjusted 
hospital market basket update factor to the CY 2023 ASC conversion 
factor for ASCs not meeting the quality reporting requirements. We also 
propose that if more recent data are subsequently available (for 
example, a more recent estimate of the inpatient hospital market basket 
percentage increase or productivity adjustment), we would use such 
data, if appropriate, to determine the CY 2024 ASC update for the CY 
2024 OPPS/ASC final rule with comment period.
    For CY 2024, we propose to adjust the CY 2023 ASC conversion factor 
($51.854) by the proposed wage index budget neutrality factor of 1.0017 
in addition to the productivity-adjusted hospital market basket update 
of 2.8 percent discussed above, which results in a proposed CY 2024 ASC 
conversion factor of $53.397 for ASCs meeting the quality reporting 
requirements. For ASCs not meeting the quality reporting requirements, 
we propose to adjust the CY 2023 ASC conversion factor ($51.854) by the 
proposed wage index budget neutrality factor of 1.0017 in addition to 
the quality reporting/productivity-adjusted hospital market basket 
update of 0.8 percent discussed above, which results in a proposed CY 
2024 ASC conversion factor of $52.358.
3. Display of the Proposed CY 2024 ASC Payment Rates
    Addenda AA and BB to this proposed rule (which are available on the 
CMS website) display the proposed ASC payment rates for CY 2024 for 
covered surgical procedures and covered ancillary services, 
respectively. The proposed payment rates included in Addenda AA and BB 
to this proposed rule reflect the full ASC proposed payment update and 
not the reduced payment update used to calculate payment rates for ASCs 
not meeting the quality reporting requirements under the ASCQR Program.
    These Addenda contain several types of information related to the 
proposed CY 2024 payment rates. Specifically, in Addendum AA, a ``Y'' 
in the column titled ``To be Subject to Multiple Procedure 
Discounting'' indicates that the surgical procedure would be subject to 
the multiple procedure payment reduction policy. As discussed in the CY 
2008 OPPS/ASC final rule with comment period (72 FR 66829 through 
66830), most covered surgical procedures are subject to a 50 percent 
reduction in the ASC payment for the lower-paying procedure when more 
than one procedure is performed in a single operative session.
    For CY 2021, we finalized adding a new column to ASC Addendum BB 
titled ``Drug Pass-Through Expiration during Calendar Year'' where we 
flag through the use of an asterisk each drug for which pass-through 
payment is expiring during the calendar year (that is, on a date other 
than December 31st).
    The values displayed in the column titled ``Proposed CY 2024 
Payment Weight'' are the proposed relative payment weights for each of 
the listed services for CY 2024. The proposed relative payment weights 
for all covered surgical procedures and covered ancillary services 
where the ASC payment rates are based on OPPS relative payment weights 
were scaled for budget neutrality. Therefore, scaling was not applied 
to the device portion of the device-intensive procedures; services that 
are paid at the MPFS nonfacility PE RVU-based amount; separately 
payable covered ancillary services that have a predetermined national 
payment amount, such as drugs and biologicals and brachytherapy sources 
that are separately paid under the OPPS; or services that are 
contractor-priced or paid at reasonable cost in ASCs. This includes 
separate payment for non-opioid pain management drugs.
    To derive the proposed CY 2024 payment rate displayed in the 
``Proposed CY 2024 Payment Rate'' column, each ASC payment weight in 
the ``Proposed CY 2024 Payment Weight'' column was multiplied by the 
proposed CY 2024 conversion factor. The conversion factor includes a 
budget neutrality adjustment for changes in the wage index values and 
the annual update factor as reduced by the productivity adjustment. The 
proposed CY 2024 ASC conversion factor uses the CY 2024 productivity-
adjusted hospital market basket update factor of 2.8 percent (which is 
equal to the proposed inpatient hospital market basket percentage 
increase of 3.0 percent reduced by the proposed productivity adjustment 
of 0.2 percentage point).
    In Addendum BB, there are no relative payment weights displayed in 
the ``Proposed CY 2024 Payment Weight'' column for items and services 
with predetermined national payment amounts, such as separately payable 
drugs and biologicals. The ``Proposed CY 2024 Payment'' column displays 
the proposed CY 2024 national unadjusted ASC payment rates for all 
items and services. The proposed CY 2024 ASC payment rates listed in 
Addendum BB for separately payable drugs and biologicals are based on 
the most recently available data used for payment in physicians' 
offices.
    Addendum EE to this proposed rule provides the HCPCS codes and 
short descriptors for surgical procedures that are finalized to be 
excluded from payment in ASCs for CY 2024.
    Addendum FF to this proposed 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 2024 for covered surgical procedures.

XIV. Hospital Outpatient Quality Reporting (OQR) Program Requirements, 
Proposals, and Requests for Comment

A. Background

    We seek to promote higher quality, more efficient, and equitable 
healthcare for patients. Consistent with these goals, we have 
implemented quality reporting programs for multiple care settings, 
including the Hospital Outpatient Quality Reporting (OQR) Program for 
hospital outpatient care.
    We refer readers to the CY 2011 Outpatient Prospective Payment 
System (OPPS) and Ambulatory Surgical Center (ASC) payment system final 
rule (75 FR 72064 through 72065) for a detailed discussion of the 
statutory history of the Hospital OQR Program. We refer readers to the 
CYs 2008 through 2023 OPPS/ASC final rules for detailed discussions of 
the regulatory history of the Hospital OQR Program (72 FR 66860 through 
66875; 73 FR 68758 through 68779; 74 FR 60629 through 60656; 75 FR 
72064 through 72110; 76 FR 74451 through 74492; 77 FR 68467 through 
68492; 78 FR 75090 through 75120; 79 FR 66940 through 66966; 80 FR 
70502 through 70526; 81 FR 79753 through 79797; 82 FR 59424 through 
59445; 83 FR 59080 through 59110; 84 FR 61410 through 61420; 85 FR 
86179 through 86187; 86 FR 63822 through 63875; and 87 FR 72096 through 
72117).
    We have codified certain requirements under the Hospital OQR 
Program at 42 CFR[thinsp]419.46. We refer readers to section XIV.F of 
this proposed rule for a detailed discussion

[[Page 49774]]

of the payment reduction for hospitals that fail to meet Hospital OQR 
Program requirements.

B. Hospital OQR Program Quality Measures

1. Retention, Removal, Replacement, or Suspension of Quality Measures 
From the Hospital OQR Program Measure Set
    We refer readers to Sec.  419.46(i) for our policies regarding: (1) 
measure retention; (2) immediate measure removal; and (3) measure 
removal, suspension, or replacement through the rulemaking process. We 
propose to amend our immediate measure removal policy codified at Sec.  
419.46(i)(2) to replace references to ``QualityNet'' with ``CMS-
designated information system'' or ``CMS website,'' and to make other 
conforming technical edits, to accommodate recent and future systems 
requirements and mitigate confusion for program participants.
    We invite public comment on this proposal.
a. Proposed Removal of the Left Without Being Seen Measure Beginning 
With the CY 2024 Hospital OQR Reporting Period
    We refer readers to the CY 2011 OPPS/ASC final rule (75 FR 72088 
through 72089) where we adopted the Left Without Being Seen (LWBS) 
measure beginning with the CY 2013 payment determination. The LWBS 
measure was initially endorsed by a consensus-based entity (CBE) in 
2008. This process measure assesses the percent of patients who leave 
the emergency department (ED) without being evaluated by a physician, 
advanced practice nurse, or physician's assistant. Our rationale for 
adopting the LWBS measure was that patients leaving without being seen 
was an indicator of ED overcrowding (75 FR 72089).
    Endorsement of the measure was removed in 2012 because the measure 
steward did not choose to resubmit the measure to maintain endorsement. 
We continued to retain the LWBS measure because our data showed 
variation/gap in performance and improvement. However, over the last 
few years, our routine measure monitoring and evaluation indicated: (1) 
limited evidence linking the measure to improved patient outcomes; (2) 
that increased LWBS rates may reflect poor access to timely clinic-
based care rather than intrinsic systemic issues within the ED; \137\ 
and (3) unintended effects on LWBS rates caused by other policies, 
programs, and initiatives may lead to skewed measure 
performance.138 139 140
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    \137\ Li DR, Brennan JJ, Kreshak AA, et al. (2019). Patients who 
leave the emergency department without being seen and their follow-
up behavior: a retrospective descriptive analysis. J Emerg Med, 
57(1), 106-13. https://doi.org/10.1016/j.jemermed.2019.03.051.
    \138\ Allen L, Cong TG, & Kosali S. (2022). The Impact of 
Medicaid Expansion on Emergency Department Wait Times. Health 
Services Research, 57(2), 294-99. https://doi.org/10.1111/1475-6773.13892.
    \139\ Roby N, Smith H, Hurdelbrink J, et al. (2022). 
Characteristics and Retention of Emergency Department Patients Who 
Left without Being Seen (LWBS). Internal and Emergency Medicine, 
17(2), 551-58. https://doi.org/10.1007/S11739-021-02775-Z.
    \140\ Yoo MJ, Schauer SG, & Trueblood WE. (2022). `Swab and Go' 
Impact on Emergency Department Left without Being Seen Rates.'' The 
American Journal of Emergency Medicine, 57(July): 164-65. https://doi.org/10.1016/J.AJEM.2021.11.043.
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    We recognize that LWBS performance issues could be due to 
inefficient patient flow in the ED for a variety of reasons or due to 
insufficient community resources, which result in higher ED patient 
volumes that lead to long wait times and patients deciding to leave 
without being seen. These patients' reasoning for visiting the ED is 
often not severe enough that they would want to wait if the ED is 
crowded. Additionally, we do not believe that the LWBS measure provides 
enough specificity to give value because it does not provide 
granularity for actionable meaningful data toward quality improvement.
    We believe, based on these findings, that this measure meets the 
measure removal factor 2 (that is, performance or improvement on a 
measure does not result in better patient outcomes), as codified under 
Sec.  419.46(i)(3)(i)(B).
    ED performance and care continues to be an important topic area of 
the Hospital OQR Program. We believe the Median Time from ED Arrival to 
ED Departure for Discharged ED Patients measure (Median Time for 
Discharged ED Patients measure) is better for measuring ED performance 
and care. The Median Time for Discharged ED Patients measure, adopted 
for reporting in the Hospital OQR Program, provides more meaningful 
data compared to the LWBS measure because the measure presents more 
granular data on length of time of ED throughput. Additionally, the 
Median Time for Discharged ED Patients measure provides useful 
information to facilities for improvement efforts because the measure 
is stratified, showing the median time from ED departure for discharged 
ED patients in four different strata in the Hospital Outpatient 
Department (HOPD) setting. These improvement efforts by facilities 
could ultimately reduce the number of patients who leave without being 
seen.
    Based on the above assessment and rationale, we believe the LWBS 
measure does not provide enough evidence to promote quality of care and 
improved patient outcomes to justify retaining the measure in the 
Hospital OQR Program. Therefore, we propose to remove the LWBS measure 
from the program beginning with the CY 2024 reporting period/CY 2026 
payment determination.
    We invite public comment on our proposal.
2. Modifications to Previously Adopted Measures
    In this proposed rule, we propose to modify three previously 
adopted measures beginning with CY 2024 reporting period/CY 2026 
payment determination: (1) COVID-19 Vaccination Coverage Among 
Healthcare Personnel (HCP) measure; (2) Cataracts: Improvement in 
Patient's Visual Function Within 90 Days Following Cataract Surgery 
measure; and (3) Appropriate Follow-Up Interval for Normal Colonoscopy 
in Average Risk Patients measure.
a. Proposed Modification of the COVID-19 Vaccination Coverage Among 
Health Care Personnel (HCP) Measure Beginning With the CY 2024 
Reporting Period/CY 2026 Payment Determination
(1) Background
    On January 31, 2020, the Secretary of the Department of Health and 
Human Services (HHS) declared a public health emergency (PHE) for the 
United States in response to the global outbreak of SARS-COV-2, a then 
novel coronavirus that causes a disease named ``coronavirus disease 
2019'' (COVID-19).\141\ Subsequently, the COVID-19 Vaccination Coverage 
Among Health Care Personnel (HCP) measure was adopted across multiple 
quality reporting programs, including the Hospital OQR Program (86 FR 
63824 through 63833).\142\ COVID-19 has continued to spread 
domestically and around the world with more than 102.7 million cases 
and 1.1 million deaths in the United States alone as of February

[[Page 49775]]

13, 2023.\143\ The Secretary renewed the PHE on April 21, 2020, and 
then every three months thereafter, with the final renewal on February 
9, 2023.\144\ The PHE expired on May 11, 2023; however, the public 
health response to COVID-19 remains a public health priority including 
vaccination efforts.\145\
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    \141\ U.S. Dept. of Health and Human Services, Office of the 
Assistant Secretary for Preparedness and Response. (2020). 
Determination that a Public Health Emergency Exists. Available at: 
https://www.phe.gov/emergency/news/healthactions/phe/Pages/2019-nCoV.aspx
    \142\ The ASCQR Program (86 FR 63875 through 63833), the 
Hospital IQR Program (86 FR 45374 through 45382), the Inpatient 
Psychiatric Facility Quality Reporting Program (86 FR 42633 through 
42640), the PPS-Exempt Cancer Hospital Quality Reporting Program (86 
FR 45428 through 45434), the Long-Term Care Hospital Quality 
Reporting Program (86 FR 45438 through 45446), the Skilled Nursing 
Facility Quality Reporting Program (86 FR 42480 through 42489), the 
End-Stage Renal Disease Quality Incentive Program (87 FR 67244 
through 67248), and the Inpatient Rehabilitation Facility Quality 
Reporting Program (86 FR 42385 through 42396).
    \143\ Centers for Disease Control and Prevention. COVID Data 
Tracker. Accessed February 13, 2023. Available at: https://covid.cdc.gov/covid-data-tracker/#datatracker-home.
    \144\ U.S. Dept. of Health and Human Services. Office of the 
Assistant Secretary for Preparedness and Response. (2023). Renewal 
of Determination that a Public Health Emergency Exists. Available 
at: https://aspr.hhs.gov/legal/PHE/Pages/COVID19-9Feb2023.aspx.
    \145\ U.S. Dept. of Health and Human Services. Fact Sheet: 
COVID-19 Public Health Emergency Transition Roadmap. February 9, 
2023. Available at: https://www.hhs.gov/about/news/2023/02/09/fact-sheet-covid-19-public-health-emergency-transition-roadmap.html.
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    We stated in the CY 2022 OPPS/ASC final rule (86 FR 63825), and in 
our ``Revised Guidance for Staff Vaccination Requirements,'' that 
vaccination is a critical part of the nation's strategy to effectively 
counter the spread of COVID-19.146 147 148 We continue to 
believe it is important to incentivize and track HCP vaccination 
through quality measurement across care settings, including the HOPD 
setting, to protect health care workers, patients, and caregivers, and 
to help sustain the ability of HCP in each of these care settings to 
continue serving their communities. Studies indicate higher levels of 
population-level vaccine effectiveness in preventing COVID-19 infection 
among HCP and other frontline workers in multiple industries, with 
vaccines having a 90 percent effectiveness in preventing symptomatic 
and asymptomatic infection from December 2020 through August 2021.\149\ 
Since the Food and Drug Administration (FDA) issued emergency use 
authorizations (EUAs) for selected initial and primary vaccines for 
adults, vaccines have been highly effective in real-world conditions at 
preventing COVID-19 in HCP with up to 96 percent efficacy for fully 
vaccinated HCP, including those at risk for severe infection and those 
in racial and ethnic groups disproportionately affected by COVID-
19.150 151 152 153 Overall, data demonstrate that COVID-19 
vaccines are effective and prevent severe disease, hospitalization, and 
death from COVID-19 infection.\154\
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    \146\ Centers for Medicare and Medicaid Services. (October 26, 
2022). Revised Guidance for Staff Vaccination Requirements. 
Available at: https://www.cms.gov/files/document/qs0-23-02-all.pdf.
    \147\ Centers for Disease Control and Prevention. (September 24, 
2021). Morbidity and Mortality Weekly Report (MMWR). Comparative 
Effectiveness of Moderna, Pfizer-BioNTech, and Janssen (Johnson & 
Johnson) Vaccines in Preventing COVID-19 Hospitalizations Among 
Adults Without Immunocompromising Conditions--United States, March-
August 2021. Available at: https://cdc.gov/mmwr/volumes/70/wr/mm7038e1.htm?s_cid=mm7038e1_w.
    \148\ Centers for Medicare and Medicaid Services. (October 26, 
2022). Revised Guidance for Staff Vaccination Requirements. 
Available at: https://www.cms.gov/files/document/qs0-23-02-all.pdf.
    \149\ Centers for Disease Control and Prevention. (August 27, 
2021). Morbidity and Mortality Weekly Report (MMWR). Effectiveness 
of COVID-19 Vaccines in Preventing SARS-COV-2 Infection Among 
Frontline Workers Before and During B.1.617.2 (Delta) Variant 
Predominance--Eight U.S. Locations, December 2020-August 2021. 
Available at: https://www.cdc.gov/mmwr/volumes/70/wr/mm7034e4.htm.
    \150\ Pilishivi T, Gierke R, Fleming-Dutra KE, et al. (2022). 
Effectiveness of mRNA Covid-19 Vaccine among U.S. Health Care 
Personnel. New England Journal of Medicine, 385(25), e90. https://doi.org/10.1056/NEJMoa2106599.
    \151\ Centers for Disease Control and Prevention. (2021). 
Morbidity and Mortality Weekly Report (MMWR). Monitoring Incidence 
of COVID-19 Cases, Hospitalizations, and Deaths, by Vaccination 
Status--13 U.S. Jurisdictions, April 4-July 17, 2021. Available at: 
https://www.cdc.gov/mmwr/volumes/70/wr/mm7037e1.htm.
    \152\ Centers for Medicare and Medicaid Services. (October 26, 
2022). Revised Guidance for Staff Vaccination Requirements. 
Available at: https://www.cms.gov/files/document/qs0-23-02-all.pdf.
    \153\ Food and Drug Administration. (2020). FDA Takes Key Action 
in Fight Against COVID-19 By Issuing Emergency Use Authorization for 
First COVID-19 Vaccine. Available at: https://www.fda.gov/news-events/press-announcements/fda-takes-key-action-fight-against-covid-19-issuing-emergency-use-authorization-first-covid-19.
    \154\ McGarry BE, Barnett ML, Grabowski DC, et al. (2022). 
Nursing Home Staff Vaccination and Covid-19 Outcomes. New England 
Journal of Medicine, 386(4), 397-398. https://doi.org/10.1056/NEJMc2115674.
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    When we adopted the COVID-19 Vaccination Coverage Among HCP measure 
in the CY 2022 OPPS/ASC final rule (86 FR 63875 through 63883), we 
acknowledged that the measure did not address booster shots for COVID-
19 vaccination (86 FR 63881) though the FDA authorized, and the Centers 
for Disease Control and Prevention (CDC) recommended, additional doses 
and booster doses of the COVID-19 vaccine for certain individuals, 
particularly those who are immunocompromised due to age or condition or 
who are living or working in high-risk settings, such as HCP (86 FR 
63881). However, we also stated that we believed the numerator of the 
measure was sufficiently broad to include potential future boosters as 
part of a ``complete vaccination course'' (86 FR 63881).
    Since then, new variants of SARS-COV-2 have emerged around the 
world and within the United States. Specifically, the Omicron variant 
(and its related subvariants) is listed as a variant of concern by the 
CDC because it spreads more easily than earlier variants.\155\ Vaccine 
manufacturers have responded to the Omicron variant by developing 
bivalent COVID-19 vaccines, which include a component of the original 
virus strain to provide broad protection against COVID-19 and a 
component of the Omicron variant to provide better protection against 
COVID-19 caused by the Omicron variant.\156\ Booster doses of the 
bivalent COVID-19 vaccine have proven effective at increasing immune 
response to SARS-COV-2 variants, including Omicron, particularly in 
individuals who are more than 6 months removed from receipt of their 
primary series.\157\ These booster doses are associated with a greater 
reduction in infections among HCP and their patients relative to those 
who only received primary series vaccination, with a rate of 
breakthrough infections among HCP who received only the two-dose 
regimen of 21.4 percent compared to a rate of 0.7 percent among boosted 
HCP.158 159 160 Data from the existing COVID-19 Vaccination 
Coverage Among HCP measure demonstrate clinically significant variation 
in booster dose vaccination rates across HOPDs.
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    \155\ Centers for Disease Control and Prevention. (2021). 
Variants of the Virus. Available at: https://www.cdc.gov/coronavirus/2019-ncov/variants/index.html.
    \156\ Food and Drug Administration. (2022). COVID-19 Bivalent 
Vaccine Boosters. Available at: https://www.fda.gov/emergency-preparedness-and-response/coronavirus-disease-2019-covid-19/covid-19-bivalent-vaccines.
    \157\ Chalkias S, Harper C, Vrbicky K, et al. (2022). A Bivalent 
Omicron-Containing Booster Vaccine against Covid-19. New England 
Journal of Medicine, 387(14), 1279-1291. https://doi.org/10.1056/NEJMoa2208343.
    \158\ Prasad N, Derado G, Nanduri SA, et al. (May 2022). 
Effectiveness of a COVID-19 Additional Primary or Booster Vaccine 
Dose in Preventing SARS-CoV-2 Infection Among Nursing Home Residents 
During Widespread Circulation of the Omicron Variant--United States, 
February 14-March 27, 2022. Morbidity and Mortality Weekly Report 
(MMWR). 71(18), 633-637. Available online at: https://www.cdc.gov/mmwr/volumes/71/wr/mm7118a4.htm.
    \159\ Oster Y, Benenson S, Nir-Paz R, et al. (2022). The effect 
of a third BNT162b2 vaccine on breakthrough infections in health 
care workers: a cohort analysis. Clinical Microbiology and 
Infection, 28(5), 735.e1-735.e3. https://doi.org/10.1016/j.cmi.2022.01.019.
    \160\ Ibid.
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    We believe that vaccination remains the most effective means to 
prevent the worst consequences of COVID-19, including severe illness, 
hospitalization, and death. Given the availability of vaccine efficacy 
data, EUAs issued by the FDA for bivalent boosters, continued presence 
of SARS-COV-2 in the United States, and variance among rates of booster 
dose vaccination, it is important to modify the COVID-19 Vaccination 
Coverage Among HCP measure for HCP

[[Page 49776]]

to receive primary series and booster vaccine doses in a timely manner 
per CDC's recommendation that bivalent COVID-19 vaccine booster doses 
might improve protection against SARS-CoV-2 Omicron sublineages.\161\
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    \161\ Centers for Medicare and Medicaid Services. (October 26, 
2022). Revised Guidance for Staff Vaccination Requirements. 
Available at: https://www.cms.gov/files/document/qs0-23-02-all.pdf.
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    We propose to modify the COVID-19 Vaccination Coverage Among HCP 
measure to utilize the term ``up to date'' in the HCP vaccination 
definition. We also propose to update the numerator to specify the 
timeframes within which an HCP is considered up to date with CDC 
recommended COVID-19 vaccines, including booster doses, beginning with 
CY 2024 reporting period/CY 2026 payment determination for the Hospital 
OQR Program.
    We note that as we stated in the CY 2022 OPPS/ASC final rule (86 FR 
63877), the COVID-19 Vaccination Coverage Among HCP measure is a 
process measure that assesses HCP vaccination coverage rates and not an 
outcome measure for which hospitals are held responsible for a 
particular outcome. We propose to adopt the same modification to 
versions of the measure that we have adopted for other quality 
reporting programs.\162\
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    \162\ The Hospital Inpatient Quality Reporting Program, the 
Long-Term Care Hospital Quality Reporting Program and the PPS-Exempt 
Cancer Hospital Quality Reporting Program (88 FR 27074) as well as 
the Inpatient Psychiatric Facility Quality Reporting Program (88 FR 
21290), the Skilled Nursing Facility Quality Reporting Program (88 
FR 21332), the End-Stage Renal Disease Quality Incentive Program (87 
FR 67244), and the Inpatient Rehabilitation Facility Quality 
Reporting Program (88 FR 20985).
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(2) Overview of Measure
    The COVID-19 Vaccination Coverage Among HCP measure is a process 
measure developed by the CDC to track COVID-19 vaccination coverage 
among HCPs in various settings and are reported via the CDC's National 
Healthcare Safety Network (NHSN). We refer readers to the CY 2022 OPPS/
ASC final rule with comment period (86 FR 63827 through 63828) for more 
information on the initial review of the measure by the Measure 
Applications Partnership (MAP).\163\ We included an updated version of 
the measure on the Measures Under Consideration (MUC) list for the 
2022-2023 pre-rulemaking cycle for consideration by the MAP. In 
December 2022, during the MAP's Hospital Workgroup discussion, the 
workgroup stated that the revision of the current measure captures up 
to date vaccination information in accordance with the CDC's updated 
recommendations for additional and booster doses since the measure's 
initial development. Additionally, the Hospital Workgroup appreciated 
that the re-specified measure's target population is broader and 
simplified from seven categories of HCP to four.\164\ During the MAP's 
Health Equity Advisory Group review, the group highlighted the 
importance of COVID-19 vaccination measures and questioned whether the 
proposed revised measure excludes individuals with contraindications to 
FDA authorized or approved COVID-19 vaccines, and if the measure would 
be stratified by demographic factors. The measure developer confirmed 
that HCP with contraindications to the vaccines are excluded from the 
measure denominator but stated that the measure would not be stratified 
since the data are submitted at an aggregate rather than an individual 
level. The MAP Rural Health Advisory Group expressed concerns about 
data collection burden, citing that collection is performed 
manually.\165\ We note that when reviewed by the MAP, reporting for 
contract personnel providing care or services not specifically included 
in the measure denominator was fully optional, whereas this reporting 
is now required to complete NHSN data entry, but is not included in the 
measure calculation.
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    \163\ Interested parties convened by the consensus-based entity 
will provide input and recommendations on the Measures under 
Consideration (MUC) list as part of the pre-rulemaking process 
required by section 1890A of the Act. We refer readers to https://p4qm.org/PRMR-MSR for more information.
    \164\ Centers for Medicare & Medicaid Services. Pre-rulemaking 
MUC lists and map reports. The Measures Management System. Available 
at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
    \165\ Ibid.
---------------------------------------------------------------------------

    The developer also noted that the model used for this measure is 
based on the Influenza Vaccination Coverage Among HCP measure (CBE 
#0431).\166\ We refer readers to sections XXIV.B and XXVI of this 
proposed rule for additional detail on the burden and impact of this 
proposal.
---------------------------------------------------------------------------

    \166\ In previous years, we referred to the consensus-based 
entity (CBE) by corporate name. We have updated this language to 
refer to the CBE more generally.
---------------------------------------------------------------------------

    The proposed revised measure received conditional support for 
rulemaking from the MAP pending (1) testing indicating the measure is 
reliable and valid, and (2) endorsement by the CBE. The MAP noted that 
the previous version of the measure received endorsement from the CBE 
(CBE #3636) \167\ and that the measure steward (CDC) intends to submit 
the updated measure for endorsement.\168\
---------------------------------------------------------------------------

    \167\ Centers for Medicare and Medicaid Services. Measures 
Inventory Tool. Available at: https://cmit.cms.gov/cmit/#/MeasureView?variantId=11670&sectionNumber=1.
    \168\ The measure steward owns and maintains a measure while a 
measure developer develops, implements, and maintains a measure. In 
this case, the CDC serves as both the measure steward and measure 
developer. For more information on measure development, we refer 
readers to: Centers for Medicare and Medicaid Services (2023). Roles 
in Measure Development. Available at: https://mmshub.cms.gov/about-quality/new-to-measures/roles.
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(a) Measure Specifications
    This measure is calculated quarterly by averaging the hospital's 
most recently submitted and self-selected 1 week of data. The measure 
includes at least 1 week of data collection a month for each of the 3 
months in a quarter. The denominator is calculated as the aggregated 
number of HCP eligible to work in the hospital for at least 1 day 
during the week of data collection, excluding denominator-eligible 
individuals with contraindications as defined by the CDC for all 3 
months in a quarter.\169\ Facilities report the following four 
categories of HCP to the NHSN:
---------------------------------------------------------------------------

    \169\ Centers for Disease Control and Prevention. (2022). 
Contraindications and precautions. Available at: https://www.cdc.gov/vaccines/covid-19/clinical-considerations/interim-considerations-us.html#contraindications.
---------------------------------------------------------------------------

     Employees: This includes all persons who receive a direct 
paycheck from the reporting facility (that is, on the facility's 
payroll), regardless of clinical responsibility or patient contact.)
     Licensed independent practitioners (LIPs): This includes 
only physicians (MD, DO), advanced practice nurses, and physician 
assistants who are affiliated with the reporting facility but are not 
directly employed by it (that is, they do not receive a paycheck from 
the reporting facility), regardless of clinical responsibility or 
patient contact. Post-residency fellows are also included in this 
category if they are not on the facility's payroll.
     Adult students/trainees and volunteers: This includes 
medical, nursing, or other health professional students, interns, 
medical residents, or volunteers aged 18 or older who are affiliated 
with the facility but are not directly employed by it (that is, they do 
not receive a paycheck from the facility), regardless of clinical 
responsibility or patient contact.
     Other contract personnel: Contract personnel are defined 
as persons providing care, treatment, or services at the facility 
through a contract who do not fall into any of the previously discussed 
denominator categories. This

[[Page 49777]]

also includes vendors providing care, treatment, or services at the 
facility who may or may not be paid through a contract. Facilities are 
required to enter data on other contract personnel for submission in 
the NHSN application, but data for this category are not included in 
the HCP COVID-19 Vaccine measure.\170\
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    \170\ For more details on the reporting of other contract 
personnel, we refer readers to the NHSN COVID-19 Vaccination 
Protocol, Weekly COVID-19 Vaccination Module for Healthcare 
Personnel available at: https://www.cdc.gov/nhsn/pdfs/hps/covidvax/protocol-hcp-508.pdf.
---------------------------------------------------------------------------

    We are not proposing to modify the denominator exclusions. The 
numerator is calculated as the cumulative number of HCP in the 
denominator population who are considered up to date with CDC 
recommended COVID-19 vaccine. Guidance issued by the CDC defines the 
term ``up to date'' as meeting the CDC's criteria on the first day of 
the applicable reporting quarter. The current definition of ``up to 
date'' can be found at: https://www.cdc.gov/nhsn/pdfs/hps/covidvax/UpToDateGuidance-508.pdf.
    We propose that public reporting of the modified version of the 
COVID-19 Vaccination Coverage Among HCP for the Hospital OQR Program 
would begin with the Fall 2024 Care Compare refresh, or as soon as 
technically feasible.
(b) CBE Endorsement
    The current version of the measure in the Hospital OQR Program 
received CBE endorsement (CBE #3636) on July 26, 2022.\171\ The measure 
steward (CDC) is pursuing endorsement for the modified version of this 
measure.
---------------------------------------------------------------------------

    \171\ Centers for Medicare & Medicaid Services. Measure 
Specifications for Hospital Workgroup for the 2022 MUC List. 
Available at: https://mmshub.cms.gov/sites/default/files/map-hospital-measure-specifications-manual-2022.pdf.
---------------------------------------------------------------------------

(3) Data Submission and Reporting
    We refer readers to the CY 2022 OPPS/ASC final rule (86 FR 63879 
through 63883) for information on data submission and reporting of this 
measure. While we are not proposing any changes to the data submission 
or reporting process, we propose that reporting of the updated, 
modified version of this measure would begin with the CY 2024 reporting 
period for the Hospital OQR Program. Under the data submission and 
reporting process, hospitals would collect the numerator and 
denominator for the COVID-19 Vaccination Coverage Among HCP measure for 
at least one self-selected week during each month of the reporting 
quarter and submit the data to the NHSN Healthcare Personnel Safety 
(HPS) Component before the quarterly deadline to meet Hospital OQR 
Program requirements. If a hospital submits more than one week of data 
in a month, the most recent week's data would be used to calculate the 
measure. For example, if first and third week data are submitted, the 
third week data would be used. Each quarter, the CDC would calculate a 
single quarterly COVID-19 HCP vaccination coverage rate for each 
hospital, which would be calculated by taking the average of the data 
from the three weekly rates submitted by the hospital for that quarter. 
CMS would publicly report each quarterly COVID-19 HCP vaccination 
coverage rate as calculated by the CDC (86 FR 63878). We refer readers 
to section XV.B of this proposed rule for the same proposal for the 
Ambulatory Surgical Center Quality Reporting (ASCQR) Program.
    We invite public comment on this proposal.
b. Proposed Modification of Survey Instrument Use for the Cataracts: 
Improvement in Patient's Visual Function Within 90 Days Following 
Cataract Surgery Measure Beginning With the Voluntary CY 2024 Reporting 
Period
(1) Background
    In the CY 2014 OPPS/ASC final rule (78 FR 75102 through 75103), we 
finalized the adoption of the Cataracts: Improvement in Patient's 
Visual Function Within 90 Days Following Cataract Surgery (the 
Cataracts Visual Function) measure, beginning with the CY 2014 
reporting period/CY 2016 payment determination. This measure assesses 
the percentage of patients aged 18 years and older who had cataract 
surgery and had improvement in visual function within 90 days following 
the cataract surgery via the administration of pre-operative and post-
operative survey instruments (78 FR 75102). A ``survey instrument'' is 
an assessment tool that has been appropriately validated for the 
population for which it being used.\172\ For purposes of this proposed 
modification to the Cataracts Visual Function measure, the survey 
instruments we considered and propose assess the visual function of a 
patient pre- and post-operatively to determine whether the patient's 
visual function changed within 90 days of cataract surgery. Currently, 
examples of survey instruments assessing visual function include, but 
are not limited to, the National Eye Institute Visual Function 
Questionnaire (NEI-VFQ), the Visual Function (VF-14), the modified (VF-
8), the Activities of Daily Vision Scale (ADVS), the Catquest, and the 
modified Catquest-9. While the measure has been available for voluntary 
reporting in the Hospital OQR Program since the CY 2015 reporting 
period, a number of facilities have reported data consistently using 
the survey instrument-collection method of their choice (87 FR 72098). 
We refer readers to the Cataracts Visual Function measure's Measure 
Information Form (MIF) and the Hospital OQR Program Specifications 
Manual for additional detail, which is available at: https://qualitynet.cms.gov/outpatient/specifications-manuals.
---------------------------------------------------------------------------

    \172\ Centers for Medicare & Medicaid Services. (2023). Hospital 
OQR Specification Manual Version 16.0. Available at: https://qualitynet.cms.gov/outpatient/specifications-manuals#tab1.
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    In the CY 2015 OPPS/ASC final rule (79 FR 66947), we expressed 
concerns that clinicians' use of varying survey instruments would lead 
to inconsistent measure results. However, a comparison study conducted 
of the 16 survey instruments that are currently accepted for use in 
collecting data for this measure by HOPDs found them to be 
scientifically valid, able to detect clinically important changes, and 
provide comparable results.\173\ While all 16 survey instruments 
demonstrate usefulness for detecting clinically important changes in 
cataract patients, some survey instrument's detection sensitivity 
scored higher than others.\174\
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    \173\ McAlinden C, Gothwal VK, Khadka J, et al. (2011). A head-
to-head comparison of 16 cataract surgery outcome questionnaires. 
Ophthalmology, 118(12), 2374-81. https://doi.org/10.1016/j.ophtha.2011.06.008.
    \174\ Ibid.
---------------------------------------------------------------------------

    Several commenters responding to the CY 2022 OPPS/ASC proposed rule 
(86 FR 63846) requested additional guidance from CMS regarding measure 
specifications and survey instruments. We agree that the use of survey 
instruments for the assessment of visual function pre- and post-
cataract surgery should be clarified. The use of survey instruments 
should be standardized across HOPDs to minimize collection and 
reporting burden, as well as to improve measure reliability. We propose 
to clarify which specific survey instruments may be used for the 
assessment of visual function pre- and post- cataract surgery for the 
Cataracts Visual Function measure in both the Hospital OQR Program and 
the ASCQR Program, to ensure alignment of this measure's specifications 
across our quality reporting programs. Thus, we propose to limit the 
allowable survey instruments that an HOPD may use to assess changes in 
patient's visual function for the purposes of the Cataracts Visual 
Function measure to those listed below:


[[Page 49778]]


The National Eye Institute Visual Function Questionnaire-25 (NEI VFQ-
25)
The Visual Functioning Patient Questionnaire (VF-14)
The Visual Functioning Index Patient Questionnaire (VF-8R)
(2) Considerations for the Standardization of Survey Instruments 
Assessing Improvement in Patient's Visual Function Within 90 Days 
Following Cataract Surgery
    We took into consideration several factors when identifying which 
specific survey instruments would be acceptable for HOPDs to use when 
collecting data for the Cataracts Visual Function measure, such as 
comprehensiveness, validity, reliability, length, and burden. We 
believe that these three proposed survey instruments will allow HOPDs 
to select the length of the survey to be administered while ensuring 
adequate validity and reliability.175 176 177 All three of 
these proposed surveys are based upon the 51-item National Eye 
Institute Visual Function Questionnaire (NEI VFQ-51) survey instrument, 
which was the first survey instrument originally developed for 
assessing a patient's visual function before and after cataract 
surgery. Each of the three proposed survey instruments have 
progressively fewer numbers of questions than the NEI VFQ-51: 25 
questions for the NEI VFQ-25, 14 questions for the VF-14, and 8 
questions for the VF-8R. Even with fewer numbers of questions, all 
three of the proposed survey instruments have been validated as 
providing results comparable to the NEI VFQ-51. In addition, all three 
of the proposed survey instruments are readily available for hospitals 
to access and use.
---------------------------------------------------------------------------

    \175\ Sivaprasad S., Tschosik E., Kapre A., et al. (2018). 
Reliability and construct validity of the NEI VFQ-25 in a subset of 
patients with geographic atrophy from the Phase 2 mahalo study. 
American Journal of Ophthalmology, 190, 1-8. https://doi.org/10.1016/j.ajo.2018.03.006.
    \176\ Hecht I., Kanclerz P., & Tuuminen R. (2022). Secondary 
outcomes of Lens and cataract surgery: More than just ``best-
corrected visual acuity''. Progress in Retinal and Eye Research, 
101150. https://doi.org/10.1016/j.preteyeres.2022.101150.
    \177\ Orizonartstudios. (2023). 2023 MIPS measure #303: 
Cataracts: Improvement in patient's visual function within 90 days 
following cataract surgery. Mdinteractive. Available at: https://mdinteractive.com/mips_quality_measure/2023-mips-quality-measure-303.
---------------------------------------------------------------------------

    We propose to allow HOPDs to use the NEI VFQ-25 for administering 
and calculating the Cataracts Visual Function measure due to its 
comprehensiveness, its adequate validity and reliability, as well as 
its potential to reduce language barriers for patients. The NEI VFQ-25 
is a shorter version of the NEI VFQ-51, being comprised of 25 items 
across 12 vision-specific domains (general health, general vision, 
ocular pain, near activities, distance activities, social functioning, 
mental health, role difficulties, dependency, driving, color vision, 
and peripheral vision).\178\
---------------------------------------------------------------------------

    \178\ U.S. Department of Health and Human Services. Visual 
function questionnaire 25. National Eye Institute. Available at: 
https://www.nei.nih.gov/learn-about-eye-health/outreach-campaigns-and-resources/outreach-materials/visual-function-questionnaire-25.
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    The NEI VFQ-25, similar to the VF-14 and VF-8R, displays adequate 
reliability and validity.\179\ The NEI VFQ-25 composite, near 
activities, and distance activities subscales demonstrated good 
internal consistency reliability, test-retest reliability, convergent 
validity, and known-groups validity.\180\ Furthermore, the NEI VFQ-25's 
high internal consistency, indicates that items of the NEI VFQ-25 are 
highly related to each other and to the scale as a whole.\181\
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    \179\ Sivaprasad S., Tschosik E., Kapre A., et al. (2018). 
Reliability and construct validity of the NEI VFQ-25 in a subset of 
patients with geographic atrophy from the Phase 2 mahalo study. 
American Journal of Ophthalmology, 190, 1-8. https://doi.org/10.1016/j.ajo.2018.03.006.
    \180\ Ibid.
    \181\ Ibid.
---------------------------------------------------------------------------

    In addition, the survey instrument is publicly available on the 
RAND website at no cost and has been translated to many languages, 
which is a valuable benefit for patients with limited English 
proficiency. The NEI VFQ-25 was chosen over other survey instruments to 
reduce potential language barriers, as, for example, the currently 
available Activities of Daily Vision Scale (ADVS) is dependent on 
English language skills.\182\ More information on the NEI VFQ-25 can be 
found at: https://www.rand.org/health-care/surveys_tools/vfq.html.
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    \182\ Mangione C.M., Phillips R.S., Seddon J.M., et al. (1992). 
Development of the `Activities of Daily Vision Scale'. A measure of 
visual functional status. Med Care, 30(12), 1111-1126. https://doi.org/10.1097/00005650-199212000-00004.
---------------------------------------------------------------------------

    While the NEI VFQ-25 was shortened significantly from the original 
NEI VFQ-51, it has been criticized for its still lengthy test-time. 
However, our proposal to include this survey instrument in this 
measure's specifications allows for a more detailed assessment of 
cataract surgery outcomes, as it was designed to include questions 
which are most important for persons who have chronic eye 
diseases.\183\ Further, if a hospital finds the NEI VFQ-25 particularly 
burdensome to administer, the hospital may choose from the other two 
survey instruments we propose for inclusion in this measure's 
specifications, as both of these have even fewer survey questions to 
administer.
---------------------------------------------------------------------------

    \183\ Hecht I., Kanclerz P., & Tuuminen R. (2022). Secondary 
outcomes of Lens and cataract surgery: More than just ``best-
corrected visual acuity.'' Progress in Retinal and Eye Research, 
101150. https://doi.org/10.1016/j.preteyeres.2022.101150.
---------------------------------------------------------------------------

    We also propose to allow HOPDs to use the 14-item VF-14 and the 8-
item VF-8R for administering and calculating the Cataracts Visual 
Function measure, which each can be administered in a shorter timeframe 
than the NEI VFQ-25 with high precision.184 185 Thus, the 
succinct formats of the VF-14 and VF-8R may ease HOPD's burden in 
administering the survey instruments and potentially increase the rate 
of patient responses for this measure, as compared with other survey 
instrument options we considered. Therefore, we propose the VF-14 and 
VF-8R for this measure's data collection specifications because we 
believe these survey instruments achieve comparable results with the 
longer NEI VFQ-25 and NEI VFQ-51 survey instruments with substantially 
fewer questions to administer.
---------------------------------------------------------------------------

    \184\ Ibid.
    \185\ Orizonartstudios. (2023). 2023 MIPS measure #303: 
Cataracts: Improvement in patient's visual function within 90 days 
following cataract surgery. MDinteractive. Available at: https://mdinteractive.com/mips_quality_measure/2023-mips-quality-measure-303.
---------------------------------------------------------------------------

    Furthermore, we propose inclusion of the VF-14 because currently it 
is the most commonly used survey instrument and we believe it would be 
beneficial to allow the majority of physicians who have already been 
using VF-14 to continue to have the option to do so.\186\ The VF-14 is 
comprised of 14 items relating to daily living activities and function, 
such as reading, writing, seeing steps, stairs or curbs, and operating 
a motor vehicle.\187\ Studies using this survey instrument generally 
report significant and clinically important improvement following 
cataract surgery.\188\ The VF-14 additionally has achieved adequate 
reliability and validity, proving it to be a dependable survey 
instrument for cataract outcomes.189 190
---------------------------------------------------------------------------

    \186\ Hecht, I., Kanclerz, P., &; Tuuminen, R. (2022). Secondary 
outcomes of Lens and cataract surgery: More than just ``best-
corrected visual acuity.'' Progress in Retinal and Eye Research, 
101150. https://doi.org/10.1016/j.preteyeres.2022.101150.
    \187\ Ibid.
    \188\ Ibid.
    \189\ Ibid.
    \190\ Orizonartstudios. (2023). 2023 MIPS measure #303: 
Cataracts: Improvement in patient's visual function within 90 days 
following cataract surgery. MDinteractive. Retrieved March 13, 2023, 
from https://mdinteractive.com/mips_quality_measure/2023-mips-quality-measure-303.

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[[Page 49779]]

    We propose the VF-8R as it is the most concise of the three survey 
instruments, while still achieving adequate validity and 
reliability.\191\ The VF-8R consists of questions related to reading, 
fine handwork, writing, playing board games, and watching 
television.\192\ Given its conciseness compared to the majority of 
currently available survey instruments and its adequate psychometric 
properties, we believe that the VF-8R would be beneficial for measuring 
cataract surgery outcomes without prompting further patient survey 
fatigue.\193\
---------------------------------------------------------------------------

    \191\ Ibid.
    \192\ Pre[hyphen]Cataract Surgery--Visual Functioning Index (VF-
8R) patient. (n.d.). https://eyecaresite.com/wp-content/uploads/2020/02/Visual-Functioning-Index-Pre-Cat-SX.pdf.
    \193\ Ibid.
---------------------------------------------------------------------------

    For these reasons, we believe that the NEI VFQ-25, VF-14, and VF-8R 
are the most appropriate survey instruments for HOPDs to use to assess 
a patient's visual function pre- and post-cataract surgery for purposes 
of calculating and submitting data for the Cataracts Visual Function 
measure in the Hospital OQR Program.
    In response to commenters' concerns as summarized in the CY 2023 
OPPS/ASC final rule (87 FR 72097 through 72099) regarding the lack of 
specificity around survey instrument administration for the Cataracts 
Visual Function measure, we propose to limit the survey instruments 
that can be used to administer this measure, beginning with the 
voluntary CY 2024 reporting period, to these three survey instruments: 
(1) NEI VFQ-25; (2) VF-14; and (3) VF-8R. We believe the use of these 
three survey instruments to report data on the Cataracts Visual 
Function measure would allow for a more standardized approach to data 
collection. Having a limited number of allowable survey instruments 
would also address commenters' requests for additional guidance on 
survey instruments as well as improve measure reliability.
(3) Considerations for Data Collection Modes for the Cataracts: 
Improvement in Patient's Visual Function Within 90 Days Following 
Cataract Surgery Measure Beginning With the Voluntary CY 2024 Reporting 
Period
    As summarized in the CY 2023 OPPS/ASC final rule (87 FR 72104 
through 72105), many commenters expressed concern about the high 
administrative burden of reporting the Cataracts Visual Function 
measure, as the measure uniquely requires coordination among clinicians 
of different specialties (that is, opticians and ophthalmologists). In 
an effort to decrease administrative burden surrounding in-office time 
constraints, we reiterate that, while we recommend the patient's 
physician or optometrist administer, collect, and report the survey 
instrument results to the HOPD, the survey instruments required for 
this measure can be administered by the HOPD itself via phone, by the 
patient via regular or electronic mail, or during clinician follow-up.
    Scientific literature supports the conclusion that self-
administered survey instruments produce statistically reliable 
results.194 195 Furthermore, scientific literature indicates 
that regular mail and electronic mail surveys respectively, are 
preferred by varying subgroups of patients. The inclusion of both 
options ensures that patients will be able to respond to surveys in 
their preferred format.196 197 These findings support the 
inclusion of varying survey instrument-collection methods for patient 
and provider convenience.
---------------------------------------------------------------------------

    \194\ Bhandari N.R., Kathe N., Hayes C., & Payakachat N. (2018). 
Reliability and validity of SF-12V2 among adults with self-reported 
cancer. Research in Social and Administrative Pharmacy, 14(11), 
1080-1084. https://doi.org/10.1016/j.sapharm.2018.01.007.
    \195\ Stolwijk C., van Tubergen A., Ramiro S., et al. (2014). 
Aspects of validity of the self-administered comorbidity 
questionnaire in patients with ankylosing spondylitis. Rheumatology, 
53(6), 1054-1064. https://doi.org/10.1093/rheumatology/ket354.
    \196\ Kelfve S., Kivi M., Johansson B., & Lindwall M. (2020). 
Going web or staying paper? the use of web-surveys among older 
people. BMC Medical Research Methodology, 20(1), 252. https://doi.org/10.1186/s12874-020-01138-0.
    \197\ Meyer V.M., Benjamens S., Moumni M.E., et al. (2020). 
Global overview of response rates in patient and health care 
professional surveys in surgery. Annals of Surgery, 275(1). https://doi.org/10.1097/sla.0000000000004078.
---------------------------------------------------------------------------

    We invite public comment on this proposal.
c. Proposed Modification of the Appropriate Follow-Up Interval for 
Normal Colonoscopy in Average Risk Patients Measure Denominator Change 
To Align With Current Clinical Guidelines Beginning With the CY 2024 
Reporting Period/CY 2026 Payment Determination
(1) Background
    In 2019, colorectal cancer (CRC) accounted for the 4th highest rate 
of new cancer cases and the 4th highest rate of cancer deaths in the 
United States.\198\ The American Cancer Society (ACS) estimates that in 
2023, 153,020 individuals will be newly diagnosed with CRC and 52,550 
individuals will die from CRC in the United States.\199\ The CDC 
advises, ``[c]olorectal cancer almost always develops from precancerous 
polyps (abnormal growths) in the colon or rectum. Screening tests can 
find precancerous polyps, so that they can be removed before they turn 
into cancer. Screening tests can also find colorectal cancer early, 
when treatment works best. Regular screening, beginning at age 45, is 
the key to preventing colorectal cancer and finding it early.'' \200\
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    \198\ Centers for Disease Control and Prevention. (2022). 
Colorectal Cancer Statistics. Available at: https://gis.cdc.gov/Cancer/USCS/#/AtAGlance/.
    \199\ American Cancer Society. (2023). Cancer Facts & Figures 
2023. Available at: https://www.cancer.org/research/cancer-facts-statistics/all-cancer-facts-figures/2023-cancer-facts-figures.html.
    \200\ Centers for Disease Control and Prevention. (2022). What 
Should I Know About Screening? Available at: https://www.cdc.gov/cancer/colorectal/basic_info/screening/index.htm.
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    In May 2021, the United States Preventive Services Task Force 
(USPSTF) issued a revised Final Recommendation Statement on CRC 
Screening.\201\ This replaced the prior USPSTF 2016 Final 
Recommendation Statement and included a number of updated policy 
recommendations based on new evidence and understandings of CRC and CRC 
screening. The USPSTF recommended that adults who do not have signs or 
symptoms of CRC and who are at average risk for CRC begin screening at 
age 45 instead of the previous recommendation of age 50.\202\ In 
addition, multiple professional organizations, including the ACS, 
American Society of Colon and Rectal Surgeons, and the U.S. Multi-
Society Task Force on Colorectal Cancer (which represents the American 
College of Gastroenterology, the American Gastroenterological 
Association, and the American Society for Gastrointestinal Endoscopy), 
recommend that people of average risk of CRC start regular screening at 
age 45.203 204 205 Based on the recent changes in clinical 
guidelines

[[Page 49780]]

to begin CRC screening at age 45 instead of age 50, we propose to 
modify the Appropriate Follow-Up Interval for Normal Colonoscopy in 
Average Risk Patients (the Colonoscopy Follow-Up Interval) measure to 
follow these clinical guideline changes.
---------------------------------------------------------------------------

    \201\ US Preventive Services Task Force. (2021). Screening for 
Colorectal Cancer. JAMA, 325(19), 1965-1977. https://doi.org/10.1001/jama.2021.6238.
    \202\ Ibid.
    \203\ Wolf A., Fontham E.T.H., Church T.R., et al. (2018). 
Colorectal cancer screening for average-risk adults: 2018 guideline 
update from the American Cancer Society. CA. Cancer J. Clin., 
2018(68), 250-281. https://doi.org/10.3322/caac.21457.
    \204\ American Society of Colon & Rectal Surgeons. Colorectal 
Cancer Screening and Surveillance Recommendations of U.S. 
Multisociety Task Force. Available at: https://fascrs.org/healthcare-providers/education/clinical-practice-guidelines/colorectal-cancer-screening-and-surveillance-recom.
    \205\ Patel SG, May FP, Anderson JC, Burke CA, et al. (2022). 
Updates on Age to Start and Stop Colorectal Cancer Screening: 
Recommendations From the U.S. Multi-Society Task Force on Colorectal 
Cancer. The American Journal of Gastroenterology, 117(1), 57-69. 
https://doi.org/10.14309/ajg.0000000000001548.
---------------------------------------------------------------------------

(2) Overview of Measure
    We refer readers to the CMS Measures Inventory Tool and the 
Hospital OQR Program specification manual for more information on the 
Colonoscopy Follow-Up Interval measure, including background on the 
measure and a complete summary of measure 
specifications.206 207 Currently, the Colonoscopy Follow-Up 
Interval measure assesses the ``percentage of patients aged 50 years to 
75 years receiving a screening colonoscopy without biopsy or 
polypectomy who had a recommended follow-up interval of at least 10 
years for repeat colonoscopy documented in their colonoscopy report.'' 
\208\ We propose to amend the measure's denominator language by 
replacing the phrase ``aged 50 years'' with the phrase ``aged 45 
years.'' The measure denominator would be modified to ``all patients 
aged 45 years to 75 years receiving screening colonoscopy without 
biopsy or polypectomy'' from ``all patients aged 50 years to 75 years 
receiving screening colonoscopy without biopsy or polypectomy.'' \209\ 
We are not proposing any changes to the measure numerator, other 
measure specifications, exclusions, or data collection for the 
Colonoscopy Follow-Up Interval measure.
---------------------------------------------------------------------------

    \206\ Centers for Medicare & Medicaid Services. (2023). Measures 
Inventory Tool. Available at: https://cmit.cms.gov/cmit/#/MeasureView?variantId=793&sectionNumber=1.
    \207\ Centers for Medicare & Medicaid Services. Qualitynet Home. 
Available at: https://qualitynet.cms.gov/outpatient/specifications-manuals.
    \208\ Centers for Medicare & Medicaid Services. (2023). Measures 
Inventory Tool. Available at: https://cmit.cms.gov/cmit/#/MeasureView?variantId=793&sectionNumber=1.
    \209\ Ibid.
---------------------------------------------------------------------------

    In the CY 2023 Physician Fee Schedule final rule (87 FR 69760 
through 69767), we adopted the modified Colonoscopy Follow-Up Interval 
measure (which we propose here for the Hospital OQR Program) for the 
Merit-based Incentive Payment System (MIPS). We have considered the 
importance of aligning the minimum age requirement for CRC screening 
across quality reporting programs and clinical guidelines. As a result, 
we propose to modify the Colonoscopy Follow-Up Interval measure 
denominator to ``all patients aged 45 to 75 years'' for the Hospital 
OQR Program. We propose the modification of the Colonoscopy Follow-Up 
Interval measure beginning with the CY 2024 reporting period/CY 2026 
payment determination.
    We invite public comment on this proposal.
3. Proposed Adoption of New Measures for the Hospital OQR Program 
Measure Set
    Section 1833(t)(17)(C)(i) of the Act requires the Secretary to 
develop measures appropriate for the measurement of the quality of care 
(including medication errors) furnished by hospitals in outpatient 
settings, that these measures reflect consensus among affected parties 
and, to the extent feasible and practicable, that these measures 
include measures set forth by one or more national consensus-based 
entities. We have noted in previous rulemaking, the requirement that 
measures reflect consensus among affected parties can be achieved in 
other ways aside from CBE endorsement, including through the measure 
development process, through broad acceptance, use of the measure(s), 
and through public comment (75 FR 72064).
    Section 1890A of the Act requires that we establish and follow a 
pre-rulemaking process for selecting quality and efficiency measures 
for our programs, including taking into consideration input from multi-
stakeholder groups. As part of this pre-rulemaking process, the CBE, 
with which we contract under section 1890 of the Act, convened these 
groups under the Measure Applications Partnership (MAP). The MAP is a 
public-private partnership created for the primary purpose of providing 
input to HHS on the selection of measures as required by section 
1890(b)(7)(B) of the Act. We followed this pre-rulemaking process for 
the measures we propose for adoption for the Hospital OQR Program under 
this section of the proposed rule, as further detailed below.
    In this proposed rule, we propose to: (1) re-adopt the original 
Hospital Outpatient Department Volume Data on Selected Outpatient 
Surgical Procedures with modification, beginning with the voluntary CY 
2025 reporting period followed by mandatory reporting beginning with 
the CY 2026 reporting period/CY 2028 payment determination; (2) adopt 
the Risk-Standardized Patient-Reported Outcome-Based Performance 
Measure (PRO-PM) Following Elective Primary Total Hip Arthroplasty 
(THA) and/or Total Knee Arthroplasty (TKA) in the HOPD Setting (THA/TKA 
PRO-PM), beginning with the voluntary CYs 2025 and 2026 reporting 
periods followed by mandatory reporting beginning with the CY 2027 
reporting period/CY 2030 payment determination; and (3) adopt the 
Excessive Radiation Dose or Inadequate Image Quality for Diagnostic 
Computed Tomography (CT) in Adults measure, beginning with the 
voluntary CY 2025 reporting period and mandatory reporting beginning 
with the CY 2026 reporting period/CY 2028 payment determination. In 
this section of the proposed rule, we provide additional information on 
these measure adoption proposals.
a. Proposed Re-Adoption With Modification of the Hospital Outpatient 
Department Volume Data on Selected Outpatient Surgical Procedures 
Measure Beginning With the Voluntary CY 2025 Reporting Period Followed 
by Mandatory Reporting Beginning With the CY 2026 Reporting Period/CY 
2028 Payment Determination
(1) Background
    Hospital care has been gradually shifting from inpatient to 
outpatient settings.\210\ Research indicates that volume of services 
performed in HOPDs will continue to grow, with some estimates 
projecting a 19 percent increase in patients between 2019 and 
2029.\211\ In light of this trend, it has become even more important to 
track volume within HOPDs. Larger facility surgical procedure volume 
may be associated with better outcomes due to having characteristics 
that improve care, such as efficient team work and increased surgical 
experience, discussed in more detail below.\212\ Given the association 
between volume and outcomes, this information could provide valuable 
insight to patients when choosing a HOPD.
---------------------------------------------------------------------------

    \210\ Medicare Payment Advisory Commission. March 2021 Report to 
the Congress: Medicare Payment Policy. Chapter 3. Available at: 
https://www.medpac.gov/wp-content/uploads/2021/10/mar21_medpac_report_ch3_sec.pdf.
    \211\ Sg2. (2021). Sg2 Impact of Change Forecast Predicts 
Enormous Disruption in Health Care Provider Landscape by 2029. 
Available at: https://www.sg2.com/media-center/press-releases/sg2-impact-forecast-predicts-disruption-health-care-provider-landscape-2029/.
    \212\ Jha AK. (2015) Back to the Future: Volume as a Quality 
Metric. JAMA Forum Archive. Published online June 10, 2015. https://jamanetwork.com/channels/health-forum/fullarticle/2760155.
---------------------------------------------------------------------------

    Although measuring the volume of procedures and other services has 
a long history as a quality metric, quality measurement efforts had 
moved away from collecting and analyzing data on volume because some 
considered volume simply a proxy for quality compared to directly 
measuring

[[Page 49781]]

outcomes.\213\ However, experts on quality and safety have recently 
suggested that while volume alone may not indicate or lead to better 
outcomes, it is still an important component of 
quality.214 215 216 Specifically, larger facility surgical 
procedure volume may be associated with better outcomes due to having 
characteristics that improve care.\217\ For example, high-volume 
facilities may have teams that work more effectively together, or have 
superior systems or programs for identifying and responding to 
complications.\218\ This association between volume and patient 
outcomes may be attributable to greater experience or surgical skill, 
greater comfort with and, hence, likelihood of application of 
standardized best practices, and increased experience in monitoring and 
management of surgical patients for the particular procedure.
---------------------------------------------------------------------------

    \213\ Ibid.
    \214\ Ibid.
    \215\ Shang M, Mori M, Gan G, et al. (2022). Widening volume and 
persistent outcome disparity in Valve Operations: New York Statewide 
Analysis, 2005-2016. The Journal of Thoracic and Cardiovascular 
Surgery, 164(6). https://doi.org/10.1016/j.jtcvs.2020.11.098.
    \216\ Iwatsuki M, Yamamoto H, Miyata H, et al. (2018). Effect of 
hospital and surgeon volume on postoperative outcomes after distal 
gastrectomy for gastric cancer based on data from 145,523 Japanese 
patients collected from a nationwide web-based data entry system. 
Gastric Cancer, 22(1), 190-201. https://doi.org/10.1007/s10120-018-0883-1.
    \217\ Jha AK. (2015) Back to the Future: Volume as a Quality 
Metric. JAMA Forum Archive. Published online June 10, 2015. https://jamanetwork.com/channels/health-forum/fullarticle/2760155.
    \218\ Ibid.
---------------------------------------------------------------------------

    The Hospital OQR Program does not currently include a quality 
measure for facility-level volume data, including surgical procedure 
volume data, but it did so previously. We refer readers to the CY 2012 
OPPS/ASC final rule (76 FR 74466 through 74468) where we adopted the 
Hospital Outpatient Department Volume Data on Selected Outpatient 
Surgical Procedures (HOPD Procedure Volume) measure beginning with the 
CY 2014 payment determination. This structural measure of facility 
capacity collected surgical procedure volume data on nine categories of 
procedures frequently performed in the hospital outpatient setting: 
Cardiovascular, Eye, Gastrointestinal, Genitourinary, Musculoskeletal, 
Nervous System, Respiratory, Skin, and Other.\219\ We adopted the HOPD 
Procedure Volume measure based on evidence that the volume of surgical 
procedures, particularly of high-risk surgical procedures, is related 
to better patient outcomes, including decreased mortality (76 FR 
74466).220 221 We further stated our belief that publicly 
reporting volume data would provide patients with beneficial 
information to use when selecting a care provider (76 FR 74467).
---------------------------------------------------------------------------

    \219\ Centers for Medicare & Medicaid Services. (2016). Hospital 
Outpatient Specifications Manuals version 9.1. Available at: https://qualitynet.cms.gov/outpatient/specifications-manuals#tab9.
    \220\ Saito Y, Tateishi K, Kanda M, et al. (2022). 
Volume[hyphen]outcome relationships for percutaneous coronary 
intervention in acute myocardial infarction. Journal of the American 
Heart Association, 11(6). https://doi.org/10.1161/jaha.121.023805.
    \221\ Vemulapalli S, Carroll J, Mack, M, et al. (2019) 
Procedural Volume and Outcomes for Transcatheter Aortic-Valve 
Replacement. The New England Journal of Medicine, 380(26), 2541-
2550. https://doi.org/10.1056/NEJMsa1901109.
---------------------------------------------------------------------------

    In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59429 
through 59430), we removed the HOPD Procedure Volume measure, stating 
our belief at that time that there is a lack of evidence to support 
this specific measure's link to improved clinical quality. Although 
there is currently increased evidence of a link between patient volume 
and better patient outcomes, we previously stated that we believed that 
there was a lack of evidence that this link was reflected in the HOPD 
Procedure Volume measure. At the time, we stated that measuring the 
number of surgical procedures does not offer insight into the 
facilities' overall performance or quality improvement in regard to 
surgical procedures (82 FR 59429). Thus, we removed the HOPD Procedure 
Volume measure beginning with the CY 2020 payment determination based 
on measure removal factor 2 (that is, performance or improvement on a 
measure does not result in better patient outcomes), as codified under 
Sec.  419.46(i)(3)(i)(B).
    In the CY 2023 OPPS/ASC proposed rule (87 FR 44730 through 44732), 
we stated that we have been considering re-adopting the HOPD Procedure 
Volume measure with modification for two reasons. First, since the 
removal of the HOPD Procedure Volume measure, scientific literature has 
concluded that volume metrics serve as an indicator of which facilities 
are experienced with certain outpatient procedures and can assist 
consumers in making informed decisions about where they receive 
care.\222\ Further supporting this position that volume metrics are an 
indicator of quality, one study found an inverse volume-mortality 
relationship related to transfemoral transcatheter aortic-valve 
replacement (TAVR) procedures performed from 2015 through 2017.\223\ 
Second, as discussed above, the recent shift of more surgical 
procedures being performed in outpatient settings has placed greater 
importance on tracking the volume of outpatient procedures in different 
settings, including HOPDs. 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, 
provide the ability to track volume changes by facility and procedure 
category, and can serve as an indicator for patients of which 
facilities are experienced with certain outpatient procedures.
---------------------------------------------------------------------------

    \222\ Ogola GO, Crandall ML, Richter KM, & Shafi S. (2018). 
High-volume hospitals are associated with lower mortality among 
high-risk emergency general surgery patients. Journal of Trauma and 
Acute Care Surgery, 85(3), 560-565. https://doi.org/10.1097/TA.0000000000001985.
    \223\ Vemulapalli S, Carroll J, Mack M, et al. (2019). 
Procedural Volume and Outcomes for Transcatheter Aortic-Valve 
Replacement. The New England Journal of Medicine, 380(26), 2541-
2550. https://doi.org/10.1056/NEJMsa1901109.
---------------------------------------------------------------------------

    In response to our request for comment in the CY 2023 OPPS/ASC 
proposed rule (87 FR 44730 through 44732), regarding the potential re-
adoption of the Hospital Outpatient Surgical measure, several 
commenters expressed concern that the burden of collecting and 
reporting data for the measure outweighs its value (87 FR 72104 through 
72105). Before its removal from the Hospital OQR Program, the HOPD 
Procedure Volume measure was the only measure that captured facility-
level volume within HOPDs and volume for Medicare and non-Medicare 
patients. As a result, the Hospital OQR Program currently does not 
capture surgical procedure volume in HOPDs. We recognize that we can 
determine facility volumes for procedures performed using Medicare Fee-
For-Service (FFS) claims. However, the specifications for the HOPD 
Procedure Volume measure also include reporting data for non-Medicare 
patients; thus, relying solely on the use of Medicare FFS claims data 
to simplify reporting would limit a future volume measure to only the 
Medicare program payer, leading to an incomplete representation of 
procedural volume.\224\
---------------------------------------------------------------------------

    \224\ The specifications for the removed HOPD Procedure Volume 
measure are available in the Hospital Outpatient Specifications 
Manuals version 9.1 available at https://qualitynet.cms.gov/outpatient/specifications-manuals#tab9.

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

[[Page 49782]]

    In addition, in response to our request for comment in the CY 2023 
OPPS/ASC proposed rule (87 FR 44730 through 44732), some commenters 
expressed their belief that volume is not a clear indicator of care 
quality and therefore procedure volume data would not be useful to 
consumers (87 FR 72104 through 72105). However, many studies in recent 
years have shown that volume does serve as an indicator of quality of 
care.225 226 For example, studies published since the CY 
2018 OPPS/ASC final rule found that patients at high volume hospitals 
for a specific procedure had lower rates of surgical site infections, 
complications, and mortality compared to patients at low-volume 
hospitals.227 228 We reiterate our belief, grounded in this 
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 in recent 
years have shown that volume does serve as an indicator of quality of 
care.229 230
---------------------------------------------------------------------------

    \225\ Ogola, GO, Crandall, ML, Richter, KM, & Shafi, S. (2018). 
High-volume hospitals are associated with lower mortality among 
high-risk emergency general surgery patients. Journal of Trauma and 
Acute Care Surgery, 85(3), 560-565. https://doi.org/10.1097/TA.0000000000001985.
    \226\ Vemulapalli S, Carroll J, Mack M, et al. (2019) Procedural 
Volume and Outcomes for Transcatheter Aortic-Valve Replacement. The 
New England Journal of Medicine, 380(26), 2541-2550. https://doi.org/10.1056/NEJMsa1901109.
    \227\ Mufarrih SH, Ghani MOA, Martins RS, et al. (2019) Effect 
of hospital volume on outcomes of total hip arthroplasty: a 
systematic review and metaanalysis. J Orthop Surg Res 14, 468. 
https://doi.org/10.1186/s13018-019-1531-0.
    \228\ Saito Y, Tateishi K, Kanda M, et al. (2022). 
Volume[hyphen]outcome relationships for percutaneous coronary 
intervention in acute myocardial infarction. Journal of the American 
Heart Association, 11(6). https://doi.org/10.1161/jaha.121.023805.
    \229\ Ogola GO, Crandall ML, Richter KM, Shafi, S. (2018). High-
volume hospitals are associated with lower mortality among high-risk 
emergency general surgery patients. Journal of Trauma and Acute Care 
Surgery, 85(3), 560-565. https://doi.org/10.1097/TA.0000000000001985.
    \230\ Vemulapalli S, Carroll J, Mack M, et al. (2019). 
Procedural Volume and Outcomes for Transcatheter Aortic-Valve 
Replacement. The New England Journal of Medicine, 380(26), 2541-
2550. https://doi.org/10.1056/NEJMsa1901109.
---------------------------------------------------------------------------

(2) Overview of Measure
(a) Data Collection, Submission, Reporting, and Measure Specifications
    The proposed HOPD Procedure Volume measure collects data regarding 
the aggregate count of selected surgical procedures. Most frequent 
outpatient procedures fall into one of eight categories: 
Cardiovascular, Eye, Gastrointestinal, Genitourinary, Musculoskeletal, 
Nervous System, Respiratory, and Skin.\231\ For this proposed measure, 
data surrounding the top five most frequently performed procedures 
among HOPDs in each category would be collected and publicly displayed. 
The top five procedures in each category would be assessed and updated 
annually as needed to ensure data collection of most accurate and 
frequently performed procedures.\232\
---------------------------------------------------------------------------

    \231\ Centers for Medicare & Medicaid Services. (2016). Hospital 
Outpatient Specifications Manuals version 9.1. Available at: https://qualitynet.cms.gov/outpatient/specifications-manuals#tab9.
    \232\ Data source: Part A and B claims for Outpatient Hospitals 
for services January 1, 2022-December 31, 2022.
---------------------------------------------------------------------------

    We propose that hospitals would submit aggregate-level data through 
the CMS Web-based tool (currently, the Hospital Quality Reporting (HQR) 
system), consistent with what was required during the measure's initial 
adoption (76 FR 74467). Data received through the HQR system would then 
be publicly displayed on Care Compare or another CMS website. 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 propose to re-adopt the HOPD Procedure Volume measure with 
modification, with voluntary reporting beginning with the CY 2025 
reporting period and mandatory reporting beginning with the CY 2026 
reporting period/CY 2028 payment determination. At the time of this 
measure's initial adoption in the CY 2012 OPPS/ASC final rule, (76 FR 
74468) we finalized that HOPDs would report all-patient volume data 
with respect to the eight categories mentioned prior. In response to 
commenter concerns regarding potential difficulty detecting procedural 
volume differentiation among these broad based categories (76 FR 
74467), the sole modification to this measure is that instead of 
collecting and publicly displaying data surrounding these eight broad 
categories, we would more granularly collect and publicly display data 
reported for the top five most frequently performed procedures among 
HOPDs within each category. We refer readers to the Center for Medicare 
and Medicaid Services Inventory Tool for more information on this 
measure: https://cmit.cms.gov/cmit/#/.
    We also propose that HOPDs submit these data to CMS during the time 
period of January 1 through May 15 in the year prior to the affected 
payment determination year. For example, for the CY 2028 payment 
determination, the data submission period would be January 1, 2027 to 
May 15, 2027, covering the performance period of January 1, 2026 to 
December 31, 2026. We refer readers to section XIV.E.5 of this proposed 
rule for a more detailed discussion of the requirements for data 
submitted via a CMS Web-based tool. We previously codified our existing 
policies regarding data collection and submission under the Hospital 
OQR Program at Sec.  419.46.
(b) Review by the Measure Applications Partnership (MAP)
    The MAP conditionally supported the HOPD Procedure Volume measure 
for rulemaking, pending testing indicating that the measure is reliable 
and valid, and endorsement by the CBE.\233\ The MAP acknowledged that 
the measure reports the volume of procedures performed at HOPDs in 
select categories reflecting typical high-volume categories of 
procedures and stated that the measure would capture the volume for 
many procedures not currently monitored by the Hospital OQR Program 
measure set. Furthermore, the MAP expressed its belief that measuring 
the volume of procedures would relate to the program's goals of 
improving the safety and quality of outpatient procedures in 
HOPDs.\234\ The MAP added that electronic reporting of procedure 
volumes based on code lists should not be overly burdensome to 
hospitals, and the public reporting of specific procedure volumes may 
be useful to patients.\235\
---------------------------------------------------------------------------

    \233\ Centers for Medicare & Medicaid Services. Pre-Rulemaking 
MUC Lists and MAP Reports. The Measures Management System. Available 
at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
    \234\ Ibid.
    \235\ Ibid.
---------------------------------------------------------------------------

    The MAP described that there is a well-established positive 
correlation between the volume of procedures performed at a facility 
and the clinical outcomes resulting from that procedure. One systematic 
review highlighted by the MAP found a significant volume-outcome 
relationship in the vast majority (87 percent) of the 403 included 
studies.\236\ Furthermore, the MAP included a similar review in their 
analysis of the HOPD Procedure Volume measure that also focused on 
outpatient surgeries, which found a significant

[[Page 49783]]

volume-outcome relationship across eight studies.\237\
---------------------------------------------------------------------------

    \236\ Levaillant M, Marcilly R, Levaillant L, et al. (2021). 
Assessing the hospital volume-outcome relationship in surgery: A 
scoping review. BMC Medical Research Methodology, 21(1). https://doi.org/10.1186/s12874-021-01396-6.
    \237\ Stanak M, & Strohmaier C. (2020). Minimum volume standards 
in day surgery: A systematic review. BMC Health Services Research, 
20(1). https://doi.org/10.1186/s12913-020-05724-2.
---------------------------------------------------------------------------

    The MAP stated that this measure addresses a national trend where 
even complex surgeries are moving from inpatient to outpatient 
settings, and that public reporting of this measure could help CMS and 
the public better understand possible quality differences between 
settings.\238\ The MAP reported that the HOPD Procedure Volume measure 
data from 2015 and 2016 demonstrates that the number of procedures 
performed by facilities in the 25th and 75th percentiles varied across 
the condition categories.\239\ These findings support our belief that 
volume metrics serve as an indicator of which facilities are 
experienced with certain outpatient procedures and can assist consumers 
in making informed decisions about where they receive 
care.240 241
---------------------------------------------------------------------------

    \238\ Medicare Payment Advisory Commission. March 2021 Report to 
the Congress: Medicare Payment Policy. Available at: https://www.medpac.gov/document/march-2021-report-to-the-congress-medicare-payment-policy/.
    \239\ Centers for Medicare & Medicaid Services. Pre-Rulemaking 
MUC Lists and MAP Reports. The Measures Management System. Available 
at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
    \240\ Ogola GO, Crandall ML, Richter KM, & Shafi S. (2018). 
High-volume hospitals are associated with lower mortality among 
high-risk emergency general surgery patients. Journal of Trauma and 
Acute Care Surgery, 85(3), 560-565. https://doi.org/10.1097/TA.0000000000001985.
    \241\ Saito Y, Tateishi K, Kanda M, et al. (2022). 
Volume[hyphen]outcome relationships for percutaneous coronary 
intervention in acute myocardial infarction. Journal of the American 
Heart Association, 11(6). https://doi.org/10.1161/jaha.121.023805.
---------------------------------------------------------------------------

    In addition, the MAP noted the concurrent submission of MUC 2022-
028: ASC Facility Volume Data on Selected Surgical Procedures for 
inclusion in the ASCQR Program. The MAP highlighted that the 
specifications of the volume measure proposal for the ASCQR Program are 
aligned with the volume measure we propose for the Hospital OQR Program 
and, therefore would facilitate comparisons of equivalent procedure 
volumes across ambulatory surgical centers (ASCs) and HOPDs, one of the 
key goals of the programs.\242\
---------------------------------------------------------------------------

    \242\ Centers for Medicare & Medicaid Services. Pre-Rulemaking 
MUC Lists and MAP Reports. The Measures Management System. Available 
at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
---------------------------------------------------------------------------

(c) Measure Endorsement
    As discussed in the previous subsection of the proposed rule, the 
MAP reviewed and conditionally supported the HOPD Procedure Volume 
measure pending testing indicating the measure is reliable and valid, 
and endorsement by a national consensus-based entity as the measure was 
not submitted for endorsement. As we noted in previous rulemaking (75 
FR 72064), the requirement that measures reflect consensus among 
affected parties can be achieved in ways other than from endorsement by 
a national consensus-based entity, including the measure development 
process, broad acceptance of the measure(s), use of the measure(s), and 
public comment.
    We considered the MAPs recommendation and propose to adopt the 
measure because we did not find any other measures of procedure volume. 
Additionally, this measure was previously in the program with 
supporters of its use. Given the support from the MAP and feedback from 
public comment, as well as the increasing shift from inpatient to 
outpatient surgical procedures and evidence that volume metrics can 
promote higher quality healthcare for patients, we propose adoption of 
this measure in the Hospital OQR Program pending endorsement by a 
national consensus-based entity.
    We invite public comment on this proposal.
b. Proposed Adoption of the Risk-Standardized Patient-Reported Outcome-
Based Performance Measure (PRO-PM) Following Elective Primary Total Hip 
Arthroplasty (THA) and/or Total Knee Arthroplasty (TKA) in the HOPD 
Setting (THA/TKA PRO-PM) Beginning With Voluntary CYs 2025 and 2026 
Reporting Periods Followed by Mandatory Reporting Beginning With the CY 
2027 Reporting Period/CY 2030 Payment Determination
(1) Background
    In the FY 2023 IPPS/LTCH PPS final rule (87 FR 49246 through 
49257), we adopted the THA/TKA PRO-PM in the Hospital Inpatient Quality 
Reporting (IQR) Program beginning with voluntary FY 2025 and FY 2026 
reporting periods, followed by mandatory reporting for eligible 
elective procedures occurring July 1, 2024 through June 30, 2025 for 
the FY 2028 payment determination. In this proposed rule, we propose 
the adoption of the THA/TKA PRO-PM into the Hospital OQR Program using 
the same specifications as finalized for the hospital-level measure 
adopted into the Hospital IQR Program (87 FR 49246 through 49257), with 
modifications to include procedures performed in the HOPD setting.
    Approximately six million adults aged 65 or older suffer from 
osteoarthritis in the United States.\243\ In 2013, there were 
approximately 568,000 hospitalizations billed to Medicare for 
osteoarthritis.\244\ Hip and knee osteoarthritis is one of the leading 
causes of disability among non-institutionalized 
adults,245 246 and roughly 80 percent of patients with 
osteoarthritis have some limitation in mobility.247 248 
Elective THA and TKA are most commonly performed for degenerative joint 
disease or osteoarthritis, which affects more than 30 million 
Americans.\249\ THA and TKA offer the potential for significant 
improvement in quality of life by decreasing pain and improving 
function in a majority of patients, without resulting in a high risk of 
complications or death.250 251 252 However, not all

[[Page 49784]]

patients experience benefit from these procedures.\253\ Many patients 
note that their pre-operative expectations for functional improvement 
have not been met.254 255 256 257 In addition, clinical 
practice variation has been well documented in the United 
States,258 259 260 261 262 readmission and complication 
rates vary across hospitals,\263\ and international experience 
documents wide hospital-level variation in patient-reported outcome 
measure results following THA and TKA.\264\
---------------------------------------------------------------------------

    \243\ Arthritis Foundation. (2018). Arthritis By the Numbers 
Book of Trusted Facts and Figures. Accessed March 8, 2019. Available 
at: https://www.arthritis.org/getmedia/e1256607-fa87-4593-aa8a-8db4f291072a/2019-abtn-final-march2019.pdf.
    \244\ Torio CM, & Moore BJ. (2016). National inpatient hospital 
costs: the most expensive conditions by payer, 2013. HCUP 
statistical brief #204. Healthcare Cost and Utilization Project 
(HCUP) Statistical Briefs. Rockville, MD, Agency for Healthcare 
Research and Quality. Available at: https://www.ncbi.nlm.nih.gov/books/NBK368492/.
    \245\ Guccione AA, Felson DT, Anderson JJ, et al. (1994). The 
effects of specific medical conditions on the functional limitations 
of elders in the Framingham Study. American journal of public 
health, 84(3), 351-358. https://doi.org/10.2105/AJPH.84.3.351.
    \246\ Barbour KE, Helmick CG, Boring M, & Brady TJ. (2017). 
Vital Signs: Prevalence of Doctor-Diagnosed Arthritis and Arthritis-
Attributable Activity Limitation--United States, 2013-2015. MMWR 
Morbidity and mortality weekly report, 66(9), 246-253. https://doi.org/10.15585/mmwr.mm6609e1.
    \247\ Michaud CM, McKenna MT, Begg S, et al. (2006). The burden 
of disease and injury in the United States 1996. Population health 
metrics, 4, 11. https://doi.org/10.1186/1478-7954-4-11.
    \248\ Theis KA, Murphy LB, Baker NA, & Hootman JM. (2019). When 
you can't walk a mile: Walking limitation prevalence and 
associations among middle-aged and older US adults with Arthritis: A 
cross-sectional, population-based study. ACR Open Rheumatol, 1(6), 
350-358. https://doi.org/10.1002/acr2.11046.
    \249\ Centers for Disease Control and Prevention (CDC). 
Osteoarthritis (OA). Accessed March 8, 2019. Available at: https://www.cdc.gov/arthritis/basics/osteoarthritis.htm.
    \250\ Rissanen P, Aro S, Slatis P, et al. (1995). Health and 
quality of life before and after hip or knee arthroplasty. The 
Journal of arthroplasty, 10(2), 169-175. https://doi.org/10.1016/s0883-5403(05)801238.
    \251\ Ritter MA, Albohm MJ, Keating EM, et al. (1995). 
Comparative outcomes of total joint arthroplasty. The Journal of 
arthroplasty, 10(6), 737-741. https://doi.org/10.1016/s0883-5403(05)80068-3.
    \252\ Sayah SM, Karunaratne S, Beckenkamp PR, et al. (2021). 
Clinical Course of Pain and Function Following Total Knee 
Arthroplasty: A Systematic Review and Meta-Regression. J 
Arthroplasty, 36(12), 3993-4002.e37. https://doi.org/10.1016/j.arth.2021.06.019.
    \253\ National Joint Registry. National Joint Registry for 
England and Wales 9th Annual Report 2012. Available at: https://www.hqip.org.uk/resource/national-joint-registry-9th-annual-report-2012/.
    \254\ Suda AJ, Seeger JB, Bitsch RG, et al. (2010). Are 
patients' expectations of hip and knee arthroplasty fulfilled? A 
prospective study of 130 patients. Orthopedics, 33(2), 76-80. 
https://doi.org/10.3928/01477447-20100104-07.
    \255\ Ghomrawi HM, Franco Ferrando N, Mandl LA, et al. (2011). 
How Often are Patient and Surgeon Recovery Expectations for Total 
Joint Arthroplasty Aligned? Results of a Pilot Study. HSS journal: 
The musculoskeletal journal of Hospital for Special Surgery, 7(3), 
229-234. https://doi.org/10.1007/s11420-011-9203-6.
    \256\ Harris IA, Harris AM, Naylor JM, et al. (2013). 
Discordance between patient and surgeon satisfaction after total 
joint arthroplasty. The Journal of arthroplasty, 28(5), 722-727. 
https://doi.org/10.1016/j.arth.2012.07.044.
    \257\ Jourdan C, Poiraudeau S, Descamps S, et al. (2012). 
Comparison of patient and surgeon expectations of total hip 
arthroplasty. PloS one, 7(1), e30195. https://doi.org/10.1371/journal.pone.0030195.
    \258\ Roos EM. (2003). Effectiveness and practice variation of 
rehabilitation after joint replacement. Current opinion in 
rheumatology, 15(2), 160-162. https://doi.org/10.1097/00002281-200303000-00014.
    \259\ Anderson FA, Huang W, Friedman RJ, et al. (2012). 
Prevention of venous thromboembolism after hip or knee arthroplasty: 
findings from a 2008 survey of US orthopedic surgeons. The Journal 
of arthroplasty, 27(5), 659-666 e655. https://doi.org/10.1016/j.arth.2011.09.001.
    \260\ American Academy of Orthopaedic Surgeons. (2011). 
Preventing Venous Thromboembolic Disease in Patients Undergoing 
Elective Hip and Knee Arthroplasty: Evidence-Based Guideline and 
Evidence Report. https://www.aaos.org/globalassets/quality-and-practice-resources/vte/vte_full_guideline_10.31.16.pdf.
    \261\ Pincus D, et al. (2020). Association Between Surgical 
Approach and Major Surgical Complications in Patients Undergoing 
Total Hip Arthroplasty. JAMA, 323(11), 1070-1076. https://doi.org/10.1001/jama.2020.0785.
    \262\ Siebens HC, Sharkey P, Aronow HU, et al. (2016). Variation 
in Rehabilitation Treatment Patterns for Hip Fracture Treated With 
Arthroplasty. PM&R, 8(3), 191-207. https://doi.org/10.1016/j.pmrj.2015.07.005.
    \263\ Suter LG, Parzynski CS, Grady JN, et al. 2013 Measures 
Update and Specifications: Elective Primary Total Hip Arthroplasty 
(THA) AND/OR Total Knee Arthroplasty (TKA) Risk-Standardized 
Complication Measure (Version 2.0). March 2013. Available at: http://qualitynet.org/.
    \264\ Rolfson O. (2010). Patient-reported Outcome Measures and 
Health-economic Aspects of Total Hip Arthroplasty: A study of the 
Swedish Hip Arthroplasty Register. Accessed July 20, 2013. Available 
at: https://gupea.ub.gu.se/bitstream/handle/2077/23722/gupea_2077_23722_1.pdf?sequence=1.
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    Due to the absence of recently conducted large scale and uniformly 
collected patient-reported outcome (PRO) data available from patients 
undergoing elective primary THA/TKA, we established an incentivized, 
voluntary PRO data collection opportunity within the Comprehensive Care 
for Joint Replacement (CJR) model to support measure development.\265\ 
Elective THA/TKAs are important, effective procedures performed on a 
broad population, and the patient outcomes for these procedures (such 
as pain, mobility, and quality of life) can be measured in a 
scientifically sound way,266 267 are influenced by a range 
of improvements in care,\268\ and demonstrate hospital-level variation 
even after patient case mix adjustment. 269 270 Further, 
THA/TKA procedures are specifically intended to improve function and 
reduce pain, making PROs a meaningful outcome metric to assess.\271\
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    \265\ Centers for Medicare & Medicaid Services. Comprehensive 
Care for Joint Replacement Model. Available at: https://innovation.cms.gov/innovation-models/cjr
    \266\ Liebs TR, Herzberg W, Ruther W, et al. (2016). Quality-
adjusted life years gained by hip and knee replacement surgery and 
its aftercare. Archives of physical medicine and rehabilitation, 
97(5), 691-700. https://doi.org/10.1016/j.apmr.2015.12.021.
    \267\ White D, & Master H. (2016). Patient Reported Measures of 
Physical Function in Knee Osteoarthritis. Rheum Dis Clin North Am, 
42(2), 239-252. Available at: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4853650/.
    \268\ Kim K, Anoushiravani A, Chen K, et al. (2019). 
Perioperative Orthopedic Surgical Home: Optimizing Total Joint 
Arthroplasty Candidates and Preventing Readmission. Journal of 
Arthroplasty, 34(7), S91-S96. https://doi.org/10.1016/j.arth.2019.01.020.
    \269\ Bozic KJ, Grosso LM, Lin Z, et al. (2014). Variation in 
hospital-level risk-standardized complication rates following 
elective primary total hip and knee arthroplasty. The Journal of 
Bone and Joint Surgery, 96(8), 640-647. https://doi.org/10.2106/JBJS.L.01639.
    \270\ Makela KT, Peltola M, Sund R, et al. (2011). Regional and 
hospital variance in performance of total hip and knee replacements: 
A national population-based study. Annals of medicine, 43(sup1), 
S31-S38. https://doi.org/10.3109/07853890.2011.586362.
    \271\ Liebs T, Herzberg W, Gluth J, et al. (2013). Using the 
patient's perspective to develop function short forms specific to 
total hip and knee replacement based on WOMAC function items. The 
Bone & Joint Journal, 95(B), 239-243. https://doi.org/10.1302/0301-620X.95B2.28383.
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    In the CY 2021 OPPS/ASC final rule (85 FR 86146), we announced that 
THA and TKA procedures were removed from the Inpatient Only Procedures 
(IPO) list and added to the ASC covered procedures list (CPL).\272\ As 
a result, the volume of THA and TKA procedures for Medicare 
beneficiaries aged 65 years and older have been increasing in 
outpatient settings.
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    \272\ Centers for Medicare & Medicaid Services. Ambulatory 
Surgical Center (ASC) Payment. Available at: https://www.cms.gov/medicare/medicare-fee-for-service-payment/ascpayment.
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    We analyzed Part B Medicare FFS claims data for the number of HOPD 
claims with THA/TKA procedures during CY 2020, 2021, and 2022 (Table 
65).
BILLING CODE 4120-01-P

[[Page 49785]]

[GRAPHIC] [TIFF OMITTED] TP31JY23.101

BILLING CODE 4120-01-C
    In CY 2022 OPPS/ASC proposed rule (86 FR 42251 through 42252), we 
requested comment on the potential future adoption of the THA/TKA PRO-
PM into the Hospital OQR Program. We refer readers to the CY 2022 OPPS/
ASC final rule (86 FR 63896 through 63898) for a complete summary of 
feedback from interested parties.
    Many commenters supported inclusion of the THA/TKA PRO-PM to the 
Hospital OQR Program as procedures move from inpatient to outpatient 
settings. Commenters noted it was important to monitor quality outcomes 
and publicly report results. Additionally, commenters stated that the 
measure is aligned with patient values, being presented in a manner 
that is easy to understand.
    Other commenters did not support expansion of the measure to the 
Hospital OQR Program, and expressed concern with data collection 
burden, patient survey fatigue, and reporting thresholds. While we 
recognize that PRO based performance measures require providers to 
integrate data collection into clinical workflows, this integration 
provides opportunity for PROs to inform clinical decision-making and 
benefits patients by engaging them in discussions about potential 
outcomes. Furthermore, we do not expect this measure to contribute to 
survey fatigue as the PRO instruments used to calculate pre- and post-
operative scores for this THA/TKA PRO-PM were carefully selected, with 
extensive input from interested parties, to be low burden for patients. 
We refer readers to the CY 2022 OPPS/ASC final rule (86 FR 63851 
through 63854) for a complete summary of feedback.
    We propose to adopt the THA/TKA PRO-PM into the Hospital OQR 
Program beginning with two voluntary reporting periods, followed by 
mandatory reporting. The first voluntary reporting period would begin 
with the CY 2025 reporting period for eligible elective outpatient 
procedures between January 1, 2025 through December 31, 2025, and the 
second would begin with the CY 2026 reporting period for eligible 
elective outpatient procedures between January 1, 2026 through December 
31, 2026. Mandatory reporting would begin with the CY 2027 reporting 
period/CY 2030 payment determination for eligible elective outpatient 
procedures occurring January 1, 2027 through December 31, 2027, 
impacting the CY 2030 payment determination and subsequent years. 
Because this proposed measure requires collection of data during the 3-
month pre-operative period and the greater than 1-year post-operative 
period, there is a delay between when the elective THA/TKA procedures 
actually occur, when the results would be reported under the Hospital 
OQR Program, and when payment determinations occur. Therefore, we 
propose a 3-year gap between the reporting period and the payment 
determination year (for example, CY 2027 reporting period for the CY 
2030 payment determination) for the Hospital OQR Program. We refer 
readers to section XIV.E.7.a of this

[[Page 49786]]

proposed rule for more information on the reporting requirements.
(2) Overview of Measure
(a) Data Collection, Submission, Reporting, and Measure Specifications
    This measure reports the facility-level risk-standardized 
improvement rate (RSIR) in PROs following elective primary THA/TKA for 
Medicare FFS beneficiaries aged 65 years and older who were enrolled in 
Medicare FFS Part A and B for the 12 months prior to the date of the 
procedure and in Medicare Part A and B during the procedure. The 
measure includes only elective primary outpatient THA/TKA procedures 
(patients with fractures and revisions are not included) performed in 
HOPDs and does not include any inpatient procedures. The measure 
excludes patients with staged procedures (multiple elective primary THA 
or TKA procedures performed on the same patient during distinct 
encounter) that occur during the measurement period and excludes 
discontinued procedures (that is, procedures that were started but not 
completed).\273\
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    \273\ U.S. Department of Health and Human Services. (2021). 
Hospital Outpatient Prospective Payment System (OPPS): Use of 
Modifiers -52, -73, and -74 for Reduced or Discontinued Services. 
Available at: https://www.hhs.gov/guidance/document/hospital-outpatient-prospective-payment-system-opps-use-modifiers-52-73-and-74-reduced-or.
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    Substantial clinical improvement is measured by achieving a pre-
defined improvement in score on one of the two validated joint-specific 
PRO instruments measuring hip or knee pain and functioning: (1) The Hip 
Dysfunction and Osteoarthritis Outcome Score for Joint Replacement 
(HOOS, JR) for completion by THA recipients; or (2) the Knee Injury and 
Osteoarthritis Outcome Score for Joint Replacement (KOOS, JR) for 
completion by TKA recipients. Improvement is measured from the pre-
operative assessment (data collected 90 to 0 days before surgery) to 
the post-operative assessment (data collected 300 to 425 days following 
surgery). Improvement scores are risk-adjusted to account for 
differences in patient case-mix. The measure, as proposed, accounts for 
potential non-response bias through inverse probability weighting based 
on likelihood of response.
    We refer readers to the FY 2023 IPPS/LTCH PPS final rule (FR 87 
49246 through 49257), for more information on the development of the 
hospital-level THA/TKA PRO-PM, including background on the measure and 
a complete summary of measure specifications, data sources, and measure 
calculation.
    For additional details regarding the measure specifications, we 
also refer readers to the Hip and Knee Arthroplasty Patient-Reported 
Outcomes file, available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.
(i) Data Sources
    The THA/TKA PRO-PM uses four sources of data for the calculation of 
the measure: (1) PRO data; (2) claims data; (3) Medicare enrollment and 
beneficiary data; and (4) U.S. Census Bureau survey data. As described 
in section XIV.B.3.b(1) of this proposed rule, the measure uses PRO 
data directly reported by the patient regarding their health, quality 
of life, or functional status associated with health care or treatment. 
These patient-reported data are collected by facilities pre-operatively 
and post-operatively, and limited patient-level risk factor data are 
collected with PRO data and identified in claims as detailed in this 
section of the proposed rule.\274\ The measure includes PRO data 
collected with the PRO instruments described in this section of the 
proposed rule, among them are two joint-specific PRO instruments--the 
HOOS, JR for completion by THA recipients and the KOOS, JR for 
completion by TKA recipients--from which scores are used to assess 
substantial clinical improvement. For risk-adjustment by pre-operative 
mental health score, HOPDs would submit one of two additional PRO 
instruments, all of the items in either the: (1) Patient-Reported 
Outcomes Measurement Information System (PROMIS)-Global Mental Health 
subscale; or (2) Veterans RAND 12-Item Health Survey (VR-12) Mental 
Health subscale. The risk model also includes a one-question patient-
reported assessment of health literacy--the Single Item Literacy 
Screener questionnaire.
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    \274\ Higgins JP, Thomas J, Chandler J, et al. (2019). Cochrane 
handbook for systematic reviews of interventions. John Wiley & Sons. 
https://doi.org/10.1002/9781119536604.
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    Furthermore, the following data would be collected for 
identification of the measure cohort, for risk-adjustment purposes, and 
for the statistical approach to potential non-response bias. Claims 
data billed under OPPS would be used to identify eligible elective 
primary outpatient THA/TKA procedures for the measure cohort to which 
submitted PRO data can be matched, and to identify additional variables 
for risk-adjustment and in the statistical approach to account for 
response bias, including patient demographics and clinical co-
morbidities up to 12 months prior to surgery. The Medicare Enrollment 
Database (EDB) identifies Medicare FFS enrollment and patient-
identified race, and the Master Beneficiary Summary File allows for 
determination of Medicare and Medicaid dual eligibility enrollment 
status. Demographic information from the U.S. Census Bureau's American 
Community Survey allows for derivation of the Agency for Healthcare 
Research and Quality (AHRQ) Socioeconomic Status (SES) Index score. 
Race, dual eligibility, and AHRQ SES Index score are used in the 
statistical approach to account for potential non-response bias in the 
outcome calculation. We refer readers to section XIV.B.3.b(2)(a)(iii) 
of this proposed rule for further details regarding the variables 
required for data collection and submission.
(ii) Measure Calculation
    The HOPD facility-level THA/TKA PRO-PM result is calculated by 
aggregating all patient-level results across the facility. This measure 
would be calculated and presented as a RSIR, producing a performance 
measure per facility which accounts for patient case-mix, addresses 
potential non-response bias, and represents a measure of quality of 
care following elective primary outpatient THA/TKA. Response rates for 
PRO data would be calculated as the percentage of elective primary THA 
or TKA procedures performed at HOPDs for which complete and matched 
pre- and post-operative PRO data have been submitted, divided by the 
total number of eligible THA or TKA procedures performed at each 
facility.
(iii) Data Submission and Reporting
    In response to feedback received from interested parties in the 
requests for comments (RFCs) on this measure in the FY 2022 IPPS/LTCH 
PPS final rule (86 FR 45408 through 45414) and the CY 2022 OPPS/ASC 
proposed rule (FR 86 42251 through 42252) and the adoption of the 
measure in the Hospital IQR Program in the FY 2023 IPPS/LTCH PPS final 
rule (87 FR 49246 through 49257), we propose to adopt the THA/TKA PRO-
PM in the Hospital OQR Program utilizing flexible data submission 
approaches.

[[Page 49787]]

    HOPDs would submit the following variables collected pre-
operatively between 90 and zero days prior to the THA/TKA procedure for 
each patient: Medicare provider number; Medicare health insurance claim 
(HIC) number/Medicare beneficiary identifier (MBI); date of birth; date 
of procedure; date of PRO data collection; procedure type; mode of 
collection; person completing the survey; facility admission date; 
patient reported outcome measure version; PROMIS Global (mental health 
subscale items) or VR-12 (mental health subscale items); HOOS, JR (for 
THA patients) or KOOS, JR (for TKA patients); Single-Item Health 
Literacy Screening (SILS2) questionnaire; BMI or weight (kg)/height 
(cm); chronic (>=90 day) narcotic use; total painful joint count 
(patient reported in non-operative lower extremity joint); and 
quantified spinal pain (patient-reported back pain, Oswestry index 
question 275 276).
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    \275\ Fairbank JC, & Pynsent PB. (2000). The Oswestry Disability 
Index. Spine. 25(22), 2940-52. https://doi.org/10.1097/00007632-200011150-00017.
    \276\ The Oswestry Disability Index is in the public domain and 
available for all hospitals to use.
---------------------------------------------------------------------------

    HOPDs would submit the following variables collected post-
operatively between 300 and 425 days following the THA/TKA procedure 
for each patient: Medicare provider number; Medicare HIC number/MBI; 
date of birth; procedure date, date of PRO data collection; procedure 
type; mode of collection; person completing the survey; facility 
admission date; KOOS, JR (TKA patients) or HOOS, JR (THA patients). The 
data submission period for the THA/TKA PRO-PM would also serve as the 
review and correction period. Data would not be able to be corrected 
following the submission deadline.
    We propose a phased implementation approach for adoption of this 
measure to the Hospital OQR Program, with voluntary reporting periods 
in CYs 2025 and 2026 followed by mandatory reporting beginning with the 
CY 2027 reporting period/CY 2030 payment determination.
    Voluntary reporting prior to mandatory reporting would allow time 
for facilities to incorporate the THA/TKA PRO-PM data collection into 
their clinical workflows and is responsive to comments from interested 
parties, as summarized in the FY 2022 IPPS/LTCH PPS final rule (86 FR 
45408 through 45414) and FY 2023 IPPS/LTCH PPS final rule (FR 87 49246 
through 49257). Following the two voluntary reporting periods, we 
propose mandatory reporting of the THA/TKA PRO-PM beginning with the CY 
2027 reporting period/CY 2030 payment determination. For each voluntary 
and subsequent mandatory reporting period, we would collect data on the 
THA/TKA PRO-PM in accordance with the Health Insurance Portability and 
Accountability Act of 1996 (HIPAA), Privacy and Security Rules (45 CFR 
parts 160 and 164, subparts A, C, and E), and other applicable law.
(b) Review by Measure Applications Partnership (MAP)
    We included the THA/TKA PRO-PM for the Hospital OQR in the publicly 
available ``2022 Measures Under Consideration List'' (MUC 2022-
026).\277\ The MAP Coordinating Committee supported the measure, as 
referenced in the 2022-2023 Final Recommendations report to HHS and 
CMS.\278\
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    \277\ Centers for Medicare & Medicaid Services. 2022 Measures 
Under Consideration List. Available at: https://mmshub.cms.gov/sites/default/files/2022-MUC-List.xlsx.
    \278\ MAP MUC Preliminary Recommendations 2022-2023. Available 
at https://mmshub.cms.gov/sites/default/files/2022-2023-MAP-Final-Recommendations-508.xlsx.
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    The MAP members noted that a similar version of this measure has 
been adopted for use in the Hospital IQR Program, however, there 
currently is no measure that assesses PROs among THA/TKA patients in 
HOPDs for the Hospital OQR Program. The MAP highlighted that the key 
strategy for the Hospital OQR Program is to ensure that procedures done 
in any type of facility, including HOPDs, have equivalent quality. As 
such, the MAP members agreed that measures of quality of procedures in 
hospital settings should extend to HOPDs, to the extent feasible and 
appropriate, so that consumers can compare quality of a specific 
procedure across different facility types.\279\
---------------------------------------------------------------------------

    \279\ Ibid.
---------------------------------------------------------------------------

    In addition, the MAP members stated that the goal of the PRO-PM is 
to capture the full spectrum of care to incentivize collaboration and 
shared responsibility for improving patient health and reducing the 
burden of their disease. They agreed that this measure aligns with the 
goal of patient-centered approaches to health care quality improvement 
and addresses the high priority areas of patient and family engagement 
and communication/care coordination for the Hospital OQR program.\280\
---------------------------------------------------------------------------

    \280\ Ibid.
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(c) Measure Endorsement
    The CBE endorsed the hospital-level version of the THA/TKA PRO-PM 
(CBE #3559) in November 2020.\281\ We note that the HOPD version of the 
THA/TKA PRO-PM would use the same specifications as the CBE-endorsed 
hospital-level THA/TKA PRO-PM that is currently implemented in the 
Hospital IQR program with modifications to capture procedures for the 
HOPDs. We intend to seek CBE endorsement for the HOPD version of the 
THA/TKA PRO-PM in a future endorsement cycle.
---------------------------------------------------------------------------

    \281\ Centers for Medicaid & Medicare Services. Hospital-Level, 
Risk-Standardized Improvement Rate in Patient-Reported Outcomes 
Following Elective Primary Total Hip and/or Total Knee Arthroplasty 
(THA/TKA). Available at: https://cmit.cms.gov/cmit/#/FamilyView?familyId=1618.
---------------------------------------------------------------------------

    We have noted in previous rulemaking (75 FR 72064) the requirement 
that measures reflect consensus among affected parties can be achieved 
in other ways aside from CBE endorsement, including through the measure 
development process, through broad acceptance, use of the measure(s), 
and through public comment. We propose this measure without CBE 
endorsement based upon strong MAP and public support combined with the 
importance of the measure for Medicare beneficiaries. In addition, 
there are two existing, CBE-endorsed versions of this measure, one at 
the clinician-group level (CBE #3639) and one for the hospital level 
(CBE #3559). We expect that the measure will perform similarly in the 
HOPD setting, and we intend on submitting the measures for CBE 
endorsement following data collection during voluntary reporting.
    We refer readers to section XIV.E.7.a of this proposed rule for a 
discussion on the proposed THA/TKA PRO-PM form, manner, and timing 
submission requirements.
    We invite public comment on this proposal.
c. Proposed Adoption of the Excessive Radiation Dose or Inadequate 
Image Quality for Diagnostic Computed Tomography (CT) in Adults 
(Hospital Level--Outpatient) Measure Beginning With the Voluntary CY 
2025 Reporting Period Followed by Mandatory Reporting Beginning With 
the CY 2026 Reporting Period/CY 2028 Payment Determination
(1) Background
    The use of computed tomography (CT) scans has greatly improved the 
diagnosis and treatment of many conditions, and as such, over 80 
million CT scans are performed each year in the US.\282\ Most CT scans 
are performed as

[[Page 49788]]

outpatient procedures.\283\ CT scans expose patients to low-dose 
ionizing radiation which is known to contribute to the development of 
cancer.\284\ The Biological Effects of Ionizing Radiation (BEIR) VII 
report by the United States National Academy of Sciences defined low-
dose radiation as doses up to 100 millisieverts (mSv).\285\ A low dose 
CT scan of the chest delivers 1.5 mSv of radiation, while a regular-
dose CT chest scan delivers 7 mSv of radiation.\286\ In comparison, a 
conventional chest x-ray delivers about 0.1 mSv of radiation.\287\
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    \282\ Harvard Health Publishing. (2021). Radiation Risk from 
Medical Imaging. Available at: https://www.health.harvard.edu/cancer/radiation-risk-from-medical-imaging.
    \283\ Food and Drug Administration. Computed Tomography. 
Available at: https://www.fda.gov/radiation-emitting-products/medical-x-ray-imaging/computed-tomography-ct.
    \284\ Harvard Health Publishing. (2021). Radiation Risk from 
Medical Imaging. Available at: https://www.health.harvard.edu/cancer/radiation-risk-from-medical-imaging.
    \285\ Siegel JA, Greenspan BS, Maurer AH, et al. (2018). The 
BEIR VII Estimates of Low-Dose Radiation Health Risks Are Based on 
Faulty Assumptions and Data Analyses: A Call for Reassessment. 
Journal of Nuclear Medicine, 59 (7) 1017-1019. https://doi.org/10.2967/jnumed.117.206219.
    \286\ Ibid.
    \287\ Environmental Protection Agency. Radiation Sources and 
Doses. Available at: https://www.epa.gov/radiation/radiation-sources-and-doses.
---------------------------------------------------------------------------

    There is a large body of research that suggests that exposure to 
ionizing radiation within the same range that is routinely delivered by 
CT scans increases a person's risk of developing 
cancer.288 289 290 291 One study found that patients who 
received CT scans, particularly women and adults aged 45 years or 
younger, had an elevated risk of developing thyroid cancer and 
leukemia.\292\ Another study found that patients who received CT scans 
had a 0.7 percent higher risk of developing cancer in their lifetime 
compared to the general United States population.\293\ Cancer risk 
increased for patients who underwent multiple CT scans, ranging from 
2.7 to 12 percent.\294\ While the likelihood of developing cancer from 
a CT scan is small on an individual level, it has been estimated that 
the percentage of cancers attributable to CT scans in the United States 
may be as high as two percent.\295\
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    \288\ Berrington de Gonzalez A, Daniels RD, Cardis E, et al. 
(2020). Epidemiological Studies of Low-Dose Ionizing Radiation and 
Cancer: Rationale and Framework for the Monograph and Overview of 
Eligible Studies. J Natl Cancer Inst Monogr, 2020(56), 97-113. 
https://doi.org/10.1093/jncimonographs/lgaa009.
    \289\ Cao CF, Ma KL, Shan H, et al. (2022). CT Scans and Cancer 
Risks: A Systematic Review and Dose-response Meta-analysis. BMC 
Cancer, 22, 1238. https://doi.org/10.1186/s12885-022-10310-2.
    \290\ Hauptmann M, Daniels R, Cardis E, et al. (2020). 
Epidemiological Studies of Low-Dose Ionizing Radiation and Cancer: 
Summary Bias Assessment and Meta-Analysis. J Natl Cancer Inst 
Monogr, 2020(56), 188-200. https://doi.org/10.1093/jncimonographs/lgaa010.
    \291\ Shao YH, Tsai K, Kim S, Wu YJ, Demissie K. (2020). 
Exposure to Tomographic Scans and Cancer Risks. JNCI Cancer Spectr, 
4(1). https://doi.org/10.1093/jncics/pkz072.
    \292\ Ibid.
    \293\ Harvard Health Publishing. (2021). Radiation Risk from 
Medical Imaging. Available at: https://www.health.harvard.edu/cancer/radiation-risk-from-medical-imaging.
    \294\ Ibid.
    \295\ Berrington de Gonz[aacute]lez A, Mahesh M, Kim KP, et al. 
(2009). Projected cancer risks from computed tomographic scans 
performed in the United States in 2007. Archives of internal 
medicine, 169(22), 2071-2077. https://doi.org/10.1001/archinternmed.2009.440.
---------------------------------------------------------------------------

    CT image quality and radiation dose are related; as radiation dose 
increases, image quality increases until a diagnostic threshold is 
reached, at which point no further diagnostic benefit from image 
quality occurs.296 297 Conversely, too little radiation dose 
can produce inadequate image quality. Research suggests that current 
radiation doses utilized for CT scans may be lowered between 50 percent 
and 90 percent without impacting image diagnostic utility. 
298 299 300 301 302 Based on the evidence of harm from 
excessive radiation and evidence that radiation doses could be lowered 
in many patients' situation without deteriorating image diagnostic 
utility to the point of rendering exams unacceptable, we believe it is 
important to promote patient safety by ensuring that patients are 
exposed to the lowest possible level of radiation while preserving 
image quality.
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    \296\ Goldman LW. (2007). Principles of CT: Radiation Dose and 
Image Quality. Journal of Nuclear Medicine Technology, 35(4), 213-
225. https://doi.org/10.2967/jnmt.106.037846.
    \297\ Smith-Bindman R, Chu P, Wang Y, Chung R, et al. (2020). 
Comparison of the Effectiveness of Single-Component and 
Multicomponent Interventions for Reducing Radiation Doses in 
Patients Undergoing Computed Tomography: A Randomized Clinical 
Trial. JAMA Intern Med, 180(5), 666-675. https://doi.org/10.1001/jamainternmed.2020.0064.
    \298\ Greffier J, Hamard A, Pereira F, et al. (2020). Image 
quality and dose reduction opportunity of deep learning image 
reconstruction algorithm for CT: a phantom study. Eur Radiol, 30(7), 
3951-3959. https://doi.org/10.1007/s00330-020-06724-w.
    \299\ Gottumukkala RV, Kalra MK, Tabari A, Otrakji A, Gee MS. 
(2019). Advanced CT Techniques for Decreasing Radiation Dose, 
Reducing Sedation Requirements, and Optimizing Image Quality in 
Children. Radiographics, 39(3), 709-726. https://doi.org/10.1148/rg.2019180082.
    \300\ Den Harder AM, Willemink MJ, van Doormaal PJ, et al. 
(2018). Radiation dose reduction for CT assessment of urolithiasis 
using iterative reconstruction: A prospective intra-individual 
study. Eur Radiol, 28(1), 143-150. https://doi.org/10.1007/s00330-017-4929-2.
    \301\ Rob S, Bryant T, Wilson I, Somani BK. (2017). Ultra-low-
dose, low-dose, and standard-dose CT of the kidney, ureters, and 
bladder: is there a difference? Results from a systematic review of 
the literature. Clin Radiol, 72(1), 11-15. https://doi.org/10.1016/j.crad.2016.10.005.
    \302\ Konda SR, Goch AM, Leucht P, et al. (2016). The use of 
ultra-low-dose CT scans for the evaluation of limb fractures: is the 
reduced effective dose using CT in orthopaedic injury (REDUCTION) 
protocol effective? Bone Joint J, 98-B(12), 1668-1673. https://doi.org/10.1302/0301-620X.98B12.BJJ-2016-0336.R1.
---------------------------------------------------------------------------

(2) Overview of Measure
    The Excessive Radiation Dose or Inadequate Image Quality for 
Diagnostic Computed Tomography (CT) in Adults (Hospital Level--
Outpatient) electronic clinical quality measure (eCQM) (the Excessive 
Radiation eCQM), which was developed by the University of California 
San Francisco and is stewarded by Alara Imaging, Inc., provides a 
standardized method for monitoring the performance of diagnostic CT to 
discourage unnecessarily high radiation doses while preserving image 
quality. The measure calculates the percentage of eligible CT scans 
that are out-of-range based on having either excessive radiation dose 
or inadequate image quality, relative to evidence-based thresholds 
based on the clinical indication for the exam.\303\ This measure 
provides a metric toward reducing unintentional harm to patients from 
CT scans. Setting a standard for diagnostic CT scans to prevent 
unnecessarily high radiation doses while preserving image quality would 
provide hospitals with a reliable method to assess harm reduction 
efforts and modify their improvement efforts. This measure also 
addresses high priority areas as stated in our Meaningful Measures 
Framework, including the transition to digital quality measures and the 
adoption of high-quality measures that improve patient outcomes and 
safety.\304\ Additionally, the Excessive Radiation eCQM supports the 
National Quality Strategy goal of promoting safety because it works to 
reduce preventable harm to patients.\305\ The measure was developed 
according to evidence and consensus-based clinical guidelines for 
optimizing CT radiation doses, including guidelines developed by the 
American College of Radiology, American College of Cardiology, Image 
Wisely 2020, and the

[[Page 49789]]

American Association of Physicists in Medicine. 
306 307 308 309
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    \303\ Centers for Medicare & Medicaid Services. Pre-Rulemaking 
MUC Lists and MAP Reports. The Measures Management System. Available 
at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
    \304\ Centers for Medicare & Medicaid Services. Meaningful 
Measures Framework. Available at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/CMS-Quality-Strategy.
    \305\ Centers for Medicare & Medicaid Services. CMS Quality 
Strategy. Available at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/CMS-Quality-Strategy.
    \306\ American College of Radiology. (2015). Development and 
Revision Handbook. Available at: https://www.acr.org/-/media/ACR/Files/Practice-Parameters/DevelopmentHandbook.pdf.
    \307\ Hirshfeld JW, Ferrari VA, Bengel FM, et al. (2018). 2018 
ACC/HRS/NASCI/SCAI/SCCT Expert Consensus Document on Optimal Use of 
Ionizing Radiation in Cardiovascular Imaging: Best Practices for 
Safety and Effectiveness. Catheter Cardiovasc Interv, 2018(92), E35-
E97. https://doi.org/10.1002/ccd.27659.
    \308\ Image Wisely 2020. Available at: https://www.imagewisely.org/Imaging-Modalities/Computed-Tomography/Diagnostic-Reference-Levels.
    \309\ American Association of Physicists in Medicine. The 
Alliance For Quality Computed Tomography. Available at: https://www.aapm.org/pubs/CTProtocols/.
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    Measure testing by the measure developer across a total of 16 
inpatient and outpatient hospitals and a large system of outpatient 
radiology practices revealed that availability, accuracy, validity, and 
reproducibility were high for all of the measure's required data 
elements and the variables that were calculated by the translation 
software. The measure developer further assessed the reporting burden 
by administering surveys to each of the participating hospitals and 
outpatient groups. The measure developer found the burden to be small 
to moderate, comparable to the burden of measure reporting for other 
measures. Additionally, the measure developer noted that the burden of 
reporting the Excessive Radiation eCQM fell to information technology 
personnel rather than physicians.
    Measure testing found that assessing radiation doses and providing 
audit feedback to radiologists resulted in significant reductions in 
dose levels. The testing sites also noted that the assessment of their 
doses as specified in the measure was helpful for identifying areas for 
quality improvement. According to the measure developer, over 40 
letters were submitted in support of the measure, including several 
from radiologists and medical physicists who serve as leaders of the 
testing sites, that confirmed the measure was feasible and that data 
assembly would not pose a large burden.
    The Excessive Radiation eCQM was submitted to the CBE for 
endorsement review in the Fall 2021 cycle (CBE #3663e) and was endorsed 
on August 2, 2022. The measure was also included in the 2022 MUC 
List.\311\ The MAP Hospital Workgroup reviewed the MUC List on December 
13-14, 2022. The Workgroup noted that the Hospital OQR Program 
currently does not have any measures assessing the risk of radiation 
exposure from CT scans. The Workgroup also noted that the measure 
addresses the ``Safety'' Meaningful Measures 2.0 Healthcare Priority 
and would encourage shared decision-making between providers and 
patients.\312\ The MAP's Final Report on February 1, 2023 supported the 
Excessive Radiation eCQM for rulemaking in the Hospital OQR 
Program.\313\
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    \311\ Centers for Medicare & Medicaid Services. Pre-Rulemaking 
MUC Lists and MAP Reports. The Measures Management System. Available 
at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
    \312\ Ibid.
    \313\ Ibid.
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(3) Data Sources
    The Excessive Radiation eCQM uses hospitals' electronic health 
record (EHR) data and radiology electronic clinical data systems, 
including the Radiology Information System (RIS) and the Picture 
Archiving and Communication System (PACS). Medical imaging information 
such as Radiation Dose Structured Reports and image pixel data are 
stored according to the universally adopted Digital Imaging and 
Communications in Medicine (DICOM) standard. Currently, eCQMs cannot 
access and process data elements in their original DICOM formats.
    Hospitals may choose to use any available software that performs 
the necessary functions to comply with measure requirements. One such 
example is the Alara Imaging software,\314\ which fulfills these 
requirements by linking primary data elements, assessing CT scans for 
eligibility for inclusion in the measure, and generating three data 
elements mapped to clinical terminology for EHR consumption (CT Dose 
and Image Quality Category, Calculated CT Size-Adjusted Dose, and 
Calculated CT Global Noise) within the hospital's firewall.\315\ While 
the Alara Imaging software and the necessary updates to the software 
are proprietary, these would be available to all reporting entities 
free of charge and accessible by creating a secure account through the 
measure steward's website. Alara Imaging Inc. would also provide free 
of charge necessary education materials including step-by-step 
instructions on creating an account and linking their EHR and PACS data 
to the software. Hospitals and their vendors would be able to use the 
data elements created by this software to calculate the eCQM and to 
submit results to the Hospital OQR Program via Quality Reporting 
Document Architecture (QRDA) Category I files as they do for all other 
eCQMs.
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    \314\ Alara Imaging. Available at: https://www.alaracare.com/.
    \315\ Additional information on measure software security and 
processes is available at https://www.alaracare.com/our-solutions.
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(4) Measure Specifications
    The measure numerator is diagnostic CT scans that have a size-
adjusted radiation dose greater than the threshold defined for the 
specific CT category. The threshold is determined by the body region 
being imaged and the reason for the exam, which affects the radiation 
dose and image quality required for that exam. The numerator also 
includes CT scans with a noise value greater than a threshold specific 
to the CT category.\316\
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    \316\ Centers for Medicare & Medicaid Services. Pre-Rulemaking 
MUC Lists and MAP Reports. The Measures Management System. Available 
at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
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    The measure denominator is all diagnostic CT scans performed on 
patients ages 18 and older during the one-year measurement period which 
have an assigned CT category, a size-adjusted radiation dose value, and 
a global noise value.\317\
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    \317\ Ibid.
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    The measure excludes CT scans that cannot be categorized by the 
area of the body being imaged or reason for imaging. These include 
scans that are simultaneous exams of multiple body regions outside of 
four commonly performed multiple region exams defined by the measure, 
or scans that cannot be classified based on diagnosis and procedure 
codes. Exams that cannot be classified are specified as LOINC code 
96914-7, CT Dose and Image Quality Category, Full Body. The measure 
also has technical exclusions for CT scans missing information on the 
patient's age, Calculated CT Size-Adjusted Dose, or Calculated CT 
Global Noise. We refer readers to the eCQI Resource Center (https://ecqi.healthit.gov/ecqm/oqr/pre-rulemaking/2024/cms1206v1#quicktabs-tab-tabs_pre_rule_measure-0) for more details on the measure 
specifications.
(5) Data Submission and Reporting
    We propose the adoption of the Excessive Radiation eCQM as a 
voluntary measure for the CY 2025 reporting period followed by 
mandatory reporting beginning with the CY 2026 reporting period/CY 2028 
payment determination. We would utilize the voluntary period to monitor 
the implementation and operationalization of the measure. We refer 
readers to section XIV.E.6.b of this proposed rule for a discussion of 
the Excessive Radiation eCQM reporting and data

[[Page 49790]]

submission requirements. We also refer readers to section XIV.E.6 of 
this proposed rule for a discussion of our previously finalized eCQM 
reporting and submission policies.
    We invite public comment on this proposal.
4. Previously Finalized and Proposed Hospital OQR Program Measure Sets
a. Summary of Previously Finalized and Newly Proposed Hospital OQR 
Program Measure Set for the CY 2026 Payment Determination
    We refer readers to the CY 2023 OPPS/ASC final rule (87 FR 72100 
through 72102) for a summary of the previously finalized Hospital OQR 
Program measure set for the CY 2025 payment determination. Table 66 
summarizes the previously finalized and newly proposed Hospital OQR 
Program measures for the CY 2026 payment determination:
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b. Summary of Previously Finalized and Newly Proposed Hospital OQR 
Program Measure Set for the CY 2027 Payment Determination and 
Subsequent Years
    Table 67 summarizes the previously finalized and newly proposed 
Hospital OQR Program measures beginning with the CY 2027 payment 
determination and subsequent years:
[GRAPHIC] [TIFF OMITTED] TP31JY23.103

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[[Page 49792]]

5. Maintenance of Technical Specifications for Quality Measures
    We refer readers to the CY 2019 OPPS/ASC final rule (83 FR 59104 
and 59105) and the CY 2022 OPPS/ASC final rule (86 FR 63861) for our 
policies regarding maintenance of technical specifications for quality 
measures. We maintain technical specification manuals that can be found 
on the CMS website at: https://qualitynet.cms.gov/outpatient/specifications-manuals. Technical specifications for eCQMs used in the 
Hospital OQR Program are contained in the CMS Annual Update for the 
Hospital Quality Reporting Programs (Annual Update), which are 
available, along with implementation guidance documents, on the eCQI 
Resource Center website at: https://ecqi.healthit.gov/.
    We are not proposing any changes to these policies in this proposed 
rule.
6. Public Display of Quality Measures
    We refer readers to the CY 2009, CY 2014, CY 2017, and CY 2021 
OPPS/ASC final rules (73 FR 68777 through 68779, 78 FR 75092, 81 FR 
79791, and 85 FR 86193 through 86236 respectively) for our previously 
finalized policies regarding public display of quality measures.
    We are not proposing any changes to these policies in this proposed 
rule.
a. Public Reporting Median Time for Discharged ED Patients--Transfer 
Patients and Median Time for Discharged ED Patients--Overall Rate
    The Median Time from Emergency Department (ED) Arrival to ED 
Departure for Discharged ED Patients (Median Time for Discharged ED 
Patients) measure was adopted for reporting in the Hospital OQR Program 
beginning with the CY 2013 payment determination (75 FR 72086). The 
Median Time for Discharged ED Patients measure is a chart-abstracted 
measure that evaluates the time between the arrival to and departure 
from the ED, also known as ED throughput time. The Median Time for 
Discharged ED Patients measure is calculated in stratified subsections 
for certain types of patients: Median Time for Discharged ED Patients--
Reported Measure, which excludes psychiatric/mental health and 
transferred patients; Median Time for Discharged ED Patients-
Psychiatric/Mental Health Patients, which includes information only for 
psychiatric/mental health patients; and Median Time for Discharged ED 
Patients--Transfer Patients, which includes information only for 
patients transferred from the ED; along with the Median Time for 
Discharged ED Patients-Overall Rate. The measure excludes patients who 
expired in the ED, left against medical advice, or whose discharge was 
not documented or unable to be determined.
    In the CY 2011 OPPS/ASC final rule (75 FR 72086), we considered 
publicly displaying all strata; however, due to input from interested 
parties, we did not finalize public display of Median Time for 
Discharged ED Patients--Transfer Patients and Median Time for 
Discharged ED Patients--Overall Rate. Currently, measure data for the 
Median Time for Discharged ED Patients--Transfer Patients and Median 
Time for Discharged ED Patients--Overall Rate are not reported publicly 
on the Care Compare site. Measure data for the Median Time for 
Discharged ED Patients--Reported Measure is currently publicly 
displayed on the Care Compare site and in the corresponding 
downloadable data file for the Hospital OQR Program. We also collect 
and report Median Time for Discharged ED Patients--Psychiatric/Mental 
Health Patients for public awareness of behavioral health gaps in the 
transfer of such patients, and per the CY 2018 OPPS/ASC final rule (82 
FR 59437), we adopted a policy to publicly report these stratified 
behavioral health data beginning in July 2018 using data from patient 
encounters during the third quarter of 2017. We now believe displaying 
all strata will highlight and prioritize various issues in the health 
care system, specifically behavioral health and continuum of care.
    We propose publicly reporting measure data for Median Time for 
Discharged ED Patients--Transfer Patients and Median Time for 
Discharged ED Patients--Overall Rate. Publicly reporting these measure 
stratifications can elucidate ED throughput performance gaps for 
patients requiring higher levels of specialized care above what a 
facility is able to or provide. Data for these measure stratifications 
are not currently being reported publicly on the Care Compare site.
    Beginning with the CY 2024, we propose to make data publicly 
available on our Care Compare website and in downloadable data files 
found at http://data.cms.gov">data.cms.gov for the following chart-abstracted measure 
strata: Median Time for Discharged ED Patients--Transfer Patients and 
the Median Time for Discharged ED Patients--Overall Rate which contains 
data for all patients.
    We invite public comment on this proposal.
b. Overall Hospital Star Ratings
    In the CY 2021 OPPS/ASC final rule (85 FR 86193 through 86236), we 
finalized a methodology to calculate the Overall Hospital Quality Star 
Rating (Overall Star Ratings). The Overall Star Ratings utilizes data 
collected on hospital inpatient and outpatient measures that are 
publicly reported on a CMS website. We refer readers to the CY 2021 
OPPS/ASC final rule (85 FR 86193 through 86236) for our previously 
finalized policies regarding the Overall Star Ratings.
    We are not proposing any changes to these policies in this proposed 
rule.

C. Hospital OQR Program Quality Measure Topics for Potential Future 
Consideration

1. Summary
    We seek public comment on potential measurement topic areas for the 
Hospital OQR Program. This request for comment (RFC) seeks input on 
innovative measurement approaches and data sources for use in quality 
measurement to inform our work and, more specifically, the focus of 
measure development within the Hospital OQR Program. We identified 
three potential priority areas and we encourage the public to review 
and provide comment.
2. Background
    We are seeking public comment to address: (1) quality measurement 
gaps in the HOPD setting, including the ED; (2) changes in outpatient 
care (such as shifts in volume, technology use, and case complexity); 
(3) growth of concerns around workforce and patient safety; (4) the 
transition to digital quality measurement; and (5) interest in patient-
reported outcomes.
    Specifically, we seek comment on quality measurement topics for the 
Hospital OQR Program that include:
     Promoting Safety (Patient and Workforce);
     Behavioral Health; and
     Telehealth.
    We seek input on the specific questions posed in this RFC.
3. Solicitation of Comments on Patient and Workforce Safety as a 
Measurement Topic Area in the Hospital OQR Program
    Launched in April 2022, the CMS National Quality Strategy outlines 
CMS' aim to shape a resilient, high-value healthcare system through 
quality outcomes, safety, equity, and accessibility for all.\318\ 
Improving safety

[[Page 49793]]

through levers such as quality measurement is a critical objective of 
the National Quality Strategy. We acknowledge that promoting safety in 
order to achieve zero preventable harm requires developing measures 
that assess and hold healthcare systems accountable to keep individuals 
safe through preventative and treatment processes. Therefore, in this 
proposed rule, we are seeking public comment on patient and workforce 
safety measures. We are particularly interested in sepsis care for 
potential future inclusion in the Hospital OQR Program as a patient 
safety measure.
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    \318\ Schreiber M, Richards AC, Moody-Williams J, et al. (2022). 
The CMS National Quality Strategy: A Person-Centered Approach to 
Improving Quality. Available at: https://www.cms.gov/blog/cms-national-quality-strategy-person-centered-approach-improving-quality.
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    Sepsis is a life-threatening condition which can arise from simple 
infections (such as pneumonia or a urinary tract infection) and 
requires prompt recognition and early intervention, which can often 
occur in an ED.319 320 Although sepsis can affect anyone at 
any age, it is more common in infants, older adults, and patients with 
chronic health conditions such as diabetes and immunosuppressive 
disorders.\321\ The Centers for Disease Control and Prevention (CDC) 
estimates annually that there are approximately 1.7 million adults 
diagnosed with sepsis with 270,000 resulting deaths.\322\ Therefore, 
preventing, diagnosing, and treating sepsis effectively has been a 
focus of patient safety in recent years.323 324
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    \319\ McVeigh SE. (2020). Sepsis Management in the Emergency 
Department. The Nursing clinics of North America, 55(1), 71-79. 
https://doi.org/10.1016/j.cnur.2019.10.009.
    \320\ Seymour CW, Gesten F, Prescott HC, et al. (2017). Time to 
Treatment and Mortality during Mandated Emergency Care for Sepsis. 
The New England journal of medicine, 376(23), 2235-2244. https://doi.org/10.1056/NEJMoa1703058.
    \321\ National Institute of General Medical Sciences. (2021). 
Sepsis. Available at: https://nigms.nih.gov/education/fact-sheets/Pages/sepsis.aspx.
    \322\ Centers for Disease Control and Prevention. (2022). What 
is Sepsis? Available at: https://www.cdc.gov/sepsis/what-is-sepsis.html.
    \323\ Rhee C, Dantes RB, Epstein L, & Klompas M. (2019). Using 
Objective Clinical Data to Track Progress on Preventing and Treating 
Sepsis: CDC's New `Adult Sepsis Event' Surveillance Strategy. BMJ 
Qual Saf, 28(4), 305-309. https://doi.org/10.1136/bmjqs-2018-008331.
    \324\ Fay K, Sapiano MRP, Gokhale R, et al. (2020). Assessment 
of Health Care Exposures and Outcomes in Adult Patients with Sepsis 
and Septic Shock. JAMA Netw Open, 3(7), e206004. https://doi.org/10.1001/jamanetworkopen.2020.6004.
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    HOPDs may play a critical role in the initial assessment and 
evaluation of suspected sepsis patients through lab tests, diagnostic 
imaging, and collection of sepsis biomarkers.\325\ Timely and accurate 
sepsis diagnosis is essential to effective care. Research shows that 
performance of evidence-based time-sensitive therapies in EDs can lower 
the risk of organ dysfunction, reduce mortality, and mitigate the need 
for mechanical ventilation.326 327 328 In addition, using an 
interdisciplinary sepsis-response team to coordinate care in the ED 
shows potential in improving sepsis care management and enhancing 
patient outcomes.\329\ These findings highlight the role of HOPDs and 
EDs in the timely diagnosis and treatment of sepsis. Therefore, we 
believe the Hospital OQR Program may benefit from quality measures 
centered around sepsis care.
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    \325\ Gauer R, Forbes D, & Boyer N. (2020). Sepsis: Diagnosis 
And Management. American Family Physician, 101(7), 409-418. https://www.aafp.org/pubs/afp/issues/2020/0401/p409.html.
    \326\ Arabi YM, Al-Dorzi HM, Alamry A, et al. (2017). The Impact 
of a Multifaceted Intervention Including Sepsis Electronic Alert 
System and Sepsis Response Team on the Outcomes of Patients with 
Sepsis and Septic Shock. Annals of intensive care, 7(1), 57. https://doi.org/10.1186/s13613-017-0280-7.
    \327\ Whiles BB, Deis AS, & Simpson SQ. (2017). Increased Time 
to Initial Antimicrobial Administration is Associated With 
Progression to Septic Shock in Severe Sepsis Patients. Critical care 
medicine, 45(4), 623-629. https://doi.org/10.1097/CCM.0000000000002262.
    \328\ Gavelli F, Castello LM, & Avanzi GC. (2021). Management of 
Sepsis and Septic Shock in the Emergency Department. Internal and 
emergency medicine. 16(6), 1649-1661. https://doi.org/10.1007/s11739-021-02735-7.
    \329\ Delawder JM, & Hulton L. (2020). An Interdisciplinary Code 
Sepsis Team to Improve Sepsis-Bundle Compliance: A Quality 
Improvement Project. Journal of emergency nursing, 46(1), 91-98. 
https://doi.org/10.1016/j.jen.2019.07.001.
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    We also believe quality measures should align, to the extent 
possible, across CMS programs to minimize reporting burden. In the FY 
2015 IPPS/LTCH PPS final rule (79 FR 50236 through 50241), we adopted 
the Severe Sepsis and Septic Shock: Management Bundle measure (CBE 
#0500 \330\) (the Sepsis measure) into the Hospital Inpatient Quality 
Reporting (IQR) Program beginning with the FY 2015 reporting period/FY 
2017 payment determination. In the FY 2024 IPPS/LTCH PPS proposed rule 
(88 FR 27027 through 27030), we proposed to adopt the Sepsis measure 
into the Hospital Value-Based Purchasing (HVBP) Program beginning with 
the FY 2026 program year. The Sepsis measure supports the efficient, 
effective, and timely delivery of high-quality sepsis care by providing 
a standard operating procedure for the early risk stratification and 
management of a patient with severe infection. When the care 
interventions in the measure are provided as a composite, health 
systems observe significant reductions in hospital length of stay, re-
admission rates, and mortality.331 332
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    \330\ In previous years, we referred to the consensus-based 
entity by corporate name. We have updated this language to refer to 
the consensus-based entity more generally.
    \331\ Levy MM, Gesten FC, Phillips GS, et al. (2018). Mortality 
Changes Associated with Mandated Public Reporting for Sepsis: The 
Results of the New York State Initiative. Am J Respir Crit Care Med, 
198(11), 1406-1412. https://doi.org/10.1164/rccm.201712-2545OC.
    \332\ Bauer SR, Han X, Wang XF, et al. (2020). Association 
Between Compliance with the Sepsis Quality Measure (SEP-1) and 
Hospital Readmission. Chest, 158(2), 608-611. https://doi.org/10.1016/j.chest.2020.02.042.
---------------------------------------------------------------------------

    We request comment on whether this measure would be appropriate and 
feasible for use in the Hospital OQR Program, as well as whether CMS 
should consider adopting an alternative measure that assesses the 
quality of sepsis care in the hospital outpatient setting.\333\
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    \333\ Centers for Medicare & Medicaid Services. (2023). Sepsis 
Bundle Project (SEP) National Hospital Inpatient Quality Measures. 
Available at: https://qualitynet.cms.gov/files/6391e95676962e0016ad9199?filename=2a-b_SEP-List_v5.14.pdf.
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    Additional safety measures may be needed to adequately monitor and 
maintain safety in the Hospital OQR Program, such as measurement of 
system-wide all-cause harm, in addition to the safety of observation 
care, procedures and services, medication errors, technology, and 
workforce. Patient and workforce safety are interconnected, as the 
safety of healthcare workers is critical to maintaining a safe and 
effective healthcare environment.\334\
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    \334\ McGaffigan P, Gerwig K, & Kingston MB. (2020). Workforce 
Safety Key to Patient Safety. Healthcare Executive. 35(6), 48-50. 
https://www.ihi.org/resources/Pages/Publications/workforce-safety-key-to-patient-safety.aspx.
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    We are requesting input from interested parties on the following 
topics: (1) safety outcome priorities specific to settings, services, 
transitions and transfers, and access to care; (2) general cross-
outpatient setting outcomes; (3) individual harms, including 
methodological approaches to patient identification and data 
collection, technological-derived harm, and use of electronic resources 
to mitigate potential for harm; and (4) workforce safety. Specifically, 
we are requesting comment on the following questions:
     What are interested parties' highest priority outcomes for 
ensuring safety in the outpatient setting, not limited to the 
following: overall priorities; priorities for specific settings (for 
example, EDs, HOPDs) and services (for example, observation care, 
emergent and non-emergent surgeries, procedures, and imaging); safety 
related to transitions between care settings; and safety around access 
to care (for example, a patient who lacks access to life-saving

[[Page 49794]]

medications such as insulin, epinephrine, albuterol)?
     What outcomes should be measured across all settings 
within the Hospital OQR Program?
     Individual harms (such as wrong-site surgery) occur at low 
frequencies, presenting a challenge for the development of risk-
adjusted quality measures that can be used to compare facilities. 
Existing measures in the Hospital OQR Program have used approaches such 
as the capture of utilization (for example, the Hospital Visits After 
Hospital Outpatient Surgery Measure (CBE #2687)) to indicate potential 
harm and longer measurement periods to improve measurement reliability.
    ++ Are there other methodological approaches or data that we could 
use to identify harm to patients receiving care in the outpatient 
setting?
    ++ What approaches could we use to capture harms associated with 
outpatient services (HOPD procedures, ED visits, outpatient clinic 
visits, outpatient imaging)?
    ++ How could electronic data sources or monitoring systems be 
leveraged to gather timely data on such errors?
     What aspects of workforce safety are important for us to 
consider for the Hospital OQR Program?
     As new technology becomes available and is used more 
widely (such as artificial intelligence (AI) for diagnoses, robotic 
surgery, and electronic health records (EHRs)), there is a potential 
for these technologies or their application to cause harm to patients. 
For example, AI algorithms trained on data that is under representative 
of certain racial, ethnic, or gender groups may misdiagnosis these same 
populations.\335\ At the same time, technology could also be leveraged 
to mitigate AI risks, improve safety, or facilitate quality 
measurement.
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    \335\ Thomas, LB, Mastorides, SM, Viswanadhan, NA, et al. 
(2021). Artificial Intelligence: Review of Current and Future 
Applications in Medicine. Federal practitioner: for the health care 
professionals of the VA, DoD, and PHS, 38(11), 527-538. https://doi.org/10.12788/fp.0174.
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    ++ Which technologies are of the most concern in terms of potential 
for harm?
    ++ What measurable safety-related outcomes should CMS consider for 
the Hospital OQR Program?
    ++ What technologies could be leveraged to improve safety or 
facilitate its measurement?
4. Solicitation of Comments on Behavioral Health and Suicide Prevention 
in the Hospital OQR Program
    Behavioral healthcare in the outpatient setting comprises a vast 
array of services for patients with a wide range of conditions. 
Behavioral health services are delivered in multiple settings by 
multiple types of providers, including but not limited to HOPDs, 
through partial observation, and in the ED.
    Quality gaps in the area of hospital outpatient behavioral health 
include care coordination across settings, availability of services, 
and barriers to accessing services. In this RFC, we are seeking comment 
from interested parties on behavioral health topics based in part on 
work by the National Quality Forum (NQF), The National Committee for 
Quality Assurance (NCQA), and the CMS Behavioral Health 
Strategy.336 337 338 Behavioral health topics under 
consideration for measure development in the hospital outpatient 
setting include: availability and access, coordination of care, patient 
experience, patient-centered clinical care, prevention and treatment of 
chronic conditions, prevention of iatrogenic harm (that is, harm 
resulting from medical care), equity across all domains, and suicide 
prevention. We are particularly interested in measuring suicide 
screening in the hospital outpatient setting to improve early risk 
detection and facilitate appropriate behavioral health treatment.
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    \336\ National Quality Forum. (2022). Opioid-Related Outcomes 
Among Individuals with Co-occurring Behavioral Health Conditions. 
Available at: https://www.qualityforum.org/Projects/n-r/Opioids_and_Behavioral_Health_Committee/2022_Final_Report.aspx#onclick=%E2%80%9D_gaq.push([%E2%80%98_trackEve
nt%E2%80%99,%E2%80%99Download%E2%80%99,%E2%80%99PDF%E2%80%99,this.hre
f]);%E2%80%9D Using Measurement to Promote Joint Accountability and 
Whole-Person Care.
    \337\ The National Committee for Quality Assurance. (2021). 
Behavioral Health Quality Framework: A Roadmap for Using Measurement 
to Promote Joint Accountability and Whole-Person Care. Available at: 
https://www.ncqa.org/wp-content/uploads/2021/07/20210701_Behavioral_Health_Quality_Framework_NCQA_White_Paper.pdf.
    \338\ Centers for Medicare and Medicaid Services. (2022). CMS 
Behavioral Health Strategy. Available at: https://www.cms.gov/cms-behavioral-health-strategy.
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    Suicide is a serious but preventable public health threat and is 
one of the leading causes of death in the United States (US).\339\ In 
2020, about 46,000 Americans died as a result of suicide and 12.2 
million adults experienced suicidal ideation.\340\ Individuals with a 
recorded depressive disorder are about five times more likely to die by 
suicide after adjusting for sociodemographic factors and other mental 
health diagnoses than individuals without a recorded mental health 
condition.\341\ Many factors contribute to suicide risk, including 
Major Depressive Disorder (MDD) diagnosis.342 343 MDD is a 
significant risk factor for suicide, indicating that patients with MDD 
are a critical population for intervention efforts.\344\
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    \339\ Centers for Disease Control and Prevention. (2022). Facts 
About Suicide. Available at: http://www.cdc.gov/suicide/facts/index.html.
    \340\ Centers for Disease Control and Prevention. (2022). 
Suicide Prevention. Available at: http://www.cdc.gov/suicide/index.html.
    \341\ Yeh HH, Westphal J, Hu Y, et al. (2019). Diagnosed Mental 
Health Conditions and Risk of Suicide Mortality. Psychiatric 
services (Washington, DC), 70(9), 750-757. https://doi.org/10.1176/appi.ps.201800346.
    \342\ Ibid.
    \343\ Cai H, Xie XM, Zhang Q, et al. (2021). Prevalence of 
Suicidality in Major Depressive Disorder: A Systematic Review and 
Meta-Analysis of Comparative Studies. Frontiers in psychiatry, 12, 
690130. https://doi.org/10.3389/fpsyt.2021.690130.
    \344\ Moitra M, Santomauro D, Degenhardt L, et al. (2021). 
Estimating the Risk of Suicide Associated with Mental Disorders: A 
Systematic Review and Meta-regression Analysis. Journal of 
psychiatric research, 137, 242-249. https://doi.org/10.1016/j.jpsychires.2021.02.053.
---------------------------------------------------------------------------

    Research shows that in the weeks, months, and year prior to 
suicide, individuals significantly utilized healthcare services, 
providing an opportunity for assessment and prevention in the clinical 
setting.\345\ Nineteen percent of individuals who died by suicide with 
a recorded mental health diagnosis visited the ED within one year prior 
to their death while 7.5 percent visited the ED within one month.\346\ 
HOPDs may be an opportune setting for detecting suicide risk in persons 
with mental health diagnoses, such as MDD, and reducing the overall 
suicide rate. ED-initiated suicide prevention efforts can meaningfully 
reduce suicide attempts in individuals that are screened and receive 
evidence-based care.\347\
---------------------------------------------------------------------------

    \345\ Miller IW, Camargo CA, Arias SA, et al. (2017). Suicide 
Prevention in an Emergency Department Population: The ED-SAFE Study. 
JAMA psychiatry, 74(6), 563-570. https://doi.org/10.1001/jamapsychiatry.2017.0678.
    \346\ Ahmedani BK, Simon GE, Stewart C, et al. (2014). Health 
Care Contacts in the Year Before Suicide Death. J Gen Intern Med, 
29, 870-877. https://doi.org/10.1007/s11606-014-2767-3.
    \347\ Miller IW, Camargo CA, Arias SA, et al. (2017). Suicide 
Prevention in an Emergency Department Population: The ED-SAFE Study. 
JAMA psychiatry, 74(6), 563-570. https://doi.org/10.1001/jamapsychiatry.2017.0678.
---------------------------------------------------------------------------

    Under the Merit-based Incentive Payment System (MIPS), we adopted 
the Adult Major Depressive Disorder (MDD): Suicide Risk Assessment 
measure (CBE #0104). This measure

[[Page 49795]]

aims to improve clinical assessment of suicide risk where a new or 
recurrent episode of MDD is identified and may be beneficial in the 
Hospital OQR Program. We request comment on this specific measure 
example, including whether interested parties believe this measure 
would be appropriate and feasible for use in the Hospital OQR Program, 
as well as other measures, such as a universal screening measure. More 
than half of those who die by suicide do not have a recorded mental 
health diagnosis.\348\ Universal suicide screening may improve 
identification of individuals who may not otherwise have been 
identified as at risk.\349\
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    \348\ Stone DM, Simon TR, Fowler KA, et al. (2018) Vital Signs: 
Trends in State Suicide Rates--United States, 1999-2016 and 
Circumstances Contributing to Suicide--27 States, 2015. MMWR, 67, 
617-624. http://dx.doi.org/10.15585/mmwr.mm6722a1.
    \349\ Boudreaux ED, Camargo CA, Arias SA, et al. (2016). 
Improving Suicide Risk Screening and Detection in the Emergency 
Department. American Journal of Preventive Medicine, 50(4), 445-453. 
https://doi.org/10.1016/j.amepre.2015.09.029.
---------------------------------------------------------------------------

    Additional measures may be needed to adequately promote screening 
and treatment of behavioral health disorders in the outpatient setting. 
For example, measures geared towards prevention and treatment of 
substance use disorders. In 2021, 17.3 percent of adults over the age 
of 18 met the criteria for substance use disorder for drugs or 
alcohol.\350\ Outpatient screening of substance use disorders through 
tools such as SAMHSA's Screening, Brief Intervention, and Referral to 
Treatment (SBIRT) may aid the early intervention and treatment for 
persons with substance use disorders and help identify those at risk of 
developing such disorders.351 352 We seek comment on whether 
screening for substance use disorders would be an appropriate measure 
topic for the Hospital OQR Program.
---------------------------------------------------------------------------

    \350\ Substance Abuse and Mental Health Services Administration. 
(2021).
    Table 5.1B--Substance Use Disorder for Specific Substances in 
Past Year: Among People Aged 12 or Older; by Age Group, Percentages, 
2021. Available at: https://www.samhsa.gov/data/sites/default/files/reports/rpt39441/NSDUHDetailedTabs2021/NSDUHDetailedTabs2021/NSDUHDetTabsSect5pe2021.htm.
    \351\ Substance Abuse and Mental Health Services Administration. 
(2022). Screening, Brief Intervention, and Referral to Treatment 
(SBIRT). Available at: https://www.samhsa.gov/sbirt.
    \352\ O'Connor EA, Perdue LA, Senger, CA, et al. (2018). 
Screening and Behavioral Counseling Interventions to Reduce 
Unhealthy Alcohol Use in Adolescents and Adults: Updated Evidence 
Report and Systematic Review for the US Preventive Services Task 
Force. JAMA, 320(18), 1910-1928. https://doi.org/10.1001/jama.2018.12086.
---------------------------------------------------------------------------

    Furthermore, we seek broad input on behavioral health as a 
measurement topic area in the Hospital OQR Program based on, but not 
limited to, the following matters: (1) priorities for measuring 
outcomes of outpatient behavioral health services, particularly by 
setting within the HOPD; and (2) quality measure approaches to improve 
behavioral health access in outpatient settings. Specifically, we are 
requesting comment from interested parties on the following questions:
     Are there additional behavioral health topic areas that we 
should prioritize? Of the topics outlined in this RFC (availability and 
access, coordination of care, patient experience, patient-centered 
clinical care, prevention and treatment of chronic conditions, 
prevention of iatrogenic harm, equity across all domains, and suicide 
prevention), which are the highest priority? What are the most relevant 
quality gaps and outcomes related to behavioral health for hospital 
outpatient settings and services?
     Access is one of the biggest challenges around improving 
behavioral health outcomes. What measurement approaches could be used 
to drive improvements in access to services?
     Should CMS consider substance use disorder-related 
screening and counseling measures in regards to behavioral health 
outcomes for the outpatient setting, and, if so, what specific quality 
measures should CMS include?
     Should CMS consider a measure related to universal suicide 
risk in the ED? Are there other interventions or measurement approaches 
targeted at suicide prevention that CMS should consider?
5. Solicitation of Comments on Telehealth as a Measurement Topic Area 
in the Hospital OQR Program
    We define telehealth as the provision of healthcare services 
through two-way, real-time interactive telecommunications technology 
between patients and providers who are located at a distant site.\353\ 
Telemedicine has the potential to improve patient experience, outcomes, 
and access to healthcare.\354\ Telemedicine is also associated with 
cost-savings for both patients and healthcare 
systems.355 356 Telehealth utilization expanded greatly in 
the outpatient setting during the early months of the SARS-CoV-2 
pandemic.\357\ The number of outpatient visits conducted via telehealth 
has since declined but remains higher than pre-pandemic levels.\358\
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    \353\ Telehealth Services, 42 CFR 410.78 Available at: https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-B/part-410/subpart-B/section-410.78.
    \354\ Corbett, JA, Opladen, JM, & Bisognano, JD. (2020). 
Telemedicine can revolutionize the treatment of chronic disease. 
International Journal of Cardiology. Hypertension, 7, 100051. 
https://doi.org/10.1016/j.ijchy.2020.100051.
    \355\ American Health Association. (2016). Telehealth: Helping 
Hospitals Deliver Cost-Effective Care. Available at: https://www.aha.org/system/files/content/16/16telehealthissuebrief.pdf.
    \356\ Patel KB, Turner K, Alishahi TA, et al. (2023). Estimated 
Indirect Cost Savings of Using Telehealth Among Nonelderly Patients 
With Cancer. JAMA network open, 6(1), e2250211. https://doi.org/10.1001/jamanetworkopen.2022.50211.
    \357\ Lo, J, Rae M, Amin, K, & Cox C. (2022). Outpatient 
telehealth use soared early in the COVID-19 pandemic but has since 
receded. Peterson-KFF Health System Tracker. Available at: https://www.healthsystemtracker.org/brief/outpatient-telehealth-use-soared-early-in-the-covid-19-pandemic-but-has-since-receded/.
    \358\ Ibid.
---------------------------------------------------------------------------

    While telehealth provides a variety of benefits to patients and 
health systems, there is variability in telehealth's effectiveness 
across different outpatient services as some conditions may necessitate 
in-person physical examination or diagnostic testing.359 360 
There are also known disparities in the effectiveness of telehealth and 
its impact on outcomes as certain populations lack access to internet 
and digital devices, or lack familiarity with 
technology.361 362
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    \359\ Patel SY, Mehrotra A, Huskamp HA, et al. (2021). Variation 
in Telemedicine Use and Outpatient Care During The COVID-19 Pandemic 
in the United States. Health affairs (Project Hope), 40(2), 349-358. 
https://doi.org/10.1377/hlthaff.2020.01786.
    \360\ Koonin LM, Hoots B, Tsang CA, et al. Trends in the Use of 
Telehealth During the Emergence of the COVID-19 Pandemic--United 
States, January-March 2020. MMWR Morb Mortal Wkly Rep 2020;69:1595-
1599. http://dx.doi.org/10.15585/mmwr.mm6943a3.
    \361\ Ibid.
    \362\ Roberts ET, & Mehrotra A. (2020). Assessment of 
Disparities in Digital Access Among Medicare Beneficiaries and 
Implications for Telemedicine. JAMA internal medicine, 180(10), 
1386-1389. https://doi.org/10.1001/jamainternmed.2020.2666.
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    For the Hospital OQR Program, we are considering a measure focused 
on telehealth quality based on a framework developed by the CBE.\363\ 
This framework was chosen because it offers a comprehensive guide for 
developing telehealth measures under four domains: access, 
effectiveness, experience, and equity. We seek input from interested 
parties on the following topics: (1) inclusion and prioritization of 
areas of telehealth-related care, and in particular those priority 
topic areas discussed above; (2) addressing quality gaps in outpatient 
telehealth-related care, including across HOPD settings and services; 
(3) capturing utilization, and disparities resulting from

[[Page 49796]]

utilization, of telehealth-related care for outpatient settings and 
services; and (4) understanding patient experience with outpatient 
telehealth services. Specifically, we are requesting comment from 
interested parties on the following questions:
---------------------------------------------------------------------------

    \363\ National Quality Forum. (2021). Rural Telehealth and 
Healthcare System Readiness Measurement Framework--Final Report. 
Available at: https://www.qualityforum.org/Publications/2021/11/Rural_Telehealth_and_Healthcare_System_Readiness_Measurement_Framework_-_Final_Report.aspx.
---------------------------------------------------------------------------

     In reference to the telehealth-related topics outlined 
above, are there additional matters that we should prioritize for the 
Hospital OQR Program? Which subjects are of the highest priority?
     What do commenters believe are the most relevant clinical 
issues addressable through telehealth in outpatient settings, and gaps 
in care that telehealth can address?
     What are the highest priority concerns regarding 
disparities in access, use, or outcomes related to telehealth in the 
outpatient setting? Are there any settings or services that should be 
prioritized?
     Which existing outpatient quality measures should be 
stratified by telehealth as the mode of delivery?
     What are the most relevant patient-experience-related 
telehealth outcomes that should be measured?

D. Administrative Requirements

1. Proposal To Modify Requirements Regarding Hospital OQR Program 
Participation Status
    We refer readers to Sec.  419.46(b) for our current policies 
regarding participation in the Hospital OQR Program, including security 
official and system registration requirements. We propose to amend our 
participation regulation codified at Sec.  419.46(b)(1) and (2) to 
replace references to ``QualityNet'' with ``CMS-designated information 
system'' or ``CMS website,'' and to make other conforming technical 
edits, to accommodate recent and future systems requirements and 
mitigate confusion for program participants.
    We invite public comment on this proposal.
2. Proposal To Modify Requirements Regarding Hospital OQR Program 
Withdrawal
    We refer readers to Sec.  419.46(c) for our policies regarding 
requirements for withdrawal from the Hospital OQR Program. We propose 
to amend our withdrawal policy codified at Sec.  419.46(c) to replace 
references to ``QualityNet'' with ``CMS-designated information system'' 
or ``CMS website,'' and to make other conforming technical edits, to 
accommodate recent and future systems requirements and mitigate 
confusion for program participants.
    We invite public comment on this proposal.
    Other than the proposal to amend Sec.  419.46(c), we are not 
proposing any changes to these policies in this proposed rule.

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

    Previously finalized quality measures and information collections 
discussed in this section were approved by the Office of Management and 
Budget (OMB) under control number 0938-1109 (expiration date February 
28, 2025).\364\ An updated PRA package reflecting the updated 
information collection requirements related to the proposals set forth 
in this section of the proposed rule will be submitted for approval 
under the same OMB control number.
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    \364\ Office of Management and Budget. Office of Information and 
Regulatory Affairs. Available at: https://www.reginfo.gov/public/do/PRAOMBHistory?ombControlNumber=0938-1109.
---------------------------------------------------------------------------

1. Hospital OQR Program Annual Submission Deadlines
    We refer readers to Sec.  419.46(d) for our policies regarding 
clinical data submission deadlines. In the CY 2023 OPPS/ASC final rule 
(87 FR 72110 through 72112), we finalized alignment of the patient 
encounter quarters for chart-abstracted measures with the calendar year 
beginning with the CY 2024 reporting period/CY 2026 payment 
determination. To facilitate this process, we finalized transitioning 
to the new 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 68, 69, and 70 below (87 FR 44734).
BILLING CODE 4120-01-P
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BILLING CODE 4120-01-C
    We propose to amend our submission deadline codified at Sec.  
419.46(d)(2) to replace references to ``QualityNet'' with ``CMS-
designated information system'' or ``CMS website,'' and to make other 
conforming technical edits, to accommodate recent and future systems 
requirements and mitigate confusion for program participants.
    We invite public comment on this proposal.
    Other than the proposal to amend Sec.  419.46(d)(2), we are not 
proposing any changes to these policies in this proposed rule.
2. Requirements for Chart-Abstracted Measures Where Patient-Level Data 
Are Submitted Directly to CMS
    We refer readers to the CY 2013 OPPS/ASC final rule (77 FR 68481 
through 68484) and the CMS website, currently available at: https://qualitynet.cms.gov, for a discussion of the requirements for chart-
abstracted measure data submitted via the HQR System (formerly referred 
to as the QualityNet Secure Portal) for the CY 2014 payment 
determination and subsequent years.
    We are not proposing any changes to these policies in this proposed 
rule.
3. Claims-Based Measure Data Requirements
    We refer readers to the CY 2019 OPPS/ASC final rule (83 FR 59106 
through 59107), where we established a 3-year reporting period for the 
Facility 7-Day Risk-Standardized Hospital Visit Rate after Outpatient 
Colonoscopy measure beginning with the CY 2020 payment determination. 
We refer readers to the CY 2022 OPPS/ASC final rule (86 FR 63863) where 
we finalized a 3-year reporting period for the Breast Cancer Screening 
Recall Rates measure.
    We are not proposing any changes to these policies in this proposed 
rule.
4. Data Submission Requirements for the Outpatient and Ambulatory 
Surgery Consumer Assessment of Healthcare Providers and Systems (OAS 
CAHPS) Survey-Based Measure
    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 measure. For more information about the 
modes of administration, we refer readers to the OAS CAHPS Survey 
website: https://oascahps.org/.
    We are not proposing any changes to these policies in this proposed 
rule.
5. Data Submission Requirements for Measures Submitted via a Web-Based 
Tool
a. Background
    We refer readers to the CY 2014 OPPS/ASC final rule (78 FR 75112 
through 75115), the CY 2016 OPPS/ASC final rule (80 FR 70521), and the 
CMS website, currently at available at https://qualitynet.cms.gov, for 
a discussion of the requirements for measure data submitted via the HQR 
System (formerly referred to as the QualityNet Secure Portal) for the 
CY 2017 payment determination and subsequent years. The information 
collections finalized in the aforementioned final rules were approved 
under OMB control number 0938-1109 (expiration date February 28, 
2025).\365\ 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.
---------------------------------------------------------------------------

    \365\ Ibid.
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    We are not proposing any changes to these policies in this proposed 
rule.

[[Page 49798]]

b. Proposed HOPD Procedure Volume Measure Reporting and Data Submission 
Requirements
    We propose to re-adopt the HOPD Procedure Volume measure with 
modification, beginning with the voluntary CY 2025 reporting period 
followed by mandatory reporting beginning with the CY 2026 reporting 
period/CY 2028 payment determination. We propose that hospitals submit 
these data to CMS during the time period of January 1 to May 15 in the 
year prior to the affected payment determination year. For example, for 
the CY 2025 reporting period, the submission period to report the data 
to CMS through the HQR System would be January 1, 2026 to May 15, 2026, 
covering the performance period of January 1, 2025 to December 31, 
2025. Following a 30-day preview period, CMS would publicly display 
data surrounding the top five most frequently performed procedures 
among HOPDs in each of the following eight categories: Cardiovascular, 
Eye, Gastrointestinal, Genitourinary, Musculoskeletal, Nervous System, 
Respiratory, and Skin.\366\ This data would be publicly displayed on 
the Care Compare website or another CMS website. We would assess and 
update the top five procedures in each category annually, as needed. We 
propose that hospitals would submit aggregate-level data through the 
CMS Web-based tool within the HQR System. 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 
previously codified our existing policies regarding data collection and 
submission under the Hospital OQR Program at Sec.  419.46.
---------------------------------------------------------------------------

    \366\ Centers for Medicare & Medicaid Services. (2016). Hospital 
Outpatient Specifications Manuals version 9.1. Available at: https://qualitynet.cms.gov/outpatient/specifications-manuals#tab9.
---------------------------------------------------------------------------

    We invite public comment on this proposal.
c. Proposed Modification of Survey Instrument Use for the Cataracts 
Visual Function Measure Reporting and Data Submission Requirements
    In section XIV.B.2.b of this proposed rule, we propose to modify 
the Cataracts Visual Function measure survey instrument use, beginning 
with the voluntary CY 2024 reporting period. The proposed modified 
measure would refine data collection by standardizing survey 
instruments that HOPDs can use, which would limit the allowable survey 
instruments to those listed below:

The National Eye Institute Visual Function Questionnaire-25 (NEI VFQ-
25)
The Visual Functioning Patient Questionnaire (VF-14)
The Visual Functioning Index Patient Questionnaire (VF-8R)

    We also propose that hospitals submit these data to CMS during the 
time period of January 1 to May 15 in the year prior to the affected 
payment determination year. For example, for the voluntary CY 2024 
reporting period, the data submission period would be January 1, 2025 
to May 15, 2025, covering the performance period of January 1, 2024 to 
December 31, 2024. Specifically, for data collection, we propose that 
hospitals submit aggregate-level data through the CMS Web-based tool 
within the HQR System. We previously codified our existing policies 
regarding data collection and submission under the Hospital OQR Program 
at Sec.  419.46.
    We invite public comment on this proposal.
d. Data Submission Requirements for Measures Submitted via the Centers 
for Disease Control and Prevention (CDC) National Healthcare Safety 
Network (NHSN) Website
    We refer readers to the CY 2014 OPPS/ASC final rule (78 FR 75097 
through 75100) for a discussion of the previously finalized 
requirements for measure data submitted via the CDC NHSN website. In 
addition, we refer readers to the CY 2022 OPPS/ASC final rule (86 FR 
63866), where we finalized the adoption of the COVID-19 Vaccination 
Coverage Among HCP measure beginning with the CY 2022 reporting period/
CY 2024 payment determination. In section XIV.B.2.a of this proposed 
rule, we discuss the proposed modification of the COVID-19 Vaccination 
Coverage Among HCP measure beginning with the CY 2024 reporting period/
CY 2026 payment determination. The requirements for measure data 
submitted via the CDC NHSN website would remain as previously 
finalized.
    We are not proposing any changes to these policies in this proposed 
rule.
6. eCQM Reporting and Submission Requirements
a. Background
    We refer readers to the CY 2014 OPPS/ASC final rule (78 FR 75106 
and 75107), the CY 2015 OPPS/ASC final rule (79 FR 66956 through 
66961), the CY 2016 OPPS/ASC final rule (80 FR 70516 through 70518), 
the CY 2017 OPPS/ASC final rule (81 FR 79785 through 79790), the CY 
2018 OPPS/ASC final rule (82 FR 59435 through 59438), the CY 2022 OPPS/
ASC final rule (86 FR 63867 through 63870), and the CY 2023 OPPS/ASC 
final rule (87 FR 72113 through 72114) 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.
    We refer readers to the CY 2022 OPPS/ASC final rule (86 FR 63867 
through 63868), where we finalized the adoption of the STEMI eCQM 
reporting and data submission requirements. For the CY 2024 reporting 
period/CY 2026 payment determination, hospitals must submit one self-
selected quarter of data.
    We are not proposing any changes to these policies in this proposed 
rule.
    b. Proposed Excessive Radiation Dose or Inadequate Image Quality 
for Diagnostic Computed Tomography (CT) in Adults eCQM Reporting and 
Data Submission Requirements
    In section XIV.B.3.c of this proposed rule, we discuss the proposed 
adoption of the Excessive Radiation eCQM beginning with the voluntary 
CY 2025 reporting period followed by mandatory reporting beginning with 
the CY 2026 reporting period/CY 2028 payment determination. In this 
proposed rule, we propose a progressive increase in the number of 
quarters for which hospitals report eCQM data. We propose that 
hospitals that submit Excessive Radiation eCQM data during the CY 2025 
voluntary period may submit up to all four quarter(s) of data.
    Beginning with the CY 2026 mandatory reporting period/CY 2028 
payment determination, we propose that hospitals report two self-
selected calendar quarters of data for the Excessive Radiation eCQM. 
Beginning with the CY 2027 reporting period/CY 2029 payment 
determination, we propose to require hospitals to report all four 
calendar quarters (one calendar year) of data for the Excessive 
Radiation eCQM. We believe that a phased implementation approach would 
allow facilities the ability to make the necessary adjustments for data 
submission over time and would produce more comprehensive and reliable 
quality measure data for patients and providers. Furthermore, we 
believe that aligning the schedule with the STEMI measure will allow 
for a seamless transition from voluntary to mandatory reporting of all 
calendar quarters.

[[Page 49799]]

    We also refer readers to Table 71 for a summary of the proposed 
quarterly data increase in eCQM reporting beginning with the CY 2025 
reporting period.
[GRAPHIC] [TIFF OMITTED] TP31JY23.107

    We also propose to require Excessive Radiation eCQM data submission 
by May 15 in the year prior to the affected payment determination year. 
All deadlines occurring on a Saturday, Sunday, or legal holiday, or on 
any other day all or part of which is declared to be a non-workday for 
federal employees by statute or Executive Order would be extended to 
the first day thereafter. For example, for the CY 2026 reporting 
period/CY 2028 payment determination, hospitals must report two self-
selected quarters of data and would be required to submit eCQM data by 
May 15, 2027. This data submission deadline would follow our policies 
on submission deadlines for eCQM data defined in section XIV.E.6.e of 
this proposed rule.
    We invite public comment on our proposals.
c. Electronic Clinical Quality Measure Certification Requirements for 
eCQM Reporting
(1) Use of the 2015 Edition Cures Update Certification Criteria
    We refer readers to the CY 2022 OPPS/ASC final rule (86 FR 63868 
and 63869) for our policies regarding the requirement that hospitals 
participating in the Hospital OQR Program utilize certified technology 
updated consistent with the 2015 Edition Cures Update as finalized in 
the Office of the National Coordinator for Health Information 
Technology (ONC) 21st Century Cures Act final rule (85 FR 25642 through 
25961) beginning with the CY 2023 reporting period/CY 2025 payment 
determination.
    We are not proposing any changes to these policies in this proposed 
rule.
d. File Format for eCQM Data, Zero Denominator Declarations, and Case 
Threshold Exemptions
(1) File Format for eCQM Data
    We refer reader to the CY 2022 OPPS/ASC final rule (86 FR 42262) 
for our policies regarding the file format for eCQM data.
    We are not proposing any changes to these policies in this proposed 
rule.
(2) Zero Denominator Declarations
    We refer readers to the CY 2022 OPPS/ASC final rule (86 FR 63869) 
for our policies regarding zero denominator declarations.
    We are not proposing any changes to these policies in this proposed 
rule.
(3) Case Threshold Exemptions
    We refer readers to the CY 2022 OPPS/ASC final rule (86 FR 63869) 
for our policies regarding case threshold exemptions.
    We are not proposing any changes to these policies in this proposed 
rule.
e. Submission Deadlines for eCQM Data
    We refer readers to the CY 2022 OPPS/ASC final rule (86 FR 63870) 
for our policies regarding submission deadlines for eCQM data.
    We are not proposing any changes to these policies in this proposed 
rule.
7. Proposed Data Submission and Reporting Requirements for Patient-
Reported Outcome-Based Performance Measures (PRO-PMs)
    In section XIV.B.3.b of this proposed rule, we propose the adoption 
of the hospital-level THA/TKA PRO-PM into the Hospital OQR Program 
measure set. In this section of the proposed rule, we propose the 
reporting and submission requirements for PRO-PM as a new type of 
measure to the Hospital OQR Program.
a. Submission of PRO-PM Data
(1) Data Submission Generally
    In section XIV.B.3.b of this proposed rule, we propose adoption of 
the THA/TKA PRO-PM in the Hospital OQR Program beginning with voluntary 
CYs 2025 and 2026 reporting periods and mandatory reporting period 
beginning with the CY 2027/CY 2030 payment determination. We propose 
that hospitals and vendors use the HQR System for data submission for 
the THA/TKA PRO-PM, which would enable us to incorporate this new 
requirement into the infrastructure we have developed and use to 
collect other quality data. HOPDs may choose to: (1) send their data to 
CMS directly; or (2) utilize an external entity, such as through a 
vendor or registry, to submit data on behalf of the facility to CMS. We 
would provide hospitals with additional detailed information and 
instructions for submitting data using the HQR System through CMS' 
existing websites, through outreach, or both. Use of the HQR system 
leverages existing CMS infrastructure already utilized for other 
quality measures. The HQR System allows for data submission using 
multiple file formats (such as CSV, XML) and a manual data entry 
option, allowing facilities and vendors additional flexibility in data 
submission.
(2) Data Submission Reporting Requirements
(a) Voluntary Reporting Requirements for the Proposed THA/TKA PRO-PM
    For hospitals participating in voluntary reporting for the THA/TKA 
PRO-PM as discussed in section

[[Page 49800]]

XIV.B.3.b of this proposed rule, we propose that hospitals submit pre-
operative PRO data, as well as matching post-operative PRO data, for at 
least 50 percent of their eligible elective primary THA/TKA procedures.
    For the THA/TKA PRO-PM, we propose that the first voluntary 
reporting period for CY 2025 would include pre-operative PRO data 
collection from 90 to 0 days before the procedure (for eligible 
elective THA/TKA procedures performed from January 1, 2025, through 
December 31, 2025) and post-operative PRO data collection from 300 to 
425 days after the procedure. Therefore, during the first voluntary 
reporting period for CY 2025, hospitals would submit pre-operative data 
by May 15, 2026 and post-operative data by May 15, 2027, and we intend 
to provide hospitals with their results in confidential feedback 
reports in CY 2028. All deadlines occurring on a Saturday, Sunday, or 
legal holiday, or on any other day all or part of which is declared to 
be a non-workday for federal employees by statute or Executive order 
would be extended to the first day thereafter. After the initial 
submission of pre-operative data for the first voluntary period, 
hospitals would submit both pre-operative data for the second voluntary 
period and post-operative data for the first voluntary period by the 
same data submission deadline, but for the different voluntary 
reporting periods. For example, hospitals would need to submit: (1) 
post-operative data for the first voluntary reporting (for procedures 
performed between January 1, 2025, and December 31, 2025); and (2) pre-
operative data for the second voluntary reporting (for procedures 
performed between January 1, 2026, and December 31, 2026) of the THA/
TKA PRO-PM by May 15, 2027.
    For the THA/TKA PRO-PM, we propose that the second voluntary 
reporting period for the CY 2026 reporting period would include pre-
operative PRO data collection from 90 to 0 days before the procedure 
(for eligible elective THA/TKA procedures performed from January 1, 
2026 through December 31, 2026) and post-operative PRO data collection 
from 300 to 425 days after the procedure. Hospitals would submit pre-
operative data for the second voluntary reporting period by May 15, 
2027 and post-operative data for the second voluntary reporting period 
by May 15, 2028.we intend to provide hospitals with their results in 
confidential feedback reports in CY 2029. HOPDs that voluntarily submit 
data for this measure would receive confidential feedback reports that 
detail submission results from the reporting period. Results of 
voluntary reporting would not be made publicly available. If feasible, 
we would calculate and provide each participating facility with their 
RSIR as part of the confidential feedback reports. This would provide 
each facility with an indication of their performance relative to the 
other facilities that participate in the voluntary reporting period.
    While we do not propose to publicly report the data we receive 
during the voluntary reporting periods for the THA/TKA PRO-PM facility-
level RSIR, we propose to publicly report which facilities choose to 
participate in voluntary reporting and/or the percent of pre-operative 
data submitted by participating facilities for the first voluntary 
reporting period, and their percent of pre-operative and post-operative 
matched PRO data submitted for subsequent voluntary reporting periods. 
For example, if out of 100 eligible procedures a facility submits 45 
pre-operative cases that match to post-operative cases, then we would 
report that the facility submitted 45 percent of matched pre-operative 
and post-operative PRO surveys during voluntary reporting.
    We refer readers to Table 72 for an overview of the proposed 
performance period, pre- and post-operative data collection timeframes, 
and data submission deadlines during the voluntary reporting periods 
for THA/TKA PRO-PM.
[GRAPHIC] [TIFF OMITTED] TP31JY23.108


[[Page 49801]]


(b) Mandatory Reporting
    Following the voluntary reporting periods, we propose that 
mandatory reporting of the THA/TKA PRO-PM would begin with reporting 
PRO data for eligible elective THA/TKA procedures from January 1, 2027 
through December 31, 2027 (the CY 2027 performance period), impacting 
the CY 2030 payment determination. This initial mandatory reporting 
would include pre-operative PRO data collection from 90 days preceding 
the applicable performance period and from 300 to 425 days after the 
performance period. For example, pre-operative data from October 3, 
2026 through December 31, 2027 (for eligible elective primary THA/TKA 
procedures from January 1, 2027 through December 31, 2027) and post-
operative PRO data collection from October 28, 2027 to February 28, 
2029. Pre-operative data submission would occur by May 15, 2028 and 
post-operative data submission would occur by May 15, 2029.
    We intend to provide hospitals with their results in CY 2030 before 
publicly reporting results on the Compare tool hosted by HHS, currently 
available at https://www.medicare.gov/care-compare, or its successor 
website. We would provide confidential feedback reports during the 
voluntary period which would include the risk-standardized improvement 
rate (RSIR); as well as other results that support understanding of 
their performance prior to public reporting. For this first mandatory 
reporting period, hospitals that fail to meet the reporting 
requirements would receive a reduction of their Annual Payment Update 
(APU) in the CY 2030 payment determination. We propose that hospitals 
would be required to submit 50 percent of eligible, complete pre-
operative data with matching eligible, complete post-operative data as 
a minimum amount of data for mandatory reporting in the Hospital OQR 
Program.
    We refer readers to Table 73 below. for an overview of the proposed 
performance period, pre- and post-operative data collection timeframes, 
and data submission deadlines during the first year of mandatory 
reporting.
[GRAPHIC] [TIFF OMITTED] TP31JY23.109

    We invite comment on these proposals.
8. Population and Sampling Data Requirements for the CY 2023 Payment 
Determination and Subsequent Years
    We refer readers to the CY 2011 OPPS/ASC final rule (75 FR 72100 
through 72103) and the CY 2012 OPPS/ASC final rule (76 FR 74482 through 
74483) for our policies regarding population and sampling data 
requirements.
    We are not proposing any changes to these policies in this proposed 
rule.
9. Review and Corrections Period for Measure Data Submitted to the 
Hospital OQR Program
a. Chart-Abstracted Measures
    We refer readers to the CY 2015 OPPS/ASC final rule (79 FR 66964 
and 67014) for our policies regarding a review and corrections period 
for chart-abstracted measures in the Hospital OQR Program.
    We are not proposing any changes to these policies in this proposed 
rule.
b. Web-Based Measures
    We refer readers to the CY 2021 OPPS/ASC final rule (85 FR 86184) 
for our policies regarding a review and corrections period for web-
based measures in the Hospital OQR Program.
    We are not proposing any changes to these policies in this proposed 
rule.
c. Electronic Clinical Quality Measures (eCQMs)
    We refer readers to the CY 2022 OPPS/ASC final rule (86 FR 63870) 
for our policies regarding a review and corrections period for eCQMs in 
the Hospital OQR Program. We refer readers to the CMS website 
(currently available at: https://qualitynet.cms.gov/outpatient/measures/eCQM) and the eCQI Resource Center (available at: https://ecqi.healthit.gov/) for more resources on eCQM reporting.
    We are not proposing any changes to these policies in this proposed 
rule.
d. OAS CAHPS Measures
    We refer readers to the CY 2022 OPPS/ASC final rule (86 FR 63870) 
and the CY 2017 OPPS/ASC final rule (81 FR 79793) for our policies 
regarding a review and corrections period for OAS CAHPS measures in the 
Hospital OQR Program.
    We are not proposing any changes to these policies in this proposed 
rule.

[[Page 49802]]

10. Hospital OQR Program Validation Requirements
a. Background
    We refer readers to the CY 2011 OPPS/ASC final rule (75 FR 72105 
through 72106), the CY 2013 OPPS/ASC final rule (77 FR 68484 through 
68487), the CY 2015 OPPS/ASC final rule (79 FR 66964 through 66965), 
the CY 2016 OPPS/ASC final rule (80 FR 70524), the CY 2018 OPPS/ASC 
final rule (82 FR 59441 through 59443), the CY 2022 OPPS/ASC final rule 
(86 FR 63870 through 63873), the CY 2023 OPPS/ASC final rule (87 FR 
72115 through 72116), and Sec.  419.46(f) for our policies regarding 
validation.
    We are not proposing any changes to these policies in this proposed 
rule.
b. Use of Electronic File Submissions for Chart-Abstracted Measure 
Medical Records Requests
    We refer readers to the CY 2022 OPPS/ASC final rule (86 FR 63870) 
for additional information on the use of electronic file submissions 
for chart-abstracted measure medical records requests.
    We are not proposing any changes to these policies in this proposed 
rule.
c. Time Period for Chart-Abstracted Measure Data Validation
    We refer readers to the chart-abstracted validation requirements 
and methods we adopted in the CY 2014 OPPS/ASC final rule (78 FR 75117 
through 75118) and codified at Sec.  419.46(f)(1) for the CY 2025 
payment determination and subsequent years. We refer readers to Sec.  
419.46(f)(1) for our policies regarding the time period for chart-
abstracted measure data validation.
    We are not proposing any changes to these policies in this proposed 
rule.
d. Targeting Criteria
    We refer readers to the CY 2012 OPPS/ASC final rule (76 FR 74485), 
where 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; the CY 2013 OPPS/
ASC final rule (77 FR 68485 and 68486), where we finalized that 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, and for a discussion of 
finalized policies regarding our medical record validation procedure 
requirements; the CY 2018 OPPS/ASC final rule (82 FR 59441), where we 
clarified that an ``outlier value'' for purposes of the targeting 
criterion; the CY 2022 OPPS/ASC final rule (86 FR 63872), where we 
finalized the addition of two targeting criteria: (1) any hospital that 
has not been randomly selected for validation in any of the previous 
three years; or (2) any hospital that passed validation in the previous 
year and had a two-tailed confidence interval that included 75 percent; 
and the CY 2023 OPPS/ASC final rule (87 FR 72115 through 72116), where 
we finalized an additional targeting criteria: 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. We refer readers to Sec.  419.46(f)(3) for our policies 
regarding the validation selection process and targeting criteria.
    We are not proposing any changes to these policies in this proposed 
rule.
e. Educational Review Process and Score Review and Correction Period 
for Chart-Abstracted Measures
    We refer readers to Sec.  419.46(f)(4) for our policies regarding 
the educational review process, including validation score review and 
correction, for chart-abstracted measures.
    We are not proposing any changes to these policies in this proposed 
rule.
11. Extraordinary Circumstances Exception (ECE) Process
    We refer readers to Sec.  419.46(e) for our policies regarding the 
extraordinary circumstances exception (ECE) process under the Hospital 
OQR Program. We propose to amend our exception policy codified at Sec.  
419.46(e)(1) to replace references to ``QualityNet'' with ``CMS-
designated information system'' or ``CMS website.'' and to make other 
conforming technical edits, to accommodate recent and future systems 
requirements and mitigate confusion for program participants.
    We invite public comment on this proposal.
    Other than the proposal to amend Sec.  419.46(e)(1), we are not 
proposing any changes to these policies in this proposed rule.
12. Hospital OQR Program Reconsideration and Appeals Procedures
    We refer readers to Sec.  419.46(g) for our policies regarding 
reconsideration and appeals procedures. We propose to amend our 
submission deadline codified at Sec.  419.46(g)(1) to replace 
references to ``QualityNet'' with ``CMS-designated information system'' 
or ``CMS website,'' and to make other conforming technical edits, to 
accommodate recent and future systems requirements and mitigate 
confusion for program participants.
    We invite public comment on this proposal.
    Other than the proposal to amend Sec.  419.46(g)(1), we are not 
proposing any changes to these policies in this proposed rule.

F. Payment Reduction for Hospitals That Fail To Meet the Hospital OQR 
Program Requirements for the CY 2024 Payment Determination

1. Background
    Section 1833(t)(17) of the Act, which applies to subsection (d) 
hospitals (as defined under section 1886(d)(1)(B) of the Act), states 
that hospitals that fail to report data required to be submitted on 
measures selected by the Secretary, in the form and manner, and at a 
time, specified by the Secretary will incur a 2.0 percentage point 
reduction to their Outpatient Department (OPD) fee schedule increase 
factor; that is, the annual payment update factor. Section 
1833(t)(17)(A)(ii) of the Act specifies that any reduction applies only 
to the payment year involved and will not be taken into account in 
computing the applicable OPD fee schedule increase factor for a 
subsequent year.
    The application of a reduced OPD fee schedule increase factor 
results in reduced national unadjusted payment rates that apply to 
certain outpatient items and services provided by hospitals that are 
required to report outpatient quality data in order to receive the full 
payment update factor and that fail to meet the Hospital OQR Program 
requirements. Hospitals that meet the reporting requirements receive 
the full OPPS payment update without the reduction. For a more detailed 
discussion of how this payment reduction was initially implemented, we 
refer readers to the CY 2009 OPPS/ASC final rule with comment period 
(73 FR 68769 through 68772).
    The national unadjusted payment rates for many services paid under 
the OPPS equal the product of the OPPS conversion factor and the scaled 
relative payment weight for the APC to which the service is assigned. 
The OPPS conversion factor, which is updated annually by the OPD fee 
schedule increase factor, is used to calculate the OPPS payment rate 
for services with the following status indicators (listed in Addendum B 
to the proposed rule, which is available via the internet on the CMS 
website): ``J1'', ``J2'', ``P'', ``Q1'', ``Q2'', ``Q3'', ``R'', ``S'', 
``T'', ``V'', or ``U''. In the CY 2017 OPPS/ASC final

[[Page 49803]]

rule with comment period (81 FR 79796), we clarified that the reporting 
ratio does not apply to codes with status indicator ``Q4'' because 
services and procedures coded with status indicator ``Q4'' are either 
packaged or paid through the Clinical Laboratory Fee Schedule and are 
never paid separately through the OPPS. Payment for all services 
assigned to these status indicators will be subject to the reduction of 
the national unadjusted payment rates for hospitals that fail to meet 
Hospital OQR Program requirements, with the exception of services 
assigned to New Technology APCs with assigned status indicator ``S'' or 
``T''. We refer readers to the CY 2009 OPPS/ASC final rule with comment 
period (73 FR 68770 through 68771) for a discussion of this policy.
    The OPD fee schedule increase factor is an input into the OPPS 
conversion factor, which is used to calculate OPPS payment rates. To 
reduce the OPD fee schedule increase factor for hospitals that fail to 
meet reporting requirements, we calculate two conversion factors--a 
full market basket conversion factor (that is, the full conversion 
factor), and a reduced market basket conversion factor (that is, the 
reduced conversion factor). We then calculate a reduction ratio by 
dividing the reduced conversion factor by the full conversion factor. 
We refer to this reduction ratio as the ``reporting ratio'' to indicate 
that it applies to payment for hospitals that fail to meet their 
reporting requirements. Applying this reporting ratio to the OPPS 
payment amounts results in reduced national unadjusted payment rates 
that are mathematically equivalent to the reduced national unadjusted 
payment rates that would result if we multiplied the scaled OPPS 
relative payment weights by the reduced conversion factor. For example, 
to determine the reduced national unadjusted payment rates that applied 
to hospitals that failed to meet their quality reporting requirements 
for the CY 2010 OPPS, we multiplied the final full national unadjusted 
payment rate found in Addendum B of the CY 2010 OPPS/ASC final rule 
with comment period by the CY 2010 OPPS final rule with comment period 
reporting ratio of 0.980 (74 FR 60642).
    We note that the only difference in the calculation for the full 
conversion factor and the calculation for the reduced conversion factor 
is that the full conversion factor uses the full OPD update and the 
reduced conversion factor uses the reduced OPD update. The baseline 
OPPS conversion factor calculation is the same since all other 
adjustments would be applied to both conversion factor calculations. 
Therefore, our standard approach of calculating the reporting ratio as 
described earlier in this section is equivalent to dividing the reduced 
OPD update factor by that of the full OPD update factor. In other 
words:

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

    Which is equivalent to:

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

    In the CY 2009 OPPS/ASC final rule with comment period (73 FR 68771 
through 68772), we established a policy that the Medicare beneficiary's 
minimum unadjusted copayment and national unadjusted copayment for a 
service to which a reduced national unadjusted payment rate applies 
would each equal the product of the reporting ratio and the national 
unadjusted copayment or the minimum unadjusted copayment, as 
applicable, for the service. Under this policy, we apply the reporting 
ratio to both the minimum unadjusted copayment and national unadjusted 
copayment for services provided by hospitals that receive the payment 
reduction for failure to meet the Hospital OQR Program reporting 
requirements. This application of the reporting ratio to the national 
unadjusted and minimum unadjusted copayments is calculated according to 
Sec.  419.41 of our regulations, prior to any adjustment for a 
hospital's failure to meet the quality reporting standards according to 
Sec.  419.43(h). Beneficiaries and secondary payers thereby share in 
the reduction of payments to these hospitals.
    In the CY 2009 OPPS/ASC final rule with comment period (73 FR 
68772), we established the policy that all other applicable adjustments 
to the OPPS national unadjusted payment rates apply when the OPD fee 
schedule increase factor is reduced for hospitals that fail to meet the 
requirements of the Hospital OQR Program. For example, the following 
standard adjustments apply to the reduced national unadjusted payment 
rates: the wage index adjustment, the multiple procedure adjustment, 
the interrupted procedure adjustment, the rural sole community hospital 
adjustment, and the adjustment for devices furnished with full or 
partial credit or without cost. Similarly, OPPS outlier payments made 
for high cost and complex procedures will continue to be made when 
outlier criteria are met. For hospitals that fail to meet the quality 
data reporting requirements, the hospitals' costs are compared to the 
reduced payments for purposes of outlier eligibility and payment 
calculation. We established this policy in the OPPS beginning in the CY 
2010 OPPS/ASC final rule with comment period (74 FR 60642). For a 
complete discussion of the OPPS outlier calculation and eligibility 
criteria, we refer readers to section II.G of the CY 2023 OPPS/ASC 
proposed rule (87 FR 44533 through 44534).
2. Reporting Ratio Application and Associated Adjustment Policy for CY 
2024
    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 2024 annual payment update factor. 
For this CY 2024 OPPS/ASC proposed rule, the proposed reporting ratio 
is 0.9805, which, when multiplied by the proposed full conversion 
factor of $87.488, 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 $85.782. We propose to continue 
to apply the reporting ratio to all services calculated using the OPPS 
conversion factor. We propose to continue to apply the reporting ratio, 
when applicable, to all HCPCS codes to which we have proposed status 
indicator assignments of ``J1'', ``J2'', ``P'', ``Q1'', ``Q2'', ``Q3'', 
``R'', ``S'', ``T'', ``V'', and ``U'' (other than New Technology APCs 
to which we have proposed status indicator assignments of ``S'' and 
``T''). We proposed to continue to exclude services paid under New 
Technology APCs. We propose to continue to apply the reporting ratio to 
the national unadjusted payment rates and the minimum unadjusted and 
national unadjusted copayment rates of all applicable services for 
those hospitals that fail to meet the Hospital OQR Program reporting 
requirements. We also propose to continue to apply all other applicable 
standard adjustments to the OPPS national unadjusted payment rates for 
hospitals that fail to meet the requirements of the Hospital OQR 
Program. Similarly, we propose to continue to calculate OPPS outlier 
eligibility and outlier payment based on the reduced payment rates for 
those hospitals that fail to meet the reporting requirements. In 
addition to our

[[Page 49804]]

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 2024, the proposed reporting ratio is 0.9805, which, when 
multiplied by the proposed full conversion factor of $87.488, 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 $85.782.

XV. Ambulatory Surgical Center Quality Reporting (ASCQR) Program 
Requirements, Proposals, and Requests for Comment

A. Background

1. Overview
    We seek to promote higher quality, more efficient, and equitable 
healthcare for Medicare beneficiaries. Consistent with these goals, we 
have implemented quality reporting programs for multiple care settings, 
including the Ambulatory Surgical Center Quality Reporting (ASCQR) 
Program for ambulatory surgical center care.
2. Statutory Authority for the ASCQR Program
    Section 1833(i)(7)(A) authorizes the Secretary to reduce any annual 
increase under the revised ambulatory surgical center (ASC) payment 
system by 2.0 percentage points for such year that an ASC that fails to 
submit required data on quality measures specified by the Secretary in 
accordance with section 1833(i)(7)(B) of the Act. Section 1833(i)(7)(B) 
of the Act states that, except as the Secretary may otherwise provide, 
several of the statutory provisions governing the Hospital Outpatient 
Quality Reporting (OQR) Program, specifically section 1833(t)(17)(B) 
through (E) of the Act, also apply to the services of ASCs under the 
ASCQR Program in a similar manner to the manner in which they apply to 
the services of hospital outpatient departments under the Hospital OQR 
Program. Sections 1833(t)(17)(B) through (E) of the Act generally 
govern the development and replacement of quality measures, the form 
and manner of submission of data to CMS, and procedures for making the 
data submitted to CMS available to the public.
    We refer readers to the CY 2012 OPPS/ASC final rule (76 FR 74492 
through 74494) for a detailed discussion of the statutory authority of 
the ASCQR Program.
3. Regulatory History of the ASCQR Program
    We refer readers to the following final rules for detailed 
discussions of the regulatory history of the ASCQR Program:
     CY 2012 OPPS/ASC final rule (76 FR 74492 through 74517);
     FY 2013 IPPS/LTCH PPS final rule (77 FR 53637 through 
53644);
     CY 2013 OPPS/ASC final rule (77 FR 68492 through 68500);
     CY 2014 OPPS/ASC final rule (78 FR 75122 through 75141);
     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);
     CY 2022 OPPS/ASC final rule (86 FR 63875 through 63911); 
and
     CY 2023 OPPS/ASC final rule (87 FR 72117 through 72136)
    We have codified certain requirements under the ASCQR Program at 42 
CFR part 416, subpart H (Sec.  416.300 through Sec.  416.330). We refer 
readers to section XV.E of this proposed rule for a detailed discussion 
of the payment reduction for ASCs that fail to meet program 
requirements.

B. ASCQR Program Quality Measures

1. Considerations in the Selection of ASCQR Program Quality Measures
    We refer readers to the CY 2013 OPPS/ASC final rule (77 FR 68493 
and 68494) for a detailed discussion of the priorities we consider for 
quality measure selection for the ASCQR Program.
    We are not proposing any changes to these policies in this proposed 
rule.
2. Retention of Previously Adopted ASCQR Program Measures
    We previously finalized and codified at Sec.  416.320(a) our policy 
regarding retention of quality measures adopted for the ASCQR Program. 
Specifically, our regulation at Sec.  416.320(a) provides that we will 
retain quality measures previously adopted for the ASCQR Program as 
part of its measure set unless we remove, suspend, or replace the 
measure.
    We are not proposing any changes to this policy in this proposed 
rule.
3. Removal, Replacement, or Suspension of Quality Measures From the 
ASCQR Program Measure Set
a. Immediate Removal of Program Measures
    We refer readers to Sec.  416.320(b) for our policies regarding 
immediate removal of a measure for the ASCQR Program based on evidence 
that the continued use of the measure as specified raises patient 
safety concerns. We propose to amend our measure removal policy 
codified at Sec.  416.320(b) to replace references to ``QualityNet'' 
with ``CMS-designated information system'' or ``CMS website,'' and to 
make other conforming technical edits, to accommodate recent and future 
systems requirements and mitigate confusion for program participants.
    We invite public comment on this proposal.
b. Removal, Replacement, or Suspension of Program Measures
    We previously finalized and codified at Sec.  416.320(c) our 
policies regarding removal of quality measures adopted for the ASCQR 
Program. Specifically, our regulation at Sec.  416.320(c) provides 
that, unless a measure raises specific safety concerns, we will use the 
regular rulemaking process, allowing public comment, to remove, 
suspend, or replace quality measures in the ASCQR Program. Our 
regulation at Sec.  416.320(c)(2) further provides that we will weigh 
whether to remove measures based on eight factors, including whether a 
measure is ``topped-out'' (Sec.  416.320(c)(2)(i)), based on criteria 
set forth in our regulation at Sec.  416.320(c)(3). However, as 
provided in our regulation at Sec.  416.320(c)(4), we will assess the 
benefits of removing a measure on a case-by-case basis and will not 
remove a measure solely on the basis of it meeting any of specific 
factor or criterion.
    We are not proposing any changes to these policies in this proposed 
rule.
4. Modifications to Previously Adopted Measures
    In this proposed rule, we propose to modify three previously 
adopted measures beginning with the CY 2024 reporting period/CY 2026 
payment determination: (1) COVID-19 Vaccination Coverage Among 
Healthcare Personnel (HCP) measure; (2) Cataracts: Improvement in 
Patient's Visual Function Within 90 Days Following Cataract Surgery 
measure survey instrument use; and (3) Endoscopy/Polyp Surveillance: 
Appropriate Follow-Up Interval for

[[Page 49805]]

Normal Colonoscopy in Average Risk Patients measure.
a. Proposed Modification of the COVID-19 Vaccination Coverage Among 
HealthCare Personnel (HCP) Measure Beginning With the CY 2024 Reporting 
Period/CY 2026 Payment Determination
(1) Background
    On January 31, 2020, the Secretary of the Department of Health and 
Human Services (HHS) declared a public health emergency (PHE) for the 
United States in response to the global outbreak of SARS-COV-2, a then 
novel coronavirus that causes a disease named ``coronavirus disease 
2019'' (COVID-19).\367\ Subsequently, the COVID-19 Vaccination Coverage 
Among Health Care Personnel (HCP) measure was adopted across multiple 
quality reporting programs, including the ASCQR Program (86 FR 63875 
through 63833).\368\ COVID-19 has continued to spread domestically and 
around the world with more than 102.7 million cases and 1.1 million 
deaths in the United States alone as of February 13, 2023.\369\ The 
Secretary renewed the PHE on April 21, 2020 and then every three months 
thereafter, with the final renewal on February 9, 2023.\370\ The PHE 
ended on May 11, 2023; however, the public health response to COVID-19 
remains a public health priority including vaccination efforts.\371\
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    \367\ U.S. Dept of Health and Human Services, Office of the 
Assistant Secretary for Preparedness and Response. (2020). 
Determination that a Public Health Emergency Exists. Available at: 
https://www.phe.gov/emergency/news/healthactions/phe/Pages/2019-nCoV.aspx.
    \368\ The Hospital Inpatient Quality Reporting Program (86 FR 
45374 through 45382), the Hospital OQR Program (86 FR 63824 through 
63833), the Inpatient Psychiatric Facility Quality Reporting Program 
(86 FR 42633 through 42640), the PPS-Exempt Cancer Hospital Quality 
Reporting Program (86 FR 45428 through 45434), the Long-Term Care 
Hospital Quality Reporting Program (86 FR 45438 through 45446), the 
Skilled Nursing Facility Quality Reporting Program (86 FR 42480 
through 42489), the End-Stage Renal Disease Quality Incentive 
Program (87 FR 67244 through 67248), and the Inpatient 
Rehabilitation Facility Quality Reporting Program (86 FR 42385 
through 42396).
    \369\ Centers for Disease Control and Prevention. COVID Data 
Tracker. Accessed February 13, 2023. Available at: https://covid.cdc.gov/covid-data-tracker/#datatracker-home.
    \370\ U.S. Dept. of Health and Human Services. Office of the 
Assistant Secretary for Preparedness and Response. (2023). Renewal 
of Determination that a Public Health Emergency Exists. Available 
at: https://aspr.hhs.gov/legal/PHE/Pages/COVID19-9Feb2023.aspx.
    \371\ U.S. Dept. of Health and Human Services. Fact Sheet: 
COVID-19 Public Health Emergency Transition Roadmap. February 9, 
2023. Available at: https://www.hhs.gov/about/news/2023/02/09/fact-sheet-covid-19-public-health-emergency-transition-roadmap.html.
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    As stated in the CY 2022 OPPS/ASC final rule (86 FR 63876) and in 
our ``Revised Guidance for Staff Vaccination Requirements,'' 
vaccination is a critical part of the nation's strategy to effectively 
counter the spread of COVID-19.372 373 374 We continue to 
believe it is important to incentivize and track HCP vaccination 
through quality measurement across care settings, including the ASC 
setting, to protect health care workers, patients, and caregivers, and 
to help sustain the ability of HCP in each of these care settings to 
continue serving their communities. Studies indicate higher levels of 
population-level vaccine effectiveness in preventing COVID-19 infection 
among HCP and other frontline workers in multiple industries, with 
vaccines having a 90 percent effectiveness in preventing symptomatic 
and asymptomatic infection from December 2020 through August 2021.\375\ 
Since the Food and Drug Administration (FDA) issued emergency use 
authorizations (EUAs) for selected initial and primary vaccines for 
adults, vaccines have been highly effective in real-world conditions at 
preventing COVID-19 in HCP with up to 96 percent efficacy for fully 
vaccinated HCP, including those at risk for severe infection and those 
in racial and ethnic groups disproportionately affected by COVID-
19.376 377 378 379 Overall, data demonstrate that COVID-19 
vaccines are effective and prevent severe disease, hospitalization, and 
death from the COVID-19 infection.\380\
---------------------------------------------------------------------------

    \372\ Centers for Medicare & Medicaid Services. (October 26, 
2022). Revised Guidance for Staff Vaccination Requirements. 
Available at: https://www.cms.gov/medicareprovider-enrollment-and-certificationsurveycertificationgeninfopolicy-and-memos-states-and/revised-guidance-staff-vaccination-requirements.
    \373\ Centers for Disease Control and Prevention. (September 24, 
2021). Morbidity and Mortality Weekly Report (MMWR). Comparative 
Effectiveness of Moderna, Pfizer-BioNTech, and Janssen (Johnson & 
Johnson) Vaccines in Preventing COVID-19 Hospitalizations Among 
Adults Without Immunocompromising Conditions--United States, March-
August 2021. Available at: https://cdc.gov/mmwr/volumes/70/wr/mm7038e1.htm?s_cid=mm7038e1_w.
    \374\ Centers for Medicare & Medicaid Services. (2022). Revised 
Guidance for Staff Vaccination Requirements. Available at: https://www.cms.gov/files/document/qs0-23-02-all.pdf.
    \375\ Centers for Disease Control and Prevention. (August 27, 
2021). Morbidity and Mortality Weekly Report (MMWR). Effectiveness 
of COVID-19 Vaccines in Preventing SARS-COV-2 Infection Among 
Frontline Workers Before and During B.1.617.2 (Delta) Variant 
Predominance--Eight U.S. Locations, December 2020-August 2021. 
Available at: https://www.cdc.gov/mmwr/volumes/70/wr/mm7034e4.htm.
    \376\ Pilishivi T, Gierke R, Fleming-Dutra KE, et al. (2022). 
Effectiveness of mRNA Covid-19 Vaccine among U.S. Health Care 
Personnel. New England Journal of Medicine, 385(25), e90. https://doi.org/10.1056/NEJMoa2106599.
    \377\ Centers for Disease Control and Prevention. (2021). 
Morbidity and Mortality Weekly Report (MMWR). Monitoring Incidence 
of COVID-19 Cases, Hospitalizations, and Deaths, by Vaccination 
Status--13 U.S. Jurisdictions, April 4-July 17, 2021. Available at: 
https://www.cdc.gov/mmwr/volumes/70/wr/mm7037e1.htm.
    \378\ Centers for Medicare & Medicaid Services. (2022). Revised 
Guidance for Staff Vaccination Requirements QSO-23-02-ALL. Available 
at: https://www.cms.gov/files/document/qs0-23-02-all.pdf.
    \379\ Food and Drug Administration. (2020). FDA Takes Key Action 
in Fight Against COVID-19 By Issuing Emergency Use Authorization for 
First COVID-19 Vaccine. Available at: https://www.fda.gov/news-events/press-announcements/fda-takes-key-action-fight-against-covid-19-issuing-emergency-use-authorization-first-covid-19.
    \380\ McGarry BE et al. (January 2022). Nursing Home Staff 
Vaccination and Covid-19 Outcomes. New England Journal of Medicine. 
2022 Jan 27;386(4):397-398. Available online at: https://pubmed.ncbi.nlm.nih.gov/34879189/.
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    When we adopted the COVID-19 Vaccination Coverage Among HCP measure 
in the CY 2022 OPPS/ASC final rule (86 FR 63875 through 63883), we 
acknowledged that the measure did not address booster shots for COVID-
19 vaccination (86 FR 63881), although the FDA authorized, and the 
Centers for Disease Control and Prevention (CDC) recommended, 
additional doses and booster doses of the COVID-19 vaccine for certain 
individuals, particularly those who are immunocompromised due to age or 
condition or who are living or working in high-risk settings, such as 
HCP (86 FR 63881). However, we also stated that we believed the 
numerator of the measure was sufficiently broad to include potential 
future boosters as part of a ``complete vaccination course'' (86 FR 
63881).
    Since then, new variants of SARS-COV-2 have emerged around the 
world and within the United States. Specifically, the Omicron variant 
(and its related subvariants) is listed as a variant of concern by the 
CDC because it spreads more easily than earlier variants.\381\ Vaccine 
manufacturers have responded to the Omicron variant by developing 
bivalent COVID-19 vaccines, which include a component of the original 
virus strain to provide broad protection against COVID-19 and a 
component of the Omicron variant to provide better protection against 
COVID-19 caused by the Omicron variant.\382\ Booster doses of the 
bivalent COVID-19 vaccine have proven effective at increasing immune 
response to SARS-COV-2 variants, including Omicron, particularly in 
individuals

[[Page 49806]]

who are more than six months removed from receipt of their primary 
series.\383\ These booster doses are associated with a greater 
reduction in infections among HCP and their patients relative to those 
who only received primary series vaccination, with a rate of 
breakthrough infections among HCP who received only the two-dose 
regimen of 21.4 percent compared to a rate of 0.7 percent among boosted 
HCP.384 385 Data from the existing COVID-19 Vaccination 
Coverage Among HCP measure demonstrate clinically significant variation 
in booster dose vaccination rates across ASCs.
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    \381\ Centers for Disease Control and Prevention. (August 2021). 
Variants of the Virus. Available at: https://www.cdc.gov/coronavirus/2019-ncov/variants/index.html.
    \382\ Food and Drug Administration. (November 2022). COVID-19 
Bivalent Vaccine Boosters. Available at: https://www.fda.gov/emergency-preparedness-and-response/coronavirus-disease-2019-covid-19/covid-19-bivalent-vaccines.
    \383\ Chalkias, S et al. (October 2022). A Bivalent Omicron-
Containing Booster Vaccine against Covid-19. N Engl J Med 2022; 
387:1279-1291. Available online at: https://www.nejm.org/doi/full/10.1056/NEJMoa2208343.
    \384\ Prasad N et al. (May 2022). Effectiveness of a COVID-19 
Additional Primary or Booster Vaccine Dose in Preventing SARS-CoV-2 
Infection Among Nursing Home Residents During Widespread Circulation 
of the Omicron Variant--United States, February 14-March 27, 2022. 
Morbidity and Mortality Weekly Report (MMWR). 2022 May 6;71(18):633-
637. Available online at: https://pubmed.ncbi.nlm.nih.gov/35511708/.
    \385\ Oster Y et al. (May 2022). The effect of a third BNT162b2 
vaccine on breakthrough infections in health care workers: a cohort 
analysis. Clin Microbiol Infect. 2022 May;28(5):735.e1-735.e3. 
Available online at: https://pubmed.ncbi.nlm.nih.gov/35143997/.
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    We believe that vaccination remains the most effective means to 
prevent the worst consequences of COVID-19, including severe illness, 
hospitalization, and death. Given the availability of vaccine efficacy 
data, EUAs issued by the FDA for bivalent boosters, the continued 
presence of SARS-COV-2 in the United States, and variance among rates 
of booster dose vaccination, we believe it is important to modify the 
COVID-19 Vaccination Coverage Among HCP measure for HCP to receive 
primary series and booster vaccine doses in a timely manner per the 
CDC's recommendation that bivalent COVID-19 vaccine booster doses might 
improve protection against SARS-CoV-2 Omicron sublineages.\386\
---------------------------------------------------------------------------

    \386\ Centers for Medicare and Medicaid Services. (October 26, 
2022). Revised Guidance for Staff Vaccination Requirements. Center 
for Clinical Standards and Quality/Quality, Safety & Oversight 
Group. Available at: https://www.cms.gov/files/document/qs0-23-02-all.pdf.
---------------------------------------------------------------------------

    We propose to modify the COVID-19 Vaccination Coverage Among HCP 
measure to utilize the term ``up to date'' in the HCP vaccination 
definition. We also propose to update the numerator to specify the 
timeframes within which an HCP is considered up to date with CDC 
recommended COVID-19 vaccines, including booster doses, beginning with 
the CY 2024 reporting period/CY 2026 payment determination for the 
ASCQR Program.
    We note that as we stated in the CY 2022 OPPS/ASC final rule (86 FR 
63877), the COVID-19 Vaccination Coverage Among HCP measure is a 
process measure that assesses HCP vaccination coverage rates and not an 
outcome measure for which ASCs are held responsible for a particular 
outcome. We propose to adopt the same modification to versions of the 
measure that we have adopted for other quality reporting programs.\387\
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    \387\ The Hospital Inpatient Quality Reporting Program, the 
Long-Term Care Hospital Quality Reporting Program and the PPS-Exempt 
Cancer Hospital Quality Reporting Program (88 FR 27074) as well as 
the Inpatient Psychiatric Facility Quality Reporting Program (88 FR 
21290), the Skilled Nursing Facility Quality Reporting Program (88 
FR 21332), the End-Stage Renal Disease Quality Incentive Program (87 
FR 67244),), and the Inpatient Rehabilitation Facility Quality 
Reporting Program (88 FR 20985).
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(2) Overview of Measure
    The COVID-19 Vaccination Coverage Among HCP measure is a process 
measure developed by the CDC to track COVID-19 vaccination coverage 
among HCP in various settings. ASCs report the required data for this 
measure via the CDC's National Healthcare Safety Network (NHSN). We 
refer readers to the CY 2022 OPPS/ASC final rule (86 FR 63877 through 
63878) for more information on the initial review of the measure by the 
Measure Applications Partnership (MAP).\388\
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    \388\ Interested parties convened by the consensus-based entity 
will provide input and recommendations on the Measures under 
Consideration (MUC) list as part of the pre-rulemaking process 
required by section 1890A of the Act. We refer readers to https://p4qm.org/PRMR-MSR for more information.
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    We included an updated version of the measure on the Measures Under 
Consideration (MUC) list for the 2022-2023 pre-rulemaking cycle for 
consideration by the MAP. In December 2022, during the MAP's Hospital 
Workgroup discussion, the workgroup stated that the revision of the 
current measure captures up to date vaccination information in 
accordance with the CDC's updated recommendations for additional and 
booster doses since the measure's initial development. Additionally, 
the Hospital Workgroup appreciated that the revised measure's target 
population is broader and simplified from seven categories of HCP to 
four.\389\ During the MAP's Health Equity Advisory Group review, the 
group highlighted the importance of COVID-19 vaccination measures and 
questioned whether the proposed revised version of the measure excludes 
individuals with contraindications to FDA authorized or approved COVID-
19 vaccines, and if the measure would be stratified by demographic 
factors. The measure developer confirmed that HCP with 
contraindications to the vaccines are excluded from the measure 
denominator, but stated that the measure would not be stratified since 
the data are submitted at an aggregate rather than an individual level. 
The MAP Rural Health Advisory Group expressed concerns about data 
collection burden, citing that collection is performed manually.\390\ 
We note that when reviewed by the MAP, reporting for contract personnel 
providing care or services not specifically included in the measure 
denominator was fully optional, whereas this reporting is now required 
to complete NHSN data entry, but is not included in the measure 
calculation. The developer also noted that the model used for this 
measure is based on the Influenza Vaccination Coverage Among HCP 
measure (CBE #0431).\391\ We refer readers to sections XXIV.B and XXVI 
(Collection of Information) of this proposed rule for additional detail 
on the burden and impact of this proposal.
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    \389\ Pre-rulemaking MUC lists and map reports. The Measures 
Management System. (n.d.). Available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
    \390\ Ibid.
    \391\ In previous years, we referred to the consensus-based 
entity (CBE) by corporate name. We have updated this language to 
refer to the CBE more generally.
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    The proposed revised measure received conditional support for 
rulemaking from the MAP pending (1) testing indicating the measure is 
reliable and valid, and (2) endorsement by the consensus-based entity 
(CBE). The MAP noted that the previous version of the measure received 
endorsement from the CBE (CBE #3636) \392\ and that the measure steward 
(CDC) intends to submit the updated measure for endorsement.\393\
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    \392\ Centers for Medicare and Medicaid Services Measures 
Inventory Tool. (n.d.). Available at: https://cmit.cms.gov/cmit/#/MeasureView?variantId=11670&sectionNumber=1.
    \393\ The measure steward owns and maintains a measure while a 
measure developer develops, implements, and maintains a measure. In 
this case, the CDC serves as both the measure steward and measure 
developer. For more information on measure development, we refer 
readers to: Centers for Medicare and Medicaid Services (2023). Roles 
in Measure Development. Available at: https://mmshub.cms.gov/about-quality/new-to-measures/roles.
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(a) Measure Specifications
    This measure is calculated quarterly by averaging the ASC's most 
recently submitted and self-selected one week of data. The measure 
includes at least 1 week of data collection a month for each of the 
three months in a quarter. The

[[Page 49807]]

denominator is calculated as the aggregated number of HCP eligible to 
work in the ASC for at least one day during the week of data 
collection, excluding denominator-eligible individuals with 
contraindications as defined by the CDC for all 3 months in a 
quarter.\394\ Facilities report vaccination information for the 
following four, separate categories of HCP to NHSN:
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    \394\ Centers for Disease Control and Prevention. (2022). 
Contraindications and precautions. Available at: https://www.cdc.gov/vaccines/covid-19/clinical-considerations/interim-considerations-us.html#contraindications.
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     Employees: This includes all persons who receive a direct 
paycheck from the reporting facility (i.e., on the facility's payroll), 
regardless of clinical responsibility or patient contact.
     Licensed independent practitioners (LIPs): This includes 
only physicians (MD, DO), advanced practice nurses, and physician 
assistants who are affiliated with the reporting facility, but are not 
directly employed by it (i.e., they do not receive a paycheck from the 
reporting facility), regardless of clinical responsibility or patient 
contact. Post-residency fellows are also included in this category if 
they are not on the facility's payroll.
     Adult students/trainees and volunteers: This includes 
medical, nursing, or other health professional students, interns, 
medical residents, or volunteers aged 18 or older who are affiliated 
with the facility but are not directly employed by it (i.e., they do 
not receive a paycheck from the facility), regardless of clinical 
responsibility or patient contact.
     Other contract personnel: Contract personnel are defined 
as persons providing care, treatment, or services at the facility 
through a contract who do not fall into any of the previously discussed 
denominator categories.\395\ This also includes vendors providing care, 
treatment, or services at the facility who may or may not be paid 
through a contract. We note that the other contract personnel category 
is required for data submission to NHSN, but is not included as part of 
the proposed COVID-19 Vaccination Coverage Among HCP measure.\396\
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    \395\ For more details on the reporting of other contract 
personnel, we refer readers to the NHSN COVID-19 Vaccination 
Protocol, Weekly COVID-19 Vaccination Module for Healthcare 
Personnel available at: https://www.cdc.gov/nhsn/pdfs/hps/covidvax/protocol-hcp-508.pdf.
    \396\ Ibid.
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    We are not proposing to modify the denominator exclusions. The 
numerator is calculated as the cumulative number of HCP in the 
denominator population who are considered up to date with CDC 
recommended COVID-19 vaccines. The term ``up to date'' is defined as 
meeting the CDC's set of criteria on the first day of the applicable 
reporting quarter. The current definition of ``up to date'' for COVID-
19 vaccination can be found at: https://www.cdc.gov/nhsn/pdfs/hps/covidvax/UpToDateGuidance-508.pdf.
    We refer readers to XV.D.1.c.(2) of this proposed rule for more 
details on the proposed modifications to this measure's specifications.
    We propose that public reporting of the modified version of the 
COVID-19 Vaccination Coverage Among HCP for the ASCQR Program would 
begin with the Fall 2024 Care Compare refresh, or as soon as 
technically feasible.
(b) CBE Endorsement
    The current version of the measure in ASCQR received CBE 
endorsement (CBE #3636) on July 26, 2022.\397\ The measure steward 
(CDC) intends to pursue CBE endorsement for the modified version of 
this measure.
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    \397\ Centers for Medicare & Medicaid Services. Measure 
Specifications for Hospital Workgroup for the 2022 MUC List. 
Available at: https://mmshub.cms.gov/sites/default/files/map-hospital-measure-specifications-manual-2022.pdf.
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(3) Data Submission and Reporting
    We refer readers to the CY 2022 OPPS/ASC final rule (86 FR 63879 
through 63883) for information on data submission and reporting of this 
measure. While we are not proposing any changes to the data submission 
or reporting process, we propose that reporting of the updated, 
modified version of this measure would begin with the CY 2024 reporting 
period for the ASCQR Program. Under the data submission and reporting 
process, ASCs would collect the numerator and denominator for the 
COVID-19 Vaccination Coverage Among HCP measure for at least one self-
selected week during each month of the reporting quarter and submit the 
data to the NHSN Healthcare Personnel Safety (HPS) Component before the 
quarterly deadline to meet ASCQR Program requirements. If an ASC 
submits more than one week of data in a month, the most recent week's 
data would be used to calculate the measure. For example, if first and 
third week data are submitted, the third week data would be used. Each 
quarter, the CDC would calculate a single quarterly COVID-19 HCP 
vaccination coverage rate for each ASC, which would be calculated by 
taking the average of the data from the three weekly rates submitted by 
the ASC for that quarter. CMS would publicly report each quarterly 
COVID-19 HCP vaccination coverage rate as calculated by the CDC (86 FR 
63878).
    We refer readers to section XIV.B.2.a of this proposed rule for the 
same proposal for the Hospital OQR Program.
    We invite public comment on this proposal.
b. Proposed Modification of the Survey Instrument Used for the 
Cataracts: Improvement in Patient's Visual Function Within 90 Days 
Following Cataract Surgery Measure Beginning With the Voluntary CY 2024 
Reporting Period
(1) Background
    In the CY 2014 OPPS/ASC final rule (78 FR 75129), we finalized the 
adoption of the Cataracts: Improvement in Patient's Visual Function 
Within 90 Days Following Cataract Surgery (Cataracts Visual Function) 
measure beginning with the CY 2014 reporting period/CY 2016 payment 
determination. This measure assesses the percentage of patients aged 18 
years and older who had cataract surgery and had improvement in visual 
function within 90 days following the cataract surgery via the 
administration of pre-operative and post-operative survey instruments 
(78 FR 75129). A ``survey instrument'' is an assessment tool that has 
been appropriately validated for the population for which it being 
used.\398\ For purposes of this proposed modification to the Cataracts 
Visual Function measure, the survey instruments we considered and are 
proposing to assess the visual function of a patient pre- and post-
operatively to determine whether the patient's visual function changed 
within 90 days of cataract surgery. Currently, examples of survey 
instruments assessing visual function include, but are not limited to, 
the National Eye Institute Visual Function Questionnaire (NEI-VFQ), the 
Visual Function (VF-14), the modified (VF-8R), the Activities of Daily 
Vision Scale (ADVS), the Catquest, and the modified Catquest-9. While 
the measure has been available for voluntary reporting in the ASCQR 
Program since the CY 2015 reporting period, a number of ASCs have 
reported data consistently using the survey instrument of their choice 
(87 FR 72119). We refer readers to the Cataracts Visual Function 
measure's Measure Information Form (MIF) and the ASCQR Program 
Specifications Manual for additional detail, which is available at: 
https://

[[Page 49808]]

qualitynet.cms.gov/asc/specifications-manuals.
---------------------------------------------------------------------------

    \398\ Ambulatory Surgical Center Specification Manual. (n.d.). 
Qualitynet. Retrieved March 21, 2023, from https://qualitynet.cms.gov/asc/specifications-manuals.
---------------------------------------------------------------------------

    In the CY 2015 OPPS/ASC final rule (79 FR 66984), we expressed 
concerns that clinicians' use of varying survey instruments would lead 
to inconsistent measure results. However, a study conducted a 
comparison among the 16 survey instruments currently accepted for use 
by ASCs in collecting data for this measure and found them to be 
scientifically validated, detected clinically important changes, and 
provided comparable results.\399\ While all 16 survey instruments in 
this study demonstrate usefulness for detecting clinically important 
change in cataract patients, some survey instrument's detection 
sensitivity scores higher than others.\400\
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    \399\ McAlinden C, Gothwal VK, Khadka J, et al. (2011). A head-
to-head comparison of 16 cataract surgery outcome questionnaires. 
Ophthalmology. 118(12):2374-81. https://doi.org/10.1016/j.ophtha.2011.06.008.
    \400\ Ibid.
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    Several commenters responding to the CY 2022 OPPS/ASC proposed rule 
(86 FR 63846) requested additional guidance from CMS regarding measure 
specifications and survey instruments for this Cataracts Visual 
Function measure in the Hospital OQR Program. We have considered this 
comment on this measure, and we agree that survey instruments for the 
assessment of visual function pre- and post-cataract surgery should be 
clarified in order to standardize acceptable survey instruments while 
minimizing collecting and reporting burden and to improve measure 
reliability. We propose to clarify which specific survey instruments 
may be used for the assessment of visual function pre- and post-
cataract surgery for the Cataracts Visual Function measure in both the 
Hospital OQR Program and the ASCQR Program, to ensure alignment of this 
measure's specifications across our quality reporting programs. Thus, 
for the ASCQR Program, we propose to limit the survey instruments that 
an ASC may use to assess changes in a patient's visual function for 
purposes of the Cataracts Visual Function measure to those listed 
below:

     The National Eye Institute Visual Function Questionnaire-
25 (NEI VFQ-25)
     The Visual Functioning Patient Questionnaire (VF-14)
     The Visual Functioning Index Patient Questionnaire (VF-8R)
(2) Considerations for the Standardization of Survey Instruments 
Assessing Improvement in Patient's Visual Function Within 90 Days 
Following Cataract Surgery
    We took into consideration several factors when identifying which 
specific survey instruments would be acceptable for ASCs to use when 
collecting data for the Cataracts Visual Function measure, such as 
comprehensiveness, validity, reliability, length, and burden. We 
believe that these three proposed survey instruments will allow ASCs to 
select the length of the survey instrument to be administered while 
ensuring adequate validity and reliability.401 402 403 All 
three of these proposed survey instruments are based upon the 51-item 
National Eye Institute Visual Function Questionnaire (NEI VFQ-51) 
survey instrument, which was the first survey instrument originally 
developed for assessing a patient's visual function before and after 
cataract surgery. Each of the three proposed survey instruments have 
progressively fewer numbers of questions than the NEI VFQ-51: 25 
questions for the NEI VFQ-25, 14 questions for the VF-14, and 8 
questions for the VF-8R. Even with fewer questions, all three of the 
proposed survey instruments have been validated as providing results 
comparable to the NEI VFQ-51. In addition, all three of the proposed 
survey instruments are readily available for ASCs to access and use.
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    \401\ Sivaprasad, S., Tschosik, E., Kapre, A., Varma, R., 
Bressler, N.M., Kimel, M., Dolan, C., & Silverman, D. (2018). 
Reliability and construct validity of the NEI VFQ-25 in a subset of 
patients with geographic atrophy from the Phase 2 mahalo study. 
American Journal of Ophthalmology, 190, 1-8. https://doi.org/10.1016/j.ajo.2018.03.006.
    \402\ Hecht, I., Kanclerz, P., & Tuuminen, R. (2022). Secondary 
outcomes of Lens and cataract surgery: More than just ``best-
corrected visual acuity.'' Progress in Retinal and Eye Research, 
101150. https://doi.org/10.1016/j.preteyeres.2022.101150.
    \403\ Orizonartstudios. (2023). 2023 MIPS measure #303: 
Cataracts: Improvement in patient's visual function within 90 days 
following cataract surgery. MDinteractive. Retrieved March 13, 2023, 
from https://mdinteractive.com/mips_quality_measure/2023-mips-quality-measure-303.
---------------------------------------------------------------------------

    We propose to allow ASCs to use the NEI VFQ-25 for administering 
and calculating this Cataracts Visual Function measure due to its 
comprehensiveness, its adequate validity and reliability, as well as 
its potential to reduce language barriers for patients. The NEI VFQ-25 
is a shorter version of the NEI VFQ-51, being comprised of 25 items 
across 12 vision-specific domains (general health, general vision, 
ocular pain, near activities, distance activities, social functioning, 
mental health, role difficulties, dependency, driving, color vision, 
and peripheral vision).\404\
---------------------------------------------------------------------------

    \404\ U.S. Department of Health and Human Services. (n.d.). 
Visual function questionnaire 25. National Eye Institute. Retrieved 
March 13, 2023, from https://www.nei.nih.gov/learn-about-eye-health/outreach-campaigns-and-resources/outreach-materials/visual-function-questionnaire-25.
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    The NEI VFQ-25, similar to the VF-14 and VF-8R, has adequate 
reliability and validity.\405\ The NEI VFQ-25 composite, near 
activities, and distance activities subscales demonstrated good 
internal consistency reliability, test-retest reliability, convergent 
validity, and known-groups validity.\406\ Furthermore, the NEI VFQ-25's 
high internal consistency, indicates that items of the NEI VFQ-25 are 
highly related to each other and to the scale as a whole.\407\
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    \405\ Sivaprasad, S., Tschosik, E., Kapre, A., Varma, R., 
Bressler, N.M., Kimel, M., Dolan, C., & Silverman, D. (2018). 
Reliability and construct validity of the NEI VFQ-25 in a subset of 
patients with geographic atrophy from the Phase 2 mahalo study. 
American Journal of Ophthalmology, 190, 1-8. https://doi.org/10.1016/j.ajo.2018.03.006.
    \406\ Ibid.
    \407\ Ibid.
---------------------------------------------------------------------------

    In addition, the survey instrument is publicly available on the 
RAND website at no cost and has been translated to many languages, 
which is a valuable benefit for patients with limited English 
proficiency. The NEI VFQ-25 was chosen over other survey instruments to 
reduce potential language barriers, as, for example, the currently 
available Activities of Daily Vision Scale (ADVS) is dependent on 
English language skills.\408\ More information on the NEI VFQ-25 can be 
found at: https://www.rand.org/health-care/surveys_tools/vfq.html.
---------------------------------------------------------------------------

    \408\ Mangione CM, Phillips RS, Seddon JM, et al. Development of 
the `Activities of Daily Vision Scale'. A measure of visual 
functional status. Med Care. 1992;30(12):1111-1126. https://doi.org/10.1097/00005650-199212000-00004.
---------------------------------------------------------------------------

    While the NEI VFQ-25 was shortened significantly from the original 
NEI VFQ-51, it has been criticized for its still lengthy test-time. 
However, our proposal to include this survey instrument in this 
measure's specifications allows for a more detailed assessment of 
cataract surgery outcomes as it was designed to include questions which 
are most important for persons who have chronic eye diseases.\409\ 
Further, if an ASC finds the NEI VFQ-25 particularly burdensome to 
administer, the ASC may choose from the other two survey instruments we 
propose for inclusion in this measure's

[[Page 49809]]

specifications for ASCs to use for this measure, as both of these have 
even fewer survey questions to administer.
---------------------------------------------------------------------------

    \409\ Hecht, I., Kanclerz, P., &; Tuuminen, R. (2022). Secondary 
outcomes of Lens and cataract surgery: More than just ``best-
corrected visual acuity.'' Progress in Retinal and Eye Research, 
101150. https://doi.org/10.1016/j.preteyeres.2022.101150.
---------------------------------------------------------------------------

    We also propose to allow ASCs to use the 14-item VF-14 and the 8-
item VF-8R for administering and calculating this Cataracts Visual 
Function measure. Each can be administered in a shorter timeframe than 
the NEI VFQ-25 with high precision.410 411 Thus, the 
succinct formats of the VF-14 and VF-8R may ease ASCs' burden in 
administering the survey instruments, and potentially increase the rate 
of patient responses for this measure, as compared with other survey 
instrument options we considered. Therefore, we propose including the 
VF-14 and VF-8R for this measure's data collection specifications 
because we believe these survey instruments achieve results comparable 
with the longer NEI VFQ-25 and NEI VFQ-51 survey instruments with 
substantially fewer questions to administer.
---------------------------------------------------------------------------

    \410\ Ibid.
    \411\ Orizonartstudios. (2023). 2023 MIPS measure #303: 
Cataracts: Improvement in patient's visual function within 90 days 
following cataract surgery. MDinteractive. Retrieved March 13, 2023, 
from https://mdinteractive.com/mips_quality_measure/2023-mips-quality-measure-303.
---------------------------------------------------------------------------

    Furthermore, we propose inclusion of the VF-14 because currently it 
is the most commonly used survey instrument and we believe it would be 
beneficial to allow the majority of physicians who have already been 
using the VF-14 to continue to have the option to do so.\412\ The VF-14 
is comprised of 14 items relating to daily living activities and 
function, such as reading, writing, seeing steps, stairs or curbs, and 
operating a motor vehicle.\413\ Studies using this survey instrument 
generally report significant and clinically important improvement 
following cataract surgery.\414\ The VF-14 additionally has achieved 
adequate reliability and validity, proving it to be a dependable survey 
instrument for cataract outcomes.415 416
---------------------------------------------------------------------------

    \412\ Hecht, I., Kanclerz, P., &; Tuuminen, R. (2022). Secondary 
outcomes of Lens and cataract surgery: More than just ``best-
corrected visual acuity.'' Progress in Retinal and Eye Research, 
101150. https://doi.org/10.1016/j.preteyeres.2022.101150.
    \413\ Ibid.
    \414\ Ibid.
    \415\ Ibid.
    \416\ Orizonartstudios. (2023). 2023 MIPS measure #303: 
Cataracts: Improvement in patient's visual function within 90 days 
following cataract surgery. MDinteractive. Retrieved March 13, 2023, 
from https://mdinteractive.com/mips_quality_measure/2023-mips-quality-measure-303.
---------------------------------------------------------------------------

    We propose the VF-8R, as it is the most concise of the three survey 
instruments, while still achieving adequate validity and 
reliability.\417\ The VF-8R consists of questions related to reading, 
fine handwork, writing, playing board games, and watching 
television.\418\ Given its conciseness compared to the majority of 
currently available survey instruments and its adequate psychometric 
properties, we believe that the VF-8R would be beneficial for measuring 
cataract surgery outcomes without prompting further patient survey 
fatigue.\419\
---------------------------------------------------------------------------

    \417\ Ibid.
    \418\ Pre[hyphen]Cataract Surgery--Visual Functioning Index 
(VF[hyphen]8R) patient. (n.d.). https://eyecaresite.com/wp-content/uploads/2020/02/Visual-Functioning-Index-Pre-Cat-SX.pdf.
    \419\ Ibid.
---------------------------------------------------------------------------

    For these reasons, we believe that the NEI VFQ-25, VF-14, and VF-8R 
are the most appropriate survey instruments for ASCs to use to assess a 
patient's visual function pre- and post-cataract surgery for purposes 
of calculating and submitting data for the Cataracts Visual Function 
measure in the ASCQR Program.
    To standardize survey instrument administration for the Cataracts 
Visual Function measure, we propose to limit the survey instruments 
that can be used to administer this measure, beginning with the 
voluntary CY 2024 reporting period, to these three survey instruments: 
(1) NEI VFQ-25; (2) VF-14; and (3) VF-8R. We believe the use of these 
three survey instruments to report data on the Cataracts Visual 
Function measure would allow for a more standardized approach to data 
collection. Having a limited number of allowable survey instruments 
would also address several commenters' request for additional guidance 
on survey instruments as well as improve measure reliability.
(3) Considerations for Data Collection Modes for the Cataracts: 
Improvement in Patient's Visual Function Within 90 Days Following 
Cataract Surgery Measure Beginning With the Voluntary CY 2024 Reporting 
Period
    As summarized in the CY 2023 OPPS/ASC final rule (87 FR 72118 
through 72120), many commenters expressed concern about the high 
administrative burden of reporting the Cataracts Visual Function 
measure, as the measure uniquely requires coordination among clinicians 
of different specialties (that is, opticians and ophthalmologists). In 
an effort to decrease administrative burden surrounding in-office time 
constraints, we reiterate that, while we recommend the patient's 
physician or optometrist administer, collect, and report the survey 
results to the ASC, the survey instruments required for this measure 
can be administered by the ASC itself via phone, by the patient via 
regular or electronic mail, or during clinician follow-up.
    Scientific literature supports the conclusion that self-
administered survey instruments produce statistically reliable 
results.420 421 Furthermore, scientific literature indicates 
that regular mail and electronic mail surveys respectively, are 
preferred by varying subgroups of patients. The inclusion of both 
options ensures that patients will be able to respond to survey 
instruments in their preferred format.422 423 These findings 
support the inclusion of varying survey instrument-collection methods 
for patient and provider convenience.
---------------------------------------------------------------------------

    \420\ Bhandari, N. R., Kathe, N., Hayes, C., & Payakachat, N. 
(2018). Reliability and validity of SF-12V2 among adults with self-
reported cancer. Research in Social and Administrative Pharmacy, 
14(11), 1080-1084. https://doi.org/10.1016/j.sapharm.2018.01.007.
    \421\ Stolwijk, C., van Tubergen, A., Ramiro, S., Essers, I., 
Blaauw, M., van der Heijde, D., Landewe, R., van den Bosch, F., 
Dougados, M., & Boonen, A. (2014). Aspects of validity of the self-
administered comorbidity questionnaire in patients with ankylosing 
spondylitis. Rheumatology, 53(6), 1054-1064. https://doi.org/10.1093/rheumatology/ket354.
    \422\ Kelfve, S., Kivi, M., Johansson, B., & Lindwall, M. 
(2020). Going web or staying paper? the use of web-surveys among 
older people. https://doi.org/10.21203/rs.3.rs-21136/v4.
    \423\ Meyer, V.M., Benjamens, S., Moumni, M.E., Lange, J.F., & 
Pol, R.A. (2020). Global overview of response rates in patient and 
health care professional surveys in surgery. Annals of Surgery, 
275(1). https://doi.org/10.1097/sla.0000000000004078.
---------------------------------------------------------------------------

    We invite public comment on this proposal.
c. Proposed Modification of Endoscopy/Polyp Surveillance: Appropriate 
Follow-Up Interval for Normal Colonoscopy in Average Risk Patients 
Measure Denominator Change To Align With Current Clinical Guidelines 
Beginning With the CY 2024 Reporting Period/CY 2026 Payment 
Determination
(1) Background
    In 2019, colorectal cancer (CRC) accounted for the 4th highest rate 
of new cancer cases and 4th highest rate of cancer deaths in the United 
States.\424\ The American Cancer Society (ACS) estimates that in 2023, 
153,020 individuals will be newly diagnosed with CRC and 52,550 
individuals will die from CRC in the United States.\425\ The CDC 
advises, ``[c]olorectal cancer almost always develops from precancerous 
polyps (abnormal growths) in the colon or rectum. Screening tests can 
find precancerous

[[Page 49810]]

polyps, so that they can be removed before they turn into cancer. 
Screening tests can also find colorectal cancer early, when treatment 
works best. Regular screening, beginning at age 45, is the key to 
preventing colorectal cancer and finding it early.'' \426\
---------------------------------------------------------------------------

    \424\ Centers for Disease Control. (2022). Colorectal Cancer 
Statistics. Available at: https://gis.cdc.gov/Cancer/USCS/#/AtAGlance/.
    \425\ American Cancer Society. (2023). Cancer Facts & Figures 
2023. Available at: https://www.cancer.org/research/cancer-facts-statistics/all-cancer-facts-figures/2023-cancer-facts-figures.html.
    \426\ Centers for Disease Control. (2022). What Should I Know 
About Screening?. Available at: https://www.cdc.gov/cancer/colorectal/basic_info/screening/index.htm.
---------------------------------------------------------------------------

    In May 2021, the United States Preventive Services Task Force 
(USPSTF) issued a revised Final Recommendation Statement on CRC 
Screening.\427\ This replaced the prior USPSTF 2016 Final 
Recommendation Statement and included a number of updated policy 
recommendations based on new evidence and understandings of CRC and CRC 
screening. The USPSTF recommended that adults who do not have signs or 
symptoms of CRC and who are at average risk for CRC begin screening at 
age 45 instead of the previous recommendation of age 50.\428\ In 
addition, multiple professional organizations, including the ACS, 
American Society of Colon and Rectal Surgeons, and the U.S. Multi-
Society Task Force on Colorectal Cancer (which represents the American 
College of Gastroenterology, the American Gastroenterological 
Association, and the American Society for Gastrointestinal Endoscopy), 
recommend that people of average risk of CRC start regular screening at 
age 45.429 430 431 Based on the recent changes in clinical 
guidelines to begin CRC screening at age 45 instead of age 50, we 
propose to modify the Endoscopy/Polyp Surveillance: Appropriate Follow-
Up Interval for Normal Colonoscopy in Average Risk Patients (the 
``Colonoscopy Follow-Up Interval'') measure to follow these clinical 
guideline changes.
---------------------------------------------------------------------------

    \427\ US Preventive Services Task Force. (2021). Screening for 
Colorectal Cancer. JAMA, 325(19), 1965-1977. https://doi.org/10.1001/jama.2021.6238.
    \428\ Ibid.
    \429\ Wolf A, Fontham ETH, Church TR, et al. (2018). Colorectal 
cancer screening for average-risk adults: 2018 guideline update from 
the American Cancer Society. CA. Cancer J. Clin., 2018(68), 250-281. 
https://doi.org/10.3322/caac.21457.
    \430\ American Society of Colon & Rectal Surgeons. Colorectal 
Cancer Screening and Surveillance Recommendations of U.S. 
Multisociety Task Force. Available at: https://fascrs.org/healthcare-providers/education/clinical-practice-guidelines/colorectal-cancer-screening-and-surveillance-recom.
    \431\ Patel SG, May FP, Anderson JC, Burke CA, et al. (2022). 
Updates on Age to Start and Stop Colorectal Cancer Screening: 
Recommendations From the U.S. Multi-Society Task Force on Colorectal 
Cancer. The American Journal of Gastroenterology, 117(1), 57-69. 
https://doi.org/10.14309/ajg.0000000000001548.
---------------------------------------------------------------------------

(2) Overview of Measure
    We refer readers to the CMS Measures Inventory Tool and the ASCQR 
Specification Manual for more information on the Colonoscopy Follow-Up 
Interval measure, including background on the measure and a complete 
summary of measure specifications.432 433 Currently, the 
Colonoscopy Follow-Up Interval measure assesses the ``percentage of 
patients aged 50 years to 75 years receiving a screening colonoscopy 
without biopsy or polypectomy who had a recommended follow-up interval 
of at least 10 years for repeat colonoscopy documented in their 
colonoscopy report.'' \434\ We propose to amend the measure's 
denominator language by replacing the phrase ``aged 50 years'' with the 
phrase ``aged 45 years.'' The measure denominator would be modified to 
``all patients aged 45 years to 75 years receiving screening 
colonoscopy without biopsy or polypectomy'' from ``all patients aged 50 
years to 75 years receiving screening colonoscopy without biopsy or 
polypectomy.'' \435\ We are not proposing any changes to the measure 
numerator, other measure specifications, exclusions, or data collection 
for the Colonoscopy Follow-Up Interval measure.
---------------------------------------------------------------------------

    \432\ Centers for Medicare & Medicaid Services. (2023). Measures 
Inventory Tool. Available at: https://cmit.cms.gov/cmit/#/MeasureView?variantId=793&sectionNumber=1.
    \433\ Qualitynet Home. (n.d.). Retrieved March 21, 2023, from 
https://qualitynet.cms.gov/asc/specifications-manuals#tab6.
    \434\ Centers for Medicare & Medicaid Services. (2023). Measures 
Inventory Tool. Available at: https://cmit.cms.gov/cmit/#/MeasureView?variantId=793&sectionNumber=1.
    \435\ Ibid.
---------------------------------------------------------------------------

    In the CY 2023 Physician Fee Schedule final rule (87 FR 69760 
through 69767), we adopted the modified Colonoscopy Follow-Up Interval 
measure, which we propose here for the ASCQR Program, for the Merit-
based Incentive Payment System (MIPS). We have considered the 
importance of aligning the minimum age requirement for CRC screening 
across quality reporting programs and clinical guidelines, and as a 
result, we propose to modify the Colonoscopy Follow-Up Interval measure 
denominator to ``all patients aged 45 to 75 years'' for the ASCQR 
Program. We propose the modification of the Colonoscopy Follow-Up 
Interval measure beginning with the CY 2024 reporting period/CY 2026 
payment determination.
    We invite public comment on this proposal.
5. Proposed Adoption of New Measures for the ASCQR Program Measure Set
    Section 1833(i)(7)(B) of the Act states that, except as the 
Secretary may otherwise provide, the provisions of section 
1833(t)(17)(B) through (E) of the Act apply with respect to ASC 
services in a similar manner to the manner in which they apply to 
hospitals for the Hospital OQR Program. Section 1833(t)(17)(C)(i) of 
the Act requires the Secretary to develop measures appropriate for the 
measurement of the quality of care (including medication errors) 
furnished by hospitals in outpatient settings, that these measures 
reflect consensus among affected parties and, to the extent feasible 
and practicable, that these measures include measures set forth by one 
or more national consensus-based entities. We have noted in previous 
rulemaking (76 FR 74494) the requirement that measures reflect 
consensus among affected parties can be achieved in other ways aside 
from CBE endorsement, including through the measure development 
process, through broad acceptance, use of the measure(s), and through 
public comment.
    Section 1890A of the Act requires that we establish and follow a 
pre-rulemaking process for selecting quality and efficiency measures 
for our programs, including taking into consideration input from multi-
stakeholder groups. As part of this pre-rulemaking process, the CBE, 
with which we contract under section 1890 of the Act, convened these 
groups under the Measure Applications Partnership (MAP). The MAP is a 
public-private partnership created for the primary purpose of providing 
input to HHS on the selection of measures as required by section 
1890(b)(7)(B) of the Act, including measures for the ASCQR Program. We 
followed this pre-rulemaking process for both of the measures we 
propose for adoption for the ASCQR Program under this section of the 
proposed rule, as further detailed below.
    In this proposed rule, we propose to: (1) re-adopt with 
modification the ASC Facility Volume Data on Selected ASC Surgica 
Procedures measure, with voluntary reporting in the CY 2025 reporting 
period followed by mandatory reporting beginning with the CY 2026 
reporting period/CY 2028 payment determination; and (2) adopt the Risk-
Standardized Patient-Reported Outcome-Based Performance Measure (PRO-
PM) Following Elective Primary Total Hip Arthroplasty (THA) and/or 
Total Knee Arthroplasty (TKA) in the ASC Setting (THA/TKA PRO-PM), with

[[Page 49811]]

voluntary reporting beginning with the CYs 2025 and 2026 reporting 
periods followed by mandatory reporting beginning with the CY 2027 
reporting period/CY 2030 payment determination. In this section of the 
proposed rule, we provide additional information on these measure 
adoption proposals for the ASCQR Program.
a. Proposed Re-Adoption With Modification of the ASC Facility Volume 
Data on Selected ASC Surgical Procedures Measure Beginning With the 
Voluntary CY 2025 Reporting Period Followed by Mandatory Reporting 
Beginning With the CY 2026 Reporting Period/CY 2028 Payment 
Determination
(1) Background
    Hospital care has been gradually shifting from inpatient to 
outpatient settings.\436\ Further, research indicates that volume of 
services performed in ASCs will continue to grow, with some estimates 
projecting a 25 percent increase in patients between 2019 and 
2029.\437\ In addition, as further discussed herein, larger facility 
surgical procedure volume may be associated with better outcomes due to 
having characteristics that improve care, such as efficient team work 
and increased surgical experience.\438\ In light of these trends in 
facility volume and more recent studies finding that volume is an 
indicator of quality, it is now especially important to track volume 
within ASCs, as it could provide valuable insight into the quality of 
ASCs' services for CMS and patients.
---------------------------------------------------------------------------

    \436\ Medicare Payment Advisory Commission. March 2021 Report to 
the Congress: Medicare Payment Policy. Chapter 3. Available at: 
https://www.medpac.gov/wp-content/uploads/2021/10/mar21_medpac_report_ch3_sec.pdf.
    \437\ SG2 impact of Change Forecast predicts enormous disruption 
in health care provider landscape by 2029. Sg2. (2021). Retrieved 
March 28, 2023, from https://www.sg2.com/media-center/press-releases/sg2-impact-forecast-predicts-disruption-health-care-provider-landscape-2029/.
    \438\ Jha AK. (2015) Back to the Future: Volume as a Quality 
Metric. JAMA Forum Archive. Published online June 10, 2015. https://jamanetwork.com/channels/health-forum/fullarticle/2760155.
---------------------------------------------------------------------------

    Although measuring the volume of procedures and other services has 
a long history as a quality metric, quality measurement efforts had 
moved away from collecting and analyzing data on volume because some 
considered volume simply a proxy for quality compared to directly 
measuring outcomes.\439\ However, experts on quality and safety have 
recently suggested that, while volume may not alone indicate better 
outcomes, it is still an important component of 
quality.440 441 442 Specifically, larger facility surgical 
procedure volume may be associated with better outcomes due to having 
characteristics that improve care.\443\ For example, high-volume 
facilities may have teams that work more effectively together, or have 
superior systems or programs for identifying and responding to 
complications.\444\ This association between volume and patient 
outcomes may be attributable to greater experience or surgical skill, 
greater comfort with and, hence, likelihood of application of 
standardized best practices, and increased experience in monitoring and 
management of surgical patients for the particular procedure.
---------------------------------------------------------------------------

    \439\ Ibid.
    \440\ Ibid.
    \441\ Shang, M., Mori, M., Gan, G., Deng, Y., Brooks, C., 
Weininger, G., Sallam, A., Vallabhajosyula, P., & Geirsson, A. 
(2022). Widening volume and persistent outcome disparity in Valve 
Operations: New York Statewide Analysis, 2005-2016. The Journal of 
Thoracic and Cardiovascular Surgery, 164(6). https://doi.org/10.1016/j.jtcvs.2020.11.098.
    \442\ Iwatsuki, M., Yamamoto, H., Miyata, H., Kakeji, Y., 
Yoshida, K., Konno, H., Seto, Y., & Baba, H. (2018). Effect of 
hospital and surgeon volume on postoperative outcomes after distal 
gastrectomy for gastric cancer based on data from 145,523 Japanese 
patients collected from a nationwide web-based data entry system. 
Gastric Cancer, 22(1), 190-201. https://doi.org/10.1007/s10120-018-0883-1.
    \443\ Jha AK. (2015) Back to the Future: Volume as a Quality 
Metric. JAMA Forum Archive. Published online June 10, 2015. https://jamanetwork.com/channels/health-forum/fullarticle/2760155.
    \444\ Ibid.
---------------------------------------------------------------------------

    The ASCQR Program does not currently include a quality measure for 
facility-level volume data, including surgical procedure volume data, 
but it did so previously. We refer readers to the CY 2012 OPPS/ASC 
final rule (76 FR 74507 through 74509) where we adopted the ASC 
Facility Volume Data on Selected ASC Surgical Procedures (ASC Procedure 
Volume) measure beginning with the CY 2015 payment determination. This 
structural measure of facility capacity collected surgical procedure 
volume data on seven categories of procedures frequently performed in 
the ASC setting: Gastrointestinal, Eye, Nervous System, 
Musculoskeletal, Skin, Respiratory, and Genitourinary.\445\ We adopted 
the ASC Procedure Volume measure based on evidence that the volume of 
surgical procedures, particularly of high-risk surgical procedures, is 
related to better patient outcomes, including decreased mortality (76 
FR 74507).446 447 We further stated our belief that publicly 
reporting volume data would provide patients with beneficial 
information to use when selecting a care provider (76 FR 74507).
---------------------------------------------------------------------------

    \445\ ASC Specifications Manual version 5.1. Available at: 
https://qualitynet.cms.gov/asc/specifications-manuals#tab6.
    \446\ Saito, Y., Tateishi, K., Kanda, M., Shiko, Y., Kawasaki, 
Y., Kobayashi, Y., & Inoue, T. (2022). Volume-outcome relationships 
for percutaneous coronary intervention in acute myocardial 
infarction. Journal of the American Heart Association, 11(6). 
https://doi.org/10.1161/jaha.121.023805.
    \447\ Vemulapalli, S., Carroll, J., & Mack, M. et al. (2019) 
Procedural Volume and Outcomes for Transcatheter Aortic-Valve 
Replacement. The New England Journal of Medicine, 380(26), 2541-
2550. https://doi.org/10.1056/NEJMsa1901109.
---------------------------------------------------------------------------

    In the CY 2018 OPPS/ASC final rule (82 FR 59449 through 59450), we 
stated our belief at that time that other measures in the ASCQR Program 
on specific procedure types, such as the Unplanned Anterior Vitrectomy 
measure, could provide patients with more valuable ASC quality of care 
information than the ASC Procedure Volume measure. Thus, we removed the 
ASC Procedure Volume measure beginning with the CY 2019 payment 
determination based on the availability of other measures that are 
``more strongly associated with desired patient outcomes for the 
particular topic'' (currently Factor 6 in our regulation at Sec.  
416.320(c)(vi)) (82 FR 59449).
    However, a commenter who opposed the removal of the ASC Procedure 
Volume measure at the time emphasized the measure data's usefulness for 
comparative research, outcomes research, immediate consumer value, and 
strategic planning (82 FR 59449). One commenter also expressed concern 
that non-availability of these data would interfere with the acceptance 
of ASC-based procedures, asserting that this measure helps to 
demonstrate the value of ASC-based procedures (82 FR 59449). These 
commenters further noted that the measure was not overly burdensome 
and, therefore, should not be removed (82 FR 59449). At the time, while 
we recognized the value of the measure and these concerns, we believed, 
overall, that the administrative burden and maintenance costs 
associated with this measure outweighed the benefits of keeping the 
measure in the ASCQR Program (82 FR 59449 through 59450).
    In the CY 2023 OPPS/ASC final rule (87 FR 72127 through 72130), we 
stated that we have been considering re-adopting the ASC Procedure 
Volume measure for two reasons. First, since the removal of the ASC 
Procedure Volume measure, scientific literature has concluded that 
volume metrics serve as an indicator of which facilities are 
experienced with certain outpatient procedures and can assist consumers 
in making informed decisions about where

[[Page 49812]]

they receive care.\448\ Further supporting this position that volume 
metrics are an indicator of quality, one study found an inverse volume-
mortality relationship related to transfemoral transcatheter aortic-
valve replacement (TAVR) procedures performed from 2015 through 
2017.\449\ Second, as discussed above, the recent shift of more 
surgical procedures being performed in outpatient settings has placed 
greater importance on tracking the volume of outpatient procedures in 
different settings, including ASCs. We believe that patients and their 
caregivers may benefit from the public reporting of facility-level 
volume measure data because the volume data illuminate which procedures 
are performed across ASCs, provide the ability to track volume changes 
by facility and procedure category, and can serve as an indicator for 
patients of which facilities are experienced with certain outpatient 
procedures. The ASC Procedure Volume measure was the only measure in 
the ASCQR Program measure set that captured facility-level volume 
within ASCs for both Medicare beneficiaries and non-Medicare patients. 
As a result of this measure's removal in the CY 2018 OPPS/ASC final 
rule, the ASCQR Program currently does not capture outpatient surgical 
procedure volume in ASCs.
---------------------------------------------------------------------------

    \448\ Ogola GO, Crandall ML, Richter KM, & Shafi S. (2018). 
High-volume hospitals are associated with lower mortality among 
high-risk emergency general surgery patients. Journal of Trauma and 
Acute Care Surgery, 85(3), 560-565. https://doi.org/10.1097/TA.0000000000001985.
    \449\ Vemulapalli S, Carroll J, Mack M, et al. (2019). 
Procedural Volume and Outcomes for Transcatheter Aortic-Valve 
Replacement. The New England Journal of Medicine, 380(26), 2541-
2550. https://doi.org/10.1056/NEJMsa1901109.
---------------------------------------------------------------------------

    In response to our request for comment in the CY 2023 OPPS/ASC 
proposed rule (87 FR 44748 through 44750) regarding the potential 
inclusion of a volume measure in the ASCQR Program, a few commenters 
suggested that we can determine facility volumes for procedures 
performed using Medicare Fee-For-Service (FFS) claims (87 72129 through 
72130). However, we note that the ASC Procedure Volume measure included 
the submission of both Medicare and non-Medicare volume data; thus, 
relying solely on the use of Medicare FFS claims data to simplify 
reporting would limit a future volume measure to only the Medicare 
program payer, leading to an incomplete representation of ASCs' 
procedural volume.\450\
---------------------------------------------------------------------------

    \450\ The specifications for the removed ASC Procedure Volume 
measure are available in the ASC Specifications Manual version 5.1 
available at https://qualitynet.cms.gov/asc/specifications-manuals#tab6.
---------------------------------------------------------------------------

    Additionally, in response to our request for comment in the CY 2023 
OPPS/ASC proposed rule (87 FR 44748 through 44750), a few commenters 
stated that they believe there is a lack of evidence proving the 
correlation between volume and quality (87 FR 72129 through 72130). 
However, many studies in recent years have shown that volume does serve 
as an indicator of quality of care.451 452 For example, 
studies published since the CY 2018 OPPS/ASC final rule found that 
patients at high volume hospitals for a specific procedure had lower 
rates of surgical site infections, complications, and mortality 
compared to patients at low-volume hospitals.453 454 We 
reiterate our belief, grounded in this 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.455 456
---------------------------------------------------------------------------

    \451\ Ogola, Gerald O. Ph.D., MPH; Crandall, Marie L. MD, MPH; 
Richter, Kathleen M. MS, MBA, MFA; & Shafi, Shahid MD, MPH. (2018) 
High-volume hospitals are associated with lower mortality among 
high-risk emergency general surgery patients. Journal of Trauma and 
Acute Care Surgery: September 2018--Volume 85--Issue 3--p 560-565 
https://doi.org/10.1097/TA.0000000000001985.
    \452\ Vemulapalli, S., Carroll, J., & Mack, M. et al. (2019) 
Procedural Volume and Outcomes for Transcatheter Aortic-Valve 
Replacement. The New England Journal of Medicine, 380(26), 2541-
2550. https://doi.org/10.1056/NEJMsa1901109.
    \453\ Mufarrih, S.H., Ghani, M.O.A., Martins, R.S. et al. (2019) 
Effect of hospital volume on outcomes of total hip arthroplasty: a 
systematic review and metaanalysis. J Orthop Surg Res 14, 468. 
https://doi.org/10.1186/s13018-019-1531-0.
    \454\ Saito, Y., Tateishi, K., Kanda, M., Shiko, Y., Kawasaki, 
Y., Kobayashi, Y., & Inoue, T. (2022). Volume[hyphen]outcome 
relationships for percutaneous coronary intervention in acute 
myocardial infarction. Journal of the American Heart Association, 
11(6). https://doi.org/10.1161/jaha.121.023805.
    \455\ Ogola GO, Crandall ML, Richter KM, Shafi, S. (2018). High-
volume hospitals are associated with lower mortality among high-risk 
emergency general surgery patients. Journal of Trauma and Acute Care 
Surgery, 85(3), 560-565. https://doi.org/10.1097/TA.0000000000001985.
    \456\ Vemulapalli S, Carroll J, Mack M, et al. (2019). 
Procedural Volume and Outcomes for Transcatheter Aortic-Valve 
Replacement. The New England Journal of Medicine, 380(26), 2541-
2550. https://doi.org/10.1056/NEJMsa1901109.
---------------------------------------------------------------------------

(2) Overview of Measure
(a) Data Collection, Submission, Reporting, and Measure Specifications
    The proposed ASC Procedure Volume measure collects data regarding 
the aggregate count of selected surgical procedures. Most ASC 
procedures fall into one of eight categories: Cardiovascular, Eye, 
Gastrointestinal, Genitourinary, Musculoskeletal, Nervous System, 
Respiratory, and Skin.\457\ For this proposed measure, data surrounding 
the top five most frequently performed procedures among ASCs in each 
category will be collected and publicly displayed. The top five 
procedures in each category would be assessed and updated annually as 
needed to ensure data collection of most accurate and frequently 
performed procedures.\458\
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    \457\ ASC Specifications Manual version 1.0b. Available at: 
https://qualitynet.cms.gov/asc/specifications-manuals#tab6.
    \458\ Data source: Clinical Data Warehouse; CMS ASC Part B 
claims for encounters January 1, 2022-December 31, 2022.
---------------------------------------------------------------------------

    We propose that ASCs would submit aggregate-level data through the 
CMS web-based tool (currently the Hospital Quality Reporting (HQR) 
system), consistent with what was required during the measure's initial 
adoption (76 FR 74508). Data received through the HQR system would then 
be publicly displayed on the http://data.cms.gov">data.cms.gov website or another CMS 
website. We refer readers to Sec.  416.315 for our codified policies 
regarding public reporting of data under the ASCQR Program.
    We propose to re-adopt the ASC Procedure Volume measure with 
modification, with voluntary reporting beginning with the CY 2025 
reporting period followed by mandatory reporting beginning with CY 2026 
reporting period/CY 2028 payment determination. At the time of this 
measure's initial adoption in the CY 2012 OPPS/ASC final rule (76 FR 
74509), we finalized that ASCs would report all-patient volume data 
with respect to six categories: Gastrointestinal, Eye, Nervous System, 
Musculoskeletal, Skin, and Genitourinary. The first modification of 
this previously adopted measure that we propose is that the ASC 
Procedure Volume measure data collection will cover eight categories: 
Cardiovascular, Eye, Gastrointestinal, Genitourinary, Musculoskeletal, 
Nervous System, Respiratory, and Skin. Furthermore, in response to 
commenter concerns regarding potential difficulty detecting procedural 
volume differention among these broad based categories (76 FR 74508), 
the second modification to this measure that we propose is that instead 
of collecting and publicly displaying data surrounding these eight 
broad categories, we would more granularly collect and publicly display 
data reported for the top five most frequently performed procedures 
among ASCs within each category will be collected. We refer readers to 
the Center for Medicare and Medicaid Services Inventory Tool for more 
information on this measure: https://cmit.cms.gov/cmit/#/.

[[Page 49813]]

    We also propose that ASCs submit these data to CMS during the time 
period of January 1 through May 15 in the year prior to the affected 
payment determination year. For example, for the CY 2028 payment 
determination, the data submission period would be January 1, 2027 to 
May 15, 2027, covering the performance period of January 1, 2026 to 
December 31, 2026. We refer readers to section XV.D.1.c of this 
proposed rule for a more detailed discussion of the requirements for 
data submitted via a CMS online web-based tool. We previously codified 
our existing policies regarding data collection and submission under 
the ASCQR Program at Sec.  416.310.
(b) Review by the Measure Applications Partnership (MAP)
    The MAP conditionally supported the ASC Procedure Volume measure 
for rulemaking, pending testing indicating that the measure is reliable 
and valid, and endorsement by a CBE.\459\ Additionally, the MAP noted 
that electronic reporting of procedure volumes based on code lists 
should not be overly burdensome to ASCs, and the public reporting of 
specific procedure volumes may be useful to patients.
---------------------------------------------------------------------------

    \459\ Pre-rulemaking MUC lists and map reports. Pre-Rulemaking 
MUC Lists and MAP Reports [verbar] The Measures Management System. 
(n.d.). Retrieved March 13, 2023, from https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
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    The MAP members expressed differing views on the value of volume 
data to patients. Specifically, the MAP members representing patients 
stated the measure would be useful to patients as they decide where to 
seek care, as one data point along with others (for example, advice 
from providers). However, other MAP members expressed concern about the 
value of volume data for informing patient decisions without other 
context and encouraged the use of outcome measures instead.\460\
---------------------------------------------------------------------------

    \460\ Ibid.
---------------------------------------------------------------------------

    As discussed above, we reiterate that various studies have found 
that there is a well-established positive correlation between the 
volume of procedures performed at a facility and the clinical outcomes 
resulting from that procedure. For instance, a recent systematic review 
highlighted by the MAP found a significant volume-outcome relationship 
in the vast majority (87 percent) of the 403 studies analyzed.\461\ The 
MAP noted a similar review focused on outpatient surgeries that 
similarly found a significant volume-outcome relationship across eight 
studies.\462\
---------------------------------------------------------------------------

    \461\ Levaillant, M., Marcilly, R., Levaillant, L., Michel, P., 
Hamel-Broza, J.F., Vallet, B., & Lamer, A. (2021). Assessing the 
hospital volume-outcome relationship in surgery: A scoping review. 
BMC Medical Research Methodology, 21(1). https://doi.org/10.1186/s12874-021-01396-6.
    \462\ Stanak, M., & Strohmaier, C. (2020). Minimum volume 
standards in day surgery: A systematic review. BMC Health Services 
Research, 20(1). https://doi.org/10.1186/s12913-020-05724-2.
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    The MAP stated that this measure addresses a national trend in 
which surgeries are moving from hospital inpatient settings to ASCs, 
and that public reporting of this measure could help CMS and the public 
better understand differences in the quality of care provided at 
facilities.\463\ The MAP reported that ASC Procedure Volume measure 
data from 2015 and 2016 demonstrates variation in performance in the 
number of procedures performed by facilities in the 25th and 75th 
percentiles across the condition categories.\464\ These findings 
support our belief, grounded in additional published scientific 
literature, that volume metrics serve as an indicator of which 
facilities are experienced with certain outpatient procedures and can 
assist consumers in making informed decisions about where they receive 
care.465 466
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    \463\ Medicare Payment Advisory Commission. March 2021 Report to 
the Congress: Medicare Payment Policy. Available at: https://www.medpac.gov/document/march-2021-report-to-the-congress-medicare-payment-policy/.
    \464\ Pre-rulemaking MUC lists and map reports. The Measures 
Management System. (n.d.). Retrieved March 13, 2023, from https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
    \465\ Ogola, Gerald O. Ph.D., MPH; Crandall, Marie L. MD, MPH; 
Richter, Kathleen M. MS, MBA, MFA; Shafi, & Shahid MD, MPH. (2018) 
High-volume hospitals are associated with lower mortality among 
high-risk emergency general surgery patients. Journal of Trauma and 
Acute Care Surgery: September 2018--Volume 85--Issue 3--p 560-565. 
https://doi.org/10.1097/TA.0000000000001985.
    \466\ Saito, Y., Tateishi, K., Kanda, M., Shiko, Y., Kawasaki, 
Y., Kobayashi, Y., & Inoue, T. (2022). Volume[hyphen]outcome 
relationships for percutaneous coronary intervention in acute 
myocardial infarction. Journal of the American Heart Association, 
11(6). https://doi.org/10.1161/jaha.121.023805.
---------------------------------------------------------------------------

    In addition, the MAP noted the concurrent submission of MUC 
(Measures Under Consideration) 2022-030: Hospital Outpatient Department 
Volume Data on Selected Outpatient Surgical Procedures for inclusion in 
the Hospital Outpatient Quality Reporting (OQR) Program.\467\ The MAP 
highlighted that the specifications of the volume measure proposed for 
the Hospital OQR Program are aligned with the volume measure we propose 
for the ASCQR Program and, therefore, would facilitate comparisons of 
equivalent procedure volumes across ASCs and hospital outpatient 
departments (HOPDs), one of the key goals of the Hospital OQR and ASCQR 
Programs.
---------------------------------------------------------------------------

    \467\ Pre-rulemaking MUC lists and map reports. The Measures 
Management System. (n.d.). Retrieved March 13, 2023, from https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
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(c) Measure Endorsement
    As discussed in the previous subsection of the proposed rule, the 
MAP reviewed and conditionally supported the ASC Procedure Volume 
measure pending testing indicating the measure is reliable and valid, 
and endorsement by a national consensus-based entity as the measure was 
not submitted for endorsement. We have noted in previous rulemaking (76 
FR 74494) the requirement that measures reflect consensus among 
affected parties can be achieved in other ways aside from endorsement 
by a national consensus-based entity, including through the measure 
development process, through broad acceptance, use of the measure(s), 
and through public comment.
    We considered the MAP's recommendation and propose to adopt the 
measure because we did not find any other measures of procedure volume 
and this measure was previously used in the ASCQR Program, with 
supporters of its use. Given the support from the MAP and feedback from 
public comment, as well as the increasing shift from inpatient to 
outpatient surgical procedures and evidence that volume metrics can 
promote higher quality healthcare for patients, we propose the 
readoption of this measure, with two modifications, in the ASCQR 
Program pending endorsement from a national consensus-based entity.
    We invite public comment on this proposal.
b. Proposed Adoption of the Risk Standardized Patient-Reported Outcome-
Based Performance Measure (PRO-PM) Following Elective Primary Total Hip 
Arthroplasty (THA) and/or Total Knee Arthroplasty (TKA) in the ASC 
Setting (THA/TKA PRO-PM) Beginning With Voluntary CYs 2025 and 2026 
Reporting Periods Followed by Mandatory Reporting Beginning With the CY 
2027 Reporting Period/CY 2030 Payment Determination
(1) Background
    In the FY 2023 IPPS/LTCH PPS final rule (87 FR 49246 through 
49257), we adopted the THA/TKA PRO-PM in the Hospital Inpatient Quality 
Reporting (IQR) Program beginning with voluntary reporting periods in 
FY 2025 and FY 2026, followed by mandatory reporting for eligible 
elective procedures

[[Page 49814]]

occurring July 1, 2024 through June 30, 2025 for the FY 2028 payment 
determination. In this proposed rule, we propose the adoption of the 
THA/TKA PRO-PM into the ASCQR Program using the same specifications as 
finalized for the hospital-level measure adopted into the Hospital IQR 
Program (87 FR 49246 through 49257) with modifications to include 
procedures performed in the ASC setting.
    Approximately six million adults aged 65 or older suffer from 
osteoarthritis in the United States.\468\ In 2013, there were 
approximately 568,000 hospitalizations billed to Medicare for 
osteoarthritis.\469\ Hip and knee osteoarthritis is one of the leading 
causes of disability among non-institutionalized 
adults,470 471 and roughly 80 percent of patients with 
osteoarthritis have some limitation in mobility.472 473 
Elective THA and TKA are most commonly performed for degenerative joint 
disease or osteoarthritis, which affects more than 30 million 
Americans.\474\ THA and TKA offer the potential for significant 
improvement in quality of life by decreasing pain and improving 
function in a majority of patients, without resulting in a high risk of 
complications or death.475 476 477 However, not all patients 
experience benefit from these procedures.\478\ Many patients note that 
their pre-operative expectations for functional improvement have not 
been met.479 480 481 482 In addition, clinical practice 
variation has been well documented in the United 
States,483 484 485 486 487 readmission and complication 
rates vary across hospitals,488 489 and international 
experience documents wide hospital-level variation in patient-reported 
outcome measure results following THA and TKA.\490\
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    \468\ Arthritis Foundation. (2018). Arthritis By the Numbers 
Book of Trusted Facts and Figures. Accessed March 8, 2019. Available 
at: https://www.arthritis.org/getmedia/e1256607-fa87-4593-aa8a-8db4f291072a/2019-abtn-final-march-2019.pdf.
    \469\ Torio CM, & Moore BJ. (2016). National inpatient hospital 
costs: the most expensive conditions by payer, 2013. HCUP 
statistical brief #204. Healthcare Cost and Utilization Project 
(HCUP) Statistical Briefs. Rockville, MD, Agency for Healthcare 
Research and Quality. Available at: https://www.ncbi.nlm.nih.gov/books/NBK368492/.
    \470\ Guccione AA, Felson DT, Anderson JJ, et al. (1994). The 
effects of specific medical conditions on the functional limitations 
of elders in the Framingham Study. American journal of public 
health, 84(3), 351-358. https://www.doi.org/10.2105/AJPH.84.3.351.
    \471\ Barbour KE, Helmick CG, Boring M, & Brady TJ. (2017). 
Vital Signs: Prevalence of Doctor-Diagnosed Arthritis and Arthritis-
Attributable Activity Limitation--United States, 2013-2015. MMWR 
Morbidity and mortality weekly report, 66(9), 246-253. https://www.doi.org/10.15585/mmwr.mm6609e1.
    \472\ Michaud CM, McKenna MT, Begg S, et al. (2006). The burden 
of disease and injury in the United States 1996. Population health 
metrics, 4, 11. https://doi.org/10.1186/1478-7954-4-11.
    \473\ Theis KA, Murphy LB, Baker NA, & Hootman JM. (2019). When 
you can't walk a mile: Walking limitation prevalence and 
associations among middle-aged and older US adults with Arthritis: A 
cross-sectional, population-based study. ACR Open Rheumatol, 1(6), 
350-358. https://www.doi.org/10.1002/acr2.11046.
    \474\ Centers for Disease Control and Prevention. Osteoarthritis 
(OA). Accessed March 8, 2019. Available at: https://www.cdc.gov/arthritis/basics/osteoarthritis.htm.
    \475\ Rissanen P, Aro S, Slatis P, et al. (1995). Health and 
quality of life before and after hip or knee arthroplasty. The 
Journal of arthroplasty, 10(2), 169-175. https://www.doi.org/10.1016/s0883-5403(05)80123-8.
    \476\ Ritter MA, Albohm MJ, Keating EM, et al. (1995). 
Comparative outcomes of total joint arthroplasty. The Journal of 
arthroplasty, 10(6), 737-741. https://doi.org/10.1016/s0883-5403(05)80068-3.
    \477\ Sayah SM, Karunaratne S, Beckenkamp PR, et al. (2021). 
Clinical Course of Pain and Function Following Total Knee 
Arthroplasty: A Systematic Review and Meta-Regression. J 
Arthroplasty, 36(12), 3993-4002.e37. https://www.doi.org/10.1016/j.arth.2021.06.019.
    \478\ National Joint Registry. National Joint Registry for 
England and Wales 9th Annual Report 2012. Available at: https://www.hqip.org.uk/wp-content/uploads/2018/02/national-joint-registry-9th-annual-report-2012.pdf.
    \479\ Suda AJ, Seeger JB, Bitsch RG, et al. (2010). Are 
patients' expectations of hip and knee arthroplasty fulfilled? A 
prospective study of 130 patients. Orthopedics, 33(2), 76-80. 
https://www.doi.org/10.3928/01477447-20100104-07.
    \480\ Ghomrawi HM, Franco Ferrando N, Mandl LA, et al. (2011). 
How Often are Patient and Surgeon Recovery Expectations for Total 
Joint Arthroplasty Aligned? Results of a Pilot Study. HSS journal: 
The musculoskeletal journal of Hospital for Special Surgery, 7(3), 
229-234. https://www.doi.org/10.1007/s11420-011-9203-6.
    \481\ Harris IA, Harris AM, Naylor JM, et al. (2013). 
Discordance between patient and surgeon satisfaction after total 
joint arthroplasty. The Journal of arthroplasty, 28(5), 722-727. 
https://www.doi.org/10.1016/j.arth.2012.07.044.
    \482\ Jourdan C, Poiraudeau S, Descamps S, et al. (2012). 
Comparison of patient and surgeon expectations of total hip 
arthroplasty. PloS one, 7(1), e30195. https://www.doi.org/10.1371/journal.pone.0030195.
    \483\ Roos EM. (2003). Effectiveness and practice variation of 
rehabilitation after joint replacement. Current opinion in 
rheumatology, 15(2),160-162. https://doi.org/10.1097/00002281-200303000-00014.
    \484\ Anderson FA, Huang W, Friedman RJ, et al. (2012). 
Prevention of venous thromboembolism after hip or knee arthroplasty: 
findings from a 2008 survey of US orthopedic surgeons. The Journal 
of arthroplasty, 27(5), 659-666 e655. https://doi.org/10.1016/j.arth.2011.09.001.
    \485\ American Academy of Orthopaedic Surgeons. (2011). 
Preventing Venous Thromboembolic Disease in Patients Undergoing 
Elective Hip and Knee Arthroplasty: Evidence-Based Guideline and 
Evidence Report. https://www.aaos.org/globalassets/quality-and-practice-resources/vte/vte_full_guideline_10.31.16.pdf.
    \486\ Pincus D, et al. (2020). Association Between Surgical 
Approach and Major Surgical Complications in Patients Undergoing 
Total Hip Arthroplasty. JAMA, 323(11), 1070-1076. https://doi.org/10.1001/jama.2020.0785.
    \487\ Siebens HC, Sharkey P, Aronow HU, et al. (2016). Variation 
in Rehabilitation Treatment Patterns for Hip Fracture Treated With 
Arthroplasty. PM&R, 8(3), 191-207. https://doi.org/10.1016/j.pmrj.2015.07.005.
    \488\ Suter LG, Grady JN, Lin Z, et al. 2013 Measure Updates and 
Specifications: Elective Primary Total Hip Arthroplasty (THA) And/OR 
Total Knee Arthroplasty (TKA) All-Cause Unplanned 30-Day Risk-
Standardized Readmission Measure (Version 2.0). March 2013. 
Available at: http://qualitynet.org/.
    \489\ Suter LG, Parzynski CS, Grady JN, et al. 2013 Measures 
Update and Specifications: Elective Primary Total Hip Arthroplasty 
(THA) AND/OR Total Knee Arthroplasty (TKA) Risk-Standardized 
Complication Measure (Version 2.0). March 2013. Available at: http://qualitynet.org/.
    \490\ Rolfson O. (2010). Patient-reported Outcome Measures and 
Health-economic Aspects of Total Hip Arthroplasty: A study of the 
Swedish Hip Arthroplasty Register. Accessed July 20, 2013. Available 
at: https://gupea.ub.gu.se/bitstream/handle/2077/23722/gupea_2077_23722_1.pdf?sequence=1.
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    Due to the absence of recently conducted, large scale and uniformly 
collected patient-reported outcome (PRO) data available from patients 
undergoing elective primary THA/TKA, we established an incentivized, 
voluntary PRO data collection opportunity within the Comprehensive Care 
for Joint Replacement (CJR) model to support measure development.\491\ 
Elective THA/TKAs are important, effective procedures performed on a 
broad population, and the patient outcomes for these procedures (such 
as pain, mobility, and quality of life) can be measured in a 
scientifically sound way,492 493 are influenced by a range 
of improvements in care,\494\ and demonstrate hospital-level variation 
even after patient case mix adjustment.495 496 Further, THA/
TKA procedures are specifically intended to improve function and reduce 
pain,

[[Page 49815]]

making PROs a meaningful outcome metric to assess.\497\
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    \491\ Centers for Medicare & Medicaid Services. Comprehensive 
Care for Joint Replacement Model. Available at: https://innovation.cms.gov/innovation-models/cjr.
    \492\ Liebs TR, Herzberg W, Ruther W, et al. (2016). Quality-
adjusted life years gained by hip and knee replacement surgery and 
its aftercare. Archives of physical medicine and rehabilitation, 
97(5), 691-700. https://doi.org/10.1016/j.apmr.2015.12.021.
    \493\ White D, & Master H. (2016). Patient Reported Measures of 
Physical Function in Knee Osteoarthritis. Rheum Dis Clin North Am, 
42(2), 239-252. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4853650/.
    \494\ Kim K, Anoushiravani A, Chen K, et al. (2019). 
Perioperative Orthopedic Surgical Home: Optimizing Total Joint 
Arthroplasty Candidates and Preventing Readmission. Journal of 
Arthroplasty, 34(7), S91-S96. https://doi.org/10.1016/j.arth.2019.01.020.
    \495\ Bozic KJ, Grosso LM, Lin Z, et al. (2014). Variation in 
hospital-level risk-standardized complication rates following 
elective primary total hip and knee arthroplasty. The Journal of 
Bone and Joint Surgery, 96(8), 640-647. https://www.doi.org/10.2106/JBJS.L.01639.
    \496\ Makela KT, Peltola M, Sund R, et al. (2011). Regional and 
hospital variance in performance of total hip and knee replacements: 
A national population-based study. Annals of medicine, 43(sup1), 
S31-S38. https://doi.org/10.3109/07853890.2011.586362.
    \497\ Liebs T, Herzberg W, Gluth J, et al. (2013). Using the 
patient's perspective to develop function short forms specific to 
total hip and knee replacement based on WOMAC function items. The 
Bone & Joint Journal, 95(B), 239-243. https://www.doi.org/10.1302/0301-620X.95B2.28383.
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    In the CY 2021 OPPS/ASC final rule (85 FR 86146), we announced that 
THA and TKA procedures were removed from the Inpatient Only Procedures 
(IPO) list and added to the ASC covered procedures list (CPL). As a 
result, the volume of THA and TKA procedures for Medicare beneficiaries 
aged 65 years and older have been increasing in outpatient settings, 
including ASCs.
    We analyzed Part B Medicare FFS claims data for the number of ASC 
facility claims with THA/TKA procedures during CYs 2020, 2021, and 2022 
(Table 74 below). Though we acknowledge that currently the total number 
of ASCs performing these procedures, and the number of procedures being 
performed in ASCs, is relatively low and there is wide variation in 
number of procedures performed in those ASCs, the number of procedures 
performed in the ASC setting has steadily grown.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TP31JY23.110

BILLING CODE 4120-01-C
    In the CY 2022 OPPS/ASC proposed rule (86 FR 42251 through 42252), 
we requested comment on the potential future adoption of the THA/TKA 
PRO-PM into the ASCQR Program. We refer readers to the CY 2022 OPPS/ASC 
final

[[Page 49816]]

rule (86 FR 63896 through 63898) for a complete summary of feedback 
from interested parties.
    Many commenters supported inclusion of the THA/TKA PRO-PM to the 
ASCQR Program as procedures move from inpatient to outpatient settings. 
Commenters noted it was important to monitor quality outcomes and 
publicly report results. Additionally, commenters stated that the 
measure is aligned with patient values, being presented in a manner 
that is easy to understand.
    Other commenters did not support expansion of the measure to the 
ASCQR Program, and expressed concern with data collection burden, 
patient survey fatigue, and reporting thresholds. While we recognize 
that patient-reported outcome (PRO) based performance measures require 
providers to integrate data collection into clinical workflows, this 
integration provides opportunity for PROs to inform clinical decision 
making and benefits patients by engaging them in discussions about 
potential outcomes. Furthermore, we do not expect this measure to 
contribute to survey fatigue as the PRO instruments used to calculate 
pre- and post-operative scores for this THA/TKA PRO-PM were carefully 
selected, with extensive interested party input, to be low burden for 
patients.498 499
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    \498\ Pre-rulemaking MUC lists and map reports. The Measures 
Management System. (n.d.). Retrieved March 13, 2023, from https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
    \499\ Centers for Medicare and Medicaid Services Measures 
Inventory Tool. (n.d.). Retrieved March 28, 2023, from https://cmit.cms.gov/cmit/#/MeasureView?variantId=11547&sectionNumber=1.
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    We propose to adopt the THA/TKA PRO-PM into the ASCQR Program 
beginning with two voluntary reporting periods, followed by mandatory 
reporting. The first voluntary reporting period would begin with the CY 
2025 reporting period for eligible elective outpatient procedures 
between January 1, 2025 through December 31, 2025, and the second 
voluntary reporting period would begin with the CY 2026 reporting 
period for eligible outpatient procedures between January 1, 2026 
through December 31, 2026. Mandatory reporting would begin with the CY 
2027 reporting period/CY 2030 payment determination for eligible 
elective outpatient procedures occurring January 1, 2027 through 
December 31, 2027, impacting the CY 2030 payment determination and 
subsequent years. Because this proposed measure requires collection of 
data during the 3-month pre-operative period and the greater than 1-
year post-operative period, there is a delay between when the elective 
THA/TKA procedures actually occur, when the results would be reported 
under the ASCQR Program, and when payment determinations occur. 
Therefore, we propose a 3-year gap between the reporting period and the 
payment determination year (for example, CY 2027 reporting period for 
the CY 2030 payment determination) for the ASCQR Program. We refer 
readers to section XV.B.5.b.(2)(a) of this proposed rule for more 
information on the reporting requirements.
(2) Overview of Measure
(a) Data Collection, Submission, Reporting and Measure Specifications
    This measure reports the facility-level risk-standardized 
improvement rate (RSIR) in PROs following elective primary THA/TKA for 
Medicare FFS beneficiaries aged 65 years and older who were enrolled in 
Medicare FFS Part A and B for the 12 months prior to the date of the 
procedure and in Medicare FFS Part A and B during the procedure. The 
measure includes only elective primary outpatient THA/TKA procedures 
(patients with fractures and revisions are not included) performed at 
ASCs and does not include any inpatient procedures. The measure 
excludes patients with staged procedures (multiple elective primary THA 
or TKA procedures performed on the same patient during distinct 
encounters) that occur during the measurement period and excludes 
discontinued procedures (that is, procedures that were started but not 
completed).\500\
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    \500\ U.S. Department of Health and Human Services. (2021). 
Hospital Outpatient Prospective Payment System (OPPS): Use of 
Modifiers -52, -73, and -74 for Reduced or Discontinued Services. 
Available at: https://www.hhs.gov/guidance/document/hospital-outpatient-prospective-payment-system-opps-use-modifiers-52-73-and-74-reduced-or.
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    Substantial clinical improvement is measured by achieving a pre-
defined improvement in score on one of the two validated joint-specific 
PRO instruments measuring hip or knee pain and functioning: (1) The Hip 
Dysfunction and Osteoarthritis Outcome Score for Joint Replacement 
(HOOS, JR) for completion by THA recipients; or (2) the Knee injury and 
Osteoarthritis Outcome Score for Joint Replacement (KOOS, JR) for 
completion by TKA recipients. Improvement is measured from the pre-
operative assessment (data collected 90 to 0 days before surgery) to 
the post-operative assessment (data collected 300 to 425 days following 
surgery). Improvement scores are risk-adjusted to account for 
differences in patient case-mix. The measure, as proposed, accounts for 
potential non-response bias in measure scores through inverse 
probability weighting based on likelihood of response.
    We refer readers to the FY 2023 IPPS/LTCH PPS final rule (87 FR 
49246 through 49257) for more information on the development of the 
hospital-level THA/TKA PRO-PM, including background on the measure and 
a complete summary of measure specifications, data sources, and measure 
calculation.
    For additional details regarding the measure specifications, we 
also refer readers to the Hip and Knee Arthroplasty Patient-Reported 
Outcomes file, available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.
(i) Data Sources
    The THA/TKA PRO-PM uses four sources of data for the calculation of 
the measure: (1) PRO data; (2) claims data; (3) Medicare enrollment and 
beneficiary data; and (4) U.S. Census Bureau survey data. As described 
in section XV.B.5.b.(1) of this proposed rule, the measure uses PRO 
data directly reported by the patient regarding their health, quality 
of life, or functional status associated with their health care or 
treatment. This patient reported-data are collected by facilities pre-
operatively and post-operatively, and limited patient-level risk factor 
data are collected with PRO data and identified in claims as detailed 
in this section of the proposed rule.\501\ The measure includes PRO 
data collected with the two joint-specific PRO instruments described in 
this section of the proposed rule--the HOOS, JR for completion by THA 
recipients and the KOOS, JR for completion by TKA recipients--from 
which scores are used to assess substantial clinical improvement. For 
risk-adjustment by pre-operative mental health score, ASCs would submit 
one of two additional PRO instruments, all the items in either the: (1) 
the Patient-Reported Outcomes Measurement Information System (PROMIS)-
Global Mental Health subscale; or (2) the Veterans RAND 12-Item Health 
Survey (VR-12) Mental Health subscale. The risk model also includes a 
one-question patient-reported assessment of health literacy--the Single 
Item Literacy Screener questionnaire.
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    \501\ Higgins JP, Thomas J, Chandler J, et al. (2019). Cochrane 
handbook for systematic reviews of interventions. John Wiley & Sons. 
https://doi.org/10.1002/9781119536604.

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[[Page 49817]]

    Furthermore, the following data would be collected for 
identification of the measure cohort, for risk-adjustment purposes, and 
for the statistical approach to potential non-response bias. ASC 
facility claims data would be used to identify eligible elective 
primary outpatient THA/TKA procedures for the measure cohort to which 
submitted PRO data can be matched, and to identify additional variables 
for risk-adjustment and in the statistical approach to account for 
response bias, including patient demographics and clinical 
comorbidities up to 12 months prior to surgery. The Medicare Enrollment 
Database (EDB) identifies Medicare FFS enrollment and patient-
identified race, and the Master Beneficiary Summary File allows for 
determination of Medicare and Medicaid dual eligibility enrollment 
status. Demographic information from the U.S. Census Bureau's American 
Community Survey allows for derivation of the Agency for Healthcare 
Research and Quality (AHRQ) Socioeconomic Status (SES) Index score. 
Race, dual eligibility, and AHRQ SES Index score are used in the 
statistical approach to account for potential non-response bias in the 
outcome calculation. We refer readers to section XV.B.5.b.(2)(iii) of 
this proposed rule for further details regarding the variables required 
for data collection and submission.
(ii) Measure Calculation
    The ASC facility-level THA/TKA PRO-PM result is calculated by 
aggregating all patient-level results across the facility. This measure 
would be calculated and presented as a RSIR, producing a performance 
measure per facility which accounts for patient case-mix, addresses 
potential non-response bias, and represents a measure of quality of 
care following elective primary outpatient THA/TKA. Response rates for 
PRO data would be calculated as the percentage of elective primary ASC 
THA or TKA procedures for which complete and matched pre-operative and 
post-operative PRO data have been submitted divided by the total number 
of eligible THA or TKA procedures performed at each facility.
(iii) Data Submission and Reporting
    In response to feedback received from interested parties in the 
request for comments (RFCs) on this measure in the FY 2022 IPPS/LTCH 
PPS final rule (86 FR 45408 through 45414) and the CY 2022 OPPS/ASC 
proposed rule (86 FR 42251 through 42252) and adoption of the measure 
in the Hospital IQR Program in the FY 2023 IPPS/LTCH PPS final rule (87 
FR 49246 through 49257), we propose to adopt the THA/TKA PRO-PM in the 
ASCQR Program utilizing flexible data submission approaches.
    ASCs would submit the following variables collected pre-operatively 
between 90 and zero days prior to the THA/TKA procedure for each 
patient: Medicare provider number; Medicare health insurance claim 
(HIC) number/Medicare beneficiary identifier (MBI); date of birth; date 
of procedure; date of PRO data collection; procedure type; mode of 
collection; person completing the survey; facility admission date; 
patient-reported outcome measure version; PROMIS Global (mental health 
subscale items) or VR-12 (mental health subscale items); HOOS, JR (for 
THA patients); KOOS, JR (for TKA patients); Single-Item Health Literacy 
Screening (SILS2) questionnaire; BMI or weight (kg)/height (cm); 
chronic (>=90 day) narcotic use; total painful joint count (patient 
reported in non-operative lower extremity joint); and quantified spinal 
pain (patient-reported back pain, Oswestry index 
question502 503).
---------------------------------------------------------------------------

    \502\ Fairbank JC, & Pynsent PB. (2000). The Oswestry Disability 
Index. Spine. 25(22), 2940-52 https://journals.lww.com/spinejournal/Abstract/2000/11150/The_Oswestry_Disability_Index.17.aspx.
    \503\ The Oswestry Disability Index is in the public domain and 
available for all hospitals to use.
---------------------------------------------------------------------------

    ASCs would submit the following variables collected post-
operatively between 300 and 425 days following the THA/TKA procedure 
for each patient: Medicare provider number; Medicare HIC number/MBI; 
date of birth; procedure date; date of PRO data collection; procedure 
type; mode of collection; person completing the survey; facility 
admission date; KOOS, JR (TKA patients); and HOOS, JR (THA patients). 
The data submission period for the THA/TKA PRO-PM would also serve as 
the review and correction period. Data would not be able to be 
corrected following the submission deadline.
    We propose a phased implementation approach for adoption of this 
measure to the ASCQR Program, with voluntary reporting periods in CYs 
2025 and CY 2026 followed by mandatory reporting beginning with the CY 
2027 reporting period/CY 2030 payment determination in the ASCQR 
Program. Voluntary reporting prior to mandatory reporting would allow 
time for facilities to incorporate the THA/TKA PRO-PM data collection 
into their clinical workflows and is responsive to interested parties' 
comments as summarized in the FY 2022 IPPS/LTCH PPS final rule (86 FR 
45408 through 45414) and FY 2023 IPPS/LTCH PPS final rule (87 FR 49246 
through 49257). Given the numbers of ASCs, varied number of procedures 
being performed, and the extended follow-up periods, we considered 
extending the length of voluntary reporting.
    Following the two voluntary reporting periods, we propose that 
mandatory reporting of the THA/TKA PRO-PM would begin with the CY 2027 
reporting period/CY 2030 payment determination. For each voluntary and 
subsequent mandatory reporting period, we would collect data on the 
THA/TKA PRO-PM in accordance with Health Insurance Portability and 
Accountability Act of 1996 (HIPAA), Privacy and Security Rules (45 CFR 
parts 160 and 164, subparts A, C, and E), and other applicable law.
(b) Review by Measure Applications Partnership (MAP)
    We included the THA/TKA PRO-PM measure for the ASCQR Program in the 
publicly available ``2022 Measures Under Consideration List.'' 
(MUC2022-026).\504\ The MAP Coordinating Committee supported the 
measure, as referenced in the MAP's 2022-2023 Final Recommendations 
report to HHS and CMS.\505\
---------------------------------------------------------------------------

    \504\ 2022 Measures Under Consideration List. Available at 
https://mmshub.cms.gov/sites/default/files/2022-MUC-List.xlsx.
    \505\ MAP MUC Preliminary Recommendations 2022-2023. Available 
at https://mmshub.cms.gov/sites/default/files/2022-2023-MAP-Final-Recommendations-508.xlsx.
---------------------------------------------------------------------------

    The MAP members noted that, while a similar version of this measure 
has been adopted for use in the Hospital IQR program, a measure that 
assesses PROs among THA/TKA patients in ASCs for the ASCQR Program does 
not currently exist. The MAP highlighted the key strategy for the ASCQR 
Program is to ensure that procedures done in any type of facility have 
equivalent quality. As such, the MAP members agree that quality 
measures regarding procedures in hospital settings should be 
incorporated into the ASCQR Program, to the extent feasible and 
appropriate, so that consumers can compare quality of a specific 
procedure across different facility types, including ASCs.\506\
---------------------------------------------------------------------------

    \506\ Ibid.
---------------------------------------------------------------------------

    In addition, the MAP members stated that the goal of the THA/TKA 
PRO-PM is to capture the full spectrum of care to incentivize 
collaboration and shared responsibility for improving patient health 
and reducing the burden of their disease. They agreed that this measure 
aligns with the goal of patient-centered approaches to health care 
quality improvement and addresses the high priority areas of patient 
and family

[[Page 49818]]

engagement, communication, and care coordination for the ASCQR 
Program.\507\
---------------------------------------------------------------------------

    \507\ Ibid.
---------------------------------------------------------------------------

(c) Measure Endorsement
    The CBE endorsed the hospital-level version of the THA/TKA PRO-PM 
(CBE #3559) in November 2020.\508\ We note that the ASCQR Program 
version of the THA/TKA PRO-PM currently uses the same specifications as 
the CBE endorsed hospital-level THA/TKA PRO-PM with modifications that 
allow for the capture of procedures performed in for the ASC setting. 
We intend to seek CBE endorsement for the ASCQR Program's version of 
the THA/TKA PRO-PM in a future endorsement cycle.
---------------------------------------------------------------------------

    \508\ Centers for Medicaid & Medicare Services. Hospital-Level, 
Risk-Standardized Improvement Rate in Patient-Reported Outcomes 
Following Elective Primary Total Hip and/or Total Knee Arthroplasty 
(THA/TKA). Available at: https://cmit.cms.gov/cmit/#/FamilyView?familyId=1618.
---------------------------------------------------------------------------

    We have noted in previous rulemaking (76 FR 74494) the requirement 
that measures reflect consensus among affected parties can be achieved 
in other ways aside from CBE endorsement, including through the measure 
development process, through broad acceptance, use of the measure(s), 
and through public comment. We propose this measure without CBE-
endorsement based upon strong MAP and public support combined with the 
importance of the measure for Medicare beneficiaries. In addition, 
there are two existing, CBE-endorsed versions of this measure, one at 
the clinician-group level (CBE #3639) and one for the hospital level 
(CBE #3559). We expect that the measure will perform similarly in the 
ASC setting, and we intend on submitting the measure for CBE 
endorsement following data collection during voluntary reporting.
    We refer readers to section XV.D.1.d of this proposed rule for a 
discussion on the THA/TKA PRO-PM form, manner, and timing submission 
requirements.
    We invite public comment on this proposal.
6. ASCQR Program Quality Measure Set
a. Summary of Previously Finalized and Newly Proposed ASCQR Program 
Quality Measure Set for the CY 2024 Reporting Period/CY 2026 Payment 
Determination
    We refer readers to the CY 2023 OPPS/ASC final rule (87 FR 72120 
through 72121) for the previously finalized ASCQR Program measure set 
for the CY 2024 reporting period/CY 2026 payment determination.
    Table 75 below summarizes the previously finalized and newly 
proposed ASCQR Program measures for the CY 2024 reporting period/CY 
2026 payment determination.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TP31JY23.111


b. Summary of Previously Finalized and Newly Proposed ASCQR Program 
Quality Measure Set for the CY 2025 Reporting Period/CY 2027 Payment 
Determination and Subsequent Years

    Table 76 summarizes the previously finalized and newly proposed 
ASCQR Program measures for the CY 2025

[[Page 49819]]

reporting period/CY 2027 payment determination.
[GRAPHIC] [TIFF OMITTED] TP31JY23.112

BILLING CODE 4120-01-C
7. Maintenance of Technical Specifications for Quality Measures
    We maintain technical specifications for previously adopted ASCQR 
Program measures. These specifications are updated as we modify the 
ASCQR Program measure set. The manuals that contain specifications for 
the previously adopted measures can be found on the CMS website 
(currently at: https://qualitynet.cms.gov/asc/specifications-manuals).\509\ Our policy on maintenance of technical specifications 
for the ASCQR Program are codified in our regulations at Sec.  416.325. 
We propose to amend our measure maintenance regulation at Sec.  
416.325(c) to replace references to ``QualityNet'' with ``CMS-
designated information system'' or ``CMS website,'' and to make other

[[Page 49820]]

conforming technical edits, to accommodate recent and future systems 
requirements and mitigate confusion for program participants.
---------------------------------------------------------------------------

    \509\ Qualitynet Home. (n.d.). Retrieved March 21, 2023, from 
https://qualitynet.cms.gov/asc/specifications-manuals.
---------------------------------------------------------------------------

    We invite public comment on this proposal.
8. Public Reporting of ASCQR Program Data
    We refer readers to the CYs 2012, 2016, 2017, and 2018 OPPS/ASC 
final rules (76 FR 74514 through 74515; 80 FR 70531 through 70533; 81 
FR 79819 through 79820; and 82 FR 59455 through 59470, respectively) 
for detailed discussion of our policies regarding the public reporting 
of ASCQR Program data, which are codified in our regulations at Sec.  
416.315 (80 FR 70533).
    We are not proposing any changes to these policies in this proposed 
rule.

C. Administrative Requirements

1. Requirements Regarding Data Submission
    We refer readers to Sec.  416.310(c)(1)(i) for our current policies 
regarding submission of data via our online data submission tool, 
including security official and system registration requirements. We 
propose to amend our collection and submission regulation at Sec.  
416.310(c)(1)(i) to replace references to ``QualityNet'' with ``CMS-
designated information system'' or ``CMS website,'' and to make other 
conforming technical edits, to accommodate recent and future systems 
requirements and mitigate confusion for program participants.
    We invite public comment on this proposal.
2. Requirements Regarding Program Participation
    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 beginning with the CY 2014 payment determination. In the 
CY 2016 OPPS/ASC final rule (80 FR 70533 through 70534), we codified 
these requirements regarding participation status for the ASCQR Program 
in our regulations at Sec.  416.305. We propose to amend our withdrawal 
regulation at Sec.  416.305(b)(1) to replace references to 
``QualityNet'' with ``CMS-designated information system'' or ``CMS 
website,'' and to make other conforming technical edits, to accommodate 
recent and future systems requirements and mitigate confusion for 
program participants.
    We invite public comment on this proposal.

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

    Previously finalized quality measures and information collections 
discussed in this section were approved by the Office of Management and 
Budget (OMB) under control number 0938-1270 (expiration date August 31, 
2025). An updated PRA package reflecting the updated information 
collection requirements related to the proposals set forth in this 
section of the proposed rule will be submitted for approval under the 
same OMB control number.
1. Data Collection and Submission
a. Background
    We previously codified our existing policies regarding data 
collection and submission under the ASCQR Program in our regulations at 
Sec.  416.310.
b. Requirements for Claims-Based Measures
(1) Requirements Regarding Data Processing and Collection Periods for 
Claims-Based Measures Using Quality Data Codes (QDCs)
    We refer readers to the CY 2014 OPPS/ASC final rule (78 FR 75135) 
for a complete summary of the data processing and collection periods 
for the claims-based measures using QDCs beginning with the CY 2012 
reporting period/CY 2014 payment determination. 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 in our regulations at Sec.  416.310(a)(1) and 
(2). We note that the previously finalized data processing and 
collection period requirements will apply to any future claims-based 
measures using QDCs adopted in the ASCQR Program.
    We are not proposing any changes to these policies in this proposed 
rule.
(2) Minimum Threshold, Minimum Case Volume, and Data Completeness for 
Claims-Based Measures Using QDCs
    We refer readers to the CY 2018 OPPS/ASC final rule (82 FR 59472) 
(and the previous rulemakings cited therein), as well as our 
regulations at Sec. Sec.  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 (86 FR 63904 through 
63905), where we finalized that our policies for minimum threshold, 
minimum case volume, and data completeness requirements apply to any 
future claims-based-measures using QDCs adopted in the ASCQR Program.
    We are not proposing any changes to these policies in this proposed 
rule.
(3) Requirements Regarding Data Processing and Collection Periods for 
Non-QDC Based, Claims-Based Measure Data
    We refer readers to the CY 2019 OPPS/ASC final rule (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 in our 
regulations at Sec.  416.310(b). We note that these requirements for 
non-QDC based, claims-based measures apply to the following previously 
adopted measures:
     Facility 7-Day Risk-Standardized Hospital Visit Rate after 
Outpatient Colonoscopy; and
     Facility-Level 7-Day Hospital Visits after General Surgery 
Procedures Performed at Ambulatory Surgical Centers (CBE #3357).
    We are not proposing any changes to these policies in this proposed 
rule.
c. Requirements for Data Submitted Via an Online Data Submission Tool
(1) Requirements for Data Submitted Via a CMS Online Data Submission 
Tool
    We refer readers to the CY 2018 OPPS/ASC final rule (82 FR 59473) 
(and the previous rulemakings cited therein) and our regulations at 
Sec.  416.310(c)(1) for our requirements regarding data submitted via a 
CMS online data submission tool. We are currently using the HQR System 
(formerly referred to as the QualityNet Secure Portal) \510\ to host 
our CMS online data submission tool, available by securely logging in 
at: https://hqr.cms.gov/hqrng/login. We note that, in the CY 2018 OPPS/
ASC final rule (82 FR 59473), we finalized expanded submission via the 
CMS online tool to also allow for batch data submission and made 
corresponding changes at Sec.  416.310(c)(1)(i).
---------------------------------------------------------------------------

    \510\ The HQR System was previously referred to as the 
QualityNet Secure Portal.
---------------------------------------------------------------------------

     The following previously finalized measures require data 
to be submitted via a CMS online data submission tool beginning with 
the CY 2019 reporting period/CY 2021 payment determination: Endoscopy/
Polyp Surveillance: Appropriate Follow-Up Interval for Normal 
Colonoscopy in Average Risk Patients;
     Cataracts Visual Function measure (Previously referred to 
as Cataracts:

[[Page 49821]]

Improvement in Patients' Visual Function within 90 Days Following 
Cataract Surgery);
     Normothermia Outcome; and
     Unplanned Anterior Vitrectomy.
    In the CY 2022 OPPS/ASC final rule (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:
     Patient Burn;
     Patient Fall;
     Wrong Site, Wrong Side, Wrong Patient, Wrong Procedure, 
Wrong Implant; and
     All-Cause Hospital Transfer/Admission.
    Measure data for these measures must be submitted via the HQR 
System.
    Other than the proposal to amend Sec.  416.310(c)(1)(i) and (d)(1) 
discussed in section XV.C.1 of this proposed rule, we are not proposing 
any changes to these policies in this proposed rule.
(a) Proposed Data Submission and Reporting Requirements for the ASC 
Procedure Volume Measure
    In section XV.B.5.a of this proposed rule, we propose to re-adopt 
the ASC Procedure Volume measure (with modification), with voluntary 
reporting beginning with the CY 2025 reporting period followed by 
mandatory reporting beginning with CY 2026 reporting period/CY 2028 
payment determination. We also propose that ASCs submit these data to 
CMS through the HQR System during the time period of January 1 to May 
15 in the year prior to the affected payment determination year. For 
example, for the CY 2025 reporting period, the data submission period 
would be January 1, 2026 to May 15, 2026, covering the performance 
period of January 1, 2025 to December 31, 2025.
    Under this proposed measure, we will collect and publicly display 
data surrounding the top five most frequently performed procedures 
among ASCs in each of the following eight categories: Cardiovascular, 
Eye, Gastrointestinal, Genitourinary, Musculoskeletal, Nervous System, 
Respiratory, and Skin.\511\ We will assess and update the top five 
procedures in each category annually as needed. We propose that ASCs 
would submit aggregate-level data through the CMS web-based tool 
(currently the HQR system). Data received through the HQR system 
website will then be publicly displayed on the http://data.cms.gov">data.cms.gov website, or 
other CMS website, following our 30-day preview period of submitted 
data.
---------------------------------------------------------------------------

    \511\ Ambulatory Surgical Center Specifications Manuals. 
Available at https://qualitynet.cms.gov/asc/specifications-manuals#tab6.
---------------------------------------------------------------------------

    We refer readers to our regulation at Sec.  416.315 for our 
codified policies regarding public reporting of data under the ASCQR 
Program, as well as our existing policies regarding data collection and 
submission under the ASCQR Program in our regulations at Sec.  416.310.
    We invite public comment on this proposal.
(b) Proposed Data Submission and Reporting Requirements for the 
Cataracts Visual Function Measure
    In section XV.B.4.b of this proposed rule, we propose to modify the 
Cataracts Visual Function measure by standardizing acceptable survey 
instruments, beginning with the CY 2024 reporting period, which would 
limit the allowable survey instruments to those listed below:

 The National Eye Institute Visual Function Questionnaire-25 
(NEI VFQ-25)
 The Visual Functioning Patient Questionnaire (VF-14)
 The Visual Functioning Index Patient Questionnaire (VF-8R)

    We also propose that ASCs submit these data to CMS during the time 
period of January 1 to May 15 in the year prior to the affected payment 
determination year. For example, for the CY 2024 reporting period, the 
data submission period would be January 1, 2025 to May 15, 2025, 
covering the performance period of January 1, 2024 to December 31, 
2024. Specifically, for data collection, we propose that ASCs submit 
aggregate-level data through the HQR System. We previously codified our 
existing policies regarding data collection and submission under the 
ASCQR Program in our regulations at Sec.  416.310.
    We invite public comment on this proposal.
(2) Requirements for Data Submitted Via a Non-CMS Online Data 
Submission Tool
    We refer readers to the CY 2014 OPPS/ASC final rule (78 FR 75139 
through 75140) and the CY 2015 OPPS/ASC final rule (79 FR 66985 through 
66986) for our requirements regarding data submitted via a non-CMS 
online data submission tool (specifically, the CDC's National Health 
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 in our regulations at Sec.  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 HCP measure, for 
which data will be submitted via the CDC NHSN. In section XV.B.4.a of 
this proposed rule, we discuss the proposed modification of the COVID-
19 Vaccination Coverage Among HCP measure beginning with the CY 2024 
reporting period/CY 2026 payment determination. The requirements for 
measure data submitted via the CDC NHSN website would remain as 
previously finalized.
    We are not proposing any changes to these policies in this proposed 
rule.
d. Proposed Data Submission and Reporting Requirements for Patient-
Reported Outcome-Based Performance Measures (PRO-PMs)
    In section XV.B.5.b of this proposed rule, we propose to adopt the 
THA/TKA PRO-PM into the ASCQR Program measure set. We also propose the 
reporting and submission requirements for PRO-PM measures as a new type 
of measure to the ASCQR Program.
(1) Submission of PRO-PM Data
(a) Data Submission Generally
    We believe that ASCs should have the choice of selecting from 
multiple submission approaches, in line with input received by the 
measure developer during measure development and comments as summarized 
in the FY 2022 IPPS/LTCH PPS final rule (86 FR 45411 through 45414), 
which recommended that we provide multiple options for data submission 
mechanisms to ensure flexibility.
    In section XV.B.5.b of this proposed rule, we propose that both 
ASCs and vendors use the HQR System for data submission for the THA/TKA 
PRO-PM, which would enable us to incorporate this new requirement into 
the infrastructure we have developed and use to collect other quality 
data. We would provide ASCs with additional detailed information and 
instructions for submitting data using the HQR System through CMS' 
existing websites, and through outreach, or both.
    We invite public comment on these proposals.

[[Page 49822]]

(2) Data Submission Reporting Requirements
(a) Data Submission Requirements for Measures Submitted via a Web-Based 
Tool
    We refer readers to the QualityNet website available at: https://qualitynet.cms.gov for a discussion of the requirements for measure 
data submitted via the HQR System (formerly referred to as the 
QualityNet Secure Portal) for the CY 2017 payment determination and 
subsequent years. 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 regarding the HIPAA Privacy and Security Rules.
(b) Voluntary Reporting Requirements for the Proposed THA/TKA PRO-PM
    For ASCs participating in voluntary reporting for the THA/TKA PRO-
PM as discussed in section XV.B.5.b of this proposed rule, we propose 
that ASCs submit pre-operative PRO data, as well as matching post-
operative PRO data, for at least 45 percent of their eligible elective 
primary THA/TKA procedures.
    For the THA/TKA PRO-PM, we propose that the first voluntary 
reporting period for the CY 2025 reporting period would include pre-
operative PRO data collection from 90 to 0 days before the procedure 
(for eligible elective THA/TKA procedures performed from January 1, 
2025 through December 31, 2025) and post-operative PRO data collection 
from 300 to 425 days after the procedure. Therefore, during this first 
voluntary reporting period for CY 2025, ASCs would submit pre-operative 
data by May 15, 2026 and post-operative data by May 15, 2027, and we 
intend to provide ASCs with their results in confidential feedback 
reports in CY 2028. All deadlines occurring on a Saturday, Sunday, or 
legal holiday, or on any other day all or part of which is declared to 
be a non-workday for federal employees by statute or Executive order 
would be extended to the first day thereafter. After the initial 
submission of pre-operative data for the first voluntary period, ASCs 
would submit both pre-operative and post-operative data by the same 
day, but for different time periods. For example, ASCs would need to 
submit: (1) post-operative data for the first voluntary reporting 
period (for procedures performed between January 1, 2025 and December 
31, 2025); and (2) pre-operative data for the second voluntary 
reporting (for procedures performed between January 1, 2026 and 
December 31, 2026) of the THA/TKA PRO-PM by May 15, 2027.
    For the THA/TKA PRO-PM, we propose that the second voluntary 
reporting period for the CY 2026 reporting period would include pre-
operative PRO data collection from 90 to 0 days before the procedure 
(for eligible elective THA/TKA procedures performed from January 1, 
2026, through December 31, 2026) and post-operative PRO data collection 
from 300 to 425 days after the procedure. ASCs would submit pre-
operative data by May 15, 2027 and post-operative data by May 15, 2028, 
and we intend to provide ASCs with their results in confidential 
feedback reports in CY 2029. ASCs that voluntarily submit data for this 
measure would receive confidential feedback reports that detail 
submission results from the reporting period. Results of voluntary 
reporting would not be made publicly available. If feasible, we would 
calculate and provide each participating ASC with their RSIR as part of 
the confidential feedback reports. This would provide each ASC with an 
indication of their performance relative to the other facilities that 
participate in the voluntary reporting period.
    While we do not propose to publicly report the data we receive 
during the voluntary reporting periods for the THA/TKA PRO-PM facility-
level RSIR, we propose to publicly report which ASCs choose to 
participate in voluntary reporting and/or the percent of pre-operative 
data submitted by participating ASCs for the first voluntary reporting 
period, and their percent of pre-operative and post-operative matched 
PRO data submitted for subsequent voluntary reporting periods. For 
example, if out of 100 eligible procedures a facility submits 45 pre-
operative cases that match to post-operative cases, then we would 
report that facilities submitted 45 percent of matched pre-operative 
and post-operative PRO surveys during voluntary reporting.
    We refer readers to Table 77 for an overview of the proposed 
performance period, pre- and post-operative data collection timeframes, 
and data submission deadlines during the voluntary reporting periods 
for THA/TKA PRO-PM.

[[Page 49823]]

[GRAPHIC] [TIFF OMITTED] TP31JY23.113

(c) Mandatory Reporting
    Following the two voluntary reporting periods, we propose that 
mandatory reporting of the THA/TKA PRO-PM would begin with reporting 
PRO data for eligible elective THA/TKA procedures from January 1, 2027 
through December 31, 2027 (the CY 2027 performance period), impacting 
the CY 2030 payment determination. This initial mandatory reporting 
would include pre-operative PRO data collection from 90 days preceding 
the applicable performance period and from 300 to 425 days after the 
performance period. For example, pre-operative data from October 3, 
2026 through December 31, 2027 (for eligible elective primary THA/TKA 
procedures from January 1, 2027 through December 31, 2027) and post-
operative PRO data collection from October 28, 2027 to February 28, 
2029. Pre-operative data submission would occur by May 15, 2028 and 
post-operative data submission in May 15, 2029.
    We intend to provide ASCs with their results in CY 2030 before 
publicly reporting results on the Compare tool hosted by HHS, currently 
available at https://www.medicare.gov/care-compare, or its successor 
website. We would provide confidential feedback reports during the 
voluntary period which would include the RSIR as well as other results 
that support understanding of their performance prior to public 
reporting. For this first mandatory reporting period, facilities that 
fail to meet the reporting requirements would receive a reduction of 
their Annual Payment Update (APU) in the CY 2030 payment determination. 
We propose that ASCs would be required to submit 45 percent of 
eligible, complete pre-operative data with matching eligible, complete 
post-operative data as a minimum amount of data for mandatory reporting 
in the ASCQR Program.
    We refer readers to Table 78 for an overview of the proposed 
performance period, pre- and post-operative data collection timeframes, 
and data submission deadlines during the first mandatory reporting 
period.

[[Page 49824]]

[GRAPHIC] [TIFF OMITTED] TP31JY23.114

    We invite comment on these proposals.
e. ASCQR Program Data Submission Deadlines
    We refer readers to the CY 2021 OPPS/ASC final rule (85 FR 86191) 
for a detailed discussion of our data submission deadlines policy, 
which we codified in our regulations at Sec.  416.310(f).
    We are not proposing any changes to this policy in this proposed 
rule.
f. Review and Corrections Period for Measure Data Submitted to the 
ASCQR Program Review and Corrections Period for Data Submitted via a 
CMS Online Data Submission Tool
    We refer readers to the CY 2021 OPPS/ASC final rule (85 FR 86191 
through 86192) for a detailed discussion of our review and corrections 
period policy, which we codified in our regulations at Sec.  
416.310(c)(1)(iii).
    We are not proposing any changes to this policy in this proposed 
rule.
g. ASCQR Program Reconsideration Procedures
    We refer readers to the CY 2016 OPPS/ASC final rule (82 FR 59475) 
(and the previous rulemakings cited therein) and Sec.  416.330 for the 
ASCQR Program's reconsideration policy.
    We are not proposing any changes to this policy in this proposed 
rule.
h. Extraordinary Circumstances Exception (ECE) Process
    We refer readers to the CY 2018 OPPS/ASC final rule (82 FR 59474 
through 59475) (and the previous rulemakings cited therein) and Sec.  
416.310(d) for the ASCQR Program's extraordinary circumstance 
exceptions (ECE) request policy. We propose to amend our exception 
policy codified at Sec.  416.310(d)(1) to replace references to 
``QualityNet'' with ``CMS-designated information system'' or ``CMS 
website'', and to make other conforming technical edits, to accommodate 
recent and future systems requirements and mitigate confusion for 
program participants.
    We invite public comment on this proposal.

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

1. Statutory Background
    We refer readers to the CY 2012 OPPS/ASC final rule with comment 
period (76 FR 74492 through 74493) for a detailed discussion of the 
statutory background regarding payment reductions for ASCs that fail to 
meet the ASCQR Program requirements.
2. Policy Regarding Reduction to the ASC Payment Rates for ASCs That 
Fail To Meet the ASCQR Program Requirements for a Payment Determination 
Year
    The national unadjusted payment rates for many services paid under 
the ASC payment system are equal to the product of the ASC conversion 
factor and the scaled relative payment weight for the APC to which the 
service is assigned. For CY 2022, the ASC conversion factor is equal to 
the conversion factor calculated for the previous year updated by the 
productivity-adjusted hospital market basket update factor. The 
productivity adjustment is set forth in section 1833(i)(2)(D)(v) of the 
Act. The productivity-adjusted hospital market basket update is the 
annual update for the ASC payment system for a 5-year period (CY 2019 
through CY 2023). Under the ASCQR Program, in accordance with section 
1833(i)(7)(A) of the Act and as discussed in the CY 2013 OPPS/ASC final 
rule with comment period (77 FR 68499), any annual increase in certain 
payment rates under the ASC payment system shall be reduced by 2.0 
percentage points for ASCs that fail to meet the reporting requirements 
of the ASCQR Program. This reduction applied beginning with the CY 2014 
payment rates (77 FR 68500). For a complete discussion of the 
calculation of the ASC conversion factor and our finalized proposal to 
update the ASC payment rates using the inpatient hospital market basket 
update for CYs 2019 through 2023, we refer readers to the CY 2019 OPPS/
ASC final rule with comment period (83 FR 59073 through 59080).
    In the CY 2013 OPPS/ASC final rule with comment period (77 FR 68499 
through 68500), in order to implement the requirement to reduce the 
annual update for ASCs that fail to meet the ASCQR Program 
requirements, we finalized the following policies: (1) to calculate a 
full update conversion factor and an ASCQR Program reduced update 
conversion factor; (2) to calculate 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; and (3) 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

[[Page 49825]]

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 2023 OPPS/ASC final rules with comment 
period we did not make any other changes to these policies. We propose 
the continuation of these policies for the CY 2024 reporting period/CY 
2026 payment determination.

XVI. Proposed Requirements for the Rural Emergency Hospital Quality 
Reporting (REHQR) Program

A. Background

1. Overview
    The Rural Emergency Hospital Quality Reporting (REHQR) Program's 
overarching goals are to improve the quality of care provided to 
Medicare beneficiaries, facilitate public transparency, ensure 
accountability, and safeguard the accessibility of facilities in rural 
settings. We refer readers to section XVI of the CY 2023 Hospital 
Outpatient Prospective Payment System (OPPS)/Medicare Ambulatory 
Surgical Center Payment System (ASC) final rule (87 FR 72136 through 
72150) for an overview of the REHQR Program.
2. Statutory and Regulatory History of Quality Reporting for REHs
    Congress established Rural Emergency Hospitals (REHs) as a new 
Medicare provider type in the Consolidated Appropriations Act (CAA), 
2021. 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 (2)(i) a subsection (d) hospital 
with not more than 50 beds located in a county (or equivalent unit of 
local government) in a rural area,\512\ or (ii) a subsection (d) 
hospital with not more than 50 beds that was treated as being in a 
rural area.513 514 Among other requirements, an REH must 
apply for enrollment in the Medicare program, provide emergency 
department (ED) services and observation care, 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).515 516 At the election of the REH, it can 
also provide certain services furnished on an outpatient basis.\517\
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    \512\ As defined in section 1886(d)(2)(D) of the Act.
    \513\ Pursuant to section 1886(d)(8)(E) of the Act.
    \514\ As set out under section 1861(kkk)(3) of the Act.
    \515\ 42 CFR part 485 subpart E (Sec. Sec.  485.500 through 
485.546).
    \516\ Qualification Requirements for REHs are set out under 
section 1861(kkk)(2) of the Act.
    \517\ See section 1861(kkk)(1)(A)(ii) of the Act.
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3. Proposal To Codify the Statutory Authority of the REHQR Program
    We propose to codify the statutory authority for the REHQR Program 
at 42 CFR 419.95 by adding paragraph (a) ``Statutory Authority.'' 
Section 1861(kkk)(7)(A) of the Act authorizes the Secretary to 
implement a quality reporting program requiring REHs to submit data on 
measures in accordance with the Secretary's requirements in section 
1861(kkk)(7). Section 1861(kkk)(7)(B)(ii) requires REHs to submit 
quality measure data to the Secretary ``in a form and manner, and at a 
time, specified by the Secretary.'' The Act does not require the 
Secretary to provide incentives for submitting this

[[Page 49826]]

data under the REHQR Program, nor does it require the Secretary to 
impose penalties for failing to comply with this requirement under the 
REHQR Program.
    We invite public comment on this proposal.

B. REHQR Program Quality Measures

1. Considerations in the Selection of REHQR Program Quality Measures
    As we stated in the CY 2023 OPPS/ASC final rule, 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 drive further quality improvement efforts in the REH 
setting (87 FR 72137). As we considered potential measures for the 
REHQR Program, we prioritized measures that had undergone previous 
consensus-based entity (CBE) \518\ review for the hospital outpatient 
department setting that reflect important areas of service for REHs 
while adhering to the CMS National Quality Strategy goals,\519\ 
Strategic Plan,\520\ Meaningful Measures 2.0 initiatives,\521\ and the 
Department of Health and Human Services' (HHS) Strategic Plan.\522\ 
When identifying potential measures for the REHQR Program, we focused 
on the considerations of service and patient volume, care 
accountability and quality, rurality and setting relevance, and health 
equity.
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    \518\ In previous years, we referred to the consensus-based 
entity by corporate name. We have updated this language to refer to 
the consensus-based entity more generally.
    \519\ CMS (2023). What is the CMS National Quality Strategy? 
Available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/CMS-Quality-Strategy. Last accessed April 13, 2023.
    \520\ CMS (2023). CMS Strategic Plan. Available at: https://www.cms.gov/cms-strategic-plan. Last accessed March 10, 2023.
    \521\ CMS (2022), Meaningful Measures 2.0: Moving from Measures 
Reduction to Modernization. Available at https://www.cms.gov/medicare/meaningful-measures-framework/meaningful-measures-20-moving-measure-reduction-modernization. Last accessed April 13, 
2023.
    \522\ HHS (2022). Strategic Plan FY 2022-2026. Available at 
https://www.hhs.gov/about/strategic-plan/2022-2026/index.html. Last 
accessed March 10, 2023.
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    We note that 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, also known as the CBE. The CBE is a 
voluntary, consensus-based, standard-setting organization with a 
diverse representation of consumer, purchaser, provider, academic, 
clinical, and other health care stakeholder organizations. The CBE was 
established to standardize healthcare quality measurement and reporting 
through its consensus development processes. We have generally adopted 
CBE-endorsed measures in our reporting programs. However, section 
1861(kkk)(7)(C)(ii) provides an exception to CBE-endorsement, which is 
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 a 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 CBE identified 
by the Secretary; however, due to lack of an endorsed measure for a 
given setting, procedure, or other aspect of care, the requirement that 
measures reflect consensus among affected parties can be achieved in 
other ways, including input from the measure development process, 
through broad acceptance, use of the measure(s) in other programs, and 
through public comment.
    We propose to adopt four measures in this proposed rule: (1) 
Abdomen Computed Tomography (CT)--Use of Contrast Material; (2) Median 
Time from Emergency Department (ED) Arrival to ED Departure for 
Discharged ED Patients; (3) Facility 7-Day Risk-Standardized Hospital 
Visit Rate After Outpatient Colonoscopy; and (4) Risk-Standardized 
Hospital Visits Within 7 Days After Hospital Outpatient Surgery--for 
the REHQR Program measure set. The proposed measures are currently 
adopted measures in the Hospital Outpatient Quality Reporting (OQR) 
Program. We recognize REHs will be smaller hospitals that will likely 
have limited resources compared with larger hospitals in metropolitan 
areas.\523\ For the REHQR Program, we intend to seek balance between 
the costs associated with reporting data and the benefits of ensuring 
safety and quality of care through measurement and public reporting. 
Because REHs will consist of hospitals formerly operating as either 
CAHs or subsection (d) hospitals, we assessed whether these facilities 
have successfully reported the proposed measures within the context of 
the Hospital OQR Program with sufficient volume to meet CMS case number 
thresholds for data to be publicly reported. We note that CAHs report 
data voluntarily under the Hospital OQR Program. We considered 
reporting rates and measure performance for subsection (d) hospitals 
that are eligible to convert to REHs and also analyzed data for other 
subsection (d) hospitals that are not eligible for conversion to permit 
comparisons of these providers' ability to report these data in 
sufficient numbers to permit public reporting and to view comparative 
performance. Table 79 includes the results of this analysis.
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    \523\ American Hospital Association, Rural Report. (February, 
2019), 2019 Challenges Facing Rural Communities and the Roadmap to 
Ensure Local Access to High-quality, Affordable Care 3. Available at 
https://www.aha.org/system/files/2019-02/rural-report-2019.pdf. Last 
accessed February 28, 2023.
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    Based on our analysis of these data, current to the January 2023 
refresh of Care Compare, we note that a relatively high percentage of 
the hospitals eligible to convert to REH status have reported 
aggregated measure data in sufficient number for disclosure per CMS 
privacy policy \524\ for the measures we propose for the initial REHQR 
Program measure set. For example, in comparing solely the averages for 
the Abdomen Computed Tomography (CT)--Use of Contrast Material measure, 
a significant majority of CAHs (77.9 percent) and rural subsection (d) 
hospitals with 50 or fewer beds (75.5 percent) have data publicly 
reported. In addition, for the Facility 7-Day Risk-Standardized 
Hospital Visit Rate After Outpatient Colonoscopy measure, rural 
subsection (d) hospitals with 50 or fewer beds were more often able to 
have data publicly reported than urban subsection (d) hospitals with 50 
or fewer beds (65.5 percent versus 43.7 percent), which indicates that 
this measure could be useful for small rural hospitals that convert. 
For this latter measure, while the mean values are similar across 
categories of hospitals, the results show that there are outlier 
hospitals with higher levels of hospital events following outpatient 
surgery than expected, which provides potentially valuable information 
when discerning individual hospital performance.
---------------------------------------------------------------------------

    \524\ CMS Policy for Privacy Act Implementation & Breach 
Notification, July 23, 2007, Document Number: CMS-CIO-POL-PRIV01-01, 
p 4. Statistical, aggregate or summarized information created as a 
result of analysis conducted using identifiable CMS data obtained 
under CMS-approved projects/studies may only be disclosed if the 
data are not individual-specific and the data are aggregated to a 
level where no data cells contain 10 or fewer individuals.
---------------------------------------------------------------------------

    While it is not possible to identify the exact group of hospitals 
that will choose to convert to REH status, our analysis indicates that 
the services targeted by the proposed measures are relevant for 
hospitals that may participate in the REHQR Program as these hospitals 
are currently providing the services assessed by the selected measures 
with case volumes sufficient to meet thresholds to allow public 
reporting of the collected data.\525\
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    \525\ CMS does not report measures publicly unless measures are 
the result of an analysis of more than 10 cases. See CMS Policy for 
Privacy Act Implementation & Breach Notification, July 23, 2007, 
Document Number: CMS-CIO-POL-PRIV01-01, p 4.
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2. Retention of Measures Previously Adopted Into the REHQR Program
a. Background
    For purposes of our quality reporting programs, we retain measures 
from previously adopted measure sets for subsequent years unless 
otherwise specified; for example, see the Hospital OQR (42 CFR 
419.46(i)(1)) and Ambulatory Surgical Center Quality Reporting (ASCQR) 
Programs (Sec.  416.320(a)). As this approach establishes regularity 
and predictability for participating providers and suppliers, we seek 
to align the REHQR Program with this policy.

[[Page 49831]]

b. Proposal To Adopt and Codify a Measure Retention Policy for the 
REHQR Program
    We propose that once adopted into the REHQR Program measure set, 
such measures are retained for use until we propose removal, 
suspension, or replacement. We also propose to codify this policy at 
Sec.  419.95 by adding paragraph (e) ``Retention and Removal of Quality 
Measures Under the REHQR Program.'' In proposed paragraph (e)(1), we 
propose that quality measures would be adopted into the REHQR Program 
measure set until such time that such measures are proposed for 
removal, suspension, or replacement, as set forth at proposed 
paragraphs (e)(2) and (e)(3) of the section.
    We invite public comment on these proposals.
3. Removal of Quality Measures From the REHQR Program Measure Set
a. Proposal To Adopt and Codify an Immediate Removal Policy for Adopted 
REHQR Program Measures
    When there is reason to believe that the continued collection of a 
measure as currently specified raises potential patient safety 
concerns, we believe it would be appropriate for us to take immediate 
action to remove the measure from the REHQR Program outside of 
rulemaking. Therefore, we propose to adopt an immediate measure removal 
policy that would allow us to promptly remove such a measure and notify 
REHs and the public of the decision to remove the measure through 
standard hospital communication channels, including, but not limited 
to, REHQR Program-specific listservs and REHQR Program guidance 
currently housed on the QualityNet website. We also propose to confirm 
the removal of the measure in the next appropriate rulemaking, 
typically an OPPS rulemaking cycle. We note that the Hospital OQR 
Program previously finalized a similar policy (74 FR 60634 through 
60635).
    We propose to codify this policy at Sec.  419.95 by adding 
paragraph (e)(2) ``Immediate Measure Removal.'' In proposed paragraph 
(e)(2), we propose that in cases where CMS believes that the continued 
use of a quality measure as specified raises patient safety concerns, 
CMS would immediately remove the measure from the REHQR Program, 
promptly notify REHs and the public of the removal of the measure and 
the reasons for its removal, and confirm the removal of the measure in 
the next appropriate rulemaking.
    We invite public comment on these proposals.
b. Proposal To Adopt and Codify a Measure Removal Factors Policy
    The Hospital OQR and ASCQR Programs use similar sets of factors for 
determining whether to remove measures. For more detail on the measure 
removal factors in those programs, we refer readers to Sec. Sec.  
419.46(i)(3)(i) and 416.320(c)(2), respectively. Generally, we prefer 
to use similar removal factors across the quality reporting programs 
for consistency and alignment. Therefore, to enhance alignment with 
those programs, we propose to adopt a similar set of removal factors 
for the REHQR Program.
    Specifically, we propose to adopt the following eight factors to 
determine conditions for measure removal from the REHQR Program:
     Factor 1. Measure performance among REHs is so high and 
unvarying that meaningful distinctions and improvements in performance 
can no longer be made (``topped-out'' measures).
     Factor 2. Performance or improvement on a measure does not 
result in better patient outcomes.
     Factor 3. A measure does not align with current clinical 
guidelines or practice.
     Factor 4. The availability of a more broadly applicable 
(across settings, populations, or conditions) measure for the topic.
     Factor 5. The availability of a measure that is more 
proximal in time to desired patient outcomes for the particular topic.
     Factor 6. The availability of a measure that is more 
strongly associated with desired patient outcomes for the particular 
topic.
     Factor 7. Collection or public reporting of a measure 
leads to negative unintended consequences other than patient harm.
     Factor 8. The costs associated with a measure outweigh the 
benefit of its continued use in the program.
    In addition, for the proposed Measure Removal Factor 1, we propose 
that a measure for the REHQR Program would be deemed topped-out by 
determining: (1) when the difference between the 75th and 90th 
percentiles for an REH's measure is within two times the standard error 
of all measure data reported for all REHs, and (2) when the measure's 
truncated coefficient of variation (TCOV) is less than or equal to 0.1.
    We propose to codify these policies at Sec.  419.95 by adding 
paragraph (e)(3), ``Measure Removal, Suspension, or Replacement Through 
the Rulemaking Process.'' In proposed paragraph (e)(3), we propose that 
unless a measure raises specific safety concerns as set forth in 
proposed paragraph (e)(2) of the section, we would use rulemaking to 
remove, suspend, or replace quality measures in the REHQR Program. We 
also propose to adopt the eight removal factors discussed above by 
codifying them at proposed paragraph (e)(3)(i), in alignment with other 
quality reporting programs (74 FR 60634 through 60635, 77 FR 68472, and 
83 FR 59082). Additionally, we propose to adopt the criteria to 
determine topped-out measures discussed above at proposed paragraph 
(e)(3)(ii). Similar to the Hospital OQR Program (79 FR 66941 through 
66942), we propose to assess the benefits of removing a measure from 
the REHQR Program on a case-by-case basis at proposed paragraph 
(e)(3)(iii). An REHQR Program measure would not be removed solely based 
on meeting any specific factor.
    We invite public comment on these proposals.
4. Modifications to Previously Adopted Measures
a. Background
    It is important for measures adopted for the REHQR Program to 
remain up-to-date. We believe the way to achieve this is to have in 
place a sub-regulatory process to incorporate non-substantive updates 
to measure specifications to facilitate the incorporation of scientific 
advances and updates to measure specifications in a as timely manner as 
possible.
b. Proposal To Adopt and Codify a Sub-Regulatory Measure Modification 
Policy
    We propose a policy under which we would use a sub-regulatory 
process to make non-substantive updates to measures adopted for the 
REHQR Program. Examples of non-substantive changes to measures might 
include updated diagnoses or procedure codes. With respect to what 
constitutes substantive versus non-substantive changes, we expect to 
make this determination on a case-by-case basis.
    We propose that when there is an update to an REHQR Program measure 
that we believe does not substantially change the nature of the 
measure, we would use a sub-regulatory process to incorporate those 
updates to the measure specifications that we apply to the program. 
Specifically, we will develop a specifications manual that will provide 
the complete and current technical specifications and abstraction 
information for quality measures used in the REHQR Program. We would

[[Page 49832]]

revise the specifications manual to clearly identify any updates, and 
would provide sufficient lead time for REHs to implement the revisions 
where changes to the data collection systems would be necessary. We 
would also provide notification of the measure specification updates on 
a designated website, currently the QualityNet website, https://qualitynet.cms.gov/. We note that this proposed policy for the REHQR 
Program aligns with the policies under the Hospital OQR Program (73 FR 
68766 through 68767) and ASCQR Program (Sec.  416.325) that allow 
measures to be refined through a sub-regulatory process.
    We propose to codify this policy at Sec.  419.95(d) ``Technical 
Specifications and Measure Maintenance Under the REHQR Program.'' In 
proposed paragraph (d)(2), we propose that REHQR Program specifications 
would be updated based on whether the change is considered substantive 
or non-substantive, as determined by CMS. In proposed paragraph 
(d)(2)(ii), we propose that if CMS determines that a change to a 
measure previously adopted in the REHQR Program is non-substantive, CMS 
would use a sub-regulatory process to revise the specifications manual 
as discussed above.
    Changes that we determine to be substantive would be those in which 
the changes are so significant that the measure is no longer the same 
measure. In proposed paragraph (d)(2)(i), we propose that we would 
utilize rulemaking to adopt substantive updates to measures previously 
adopted under the REHQR Program. We believe that this proposal 
adequately balances the need to incorporate updates to the REHQR 
Program measures in the most expeditious manner possible to maintain 
relevancy, reliability, and accuracy of data collection while also 
preserving the public's ability to comment on updates that 
significantly change a measure.
    We invite public comment on these proposals.
c. Proposal To Develop and Maintain Technical Specifications for 
Quality Measures
    We intend to maintain technical specifications for adopted REHQR 
Program measures. We note that many of the measures considered for the 
REHQR Program have been previously adopted by the Hospital OQR Program. 
To simplify and streamline participation in the REHQR Program, we 
propose to adopt a policy for maintaining the measure specifications of 
REHQR Program measures that aligns with the Hospital OQR Program's 
policy (83 FR 59104 through 59105).
    In this proposed rule, we propose that, whenever we modify the 
REHQR Program measures and measure sets, we would also update the 
specifications manual for the REHQR Program. The manuals containing 
specifications for previously adopted measures can be found on the 
QualityNet website at: https://qualitynet.cms.gov/outpatient/specifications-manuals. At proposed paragraph (d)(1) of Sec.  419.95, 
``Technical Specifications and Measure Maintenance Under the REHQR 
Program,'' we propose to update the specifications manual for REHQR 
Program measures at least every 12 months beginning with CY 2024.
    We invite public comment on this proposal.
5. Proposed New Measures for the REHQR Program Measure Set
    In this proposed rule, we propose to adopt four measures into the 
REHQR Program measure set beginning CY 2024: (1) Abdomen Computed 
Tomography (CT)--Use of Contrast Material measure; (2) Median Time from 
ED Arrival to ED Departure for Discharged ED Patients measure; (3) 
Facility 7-Day Risk-Standardized Hospital Visit Rate After Outpatient 
Colonoscopy measure; and (4) Risk-Standardized Hospital Visits Within 7 
Days After Hospital Outpatient Surgery measure. Three of these measures 
would be calculated from Medicare Fee-For-Service (FFS) claims and 
enrollment information. The fourth is a chart-abstracted measure. Many 
hospitals that are eligible to convert to REH status would already have 
established resources and experience with submitting these four 
measures as part of the Hospital OQR Program as previously discussed.
a. Proposal To Adopt the Abdomen Computed Tomography (CT)--Use of 
Contrast Material Measure
(1) Background
    A CT study performed with and without contrast increases the 
radiation dose to patients,\526\ exposing them to the potential harmful 
side effects of the contrast material itself \527\ and it is often 
unnecessary.\528\ In the past, reports showed deviations from 
clinically appropriate American College of Radiology contrast practices 
for abdominal/pelvic CTs nationally.\529\ A 2020 study using CMS Care 
Compare data determined that hospitals are now conducting fewer 
duplicate abdomen CTs (that is, less often performing CTs twice, once 
with and once without contrast). These improvements are more pronounced 
among hospitals that formerly conducted the most duplicate abdomen CTs. 
The reduction in duplicate abdomen CTs observed in the 2020 study may 
indicate that the Abdomen Computed Tomography (CT)--Use of Contrast 
Material measure (the Abdomen CT) measure has been effective in 
identifying performance gaps among some hospitals. Thus, collecting 
data on this measure may have been effective in reducing duplicate 
abdomen CTs and lowering related patient risks.\530\ However, the same 
2020 study found that duplicate abdomen CTs continue to occur.
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    \526\ Sahbaee, P, et. al (2017). The Effect of Contrast Material 
on Radiation Dose at CT: Part II. A Systematic Evaluation across 58 
Patient Models. Radiology, 283(3), 749-757. https://doi.org/10.1148/radiol.2017152852.
    \527\ An, J, et. al. (2019). Differences in Adverse Reactions 
Among Iodinated Contrast Media: Analysis of the KAERS Database. The 
Journal of Allergy and Clinical Immunology: In Practice, 7(7), 2205-
2211. https://www.sciencedirect.com/science/article/abs/pii/S2213219819302570.
    \528\ Hwang, IK, Lee, YS, Kim, J, Lee, YJ, Park, JH, Hwang. 
(2015). Do we really need additional contrast-enhanced abdominal 
computed tomography for differential diagnosis in triage of middle-
aged subjects with suspected biliary pain. Medicine, 94(7):e546. 
doi: 10.1097/MD.0000000000000546.
    \529\ Broder JS, Hamedani AG, Liu SW, Emerman CL. (2013). 
Emergency department contrast practices for abdominal/pelvic 
computed tomography--a national survey and comparison with the 
American College of Radiology Appropriateness Criteria([supreg]). J 
Emerg Med, 44(2): 423-433. Available at: https://doi.org/10.1016/j.jemermed.2012.08.027. Last accessed February 28, 2023.
    \530\ Davis, M, McKiernan, C, Lama, S, Parzynski, C, Bruetman, 
C, & Venkatesh, A., (July, 2020). Trends in publicly reported 
quality measures of hospital imaging efficiency, 2011-2018. American 
Journal of Roentology 215: 153-158. Available at https://www.ajronline.org/doi/pdf/10.2214/AJR.19.21993. Last accessed April 
3, 2023.
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    We believe that the Abdomen CT measure is relevant for REH quality 
reporting. Although analysis of Care Compare data indicate the practice 
of duplicate scans continues with some hospitals large and small in 
both rural and urban settings, rural hospitals during the study period 
accounted for nearly half of those cases.\531\ We note that this 
measure is also part of the Hospital OQR Program's measure set (adopted 
in the CY 2009 OPPS/ASC final rule (73 FR 68766)).
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    \531\ Ibid.
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(2) Measure Overview
    This measure provides the percentage of CT abdomen and 
abdominopelvic studies performed with and without contrast out of all 
CT abdomen studies performed (those without contrast, those with 
contrast, and those with both).

[[Page 49833]]

    Section 1890A(a)(2) of the Act outlines the pre-rulemaking process 
established under section 1890A of the Act, which requires the 
Secretary to make available to the public by December 1 of each year a 
list of quality and efficiency measures under consideration. The 
Abdomen CT measure was on the 2022 Measures Under Consideration (MUC) 
list,\532\ and the Measure Applications Partnership (MAP) Hospital 
Workgroup provided conditional support for this measure to be included 
in rulemaking for the REHQR Program. The MAP provides an annual review 
of the MUC list, and presents CMS with its recommendations in its Final 
Recommendations.\533\ In its February 1, 2023 Final Recommendations, 
the MAP noted that the measure addresses a critical priority of patient 
safety in rural hospitals for the REHQR Program.\534\ In the Final 
Recommendations, the MAP noted that the Health Equity Advisory Group 
expressed the importance of the measure and its potential to advance 
health equity, and the Rural Health Advisory Group discussed the 
measure in detail and cited no concerns with regard to rural health. 
The MAP conditionally supported the measure for rulemaking, pending 
testing indicating the measure is reliable and valid, and having CBE 
endorsement.\535\
---------------------------------------------------------------------------

    \532\ Centers for Medicare & Medicaid Services (CMS). 2022 
Measures Under Consideration Spreadsheet. Available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports. Last accessed March 13, 2023.
    \533\ Interested parties convened by the consensus-based entity 
will provide input and recommendations on the Measures under 
Consideration (MUC) list as part of the pre-rulemaking process 
required by section 1890A of the Act. We refer readers to https://p4qm.org/PRMR-MSR for more information.
    \534\ Centers for Medicare & Medicaid Services (CMS). 2022-2023 
MAP Final Recommendations. Available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports. Last accessed April 13, 2023.
    \535\ Ibid.
---------------------------------------------------------------------------

    Although section 1861(kkk)(7)(C)(i) of the Act requires that 
measures specified by the Secretary for use in the REHQR Program be 
endorsed by the entity with a contract under section 1890(a) of the 
Act, section 1861(kkk)(7)(C)(ii) of the Act states that in the case of 
a specified area or medical topic determined appropriate by the 
Secretary for which a feasible and practical measure has not been 
endorsed by the entity with a contract under section 1890(a) of the 
Act, the Secretary may specify a measure that is not so endorsed as 
long as due consideration is given to measures that have been endorsed 
or adopted by a consensus organization identified by the Secretary. The 
Abdomen CT measure is not CBE endorsed and we were unable to identify 
any other CBE-endorsed measures on this topic; therefore, we believe 
the exception in section 1861(kkk)(7)(C)(ii) of the Act applies for 
this measure. Also, we believe the measure has received sufficient 
support from consensus organizations, given the conditional support for 
the measure by the MAP Hospital Workgroup,\536\ favorable comments 
received by the Health Equity Advisory Group,\537\ and lack of 
objection by the Rural Health Advisory Group.\538\
---------------------------------------------------------------------------

    \536\ CMS, 2022 Measures Under Consideration Spreadsheet.
    \537\ CMS, 2022-2023 MAP Final Recommendations.
    \538\ Ibid.
---------------------------------------------------------------------------

    We propose to adopt the Abdomen CT measure into the REHQR Program 
measure set beginning with the CY 2024 reporting period. By addressing 
the critical priority area of patient safety in rural hospitals, 
collecting data on this measure seeks to ensure that CT abdomen imaging 
in rural communities adheres to evidence-based clinical guidelines. 
Inclusion of this measure aligns with the CMS National Quality Strategy 
goals of embedding quality into the care journey, as well as the goal 
of promoting safety,\539\ and is aligned with the priorities we 
identified for our Meaningful Measures 2.0 initiative, including using 
only high-value quality measures that impact key quality domains and 
aligning measures across our programs.\540\
---------------------------------------------------------------------------

    \539\ CMS (2023). What is the CMS National Quality Strategy? 
Available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/CMS-Quality-Strategy. Last accessed April 13, 2023.
    \540\ CMS (2022), Meaningful Measures 2.0: Moving from Measures 
Reduction to Modernization. Available at  https://www.cms.gov/medicare/meaningful-measures-framework/meaningful-measures-20-moving-measure-reduction-modernization. Last accessed April 13, 
2023.
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(3) Data Sources
    This measure addresses excessive radiation exposure from improper 
outpatient imaging procedures in Medicare beneficiaries. It would be 
calculated using Medicare FFS final action claims and enrollment data 
for hospital services paid through the OPPS for abdomen CT studies 
performed in the REH setting. Data from the hospital outpatient file is 
used to determine beneficiary inclusion (for example, a CT abdomen 
study performed at an REH) and exclusion (that is, diagnoses of adrenal 
mass, hematuria, infections of the kidney, jaundice, liver lesion (mass 
or neoplasm), malignant neoplasm of bladder, malignant neoplasm of 
pancreas, diseases of urinary system, pancreatic disorders, non-
traumatic aortic disease, and unspecified disorder of kidney or 
ureter).\541\
---------------------------------------------------------------------------

    \541\ YNHHSC/CORE and The Lewin Group, 2021. Abdomen Computed 
Tomography (CT)--Use of Contrast Material (OP-10): 2021 Annual 
Reevaluation Report. Available at:  https://qualitynet.cms.gov/files/607ee75eaba8620022335d7e?filename=OP=10_2021_ReevalReport.pdf. 
Last accessed March 13, 2023.
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(4) Measure Calculation
    This measure calculates the percentage of CT abdomen and 
abdominopelvic studies that are performed with and without contrast out 
of all CT abdomen studies performed (those with contrast, those without 
contrast, and those with both). The measure would be calculated based 
on a 12-month window of claims data. From this patient cohort, the 
numerator contains patients who had a combined CT abdomen study (that 
is, a CT abdomen study without contrast followed by a CT abdomen study 
with contrast, documented using the CT Abdomen With and Without 
Contrast CPT code). For this measure, lower scores indicate less usage 
of CT scanning as scans with and without contrast are typically not 
medically necessary, which means a high-performing facility reports a 
value nearer to zero, whereas facilities that may be performing too 
many combined CT abdomen studies score closer to 100 percent.\542\
---------------------------------------------------------------------------

    \542\ Ibid.
---------------------------------------------------------------------------

(5) Cohort
    This measure would apply to Medicare beneficiaries enrolled in 
original, Medicare FFS who underwent an abdomen or abdominopelvic CT 
study with or without contrast performed at an REH. This measure does 
not include Medicare managed care beneficiaries, non-Medicare patients, 
or beneficiaries who were admitted to the hospital as inpatients. A 
beneficiary can be included in the measure's initial patient population 
multiple times because each abdomen or abdominopelvic CT (without 
contrast, with contrast, or both with and without contrast) performed 
at an REH during the data collection period is counted once in the 
measure's denominator.
    This claims-based imaging measure is not risk-adjusted; instead, 
Medicare FFS beneficiaries who have a clinical diagnosis of one or more 
conditions for which imaging with and without contrast is considered 
appropriate are

[[Page 49834]]

excluded from the measure.\543\ Thus, this measure does not include 
beneficiaries with the following conditions: adrenal mass, hematuria, 
infections of kidney, jaundice, liver lesion (mass or neoplasm), 
malignant neoplasm of bladder, malignant neoplasm of pancreas, diseases 
of urinary system, pancreatic disorders, non-traumatic aortic disease, 
and unspecified disorder of kidney or ureter.\544\
---------------------------------------------------------------------------

    \543\ American College of Radiology. ACR Appropriateness 
Criteria. Available at:  https://www.acr.org/Clinical-Resources/ACR-Appropriateness-Criteria. Last accessed April 4, 2023.
    \544\ Centers for Medicare & Medicaid Services Measures 
Inventory Tool (CMIT). Abdomen Computed Tomography (CT)--Use of 
Contrast Material. Available at  https://cmit.cms.gov/cmit/#/MeasureView?variantId=1842&sectionNumber=1. Last accessed April 3, 
2023.
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    We invite public comment on this proposal.
b. Proposal To Adopt the Median Time From Emergency Department (ED) 
Arrival to ED Departure for Discharged ED Patients Measure
(1) Background
    Care provided in the ED will likely be a focus of REH services and 
we seek measures that assess the quality of care in this setting. 
Improving ED throughput times is important for alleviating overcrowding 
and reducing wait times.\545\ Crowding has led to a number of 
potentially avoidable problems in EDs, including ambulance diversion, 
prolonged patient waiting times, and potentially poor patient outcomes 
due to delays, such as in the administration of medication.\546\
---------------------------------------------------------------------------

    \545\ Smalley, CM, Simon, EL, Meldon, SW, et al. (2020). The 
impact of hospital boarding on the emergency department waiting 
room. JACEP Open, 1(5):1052-1059. doi: 10.1002/emp2.12100.
    \546\ Kelen GD, Wolfe R, D-Onofrio G, Mills AM, Diercks D, Stern 
SA, Wadman MC, Sokolove PE. Emergency Department Crowding: The 
Canary in the Health Care System. NEJM Catalyst. 2021; 5(2).  
https://catalyst.nejm.org/doi/full/10.1056/CAT.21.0217. Last 
accessed February 28, 2023.
---------------------------------------------------------------------------

    The Median Time from Emergency Department (ED) Arrival to ED 
Departure for Discharged ED Patients (the Median Time for Discharged ED 
Patients measure was adopted for reporting in the Hospital OQR Program 
beginning with the CY 2013 payment determination (75 FR 72086).
(2) Measure Overview
    The Median Time for Discharged ED Patients measure is a chart-
abstracted measure that evaluates the time between the arrival to and 
departure from the ED, also known as ED throughput time.
    As described in the measure specifications and Measure Information 
Form (MIF),\547\ \548\ measure data are stratified for four separate 
calculations: (1) the Overall Rate is calculated as the overall rate; 
(2) the Reported Measure calculates data for all patients excluding 
psychiatric/mental health patients and transfer patients; (3) 
Psychiatric/Mental Health calculates data for psychiatric/mental health 
patients; and (4) Transfers calculates data for transfer patients.
---------------------------------------------------------------------------

    \547\ A Measure Information Form provides detail on the 
rationale for a measure as well as the relevant numerator 
statements, denominator statements and measure calculations.
    \548\ Hospital OQR Program ED Throughput Measures Information 
Form. Available at:  https://qualitynet.cms.gov/files/638e75e376962e0016ad907d?filename=1d_ED_Throughput_set_v16.0a.pdf 
(p. 1-26). Last accessed February 28, 2023.
---------------------------------------------------------------------------

    Although section 1861(kkk)(7)(c)(i) of the Act requires that 
measures specified by the Secretary for use in CMS hospital quality 
programs be endorsed by the entity with a contract under section 
1890(a) of the Act, section 1861(kkk)(7)(C)(ii) of the Act states that 
in the case of a specified area or medical topic determined appropriate 
by the Secretary for which a feasible and practical measure has not 
been endorsed by the entity with a contract under section 1890(a) of 
the Act, the Secretary may specify a measure that is not so endorsed as 
long as due consideration is given to measures that have been endorsed 
or adopted by a consensus organization identified by the Secretary. 
This measure is not CBE-endorsed. We reviewed CBE-endorsed measures and 
were unable to identify any other CBE-endorsed measures on this topic; 
therefore, we believe the exception in section 1861(kkk)(7)(C)(ii) of 
the Act applies for this measure.
    The Median Time for Discharged ED Patients measure was included in 
the 2022 MUC list.\549\ In its February 1, 2023 Final Recommendations, 
the MAP stated their belief that changes in wait times may not directly 
influence mortality or patient outcomes and had concerns that transfer 
times may be delayed due to weather and transport safety issues that 
are out of a facility's control. The Rural Health Advisory Group 
expressed similar concerns regarding the impact on transport times of 
issues beyond a facility's control, such as weather, local facility 
transport modalities, and distance; but also noted that transfer time 
for trauma patients is especially important. The Health Equity Advisory 
Group, however, emphasized the importance of the measure and its 
potential to advance health equity. Ultimately, the MAP did not provide 
support for this measure for the REHQR Program.\550\
---------------------------------------------------------------------------

    \549\ Centers for Medicare & Medicaid Services. 2022 Measures 
Under Consideration Spreadsheet. Available at:  https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports. Last accessed March 13, 2023.
    \550\ Centers for Medicare & Medicaid Services. 2022-2023 MAP 
Final Recommendations. Available at:  https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports. Last accessed March 13, 2023.
---------------------------------------------------------------------------

    We recognize the concerns expressed in the MAP Final 
Recommendation. However, we believe that ED wait times have significant 
impact on patients. Prolonged waiting times are associated with worse 
patient experience in patients discharged from the emergency 
department.\551\ Studies demonstrate that higher patient satisfaction 
is associated with patient outcomes, including decreased mortality 
\552\ and lower readmission rates.\553\
---------------------------------------------------------------------------

    \551\ Nyce, A, Gandhi, S, Freeze, B, Bosire, J, Ricca, T, 
Kupersmith, E, Mazzarelli, A, Rachoin, J-S. Association of Emergency 
Department Waiting Times With Patient Experience in Admitted and 
Discharged Patients. 2021. J Pat Exp 8:1-7. https://doi.org/10.1177/23743735211011404.
    \552\ Glickman SW, Boulding W, Manary M, Staelin R, Roe MT, 
Wolosin RJ. et al. Patient satisfaction and its relationship with 
clinical quality and inpatient mortality in acute myocardial 
infarction. Circ Cardiovasc Qual Outcomes. 2010; 3:188-95. Available 
at  https://www.ahajournals.org/doi/10.1161/CIRCOUTCOMES.109.900597?url_ver=Z39.88-2003𝔯_id=ori:rid:crossref.org𝔯_dat=cr_pub%20%200pubmed.
    \553\ Boulding W, Glickman SW, Manary MP, Schulman KA, Staelin 
R. Relationship between patient satisfaction with inpatient care and 
hospital readmission within 30 days. Am J Manag Care. 2011;17:41-8. 
Available at https://www.ajmc.com/view/ajmc_11jan_boulding_41to48.
---------------------------------------------------------------------------

    We acknowledge that transfer times may be delayed due to weather 
and transport safety issues that are out of a facility's control. 
However, we believe that some factors such as building transfer 
relationships and process improvements can be addressed by hospitals to 
improve ED wait times. Further, this information could be useful to 
Medicare beneficiaries and other interested parties toward assessing 
care provided and the care environment of a hospital. By implementing 
this measure, we are supporting CMS National Quality Strategy goals, 
including embedding quality into the care journey (for example, by 
addressing quality throughout the patient experience); promoting safety 
(for example, by minimizing associated negative patient outcomes, such 
as delayed administration of medications); and increasing alignment 
(given that this measure is used in other quality programs).\554\ 
Alignment of measures across CMS federal programs is also an

[[Page 49835]]

objective of the Meaningful Measures 2.0 initiative.\555\ This measure 
also promotes the Meaningful Measures goal of driving outcome 
improvement through public reporting, given that CMS predicts that data 
for this measure will be reported in sufficient numbers to permit 
public reporting (see Table 79 in section XVI.B.1 of this proposed 
rule).
---------------------------------------------------------------------------

    \554\ CMS (2023). What is the CMS National Quality Strategy? 
Available at  https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/CMS-Quality-Strategy. Last accessed April 13, 2023.
    \555\ CMS (2022), Meaningful Measures 2.0: Moving from Measures 
Reduction to Modernization. Available at https://www.cms.gov/medicare/meaningful-measures-framework/meaningful-measures-20-moving-measure-reduction-modernization. Last accessed April 13, 
2023.
---------------------------------------------------------------------------

    Care Compare data current to January 2023 show that CAHs and 
subsection (d) hospitals with fewer than 50 beds reported sufficient 
data for this measure under the Hospital OQR Program to be publicly 
reported for all of these strata, indicating that hospitals eligible to 
convert to REH status would be able to report data for this measure to 
a level sufficient for public reporting. Our proposal to publicly 
report these data is further described in section XVI.B.8.c of this 
proposed rule. Thus, we propose to adopt this measure in the REHQR 
Program beginning with the CY 2024 reporting period.
(3) Data Sources
    The measure would be calculated using chart-abstracted data on a 
rolling quarterly basis, and would be publicly reported in aggregate 
for one calendar year. Sources of the relevant data may include claims 
forms, electronic health care data, electronic health records (EHRs), 
or paper records. Data elements necessary for the calculation of the 
measure include arrival time, discharge code, Evaluation and Management 
(E/M) code, ED departure date, ED departure time, ICD-10-CM principal 
diagnosis code, and outpatient encounter date.
(4) Measure Calculation
    The measure calculates the median time (in minutes) from ED arrival 
to time of departure from the ED for patients discharged from the ED. 
Reducing the time patients remain in the ED can improve access to 
treatment and increase quality of care.\556\ \557\ Improvement is noted 
as a decrease in the median value. The included population is any ED 
patient who completes an ED discharge process. This process measure is 
not risk-adjusted or risk-stratified.\558\ However, the measure is 
stratified by certain subgroups of patients, as described in the next 
section.
---------------------------------------------------------------------------

    \556\ Smalley, CM, Simon, EL, Meldon, SW, et al. (2020). The 
impact of hospital boarding on the emergency department waiting 
room. JACEP Open, 1(5):1052-1059. doi: 10.1002/emp2.12100.
    \557\ Kelen GD, Wolfe R, D-Onofrio G, Mills AM, Diercks D, Stern 
SA, Wadman MC, Sokolove PE. Emergency Department Crowding: The 
Canary in the Health Care System. NEJM Catalyst. 2021; 5(2).  
https://catalyst.nejm.org/doi/full/10.1056/CAT.21.0217.
    \558\ CMIT. Median time from ED Arrival to ED Departure for 
Discharged ED patients. Available at https://cmit.cms.gov/cmit/#/MeasureView?variantId=695&sectionNumber=1. Last accessed April 4, 
2023.
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(5) Cohort
    The Median Time for Discharged ED Patients measure is calculated in 
stratified subsections for certain types of patients: (1) Median Time 
from ED Arrival to ED Departure for Discharged ED Patients--Reported 
Measure, which excludes psychiatric/mental health and transferred 
patients; (2) Median Time from ED Arrival to ED Departure for 
Discharged ED Patients--Psychiatric/Mental Health Patients, which 
includes information only for psychiatric/mental health patients; (3) 
Median Time from ED Arrival to ED Departure for Discharged ED 
Patients--Transfer Patients, which includes information only for 
patients transferred from the ED; and (4) Median Time from ED Arrival 
to ED Departure for Discharged ED Patients--Overall Rate. The measure 
excludes patients who expired in the ED, left against medical advice, 
or whose discharge was not documented or unable to be determined.\559\
---------------------------------------------------------------------------

    \559\ QualityNet. Hospital Outpatient Specifications Manuals. 
Available at:  https://qualitynet.cms.gov/outpatient/specifications-manuals. Last accessed April 5, 2023.
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    We invite public comment on this proposal.
c. Proposal To Adopt the Facility 7-Day Risk-Standardized Hospital 
Visit Rate After Outpatient Colonoscopy Measure
(1) Background
    Colonoscopies are one of the most frequently performed procedures 
in the outpatient setting in the United States,\560\ with more than 16 
million procedures performed each year.\561\ Colonoscopies are 
associated with a range of well-described and potentially preventable 
adverse events that can lead to hospital visits, repeat procedures, or 
surgical intervention for treatment, including colonic perforation, 
gastrointestinal (GI) bleeding, and abdominal pain.\562\ While hospital 
visits are generally unexpected after an outpatient colonoscopy, the 
literature indicates that the majority of such visits occurring later 
than seven days post-procedure are more likely to be unrelated to the 
procedure.\563\ Such hospital visits occurring later than seven days 
post-procedure may be complicated by patient comorbidities and high 
risk factors.\564\
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    \560\ Definitive Healthcare. Top 10 Outpatient Procedures at 
Surgery Centers and Hospitals. Available at:  https://
www.definitivehc.com/blog/top-10-outpatient-procedures-at-ascs-and-
hospitals#:~:text=Definitive%20Healthcare%20data%20shows%20that,proce
dures%20at%20ASCs%20by%20volume. Last accessed March 12, 2023.
    \561\ I Data Research. An Astounding 16.6 Million Colonoscopies 
are Performed Annually in The United States. (https://idataresearch.com/an-astounding-19-million-colonoscopies-are-performed-annually-in-the-united-states/[sic]). Accessed February 
28, 2023.
    \562\ I. Ranasinghe, C.S. Parzynski, R. Searfoss, et al. 
Differences in colonoscopy quality among facilities: development of 
a post-colonoscopy risk-standardized rate of unplanned hospital 
visits. Gastroenterology, 150 (2016), pp. 103-113 Available at: 
https://www.gastrojournal.org/action/showPdf?pii=S0016-5085%2815%2901353-0. Last accessed March 12, 2023.
    \563\ L.B. Grossberg, A. Vodonos, K. Papamichael, et al. 
Predictors of post-colonoscopy emergency department use. 
Gastrointest Endosc, 87 (2018), pp. 517-525. Available at: https://www.sciencedirect.com/science/article/pii/S0016510717322010?viewFullText=true#sec4. Last accessed March 12, 
2023.
    \564\ Ibid.
---------------------------------------------------------------------------

    As noted in Table 79 with Hospital OQR Program data current to 
2023, the average rate of reported unplanned hospital visits per 1,000 
colonoscopies at CAHs and rural subsection (d) hospitals eligible for 
REH conversion are 14.3 (1.43 percent) and 14.4 (1.44 percent), 
respectively. These average rates are in line with those of small, 
urban subsection (d) hospitals, and larger, rural hospitals subsection 
(d) with 50 or more beds (that is, with categories of subsection (d) 
hospitals that are not eligible for REH conversion). Hospitals in these 
categories that are in the top 10th percentile in terms of numbers of 
cases (that is, unplanned hospital visits within 7 days of an 
outpatient colonoscopy) reported, however, do appear to perform 
differently. In this percentile, hospitals eligible for REH conversion 
do not perform as well as those that are not eligible for REH 
conversion. REH-eligible hospitals with these larger caseloads have a 
higher rate of unplanned hospital visits per 1,000 colonoscopies than 
non-REH eligible hospitals.
    The Facility 7-Day Risk-Standardized Hospital Visit Rate After 
Outpatient Colonoscopy (the 7-Day Hospital Visit Rate After Outpatient 
Colonoscopy) measure was adopted for reporting in the Hospital OQR 
Program in 2015, first with a dry run (that is, confidential reports 
containing measure results were made available for hospitals to review, 
provide feedback, and become familiar with the measure methodology in 
advance of public reporting and impact on payment determinations), and 
then fully implemented beginning with the

[[Page 49836]]

CY 2018 payment determination (79 FR 66948 through 66955).
(2) Measure Overview
    The 7-Day Hospital Visit Rate After Outpatient Colonoscopy measure 
was on the 2022 MUC list.\565\ In its February 1, 2023 Final 
Recommendations, the MAP considered and supported it for rulemaking for 
the REHQR Program given that a previous version of this measure 
specified for colonoscopies performed in ambulatory surgical centers 
(ASCs) and hospital outpatient departments (HOPDs) received endorsement 
from the CBE (CBE #2539) in 2014 and 2020, and that this measure is 
currently in use in the ASCQR and Hospital OQR Programs.\566\
---------------------------------------------------------------------------

    \565\ Centers for Medicare & Medicaid Services. 2022 Measures 
Under Consideration Spreadsheet. Available at:  https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports. Last accessed March 13, 2023.
    \566\ Centers for Medicare & Medicaid Services. 2022-2023 MAP 
Final Recommendations. Available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports. 
Last accessed March 13, 2023.
---------------------------------------------------------------------------

    As evidenced in Table 79, CAHs and small, rural subsection (d) 
hospitals--hospitals which are eligible to convert to REH status--
performed a sufficient number of colonoscopies and had sufficient 
measure data for this measure to be publicly reported on the Care 
Compare site. Using data current to January 2023 for the Hospital OQR 
Program, out of those eligible to report data, 65.5 percent (131) of 
small, rural subsection (d) hospitals and 44.7 percent (609) of CAHs 
eligible to convert to REHs reported for this measure.
    We believe this could be an important measure for those REHs that 
elect to provide outpatient services and for patients seeking 
information regarding complications following this procedure. Inclusion 
of this measure in the REHQR Program will also promote goals of the CMS 
National Quality Strategy, including embedding quality into the care 
journey; advancing health equity within and across settings; and 
increasing alignment of performance metrics, programs, policy, and 
payment across CMS.\567\ Inclusion will also advance goals of the 
Meaningful Measures 2.0 initiative, including by empowering consumers 
to make good health care choices by providing public transparency; and 
by leveraging quality measures to promote health equity and close gaps 
in care.\568\ Therefore, we propose to include the 7-Day Hospital Visit 
Rate After Outpatient Colonoscopy measure in the REHQR Program 
beginning with the CY 2024 reporting period.
---------------------------------------------------------------------------

    \567\ CMS (2023). What is the CMS National Quality Strategy? 
Available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/CMS-Quality-Strategy. Last accessed April 13, 2023.
    \568\ CMS (2022), Meaningful Measures 2.0: Moving from Measures 
Reduction to Modernization. Available at https://www.cms.gov/medicare/meaningful-measures-framework/meaningful-measures-20-moving-measure-reduction-modernization. Last accessed April 13, 
2023.
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(3) Data Sources
    This outcome measure is calculated 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.\569\ 
In alignment with the reporting period for this measure as used in the 
Hospital OQR Program, the initial reporting period is a three-year 
period beginning with patient encounters from January 1, 2024 through 
December 31, 2026 with annual updates on a rolling basis.\570\
---------------------------------------------------------------------------

    \569\ CMIT. Facility 7-Day Risk-Standardized Hospital Visit Rate 
after Outpatient Colonoscopy. Available at https://cmit.cms.gov/cmit/#/MeasureView?variantId=1354&sectionNumber=1. Last accessed 
February 28, 2023.
    \570\ CMS, Hospital Outpatient Specifications Manuals--Measure 
Information Form, 1.6 Outcome Measures, OP-32: Facility 7-Day Risk-
Standardized Hospital Visit Rate after Outpatient Colonoscopy. 
Available at  https://qualitynet.cms.gov/files/638e788ffb845c00175c7aaf?filename=1u_OP32MIF_v16.0a.pdf. Last 
accessed February 28, 2023.
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(4) Measure Calculation
    The measure defines the outcome as any (one or more) unplanned 
hospital visits within 7 days of an outpatient colonoscopy 
procedure.\571\ For this measure, a hospital visit includes any ED 
visit, observation stay, or unplanned inpatient admission to any short-
term, acute care facility.572 573 The measure score is the 
ratio of predicted hospital visits (numerator) over the expected 
hospital visits (denominator) multiplied by the national observed rate. 
The numerator is the number of predicted (meaning adjusted actual) 
hospital visits, which is the number of unplanned hospital visits the 
facility is predicted to have within 7 days of colonoscopy, and it 
accounts for the observed unplanned hospital visit rate, the number of 
colonoscopies performed at the facility, and the facility's case mix. 
The denominator is the number of expected hospital visits, which is the 
number of unplanned hospital visits the facility is expected to have 
based on the facility's case mix. It is the sum of all patients' 
expected probabilities of a hospital visit, given their risk factors 
and the risk of readmission at an average facility. The national 
observed rate is the national unadjusted number of patients who had a 
hospital visit post-colonoscopy among all patients who had a 
colonoscopy.\574\ Additional methodology details and information 
obtained from public comments for measure development are available at: 
http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.html under 
``Hospital Outpatient Colonoscopy.''
---------------------------------------------------------------------------

    \571\ 2022 Measure Updates and Specifications Report: Hospital 
Outpatient Quality Reporting Program. available at: https://qualitynet.cms.gov/outpatient/measures/surgery/methodology. Last 
accessed May 2, 2023.
    \572\ Ibid.
    \573\ CMS, Frequently Asked Questions. Available at: https://qualitynet.cms.gov/outpatient/measures/colonoscopy/resources. Last 
accessed May 2, 2023.
    \574\ ``Included colonoscopies'' are outpatient colonoscopy 
procedures using Healthcare Common Procedure Coding System (HCPCS) 
codes G0121 and G0105, and Common Procedural Terminology (CPT) codes 
45378, 45380, 45385, 45384, 45383, and 45381. This measure also uses 
a number of exclusion criteria. Additional methodology details and 
information obtained from public comments for measure development 
are available at: http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.html under ``Hospital Outpatient Colonoscopy.''
---------------------------------------------------------------------------

    We note that the measure calculation is comparable to the Hospital 
OQR Program version of the measure, as set out in the CY 2015 OPPS/ASC 
final rule (79 FR 66948 through 66955).
(5) Cohort
    The measure denominator includes Medicare patients with paid, final 
action claims for typical colonoscopies. The denominator excludes 
patients undergoing concomitant high-risk upper GI endoscopy because 
this is a more extensive procedure that places these patients at a 
higher risk for hospital visits than patients undergoing a typical 
colonoscopy, as well as patients with a history of inflammatory bowel 
disease (IBD) or diverticulitis in the year preceding the colonoscopy 
because we likely could not fully characterize and adjust for their 
pre-procedure risk of needing a post-procedure hospital visit or 
identify whether these admissions are planned or unplanned. The measure 
also excludes procedures for patients who lack continuous enrollment in 
Medicare FFS Parts A and B in the month after the procedure to ensure 
all patients have complete data available for outcome assessment. For 
further discussion of the cohort for the 7-Day Hospital Visit Rate 
After Outpatient Colonoscopy measure, please see ``2022 Measure Updates 
and Specifications

[[Page 49837]]

Report: Hospital Outpatient Quality Reporting Program,'' available at: 
https://qualitynet.cms.gov/outpatient/measures/surgery/methodology.
(6) Risk Adjustment
    The statistical risk-adjustment model includes 15 clinically 
relevant risk-adjustment variables that are strongly associated with 
risk of hospital visits within seven days following colonoscopy. 
Additional methodology details and information for measure development 
are available at: https://qualitynet.cms.gov/outpatient/measures/surgery/methodology.
    We invite public comment on this proposal.
d. Proposal To Adopt the Risk-Standardized Hospital Visits Within 7 
Days After Hospital Outpatient Surgery Measure
(1) Background
    Most surgical procedures in the United States are performed in 
outpatient settings; there are approximately 23 million such procedures 
performed annually.\575\ Same-day surgery offers significant patient 
benefits as compared with inpatient surgery, including shorter waiting 
times, avoidance of hospitalizations, and rapid return home.\576\ 
Furthermore, as same-day surgery costs are significantly less than an 
equivalent inpatient surgery, there is a significant cost saving 
opportunity to the health system.\577\ With the ongoing shift towards 
outpatient surgery, assessing the quality of surgical care provided by 
hospitals has become increasingly important. Patients undergoing same-
day surgery may require subsequent unplanned hospital visits for a 
broad range of reasons. While most outpatient surgery is safe, there 
are well-described and potentially preventable adverse events that 
occur after outpatient surgery, such as uncontrolled pain, urinary 
retention, infection, bleeding, and venous thromboembolism, which can 
result in unplanned hospital visits.\578\ Similarly, direct admissions 
after surgery that are primarily caused by nonclinical patient 
considerations (for example, lack of transport home upon discharge) or 
facility logistical issues (for example delayed start of surgery) are 
common causes of unplanned yet preventable hospital admissions 
following same-day surgery.\579\ Hospital utilization following same-
day surgery is an important and accepted patient-centered outcome 
reported in the literature. As evidenced by one study, ``national 
estimates of hospital visit rates following surgery vary from 0.5 to 
9.0 percent based on the type of surgery, outcome measured (admissions 
alone or admissions and ED visits), and timeframe for measurement after 
surgery,'' \580\ suggesting variation in surgical and discharge care 
quality. However, providers (hospitals and surgeons) are often unaware 
of their patients' hospital visits after surgery because patients often 
present to the ED or to different hospitals.\581\ This risk-
standardized measure provides the opportunity for providers to improve 
the quality of care and to lower the rate of preventable adverse events 
that occur after outpatient surgery.
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    \575\ Munnich, EL, & Richards, MR. (February, 2022). Long-run 
growth of ambulatory surgery centers 1990-2015 and Medicare payment 
policy. Health Services Research, 57(1), 66-71. https://doi.org/10.1111/1475-6773.13707.
    \576\ Banner Health. Outpatient Experience & Benefits. Available 
at:  https://www.bannerhealth.com/services/outpatient-surgery/experience-benefits. Last accessed April 4, 2023.
    \577\ Munnich, EL, & Parente, ST. (January, 2018). Returns to 
specialization: Evidence from the outpatient surgery market. Journal 
of health economics, 57, 147-167. https://doi.org/10.1016/j.jhealeco.2017.11.004.
    \578\ Bongiovanni, T, Parzynski, C, Ranasinghe, I, Steinman, MA, 
& Ross, JS. (July 2021). Unplanned hospital visits after ambulatory 
surgical care. PloS one, 16(7), e0254039. https://doi.org/10.1371/journal.pone.0254039.
    \579\ Ibid.
    \580\ Ibid.
    \581\ Williams, BR, Smith, LC, Only, AJ., Parikh, HR, 
Swiontkowski, MF, & Cunningham, BP. (September, 2021). Unplanned 
Emergency and Urgent Care Visits After Outpatient Orthopaedic 
Surgery. Journal of the American Academy of Orthopaedic Surgeons. 
Global research & reviews, 5(9), e21.00209. https://doi.org/10.5435/JAAOSGlobal-D-21-00209.
---------------------------------------------------------------------------

    The Risk-Standardized Hospitalized Visits Within 7 Days After 
Hospital Outpatient Surgery (the 7-Day Hospital Visit Rate After 
Outpatient Surgery) measure was adopted for reporting in the Hospital 
OQR Program beginning with the CY 2020 payment determination (81 FR 
79771).
(2) Measure Overview
    The 7-Day Hospital Visit Rate After Outpatient Surgery measure 
would make unplanned patient hospital visits (ED visits, observation 
stays, or unplanned inpatient admissions) after surgery more visible to 
providers and patients through publicly reporting scores. It could also 
encourage providers to engage in quality improvement activities to 
reduce these visits by providing feedback to facilities and physicians. 
This measure meets the National Quality Strategy goals of embedding 
quality into the care journey and promoting safety.\582\ We expect that 
the measure would promote improvement in patient care over time.
---------------------------------------------------------------------------

    \582\ CMS, What is the CMS National Quality Strategy? Available 
at:  https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/CMS-Quality-Strategy.
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    The 7-Day Hospital Visit Rate After Outpatient Surgery measure was 
on the 2022 MUC list.\583\ The Rural Health Advisory Group members did 
not have any rural health concerns about the measure. We believe that 
this proposed measure reflects consensus among the affected parties as 
public comment received during the MAP and measure development 
processes was in agreement with the MAP's conclusions on the measure. 
The CBE recommended the measure for rulemaking (CBE #2687).\584\
---------------------------------------------------------------------------

    \583\ Centers for Medicare & Medicaid Services. 2022 Measures 
Under Consideration Spreadsheet. Available at:  https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports. Last accessed March 13, 2023.
    \584\ Centers for Medicare & Medicaid Services. MAP 2016 
Considerations for Implementing Measures in Federal Programs--
Hospitals. Available at:  https://www.qualityforum.org/Publications/2016/02/MAP_2016_Considerations_for_Implementing_Measures_in_Federal_Programs_-_Hospitals.aspx. Last accessed March 13, 2023.
---------------------------------------------------------------------------

    We believe it is important to reduce adverse patient outcomes 
associated with preparation for surgery, the procedure itself, and 
follow-up care. Therefore, we propose to include the 7-Day Hospital 
Visit Rate After Outpatient Surgery measure in the REHQR Program 
beginning with the CY 2024 reporting period.
(3) Data Sources
    The proposed 7-Day Hospital Visit Rate After Outpatient Surgery 
measure would be calculated from Part A and Part B Medicare 
administrative claims data for Medicare FFS beneficiaries with an 
outpatient same-day surgical procedure excluding eye surgeries and 
colonoscopies (except colonoscopy with biopsy). Colonoscopies are 
excluded from this measure as these procedures are examined separately 
on their own. The exclusion of eye procedures is discussed below. The 
performance period for the measure is one year (that is, the measure 
calculation includes eligible outpatient same-day surgeries occurring 
within a 1-year timeframe),\585\ and would begin with the CY 2024 
reporting period. We also considered increasing the data collection 
time period, to account for low volume, to 2 or 3 years.
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    \585\ QualityNet. 2022 Measure Updates and Specifications Report 
(2022), available at https://qualitynet.cms.gov/outpatient/measures/surgery/methodology. Last accessed February 28, 2023.

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[[Page 49838]]

(4) Measure Calculation
    The measure outcome includes unplanned hospital visits within seven 
days after a surgery performed at an REH that are: (1) an inpatient 
admission at a separate hospital that can admit patients; or (2) an ED 
visit or observation stay at the REH or other hospital occurring after 
discharge. If more than one unplanned hospital visit occurs, only the 
first hospital visit within the outcome timeframe is counted in the 
outcome.
    The facility-level measure score is a ratio of the predicted to 
expected number of post-surgical hospital visits among the hospital's 
patients. The numerator of the ratio is the number of hospital visits 
predicted for the hospital's patients accounting for its observed rate, 
the number of surgeries performed at the hospital, the case-mix, and 
the surgical procedure mix. The denominator of the ratio is the 
expected number of hospital visits given the hospital's case-mix and 
surgical procedure mix. A ratio of less than one indicates the 
hospital's patients have fewer post-surgical visits than expected 
compared to hospitals with similar surgical procedures and patients; 
and a ratio of greater than one indicates the hospital's patients were 
estimated as having more visits than expected.
    To ensure the accuracy of the algorithm for attributing claims data 
and the comprehensive capture of hospital surgeries potentially 
affected by the CMS 3-day payment window policy,\586\ we identify 
physician claims for same-day surgeries in hospital settings from the 
Medicare Part B Standard Analytical Files (SAF) with inpatient 
admissions that occur within 3 days after these surgeries that lack a 
corresponding hospital facility claim. Under the 3-day payment window 
policy, all outpatient diagnostic services furnished to a Medicare 
beneficiary by a hospital (or an entity wholly owned or operated by the 
hospital), on the date of a beneficiary's admission or during the 3 
days immediately preceding the date of a beneficiary's inpatient 
hospital admission, must be included on the Part A bill for the 
beneficiary's inpatient stay at the hospital. Hospitals must include 
the following information on the claim for a beneficiary's inpatient 
stay: (1) the diagnoses; (2) procedures; and (3) charges for all 
outpatient diagnostic services and admission-related outpatient 
nondiagnostic services that are furnished to the beneficiary during the 
3-day payment window.\587\ A surgery identified as affected by this 
policy would be attributed to the appropriate hospital facility using 
the facility provider identification from the inpatient claim.\588\
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    \586\ https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/Three_Day_Payment_Window. Accessed May 4, 
2023.
    \587\ Three Day Payment Window Implementation of New Statutory 
Provision Pertaining to Medicare 3-Day (1-Day) Payment Window 
Policy--Outpatient Services Treated As Inpatient. Centers for 
Medicare and Medicaid Services (CMS). Available at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/Three_Day_Payment_Window. Last accessed on March 
28, 2023.
    \588\ For additional methodology details, we refer readers to 
the documents posted at: http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology, including ``2016 Measure Updates and 
Specifications Report: Hospital Visits after Hospital Outpatient 
Surgery Measure (PDF)''. Last accessed March 21, 2023.
---------------------------------------------------------------------------

(5) Cohort
    The measure includes Medicare FFS patients aged 65 years and older 
undergoing same-day, outpatient surgery in REHs, excluding eye 
surgeries and colonoscopies, but including colonoscopy with biopsy.
    ``Same-day surgeries'' are substantive surgeries and procedures 
listed on Medicare's list of covered ASC procedures excluding eye 
surgeries and colonoscopies (except colonoscopy with biopsy).\589\ This 
list was developed for Medicare to identify surgeries that can be 
safely performed as same-day surgeries and do not typically require an 
overnight stay. Surgeries on the ASC list of covered procedures do not 
involve or require major or prolonged invasion of body cavities, 
extensive blood loss, major blood vessels, or care that is either 
emergent or life-threatening.
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    \589\ YNHHSC/CORE (2016). 2016 Measure Updates and 
Specifications Report Hospital Outpatient Quality Reporting Program 
2022. Available at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology. Last accessed March 21, 2023.
---------------------------------------------------------------------------

    Although Medicare developed this list of surgeries for ASCs, we use 
it more broadly for this measure for two reasons. First, it aligns with 
our target cohort of surgeries that have low to moderate risk profile 
and are safe to be performed as same-day surgeries. By only including 
surgeries on this list in the measure, we effectively do not include 
surgeries performed at hospitals that typically require an overnight 
stay which are more complex, higher risk surgeries. Second, we use this 
list of surgeries because it is annually reviewed and updated by 
Medicare, and includes a transparent public comment submission and 
review process for addition or removal of procedures codes. To view the 
ASC covered procedures list for 2023, we refer readers to the CMS 
website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/ASC-Regulations-and-Notices. On that page, readers 
may select ``CMS-1772-FC'' from the list of regulations. The ASC 
Addenda are contained in a zipped folder entitled ``Addendum AA, BB, 
DD1, DD2, and EE.'' Addendum AA includes the relevant list of covered 
surgeries.
    For further discussion of the cohort for this measure, please see 
``2022 Measure Updates and Specifications Report: Hospital Outpatient 
Quality Reporting Program,'' available at https://qualitynet.cms.gov/outpatient/measures/surgery/methodology.
    The cohort for this measure excludes eye surgeries. Eye surgery is 
performed in high volume and is generally perceived as being ``low 
risk.'' However, studies have indicated non-insignificant levels of 
hospital visits following cataract surgery. One study reported 0.3 
percent of patients as having an inpatient admission within 7 days 
following cataract surgery \590\ and another study showing a 1.77 
percent of patients with ED visits within 30 days following cataract 
surgery.\591\ The measure cohort also excludes procedures for patients 
who lack continuous enrollment in Medicare FFS Parts A and B in the 
seven days after the procedure to ensure all patients have complete 
data available for outcome assessment.
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    \590\ Wang, SY, Blachley, TS, Andrews, CA, Avanian, JZ, Lee, PP, 
& Stein, JD. Feb 22, 2016). Hospitalization after Cataract Surgery 
in a Nationwide Managed-Care Population. PLOS ONE (11:2). https://doi.org/10.1371/journal.pone.0149819.
    \591\ Sahil Aggarwal, Andrew Gross, Alex Snyder, Jay 
Rathinavelu, Terry Kim, Leon Herndon. Younger Age and Longer Case 
Times Associated With Emergency Department Visits After Cataract 
Surgery Published: August 23, 2022DOI: https://doi.org/10.1016/j.ajo.2022.08.017.
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(6) Risk Adjustment
    The statistical risk-adjustment model includes 25 clinically 
relevant risk-adjustment variables that are strongly associated with 
risk of hospital visits within 7 days following outpatient 
surgery.\592\ The measure risk-adjusts for surgical procedure 
complexity using two variables. First, it adjusts for surgical 
procedure complexity using the
---------------------------------------------------------------------------

    \592\ Information about the risk-adjustment model and measure 
methodology are located in the Measure Updates and Specifications 
Report available on QualityNet at: https://qualitynet.cms.gov/outpatient/measures/surgery/methodology.

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[[Page 49839]]

Work Relative Value Units (RVUs).\593\ Work RVUs are assigned to each 
CPT procedure code and approximate procedure complexity by 
incorporating elements of physician time and effort. Second, it 
classifies each surgery into an anatomical body system group using the 
Agency for Healthcare Research and Quality (AHRQ) Clinical 
Classification System (CCS),\594\ to account for organ-specific 
differences in risk and complications, which are not adequately 
captured by the Work RVU alone.
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    \593\ Coberly, S. (January 12, 2015). The Basics; Relative Value 
Units (RVUs). National Health Policy Forum. Available at: https://hsrc.himmelfarb.gwu.edu/cgi/viewcontent.cgi?article=1275&context=sphhs_centers_nhpf. Last 
accessed February 28, 2023.
    \594\ HCUP Clinical Classifications Software for Services and 
Procedures. Healthcare Cost and Utilization Project (HCUP). 2008. 
Agency for Healthcare Research and Quality. Available at: https://www.hcup-us.ahrq.gov/toolssoftware/ccs_svcsproc/ccssvcproc.jsp. Last 
accessed February 28, 2023.
---------------------------------------------------------------------------

    We invite public comment on this proposal.
6. Summary of Proposed REHQR Program Measure Set Beginning With the CY 
2024 Reporting Period
    Table 80 summarizes the proposed REHQR Program measure set 
beginning with the CY 2024 reporting period:
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[[Page 49840]]


7. REHQR Program Measures and Topics for Future Consideration
a. Request for Comment: Electronic Clinical Quality Measures (eCQMs) 
for Reporting Quality Data Under the REHQR Program
    eCQMs are measures specified in a standard electronic format that 
use data electronically extracted from EHRs and/or health information 
technology systems to measure the quality of health care provided. 
Through electronic reporting, hospitals have leveraged EHRs to capture, 
calculate, and electronically submit quality data instead of manually 
chart-abstracting and submitting to CMS. Adoption of certain eCQMs into 
the REHQR Program could address high priority areas as stated in our 
Meaningful Measures Framework, including the transition to digital 
quality measures and the adoption of high-quality measures that improve 
patient outcomes and safety.\595\
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    \595\ CMS. Meaningful Measures Initiative. https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/CMS-Quality-Strategy. Last accessed April 
3, 2023.
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    We acknowledge that technological, monetary, and staffing barriers 
may present challenges to eCQM adoption and use at some REHs. Although 
some REH staff may have had experience reporting eCQMs in the Hospital 
IQR, Hospital OQR, or Medicare Promoting Interoperability (PI) Programs 
during the time period when their REHs were organized as CAHs or 
subsection (d) hospitals, we acknowledge that challenges will remain. 
We see evidence of these challenges when analyzing eCQM reporting under 
the Medicare PI Program for eligible hospitals and CAHs. Tables 81 and 
82 compare urban and rural hospital eCQM reporting, as defined by 
census area, with respect to the Medicare PI Program for CY 2021. Most 
hospitals of all bed sizes successfully reported eCQMs, but eCQM 
submission compliance percentages for smaller hospitals and rural 
hospitals were slightly lower than for larger or urban hospitals.
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BILLING CODE 4120-01-C
    We believe that certain eCQMs, if adopted into the REHQR Program, 
could provide insightful quality measure data for monitoring REHs and 
potentially lower provider burden. For example, the Excessive Radiation 
Dose or Inadequate Image Quality for Diagnostic Computed Tomography in 
Adults eCQM (the Excessive Radiation eCQM) could be adopted into the 
REHQR Program to improve patient outcomes and patient safety. This eCQM 
provides a standardized method for monitoring the performance of 
diagnostic CT to discourage unnecessarily high radiation doses while 
preserving image quality. The measure is expressed as a percentage of 
eligible CT scans that are out-of-range based on having either 
excessive radiation dose or inadequate

[[Page 49841]]

image quality, relative to evidence-based thresholds based on the 
clinical indication for the exam.\596\ This measure is not risk-
adjusted. The purpose of this measure is to reduce unintentional harm 
to patients and provide REHs with a reliable method to assess harm 
reduction efforts and modify their improvement efforts. We propose 
adoption of the Excessive Radiation eCQM for the Hospital OQR Program. 
We refer readers to section XIV.B.3.c of this proposed rule for a 
discussion of the Hospital OQR Program proposal.
---------------------------------------------------------------------------

    \596\ Centers for Medicare & Medicaid Services. Pre-Rulemaking 
MUC Lists and MAP Reports. The Measures Management System. Available 
at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
---------------------------------------------------------------------------

    We also refer readers to section XIV of the CY 2022 OPPS/ASC 
proposed rule (86 FR 42232 through 42237) where we requested 
information on potential actions and priority areas that would enable 
the continued transformation of our quality measurement enterprise 
toward greater digital capture of data and use of the Fast Healthcare 
Interoperability Resources (FHIR) standard. This will be taken into 
consideration in future years when deciding how and when to introduce 
eCQMs to the REHQR Program.
    We invite public comment on the use of eCQMs in the REHQR Program, 
any specific eCQM measures that we should consider for inclusion in the 
REHQR Program measure set, including the Excessive Radiation eCQM, and 
any considerations or criteria we should use in identifying eCQM 
measures to propose for future inclusion.
b. Request for Comment: Care Coordination Measures
    As part of future rulemaking, we may consider adding measures to 
the REHQR Program measure set that are relevant to the coordination of 
care between REHs and other kinds of healthcare providers. REHs 
encounter challenges in coordinating care that are specific to rural 
settings. Geographically isolated areas typically have fewer healthcare 
settings and providers, and experience difficulties related to 
workforce shortages, transportation issues, and lack of information 
technology capabilities, such as the availability of broadband 
networks.\597\ Other challenges relate to shifting workforce 
availability (for example, issues related to the availability of 
traveling nurses or independent healthcare providers) and limited 
access to specialists, diagnostic equipment, and other resources.\598\ 
In particular, REHs are required to have in effect a transfer agreement 
with a level I or level II trauma center,\599\ such that patients that 
present at an REH with needs for longer-term inpatient care may receive 
that care. REHs must, therefore, address issues related to the 
coordination of care for transferred patients.
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    \597\ Healthcare Access in Rural Communities. Rural Health 
Information Hub. Available at: https://www.ruralhealthinfo.org/topics/healthcare-access. Last accessed March 13, 2023.
    \598\ Ibid.
    \599\ Section 1861(kkk)(2)(C) of the Act.
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    We have sought to identify measures relevant to care coordination 
in rural settings that are also important, impactful, reliable, 
accurate, and clinically relevant. In the CY 2023 OPPS/ASC final rule, 
we provided responses to the comments received on our request for 
information on additional topics for quality measures appropriate for 
the REH setting (87 FR 72146 through 72149). Many of these comments 
addressed the provision of telehealth, an issue that impacts care 
coordination (87 FR 72146 through 72147). The CBE provided additional 
information on this topic in 2021, when they identified a list of 324 
measures relevant to the provision of telehealth.\600\ We believe that 
a number of these measures are directly related to the coordination of 
care, such as measures CBE #0006 Care Coordination, CBE #0097 
Medication Reconciliation Post-Discharge, and CBE #0326 Advance Care 
Plan.\601\ The current Medicare Beneficiary Quality Improvement Project 
(MBQIP) measures also include several ``care transitions'' measures 
that may be relevant to the coordination of care for REHs. Relevant 
MBQIP measures include Emergency Department Transfer Communication (on 
which we invited public comment in the CY 2022 OPPS/ASC proposed rule, 
at 86 FR 42285 through 42289), Discharge Planning, and Medication 
Reconciliation.\602\
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    \600\ Rural Telehealth and Healthcare System Readiness 
Measurement Framework Final Report (2021). Accessed March 28, 2023. 
Available at: https://www.qualityforum.org/Publications/2021/11/Rural_Telehealth_and_Healthcare_System_Readiness_Measurement_Framework__Final_Report.aspx.
    \601\ Ibid.
    \602\ Federal Office of Rural Health Policy (FORHP). MBQIP 
Measures (January 2023)--Current Medicare Beneficiary Quality 
Improvement Project (MBQIP) Measures. Available at: https://www.ruralcenter.org/sites/default/files/2023-02/MBQIP-Measures.pdf.
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    We invite public comment on the use of care coordination measures 
including telehealth measures in the REHQR Program, any specific 
measures that we should consider for inclusion in the REHQR Program 
measure set regarding care coordination, and any considerations or 
criteria we should use in determining which if any coordination of care 
measures to propose for future inclusion.
    c. Request for Comment: Tiered Approach Framework
    We refer readers to section XVII of the CY 2022 OPPS/ASC proposed 
rule, where we included a request for information (RFI) on REHs (86 FR 
42285 through 42289). We received more than 50 comments in response to 
the RFI, including one suggestion to implement a multi-tiered approach 
for quality measures and reporting requirements to incentivize REH 
reporting.
    Within such a tiered framework, Tier 1 could encompass a set of 
measures that would be required for all REHs and would focus on 
measures applicable for the required ED and observation services at 
REHs. Tier 2 could apply only to REHs that choose to provide additional 
outpatient services; the measures in that set would be related to the 
optional services provided.
    Measures being proposed in this proposed rule for adoption into the 
REHQR Program measure set are the: (1) Abdomen CT measure, (2) Median 
Time for Discharged ED Patients measure, (3) 7-Day Hospital Visit Rate 
After Outpatient Colonoscopy measure, and (4) 7-Day Hospital Visit Rate 
After Outpatient Surgery measure. Two of these proposed measures are 
related to services that REHs must provide to participate in the 
Medicare program. The other two proposed measures are related to 
services that could be furnished on an outpatient basis at the election 
of the REH.\603\ To fit into an example scenario of a tiered approach, 
Tier 1 could include the measures related to required services, which 
are the diagnostic, claims-based Abdomen CT measure, and the chart-
abstracted Median Time for Discharged ED Patients measure. Tier 2 could 
consist of the measures related to services the REH may elect to 
provide, which are the claims-based 7-Day Hospital Visit Rate After 
Outpatient Colonoscopy and 7-Day Hospital Visit Rate After Outpatient 
Surgery measures.
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    \603\ See section 1861(kkk)(1) of the Act.
---------------------------------------------------------------------------

    The aforementioned tiered measures are only examples for the 
purposes of this request for comment to further discussion of this 
concept for the REHQR Program.
    Such reporting could be phased-in; for example, as suggested by the 
commenter, all REHs could report the Tier 1 quality measures beginning 
at a designated time after their REH status began, and all REHs 
providing

[[Page 49842]]

additional services would begin to submit Tier 2 data at a designated 
time after such services begin under the new REH status.
    We invite public comment on the implementation of a tiered quality 
measure approach in the REHQR Program, considerations in designing the 
structure of a tiered framework, the number of measures in each tier, 
and considerations for designating measures for tiers of such a 
framework.
8. Proposal To Display Quality Measure Data Publicly
a. Public Reporting of Quality Data Generally
    Pursuant to the CAA, the Secretary shall establish procedures to 
make quality measure data submitted by REHs available to the public on 
a CMS website.\604\ Such procedures shall ensure that the REH has the 
opportunity to review, and submit corrections for, the data that is to 
be made public with respect to the REH prior to such data being made 
public.\605\ In this proposed rule, we propose to align our approach to 
the public display of measures with that of the Hospital OQR and ASCQR 
Programs. For detail on the public display of measures in the Hospital 
OQR and ASCQR Programs, we refer readers OPPS/ASC final rules of CY 
2009 (73 FR 68777 through 67779), CY 2014 (78 FR 75092), and CY 2017 
(81 FR 79791). We propose to make publicly reported data under the 
REHQR Program available to the public both on our Care Compare website 
and in downloadable data files located in the Provider Data Catalog 
(PDC), found at http://data.cms.gov. We intend to display these data 
publicly for any consumer or other member of the public beginning with 
measure data submitted relevant to services provided in CY 2024. To the 
extent possible, in order to publicly display these data, we will use 
the same information systems, business processes, and other 
infrastructure that we use to display data for the Hospital OQR and 
Hospital Inpatient Quality Reporting (IQR) Programs. This alignment of 
processes and policies will enhance alignment with other quality 
reporting programs and ease of understanding for REHs.
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    \604\ CAA, 2021, at section 125(a)(1)(B) of Division CC, adding 
section 1861(kkk)(7)(D) of the Act.
    \605\ CAA, 2021, at section 125(a)(1)(B) of Division CC, adding 
section 1861(kkk)(7)(D) of the Act.
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    We also propose that participating REHs would be granted the 
opportunity to review their data before the information is published 
during a 30-day review and corrections period (the preview process). 
Similarly, to the Hospital OQR and Hospital IQR Programs, we would 
announce the timeframes for the preview period starting with the 
measure data submitted relevant to services provided in CY 2024 on a 
CMS website, such as QualityNet, or on applicable listservs. We 
generally strive to display hospital quality measures data on the 
designated website as soon as possible after measure data have been 
submitted to CMS. However, if there are unresolved display issues or 
pending design considerations, we may make the data available on other, 
non-interactive, CMS websites. This preview process aligns with that of 
the Hospital OQR Program (81 FR 79791).
    We propose to codify this policy at Sec.  419.95 by adding 
paragraph (f) ``Public Reporting of Data Under the REHQR Program.'' In 
proposed paragraph (f), we propose that data that an REH submits for 
the REHQR Program would be made publicly available by a CMS 
Certification Number (CCN) on a CMS website in an easily understandable 
format after providing the REH an opportunity to review the data to be 
made public.
    We invite public comment on this proposal.
b. Public Reporting of Proposed REHQR Program Claims-Based Measures
    We propose to make measure scores for claims-based measures 
proposed for the REHQR Program measure set publicly available beginning 
with measure data submitted relevant to services provided in CY 2024. 
As discussed above in section XVI.B.5 of this proposed rule, we propose 
to adopt the following three claims-based measures into the REHQR 
Program measure set: (1) Abdomen CT measure, (2) 7-Day Hospital Visit 
Rate After Outpatient Colonoscopy measure, and (3) 7-Day Hospital Visit 
Rate After Outpatient Surgery measure.
    Public reporting measure data for a claims-based measure would not 
begin until completion of a data collection period specific to that 
claims-based measure, provided sufficient case volumes are 
achieved.606 607 For example, for the 7-Day Hospital Visit 
Rate After Outpatient Colonoscopy measure, the data collection period 
is three years; public reporting would begin after completion of an 
initial three-year data collection period, or CY 2027, provided the 
hospital had sufficient case volumes. We plan to provide additional 
detail on the timeline of publicly reporting this data in future 
rulemaking.
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    \606\ CMS does not report measures publicly unless measures are 
the result of an analysis of more than 10 cases.
    \607\ CMS Policy for Privacy Act Implementation & Breach 
Notification, July 23, 2007, Document Number: CMS-CIO-POL-PRIV01-01, 
p 4. Statistical, aggregate or summarized information created as a 
result of analysis conducted using identifiable CMS data obtained 
under CMS-approved projects/studies may only be disclosed if the 
data are not individual-specific and the data are aggregated to a 
level where no data cells contain 10 or fewer individuals.
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    The display of these data would rely on the same business processes 
and resources that are currently in use for the Hospital OQR and 
Hospital IQR Programs. The data would be available to the public both 
on our Care Compare website and in downloadable data files located in 
the Provider Data Catalog (PDC), found at http://data.cms.gov. Data 
associated with these three claims-based measures would be updated 
annually.
    We invite public comment on this proposal.
c. Public Reporting of the Proposed Median Time from ED Arrival to ED 
Departure for Discharged ED Patients Measure
    In the Hospital OQR Program, only data for two out of the four 
strata of the Median Time for Discharged ED Patients measure are 
reported publicly. Measure data for the Median Time for Discharged ED 
Patients--Reported Rate is currently publicly displayed on the Care 
Compare site and in the downloadable data files located in the PDC, 
found at https://data.cms.gov, for the Hospital OQR Program. 
Additionally, measure data for the Median Time for Discharged ED 
Patients--Psychiatric/Mental Health Patients is publicly displayed in 
downloadable data files located in the PDC, in order to address a 
behavioral health gap in the publicly reported Hospital OQR Program 
measure set.\608\
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    \608\ CMS adopted a policy to publicly report measure data for 
the Median Time for Discharged ED Patients--Psychiatric/Mental 
Health Patients in the CY 2018 OPPS/ASC final rule (82 FR 59437).
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    While data for the Median Time for Discharged ED Patients--Transfer 
Patients measure stratification is not currently reported publicly for 
hospitals participating in the Hospital OQR Program, we believe 
publicly reporting measure data for this stratum for REHs is imperative 
to allow for the identification of REH ED throughput performance gaps 
for patients requiring higher levels of specialized care above what an 
REH is able to provide. Likewise, data for the Median Time for 
Discharged Patients--Overall Rate measure stratification are not 
currently reported publicly for hospitals participating in the Hospital 
OQR

[[Page 49843]]

Program. However, we believe publicly reporting measure data for this 
stratum for REHs participating in the REHQR Program is important to 
provide an account of all patients seen in the REH's ED, beyond 
identifying specific performance in certain patient populations as 
reflected by the other strata calculated for this measure. We note that 
the Median Time for Discharged ED Patients measure is of particular 
importance for the REHQR Program because care provided in EDs will 
likely be a focus of REH services; as such, we seek to provide 
transparency in publicly reporting of all the strata calculated for 
this measure. For a more detailed discussion of our proposal to adopt 
the Median Time for Discharged ED Patients measure in the REHQR 
Program, please refer to section XVI.B.5.b of this proposed rule.
    We propose to make publicly available data received from REHs to 
calculate the following measure strata for the Median Time for 
Discharged ED Patients measure: (1) Median Time for Discharged ED 
Patients--Overall Rate; (2) Median Time for Discharged ED Patients--
Reported Measure; (3) Median Time for Discharged ED Patients--
Psychiatric/Mental Health Patients; and (4) Median Time for Discharged 
ED Patients--Transfer Patients. We intend to display these data 
publicly beginning with the first quarter of measure data submitted 
relevant to services provided in CY 2024 in which case thresholds are 
met. We plan to provide additional detail on the timeline of publicly 
reporting this data in future rulemaking. As discussed above, display 
of these data would rely on the same business processes and resources 
that are currently in use for the Hospital OQR and Hospital IQR 
Programs.
    We invite public comment on these proposals.

C. Administrative Requirements

1. Proposal To Codify Administrative Requirements
    Section 1861(kkk)(7)(B)(i) of the Act provides that, with respect 
to each year beginning with 2023, or each year beginning on or after 
the date that is one year after one or more measures are first 
specified under section 1861(kkk)(7)(C) of the Act, an REH shall submit 
data to the Secretary in accordance with section 1861(kkk)(7)(B)(ii). 
Clause (ii) states that, with respect to each such year, an REH shall 
submit to the Secretary data on quality measures in a form and manner, 
and at a time, specified by the Secretary for purposes of section 
1861(kkk)(7)(B) of the Act.
    We finalized foundational administrative requirements for REHs 
participating in the REHQR Program in the CY 2023 OPPS/ASC final rule 
(87 FR 71752, and 72149 through 72150). In that rule, we require REHs 
must (1) register on a CMS website before beginning to report data; and 
(2) identify and register a security official as part of that 
registration process. We also require REHs to submit data on all 
quality measures to CMS. We propose to codify the participation 
requirements in the REHQR Program at Sec.  419.95(b) ``Participation in 
the REHQR Program.''
    We note that we intend to propose additional administrative 
requirements as appropriate for the REHQR Program in subsequent 
rulemaking.
    We invite public comment on these proposals.

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

1. Proposal To Align and Codify Submission of REHQR Program Data
    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 for the Hospital OQR Program. We codified these submission 
requirements at Sec.  419.46(d). We propose to align the policies 
regarding submission of program data for the REHQR Program with those 
from the Hospital OQR Program.
    We also propose to codify this policy at Sec.  419.95 by adding 
paragraph (c) ``Submission of REHQR Program Data.'' In proposed 
paragraph (c)(1), we would require that REHs that participate in the 
REHQR Program must submit to CMS data on measures selected under 
section 1861(kkk)(7)(C) of the Act in a form and manner, and at a time 
specified by CMS. REHs sharing the same CMS Certification Number (CCN) 
must combine data collection and submission across their multiple 
campuses for all clinical measures for public reporting purposes. In 
proposed paragraph (c)(2), we propose that submission deadlines by 
measure and by data type be posted on a CMS website. All deadlines 
occurring on a Saturday, Sunday, or legal holiday, or on any other day 
all or part of which is declared to be a non-work day for Federal 
employees by statute or executive order would be extended to the first 
day thereafter which is not a Saturday, Sunday, or legal holiday or any 
other day all or part of which is declared to be a nonwork day for 
Federal employees by statute or executive order.
    We invite public comments on these proposals.
2. Proposed Requirements for Chart-Abstracted Measures Where Patient-
Level Data Are Submitted Directly to CMS Beginning With the CY 2024 
Reporting Period
    We propose to adopt one initial chart-abstracted measure for the CY 
2024 reporting period and for subsequent years: Median Time for 
Discharged ED Patients. Measure data for this measure would be 
submitted via the HQR System (formerly referred to as the QualityNet 
Secure Portal). In developing this proposal, we also considered 
proposing that REHs submit data for this measure on an annual rather 
than quarterly basis to help reduce burden for REHs participating in 
the REHQR Program. However, we note that REHs would have been reporting 
this measure on a quarterly basis under the Hospital OQR Program and 
would thus be acclimated to this reporting frequency. Therefore, to 
enhance alignment with this program, we propose a similar data 
submission frequency on a quarterly basis. We refer readers to the CY 
2015 OPPS/ASC and CY 2023 OPPS/ASC final rules for a discussion of our 
previously finalized policies regarding submissions deadlines for 
chart-abstracted measures for the Hospital OQR Program (79 FR 66964; 87 
FR 72110 to 72112).
    Beginning with the CY 2024 reporting period, the applicable patient 
encounter quarters for chart-abstracted data and their corresponding 
data submission deadlines are as follows in Table 83.

[[Page 49844]]

[GRAPHIC] [TIFF OMITTED] TP31JY23.125

    We propose to adopt these dates as deadlines for submitting chart-
abstracted measure data for the REHQR Program.
    We invite public comment on this proposal.
3. Proposed Claims-Based Measure Data Requirements Beginning With the 
CY 2024 Reporting Period
    We propose to adopt three initial claims-based measures for the CY 
2024 reporting period and for subsequent years: Abdomen CT; 7-Day 
Hospital Visit Rate After Outpatient Colonoscopy (CBE #2539); and 7-Day 
Hospital Visit Rate After Outpatient Surgery (CBE #2687). In 
calculating these and future claims-based measures, we propose to use 
Medicare claims data for services with encounter dates on or after 
January 1, 2024.
    We invite public comment on this proposal.
4. Proposal To Adopt and Codify a Review and Corrections Period for 
Measure Data Submitted to the REHQR Program
    In the event that an REH submits data for a measure, such as the 
chart-abstracted Median Time for Discharged ED Patients measure 
proposed for adoption in section XVI.B.5.b of this proposed rule, and 
later discovers or suspects the data provided were not accurate, it may 
need to submit corrected data. To address this need, we propose to 
adopt the same policies currently in place for the Hospital OQR 
Program. Under the Hospital OQR Program, hospitals submit chart-
abstracted data to CMS on a quarterly basis. These data are typically 
due approximately four months after the quarter has ended. We refer 
readers to the CY 2015 OPPS/ASC final rule for a discussion of our 
previously finalized policies regarding submissions deadlines for 
chart-abstracted measures for the Hospital OQR Program (79 FR 66964).
    Hospitals are encouraged to submit data early in the submission 
schedule so that they can identify errors and resubmit data before 
submission deadlines. Hospitals can continue to review, correct, and 
change these data up until the close of each submission deadline. For 
example, under the Hospital OQR Program, we finalized a 4-month period 
as the review and corrections period for chart-abstracted data (79 FR 
66964). During this review and corrections period, hospitals can enter, 
review, and correct data submitted directly to CMS. However, after the 
submission deadline, hospitals would not be allowed to change these 
data. Under the Hospital OQR Program, we generally provide rates to 
hospitals for the measures that have been submitted for chart-
abstracted, patient-level data 24 to 48 hours following submission 
deadline.
    We propose to adopt this same policy under which an REH may review 
and submit corrections to measure data, and that for chart-abstracted 
measure data, an REH may review and submit corrections to measure data 
submitted for a period of four months after the reporting quarter has 
ended. We also propose to codify this policy at Sec.  419.95 by adding 
paragraph (c)(3) ``Review and Corrections Period.'' In proposed 
paragraph (c)(3), we propose that REHs would have a review and 
corrections period for all quality data submitted, which runs 
concurrently with the data submission period, when they would be able 
to enter, review, and correct data submitted prior to the submission 
deadline. In addition, we propose that after the submission deadline, 
these data cannot be changed.
    We invite public comment on this proposal.
5. Extraordinary Circumstances Exceptions (ECE) Process
a. Proposal To Adopt an ECE Process for the REHQR Program
    In our experience, there have been times when facilities have been 
unable to submit information to meet program requirements due to 
extraordinary circumstances that are not within their control. It is 
our goal not to penalize such entities for such circumstances and we do 
not want to unduly increase their burden during these times. We propose 
an Extraordinary Circumstances Exceptions (ECE) process for REHs to 
request and for CMS to grant extensions or waivers with respect to the 
reporting of required quality data when there are extraordinary 
circumstances beyond the control of the REH. Under this proposed 
process, CMS may grant an exception to one or more data submission 
deadlines and requirements in the event of extraordinary circumstances 
beyond the control of the REH, such as when an act of nature affects an 
entire region or locale or a systemic problem with one of CMS' data 
collection systems directly or indirectly affects data submission. 
Because we do not anticipate that such systemic errors will happen 
often, we do not anticipate granting exceptions on this basis 
frequently.
    We propose that CMS may grant an exception to one or more data 
submission deadlines and requirements upon request by an REH, pursuant 
to specific requirements for submission of such a request described 
below. In addition, we propose that CMS may grant exceptions at its own 
discretion, without an accompanying request from an affected REH, when 
CMS determines that an extraordinary circumstance has occurred.
    For an REH to request consideration of an exception to the 
requirement to submit quality data or medical record documentation for 
one or more quarters, the REH would follow specific requirements for 
submission of an ECE request form available on a CMS website. We note 
that the following information must appear on the request form: the 
REH's CCN; the REH's name; the REH's CEO or other REH-designated 
personnel contact information, including name, email address, telephone 
number, and mailing address (must include a physical address, a post 
office box address is not acceptable); REH's reason for requesting an 
exception; evidence of the impact of the extraordinary circumstances, 
including

[[Page 49845]]

but not limited to photographs, newspaper and other media articles; and 
a date when the REH believes it would again be able to submit REHQR 
Program data and/or medical record documentation, and a justification 
for the proposed date.
    The request form must be signed by the REH's designated contact, 
whether or not that individual is the CEO. A request form is required 
to be submitted within 90 days of the date that the extraordinary 
circumstance occurred. Following receipt of such a request, CMS would 
provide an email acknowledgement using the contact information provided 
in the request notifying the designated contact that the REH's request 
has been received and following CMS' decision, CMS would notify the REH 
using the same contact information. In the case where CMS grants 
exceptions to REHs that have not requested them because we determine 
that an extraordinary circumstance has occurred in a region or locale, 
we would communicate this decision to REHs and vendors through routine 
communication channels, including but not limited to emails and notices 
on a CMS website.
    We also propose to codify these policies at Sec.  419.95 by adding 
paragraph (g), ``Exception.'' In proposed paragraphs (g)(1) and (g)(2), 
we propose that we may grant, upon the request of the REH or at our 
discretion, an exception to one or more data submission deadlines and 
requirements in the event of extraordinary circumstances beyond the 
control of the REH.
    We invite public comment on this proposal.

XVII. Changes to Community Mental Health Center (CMHC) Conditions of 
Participation (CoPs)

A. Background and Statutory Authority

    The Consolidated Appropriations Act (CAA) of 2023 (Pub. L. 117-328) 
was signed into law on December 29, 2022. Section 4124 of division FF 
of this legislation established coverage of intensive outpatient 
services (IOP) in community mental health centers (CMHC). Section 4124 
of the CAA, 2023 extends Medicare coverage and payment of IOP services 
furnished by a CMHC beginning January 1, 2024, allowing coverage of 
both partial hospitalization services (PHP) and IOP services to be 
furnished by CMHCs at section 1832(a)(2)(J) of the Act. Additionally, 
the CAA, 2023 revised section 1861(ff) of the Act to define IOP 
services while also amending the definition of PHP services. The 
statutory definitions provide distinctions between the two programs for 
Medicare purposes.
    Section 1861 (ff)(3)(B)(iv) of the Act authorizes the Secretary to 
establish the requirements that a CMHC must meet to participate in the 
Medicare Program, and these CoPs are set forth in regulations at 42 CFR 
part 485, subpart J (42 CFR 485.900). On October 29, 2013, we published 
a final rule in the Federal Register titled ``Medicare Program: 
Conditions of Participation (CoP) for Community Mental Health Centers'' 
(78 FR 64604), hereinafter referred to as ``2013 CoP CMHC final rule'', 
which established CoPs for CMHCs.
    In order to implement division FF, section 4124 of the CAA, 2023, 
we propose to modify the requirements for the CMHC to include IOP 
services throughout the CoPs.
    Under section 1861(ff)(3)(B)(iii) of the Act, a CMHC must provide 
at least 40 percent of its services to individuals who are not eligible 
for Medicare Part B. This requirement is reflected in the CoPs at Sec.  
485.918(b)(1)(v).\609\ Under this requirement, CMHCs must submit a 
self-attestation certification statement upon initial application to 
enroll in Medicare, and as a part of revalidation, including any off-
cycle revalidation. Medicare enrollment will be denied or revoked in 
instances where the CMHC fails to provide the certification statement 
as required. In addition, Medicare enrollment will also be denied or 
revoked if the 40 percent requirement, as specified in section 
1861(ff)(3)(B)(iii) of the Act and Sec.  485.918(b)(1)(v), is not met. 
We solicit public comment on how the provision of IOP services may 
impact the populations CMHCs serve as well as the potential impact on 
meeting the 40 percent requirement.
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    \609\ https://www.reginfo.gov/public/do/PRAOMBHISTORY?ombControlNumber=0938-1245#.
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    We also propose to revise the personnel qualifications of Mental 
Health Counselors (MHCs) and add personnel qualifications of Marriage 
and Family Therapists (MFTs) to the CMHC CoPs. Division FF, section 
4121 of the CAA, 2023, establishes a new Medicare benefit category for 
MHC services and MFT services furnished by and directly billed by MHCs 
and MFTs, respectively. At the time of publication of the 2013 CoP CMHC 
final rule (78 FR 64604), there were no specific personnel requirements 
(for purposes of the Medicare program) for Mental Health Counselors 
(MHCs). We believe it was necessary to recognize and outline specific 
personnel requirements for MHCs due to their integral role in providing 
mental health services to CMHC clients. We believe that MFTs are also 
essential mental health professionals who may furnish services in a 
CMHC, and propose adding MFTs to Sec.  485.904 Condition of 
participation: Personnel qualifications. According to the American 
Association for Marriage and Family Therapy, a professional association 
for the MFT field, one of the settings an MFT may practice is in a 
CMHC.\610\ The CAA 2023 does not require CMHCs to employ MFTs or MHCs; 
however, we believe the services provided by both MHCs and MFTs are 
integral to ensuring the health and safety of CMHC clients. We seek 
comment on the revised personnel qualifications for MHCs.
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    \610\ https://www.aamft.org/Consumer_Updates/MFT.aspx.
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B. Provisions of the Proposed Rule

    Section 4124 of the CAA, 2023 provides intensive outpatient 
services to be included as services provided by CMHCs under the 
Medicare Program. We propose the following revisions to the CMHC CoPs.
1. Sec.  485.900 Basis and Scope
    Currently, a CMHC may receive Medicare payment for partial 
hospitalization services if it meets the CMHC CoPs. Our regulations are 
intended to protect the health and safety of CMHC clients and support 
quality care. We propose to update the CoPs for CMHCs to reflect the 
statutory addition of IOP services provided by CMHCs to protect the 
health and safety of clients. Both PHP and IOP services are outpatient 
mental health services for adults and children who have an acute mental 
illness, including, but not limited to, conditions such as depression, 
schizophrenia, and substance use disorders. The Medicare Statute 
authorizes the PHP program for clients that need a higher level and 
intensity of care, a minimum of 20 hours per week (section 1861(ff)(1) 
of the Act). A Medicare beneficiary qualifies if they otherwise require 
inpatient psychiatric care in the absence of such services (section 
1835(a)(2)(F) of the Act). The PHP program may assist in transitioning 
from these institutional settings to community-based services. PHP and 
the addition of IOP services are important components in the continuum 
of mental health care and services. Both PHP and IOP are more intensive 
than office-based counseling but less intense than inpatient 
psychiatric care. Both PHP and IOP programs can serve beneficiaries as 
a step-up in care if additional support is

[[Page 49846]]

needed or a step down in managing symptoms. The addition of IOP 
services in a CMHC would assist in ensuring the continuum of coverage 
of outpatient mental health services under the Medicare program. 
Medicare coverage of IOP services may help address barriers to access 
to mental health care, which may also address inequities in mental 
health care and services. In order to implement division FF, section 
4124 of the CAA, 2023, we propose to modify the CMHC CoP at Sec.  
485.900(a)(1) through (a)(3). These modifications would allow CMHCs to 
receive payments for IOP services under Medicare Part B, establish 
requirements for the provision of IOP services in CMHCs, provide IOP 
services to clients, and include IOP services in the Medicare provider 
agreement.
2. Sec.  485.904 Personnel Qualifications
    Section Sec.  485.904 of the CMHC CoP establishes staff 
qualifications, and paragraph (a) requires all professionals who 
furnish services directly, under an individual contract, or under 
arrangements with a CMHC to be legally authorized (licensed, certified, 
or registered) in accordance with applicable Federal, State and local 
laws, and be required to act only within the scope of their State 
licenses, certifications, or registrations. The staff qualifications 
set out at Sec.  485.904(b), Standard: Personnel qualifications for 
certain disciplines, are consistent with, or similar to, those set 
forth in CoPs for other provider types in the Medicare regulations. As 
part of the 2013 CMHC CoP final rule, we established personnel 
qualifications for MHCs at Sec.  485.904(b)(5). Division FF, section 
4124 of the CAA, 2023, established a new Medicare benefit category for 
MFTs and MHC services in section 1861(lll) of the Act, including a 
definition for MFTs in section 1861(lll)(2) of the Act and MHCs in 
section 1861(lll)(4) of the Act. Section 1861(lll)(4) of the CAA 2023 
defines the term `mental health counselor' to mean an individual who: 
(1) possesses a master's or doctor's degree which qualifies for 
licensure or certification as a mental health counselor, clinical 
professional counselor, or professional counselor under the State law 
of the State in which such individual furnishes the services described 
in paragraph (3); (2) is licensed or certified as a mental health 
counselor, clinical professional counselor, or professional counselor 
by the State in which the services are furnished; (3) after obtaining 
such a degree has performed at least 2 years of clinical supervised 
experience in mental health counseling; and (4) meets such other 
requirements as specified by the Secretary. Section 1861(lll)(2) of the 
Act defines the term `marriage and family therapist' to mean (1) 
possesses a master's or doctor's degree which qualifies for licensure 
or certification as a marriage and family therapist pursuant to State 
law of the State in which such individual furnishes the services 
described in paragraph (1); (2) is licensed or certified as a marriage 
and family therapist by the State in which such individual furnishes 
such services; (3) after obtaining such degree has performed at least 2 
years of clinical supervised experience in marriage and family therapy; 
and (4) meets such other requirements as specified by the Secretary.
    To support the health and safety of CMHC clients and to promote 
consistency and clarity of CMHC personnel qualifications, we believe it 
is best to align the personnel qualifications for MFTs and MHCs with 
the requirements set out in the CAA, 2023. The statutory requirements 
for MHCs and MFTs are being codified in the CY 2024 Physician Fee 
Schedule proposed payment rule that is published elsewhere in the 
Federal Register. We propose to modify the MHC personnel requirement at 
Sec.  485.904(b)(5) by cross-referencing the definition of an MHC at 
Sec.  410.54 and adding a new requirement at Sec.  485.904(b)(12), 
cross-referencing the definition of an MFT at Sec.  410.53.
3. Sec.  485.914 Admission, Initial Evaluation, Comprehensive 
Assessment, and Discharge or Transfer of the Client
    The requirements at Sec.  485.914 establish requirements for 
admission, initial evaluation, comprehensive assessment, and discharge 
or transfer of the client in accordance with sections 1835(a)(2)(F) and 
1861(ff) of the Act. These CoPs identify general areas that would be 
included in a client assessment and the timeframes for completing the 
assessments to help the CMHC ensure it is identifying the needs in all 
areas in a timely fashion. At Sec.  485.914(a)(1), we require that 
clients are assessed and admitted to receive partial hospitalization 
(PHP) services, and (2) the CMHC must also meet separate requirements 
as specified in Sec.  485.918(f). The requirements at Sec.  485.918(f) 
reference additional PHP requirements of 42 CFR part 410 (CMHC services 
and definition) and Sec.  424.24(e) (the content of the certification 
and plan of treatment requirements). We propose to modify the current 
CoP at Sec.  485.914(a)(2) to add IOP requirements and reference 
applicable requirements the CMHC must meet that are specific to IOP 
services at proposed Sec.  485.918(g). This proposed standard for IOP 
is discussed later in section XVII.A.5 of this proposed rule.
    Currently, Sec.  485.914(d) requires that the CMHC update each 
client's comprehensive assessment through the CMHC interdisciplinary 
treatment team, in consultation with the client's primary health care 
provider (if any), when changes in the client's status, responses to 
treatment, or goal achievement have occurred and in accordance with 
current standards of practice. Section 485.914(d)(2) requires that the 
assessment must be updated no less frequently than every 30 days for 
clients that receive PHP services. We note that this aligns with the 
changes made in section 4124(a) of the CAA, 2023 to the definition of 
``partial hospitalization services'' in section 1861(ff)(1) of the Act, 
which requires that a physician determine (not less frequently than 
monthly) that a client has a need for such services. This update 
includes information on the client's progress toward desired outcomes, 
a reassessment of the client's response to care and therapies, and the 
client's goals. We believe that for some clients, more frequent reviews 
are necessary since clients with ongoing mental illness may be subject 
to frequent and/or rapid changes in status, needs, acuity, and 
circumstances, and the client's treatment goals may change, thereby 
affecting the type and frequency of services that should be furnished. 
The CMHC interdisciplinary treatment team uses assessment information 
to guide necessary reviews and/or changes to the client's active 
treatment plan.\611\ Currently, Sec.  485.914(d)(2) addresses how often 
a CMHC must update a PHP client's assessment, and we propose to add IOP 
requirements to this standard, using the same period (30 days).
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    \611\ https://www.reginfo.gov/public/do/PRAOMBHISTORY?ombControlNumber=0938-1245#.
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4. Sec.  485.916 Treatment Team, Person-Centered Active Treatment Plan, 
and Coordination of Services
    The review and update of the CMHC client's person-centered active 
treatment plan plays an integral role in outlining the care and 
services provided by the CMHC. The current requirements at Sec.  
485.916(d) indicate that the active treatment plan be updated with 
current information from the client's comprehensive assessment and 
information concerning the client's progress toward achieving outcomes 
and goals specified in the active treatment plan. The active treatment 
plan is reviewed at specified intervals

[[Page 49847]]

but no less frequently than every 30 calendar days. Under this current 
requirement, the revised active treatment plan must include information 
from the client's initial evaluation and comprehensive assessments, the 
client's progress toward outcomes and goals specified in the active 
treatment plan, and changes in the client's goals. In addition, the 
CMHC is required to meet partial hospitalization program requirements 
specified under Sec.  424.24(e).
    We propose to modify language at Sec.  485.916(d) to include IOP 
requirements and a specific reference to the proposed requirement at 
Sec.  424.24(d). As the CMHC must meet partial hospitalization program 
requirements specified under Sec.  424.24(e), they must meet IOP 
program requirements specified under Sec.  424.24(d) if such services 
are included in the active treatment plan.
5. Sec.  485.918 Organization, Governance, Administration of Services, 
Partial Hospitalization Services
    The CoP at Sec.  485.918 establishes requirements for CMHC 
organization, governance, administration of services, and partial 
hospitalization services. This standard includes administrative and 
governance structure standards and clarifies the governing body's 
expectations. Other requirements under this standard are professional 
management responsibility, staff training, and physical environment. 
The overall goal of this CoP is to ensure that the management structure 
is organized and accountable. The requirement at Sec.  485.918(b), 
Standard: Provision of services, specifies a comprehensive list of 
services that a CMHC is required to furnish. This list of services that 
CMHCs provide corresponds directly to the Act's statutory requirements 
in section 1861(ff)(3).
    We propose to modify the section heading at Sec.  485.918 by adding 
``intensive outpatient services,'' such that the new section heading 
will be ``Organization, governance, administration of services, partial 
hospitalization services, and intensive outpatient services.''
    In addition, we propose to add IOP to the requirement at Sec.  
485.918(b)(1)(iii) for the provision of services. These proposed 
changes would recognize IOP, along with day treatment and PHP, as 
services that can be provided by a CMHC, other than in an individual's 
home or an inpatient or residential setting or psychosocial 
rehabilitation services.
    We propose to redesignate the current requirements at Sec.  
485.918(g) to paragraph (h) and add a new standard for IOP services at 
Sec.  485.918(g). This new requirement would specify the additional 
requirements a CMHC providing IOP services must meet based on the 
proposed requirements at Sec.  410.2, Sec.  410.44, Sec.  410.111, and 
Sec.  424.24(d) of this chapter. See section VIII.B.2 and VIII.C.2 of 
this proposed rule for a discussion of these additional requirements.
    We solicit public comments on each of our proposals. In addition, 
we request comments from CMHC stakeholders regarding the impact of the 
proposed IOP requirements on the requirement that CMHCs provide at 
least 40 percent of their items and services to individuals who are not 
eligible for benefits under title XVIII of the Act, as specified at 
Sec.  485.918(b)(1)(v). Specifically, we seek comment on the following:
     Do you expect the total number of clients served in your 
CMHC to increase with the addition of IOP?
     Do you expect that your CMHC would admit new clients 
directly into the IOP program, and do you have a sense of their 
anticipated insurance status?
     Do you expect that any of your PHP clients would step down 
to the IOP program? If so, can you provide an estimated percentage of 
PHP clients who would step down to the IOP program?
     Do you expect any of your outpatient treatment clients, 
such as office-based therapy, to step up to the IOP program?
     Do you expect that offering IOP would impact your ability 
to meet the 40 percent requirement at Sec.  485.918(b)(1)(v)? This 
requirement states that the CMHC provides at least 40 percent of its 
items and services to individuals who are not eligible for benefits 
under title XVIII of the Act.

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

A. Introduction and Overview

1. Statutory Basis and Background
    Section 1001 of the Patient Protection and Affordable Care Act 
(Pub. L. 111-148), as amended by section 10101 of the Health Care and 
Education Reconciliation Act of 2010 (Pub. L. 111-152), amended Title 
XXVII of the Public Health Service Act (the PHS Act), in part, by 
adding a new section 2718(e). Section 2718 of the PHS Act, entitled 
``Bringing Down the Cost of Health Care Coverage,'' requires each 
hospital operating within the United States (U.S.) for each year to 
establish and update, and make public a list of the hospital's standard 
charges for items and services provided by the hospital, including for 
diagnosis-related groups established under section 1886(d)(4) of the 
Social Security Act (the Act). Section 2718(b)(3) of the PHS Act 
requires the Secretary of the Department of Health and Human Services 
(Secretary) to promulgate regulations to enforce the provisions of 
section 2718 of the PHS Act, and, in so doing, the Secretary may 
provide for appropriate penalties.
    In a final rule dated November 2019 (84 FR 65524) (herein referred 
to as the CY 2020 HPT final rule), we adopted requirements for 
hospitals to make public their standard charges in two ways: (1) as a 
comprehensive machine-readable file (MRF); \612\ and (2) in a consumer-
friendly format. We codified these requirements at new 45 CFR part 180. 
We also explained our belief that these two different methods of making 
hospital standard charges public are necessary to ensure that such data 
are available to consumers where and when they are needed, including 
through data aggregation methods (for example, via integration into 
price transparency tools, electronic health records (EHRs), and 
consumer apps), and direct availability to consumers searching for 
hospital-specific charge information. Additionally, we believe such 
data can be used specifically by employers, researchers, and policy 
officials, and similar members of the public to help bring more value 
to healthcare.
---------------------------------------------------------------------------

    \612\ We have previously generally described the machine-
readable file (MRF) as a single digital file that is in a machine-
readable format (as defined at 45 CFR 180.20), and we propose in 
this proposed rule to codify that definition in our regulations.
---------------------------------------------------------------------------

    Subsequently, in the CY 2022 OPPS/ASC final rule with comment 
period (86 FR 63941), we strengthened the hospital price transparency 
(HPT) enforcement scheme in order to improve compliance rates and made 
other updates to the requirements. Specifically, we (1) increased the 
penalty amount for noncompliance through the use of a scaling factor 
based on hospital bed count; (2) deemed state forensic hospitals that 
meet certain requirements to be in compliance with the requirements of 
45 CFR part 180, and (3) prohibited certain conduct that we concluded 
were barriers to accessing the standard charge information, including, 
specifically, prohibiting hospitals from coding their MRF in a fashion 
that made it inaccessible to automated searches and direct downloads.
    In both of those final rules, we stated that our policies requiring 
public release of hospital standard charge information

[[Page 49848]]

are a necessary and important first step in ensuring transparency in 
healthcare prices for consumers. We also recognize that the release of 
hospital standard charge information is not itself sufficient to 
achieve our ultimate price transparency goals. The regulations are, 
therefore, designed to begin to address some of the barriers that limit 
price transparency, with a goal of increasing competition among 
healthcare providers to bring down costs.
2. Summary of Proposals in This Proposed Rule
    We propose to amend several of our HPT requirements in order to 
improve our monitoring and enforcement capabilities by improving access 
to, and the usability of, hospital standard charge information; 
reducing the compliance burden on hospitals by providing CMS templates 
and technical guidance for display of hospital standard charge 
information; aligning, where feasible, certain HPT requirements and 
processes with requirements and processes we have implemented in the 
Transparency in Coverage (TIC) initiative; and making other 
modifications to our monitoring and enforcement capabilities that will, 
among other things, increase its transparency to the public. 
Specifically, we propose to: (1) define several terms; (2) revise the 
standard charge information and data elements that hospitals must 
include in their MRFs, as well as require hospitals to use a template 
developed by CMS (hereafter referred to as a `CMS template') for 
purposes of complying with Sec.  180.50 of our regulations, in order to 
standardize the displayed MRF data; (3) improve the accessibility of 
the hospital MRF by requiring hospitals to include a .txt file in the 
root folder that includes a direct link to the MRF and a link in the 
footer on its website that links directly to the publicly available web 
page that hosts the link to the MRF; and (4) improve our enforcement 
process by updating our methods to assess hospital compliance, 
requiring hospitals to acknowledge receipt of warning notices, working 
with health system officials to address noncompliance issues in one or 
more hospitals that are part of a health system, and publicizing more 
information about CMS enforcement activities related to individual 
hospital compliance. Additionally, we are seeking comment on additional 
considerations for improving compliance and aligning consumer-friendly 
policies and requirements with other federal price transparency 
initiatives.

B. Proposal To Modify the Requirements for Making Public Hospital 
Standard Charges at 45 CFR 180.50

    In the CY 2020 HPT final rule, we finalized, at 45 CFR 180.50, 
specific requirements with which hospitals must comply for the purpose 
of making public a single comprehensive list of standard charges for 
the items and services they provide, including requirements that govern 
the format, data elements, location and accessibility of the list, as 
well as the frequency by which they must update the list.
    In this section, for the reasons discussed below, we propose to 
substantially modify Sec.  180.50(a) through (d) of our regulations, 
which govern some of the requirements for how hospitals must make 
public their standard charges for all items and services they provide. 
Specifically, we propose to (1) define several new terms; (2) require 
hospitals to affirm the accuracy and completeness of the standard 
charges displayed in the MRF; (3) require hospitals to display 
additional data elements in their list of standard charges; (4) require 
display of standard charge information using a CMS template; and (5) 
adopt new requirements to improve the automated accessibility of the 
machine-readable file.
1. Proposed Definitions
    We propose to add the following definitions to Sec.  180.20:
     ``CMS template'' means a CSV format or JSON schema that 
CMS makes available for purposes of compliance with the requirements of 
Sec.  180.40(a).
     ``Consumer-friendly expected allowed amount'' means the 
average dollar amount that the hospital estimates it will be paid by a 
third party payer for an item or service.
     ``Encode'' means to enter data items into the fields of 
the CMS template.
     ``Machine-readable file'' means a single digital file that 
is in a machine-readable format.
    In light of these proposed definitions, we further propose several 
technical and conforming revisions to ensure consistency of the use of 
these terms across the regulation. Specifically, we propose to replace 
references to ``the file'' and ``the digital file'' in Sec.  
180.50(d)(4) through (5) with the proposed defined term ``machine-
readable file''. Revisions to references to the ``file'' in the 
introductory text of Sec.  180.50(c) and at Sec.  180.50(e) are 
addressed as a part of other proposed changes within this proposed 
rule.
2. Proposal To Require Hospitals To Affirm the Accuracy and 
Completeness of Their Standard Charge Information Displayed in the MRF
    Since we implemented the HPT regulations, we have received 
questions from the public regarding the accuracy and completeness of 
the standard charge information displayed by hospitals. Similar 
questions have also arisen in the course of our enforcement activities. 
Section 2718(e) of the PHS Act requires hospitals to make public each 
standard charge the hospital has established; however, a hospital may 
not have established certain types of standard charges defined by the 
regulation. For example, under our current regulations, a hospital that 
has not established any discounted cash prices for any item or service 
would not have any discounted cash prices to display in its MRF. 
Depending on the type of MRF format chosen by the hospital, the file 
may contain `blanks' without explanation. Although a hospital that 
chooses to leave the discounted cash price field blank under this 
scenario would be in compliance with our regulations, a user of the MRF 
could be unsure as to whether the hospital has not established such 
charges, or, instead, has not complied with the requirement to disclose 
them in the MRF. Although many hospitals include explanatory 
information on the web page associated with the MRF or within the MRF 
itself (for example, in a CSV format, inserting `N/A' in blank cells or 
adding an explanatory note), they currently do so on a voluntary basis.
    We believe that requiring the hospital to affirm the accuracy and 
completeness of its MRF would mitigate the potential for public 
confusion as to whether the MRF is accurate and complete because it 
clarifies to the public that blank cells left in some formats (such as 
CSV which can be opened in a human-readable format) are intentional. 
Such an affirmation would also streamline our enforcement efforts by 
removing the need to initiate a compliance action asking for the 
hospital to verify that their file is accurate and complete. We 
therefore propose to require that each hospital affirm directly in its 
MRF (using a CMS template, which we propose in more detail at XVIII.B.2 
of this proposed rule) that it has included all applicable standard 
charge information in its MRF as of the date in the MRF. We believe 
that requiring the hospital to add this affirmation directly in its MRF 
would make it clear to the public that the affirmation relates directly 
to that MRF, and would mitigate the potential for confusion if

[[Page 49849]]

we only required that the affirmation appear on a website that links to 
the hospital's MRF, especially if that website also links to other 
hospital MRFs.
    We therefore propose to add new paragraph (a)(3) at Sec.  180.50 to 
require that, in its MRF, each hospital add a statement affirming that, 
to the best of its knowledge and belief, the hospital has included all 
applicable standard charge information in its MRF, in accordance with 
the requirements of Sec.  180.50, and that the information displayed is 
true, accurate, and complete as of the date indicated in the file.
    We seek comment on this proposal.
3. Proposal To Improve the Standardization of Hospital Machine-Readable 
File (MRF) Formats and Data Elements
    In this section, we propose to revise several requirements at Sec.  
180.50(b) and (c). We also propose to adopt technical edits to other 
sections of the HPT regulations that are related to the revisions for 
alignment, conformity, and clarity.
a. Background
    In the CY 2020 HPT final rule, we expressed our concern that lack 
of uniformity in the way that hospitals display their standard charges 
leaves the public unable to meaningfully use, understand, and compare 
standard charge information across hospitals (84 FR 65556). We stated 
that we agreed with commenters that standardization in some form is 
important to ensure high utility for users of hospital standard charge 
information, and we finalized an initial set of rules for making public 
all standard charges in an MRF at Sec.  180.50. Section 180.50(a)(1) of 
our regulations states that a hospital must establish, update, and make 
public a list of all standard charges for all items and services online 
in the form and manner specified in that section, and Sec.  
180.50(a)(2) states that each hospital location operating under a 
single hospital license (or approval) that has a different set of 
standard charges than the other location(s) operating under the same 
hospital license (or approval) must separately make public the standard 
charges applicable to that location. If a hospital location operating 
under a single hospital license or approval shares the same set of 
standard charges as another hospital location operating under the same 
license or approval, then both hospital locations may post the same 
MRF. In other words, in the interest of burden reduction, hospital 
locations may share a file so long as the standard charges information 
displayed in the file are applicable to the indicated locations.
    Section 180.50(b) of our regulations describes the required data 
elements that must be included, as applicable, in the hospital's MRF, 
which are the following:
     Description of each item or service provided by the 
hospital.
     The corresponding gross charge that applies to each 
individual item or service when provided in, as applicable, the 
hospital inpatient setting and outpatient department setting.
     The corresponding payer-specific negotiated charge that 
applies to each item or service when provided in, as applicable, the 
hospital inpatient setting and outpatient department setting. Each 
payer-specific negotiated charge must be clearly associated with the 
name of the third party payer and plan.
     The corresponding de-identified minimum negotiated charge 
that applies to each item or service when provided in, as applicable, 
the hospital inpatient setting and outpatient department setting.
     The corresponding de-identified maximum negotiated charge 
that applies to each item or service when provided in, as applicable, 
the hospital inpatient setting and outpatient department setting.
     The corresponding discounted cash price that applies to 
each item or service when provided in, as applicable, the hospital 
inpatient setting and outpatient department setting.
     Any code used by the hospital for purposes of accounting 
or billing for the item or service, including, but not limited to, the 
CPT code, HCPCS code, DRG, NDC, or other common payer identifier.
    When we finalized this set of standardized data elements, we stated 
our belief that they would help ensure that the public could compare 
standard charges for similar or the same items and services provided by 
different hospitals. Commenters had provided many additional 
suggestions for how to standardize the standard charge information 
displayed by hospitals, but we declined at the time to be more 
prescriptive in our approach. Instead, we indicated that we might 
revisit the requirements in future rulemaking should we find it 
necessary to make improvements in the display and accessibility of 
hospital standard charge information.
    At Sec.  180.50(c), the regulation specifies that the required (but 
``as applicable'') data elements must be published in a single digital 
file that is in a machine-readable format. The term ``machine-readable 
format'' is defined at Sec.  180.20 to mean a digital representation of 
data or information in a file that can be imported or read into a 
computer system for further processing.
    Since we first implemented the regulation in January 2021, feedback 
in reports developed and made public by interested parties, 
particularly from IT specialists, researchers, employers, and others, 
indicates that more standardization of the files (including a specified 
template and standardization of additional contextual data elements) 
may be necessary to improve the public's use and understanding of, and 
ability to make comparisons among, hospital standard charge 
information.613 614 615 616 617 In particular, IT 
specialists have indicated that the current flexibilities and lack of 
encoding specifications hinder the machine-readability of the data in 
the files, presenting a barrier to the intended use of the data. 
Additionally, hospitals have asked us for more specificity on how they 
should publicly display their standard charge information, with an 
emphasis on how they should explain and display their payer-specific 
negotiated charges. Some hospitals have suggested that a template 
developed by CMS could be useful to improve hospital compliance and 
reduce hospital burden. Further, the flexibilities that the current 
regulation permit insofar as the format of hospital standard charges 
information, and the very limited set of data elements required to be 
displayed under Sec.  180.50, have presented an enforcement challenge. 
For example, because hospitals are permitted to display their 
information using a wide variety of file formats and data encoding 
practices, we must manually, via time and resource-intensive processes, 
review the information in the files to assess whether the information 
is consistent with the data element requirements at Sec.  180.50(b). 
Some hospitals rename data elements, include additional data elements, 
or exclude, without explanation, data elements that are not applicable, 
which can make it difficult

[[Page 49850]]

to assess whether the information contained in the file is accurate and 
complete. This, in turn, slows compliance reviews and often requires us 
to engage in one-on-one discussions with hospitals. We therefore came 
to believe that requiring more specificity in formatting and encoding 
the MRFs, as well as increasing the number of required corresponding 
data elements hospitals must provide, would not only create 
efficiencies for public users of the MRFs and our efforts to enforce 
the requirements, but also improve the meaningfulness of the hospital's 
standard charges.
---------------------------------------------------------------------------

    \613\ https://www.healthsystemtracker.org/brief/ongoing-challenges-with-hospital-price-transparency/.
    \614\ https://energycommerce.house.gov/events/improving-drug-pricing-transparency-and-lowering-prices-for-american-consumers.
    \615\ https://familiesusa.org/wp-content/uploads/2023/04/Power-of-Price-Transparency-final-4.19.23.pdf.
    \616\ https://blog.turquoise.health/hospital-compliance-assessments/.
    \617\ https://static1.squarespace.com/static/60065b8fc8cd610112ab89a7/t/60de0380cc0972060d0354eb/1625162631437/PRA+OPPS+Recommendations+June+2021%5B3%5D.pdf.
---------------------------------------------------------------------------

    As a result, in the CY 2022 OPPS/ASC proposed rule (86 FR 42321), 
we sought comment on improving standardization of the data disclosed by 
hospitals in the MRF. In response, many commenters urged CMS to create 
a standard template for hospitals to use for posting their MRF, noting 
that such standardization could ease operational burdens, improve the 
public's (including employers and researchers) ability to make price 
comparisons across hospitals, and better enable third party data 
aggregation services to develop user-friendly consumer tools for 
displaying this information. Some commenters recommended that CMS work 
with providers and vendors to better understand the benefits of a 
standard template. Some hospitals also urged CMS to be more 
prescriptive, requesting that CMS standardize the MRF format and 
contents and provide additional clarification on how hospitals should 
indicate that they have not established all five types of standard 
charges for a particular listed item or service.
    We requested the HHS Health Federally Funded Research and 
Development Center (FFRDC) \618\ to more fully explore the feasibility 
of these commenters' recommendations, and to identify technical 
specifications and categories of information (referred to as ``data 
elements'') that we could consider proposing in future rulemaking to 
improve the usability and meaningfulness of the standard charges 
display. The Health FFRDC convened a technical expert panel (TEP) and 
used the TEP members' advice to make informed recommendations to CMS in 
the summer of 2022.\619\ The TEP was comprised of both MRF developers, 
specifically, hospitals (representatives of large and small acute and 
specialty care hospitals), and primary users of MRF data, specifically, 
researchers and information technology innovators. The TEP members 
discussed the challenges and complexities of displaying, in a 
meaningful way, all hospital standard charges in an MRF. The TEP 
members noted that increasing standardization of the MRF and the 
required data elements may improve the public's ability to make price 
comparisons across hospitals. TEP members indicated their belief that 
public display of hospital standard charge information is an important 
step toward transparency in prices for hospital items and services, but 
cautioned that hospitals use different methods to establish standard 
charges for items and services, resulting in charge/item and charge/
service combinations that are often unique to that hospital. Therefore, 
some direct comparisons of hospital standard charges may continue to be 
a challenge if such comparisons are made under the assumption that 
hospitals always use the same methods to establish their standard 
charges and that the same charge/item and charge/service combinations 
are consistent across hospitals. As such, attempting to use hospital 
standard charges in isolation, without additional contextual 
information, can result in erroneous conclusions and comparisons. The 
members went on to discuss the potential benefits to both hospitals and 
the public if CMS required hospitals to display standard charge 
information that better described or contextualized their standard 
charges, including standard charge information related to complex 
contracting arrangements between hospitals and third party payers. The 
TEP also weighed the benefits with the potential burden hospitals would 
incur to display those new data elements and encode data in a more 
specified way.
---------------------------------------------------------------------------

    \618\ MITRE operates HHS' Health FFRDC, a federally funded 
research and development center. For more information, see: https://www.mitre.org/our-impact/rd-centers/health-ffrdc.
    \619\ MITRE, Hospital Price Transparency Machine-Readable File 
Technical Expert Panel Report and MITRE Recommendations to the 
Centers for Medicare & Medicaid Services, November, 2022. https://mitre.box.com/v/MITRE-MRF-TEP.
---------------------------------------------------------------------------

    First, the TEP members discussed what general machine-readable 
format(s) would be best suited to display hospital standard charges. 
The TEP members indicated that use of non-proprietary formats would be 
ideal because they are widely and freely available to both the 
developers (the hospitals) and users (for example, IT developers and 
researchers) of the MRFs. The TEP members then considered different 
types of non-proprietary formats. They first considered whether a 
single non-proprietary format, such as JSON, should be recommended 
because of its ability to represent hierarchical relationships better 
than tabular non-proprietary formats, such as CSV. Whereas JSON's use 
of a hierarchical format could be beneficial because it would eliminate 
the need to leave data fields, sometimes numerous, blank if the 
hospital has no applicable corresponding information. However, TEP 
members noted that existing hospital systems often produce files in 
CSV, and that smaller, less-resourced, hospitals often lack the in-
house capacity to develop and manage a JSON file. The TEP members 
therefore suggested that hospitals have a choice of JSON and CSV 
formats. The TEP members also discussed the specific technical layout 
of a CSV file, including a:
     ``tall'' format, with separate payer and plan data 
elements that provide the benefit of static header naming with less 
opportunity for standardization error and that is similar to existing 
output files that many hospitals are using to build their MRFs; and
     ``wide'' format, with variable payer-specific negotiated 
charge data elements that incorporate the payer and plan name into a 
single column header; this may reduce the file size because many data 
elements would not need to be repeated as frequently.
    Ultimately, MITRE, as informed by TEP members, recommended to CMS 
that CMS provide hospitals with an option to use one of three layouts 
representing two types of machine-readable formats for displaying their 
standard charge information in an MRFs: (1) JSON schema (plain format), 
(2) CSV (``tall'' format), or (3) CSV (``wide'' format). TEP members 
indicated that this choice would balance the need for greater 
standardization for automated machine use of the files, while providing 
a hospital some flexibility to select the least burdensome format and 
layout to incorporate into its current MRF development process.
    The TEP also discussed the data elements, or categories of standard 
charge information, that they believed should be included in the MRF, 
with a goal of improving the public's understanding and use of hospital 
standard charges. These discussions focused on the challenges of 
displaying payer-specific negotiated charges, given the variety of ways 
that hospitals establish this type of standard charge, and data 
elements that would be necessary to help the public understand them. 
TEP members discussed several types of commercial contracting 
methodologies commonly used by hospitals to establish their payer-
specific negotiated charges, including:

[[Page 49851]]

fee schedule, case rate, per diem, percentage of total billed (or 
gross) charges, and others. Ultimately, the TEP agreed on the following 
data elements to improve the meaningfulness and facilitate automated 
aggregation of hospital standard charges: (1) general information such 
as file version and date of most recent update of the file; (2) 
hospital-specific information (such as hospital name and location, 
license number, financial aid policy); (3) data elements corresponding 
to the types of standard charges defined by the HPT regulation (that 
is, the gross charge, payer-specific negotiated charges by payer and 
plan, discounted cash price, and minimum and maximum de-identified 
negotiated rates) and, for payer-specific negotiated charges, the type 
of contracting methodology and whether the payer-specific negotiated 
charge established by the hospital is being expressed as a dollar 
amount versus an algorithm or percentage; and (4) data elements that 
enhance understanding of the item or service to which the standard 
charge applies, such as a general description of the item/service, 
billing class (for example, whether the standard charge is billed as a 
facility or professional service), the hospital setting in which the 
item or service is provided (for example, in the inpatient or 
outpatient setting), drug-specific information such as the drug unit 
and type of measurement (such as number of milligrams), and information 
related to corresponding codes (such as common billing codes, revenue 
center codes, modifiers). TEP participants also suggested including an 
open field that a hospital could use, as needed, to provide additional 
contextual information should it believe the template's data elements 
are insufficient to ensure a user's understanding of a standard charge 
displayed in the file.
    The TEP members discussed a number of other data elements,\620\ but 
concluded that the burden on hospitals to gather and display such 
information would outweigh their benefit to users, or that it would be 
infeasible to include such information in an MRF. As such, MITRE did 
not recommend that CMS adopt them.
---------------------------------------------------------------------------

    \620\ Those data elements included: `Billing Code Version' which 
would be the version of a code set used by providers and payers; 
`Unit of Measurement' which would be used for items and services 
other than drugs; `Place of Service Code' used by Medicare to 
indicate where in a hospital a service would be provided; `Insurance 
Plan ID' such as a Health Insurance Oversight System (HIOS) 
identifier \620\ or employer identification number (EIN) of the 
payer; `Contract Expiration Date' to indicate how long a contract 
would be in place; `Bundled Codes' which would indicate all 
individualized items and services that comprised a payer-specific 
negotiated rate or discounted cash price; `Covered Services' which 
would indicate all the codes for services covered under a capitation 
arrangement; and a `Payment Learning & Action Network' field which 
would indicate whether the hospital's commercial contract met 
criteria for different types of value-based arrangements as defined 
by the Learning & Action Network's Alternative Payment Model 
Framework (https://innovation.cms.gov/innovation-models/health-care-payment-learning-and-action-network).
---------------------------------------------------------------------------

    MITRE presented its findings and recommendations to CMS in the fall 
of 2022. After considering them, we announced in November of 2022 the 
availability of several `sample formats,' that may be found on the HPT 
website,\621\ that hospitals could voluntarily use to make public their 
standard charge information in an MRF. At the same time, we developed 
and made available a supplemental data dictionary that provides 
technical instructions to hospitals on how to conform to the sample 
formats and encode standard charge information. The sample formats and 
data dictionary can be found on the HPT website: https://www.cms.gov/hospital-price-transparency/resources. We encourage commenters to 
review the sample templates and data dictionary to inform their 
comments on these proposals.
---------------------------------------------------------------------------

    \621\ https://www.cms.gov/hospital-price-transparency/resources.
---------------------------------------------------------------------------

b. Proposals To Require Hospitals To Encode All Data Items for 
Additional Data Elements in Their MRF
(1) Proposal To Encode, as Applicable, All Data Items in the MRF
    Currently, the introductory text at Sec.  180.50(b) states that a 
hospital must include all of the data elements (as specified in the 
paragraph) in its list of standard charges, ``as applicable''. We 
propose to revise the introductory text for clarity to indicate that 
each hospital must encode, as applicable, all standard charge 
information corresponding to each required data element in its MRF.
    This proposed revision would differentiate the standard charge 
information, or data values, that must be encoded in the MRF from the 
``data elements,'' or categories of data as the basis for the CMS 
template. The term ``data element'' is currently used at Sec.  
180.50(b) in both ways, which, at the time we implemented the 
regulations, seemed appropriate because of the wide latitude of 
flexibility we were giving hospitals to display their standard charges. 
However, now that we propose to require hospitals to display complete 
standard charge information for an expanded set of data elements and to 
be much more prescriptive in how such data is encoded, we believe that 
adopting more precise terminology will make the display requirements 
easier to understand.
    We believe that this proposed revision is necessary in light of our 
other proposals to be more prescriptive in the form and manner in which 
hospitals display their standard charge information, and would clarify 
that the term ``data element'' refers to a required category of data 
items encoded in the MRF, and not the standard charge information 
itself.
    Under our proposal, the term ``as applicable'' would no longer 
refer to data elements (which, if finalized as proposed, would all be 
required) and instead would qualify the standard charge information 
that the hospital encodes in the MRF. Hospitals would thus be required 
to encode its MRF with all applicable standard charge information that 
corresponds to each of the required data elements. We note that the 
phrase ``as applicable'' does not mean that encoding standard charge 
information that corresponds to a required data element is 
``optional.'' Rather, if a hospital has established standard charge 
information for a required data element at proposed new Sec.  
180.50(b)(1) through (4), the hospital would be required to display 
that information accurately and completely, in its MRF.
(2) Proposal To Revise and Expand the Required Data Elements
    At new Sec.  180.50(b)(1) through (4), we propose to revise and 
expand the required data elements which describe the categories of 
information the hospital must encode in its MRF. We propose to include 
most of the data elements suggested by the TEP and recommended by MITRE 
in its report to CMS \622\ and note that many of the proposed data 
elements are incorporated in the CMS `sample formats' currently 
available for voluntary use by hospitals on CMS's HPT website.\623\
---------------------------------------------------------------------------

    \622\ MITRE, Hospital Price Transparency Machine-Readable File 
Technical Expert Panel Report and MITRE Recommendations to the 
Centers for Medicare & Medicaid Services, November, 2022. https://mitre.box.com/v/MITRE-MRF-TEP.
    \623\ https://www.cms.gov/hospital-price-transparency/resources.
---------------------------------------------------------------------------

    We propose to require hospitals to encode all applicable standard 
charge information for an expanded set of data elements in its MRF, 
which we believe would improve the public's ability to better 
understand and therefore more meaningfully use hospital standard 
charges. We believe that this expanded set of data elements will make 
hospital standard charges more understandable and comparable across 
hospitals. We

[[Page 49852]]

decided to make these proposals after considering: the feedback 
discussed above; our experience with enforcing the current HPT 
requirements; the FFRDC recommendations as informed by their TEP; and 
our evolving understanding of how hospitals establish payer-specific 
negotiated charges with third party payers.
    We agree with the feedback we have received from various interested 
parties, the recommendations of the FFRDC, and publicly available 
reports that the machine-readable data needs to be contextualized and 
more precisely encoded to improve the public's ability to understand 
and use hospital standard charges. We believe that this could largely 
be accomplished by requiring hospitals to conform to a CMS template 
layout and encode all applicable standard charge information in a 
consistent form and manner specified by CMS.
(a) Proposed General Data Elements
    Proposed new Sec.  180.50(b)(1) would require a hospital to encode 
standard charge information for each of the following ``general'' data 
elements:
     Hospital name(s), license number, and location name(s) and 
address(es) under the single hospital license to which the list of 
standard charges apply.
    Under this proposal, a hospital would be required to include the 
location to which its list of standard charges applies within the MRF 
itself, instead of simply on its website, as is currently required at 
45 CFR 180.50(d). We believe this change is necessary because we have 
found that a single public website may host the files of several 
hospitals and identify each hospital location in text on the web page. 
Because the hospital location is currently not listed on the file 
itself, the hospital information sometimes becomes disassociated from 
the file as it is further processed, making it difficult for end users 
of the data to connect standard charge information to a particular 
hospital, hospital location, or address. This is a result we did not 
intend when we finalized the initial display requirements. We believe 
that requiring hospitals to encode standard charge information for 
these data elements directly in the MRF will permit the public, 
including end users creating various aggregation tools, to connect the 
standard charge information in the file to a particular hospital's site 
of care as they seek to make the information more actionable. 
Additionally, the current requirement at Sec.  180.50(a)(2) indicates 
that each hospital location operating under a single hospital license 
(or approval) that has a different set of standard charges than the 
other location(s) operating under the same hospital license (or 
approval) must separately make public the standard charges applicable 
to that location. However, there is no current requirement for a 
hospital to indicate under what license the hospital is operating, 
making enforcement of this requirement challenging. By including the 
license number of the hospital in the file, CMS would better be able to 
validate and ensure that hospitals are complying with the requirements 
because CMS would be able to directly connect the hospital name, 
license and MRF.
     The file version and date of the most recent update to the 
standard charge information in the MRF. First, we propose that 
hospitals indicate in their MRF the file version that corresponds to 
the CMS template that the hospital is using to display the standard 
charge information. File version information is necessary to provide 
certainty to users of the file (including CMS for purposes of 
automating review of MRFs) that they have coded to the correct format 
for processing the data. Second, we note that hospitals are currently 
required at Sec.  180.50(e) to update, at least once annually, the 
standard charge information in the MRF and to clearly indicate the date 
that the standard charge information was most recently updated. 
Hospitals also currently have the flexibility to indicate the updated 
date in the file itself or otherwise in a manner that is clearly 
associated with the file. That flexibility would be eliminated with 
this proposal because we would require the date of last update to be 
indicated in the file itself. We therefore propose to make a necessary 
corresponding revision to Sec.  180.50(e) to remove the sentence `The 
hospital must clearly indicate the date that the standard charge data 
was most recently updated, either within the file itself or otherwise 
clearly associated with the file.' Requiring a hospital to include the 
date of the last update in the file itself is necessary for a machine 
to be able to automatically validate that the standard charge 
information in the file has been updated by the hospital at least once 
annually, as is required under section 2718(e) of the PHS Act and 45 
CFR 180.50(e). Moreover, by placing the date of most recent update 
within the MRF, file users would be assured that the file they are 
using is the most recently available. Nothing in this proposal would 
prohibit a hospital from continuing to also indicate the date of the 
last update on its website in addition to indicating the date of the 
last update within its MRF.
(b) Proposals for Data Elements Related to Types of Standard Charges
    First, at proposed new Sec.  180.50(b)(2), we would consolidate 
into a single data element the standard charges (that is, the gross 
charge, payer-specific negotiated charge, de-identified minimum and 
maximum negotiated charge, and discounted cash price) that are 
currently listed as required data elements at Sec.  180.50(b)(2) 
through (6). We note that this revision would remove the phrase ``that 
applies to each individual item or service when provided in, as 
applicable, the hospital inpatient setting and outpatient department 
setting'' from each of the individually referenced type of standard 
charge at Sec.  180.50(b)(2) through (6). This concept, however, would 
be retained and incorporated (as addressed in more detail below) as a 
separate data element (``setting'') and used to contextualize hospital 
items and services at new Sec.  180.50(b)(3).
    Second, we would continue to require that the payer-specific 
negotiated charges be displayed by name of the third party payer and 
plan(s), each indicated as a separate data element (for example, 
``payer name'' and ``plan name''). However--and as a result of our 
acquiring a better understanding of hospital and commercial payer 
contracting, we propose that hospitals may indicate plan(s) as 
categories (such as ``all PPO plans'') when the established payer-
specific negotiated charges are applicable to each plan in the 
indicated category. We believe this modification is necessary because 
we have learned that many hospital contracts are designed to negotiate 
the same rates across a grouping of payer plans, and not always on a 
plan-by-plan basis. For example, some hospitals have contracts 
stipulating that the payer-specific negotiated charges they establish 
with third party payers are for ``all plans'' offered by the third 
party payer, without specifying plan names. Similarly, a hospital's 
contract with a payer may set forth the payer-specific negotiated 
charges for ``all PPO plans'' or ``all managed care plans'' without 
listing specific plan names. As a result, hospitals would be required 
to indicate payer-specific negotiated charges that apply to ``Payer A'' 
for ``all PPO plans'', for example, rather than having to research and 
insert repetitious standard charge information for each named PPO plan 
offered by Payer A. We believe this modification is necessary to ensure 
hospitals are not penalized for displaying information that is 
consistent

[[Page 49853]]

with their contracting practices. Moreover, this practice could improve 
accessibility of the MRF by avoiding repetition of standard charge 
information that would unnecessarily increase file size. Additionally, 
because we propose to require hospitals to encode standard charge 
information in an MRF that conforms to a CMS template layout, the use 
of such template would ensure that the payer-specific negotiated 
charges remain `clearly associated' with the name of each payer and 
plan. Accordingly, we propose to remove the phrase ``clearly 
associated'' from the regulatory text as a separate and distinct 
requirement in relationship to the data elements. Finally, we are aware 
of interested parties' recommendations that the payer and plan be 
indicated in the MRF using some uniform, nationally applicable set of 
abbreviations. To the extent that a uniform nationally applicable set 
of abbreviations is available, we seek comment on a publicly available 
data source(s) that we may consider as we develop the technical 
instructions.
    Third, we propose to require that hospitals indicate the 
contracting method they used to establish the payer-specific negotiated 
charge. TEP members indicated that including the contracting method 
within the MRF would bring necessary context to the payer-specific 
negotiated charges established by the hospital. For example, a hospital 
may have established a payer-specific negotiated charge as a `base 
rate' for a service package.\624\ Without knowing that, a file user 
might assume that the listed payer-specific negotiated charge included 
every charge applicable to the provision of the item or service when, 
in fact, a `base rate' charge likely would include non-standard 
adjustments and other added charges. Additionally, including this data 
element would align with the data element in the TIC template. We seek 
comment on contracting types that we should consider as allowed values 
in the CMS template, should this data element be finalized.
---------------------------------------------------------------------------

    \624\ For additional discussion, please see the CY 2020 HPT 
final rule, 84 FR 65534.
---------------------------------------------------------------------------

    Fourth, we propose to require that hospitals indicate whether the 
payer-specific standard charge listed should be interpreted by the user 
as a dollar amount, percentage, or, if the standard charge is based on 
an algorithm, the algorithm that determines the dollar amount for the 
item or service. Specifying whether the number indicated as the 
standard charge should be interpreted as a dollar figure or percentage 
would ensure that the data is machine-readable and would minimize 
confusion about the value inserted into a particular standard charge 
column. Knowledge of the algorithm for a standard charge that can only 
be expressed as an algorithm is necessary for consumer-friendly tools 
to estimate in dollars an individual's payer-specific negotiated 
charge. Similar to the existing technical instructions for the sample 
templates, CMS will provide technical instructions for hospitals to 
display standard charges expressed in dollars, percentages, and 
algorithms in order to ensure consistency and machine-readability.
    Fifth, we propose a consumer-friendly data element called the 
`expected allowed amount' that we would require a hospital to display 
in situations where the payer-specific negotiated charge cannot be 
expressed as a dollar figure. As finalized in the CY 2020 HPT final 
rule, the definition of a standard charge is the `regular rate' 
established by the hospital for items and services provided to a 
`specific group of paying patients.' In other words, the standard 
charge displayed in the MRF represents the exact rate that applies to 
all individuals in the group, for example, all individuals covered by a 
particular payer and plan. This amount is generally considered to be 
analogous to the `allowed amount' that is established in the contract 
the hospital has with the third party payer, and that appears on a 
patient's explanation of benefits. This is the maximum payment the plan 
will pay for a covered health care service, and may also be called 
``eligible expense,'' ``payment allowance,'' or ``negotiated rate.'' 
\625\ A portion of this allowed amount is reimbursed to the hospital by 
the third party payer while the hospital bills the consumer for the 
remainder which is described as the `out-of-pocket' amount. As we 
explained in the CY 2020 HPT final rule, knowledge of the rate the 
insurer has negotiated with the hospital on the consumer's behalf is 
essential for helping consumers determine their out-of-pocket cost 
estimates in advance. However, while essential, the standard charge 
information is not sufficient because the individual must obtain 
additional information from his or her third party payer related to the 
circumstances of their particular insurance plan (for example, what 
portion of the payer-specific negotiated charges would be paid by the 
plan and other plan dependencies such as the patient's co-insurance 
obligations or where the patient has not satisfied their deductible for 
the year).
---------------------------------------------------------------------------

    \625\ https://www.cms.gov/files/document/nosurpriseactfactsheet-health-insurance-terms-you-should-know508c.pdf.
---------------------------------------------------------------------------

    Since implementation of the HPT regulation, hospitals have become 
more transparent about how they establish their payer-specific 
negotiated charges. Based on our experience in enforcing the 
requirements of the regulation, we have learned that most commercial 
contracting methods result in a hospital's ability to identify and 
display as a dollar figure the payer-specific negotiated charges they 
have established with third party payers. For example, a negotiated 
rate is established as a dollar amount for an item or service or 
service package (that is, the `base rate'), or is established as a 
percent discount off the gross charge for each item or service 
provided, or as a percentage of the Medicare rate which can be 
translated and displayed by the hospital as a standard dollar amount.
    At other times, however, hospitals and payers establish the payer-
specific negotiated charge by agreeing to an algorithm that will 
determine the dollar value of the allowed amount on a case-by-case 
basis after a pre-defined service package has been provided. This means 
that the standard charge that applies to the group of patients in a 
particular payer's plan can only prospectively be expressed as an 
algorithm, because the resulting allowed amount in dollars will be 
individualized on a case-by-case basis for a pre-defined service 
package, and thus cannot be known in advance or displayed as a rate 
that applies to each member of the group.
    For example: Patients X and Y are under the same payer's plan. They 
both go to a hospital for the same procedure which is identified by the 
payer after analyzing the claim as having the same DRG code. The gross 
charges (that is, the charges billed on the claim to the payer) for 
each itemized item and service provided by the hospital for Patient X's 
procedure total $1,500, while Patient Y's gross charges for each 
itemized item and service provided by the hospital total $2,000. The 
hospital and payer have negotiated a payer-specific negotiated charge 
that is calculated as an amount equal to 50 percent off the total gross 
(or billed) charges for the procedure identified by the DRG code. The 
resulting charge (in dollars) for Patient X would be $750 while 
resulting charge (in dollars) for Patient Y would be $1,000. In this 
example, the payer-specific negotiated charge (as an algorithm) is the 
same for each patient in the payer's plan for the procedure, but it is 
possible that each patient covered under this payer's plan would have a 
different resulting charge, in dollars, for the same procedure. In 
other

[[Page 49854]]

words, in this example, there is no single dollar amount that would be 
appropriate for the hospital to post in its MRF as the payer-specific 
negotiated charge. Instead, the only payer-specific negotiated charge 
that applies to the group is the algorithm used to calculate the 
individualized dollar amount (in this example, the algorithm would be 
``50 percent of the total gross charges'' that are billed on the claim 
for the procedure).
    The reality of commercial healthcare contracting practices 
highlights a tension that sometimes exists between a hospital's 
establishment of a `standard charge' that applies to a group of paying 
patients and the desire for individuals within the group to know and 
understand the specific cost of their care in dollars for specific 
hospital items or services. Currently, this tension is largely 
mitigated by price estimator tools that typically display `estimated' 
dollar amounts that are based on past claims and, when available, 
knowledge of the contracting arrangements to predict, often with very 
high accuracy,\626\ the most likely or expected allowed amount that 
will apply to an individual. When combined with the individual's 
insurance information, the individual's out-of-pocket can be determined 
and displayed. Therefore, as an alternative to leaving a `blank' or `N/
A' in the MRF when no standard dollar amount is available, we allow 
hospitals to make public the standard algorithm that applies to the 
group. The publication of the algorithm makes it possible for a user of 
the file (such as a price estimator tool developer) to use that 
algorithm in conjunction with educated assumptions about the items or 
services likely to be utilized by a given patient for a given 
procedure, along with their corresponding gross charges, to estimate an 
allowed amount in dollars for the individual. This amount can be 
further personalized by including insurance information (such as the 
copay, co-insurance, or deductible) to determine the individual's 
estimated out-of-pocket dollar amount.
---------------------------------------------------------------------------

    \626\ Stults, et al. Assessment of Accuracy and Usability of a 
Fee Estimator for Ambulatory Care in an Integrated Health Care 
Delivery Network. JAMA Network Open. 2019;2(12):e1917445.
---------------------------------------------------------------------------

    While we continue to support efforts via other methods, such as 
price estimator tools, for providing consumer-friendly and personalized 
out-of-pocket information, we have heard from interested parties that, 
when a hospital has negotiated a standard charge that can only be 
expressed as an algorithm, some estimate displayed in dollars within 
the MRF may be useful, particularly for making comparisons across 
hospitals. For example, an estimate displayed in dollars would permit 
users to make price comparisons across hospitals when, with respect to 
the same procedure and payer/plan, one hospital has established a 
payer-specific negotiated charge as an algorithm and a second as a 
dollar amount. We therefore considered whether and what data element 
could be required in the MRF to provide additional needed context for a 
payer-specific negotiated charge that is expressed as an algorithm.
    We propose that when a hospital has established a payer-specific 
negotiated charge that can only be expressed as a percentage or 
algorithm, it must display alongside that percentage or algorithm a 
consumer-friendly `expected allowed amount' in dollars for that payer/
plan for that particular item or service. The `expected allowed amount' 
would be the amount, on average, that the hospital estimates it will be 
paid for the item or service based on the contract with the third party 
payer. It is our understanding that hospitals often have such 
information already calculated and available as part of their revenue 
cycle management systems to provide a back-end check on their 
reimbursement from the third party payer, so we do not expect that the 
inclusion of such data in the MRF would represent a large burden. The 
`consumer-friendly expected allowed amount' is likely to represent 
reimbursement for an average patient, rather than an exact amount, 
since, for a payer-specific negotiated charge based on an algorithm, 
the amount in dollars is known with certainty only after the patient 
has been discharged. As such, it is an estimate of the average amount 
that the hospital expects to receive for the item or service for all 
group members but not the final exact amount in dollars that would be 
actually apply to each group member. Even so, we believe this 
information would provide context to the public that is necessary to 
compare payer-specific negotiated charges across hospitals and a 
valuable benchmark against which price estimator tools can use to 
develop and estimate an individual's personalized out-of-pocket costs. 
We propose to add this consumer-friendly `expected allowed amount' to 
the list of required data elements at Sec.  180.50(b)(2).
(c) Proposals for Data Elements Related to Hospital Items and Services
    At new Sec.  180.50(b)(3), we propose that hospitals be required to 
provide standard charge information for additional data elements. These 
data would describe hospital items and services that correspond to the 
standard charges established by the hospital as follows:
     Recasting as a separate data element, but otherwise 
without change, the presently required description of the item or 
service and whether the standard charge is for an item or service 
provided in connection with an inpatient admission or an outpatient 
department visit.
     If a standard charge has been established for a drug, we 
propose that the hospital would be required to indicate the drug unit 
and type of measurement as separate data elements. We have seen 
hospital MRFs in which the drug unit and type of measurement are either 
not specified or are included in the same field as the description of 
the item or service. In the first case, when the drug unit and type of 
measurement is not specified, the user of the file has no basis for 
understanding the standard charge that the hospital has established. In 
other words, the description is not sufficient for the user to 
understand what quantity of the item or service the user would receive 
at the indicated standard charge amount. In the second case, when the 
drug unit and type of measurement are included in the same field as the 
description of the drug, the information is not easily machine-readable 
because computers are unable to parse the description if expressed as a 
`string' of characters that are unique and undefined. Under this 
proposal, if the hospital has established a standard charge for a drug, 
the hospital would be required to encode the file with a description of 
the drug, including the applicable drug unit and type of measurement as 
a separate and distinct data element from the description. For example, 
if a hospital establishes a gross charge of $2 for an item or service 
it describes as `aspirin 81mg chewable tablet--each', the hospital 
would be required to input data for each of the required separate data 
elements, which would look something like this in the MRF, based on the 
current technical specifications in the data dictionary that 
accompanies the currently available sample templates: gross charge: 2; 
description: aspirin 81mg chewable tablet; unit of measurement: 1; type 
of measurement: UN.\627\ This indicates to the public that the standard 
charge established by the hospital for this item or service is $2.00 
for a single tablet of

[[Page 49855]]

a drug described as `aspirin 81mg chewable tablet.'
---------------------------------------------------------------------------

    \627\ Where ``UN'' in the sample format data dictionary (found 
here: https://www.cms.gov/hospital-price-transparency/resources) 
stands for ``unit'' which, in this example, comes in the form of a 
tablet.
---------------------------------------------------------------------------

    We are aware that hospitals may at times establish standard charges 
for units of items and services other than drugs. While we would 
encourage hospitals to be transparent about such information in the 
MRF, we only propose to add data elements for the unit and type of 
measurement of drugs because the codes (such as HCPCS codes) for non-
pharmaceutical items and services typically include instructions or 
additional descriptions that clarify the unit and type of measurement 
for the indicated item or service, but the codes (typically National 
Drug Codes (NDC)) used for pharmaceutical agents do not, and we do not 
believe it is necessary to burden the hospital with a requirement to 
publicly disclose information that is already available to the users of 
the file. Additionally, the TEP members discussed this issue and 
concluded that drugs are a unique class of items and service when it 
comes to a user's ability to clearly understand how hospitals are 
representing their standard charges. TEP members speculated that such 
challenges may arise because hospitals establish and display their 
standard charges for drugs using different methodologies. For example, 
it is often unclear in the hospital's MRF whether the payer-specific 
negotiated charge for a drug is based on the billing unit for the NDC 
associated with the drug or the billing unit associated with the drug's 
HCPCS code.
    Based on our own experience in reviewing MRFs, we agree with the 
TEP members that more prescriptive requirements are necessary when it 
comes to display of standard charges for drugs and believe that 
requiring the drug unit and type of measurement as separate data 
elements would facilitate machine-readability and ensure clarity for 
the users of these files. We also agree with the TEP members that this 
proposal may introduce a burden on some hospitals that are already 
including such information in the description but would have to 
separate it for display in the CMS template. Because of this potential 
burden, we considered an alternative approach by which we would require 
the drug unit and type of measurement to be included in the description 
or encoded as separate data elements. This alternative would ensure 
availability of the data to users of the MRF, albeit in a way that 
would not be optimized for machine-readability. However, in this case 
we believe the burden on hospitals is outweighed by the need for 
improvements in data machine-readability, and therefore propose to 
require hospitals to report this information as separate data elements. 
We note that nothing would preclude the hospital from also including 
the information in its description of the drug. We seek comment on this 
proposal and the alternative we considered but are not proposing.
(d) Proposals for Data Elements Related to Item or Service Billing
    At new Sec.  180.50(b)(2)(iv), we propose to specify data elements 
related to item or service billing. We believe data elements related to 
item or service billing are necessary because the standard charges that 
a hospital establishes are often dependent on the way an item or 
service is billed. As such, including billing information may improve 
the public's understanding of the standard charge that has been 
established for the item or service. In specifying these data elements, 
we would retain, without modification, the current requirement that the 
MRF include any code used by the hospital for purposes of accounting or 
billing for the item or service (the example of such codes would be 
removed from the reg text as unnecessary). We propose to add a 
requirement that the hospital specify any relevant modifier(s) needed 
to describe the established standard charge, and the code type(s) (for 
example, whether the code is based on HCPCS, CPT, APC, DRG, NDC, 
revenue center, or other type of code). As discussed by the TEP 
members, there are instances where a hospital has established different 
standard charges for the same item or service description, depending on 
additional factors such as modifiers or revenue centers that are not 
included in the file. As such, TEP members agreed that some distinction 
to ensure meaningfulness of the standard charge would be helpful to 
users of the file and impose minimal hospital burden. Based on our 
experience in reviewing MRFs, we have also seen such instances and 
believe that requirements to include applicable codes that include 
modifiers and revenue center codes would help make necessary 
distinctions when multiple standard charges have been established for 
the same items or services. Separating the code itself (for example, 
the numbers of the code) from the code type (for example, ``HCPCS'') 
would directly improve machine-readability.
(e) Summary of Proposed Required Data Elements
    In summary, we believe these proposed modifications to Sec.  
180.50(b) are necessary to improve hospitals' ability to display their 
standard charges in a more specific, clear, and standardized way. We 
believe the proposals would increase the meaningfulness of the standard 
charge information and heighten the public's ability to understand and 
more efficiently aggregate and use the data. Further, as described 
above, we believe these proposals would improve and streamline CMS's 
ability to enforce the HPT requirements.
    Table 84 summarizes and compares the existing sample format data 
elements with the proposed data elements.
BILLING CODE 4120-01-P

[[Page 49856]]

[GRAPHIC] [TIFF OMITTED] TP31JY23.126

BILLING CODE 4120-01-C
    We seek comment on these proposed revisions to Sec.  180.50(b). 
Specifically, we seek comment on whether we should consider additional 
data elements to ensure the public's understanding and ability to 
meaningful use the standard charge information as displayed in hospital 
MRFs. In particular, we seek comment from hospitals related to display 
of payer-specific negotiated charges and solicit specific examples of 
complex contracting methodologies so that we can provide specific 
recommendations and technical instructions on display of standard 
charges resulting from such methodologies in the CMS template.
c. Proposals To Specify Formatting Requirements for Display of Standard 
Charge Information Using a CMS Template
    In this section, we propose to require each hospital to conform to 
the CMS template layout, data specifications, data dictionary, and to 
meet any other specifications related to the encoding of the hospital's 
standard charge information in its MRF. We are making these proposals 
in order to improve automated aggregation of the standard charge 
information in the hospital's MRFs. Additionally, we believe these 
proposals will streamline our enforcement capabilities.
    While most hospitals are ensuring that the data they display 
appears in a machine-readable format (such as JSON

[[Page 49857]]

or CSV), as required under the current regulation, many are not taking 
as much care to display the data that encodes the file in a way that 
improves machine-readability that facilitates automated aggregation of 
standard charge information. Even when individual hospitals make an 
effort to optimize the machine-readability of the data they include in 
the MRF, the lack of standardization in the MRF format data encoding 
limits the ability of users to aggregate MRF data in an automated way. 
This is because the format of the data encoded in the MRF is unknown to 
the user and therefore cannot be coded by them for further processing. 
This lack of standardization in format presents a barrier to intended 
use of the MRFs as expressed in the CY 2020 HPT final rule--that is, 
for enhancing the public's ability to use the data in, for example, 
consumer price estimator tools and in EHRs at the point of care for 
value-based referrals, or to aggregate and use the data to increase 
competition.
    As indicated throughout the CY 2020 HPT final rule, we believed the 
flexibility that we initially afforded to hospitals was necessary to 
ensure that ``each hospital operating in the United States'' could 
implement the law and regulatory requirements. Now that hospitals have 
experience in making their standard charges public in an MRF and we 
have a better understanding of how hospitals establish their standard 
charges, we believe our data formatting requirements can be made more 
prescriptive to enhance the public's ability to use the hospital 
standard charge information to its fullest potential. These 
evolutionary changes may serve to decrease hospital burden.
    To accomplish this, we propose to revise the introductory text at 
Sec.  180.50(c) to require that each hospital must conform to the CMS 
template layout, data specifications, and data dictionary when making 
public the standard charge information required under paragraph (b).
    Should these proposed rules be finalized, we propose to make at 
least one CMS template available to hospitals, and hospitals would be 
required to conform to its layout and comply with technical 
instructions (located in the template, corresponding data dictionary, 
and other technical guidance) to be published on a CMS website (such as 
the HPT website or CMS GitHub). A hospital's failure to display its 
standard charge information in the form and manner specified by CMS 
could lead to a compliance action. The CMS template and accompanying 
technical specifications would describe the form and manner in which 
the hospital must organize, arrange, and encode its standard charge 
information for the required data elements (if finalized, and as 
discussed in XVIII.B.3.b of this proposed rule) in its MRF.
    For purposes of this requirement, we propose to make available a 
CMS template in CSV and JSON formats. Additionally, we propose to make 
available three different layouts. The three layouts would be similar 
to the three `sample formats' that are currently available on the HPT 
website.\628\ The three sample layout are: (1) JSON schema (plain 
format), (2) CSV (``wide'' format), and (3) CSV (``tall'' format). 
Although we considered proposing to require hospitals to display their 
standard charge information using only the JSON format, we concluded 
that some flexibility remains necessary given the variability in 
hospital sophistication and technical expertise, and the fact that 
these two proposed non-proprietary formats (CSV and JSON) appear to be 
the most frequently used by hospitals for displaying standard charges. 
We seek comment on this issue, and on whether we should instead require 
use of a single format (such as JSON).
---------------------------------------------------------------------------

    \628\ https:/www.cms.gov/hospital-price-transparency/resources.
---------------------------------------------------------------------------

    Technical guidance, to which the hospital must conform for purposes 
of encoding the standard charge information, would be made available 
through, for example, a data dictionary and within the CMS template. 
The data dictionary would be similar to the data dictionary that CMS 
has developed for the `sample templates,' \629\ but would be updated to 
include any new policies that we finalize in the CY 2024 OPPS/ASC PPS 
final rule. This technical instruction would ensure consistent 
implementation and machine-readability of hospital MRFs across all 
hospitals. For example, CMS would provide guidance on how to conform to 
the CMS template layout and encode the data items for the required data 
elements; that guidance would also consist of the set of rules for the 
header and attribute naming and rules for allowed values for encoding 
standard charge information, including the data type (for example, 
enum, numeric, alphanumeric), data format (for example, string, float), 
and, in some cases, specific (``enum'') valid values (for example, 
``inpatient'' ``outpatient'' ``both''). The data dictionary could also 
include a section on `how to use the data dictionary' which would 
provide educational information about the encoding instructions for 
those with low technology expertise. We believe that providing such 
direction via separate technical instructions is reasonable because 
such direction does not rise to the meaningful substance that is 
subject to notice-and-comment rulemaking, and it would enable CMS to 
update such technical specifications to keep pace with and respond to 
technical developments and inquiries. Moreover, this proposal is 
consistent with data disclosure formatting requirements of other CMS 
programs such as the EHR Incentive Program (see 42 CFR 412.614).
---------------------------------------------------------------------------

    \629\ https://www.cms.gov/hospital-price-transparency/resources.
---------------------------------------------------------------------------

    Hospitals that do not conform to the CMS template layout, data 
specifications, and data dictionary would be determined to be 
noncompliant with 42 CFR 180.50(c) and could be subject to a compliance 
action. In addition to providing a data dictionary, to further aid 
hospitals, we are considering whether we should develop an MRF 
validator tool, similar to the validator tool provided by TIC on the 
CMS GitHub website.\630\ The validator tool could be used by hospitals 
as a check for compliance with the formatting requirements of Sec.  
180.50(c), thereby providing some additional technical instruction and 
assurance that the formatting requirements have been met prior to 
posting the MRF online. We seek comment on whether hospitals would find 
a validator tool helpful and, if so, what technical specifications such 
a validator ought to assess.
---------------------------------------------------------------------------

    \630\ https://github.com/CMSgov/price-transparency-guide-validator.
---------------------------------------------------------------------------

    We continue to encourage hospitals to provide any additional 
information they deem necessary to further explain or contextualize 
their standard charges, and we would provide technical instructions and 
specifications for hospitals to do so. For example, the data dictionary 
could include one or more optional data elements for inserting 
additional explanatory notes (similar to the ``additional generic 
notes'' data element included in the sample formats data dictionary), 
and could also permit hospitals to add other optional data elements 
such as `average reimbursement amounts' derived from past claims, LAN 
designations, quality information, or the hospital's financial aid 
policy, or any other categories of information the hospital wishes to 
convey to the public related to hospital's standard charges.
    Consistent with our proposal that hospitals must use a CSV or JSON 
format, we propose to remove the examples of specific types of machine-
readable formats from the definition of ``machine-readable format'' at 
Sec.  180.20.

[[Page 49858]]

Similarly, we propose a technical edit to the naming convention at 
Sec.  180.50(d)(5) to remove ``[json[verbar]xml[verbar]csv]'' and in 
its place add ``[json[verbar]csv].''
    If the proposals related to these formatting requirements are 
finalized, CMS will provide additional technical instructions for how a 
hospital should indicate non-applicability, when necessary. As 
explained more fully in section XVIII.B.3.b of this proposed rule, we 
propose to apply the term `as applicable' to the standard charge 
information that the hospital encodes in the MRF, and not to the data 
elements themselves. We continue to recognize that a hospital may have 
no applicable standard charge information to encode in some fields 
within a CMS template (this is particularly true for CSV formats, which 
can be opened in a human-readable spreadsheet format that forces 
column/row cross relationships between data elements which are not 
always applicable). We therefore reiterate that absence of encoded 
information does not necessarily mean that the MRF is incomplete. To 
illustrate using a specific example, a hospital may have established a 
gross charge for operating room time described as `OR time, first 15 
minutes' but may not have established any payer-specific negotiated 
charges that correspond to the same item or service. If the hospital 
has chosen to use the CMS CSV ``wide'' template (which can also be 
opened and viewed as a human-readable spreadsheet), a person may see 
that the cell at the intersection of the column `gross charge' and row 
of `OR time, first 15 minutes' would be encoded with the applicable 
standard charge amount but the cell at the intersection of any payer 
and plan's `payer-specific negotiated charge' column(s) and the row of 
`OR time, first 15 minutes' would be empty. In this example, the 
absence of encoded data would be a result of non-applicability, not 
non-compliance, because the hospital has not established a standard 
charge with the payers for a 15-minute increment of OR time.
    We caution users of the files who choose to view MRFs in human-
readable formats from concluding that a hospital is noncompliant solely 
based on blanks or the hospital's use of ``N/A'' (or other indicator(s) 
specified by CMS in guidance). To help mitigate ongoing 
misunderstandings by users of hospital MRF data, CMS intends to 
continue to educate the public on the standard charge information 
displayed by hospitals and proper interpretation of the information 
they contain. Additionally, as discussed in this proposed rule, we 
propose that hospitals include an affirmation of accuracy and 
completeness within the CMS template (see proposal in section 
XVIII.B.2.b of this proposed rule), which we believe would provide some 
assurance to users of hospital MRFs that the data is accurate and 
complete to the best of the hospital's knowledge and belief. Such an 
affirmation may also mitigate the need for a hospital to insert any 
indicator of non-applicability into its MRF. We are therefore not 
proposing to require insertion of such an indicator, although such 
indicators would not be precluded should a hospital wish to add them, 
so long as the hospital adheres to the technical specifications to 
preserve the machine-readability of the file. However, we seek comment 
on this issue. We seek comment on whether an indicator of non-
applicability is necessary, whether such an indicator should be 
required or just recommended, and how CMS can best educate the public 
on the nature of standard charge information display, and, in 
particular, the potential for non-applicability in certain MRF formats.
    Finally, if finalized, we propose a 60-day enforcement grace period 
for adoption and conformation to the new CMS template layout and 
encoding of standard charge information of the newly proposed data 
elements. To be clear, this proposal would be with respect solely to 
enforcement actions based on the new (if finalized) CMS template 
display requirements at revised Sec.  180.50(b) and (c); it would in no 
way affect already-initiated compliance actions or actions for 
noncompliance with other requirements under part 180 as they are 
currently being implement. Additionally, this proposal would not apply 
to other proposals in this proposed rule which would become effective 
and enforced on January 1, 2024 including proposals related to 
inclusion of an affirmation statement in the hospital's MRF (discussed 
in section XVIII.B.2), the accessibility requirements as proposed and 
discussed in section XVIII.B.4 of this proposed rule, and any other 
proposals related to enforcement revisions discussed in section XVIII.C 
of this proposed rule. The effect of this proposal is that CMS would 
not begin to enforce any finalized requirement for hospitals to use the 
CMS template until 2 months after the effective date of the CY 2024 
OPPS/ASC PPS final rule with comment period. We understand that some 
hospitals may have already adopted the sample format that CMS made 
available in November 2022, however, we propose to implement an 
enforcement grace period to accommodate hospitals that have adopted 
formats that vary significantly from the sample format. We seek comment 
on this proposal. In particular, we seek comment on whether and why an 
enforcement grace period should or should not be applied.
4. Proposal To Improve the Accessibility of Hospital MRFs
    Currently, the HPT regulations at Sec.  180.50(d) describe our 
requirements for the location and accessibility of the hospital's MRF. 
Specifically, the regulations require a hospital to select a publicly 
available website for purposes of making public its standard charges 
(Sec.  180.50(d)(1)) and displaying the standard charges information in 
a prominent manner and clearly identified with the hospital location 
with which the standard charge information is associated (Sec.  
180.50(d)(2)). Additionally, at Sec.  180.50(d)(3), the hospital must 
ensure that the standard charge information is easily accessible, 
without barriers, including, but not limited to, ensuring the 
information is accessible: free of charge; without having to establish 
a user account or password; without having to submit personal 
identifying information (PII); and to automated searches and direct 
file downloads through a link posted on a publicly available website. 
At Sec.  180.50(d)(4), the digital file and the standard charge 
information contained within that file must be digitally searchable 
and, at Sec.  180.50(d)(5), the file must use a naming convention 
specified by CMS.
    As we explained in the CY 2020 HPT final rule, because of the 
flexibility we allowed to hospitals to choose the internet location, we 
recognized and expected that there would be some variability in how 
hospitals would choose to publicly display their MRF and how quickly 
the file could be found by the public. However, we indicated our belief 
that standardizing a file name or website location information could 
provide consumers with a standard pathway to find the information and 
would provide some uniformity, making it easier for potential software 
to review information on each website. We expressed our belief that 
specific requirements for file naming conventions and locations for 
posting on websites could also facilitate the monitoring and 
enforcement of the requirements.
    We believe our current policies are sufficient for purposes of 
manual searches but may not be sufficient for automated searches. As we 
noted in the CY 2022 OPPS/ASC proposed rule, in our experience, many 
publicly available web pages that hospitals select to host

[[Page 49859]]

the MRF (or a link to the MRF) are discoverable using simple manual 
internet searches (using key words such as the hospital name plus 
`standard charges,' `price,' or `machine-readable file') or, for 
example, by navigating to the hospital's home page and clicking and 
searching through pages related to patient billing and financing. 
However, despite the requirement for the MRF and the standard charge 
information contained in that file to be digitally searchable and the 
required naming convention, various MRF users, including IT developers 
and technology innovators, continue to express concerns that they can't 
efficiently, via automated techniques, aggregate the files. We believe 
these challenges should be addressed because we believe that ensuring 
that the MRFs and their data contents are easily accessible, including 
by members of the public who develop tools that improve the public's 
overall understanding and ability to use the information in meaningful 
ways, aligns with the MRFs' intended use. As we indicated in the CY 
2020 HPT final rule, we believe that ``[b]y ensuring accessibility to 
all hospital standard charge data for all items and services, these 
data will be available for use by the public in price transparency 
tools, to be integrated into EHRs for purposes of clinical decision-
making and referrals, or to be used by researchers and policy officials 
to help bring more value to healthcare.''
    As a result, we considered methods that would specifically improve 
the automated accessibility of MRFs. Thus, at proposed new Sec.  
180.50(d)(6), we propose to require that a hospital ensure that the 
public website it chooses to host the MRF establishes and maintains 
automated access to the MRF in two specific ways.
    First, we propose, at new Sec.  180.50(d)(6)(i) that the hospital 
ensure the public website includes a .txt file in the root folder that 
includes a standardized set of fields including the hospital location 
name that corresponds to the MRF, the source page URL that hosts the 
MRF, a direct link to the MRF (the MRF URL), and hospital point of 
contact information. CMS would make available the technical 
specifications for implementing this file in technical instructions, 
and could also consider creating a simple .txt generator tool to assist 
non-technical hospital personnel in generating a .txt file as well as 
plain-language instructions for complying with the requirement to post 
a .txt file to the root folder of the public website.
    In considering this proposed approach to automating access to 
hospital MRFs, we identified several benefits, including: a 
standardized text file at a consistent location (for example, the root 
folder of the website) would provide automated tools a direct link to 
the MRF as opposed to the current approach of having to locate the 
correct web page within the website; technical experts suggest this is 
a relatively simple, low burden method that could be applied by 
maintainers of any public website that hosts the MRF; and information 
included in the .txt file could include information necessary to 
validate the contents of the file, for example, by including hospital 
point-of-contact information. We also considered potential drawbacks of 
this approach, including that any standardization of this nature is 
subject to errors in formatting which could negate the benefit to 
automated access and generate a compliance action. We believe the 
benefits outweigh the drawbacks for having a hospital ensure that the 
public website it chooses to host the MRF includes a .txt file in the 
root folder that includes a direct link to the MRF to establish and 
maintain automated access.
    Second, we propose at new Sec.  180.50(d)(6)(ii) that the hospital 
ensure the public website includes a link in the footer on its website, 
including but not limited to the homepage, that is labeled ``Hospital 
Price Transparency'' and links directly to the publicly available web 
page that hosts the link to the MRF. We propose this requirement 
because we believe the addition of standardized hyperlinks in the 
footer of hospital websites would aid in the automation of MRF data 
retrieval by creating a predictable navigation path to internal web 
pages that describe the HPT program and providing direct links to the 
MRF location. Once a human or web crawler arrives at the web page on 
which the MRF is located, it would be able to identify the specific 
location of the file(s) containing the pricing data. We believe that by 
making this information more easily accessible to automated searches 
and data aggregation, it would help third parties develop tools that 
further assist the public in understanding this information and 
capturing it in a meaningful way for making informed health care 
decisions. Moreover, we believe this requirement would be simple for 
hospitals to understand and implement, due to the website footer being 
a common place for hospitals to link to other information. In addition, 
using a standardized label for the link in the footer may make the 
location of the MRFs more visible to individual consumers manually 
searching for such files.
    We seek comment on this proposed approach to improving 
accessibility of MRFs to automated searches. We particularly seek 
comment on whether there: may be better or more efficient ways of 
improving access to MRFs or the direct links to the MRFs; are 
additional benefits or challenges that we should alternatively 
consider; might be any challenges for automation tools to find MRFs 
when they are hosted by a publicly available website other than a 
website hosted by the hospital, and ways that would make those 
automated searches more easily accessible; and, might be any challenges 
for hospitals to meet the proposed requirements when the publicly 
available website hosting the MRF is not under direct control of the 
hospital. We also seek comment on whether the proposals to require use 
of a footer and .txt file, if finalized, are complementary to, or 
duplicative of, the requirements at Sec.  180.50(d)(4) and (5) which, 
respectively, require that the digital file and standard charge 
information contained in that file must be digitally searchable; and 
that the file must use the naming convention specified by CMS at Sec.  
180.50(d)(5). We also seek comment on whether there is a better or more 
efficient standardized label for the link in the footer on the website, 
including but not limited to the homepage, that links directly to the 
publicly available website that hosts the link to the MRF.

C. Proposals To Improve and Enhance Enforcement

    Section 2718(b)(3) of the PHS Act requires the Secretary to 
promulgate regulations to enforce the provisions of section 2718 of the 
PHS Act, and, in so doing, the Secretary may provide for appropriate 
penalties. Our current monitoring and enforcement scheme is codified in 
our regulations at 45 CFR 180 subpart C. Section 180.70(a) states that 
CMS may monitor and assess hospital compliance with section 2718(e) of 
the PHS Act via methods including, but not limited to, evaluating 
complaints made by individuals or entities to CMS, reviewing 
individuals' or entities' analysis of noncompliance, and auditing 
hospitals' websites. Should CMS conclude that a hospital is 
noncompliant with one or more of the requirements to make public 
standard charges, CMS may take any of the following actions described 
at Sec.  180.70(b), which generally, but not necessarily, will occur in 
the following order:
     Provide a written warning notice to the hospital of the 
specific violation(s).

[[Page 49860]]

     Request a corrective action plan from the hospital if its 
noncompliance constitutes a material violation of one or more 
requirements.
     Impose a CMP on the hospital and publicize the penalty on 
a CMS website if the hospital fails to respond to CMS' request to 
submit a corrective action plan or comply with the requirements of a 
corrective action plan.
    To better understand hospitals' HPT compliance and the impact of 
our implementation efforts, CMS conducted website assessments in 2021 
and in 2022. CMS evaluated fourteen criteria for the MRF, and either 
eleven criteria for the shoppable services display or two criteria for 
the price estimator tool, depending upon which the hospital chose to 
offer. In the first 2 years of program implementation, our website 
assessments demonstrated a substantial increase in hospitals meeting 
website assessment criteria, increasing from 27 percent to 70 percent 
between 2021 and 2022.\631\ Of the remainder of that 30 percent that 
failed to meet the criteria, 3 percent fully failed to meet website 
assessment criteria and 27 percent partially met website assessment 
criteria. Although these website assessments were not formal compliance 
reviews (which often require additional information from the hospital 
to make a final determination of compliance), we believe this 
demonstrates that hospitals are making improvements to come into 
compliance and that the increase is largely attributable to the 
increase in compliance penalties that went into effect in CY 2022, and 
our significant education, monitoring, and enforcement activities. We 
remain committed to ensuring compliance with our requirements and 
taking enforcement actions in areas of noncompliance.
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    \631\ https://www.healthaffairs.org/content/forefront/hospital-price-transparency-progress-and-commitment-achieving-its-potential.
---------------------------------------------------------------------------

    Recently, we announced updates to our enforcement process \632\ 
that are intended to increase the rates of HPT compliance. In this 
section, we make proposals that would further improve the efficiency, 
timeliness, and transparency of the compliance process.
---------------------------------------------------------------------------

    \632\ https://www.cms.gov/newsroom/fact-sheets/hospital-price-transparency-enforcement-updates.
---------------------------------------------------------------------------

1. Proposals for Improving Assessment of Hospital Compliance
    At Sec.  180.70(a), we finalized a process for monitoring hospital 
compliance with section 2718(e) of the PHS Act by which we may use 
monitoring efforts including, but not limited to, evaluating complaints 
made by individuals or entities to the CMS', reviewing individuals' or 
entities' analysis of noncompliance, and auditing hospitals' websites. 
The regulation text at Sec.  180.70(a)(2) indicates that such methods 
are also used to `assess' hospital compliance; however, we have found 
these methods to be more appropriate for monitoring, and not as 
appropriate or sufficient for assessing hospital compliance.
    For example, a review of an MRF (such as is performed in a typical 
website assessment) may reveal some obvious deficiencies which can 
trigger a compliance action. Similarly, a complaint made by the public 
may be helpful in identifying an allegedly noncompliant hospital. While 
we appreciate and continue to encourage submission of complaints, there 
are many nuances and complexities associated with the way hospitals 
establish standard charges that can lead to questions related to, in 
particular, the accuracy and completeness of the standard charges 
information that is included in a hospital's MRF. By way of example, if 
a hospital's MRF does not include any `discounted cash prices,' it can 
be difficult to determine whether the hospital is noncompliant with the 
requirement to disclose established discounted cash prices or whether 
the hospital has simply not established such charges and therefore has 
nothing to make public. Often, a hospital will preempt questions by 
making statements on its website or in the file to indicate when there 
is no applicable standard charges data to share with the public. But 
when such a public statement is absent, we find that it may be 
necessary for us to contact the hospital through our enforcement 
process to assess or determine whether the hospital is complying with 
the requirements of the regulation. In short, we have found it is 
necessary to employ methods beyond a simple audit of a hospital's 
website to definitively assess hospital compliance. We believe this 
distinction between monitoring and assessment activities is necessary 
because while monitoring activities can be used (by anyone, including 
CMS) to evaluate alleged noncompliance, only a formal CMS assessment 
can determine a hospital's compliance with the HPT requirements. We 
expect that many of these issues would be resolved if the proposed 
improvements to standardizing display of hospital standard charges (as 
discussed in section XVIII.B.3 of this proposed rule) are finalized as 
proposed. However, there could still be times when CMS would need 
additional information from the hospital to assess compliance.
    We therefore propose to amend Sec.  180.70(a)(2) to propose 
additional activities that CMS may use to monitor and assess for 
compliance. Specifically, we propose:
     To revise Sec.  180.70(a)(2)(iii) to indicate that CMS may 
conduct a comprehensive compliance review of a hospital's standard 
charges information posted on a publicly available website. We believe 
this proposal is necessary to clarify the methods we may use to 
determine a hospital's compliance with HPT requirements.
     At new Sec.  180.70(a)(2)(iv), requiring an authorized 
hospital official to submit to CMS a certification to the accuracy and 
completeness of the standard charges information posted in the MRF at 
any stage of the monitoring, assessment, or compliance phase. We also 
propose at new Sec.  180.50(a)(3) that the hospital affirm within the 
MRF the accuracy and completeness of the standard charges information. 
However, we believe that this additional authority to require a formal 
certification by an authorized official is necessary to assist CMS in 
enforcement of the regulations when questions or complaints arise about 
the completeness or accuracy of the data. This certification authority 
is necessary because CMS may need a formal certification to resolve any 
specific questions related to the standard charges displayed and the 
items and services for which the hospital has established a standard 
charge, which might not be answered by the proposed affirmation 
statement in Sec.  180.50(a)(3). For example, a formal certification 
may be necessary if a complainant alleges that specific standard 
charges displayed in the hospital's MRF are incomplete or inaccurate, 
or if certain items and services were provided by the hospital but are 
not displayed in the MRF with corresponding standard charges. Formal 
certification would provide assurance to CMS that the information 
within the MRF has been verified by the authorized official and is 
valid.
     At new Sec.  180.70(a)(2)(v), requiring submission to CMS 
of additional documentation as may be necessary to assess hospital 
compliance. Such documentation may include contracting documentation to 
validate the standard charges the hospital displays, and verification 
of the hospital's licensure status or license number, in the event that 
information was not provided in the MRF. We believe that this proposal 
is necessary to enable CMS to adequately evaluate the hospital's 
publicly posted information to be able to assess compliance.

[[Page 49861]]

    Further, we propose two technical revisions. First, we propose a 
technical revision to the introductory text at Sec.  180.70(a) so that 
it would read ``Monitoring and Assessment.'' Second, we propose to 
amend Sec.  180.90 by revising paragraph (b)(2)(ii)(C) to remove the 
phrase ``resulting from monitoring activities'' and adding in its place 
the phrase ``resulting from monitoring and assessment activities.''
2. Proposal To Require Hospital Acknowledgement of Receipt of Warning 
Notice
    Since the HPT regulations first became effective in January 2021, 
through June 2023, we have issued approximately 906 warning notices to 
hospitals. Though we send the compliance actions by tracked mail, a few 
hospitals have reported they did not receive the compliance action 
notifications. This causes delays in resolution of the deficiencies and 
in some cases resulted in additional compliance actions (for example, a 
request for a CAP) from CMS. Requiring that a hospital respond to CMS 
upon receipt of the warning notice will confirm receipt to CMS and 
hopefully prompt hospital personnel to appropriately route the warning 
notice to ensure timely corrective action.
    We make clear that hospitals' internal process challenges do not 
(and in enforcement proceedings will not) excuse a hospital's HPT 
noncompliance. But, knowledge of this concern caused CMS to consider 
modifications to the compliance process for purposes of streamlining 
compliance activities and avoiding unnecessary re-reviews when a 
hospital has taken no action in response to a warning notice. 
Additionally, receiving confirmation of receipt directly from 
individuals at the organization responsible for resolving the 
deficiencies would streamline our enforcement by providing an 
appropriate compliance contact earlier in the enforcement process. We 
therefore propose at Sec.  180.70(b)(1) that CMS will require that a 
hospital submit an acknowledgement of receipt of the warning notice in 
the form and manner, and by the deadline, specified in the notice of 
violation issued by CMS to the hospital. As part of the confirmation of 
receipt, we may request contact information from the hospital to 
streamline further communications.
3. Proposal for Actions To Address Noncompliance Within Hospital 
Systems
    Section 2718(e) of the PHS Act and the HPT regulations apply to 
`each hospital' operating in the U.S. As such, when CMS determines that 
a hospital is out of compliance with the regulations, CMS takes a 
compliance action against the individual hospital. Many hospitals, 
however, are part of a broader health system where common management 
officials have some degree of oversight and management over multiple 
hospitals. For example, some health systems have centralized 
administrative activities that establish standard charges for all the 
hospitals in the system, or that are responsible for ensuring 
compliance with Federal requirements. Under our current regulation, as 
explained in more detail in section XVIII.C.4 of this proposed rule, we 
have authority to disclose information about CMS compliance activity 
only when CMS issues a CMP, at which time CMS posts the CMP notice on 
its website. We believe that amending the regulation to provide CMS 
with express authority to notify health system officials of a 
compliance action that CMS has taken against one or more hospitals 
within their system, and working directly with them, where appropriate, 
to educate health system leadership and aid them in bringing all 
hospitals in the system into compliance, could aid in streamlining 
hospital compliance and our enforcement process.
    Therefore, we propose to add new Sec.  180.70(c) to state that, in 
the event CMS takes an action to address hospital noncompliance (as 
specified in paragraph (b)) and the hospital is determined by CMS to be 
part of a health system, CMS may notify the health system leadership of 
the action and may work with hospital system leadership to address 
similar deficiencies for hospitals across the health system. In 
determining whether a hospital is part of a health system and health 
system contact information, we anticipate using data from sources 
including, but not limited to, internal CMS systems such as the 
Medicare Provider Enrollment, Chain, and Ownership System (PECOS) or 
the Chronic Conditions Data Warehouse (CCW). For example, PECOS may be 
used to identify relationships among organizations including ownership 
or enrollment associations.\633\
---------------------------------------------------------------------------

    \633\ Cohen GR, Jones DJ, Heeringa J, Barrett K, Furukawa MF, 
Miller D, Mutti A, Reschovsky JD, Machta R, Shortell SM, Fraze T, 
Rich E. Leveraging Diverse Data Sources to Identify and Describe 
U.S. Health Care Delivery Systems. EGEMS (Wash DC). 2017 Dec 
15;5(3):9. doi: 10.5334/egems.200. PMID: 29881758; PMCID: 
PMC5983023.
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    We believe that notifying health system officials of a compliance 
action taken against one of the hospitals in the system and working 
with health system officials and (where different) the hospital's 
officials to help the hospital to come into compliance would have 
several benefits. First, it could serve to ensure full and consistent 
compliance across all hospitals in the health system. Second, we 
believe the ability to work directly with health system officials, in 
addition to working with the noncompliant hospital, could reduce the 
need for compliance actions against other health system hospitals 
because the health system could more quickly and efficiently implement 
system-wide changes. For example, in one case multiple hospitals 
designated the same hospital system official as the point of contact to 
work with CMS. This allowed the hospital official to effectively 
correct violations cited across multiple locations and resulted in 
system-wide changes.
    We seek comment on this proposal, including on whether there are 
additional data sources that CMS could access for purposes of 
identifying health system affiliation and leadership contact 
information.
4. Proposal To Publicize Compliance Actions and Outcomes
    In the CY 2020 HPT final rule, we sought comment related to 
publicizing complaints and posting results of CMS assessments of 
hospitals' HPT compliance, including on the most effective way for CMS 
to publicize information regarding hospitals that fail to comply. Some 
commenters recommended publicizing noncompliant hospitals, while one 
commenter expressed the belief that publicizing noncompliance even 
after imposition of a CMP would amount to ``public shaming,'' which the 
commenter believed would not be of benefit. We considered these 
comments and ultimately finalized a policy at Sec.  180.90(e)(1) that, 
should CMS issue a CMP to a hospital it determines is noncompliant, CMS 
would post the notice of imposition of the CMP on a CMS website.
    In finalizing this policy, we explained that we believed that 
publicizing a hospital's noncompliance prior to imposing a CMP (for 
example) could be an effective tool to raise public awareness of, for 
example, incomplete hospital data, and could encourage hospitals to 
promptly remedy its violation(s) to avoid being publicly identified as 
noncompliant. However, we declined at the time to finalize publicizing 
information beyond publicizing the notice of imposition of a CMP. We 
indicated that we would consider revisiting through future rulemaking 
the timing for, and approach by, which CMS publicizes its

[[Page 49862]]

determination of a hospital's noncompliance with the requirements to 
make public standard charges.
    As of June 27, 2023, CMS had issued approximately 906 warning 
notices and 371 requests for CAPs since the initial regulation went 
into effect in January 2021. Approximately 301 hospitals were 
determined by CMS after a comprehensive compliance review to not 
require any compliance action and approximately 457 hospitals received 
a closure notice from CMS after having addressed deficiencies indicated 
in a prior warning notice or a request for a CAP following an initial 
comprehensive compliance review. We have imposed CMPs on four hospitals 
and publicized those CMP impositions on our website.\634\ Every other 
hospital that we have identified as being noncompliant has either 
corrected its deficiencies or is cooperating with CMS to work towards 
correcting its deficiencies.
---------------------------------------------------------------------------

    \634\ https://www.cms.gov/hospital-price-transparency/enforcement-actions.
---------------------------------------------------------------------------

    CMS routinely receives inquiries from the public, including state 
hospital associations, related to its compliance activities, asking, 
among other things, whether CMS has reviewed certain hospitals in 
certain states or other geographic locations. Given this significant 
public interest, we considered whether publicizing more information 
about CMS compliance activities and hospital-specific actions would be 
useful. We reviewed other federal programs that make public compliance 
actions for various programs, such as HHS/HRSA's 340B Drug Pricing 
Program which publicly posts audit results that include the name of the 
entity and state, audit findings, sanction, and corrective action 
status,\635\ CMS' Part C and D results related to the Medicare 
Advantage and Prescription Drug Plan program audits \636\ and 
compliance actions,\637\ and the FDA which provides the public access 
to an online, searchable dashboard of compliance actions, including 
warning letters.\638\
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    \635\ https://www.hrsa.gov/opa/program-integrity/fy-22-audit-results.
    \636\ https://www.cms.gov/medicare/compliance-and-audits/part-c-and-part-d-compliance-and-audits/programaudits.
    \637\ https://www.cms.gov/Medicare/Compliance-and-Audits/Part-C-and-Part-D-Compliance-and-Audits/PartCandPartDComplianceActions.
    \638\ https://datadashboard.fda.gov/ora/cd/complianceactions.htm.
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    We believe that such information could improve the public's 
understanding and transparency of CMS' enforcement process by allowing 
interested parties to view compliance actions and determinations made 
by CMS. Additionally, making public compliance information may reduce 
repetitive complaints to CMS about hospital compliance issues and 
provide a central source of information for inquirers, including the 
media and state officials, who have expressed interest in this issue. 
Additionally, making these enforcement actions transparent may increase 
the likelihood that hospitals will more quickly come into compliance 
due to public scrutiny.
    As a result, we propose at Sec.  180.70(d) that CMS may publicize 
on its website information related to CMS' assessment of a hospital's 
compliance, any compliance actions taken against a hospital, the status 
of such compliance action(s), and the outcome of such compliance 
action(s). Additionally, we propose at Sec.  180.70(d) that CMS may 
publicize on its website information related to notifications that CMS 
may send to health system leadership, if proposals discussed in section 
XVIII.C.3 of this proposed rule are finalized. Should CMS decide to 
publicize this information on its website, it would apply uniformly to 
all hospitals. We further note that, similar to other such assessments, 
the information we would make public would only be relevant as of the 
date indicated, and should not be taken to suggest any ongoing state of 
compliance or noncompliance.

D. Seeking Comment on Consumer-Friendly Displays and Alignment With 
Transparency in Coverage and No Surprises Act

    As we concluded in the CY 2020 HPT final rule, transparency in 
pricing is necessary and can be effective to help bring down the cost 
of healthcare services, reduce price dispersion, and benefit consumers 
of healthcare services, including patients and employers. We discussed 
research suggesting that making consumer-friendly pricing information 
available to the public can reduce healthcare costs for consumers. We 
noted that despite the growing consumer demand and awareness of the 
need for healthcare pricing data, there continued to be a gap in easily 
accessible pricing information for consumers to use for healthcare 
shopping purposes. Specifically, there is inconsistent (and many times 
nonexistent) availability of provider charge information, among other 
limitations to understanding data made available or barriers to use of 
the data. We stated our belief that this information gap could, in 
part, be filled by the release of hospital standard charges as required 
by section 2718(e) of the PHS Act.
    In response to comments, we acknowledged that there are additional 
barriers that must be overcome to allow consumers to identify 
appropriate sites of care for needed services, determine out-of-pocket 
costs in advance, and utilize indicators of quality of care to make 
value-based decisions. As we previously described in the CY 2020 HPT 
final rule, we stated our (continuing) belief that the HPT regulations 
requiring hospitals to make public standard charges are a necessary and 
important first step in ensuring transparency in healthcare prices for 
consumers, but that the release of hospital standard charge information 
is not sufficient by itself to achieve our ultimate goals for price 
transparency. We noted that HHS was continuing to explore other 
authorities to advance the Administration's goal of enhancing 
consumers' ability to choose the healthcare that is best for them, to 
make fully informed decisions about their healthcare, and to access 
both useful price and quality information. We also agreed with 
commenters that ``surprise billing'' was an issue of great concern to 
consumers and of great interest to both federal and state lawmakers. We 
noted that the HPT policies would not resolve that issue entirely, 
although we expressed our belief that it was possible that disclosure 
of hospital standard charges could help mitigate some consumer surprise 
billing (86 FR 65530).
    As a result of comments indicating that long lists of standard 
charges might be difficult for the average person to directly use and 
understand, we considered ways that the authorities under section 
2718(e) of the PHS Act could be used to require or encourage hospitals 
to make public standard charges for frequently provided services in a 
form and manner that might be more directly accessible and consumer-
friendly. Ultimately, we finalized requirements for hospitals to 
display a list of payer-specific negotiated charges for a specified set 
and number of ``shoppable'' services as well as requirements intended 
to ensure the charge information for ``shoppable'' services would be 
presented in a way that is consumer-friendly, including presenting the 
information as a service package. We were also persuaded by commenters' 
suggestions that hospitals offering online price estimator tools that 
meet certain requirements including providing real-time individualized 
out-of-pocket cost estimates adequately satisfy our aim that hospitals 
communicate their standard charges in a consumer-friendly manner, and 
therefore deemed these price estimator tools as meeting our 
requirements for

[[Page 49863]]

making public standard charges for a limited set of shoppable services 
(84 FR 65579).
    Since finalizing these policies, additional federal price 
transparency initiatives that rely on other authorities that more 
directly empower consumers with pricing information have been, or are 
in the process of being, implemented. Specifically, since publication 
of the CY 2020 HPT final rule in 2019, the Transparency in Coverage 
(TIC) rule (85 FR 72158, finalized in 2020) \639\ and the No Surprises 
Act (NSA) (enacted as part of the Consolidation Appropriations Act of 
2021) have been promulgated or enacted. Under the TIC final rules, with 
respect to plan years (in the individual market, policy years) 
beginning on or after January 1, 2023, most group health plans and 
issuers of group or individual health insurance coverage are required, 
among other requirements, to disclose personalized pricing information 
for covered items and service to their participants, beneficiaries, and 
enrollees through an online consumer tool, or in paper form, upon 
request. Cost estimates must be provided in real-time based on cost-
sharing information that is accurate at the time of the request.\640\ 
This requirement is being phased in over 2 years. An initial list of 
500 shoppable services as determined by the DOL, HHS, and the Treasury 
(collectively, the Departments) will be required to be available via 
the internet based self-service tool for plan years that begin on or 
after January 1, 2023. The remainder of all items and services will be 
required to be available via these self-service tools for plan years 
that begin on or after January 1, 2024.
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    \639\ https://www.federalregister.gov/documents/2020/11/12/2020-24591/transparency-in-coverage.
    \640\ https://www.cms.gov/healthplan-price-transparency/plans-and-issuers.
---------------------------------------------------------------------------

    The NSA, which contains many provisions to protect consumers from 
surprise medical bills and to improve price transparency, will help 
patients understand health care costs in advance of care and to 
minimize unforeseen--or surprise--medical bills.\641\ Section 9819 of 
the Internal Revenue Code (Code), section 719 of the Employee 
Retirement Income Security Act (ERISA), and section 2799A-4 of the PHS 
Act, as added by section 114 of division BB of the CAA, 2021, require 
group health plans and issuers of group or individual health insurance 
coverage to offer price comparison guidance by telephone and make 
available on the plan's or issuer's website a ``price comparison tool'' 
that (to the extent practicable) allows an individual enrolled under 
such plan or coverage, with respect to such plan year, such geographic 
region, and participating providers with respect to such plan or 
coverage, to compare the amount of cost-sharing that the individual 
would be responsible for paying under such plan or coverage with 
respect to the furnishing of a specific item or service by any such 
provider. In guidance issued on August 20, 2021, the Departments 
indicated that because the price comparison methods required by the CAA 
are largely duplicative of the internet-based self-service tool 
component of the TIC final rules, the Departments intend to propose 
rulemaking and seek public comment regarding whether compliance with 
the internet-based self-service tool requirements of the TIC Final 
Rules satisfies the analogous requirements set forth in section 9819 of 
the Code, section 719 of the ERISA, and section 2799A-4 of the PHS 
Act.\642\
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    \641\ https://www.cms.gov/nosurprises.
    \642\ FAQS about Affordable Care Act and Consolidated 
Appropriations Act, 2021 Implementation Part 49 (August 20, 2021), 
available at https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/FAQs-Part-49.pdf.
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    Under section 2799B-6 of the PHS Act, as added by section 112 of 
title I of Division BB of the CAA, 2021, health care providers, health 
care facilities, and providers of air ambulance services are required 
to provide a good faith estimate (GFE) of expected charges for items 
and services to individuals who are not enrolled in a group health plan 
or group or individual health insurance coverage, Federal health care 
program, or Federal Employees Health Benefits (FEHB) program health 
benefits plan (uninsured individuals) or not seeking to file a claim 
with their group health plan, health insurance coverage, or FEHB health 
benefits plan (self-pay individuals). This GFE for uninsured (or self-
pay) individuals must be provided in writing, either on paper or 
electronically (and may also be provided orally, if an uninsured (or 
self-pay) individual requests a good faith estimate in a method other 
than on paper or electronically), upon request or at the time of 
scheduling health care items and services.
    On October 7, 2021, HHS issued regulations implementing section 
2799B-6 of the PHS Act related to GFEs for uninsured (or self-pay) 
individuals at 45 CFR 149.610.\643\ Under 45 CFR 149.610(b)(A) through 
(C), information regarding the availability of GFEs for uninsured (or 
self-pay) individuals must be written in a clear and understandable 
manner, prominently displayed (and easily searchable from a public 
search engine) on the convening provider's or convening facility's 
website, in the office, and on-site where scheduling or questions about 
the cost of items or services occur; orally provided when scheduling an 
item or service or when questions about the cost of items or services 
occur; and made available in accessible formats, and in the language(s) 
spoken by individual(s) considering or scheduling items or services 
with the convening provider or convening facility. At 45 CFR 
149.610(c)(1), the content requirements of the GFE are outlined. The 
Departments have provided a sample of the GFE form online that includes 
the required information.\644\
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    \643\ Requirements Related to Surprise Billing; Part II, 86 FR 
55980, 55983 (October 7, 2021), available at https://www.govinfo.gov/content/pkg/FR-2021-10-07/pdf/2021-21441.pdf.
    \644\ https://www.cms.gov/files/document/good-faith-estimate-example.pdf.
---------------------------------------------------------------------------

    For individuals who are enrolled in a group health plan or group or 
individual health insurance coverage, section 2799B-6 of the PHS Act 
requires providers and facilities to submit a GFE of expected charges 
to the covered individual's plan or issuer.\645\ Section 9816(f) of the 
Code, section 716(f) of the ERISA, and section 2799A-1(f) of the PHS 
Act, as added by section 111 of title I of Division BB of the CAA, 
2021, require plans and issuers, upon receiving the GFE, to send an 
advanced explanation of benefits (AEOB) in clear and understandable 
language to the covered individual, through mail or electronic means, 
as requested by the covered individual.\646\ The AEOB must include the 
following information: (1) the network status of the provider or 
facility; (2) the contracted rate for the item or service, or, if the 
provider or facility is not a participating provider or facility, a 
description of how the covered individual can obtain information on 
providers and facilities that are participating; (3) the GFE received 
from the provider or facility; (4) a GFE of the amount the plan or 
coverage is responsible for paying; (5) the amount of any cost sharing 
which the covered individual would be responsible for paying with 
respect to the GFE received from the provider or

[[Page 49864]]

facility; (6) a GFE of the amount that the covered individual has 
incurred towards meeting the limit of the financial responsibility 
(including with respect to deductibles and out-of-pocket maximums) 
under the plan or coverage as of the date of the AEOB; and (7) 
disclaimers indicating whether coverage is subject to any medical 
management techniques (including concurrent review, prior 
authorization, and step-therapy or fail-first protocols). The AEOB must 
also indicate that the information provided is only an estimate based 
on the items and services reasonably expected to be furnished, at the 
time of scheduling (or requesting) the item or service, and is subject 
to change; and any other information or disclaimer the plan, issuer, or 
carrier determines is appropriate and that is consistent with 
information and disclaimers required under this section of the statute.
---------------------------------------------------------------------------

    \645\ The Department of Health and Human Services (HHS) 
interprets the requirements described in section 2799B-6 of the PHS 
Act apply to providers and facilities furnishing items or services 
to individuals covered by the Federal Employees Health Benefits 
(FEHB) Program in the same manner as for individuals enrolled in a 
group health plan or group or individual health insurance coverage.
    \646\ Pursuant to 5 U.S.C. 8902(p), FEHB carriers must comply 
with AEOB requirements in the same manner as those provisions apply 
to a group health plan or health insurance issuer offering group or 
individual health insurance coverage.
---------------------------------------------------------------------------

    In September 2022, the Departments and the Office of Personnel 
Management (OPM) published a request for information to inform 
rulemaking on the provisions of the No Surprises Act related to the 
AEOB and GFE for covered individuals. (See 87 FR 56905.) \647\ The RFI 
requested information and recommendations on transferring data from 
providers and facilities to plans, issuers, and carriers; other policy 
approaches; and the economic impacts of implementing these 
requirements. The Departments and OPM are carefully considering the 
public comments on the RFI as they, along with industry stakeholders, 
continue work toward developing the technical standards and policy 
framework necessary to support successful implementation of the AEOB 
and GFE for covered individuals.
---------------------------------------------------------------------------

    \647\ https://www.govinfo.gov/content/pkg/FR-2022-09-16/pdf/2022-19798.pdf.
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    As these new consumer-friendly requirements are in the process of 
becoming fully realized, we are interested in hearing from the public 
how the HPT requirements, in accord with the contours of the statutory 
authority conferred by section 2718(e) of the PHS Act, can best support 
and complement the consumer-friendly requirements found in these other 
price transparency initiatives. We particularly seek comment on:
     How, if at all, and consistent with its underlying legal 
authority, could the HPT consumer-friendly requirements at Sec.  180.60 
be revised to align with other price transparency initiatives?
     How aware are consumers about healthcare pricing 
information available from hospitals? We solicit recommendations on 
raising consumer awareness.
     What elements of health pricing information do you think 
consumers find most valuable in advance of receiving care? How do 
consumers currently access this pricing information? What are 
consumers' preferences for accessing this price information?
     Given the new requirements and authorities through TIC 
final rules and the NSA, respectively, is there still benefit to 
requiring hospitals to display their standard charges in a ``consumer-
friendly'' manner under the HPT regulations?
     Within the contours of the statutory authority conferred 
by section 2718(e) of the PHS Act, should information in the hospital 
consumer-friendly display (including the information displayed in 
online price estimator tools) be revised to enhance alignment with 
price information provided under the TIC final rules and NSA 
regulations? If so, which data should be revised and how?
     How effective are hospital price estimator tools in 
providing consumers with actionable and personalized information? What 
is the minimum amount of personalized information that a consumer must 
provide for a price estimator tool to produce a personalized out-of-
pocket estimate?
     How are third parties using MRF data to develop consumer-
friendly pricing tools? What additional information is added by third 
parties to make standard charges consumer-friendly?
     Should we consider additional consumer-friendly 
requirements for future rulemaking, and to the extent our authorities 
permit? For example, what types of pricing information might give 
consumers the ability to compare the cost of healthcare services across 
healthcare providers? Is there an industry standard set of healthcare 
services or service packages that healthcare providers could use as a 
benchmark when establishing prices for consumers?

XIX. Proposed Changes to the Inpatient Prospective Payment System 
Medicare Code Editor

    As discussed in the FY 2024 Inpatient Prospective Payment System 
(IPPS)/Long-Term Care Hospital (LTCH) Prospective Payment System (PPS) 
proposed rule (88 FR 26752), the Medicare Code Editor (MCE) is a 
software program that detects and reports errors in the coding of 
Medicare claims data. Patient diagnoses, procedure(s), and demographic 
information are entered into the Medicare claims processing systems and 
are subjected to a series of automated screens. The MCE screens are 
designed to identify cases that require further review before 
classification into a Medicare Severity Diagnosis Related Group (MS-
DRG). If any of the MCE claim edits are triggered, the claim is 
returned to the provider to correct any issues related to the coded 
claims data and resubmit the claim for processing by the MAC.
    After patient information is screened through the MCE and further 
development of the claim is conducted, the cases are classified into 
the appropriate MS-DRG by the Medicare GROUPER software program. The 
GROUPER program was developed as a means of classifying each case into 
an MS-DRG. The GROUPER software used under the LTCH PPS is the same 
GROUPER software program used under the IPPS and therefore, also 
utilizes the MCE to identify cases that require further review before 
assignment into a Medicare Severity Long-Term Care Diagnosis Related 
Group (MS-LTC-DRG) can be made.
    As discussed in the FY 2023 IPPS/LTCH PPS final rule (87 FR 48874), 
we made available the FY 2023 ICD-10 MCE Version 40 manual file. The 
manual contains the definitions of the Medicare code edits, including a 
description of each coding edit with the corresponding diagnosis and 
procedure code edit lists. The link to this MCE manual file, along with 
the link to the mainframe and computer software for the MCE Version 40 
(and ICD-10 MS-DRGs) are posted on the CMS website at: https://www.cms.gov/medicare/medicare-fee-for-service-payment/acuteinpatientpps/ms-drg-classifications-and-software. The MCE manual 
is currently comprised of two chapters: Chapter 1: Edit code lists 
provides a listing of each edit, an explanation of each edit, and as 
applicable, the diagnosis and/or procedure codes for each edit, and 
Chapter 2: Code list changes summarizes the changes in the edit code 
lists (for example, additions and deletions) from the prior release of 
the MCE software.
    As discussed in the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 
26758) and prior rulemaking, as we continue to evaluate the purpose and 
function of the MCE with respect to ICD-10, we encourage public input 
for future discussion, including with respect to whether there are 
concerns with the current edits, including specific edits or language 
that should be removed or revised, edits that should be combined, or 
new edits that should be added to

[[Page 49865]]

assist in detecting errors or inaccuracies in the coded data. We note 
that historically, CMS has typically addressed the addition or deletion 
of MCE edits in its annual IPPS rulemakings, as well as the addition or 
deletion of ICD-10 diagnosis and procedure codes for the applicable MCE 
edit code lists effective October 1, consistent with the October 1 
updates to the ICD-10 code set. We also note that currently, any 
changes applicable to the MCE edit code list in connection with the 
April 1 updates to the ICD-10 code set are made available on the CMS 
website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-
Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software.
    As we have continued to evaluate the purpose and function of the 
MCE with respect to ICD-10, we recognize a need to further examine the 
operability of the MCE software program, including the current list of 
edits and the definitions of those edits. We have also considered the 
operation of the MCE as compared to the claims editing programs used 
for other Medicare payment systems, including how those edits are 
defined and applied, as well as how they are updated and maintained. 
For example, the Outpatient Prospective Payment System (OPPS) 
``Integrated'' Outpatient Code Editor (I/OCE) is a software program 
that combines editing logic with an ambulatory payment classification 
(APC) assignment program. Similar to the IPPS MCE, the I/OCE edits the 
claims data to identify errors and ensure accuracy of submitted data. 
The I/OCE also serves additional claims editing functions as compared 
to the IPPS MCE. CMS makes updates to the I/OCE through quarterly 
releases with effective dates of January 1, April 1, July 1, and 
October 1 of each year. The updates reflect modifications to the 
program logic, such as additions and deletions of the ICD-10-CM 
diagnosis codes and Healthcare Common Procedure Coding System (HCPCS) 
codes, adding, removing or revising APCs, activating and deactivating 
edits, and other related actions. Changes and updates to the I/OCE are 
announced through quarterly I/OCE Change Requests (CRs) that are posted 
to the CMS website for MACs and public download at: https://www.cms.gov/Medicare/Coding/OutpatientCodeEdit/OCEQtrReleaseSpecs. The 
public may submit any questions or concerns related to the I/OCE 
through the CMS website at: https://www.cms.gov/Medicare/Coding/OutpatientCodeEdit/ContactUs.
    Similar to the claims editing programs used for the OPPS and other 
Medicare payment systems, the claims edits under the MCE serve the 
operational function of identifying cases that require further review 
before classification into an MS-DRG. As previously discussed, if an 
edit is triggered, the claim is returned to the provider to correct any 
issues related to the coded claims data and to resubmit the claim for 
processing. Accordingly, consistent with the process that is used for 
updates to the I/OCE and other Medicare claims editing systems, we 
propose to address any future revisions to the MCE, including any 
additions or deletions of claims edits, as well as the addition or 
deletion of ICD-10 diagnosis and procedure codes to the applicable MCE 
edit code lists, outside of the annual IPPS rulemakings. As described 
further in this section, we anticipate generally announcing any such 
changes or updates to the MCE as part of our instructions issued to the 
MACs in connection with the April 1 and October 1 ICD-10 code updates.
    Under our current process, we announce updates to the MCE in 
connection with the April 1 and October 1 ICD-10 code updates, as 
applicable. For example, as discussed in the FY 2024 IPPS/LTCH PPS 
proposed rule (88 FR 26767), we issued Change Request (CR) 13034, 
Transmittal 11746, titled ``April 2023 Update to the Medicare 
Severity--Diagnosis Related Group (MS-DRG) Grouper and Medicare Code 
Editor (MCE) Version 40.1 for the International Classification of 
Diseases, Tenth Revision (ICD-10) Diagnosis Codes for Collection of 
Health-Related Social Needs (HRSNs) and New ICD-10 Procedure Coding 
System (PCS) Codes'', on December 15, 2022 (available on the CMS 
website at: https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Transmittals/r11746cp) regarding the release of an updated 
version of the ICD-10 MS-DRG GROUPER and Medicare Code Editor software, 
Version 40.1, effective with discharges on and after April 1, 2023, 
reflecting the new diagnosis and procedure codes. We noted in the CR 
that the updated software, along with the updated ICD-10 MS-DRG V40.1 
Definitions Manual and the Definitions of Medicare Code Edits V40.1 
manual is available at: https://www.cms.gov/Medicare/Medicare-Fee-for-
Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software. 
We issued similar instructions with respect to the October 1, 2022 
updates to the MCE and related materials, including the release of the 
updated Version 40 ICD-10 MS-DRG GROUPER and Medicare Code Editor 
software, effective with discharges on and after October 1, 2022, 
available at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-
Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software.
    Under our proposed approach, we would continue to issue 
instructions to the MACs in connection with any April 1 or October 1 
updates to the IPPS MCE, including the effective date for the 
appropriate version of the MCE software program and the Definitions of 
Medicare Code Edits manual, and where these resources may be found on 
the CMS website. We would be interested in feedback as to whether it 
would also be helpful to list the specific MCE updates in the CR, 
including any additions or deletions of diagnosis or procedure codes or 
any addition or deletion of particular MCE edits. As previously noted, 
Chapter 2 of the MCE manual currently identifies the changes in the 
edit code lists (for example, additions and deletions) from the prior 
release of the MCE software. Beginning with the FY 2025 rulemaking, we 
would no longer address the addition or deletion of MCE edits or the 
addition or deletion of ICD-10 diagnosis and procedure codes for the 
applicable MCE edit code lists in the annual IPPS rulemakings.
    We note that under this revised approach, we would also continue to 
welcome input from the public on the current edits, including input 
from providers and other users on how the MCE may currently be utilized 
in their respective workflow processes, as well as feedback on users' 
experience with the MCE, to inform any future revisions to the MCE.
    We invite public comments on our proposal to remove discussion of 
the MCE from the annual IPPS rulemakings, beginning with the FY 2025 
rulemaking, and to generally address future changes or updates to the 
MCE through instruction to the MACs, as previously described.

XX. Proposed Technical Edits for REH Conditions of Participation and 
Critical Access Hospital (CAH) CoP Updates

    On November 23, 2022, we published a final rule for the Rural 
Emergency Hospital health and safety standards (or the Conditions of 
Participation) titled, ``REH Conditions of Participation (CoP) and 
Critical Access Hospital (CAH) CoP Updates (CMS-3419-F)'', which was 
included in the ``Medicare Program: Hospital Outpatient Prospective 
Payment and Ambulatory Surgical Center Payment Systems and Quality 
Reporting Programs; Organ Acquisition; Rural Emergency Hospitals: 
Payment Policies, Conditions of Participation, Provider Enrollment, 
Physician Self-Referral; New Service Category for

[[Page 49866]]

Hospital Outpatient Department Prior Authorization Process; Overall 
Hospital Quality Star Rating; COVID-19'' final rule with comment period 
(87 FR 71748). In that rule, we finalized the designation and 
certification for Rural Emergency Hospitals of part 485, subpart E, at 
42 CFR 485.506. In the section titled, Statutory Authority and 
Establishment of Rural Emergency Hospitals as a Medicare Provider Type, 
we noted the following:

    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.''

    We reiterated these requirements in the discussion of the 
Designation and Certification of REHs (Sec.  485.506) and finalized the 
regulatory text for the requirement at 42 CFR 485.506; however, we 
inadvertently cited the incorrect statutory references. We propose to 
correct these statutory citations from ``1881(d)(2)(D)'' to 
``1886(d)(2)(D)'' and from ``1881(d)(1)(B)'' to ``1886(d)(1)(B)'' at 
Sec.  485.506(b) and (c).

XXI. Rural Emergency Hospitals (REHs): Proposal Regarding Payment for 
Rural Emergency Hospitals (REHs)

A. Background on Rural Emergency Hospitals

    The Consolidated Appropriations Act (CAA), 2021 (Pub. L. 116-260), 
was signed into law on December 27, 2020. In this legislation, Congress 
established Rural Emergency Hospitals (REHs), a new rural Medicare 
provider type, to help maintain access to rural outpatient hospital 
services and prevent rural hospital closures. These providers 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 are 
eligible to 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. For more information on the statutory authority 
for and the regulations implementing this new Medicare provider type, 
please refer to the CY 2023 OPPS/ASC final rule with comment period (87 
FR 72160 through 72161).

B. REH Payment Methodology

    Pursuant to section 1834(x)(1) of the Act and CMS's implementing 
regulations at 42 CFR 419.91 and 419.92(a)(1), payment for REH services 
is defined in terms of the amount of payment ``that would otherwise 
apply under section 1833(t),'' for covered outpatient department (OPD) 
services, increased by 5 percent. As discussed in the CY 2023 OPPS/ASC 
final rule with comment period, CMS interprets ``rural emergency 
hospital services,'' as defined by section 1861(kkk)(1) of the Act, to 
include the scope of covered OPD services as defined in 1833(t)(1)(B) 
of the Act (excluding 1833(t)(1)(B)(ii) of the Act) (87 FR 72162). In 
the CY 2023 OPPS/ASC final rule with comment period, CMS also finalized 
regulations at 42 CFR 419.92(c) which address payment for services 
furnished by an REH that fall outside the scope of the covered OPD 
services under section 1833(t)(1)(B) of the Act. In addition, pursuant 
to section 1834(x)(2) of the Act, CMS codified at 42 CFR 419.92(b) that 
REHs will be paid an additional monthly facility payment, which was 
calculated for CY 2023 pursuant to the methodology described in the CY 
2023 OPPS/ASC final rule with comment period and will be updated in 
subsequent years by the hospital market basket percentage increase as 
described in section 1886(b)(3)(B)(iii) of the Act.

C. Background on the IHS Outpatient All-Inclusive Rate (AIR) for Tribal 
and IHS Hospitals

    For many years, tribal and IHS hospitals have been paid for 
hospital outpatient services furnished to Medicare beneficiaries based 
upon an outpatient per visit rate (the All-Inclusive Rate or ``AIR''), 
which is published annually by the IHS in the Federal Register. For 
additional information about the annual all-inclusive rates that IHS 
sets for inpatient and outpatient medical care provided by IHS 
facilities, please refer to IHS's CY 2023 Reimbursement Rate Notice 
which appeared in the Federal Register on February 27, 2023 (88 FR 
12387).
    In the CY 2002 OPPS final rule, CMS explicitly excluded IHS 
hospitals from the OPPS (66 FR at 59893) and codified that exclusion at 
Sec.  419.20(b)(4), explaining that these facilities would continue to 
be paid under the separately established rate (the AIR) that is 
published annually in the Federal Register.

D. Proposal To Pay IHS and Tribal Hospitals That Convert to an REH 
Under the AIR

    While some tribal and IHS hospitals have expressed interest in 
converting to an REH, they have expressed significant reservations 
about doing so due to having to transition from their existing payment 
methodology under the AIR to the REH payment methodology. As discussed 
above, in accordance with 42 CFR 419.20(b)(4) and CMS's longstanding 
policy, tribal and IHS hospitals are excluded from payment under the 
OPPS and instead are paid for hospital outpatient services under the 
AIR. In contrast, payment for REH services is defined in section 
1834(x)(1) of the Act and under Sec.  419.92(a)(1) as ``the amount of 
payment that would otherwise apply under section 1833(t) of the Act for 
the equivalent covered OPD service.'' Because there is no amount that 
would otherwise apply under section 1833(t) of the Act for hospital 
outpatient services furnished by tribal and IHS hospitals (because 
these hospitals have always been excluded from the OPPS for payment for 
hospital outpatient services), such services, when furnished by IHS 
operated or tribally operated REHs (hereinafter referred to as ``IHS-
REHs''), do not fall within the scope of ``REH services.'' Under Sec.  
419.92(c), ``a service furnished by an REH that does not meet the 
definition of an REH service under Sec.  419.91 is paid for under the 
payment system applicable to the service, provided the requirements for 
payment under that system are met.'' Consequently, we propose that IHS-
REHs be paid for hospital outpatient services under the same rate (the 
applicable AIR that is established and published annually by the IHS) 
that would otherwise apply if these services were performed by an IHS 
or tribal hospital, consistent with the requirements of Sec.  
419.92(c). Under this proposal, the AIR would serve as payment for 
services furnished by IHS-REHs as part of an outpatient hospital 
encounter in the same manner as the AIR currently applies to IHS 
operated hospitals. Accordingly, to the extent that IHS hospitals are 
currently compensated via the AIR, rather than other Medicare payment 
mechanisms, for services other than hospital outpatient services that 
are furnished as part of an outpatient hospital encounter,

[[Page 49867]]

CMS is proposing that an IHS-REH would also be paid via the AIR when 
furnishing such services as part of an outpatient hospital encounter. 
Further, we note that existing beneficiary coinsurance policies 
applicable to such services under the AIR would remain unchanged by our 
proposal.
    We propose that IHS-REHs would receive the REH monthly facility 
payment consistent with how this payment is made to REHs that are not 
tribally or IHS operated. CMS pays the monthly facility payment, 
pursuant to section 1834(x)(2) of the Act, as a separate payment to the 
REH that is not tied to specific services. Likewise, there is nothing 
in the statute and CMS's implementing regulations (42 CFR 419.92(b)) 
that would preclude REHs, including tribally or IHS operated REHs, from 
receiving this payment, even if they are paid under a separate payment 
framework for hospital outpatient services provided to beneficiaries 
(87 FR 72167 through 72181). Therefore, we propose that IHS-REHs would 
receive the monthly facility payment, consistent with Sec.  419.92(b).
    We also believe that for IHS-REHs it would be most efficient from a 
claims processing perspective for the IHS-REHs to process their claims 
separately from other REHs. Therefore, we propose to update the OPPS 
claims processing logic to include an IHS-REH specific payment flag, 
which an IHS-REH provider would utilize to indicate that the provider 
is an IHS-REH and should be paid the AIR.
    Allowing tribal and IHS hospitals to continue receiving payment for 
hospital outpatient services through the AIR would remove several 
barriers to these hospitals converting to REHs. This proposal would 
provide tribal or IHS hospitals that convert to REHs greater 
predictability by allowing these facilities to continue to be paid via 
a familiar payment mechanism (the AIR), that will enable payment at the 
same rate that these hospitals are currently paid for outpatient 
hospital encounters. This proposal would also reduce the administrative 
burden for tribal and IHS hospitals to convert to an REH since they 
would already be familiar with reporting services and receiving payment 
using the AIR and would not need to invest in new software and 
additional staff training to receive payment for individual REH 
services at the REH payment rate. The continued use of the AIR would 
also make it easier for tribal and IHS providers that convert to an 
REH, but later determine it was the wrong decision for their facility, 
to convert back to a CAH or an inpatient hospital. Finally, CMS 
anticipates that this proposal would enable an increased number of 
rural tribal and IHS hospitals to attain an REH designation in a manner 
that would allow them to maintain their outpatient services, which may 
have a positive impact on health equity for Native Americans and people 
adversely affected by persistent poverty or inequality by facilitating 
access to health care in rural tribal communities.
    We propose to add a new paragraph (d) to Sec.  419.92 to codify 
that, beginning in CY 2024, IHS and tribally operated REHs, as defined 
in a proposed new paragraph (e) in Sec.  419.92 as discussed below, 
will be paid under the outpatient hospital AIR that is established and 
published annually by the IHS instead of being paid the rates for REH 
services described in Sec.  419.92(a)(1).
    We also propose to amend Sec.  419.93(a)(2), relating to services 
furnished by an off-campus provider-based department of an REH, to add 
a reference to the proposed new provision at Sec.  419.92(d) for 
purposes of payment for services furnished by off-campus provider-based 
departments of IHS and tribally operated REHs.
    Finally, we propose to establish a definition for IHS or tribally 
operated REHs, to identify the REHs that will be eligible to receive 
payment under the proposed new policy in Sec.  419.92(d). Accordingly, 
we propose to add paragraph (e) to Sec.  419.92 to codify that for 
purposes of Sec.  419.92, an IHS or tribally operated REH means an REH, 
as defined in Sec.  485.502, that is operated by the IHS or by a tribe 
or tribal organization with funding authorized by Title I or III of the 
Indian Self-Determination and Education Assistance Act (Pub. L. 93-
638).

E. Exclusion of REHs From the OPPS

    Hospitals that are excluded from payment under the OPPS are 
specified under Sec.  419.20(b) of the regulations. Because, as 
described above, REHs are paid outside of the OPPS, we intended to 
revise Sec.  419.20(b) during the CY 2023 rulemaking cycle to exclude 
REHs from payment under the OPPS. However, this intended revision was 
inadvertently omitted. Consequently, we are now proposing to codify the 
exclusion of REHs from the OPPS by adding new paragraph (5) to Sec.  
419.20(b).

XXII. Request for Public Comments on Potential Payment Under the IPPS 
and OPPS for Establishing and Maintaining Access to Essential Medicines

A. Overview

    On January 26, 2021, President Biden issued Executive Order 14001, 
``A Sustainable Public Health Supply Chain'' (86 FR 7219), which 
launched a whole-of-government effort to strengthen the resilience of 
medical supply chains, especially for pharmaceuticals and simple 
medical devices. This effort was bolstered subsequently by Executive 
Orders 14005, 14017, and 14081 (86 FR 7475, 11849, and 25711, 
respectively). In June 2021, as tasked in Executive Order 14017 on 
``America's Supply Chains,'' the Department of Health and Human 
Services released a review of pharmaceuticals and active pharmaceutical 
ingredients, analyzing risks in these supply chains and recommending 
solutions to increase their reliability.\648\ In July 2022, as tasked 
in Executive Order 14001, the Biden-Harris Administration also released 
the National Strategy for a Resilient Public Health Supply Chain, which 
laid out a roadmap to support reliable access to products for public 
health in the future, including through prevention and mitigation of 
medical product shortages.\649\
---------------------------------------------------------------------------

    \648\ Department of Health and Human Services, Review of 
Pharmaceuticals and Active Pharmaceutical Ingredients (pp. 207-250), 
June 2021: https://www.whitehouse.gov/wp-content/uploads/2021/06/100-day-supply-chain-review-report.pdf.
    \649\ Department of Health and Human Services, National Strategy 
for a Resilient Public Health Supply Chain, July 2021: https://www.phe.gov/Preparedness/legal/Documents/National-Strategy-for-Resilient-Public-Health-Supply-Chain.pdf.
---------------------------------------------------------------------------

    Over the last few years, shortages for critical medical products 
have persisted and continued to increase.\650\ For pharmaceuticals, 
even before the COVID-19 pandemic, nearly two-thirds of hospitals 
reported more than 20 drug shortages at any one time--from antibiotics 
used to treat severe bacterial infections to crash cart drugs necessary 
to stabilize and resuscitate critically ill adults.\651\ The frequency 
and severity of these supply disruptions has only been exacerbated over 
the last few years.
---------------------------------------------------------------------------

    \650\ Senate Committee on Homeland Security & Governmental 
Affairs, Short Supply: The Health and National Security Risks of 
Drug Shortages, March 2023: https://www.hsgac.senate.gov/wp-content/uploads/2023-06-06-HSGAC-Majority-Draft-Drug-Shortages-Report.-FINAL-CORRECTED.pdf.
    \651\ Vizient, Drug Shortages and Labor Costs: Measuring the 
Hidden Costs of Drug Shortages on U.S. Hospitals, June 2019: https://wieck-vizient-production.s3.us-west-1.amazonaws.com/page-Brum/attachment/c9dba646f40b9b5def8032480ea51e1e85194129.
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    Recent data supports that hospitals are estimated to spend more 
than 8.6 million personnel hours and $360 million per year to address 
drug shortages, which will likely further result in treatment delays 
and denials, changes in treatment regimens,

[[Page 49868]]

medication errors,652 653 654 as well as higher rates of 
hospital-acquired infections and in-hospital 
mortality.655 656 The additional time, labor, and resources 
required to navigate drug shortages also increase health care 
costs.\657\
---------------------------------------------------------------------------

    \652\ American Journal of Health System Pharmacology, National 
Survey on the Effect of Oncology. Drug Shortages on Cancer Care, 
2013: https://pubmed.ncbi.nlm.nih.gov/23515514/.
    \653\ JCO Oncology Practice, National Survey on the Effect of 
Oncology Drug Shortages in Clinical Practice, 2022: https://pubmed.ncbi.nlm.nih.gov/35544740/.
    \654\ Journal of the American Medical Association, Association 
between U.S. Norepinephrine Shortage and Mortality Among Patients 
with Septic Shock, 2017: https://pubmed.ncbi.nlm.nih.gov/28322415/.
    \655\ Clinical Infectious Diseases, The Effect of a 
Piperacillin/Tazobactam Shortage on Antimicrobial Prescribing and 
Clostridium difficile Risk in 88 US Medical Centers, 2017: https://pubmed.ncbi.nlm.nih.gov/28444166/.
    \656\ New England Journal of Medicine, The Impact of Drug 
Shortages on Children with Cancer: The Example of Mechlorethamine, 
2012: https://pubmed.ncbi.nlm.nih.gov/23268661/.
    \657\ Department of Health and Human Services, ASPE Report to 
Congress: Impact of Drug Shortages on Consumer Costs, May 2023: 
https://aspe.hhs.gov/reports/drug-shortages-impacts-consumer-costs.
---------------------------------------------------------------------------

    Hospitals' procurement preferences directly influence upstream 
intermediary and manufacturer behavior and can be leveraged to help 
foster a more resilient supply chain for lifesaving drugs and 
biologicals. With respect to shortages, supply chain resiliency 
includes having sufficient inventory that can be leveraged in the event 
of a supply disruption or demand increase--as opposed to ``just-in-
time'' inventory-management efficiency that can leave supply chains 
vulnerable to shortage.658 659 This concept is especially 
true for essential medicines, which generally comprise of products that 
are medically necessary to have available at all times in an amount 
adequate to serve patient needs and in the appropriate dosage forms. A 
resilient supply can also include essential medicines from multiple 
manufacturers, including the availability of domestic pharmaceutical 
manufacturing capacity, to diversify the sourcing of essential 
medicines. We believe it is necessary to support practices that can 
curtail pharmaceutical shortages of essential medicines and promote 
resiliency in order to safeguard and improve the care hospitals are 
able to provide to beneficiaries.
---------------------------------------------------------------------------

    \658\ Department of Health and Human Services, Review of 
Pharmaceuticals and Active Pharmaceutical Ingredients (pp. 207-250), 
June 2021: https://www.whitehouse.gov/wp-content/uploads/2021/06/100-day-supply-chain-review-report.pdf.
    \659\ Department of Health and Human Services, National Strategy 
for a Resilient Public Health Supply Chain, July 2021: https://www.phe.gov/Preparedness/legal/Documents/National-Strategy-for-Resilient-Public-Health-Supply-Chain.pdf.
---------------------------------------------------------------------------

    We are seeking comment on, and may consider finalizing based on the 
review of comments received, as early as for cost reporting periods 
beginning on or after January 1, 2024, separate payment under the IPPS, 
for establishing and maintaining access to a buffer stock of essential 
medicines to foster a more reliable, resilient supply of these 
medicines. This separate payment would not be budget neutral. An 
adjustment under the OPPS could be considered for future years.

B. Establishing and Maintaining a Buffer Stock of Essential Medicines

    The report Essential Medicines Supply Chain and Manufacturing 
Resilience Assessment, as developed by the U.S. Department of Health 
and Human Services (HHS) Office of the Assistant Secretary for 
Preparedness and Response (ASPR) prioritized 86 essential medicines 
(hereinafter referred to as, the ``essential medicines'') identified as 
either critical for minimum patient care in acute settings or important 
for acute care or important for acute care of respiratory illnesses/
conditions, with no comparable alternative available. 
660 661 When hospitals have insufficient supply of these 
essential medicines, such as during a shortage, care for Medicare 
beneficiaries can be negatively impacted. To mitigate negative care 
outcomes in the event of insufficient supply, hospitals can adopt 
procurement strategies that foster a consistent, safe, stable, and 
resilient supply of these essential medicines. Such procurement 
strategies can include provisions to maintain or otherwise provide for 
extra stock of product (for example, either to maintain or to hold 
directly at the hospital, arrange contractually for a distributor to 
hold, or arrange contractually with a wholesaler for a manufacturer to 
hold), which can act as a buffer in the event of an unexpected increase 
in product use or disruption to supply. We expect that the resources 
required to establish and maintain access to a minimal ``buffer stock'' 
of essential medicines, such as a 3-month supply, will generally be 
greater than the resources required to establish and maintain access to 
these medicines through alternative means that are more susceptible to 
supply chain disruptions (for example, through so-called ``just-in-
time'' inventory practices). Given these additional resource costs, we 
are considering separate payment under the IPPS for 2024, and the OPPS 
for future years, for the costs of establishing and maintaining access 
to a buffer stock of essential medicines.
---------------------------------------------------------------------------

    \660\ https://www.armiusa.org/wp-content/uploads/2022/07/ARMI_Essential-Medicines_Supply-Chain-Report_508.pdf.
    \661\ https://aspr.hhs.gov/newsroom/Pages/Essential-Medicines-May22.aspx.
---------------------------------------------------------------------------

    For the IPPS for 2024 and subsequent years, the Secretary could 
potentially make this separate payment for the additional resource 
costs of establishing and maintaining access to a buffer stock of 
essential medicines 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, for future years, the Secretary could potentially 
make this separate payment for the 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 and payments for non-opioid treatments for pain 
relief) necessary to ensure equitable payments, such as adjustments for 
certain classes of hospitals.
    Additionally, sustaining sources of domestically sourced medical 
supplies can also help support continued availability in the event of 
public health emergencies and other disruptions.662 663 This 
concept is consistent with our current policy for domestic National 
Institute for Occupational Safety and Health (NIOSH) approved surgical 
N95 respirators (87 FR 72037). Hospitals, as major purchasers and users 
in the U.S. of essential medicines, can support the existence of 
domestic sources by sourcing domestically made essential medicines. 
However, we expect that domestically manufactured essential medicines 
may be more expensive than those sourced from some other countries that 
may have lower manufacturing costs.\664\ Given these additional 
resource

[[Page 49869]]

costs, we took into account in developing the potential payment 
outlined in the previous paragraph (for the costs of establishing and 
maintaining access to a buffer stock of essential medicines) the 
increased costs to establish and maintain access to a buffer stock of 
domestically manufactured essential medicines.
---------------------------------------------------------------------------

    \662\ Department of Health and Human Services, Review of 
Pharmaceuticals and Active Pharmaceutical Ingredients (pp. 207-250), 
June 2021: https://www.whitehouse.gov/wp-content/uploads/2021/06/100-day-supply-chain-review-report.pdf.
    \663\ Department of Health and Human Services, National Strategy 
for a Resilient Public Health Supply Chain, July 2021: https://www.phe.gov/Preparedness/legal/Documents/National-Strategy-for-Resilient-Public-Health-Supply-Chain.pdf.
    \664\ Department of Health and Human Services, Review of 
Pharmaceuticals and Active Pharmaceutical Ingredients (pp. 207-250), 
June 2021: https://www.whitehouse.gov/wp-content/uploads/2021/06/100-day-supply-chain-review-report.pdf.
---------------------------------------------------------------------------

    In addition to essential medicines, we may consider expanding a 
potential Medicare payment policy in future years to include critical 
medical devices once the FDA's Critical Medical Device List (CMDL) 
becomes available. In accordance with implementation of Executive Order 
14001 on a Sustainable Public Health Supply Chain, the FDA is leading 
an effort to develop this list of recommended medical devices that are 
critical to have on hand, at all times for patients, healthcare 
workers, and the U.S. public because of their clinical need. The list 
is expected to be available by the end of 2023.

C. Potential Separate Payment Under IPPS and OPPS for Establishing and 
Maintaining Access to a Buffer Stock of Essential Medicines

    Currently, payment for the resources required to establish and 
maintain access to medically reasonable and necessary drugs and 
biologicals is generally part of the IPPS or OPPS payment. As noted in 
section XXII.B, we expect that the resources required to establish and 
maintain access to a buffer stock of essential medicines will generally 
be greater than the resources required to establish and maintain access 
to these medicines without such a buffer stock. Additionally, the 
resources required to establish and maintain access to a buffer stock 
of domestically manufactured essential medicines may generally be 
greater than the resources required to establish and maintain access to 
a buffer stock of these medicines from non-domestic sources. Given the 
policy goals discussed in sections XXII.A and XXII.B of this proposed 
rule, we believe it may be appropriate to pay separately for the 
additional resource costs associated with establishing and maintaining 
access, including through contractual arrangement, to a buffer stock of 
essential medicines. These potential separate payments would be in 
addition to payment for the essential medicines themselves, whether 
that payment is bundled with other items or services or the essential 
medicines are separately paid, and would help account for the 
additional resource costs associated with establishing and maintaining 
access, including through contractual arrangements, to a buffer stock 
of these essential medicines.
    It is challenging to quantify these additional resource costs 
precisely based on currently available information. As noted in section 
XXII.B, hospitals could establish and maintain access to a buffer stock 
in a variety of ways, including, but not limited to, through 
contractual arrangements with distributors and wholesalers. Given the 
current challenge in precisely quantifying these additional resource 
costs, CMS could initially base the IPPS payment on the IPPS shares of 
the additional reasonable costs of a hospital to establish and maintain 
access to its buffer stock. The use of IPPS shares in this payment 
adjustment would be consistent with the use of these shares for the 
payment adjustment for domestic NIOSH approved surgical N95 respirators 
(87 FR 72037). These costs, which could include costs to hold essential 
medicines directly at the hospital, arrange contractually for a 
distributor to hold, or arrange contractually with a wholesaler for a 
manufacturer to hold, could be reported to CMS by a hospital in 
aggregate on its cost report. These costs would not include the costs 
of the essential medicine itself. This reported information, along with 
existing information already collected on the cost report, could be 
used to calculate a Medicare payment for the estimated cost, specific 
to each hospital, incurred to establish and maintain access to its 
buffer stock of these essential medicines. (As noted in section XXII.B, 
essential medicines refers to the 86 essential medicines prioritized in 
the report Essential Medicines Supply Chain and Manufacturing 
Resilience Assessment.) In accordance with the principles of reasonable 
cost as set forth in section 1861(v)(1)(A) of the Act and in 42 CFR 
413.1 and 413.9, Medicare could make a lump-sum payment for Medicare's 
share of these additional inpatient costs at cost report settlement.
    These payments for the IPPS shares of establishing and maintaining 
access to a buffer stock of essential medicines could be provided 
biweekly as interim lump-sum payments to the hospital and would be 
reconciled at cost report settlement. A provider could make a request 
for these biweekly interim lump sum payments for an applicable cost 
reporting period, as provided under 42 CFR 413.64 (Payments to 
providers: Specific rules) and 42 CFR 412.116(c) (Special interim 
payments for certain costs). These payment amounts would be determined 
by the Medicare Administrative Contractor (MAC), consistent with 
existing policies and procedures. In general, interim payments are 
determined by estimating the reimbursable amount for the year using 
Medicare principles of cost reimbursement and dividing it into 26 equal 
biweekly payments. The estimated amount is based on the most current 
cost data available, which will be reviewed and, if necessary, adjusted 
at least twice during the reporting period. (See CMS Pub 15-1 2405.2 
for additional information.) The MACs could determine the interim lump-
sum payments based on the data the hospital may provide that reflects 
the information that could be included on a supplemental cost reporting 
form. CMS will separately seek comment through the PRA process on a 
potential supplemental cost reporting form that could be used for this 
purpose. In future years, the MACs could determine the interim biweekly 
lump-sum payments utilizing information from the prior year's cost 
report, which may be adjusted based on the most current data available. 
This would be consistent with the current policies for medical 
education costs, and bad debts for uncollectible deductibles and 
coinsurance paid on interim biweekly basis as noted in CMS Pub 15-1 
2405.2. It is also consistent with the payment adjustment for 
domestically sourced NIOSH approved surgical N95 respirators (87 FR 
72037).
    We are seeking comment on, and may consider finalizing based on the 
review of comments received, as early as for cost reporting periods 
beginning on or after January 1, 2024, separate payment under IPPS for 
the IPPS share of the reasonable costs of establishing and maintaining 
access to a 3-month buffer stock of one or more essential medicine(s). 
Essential medicines for the potential IPPS separate payment would be 
the 86 essential medicines prioritized in the report Essential 
Medicines Supply Chain and Manufacturing Resilience Assessment. An 
adjustment under OPPS could be considered for future years. We seek 
comment on all aspects of this potential payment policy.
    If CMS were to finalize based on the review of comments received, 
as early as for cost reporting periods beginning on or after January 1, 
2024, separate payment under IPPS, we are considering amending our 
regulations at 42 CFR 412.1 by revising paragraph (a)(1)(iv) to read as 
follows: ``(iv) Additional payments are made for outlier cases, bad 
debts, indirect medical education costs, for serving a disproportionate 
share of low-income patients, for the additional resource costs of 
domestic National Institute for Occupational Safety and Health approved 
surgical N95

[[Page 49870]]

respirators, and for the additional resource costs of establishing and 
maintaining access to a buffer stock of essential medicines.''
    We are also considering amending our regulations, and seek comment 
on these potential revisions, at 42 CFR 412.2 by adding paragraph 
(f)(11) to read as follows: ``(11) A payment adjustment for the 
additional resource costs of establishing and maintaining access to a 
buffer stock of essential medicines as specified in Sec.  412.113.''
    We are also considering amending our regulations, and seek comment 
on these potential revisions, at Sec.  412.113 by adding paragraph (g) 
to read as follows:
    ``(g) Additional resource costs of establishing and maintaining 
access to a buffer stock of essential medicines: (1) Essential 
medicines are the 86 medicines prioritized in the report Essential 
Medicines Supply Chain and Manufacturing Resilience Assessment 
developed by the U.S. Department of Health and Human Services Office of 
the Assistant Secretary for Preparedness and Response and published in 
May of 2022. A buffer stock of essential medicines for a hospital is a 
3-month supply of one or more essential medicines; (2) The additional 
resource costs of establishing and maintaining access to a buffer stock 
of essential medicines for a hospital are the additional resource costs 
incurred by the hospital to directly hold a buffer stock of essential 
medicines for its patients, or arrange contractually for such a buffer 
stock to be held for use by the hospital for its patients. The 
additional resource costs of establishing and maintaining access to a 
buffer stock of essential medicines does not include the resource costs 
of the essential medicines themselves; (3) For cost reporting periods 
beginning on or after January 1, 2024, a payment adjustment to a 
hospital for the additional resource costs of establishing and 
maintaining access to a buffer stock of essential medicines is made as 
described in paragraph (g)(4) of this section; and (4) The payment 
adjustment is based on the reasonable cost incurred by the hospital for 
establishing and maintaining access to a buffer stock of essential 
medicines during the cost reporting period.''

D. Comment Solicitation on Additional Considerations

    In addition to the potential payment policy as described in section 
XXII.C of this proposed rule, we also take particular interest, and 
seek comment on, the following. We note that we may consider amending, 
and finalizing, the potential policy under XXII.C of this proposed rule 
based on a review of the comments received on the following questions:
     How effective would this potential payment policy be at 
improving the resiliency of the supply chain for essential medicines 
and the care delivery system? How could it be improved, either 
initially or through future rulemaking? Are there suggested alternative 
pathways for establishing similar separate payments?
     The potential payment policy specified under section 
XXII.C of this proposed rule would account for any increased resource 
costs for a hospital to establish and maintain access to a buffer stock 
of domestically manufactured essential medicines compared to non-
domestically manufactured ones. Even though the costs of essential 
medicines themselves is not considered a resource cost of establishing 
and maintaining access to a buffer stock, it is possible that there are 
additional resource costs, perhaps contractual, to establishing and 
maintaining access to a buffer stock of more expensive domestically 
manufactured essential medicines compared to non-domestically 
manufactured ones. What type of additional hospital resource costs are 
involved in establishing and maintaining access to domestically 
manufactured essential medicines compared to non-domestically 
manufactured ones? Are there alternative approaches that might better 
recognize the increased resource costs for a hospital to establish and 
maintain access to a buffer stock of domestically manufactured 
essential medicines? How might any suggested alternatives be better at 
improving the resiliency of the supply chain for essential medicines 
and the care delivery system? What standard should be used to define 
domestic manufacturing for suggested alternatives? Specifically, would 
the international trade rule of ``substantial transformation'' be 
appropriate to define domestic manufacturing, if that product was 
substantially transformed in the U.S.? Would hospitals have sufficient 
access to that information when making procurement decisions or doing 
reporting to CMS?
     Are the 86 essential medicines prioritized in the report 
Essential Medicines Supply Chain and Manufacturing Resilience 
Assessment the appropriate initial list of essential medicines for this 
potential payment policy? How often should HHS consider updating the 
respective list used for establishing these potential additional 
payments? For example, HHS expects it may update the essential medicine 
list every two years. Should that be the frequency for purposes of 
administering these additional payments? Also, what additional criteria 
should be considered when determining whether the list should be 
updated?
     Should HHS consider expanding the list of essential 
medicines used in establishing these potential additional payments to 
include essential medicines used in the treatment of cancer?
     Is a 3-month supply the appropriate amount of supply for 
the buffer stock or should an alternative duration be used? We 
recognize that a 3-month supply may not be feasible in all 
circumstances, given various factors, including, but not limited to, 
the shelf life of certain essential medicines. What additional 
considerations, if any, are needed?
     In general, how much of a buffer stock of these essential 
medicines are hospitals currently maintaining across different hospital 
types and regions (whether directly, or contractually through 
distributors or other partners)? Are there unique circumstances for 
safety net hospitals that should be taken into consideration in any 
potential payment policy?
     What type of additional hospital resource costs are 
involved in establishing and maintaining access to a buffer stock of 
essential medicines? To what degree, and under what circumstances, 
might hospitals use contractual arrangements? What type of contractual 
arrangements might be used?
     What flexibilities should exist for implementing buffer 
stock practices?
     What immediate impacts on the supply of essential 
medicines could be expected upon implementation of this potential 
policy? What steps, if any, would need to be taken to mitigate risks of 
possible demand-driven shortages as a result of implementation of such 
a policy?
     While the availability of essential medicines is critical 
at all times, it is especially the case for emergencies. Should there 
be a separate payment adjustment to more acutely address supply issues 
that emerge specific to the case of preparedness as a pandemic or other 
public health emergency emerges?
     How should such a policy be considered for essential 
medicines that are currently in shortage, and thus potentially not 
appropriate for arranging to have buffer stock? What steps, if any, 
would need to be taken if an eligible essential medicine enters 
shortage while such a policy is in place?
     Should critical medical devices be considered in future 
rulemaking for inclusion in a potential payment policy?
    ++ Which types of medical devices do hospitals currently maintain 
in a buffer stock?

[[Page 49871]]

    ++ Do single use devices (including consumables) or reusable 
devices pose a greater risk of supply chain impact leading to 
shortages?
    ++ Are hospitals more likely to have a buffer stock of devices that 
are single use (including consumables) or reusable?
    ++ What levels of buffer stock do hospitals currently keep on hand 
for devices they consider critical?
    ++ Is the quantity of buffer stock dependent on type of medical 
device (single use vs. reusable)?
    ++ Generally, how many days of buffer stock is typically carried by 
device type?
    ++ What other factors are considered when determining which types 
of medical devices to maintain in a buffer stock?
    + What are the prevailing buffer stock strategies employed across 
deice types (e.g., just in time, consignment, single warehousing, 
warehouse to warehouse)?

XXIII. Files Available to the Public via the Internet

    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). 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 a column titled ``Drug Pass-Through 
Expiration during Calendar Year'' where we flagged, through the use of 
an asterisk, each drug for which pass-through payment was expiring 
during the calendar year on a date other than December 31. For CY 2024 
and subsequent years, we propose to retain these columns that are 
updated to reflect the drug codes for which pass-through payment is 
expiring in the applicable year.
    In the CY 2023 OPPS/ASC final rule with comment period (87 FR 
72250) for CY 2023, we changed the format of the OPPS Addenda A, B, and 
C by adding a 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 
flagged, through the use of an asterisk, each drug and device for which 
pass-through payment was expiring during the calendar year on a date 
other than December 31. For CY 2024 and subsequent years, we propose to 
retain these columns that are updated to reflect the devices for which 
pass-through payment is expiring in the applicable year.
    In addition, we propose to delete the column titled ``Copayment 
Capped at the Inpatient Deductible'' and instead to add a new column 
for ``Adjusted Beneficiary Copayment'' to identify any copayment 
adjustment due to either the inpatient deductible amount copayment cap 
or the inflation-adjusted copayment of a Part B rebatable drug per 
section 1833(t)(8)(F) and section 1833(i)(9) of the Act, as added by 
section 11101 of the Inflation Reduction Act (IRA). We also propose to 
add another column for notes. We propose that the ``Note'' column would 
contain multiple messages including, but not limited to, inflation-
adjusted copayment of a Part B rebatable drug, the copayment for a code 
capped at the inpatient deductible, or 8 percent of the reference 
product add-on applied for a biosimilar.
    To view the Addenda to this proposed rule pertaining to proposed CY 
2024 payments under the OPPS, we refer readers to the CMS website at: 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html; 
select ``CMS-1786-P'' from the list of regulations. All OPPS Addenda to 
this proposed rule are contained in the zipped folder titled ``2024 
NPRM OPPS Addenda'' in the related links section at the bottom of the 
page. To view the Addenda to the CY 2024 OPPS/ASC proposed rule 
pertaining to CY 2024 payments under the ASC payment system, we refer 
readers to the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/ASC-Regulations-and-Notices.html; 
select ``CMS-1786-P'' from the list of regulations. The ASC Addenda to 
the CY 2024 OPPS/ASC proposed rule are contained in a zipped folder 
titled ``2024 NPRM Addendum AA, BB, DD1, DD2, EE, and FF'' in the 
related links section at the bottom of the page.

XXIV. Collection of Information Requirements

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

A. ICRs Related to Proposed Intensive Outpatient Physician 
Certification Requirements

    As discussed in section VIII.B.3 of this proposed rule, we propose 
to codify the content of certification and plan of treatment 
requirements for intensive outpatient services at Sec.  424.24(d). 
Specifically, we propose to mirror the PHP content of certification and 
plan of care treatment requirements at Sec.  424.24(e), with the 
following exceptions: require the content of certification to include 
documentation that the individual requires such services for a minimum 
of 9 hours per week (with no requirement for a need for inpatient 
psychiatric care if the IOP services were not provided).
    The proposed ICRs at Sec.  424.24(d) are subject to the Act. 
However, we believe the burden associated with these ICRs are exempt, 
as defined by 5 CFR 1320.3(b)(2), because the time, effort, and 
financial resources necessary to comply with these requirements would 
be incurred by persons in the normal course of their activities. We 
believe the record keeping requirements described in section VIII.B.3 
of this proposed rule are a usual and customary part of physicians' 
activities in developing the plan of treatment for existing patients in 
intensive outpatient programs, and that the requirements are similar to 
existing ICRs under Medicare for partial hospitalization patients.

[[Page 49872]]

B. ICRs Related to the Hospital OQR Program

1. Background
    The Hospital Outpatient Quality Reporting (OQR) Program is 
generally aligned with the CMS quality reporting program for hospital 
inpatient services known as the Hospital Inpatient Quality Reporting 
(IQR) Program. We refer readers to the CY 2011 through CY 2023 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; 86 FR 63961 through 63968, and 87 FR 
72250 through 72252, 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 2023 
OPPS/ASC final rule, our burden estimates were based on an assumption 
that approximately 3,350 hospitals would report data to the Hospital 
OQR Program. For this proposed rule, based on data from the CY 2023 
Hospital OQR Program payment determination, which supports this 
assumption, we will continue to estimate that 3,350 hospitals will 
report data to the Hospital OQR Program, unless otherwise noted. While 
the exact number of hospitals required to submit data annually may 
vary, we use this estimate to be consistent with previous rules and for 
ease of calculation across reporting periods.
    In the CY 2018 OPPS/ASC final rule (82 FR 52617), we finalized a 
policy 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. We note that since the CY 2023 OPPS/ASC final rule, BLS 
removed this labor category and added a new labor category titled 
``Medical Records Specialists.'' While the most recent data from the 
BLS reflects a median hourly wage of $24.56 per hour for all medical 
records specialists, $26.06 is the hourly mean wage for ``general 
medical and surgical hospitals,'' \665\ which is an industry within 
medical records specialists. We believe the industry of ``general 
medical and surgical hospitals'' is more specific to our settings for 
use in our calculations than other industries that fall under medical 
records specialists, such as ``office of physicians'' or ``nursing care 
facilities.'' We have finalized a policy to calculate the cost of 
overhead, including fringe benefits, at 100 percent of the mean hourly 
wage (82 FR 52617). This is necessarily a rough adjustment, both 
because fringe benefits and overhead costs can vary significantly from 
employer-to-employer and because methods of estimating these costs vary 
widely from study-to-study. Nonetheless, we believe that doubling the 
hourly wage rate ($26.06 x 2 = $52.12) to estimate the total cost is a 
reasonably accurate estimation method and allows for a conservative 
estimate of hourly costs.
---------------------------------------------------------------------------

    \665\ U.S. Bureau of Labor Statistics. Occupational Outlook 
Handbook, Medical Records Specialists. Accessed on March 6, 2023. 
Available at: https://www.bls.gov/oes/current/oes292072.htm.
---------------------------------------------------------------------------

    In section XIV.B.2 of this proposed rule, we propose to modify 
three previously adopted measures: (1) the COVID-19 Vaccination 
Coverage Among Healthcare Personnel measure, beginning with the CY 2024 
reporting period/CY 2026 payment determination; (2) the Cataracts: 
Improvement in Patient's Visual Function Within 90 Days Following 
Cataract Surgery measure survey instrument usage, beginning with the 
voluntary CY 2024 reporting period; and (3) the Appropriate Follow-Up 
Interval for Normal Colonoscopy in Average Risk Patients measure, 
beginning with the CY 2024 reporting period/CY 2026 payment 
determination. We propose to adopt three new measures: (1) Risk 
Standardized Patient-Reported Outcome-Based Performance Measure (PRO-
PM) Following Elective Primary Total Hip Arthroplasty (THA) and/or 
Total Knee Arthroplasty (TKA) in the HOPD Setting, beginning with the 
voluntary CYs 2025 and 2026 reporting periods followed by mandatory 
reporting beginning with the CY 2027 reporting period/CY 2030 payment 
determination; (2) the Excessive Radiation Dose or Inadequate Image 
Quality for Diagnostic Computed Tomography (CT) in Adults (Hospital 
Level--Outpatient) electronic clinical quality measure (eCQM), 
beginning with the voluntary CY 2025 reporting period followed by 
mandatory reporting beginning with the CY 2026 reporting period/CY 2028 
payment determination; and (3) readoption of the Hospital Outpatient 
Volume on Selected Outpatient Surgical Procedures measure with 
modification, with voluntary CY 2025 reporting period followed by 
mandatory reporting beginning with the CY 2026 reporting period/CY 2028 
payment determination. We are also proposing to remove the Left Without 
Being Seen measure beginning with the CY 2024 reporting period/CY 2026 
payment determination.
2. Information Collection Burden for the Proposal To Modify the COVID-
19 Vaccination Coverage Among Healthcare Personnel (HCP) Measure 
Beginning With the CY 2024 Reporting Period/CY 2026 Payment 
Determination
    In the CY 2022 OPPS/ASC final rule, we finalized adoption of the 
COVID-19 Vaccination Coverage Among Healthcare Personnel (HCP) measure 
for the Hospital OQR Program (87 FR 71748 through 72310). In section 
XIV.B.2.a of this proposed rule, we propose to modify the COVID-19 
Vaccination Coverage Among HCP measure to utilize the term ``up to 
date'' in the HCP vaccination definition and update the numerator to 
specify the timeframes within which an HCP is considered up to date 
with recommended COVID-19 vaccines, including booster doses, beginning 
with the CY 2024 reporting period/CY 2026 payment determination for the 
Hospital OQR Program. We previously discussed information collection 
burden associated with this measure in the CY 2022 OPPS/ASC final rule 
(86 FR 63962).
    We do not believe that the use of the term ``up to date'' or the 
update to the numerator will impact information collection or reporting 
burden because the modification changes neither the amount of data 
being submitted to CMS nor the frequency of data submission. 
Additionally, because we are not proposing any updates to the form, 
manner, and timing of data submission for this measure, we do not 
anticipate any increase in burden associated with this proposal. The 
modified COVID-19 Vaccination Coverage Among HCP measure would continue 
to be calculated using data submitted to the CDC under a separate OMB 
control number (0920-1317; expiration date January 31, 2024). However, 
the CDC currently has a PRA waiver for the collection and reporting of 
vaccination data under section 321 of the National Childhood Vaccine 
Injury Act of 1986 (enacted on November 14, 1986) (NCVIA) (Pub. L. 99-
660).
3. Information Collection Burden for the Proposal To Modify the 
Cataracts: Improvement in Patient's Visual Function Within 90 Days 
Following Cataract Surgery Measure Survey Instrument Use Beginning With 
the CY 2024 Reporting Period
    In the CY 2014 OPPS/ASC final rule (78 FR 75102 through 75104), we

[[Page 49873]]

finalized the adoption of the Cataracts: Improvement in Patient's 
Visual Function Within 90 Days Following Cataract Surgery beginning 
with the CY 2016 payment determination; this measure currently is 
voluntary. In section XIV.B.2.b of this proposed rule, we propose to 
limit the survey instruments that can be used to administer this 
measure to three assessment tools: NEI VFQ-25, VF-14, and VF-8R, 
beginning with the CY 2024 reporting period.
    Because the three assessment tools being proposed are currently 
allowable for collecting data for this measure, we do not believe 
limiting use to these three surveys would result in a change in burden. 
As a result, we are not proposing any changes in burden per response 
associated with this proposal. Additionally, as currently stated in the 
Hospital OQR Program Specifications Manual, the maximum annual sample 
case size for chart abstraction for this measure is 63 cases for 
hospitals with an outpatient population size of between 0 and 900 and 
96 cases for hospitals with an outpatient population size of greater 
than 900.\666\ We are not proposing an increase in the required sample 
size for chart abstraction; therefore we do not believe there is any 
increase in burden associated with this proposal.
---------------------------------------------------------------------------

    \666\ https://qualitynet.cms.gov/files/63c8361058e56000179b310e?filename=OQR_v16.0a_SpecsManual_011723.pdf.
---------------------------------------------------------------------------

4. Information Collection Burden for the Proposal To Modify the 
Appropriate Follow-Up Interval for Normal Colonoscopy in Average Risk 
Patients Measure Beginning With the CY 2024 Reporting Period/CY 2026 
Payment Determination
    In the CY 2014 OPPS/ASC final rule, we finalized the Appropriate 
Follow-Up Interval for Normal Colonoscopy in Average Risk Patients 
measure (78 FR 75101 through 75102). In section XIV.B.2.c of this 
proposed rule, we propose to amend the measure denominator language by 
removing the phrase ``aged 50 years'' and adding in its place the 
phrase ``aged 45 years.''
    As currently stated in the Hospital OQR Program Specifications 
Manual, the maximum annual sample case size for chart abstraction for 
this measure is 63 cases for hospitals with an outpatient population 
size of between 0 and 900 and 96 cases for hospitals with an outpatient 
population size of greater than 900. We are not proposing an increase 
in the required sample size for chart abstraction; therefore, we do not 
believe there is any increase in burden associated with this proposal.
5. Information Collection Burden for the Proposal To Adopt the Risk 
Standardized Patient-Reported Outcome-Based Performance Measure (PRO-
PM) Following Elective Primary Total Hip Arthroplasty (THA) and/or 
Total Knee Arthroplasty (TKA) in the HOPD Setting Beginning With 
Voluntary CYs 2025 and 2026 Reporting Periods Followed by Mandatory 
Reporting Beginning With the CY 2027 Reporting Period/CY 2030 Payment 
Determination
    In section XIV.B.3.b of this proposed rule, we propose to adopt the 
THA/TKA PRO-PM beginning with voluntary CYs 2025 and 2026 reporting 
periods, followed by mandatory reporting beginning with the CY 2027 
reporting period/CY 2030 payment determination. This measure was 
previously adopted for the Hospital IQR Program in the FY 2023 IPPS/
LTCH PPS final rule with an estimated burden of 7.25 minutes (0.120833 
hours) per patient to complete both the pre-operative and post-
operative surveys and 10 minutes (0.167 hours) per hospital per 
response to collect and submit the measure data via the Hospital 
Quality Reporting (HQR) system (87 FR 49386 through 49387). We believe 
the estimated burden for both patient surveys and data submission would 
be the same for the Hospital OQR Program.
    The THA/TKA PRO-PM uses four sources of data for the calculation of 
the measure: (1) patient-reported outcome (PRO) data; (2) claims data; 
(3) Medicare enrollment and beneficiary data; and (4) U.S. Census 
Bureau survey data. We estimate no additional burden associated with 
claims data, Medicare enrollment and beneficiary data, and U.S. Census 
Bureau survey data as these data are already collected via other 
mechanisms such as Medicare enrollment forms, CMS Form 1500, and U.S. 
Census Informational Questionnaires. While we are not proposing to 
require how hospitals collect PRO data for this measure, hospitals 
collecting PRO data would have multiple options for when and how they 
would collect these data so they could best determine the mode and 
timing of collection that works best for their patient population.
    The possible patient touchpoints for pre-operative PRO data 
collection include the doctor's office, pre-surgical steps such as 
education classes, or medical evaluations that can occur in an office 
or at the hospital. The modes of PRO data collection could include 
completion of the pre-operative surveys using electronic devices (such 
as an iPad or tablet), pen and paper, mail, telephone, or through a 
patient portal. Post-operative PRO data collection modes are similar to 
pre-operative modes. The possible patient touchpoints for post-
operative data collection can occur before the follow-up appointment, 
at the doctor's office, or after the follow-up appointment. The 
potential modes of PRO data collection for post-operative data are the 
same as for pre-operative data. If the patient does not or cannot 
attend a follow-up appointment, the modes of collection could include 
completion of the post-operative survey using email, mail, telephone, 
or through a patient portal. Similar to other surveys, like the 
Outpatient and Ambulatory Surgery Consumer Assessment of Healthcare 
Providers and Systems (OAS CAHPS) survey, we believe the use of 
multiple modes would maximize response rates as it allows for different 
patient preferences.
    For the THA/TKA PRO-PM data, hospitals would be able to submit data 
during two voluntary periods. The first voluntary reporting period 
would begin in CY 2025 for eligible procedures occurring between 
January 1, 2025 through December 31, 2025, and the second voluntary 
reporting period would begin with CY 2026 for eligible procedures 
occurring between January 1, 2026 through December 31, 2026. Voluntary 
reporting would be followed by mandatory reporting for eligible 
elective procedures beginning with the CY 2027 reporting period 
(occurring January 1, 2027 through December 31, 2027), impacting the CY 
2030 payment determination. Hospitals would need to submit data twice 
(pre-operative data and post-operative data).
    For the purposes of calculating burden, similar to assumptions used 
for the Hospital IQR Program in the FY 2023 IPPS/LTCH PPS final rule 
(87 FR 49386 through 49387), we estimate that during the voluntary 
periods, 50 percent of hospitals that perform at least one THA/TKA 
procedure would submit data for 50 percent of THA/TKA patients. For 
purposes of calculating burden, we estimate that, during the mandatory 
period, hospitals would submit for 100 percent of patients. While we 
propose to require hospitals to submit, at minimum, 50 percent of 
eligible, complete pre-operative data with matching eligible, complete 
post-operative data, we are conservative in our estimate for the 
mandatory period in case hospitals exceed this threshold.
    To estimate the cost burden for patients completing the surveys for 
this proposed measure, we refer to the ``Valuing Time in U.S. 
Department of

[[Page 49874]]

Health and Human Services Regulatory Impact Analyses: Conceptual 
Framework and Best Practices,'' as it identifies the approach for 
valuing time when individuals undertake activities on their own 
time.\667\ Therefore, we estimate that the cost for beneficiaries 
undertaking administrative and other tasks on their own time is a post-
tax wage of $20.71/hour. To derive the costs for beneficiaries, a 
measurement of the usual weekly earnings of wage and salary workers of 
$998, divided by 40 hours to calculate an hourly pre-tax wage rate of 
$24.95/hour. This rate is adjusted downwards by an estimate of the 
effective tax rate for median income households of about 17 percent, 
resulting in the post-tax hourly wage rate of $20.71/hour. Unlike our 
State and private sector wage adjustments, we are not adjusting 
beneficiary wages for fringe benefits and other indirect costs since 
the individuals' activities, if any, would occur outside the scope of 
their employment.
---------------------------------------------------------------------------

    \667\ https://aspe.hhs.gov/reports/valuing-time-us-department-health-human-services-regulatory-impact-analyses-conceptual-framework.
---------------------------------------------------------------------------

    For burden estimating purposes for this proposed measure, we assume 
that most hospitals would likely undertake PRO data collection through 
a screening tool incorporated into their electronic health record (EHR) 
or other patient intake process. We estimate that approximately 526,793 
THA/TKA procedures occur in the outpatient setting each year, and that 
many patients could complete both the pre-operative and post-operative 
questionnaires. However, from our experience with using this measure in 
the Comprehensive Joint Replacement model, we are also aware that not 
all patients who complete the pre-operative questionnaire would 
complete the post-operative questionnaire. For CY 2025 and CY 2026 
reporting periods, we assume 131,698 patients would complete the survey 
(526,793 patients x 0.50 x 0.50 of hospitals) for a total of 15,914 
hours annually (131,698 respondents x 0.120833 hours) at a cost of 
$329,579 (15,914 hours x $20.71) across all hospitals. Beginning with 
mandatory reporting in the CY 2027 reporting period, we estimate a 
total of 63,654 hours (526,793 patients x 0.120833 hours) at a cost of 
$1,318,274 (63,654 hours x $20.71) across all hospitals.
    Regarding hospitals' burden related to submitting data for this 
proposed measure, which would be reported via the HQR System, we 
estimate a burden of 10 minutes per response. Hospitals would submit 
data associated with pre-operative surveys by March 31 of the CY 
following the CY in which the eligible procedures took place and would 
submit data associated with post-operative surveys by March 31 of the 
CY following the CY in which pre-operative data was submitted. 
Therefore, for the initial voluntary reporting period for eligible 
procedures occurring in CY 2025, pre-operative survey data submission 
would occur in the first quarter of the CY 2026 reporting period and 
post-operative survey data submission would occur in the first quarter 
of the CY 2027 reporting period. For each reporting period, we estimate 
that each hospital would spend 20 minutes (0.33 hours) annually (10 
minutes x 2 surveys) to collect and submit the data. For the voluntary 
CY 2026 reporting period, we estimate a burden for all participating 
hospitals of 279.2 hours (0.167 hours x 3,350 hospitals x 50 percent) 
at a cost of $14,552 (279.2 hours x $52.12). For the voluntary CY 2027 
reporting period, we estimate a burden for all participating hospitals 
of 558.3 hours (0.33 hours x 3,350 hospitals x 50 percent) at a cost of 
$29,099 (558.3 hours x $52.12). For the mandatory CY 2028 reporting 
period, we estimate a burden for all participating hospitals of 837.5 
hours [(0.167 hours x 3,350 hospitals x 50 percent) + (0.167 hours x 
3,350 hospitals)] at a cost of $43,651 (837.5 hours x $52.12). For the 
mandatory CY 2029 reporting period and subsequent years, we estimate a 
total of 1,116.7 hours (0.33 hours x 3,350 hospitals) at a cost of 
$58,202 (1,116.7 hours x $52.12).
    With respect to any costs/burdens unrelated to data submission, we 
refer readers to section XXVI.C.3.b ``Regulatory Impact Analysis'' of 
this proposed rule.
6. Information Collection Burden for the Proposal To Adopt the 
Excessive Radiation Dose or Inadequate Image Quality for Diagnostic 
Computed Tomography (CT) in Adults (Hospital Level--Outpatient) eCQM, 
Beginning With the Voluntary CY 2025 Reporting Period, followed by 
Mandatory Reporting Beginning With the CY 2026 Reporting Period/CY 2028 
Payment Determination
    In section XIV.B.3.c of this proposed rule, we propose to adopt the 
Excessive Radiation Dose or Inadequate Image Quality for Diagnostic CT 
in Adults (Hospital Level--Outpatient) eCQM, beginning with the 
voluntary CY 2025 reporting period, followed by mandatory reporting 
beginning with the CY 2026 reporting period/CY 2028 payment 
determination. For the CY 2025 voluntary reporting period, hospitals 
would be able to voluntarily report the measure for one or more 
quarters during the year. For subsequent years, as described in section 
XIV.E.6.b of this proposed rule, we propose to gradually increase the 
number of quarters of data hospitals would be required to report on the 
measure starting with two self-selected quarters for the CY 2026 
reporting period/CY 2028 payment determination, and all four quarters 
for the CY 2027 reporting period/CY 2029 payment determination.
    For the voluntary reporting period in CY 2025, we estimate 20 
percent of hospitals would voluntarily report at least one quarter of 
data for the measure with 100 percent of hospitals reporting the 
measure as proposed to be required in subsequent years. Similar to the 
ST-elevation myocardial infarction (STEMI) eCQM for which adoption was 
finalized in the CY 2022 OPPS/ASC final rule for the Hospital OQR 
Program, we assume a Medical Records Specialist would require 10 
minutes to submit the data required per quarter for each hospital (86 
FR 63962 through 63963). For the CY 2025 voluntary reporting period, we 
estimate an annual burden for all participating hospitals of 111.7 
hours (3,350 hospitals x 20 percent x 0.1667 hours x 1 quarter) at a 
cost of $5,822 (111.7 hours x $52.12). For the CY 2026 reporting 
period/CY 2028 payment determination, we estimate the annual burden for 
all participating hospitals to be 1,116.7 hours (3,350 hospitals x 
.1667 hours x 2 quarters) at a cost of $58,202 (1,116.7 hours x 
$52.12). For the CY 2027 reporting period/CY 2029 payment 
determination, we estimate the annual burden for all participating 
hospitals to be 2,233.3 hours (3,350 hospitals x .1667 hours x 4 
quarters) at a cost of $116,400 (2,233.3 hours x $52.12).
7. Information Collection Burden for the Proposal To Re-Adopt With 
Modification the Hospital Outpatient Volume on Selected Outpatient 
Surgical Procedures Measure, Beginning With the Voluntary CY 2025 
Reporting Period Followed by Mandatory Reporting Beginning With the CY 
2026 Reporting Period/CY 2028 Payment Determination
    In section XIV.B.3.a of this proposed rule, we propose to re-adopt 
with modification the Hospital Outpatient Volume on Selected Outpatient 
Surgical Procedures measure, beginning with the voluntary CY 2025 
reporting period followed by mandatory reporting beginning with the CY 
2026 reporting period/CY 2028 payment determination. This measure was 
previously finalized in the CY 2012 OPPS/ASC final rule

[[Page 49875]]

with the assumption that, because hospitals must determine their 
populations for data reporting purposes--and most hospitals are 
voluntarily reporting population and sampling data for Hospital OQR 
Program purposes--the only additional burden would be the reporting of 
the data using a web-based tool (now the HQR system) (76 FR 74552 
through 74553). This assumption continues to be applicable; therefore, 
we estimate the burden to be consistent with both the CY 2012 OPPS/ASC 
final rule when the measure was initially adopted (76 FR 74552) and 
with the CY 2018 OPPS/ASC final rule when the measure was previously 
removed (82 FR 52618). We estimate that each participating hospital 
would spend 10 minutes per year to collect and submit the data for this 
measure. For the voluntary CY 2025 reporting period, we assume 20 
percent of hospitals will report data, resulting in an annual burden of 
111.7 hours (3,350 hospitals x 20 percent x 0.167 hours) at a cost of 
$5,822 (111.7 hours x $52.12). For mandatory reporting beginning with 
the CY 2026 reporting period/CY 2028 payment determination, we estimate 
an annual burden of 558.3 hours (3,350 hospitals x 0.167 hours) at a 
cost of $29,099 (558.3 hours x $52.12).
8. Information Collection Burden for the Proposal To Remove the Left 
Without Being Seen Measure Beginning With the CY 2024 Reporting Period/
CY 2026 Payment Determination
    In section XIV.B.1.a of this proposed rule, we proposed to remove 
the Left Without Being Seen measure beginning with the CY 2024 
reporting period/CY 2026 payment determination. Under OMB control 
number 0938-1109 (expiration date February 28, 2025), the currently 
approved burden for this measure is estimated to be 10 minutes (0.1667 
hours) per hospital to report measure data via a web-based tool located 
on a CMS website.\668\ In addition, as stated under OMB control number 
0938-1109, there is no additional burden for abstraction of chart data 
associated with this measure. Therefore, we estimate the decrease in 
burden associated with the removal of this measure to be 558.3 hours 
(0.1667 hours x 3,350 hospitals) at a cost of $29,100 (558.3 hours x 
$52.12/hour).
---------------------------------------------------------------------------

    \668\ CY 2023 Final Rule Hospital OQR Program ``Supporting 
Statement-A''. Available at: https://www.reginfo.gov/public/do/DownloadDocument?objectID=129107500.
---------------------------------------------------------------------------

9. Summary of Information Collection Burden Estimates for the Hospital 
OQR Program
    In summary, under OMB control number 0938-1109 (expiration date 
February 28, 2025), we estimate that the proposals in this proposed 
rule would result in an increase of 67,004 hours at a cost of 
$1,492,875 for 3,350 OPPS hospitals across a 6-year period from the CY 
2024 reporting period/CY 2026 payment determination through the CY 2029 
reporting period/CY 2030 payment determination. The following Tables 85 
through 90 summarize the total burden changes for each respective CY 
payment determination compared to our currently approved information 
collection burden estimates (the table for the CY 2030 payment 
determination reflects the cumulative burden changes). We will submit 
the revised information collection estimates to OMB for approval under 
OMB control number 0938-1109.
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C. ICRs Related to the ASCQR Program

1. Background
    We refer readers to the CY 2012 OPPS/ASC final rule (76 FR 74554), 
the FY 2013 IPPS/LTCH PPS final rule (77 FR 53672), and the CY 2013 
through CY 2023 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; 86 FR 63968 through 
63971; and 87 FR 72252 through 72253 respectively) for detailed 
discussions of the ASCQR Program ICRs we have previously finalized. The 
ICRs associated with the ASCQR Program for the CY 2014 through CY 2027 
payment determinations are currently approved under OMB control number 
0938-1270, which expires on August 31, 2025.

[[Page 49881]]

    While the most recent data from the BLS reflects a median hourly 
wage of $24.56 per hour for medical records specialists generally, 
$26.06 is the hourly mean wage for medical records specialists in 
``general medical and surgical hospitals,'' \669\ which we believe is 
more specific to our settings for use in our calculations than a 
position that may be found in other settings, such as ``office of 
physicians'' or ``nursing care facilities.'' We have finalized a policy 
to calculate the cost of overhead, including fringe benefits, at 100 
percent of the mean hourly wage (81 FR 79863 through 79864). This is 
necessarily a rough adjustment, both because fringe benefits and 
overhead costs can vary significantly from employer-to-employer and 
because methods of estimating these costs vary widely from study-to-
study. Nonetheless, we believe that doubling the hourly wage rate 
($26.06 x 2 = $52.12) to estimate the total cost is a reasonably 
accurate estimation method and allows for a conservative estimate of 
hourly costs.
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    \669\ U.S. Bureau of Labor Statistics. Occupational Outlook 
Handbook, Medical Records Specialists. Accessed on March 6, 2023. 
Available at: https://www.bls.gov/oes/current/oes292072.htm.
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    Based on an analysis of the CY 2023 payment determination data, we 
found that, of the 5,697 ambulatory surgical centers (ASCs) that met 
eligibility requirements for the ASCQR Program, 5,181 ASCs received the 
full annual payment update (APU) because they complied with all 
applicable data reporting requirements for the ASCQR Program. In 
addition, 687 ASCs that were not required to participate in reporting 
did so, as well as 195 Hospitals Without Walls returned to active ASC 
billing, for a total of 6,063 participating facilities participating in 
the ASCQR Program. As noted in section XV.C.1 ``Regulatory Impact 
Analysis'' of this proposed rule, for the CY 2023 payment 
determination, all 5,181 ASCs that met eligibility requirements for the 
ASCQR Program received the APU including all facilities who were 
required, but exempted; 4,175 of these ASCs were required to 
participate without the public health emergency (PHE) exception (not 
applicable for current APU). On this basis, we estimate that 5,057 ASCs 
(4,175 + 687 + 195) will submit data for the ASCQR Program for the CY 
2026 payment determination unless otherwise noted.
    In section XV.B.4 of this proposed rule, we propose to modify three 
previously adopted measures: (1) the COVID-19 Vaccination Coverage 
Among Healthcare Personnel measure, beginning with the CY 2024 
reporting period/CY 2026 payment determination; (2) the Cataracts: 
Improvement in Patient's Visual Function Within 90 Days Following 
Cataract Surgery measure survey instrument usage, beginning with the 
voluntary CY 2024 reporting period; and (3) Endoscopy/Polyp 
Surveillance: Appropriate Follow-Up Interval for Normal Colonoscopy in 
Average Risk Patients measure, beginning with the CY 2024 reporting 
period/CY 2026 payment determination. We also propose to re-adopt with 
modification the ASC Facility Volume on Selected ASC Surgical 
Procedures measure, beginning with the voluntary CY 2025 reporting 
period followed by mandatory reporting beginning with the CY 2026 
reporting period/CY 2028 payment determination. Lastly, we propose to 
adopt the Risk Standardized Patient-Reported Outcome-Based Performance 
Measure (PRO-PM) Following Elective Primary Total Hip Arthroplasty 
(THA) and/or Total Knee Arthroplasty (TKA) in the ASC Setting, 
beginning with the voluntary CYs 2025 and 2026 reporting periods, 
followed by mandatory reporting beginning with the CY 2027 reporting 
period/CY 2030 payment determination.
2. Information Collection Burden for the Proposal To Modify the COVID-
19 Vaccination Coverage Among Healthcare Personnel (HCP) Measure 
Beginning With the CY 2024 Reporting Period/CY 2026 Payment 
Determination
    In the CY 2022 OPPS/ASC proposed rule, we finalized adoption of the 
COVID-19 Vaccination Coverage Among Healthcare Personnel (HCP) measure 
for the ASCQR Program (86 FR 63875 through 63883). In section XV.B.4.a 
of this proposed rule, we propose to modify the COVID-19 Vaccination 
Coverage Among HCP measure to utilize the term ``up to date'' in the 
HCP vaccination definition and update the numerator to specify the time 
frames within which an HCP is considered up to date with recommended 
COVID-19 vaccines, including booster doses, beginning with the CY 2024 
reporting period/CY 2026 payment determination for the ASCQR Program. 
We previously discussed information collection burden associated with 
this measure in the CY 2022 OPPS/ASC final rule (86 FR 63969).
    We do not believe that the use of the term ``up to date'' or the 
update to the numerator will impact information collection or reporting 
burden because the modification changes neither the amount of data 
being submitted to CMS nor the frequency of data submission. 
Additionally, because we are not proposing any updates to the form, 
manner, and timing of data submission for this measure, we do not 
anticipate any increase in burden associated with this proposal. 
Furthermore, the modified COVID-19 Vaccination Coverage Among HCP 
measure would continue to be calculated using data submitted to the CDC 
under a separate OMB control number (0920-1317; expiration date January 
31, 2024). However, the CDC currently has a PRA waiver for the 
collection and reporting of vaccination data under section 321 of the 
National Childhood Vaccine Injury Act of 1986 (enacted on November 14, 
1986) (NCVIA).\670\
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    \670\ Public Law 99-660.
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3. Information Collection Burden for the Proposal To Modify the 
Cataracts: Improvement in Patient's Visual Function Within 90 Days 
Following Cataract Surgery Measure Survey Instrument Use Beginning With 
the CY 2024 Reporting Period
    In the CY 2014 OPPS/ASC final rule with comment period (78 FR 75126 
through 75127), we finalized the adoption of the Cataracts: Improvement 
in Patient's Visual Function Within 90 Days Following Cataract Surgery 
measure beginning with the CY 2016 payment determination. In section 
XV.B.4.b of this proposed rule, we propose to limit the survey 
instruments that can be used to administer this measure to three 
assessment tools: NEI VFQ-25, VF-14, and VF-8R, beginning with the CY 
2024 reporting period.
    Because the three assessment tools being proposed are currently 
allowable for administering this measure, we do not believe limiting 
use to these three surveys would result in a change in burden. As a 
result, we are not proposing any changes in burden per response 
associated with this proposal. Additionally, as currently stated in the 
ASCQR Program Specifications Manual, the maximum annual sample case 
size for chart abstraction for this measure is 63 cases for ASCs with 
an outpatient population size of between 0 and 900 and 96 cases for 
ASCs with an outpatient population size of greater than 900.\671\ We 
are not proposing an increase in the required sample size for chart 
abstraction; therefore we do not believe there is any increase in 
burden associated with this proposal.
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    \671\ https://qualitynet.cms.gov/files/62900933404aa300169072f1?filename=12.0_ASC_Full_Specs_Mnl.pdf.

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[[Page 49882]]

4. Information Collection Burden for the Proposal To Modify the 
Endoscopy/Polyp Surveillance: Appropriate Follow-Up Interval for Normal 
Colonoscopy in Average Risk Patients Measure, Beginning With the CY 
2024 Reporting Period/CY 2026 Payment Determination
    In the CY 2014 OPPS/ASC final rule, we finalized the Endoscopy/
Polyp Surveillance: Appropriate Follow-Up Interval for Normal 
Colonoscopy in Average Risk Patients measure (78 FR 75127 through 
75128). In section XV.B.4.c of this proposed rule, we propose to amend 
the measure denominator language by removing the removing the phrase 
``aged 50 years'' and adding in its place the phrase ``aged 45 years.''
    As currently stated in the ASCQR Program Specifications Manual, the 
maximum annual sample case size for chart abstraction for this measure 
is 63 cases for ASCs with an outpatient population size of between 0 
and 900 and 96 cases for ASCs with an outpatient population size of 
greater than 900. We are not proposing an increase in the required 
sample size for chart abstraction; therefore, we do not believe there 
is any increase in burden associated with this proposal.
5. Information Collection Burden for the Proposal To Readopt With 
Modification the ASC Facility Volume on Selected ASC Surgical 
Procedures Measure With the Voluntary CY 2025 Reporting Period Followed 
by Mandatory Reporting Beginning With the CY 2026 Reporting Period/CY 
2028 Payment Determination
    In section XV.B.5.a of this proposed rule, we propose to re-adopt 
with modification the ASC Facility Volume on Selected ASC 
SurgicalProcedures measure with the voluntary CY 2025 reporting period 
followed by mandatory reporting beginning with the CY 2026 reporting 
period/CY 2028 payment determination. This measure was previously 
finalized in the CY 2012 OPPS/ASC final rule with a burden estimate of 
10 minutes per response (76 FR 74554). This measure was subsequently 
removed from the ASCQR Program in the CY 2017 OPPS/ASC final rule with 
the same estimate of 10 minutes per response (82 FR 59479). Because 
this measure was originally adopted with the same burden estimate as 
the similar measure for the Hospital OQR Program, we continue to 
believe the burden per response is the same as the measure for the 
Hospital OQR Program, which we estimate to be 10 minutes per year in 
section XXIII.B.7 of this proposed rule. As a result, we estimate that 
each participating ASC would spend 10 minutes per year to collect and 
submit the data for this measure. For the voluntary CY 2025 reporting 
period, we assume 20 percent of ASCs will report data, resulting in an 
annual burden of 168.5 hours (5,057 ASCs x 20 percent x 0.167 hours) at 
a cost of $8,782 (168.5 hours x $52.12). For mandatory reporting 
beginning with the CY 2026 reporting period/CY 2028 payment 
determination, we estimate an annual burden of 843 hours (5,057 ASCs x 
0.167 hours) at a cost of $43,937 (843 hours x $52.12).
6. Information Collection Burden for the Proposal To Adopt the Risk 
Standardized Patient-Reported Outcome-Based Performance Measure (PRO-
PM) Following Elective Primary Total Hip Arthroplasty (THA) and/or 
Total Knee Arthroplasty (TKA) in the ASC Setting, Beginning With the 
Voluntary CY 2025 and CY 2026 Reporting Periods Followed by Mandatory 
Reporting Beginning With the CY 2027 Reporting Period/CY 2030 Payment 
Determination
    In section XV.B.5.b of this proposed rule, we propose to adopt the 
THA/TKA PRO-PM, beginning with the voluntary CY 2025 and CY 2026 
reporting periods, followed by mandatory reporting beginning with the 
CY 2027 reporting period/CY 2030 payment determination. This measure 
was previously adopted for the Hospital IQR Program in the FY 2023 
IPPS/LTCH PPS final rule with an estimated burden of 7.25 minutes 
(0.120833 hours) per patient to complete both the pre-operative and 
post-operative surveys and 10 minutes (0.167 hours) per hospital per 
response to collect and submit the measure data via the HQR system (87 
FR 49386 through 49387). We believe the estimated burden for both 
patient surveys and data submission would be the same for the ASCQR 
Program.
    The THA/TKA PRO-PM uses four sources of data for the calculation of 
the measure: (1) patient-reported outcome (PRO) data; (2) claims data; 
(3) Medicare enrollment and beneficiary data; and (4) U.S. Census 
Bureau survey data. We estimate no additional burden associated with 
claims data, Medicare enrollment and beneficiary data, and U.S. Census 
Bureau survey data as these data are already collected via other 
mechanisms such as Medicare enrollment forms, CMS Form 1500, and U.S. 
Census Informational Questionnaires. While we are not proposing to 
require how ASCs collect PRO data for this measure, ASCs collecting PRO 
data would have multiple options for when and how they would collect 
these PRO data so they could best determine the mode and timing of 
collection that works best for their patient population.
    The possible patient touchpoints for pre-operative PRO data 
collection include the doctor's office, pre-surgical steps such as 
education classes, or medical evaluations that could occur in an office 
or at the ASC. The modes of PRO data collection could include 
completion of the pre-operative surveys using electronic devices (such 
as an iPad or tablet), pen and paper, mail, telephone, or through a 
patient portal. Post-operative PRO data collection modes are similar to 
pre-operative modes. The possible patient touchpoints for post-
operative data collection could occur before the follow-up appointment, 
at the doctor's office, or after the follow-up appointment. The 
potential modes of PRO data collection for post-operative data are the 
same as for pre-operative data. If the patient does not or cannot 
attend a follow-up appointment, the modes of collection could include 
completion of the post-operative survey using email, mail, telephone, 
or through a patient portal.
    Similar to other surveys like the Outpatient and Ambulatory Surgery 
Consumer Assessment of Healthcare Providers and Systems (OAS CAHPS) 
survey, we believe the use of multiple modes would maximize response 
rates as it allows for different patient preferences. For the THA/TKA 
PRO-PM data, ASCs would be able to submit data during two voluntary 
periods. The first voluntary reporting period would begin in CY 2025 
for eligible procedures occurring between January 1, 2025 through 
December 31, 2025, and the second voluntary reporting period would 
begin with CY 2026 for eligible procedures occurring between January 1, 
2026 through December 31, 2026. Voluntary reporting would be followed 
by mandatory reporting for eligible elective procedures beginning with 
the CY 2027 reporting period (occurring between January 1, 2027 through 
December 31, 2027), impacting the CY 2030 payment determination.
    Whether participating in the voluntary reporting period or during 
subsequent mandatory reporting, ASCs would need to submit data twice 
(pre-operative data and post-operative data). For the purposes of 
calculating burden, we applied similar assumptions used for the 
Hospital IQR Program in the FY 2023 IPPS/LTCH PPS final rule (87 FR 
49386 through 49387). Specifically, we estimate that, during the 
voluntary periods, 50 percent of ASCs that perform at least one THA/TKA 
procedure would submit data and

[[Page 49883]]

would do so for 50 percent of THA/TKA patients. For purposes of 
calculating burden for the mandatory period, we estimate that ASCs 
would submit for 100 percent of patients. While we propose to require 
ASCs to submit, at minimum, 50 percent of eligible, complete pre-
operative data with matching eligible, complete post-operative data, we 
are conservative in our estimate for the mandatory period in case ASCs 
exceed this threshold.
    To estimate the cost burden for patients completing the surveys for 
this proposed measure, we believe that the cost for beneficiaries 
undertaking administrative and other tasks on their own time is a post-
tax wage of $20.71/hour. We base this estimate on the Valuing Time in 
U.S. Department of Health and Human Services Regulatory Impact 
Analyses: Conceptual Framework and Best Practices, which identifies the 
approach for valuing time when individuals undertake activities on 
their own time.\672\ To derive the costs for beneficiaries, a 
measurement of the usual weekly earnings of wage and salary workers of 
$998, divided by 40 hours to calculate an hourly pre-tax wage rate of 
$24.95/hour. This rate is adjusted downwards by an estimate of the 
effective tax rate for median income households of about 17 percent, 
resulting in the post-tax hourly wage rate of $20.71/hour. Unlike our 
state and private sector wage adjustments, we are not adjusting 
beneficiary wages for fringe benefits and other indirect costs since 
the individuals' activities, if any, would occur outside the scope of 
their employment.
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    \672\ http://aspe.hhs.gov/reports/valuing-time-us-department-health-human-services-regulatory-impact-analyses-conceptual-framework.
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    To estimate the burden of information collection for patients 
completing surveys for this proposed measure, we assume that most ASCs 
would likely undertake PRO data collection through a screening tool 
incorporated into their electronic health record (EHR) or other patient 
intake process. We estimate that approximately 42,706 THA/TKA 
procedures occur in an ASC each year, and that many patients could 
complete both the pre-operative and post-operative questionnaires. 
However, from our experience with using this measure in the 
Comprehensive Joint Replacement model, we are also aware that not all 
patients who complete the pre-operative questionnaire would complete 
the post-operative questionnaire. For the voluntary CY 2025 and CY 2026 
reporting periods, we assume 10,677 patients would complete the survey 
(42,706 patients x 0.50 x 0.50 of ASCs) for a total of 1,290 hours 
annually (10,677 respondents x 0.120833 hours) at a cost of $26,716 
(1,290 hours x $20.71) across all ASCs. Beginning with mandatory 
reporting in the CY 2027 reporting period/CY 2030 payment 
determination, we estimate a total of 5,160 hours (42,706 patients x 
0.120833 hours) at a cost of $106,864 (5,160 hours x $20.71) across all 
ASCs.
    Regarding ASCs' burden related to submitting data for this proposed 
measure, which would be reported via the HQR System, we estimate a 
burden of 10 minutes per response. ASCs would submit data associated 
with pre-operative surveys by March 31 of the CY following the CY in 
which the eligible procedures took place and would submit data 
associated with post-operative surveys by March 31 of the CY following 
the CY in which pre-operative data was submitted. Therefore, for the 
first voluntary reporting period for eligible procedures occurring in 
CY 2025, pre-operative survey data submission would occur in the first 
quarter of the CY 2026 reporting period and post-operative survey data 
submission would occur in the first quarter of the CY 2027 reporting 
period. For each of the two voluntary reporting periods, we estimate 
that each ASC would spend 20 minutes (0.33 hours) annually (10 minutes 
x 2 surveys) to collect and submit the data. For the voluntary CY 2026 
reporting period, we estimate a burden for all participating ASCs of 
422 hours (0.167 hours x 2,529 ASCs) at a cost of $21,995 (422 hours x 
$52.12). For the voluntary CY 2027 reporting period, we estimate a 
burden for all participating ASCs of 843 hours (0.33 hours x 2,529 
ASCs) at a cost of $43,937 (843 hours x $52.12). For the mandatory CY 
2028 reporting period, we estimate a burden for all participating ASCs 
of 1,264 hours [(0.167 hours x 2,529 ASCs) + (0.167 hours x 5,057 
ASCs)] at a cost of $65,880 (1,264 hours x $52.12). For the CY 2029 
reporting period and subsequent years, we estimate a total of 1,686 
hours (0.33 hours x 5,057 ASCs) at a cost of $87,874 (1,686 hours x 
$52.12).
    With respect to any costs or burdens unrelated to data submission, 
we refer readers to section XXVI.C.4.b ``Regulatory Impact Analysis'' 
of this proposed rule.
7. Summary of Information Collection Burden Estimates for the ASCQR 
Program
    In summary, under OMB control number 0938-1270 (expiration date 
August 31, 2025), we estimate that the proposals in this proposed rule 
would result in an increase of 7,689 hours at a cost of $238,675 for 
5,057 ASCs across a 6-year period from the CY 2024 reporting period/CY 
2026 payment determination through the CY 2029 reporting period/CY 2030 
payment determination. The following Tables 91 through 95 summarize the 
total burden changes for each respective CY payment determination 
compared to our currently approved information collection burden 
estimates (the table for the CY 2030 payment determination reflects the 
cumulative burden changes). We will submit the revised information 
collection estimates to OMB for approval under OMB control number 0938-
1270.\673\
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    \\
    \673\ CY 2023 Final Rule ASCQR Program ``Supporting Statement-
A''. Available at: https://www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=201911-0938-015.
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D. ICRs Related to the REHQR Program

1. Background
    In section XVI. of this proposed rule, we discuss the requirements 
for the REH Quality Reporting (REHQR) Program. In this proposed rule, 
we propose to adopt four new measures, beginning with the CY 2024 
reporting period: (1) the Abdomen Computed Tomography (CT) Use of 
Contrast Material measure; (2) the Median Time from ED Arrival to ED 
Departure for Discharged ED Patients measure; (3) the Facility 7-Day 
Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy 
measure; and (4) the Risk-Standardized Hospital Visits Within 7 Days 
After Hospital Outpatient Surgery measure. As we are establishing the 
REHQR Program in this proposed rule, the ICRs associated with the REHQR 
Program will be submitted for OMB approval under a new OMB control 
number.
    While the most recent data from the Bureau of Labor Statistics 
reflects a median hourly wage of $24.56 per hour for all medical 
records specialists, $26.06 is the hourly mean wage for medical records 
specialists in ``general medical and surgical hospitals.'' \674\ We 
believe specialists in ``general medical and surgical hospitals'' is 
more specific to our settings for use in our calculations than a 
position that may be found in other medical record specialist settings, 
such as ``office of physicians'' or ``nursing care facilities.'' We 
propose to calculate the cost of overhead, including fringe benefits, 
at 100 percent of the mean hourly wage similar to the policy previously 
finalized in the CY 2018 OPPS/ASC final rule for the Hospital OQR 
Program (82 FR 52617). This is necessarily a rough adjustment, both 
because fringe benefits and overhead costs can vary significantly from 
employer-to-employer and because methods of estimating these costs vary 
widely from study-to-study. Nonetheless, we believe that doubling the 
hourly wage rate ($26.06 x 2 = $52.12) to estimate the total cost is a 
reasonably accurate estimation method

[[Page 49889]]

and allows for a conservative estimate of hourly costs.
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    \674\ U.S. Bureau of Labor Statistics. Occupational Outlook 
Handbook, Medical Records Specialists. Accessed on March 6, 2023. 
Available at: https://www.bls.gov/oes/current/oes292072.htm.
---------------------------------------------------------------------------

    Based on our analysis of CAHs and subsection (d) hospitals 
currently participating in the Hospital OQR Program with 50 beds or 
less, we have estimated 746 hospitals which would be both eligible to 
transition to REH status and are located in a State where legislation 
has passed as of March 2023 enabling transition to occur. We will 
revise this estimate in future rules when updated data are available.
2. Information Collection Burden for the Proposal To Adopt Three 
Claims-Based Measures Beginning With the CY 2024 Reporting Period
    In sections XVI.B.5.a, XVI.B.5.c, and XVI.B.5.d of this proposed 
rule, we propose to adopt the following claims-based measures beginning 
with the CY 2024 reporting period: (1) the Abdomen Computed Tomography 
(CT) Use of Contrast Material measure; (2) the Facility 7-Day Risk-
Standardized Hospital Visit Rate After Outpatient Colonoscopy measure; 
and (3) the Risk-Standardized Hospital Visits Within 7 Days After 
Hospital Outpatient Surgery measure. Because these measures are 
calculated using data that are already reported to the Medicare program 
for payment purposes, adopting these measures does not result in 
additional burden for REHs participating in the REHQR Program.
3. Information Collection Burden for the Proposal To Adopt the Median 
Time From ED Arrival to ED Departure for Discharged ED Patients Measure 
Beginning With the CY 2024 Reporting Period
    In section XVI.B.5.b of this proposed rule, we propose to adopt the 
Median Time from ED Arrival to ED Departure for Discharged ED Patients 
measure beginning with the CY 2024 reporting period. This chart-
abstracted measure was previously adopted as part of the Hospital OQR 
Program in the CY 2011 OPPS/ASC final rule with comment period (75 FR 
72086). Similar to reporting of this measure to the Hospital OQR 
Program as currently approved under OMB control number 0938-1109 
(expiration date February 28, 2025), we estimate that chart-abstracted 
measures where patient-level data are submitted directly to CMS would 
take 2.9 minutes, or 0.049 hours. Further, based on sample size 
requirements for the measure in the Hospital OQR Program, we assume 
that each REH would similarly abstract and submit data from 63 cases 
per quarter, for a total of 252 cases per year.\675\ We therefore 
estimate that it would take approximately 12.2 hours (0.049 hours x 252 
cases) at a cost of approximately $636 per hospital (12.2 hours x 
$52.12/hour) to collect and report data for this measure. Therefore, 
for all participating REHs, we estimate an annual chart-abstraction 
burden of 9,101 hours (12.2 hours per REH x 746 REHs) at a cost of 
$474,344 per measure (9,101 hours x $52.12/hour).
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    \675\ https://qualitynet.cms.gov/files/63c8361058e56000179b310e?filename=OQR_v16.0a_SpecsManual_011723.pdf.
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4. Summary of Information Collection Burden Estimates for the REHQR 
Program
    In summary, we estimate that the proposals in this proposed rule 
would result in an initial burden of 9,101 hours at a cost of $474,344 
for 746 REHs annually beginning with the CY 2024 reporting period, as 
reflected in Table 96. We will submit these information collection 
estimates to OMB for approval as part of a new information collection 
request.
    With respect to any costs/burdens unrelated to data submission, we 
refer readers to section XXVI.C.5.a ``Regulatory Impact Analysis'' of 
this proposed rule.
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[[Page 49890]]



E. ICRs Related to Conditions of Participation (CoPs): Admission, 
Initial Evaluation, Comprehensive Assessment, and Discharge or Transfer 
of the Client (Sec.  485.914)

    To implement Division FF, section 4124 of the CAA 2023, we propose 
to modify the regulation text at Sec.  485.914(a)(2) to include a 
cross-reference to Sec.  485.918(g), which are additional requirements 
CMHCs must meet when assessing and admitting clients into the IOP 
program. At present, Sec.  485.914(a)(2) solely pertains to PHP 
services with reference to Sec.  485.918(f), which provides distinct 
criteria for clients evaluated and accepted for PHP services. We 
believe the burdens associated with these requirements are usual and 
customary business practice under 5 CFR 1320.3(b)(2). As such, the 
burden associated with these requirements is exempt from PRA; 
therefore, we are not proposing to seek PRA approval for any 
information collection or recordkeeping activities that may be 
conducted in connection with the proposed revisions to Sec.  
485.914(a)(2).
    We also propose to revise Sec.  485.914(d)(2), which sets forth 
standards for updating a PHP client's comprehensive assessment no less 
frequently than every 30 days. We propose to add ``and IOP services,'' 
which would require the PHP and IOP client's interdisciplinary 
treatment team to update the assessment no less frequently than every 
30 days. We believe that the burden associated with these requirements 
is the time required to update the comprehensive assessment and that 
this documentation is usual and customary business practice under 5 CFR 
1320.3(b)(2). Therefore, we do not propose seeking PRA approval for any 
information collection or recordkeeping activities that may be 
conducted in connection with the proposed revisions to Sec.  
485.914(d)(2).

F. ICRs Related to Conditions of Participation (CoPs): Treatment Team, 
Person-Centered Active Treatment Plan, and Coordination of Services 
(Sec.  485.916)

    We propose to modify Sec.  485.916(d), which sets forth 
requirements for reviewing the person-centered active treatment plan. 
Currently, the interdisciplinary team is required to review, revise, 
and document the active treatment plan as frequently as the client's 
condition requires, but no less frequently than every 30 calendar days. 
A revised active treatment plan must include information from the 
client's updated comprehensive assessment and must document the 
client's progress toward the outcomes specified in the active treatment 
plan. CMHCs must also meet PHP program requirements specified under 
Sec.  424.24(e) if such services are included in the active treatment 
plan. As Division FF, section 4124 of the CAA 2023 included coverage of 
IOP services for CMHCs, we believe it is necessary to add IOP services 
to this requirement and reference the specific IOP program requirements 
being proposed in section VIII.C.2 at Sec.  424.24(d) of this proposed 
rule. We propose to cross-reference additional requirements specified 
under Sec.  424.24(d) if a client's active treatment plan includes IOP 
services. The 2013 CMHC CoP final rule (78 FR 64603) included a burden 
for Sec.  485.916(d) and is collected under OMB control number 0938-
1245. The proposed revision to this requirement does not affect the 
burden. Therefore, we do not propose seeking PRA approval for any 
information collection or recordkeeping activities that may be 
conducted in connection with the proposed revisions to Sec.  
485.916(d).

G. ICRs Related to Conditions of Participation (CoPs): Organization, 
Governance, Administration of Services, Partial Hospitalization 
Services (Sec.  485.918)

    To implement Division FF, section 4124 of the CAA, 2023, which 
extended coverage of IOP services for CMHCs, we propose to revise the 
title of Sec.  485.918 to include IOP services. The overall goal of 
this section is to ensure that the management structure is organized 
and accountable for the services furnished. We propose to add ``and 
intensive outpatient services'' to the end of the section heading.
    The requirement at Sec.  485.918(b) ``Standard: Provision of 
services'' specifies a comprehensive list of services that a CMHC must 
furnish. This list of services that CMHCs provide corresponds directly 
to the Statutory requirements in section 1861(ff)(3) of the Act. We 
propose to add ``and intensive outpatient services'' to Sec.  
485.918(b)(1)(iii), which states where specific services cannot be 
furnished, such as other than in an individual's home or an inpatient 
or residential setting, or psychosocial rehabilitation services. We 
believe that adding IOP services to Sec.  485.918(b)(1)(iii) is a usual 
and customary business practice under 5 CFR 1320.3(b)(2). Therefore, we 
are not proposing to seek PRA approval for any information collection 
or recordkeeping activities that may be conducted in connection with 
the proposed revisions to Sec.  485.918(b)(1)(iii).
    We propose to add a new standard at Sec.  485.918(g), ``Standard: 
Intensive Outpatient Services'', which will require all IOP services to 
meet all applicable requirements of 42 CFR 410 and 424. We also believe 
adding the IOP services requirement in the new proposed Sec.  
485.918(g) is a usual and customary business practice under 5 CFR 
1320.3(b)(2). Therefore, we do not propose seeking PRA approval for any 
information collection or recordkeeping activities that may be 
conducted in connection with the proposed revisions to Sec.  
485.918(g).

H. ICRs Related to Hospital Price Transparency

    In a final rule dated November 2019 (84 FR 65524) (herein referred 
to as the CY 2020 HPT final rule), we adopted requirements for 
hospitals to make public their standard charges in two ways: (1) as a 
comprehensive machine-readable file (MRF); and (2) in a consumer-
friendly format. We codified these requirements at new 45 CFR part 
180.50 and 180.60, respectively.
    The existing information collection requirement and the associated 
burden were finalized in the CY 2020 HPT final rule and are currently 
approved under OMB control number is 0938-1369, which expires on 
December 31, 2023. We originally estimated the number of hospitals to 
be 6,002. We finalized an initial one-time burden 150 hours and cost of 
$11,898.60 per hospital, resulting in a total national burden of 
900,300 hours (150 hours x 6,002 hospitals) and $71,415,397 ($11,898.60 
x 6,002 hospitals) to build processes and make required system updates 
to make their standard charge data publicly available: (1) as a 
comprehensive machine-readable file and (2) in a consumer-friendly 
format. Additionally, we estimated an on-going annual burden of 46 
hours per hospital with a cost of $3,610.88 per hospital, resulting in 
a total national burden of 276,092 hours (46 hours x 6,002 hospitals) 
and total cost of $21,672,502 ($3,610.88 x 6,002 hospitals), to make 
required annual updates to the hospital's standard charge data 
information. For a detailed discussion of the cost estimates for the 
requirements related to hospitals making their standard charge data 
publicly available we refer readers to our discussion in the collection 
of information section in the CY 2020 HPT final rule (84 FR 65591 
through 65596).
    In section XVIII of this proposed rule, we propose to revise 
regulations at 45 CFR 180.50 related to making public hospital standard 
charges in an MRF.

[[Page 49891]]

First, we propose to add data elements to be included in the hospital's 
MRF and to require hospitals to conform to a CMS template layout. 
Second, to enhance automated access to the MRF, we propose that 
hospitals include a .txt file in the root folder of the public website 
it selects to host its MRF in the form and manner specified by CMS that 
includes a standardized set of fields, and a link in the footer on its 
website that is labeled ``Hospital Price Transparency'' and links 
directly to the publicly available web page that hosts the link to the 
MRF. We believe these proposed revisions would result in an increased 
collection burden to hospitals, both in one-time cost and ongoing 
annual cost.
    Additionally, we are increasing the number of hospitals we believe 
to be subject to these requirements from 6,002 to 7,098 which would 
increase the estimated national burden. In the CY 2020 HPT final rule 
(84 FR 65591), we estimated that 6,002 hospitals would be subject to 
the hospital price transparency requirements. To derive the estimated 
number, we relied on data from the American Hospital Association 
(AHA).\676\ For this collection of information estimate, we are using 
updated hospital numbers based on the publicly available dataset from 
the Homeland Infrastructure Foundation-Level Data (HIFLD) \677\ 
hospital dataset because the HIFLD dataset compiles a directory of 
hospital facilities based on data acquired directly from state hospital 
licensure information and federal sources, and validates this data 
annually. Thus, we believe the HIFLD dataset is more accurate than the 
AHA Directory. The source data was available in a variety of formats 
(pdfs, tables, web pages, etc.) which is reviewed and geocoded and then 
converted into a spatial database. To estimate the number of hospitals 
subject to these requirements, we leveraged the HIFLD hospital dataset 
to identify 8,013 total hospitals. We then subtracted out 379 hospitals 
HIFLD identified as ``closed'' as well as hospitals that are deemed 
under the regulation to have met requirements (see 45 CFR 180.30) which 
included 339 federally owned non-military and military hospitals, and 
197 State, local, and district run forensic hospitals. We therefore 
estimate that this proposed rule applies to 7,098 hospitals operating 
within the United States under the definition of ``hospital.'' Finally, 
we estimate the hourly cost for each labor category used in this 
analysis by referencing Bureau of Labor Statistics report on 
Occupational Employment and Wages (May 2022) \678\ in Table 97 below.
---------------------------------------------------------------------------

    \676\ American Hospital Association. Fast Facts on U.S. 
Hospitals, 2019. Available at: https://www.aha.org/statistics/fast-facts-us-hospitals. The AHA listed 6,210 total hospitals operating 
in the U.S. To arrive at 6,002 hospitals, we subtracted the 208 
federally owned or operated hospitals.
    \677\ Homeland Infrastructure Foundation-Level Data hospital 
dataset accessed on May 3, 2023, located at https://hifld-geoplatform.opendata.arcgis.com/datasets/hospitals/data.
    \678\ U.S. Bureau of Labor Statistics, May 2022 national 
Occupational Employment and Wage Estimates United States, 
Occupational Employment and Wage Statistics. Accessed at https://www.bls.gov/oes/tables.htm.
[GRAPHIC] [TIFF OMITTED] TP31JY23.139

    First, we believe that hospitals would incur a one-time cost to 
update their processes and systems to (1) identify and collect the 
standard charge information represented by the newly proposed data 
elements, and (2) to conform the standard charge information for both 
the existing and newly proposed data elements in the proposed CMS 
template layout. To implement these requirements, we estimate that it 
would take, on average, 1 hour (at a cost of $118.14 per hour) for a 
General and Operations Manager (BLS 11-1021) to review and determine 
proposed compliance requirements. We estimate it will take a Business 
Operations Specialist (BLS 13-1000), on average, 10 hours (at a cost of 
$80.08 per hour) to develop and update the necessary processes and 
procedures and develop the requirements to implement the proposed CMS 
template. Once the existing systems have been identified and 
requirements developed, we estimate that a network and computer system 
administrator (BLS 15-1244) would spend, on average, 20 hours (at a 
cost of $93.42 per hour), to make updates to existing systems to 
conform to the proposed CMS template layout and post it to the 
internet, including developing and posting the proposed txt file in the 
root folder of the public web page it selects to host its MRF in the 
form and manner specified by CMS that includes a standardized set of 
fields specified by this proposed rule. Therefore, we are finalizing 
the total annual burden estimate for the first year to be 31 hours (1 
hours + 10 hours + 20 hours) per hospital with a cost of $2,787.34 
($118.14 + $800.80 + $1,868.40) per hospital. The one-time national 
burden is calculated to be $19,784,539.32 dollars ($2,787.34 per 
hospital x 7,098 hospitals). (See Table 98 below.)

[[Page 49892]]

[GRAPHIC] [TIFF OMITTED] TP31JY23.140

    In addition to the one-time cost to implement the proposed CMS 
template, we are providing a revised estimate of our annual burden 
estimates. As noted, we originally estimated an on-going annual burden 
of 46 hours, per hospital, for 6,002 hospitals to make annual updates 
to display their standard charge data. Originally, we estimated it 
would take on average: a general or operations manager 2 hours, per 
hospital, to review and determine updates in compliance with 
requirements; a business operations specialist 32 hours, per hospital, 
to gather and compile required information and post it to the internet; 
and a network and computer system administrator 12 hours to maintain 
requirements specified in the CY 2020 HPT final rule (84 FR 65596).
    We estimate it will still take a general or operations manager 2 
hours, per hospital, to review and determine updates in compliance with 
requirements. However, we now estimate an increased ongoing amount of 
time for a business operations specialist, from 32 hours to 40 hours 
per hospital, to identify and gather required additional data elements 
on an annual basis. This increase acknowledges that some hospitals may 
not update their systems in the first year to maintain and abstract 
newly required data elements in an automated way to facilitate future 
annual updates to the MRF, thus we expect a subset of hospitals will 
continue to spend time annually to gather their standard charge 
information. We continue to believe that it will still take a computer 
system administrator 12 hours to maintain and post the MRF in a manner 
that conforms to the CMS template layout. Therefore, we estimate an 
annual national burden of 383,292 hours (54 hours x 7,098 hospitals) 
and an annual national cost of $32,370,571 dollars ($4,560.52 per 
respondent x 7,098 hospitals). This represents a $10,698,069 
($32,370,571-$21,672,502) increase over our previous estimated national 
annual burden for subsequent years. We summarize our updated annual 
burden estimates in the Table 99 below.
[GRAPHIC] [TIFF OMITTED] TP31JY23.141

    The new information collection requirements, as well as the one-
time cost estimates and updated annual burden estimates discussed in 
this section will be submitted for OMB review and approval for OMB 
control number is 0938-1369.
    If you comment on these information collection, that is, reporting, 
recordkeeping or third-party disclosure requirements, please submit 
your comments electronically as specified in the ADDRESSES section of 
this proposed rule.
    Comments must be received on/by September 11, 2023.

XXV. Response to Comments

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

XXVI. Economic Analyses

A. Statement of Need

    This proposed rule is necessary to make updates to the Medicare 
hospital OPPS rates. It is also necessary to make changes to the 
payment policies and rates for outpatient services furnished by 
hospitals and CMHCs in CY 2024. We are required under section 
1833(t)(3)(C)(ii) of the Act to update annually the OPPS conversion 
factor used to determine the payment rates for APCs. We also are 
required under section 1833(t)(9)(A) of the Act to review, not less 
often than annually, and revise the groups, the relative payment 
weights, and the wage and other adjustments described in section 
1833(t)(2) of the Act. We must review the clinical integrity of payment 
groups and relative payment weights at least annually. We propose to 
revise the APC relative payment weights using claims data for services 
furnished on and after January 1, 2022, through and including December 
31, 2022, and processed through June 30, 2023, and updated HCRIS cost 
report information, as discussed in section X.F of this proposed rule.
    This proposed rule is also necessary to make updates to the ASC 
payment rates for CY 2024, enabling CMS to make changes to payment 
policies and payment rates for covered surgical

[[Page 49893]]

procedures and covered ancillary services that are performed in ASCs in 
CY 2024. 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. In this CY 2024 OPPS/ASC proposed rule, we 
propose to extend the 5-year interim period to an additional 2 years, 
through CY 2024 and CY 2025, to enable us to more accurately analyze 
whether the application of the hospital market basket update to the ASC 
payment system resulted in a migration of services from the hospital 
setting to the ASC setting. Further discussion of this proposed policy 
can be found in section XIII.G.2.b of this proposed rule.

B. Overall Impact of Provisions of This Proposed Rule

    We have examined the impacts of this proposed rule, as required by 
Executive Order 12866, as amended, on Regulatory Planning and Review 
(September 30, 1993), Executive Order 13563 on Improving Regulation and 
Regulatory Review (January 18, 2011), Executive Order 14094 entitled 
``Modernizing Regulatory Review'' (April 6, 2023), 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), and 
Executive Order 13132 on Federalism (August 4, 1999)
    Executive Orders 12866, as amended, 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). 
The Executive Order 14094 entitled ``Modernizing Regulatory Review'' 
(hereinafter, the Modernizing E.O.) amends section 3(f) of Executive 
Order 12866 (Regulatory Planning and Review). The amended 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 $200 million or more in any 1 year (adjusted 
every 3 years by the Administrator of OIRA for changes in gross 
domestic product), or adversely effect in a material way the economy, a 
sector of the economy, productivity, competition, jobs, the 
environment, public health or safety, or State, local, territorial, or 
tribal governments or communities; (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) raise legal or policy issues for which 
centralized review would meaningfully further the President's 
priorities or the principles set forth in this Executive order, as 
specifically authorized in a timely manner by the Administrator of OIRA 
in each case. A regulatory impact analysis (RIA) must be prepared for 
major rules with significant regulatory action/s and/or with 
significant effects as per section 3(f)(1) ($200 million or more in any 
1 year). Based on our estimates, OMB's Office of Information and 
Regulatory Affairs has determined this rulemaking is significant per 
section 3(f)(1)) as measured by the $200 million or more in any 1 year. 
Accordingly, we have prepared a Regulatory Impact Analysis that to the 
best of our ability presents the costs and benefits of the rulemaking.
    We estimate that the total increase in Federal Government 
expenditures under the OPPS for CY 2024, compared to CY 2023, due to 
the changes to the OPPS in this proposed rule, would be approximately 
$1.92 billion. Taking into account our estimated changes in enrollment, 
utilization, and case-mix for CY 2024, we estimate that the OPPS 
expenditures, including beneficiary cost-sharing, for CY 2024 will be 
approximately $88.6 billion, which is approximately $6.0 billion higher 
than estimated OPPS expenditures in CY 2023. Table 100 of this proposed 
rule displays the distributional impact of the CY 2024 changes in OPPS 
payment to various groups of hospitals and for CMHCs.
    We note that under our proposed CY 2024 policy, drugs and 
biologicals are generally proposed to 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 proposed policy are reflected in the 
discussion of the estimated effects of this proposed rule.
    We estimate that the proposed update to the conversion factor and 
other budget neutrality adjustments would increase total OPPS payments 
by 2.8 percent in CY 2024. The proposed changes to the APC relative 
payment weights, the proposed changes to the wage indexes, the proposed 
continuation of a payment adjustment for rural SCHs, including EACHs, 
and the proposed payment adjustment for cancer hospitals would not 
increase total OPPS payments because these changes to the OPPS are 
budget neutral. However, these updates would change the distribution of 
payments within the budget neutral system. We estimate that the total 
change in payments between CY 2023 and CY 2024, 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 would increase total 
estimated OPPS payments by 2.9 percent.
    We estimate the total increase (from changes to the ASC provisions 
in this proposed rule, as well as from enrollment, utilization, and 
case-mix changes) in Medicare expenditures (not including beneficiary 
cost-sharing) under the ASC payment system for CY 2024 compared to CY 
2023, to be approximately $220 million. Tables 101 and 102 of this 
proposed rule display the redistributive impact of the CY 2024 changes 
regarding ASC payments, grouped by specialty area and then grouped by 
procedures with the greatest ASC expenditures, respectively.

C. Detailed Economic Analyses

1. Estimated Effects of OPPS Changes in This Proposed Rule
a. Limitations of Our Analysis
    The distributional impacts presented here are the projected effects 
of the proposed CY 2024 policy changes on various hospital groups. We 
post our hospital-specific estimated payments for CY 2024 on the CMS 
website with the other supporting documentation for this proposed rule. 
To view the hospital-specific estimates, we refer readers to the CMS 
website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html. On the website, select 
``Regulations and Notices'' from the left side of the page and then 
select ``CMS-1786-P'' from the list of regulations and notices. The 
hospital-specific file layout and the hospital-specific file are listed 
with the

[[Page 49894]]

other supporting documentation for this proposed rule. We show 
hospital-specific data only for hospitals whose claims were used for 
modeling the impacts shown in Table 100 of this proposed rule. We do 
not show hospital-specific impacts for hospitals whose claims we were 
unable to use. We refer readers to section II.A of this proposed rule 
for a discussion of the hospitals whose claims we do not use for 
ratesetting or impact purposes.
    We estimate the effects of the individual policy changes by 
estimating payments per service, while holding all other payment 
policies constant. We use the best data available but do not attempt to 
predict behavioral responses to our policy changes in order to isolate 
the effects associated with specific policies or updates, but any 
policy that changes payment could have a behavioral response. In 
addition, we have not made any adjustments for future changes in 
variables, such as service volume, service-mix, or number of 
encounters.
b. Estimated Effects of OPPS Changes on Hospitals
    Table 100 shows the estimated impact of this proposed rule on 
hospitals. Historically, the first line of the impact table, which 
estimates the change in payments to all facilities, has always included 
cancer and children's hospitals, which are held harmless to their pre-
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 100, and we discuss 
them separately below, because CMHCs have historically been paid only 
for partial hospitalization services under the OPPS and are a different 
provider type from hospitals. In CY 2024, we propose to pay CMHCs for 
partial hospitalization services under APCs 5853 (Partial 
Hospitalization (three services per day) for CMHCs) and 5854 (Partial 
Hospitalization (four or more services per day) for CMHCs) and to pay 
hospitals for partial hospitalization services under APCs 5863 (Partial 
Hospitalization (three services per day) for hospital-based PHPs) and 
5864 (Partial Hospitalization (four or more services per day) for 
hospital-based PHPs). In addition, we propose to establish payment for 
four Intensive Outpatient Program (IOP) APCs, two for each provider 
type, including an APC for three services per day and an APC for four 
or more services per day.
    The estimated increase in the total payments made under the OPPS is 
determined largely by the increase to the conversion factor under the 
statutory methodology. The distributional impacts presented do not 
include assumptions about changes in volume and service-mix. The 
conversion factor is updated annually by the OPD fee schedule increase 
factor, as discussed in detail in section II.B of this proposed rule.
    Section 1833(t)(3)(C)(iv) of the Act provides that the OPD fee 
schedule increase factor is equal to the market basket percentage 
increase applicable under section 1886(b)(3)(B)(iii) of the Act, which 
we refer to as the IPPS market basket percentage increase. The proposed 
IPPS market basket percentage increase applicable to the OPD fee 
schedule for CY 2024 is 3.0 percent. Section 1833(t)(3)(F)(i) of the 
Act reduces that 3.0 percent by the productivity adjustment described 
in section 1886(b)(3)(B)(xi)(II) of the Act, which is proposed to be 
0.2 percentage point for CY 2024 (which is also the productivity 
adjustment for FY 2024 in the FY 2024 IPPS/LTCH PPS proposed rule (88 
FR 27005)), resulting in the proposed CY 2024 OPD fee schedule increase 
factor of 2.8 percent. We are using the OPD fee schedule increase 
factor of 2.8 percent in the calculation of the proposed CY 2024 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 100 of 
this proposed rule.
    To illustrate the impact of the CY 2024 changes, our analysis 
begins with a baseline simulation model that uses the CY 2023 relative 
payment weights, the FY 2023 final IPPS wage indexes that include 
reclassifications, and the final CY 2023 conversion factor. Table 100 
shows the estimated redistribution of the increase or decrease in 
payments for CY 2024 over CY 2023 payments to hospitals and CMHCs as a 
result of the following factors: the impact of the APC reconfiguration 
and recalibration changes between CY 2023 and CY 2024 (Column 2); the 
wage indexes and the provider adjustments (Column 3); the combined 
impact of all of the changes described in the preceding columns plus 
the 2.8 percent OPD fee schedule increase factor update to the 
conversion factor (Column 4); the estimated impact taking into account 
all payments for CY 2024 relative to all payments for CY 2023, 
including the impact of changes in estimated outlier payments and 
changes to the pass-through payment estimate (Column 5).
    We did not model an explicit budget neutrality adjustment for the 
rural adjustment for SCHs because we propose to maintain the current 
adjustment percentage for CY 2024. Because the proposed 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 2024 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 would change), and the impact of the 
wage index changes on the hospital. However, total payments made under 
this system and the extent to which this proposed rule would 
redistribute money during implementation also will depend on changes in 
volume, practice patterns, and the mix of services billed between CY 
2023 and CY 2024 by various groups of hospitals, which CMS cannot 
forecast.
    Overall, we estimate that the proposed rates for CY 2024 would 
increase Medicare OPPS payments by an estimated 2.9 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 3.0 percent increase 
in Medicare payments to all other hospitals. These estimated payments 
would not significantly impact other providers.
Column 1: Total Number of Hospitals
    The first line in Column 1 in Table 100 shows the total number of 
facilities (3,567), including designated cancer and children's 
hospitals and CMHCs, for which we were able to use CY 2022 hospital 
outpatient and CMHC claims data to model CY 2023 and CY 2024 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 2023 or CY 2024 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

[[Page 49895]]

in greater detail in section II.A of this proposed rule. At this time, 
we are unable to calculate a DSH variable for hospitals that are not 
also paid under the IPPS because DSH payments are only made to 
hospitals paid under the IPPS. Hospitals for which we do not have a DSH 
variable are grouped separately and generally include freestanding 
psychiatric hospitals, rehabilitation hospitals, and long-term care 
hospitals. We show the total number of OPPS hospitals (3,472), 
excluding the hold harmless cancer and children's hospitals and CMHCs, 
on the second line of the table. We excluded cancer and children's 
hospitals because section 1833(t)(7)(D) of the Act permanently holds 
harmless cancer hospitals and children's hospitals to their ``pre-BBA 
amount'' as specified under the terms of the statute, and therefore, we 
removed them from our impact analyses. We show the isolated impact on 
the 27 CMHCs at the bottom of the impact table (Table 100) and discuss 
that impact separately below.
Column 2: APC Recalibration--All Changes
    Column 2 shows the estimated effect of APC recalibration. Column 2 
also reflects any changes in multiple procedure discount patterns or 
conditional packaging that occur as a result of the changes in the 
relative magnitude of payment weights. As a result of APC 
recalibration, we estimate that urban hospitals will experience a 0.0 
increase, with the impact ranging from a decrease of 0.4 percent to an 
increase of 0.5, depending on the number of beds. Rural hospitals will 
experience an estimated increase of 0.4 overall. Major teaching 
hospitals will experience an estimated decrease of 0.3 percent.
Column 3: Wage Indexes and the Effect of the Provider Adjustments
    Column 3 demonstrates the combined budget neutral impact of the APC 
recalibration, the updates for the wage indexes with the FY 2024 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 2023 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 proposed CY 2024 
changes in wage index policy, discussed in section II.C of this 
proposed rule. 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 2024, as described in 
section II.E of this proposed rule. We modeled 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 2024 is 0.88, which is different from the 0.89 
PCR target for the CY 2023 OPPS/ASC final rule with comment period (87 
FR 71788). 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 0.89, not the 0.88 target payment-to-cost ratio we propose to 
apply in section II.F of this proposed rule.
    We modeled the independent effect of updating the wage indexes by 
varying only the wage indexes, holding APC relative payment weights, 
service-mix, and the rural adjustment constant and using the CY 2024 
scaled weights and a CY 2023 conversion factor that included a budget 
neutrality adjustment for the effect of the proposed changes to the 
wage indexes between CY 2023 and CY 2024.
Column 4: All Budget Neutrality Changes Combined With the Market Basket 
Update
    Column 4 demonstrates the combined impact of all of the proposed 
changes previously described and the proposed update to the conversion 
factor of 2.8 percent. Overall, these changes would increase payments 
to urban hospitals by 2.8 percent and to rural hospitals by 4.7 
percent. Rural sole community hospitals would receive an estimated 
increase of 4.9 percent while other rural hospitals would receive an 
estimated increase of 4.4 percent.
Column 5: All Changes for CY 2024
    Column 5 depicts the full impact of the proposed CY 2024 policies 
on each hospital group by including the effect of all changes for CY 
2024 and comparing them to all estimated payments in CY 2023. Column 5 
shows the combined budget neutral effects of Columns 2 and 3; the OPD 
fee schedule increase; the impact of estimated OPPS outlier payments, 
as discussed in section II.G of this proposed rule; the change in the 
Hospital OQR Program payment reduction for the small number of 
hospitals in our impact model that failed to meet the reporting 
requirements (discussed in section XIV of this proposed rule); and 
other proposed adjustments to the CY 2024 OPPS payments.
    Of those hospitals that failed to meet the Hospital OQR Program 
reporting requirements for the full CY 2023 update (and assumed, for 
modeling purposes, to be the same number for CY 2023), we included 59 
hospitals in our model because they had both CY 2022 claims data and 
recent cost report data. We estimate that the cumulative effect of all 
changes for CY 2024 would increase payments to all facilities by 2.9 
percent for CY 2023. We modeled the independent effect of all changes 
in Column 5 using the final relative payment weights for CY 2023 and 
the proposed relative payment weights for CY 2024. We used the final 
conversion factor for CY 2023 of $85.585 and the proposed CY 2024 
conversion factor of $84.788 discussed in section II.B of this proposed 
rule.
    Column 5 contains simulated outlier payments for each year. We used 
the 1-year charge inflation factor used in the FY 2024 IPPS/LTCH PPS 
proposed rule (87 FR 49427) of 5.8 percent (1.05755) to increase 
charges on the CY 2022 claims, and we used the overall CCR in the April 
2023 Outpatient Provider-Specific File (OPSF) to estimate outlier 
payments for CY 2023. Using the CY 2022 claims and a 5.8 percent charge 
inflation factor, we currently estimate that outlier payments for CY 
2023, using a multiple threshold of 1.75 and a fixed-dollar threshold 
of $8,625, would be approximately 0.78 percent of total payments. The 
estimated current outlier payments of 0.78 percent are incorporated in 
the comparison in Column 5. We used the same set of claims and a charge 
inflation factor of 11.8 percent (1.118412) and the CCRs in the April 
2023 OPSF, with an adjustment of 0.977799 (88 FR 27221), to reflect 
relative changes in cost and charge inflation between CY 2022 and CY 
2024, to model the proposed CY 2024 outliers at 1.0 percent of 
estimated total payments using a multiple threshold of 1.75 and a fixed 
dollar threshold of $6,875. The charge inflation and CCR inflation 
factors are discussed in detail in the FY 2024 IPPS/LTCH PPS final rule 
(88 FR 27219 through 27223).
    Overall, we estimate that facilities would experience an increase 
of 2.9 percent under this proposed rule in CY 2024 relative to total 
spending in CY 2023. This projected increase (shown in Column 5) of 
Table 100 of this proposed

[[Page 49896]]

rule reflects the proposed 2.8 percent OPD fee schedule increase 
factor, added by the difference in estimated outlier payments between 
CY 2023 (0.78 percent) and CY 2024 (1.0 percent), minus 0.10 percent 
for the change in the pass-through payment estimate between CY 2023 and 
CY 2024. We estimate that the combined effect of all changes for CY 
2024 would increase payments to urban hospitals by 2.8 percent. 
Overall, we estimate that rural hospitals would experience a 4.4 
percent increase as a result of the combined effects of all the changes 
for CY 2024.
    Among hospitals, by teaching status, we estimate that the impacts 
resulting from the combined effects of all changes would include an 
increase of 2.4 percent for major teaching hospitals and an increase of 
3.5 percent for nonteaching hospitals. Minor teaching hospitals would 
experience an estimated increase of 3.0 percent.
    In our analysis, we also have categorized hospitals by type of 
ownership. Based on this analysis, we estimate that voluntary hospitals 
would experience an increase of 3.0 percent, proprietary hospitals 
would experience an increase of 3.4 percent, and governmental hospitals 
would experience an increase of 5.8 percent.
c. Estimated Effects of OPPS Changes on CMHCs
    The last line of Table 100 demonstrates the isolated impact on 
CMHCs, which historically have only furnished partial hospitalization 
services under the OPPS. As discussed in section VIII.D of this 
proposed rule, we propose for CY 2024 to pay CMHCs under APC 5853 
(Partial Hospitalization (3 services per day) for CMHCs) for PHP days 
with three or fewer services, and APC 5854 (Partial Hospitalization 
(four or more services per day) for CMHCs) for days with four or more 
services. We modeled the impact of this APC policy assuming CMHCs will 
continue to provide the same PHP care as seen in the CY 2022 claims 
used for ratesetting in this proposed rule. We did not exclude days 
with one or two services from our modeling for CY 2024, because our 
proposed policy would pay the per diem rate for APC 5853 for such days 
beginning in CY 2024. As a result of the proposed PHP APC changes for 
CMHCs, we estimate that CMHCs would experience a 5.8 percent increase 
in CY 2024 payments relative to their CY 2023 payments (shown in Column 
5). For a detailed discussion of our proposed PHP policies, please see 
section VIII of this proposed rule.
    Column 3 shows the estimated impact of adopting the proposed FY 
2024 wage index values, which result in an estimated decrease of 1.0 
percent to CMHCs. Column 4 shows that combining the OPD fee schedule 
increase factor, along with the proposed changes in APC policy for CY 
2024 and the proposed FY 2024 wage index updates, would result in an 
estimated increase of 5.9 percent.
    Lastly, we note that as discussed in section VIII of this proposed 
rule, we propose to establish payment for intensive outpatient services 
furnished by CMHCs under APCs 5851 (Intensive Outpatient (3 services 
per day) for CMHCs) and 5852 (Intensive Outpatient (4 or more services 
per day) for CMHCs). Payment estimates for APCs 5851 and 5852 are not 
reflected in Table 100 but are discussed in section XXI.C.1.i of this 
proposed rule.
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d. Estimated Effect of OPPS Changes on Beneficiaries
    For services for which the beneficiary pays a copayment of 20 
percent of the payment rate, the beneficiary's payment would increase 
for services for which the OPPS payments will rise and will decrease 
for services for which the OPPS payments will fall. For further 
discussion of the calculation of the national unadjusted copayments and 
minimum unadjusted copayments, we refer readers to section II.H of this 
proposed rule. In all cases, section 1833(t)(8)(C)(i) of the Act limits 
beneficiary liability for copayment for a procedure performed in a year 
to the hospital inpatient deductible for the applicable year.
    We estimate that the aggregate beneficiary coinsurance percentage 
would be approximately 18.0 percent for all services paid under the 
OPPS in CY 2024. The estimated aggregate beneficiary coinsurance 
reflects general system adjustments, including the proposed CY 2024 
comprehensive APC payment policy discussed in section II.A.2.b of this 
proposed rule. We note that the individual payments, and therefore 
copayments, associated with services may differ based on the setting in 
which they are furnished. However, at the aggregate system level, we do 
not currently observe significant impact on beneficiary coinsurance as 
a result of those policies.
e. Estimated Effects of OPPS Changes on Other Providers
    The relative payment weights and payment amounts established under 
the OPPS affect the payments made to ASCs, as discussed in section XIII 
of this proposed rule. Hospitals, CMHCs, and ASCs would be affected by 
the changes in this proposed rule. Additionally, as discussed in 
section VIII of this proposed rule, we propose to establish payment for 
IOP furnished by RHCs, FQHCs, and OTPs. These providers of IOP are not 
paid under the OPPS and are not included in the impact analysis shown 
in Table 100; however, the proposed payment amount for OPPS APC 5861 
would affect payments to these providers. We discuss estimated effects 
of proposed IOP policies in section XXI.C.1.i of this proposed rule.
f. Estimated Effects of OPPS Changes on the Medicare and Medicaid 
Programs
    The effect of the update on the Medicare program is expected to be 
an increase of $1.9 billion in program payments for OPPS services 
furnished in CY 2024. 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 proposed rule would increase these Medicaid beneficiary 
payments by approximately $115 million in CY 2024. 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 $115 million 
Medicaid increase, approximately $65 million would be from the Federal 
Government and $50 million will be from State governments.
g. Alternative OPPS Policies Considered
    Alternatives to the OPPS changes we propose and the reasons for our 
selected alternatives are discussed throughout this proposed rule.
     Alternatives Considered for the Claims Data used in OPPS 
and ASC Ratesetting due to the PHE.
    We refer readers to section X.F. of this proposed rule for a 
discussion of our proposed policy of returning to the standard update 
process of using updated cost report data for OPPS ratesetting. In that 
section, we discuss our consideration of issues regarding data updates, 
and in particular the selection of cost report data used, which would 
include some cost report data including the timeframe of the PHE. We

[[Page 49900]]

note that were we to continue using cost report data from prior to the 
PHE it would potentially not be reflective of more updated cost and 
charging patterns. In this proposed rule, as discussed in section X.F. 
of this proposed rule, we propose a policy of resuming our regular cost 
report update process for CY 2024 OPPS ratesetting.
    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.
h. Health Equity Comment Solicitation
    Advancing health equity is the first pillar of the CMS 2022 
Strategic Framework.\679\ To gain insight into how OPPS and ASC 
policies could affect health equity, we are considering adding elements 
to our impact analysis that would detail how OPPS and ASC policies 
impact particular beneficiary populations. Beneficiary populations that 
have been disadvantaged or underserved by the healthcare system may 
include patients with the following characteristics, among others: 
members of racial and ethnic minorities; members of federally 
recognized Tribes; people with disabilities; members of the lesbian, 
gay, bisexual, transgender, and queer (LGBTQ+) community; individuals 
with limited English proficiency; members of rural communities; and 
persons otherwise adversely affected by persistent poverty or 
inequality.
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    \679\ Available at: https://www.cms.gov/files/document/2022-cms-strategic-framework.pdf.
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    We are seeking comment from interested parties about how we might 
structure an impact analysis that addresses how OPPS and ASC changes 
may impact beneficiaries of different groups. We currently present OPPS 
impacts by provider type, rural versus urban area, geographic region, 
teaching status, and ownership type. We are interested in what health 
equity questions we can examine within these existing categories to 
better understand the heath equity impact of our policies. We also 
welcome suggestions about adding new categories or measures of health 
equity in our impact analyses, such as using the area deprivation index 
(ADI) as a proxy for disparities related to geographic variation. 
Additionally, we are seeking comment on ways to continue building an 
OPPS health equity framework that allows us to develop policies that 
enhance health equity under our existing statutory authority.
i. Effects of Proposed IOP Policies on Hospitals, CMHCs, FQHCs, RHCs, 
and OTPs
    As discussed in section VIII of this proposed rule, we propose to 
establish payment for intensive outpatient services furnished by 
hospitals, CMHCs, FQHCs, and RHCs under a new IOP benefit. We also 
propose to establish payment for intensive outpatient services provided 
by OTPs under the existing OTP benefit. Estimates of the payment 
impacts for IOP furnished by hospitals are included in Table 100 of 
this proposed rule, based on utilization in the CY 2022 claims for days 
that we believe would likely be billed as IOP beginning in CY 2024. 
Specifically, we modeled non-PHP days furnished by hospitals with 3 and 
4 or more services from Table 43 of this proposed rule and at least one 
service from the list of primary services shown in Table 44 of this 
proposed rule.
    Because CMHCs are currently only permitted to bill for partial 
hospitalization services, we are unable to model payments for IOP APCs 
5851 and 5852 based on utilization from CY 2022 claims. Therefore, the 
payment impacts for IOP furnished by CMHCs are not included in Table 
100. However, we anticipate there would be an increase in utilization 
for CMHCs beginning in CY 2024. We simulated potential utilization for 
IOP APCs 5851 and 5852 based on estimates of the volume of such 
services that we expect would be provided beginning in CY 2024. We 
calculated the number of non-PHP 3-service and 4-service days in the 
hospital setting, and compared this to the number of PHP 3-service and 
4-service days in the hospital setting. We applied the same ratio of 
non-PHP to PHP days to estimate anticipated IOP claims in the CMHC 
setting for CY 2024. We believe this is appropriate, because as 
discussed in section VIII.C of this proposed rule, we propose that IOP 
and PHP days would consist of the same services and use the same HCPCS 
codes. Therefore, for public awareness, we are including projections 
about potential IOP utilization for CMHCs using claims with a 
comparable number and type of services, which we believe is the best 
available estimate of IOP utilization in the future. Based on this 
methodology, we estimate that CMHCs would provide approximately 35,511 
IOP days with three services and approximately 22,558 IOP days with 
four or more services. These projections correspond to an estimated 
$6,593,452 in additional payments to CMHCs for the provision of 
intensive outpatient services. This represents an increase of roughly 
165 percent relative to current CMHC payments for partial 
hospitalization services. We solicit comment on our assumptions and the 
methodology used to derive this estimate.
    In section VIII.F.4 of this proposed rule, we discuss the special 
payment rules for FQHCs and RHCs to furnish intensive outpatient 
services as mandated by sections 4124(c)(1) and (c)(2) of the CAA, 
2023. For both FQHCs and RHCs, we propose to set the IOP payment rate 
as based on the per diem payment amount determined for APC 5861 
(Intensive Outpatient (3 services per day) for hospital-based IOPs). 
However, for IOP services furnished in FQHCs, we propose that that 
payment amount is based on the lesser of a FQHC's actual charges or the 
rate determined for APC 5861. Additionally, we propose that 
grandfathered tribal FQHCs will continue to have their payment based on 
the outpatient per visit rate when furnishing IOP services. That is, 
payment is based on the lesser of a grandfathered tribal FQHC's actual 
charges or the outpatient per visit rate.
    FQHCs and RHCs currently bill for mental health services. Beginning 
January 1, 2024 these settings will be able to bill for certain mental 
health services determined to be IOP services that they were not able 
to furnish previously, for example group therapy. We anticipate there 
would be utilization of IOP services for both RHCs and FQHCs in CY 
2024; however, since this is a new program for both settings, we are 
unable to project what that utilization would be or the associated 
Medicare expenditures. FQHCs and RHCs typically furnish primary care 
services therefore we believe that it may take time for these settings 
to build the internal framework needed to initiate and foster an IOP. 
With regard to RHCs, we note the statutory provision which defines the 
term ``rural health clinic'' in section 1861(aa)(2)(K)(iv) of the Act, 
states that a RHC is not a facility which is primarily for the care and 
treatment of mental diseases. We believe this provision could cause low 
utilization of IOP services until RHCs can determine what they can or 
cannot furnish. Therefore, we believe extending coverage for IOP 
services in FQHCs and RHCs is unlikely to have a significant impact on 
overall Medicare spending.
    As discussed in section VIII.G of this proposed rule, for CY 2024 
and subsequent years, we propose to establish a weekly add-on code for 
IOP services furnished by OTPs for the treatment of opioid use disorder 
(OUD) and to revise the definition of OUD treatment services to include 
IOP services. In accordance with our

[[Page 49901]]

methodology for other add-on adjustments to the bundled payment for OUD 
treatment services, we propose to apply an annual update based on the 
Medicare Economic Index (MEI) described in Sec.  414.30, and apply a 
geographic adjustment based on the Geographic Adjustment Factor (GAF) 
described in Sec.  414.26. Under this proposal, we would permit OTPs to 
bill a new HCPCS code (GOTP1) for IOP services based on a minimum of at 
least nine IOP services furnished to eligible patients per week, which 
would result in a payment rate of $719.67.
    We estimate that these proposed policies to allow OTPs to bill for 
IOP services beginning in CY 2024 would result in a negligible cost 
increase. In our analysis, we evaluated mental health services 
furnished to beneficiaries receiving care at OTPs, including for levels 
of care and types of services that are not currently reflected in the 
OTP benefit. Approximately 557 OTPs offer IOP services nationwide 
according to the National Substance Use and Mental Health Services 
Survey in 2021.\680\ However, our analysis of claims data from Medicare 
beneficiaries receiving care under the OTP benefit from CY 2020-2022 
indicated a small number of beneficiaries actually receive intensive 
care services equivalent to 9 hours or more a week to meet the minimum 
threshold for IOP services. Specifically, 85 percent of Medicare 
beneficiaries received only medications for OUD with basic counseling 
and no other mental health care, and thus did not likely utilize a 
higher level of care required for IOP services. For the remaining 15 
percent of Medicare beneficiaries, approximately 0.5-0.7 percent 
received a higher acuity of care likely to meet the minimum 9 hours or 
more of services under IOPs. The estimated total annual cost per 
Medicare beneficiary with an OUD receiving IOP services at an OTP would 
be approximately $38,000, however, this estimate assumes that a 
beneficiary would require this level of care every week of the calendar 
year, which we do not believe would be likely. Therefore, extending 
coverage for IOP services in OTP settings is unlikely to have a 
significant impact on overall Medicare spending.
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    \680\ Substance Abuse and Mental Health Services Administration, 
National Substance Use and Mental Health Services Survey (N-SUMHSS), 
2021: Annual Detailed Tables. Rockville, MD: Substance Abuse and 
Mental Health Services Administration, 2023. Weblink: https://www.samhsa.gov/data/sites/default/files/reports/rpt39450/2021%20N-SUMHSS%20Annual%20Detailed%20Tables_508_Compliant_2_8_2023.pdf.
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2. Estimated Effects of CY 2024 ASC Payment System Changes
    Most ASC payment rates are calculated by multiplying the ASC 
conversion factor by the ASC relative payment weight. As discussed 
fully in section XIII of this proposed rule, we are setting the CY 2024 
ASC relative payment weights by scaling the proposed CY 2024 OPPS 
relative payment weights by the proposed CY 2024 ASC scalar of 0.8649. 
The estimated effects of the updated relative payment weights on 
payment rates are varied and are reflected in the estimated payments 
displayed in Tables 101 and 102.
    Beginning in CY 2011, section 3401 of the Affordable Care Act 
requires that the annual update to the ASC payment system after 
application of any quality reporting reduction be reduced by a 
productivity adjustment. In CY 2019, we adopted a policy for the annual 
update to the ASC payment system to be the hospital market basket 
update for CY 2019 through CY 2023. 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 2024 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 2024. We calculated the proposed 
CY 2024 ASC conversion factor by adjusting the CY 2023 ASC conversion 
factor by 1.0017 to account for changes in the pre-floor and pre-
reclassified hospital wage indexes between CY 2023 and CY 2024 and by 
applying the CY 2024 productivity-adjusted hospital market basket 
update factor of 2.8 percent (which is equal to the proposed inpatient 
hospital market basket percentage increase of 3.0 percent reduced by a 
productivity adjustment of 0.2 percentage point). The proposed CY 2024 
ASC conversion factor is $53.397 for ASCs that successfully meet the 
quality reporting requirements.
a. Limitations of Our Analysis
    Presented here are the projected effects of the proposed changes 
for CY 2024 on Medicare payment to ASCs. A key limitation of our 
analysis is our inability to predict changes in ASC service-mix between 
CY 2022 and CY 2024 with precision. We believe the net effect on 
Medicare expenditures resulting from the proposed CY 2024 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.
b. Estimated Effects of ASC Payment System Policies on ASCs
    Some ASCs are multispecialty facilities that perform a wide range 
of surgical procedures from excision of lesions to hernia repair to 
cataract extraction; others focus on a single specialty and perform 
only a limited range of surgical procedures, such as eye, digestive 
system, or orthopedic procedures. The combined effect of the proposed 
update to the CY 2024 payments on an individual ASC 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 proposed CY 2024 updates to the ASC payment system on 
Medicare payments to ASCs, assuming the same mix of services, as 
reflected in our CY 2022 claims data. Table 101 depicts the estimated 
aggregate percent change in payment by surgical specialty or ancillary 
items and services group by comparing estimated CY 2023 payments to 
estimated CY 2024 payments, and Table 102 shows a comparison of 
estimated CY 2023 payments to estimated CY 2024 payments for procedures 
that we estimate would receive the most Medicare payment in CY 2023.
    In Table 101, 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 101.

[[Page 49902]]

     Column 1--Surgical Specialty or Ancillary Items and 
Services Group indicates the surgical specialty into which ASC 
procedures are grouped and the ancillary items and services group, 
which includes all HCPCS codes for covered ancillary items and 
services. To group surgical procedures by surgical specialty, we used 
the CPT code range definitions and Level II HCPCS codes and Category 
III CPT codes, as appropriate, to account for all surgical procedures 
to which the Medicare program payments are attributed.
     Column 2--Estimated CY 2023 ASC Payments were calculated 
using CY 2022 ASC utilization data (the most recent full year of ASC 
utilization) and CY 2023 ASC payment rates. The surgical specialty 
groups are displayed in descending order based on estimated CY 2023 ASC 
payments.
     Column 3--Estimated CY 2024 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 2024 compared to CY 2023.
    As shown in Table 101, 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 6 percent 
increase in aggregate payment amounts for eye and ocular adnexa 
procedures, a 6 percent decrease in aggregate payment amounts for 
nervous system procedures, 3 percent increase in aggregate payment 
amounts for musculoskeletal system procedures, a 7 percent increase in 
aggregate payment amounts for digestive system procedures, a 4 percent 
increase in aggregate payment amounts for cardiovascular system 
procedures, and a 6 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 2.8 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 2.8 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 6 percent increase in aggregate eye and ocular 
adnexa procedure payments. The increase in payment rates for eye and 
ocular andexa procedures is a result of increased OPPS relative weights 
as a result of the APC restructuring to the Intraocular APC family and 
is further increased by the 2.8 percent ASC rate update for these 
procedures. Conversely, we estimate a 6 percent decrease in nervous 
system procedures related to the American Medical Association's RVU 
Update Committee (RUC) estimated shift in utilization from an existing 
high-cost neurostimulator procedure (CPT code 64685) to a new, lower-
cost neurostimulator procedure (CPT code 0X43T) for CY 2024. For 
estimated changes for selected procedures, we refer readers to Table 
101 provided later in this section.
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    Table 102 shows the estimated impact of the updates to the revised 
ASC payment system on aggregate ASC payments for selected surgical 
procedures during CY 2024. The table displays 30 of the procedures 
receiving the greatest estimated CY 2023 aggregate Medicare payments to 
ASCs. The HCPCS codes are sorted in descending order by estimated CY 
2023 program payment.
     Column 1--CPT/HCPCS code.
     Column 2--Short Descriptor of the HCPCS code.
     Column 3--Estimated CY 2023 ASC Payments were calculated 
using CY 2022 ASC utilization (the most recent full year of ASC 
utilization) and the CY 2023 ASC payment rates. The estimated CY 2023 
payments are expressed in millions of dollars.
     Column 4--Estimated CY 2024 Percent Change reflects the 
percent differences between the estimated ASC payment for CY 2023 and 
the estimated payment for CY 2024 based on the proposed update.
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c. Estimated Effects of ASC Payment System Policies on Beneficiaries
    We estimate that the CY 2024 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 2024. 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

[[Page 49904]]

those additional procedures that we proposed to designate as office-
based in CY 2024, the beneficiary coinsurance amount under the ASC 
payment system generally will be no greater than the beneficiary 
coinsurance under the PFS because the coinsurance under both payment 
systems generally is 20 percent (except for certain preventive services 
where the coinsurance is waived under both payment systems).
Accounting Statements and Tables for OPPS and ASC Payment System
    As required by OMB Circular A-4 (available on the Office of 
Management and Budget website at: https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/assets/OMB/circulars/a004/a-4.html), we have 
prepared accounting statements to illustrate the impacts of the OPPS 
and ASC changes in this proposed rule. The first accounting statement, 
Table 103, illustrates the classification of expenditures for the CY 
2024 estimated hospital OPPS incurred benefit impacts associated with 
the final CY 2024 OPD fee schedule increase. The second accounting 
statement, Table 104, illustrates the classification of expenditures 
associated with the 2.8 percent CY 2024 update to the ASC payment 
system, based on the provisions of this proposed rule and the baseline 
spending estimates for ASCs. Both tables classify most estimated 
impacts as transfers. Table 105 includes the annual estimated impact of 
hospital OQR and ASCQR programs.
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3. Effects of Changes in Requirements for the Hospital Outpatient 
Quality Reporting (OQR) Program
a. Background
    We refer readers to the CY 2023 OPPS/ASC final rule (87 FR 72278 
through 72279) for the previously estimated effects of changes to the 
Hospital OQR Program for the CY 2025 payment determination. Of the 
3,097 hospitals that met eligibility requirements for the CY 2023 
payment determination for the Hospital OQR Program, we determined that 
77 hospitals did not meet the requirements to receive the full annual 
Outpatient Department (OPD) fee schedule increase factor.
b. Impact of CY 2024 OPPS/ASC Proposed Rule Policies
    We do not anticipate that the proposed Hospital OQR Program 
policies would significantly impact the number of hospitals that will 
receive payment reductions. In this proposed rule, we propose to: (1) 
modify the COVID-19 Vaccination Coverage Among Healthcare Personnel 
(HCP) measure, beginning with the CY 2024 reporting period/CY 2026 
payment determination; (2) modify the Cataracts: Improvement in 
Patient's Visual Function Within 90 Days Following Cataract Surgery 
measure beginning with the voluntary CY 2024 reporting period; (3) 
modify the Appropriate

[[Page 49905]]

Follow-Up Interval for Normal Colonoscopy in Average Risk Patients 
measure, beginning with the CY 2024 reporting period/CY 2026 payment 
determination; (4) adopt the Risk-Standardized Patient-Reported 
Outcome-Based Performance Measure (PRO-PM) Following Elective Primary 
Total Hip Arthroplasty (THA) and/or Total Knee Arthroplasty (TKA) in 
the HOPD Setting (THA/TKA PRO-PM), beginning with the voluntary CYs 
2025 and 2026 reporting period followed by mandatory reporting 
beginning with the CY 2027 reporting period/CY 2030 payment 
determination; (5) adopt the Excessive Radiation Dose or Inadequate 
Image Quality for Diagnostic Computed Tomography (CT) in Adults 
(Hospital Level--Outpatient) electronic clinical quality measure 
(eCQM), beginning with the CY 2025 voluntary reporting period followed 
by mandatory reporting beginning with the CY 2026 reporting period/CY 
2028 payment determination; (6) re-adopt with modification the Hospital 
Outpatient Volume Data on Selected Outpatient Surgical Procedures 
measure, beginning with voluntary reporting for the CY 2025 reporting 
period and mandatory reporting beginning with the CY 2026 reporting 
period/CY 2028 payment determination; and (7) remove the Left Without 
Being Seen measure beginning with the CY 2024 reporting period/CY 2026 
payment determination.
    We refer readers to section XXIV.B of this proposed rule 
(information collection requirements) for a detailed discussion of the 
calculations estimating the changes to the information collection 
burden for submitting data to the Hospital OQR Program where we state 
that for purposes of burden estimation, 3,350 hospitals will be 
considered and Table 89 where we estimate a total information 
collection burden increase for 3,350 OPPS hospitals of 67,004 hours at 
a cost of $1,492,875 annually associated with our proposed policies for 
the CYs 2024 reporting period/CY 2026 payment determination and 
subsequent years, compared to our currently approved information 
collection burden estimates.
    In section XIV.B.2.a of this proposed rule, we propose to modify 
the COVID-19 Vaccination Coverage among HCP measure to utilize the term 
``up to date'' in the HCP vaccination definition and update the 
numerator to specify the time frames within which an HCP is considered 
up to date with recommended COVID-19 vaccines, including booster doses. 
Although we anticipate this modification may require some hospitals to 
update information technology (IT) systems or workflow related to 
maintaining accurate vaccination records for HCP, we assume most 
hospitals are currently recording all necessary information for HCP 
such that this modification would not require additional information to 
be collected. Therefore, the financial impact of any required updates 
would be minimal. Finally, we do not estimate any changes to the 
effects previously discussed in the CY 2022 OPPS/ASC final rule for the 
Hospital OQR Program (86 FR 63984).
    In section XIV.B.2.b of this proposed rule, we propose to modify 
the Cataracts: Improvement in Patient's Visual Function Within 90 Days 
Following Cataract Surgery measure by limiting the survey instrument 
that can be used to administer this measure to three assessment tools: 
National Eye Institute Visual Function Questionnaire (NEI VFQ-25), 
Visual Function Index (VF-14), and VF-8R. These surveys were found to 
have fewer noted limitations, present the lowest administrative burden, 
and achieve adequate validity and reliability compared to other 
surveys. We understand some hospitals may be currently using one of the 
other surveys which would no longer be allowable for collecting data 
for this measure, however, we believe any costs associated with 
modifying clinical practices would be negligible as these surveys are 
all publicly available at no additional cost and are comparable survey 
instruments in form and manner for data collection and measure 
calculation to other surveys used for this measure.
    In section XIV.B.3.b of this proposed rule, we propose the adoption 
of the THA/TKA PRO-PM. We assume the effects on outpatient hospitals 
would be similar to the effects previously discussed in the FY 2023 
IPPS/LTCH PPS final rule for the inpatient hospital setting under the 
Hospital Inpatient Quality Reporting (IQR) Program (87 FR 49492). For 
hospitals that would not already be collecting these data for the 
Hospital IQR Program, there would be some non-recurring costs 
associated with changes in workflow and IT systems to collect the data 
for the Hospital OQR Program. The extent of these costs is difficult to 
quantify as different hospitals may utilize different modes of data 
collection (such as paper-based, electronically patient-directed, or 
clinician-facilitated). While we assume the majority of hospitals would 
report data for this measure directly to CMS via the CMS-designated 
information system (currently, the Hospital Quality Reporting (HQR) 
system), we assume some hospitals may elect to submit measure data 
using a third-party vendor, for which there are associated costs. To 
determine an estimate of third-party vendor costs, we looked at the 
Hospital Consumer Assessment of Healthcare Providers and Systems 
(HCAHPS) measure (OMB control number 0938-098; expiration date 
September 30, 2024), which used an estimate of approximately $4,000 per 
hospital to account for these costs. This per hospital cost estimate 
originates from this Paperwork Reduction Act analysis performed for 
2012, therefore, to account for inflation (assuming end of CY 2012 to 
January CY 2023), we adjust the price using the Bureau of Labor 
Statistics Consumer Price Index and estimate an updated cost of 
approximately $5,212 ($4,000 x 130.3 percent).\681\
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    \681\ U.S. Bureau of Labor Statistics. Historical CPI-U data. 
Accessed on March 9, 2023. Available at: https://www.bls.gov/cpi/tables/supplemental-files/historical-cpi-u-202301.pdf.
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    In section XIV.B.3.c of this proposed rule, we propose the adoption 
of the Excessive Radiation Dose or Inadequate Image Quality for 
Diagnostic CT in Adults (Hospital Level--Outpatient) eCQM. Similar to 
the CY 2022 OPPS/ASC final rule (86 FR 63837 through 63840), we believe 
that costs associated with adoption of eCQMs are multifaceted and 
include not only the burden associated with reporting but also the 
costs associated with implementing and maintaining program 
requirements, such as maintaining measure specifications in hospitals' 
electronic health record (EHR) systems for the eCQMs used in the 
Hospital OQR Program (83 FR 41771).
    Regarding the remaining proposals, we do not believe any of these 
proposals would result in any additional economic impact beyond those 
discussed in section XXIV ``Collection of Information'' of this 
proposed rule, if adopted.
4. Effects of Requirements for the Ambulatory Surgical Center Quality 
Reporting (ASCQR) Program
a. Background
    In section XV of this proposed rule, we discuss our proposed 
policies affecting the ASCQR Program. For the CY 2023 payment 
determination, of the 5,697 Ambulatory Surgical Centers (ASCs) that met 
eligibility requirements, we determined that 516 ASCs did not meet the 
requirements to receive the full annual payment rate update under the 
ASC fee schedule.

[[Page 49906]]

b. Impact of CY 2024 OPPS/ASC Proposed Policies
    In this proposed rule, we propose to: (1) modify the COVID-19 
Vaccination Coverage Among Healthcare Personnel (HCP) measure, 
beginning with the CY 2024 reporting period/CY 2026 payment 
determination; (2) modify the Cataracts: Improvement in Patient's 
Visual Function Within 90 Days Following Cataract Surgery measure 
beginning with the voluntary CY 2024 reporting period; (3) modify the 
Endoscopy/Polyp Surveillance: Appropriate Follow-Up Interval for Normal 
Colonoscopy in Average Risk Patients measure, beginning with the CY 
2024 reporting period/CY 2026 payment determination; (4) re-adopt with 
modification the ASC Facility Volume Data on Selected ASC Surgical 
Procedures measure, beginning with voluntary reporting for the CY 2025 
reporting period followed by mandatory reporting beginning with the CY 
2026 reporting period/CY 2028 payment determination; and (5) adopt the 
Risk-Standardized Patient-Reported Outcome-Based Performance Measure 
(PRO-PM) Following Elective Primary Total Hip Arthroplasty (THA) and/or 
Total Knee Arthroplasty (TKA) in the ASC Setting (THA/TKA PRO-PM), 
beginning with voluntary CYs 2025 and CY 2026 reporting periods 
followed by mandatory reporting beginning with the CY 2027 reporting 
period/CY 2030 payment determination.
    We refer readers to section XXIV.C of this proposed rule 
(information collection requirements) for a detailed discussion of the 
calculations estimating the changes to the information collection 
burden for submitting data to the ASCQR Program and Table 94 where we 
estimate a total information collection burden increase for 5,057 ACSs 
of 7,689 hours at a cost of $238,675 annually associated with our 
proposed 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.
    In section XV.B.4.a of this proposed rule, we propose to modify the 
COVID-19 Vaccination Coverage among HCP measure to utilize the term 
``up to date'' in the HCP vaccination definition and update the 
numerator to specify the time frames within which an HCP is considered 
up to date with recommended COVID-19 vaccines, including booster doses. 
Although we anticipate this modification may require some facilities to 
update information technology (IT) systems or workflow related to 
maintaining accurate vaccination records for HCP, we assume most 
facilities are currently recording all necessary information for HCP 
such that this modification would not require additional information to 
be collected and, therefore, the financial impact of any required 
updates would be minimal. Finally, we do not estimate any changes to 
the effects previously discussed in the CY 2022 OPPS/ASC final rule for 
the ASCQR Program (86 FR 63985).
    In section XV.B.4.b of this proposed rule, we propose to modify the 
Cataracts: Improvement in Patient's Visual Function Within 90 Days 
Following Cataract Surgery measure by limiting the survey instrument 
that can be used to administer this measure to three assessment tools: 
NEI VFQ-25, VF-14, and VF-8R. These surveys were found to have fewer 
noted limitations, present the lowest administrative burden, and 
achieve adequate validity and reliability compared to other surveys. We 
understand some ASCs may be currently using one of the other surveys 
which would no longer be allowable for collecting data for this 
measure, however, we believe any costs associated with modifying 
clinical practices would be negligible as these surveys are all 
publicly available at no additional cost and are comparable survey 
instruments in form and manner for data collection and measure 
calculation to other surveys used for this measure.
    In section XV.B.5.b of this proposed rule, we propose the adoption 
of the THA/TKA PRO-PM. We assume the effects on ASCs would be similar 
to those previously finalized for the inpatient hospital setting under 
the Hospital IQR Program as discussed in the FY 2023 IPPS/LTCH PPS 
final rule (87 FR 49492). For ASCs that are not currently collecting 
these data, there would be some non-recurring costs associated with 
changes in workflow and information systems to collect the data. The 
extent of these costs is difficult to quantify as different ASCs may 
utilize different modes of data collection (such as paper-based, 
electronically patient-directed, or clinician-facilitated). While we 
assume the majority of ASCs would report data for this measure directly 
to CMS via the CMS-designated information system (currently, the HQR 
System), we also assume some ASCs may elect to submit measure data via 
a third-party vendor, for which there are associated costs. To 
determine an estimate of third-party vendor costs, we looked at the 
HCAHPS measure (OMB control number 0938-0981; expiration date September 
30, 2024), which used an estimate of approximately $4,000 per hospital 
to account for these costs. This estimate originates from 2012, 
therefore, to account for inflation (assuming end of CY 2012 to January 
CY 2023), we adjust the price using the Bureau of Labor Statistics 
Consumer Price Index and estimate an updated cost of approximately 
$5,212 ($4,000 x 130.3 percent).\682\
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    \682\ U.S. Bureau of Labor Statistics. Historical CPI-U data. 
Accessed on March 9, 2023. Available at: https://www.bls.gov/cpi/tables/supplemental-files/historical-cpi-u-202301.pdf.
---------------------------------------------------------------------------

    Regarding the remaining proposals, we do not believe any of these 
proposals would result in any additional economic impact beyond those 
discussed in section XXIV ``Collection of Information'' of this 
proposed rule, if adopted.
5. Effects of Requirements for the Rural Emergency Hospital Quality 
Reporting (REHQR) Program
a. Background
    In section XVI of this proposed rule, we discuss our proposed 
policies affecting the REHQR Program. We propose to adopt four new 
measures, beginning with the CY 2024 reporting period: (1) the Abdomen 
Computed Tomography (CT)--Use of Contrast Material measure; (2) the 
Median Time from ED Arrival to ED Departure for Discharged ED Patients 
measure; (3) the Facility 7-Day Risk-Standardized Hospital Visit Rate 
After Outpatient Colonoscopy measure; and (4) the Risk-Standardized 
Hospital Visits Within 7 Days After Hospital Outpatient Surgery 
measure.
    We refer readers to section XXIV.D ``Collection of Information'' of 
this proposed rule for a detailed discussion of the calculations 
estimating the changes to the information collection burden for 
submitting data to the REHQR Program and Table 96 where we estimate a 
total information collection burden for 746 REHs of 9,101 hours at a 
cost of $474,344 annually associated with our proposed policies for the 
CY 2024 reporting period and subsequent years. Regarding the remaining 
proposals, we do not believe any of these proposals would result in any 
additional economic impact beyond those discussed in section XXIV 
``Collection of Information'' of this proposed rule, if adopted.
b. Impact of CY 2024 OPPS/ASC Proposed REHQR Program Policies
    For CY 2024, we have determined there are 1,716 CAHs and rural 
subsection (d) hospitals with 50 or fewer beds that are eligible to 
convert to

[[Page 49907]]

become an REH in the nation. Based on the March 2023 numbers of REH-
eligible hospitals currently in the Hospital OQR program and in states 
with REH licensure provisions, we estimate 746 hospitals which could 
convert to REH status, and we use this number of REHs for our impact 
analyses. We acknowledge that the number of conversions could be less 
than or significantly greater than this estimate.
    As hospitals eligible to convert to REH status have been eligible 
to report quality measures under the Hospital OQR Program and most of 
these hospitals have been reporting, we do not believe any of our 
administrative proposals would result in additional impact on these 
hospitals.
6. Estimated Effects of Changes to the CMHC CoPs
a. Impacts Related to Conditions of Participation: Admission, Initial 
Evaluation, Comprehensive Assessment, and Discharge or Transfer of the 
Client (Sec.  485.914)
    Under the Medicare Program, in accordance with section 4124 of 
division FF of the CAA. 2023, we propose conforming regulations text 
changes to establish coverage for Intensive Outpatient Services (IOP) 
in CMHC at Sec.  485.914 ``Admission, initial evaluation, comprehensive 
assessment, and discharge or transfer of the client''. At Sec.  
485.914(a), we require that for clients who are assessed and admitted 
to receive partial hospitalization services, the CMHC must also meet 
separate requirements specified in Sec.  485.918(f). In Sec.  
418.918(d)(2), we propose to add IOP services to the update of the 
assessment no less frequently than every 30 days. We do not expect any 
increase in burden for this modification, nor do we expect the changes 
for this provision will cause any appreciable expense or anticipated 
savings. Therefore, we do not believe this standard would impose any 
additional regulatory burden.
b. Impacts Related to Conditions of Participation: Treatment Team, 
Person-Centered Active Treatment Plan, and Coordination of Services 
(Sec.  485.916)
    This standard requires the active treatment plan to be updated with 
current information from the client's comprehensive assessment and 
information concerning the client's progress toward achieving outcomes 
and goals specified in the active treatment plan. With the addition of 
IOP services to CMHCs, we believe it is necessary to add IOP into this 
requirement and to reference the specific IOP program requirements 
being proposed in section VIII.B.2 at Sec.  424.24(d) of this proposed 
rule. We do not expect any increase in burden for this modification, 
nor do we expect the changes for this provision will cause any 
appreciable expense or anticipated savings. Therefore, we do not 
believe this standard would impose any additional regulatory burden.
7. Impacts Related to Conditions of Participation: Organization, 
Governance, Administration of Services, Partial Hospitalization 
Services (Sec.  485.918)
    The requirement at Sec.  485.918(b) Standard: Provision of 
services, specifies a comprehensive list of services that a CMHC is 
required to furnish. This list of services that CMHCs provide 
corresponds directly to the Statutory requirements in (section 
1861(ff)(3) of the Act). We propose to modify the title at Sec.  
485.918, by adding intensive outpatient services after partial 
hospitalization services. In addition, we propose to add IOP to the 
requirement at Sec.  485.918(b)(1)(iii) for the provision of services. 
This proposed change will recognize IOP, along with day treatment and 
PHP, as services that can be provided by a CMHC, other than in an 
individual's home or in an inpatient or residential setting, or 
psychosocial rehabilitation services.
    Lastly, we propose to add a new standard for IOP services at Sec.  
485.918(g). This new requirement would specify the additional 
requirements a CMHC providing IOP services must meet under proposed 
requirements at Sec.  410.2, Sec.  410.44, Sec.  410.111, and Sec.  
424.24(d) of this chapter. We believe that modifying the title of this 
CoP to include IOP services, as well as adding IOP services to Sec.  
485.918(b)(1)(iii) and the proposed new standard at Sec.  485.918(g) 
will not increase the burden for this modification. In addition, we do 
not expect the changes to this provision will cause any appreciable 
amount of expense or anticipated savings, and we do not believe this 
standard would impose any additional regulatory burden.
8. Effects of Proposals Relating to Hospital Price Transparency
a. Background
    Since the hospital price transparency regulation's (at 45 CFR 180) 
effective date on January 1, 2021, hospitals have been required to make 
their standard charges available to the public. Various interested 
parties have reported success in using the data to realize savings. 
These interested parties come from various parts of the healthcare 
industry and range from individuals to large organizations. Individual 
consumers of healthcare have accessed the pricing data to shop for care 
and save money, and they have created tutorials to teach others how to 
use this information to achieve similar results.\683\ Employers have 
used the data to reconsider their employee healthcare plans and 
renegotiate hospital contracts.684 685 686 Innovators have 
identified and aggregated the data allowing consumers of healthcare to 
more easily make meaningful comparisons.\687\ Insurers have evaluated 
data, identified hospitals that are cost outliers, and successfully 
renegotiated their contracts.\688\ Researchers \689\ and industry 
experts \690\ continue to expose potential savings by publishing on 
variation in negotiated charges and discounted cash prices for the same 
items and services both within and across hospitals. Taken together, 
such actions can motivate hospitals to compete on prices. Furthermore, 
as interested parties continue to identify new sources of value in this 
pricing data, the full potential is likely beyond what we previously 
imagined.
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    \683\ R&R Insurance. How I Saved Over 1K. Available at: https://rrins.wistia.com/medias/rkefb7g3aq.
    \684\ Minemyer, P. New Playbook Aims to Help Employers, Plan 
Sponsors Negotiate Hospital Prices. Fierce Healthcare. September 8, 
2022. Available at: https://www.fiercehealthcare.com/payers/new-playbook-aims-help-employers-plan-sponsors-negotiate-hospital-prices.
    \685\ Hansard, S. One County Combed Hospital Data to Slash 
Health Plan Costs 43 percent. Bloomberg. February 6, 2023. Available 
at: https://news.bloomberglaw.com/health-law-and-business/employer-health-plan-eyes-43-savings-from-payment-data-audits.
    \686\ Hansard, S. Employer, Hospital Tensions Rise Over Price 
Transparency. Bloomberg. August 2, 2022. Available at: https://news.bloomberglaw.com/health-law-and-business/tensions-between-employers-hospitals-up-with-transparency-push.
    \687\ Turquoise Health. Patients--Shop Healthcare Like You Shop 
Anything Else. Available at: https://turquoise.health/patients.
    \688\ Pierce, S. Why BlueCross Blue Shield Tennessee is 
Renegotiating Provider Network Contracts. The Tennessean. August 18, 
2022. Available at: https://www.tennessean.com/story/opinion/2022/08/18/bluecross-blue-shield-tennessee-health-insurance-contracts/10333329002/.
    \689\ Mouslim, M., Henderson, M. How New Data on Hospital 
``Discounted Cash Prices'' Might Lead to Patient Savings. Health 
Affairs. November 8, 2021. Available at: https://www.healthaffairs.org/do/10.1377/forefront.20211103.716124/full/.
    \690\ Smith, C., et al. Hospital Price Transparency Data: Case 
Studies for How to Use It. Milliman. May 3, 2022. Available at: 
https://us.milliman.com/en/insight/hospital-price-transparency-data-case-studies-for-how-to-use-it.
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    As discussed in more detail in section XVIII of this proposed rule, 
we believe the revisions we are proposing a number of changes to the 
hospital price transparency regulations at 45 CFR 180

[[Page 49908]]

to accelerate automated aggregation of hospital standard charge 
information, improve the public's ability to meaningfully understand 
and use the data, and support and streamline CMS compliance efforts. We 
propose to: (1) define several new terms; (2) require hospitals to 
include standard charge information for an increased number of data 
elements within the MRF and to conform to a CMS template layout data 
encoding specifications; (3) require hospitals to include a txt file in 
the root folder that includes a direct link to the MRF and a link in 
the footer on its homepage that links directly to the publicly 
available web page that hosts the link to the MRF; and (4) improve our 
enforcement process by updating our methods to assess hospital 
compliance, requiring hospitals to acknowledge receipt of warning 
notices, working with health system officials to address noncompliance 
issues in one or more hospitals that are part of a health system, and 
publicizing more information about CMS enforcement activities related 
to individual hospital compliance. Additionally, we are seeking comment 
on additional considerations for improving compliance and aligning 
consumer-friendly policies and requirements with other federal price 
transparency initiatives.
b. Overall Estimated Burden on Hospitals Due to Hospital Price 
Transparency Requirements
    The hospital price transparency proposed policies are estimated to 
increase burden on hospitals (as defined at 45 CFR 180.20), as detailed 
in section XXIV ``Collection of Information'', including a one-time 
cost and increased ongoing costs. However, we believe that the benefits 
to the public justify this proposed regulatory action.
    To analyze the costs of this proposed requirement, we used a 
baseline that assumes the existing requirements (adopted in the CY 2020 
HPT final rule and the CY 2022 OPPS/ASC final rule and codified at 45 
CFR 180) remain in place over the time horizon of this RIA. That is, 
the retrospective analysis and revised cost estimates for recurring 
administrative burden contained in section XXIV ``Collection of 
Information'' inform our baseline scenario of no further regulatory 
action.
    As detailed in the Collection of Information section, we estimate a 
one-time cost for this proposed requirement of approximately $2,787 per 
hospital, or $19,784,539 ($2,787 x 7,098) for all hospitals combined. 
To estimate a lower bound of potential burden, we assume hospitals may 
be sorted into three subsets. First, we note that the proposed MRF 
templates have been available since November 2022 and a number of 
hospitals may be already voluntarily meeting these proposed 
requirements. As a result, a potentially large subset of these 
hospitals with robust information systems who are fully compliant may 
only need to review this regulation to ensure that these proposed 
requirements are being met, which represents our low estimate. A second 
group of hospitals may have less flexible information systems and 
limited ability to leverage their existing ad-hoc efforts to adapt to 
the new requirements; for these hospitals we assume the full collection 
and implementation cost estimated above. A third subset of hospitals 
are assumed to not currently be meeting the requirements of existing 
HPT regulations and would be effectively implementing HPT requirements 
for the first time. The marginal burden on these hospitals would be 
limited to the difference in burden under the proposed regulation 
compared to the existing requirements which the hospital has yet to 
comply with; we assume the marginal burden to only be 20 percent of the 
preceding group because these hospitals would have been required to 
comply with existing regulations regardless of the new proposals. For 
the low estimate we assume hospitals are distributed 40, 40, and 20 
percent across the three subsets described above, respectively. 
Finally, to account for uncertainty inherent in these types of 
estimates of administrative costs, we also provide a high estimate 
which reflects administrative burden 50 percent greater than the 
primary estimate also detailed in section XXIV ``Collection of 
Information'' of this proposed rule. These cost range estimates are 
displayed in Table 106.
[GRAPHIC] [TIFF OMITTED] TP31JY23.150

    In the CY 2020 HPT final rule, we estimated an on-going annual 
burden of 46 hours per hospital with a cost of $3,610.88 per hospital, 
resulting in a total national burden of 276,092 hours and total cost of 
$21,672,502. We anticipate the proposals in this proposed rule would 
increase hospital annual burden by 8 hours per year, as discussed in 
greater detail in section XXIV ``Collection of Information'' of this 
proposed rule. This would result in an increase the total national 
annual burden to 383,292 hours (54 hours x 7,098 hospitals) and an 
annual national cost of $32,370,571 dollars ($4,560.52 per respondent x 
7,098 hospitals). This represents a $10,698,069 ($32,370,571--
$21,672,502) increase over our previous estimated national annual 
burden for subsequent years.
c. Benefits of Proposals
    Although we cannot quantify the benefits of including additional 
data elements and encoding such data in a CMS template layout, as 
proposed in this rule, we believe the proposed standardization 
requirements would help streamline the development and

[[Page 49909]]

consumption of the MRF data, making it more actionable for consumers, 
employers, third party tool developers, and researchers.
(1) Benefits to Hospitals
    We believe that requiring the proposed CMS template would assist 
hospitals with implementing the hospital price transparency regulation 
and would improve compliance rates, thereby supporting the overarching 
goal of increasing healthcare pricing competition and lowering costs. 
As discussed in section XXIV ``Collection of Information'' of this 
proposed rule, hospitals have sought clarification on how to display 
their standard charges, particularly payer-specific negotiated charges 
established by the hospital, and they have indicated that having access 
to a CMS-developed template could be useful for improving hospital 
compliance with the HPT regulation.\691\ As we noted in section XXIV 
``Collection of Information'' of this proposed rule, in response to the 
CY 2022 OPPS/ASC final rule request for information, hospitals urged 
CMS to be more prescriptive, requesting that CMS standardize the MRF 
format and contents. Additionally, researchers and experts suggest that 
a clear standard format would better support hospital compliance with 
the regulation.692 693 694 695 This sentiment was echoed in 
a Congressional hearing, when witnesses favored a standard template for 
MRF data, as a means, to support more hospitals complying with the 
regulation.\696\
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    \691\ American Hospital Association. AHA Statement on Lowering 
Unaffordable Costs: Examining Transparency and Competition in Health 
Care. March 28, 2023 https://www.aha.org/testimony/2023-03-28-aha-statement-lowering-unaffordable-costs-examining-transparency-and-competition-health-care.
    \692\ The State of Hospital Pricing Transparency in Texas. Texas 
2036. Available at: http://pricetransparency.texas2036.org/.
    \693\ Fourth Semi-Annual Hospital Price Transparency Report. 
Patient Rights Advocate. February 14, 2023. Available at: https://www.patientrightsadvocate.org/february-semi-annual-compliance-report-2023.
    \694\ Severn, Chris. Price Transparency Hospital Data: Why Am I 
Seeing Different Assessments of Hospital Compliance? Turquoise 
Health. October 18, 2022. Available at: https://blog.turquoise.health/hospital-compliance-assessments/.
    \695\ Andrews, M. A Progress Check on Hospital Price 
Transparency. KFF News. March 29, 2023. Available at: https://kffhealthnews.org/news/article/hospital-price-transparency-federal-rule-checkup-2023/?utm_campaign=KHN%3A%20Daily%20Health%20Policy%20Report&utm_medium=email&_hsmi=252217703&_hsenc=p2ANqtz-9H9illkRczNZhnmE0zhKuwC1oytcDvawv29aM7Fq7gAXWHc_9mjsY3PZkLrJX2vjIDADMQaZ0Yh01jC-NkJqQqflpFlg&utm_content=252217703&utm_source=hs_email.
    \696\ ``Lowering Unaffordable Costs: Examining Transparency and 
Competition in Health Care.'' Congressional House Committee on 
Energy and Commerce, Subcommittee on Health. March 28, 2023. 
Available at: https://energycommerce.house.gov/events/health-subcommittee-hearing-lowering-unaffordable-costs-examining-transparency-and-competition-in-health-care
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(2) Benefits to Other Interested Parties
    As discussed in the CY 2020 HPT final rule (84 FR 65538), we 
believe public access to hospital standard charge information can be 
useful to the public, including patients who need to obtain items and 
services from a hospital, consumers of healthcare who wish to view 
hospital prices prior to selecting a hospital, clinicians who use the 
data at the point of care when making referrals, employers searching 
for lower cost options for healthcare coverage, and other users of the 
data who may develop consumer-friendly price transparency tools or 
perform analyses to drive value-based policy-development. Since the 
establishment of the HPT regulation, innovators have made price 
information accessible to researchers, academics, employers, and the 
public. Numerous peer-reviewed academic studies have used the MRF data 
to conduct price analyses.697 698 699 700 Additionally, 
journalists and news outlets are now commonly conducting their own 
price analyses and research with HPT data obtained either directly from 
the hospital MRF or vendor price estimator tools. For example, some 
have compared prices of common medical procedures like childbirth, or 
hip and knee replacements among hospitals within specific 
regions.701 702 Across these publications, authors routinely 
state that some price comparisons may not be fully accurate due to lack 
of specificity and standardization of the available hospital MRF data.
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    \697\ Gul, Z., et al. Large Variations in the Prices of Urologic 
Procedures at Academic Medical Centers 1 Year After Implementation 
of the Price Transparency Final Rule. JAMA. January 5, 2023. 
Available at: https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2800088.
    \698\ Rochlin, D., et al. Commercial Price Variation for Breast 
Reconstruction in the Era of Price Transparency. JAMA. December 14, 
2022. Available here: https://jamanetwork.com/journals/jamasurgery/article-abstract/2799698.
    \699\ Jiang, X., et al. Price Variability for Common Radiology 
Services Within U.S. Hospitals. Radiology. October 18, 2022. 
Available at: https://pubs.rsna.org/doi/10.1148/radiol.221815.
    \700\ Mullens, C., et al. Evaluation of Prices for Surgical 
Procedures Within and Outside Hospital Networks in the US. JAMA. 
February 13, 2023. Available at: https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2801354?utm_source=For_The_Media&utm_medium=referral&utm_campaign=ftm_links&utm_term=021323.
    \701\ Maddox, W. How Much Do Insurance Plans Pay for Childbirth 
in North Texas? D Magazine. April 11, 2023. Available at: https://www.dmagazine.com/healthcare-business/2023/04/how-much-do-insurance-plans-pay-for-childbirth-in-north-texas/.
    \702\ Analysis: Inconsistencies Within Hospital Price 
Transparency Data Make Costs Comparisons Difficult. KFF. February 
10, 2023. Available at: https://www.kff.org/health-costs/press-release/analysis-inconsistencies-within-hospital-price-transparency-data-make-cost-comparisons-difficult/ difficult/.
---------------------------------------------------------------------------

    Early feedback from interested parties, particularly from IT 
specialists, researchers, employers, and others who seek to use the 
standard charge information that hospitals are now required to make 
public, has indicated that increased standardization may be necessary 
to improve the public's understanding of the standard charges 
established by hospitals and the public's ability to make comparisons 
of standard charges from one hospital to the next. The proposed data 
elements and CMS templates would not only support hospitals in 
complying with the rule but also improve the quality and usefulness of 
MRF data available to consumers of the data, including researchers, 
innovators, employers, and payers. Studies suggest that standardization 
would improve the accuracy of price comparisons, the quality and 
usefulness of MRF data, and perhaps reduce wide variations in hospital 
prices.703 704 In a previous rule, we cited literature 
regarding consumer engagement with existing price transparency 
interventions demonstrating that disclosing price information 
positively impacts consumers of healthcare by allowing them to compare 
prices for common procedures and shift their demand towards lower-
priced options (84 FR 65600). Similarly, studies have indicated that, 
as these MRF analyses are becoming more widespread, consumers are able 
to make better use of the pricing information. Standardization would 
likely remove many of the existing barriers to allow innovators to 
create more useful data products for consumers of healthcare and reduce 
some of the uncertainty that currently exists about how hospitals 
establish standard charges for the items and services they 
provide.\705\
---------------------------------------------------------------------------

    \703\ Lo, J, et al. Ongoing Challenges with Hospital Price 
Transparency. Peterson-KFF Health System Tracker. February 10, 2023. 
Available here: https://www.healthsystemtracker.org/brief/ongoing-challenges-with-hospital-price-transparency/#Select%20data%20for%20University%20of%20Chicago%20Hospitals.
    \704\ Hospital Price Transparency: Understanding and Using the 
Data. National Consumer Law Center. January 25, 2023. Available at: 
https://www.nclc.org/event/hospital-pricing-transparency-understanding-and-using-the-data/.
    \705\ Severn, Chris. Price Transparency Impact Report Q3 2022. 
Turquoise Health. October 19, 2022. Available at: https://s3.us-west-1.amazonaws.com/assets.turquoise.health/impact_reports/TQ_Price-Transparency-Impact-Report_2022_Q3.pdf.

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[[Page 49910]]

d. Consideration of Increased Burden to Hospitals Due to Hospital Price 
Transparency Proposals
(1) Proposals Related to MRF Standardization and Accessibility of 
Hospital MRFs
    Many hospitals have expressed concern over two major hurdles in 
implementing the HPT rule requirements: administrative burden \706\ and 
cost,707 708 and we acknowledge that the proposals for 
increasing the data elements and requiring use of a CMS template would 
impose an additional one-time burden on hospitals. However, for the 
reasons discussed in this proposed rule, we believe that transparency 
is necessary to improve healthcare value, and that the proposals 
related to MRF standardization would assist hospitals in implementing 
the HPT regulations and assist numerous interested parties by creating 
clearer, more accurate data for purposes of price comparison and data 
analysis that can then be used to drive down healthcare costs. We 
believe these benefits justify the additional burden to hospitals. We 
continue to believe that improved hospital compliance with the required 
disclosure of this pricing information would allow providers, 
hospitals, insurers, employers, and patients to begin to engage each 
other and better utilize market forces to address the high cost of 
healthcare in a more widespread fashion. In addition, we continue to 
believe, as we noted in the CY 2020 HPT final rule (84 FR 65528), that 
there is a direct connection between transparency in hospital standard 
charge information and having more affordable healthcare and lower 
healthcare costs.
---------------------------------------------------------------------------

    \706\ Kacik, A. Hospital Price Transparency: Fines or Full 
Compliance? Modern Healthcare. January 24, 2023. Available at: 
https://www.modernhealthcare.com/finance/hospital-price-transparency-compliance-cms-deaconess-sanford.
    \707\ Jiang, J., et al. Price Transparency in Hospitals-Current 
Research and Future Directions. JAMA. January 5, 2023. Available at: 
https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2800088.
    \708\ Meghjani, T. Lawmakers Question Why Hospital Pricing Isn't 
Living Up to Transparency Goals. Bloomberg. March 28, 2023. 
Available at: https://www.bloomberg.com/news/articles/2023-03-28/what-s-the-best-way-to-compare-hospital-costs-us-hearing-seeks-transparency?leadSource=uverify%20wall#xj4y7vzkg.
---------------------------------------------------------------------------

    In our CY 2020 HPT final rule, we finalized requirements for MRF 
accessibility. We prioritized accessibility because we want to be sure 
hospital standard charge information can be available for use by the 
public for creating price transparency tools, to be integrated into 
EHRs for purposes of clinical decision making and referrals, or to be 
used by researchers and policy officials to help bring more value to 
healthcare (45 FR 65555). Despite the requirement for the MRF and the 
standard charge information contained in that file to be digitally 
searchable and the required naming convention, users of the MRF 
information, such as IT developers and innovators, continue to express 
concerns related to challenges in efficiently aggregating the files in 
an automated way. Some innovators and researchers noted the difficulty 
in locating hospital MRFs because they are posted on obscure website 
locations or with links redirecting to vendor 
websites.709 710 We believe that ensuring the MRFs and the 
data contents are easily accessible to automation aligns with the 
intended use of the MRFs and their content. Therefore, to increase 
access to the MRFs, we propose to require hospitals to post a .txt file 
to the root folder of the public website. To reduce burden on 
hospitals, CMS would provide both plain language instruction and 
develop a .txt generator to support this proposed requirement.
---------------------------------------------------------------------------

    \709\ Zuradzki, P. How to Parse Hospital Price Transparency 
Files. Turquoise Health. October 3, 2022. Available at: https://blog.turquoise.health/how-to-parse-hospital-price-transparency-files/.
    \710\ Fourth Semi-Annual Hospital Price Transparency Report. 
Patient Rights Advocate. February 14, 2023. Available at: https://www.patientrightsadvocate.org/february-semi-annual-compliance-report-2023.
_____________________________________-

    As we noted in the preamble, there would be several benefits to 
requiring a hospital to post a .txt file to the root folder of the 
public website. This proposed requirement would allow for automated 
tools to directly link to the MRF, as opposed to the manual location of 
the correct web page within the website and may make the location of 
the MRFs more visible to individual consumers who are manually 
searching for such files. We believe that the benefit of automating the 
identification of the MRF location would outweigh the minimal burden to 
maintainers of the public web page that hosts the MRF.
(2) Improvements in CMS Enforcement of Hospital Price Transparency
    In the CY 2020 HPT final rule (84 FR 65525), we finalized actions 
to address hospital noncompliance by requiring hospitals determined by 
CMS to be in material violation of the HPT regulations to submit a 
corrective action plan (CAP) and to comply with the requirements of the 
CAP. For hospitals that fail to respond to or comply with the CAP, CMS 
may impose CMPs and publicize these penalties on a CMS website. 
However, there are many nuances and complexities associated with the 
way hospitals establish standard charges that can lead to questions 
related to the accuracy and completeness of the standard charges 
information that is included in a hospital's MRF. As mentioned before, 
we have found it is necessary to employ methods beyond a simple audit 
of a hospital's website to definitively assess hospital compliance. 
Although we expect that the deployment of a standardized MRF template 
would mitigate many of these questions, we may need additional 
clarification from the hospital to assess or determine accuracy and 
completeness of the data. As mentioned above, CMS proposes additional 
methods to assess compliance which include receiving confirmation of 
receipt of warning notices directly from individuals at the 
organization responsible for resolving the deficiencies.
    While requiring that hospitals acknowledge receipt of warning 
notices may require additional effort for hospitals who have received 
notification of a deficiency, we believe it will streamline our 
enforcement by providing an appropriate compliance contact earlier in 
the enforcement process, so that we may provide any necessary technical 
assistance earlier in the compliance process. We also believe this 
proposed requirement would provide benefits to others, including 
consumers, researchers, and innovators, by supporting the public 
release of standard charge data in a timely and accurate manner.
    We do not believe that our compliance activities represent a burden 
to hospitals and therefore have not included any costs in this burden 
related to them.
e. Limitations of Our Analysis
    It would be difficult for us to conduct a detailed quantitative 
analysis given the lack of studies at the national level on the 
regulatory impact of making price transparency information publicly 
available. Additionally, implementation of the requirements is 
relatively new, so the impacts may not yet be realized. Finally, 
several other price transparency initiatives have been implemented, or 
are in the process of being implemented, that may make a definitive 
analysis challenging. Since we cannot produce a detailed quantitative 
analysis, we have developed a qualitative discussion for this 
regulatory impact analysis, drawing from examples of experiences of the 
use of public price transparency data that has been released publicly. 
We have

[[Page 49911]]

taken an approach that assesses potential directional impact of these 
proposed requirements (that is, increasing versus decreasing health 
care costs, increasing, or decreasing likelihood of certain market 
behaviors) rather than attempting more specific estimates due to the 
lack of empirical data. We believe there are many benefits with this 
regulation, particularly to speed the ability of users of the machine-
readable files to identify, ingest, analyze and draw more meaningful 
comparisons of the hospital standard charge data and ultimately for 
consumers who will be able to benefit from cost savings through 
employer-payer negotiations, or through direct access to hospital cost 
comparison data developed by innovators and researchers, allowing the 
ability to shop for the best value.
f. Alternatives Considered
    This proposal is designed to begin to address some of the barriers 
identified that limit price transparency, with a goal of increasing 
competition among healthcare providers to bring down costs. 
Specifically, this proposed rule aims to make hospital standard charges 
more readily available to the public by improving machine-readability 
of the data and improving automated access to the MRFs. We considered a 
number of alternative approaches including reducing or increasing the 
number of proposed data elements, or limiting the CMS template to a 
single format (for example, JSON).
    The proposal to increase data elements that are necessary to 
provide context to hospital standard charges represents nearly the 
entire cost in our burden estimate. Thus, reducing the number of 
proposed data elements would reduce hospital burden and the cost 
associated with gathering the data necessary to display which 
increasing the number of proposed data elements would increase hospital 
burden and the cost associated with gathering data for display. The 
proposed number of data elements is based on CMS contractor 
recommendations which took into consideration technical expert input 
(including input from hospital experts). These technical experts 
indicated that the data elements currently included in the sample 
formats found on the CMS website were necessary for providing context 
to hospital standard charges. They also indicated that the data 
elements we included in the sample formats strike a balance between 
burden on the hospital and benefit to the public.
    The alternative proposal considered to limit hospital choice of 
format for the MRF to JSON would be expected to increase hospital 
burden for hospitals that lack technical expertise.
    Ultimately, however, we determined that the alternatives would 
either limit the usefulness of hospital standard charge information or 
increase burden for hospitals without any additional benefit to for 
users of MRF standard charge information.

D. Regulatory Review Cost Estimation

    If regulations impose administrative costs on private entities, 
such as the time needed to read and interpret this proposed or final 
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 assume that the total number 
of unique commenters on last year's proposed rule will be the number of 
reviewers of this proposed rule. We acknowledge that this assumption 
may understate or overstate the costs of reviewing this rule. It is 
possible that not all commenters reviewed last year's rule in detail, 
and it is also possible that some reviewers chose not to comment on the 
proposed rule. For these reasons we thought that the number of past 
commenters would be a fair estimate of the number of reviewers of this 
rule. We welcome any comments on the approach in estimating the number 
of entities which will review this proposed rule.
    We also recognize that different types of entities are in many 
cases affected by mutually exclusive sections of this proposed rule, 
and therefore for the purposes of our estimate we assume that each 
reviewer reads approximately 50 percent of the rule. We seek comments 
on this assumption.
    Using the wage information from the BLS for medical and health 
service managers (Code 11-9111), we estimate that the cost of reviewing 
this rule is $123.06 per hour, including overhead and fringe benefits 
https://www.bls.gov/oes/current/oes_nat.htm. Assuming an average 
reading speed, we estimate that it would take approximately 8 hours for 
the staff to review half of this proposed or final rule. For each 
entity that reviews the rule, the estimated cost is $984.48 (8 hours x 
$123.06). Therefore, we estimate that the total cost of reviewing this 
regulation is $1,574,184 ($984.48 x 1,599).

E. Regulatory Flexibility Act (RFA) Analysis

    The RFA requires agencies to analyze options for regulatory relief 
of small entities, if a rule has a significant impact on a substantial 
number of small entities. For purposes of the RFA, we estimate that, 
many hospitals are considered small businesses either by the Small 
Business Administration's size standards with total revenues of $41.5 
million or less in any single year or by the hospital's not-for-profit 
status. Most ASCs and most CMHCs are considered small businesses with 
total revenues of $16.5 million or less in any single year. For 
details, we refer readers to the Small Business Administration's 
``Table of Size Standards'' at http://www.sba.gov/content/table-small-business-sizestandards.
    Individuals and states are not included in the definition of a 
small entity. As its measure of significant economic impact on a 
substantial number of small entities, HHS uses a change in revenue of 
more than 3 to 5 percent. We believe that this threshold will be 
reached by the requirements in this proposed rule. As a result, the 
Secretary has determined that this proposed rule may have a significant 
impact on a substantial number of small entities.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis if a rule may have a significant impact on 
the operations of a substantial number of small rural hospitals. This 
analysis must conform to the provisions of section 603 of the RFA. For 
purposes of section 1102(b) of the Act, we define a small rural 
hospital as a hospital that is located outside of a metropolitan 
statistical area and has 100 or fewer beds. We estimate that this 
proposed rule will increase payments to small rural hospitals by 
approximately 5 percent; therefore, it should have a negligible impact 
on approximately 555 small rural hospitals. We note that the estimated 
payment impact for any category of small entity will depend on both the 
services that they provide as well as the payment policies and/or 
payment systems that may apply to them. Therefore, the most applicable 
estimated impact may be based on the specialty, provider type, or 
payment system.
    The analysis above, together with the remainder of this preamble, 
provides a regulatory flexibility analysis and a regulatory impact 
analysis.

F. Unfunded Mandates Reform Act Analysis

    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule whose mandates require spending in any 1 year of $100 
million in 1995 dollars, updated annually for inflation. In 2023, that

[[Page 49912]]

threshold is approximately $177 million. This proposed rule would not 
impose a mandate that will result in the expenditure by State, local, 
and Tribal Governments, in the aggregate, or by the private sector, of 
more than $177 million in any 1 year.''

G. Federalism

    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 requirement costs on state 
and local governments, preempts state law, or otherwise has Federalism 
implications. We have examined the OPPS and ASC provisions included in 
this proposed rule in accordance with Executive Order 13132, 
Federalism, and have determined that they will not have a substantial 
direct effect on State, local, or tribal governments, preempt State 
law, or otherwise have a federalism implication. As reflected in Table 
100 of this proposed rule, we estimate that OPPS payments to 
governmental hospitals (including State and local governmental 
hospitals) would increase by 2.8 percent under this proposed rule. 
While we do not know the number of ASCs or CMHCs with government 
ownership, we anticipate that it is small. The analyses we have 
provided in this section of this proposed rule, in conjunction with the 
remainder of this document, demonstrate that this proposed rule is 
consistent with the regulatory philosophy and principles identified in 
Executive Order 12866, the RFA, and section 1102(b) of the Act.
    This proposed rule would 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 proposed rule, 
this rule should not have a significant effect on small rural 
hospitals.

H. Conclusion

    The changes we propose in this proposed rule will affect all 
classes of hospitals paid under the OPPS as well as 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 2024. Table 100 demonstrates 
the estimated distributional impact of the OPPS budget neutrality 
requirements that would result in a 2.9 percent increase in payments 
for all services paid under the OPPS in CY 2024, 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, and estimated payment for 
outliers, changes to the pass-through payment estimate, and changes to 
outlier payments. However, some classes of providers that are paid 
under the OPPS would experience more significant gains or losses in 
OPPS payments in CY 2024.
    The updates we are making to the ASC payment system for CY 2024 
will affect each of the approximately 6,000 ASCs currently approved for 
participation in the Medicare program. The effect on an individual ASC 
will depend on its mix of patients, the proportion of the ASCs patients 
who are Medicare beneficiaries, the degree to which the payments for 
the procedures offered by the ASC are changed under the ASC payment 
system, and the extent to which the ASC provides a different set of 
procedures in the coming year than in previous years. Table 101 
demonstrates the estimated distributional impact among ASC surgical 
specialties of the productivity-adjusted hospital market basket update 
factor of 2.8 percent for CY 2024.
    Chiquita Brooks-LaSure, Administrator of the Centers for Medicare & 
Medicaid Services, approved this document on June 26, 2023.

List of Subjects

42 CFR Part 405

    Administrative practice and procedure, Diseases, Health facilities, 
Health professions, Medical devices, Medicare, Reporting and 
recordkeeping requirements, Rural areas, and X-rays.

42 CFR Part 410

    Diseases, Health facilities, Health professions, Laboratories, 
Medicare, Reporting and recordkeeping requirements, Rural areas, X-
rays.

42 CFR Part 416

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

42 CFR Part 419

    Hospitals, Medicare, Reporting and recordkeeping requirements.

42 CFR Part 424

    Emergency medical services, Health facilities, Health professions, 
Medicare, Reporting and recordkeeping requirements.

42 CFR Part 485

    Grant programs-health, Health facilities, Medicaid, Privacy, 
Reporting and recordkeeping requirements.

42 CFR Part 488

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

42 CFR Part 489

    Health facilities, Medicare, and Reporting and recordkeeping 
requirements.

45 CFR Part 180

    Hospitals, Reporting and recordkeeping requirements.

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

PART 405--FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED

0
1. The authority citation for part 405 continues to read as follows:

    Authority:  42 U.S.C. 263a, 405(a), 1302, 1320b-12, 1395x, 
1395y(a), 1395ff, 1395hh, 1395kk, 1395rr, and 1395ww(k).

0
2. Section 405.2400 is amended by adding paragraph (d) to read as 
follows:


Sec.  405.2400  Basis.

* * * * *
    (d) Section 1834(y)--Payment for certain services furnished by 
rural health clinics.
0
3. Section 405.2401(b) is amended by adding the definition of 
``Intensive outpatient services'' in alphabetical order to read as 
follows:


Sec.  405.2401  Scope and definitions.

* * * * *
    (b) * * *
    Intensive outpatient services means a distinct and organized 
intensive ambulatory treatment program that offers less than 24-hour 
daily care other than in an individual's home or in an inpatient or 
residential setting and that furnishes the services as described in 
Sec.  410.44 of this chapter.
* * * * *
0
4. Section 405.2410 is amended by adding paragraph (c) to read as 
follows:


Sec.  405.2410  Application of Part B deductible and coinsurance.

* * * * *
    (c) Application of deductible and coinsurance for RHCs and FQHCs 
paid on the basis of the special payment rule described under Sec.  
405.2462(j) of this section. (1) For RHCs, a coinsurance

[[Page 49913]]

amount that does not exceed 20 percent of the payment determined under 
Sec.  405.2462(j)(1) of this part; or
    (2) For FQHCs, a coinsurance amount that does not exceed 20 percent 
of the payment determined under Sec.  405.2462(j)(2).
0
5. Section 405.2411 is amended by adding paragraph (a)(7) to read as 
follows:


Sec.  405.2411  Scope of benefits.

    (a) * * *
    (7) Intensive outpatient services when provided in accordance with 
section 1861(ff)(4) of the Act and Sec.  410.44 of this chapter.
* * * * *
0
6. Amend Sec.  405.2446 by adding paragraph (b)(10) to read as follows:


Sec.  405.2446  Scope of services.

* * * * *
    (b) * * *
    (10) Intensive outpatient services when provided in accordance with 
section 1861(ff)(4) of the Act and Sec.  410.44 of this chapter.
* * * * *
0
7. Section 405.2462 is amended by adding paragraph (j) to read as 
follows:


Sec.  405.2462  Payment for RHC and FQHC services.

* * * * *
    (j) An RHC is paid the payment rate determined under Sec.  
419.21(a) of this chapter for services described under Sec.  410.44 of 
this chapter. There are no adjustments to this rate.
    (1) If the deductible has been fully met by the beneficiary prior 
to the RHC service, Medicare pays eighty (80) percent of the payment 
amount determined under paragraph (j)(1) of this section.
    (2) If the deductible has not been fully met by the beneficiary 
prior to the RHC service, Medicare pays eighty (80) percent of the 
difference between the remaining deductible and the payment amount 
determined under paragraph (j)(1) of this section; or
    (3) If the deductible has not been fully met by the beneficiary 
prior to the RHC service, no payment is made to the RHC if the 
deductible is equal to or exceeds the payment amount determined under 
paragraph (j)(1) of this section.
    (4) FQHCs are paid the payment rate determined under Sec.  
419.21(a) of this chapter for services described under Sec.  410.44 of 
this chapter, there are no adjustments to this rate. Except as noted in 
paragraph (f) of this section.
    (i) Medicare pays eighty (80) percent of the lesser of the FQHC's 
actual charge or the payment rate determined under paragraph (j)(2) of 
this section; or
    (ii) Medicare pays eighty (80) percent of the lesser of a 
grandfathered tribal FQHC's actual charge or the amount described under 
paragraphs (f)(2) and (f)(3) of this section.
    (iii) No deductible is applicable to FQHC services.
0
8. Section 405.2463 is amended by revising paragraphs (c)(1)(ii) and 
(iii), and (c)(4)(ii) to read as follows:


Sec.  405.2463  What constitutes a visit.

* * * * *
    (c) * * *
    (1) * * *
    (ii) Has a medical visit and a mental health visit or intensive 
outpatient services on the same day: or
    (iii) Has an initial preventive physical exam visit and a separate 
medical, mental health, or intensive outpatient services visit on the 
same day.
* * * * *
    (4) * * *
    (ii) Has a medical visit and a mental health visit or intensive 
outpatient services on the same day.
0
9. Section 405.2464 is amended by adding paragraph (f) to read as 
follows:


Sec.  405.2464  Payment rate.

* * * * *
    (f) Payment for intensive outpatient services. Payment to RHCs and 
FQHCs is at the rate determined under Sec.  405.2462(j).
0
10. Section 405.2468 is amended by adding paragraph (g) to read as 
follows:


Sec.  405.2468  Allowable costs.

* * * * *
    (g) Intensive outpatient services. (1) For RHCs, costs associated 
with intensive outpatient services are not used to determine the amount 
of payment for RHC services under the methodology for all-inclusive 
rates under section 1833(a)(3) of the Act as described in Sec.  
405.2464(a).
    (2) For FQHCs, costs associated with intensive outpatient services 
are not used to determine the amount of payment for FQHC services under 
the prospective payment system under section 1834(o)(2)(B) of the Act 
as described in Sec.  405.2464(b).
0
11. Section 405.2469 is amended by revising paragraphs (a)(1) and 
(a)(2), and adding paragraphs (a)(3) and (b)(4) to read as follows:


Sec.  405.2469  FQHC supplemental payments.

    (a) * * *
    (1) The PPS rate if the FQHC is authorized to bill under the PPS;
    (2) The Medicare outpatient per visit rate as set annually by the 
Indian Health Service for grandfathered tribal FQHCs; or
    (3) The payment rate as determined in Sec.  405.2462(j).
    (b) * * *
    (4) Payments received by the FQHC from the MA plan as determined on 
a per visit basis and the payment rate as determined in Sec.  
405.2462(j), less any amount the FQHC may charge as described in 
section 1857(e)(3)(B) of the Act.
* * * * *

PART 410--SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS

0
12. The authority citation for part 410 continues to read as follows:

    Authority:  42 U.S.C. 1302, 1395m, 1395hh, and 1395ddd.

0
13. Section 410.2 is amended by--
0
a. In the definition r ``Community mental health center (CMHC)'', 
revise paragraph (3);
0
b. Adding the definition ``Intensive outpatient services'' in 
alphabetical order; and
0
c. Revising the definition for ``Participating''.
    The revisions and addition read as follows:


Sec.  410.2  Definitions.

* * * * *
    Community mental health center (CMHC) means an entity that--
* * * * *
    (3) Provides day treatment or other partial hospitalization 
services or intensive outpatient services, or psychosocial 
rehabilitation services;
* * * * *
    Intensive outpatient services mean a distinct and organized 
intensive ambulatory treatment program that offers less than 24-hour 
daily care other than in an individual's home or in an inpatient or 
residential setting and furnishes the services as described in Sec.  
410.44. Intensive outpatient services are not required to be provided 
in lieu of inpatient hospitalization.
* * * * *
    Participating refers to a hospital, CAH, SNF, HHA, CORF, or hospice 
that has in effect an agreement to participate in Medicare; or a 
clinic, rehabilitation agency, or public health agency that has a 
provider agreement to participate in Medicare but only for purposes of 
providing outpatient physical therapy, occupational therapy, or speech 
pathology services; or a CMHC that has in effect a similar agreement 
but only for purposes of providing partial hospitalization services and 
intensive outpatient services, and nonparticipating refers to a 
hospital,

[[Page 49914]]

CAH, SNF, HHA, CORF, hospice, clinic, rehabilitation agency, public 
health agency, or CMHC that does not have in effect a provider 
agreement to participate in Medicare.
* * * * *
0
14. Section 410.3 is amended by revising paragraph (a)(2) to reads as 
follows:


Sec.  410.3  Scope of benefits.

    (a) * * *
    (2) Services furnished by ambulatory surgical centers (ASCs), home 
health agencies (HHAs), comprehensive outpatient rehabilitation 
facilities (CORFs), and partial hospitalization services and intensive 
outpatient services provided by community mental health centers 
(CMHCs).
* * * * *
0
15. Section 410.10 is amended by revising paragraph (c) to read as 
follows:


Sec.  410.10  Medical and other health services: Included services.

* * * * *
    (c) Services and supplies, including partial hospitalization 
services and intensive outpatient services, that are incident to 
physician services and are furnished to outpatients by or under 
arrangements made by a hospital or a CAH.
* * * * *
0
16. Section 410.27 is amended by revising paragraphs (a)(1)(iv)(B)(1), 
(a)(2), and (e) introductory text to read as follows:


Sec.  410.27  Therapeutic outpatient hospital or CAH services and 
supplies incident to a physician's or nonphysician practitioner's 
service: Conditions.

* * * * *
    (a) * * *
    (1) * * *
    (iv) * * *
    (B) * * *
    (1) For purposes of this section, direct supervision means that the 
physician or nonphysician practitioner must be 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. For pulmonary rehabilitation, cardiac rehabilitation, and 
intensive cardiac rehabilitation services, direct supervision must be 
furnished as specified in Sec. Sec.  410.47 and 410.49, respectively. 
Through December 31, 2024, the presence of the physician or 
nonphysician practitioner for the purpose of the supervision of 
pulmonary rehabilitation, cardiac rehabilitation, and intensive cardiac 
rehabilitation services includes virtual presence through audio/video 
real-time communications technology (excluding audio-only); and
* * * * *
    (2) In the case of partial hospitalization services or intensive 
outpatient services, also meet the conditions of paragraph (e) of this 
section.
* * * * *
    (e) Medicare Part B pays for partial hospitalization services and 
intensive outpatient services if they are--
* * * * *
0
17. Section 410.44 is added to read as follows:


Sec.  410.44  Intensive outpatient services: Conditions and exclusions.

    (a) Intensive outpatient services are services that--
    (1) Are reasonable and necessary for the diagnosis or active 
treatment of the individual's condition;
    (2) Are reasonably expected to improve or maintain the individual's 
condition and functional level and to prevent relapse or 
hospitalization;
    (3) Are furnished in accordance with a physician certification and 
plan of care as specified under Sec.  424.24(d) of this chapter; and
    (4) Include any of the following:
    (i) Individual and group therapy with physicians or psychologists 
or other mental health professionals to the extent authorized under 
State law.
    (ii) Occupational therapy requiring the skills of a qualified 
occupational therapist, provided by an occupational therapist, or under 
appropriate supervision of a qualified occupational therapist by an 
occupational therapy assistant as specified in part 484 of this 
chapter.
    (iii) Services of social workers, trained psychiatric nurses, and 
other staff trained to work with psychiatric patients.
    (iv) Drugs and biologicals furnished for therapeutic purposes, 
subject to the limitations specified in Sec.  410.29.
    (v) Individualized activity therapies that are not primarily 
recreational or diversionary.
    (vi) Family counseling, the primary purpose of which is treatment 
of the individual's condition.
    (vii) Patient training and education, to the extent the training 
and educational activities are closely and clearly related to the 
individual's care and treatment.
    (viii) Diagnostic services.
    (b) The following services are separately covered and not paid as 
intensive outpatient services:
    (1) Physician services that meet the requirements of Sec.  
415.102(a) of this chapter for payment on a fee schedule basis.
    (2) Physician assistant services, as defined in section 
1861(s)(2)(K)(i) of the Act.
    (3) Nurse practitioner and clinical nurse specialist services, as 
defined in section 1861(s)(2)(K)(ii) of the Act.
    (4) Qualified psychologist services, as defined in section 1861(ii) 
of the Act.
    (5) Services furnished to SNF residents as defined in Sec.  
411.15(p) of this chapter.
    (c) Intensive outpatient programs are intended for patients who -
    (1) Require a minimum of 9 hours per week of therapeutic services 
as evidenced in their plan of care;
    (2) Are likely to benefit from a coordinated program of services 
and require more than isolated sessions of outpatient treatment;
    (3) Do not require 24-hour care;
    (4) Have an adequate support system while not actively engaged in 
the program;
    (5) Have a mental health diagnosis;
    (6) Are not judged to be dangerous to self or others; and
    (7) Have the cognitive and emotional ability to participate in the 
active treatment process and can tolerate the intensity of the 
intensive outpatient program.
0
18. Section 410.67 is amended by--
0
a. In paragraph (b), amend the definition of ``Opioid use disorder 
treatment service'' by adding paragraph (ix);
0
b. Adding paragraph (c)(5);
0
d. Revising paragraph (d)(3);
0
e. Adding (d)(4)(i)(F); and
0
f. Revising paragraphs (d)(4)(ii) and (iii).
    The revisions and additions read as follows:


Sec.  410.67  Medicare coverage and payment of Opioid use disorder 
treatment services furnished by Opioid treatment programs.

* * * * *
    (b) * * *
    (ix) OTP intensive outpatient services, which means one or more 
services specified in Sec.  410.44(a)(4) when furnished by an OTP as 
part of a distinct and organized intensive ambulatory treatment program 
for the treatment of Opioid Use Disorder and that offers less than 24-
hour daily care other than in an individual's home or in an inpatient 
or residential setting. OTP intensive outpatient services are 
reasonable and necessary for the diagnosis or active treatment of the 
individual's condition; are reasonably expected to improve or maintain 
the individual's condition and functional level and to prevent relapse 
or hospitalization; and are furnished in

[[Page 49915]]

accordance with a physician certification and plan of care, in which a 
physician must certify that the individual has a need for a minimum of 
nine hours of services per week and requires a higher level of care 
intensity compared to other non-intensive outpatient OTP services. OTP 
intensive outpatient services do not include FDA-approved opioid 
agonist or antagonist medications for the treatment of OUD, opioid 
antagonist medications for the emergency treatment of known or 
suspected opioid overdose, or toxicology testing.
* * * * *
    (c) * * *
    (5) OTPs that provide OTP intensive outpatient services must meet 
the requirements set forth in Sec.  424.24(d)(1) through (3) of this 
chapter related to content of certification, plan of treatment, and 
recertification for the purposes of furnishing OTP intensive outpatient 
services, except that the recertification required under Sec.  
424.24(d)(3)(ii) of this chapter may occur any time during an episode 
of care in which the 30th day from the start of IOP services falls.
* * * * *
    (d) * * *
    (3) At least one OUD treatment service described in paragraphs (i) 
through (v) of the definition of Opioid use disorder treatment service 
in paragraph (b) of this section must be furnished to bill for the 
bundled payment for an episode of care.
    (4) * * *
    (i) * * *
    (F) For OTP intensive outpatient services, an adjustment will be 
made when at least nine OTP intensive outpatient services described in 
paragraph (b)(ix) of this section are furnished in a week. This 
adjustment will be based on the per diem payment rate for intensive 
outpatient services at hospital-based programs defined at 410.44(c) and 
multiplied by a factor of three for a weekly payment adjustment, 
excluding an amount equivalent to the amount included in the OTP weekly 
bundled payment for individual and group therapy.
    (ii) The payment amounts for the non-drug component of the bundled 
payment for an episode of care, the adjustments for counseling or 
therapy, intake activities, periodic assessments, and OTP intensive 
outpatient services, and the non-drug component of the adjustment for 
take-home supplies of opioid antagonist medications will be 
geographically adjusted using the Geographic Adjustment Factor 
described in Sec.  414.26 of this subchapter. For purposes of this 
adjustment, OUD treatment services that are furnished via an OTP mobile 
unit will be treated as if they were furnished at the physical location 
of the OTP registered with the Drug Enforcement Administration (DEA) 
and certified by SAMHSA.
    (iii) The payment amounts for the non-drug component of the bundled 
payment for an episode of care, the adjustments for counseling or 
therapy, intake activities, periodic assessments and OTP intensive 
outpatient services, and the non-drug component of the adjustment for 
take-home supplies of opioid antagonist medications will be updated 
annually using the Medicare Economic Index described in Sec.  
405.504(d) of this subchapter.
* * * * *
0
19. Revise the heading to Subpart E to read as follows:

Subpart E--Community Mental Health Centers (CMHCs) Providing 
Partial Hospitalization Services and Intensive Outpatient Services

0
20. Section 410.111 is added to read as follows:


Sec.  410.111  Requirements for coverage of intensive outpatient 
services in CMHCs.

    Medicare part B covers intensive outpatient services furnished by 
or under arrangements made by a CMHC if they are provided by a CMHC as 
defined in Sec.  410.2 that has in effect a provider agreement under 
part 489 of this chapter and if the services are--
    (a) Prescribed by a physician and furnished under the general 
supervision of a physician;
    (b) Subject to certification by a physician in accordance with 
Sec.  424.24(d)(1) of this subchapter; and
    (c) Furnished under a plan of treatment that meets the requirements 
of Sec.  424.24(d)(2) of this subchapter.
0
21. Section 410.150 is amended by revising paragraph (b)(13) to read as 
follows:


Sec.  410.150  To whom payment is made.

* * * * *
    (b) * * *
    (13) To a community mental health center (CMHC) on the individual's 
behalf, for partial hospitalization services or intensive outpatient 
services furnished by the CMHC (or by others under arrangements made 
with them by the CMHC).
* * * * *
0
22. Section 410.155 is amended by revising paragraph (b)(2)(iii) to 
read as follows:


Sec.  410.155  Outpatient mental health treatment limitation.

* * * * *
    (b) * * *
    (2) * * *
    (iii) Partial hospitalization services or intensive outpatient 
services not directly provided by a physician.
* * * * *
0
23. Section 410.173 is added to read as follows:


Sec.  410.173  Payment for intensive outpatient services in CMHCs: 
Conditions.

    Medicare Part B pays for intensive outpatient services furnished in 
a CMHC on behalf of an individual only if the following conditions are 
met:
    (a) The CMHC files a written request for payment on the CMS form 
1450 and in the manner prescribed by CMS; and
    (b) The services are furnished in accordance with the requirements 
described in Sec.  410.111.

PART 416--AMBULATORY SURGICAL SERVICES

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

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

0
25. Section 416.171 is amended by revising paragraphs (a)(2)(iii), 
(iv), (vi), and (vii), and (a)(2)(viii)(B) and (C) to read as follows:


Sec.  416.171  Determination of payment rates for ASC services.

    (a) * * *
    (2) * * *
    (iii) For CY 2019 through CY 2025, the update is the hospital 
inpatient market basket percentage increase applicable under section 
1886(b)(3)(B)(iii) of the Act.
    (iv) For CY 2026 and subsequent years, the update is the Consumer 
Price Index for All Urban Consumers (U.S. city average) as estimated by 
the Secretary for the 12-month period ending with the midpoint of the 
year involved.
* * * * *
    (vi) For CY 2019 through CY 2025, the hospital inpatient market 
basket update determined under paragraph (a)(2)(iii) of this section is 
reduced by 2.0 percentage points for an ASC that fails to meet the 
standards for reporting of ASC quality measures as established by the 
Secretary for the corresponding calendar year.
    (vii) For CY 2026 and subsequent years, the Consumer Price Index 
for All Urban Consumers update determined under paragraph (a)(2)(iv) of 
this section is reduced by 2.0 percentage points for an ASC that fails 
to meet the standards for reporting of ASC quality measures as 
established by the Secretary for the corresponding calendar year.
    (viii) * * *
    (B) For CY 2019 through CY 2025, the hospital inpatient market 
basket update

[[Page 49916]]

determined under paragraph (a)(2)(iii) of this section, after 
application of any reduction under paragraph (a)(2)(vi) of this 
section, is reduced by the productivity adjustment described in section 
1886(b)(3)(B)(xi)(II) of the Act.
    (C) For CY 2026 and subsequent years, the Consumer Price Index for 
All Urban Consumers determined under paragraph (a)(2)(iv) of this 
section, after application of any reduction under paragraph (a)(2)(vii) 
of this section, is reduced by the productivity adjustment described in 
section 1886(b)(3)(B)(xi)(II) of the Act.
* * * * *
0
26. Section 416.172 is amended by revising paragraph (d) to read as 
follows:


Sec.  416.172  Adjustments to national payment rates.

* * * * *
    (d) Deductibles and coinsurance. Part B deductible and coinsurance 
amounts apply as specified in Sec. Sec.  410.152(a) and (i)(2) of this 
subchapter and in 42 CFR 489.30(b)(6).
* * * * *
0
27. Section 416.305 is amended by revising paragraph (b)(1) to read as 
follows:


Sec.  416.305  Participation and withdrawal requirements under the 
ASCQR Program.

* * * * *
    (b) * * *
    (1) An ASC may withdraw from the ASCQR Program by submitting to CMS 
a withdrawal of participation form that can be found in the secure 
portion of the CMS-designated information system.
* * * * *
0
28. Section 416.310 is amended by revising paragraphs (c)(1)(i) and 
(d)(1) to read as follows:


Sec.  416.310  Data collection and submission requirements under the 
ASQR Program.

* * * * *
    (c) * * *
    (1) * * *
    (i) CMS-designated information system account for web-based 
measures. ASCs, and any agents submitting data on an ASC's behalf, must 
maintain an account for the CMS-designated information system in order 
to submit quality measure data to the CMS-designated information system 
for all web-based measures submitted via a CMS online data submission 
tool. A security official is necessary to set up such an account for 
the CMS-designated information system for the purpose of submitting 
this information.
* * * * *
    (d) * * *
    (1) Upon request of the ASC. Specific requirements for submission 
of a request for an exception are available on the CMS website.
* * * * *
0
29. Section 416.320 is amended by revising paragraph (b) to read as 
follows:


Sec.  416.320  Retention and removal of quality measures under the 
ASCQR Program.

* * * * *
    (b) Immediate measure removal. In cases where CMS believes that the 
continued use of a measure as specified raises patient safety concerns, 
CMS will immediately remove a quality measure from the ASCQR Program 
and will promptly notify ASCs and the public of the removal of the 
measure and the reasons for its removal through the ASCQR Program 
ListServ and the ASCQR Program CMS website. CMS will confirm the 
removal of the measure for patient safety concerns in the next ASCQR 
Program rulemaking.
* * * * *
0
30. Section 416.325 is amended by revising paragraph (c) to read as 
follows:


Sec.  416.325  Measure maintenance under the ASCQR Program.

* * * * *
    (c) Non-substantive changes. If CMS determines that a change to a 
measure previously adopted in the ASCQR Program is non-substantive, CMS 
will use a sub-regulatory process to revise the ASCQR Program 
Specifications Manual so that it clearly identifies the changes to that 
measure and provide links to where additional information on the 
changes can be found. When a measure undergoes sub-regulatory 
maintenance, CMS will provide notification of the measure specification 
update on the CMS website and in the ASCQR Program Specifications 
Manual, and will provide sufficient lead time for ASCs to implement the 
revisions where changes to the data collection systems would be 
necessary.

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

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

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

0
32. Section 419.20 is amended by adding paragraph (b)(5) to read as 
follows:


Sec.  419.20  Hospitals subject to the hospital outpatient prospective 
payment system.

* * * * *
    (b) * * *
    (5) A rural emergency hospital (REH).
0
33. Section 419.21 is amended by revising paragraph (c) for read as 
follows:


Sec.  419.21  Hospital services subject to the outpatient prospective 
payment system.

* * * * *
    (c) Partial hospitalization services and intensive outpatient 
services furnished by community mental health centers (CMHCs).
* * * * *
0
34. Section 419.41 is amended by adding paragraphs (d), (e), (f), and 
(g) to read as follows:


Sec.  419.41  Calculation of national beneficiary copayment amounts and 
national Medicare program payment amounts.

* * * * *
    (d) Notwithstanding the foregoing, for a drug or biological for 
which payment is not packaged into a payment for a covered OPD service 
(or group of services) and is not a rebatable drug (as defined in 
section 1847A(i)(2)(A)), to calculate the program payment and copayment 
amounts CMS does the following:
    (1) Determines the payment rate for the drug or biological for the 
quarter established under the methodology described by section 1842(o), 
section 1847A, or section 1847B of the Act, as the case may be, as 
calculated and adjusted by the Secretary as necessary for purposes of 
paragraph (14) of section 1833(t) of the Act.
    (2) Subtracts from the amount determined under paragraph (d)(1) of 
this section the amount of the applicable Part B deductible provided 
under Sec.  410.160 of this chapter.
    (3) Multiples the amount determined under paragraph (d)(1) of this 
section (less any applicable deductible under paragraph (d)(2) of this 
section) by 20 percent. This is the beneficiary's copayment amount for 
the drug or biological.
    (4) Subtracts the amount determined under paragraph (d)(3) of this 
section from the amount determined under paragraph (d)(1) of this 
section (less any applicable deductible determined under paragraph 
(d)(2) of this section). This amount is the preliminary program amount.
    (5) Adds to the preliminary program amount determined under 
paragraph (d)(4) of this section the amount by which the copayment 
amount would have exceeded the inpatient hospital deductible for that 
year. This amount is the final Medicare program payment amount.
    (e) In the case of a rebatable drug (as defined in section 
1847A(i)(2)(A) of the

[[Page 49917]]

Act), except if such drug does not have a copayment amount as a result 
of application of section 1833(t)(8)(E) of the Act, for which payment 
is not packaged into payment for a covered OPD service (or group of 
services) furnished on or after April 1, 2023, and the payment for such 
drug under the OPPS is the same as the amount for a calendar quarter 
under section 1847A(i)(3)(A)(ii)(I) of the Act, in lieu of the 
calculation of the copayment amount and the Medicare program payment 
amount otherwise applicable under paragraph (d) of this section (other 
than application of the limitation described in paragraph (c)(4)(i) of 
this section), the copayment and Medicare program payment amounts 
determined under Sec. Sec.  410.152(m) and 489.30(b)(6) of this chapter 
shall apply.
    (f) In the case of a qualifying biosimilar biological product (as 
defined in Sec.  414.902 of this subchapter) that is furnished during 
the applicable five-year period (as defined in Sec.  414.902 of this 
subchapter) for such product, the payment amount for such product with 
respect to such period is the amount determined in Sec.  414.904(j)(2) 
of this subchapter.
    (g) For dates of service on or after July 1, 2024, the payment 
amount for a biosimilar biological product (as defined in Sec.  414.902 
of this subchapter) during the initial period is the amount determined 
in Sec.  414.904(e)(4)(ii) of this subchapter.
0
35. Section 419.46 is amended by revising the section heading and 
paragraphs (b), (c), (d)(2), (e)(1), (g)(1), and (i)(2) to read as 
follows:


Sec.  419.46  Requirements Under the Hospital Outpatient Quality 
Reporting (OQR) Program.

* * * * *
    (b) Participation in the Hospital OQR Program. To participate in 
the Hospital OQR Program, a hospital as defined in section 
1886(d)(1)(B) of the Act and is paid under the OPPS must--
    (1) Register on the CMS-designated information system before 
beginning to report data;
    (2) Identify and register a CMS-designated information system 
security official as part of the registration process under paragraph 
(b)(1) of this section; and
    (3) Submit at least one data element.
    (c) Withdrawal from the Hospital OQR Program. A participating 
hospital may withdraw from the Hospital OQR Program by submitting to 
CMS a withdrawal form that can be found in the secure portion of the 
CMS-designated information system. The hospital may withdraw any time 
up to and including August 31 of the year prior to the affected annual 
payment updates. A withdrawn hospital will not be able to later sign up 
to participate in that payment update, is subject to a reduced annual 
payment update as specified under paragraph (i) of this section, and is 
required to renew participation as specified in paragraph (b) of this 
section in order to participate in any future year of the Hospital OQR 
Program.
    (d) * * *
    (2) Submission deadlines. Submission deadlines by measure and by 
data type are posted on the CMS website. All deadlines occurring on a 
Saturday, Sunday, or legal holiday, or on any other day all or part of 
which is declared to be a non-work day for Federal employees by statute 
or Executive order are extended to the first day thereafter which is 
not a Saturday, Sunday, or legal holiday or any other day all or part 
of which is declared to be a non-work day for Federal employees by 
statute or Executive order.
* * * * *
    (e) * * *
    (1) Upon request by the hospital. Specific requirements for 
submission of a request for an exception are available on the CMS 
website.
* * * * *
    (g) * * *
    (1) A hospital may request reconsideration of a decision by CMS 
that the hospital has not met the requirements of the Hospital OQR 
Program in paragraph (b) of this section for a particular calendar 
year. Except as provided in paragraph (e) of this section, a hospital 
must submit a reconsideration request to CMS via the CMS-designated 
information system, no later than March 17, or if March 17 falls on a 
nonwork day, on the first day after March 17 which is not a nonwork day 
as defined in paragraph (d)(2) of this section, of the affected payment 
year as determined using the date the request was mailed or submitted 
to CMS.
* * * * *
    (i) * * *
    (2) Immediate measure removal. For cases in which CMS believes that 
the continued use of a measure as specified raises patient safety 
concerns, CMS will immediately remove a quality measure from the 
Hospital OQR Program and will promptly notify hospitals and the public 
of the removal of the measure and the reasons for its removal through 
the Hospital OQR Program ListServ and the CMS website.
* * * * *
0
36. Section 419.92 is amended by adding paragraphs (d) and (e) to read 
as follows:


Sec.  419.92  Payment to rural emergency hospitals.

* * * * *
    (d) Payment for IHS or tribally operated REHs. An Indian Health 
Service (IHS) or tribally operated REH, as defined in paragraph (e) of 
this section will be paid under the outpatient hospital All-Inclusive 
Rate that is established and published annually by the Indian Health 
Service rather than the rates for REH services described in paragraph 
(a)(1) of this section.
    (e) IHS or tribally operated REHs. An Indian Health Service (IHS) 
or tribally operated REH is an REH, as defined in Sec.  485.502 of this 
chapter, that is operated by the IHS or by a tribe or tribal 
organization with funding authorized by Title I or III of the Indian 
Self-Determination and Education Assistance Act (Pub. L. 93-638).
0
37. Section 419.93 is amended by revising paragraph (a)(2) to read as 
follows:


Sec.  419.93  Payment for an off-campus provider-based department of a 
rural emergency hospital.

    (a) * * *
    (2) Services that do not meet the definition of REH services under 
Sec.  419.91 that are furnished by an off-campus provider-based 
department of an REH are paid as described under Sec.  419.92(c) or, if 
applicable, Sec.  419.92(d).
* * * * *
0
38. Section 419.95 is added to read as follows:


Sec.  419.95  Requirements under the Rural Emergency Hospital Quality 
Reporting (REHQR) Program.

    (a) Statutory authority. Section 1861(kkk) (7) of the Social 
Security Act authorizes the Secretary to implement a quality reporting 
program requiring Rural Emergency Hospitals (REHs) to submit data on 
measures in accordance with the Secretary's requirements in this part.
    (b) Participation in the REHQR Program. To participate in the REHQR 
Program, an REH as defined in section 1861(kkk) (2) of the Act must--
    (1) Register on a CMS website before beginning to report data;
    (2) Identify and register a security official as part of the 
registration process under paragraph (b)(1) of this section; and
    (3) Submit data on all quality measures to CMS as specified under 
paragraph (d) of this section.

[[Page 49918]]

    (c) Submission of REHQR Program data--(1) General rule. REHs that 
participate in the REHQR Program must submit to CMS data on measures 
selected under section 1861(kkk)(7)(C) of the Act in a form and manner, 
and at a time specified by CMS. REHs sharing the same CMS Certification 
Number (CCN) must combine data collection and submission across their 
multiple campuses for all clinical measures for public reporting 
purposes.
    (2) Submission deadlines. Submission deadlines by measure and by 
data type are posted on a CMS website. All deadlines occurring on a 
Saturday, Sunday, or legal holiday, or on any other day all or part of 
which is declared to be a non-work day for Federal employees by statute 
or executive order are extended to the first day thereafter which is 
not a Saturday, Sunday, or legal holiday or any other day all or part 
of which is declared to be a non-work day for Federal employees by 
statute or executive order.
    (3) Review and corrections period. For all quality data submitted, 
REHs will have a review and corrections period, which runs concurrently 
with the data submission period. During this timeframe, REHs can enter, 
review, and correct data submitted. However, after the submission 
deadline, these data cannot be changed.
    (d) Technical specifications and measure maintenance under the 
REHQR Program.
    (1) CMS will update the specifications manual for measures in the 
REHQR Program at least every 12 months.
    (2) CMS follows different procedures to update the measure 
specifications of a measure previously adopted under the REHQR Program 
based on whether the change is substantive or non-substantive. CMS will 
determine what constitutes a substantive versus a non-substantive 
change to a measure's specifications.
    (i) Substantive changes. CMS will use rulemaking to adopt 
substantive updates to measures in the REHQR Program.
    (ii) Non-substantive changes. If CMS determines that a change to a 
measure previously adopted in the REHQR Program is non-substantive, CMS 
will use a sub-regulatory process to revise the specifications manual 
for the REHQR Program so that it clearly identifies the change to that 
measure and provide links to where additional information on the change 
can be found. When a measure undergoes sub-regulatory maintenance, CMS 
will provide notification of the measure specification update on a 
designated website and in the specifications manual, and will provide 
sufficient lead time for REHs to implement the revisions where changes 
to the data collection systems would be necessary.
    (e) Retention and removal of quality measures under the REHQR 
Program.
    (1) General rule for the retention of quality measures. Quality 
measures adopted for the REHQR Program measure set are retained for 
use, except when they are removed, suspended, or replaced as set forth 
in paragraphs (e)(2) and (e)(3) of this section.
    (2) Immediate measure removal. In cases where CMS believes that the 
continued use of a quality measure as specified raises patient safety 
concerns, CMS will immediately remove the measure from the REHQR 
Program and will promptly notify REHs and the public of the removal of 
the measure and the reasons for its removal. CMS will confirm the 
removal of the measure in the next appropriate rulemaking.
    (3) Measure removal, suspension, or replacement through the 
rulemaking process. Unless a measure raises specific safety concerns as 
set forth in paragraph (e)(2) of this section, CMS will use rulemaking 
to remove, suspend, or replace quality measures in the REHQR Program.
    (i) Factors for consideration for removal of quality measures. CMS 
will weigh whether to remove measures based on the following factors:
    (A) Factor 1. Measure performance among REHs is so high and 
unvarying that meaningful distinctions and improvements in performance 
can no longer be made (``topped-out'' measures);
    (B) Factor 2. Performance or improvement on a measure does not 
result in better patient outcomes;
    (C) Factor 3. A measure does not align with current clinical 
guidelines or practice;
    (D) Factor 4. The availability of a more broadly applicable (across 
settings, populations, or conditions) measure for the topic;
    (E) Factor 5. The availability of a measure that is more proximal 
in time to desired patient outcomes for the particular topic;
    (F) Factor 6. The availability of a measure that is more strongly 
associated with desired patient outcomes for the particular topic;
    (G) Factor 7. Collection or public reporting of a measure leads to 
negative unintended consequences other than patient harm; and
    (H) Factor 8. The costs associated with a measure outweigh the 
benefit of its continued use in the program.
    (ii) Criteria to determine topped-out measures. For the purposes of 
the REHQR Program, a measure is considered to be topped-out under 
paragraph (e)(3)(i)(A) of this section when it meets both of the 
following criteria:
    (A) Statistically indistinguishable performance at the 75th and 
90th percentiles (defined as when the difference between the 75th and 
90th percentiles for an REH's measure is within two times the standard 
error of the full data set); and
    (B) A truncated coefficient of variation less than or equal to 
0.10.
    (iii) Application of measure removal factors. The benefits of 
removing a measure from the REHQR Program will be assessed on a case-
by-case basis. Under this case-by-case approach, a measure will not be 
removed solely on the basis of meeting any specific factor.
    (f) Public reporting of data under the REHQR Program. Data that an 
REH submits for the REHQR Program will be made publicly available on a 
CMS website in an easily understandable format after providing the REH 
an opportunity to review the data to be made public. CMS will publicly 
display REH data by the CCN when data are submitted under the CCNs.
    (g) Exception. CMS may grant an exception to one or more data 
submission deadlines and requirements in the event of extraordinary 
circumstances beyond the control of the hospital, such as when an act 
of nature affects an entire region or locale or a systemic problem with 
one of CMS' data collection systems directly or indirectly affects data 
submission. CMS may grant an exception as follows:
    (1) Upon request by the REH. Specific requirements for submission 
of a request for an exception are available on a CMS website.
    (2) At the discretion of CMS. CMS may grant exceptions to REHs that 
have not requested them when CMS determines that an extraordinary 
circumstance has occurred.

PART 424--CONDITIONS FOR MEDICARE PAYMENT

0
39. The authority citation for part 424 continues to read as follows:

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

0
40. Section 424.24 is amended by--
0
a. Revising paragraphs (b);
0
b. Adding paragraph (d), and
0
c. Revising paragraph (e)(1)(i).
    The revisions and addition read as follows:


Sec.  424.24  Requirements for medical and other health services 
furnished by providers under Medicare Part B.

* * * * *
    (b) General rule. Medicare Part B pays for medical and other health 
services

[[Page 49919]]

furnished by providers (and not exempted under paragraph (a) of this 
section) only if a physician certifies the content specified in 
paragraphs (c)(1), (c)(4), (d)(1), or (e)(1) of this section, as 
appropriate.
* * * * *
    (d) Intensive outpatient services: Content of certification and 
plan of treatment requirements--
    (1) Content of certification. (i) The individual requires such 
services for a minimum of 9 hours per week.
    (ii) The services are or were furnished while the individual was 
under the care of a physician.
    (iii) The services were furnished under a written plan of treatment 
that meets the requirements of paragraph (d)(2) of this section.
    (2) Plan of treatment requirements. (i) The plan is an 
individualized plan that is established and is periodically reviewed by 
a physician in consultation with appropriate staff participating in the 
program, and that sets forth--
    (A) The physician's diagnosis;
    (B) The type, amount, duration, and frequency of the services; and
    (C) The treatment goals under the plan.
    (ii) The physician determines the frequency and duration of the 
services taking into account accepted norms of medical practice and a 
reasonable expectation of improvement in the patient's condition.
    (3) Recertification requirements--(i) Signature. The physician 
recertification must be signed by a physician who is treating the 
patient and has knowledge of the patient's response to treatment.
    (ii) Timing. Recertifications are required at intervals established 
by the provider, but no less frequently than every 60 days.
    (iii) Content. The recertification must specify that the patient 
continues to require at least 9 hours of intensive outpatient services 
and describe the following:
    (A) The patient's response to the therapeutic interventions 
provided by the intensive outpatient program.
    (B) The patient's psychiatric symptoms that continue to place the 
patient at risk of relapse or hospitalization.
    (C) Treatment goals for coordination of services to facilitate 
discharge from the intensive outpatient program.
    (e) * * *
    (1) * * *
    (i) The individual requires such services for a minimum of 20 hours 
per week, and would require inpatient psychiatric care if the partial 
hospitalization services were not provided.
* * * * *

PART 485--CONDITIONS OF PARTICIPATION: SPECIALIZED PROVIDERS

0
41. The authority citation for part 485 continues to read as follows:

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

0
42. Section 485.506 is amended by revising paragraphs (b) and (c) to 
read as follows:


Sec.  485.506  Designation and certification of REHs.

* * * * *
    (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) that is considered rural (as defined in section 
1886(d)(2)(D) of the Act); or
    (c) A hospital as defined in section 1886(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 Sec.  412.103 of this chapter as of December 27, 2020.
0
43. Section 485.900 is amended by revising paragraphs (a)(1), (2), and 
(3) to read as follows:


Sec.  485.900  Basis and scope.

    (a) * * *
    (1) Section 1832(a)(2)(J) of the Act specifies that payments may be 
made under Medicare Part B for partial hospitalization services and 
intensive outpatient services furnished by a community mental health 
center (CMHC) as described in section 1861(ff)(3)(B) of the Act.
    (2) Section 1861(ff) of the Act describes the items and services 
that are covered under Medicare Part B as ``partial hospitalization 
services'' and ``intensive outpatient services'' and the conditions 
under which the items and services must be provided. In addition, 
section 1861(ff) of the Act specifies that the entities authorized to 
provide partial hospitalization services and intensive outpatient 
services under Medicare Part B include CMHCs and defines that term.
    (3) Section 1866(e)(2) of the Act specifies that a provider of 
services for purposes of provider agreement requirements includes a 
CMHC as defined in section 1861(ff)(3)(B) of the Act, but only with 
respect to providing partial hospitalization services and intensive 
outpatient services.
* * * * *
0
44. Section 485.904 is amended by revising paragraph (b)(5) and adding 
paragraph (b)(12) to read as follows:


Sec.  485.904  Condition of participation: Personnel qualifications.

* * * * *
    (b) * * *
    (5) Mental health counselor. An individual who meets the applicable 
education, training, and other requirements of Sec.  410.54 of this 
chapter.
* * * * *
    (12) Marriage and family therapist. An individual who meets the 
applicable education, training, and other requirements of Sec.  410.53 
of this chapter.
* * * * *
0
45. Section 485.914 is amended by revising paragraphs (a)(2) and (d)(2) 
to read as follows:


Sec.  485.914  Condition of participation: Admission, initial 
evaluation, comprehensive assessment, and discharge or transfer of the 
client.

    (a) * * *
    (2) For clients assessed and admitted to receive partial 
hospitalization services and intensive outpatient services, the CMHC 
must also meet separate requirements as specified in Sec. Sec.  
485.918(f) and 485.918(g), as applicable.
* * * * *
    (d) * * *
    (2) For clients that receive PHP or IOP services, the assessment 
must be updated no less frequently than every 30 days.
* * * * *
0
46. Section 485.916 is amended by revising paragraph (d) to read as 
follows:


Sec.  485.916  Condition of participation: Treatment team, person-
centered active treatment plan, and coordination of services.

* * * * *
    (d) Standard: Review of the person-centered active treatment plan. 
The CMHC interdisciplinary treatment team must review, revise, and 
document the individualized active treatment plan as frequently as the 
client's condition requires, but no less frequently than every 30-
calendar day. A revised active treatment plan must include information 
from the client's initial evaluation and comprehensive assessments, the 
client's progress toward outcomes and goals specified in the active 
treatment plan, and changes in the client's goals. The CMHC must also 
meet partial hospitalization program requirements specified under Sec.  
424.24(e) of this chapter or intensive outpatient service requirements 
as specified under Sec.  424.24(d) of this chapter, as applicable, if 
such services

[[Page 49920]]

are included in the active treatment plan.
* * * * *
0
47. Section 485.918 is amended by:
0
a. Revising the section heading;
0
b. Revising paragraph (b)(1)(iii);
0
c. Redesignating paragraph (g) as paragraph (h); and
0
d. Adding paragraph (g).
    The revisions and addition read as follows:


Sec.  485.918  Condition of participation: Organization, governance, 
administration of services, partial hospitalization services and 
intensive outpatient services.

* * * * *
    (b) * * *
    (1) * * *
    (iii) Provides day treatment, partial hospitalization services, or 
intensive outpatient services, other than in an individual's home or in 
an inpatient or residential setting, or psychosocial rehabilitation 
services.
* * * * *
    (g) Standard: Intensive outpatient services. A CMHC providing 
intensive outpatient services must--
    (1) Provide services as defined in Sec.  410.2 of this chapter.
    (2) Provide the services and meet the requirements specified in 
Sec.  410.44 of this chapter.
    (3) Meet the requirements for coverage as described in Sec.  
410.111 of this chapter.
    (4) Meet the content of certification and plan of treatment 
requirements as described in Sec.  424.24(d) of this chapter.
* * * * *

PART 488--SURVEY, CERTIFICATION, AND ENFORCEMENT PROCEDURES

0
48. The authority citation for part 488 continues to read as follows:

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

0
49. Section 488.2 is amended by revising provision ``1832(a)(2)(J)'' to 
read as follows:


Sec.  488.2  Statutory basis.

* * * * *
    1832(a)(2)(J)--Requirements for partial hospitalization services 
and intensive outpatient services provided by CMHCs.
* * * * *

PART 489--PROVIDER AGREEMENTS AND SUPPLIER APPROVAL

0
50. The authority citation for part 489 continues to read as follows:

    Authority: 42 U.S.C. 1302, 1395i-3, 1395x, 1395aa(m), 1395cc, 
1395ff, and 1395(hh).

0
48. Section 489.2 is amended by revising paragraph (c)(2) to read as 
follows:


Sec.  489.2  Scope of part.

* * * * *
    (c) * * *
    (2) CMHCs may enter into provider agreements only to furnish 
partial hospitalization services and intensive outpatient services.
* * * * *
    For the reasons set forth in the preamble, the Department of Health 
and Human Services proposes to amend 45 CFR part 180 as set forth 
below:

PART 180--HOSPITAL PRICE TRANSPARENCY

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

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

0
52. Section 180.20 is amended by--
0
a. Adding definitions for ``CMS template'', ``Consumer-friendly 
expected allowed charges'', ``Encode'', and ``Machine-readable file''.
0
b. In the definition ``Machine-readable format'' removing the sentence 
``Examples of machine-readable formats include, but are not limited to, 
XML, JSON and .CSV formats.''
    The additions read as follows:


Sec.  180.20  Definitions.

* * * * *
    CMS template means a CSV format or JSON schema that CMS makes 
available for purposes of compliance with 180.40(a).
    Consumer-friendly expected allowed amount means the average dollar 
amount that the hospital estimates it will be paid by a third party 
payer for an item or service.
* * * * *
    Encode means to enter data items into the fields of the CMS 
template.
* * * * *
    Machine-readable file means a single digital file that is in a 
machine-readable format.
* * * * *
0
53. Section 180.50 is amended by--
0
a. Adding paragraph (a)(3);
0
b. Revising paragraphs (b) and (c);
0
c. Amending paragraph (d)(4) by removing the phrase ``The digital file 
and standard charge information contained in that file must be'' and 
adding in its place the phrase ``The machine-readable file and standard 
charge information contained in that machine-readable file must be''.
0
d. Amending paragraph (d)(5) by:
0
i. Removing the phrase ``The file must'' and adding in its place the 
phrase ``The machine-readable file must''; and
0
ii. Removing the phrase ``[json[verbar]xml[verbar]csv]'' and adding in 
its place the phrase ``[json[verbar]csv]''.
0
e. Adding paragraph (d)(6).
0
f. Amending paragraph (e) by removing the second sentence.
    The additions and revisions read as follows:


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

* * * * *
    (a) * * *
    (3) The hospital must include a statement in its machine-readable 
file affirming that the hospital, to the best of its knowledge and 
belief, has included all applicable standard charge information in 
accordance with the requirements of this section, and that the 
information displayed is true, accurate, and complete as of the date 
indicated in the file.
    (b) Required data elements. Each hospital must encode in its 
machine-readable file all standard charge information, as applicable, 
for each of the following required data elements:
    (1) General data elements:
    (i) Hospital name, license number, and location name(s) and 
address(es) at which the public may obtain the items and service at the 
standard charge amount indicated in the machine-readable file; and
    (ii) The version number of the CMS template and the date of most 
recent update of the standard charge information in the machine-
readable file.
    (2) Each type of standard charge as defined at Sec.  180.20 (for 
example, gross charge, discounted cash price, payer-specific negotiated 
charge, de-identified minimum negotiated charge, and de-identified 
maximum negotiated charge) and, for payer-specific negotiated charges, 
the following additional data elements:
    (i) Payer and plan names; plan(s) may be indicated as categories 
(such as ``all PPO plans'') when the established payer-specific 
negotiated charges are applicable to each plan in the indicated 
category.
    (ii) Type of contracting method used to establish the standard 
charge; and
    (iii) Whether the standard charge indicated should be interpreted 
by the user as a dollar amount, or if the standard charge is based on a 
percentage or algorithm. If the standard charge is based on a 
percentage or algorithm, the MRF must also specify what percentage or 
algorithm determines the dollar amount for the item or service, and the 
consumer-friendly expected allowed amount for that item or service.
    (3) A description of the item or service that corresponds to the 
standard charge established by hospital, including:

[[Page 49921]]

    (i) A general description of the item or service;
    (ii) Whether the item or service is provided in connection with an 
inpatient admission or an outpatient department visit; and
    (iii) For drugs, the drug unit and type of measurement.
    (4) Any codes used by the hospital for purposes of accounting or 
billing for the item or service, modifier(s), and the code type(s).
    (c) Format. The hospital's machine-readable file must conform to 
the CMS template layout, data specifications, and data dictionary for 
purposes of making public the standard charge information required 
under paragraph (b) of this section.
    (d) * * *
    (6) The hospital must ensure that the public website it selects to 
host its machine-readable file establishes and maintains, in the form 
and manner specified by CMS:
    (i) A .txt file in the root folder that includes:
    (A) The hospital location name that corresponds to the machine-
readable file;
    (B) The source page URL that hosts the machine-readable file;
    (C) A direct link to the machine-readable file (the machine-
readable file URL); and
    (D) Hospital point of contact information.
    (ii) A link in the footer on its website, including but not limited 
to the homepage, that is labeled ``Hospital Price Transparency'' and 
links directly to the publicly available web page that hosts the link 
to the machine-readable file.
0
54. Section 180.70 is amended by:
0
a. Revising paragraph (a) introductory text.
0
b. Revising paragraph (a)(2)(iii).
0
c. By adding paragraphs (a)(2)(iv) and (v).
0
d. By revising paragraph (b)(1); and
0
e. By adding paragraphs (c) and (d).
    The additions and revisions read as follows:


Sec.  180.70  Monitoring and enforcement.

    (a) Monitoring and assessment.
    (1) * * *
    (2) * * *
* * * * *
    (iii) CMS audit and comprehensive review.
    (iv) Requiring submission of certification by an authorized 
hospital official as to the accuracy and completeness of the data in 
the machine-readable file.
    (v) Requiring submission of additional documentation as may be 
necessary to make a determination of hospital compliance.
    (b) * * *
    (1) Provide a written warning notice to the hospital of the 
specific violation(s). CMS will require that a hospital submit an 
acknowledgement of receipt of the warning notice in the form and 
manner, and by the deadline, specified in the notice of violation 
issued by CMS to the hospital.
* * * * *
    (c) Actions to address noncompliance of hospitals in health 
systems. In the event CMS takes an action to address hospital 
noncompliance (as specified in paragraph (b) of this section) and the 
hospital is determined by CMS to be part of a health system, CMS may 
notify health system leadership of the action and may work with health 
system leadership to address similar deficiencies for hospitals across 
the health system.
    (d) Publicizing assessments, compliance actions, and outcomes. CMS 
may publicize on its website information related to the following:
    (1) CMS' assessment of a hospital's compliance.
    (2) Any compliance action taken against a hospital, the status of 
such compliance action, or the outcome of such compliance action.
    (3) Notifications sent to health system leadership.


Sec.  180.90  [Amended]

0
55. In Sec.  180.90, amend paragraph (b)(2)(ii)(C) by removing the 
phrase ``resulting from monitoring activities'' and adding in its place 
the phrase ``resulting from monitoring and assessment activities''.

    Dated: July 7, 2023.
Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2023-14768 Filed 7-13-23; 4:15 pm]
BILLING CODE 4120-01-P