[Federal Register Volume 88, Number 224 (Wednesday, November 22, 2023)]
[Rules and Regulations]
[Pages 81540-82185]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-24293]



[[Page 81539]]

Vol. 88

Wednesday,

No. 224

November 22, 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 Hospital Outpatient 
Departments, Community Mental Health Centers, Rural Health Clinics, 
Federally Qualified Health Centers, and Opioid Treatment Programs; 
Hospital Price Transparency; Changes to Community Mental Health Centers 
Conditions of Participation, Changes to the Inpatient Prospective 
Payment System Medicare Code Editor; Rural Emergency Hospital 
Conditions of Participation Technical Correction; Final Rule

  Federal Register / Vol. 88 , No. 224 / Wednesday, November 22, 2023 / 
Rules and Regulations  

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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, and 489

Office of the Secretary

45 CFR Part 180

[CMS-1786-FC]
RIN 0938-AV09


Medicare Program: Hospital Outpatient Prospective Payment and 
Ambulatory Surgical Center Payment Systems; Quality Reporting Programs; 
Payment for Intensive Outpatient Services in Hospital Outpatient 
Departments, Community Mental Health Centers, Rural Health Clinics, 
Federally Qualified Health Centers, and Opioid Treatment Programs; 
Hospital Price Transparency; Changes to Community Mental Health Centers 
Conditions of Participation, 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: Final rule with comment period.

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SUMMARY: This final rule with comment period revises the Medicare 
hospital outpatient prospective payment system (OPPS) and the Medicare 
ambulatory surgical center (ASC) payment system for calendar year 2024 
based on our continuing experience with these systems. In this final 
rule, we describe the changes to the amounts and factors used to 
determine the payment rates for Medicare services paid under the OPPS 
and those paid under the ASC payment system. Also, this final rule 
updates and refines the requirements for the Hospital Outpatient 
Quality Reporting (OQR) Program, the ASC Quality Reporting (ASCQR) 
Program, and the Rural Emergency Hospital Quality Reporting (REHQR) 
Program. In this final rule, we are also establishing a payment for 
certain intensive outpatient services under Medicare, beginning January 
1, 2024. In addition, this final rule updates and refines requirements 
for hospitals to make public their standard charge information and 
enforcement of hospital price transparency. We are finalizing changes 
to the community mental health center (CMHC) Conditions of 
Participation (CoPs) to provide requirements for furnishing intensive 
outpatient (IOP) services, and we are finalizing the proposed personnel 
qualifications for mental health counselors (MHCs) and marriage and 
family therapists (MFTs). Additionally, we are finalizing the removal 
of discussion of the inpatient prospective payment system (IPPS) 
Medicare Code Editor (MCE) from the annual IPPS rulemakings, beginning 
with the fiscal year (FY) 2025 rulemaking. Finally, we are finalizing a 
technical correction to the Rural Emergency Hospital (REH) CoPs under 
the standard for the designation and certification of REHs.

DATES: 
    Effective date: The provisions of this rule are effective January 
1, 2024.
    Comment period: To be assured consideration, comments must be 
received at one of the addresses provided below, by January 1, 2024.

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

FOR FURTHER INFORMATION CONTACT: 
    Au'Sha Washington, [email protected] or 410-786-3736.
    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 Au'Sha Washington 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 Abby Cesnik 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 
Beneficiaries in Their Homes, contact Emily Yoder via email at 
[email protected].
    Method to Control Unnecessary Increases in the Volume of Clinic 
Visit

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Services Furnished in Excepted Off-Campus Provider-Based Departments 
(PBDs), contact Nate Vercauteren 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 Cory Duke via email at [email protected] and 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], Gil Ngan via email at Gil.Ngan@ cms.hhs.gov, 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 the RHC Payment 
Policy Mailbox at [email protected] or the FQHC Payment Policy Mailbox 
at [email protected].
    Separate Payment for High-Cost Drugs Provided by Indian Health 
Service and Tribally-Owned Facilities, contact Josh McFeeters 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 calendar year 
(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/payment/prospective-payment-systems/hospital-outpatient/regulations-notices.
    The Addenda relating to the ASC payment system are available at: 
https://www.cms.gov/medicare/payment/prospective-payment-systems/ambulatory-surgical-center-asc/asc-regulations-and-notices.

Current Procedural Terminology (CPT) Copyright Notice

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

Table of Contents

I. Summary and Background
    A. Executive Summary of This Document
    B. Legislative and Regulatory Authority for the Hospital OPPS
    C. Excluded OPPS Services and Hospitals
    D. Prior Rulemaking
    E. Advisory Panel on Hospital Outpatient Payment (the HOP Panel 
or the Panel)
    F. Public Comments Received on the CY 2024 OPPS/ASC Proposed 
Rule
    G. Public Comments Received on the CY 2023 OPPS/ASC Final Rule 
With Comment Period
II. 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
    B. Conversion Factor Update
    C. Wage Index Changes

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    D. Statewide Average Default Cost-to-Charge Ratios (CCRs)
    E. Adjustment for Rural Sole Community Hospitals (SCHs) and 
Essential Access Community Hospitals (EACHs) Under Section 
1833(t)(13)(B) of the Act for CY 2024
    F. Payment Adjustment for Certain Cancer Hospitals for CY 2024
    G. Hospital Outpatient Outlier Payments
    H. Calculation of an Adjusted Medicare Payment From the National 
Unadjusted Medicare Payment
    I. Beneficiary Copayments
III. OPPS Ambulatory Payment Classification (APC) Group Policies
    A. OPPS Treatment of New and Revised HCPCS Codes
    B. OPPS Changes--Variations Within APCs
    C. New Technology APCs
    D. Universal Low Volume APC Policy for Clinical and 
Brachytherapy APCs
    E. APC-Specific Policies
IV. OPPS Payment for Devices
    A. Pass-Through Payment for Devices
    B. Device-Intensive Procedures
V. OPPS Payment for Drugs, Biologicals, and Radiopharmaceuticals
    A. OPPS Transitional Pass-Through Payment for Additional Costs 
of Drugs, Biologicals, and Radiopharmaceuticals
    B. OPPS Payment for Drugs, Biologicals, and Radiopharmaceuticals 
Without Pass-Through Payment Status
    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. Estimate of OPPS Transitional Pass-Through Spending for Drugs, 
Biologicals, Radiopharmaceuticals, and Devices
    A. Amount of Additional Payment and Limit on Aggregate Annual 
Adjustment
    B. Estimate of Pass-Through Spending for CY 2024
VII. 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. Payment Rate Methodology for PHP and IOP
    E. 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. 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
    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 Tribal Facilities
    H. Technical Changes to Hospital Billing for Marriage and Family 
Therapist Services and Mental Health Counselor Services
XI. CY 2024 OPPS Payment Status and Comment Indicators
    A. CY 2024 OPPS Payment Status Indicator Definitions
    B. CY 2024 Comment Indicator Definitions
XII. MedPAC Recommendations
    A. OPPS Payment Rates Update
    B. Medicare Safety Net Index
    C. ASC Cost Data
XIII. Updates to the Ambulatory Surgical Center (ASC) Payment System
    A. Background, Legislative History, Statutory Authority, and 
Prior Rulemaking for the ASC Payment System
    B. ASC Treatment of New and Revised Codes
    C. Payment Policies Under the ASC Payment System
    D. 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. New Technology Intraocular Lenses (NTIOLs)
    H. Calculation of the ASC Payment Rates and the ASC Conversion 
Factor
XIV. Requirements for the Hospital Outpatient Quality Reporting 
(OQR) Program
    A. Background
    B. Hospital OQR Program Quality Measures
    C. 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. Ambulatory Surgical Center Quality Reporting (ASCQR) Program 
Requirements
    A. Background
    B. ASCQR Program Quality Measures
    C. Administrative Requirements
    D. Form, Manner, and Timing of Data Submitted for the ASCQR 
Program
    E. Payment Reduction for ASCs That Fail To Meet the ASCQR 
Program Requirements
XVI. 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. Summary of the CMHC Proposed Provisions, Public Comments and 
Responses to Comments
XVIII. Updates to Requirements for Hospitals To Make Public a List 
of Their Standard Charges
    A. Introduction and Overview
    B. New Requirements for Making Public Hospital Standard Charges 
Under 45 CFR 180.50
    C. Requirements To Improve and Enhance Enforcement
    D. Comments on CMS' Request for Information Related to Consumer-
Friendly Displays and Alignment With Transparency in Coverage and No 
Surprises Act
XIX. Changes to the Inpatient Prospective Payment System Medicare 
Code Editor
XX. Technical Edits for REH Conditions of Participation and Critical 
Access Hospital (CAH) CoP Updates
XXI. Rural Emergency Hospitals (REHs): Payment for Rural Emergency 
Hospitals (REHs)
    A. Background on Rural Emergency Hospitals (REHs)
    B. REH Payment Methodology
    C. Background on the IHS Outpatient All-Inclusive Rate (AIR) for 
Tribal and IHS Hospitals
    D. Paying Indian Health Service (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 of Essential 
Medicines
    D. Comment Solicitation on Additional Considerations
    E. Overview of Comments Received
    F. Next Steps
XXIII. Files Available to the Public via the Internet
XXIV. Collection of Information Requirements
    A. ICRs Related to Proposed Intensive Outpatient Physician 
Certification Requirements

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    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 Final Rule With Comment 
Period
    C. Detailed Economic Analyses
    D. Regulatory Review Cost Estimation
    E. Regulatory Flexibility Act (RFA) Analysis
    F. Unfunded Mandates Reform Act Analysis
    G. Federalism
    H. Conclusion
    I. Congressional Review

I. Summary and Background

A. Executive Summary of This Document

1. Purpose
    In this final rule with comment period, we are updating the payment 
policies and payment rates for services furnished to Medicare 
beneficiaries in hospital outpatient departments (HOPDs) and ambulatory 
surgical centers (ASCs), beginning January 1, 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 
final rule with comment period also includes additional policy changes 
made in accordance with our experience with the OPPS and the ASC 
payment system and recent changes in our statutory authority. We 
describe these and various other statutory authorities in the relevant 
sections of this final rule with comment period. In addition, this 
final rule with comment period updates and refines the requirements for 
the Hospital Outpatient Quality Reporting (OQR) Program, the ASC 
Quality Reporting (ASCQR) Program, and Rural Emergency Hospital Quality 
Reporting (REHQR) Program. In addition, this final rule with comment 
period establishes payment for intensive outpatient services under 
Medicare, beginning January 1, 2024. This final rule with comment 
period also updates and refines the requirements for hospitals to make 
public their standard charges and CMS enforcement of hospital price 
transparency regulations. In addition, we are finalizing changes to the 
CMHC CoPs to provide requirements for furnishing IOP services. In 
addition, we are finalizing changes to the CMHC CoPs to provide 
requirements for furnishing IOP services, as well as finalizing the 
proposed personnel qualifications for MHCs and MFTs. We are also 
finalizing the removal of discussion of the IPPS Medicare Code Editor 
(MCE) from the annual IPPS rulemakings, beginning with the FY 2025 
rulemaking. Finally, we are finalizing 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 are increasing the payment rates 
under the OPPS by an Outpatient Department (OPD) fee schedule increase 
factor of 3.1 percent. This increase factor is based on the final 
inpatient hospital market basket percentage increase of 3.3 percent for 
inpatient services paid under the hospital inpatient prospective 
payment system (IPPS) reduced by a final 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 will be approximately $88.9 billion, an increase of 
approximately $6.0 billion compared to estimated CY 2023 OPPS payments.
    We are continuing to implement the statutory 2.0 percentage point 
reduction in payments for hospitals that fail to meet the hospital 
outpatient quality reporting requirements by applying a reporting 
factor of 0.9806 to the OPPS payments and copayments for all applicable 
services.
     Data used in CY 2024 OPPS/ASC Ratesetting: To set 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 are using 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 are 
finalizing changes to our methodology used to calculate the Community 
Mental Health Center (CMHC) and hospital-based PHP (HB PHP) geometric 
mean per diem costs. We also are finalizing changes to expand PHP 
payment from two APCs to four APCs.
     Medicare Payment for Intensive Outpatient Programs: 
Beginning in CY 2024, we are finalizing payment for intensive 
outpatient program (IOP) services under Medicare. We are finalizing 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 (FQHCs), and rural 
health clinics (RHCs). We also are finalizing 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 
finalizing our proposal to not remove any services from the IPO list 
for CY 2024.
     340BAcquired Drugs: For CY 2024, we are continuing to 
apply the default rate, generally average sales price (ASP) plus 6 
percent, to 340B acquired drugs and biologicals in this final rule with 
comment period. Therefore, drugs and biologicals acquired under the 
340B program will 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 are 
finalizing our proposal to except biosimilars from the OPPS threshold 
packaging policy when their reference products are separately paid. 
However, we are not finalizing that all the biosimilars related to the 
reference product would be similarly

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packaged if a reference product's per-day cost falls below the 
threshold packaging policy.
     Finalizing 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 are finalizing 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 are finalizing 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 six applications for device pass-through payments. We sought 
public comment on these applications and are approving four applicants 
for device pass-through payment status in this final rule with comment 
period.
     Cancer Hospital Payment Adjustment: For CY 2024, we are 
continuing to provide additional payments to cancer hospitals so that a 
cancer hospital's payment-to-cost ratio (PCR) after the additional 
payments is equal to the weighted average PCR for the other OPPS 
hospitals using the most recently submitted or settled cost report 
data. 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 public health emergency (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 final rule with comment 
period, we are finalizing 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 are finalizing 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 are finalizing to extend our policy to update the ASC 
payment system using the hospital market basket update an additional 2 
years--through CYs 2024 and 2025. Using the hospital market basket 
methodology, for CY 2024, we are increasing payment rates under the ASC 
payment system by 3.1 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 3.3 percent reduced by a 
productivity adjustment of 0.2 percentage point. Based on this final 
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 $7.1 billion, an increase 
of approximately $207 million compared to estimated CY 2023 Medicare 
payments.
     Changes to the List of ASC Covered Surgical Procedures: 
For CY 2024, we are adding 37 surgical procedures, including total 
shoulder arthroplasty (TSA) (Healthcare Common Procedure Coding System 
(HCPCS) code 23472), to the ASC covered procedures list (CPL) based 
upon existing criteria at Sec.  416.166.
     Hospital Outpatient Quality Reporting (OQR) Program: We 
are finalizing our proposals 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 Follow-Up Interval for 
Normal Colonoscopy in Average Risk Patients measure beginning with the 
CY 2024 reporting period/CY 2026 payment determination; and (4) 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 finalizing with modification 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 (THA/TKA PRO-PM) with 
voluntary reporting beginning with the CY 2025 reporting period through 
the CY 2027 reporting period followed by mandatory reporting beginning 
one year later than proposed with the CY 2028 reporting period/CY 2031 
payment determination.
    We are finalizing with modification the proposal to adopt the 
Excessive Radiation Dose or Inadequate Image Quality for Diagnostic 
Computed Tomography (CT) in Adults (Hospital Level--Outpatient) measure 
with voluntary reporting beginning with the CY 2025 reporting period 
and mandatory reporting beginning 1 year later than proposed with the 
CY 2027 reporting period/CY 2029 payment determination.
    We are not finalizing our proposal to remove the Left without Being 
Seen measure. We are also not finalizing our proposal to re-adopt with 
modification the Hospital Outpatient Volume Data on Selected Outpatient 
Procedures measure.
    We also requested 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: We are finalizing our proposals 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; and (4) 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 finalizing with modification 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 (THA/TKA PRO-PM) with 
voluntary reporting beginning with the CY 2025 reporting period through 
the CY 2027 reporting period followed by mandatory reporting beginning 
1 year later than proposed with the CY 2028 reporting period/CY 2031 
payment determination.

[[Page 81545]]

    We are not finalizing our proposal to re-adopt with modification 
the ASC Facility Volume Data on Selected ASC Surgical Procedures 
measure.
     Rural Emergency Hospital Quality Reporting (REHQR) 
Program: We are finalizing our proposals to: (1) codify the statutory 
authority for the REHQR Program; (2) adopt and codify policies related 
to measure retention and measure modification; (3) adopt one chart-
abstracted measure, Median Time from Emergency Department (ED) Arrival 
to ED Departure for Discharged ED Patients, beginning with the CY 2024 
reporting period; (4) adopt three claims-based measures, Abdomen 
Computed Tomography (CT)--Use of Contrast Material, Facility 7-Day 
Risk-Standardized Hospital Visit Rate After Outpatient Colonoscopy, and 
Risk-Standardized Hospital Visits Within 7 Days After Hospital 
Outpatient Surgery, beginning with the CY 2024 reporting period; (5) 
establish related reporting requirements beginning with the CY 2024 
reporting period; (6) adopt and codify policies related to public 
reporting of data; (7) codify foundational requirements related to 
REHQR Program participation; (8) adopt and codify policies related to 
the form, manner, and timing of data submission under the REHQR 
Program; (9) adopt and codify a review and corrections period for 
submitted data; and (10) adopt and codify an Extraordinary 
Circumstances Exception (ECE) process for data submission requirements.
    We are finalizing with modification the proposal to adopt and 
codify a policy related to immediate measure removal such that it is 
referred to more appropriately as immediate measure suspension. In such 
a case, a quality measure considered by CMS to have potential patient 
safety concerns will be immediately suspended from the program and then 
addressed in the next appropriate rulemaking cycle.
    We also requested 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 
measures; and (3) a tiered approach for quality measure reporting.
     Mental Health Services Furnished Remotely by Hospital 
Staff to Beneficiaries in Their Homes: For CY 2024, we are finalizing 
technical refinements to the existing coding for remote mental health 
services to allow for multiple units to be billed daily. We also are 
finalizing to create a new, untimed code to describe group 
psychotherapy. Finally, we are delaying the in-person visit 
requirements until January 1, 2025.
     OPPS Payment for Dental Services: For CY 2024, we are 
assigning over 240 HCPCS codes describing dental services to various 
clinical APCs to align with Medicare payment provisions regarding 
dental services adopted in the CY 2024 Physician Fee Schedule (PFS) 
final rule (87 FR 69404; November 18, 2023).
     Comment Solicitation on Payment for High-Cost Drugs 
Provided by Indian Health Service and Tribal Facilities: We sought 
comment on whether Medicare should pay separately for high-cost drugs 
provided by IHS and tribal facilities. Commenters supported 
establishing a payment methodology that would allow IHS and Tribal 
healthcare facilities to receive separate payment outside of the IHS 
outpatient hospital all-inclusive rate (AIR) for oncology drugs and 
services whose costs exceed the AIR. Their preferred approach was to 
treat the AIR payment amount as a payment threshold and to have a 
separate payment for a drug if the cost of the drug was more than the 
AIR. Commenters also wanted CMS to ensure the integrity of the AIR if 
separate payment is established for high-cost oncology drugs and other 
high-cost services. We will consider these comments for future 
rulemaking.
     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 final revisions to Sec. Sec.  410.47 and 
410.49 in the CY 2024 PFS final rule, published in the Federal Register 
of November 16, 2023 (FR Doc. 2023-24184), we are revising 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 are allowing 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 are paying 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.
     Final Updates to Requirements for Hospitals to Make Public 
a List of Their Standard Charges: We are finalizing our proposals to 
revise 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. Together, we believe these 
activities will enhance existing and future enforcement actions while 
also providing the public with more meaningful standard charge 
information that can be used to improve the accuracy of consumer-
friendly price estimator tools. Specifically, we are finalizing: (1) 
definitions of several terms; (2) a requirement that hospitals make a 
good faith effort to ensure standard charge information is true, 
accurate, and complete, and to include a statement affirming this in 
the machine-readable file (MRF); (3) new data elements that hospitals 
must include in their MRFs, as well a requirement that hospitals encode 
standard charge information in a CMS template layout; (4) phased 
implementation timeline applicable to the new requirements we are 
finalizing in this final rule with comment period; (5) a requirement 
that 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 (6) improvements to 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

[[Page 81546]]

information about CMS enforcement activities related to individual 
hospital compliance. Specifically, and as discussed in more detail in 
section XVIII of this final rule with comment, we are finalizing that 
the effective date of the changes to the hospital price transparency 
regulations at 45 CFR part 180 will be January 1, 2024. However, the 
regulation text will specify later dates by which hospitals must be in 
compliance with some of these new requirements, and we will begin 
enforcing those requirements on those specified dates. We believe this 
phased implementation approach is necessary to provide hospitals time 
to collect and encode the required standard charge information 
completely and accurately.
     Community Mental Health Center (CMHC) Conditions of 
Participation (CoPs): The Consolidated Appropriations Act (CAA), 2023 
(Pub. L. 117-238) established in section 4124 coverage of intensive 
outpatient (IOP) services in CMHCs. The legislation extended Medicare 
coverage and payment of IOP services furnished by a CMHC beginning 
January 1, 2024, adding to the existing coverage and payment for 
partial hospitalization (PHP) services in CMHCs. Section 4121 of 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). To implement these provisions of 
section 4121 of the CAA, 2023, CMS is finalizing, as proposed, to 
modify the requirements for CMHCs to include IOP services throughout 
the CoPs. We are also finalizing our proposal to modify the CMHC CoPs 
for personnel qualifications to add a definition of marriage and family 
therapists and revise the current definition of mental health 
counselors. In addition, we are adding MFTs and MHCs to the list of 
practitioners who can lead interdisciplinary team meetings when deemed 
necessary.
     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 are finalizing our proposal 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 sought comment on potential separate payment 
under the IPPS for establishing and maintaining access to a buffer 
stock of essential medicines.
     Rural Emergency Hospital (REH) Conditions of Participation 
(CoPs): On November 23, 2022, we published a final rule for the REH 
health and safety standards, 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 Hospital Outpatient Department Prior Authorization 
Process; Overall Hospital Quality Star Rating; COVID-19'' final rule 
with comment period (87 FR 71748). We are finalizing as proposed 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 final rule with comment period, we set 
forth a detailed analysis of the regulatory and federalism impacts that 
the changes will have on affected entities and beneficiaries. Key 
estimated impacts are described below.
a. Impacts of All OPPS Changes
    Table 168 in section XXVI.C of this final rule with comment period 
displays the distributional impact of all the OPPS changes on various 
groups of hospitals and CMHCs for CY 2024 compared to all estimated 
OPPS payments in CY 2023. We estimate that the final policies in this 
final rule would result in a 3.2 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) will increase by 
approximately $2.2 billion compared to CY 2023 payments, excluding our 
estimated changes in enrollment, utilization, and case-mix.
    We estimated the isolated impact of our 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 9.2 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 final rule wage indexes will result in a 0.0 
percent increase for urban hospitals under the OPPS and a 1.2 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 final rule with comment 
period.
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 
final 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 final 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 are establishing an OPD fee schedule 
increase factor of 3.1 percent and applying that 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 will experience an increase in payments of 
approximately 3.2 percent and that rural hospitals will experience an 
increase in payments of 4.2 percent. Classifying hospitals by teaching 
status, we estimate non-teaching hospitals will experience an increase 
in payments of 3.9 percent, minor teaching hospitals will experience an 
increase in payments of 3.5 percent, and major teaching hospitals will 
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 will experience an increase of 3.2 percent in 
payments, while hospitals with government ownership will experience an 
increase of 2.8 percent in payments. We estimate that hospitals with 
proprietary ownership will experience an increase of 4.6 percent in 
payments.

[[Page 81547]]

e. Impacts of the Final ASC Payment Update
    For impact purposes, the surgical procedures on the ASC covered 
surgical procedure list are aggregated into surgical specialty groups 
using CPT and HCPCS code range definitions. The percentage change in 
estimated total payments by specialty groups under the CY 2024 payment 
rates, compared to estimated CY 2023 payment rates, generally ranges 
between a decrease of 11 percent and an increase of 8 percent, 
depending on the service, with some exceptions. We estimate the impact 
of applying the final inpatient hospital market basket update to ASC 
payment rates will increase payments by $207 million under the ASC 
payment system in CY 2024. We note that an increase based on the 
Consumer Price Index for all urban consumers (CPI-U) update would be 
2.5 percent and would increase payments by $174 million under the ASC 
payment system in CY 2024. This increase would have been based on a 
projected CPI-U update of 2.9 percent minus a multifactor productivity 
adjustment required by the Affordable Care Act of 0.4 percentage point.
f. Impacts of Hospital Price Transparency
    The policies we are finalizing 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 final rule with comment period, 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. 115-141), 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 final rule with comment period. 
Section 1833(t)(1)(B) of the Act provides for payment under the OPPS 
for hospital outpatient services designated by the Secretary (which 
includes partial hospitalization services furnished by CMHCs), and 
certain inpatient hospital services that are paid under Medicare Part 
B.
    The OPPS rate is an unadjusted national payment amount that 
includes the Medicare payment and the beneficiary copayment. This rate 
is divided into a labor-related amount and a nonlabor-related amount. 
The labor-related amount is adjusted for area wage differences using 
the hospital inpatient wage index value for the locality in which the 
hospital or CMHC is located.
    All services and items within an APC group are comparable 
clinically and with respect to resource use, as required by section 
1833(t)(2)(B) of the Act. In accordance with section 1833(t)(2)(B) of 
the Act, subject to certain exceptions, items and services within an 
APC group cannot be considered comparable with respect to the use of 
resources if the highest median cost (or mean cost, if elected by the 
Secretary) for an item or service in the APC group is more than 2 times 
greater than the lowest median cost (or mean cost, if elected by the 
Secretary) for an item or service within the same APC group (referred 
to as the ``2 times rule''). In implementing this provision, we 
generally use the cost of the item or service assigned to an APC group.

[[Page 81548]]

    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/payment/prospective-payment-systems/hospital-outpatient/regulations-notices.

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

1. Authority of the Panel
    Section 1833(t)(9)(A) of the Act, as amended by section 201(h) of 
Public Law 106-113, and redesignated by section 202(a)(2) of Public Law 
106-113, requires that we consult with an expert outside advisory panel 
composed of an appropriate selection of representatives of providers to 
annually review (and advise the Secretary concerning) the clinical 
integrity of the payment groups and their weights under the OPPS. In CY 
2000, based on section 1833(t)(9)(A) of the Act, the Secretary 
established the Advisory Panel on Ambulatory Payment Classification 
Groups (APC Panel) to fulfill this requirement. In CY 2011, based on 
section 222 of the Public Health Service Act (the PHS Act), which gives 
discretionary authority to the Secretary to convene advisory councils 
and committees, the Secretary expanded the panel's scope to include the 
supervision of hospital outpatient therapeutic services in addition to 
the APC groups and weights. To reflect this new role of the panel, the 
Secretary changed the panel's name to the Advisory Panel on Hospital 
Outpatient Payment (the HOP Panel). 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

[[Page 81549]]

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 21, 2023. 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 21, 2023, 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 2024 OPPS/ASC Proposed Rule

    We received approximately 3,777 timely pieces of correspondence on 
the CY 2024 OPPS/ASC proposed rule that appeared in the Federal 
Register on July 31, 2023 (88 FR 49552 through 49921), from 
individuals, elected officials, providers and suppliers, practitioners, 
manufacturers and advocacy groups. We provide summaries of the public 
comments, and our responses are set forth in the various sections of 
this final rule with comment period under the appropriate headings. We 
note that we received some public comments that were outside the scope 
of the CY 2024 OPPS/ASC proposed rule. Out-of-scope-public comments are 
not addressed in this CY 2024 OPPS/ASC final rule with comment period.

G. 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 23, 2022 (87 FR 71748).

II. 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 proposed 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 proposed to 
recalibrate the relative payment weights for each APC based on claims 
and cost report data for hospital outpatient department (HOPD) services 
to construct a database for calculating APC group weights.
    For the purpose of recalibrating the proposed APC relative payment 
weights for CY 2024, we began with approximately 180 million final 
action claims (claims for which all disputes and adjustments have been 
resolved and payment has been made) for HOPD services furnished on or 
after January 1, 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 the CY 
2024 OPPS/ASC proposed rule on the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient.
    Addendum N to the CY 2024 OPPS/ASC proposed rule (which is 
available via the internet on the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices) included 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 retained 
these 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 CY 2024 OPPS/ASC 
proposed rule. HCPCS codes that we proposed to add for CY 2024 are 
identified by asterisks (*) in the fourth column of Addendum N.
    We did not receive any public comments on our general proposal to 
recalibrate the relative payment weights for each APC based on claims 
and cost report data for HOPD services or on our

[[Page 81550]]

proposed bypass code process. We are finalizing as proposed the 
``pseudo'' single claims process and the final CY 2024 list of bypass 
codes, as displayed in Addendum N to this final rule with comment 
period (which is available via the internet on the CMS website). For 
this final rule with comment period, for the purpose of recalibrating 
the final APC relative payment weights for CY 2024, we used 
approximately 103 million final actions claims (claims for which all 
disputes and adjustments have been resolved and payment has been made) 
for HOPD services furnished on or after January 1, 2022, and before 
January 1, 2023. For exact numbers of claims used and additional 
details on the claims accounting process, we refer readers to the 
claims accounting narrative under supporting documentation for this 
final rule with comment period on the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient.
b. Calculation and Use of Cost-to-Charge Ratios (CCRs)
    For CY 2024, we proposed to continue to use the hospital-specific 
overall ancillary and departmental cost-to-charge ratios (CCRs) to 
convert charges to estimated costs through application of a revenue 
code-to-cost center crosswalk. To calculate the APC costs on which the 
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/payment/prospective-payment-systems/hospital-outpatient.
    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. In the 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, in 
the 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 the CY 2024 OPPS/ASC 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 stated that 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 proposed 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 solicited 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 proposed to calculate 
CCRs for the standard cost centers--cost centers with a predefined 
label--and nonstandard cost centers--cost centers defined by a 
hospital--accepted by the electronic cost report database. In general, 
the most detailed level at which we calculate CCRs is the hospital-
specific departmental level.
    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 proposed not 
to include the nonstandard cost centers reported in this way in the 
OPPS ratesetting database construction.
    Comment: Two commenters supported our proposed revenue code-to-cost 
center crosswalk changes associated with CAR-T.
    Response: We appreciate the commenters' support for our proposal.
    Comment: A few commenters listed a number of concerns regarding the 
revenue code-to-cost center crosswalk mappings associated with revenue 
codes 0815 and 0819. They noted that the 2552-96 revenue code-to-cost 
center crosswalk does not show the cost center used for ratesetting. 
They also noted that the current 2552-10 revenue code-to-cost center 
crosswalk includes a primary cost center mapping to 112.50 and no 
secondary or tertiary cost centers listed.
    A commenter requested more detail around the cost reporting and 
billing patterns related to revenue codes 0815 and cost centers 112.50 
and 7700. A commenter believed that the mapping

[[Page 81551]]

for revenue code 0819 to cost center 8600 was incongruent with CMS 
instructions for cost reporting periods after 2017 to no longer include 
donor costs in cost center 8600. They believed that this mapping should 
not apply.
    Commenters stated that cost center 7700 represented a logical 
alternative mapping for revenue code 0815 but noted that it did not 
represent all donor search and cell acquisition costs because those 
costs were only recently calculated through Worksheet D-6 of the 
Medicare cost report and that data would not be available for 
ratesetting for several years. They also suggested that CMS review the 
use of the hospital overall ancillary CCR until more accurate 
information could be obtained in both cost center 7700 and Worksheet D-
6. A commenter also requested that CMS ensure that the Worksheet D-6 is 
available for all cost reporting periods beginning on or after October 
1, 2020.
    Response: As discussed in this section and briefly in the claims 
accounting narrative available online, the revenue code-to-cost center 
crosswalk is a hierarchy that attempts to apply departmental cost 
center CCRs to estimate costs from charges. Where no specific CCR is 
available, the provider's overall ancillary CCR will be applied. There 
may be significant differences in the cost reports used in our 
ratesetting process, based on providers' charging structures as well as 
cost reporting periods. As a result, the revenue code-to-cost center 
crosswalk is designed to accommodate that flexibility by selecting what 
we believe to be the most accurate CCRs available.
    The Medicare cost report form 2552-10 was implemented for cost 
reporting periods on or after May 1, 2010. Providers have familiarity 
with cost reporting using this form. While there may be a range in the 
cost reporting periods available, all cost report data used in 
ratesetting for the CY 2024 OPPS final rule with comment period are 
based on the Medicare cost report form 2552-10. The 2552-96 crosswalk 
is largely provided for historical reference purposes and not because 
it is actively used in our ratesetting process. However, we can 
consider removing those worksheets from the form if they no longer 
serve a purpose for hospitals.
    With regard to the primary mapping of revenue code 0815 to cost 
center 112.50 (Stem Cell Acquisition) indicated in the display version 
of the revenue code-to-cost center crosswalk, the cost center was 
inadvertently listed as a primary mapping. The primary and sole mapping 
for revenue code 0815 in our current ratesetting process is to cost 
center 7700 (Allogeneic Stem Cell Acquisition). In cases where that 
cost center CCR is not available in a provider's cost report but 
services are billed using revenue code 0815, the overall ancillary CCR 
would instead be applied to reduce charges to estimated cost. We note 
that there are no cost reports we are including in the CY 2024 OPPS 
ratesetting process that report cost and charges under 112.50, and 
there are no revenue code-to-cost center crosswalk mappings to that 
cost center.
    As discussed earlier, the cost reports used in OPPS ratesetting can 
have varying cost reporting periods and varying cost reporting 
structures. Therefore, the cost center CCR mappings included in the 
revenue code-to-cost center crosswalk are designed to accommodate this 
variability. For revenue code 0815 (Allogeneic Stem Cell Acquisition 
Services), most of the providers billing using this revenue code are 
also cost reporting with cost center 7700. Within our ratesetting 
process, the CCRs for cost center 7700 are significantly higher than 
those for the overall ancillary CCR; and we continue to believe that 
the preference should be to use the cost center 7700 CCR unless it is 
not otherwise available. We note that billing using revenue code 0819 
(Organ Acquisition: Other donor) is extremely limited, with only a 
single line observed within our data. We believe that having the 
flexibility to use its cost center 8600 mapping where this revenue code 
is billed is more reflective than the overall ancillary CCR. However, 
we will monitor the data to determine if this cost center CCR mapping 
continues to remain appropriate in the future.
    While we do not have any specific changes at this time associated 
with the data from Worksheet D-6 of the Medicare cost report form, we 
will review the data as they become available. Based on that review, we 
will consider inclusion of that data and integration into the cost 
estimation process, if appropriate. We appreciate commenter input as we 
consider possible changes in the OPPS ratesetting process we use to 
estimate service costs. We also note that the cost reporting software 
has already been updated to allow for submission of data regarding 
these acquisition costs for cost reporting periods on or after October 
1, 2020.
    After consideration of the public comments we received, we are 
finalizing the proposed crosswalk, including the proposed changes 
associated with CAR-T. In addition, we are making the change to our 
display copy of the revenue code-to-cost center crosswalk to assign 
cost center 77 as the primary cost center CCR mapping for revenue code 
0815.
2. Final Data Development and Calculation of Costs Used for Ratesetting
    In this section of this final rule with comment period, we discuss 
the use of claims to calculate the OPPS payment rates for CY 2024. The 
Hospital OPPS page on the CMS website on which this final rule with 
comment period is posted (https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient) provides an accounting 
of claims used in the development of the final 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/payment/prospective-payment-systems/hospital-outpatient, 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 International Classification of Diseases, Tenth 
Revision, Clinical Modification (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 final payment rates for this final rule with 
comment period.
    Previously, the OPPS established the scaled relative weights on 
which payments are based using APC median costs, a process described in 
the CY 2012 OPPS/ASC final rule with comment period (76 FR 74188). 
However, as discussed in more detail in section II.A.2.f of the CY 2013 
OPPS/ASC final rule with comment period (77 FR 68259 through 68271), we 
finalized the use of geometric mean costs to calculate the relative 
weights on which the CY 2013 OPPS payment rates were based. While this 
policy changed the cost metric on which the relative payments are 
based, the data process in general remained the same under the 
methodologies that we used to obtain appropriate claims data and 
accurate cost information in determining estimated service cost.
    We used the methodology described in sections II.A.2.a through 
II.A.2.c of this final rule with comment period to calculate the costs 
we used to establish the final relative payment weights used in 
calculating the OPPS payment rates for CY 2024 shown in Addenda A and B 
to this final rule with comment period (which are available via the 
internet on

[[Page 81552]]

the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices). We refer 
readers to section II.A.4 of this final rule with comment period for a 
discussion of the conversion of APC costs to scaled payment weights.
    We note that under the OPPS, CY 2019 was the first year in which 
the claims data used for setting payment rates (CY 2017 data) contained 
lines with the modifier ``PN,'' which indicates nonexcepted items and 
services furnished and billed by off-campus provider-based departments 
(PBDs) of hospitals. Because nonexcepted items and services are not 
paid under the OPPS, in the CY 2019 OPPS/ASC final rule with comment 
period (83 FR 58832), we finalized a policy to remove those claim lines 
reported with modifier ``PN'' from the claims data used in ratesetting 
for the CY 2019 OPPS and subsequent years. For the CY 2024 OPPS, we 
proposed to continue to remove claim lines with modifier ``PN'' from 
the ratesetting process.
    For details of the claims accounting process used in final rule 
with comment period, we refer readers to the claims accounting 
narrative under supporting documentation for this final rule with 
comment period on the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient.
    We did not receive any public comments on our proposal and are 
finalizing our proposal to continue to remove claim lines reported with 
modifier ``PN'' from the ratesetting process.
a. Calculation of Single Procedure APC Criteria-Based Costs
(1) Blood and Blood Products
    Since the implementation of the OPPS in August 2000, we have made 
separate payments for blood and blood products through APCs rather than 
packaging payment for them into payments for the procedures with which 
they are administered. Hospital payments for the costs of blood and 
blood products, as well as for the costs of collecting, processing, and 
storing blood and blood products, are made through the OPPS payments 
for specific blood product APCs.
    In the CY 2024 OPPS/ASC proposed rule, we proposed to continue to 
establish payment rates for blood and blood products using our blood-
specific CCR methodology (88 FR 49562), 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 proposed 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.
    We continue to believe that the 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 final rule with comment 
period (which is available via the internet on the CMS website at 
https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices) for the final 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 and 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
     the CY 2015 OPPS/ASC final rule with comment period (79 FR 
66795 and 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.
    Comment: Two commenters discussed our payment policies for blood 
and blood products. One commenter expressed concerns about lower 
payment rates for some blood products in CY 2024 as compared to CY 2023 
and encouraged CMS to work with interested parties in the blood 
products and blood services community to address this issue. The other 
commenter expressed their support for separate payment for blood and 
blood products in the OPPS for most services.
    Response: We appreciate the input from the commenters, and we will 
keep these issues in mind in future rulemaking.
    After consideration of the public comments we received, we are 
adopting as final our proposals for blood and blood products using our 
blood-specific CCR methodology without modification. Refer to Addendum 
B to this final rule with comment period (which is available via the 
internet on the CMS website) for the final CY 2024 payment rates for 
blood and blood products.
(2) Brachytherapy Sources
    Section 1833(t)(2)(H) of the Act mandates the creation of 
additional groups of covered OPD services that classify devices of 
brachytherapy--cancer treatment through solid source radioactive 
implants--consisting of a seed or seeds (or radioactive source) 
(``brachytherapy sources'') separately from other services or groups of 
services. The statute provides certain criteria for the additional 
groups. For the history of OPPS payment for brachytherapy sources, we 
refer readers to prior OPPS final rules, such as the CY 2012 OPPS/ASC 
final rule with comment period (77 FR 68240 and 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

[[Page 81553]]

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 proposed 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 proposed 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 the CY 2024 OPPS/ASC proposed rule (88 FR 49563), 
we proposed to base the payment rates for brachytherapy sources on the 
geometric mean unit costs for each source, consistent with the 
methodology that we proposed for other items and services paid under 
the OPPS, as discussed in section II.A.2 of the CY 2024 OPPS/ASC 
proposed rule (88 FR 49563). We also proposed 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 proposed to pay for the stranded and 
nonstranded not otherwise specified (NOS) codes, HCPCS codes C2698 
(Brachytherapy source, stranded, not otherwise specified, per source) 
and C2699 (Brachytherapy source, non-stranded, not otherwise specified, 
per source), at a rate equal to the lowest stranded or nonstranded 
prospective payment rate for such sources, respectively, on a per-
source basis (as opposed to, for example, per mCi), which is based on 
the policy we established in the CY 2008 OPPS/ASC final rule with 
comment period (72 FR 66785). For CY 2024 and subsequent years, we also 
proposed to continue the policy we first implemented in the CY 2010 
OPPS/ASC final rule with comment period (74 FR 60537) regarding payment 
for new brachytherapy sources for which we have no claims data, based 
on the same reasons we discussed in the CY 2008 OPPS/ASC final rule 
with comment period (72 FR 66786; which was delayed until January 1, 
2010, by section 142 of Pub. L. 110-275). Specifically, this policy is 
intended to enable us to assign new HCPCS codes for new brachytherapy 
sources to their own APCs, with prospective payment rates set based on 
our consideration of external data and other relevant information 
regarding the expected costs of the sources to hospitals. The proposed 
CY 2024 payment rates for brachytherapy sources are included on 
Addendum B to the CY 2024 OPPS/ASC proposed rule (which is available 
via the internet on the CMS website) and identified with status 
indicator ``U.''
    For CY 2018, we assigned status indicator ``U'' (Brachytherapy 
Sources, Paid under OPPS; separate APC payment) to HCPCS code C2645 
(Brachytherapy planar source, palladium-103, per square millimeter) in 
the absence of claims data and established a payment rate using 
external data (invoice price) at $4.69 per mm\2\ for 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 (84 FR 61142) 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 and 85880 and 86 FR 63469 and 87 FR 
71760 and 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.
    We reviewed CY 2022 claims data available for the CY 2024 OPPS/ASC 
proposed rule, and 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 was $168.67. We stated 
we were 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 proposed 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 we proposed to assign to 
APC 2648 (Brachytx planar, p-103), for CY 2024.
    For this final rule with comment period, we once again reviewed CY 
2022 claims data available; and we observed the same three claims that 
reported HCPCS code C2645.
    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 proposed to designate five brachytherapy APCs as 
Low Volume APCs as these APCs meet

[[Page 81554]]

our criteria to be designated as a Low Volume APC. For more information 
on the brachytherapy APCs we proposed to designate as Low Volume APCs, 
see section III.D of the CY 2024 OPPS/ASC proposed rule (88 FR 49628) 
and section III.D of this final rule with comment period.
    We invited interested parties to submit recommendations for new 
codes to describe new brachytherapy sources. We will continue to add 
new brachytherapy source codes and descriptors to our systems for 
payment on a quarterly basis.
    We did not receive any public comments on either proposal 
described. We are finalizing, without modification, 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.
    Similarly, for CY 2024 and subsequent years we are finalizing, 
without modification, our proposal to continue to set the payment rates 
for other brachytherapy sources that are not otherwise assigned to 
designated Low Volume APCs for CY 2024 using our established 
prospective payment methodology. The final CY 2024 payment rates for 
brachytherapy sources are included in Addendum B to this final rule 
with comment period (which is available via the internet on the CMS 
website) and are identified with status indicator ``U.'' We continue to 
invite interested parties to submit recommendations for new codes to 
describe new brachytherapy sources. Such recommendations should be 
directed via email to outpatientpps@ cms.hhs.gov 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 and 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 72 (80 FR 70332; 81 FR 79584 and 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 and 66801). A list of services excluded from 
the C-APC policy is included in Addendum J to this final rule with 
comment period (which is available via the internet on the CMS website 
at https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-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.

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

[[Page 81555]]

     Does not contain a procedure described by a HCPCS code to 
which we have assigned status indicator ``T;''
     Contains 8 or more units of services described by HCPCS 
code G0378 (Hospital observation services, per hour);
     Contains services provided on the same date of service or 
one day before the date of service for HCPCS code G0378 that are 
described by one of the following codes: HCPCS code G0379 (Direct 
admission of patient for hospital observation care) on the same date of 
service as HCPCS code G0378; CPT code 99281 (Emergency department visit 
for the evaluation and management of a patient (Level 1)); CPT code 
99282 (Emergency department visit for the evaluation and management of 
a patient (Level 2)); CPT code 99283 (Emergency department visit for 
the evaluation and management of a patient (Level 3)); CPT code 99284 
(Emergency department visit for the evaluation and management of a 
patient (Level 4)); CPT code 99285 (Emergency department visit for the 
evaluation and management of a patient (Level 5)) or HCPCS code G0380 
(Type B emergency department visit (Level 1)); HCPCS code G0381 (Type B 
emergency department visit (Level 2)); HCPCS code G0382 (Type B 
emergency department visit (Level 3)); HCPCS code G0383 (Type B 
emergency department visit (Level 4)); HCPCS code G0384 (Type B 
emergency department visit (Level 5)); CPT code 99291 (Critical care, 
evaluation and management of the critically ill or critically injured 
patient; first 30-74 minutes); or HCPCS code G0463 (Hospital outpatient 
clinic visit for assessment and management of a patient); and
     Does not contain services described by a HCPCS code to 
which we have assigned status indicator ``J1.''
    The assignment of status indicator ``J2'' to a specific set of 
services performed in combination with each other allows for all other 
OPPS payable services and items reported on the claim (excluding 
services that are not covered OPD services or that cannot by statute be 
paid for under the OPPS) to be deemed adjunctive services representing 
components of a comprehensive service and resulting in a single 
prospective payment for the comprehensive service based on the costs of 
all reported services on the claim (80 FR 70333 through 70336).
    Services included under the C-APC payment packaging policy, that 
is, services that are typically adjunctive to the primary service and 
provided during the delivery of the comprehensive service, include 
diagnostic procedures, laboratory tests, and other diagnostic tests and 
treatments that assist in the delivery of the primary procedure; visits 
and evaluations performed in association with the procedure; uncoded 
services and supplies used during the service; durable medical 
equipment as well as prosthetic and orthotic items and supplies when 
provided as part of the outpatient service; and any other components 
reported by HCPCS codes that represent services that are provided 
during the complete comprehensive service (78 FR 74865 and 79 FR 
66800).
    In addition, payment for hospital outpatient department services 
that are similar to therapy services, such as speech language 
pathology, and delivered either by therapists or nontherapists is 
included as part of the payment for the packaged complete comprehensive 
service. These services that are provided during the perioperative 
period are adjunctive services and are deemed not to be therapy 
services as described in section 1834(k) of the Act, regardless of 
whether the services are delivered by therapists or other nontherapist 
health care workers. We have previously noted that therapy services are 
those provided by therapists under a plan of care in accordance with 
section 1835(a)(2)(C) and section 1835(a)(2)(D) of the Act and are paid 
for under section 1834(k) of the Act, subject to annual therapy caps as 
applicable (78 FR 74867 and 79 FR 66800). However, certain other 
services similar to therapy services are considered and paid for as 
hospital outpatient department services. Payment for these nontherapy 
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, 74869, and 74909 and 79 FR 66800). We refer 
readers to Section 50.2M, Chapter 15, of the Medicare Benefit Policy 
Manual for a description of our policy on SADs treated as hospital 
outpatient supplies, including lists of SADs that function as supplies 
and those that do not function as supplies.\3\
---------------------------------------------------------------------------

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

    We define each hospital outpatient claim reporting a single unit of 
a single primary service assigned to status indicator ``J1'' as a 
single ``J1'' unit procedure claim (78 FR 74871 and 79 FR 66801). Line-
item charges for services included on the C-APC claim are converted to 
line-item costs, which are then summed to develop the estimated APC 
costs. These claims are then assigned one unit of the service with 
status indicator ``J1'' and later used to develop the geometric mean 
costs for the C-APC relative payment weights. (We note that we use the 
term ``comprehensive'' to describe the geometric mean cost of a claim 
reporting ``J1'' service(s) or the geometric mean cost of a C-APC, 
inclusive of all 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

[[Page 81556]]

process results in initial assignments of claims for the primary 
services assigned to status indicator ``J1'' to the most appropriate C-
APCs based on both single and multiple procedure claims reporting these 
services and clinical and resource homogeneity.
    Complexity Adjustments. We use complexity adjustments to provide 
increased payment for certain comprehensive services. We apply a 
complexity adjustment by promoting qualifying paired ``J1'' service 
code combinations or paired code combinations of ``J1'' services and 
certain add-on codes (as described further below) from the originating 
C-APC (the C-APC to which the designated primary service is first 
assigned) to the next higher paying C-APC in the same clinical family 
of C-APCs. We apply this type of complexity adjustment when the paired 
code combination represents a complex, costly form or version of the 
primary service according to the following criteria:
     Frequency of 25 or more claims reporting the code 
combination (frequency threshold); and
     Violation of the 2 times rule, as stated in section 
1833(t)(2) of the Act and section III.B.2 of this final rule with 
comment period, in the originating C-APC (cost threshold).
    These criteria identify paired code combinations that occur 
commonly and exhibit materially greater resource requirements than the 
primary service. The CY 2017 OPPS/ASC final rule with comment period 
(81 FR 79582) included a revision to the complexity adjustment 
eligibility criteria. Specifically, we finalized a policy to 
discontinue the requirement that a code combination (that qualifies for 
a complexity adjustment by satisfying the frequency and cost criteria 
thresholds described above) also not create a 2 times rule violation in 
the higher level or receiving APC.
    After designating a single primary service for a claim, we evaluate 
that service in combination with each of the other procedure codes 
reported on the claim assigned to status indicator ``J1'' (or certain 
add-on codes) to determine if there are paired code combinations that 
meet the complexity adjustment criteria. For a new HCPCS code, we 
determine initial C-APC assignment and qualification for a complexity 
adjustment using the best available information, crosswalking the new 
HCPCS code to a predecessor code(s) when appropriate.
    Once we have determined that a particular code combination of 
``J1'' services (or combinations of ``J1'' services reported in 
conjunction with certain add-on codes) represents a complex version of 
the primary service because it is sufficiently costly, frequent, and a 
subset of the primary comprehensive service overall according to the 
criteria described above, we promote the claim including the complex 
version of the primary service as described by the code combination to 
the next higher cost C-APC within the clinical family, unless the 
primary service is already assigned to the highest cost APC within the 
C-APC clinical family or assigned to the only C-APC in a clinical 
family. We do not create new APCs with a comprehensive geometric mean 
cost that is higher than the highest geometric mean cost (or only) C-
APC in a clinical family just to accommodate potential complexity 
adjustments. Therefore, the highest payment for any claim including a 
code combination for services assigned to a C-APC would be the highest 
paying C-APC in the clinical family (79 FR 66802).
    We package payment for all add-on codes into the payment for the C-
APC. However, certain primary service add-on combinations may qualify 
for a complexity adjustment. As noted in the CY 2016 OPPS/ASC final 
rule with comment period (80 FR 70331), all add-on codes that can be 
appropriately reported in combination with a base code that describes a 
primary ``J1'' service are evaluated for a complexity adjustment.
    To determine which combinations of primary service codes reported 
in conjunction with an add-on code may 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 the 
other final complexity adjustments, in Addendum J to this final rule 
with comment period (which is available via the internet on the CMS 
website at https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices).
    Addendum J to this final rule with comment period includes the cost 
statistics for each code combination that would qualify for a 
complexity adjustment (including primary code and add-on code 
combinations). Addendum J to this final rule with comment period also 
contains summary cost statistics for each of the paired code 
combinations that describe a complex code combination that would 
qualify for a complexity adjustment and 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 final geometric 
mean cost listed in Addendum J for the code combination described by 
complexity adjustment assignment 3320R, which is assigned to C-APC 5224 
(Level 4 Pacemaker and Similar Procedures), includes all paired code 
combinations that will be reassigned to C-APC 5224 when CPT code 33208 
is the primary code. Providing the information contained in Addendum J 
to this final rule with comment period allows interested parties the 
opportunity to better assess the impact associated with the assignment 
of claims with each of the paired code combinations eligible for a 
complexity adjustment.
    Comment: We received support from commenters for a variety of 
existing and proposed complexity adjustments.
    Response: We thank the commenters for their support.
    Comment: Multiple commenters requested that CMS apply a complexity 
adjustment to additional code combinations. The specific C-APC 
complexity adjustment code combinations requested by the commenters for 
CY 2024 are listed in Table 1 below.
BILLING CODE 4150-28-P

[[Page 81557]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.000


[[Page 81558]]


[GRAPHIC] [TIFF OMITTED] TR22NO23.001


[[Page 81559]]


[GRAPHIC] [TIFF OMITTED] TR22NO23.002


[[Page 81560]]


[GRAPHIC] [TIFF OMITTED] TR22NO23.003

BILLING CODE 4150-28-C
    Response: We reviewed each of the requested code combinations 
suggested by commenters, listed in Table 1, against our complexity 
adjustment criteria. The code combination for primary HCPCS code 43270 
with secondary HCPCS code 43252 meets our cost and frequency criteria, 
qualifying for a complexity adjustment for CY 2024. All the remaining 
code combinations listed failed to meet our cost or frequency criteria 
and do not qualify for complexity adjustments for CY 2024. 
Additionally, the code combinations for primary HCPCS codes, C9600, 
92928, 92943, and 92920 with secondary HCPCS code C1761 would not 
qualify for complexity adjustments for CY 2024 as the Coronary IVL 
device, described by C1761, is still on transitional pass-through 
status through June 2024. Addendum J to this final rule with comment 
period includes the cost statistics for each code combination that was 
evaluated for a complexity adjustment.
    Comment: Commenters requested that CMS modify, waive, or eliminate 
the established C-APC complexity adjustment eligibility criteria of 25 
or more claims reporting the code combination (frequency) and a 
violation of the 2 times rule in the originating C-APC (cost) to allow 
additional code combinations to qualify for complexity adjustments. 
These commenters were concerned that C-APC packaging and a lack of 
complexity adjustment would limit access to procedures. Specifically, 
some commenters expressed concern that CMS's methodology for 
determining complexity adjustments is unnecessarily restrictive, 
particularly the 25-claim threshold, and suggested that CMS eliminate 
the 25-claim threshold and implement a complexity adjustment whenever a 
code pair exceeds the cost threshold. Other commenter suggestions 
included considering an amount halfway between the standard APC and the 
complexity-adjusted APC as a cost threshold, as well as a implementing 
a sliding scale approach for procedures with high frequency that do not 
meet the cost criteria.
    Commenters were concerned that when multiple ``J1'' primary 
services are reported on a claim, along with an add-on service, the 
add-on service is not evaluated for a complexity adjustment. Commenters 
cited examples where significant claims volume from add-on services may 
not be incorporated into the complexity adjustment evaluation. 
Commenters also reiterated requests to broaden the complexity 
adjustment policy and allow clusters of procedures, consisting of a 
``J1'' code pair and multiple other associated add-on codes used in 
combination with that ``J1'' code pair, to qualify for complexity 
adjustments. Commenters stated that there are certain complex 
procedures that include numerous add-on codes and this approach would 
allow more accurate reflection of medical practice when multiple 
procedures are performed together. They noted that lack of additional 
payment for these code combinations can present a financial challenge 
for the providers who perform these more resource intensive services.
    In addition, commenters requested that CMS expand its review of 
procedure combinations to include ``J1'' and expiring transitional 
pass-through codes to allow facilities to continue to provide these 
services after pass-through expiration.
    Response: We appreciate these comments. At this time, we do not 
believe changes to the C-APC complexity adjustment criteria are 
necessary or that we should make exceptions to the criteria to allow 
claims with the code combinations suggested by the commenters to 
receive complexity adjustments. As we stated in the CY 2017 OPPS/ASC 
final rule (81 FR 79582), we believe that the complexity adjustment 
criteria, which require a frequency of 25 or more claims reporting a 
code combination and a violation of the 2 times rule in the originating 
C-APC, are appropriate to determine if a combination of procedures 
represents a complex, costly subset of the primary service that should 
qualify for the adjustment and be paid at the next higher paying C-APC 
in the clinical family. As we previously stated in the CY 2020 OPPS/ASC 
final rule with comment period (84 FR 61161), a minimum of 25 claims is 
already a very low threshold for a national payment system. Lowering 
the minimum of 25 claims further could lead to unnecessary complexity 
adjustments for service combinations that are rarely performed.
    As we explained in the CY 2019 OPPS/ASC final rule with comment 
period (83 FR 58843), we do not believe that it is necessary to adjust 
the complexity adjustment criteria to allow claims that include more 
than two ``J1'' procedures, add-on codes, or procedures that are not 
assigned to C-APCs to qualify for a complexity adjustment. As 
previously mentioned, we believe the current criteria are adequate to 
determine if a combination of procedures represents a complex, costly 
subset of the primary service. We will continue to monitor the 
application of the complexity adjustment criteria for future 
rulemaking.
    After consideration of the public comments we received, we are 
finalizing the C-APC complexity adjustment policy for CY 2024 as 
proposed. We are also finalizing the proposed complexity adjustments, 
with the addition of one new code combination suggested by commenters, 
that meet our complexity adjustment criteria.
    (2) Exclusion of Procedures Assigned to New Technology APCs from 
the C-APC Policy Services that are assigned to New Technology APCs are 
typically new procedures that do not have sufficient claims history to 
establish an accurate payment for them. Beginning in CY 2002, we retain 
services within New Technology APC groups until we gather sufficient 
claims data to enable us to assign the service to an appropriate 
clinical APC. This policy allows us to move a service from a New 
Technology APC in less than 2 years if sufficient data are available. 
It also allows us to retain a service in a New Technology APC for more 
than 2 years

[[Page 81561]]

if sufficient data upon which to base a decision for reassignment have 
not been collected (82 FR 59277).
    The C-APC payment policy packages payment for adjunctive and 
secondary items, services, and procedures into the most costly primary 
procedure under the OPPS at the claim level. Prior to CY 2019, when a 
procedure assigned to a New Technology APC was included on the claim 
with a primary procedure, identified by OPPS status indicator ``J1,'' 
payment for the new technology service was typically packaged into the 
payment for the primary procedure. Because the new technology service 
was not separately paid in this scenario, the overall number of single 
claims available to determine an appropriate clinical APC for the new 
service was reduced. This was contrary to the objective of the New 
Technology APC payment policy, which is to gather sufficient claims 
data to enable us to assign the service to an appropriate clinical APC.
    To address this issue and ensure that there are sufficient claims 
data for services assigned to New Technology APCs, in the CY 2019 OPPS/
ASC final rule with comment period (83 FR 58847), we finalized 
excluding payment for any procedure that is assigned to a New 
Technology APC (APCs 1491 through 1599 and APCs 1901 through 1908) from 
being packaged when included on a claim with a ``J1'' service assigned 
to a C-APC. In the CY 2020 OPPS/ASC final rule with comment period, we 
finalized that beginning in CY 2020, payment for services assigned to a 
New Technology APC would be excluded from being packaged into the 
payment for comprehensive observation services assigned status 
indicator ``J2'' when they are included on a claim with a ``J2'' 
service (84 FR 61167).
(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 Food and Drug Administration (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 had 
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 was 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 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. See Addendum J for the CY 2024 C-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'' of the CY 2024 OPPS/ASC proposed rule 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 proposed to continue to apply 
the C-APC payment policy methodology. We refer readers to the CY 2017 
OPPS/ASC final rule with comment period (81 FR 79583) for a discussion 
of the C-APC payment policy methodology and revisions.
    Each year, in accordance with section 1833(t)(9)(A) of the Act, we 
review and revise the services within each APC group and the APC 
assignments under the OPPS. As a result of our annual review of the 
services and the APC assignments under the OPPS, we did not propose to 
convert any standard APCs to C-APCs in CY 2024, but we did propose to 
create two new APCs that will both be C-APCs. Thus, we

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proposed that the number of C-APCs for CY 2024 would be 72 C-APCs.
    We proposed to split the Level 2 Intraocular APC (APC 5492) into 
two and assign the higher cost procedures previously within this 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) would 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 the 
CY 2024 OPPS/ASC proposed rule (88 FR 49552) for more information 
regarding the proposal.
    We also proposed 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).
    Comment: Commenters supported the creation of the two new proposed 
C-APCs, C-APCs 5342 (Level 2 Abdominal/Peritoneal/Biliary and Related 
Procedures APC) and 5496 (Level 6 Intraocular APC) for CY 2024, based 
on resource cost and clinical characteristics.
    Response: We appreciate commenters' support.
    Comment: Several commenters expressed concerns with the C-APC 
methodology for surgical insertion codes for brachytherapy treatment, 
noting that these concerns impact beneficiary access to brachytherapy 
in the HOPD setting. These commenters stated that the C-APC methodology 
lacks the appropriate charge capture mechanisms to accurately reflect 
the services associated with the C-APC, that there are significant 
variations in the clinical practice and billing patterns in the 
hospital claims data used for ratesetting, and that the C-APC rates do 
not accurately or fully reflect the services and costs associated with 
the primary procedure. Commenters urged the agency to explore 
alternatives, including that CMS discontinue the C-APC policy for all 
brachytherapy insertion codes, implementing a modified C-APC 
methodology to allow separate payment for specified preparation and 
planning codes, or moving brachytherapy for cervical cancer treatment 
to C-APC 5416 (Level 6 Gynecologic Procedures).
    Response: We appreciate the comments on the C-APC methodology. 
However, we believe that the current C-APC methodology is appropriately 
applied to these surgical procedures and is accurately capturing costs, 
particularly as the brachytherapy sources used for these procedures are 
excluded from C-APC packaging and are separately payable. This 
methodology also enables hospitals to manage their resources with 
maximum flexibility by monitoring and adjusting the volume and 
efficiency of services themselves.
    We reviewed the request by commenters to move brachytherapy 
procedures, CPT code 57155 and CPT code 58346, to a higher paying C-
APC. For CPT code 57155, the claims data in the two times rule 
evaluation show that this code is being paid at the appropriate level 
in C-APC 5415 (Level 5 Gynecologic Procedures). For CPT code 53846, 
given that this code has fewer than 100 claims, it does not meet the 
significance threshold for the two times rule evaluation, and we do not 
believe the few claims available provide an accurate reflection of the 
service's cost sufficient to move this procedure to a higher C-APC. We 
will continue to examine these concerns and will determine if any 
modifications to this policy are warranted in future rulemaking.
    Comment: Several commenters requested that CMS unpackage and pay 
separately for all status indicator ``K'' drugs from C-APCs due to 
certain instances of high-cost drugs and biologics, such as CAR-T, 
being paid through C-APC 8011 and potentially impacting beneficiary 
access to high-cost therapies.
    Response: We thank the commenters for their comments. We will take 
the issue of C-APCs and payments for high-cost drugs into consideration 
for future rulemaking.
    After consideration of the public comments we received, we are 
finalizing as proposed C-APCs 5342 (Level 2 Abdominal/Peritoneal/
Biliary and Related Procedures APC) and 5496 (Level 6 Intraocular APC) 
for CY 2024. Table 2 lists the final C-APCs for CY 2024. All C-APCs are 
displayed in Addendum J to this CY 2024 OPPS/ASC final rule with 
comment period (which is available via the internet on the CMS 
website). Addendum J to this final rule with comment period also 
contains all the data related to the C-APC payment policy methodology, 
including the list of complexity adjustments and other information for 
CY 2024.
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c. Calculation of Composite APC Criteria-Based Costs
    As discussed in the CY 2008 OPPS/ASC final rule with comment period 
(72 FR 66613), we believe it is important that the OPPS enhance 
incentives for hospitals to provide necessary, high-quality care as 
efficiently as possible. For CY 2008, we developed composite APCs to 
provide a single payment for groups of services that are typically 
performed together during a single clinical encounter and that result 
in the provision of a complete service. Combining payment for multiple, 
independent services into a single OPPS payment in this way enables 
hospitals to manage their resources with maximum flexibility by 
monitoring and adjusting the volume and efficiency of services 
themselves. An additional advantage to the composite APC model is that 
we can use data from correctly coded multiple procedure claims to 
calculate payment rates for the specified combinations of services, 
rather than relying upon single procedure claims which may be low in 
volume and/or incorrectly coded. Under the OPPS, we currently have 
composite policies for mental health services and multiple imaging 
services. We refer readers to the CY 2008 OPPS/ASC final rule with 
comment period (72 FR 66611 through 66614 and 66650 through 66652) for 
a full discussion of the development of the composite APC methodology, 
and the CY 2012 OPPS/ASC final rule with comment period (76 FR 74163) 
and the CY 2018 OPPS/ASC final rule with comment period (82 FR 59241, 
59242, and 59246 through 52950) for more recent background.
(1) Mental Health Services Composite APC
    For CY 2024, we proposed to continue our longstanding policy of 
limiting the aggregate payment for specified less resource-intensive 
mental health services furnished on the same date to the payment for a 
day of partial hospitalization services provided by a hospital, which 
we consider to be the most resource-intensive of all outpatient mental 
health services (88 FR 49572). 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, 33581, 59246, and 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 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 proposed that when the aggregate payment for specified mental 
health services provided by one hospital to a single beneficiary on a 
single date of service, based on the payment rates associated with the 
APCs for the individual services, exceeds the per diem payment rate for 
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day by a hospital, those specified mental health services would be paid 
through composite APC 8010 for CY 2024. In addition, we proposed to set 
the payment rate for composite APC 8010 at the same payment rate that 
we proposed for APC 5863, which is 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. We explained that 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 CY 2024 
OPPS/ASC proposed rule, we believed it was 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 1 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 also solicited 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.
    Comment: One commenter supported CMS's alternative proposal to use 
APC 5864 as the basis for setting the daily mental health cap for APC 
8010. They stated that as CMS is introducing APC 5864 to capture four 
or more hospital-based PHP services per day, as opposed to three 
services in APC 5863, the mental health cap should be increased to 
match this new code.
    Response: We thank the commenter for their comment. Although 
setting the daily mental health cap at APC 5863 would be comparable to 
the CY 2023 payment for APC 5863, we recognize that raising the cap 
allows hospitals increased flexibility to determine the level of care 
necessary for their patient. Additionally, setting the mental health 
cap at APC 5864 aligns with 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. Based upon the comment we received as well as the fact that 
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 finalizing APC 5864, which is for four hospital-based 
PHP services per day, as the daily mental health cap.
    Comment: Several commenters recommended that CMS change the status 
indicator for two neuropsychological testing codes (HCPCS codes 96133 
and 96137) from SI = N to SI = Q3 to allow separate payment for 
additional hours of testing on the same date or increase the payment 
rate for the primary testing procedure code. The commenters noted that 
the payment rate for Composite APC 8010, which is capped at the maximum 
per diem partial hospitalization rate, is lower than the individual 
HCPCS code APC payment rates and does not provide sufficient payment 
for these procedures.
    Response: After reviewing this issue, we believe the Composite APC 
methodology is being appropriately applied in this case, as packaging 
multiple testing services performed on a single date of service creates 
incentives for hospitals to provide these services in the most cost-
efficient manner. We will continue to examine these concerns and will 
determine if any modifications to this policy are warranted in future 
rulemaking.
    After consideration of the public comments we received, we are 
finalizing our proposal, without modification, that when the aggregate 
payment for specified mental health services provided by one hospital 
to a single beneficiary on a single date of service, based on the 
payment rates associated with the APCs for the individual services, 
exceeds the maximum per diem payment rate for partial hospitalization 
services provided by a hospital, those specified mental health services 
would be paid through composite APC 8010 for CY 2024. In addition, we 
are finalizing setting the payment rate for composite APC 8010 for CY 
2024 at the same payment rate that we set for APC 5864, which is the 
maximum partial hospitalization per diem payment rate for a hospital.
(2) Multiple Imaging Composite APCs (APCs 8004, 8005, 8006, 8007, and 
8008)
    Effective January 1, 2009, we provide a single payment each time a 
hospital submits a claim for more than one imaging procedure within an 
imaging family on the same date of service, to reflect and promote the 
efficiencies hospitals can achieve when performing multiple imaging 
procedures during a single session (73 FR 41448 through 41450). We 
utilize three imaging families based on imaging modality for purposes 
of this methodology: (1) ultrasound; (2) computed tomography (CT) and 
computed tomographic angiography (CTA); and (3) magnetic resonance 
imaging (MRI) and magnetic resonance angiography (MRA). The HCPCS codes 
subject to the multiple imaging composite policy and their respective 
families are listed in Table 3 below.
    While there are three imaging families, there are five multiple 
imaging composite APCs due to the statutory requirement under section 
1833(t)(2)(G) of the Act that we differentiate payment for OPPS imaging 
services provided with and without contrast. While the ultrasound 
procedures included under the policy do not involve contrast, both CT/
CTA and MRI/MRA scans can be 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.

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    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 proposed to continue to pay for all multiple 
imaging procedures within an imaging family performed on the same date 
of service using the multiple imaging composite APC payment 
methodology. We continue to believe that this policy would reflect and 
promote the efficiencies hospitals can achieve when performing multiple 
imaging procedures during a single session.
    For CY 2024, except where otherwise indicated, we proposed 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) 
were based on proposed geometric mean costs calculated from CY 2022 
claims available for the CY 2024 OPPS/ASC proposed rule that qualify 
for composite payment under the current policy (that is, those claims 
reporting more than one procedure within the same family on a single 
date of service). To calculate the proposed geometric mean costs, we 
used the same methodology that we used to calculate the geometric mean 
costs for these composite APCs since CY 2014, as described in the CY 
2014 OPPS/ASC final rule with comment period (78 FR 74918). The imaging 
HCPCS codes referred to as ``overlap bypass codes'' that we removed 
from the bypass list for purposes of calculating the proposed multiple 
imaging composite APC geometric mean costs, in accordance with our 
established methodology as stated in the CY 2014 OPPS/ASC final rule 
with comment period (78 FR 74918), were identified by asterisks in 
Addendum N to the CY 2024 OPPS/ASC 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 the CY 2024 OPPS/ASC proposed rule (88 FR 
49561).
    For this CY 2024 OPPS/ASC final rule, we were able to identify 
approximately 0.99 million ``single session'' claims out of an 
estimated 2.2 million potential claims for payment through composite 
APCs from our ratesetting claims data, which represents approximately 
45.0 percent of all eligible claims, to calculate the final CY 2024 
geometric mean costs for the multiple imaging composite APCs. Table 2 
of this CY 2024 OPPS/ASC final rule lists the final HCPCS codes that 
would be subject to the multiple imaging composite APC policy and their 
respective families and approximate composite APC final geometric mean 
costs for CY 2024.
    We did not receive any public comments on this policy. We are 
finalizing our proposal to continue the use of multiple imaging 
composite APCs to pay for services providing more than one imaging 
procedure from the same family on the same date without modification. 
Table 3 below lists the HCPCS codes that will be subject to the 
multiple imaging composite APC policy and their respective families and 
approximate composite APC final geometric mean costs for CY 2024.
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3. Changes to Packaged Items and Services
a. Background and Rationale for Packaging in the OPPS
    Like other prospective payment systems, the OPPS relies on the 
concept of averaging to establish a payment rate for services. The 
payment may be more or less than the estimated cost of providing a 
specific service or a bundle of specific services for a particular 
beneficiary. The OPPS packages payments for multiple interrelated items 
and services into a single payment to create incentives for hospitals 
to furnish services most efficiently and to manage their resources with 
maximum flexibility. Our packaging policies support our strategic goal 
of using larger payment bundles in the OPPS to maximize hospitals' 
incentives to provide care in the most efficient manner. For example, 
where there are a variety of devices, drugs, items, and supplies that 
could be used to furnish a service, some of which are more costly than 
others, packaging encourages hospitals to use the most cost-efficient 
item that meets the patient's needs, rather than to routinely use a 
more expensive item, which may occur if separate payment is provided 
for the item.
    Packaging also encourages hospitals to effectively negotiate with 
manufacturers and suppliers to reduce the purchase price of items and 
services or to explore alternative group purchasing arrangements, 
thereby encouraging the most economical health care delivery. 
Similarly, packaging encourages hospitals to establish protocols that 
ensure that necessary services are furnished, while scrutinizing the 
services ordered by practitioners to maximize the efficient use of 
hospital resources. Packaging payments into larger payment bundles 
promotes the predictability and accuracy of payment for services over 
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importance of refining service-specific payment because packaged 
payments include costs associated with higher cost cases requiring many 
ancillary items and services and lower cost cases requiring fewer 
ancillary items and services. Because packaging encourages efficiency 
and is an essential component of a prospective payment system, 
packaging payments for items and services that are typically integral, 
ancillary, supportive, dependent, or adjunctive to a primary service 
has been a fundamental part of the OPPS since its implementation in 
August 2000. As we continue to develop larger payment groups that more 
broadly reflect services provided in an encounter or episode of care, 
we have expanded the OPPS packaging policies. Most, but not necessarily 
all, categories of items and services currently packaged in the OPPS 
are listed in 42 CFR 419.2(b). Our overarching goal is to make payments 
for all services under the OPPS more consistent with those of a 
prospective payment system and less like those of a per-service fee 
schedule, which pays separately for each coded item. As a part of this 
effort, we have continued to examine the payment for items and services 
provided under the OPPS to determine which OPPS services can be 
packaged to further achieve the objective of advancing the OPPS toward 
a more prospective payment system.
b. Policy and Comment Solicitation on Packaged Items and Services
    For CY 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 did not propose any changes to the overall 
packaging policy discussed above. We proposed to continue to 
conditionally package the costs of selected newly identified ancillary 
services into payment for a primary service where we believe that the 
packaged item or service is integral, ancillary, supportive, dependent, 
or adjunctive to the provision of care that was reported by the primary 
service HCPCS code.
    While we did not propose any changes to the overall packaging 
policy, we solicited comments on potential modifications to our 
packaging policy as described in the following sections.
    Comment: Several commenters expressed concerns that packaging 
policies may create access barriers and incentives for stinting on 
care. They urged CMS to do a comprehensive evaluation and study all 
OPPS packaging policies to determine whether they reduce patients' 
access to appropriate therapies and quality of care. They also 
requested CMS provide continued opportunity for interested parties to 
weigh in to help advance patient access to new innovations.
    One commenter suggested that packaging can only create the types of 
efficiency incentives CMS intends when there are certain principles in 
place, recommending CMS only package items/services that truly have 
substitutes, take cost and volume into consideration when determining 
whether to package an item/service, and package the charges for 
packaged items and/or services in a more logical and deliberate manner. 
Another commenter clarified that potential access issues cannot always 
be identified by a decline in volume of packaged services; access 
issues also occur when patients do not receive the most clinically 
appropriate drug, biological, or service because of how packaging 
policies prioritize minimizing costs. Commenters felt that these issues 
are increasingly important as health care moves toward more 
personalized medicine and new innovations.
    Commenters stated that, when CMS defines a packaging threshold, 
manufacturers may select a price to ensure that the costs exceed the 
packaging threshold to market the fact that separate CMS payment is 
available. Commenter felt this conflicted with CMS' goal to provide 
hospitals with incentives to choose the most clinically viable and 
cost-effective option for their patients.
    Response: We appreciate the comments on this issue, and we will 
take these suggestions into consideration for future rulemaking.
    After consideration of the public comments we received, we are 
finalizing our overall OPPS packing policy, as proposed, for CY 2024.
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 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 previously stated that we will include 
our proposals to implement the CAA, 2023, section 4135 amendments in 
the CY 2025 OPPS/ASC proposed rule. We discussed section 4135 of CAA, 
2023, at length in section XIII.F of the CY 2024 OPPS/ASC proposed rule 
(88 FR 49767), and we solicited comment on numerous aspects of this 
future policy. While we expect this policy to operate similarly in the 
ASC and HOPD settings, we welcomed 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.
    We thank commenters for their detailed comments regarding the 
implementation of section 4135 of the CAA, 2023. We received a range of 
comments regarding potential qualifying drugs, biologicals, devices, 
and services, as well as evidence requirements for medical devices, 
payment amounts, and payment limitations. See section XIII.F of this 
final rule with comment period for a brief summary of the comments 
received. We intend to take these comments into consideration as we 
develop our proposals for the CY 2025 OPPS/ASC proposed rule.
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

[[Page 81574]]

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 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 and 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 and 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 and 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 and 71963) for the most recent discussion 
of this subject.
    As stated in the CY 2024 OPPS/ASC proposed rule (88 FR 49577), 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 sought public comments on 
potential modifications to our packaging policy for diagnostic 
radiopharmaceuticals in order to ensure equitable payment and continued 
beneficiary access.
    Below we include the comment solicitation described in the CY 2024 
OPPS/ASC proposed rule (88 FR 49578) followed by a brief summary of the 
public comments we received.
(ii) Comment Solicitation on Potential Issues Caused by Current Payment 
of Diagnostic Radiopharmaceuticals Under the OPPS
    As described in the CY 2024 OPPS/ASC proposed rule (88 FR 49578), 
we solicited 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 sought information on 
specific cost-prohibitive diagnostic radiopharmaceuticals that 
commenters believe are superior to alternative diagnostic modalities. 
We were 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 sought information or 
evidence that these high-cost diagnostic radiopharmaceuticals have 
unique clinical value, and access has been negatively impacted by our 
packaging policy. We also sought 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.

[[Page 81575]]

    We were 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 solicited comment on the following potential 
approaches that would enhance beneficiary access, while also 
maintaining the principles of the outpatient prospective payment 
system. These approaches included: (1) paying separately for diagnostic 
radiopharmaceuticals with per-day costs 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 solicited 
comments, we specifically sought 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 the CY 2024 
OPPS/ASC 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 sought 
additional information from interested parties on this approach. We 
note, for CY 2024, the OPPS drug packaging threshold was proposed to be 
$140. However, based on updated data, we are finalizing a threshold of 
$135 for CY 2024. For more information on the drug packaging threshold, 
see section V.B.1.a of this final rule with comment period.
    Regarding the second listed option, we sought 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 were 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 sought 
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 were 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 
requested comment as to whether CMS should consider creating payment 
policies for diagnostic radiopharmaceuticals used in clinical trials. 
Specifically, we were 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 sought 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 positron emission 
tomography (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 sought 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 
welcomed comment regarding ideas discussed in this section, discussed 
in prior rulemaking, or new ideas for payment for diagnostic 
radiopharmaceuticals in the OPPS.

[[Page 81576]]

    Finally, we were 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 those 
of a prospective payment system rather than a fee schedule. We stated 
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.
    In the CY 2024 OPPS/ASC proposed rule (88 FR 49578), we noted that 
depending on the comments received, we may adopt as final one or more 
alternative payment mechanisms for radiopharmaceuticals for CY 2024.
    Comment: We received a significant number of comments in response 
to the comment solicitation on potential issues caused by our current 
payment policy for diagnostic radiopharmaceuticals under the OPPS and 
on new approaches to payment for these products. Overall, commenters 
described clinical scenarios in which they believed CMS' payment 
policies created the most significant access issues, and accordingly, 
commenters urged CMS to reform payment policy for diagnostic 
radiopharmaceuticals to address these concerns. However, there was not 
a general consensus among commenters as to the most effective way for 
CMS to reform its OPPS diagnostic radiopharmaceutical payment policy.
    Commenters expressed concerns regarding the CMS policy to package 
diagnostic radiopharmaceuticals and the financial burden it has on 
facilities. These commenters believed radiopharmaceuticals are not 
supplies but instead are essential elements in driving the procedures 
themselves. Commenters believe that, for newer, more innovative 
radiopharmaceuticals, the current OPPS packaging policy has led to a 
lack of patient access to the technologies after their pass-through 
status expires, especially if there is no clinical alternative. 
Commenters also suggested that many of these diagnostic 
radiopharmaceuticals offer additional precision and improved clinical 
outcomes compared to predecessor products for a variety of disease 
states. Commenters also discussed that, in their view, some groups were 
more disadvantaged than others, such as rural communities and minority 
groups, from the lack of access. Similarly, some commenters discussed 
that the impact was more profound on certain disease states, such as 
neuroendocrine tumors, Alzheimer's disease, Parkinson's disease, Lewy 
body dementia, epilepsy, brain disorders, thyroid disorders, 
neuroendocrine tumors, heart disease, and a variety of cancers.
    Many commenters suggested potential ways to develop a payment 
policy to address some of these issues. Predominately, most commenters 
requested that CMS provide separate payment for diagnostic 
radiopharmaceuticals. However, we received many different suggestions 
as to the best way to pay separately. Some commenters believed paying 
separately for all diagnostic radiopharmaceuticals regardless of their 
per-day cost was the best methodology to avoid encouraging upward price 
inflation to above a certain threshold. Other commenters thought that 
applying the existing OPPS per-day cost threshold (finalized to be $135 
for CY 2024) to the payment of diagnostic radiopharmaceuticals would be 
an adequate solution. Others supported a $500 threshold, and many cited 
the Facilitating Innovative Nuclear Diagnostics Act (FIND Act) of 2023 
as their rationale for that number. Some of commenters recommended the 
OPPS drug packaging threshold but recognized the $500 threshold number 
may be a more targeted approach relative to the OPPS drug packaging 
threshold as the higher cost diagnostic radiopharmaceuticals were the 
most disadvantaged by the OPPS packaging policy in their view. Still 
others contended the opposite that $500 would be too high a threshold. 
Many deferred to CMS to pick an appropriate packaging threshold for 
diagnostic radiopharmaceuticals. Others requested more information to 
allow them to make a more well-informed comment on this issue. Many 
commenters requested CMS use the ASP methodology in order to pay for 
diagnostic radiopharmaceuticals. Similarly, some suggested we pay for 
diagnostic radiopharmaceuticals similarly to the Physician Fee Schedule 
methodology and others recommended CMS reassess the pass-through 
payment methodology.
    The majority of commenters discussed their views on providing 
separate payment for diagnostic radiopharmaceuticals, but some 
commenters also discussed the other aspects of the policy we solicited 
comment on. Commenters' views were mixed on these aspects. For example, 
some commenters supported CMS restructuring the nuclear medicine APCs 
and more specifically, one commenter supported packaging diagnostic 
radiopharmaceuticals in a new APC. However, other commenters did not 
believe this was sufficiently targeted enough or that it did not 
provide the needed granularity, and some thought new APCs would not 
accurately account for the variable costs of diagnostic 
radiopharmaceuticals and those yet to be approved. Similarly, many 
acknowledged that diagnostic radiopharmaceuticals should be paid 
separately in clinical trials, but that a clinical trial-specific 
policy would not address the broader issue at hand. Several commenters 
did recognize the difficulties that some clinical trials that utilize 
diagnostic radiopharmaceuticals have had in recruiting patients, such 
as the NEW IDEAS trial. Many commenters did not recommend CMS pursue 
issuing new HCPCS codes for disease-specific diagnostic 
radiopharmaceuticals as the process would be too complex, burdensome, 
lack the required specificity, and require continual updating. 
Alternatively, at least one commenter indicated that this methodology 
could have some merit in addressing this issue. This commenter stated 
that a specific code that incorporates the disease state would provide 
clinical and scientific specificity, which would enable CMS to collect 
data to improve care.
    Many requested CMS create a new policy to be implemented for CY 
2024, while others requested that CMS release more information on the 
per-day threshold and any proposed changes to the payment methodology 
before finalizing a new payment policy. These commenters acknowledged 
that reimbursement policy changes are complex and require careful 
consideration and an evaluation of all relevant factors. Some 
commenters were concerned with how any changes for CY 2024 could impact 
the Nuclear Medicine APC rates and requested an opportunity to evaluate 
and comment on those changes before they become the new policy.
    Response: We sincerely thank commenters for their interest and 
engagement on this important issue. We agree this is a complex and 
important issue and, given the wide array of information presented 
through the public comment process, we intend to further consider these 
points and take them into consideration for future notice and comment 
rulemaking. We welcome ongoing dialogue and engagement from 
stakeholders regarding suggestions for potential future payment 
changes, including on any of the five potential approaches included in 
the original comment solicitation as well as any other potential 
solutions.

[[Page 81577]]

    Please also see section V of this final rule with comment period, 
OPPS Payment for Drugs, Biologicals, and Radiopharmaceuticals, for 
additional details on payment for diagnostic radiopharmaceuticals in 
the OPPS.
4. Calculation of OPPS Scaled Payment Weights
    We established a policy in the CY 2013 OPPS/ASC final rule with 
comment period (77 FR 68283) of using geometric mean-based APC costs to 
calculate relative payment weights under the OPPS. In the CY 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 proposed 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 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 proposed to assign APC 5012 a relative 
payment weight of 1.00 and to divide the geometric mean cost of each 
APC by the geometric mean cost for APC 5012 to derive the unscaled 
relative payment weight for each APC. The choice of the APC on which to 
standardize the relative payment weights does not affect payments made 
under the OPPS because we scale the weights for budget neutrality.
    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 proposed 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 
proposed to apply the same process using the estimated CY 2024 unscaled 
relative payment weights rather than scaled relative payment weights. 
We proposed 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/payment/prospective-payment-systems/hospital-outpatient. Click on the link labeled 
``Hospital Outpatient Prospective Paymen--Notice of Final Rulemaking 
with Comment Period (NFRM)'' for 2024, which can be found under the 
heading ``Hospital Outpatient Regulations and Notices'' and open the 
claims accounting document link, which is labeled ``2024 NPRM OPPS 
Claims Accounting (PDF).''
    We proposed 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 proposed to adjust the calculated CY 2024 unscaled 
relative payment weights for purposes of budget neutrality. We proposed 
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 the CY 2024 OPPS/ASC proposed rule (which are 
available via the internet on the CMS website) are scaled and 
incorporate the recalibration adjustments discussed in sections II.A.1 
and II.A.2 of the CY 2024 OPPS/ASC 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 the CY 2024 OPPS/ASC proposed rule) is 
included in the budget neutrality calculations for the CY 2024 OPPS.
    We did not receive any public comments on the proposed weight 
scalar calculation, and we are finalizing our proposal to use the 
calculation process described in the proposed rule, without 
modification, for CY 2024. For CY 2024, as we did for CY 2023, we will 
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 2024, as we did for CY 2023, we will assign APC 
5012 a relative payment weight of 1.00; and we will divide the 
geometric mean cost of each APC by the geometric mean cost for APC 5012 
to derive the unscaled relative payment weight for each APC. To comply 
with this requirement concerning the APC changes, we will compare the 
estimated aggregate weight using the CY 2023 scaled relative payment 
weights to the estimated

[[Page 81578]]

aggregate weight using the CY 2024 unscaled relative payment weights.
    Using updated final rule claims data, we are updating the estimated 
CY 2024 unscaled relative payment weights by multiplying them by a 
weight scalar of 1.4429 to ensure that the final CY 2024 relative 
payment weights are scaled to be budget neutral. The final CY 2024 
relative payments weights listed in Addenda A and B of this final rule 
with comment period (available via the internet on the CMS website) 
were scaled and incorporate the recalibration adjustments discussed in 
sections II.A.1 and II.A.2 of this final rule with comment period.

B. Conversion Factor Update

1. OPD Fee Schedule Increase Factor
    Section 1833(t)(3)(C)(ii) of the Act requires the Secretary to 
update the conversion factor used to determine the payment rates under 
the OPPS on an annual basis by applying the OPD fee schedule increase 
factor. For purposes of section 1833(t)(3)(C)(iv) of the Act, subject 
to sections 1833(t)(17) and 1833(t)(3)(F) of the Act, the OPD fee 
schedule increase factor is equal to the hospital inpatient market 
basket percentage increase applicable to hospital discharges under 
section 1886(b)(3)(B)(iii) of the Act. In the FY 2024 IPPS/Long Term 
Care Hospital (LTCH) PPS proposed rule (88 FR 27004 and 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 noted that under our regular process for 
the CY 2024 OPPS/ASC final rule with comment period, we would use the 
market basket update for the FY 2024 IPPS/LTCH PPS final rule (88 FR 
58640) which would be based on IHS Global, Inc.'s second quarter 2023 
forecast of the FY 2024 IPPS market basket percentage increase. We 
stated that if that forecast is different than the IPPS market basket 
percentage increase used for the CY 2024 OPPS/ASC proposed rule, the CY 
2024 OPPS/ASC final rule with comment period OPD fee schedule increase 
factor would reflect that updated forecast of the market basket 
percentage increase. We proposed 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).
    Comment: Many commenters indicated that the proposed CY 2024 OPPS 
fee schedule increase factor was inadequate because it failed to take 
into account the fiscal reality currently faced by hospitals due to 
inflation, operating margins, increased labor costs, and other economic 
factors. Some of these commenters reiterated concerns included in 
public comments submitted in response to the FY 2024 IPPS/LTCH PPS 
proposed rule about what they believed was the inadequacy of the IPPS 
market basket percentage increase. Commenters explained that because 
section 1833(t)(3)(C)(iv) requires the OPD fee schedule increase factor 
for a year to equal the IPPS market basket percentage increase factor 
applicable under section 1886(b)(3)(B)(iii) to hospital discharges in 
the fiscal year ending in such year, the same concerns that they 
articulated about the IPPS market basket apply with respect to the OPPS 
fee schedule increase factor.
    Several commenters, in support of their argument that the proposed 
market basket percentage increase is inadequate, stated that hospitals 
continue to face significant inflationary pressures. Commenters 
specifically expressed concern that the proposed OPPS payment update 
for CY 2024 does not adequately consider the cost growth that hospitals 
have faced over the last few years, noting cost increases related to 
workforce (including contract labor), drugs, medical supplies, personal 
protective equipment (PPE), and capital investment. The commenters 
stated that the significant inflation over the past several years due 
to the COVID-19 PHE has not been fully captured by the OPPS payment 
update. Multiple commenters were concerned that CMS use of time-lagged 
data did not reflect current inflationary trends and encouraged CMS to 
use more recent economic data to calculate the market basket increase.
    Many commenters, in support of their argument that the CY 2024 
proposed market basket percentage increase is inadequate, pointed to a 
February 2022 analysis from the American Hospital Association stating 
that Medicare only pays 84 percent of hospital costs; and they cited 
MedPAC's March 2023 report to Congress, which stated that overall 
Medicare hospital margins were minus 8.2 percent without COVID-19 
relief funds in 2021 and were projected to be minus 10 percent in 2023.
    Several commenters appreciated the proposed payment increase but 
also agreed with other commenters that the proposed update is 
inadequate given inflation and labor and supply pressures that 
hospitals, particularly rural hospitals, have been facing and continue 
to face.
    Many commenters had significant concerns that the proposed OPPS 
payment update does not adequately reflect labor costs. Commenters 
stated the significant increases in labor expenses over the last couple 
of years have been largely driven by increased utilization of contract 
staff (due to workforce shortages) and growth in employee salaries. Two 
commenters cited their own independent analysis of payroll data done by 
one of the commenters to calculate the increased cost of labor, which 
they stated was significantly higher than the annual increases for 
compensation prices that CMS finalized over the last several years. 
Given the significant difference between the increased cost of labor 
versus what CMS estimates using the Bureau of Labor Statistics' 
Employment Cost Index (ECI), many commenters stated they had 
significant concerns that CMS's data source for estimating the cost of 
labor does not capture current market dynamics and underestimates the 
actual cost of healthcare labor. They cited analysis predicting that 
nursing staff shortages will continue for the next several years. 
Specifically, commenters raised concerns about CMS's use of the ECI in 
the market basket. Commenters stated they believe the Bureau of Labor 
Statistics' (BLS) ECI does not accurately reflect the shift from 
salaried employees to contract labor since the ECI does not collect 
data for contract staff, and thus does not capture extraordinary labor 
cost growth associated with hospitals' increased reliance on clinicians 
contracted through staffing agencies in response to supply shortages. 
Multiple commenters highlighted their belief that a closely related 
measure--the Employer Costs for Employee Compensation (ECEC)--may be a 
better and more timely data source for growth in hospital compensation 
costs compared to the ECI. One commenter claimed that all else being 
equal, if the hospital ECI growth had matched the hospital ECEC growth, 
this would have meant an additional three percentage point increase in 
the IPPS market basket percentage increase over the 2019 to 2022 time 
period. The commenter noted that, in the FY 2024 IPPS/LTCH PPS final 
rule (88 FR 59032), CMS rejected the use of the ECEC as an alternative 
to the ECI as a measure of change in hospital wage costs because it 
includes both changes in compensation as well as changes in employment. 
However, the commenter felt there were flaws in both the ECI and the 
ECEC; and, according to the commenter, the ECEC has, based on a 
retrospective analysis, better predicted labor costs during this period 
of high inflation and price instability. Several commenters recommended 
that CMS

[[Page 81579]]

use its exceptions and adjustments authority under section 
1886(d)(5)(I) of the Act to adopt new or supplemental data sources such 
as commercial databases on hospital payrolls, to ensure labor costs are 
adequately reflected in the payment update in the OPPS final rule.
    One commenter also requested CMS identify more accurate data inputs 
and use its existing authority to calculate the final rule ``base'' 
(before additional adjustments) market basket update with data that 
better reflect the rapidly increasing input prices facing hospitals. 
The commenter suggested that CMS should consider using the average 
growth rate in allowable Medicare costs per risk adjusted discharge for 
IPPS hospitals between FY 2019 and FY 2021 to calculate the CY 2024 
final rule market basket update rather than using the growth in the ECI 
as the price proxy for compensation in the IPPS and OPPS market basket. 
The commenter requested using Medicare cost report data from Worksheets 
D-1, Part II, Lines 48 and 49 and S-3, Part 1, Column 13 to determine 
the Medicare costs per discharge. The commenter stated that this growth 
rate will capture the increased cost of contract labor, unlike the ECI. 
Based on their analysis of Medicare cost report data, they found that 
this methodology would yield an unadjusted market basket update of 4.39 
percent for FY 2024 and CY 2024 rather than the 2.8 percent net market 
basket update proposed by CMS.
    The commenter also responded to CMS's analysis of using Medicare 
cost report data to Calculate the market basket increase in the FY 2024 
IPPS/LTCH PPS final rule (88 FR 59032). The commenter believes that 
using the Medicare case mix index to risk adjust the costs per 
discharge will eliminate any case-mix changes and provide an accurate 
comparison of the resources used to treat patients. The commenter also 
believes that because they are measuring changes in costs from FY 2019 
to FY 2021 there should be only a minimal impact on service inputs 
based on changes in technology. Finally, they assert the increase in 
case mix CMS observes is a direct result of hospitals caring for 
sicker, more resource-intensive patients as procedures that previously 
performed in the inpatient setting have become outpatient procedures.
    The commenter also stated that Medicare margins have declined over 
the last 20 years and believes this is due to persistently inadequate 
Medicare market basket updates. They further stated that hospitals' 
financial situations are so precarious that MedPAC recommended to 
Congress that it increase IPPS and OPPS payments over what is currently 
in the law to preserve access.
    Finally, several commenters also requested that CMS use its 
exceptions and adjustments authority under section 1886(d)(5)(I) to 
increase the CY 2024 OPPS hospital market basket update higher than the 
proposed percentage increase. One commenter urged CMS to review the 
hospital cost data and the margin on Medicare reimbursement and 
readjust payment rates based on the new baseline cost of care that 
includes the results of supply shocks and labor shortages. Two other 
commenters requested that CMS use its authority to increase the FY 2024 
IPPS market basket percentage increase to at least 5 percent, which 
would result in a CY 2024 OPPS/ASC fee schedule increase factor of the 
same amount.
    Response: We acknowledge commenters' concerns, however, as we 
stated in the CY 2024 OPPS/ASC proposed rule, section 1833(t)(3)(C)(iv) 
of the Act requires the OPD fee schedule increase factor for a year to 
equal the IPPS market basket percentage increase factor applicable 
under section 1886(b)(3)(B)(iii) to hospital discharges in the fiscal 
year ending in such year. Accordingly, we are unable to adopt a final 
OPD fee schedule increase factor different than the IPPS market basket 
percentage increase factor finalized in the FY 2024 IPPS/LTCH PPS final 
rule. We refer commenters to that final rule for responses regarding 
the issues commenters raised (88 FR 59032 and 59033).
2. Productivity Adjustment
    Section 1833(t)(3)(F)(i) of the Act requires that, for 2012 and 
subsequent years, the OPD fee schedule increase factor under 
subparagraph (C)(iv) be reduced by the productivity adjustment 
described in section 1886(b)(3)(B)(xi)(II) of the Act. Section 
1886(b)(3)(B)(xi)(II) of the Act defines the productivity adjustment as 
equal to the 10-year moving average of changes in annual economy-wide, 
private nonfarm business multifactor productivity (MFP) (as projected 
by the Secretary for the 10-year period ending with the applicable 
fiscal year, year, cost reporting period, or other annual period) (the 
``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. 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 IHS Global, Inc.'s (IGI) TFP projection 
methodology is available on the CMS website at https://www.cms.gov/data-research/statistics-trends-and-reports/medicare-program-rates-statistics/market-basket-research-and-information. 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 proposed that the productivity adjustment for the CY 
2024 OPPS/ASC would be 0.2 percentage point. We also proposed that if 
more recent data subsequently became available after the publication of 
the CY 2024 OPPS/ASC 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

[[Page 81580]]

proposed for CY 2024 an OPD fee schedule increase factor of 2.8 percent 
for the CY 2024 OPPS/ASC (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).
    Comment: Several commenters expressed concern about the application 
of the productivity adjustment, stating that the PHE has had 
unimaginable impacts on hospital productivity. They stated that even 
before the PHE, the CMS Office of the Actuary (OACT) indicated that 
hospital productivity will be less than the general economy-wide 
productivity, which is the measure that is required by law to be used 
to derive the productivity adjustment. Commenters noted that hospitals 
are highly labor intensive and the large amounts of staff turnover 
during the PHE substantially reduced hospital productivity. Given that 
CMS is required by statute to implement a productivity adjustment to 
the market basket update, commenters asked the agency to work with 
Congress to permanently eliminate what they stated is an unjustified 
reduction to hospital payments. Further, they asked CMS to use its 
``exceptions and adjustments'' authority under section 1886(d)(5)(I) of 
the Act to remove the productivity adjustment for any fiscal year that 
was covered under PHE determination (i.e., 2020 (0.4 percent), 2021 
(0.0 percent), 2022 (0.7 percent), and 2023 (0.3 percent)) from the 
calculation of the market basket update for FY 2024 and any year 
thereafter. A few commenters expressed concerns about the proposed 
productivity adjustment given the extreme and uncertain circumstances 
under which hospitals and health systems are currently operating and 
urged CMS to eliminate the productivity cut for FY 2024.
    Response: While we appreciate the commenters' concerns, section 
1833(t)(3)(F)(i) requires that after determining the OPD fee schedule 
increase factor under subparagraph (C)(iv), the Secretary shall reduce 
such increase factor by the productivity adjustment described in 
section 1886(b)(3)(B)(xi) of the Act. As required by statute, the FY 
2024 productivity adjustment is derived based on the 10-year moving 
average growth in economy-wide productivity for the period ending FY 
2024.
    We thank the commenters for their comments. After consideration of 
the comments received and consistent with our proposal, we are 
finalizing an OPD fee schedule increase factor of 3.1 percent for CY 
2024, which consists of the IPPS market basket increase factor of 3.3 
percent less a 0.2 percentage point productivity adjustment.
3. Other Conversion Factor Adjustments
    To set the OPPS conversion factor for 2024, we proposed to increase 
the CY 2023 conversion factor of $85.585 by 2.8 percent. In accordance 
with section 1833(t)(9)(B) of the Act, we proposed 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 proposed 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 proposed 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 CY 2024, we proposed to maintain the current rural adjustment 
policy, as discussed in section II.E of the CY 2024 OPPS/ASC proposed 
rule. Therefore, the proposed budget neutrality factor for the rural 
adjustment was 1.0000.
    We proposed 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 proposed 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), 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 the CY 2024 OPPS/ASC 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, we stated that 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.
    We proposed that estimated payments for outliers would remain at 
1.0 percent of total OPPS payments for CY 2024. We estimated for the CY 
2024 OPPS/ASC 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 2024, we proposed 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 resulted in a proposed conversion factor for CY 2024 of 
$87.488.
    For CY 2024, we also proposed that hospitals that fail to meet the 
reporting requirements of the Hospital OQR Program would continue to be 
subject to a further reduction of 2.0 percentage points to the OPD fee 
schedule increase factor. For hospitals that fail to meet the 
requirements of the Hospital OQR Program, we proposed to make all other 
adjustments discussed above, but use a reduced OPD fee schedule update 
factor of 0.8 percent (that is, the proposed OPD fee schedule increase 
factor of 2.8 percent further reduced by 2.0 percentage points). This 
resulted 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). For further discussion of the Hospital OQR 
Program, we refer readers to section XIV of the CY 2024 OPPS/ASC

[[Page 81581]]

proposed rule. For 2024, we proposed 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).
    We received no comments on our proposed adjustments to the 
conversion factor for CY 2024. For this CY 2024 OPPS/ASC final rule 
with comment period, based on more recent data available, the OPD fee 
schedule increase factor for the CY 2024 OPPS is 3.1 percent (which 
reflects the 3.3 percent final estimate of the hospital inpatient 
market basket percentage increase with a-0.2 percentage point 
productivity adjustment). For CY 2024, we are using a conversion factor 
of $87.382 in the calculation of the national unadjusted payment rates 
for those items and services for which payment rates are calculated 
using geometric mean costs; that is, the OPD fee schedule increase 
factor of 3.1 percent for CY 2024, the required wage index budget 
neutrality adjustment of 0.9912, the 5 percent annual cap for 
individual hospital wage index reductions of 0.9997, the cancer 
hospital payment adjustment of 1.0005, and the adjustment of 0.11 (or 
0.27 less 0.16) percentage point of projected OPPS spending for the 
difference in pass-through spending that results in a conversion factor 
for CY 2024 of $87.382. We are also finalizing a reduced conversion 
factor of $85.687 in the calculation of payments for hospitals that 
fail to meet the Hospital OQR Program requirements (a difference of -
1.695 in the conversion factor relative to hospitals that met the 
requirements).
    The calculations we performed to determine the CY 2024 final 
conversion factor are shown in Table 4.
BILLING CODE 4150-28-P

[[Page 81582]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.012


[[Page 81583]]


[GRAPHIC] [TIFF OMITTED] TR22NO23.013

C. Wage Index Changes

    Section 1833(t)(2)(D) of the Act requires the Secretary to 
determine a wage adjustment factor to adjust the portion of payment and 
coinsurance attributable to labor-related costs for relative 
differences in labor and labor-related costs across geographic regions 
in a budget neutral manner (codified at 42 CFR 419.43(a)). This portion 
of the OPPS payment rate is called the OPPS labor-related share. Budget 
neutrality is discussed in section II.B of this CY 2024 OPPS/ASC final 
rule with comment period.
    The OPPS labor-related share is 60 percent of the national OPPS 
payment. This labor-related share is based on a regression analysis 
that determined that, for all hospitals, approximately 60 percent of 
the costs of services paid under the OPPS were attributable to wage 
costs. We confirmed that this labor-related share for outpatient 
services is appropriate during our regression analysis for the payment 
adjustment for rural hospitals in the CY 2006 OPPS final rule with 
comment period (70 FR 68553). We proposed to continue this policy for 
the CY 2024 OPPS/ASC (88 FR 49584). We refer readers to section II.H of 
the CY 2024 OPPS/ASC 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.
    We did not receive any public comments on our proposal, and we are 
finalizing our proposal without modification.
    As discussed in the claims accounting narrative included with the 
supporting documentation for this final rule with comment period (which 
is available via the internet on the CMS website (https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-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/ASC proposed rule (63 FR 
47576), we believe that using the IPPS wage index as the source of an 
adjustment factor for the OPPS is reasonable and logical, given the 
inseparable, subordinate status of the HOPD within the hospital 
overall. In accordance with section 1886(d)(3)(E) of the Act, the IPPS 
wage index is updated annually.
    The Affordable Care Act contained several provisions affecting the 
wage index. These provisions were discussed in the CY 2012 OPPS/ASC 
final rule with comment period (76 FR 74191). Section 10324 of the 
Affordable Care Act added section 1886(d)(3)(E)(iii)(II) to the Act, 
which defines a frontier State and amended section 1833(t) of the Act 
to add paragraph (19), which requires a frontier State wage index floor 
of 1.00 in certain cases, and states that the frontier State floor 
shall not be applied in a budget neutral manner. We codified these 
requirements at Sec.  419.43(c)(2) and (3) of our regulations. In the 
CY 2024 OPPS/ASC proposed rule (88 FR 49584 and 49585), we proposed to 
implement this provision in the same manner as we have since CY 2011. 
Under this policy, the frontier State hospitals would receive a wage 
index of 1.00 if the otherwise applicable wage index (including 
reclassification, the rural floor, and rural floor budget neutrality) 
is less than 1.00. Because the HOPD receives a wage index based on the 
geographic location of the specific

[[Page 81584]]

inpatient hospital with which it is associated, the frontier State wage 
index adjustment applicable for the inpatient hospital also would apply 
for any associated HOPD. We refer readers to the FY 2011 through FY 
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 and 53370; for FY 2014, 78 FR 50590 and 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.
    We did not receive any public comments on our proposal, and we are 
finalizing our proposal without modification.
    In addition to the changes required by the Affordable Care Act, we 
noted in the CY 2024 OPPS/ASC proposed rule (88 FR 49585) 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 and 26974). We also proposed 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 noted 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 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.
    In the CY 2024 OPPS/ASC proposed rule, we proposed 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 (88 FR 49585). 
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/payment/prospective-payment-systems/acute-inpatient-pps/fy-2024-ipps-proposed-rule-home-page. Regarding 
budget neutrality for the CY 2024 OPPS wage index, we refer readers to 
section II.B of this CY 2024 OPPS/ASC final rule with comment period. 
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 proposed to continue 
this policy for CY 2024 (88 FR 49585 and 49586). We refer readers to 
the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 26963 through 26986) for 
a detailed

[[Page 81585]]

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)) (Pub. L. 108-173). 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 proposed to 
continue our policy of allowing non-IPPS hospitals paid under the OPPS 
to qualify for the outmigration adjustment if they are located in a 
section 505 out-migration county (section 505 of the MMA) (88 FR 49585 
and 49586). Furthermore, we proposed 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, we proposed that the wage index that would 
apply to non-IPPS hospitals paid under the OPPS would include the 5-
percent cap on wage index decreases.
    Comment: Multiple commenters supported our policy to apply a 5-
percent cap on any decrease to a hospital's wage index from its wage 
index in the prior FY. Commenters also requested that the proposed 5-
percent cap policy be excluded from budget neutrality, which would 
allow the cap to be applied while avoiding decreases to the wage index 
in areas with high wage indexes.
    Response: We appreciate the commenters' support of our policy to 
apply a 5-percent cap on any decrease to a hospital's wage index from 
its wage index in the prior FY. We finalized the proposal and the 
associated proposed budget neutrality adjustment in the FY 2023 IPPS/
LTCH PPS final rule (87 FR 49018 through 49021) and agree that the 
policy will promote payment stability for HOPDs as well.
    We stated in the FY 2023 IPPS/LTCH PPS final rule (87 FR 49021) 
that we will apply the cap in a budget neutral manner through a 
national adjustment to the standardized amount each fiscal year. 
Specifically, we will apply a budget neutrality adjustment to ensure 
that estimated aggregate payments under our wage index cap policy for 
hospitals that would have a decrease in their wage indexes for the 
upcoming fiscal year of more than 5 percent would equal what estimated 
aggregate payments would have been without the wage index cap policy. 
We proposed to apply a similar budget neutrality adjustment in the OPPS 
for each calendar year (87 FR 44530). For the OPPS, section 
1833(t)(2)(D) of the Act requires the Secretary to determine a wage 
adjustment factor to adjust the portion of payment and coinsurance 
attributable to labor-related costs for relative differences in labor 
and labor-related costs across geographic regions in a budget neutral 
manner, which is inconsistent with the commenters' request to exclude 
the wage index cap policy from budget neutrality.
    Comment: Multiple commenters supported our policy to treat urban 
hospitals reclassified as rural hospitals under Sec.  412.103 as rural 
hospitals for purposes of the rural wage indexes and the rural floor.
    Response: We appreciate the commenters' support of our policy.
    Comment: Multiple commenters supported our low-wage index policy, 
which, for hospitals with a wage index value below the 25th percentile, 
increases the hospital's wage index by half the difference between the 
otherwise applicable wage index value for that hospital and the 25th 
percentile wage index value for all hospitals.
    Response: We appreciate the support of the commenters.
    After consideration of the public comments we received, we are 
finalizing our proposal without modification 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. Any policies and 
adjustments for the FY 2024 IPPS post-reclassified wage index will be 
reflected in the final CY 2024 OPPS wage index beginning on January 1, 
2024, including, but not limited to, reclassification of hospitals to 
different geographic areas, the rural floor provisions, the imputed 
floor wage index adjustment in all-urban states, an adjustment for 
occupational mix, an adjustment to the wage index based on commuting 
patterns of employees (the out-migration adjustment), an adjustment to 
the wage index for certain low wage index hospitals to help address 
wage index disparities between low and high wage index hospitals, and a 
5-percent cap on any decrease to a hospital's wage index from its wage 
index in the prior FY. We refer readers to the FY 2024 IPPS/LTCH PPS 
final rule (88 FR 58958 through 58988) and the FY 2024 hospital wage 
index files posted on the CMS website at https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/fy-2024-ipps-final-rule-home-page. Regarding budget neutrality for the CY 2024 OPPS 
wage index, we refer readers to section II.B. of this final rule with 
comment period.
    For CMHCs, for CY 2024, we proposed to continue to calculate the 
wage index by using the post-reclassification IPPS wage index based on 
the CBSA where the CMHC is located (88 FR 48586). Furthermore, we 
proposed 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 
proposed that the wage index that would apply to CMHCs would not 
include the outmigration adjustment because that adjustment only 
applies to hospitals.
    We did not receive any public comments on our proposals, and we are 
finalizing our proposals regarding CMHC wage index calculations without 
modification.
    Table 4A associated with the FY 2024 IPPS/LTCH PPS final rule 
(available via the internet on the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/fy-2024-ipps-final-rule-home-page) identifies counties 
that would be eligible for the out-migration adjustment. Table 2 
associated with the FY 2024 IPPS/LTCH PPS final 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 final rule as Addendum L to this final rule with 
comment period, with the addition of non-IPPS hospitals that would 
receive the section 505 outmigration adjustment under this final rule 
with comment period. 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/payment/prospective-payment-systems/hospital-outpatient/regulations-notices. At this link, readers will 
find a link to the final FY 2024 IPPS wage index tables and Addendum L.

[[Page 81586]]

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

    In addition to using CCRs to estimate costs from charges on claims 
for ratesetting, we use overall hospital-specific CCRs calculated from 
the hospital's most recent cost report (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 Claims 
Accounting Narrative for this CY 2024 OPPS/ASC final rule with comment 
period, which is posted on our website. We proposed to calculate the 
default ratios for CY 2024 using the most recent cost report data.
    We did not receive any public comments on our proposal, and we are 
finalizing our proposal without modification to calculate the default 
ratios for CY 2024 using the June 2021 HCRIS cost reports, consistent 
with the broader proposal regarding CY 2024 OPPS ratesetting.
    We no longer publish a table in the Federal Register containing the 
statewide average CCRs in the annual OPPS proposed rule and final rule 
with comment period. These CCRs with the upper limit will be available 
for download with each OPPS CY proposed rule and final rule on the CMS 
website. We refer readers to our website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html; click on the link on 
the left of the page titled ``Hospital Outpatient Regulations and 
Notices'' and then select the relevant regulation to download the 
statewide CCRs and upper limit in the downloads section of the web 
page.

E. Adjustment for Rural Sole Community Hospitals (SCHs) and Essential 
Access Community Hospitals (EACHs) Under Section 1833(t)(13)(B) of the 
Act for CY 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 
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 proposed to continue the current policy of a 7.1 
percent payment adjustment for rural SCHs, including EACHs, for all 
services and procedures paid under the OPPS, excluding separately 
payable drugs and biologicals, brachytherapy sources, items paid at 
charges reduced to costs, and devices paid under the pass-through 
payment policy, applied in a budget neutral manner.
    Comment: Two commenters requested that the 7.1 percent payment 
adjustment be allowed for providers other than rural SCHs and EACHs. 
The commenters suggested that Medicare dependent hospitals and urban 
sole community hospitals either receive the adjustment or be studied to 
see if they are eligible to receive the adjustment.
    Response: Our study of the difference in costs by APC between 
hospitals in rural areas and hospitals in urban areas only showed a 
significant difference in costs for rural SCHs. We did not identify 
significant cost differences between hospitals in urban areas and 
Medicare dependent hospitals. In addition, our authority under section 
1833(t)(13) of the Act only extends to rural hospitals. Therefore, we 
are not expanding the types of hospitals eligible for the 7.1 percent 
payment adjustment at this time.
    Comment: Multiple commenters are in favor of our policy to apply a 
7.1 percent payment adjustment for rural SCHs, including EACHs.
    Response: We appreciate the commenters' support of our policy.
    After consideration of the public comments we received, we are 
finalizing our proposal, without modification, to continue in CY 2024 
our current policy of utilizing a budget neutral 7.1 percent payment 
adjustment for rural SCHs, including EACHs, for all services and 
procedures paid under the OPPS, excluding separately payable drugs and 
biologicals, devices paid under the pass-through payment policy, and 
items paid at charges reduced to costs.

F. Payment Adjustment for Certain Cancer Hospitals for CY 2024

1. Background
    Since the inception of the OPPS, which was authorized by the 
Balanced

[[Page 81587]]

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 and 
74201).
    Based on these findings, we finalized a policy to provide a payment 
adjustment to the 11 specified cancer hospitals that reflects their 
higher outpatient costs, as discussed in the CY 2012 OPPS/ASC final 
rule with comment period (76 FR 74202 through 74206). Specifically, we 
adopted a policy to provide additional payments to the cancer hospitals 
so that each cancer hospital's final PCR for services provided in a 
given calendar year is equal to the weighted average PCR (which we 
refer to as the ``target PCR'') for other hospitals paid under the 
OPPS. The target PCR is set in advance of the calendar year and is 
calculated using the most recently submitted or settled cost report 
data that are available at the time of final rulemaking for the 
calendar year. The amount of the payment adjustment is made on an 
aggregate basis at cost report settlement. We note that the changes 
made by section 1833(t)(18) of the Act do not affect the existing 
statutory provisions that provide for TOPs for cancer hospitals. The 
TOPs are assessed, as usual, after all payments, including the cancer 
hospital payment adjustment, have been made for a cost reporting 
period. Table 5 displays the target PCR for purposes of the cancer 
hospital adjustment for CY 2012 through CY 2023.
[GRAPHIC] [TIFF OMITTED] TR22NO23.014


[[Page 81588]]


2. 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.
    In the CY 2024 OPPS/ASC proposed rule (88 FR 49587 through 49589), 
we proposed to provide additional payments to the 11 specified cancer 
hospitals so that each cancer hospital's proposed PCR is equal to the 
weighted average PCR (or ``target PCR'') for the other OPPS hospitals, 
generally using the most recent submitted or settled cost report data 
that are available, reduced by 1.0 percentage point, to comply with 
section 16002(b) of the 21st Century Cures Act, and adjusted by the 
proposed post-Public Health Emergency transition as described later in 
this section. We did not propose an additional reduction beyond the 1.0 
percentage point reduction required by section 16002(b) of the 21st 
Century Cures Act for CY 2024.
    Under our established policy, to calculate the proposed CY 2024 
target PCR, we used 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 estimated 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 0.86). 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 noted 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 5 of the final rule, 
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 explained that 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 also explained that 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 
noted that we do not 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 stated that 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 the CY 2024 OPPS/ASC proposed rule, we proposed 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 the CY 2024 OPPS/ASC proposed rule, we proposed to reduce the CY 
2023 target PCR of 0.89 by 1 percentage point and proposed a cancer 
hospital target PCR of 0.88 for CY 2024.
    Comment: Several commenters supported the proposed methodology of 
incrementally reducing the target PCR until it equals the target PCR 
based on cost report data. A few of those commenters also requested 
that the repayments made to 340B hospitals associated with the prior 
340B-acquired drug policy be included in the final CY 2024 target PCR.
    Response: We appreciate commenters' support for our proposal.
    We also appreciate the commenters' suggestion to include repayments 
made to 340B hospitals in calculating the CY 2024 target PCR. The 
cancer hospital adjustment target PCR calculation relies on historical 
cost report data, and we believe that the proposed methodology 
continues to remain appropriate for the CY 2024 target PCR without the 
addition of anticipated future payments. However, the request raises a 
valid concern regarding if and how best to accommodate changes made as 
part of the final 340B Remedy policy. We believe that having public 
input on how to appropriately account for those changes once the 340B 
Remedy policy is finalized and implemented will be important, including 
because the cancer hospital adjustment is budget neutral within the 
OPPS and thus any changes to it will affect not only cancer

[[Page 81589]]

hospitals, but all hospitals paid under the system.
    After consideration of the public comments we received, we are 
finalizing without modification our proposed policy to reduce the 
target PCR by 1 percentage point until such time that it equals the 
target PCR calculated based on cost report data. Therefore, a CY 2024 
target PCR of 0.88 will apply to the 11 specified cancer hospitals for 
CY 2024.
    Table 6 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 will be determined 
at cost report settlement and will 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.
[GRAPHIC] [TIFF OMITTED] TR22NO23.015

G. Hospital Outpatient Outlier Payments

1. Background
    The OPPS provides outlier payments to hospitals to help mitigate 
the financial risk associated with high-cost and complex procedures, 
where a very costly service could present a hospital with significant 
financial loss. As explained in the CY 2015 OPPS/ASC final rule with 
comment period (79 FR 66832 through 66834), we set our projected target 
for aggregate outlier payments at 1.0 percent of the estimated 
aggregate total payments under the OPPS for the prospective year. 
Outlier payments are provided on a service-by-service basis when the 
cost of a service exceeds the APC payment amount multiplier threshold 
(the APC payment amount multiplied by a certain amount) as well as the 
APC payment amount plus a fixed-dollar amount threshold (the APC 
payment plus a certain dollar amount). In CY 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 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 final rule, is approximately 0.95 percent. Therefore, for CY 
2022, we estimate that

[[Page 81590]]

we did not meet the outlier target by 0.05 percent of total aggregated 
OPPS payments.
    For this final rule with comment period, using CY 2022 claims data 
and CY 2023 payment rates, we estimate that the aggregate outlier 
payments for CY 2023 would be approximately 0.83 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/payment/prospective-payment-systems/hospital-outpatient.
2. Outlier Calculation for CY 2024
    For CY 2024, we proposed to continue our policy of estimating 
outlier payments to be 1.0 percent of the estimated aggregate total 
payments under the OPPS. We proposed that a portion of that 1.0 
percent, an amount equal to less than 0.01 percent of outlier payments 
(or 0.0001 percent of total OPPS payments), would be allocated to CMHCs 
for PHP and IOP outlier payments. This is the amount of estimated 
outlier payments that would result from the proposed CMHC outlier 
threshold as a proportion of total estimated OPPS outlier payments. We 
proposed to 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 final rule with comment period.
    To ensure that the estimated CY 2024 aggregate outlier payments 
would equal 1.0 percent of estimated aggregate total payments under the 
OPPS, we proposed that the hospital outlier threshold be set so that 
outlier payments would be triggered when a hospital's cost of 
furnishing a service exceeds 1.75 times the APC payment amount and 
exceeds the APC payment amount plus the fixed-dollar threshold.
    We calculated the proposed fixed-dollar threshold 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 two 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 and 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 proposed 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 proposed 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 applied 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 proposed 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 Program requirements, we proposed to continue the policy 
that we implemented in CY 2010 that the hospitals' costs would be 
compared to the reduced payments for purposes of outlier eligibility 
and payment calculation. For more information on the Hospital OQR 
Program, we refer readers to section XIV of the CY 2024 OPPS/ASC 
proposed rule.
    We note that in section II.G. of the CY 2024 OPPS/ASC proposed rule 
and our references here to that proposal, discussion of the proposed 
fixed-dollar threshold referenced the prior year's proposal of $8,350 
rather than the correct proposed threshold, which was $6,875. However, 
the correct proposed fixed-dollar outlier threshold of $6,875 was used 
in developing the hospital impacts and was noted in the discussion of 
the effect of the CY 2024 proposed

[[Page 81591]]

rule policies on payments to hospitals (88 FR 49895).
    Comment: A commenter expressed concern about the increases in the 
fixed-dollar outlier threshold, noting that fewer cases would qualify 
for OPPS outlier payments.
    Response: We appreciate the commenter's concern; however, we note 
that both the incorrect proposed fixed-dollar outlier threshold of 
$8,350 and the correct proposed threshold of $6,875 are a decrease from 
the CY 2023 fixed-dollar outlier threshold of $8,625. We have reviewed 
and analyzed our methodology as well as the most up to date CCRs 
available in the July 2023 OPSF for determining estimated outlier 
payments. We continue to believe that they are appropriate for 
estimating hospital costs for establishing the fixed-dollar outlier 
threshold.
    The fixed-dollar threshold better targets outlier payments to those 
high-cost and complex procedures where a very costly service could 
present a hospital with significant financial loss. We maintain the 
target outlier percentage of 1.0 percent of estimated aggregate total 
payment under the OPPS and have a fixed-dollar threshold so that OPPS 
outlier payments are made only when the hospital would experience a 
significant loss for furnishing a particular service. The methodology 
we use to calculate the fixed-dollar threshold for the prospective 
payment year is based on several data inputs that may change from prior 
payment years. For instance, updated hospital CCR data and changes to 
the OPPS payment methodology influence projected outlier payments in 
the prospective year. As a result of those and other factors, the 
fixed-dollar threshold can also fluctuate from year to year.
    In the past several years, we have seen significant increases in 
the fixed-dollar outlier threshold; however, the proposed CY 2024 
fixed-dollar outlier threshold would have decreased relative to CY 
2023. Further, we continue to observe a decrease under our final fixed-
dollar outlier threshold when compared to the CY 2023. We believe that 
the changes that we observe in the fixed-dollar outlier threshold 
accurately reflect changes that hospitals are experiencing in providing 
healthcare. However, we will continue to monitor changes as more 
updated data are available.
    After consideration of the public comment we received, we are 
finalizing our proposal, without modification, to continue our policy 
of estimating outlier payments to be 1.0 percent of the estimated 
aggregate total payments under the OPPS and to use our established 
methodology to set the OPPS outlier fixed-dollar loss threshold for CY 
2024.
3. Final Outlier Calculation
    Consistent with historical practice, we used updated data for this 
final rule with comment period for outlier calculations. For CY 2024, 
we are applying the overall CCRs from the July 2023 OPSF file after 
adjustment (using the CCR adjustment factor of 0.990843 to approximate 
CY 2024 CCRs) to charges on CY 2022 claims that were adjusted using a 
charge inflation factor of 1.11904 to approximate CY 2024 charges. 
These are the same CCR adjustment and charge inflation factors that 
were used to set the IPPS fixed-dollar thresholds for the FY 2024 IPPS/
LTCH PPS final rule (88 FR 59353). We simulated aggregated CY 2024 
hospital outlier payments using these costs for several different 
fixed-dollar thresholds, holding the 1.75 multiple-threshold constant 
and assuming that outlier payments will continue to be made at 50 
percent of the amount by which the cost of furnishing the service would 
exceed 1.75 times the APC payment amount, until the total outlier 
payment equaled 1.0 percent of aggregated estimated total CY 2024 OPPS 
payments. We estimate that a fixed-dollar threshold of $7,750 combined 
with the multiple threshold of 1.75 times the APC payment rate, will 
allocate the 1.0 percent of aggregated total OPPS payments to outlier 
payments.
    For CMHCs, if a CMHC's cost for partial hospitalization or 
intensive outpatient services exceeds 3.40 times the APC payment rate, 
the outlier payment will be calculated as 50 percent of the amount by 
which the cost exceeds 3.40 times the APC payment rate.

H. 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 final rule with comment period, the payment rate for most 
services and procedures for which payment is made under the OPPS is the 
product of the conversion factor calculated in accordance with section 
II.B of this final rule with comment period and the relative payment 
weight described in section II.A of this final rule with comment 
period. The national unadjusted payment rate for most APCs contained in 
Addendum A to this final rule with comment period (which is available 
via the CMS website ``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 final rule with comment period 
(which is available on the CMS website link above) is calculated by 
multiplying the final 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 final rule with comment period.
    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 final rule with comment period, 
which is available via the internet on the CMS website), in a 
circumstance in which the multiple procedure discount does not apply, 
the procedure is not bilateral, and conditionally packaged services 
(status indicator of ``Q1'' and ``Q2'') qualify for separate payment. 
We note that, although blood and blood products with status indicator 
``R'' and brachytherapy sources with status indicator ``U'' are not 
subject to wage adjustment, they are subject to reduced payments when a 
hospital fails to meet the Hospital OQR Program requirements.
    Individual providers interested in calculating the payment amount 
that they would receive for a specific service

[[Page 81592]]

from the national unadjusted payment rates presented in Addenda A and B 
to this final rule with comment period (which are available via the 
internet on the CMS website) should follow the formulas presented in 
the following steps. For purposes of the payment calculations below, we 
refer to the national unadjusted payment rate for hospitals that meet 
the requirements of the Hospital OQR Program as the ``full'' national 
unadjusted payment rate. We refer to the national unadjusted payment 
rate for hospitals that fail to meet the requirements of the Hospital 
OQR Program as the ``reduced'' national unadjusted payment rate. The 
reduced national unadjusted payment rate is calculated by multiplying 
the reporting ratio of 0.9805 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 and 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 are continuing 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 are applying for 
the CY 2024 OPPS, we refer readers to section II.C of this final rule 
with comment period.
    Step 3. Adjust the wage index of hospitals located in certain 
qualifying counties that have a relatively high percentage of hospital 
employees who reside in the county, but who work in a different county 
with a higher wage index, in accordance with section 505 of the 
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 
(Pub. L. 108-173). Addendum L to this final rule with comment period 
(which is available via the internet on the CMS website) contains the 
qualifying counties and the associated wage index increase developed 
for the final FY 2024 IPPS wage index (which are listed in Table 3 
associated with the FY 2024 IPPS/LTCH PPS final rule and available via 
the internet on the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps). (Click on the 
link on the left side of the screen titled ``FY 2024 IPPS Final Rule 
Home Page'' and select ``FY 2024 Final Rule Tables.'') This step is to 
be followed only if the hospital is not reclassified or redesignated 
under section 1886(d)(8) or section 1886(d)(10) of the Act.
    Step 4. Multiply the applicable wage index determined under Steps 2 
and 3 by the amount determined under Step 1 that represents the labor-
related portion of the national unadjusted payment rate.
    The formula below is a mathematical representation of Step 4 and 
adjusts the labor-related portion of the national unadjusted payment 
rate for the specific service by the wage index.
    Xa is the labor-related portion of the national unadjusted payment 
rate (wage adjusted).
    Xa = 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 = 0.40 * (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 final CY 2024 
full national unadjusted payment rate for APC 5071 is $671.05. The 
final reduced national adjusted payment rate for APC 5071 for a 
hospital that fails to meet the Hospital OQR Program requirements is 
$658.03. This reduced rate is calculated by multiplying the reporting 
ratio of 0.9806 by the full unadjusted payment rate for APC 5071.
    Step 1. The labor-related portion of the final full national 
unadjusted payment is approximately $402.63 (0.60 * $671.05). The 
labor-related portion of the final reduced national adjusted payment is 
approximately $394.82 (0.60 * $658.03).

[[Page 81593]]

    Step 2 & 3. The FY 2024 wage index for a provider located in CBSA 
35614 in New York, which includes the adoption of the final IPPS 2024 
wage index policies, is 1.3562.
    Step 4. The wage adjusted labor-related portion of the final full 
national unadjusted payment is approximately $546.05 ($402.63 *1.3562). 
The wage adjusted labor-related portion of the final reduced national 
adjusted payment is approximately $535.45 ($394.82 * 1.3562).
    Step 5. The nonlabor-related portion of the final full national 
unadjusted payment is approximately $268.42 (0.40 * $671.05). The 
nonlabor-related portion of the final reduced national adjusted payment 
is approximately $263.21 (0.40 * $658.03).
    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 final full national unadjusted payment is approximately $814.47 
($546.05 + $268.42). The sum of the portions of the final reduced 
national adjusted payment is approximately $798.66 ($535.45 + $263.21) 
as shown in Table 7.
[GRAPHIC] [TIFF OMITTED] TR22NO23.016

    We did not receive any public comments on these steps under the 
methodology that we included in the CY 2024 OPPS/ASC proposed rule to 
determine the APC payments for CY 2024. Therefore, we are using the 
steps in the methodology specified above, to demonstrate the 
calculation of the final CY 2024 OPPS payments using the same 
parameters.

I. Beneficiary Copayments

1. Background
    Section 1833(t)(3)(B) of the Act requires the Secretary to set 
rules for determining the unadjusted copayment amounts to be paid by 
beneficiaries for covered OPD services. Section 1833(t)(8)(C)(ii) of 
the Act specifies that the Secretary must reduce the national 
unadjusted copayment amount for a covered OPD service (or group of such 
services) furnished in a year in a manner so that the effective 
copayment rate (determined on a national unadjusted basis) for that 
service in the year does not exceed a specified percentage. As 
specified in section 1833(t)(8)(C)(ii)(V) of the Act, the effective 
copayment rate for a covered OPD service paid under the OPPS in CY 
2006, and in CYs thereafter, shall not exceed 40 percent of the APC 
payment rate.
    Section 1833(t)(3)(B)(ii) of the Act provides that, for a covered 
OPD service (or group of such services) furnished in a year, the 
national unadjusted copayment amount cannot be less than 20 percent of 
the OPD fee schedule amount. However, section 1833(t)(8)(C)(i) of the 
Act limits the amount of beneficiary copayment that may be collected 
for a procedure (including items such as drugs and biologicals) 
performed in a year to the amount of the inpatient hospital deductible 
for that year.
    Section 4104 of the Affordable Care Act eliminated the Medicare 
Part B coinsurance for preventive services furnished on and after 
January 1, 2011, that meet certain requirements, including flexible 
sigmoidoscopies and screening colonoscopies, and waived the Part B 
deductible for screening colonoscopies that become diagnostic during 
the procedure. For a discussion of the changes made by the Affordable 
Care Act with regard to copayments for preventive services furnished on 
and after January 1, 2011, we refer readers to section XII.B of the CY 
2011 OPPS/ASC final rule with comment period (75 FR 72013).
    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 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 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 
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

[[Page 81594]]

to the CY 2024 PFS proposed rule (88 FR 52262) 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 price.
---------------------------------------------------------------------------

    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) of 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 the 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 specific 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) exceeds the inflation-adjusted payment 
amount of a Part B rebatable drug, 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 the CY 2024 OPPS/ASC proposed rule, we proposed 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 proposed 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 proposed 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 did not propose 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 
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.
    We did not receive any public comments on our proposal to codify 
amendments to Sec. Sec.  419.41 and 416.172. Therefore, we are 
finalizing our proposal to codify the OPPS program payment and cost 
sharing amounts for Part B rebatable drugs as required by section 
1833(t)(8)(F) of the Act by adding a new paragraph (e) to Sec.  419.41. 
We are also finalizing our proposal 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. We are 
finalizing our proposal 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 finalized in the CY 2024 PFS final rule to codify the 
cost sharing amounts for Part B rebatable drugs with prices increasing 
at a rate faster than inflation.
    Comment: A commenter pointed out an error in the preamble of the CY 
2024 OPPS/ASC proposed rule related to the rebatable drugs under the 
IRA. Specifically, the commenter noted that the preamble language 
incorrectly suggested that a provider is paid the amount specified in 
section 1833(a)(1)(EE) with respect to a Part B rebatable drug when the 
inflation-adjusted amount exceeds the specified payment amount, which 
is the inverse of what the statute provides and therefore, is 
incorrect.
    Response: We thank the commenter for pointing out the error where 
the references to the specified payment amount and the inflation-
adjusted amount were inadvertently transposed in the preamble. We have 
corrected the preamble for this final rule with comment period.
2. OPPS Copayment Policy
    For CY 2024, we proposed to determine copayment amounts for new and 
revised APCs using the same methodology that we implemented beginning 
in CY 2004. (We refer readers to the November 7, 2003 OPPS final rule 
with comment period for a discussion of that methodology (68 FR 
63458).) In addition, we proposed to use the same standard rounding 
principles that we have historically used in instances where the 
application of our standard copayment methodology would result in a 
copayment amount that is less than 20 percent and cannot be rounded, 
under standard rounding principles, to 20 percent. (We refer readers to 
the CY 2008 OPPS/ASC final rule with comment period (72 FR 66687) in 
which we discuss our rationale for applying these rounding principles.) 
The final national unadjusted copayment amounts for services payable 
under the OPPS that would be effective January 1, 2024, are included in 
Addenda A and B to this final rule with comment period (which are 
available via the internet on the CMS website).
    As discussed in section XIV.E of the CY 2024 OPPS/ASC proposed rule 
(88

[[Page 81595]]

FR 49594) and this final rule with comment period, 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 and 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).
    We did not receive any public comments on our proposal, and we are 
finalizing our proposal to determine copayment amounts for new and 
revised APCs using the same methodology that we implemented beginning 
in CY 2004. In addition, we are finalizing the use of the same standard 
rounding principles that we have historically used in instances where 
the application of our standard copayment methodology would result in a 
copayment amount that is less than 20 percent and cannot be rounded, 
under standard rounding principles, to 20 percent. (We refer readers to 
the CY 2008 OPPS/ASC final rule with comment period (72 FR 66687) in 
which we discuss our rationale for applying these rounding principles.) 
The finalized national unadjusted copayment amounts for services 
payable under the OPPS that would be effective January 1, 2024, are 
included in Addenda A and B to this final rule with comment period 
(which are available via the internet on the CMS website).
3. Calculation of an Adjusted Copayment Amount for an APC Group
    Individuals interested in calculating the national copayment 
liability for a Medicare beneficiary for a given service provided by a 
hospital that met or failed to meet its Hospital OQR Program 
requirements should follow the formulas presented in the following 
steps.
    Step 1. Calculate the beneficiary payment percentage for the APC by 
dividing the APC's national unadjusted copayment by its payment rate. 
For example, using APC 5071, $134.21 is approximately 20 percent of the 
full national unadjusted payment rate of $671.05. For APCs with only a 
minimum unadjusted copayment in Addenda A and B to this final rule with 
comment period (which are available via the internet on the CMS 
website), the beneficiary payment percentage is 20 percent.
    The formula below is a mathematical representation of Step 1 and 
calculates the national copayment as a percentage of national payment 
for a given service.

B Is the Beneficiary Payment Percentage

    B = National unadjusted copayment for APC/national unadjusted 
payment rate for APC.
    Step 2. Calculate the appropriate wage-adjusted payment rate for 
the APC for the provider in question, as indicated in Steps 2 through 4 
under section II.H of this with comment period. Calculate the rural 
adjustment for eligible providers, as indicated in Step 6 under section 
II.H of this final rule with comment period.
    Step 3. Multiply the percentage calculated in Step 1 by the payment 
rate calculated in Step 2. The result is the wage-adjusted copayment 
amount for the APC.
    The formula below is a mathematical representation of Step 3 and 
applies the beneficiary payment percentage to the adjusted payment rate 
for a service calculated under section II.H of this final rule with 
comment period, with and without the rural adjustment, to calculate the 
adjusted beneficiary copayment for a given service.
    Wage-adjusted copayment amount for the APC = Adjusted Medicare 
Payment * B.
    Wage-adjusted copayment amount for the APC (SCH or EACH) = 
(Adjusted Medicare Payment * 1.071) * B.
    Step 4. For a hospital that failed to meet its Hospital OQR Program 
requirements, multiply the copayment

[[Page 81596]]

calculated in Step 3 by the reporting ratio of 0.9806.
    The finalized unadjusted copayments for services payable under the 
OPPS that would be effective January 1, 2024, are shown in Addenda A 
and B to this final rule with comment period (which are available via 
the CMS website). We note that the final national unadjusted payment 
rates and copayment rates shown in Addenda A and B to this final rule 
with comment period reflect the CY 2024 OPD fee schedule increase 
factor discussed in section II.B of this final rule with comment 
period.
    In addition, as noted earlier, section 1833(t)(8)(C)(i) of the Act 
limits the amount of beneficiary copayment that may be collected for a 
procedure performed in a year to the amount of the inpatient hospital 
deductible for that year.

III. OPPS Ambulatory Payment Classification (APC) Group Policies

A. OPPS Treatment of New and Revised HCPCS Codes

    Payments for OPPS procedures, services, and items are generally 
based on medical billing codes, specifically, HCPCS codes, that are 
reported on HOPD claims. 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, 
multianalyte assays with algorithmic analyses (MAAA), and proprietary 
laboratory analyses (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. (CY 2024 Payment Status and Comment 
Indicators) of this final rule with comment period, we discuss the 
various status indicators used under the OPPS. We also provide a 
complete list of the status indicators and their definitions in 
Addendum D1 to this final rule with comment period.
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 separate payment under 
the OPPS. We solicited public comments on the proposed APC and status 
indicator assignments for the codes listed in Table 6 (New HCPCS Codes 
Effective April 1, 2023) of the CY 2024 OPPS/ASC proposed rule (88 FR 
49595 through 49599), which are also displayed in Table 8.
    We received some public comments on the proposed OPPS APC and SI 
assignments for the new Level II HCPCS codes implemented in April 2023. 
The comments and our responses are addressed in their respective 
sections of this final rule with comment period, which include, but are 
not limited to: sections III.C. (New Technology APCs), III.E. (OPPS 
APC-Specific Policies), and IV. (OPPS Payment for Devices). For those 
April 2023 codes for which we received no comments, we are finalizing 
the proposed APC and status indicator assignments. We note that several 
of the HCPCS C-codes have been replaced with HCPCS J-codes, effective 
January 1, 2024. Their replacement codes are listed in Table 8. In 
addition, in prior years we included the final OPPS status indicators 
and APC assignments in the coding preamble tables, however, because the 
same information can be found in Addendum B, we are no longer including 
them in Table 8. Therefore, readers are advised to refer to the OPPS 
Addendum B for the final OPPS status indicators, APC assignments, and 
payment rates for all codes reportable under the hospital OPPS. These 
new codes that were effective April 1, 2023, were assigned to comment 
indicator ``NP'' in Addendum B to the CY 2024 OPPS/ASC proposed rule to 
indicate that the codes are assigned to an interim APC assignment and 
comments would be accepted on their interim APC assignments. The 
complete list of status indicators and definitions used under the OPPS 
can be found in Addendum D1 to this final rule with comment period, 
while the complete list of comment indicators and definitions can be 
found in Addendum D2 to this final rule with comment period. We note 
that OPPS Addendum B (OPPS payment file by HCPCS code), Addendum D1 
(OPPS Status Indicators), and Addendum D2 (OPPS Comment Indicators) are 
available via the internet on the CMS website.
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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 separate payment and assigned them to 
appropriate interim OPPS status indicators and APCs. We solicited 
public comments on the proposed APC and status indicator assignments 
for the codes listed in Table 7 (New HCPCS Codes Effective July 1, 
2023) of the CY 2024 OPPS/ASC proposed rule (88 FR 49599-49605), which 
are also listed in Table 9.
    We received some public comments on the proposed OPPS APC and SI 
assignments for the new Level II HCPCS codes implemented on July 1, 
2023. The comments and our responses are addressed in their respective 
sections of this final rule with comment period, which include, but are 
not limited to: sections III.C (New Technology APCs), III.E (OPPS APC-
Specific Policies), and IV (OPPS Payment for Devices). For those July 
1, 2023, codes for which we received no comments, we are finalizing the 
proposed APC and status indicator assignments. We note that one HCPCS 
C-code has been replaced with a HCPCS J-code. The replacement code is 
listed in Table 9. Additionally, we note that in prior years we 
included the final OPPS status indicators and APC assignments in the 
coding preamble tables, however, because the same information can be 
found in Addendum B, we are no longer including them in Table 9. 
Therefore, readers are advised to refer to the OPPS Addendum B for the 
final OPPS status indicators, APC assignments, and payment rates for 
all codes reportable under the hospital OPPS. These new codes that were 
effective July 1, 2023, were assigned to comment indicator ``NP'' in 
Addendum B to the CY 2024 OPPS/ASC proposed rule to indicate that the 
codes are assigned to an interim APC assignment and comments would be 
accepted on their interim APC assignments. The complete list of status 
indicators and definitions used under the OPPS can be found in Addendum 
D1 to this final rule with comment period, while the complete list of 
comment indicators and definitions can be found in Addendum D2 to this 
final rule with comment period. We note that OPPS Addendum B (OPPS 
payment file by HCPCS code), Addendum D1 (OPPS Status Indicators), and 
Addendum D2 (OPPS Comment Indicators) are available via the internet on 
the CMS website.
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3. October 2023 HCPCS Codes Final Rule Comment Solicitation
    For the October 2023 update, 64 new codes were established and made 
effective October 1, 2023. Through the October 2023 OPPS quarterly 
update CR (Transmittal 12077, Change Request 13210, dated June 13, 
2023), we recognized several new codes for separate payment and 
assigned them to appropriate interim OPPS status indicators and APCs. 
For CY 2024, consistent with our established policy, we proposed in the 
CY 2024 OPPS/ASC

[[Page 81606]]

proposed rule (88 FR 49605) that the HCPCS codes that would be 
effective October 1, 2023, would be flagged with comment indicator 
``NI'' in Addendum B in the CY 2024 OPPS/ASC final rule with comment 
period to indicate that we have assigned the codes to interim OPPS 
status indicators for CY 2024. Table 10 below lists the codes that were 
effective October 1, 2023. We note that several of the temporary C-
codes have been replaced with permanent J-codes effective January 1, 
2024. We are inviting public comments in this final rule on the interim 
payment indicators, which will be finalized in the CY 2025 OPPS/ASC 
final rule with comment period. We note these same codes will be 
subject to comment in the CY 2025 OPPS/ASC proposed rule with comment 
period, and will be finalized in the CY 2025 OPPS/ASC final rule with 
comment period.
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4. January 2024 HCPCS Codes
a. New Level II HCPCS Codes Final Rule Comment Solicitation
    Consistent with past practice, we are soliciting comments on the 
new Level II HCPCS codes that will be effective January 1, 2024, in 
this 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 the CY 2024 OPPS/ASC proposed rule, most Level II HCPCS codes are 
not released until sometime around November to be effective

[[Page 81611]]

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 proposed to include the new Level II HCPCS codes 
effective January 1, 2024 (that would be incorporated in the January 
2024 OPPS quarterly update CR), in Addendum B to the CY 2024 OPPS/ASC 
final rule with comment period. Specifically, for CY 2024, we proposed 
to continue our established policy of assigning comment indicator 
``NI'' in Addendum B to this final rule with comment period to the new 
HCPCS codes that will be effective January 1, 2024, to indicate that we 
are assigning them an interim status indicator, which is subject to 
public comment. We are inviting public comments in this final rule with 
comment period on the status indicators and APC assignments, which will 
be finalized in the CY 2025 OPPS/ASC final rule with comment period. 
Similar to the codes effective October 1, 2023, these new Level II 
HCPCS codes that will be effective January 1, 2024, will be subject to 
comment in the CY 2025 OPPS/ASC proposed rule with comment period, and 
will be finalized in the CY 2025 OPPS/ASC final rule with comment 
period.
b. New CY 2024 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 APCs and 
status indicators for new and revised Category I and III CPT codes that 
would be effective January 1. Specifically, for the new/revised CPT 
codes that we receive in a timely manner from the AMA's CPT Editorial 
Panel, we finalized our proposal to include the codes that would be 
effective January 1 in the OPPS/ASC proposed rules, along with proposed 
APC and status indicator assignments for them, and to finalize the APC 
and status indicator assignments in the OPPS/ASC final rules beginning 
with the CY 2016 OPPS update. For those new/revised CPT codes that were 
received too late for inclusion in the OPPS/ASC proposed rule, we 
finalized our proposal to establish and use HCPCS G-codes that mirror 
the predecessor CPT codes and retain the current APC and status 
indicator assignments for a year until we can propose APC and status 
indicator assignments in the following year's rulemaking cycle. We note 
that even if we find that we need to create HCPCS G-codes in place of 
certain CPT codes for the PFS proposed rule, we do not anticipate that 
these HCPCS G-codes will always be necessary for OPPS purposes. We will 
make every effort to include proposed APC and status indicator 
assignments for all new and revised CPT codes that the AMA makes 
publicly available in time for us to include them in the proposed rule, 
and to avoid resorting to use of HCPCS G-codes and the resulting delay 
in utilization of the most current CPT codes. Also, we finalized our 
proposal to make interim APC and status indicator assignments for CPT 
codes that are not available in time for the proposed rule and that 
describe wholly new services (such as new technologies or new surgical 
procedures), to solicit public comments in the final rule, and to 
finalize the specific APC and status indicator assignments for those 
codes in the following year's final rule.
    For the CY 2024 OPPS update, we received the CPT codes that will be 
effective January 1, 2024, from the AMA in time to be included in the 
CY 2024 OPPS/ASC proposed rule with comment period. The new, revised, 
and deleted CPT codes can be found in Addendum B to the proposed rule 
(which is available via the internet on the CMS website). We note that 
the new and revised CPT codes are assigned to a proposed APC assignment 
and comment indicator ``NP'' in Addendum B of the 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, and 
that comments will be accepted on the proposed APC assignment and 
status indicator.
    Further, we reminded readers that the CPT code descriptors that 
appear in Addendum B are short descriptors and do not accurately 
describe the complete procedure, service, or item described by the CPT 
code. Therefore, we included the 5-digit placeholder codes and their 
long descriptors for the new and revised CY 2024 CPT codes in Addendum 
O to the proposed rule (which is available via the internet on the CMS 
website) so that the public could adequately comment on the proposed 
APCs and SI assignments. The 5-digit placeholder codes were included in 
Addendum O, specifically under the column labeled ``CY 2024 OPPS/ASC 
Proposed Rule 5-Digit AMA Placeholder Code,'' to the proposed rule. We 
noted that the final CPT code numbers would be included in this CY 2024 
OPPS/ASC final rule with comment period. We also noted that not every 
code listed in Addendum O is subject to public comment. For the new and 
revised Category I and III CPT codes, we requested public comments on 
only those codes that are assigned comment indicator ``NP.''
    In summary, in the CY 2024 OPPS/ASC proposed rule, we solicited 
public comments on the proposed CY 2024 SI and APC assignments for the 
new and revised Category I and III CPT codes that would be effective 
January 1, 2024. The CPT codes were listed in Addendum B to the 
proposed rule with short descriptors only. We listed them again in 
Addendum O to the proposed rule with long descriptors. We also proposed 
to finalize the SI and APC assignments for these codes (with their 
final CPT code numbers) in the CY 2024 OPPS/ASC final rule with comment 
period. The proposed SI and APC assignments for these codes were 
included in Addendum B to the proposed rule (which is available via the 
internet on the CMS website).
    We received comments on several of the new CPT codes that were 
assigned to comment indicator ``NP'' in Addendum B to the CY 2024 OPPS/
ASC proposed rule. We have responded to those public comments in 
sections III.C, III.E, and IV of this CY 2024 OPPS/ASC final rule with 
comment period.
    The final SIs, APC assignments, and payment rates for the new CPT 
codes that are effective January 1, 2024, can be found in Addendum B to 
this final rule with comment period. In addition, the SI meanings can 
be found in Addendum D1 (OPPS Payment Status Indicators for CY 2024) to 
this final rule with comment period. Addenda B and D1 are available via 
the internet on the CMS website.
    Finally, Table 11, which is a reprint of Table 8 from the CY 2024 
OPPS/ASC proposed rule (88 FR 49606), shows the comment timeframe for 
new and revised HCPCS codes. The table provides information on our 
current process for updating codes through our OPPS quarterly update 
CRs, seeking public comments, and finalizing the treatment of these 
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B. OPPS Changes--Variations Within APCs

1. Background
    Section 1833(t)(2)(A) of the Act requires the Secretary to develop 
a classification system for covered hospital outpatient department 
services. Section 1833(t)(2)(B) of the Act provides that the Secretary 
may establish groups of covered OPD services within this classification 
system, so that services classified within each group are comparable 
clinically and with respect to the use of resources. In accordance with 
these provisions, we developed a grouping classification system, 
referred to as Ambulatory Payment Classifications (APCs), as set forth 
in regulations at 42 CFR 419.31. We use Level I (also known as CPT 
codes) and Level II HCPCS codes (also known as alphanumeric codes) to 
identify and group the services within each APC. The APCs are organized 
such that each group is homogeneous both clinically and in terms of 
resource use. Using this classification system, we have established 
distinct groups of similar services. We also have developed separate 
APC groups for certain medical devices, drugs, biologicals, therapeutic 
radiopharmaceuticals, and brachytherapy devices that are not packaged 
into the payment for the procedure.
    We have packaged into the payment for each procedure or service 
within an APC group the costs associated with those items and services 
that are typically ancillary and supportive to a primary diagnostic or 
therapeutic modality and, in those cases, are an integral part of the 
primary service they support. Therefore, we do not make separate 
payment for these packaged items or services. In general, packaged 
items and services include, but are not limited to, the items and 
services listed in regulations at 42 CFR 419.2(b). A further discussion 
of packaged services is included in section II.A.3 of this final rule 
with comment period.
    Under the OPPS, we generally pay for covered hospital outpatient 
services on a rate-per-service basis, where the service may be reported 
with one or more HCPCS codes. Payment varies according to the APC group 
to which the independent service or combination of services is 
assigned. In the CY 2024 OPPS/ASC proposed rule (88 FR 49607), for CY 
2024, we proposed that each APC relative payment weight represents the 
hospital cost of the services included in that APC, relative to the 
hospital cost of the services included in APC 5012 (Clinic Visits and 
Related Services). The APC relative payment weights are scaled to APC 
5012 because it is the hospital clinic visit APC and clinic visits are 
among the most frequently furnished services in the hospital outpatient 
setting.
2. Application of the 2 Times Rule
    Section 1833(t)(9)(A) of the Act requires the Secretary to review, 
not less often than annually, and revise the APC groups, the relative 
payment weights, and the wage and other adjustments described in 
paragraph (2) to take into account changes in medical practice, changes 
in technology, the addition of new services, new cost data, and other 
relevant information and factors. Section 1833(t)(9)(A) of the Act also 
requires the Secretary to consult with an expert outside advisory panel 
composed of an appropriate selection of

[[Page 81613]]

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 this final rule with comment 
period.
    In addition, section 1833(t)(2) of the Act provides that, subject 
to certain exceptions, the items and services within an APC group 
cannot be considered comparable with respect to the use of resources if 
the highest cost for an item or service in the group is more than 2 
times greater than the lowest cost for an item or service within the 
same group (referred to as the ``2 times rule''). The statute 
authorizes the Secretary to make exceptions to the 2 times rule in 
unusual cases, such as for low-volume items and services (but the 
Secretary may not make such an exception in the case of a drug or 
biological that has been designated as an orphan drug under section 526 
of the Federal Food, Drug, and Cosmetic Act). In determining the APCs 
with a 2 times rule violation, we consider only those HCPCS codes that 
are significant based on the number of claims. We note that, for 
purposes of identifying significant procedure codes for examination 
under the 2 times rule, we consider procedure codes that have more than 
1,000 single major claims or procedure codes that both have more than 
99 single major claims and contribute at least 2 percent of the single 
major claims used to establish the APC cost to be significant (75 FR 
71832). This longstanding definition of when a procedure code is 
significant for purposes of the 2 times rule was selected because we 
believe that a subset of 1,000 or fewer claims is negligible within the 
set of approximately 100 million single procedure or single session 
claims we use for establishing costs. Similarly, a procedure code for 
which there are fewer than 99 single claims and that comprises less 
than 2 percent of the single major claims within an APC will have a 
negligible impact on the APC cost (75 FR 71832). In the CY 2024 OPPS/
ASC proposed rule, for CY 2024, we proposed to make exceptions to this 
limit on the variation of costs within each APC group in unusual cases, 
such as for certain low-volume items and services.
    For the CY 2024 OPPS update, we identified the APCs with violations 
of the 2 times rule; and we proposed changes to the procedure codes 
assigned to these APCs (with the exception of those APCs for which we 
proposed a 2 times rule exception) in Addendum B to the CY 2024 OPPS/
ASC proposed rule. We note that Addendum B does not appear in the 
printed version of the Federal Register as part of this final rule with 
comment period. Rather, it is published and made available via the 
internet on the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices. To 
eliminate a violation of the 2 times rule and improve clinical and 
resource homogeneity in the APCs for which we did not propose a 2 times 
rule exception, we proposed to reassign these procedure codes to new 
APCs that contain services that are similar with regard to both their 
clinical and resource characteristics. In many cases, the proposed 
procedure code reassignments and associated APC reconfigurations for CY 
2024 included in the CY 2024 OPPS/ASC 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 the CY 2024 OPPS/
ASC proposed rule identifies with a comment indicator ``CH'' those 
procedure codes for which we proposed a change to the APC assignment or 
status indicator, or both, that were initially assigned in the July 1, 
2023 OPPS Addendum B Update (available via the internet on the CMS 
website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/addendum-a-b-updates).
3. APC Exceptions to the 2 Times Rule
    Taking into account the APC changes that we proposed to make for CY 
2024, we reviewed all of the APCs for which we identified 2 times rule 
violations to determine whether any of the APCs would qualify for an 
exception. We used the following criteria to evaluate whether to 
propose exceptions to the 2 times rule for affected APCs:
     Resource homogeneity;
     Clinical homogeneity;
     Hospital outpatient setting utilization;
     Frequency of service (volume); and
     Opportunity for upcoding and code fragments.
    For a detailed discussion of these criteria, we refer readers to 
the April 7, 2000 final rule (65 FR 18457 and 18458).
    Based on the CY 2022 claims data available for the CY 2024 OPPS/ASC 
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 proposed to make exceptions under the 2 times rule for CY 2024 and 
found that all of the 21 APCs we identified met the criteria for an 
exception to the 2 times rule based on the CY 2022 claims data 
available for the CY 2024 OPPS/ASC 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 12 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 the CY 2024 OPPS/ASC proposed rule (88 FR 49608) listed 
the 21 APCs for which we proposed 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 June 30, 2023, 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 the 
proposed rule can be found on the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices.
    Based on the updated final rule CY 2022 claims data used for this 
CY 2024 final rule with comment period, we found a total of 22 APCs 
with violations of the 2 times rule. Of these 22 total APCs, 19 were 
identified in the proposed rule and three are newly identified APCs. 
The following two APCs appeared in Table 9 of the CY 2024 OPPS/ASC 
proposed rule (88 FR 49608) as violating the 2 times rule, however, 
after conducting our data analysis for this final rule with comment 
period, we found that the APCs no longer violate the 2 times rule:

 APC 5303 (Level 3 Upper GI Procedures)
 APC 5822 (Health and Behavior Services)

    In addition, the three newly identified APCs with violations of the 
2 times rule include the following:

 APC 5734 (Level 4 Minor Procedures)

[[Page 81614]]

 APC 5743 (Level 3 Electronic Analysis of Devices)
 APC 5791 (Level 1 Pulmonary Treatment)

    Although we did not receive any comments on Table 9 of the proposed 
rule, we did receive comments on APC assignments for specific HCPCS 
codes. The comments, and our responses, can be found in section III.E. 
of this final rule with comment period. In addition, we received a 
comment related to the application of the 2 times rule to the nuclear 
medicine APCs and packaged diagnostic radiopharmaceuticals. Below is 
the comment and our response.
    Comment: A commenter stated that the statutory standard at section 
1833(t)(2)(B) of the Social Security Act applies to the resources of 
both items and services, and if CMS continues to package diagnostic 
radiopharmaceuticals, the commenter suggested including the cost of the 
packaged radiopharmaceuticals when evaluating the nuclear medicine APCs 
for 2 times rule violations. The commenter added that, if needed, CMS 
should consider establishing additional APCs to ensure that the nuclear 
medicine APCs do not violate the 2 times rule when the costs of the 
packaged diagnostic radiopharmaceuticals are included.
    Response: As we stated in the CY 2023 OPPS/ASC final rule (87 FR 
71963), diagnostic radiopharmaceuticals are an integral component of 
many nuclear medicine and imaging procedures, and the payment for them 
is packaged with the primary procedure. We reiterate that the payment 
rates for the nuclear medicine APCs are established in a manner that 
uses the reported costs to furnish the procedure based on data 
submitted to CMS from all hospitals paid under the OPPS. The costs that 
are calculated for the nuclear medicine APCs 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 diagnostic radiopharmaceutical used in the procedure. 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. Consequently, we believe 
that our general standard of applying the 2 times rule to all clinical 
APCs, including the nuclear medicine APCs, is appropriate.
    After considering the public comments we received on APC 
assignments and our analysis of the CY 2022 costs from hospital claims 
and cost report data available for this CY 2024 final rule with comment 
period, we are finalizing our proposals with some modifications. 
Specifically, we are finalizing our proposal to except 19 of the 21 
proposed APCs from the 2 times rule for CY 2022 claims data and also 
excepting three additional APCs (APCs 5734, 5743, and 5791) for a total 
of 22 APCs.
    In summary, Table 12 lists the 22 APCs that we are excepting from 
the 2 times rule for CY 2024 based on the criteria described earlier 
and a review of updated claims data for dates of service between 
January 1, 2022, and December 31, 2022, that were processed on or 
before June 30, 2023, and updated CCRs, if available. We note that, for 
cases in which a recommendation by the HOP Panel appears to result in 
or allow a violation of the 2 times rule, we generally accept the HOP 
Panel's recommendation because those recommendations are based on 
explicit consideration of resource use, clinical homogeneity, site of 
service, and the quality of the claims data used to determine the APC 
payment rates. The geometric mean costs for hospital outpatient 
services for these and all other APCs that were used in the development 
of this final rule with comment period can be found on the CMS website 
at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices.
BILLING CODE 4150-28-P

[[Page 81615]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.030

BILLING CODE 4150-28-C

C. New Technology APCs

1. Background
    In the CY 2002 OPPS final rule (66 FR 59903), we finalized changes 
to the time period in which a service can be eligible for payment under 
a New Technology APC. Beginning in CY 2002, we retain services within 
New Technology APC groups until we gather sufficient claims data to 
enable us to assign the service to an appropriate clinical APC. This 
policy allows us to move a service from a New Technology APC in less 
than 2 years if sufficient data are available. It also allows us to 
retain a service in a New Technology APC for more than 2 years if 
sufficient data upon which to base a decision for reassignment have not 
been collected.
    We also adopted in the CY 2002 OPPS final rule the following 
criteria for assigning a complete or comprehensive service to a New 
Technology APC: (1) the service must be truly new, meaning it cannot be 
appropriately reported by an existing HCPCS code assigned to a clinical 
APC and does not appropriately fit within an existing clinical APC; (2) 
the service is not eligible for transitional pass-through payment 
(however, a truly new, comprehensive service could qualify for 
assignment to a new technology APC even if it involves a device or drug 
that could, on its own, qualify for a pass-through payment); and (3) 
the service falls within the scope of Medicare benefits under section 
1832(a) of the Act and is reasonable and necessary in accordance with 
section 1862(a)(1)(A) of the Act (66 FR 59898 through 59903). For 
additional information about our New Technology APC policy, we refer 
readers to https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/pass-through-payment-status-new-technology-ambulatory-payment-classification-apc and then follow the instructions 
to access the MEARIS\TM\ system for OPPS New Technology APC 
applications.
    In the CY 2004 OPPS final rule with comment period (68 FR 63416), 
we restructured the New Technology APCs to make the cost intervals more 
consistent across payment levels and refined the cost bands for these 
APCs to retain two parallel sets of New Technology APCs: one set with a 
status indicator of ``S'' (Significant Procedures, Not Discounted when 
Multiple. Paid under OPPS; separate APC payment) and the other set with 
a status indicator of ``T'' (Significant Procedure, Multiple Reduction 
Applies. Paid under OPPS; separate APC payment). These current New 
Technology APC configurations allow us to price new technology 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

[[Page 81616]]

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 and 
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 
with comment period (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 proposed payment rates for New Technology APCs 1491 to 
1599 and 1901 through 1908 in Addendum A to the CY 2024 OPPS/ASC 
proposed rule (which is available on the CMS website at https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-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 proposed to 
retain services within New Technology APC groups until we obtain 
sufficient claims data to justify reassignment of the service to an 
appropriate clinical APC. The flexibility associated with this policy 
allows us to reassign a service from a New Technology APC in less than 
2 years if we have obtained sufficient claims data. It also allows us 
to retain a service in a New Technology APC for more than 2 years if we 
have not obtained sufficient claims data upon which to base a 
reassignment decision (66 FR 59902).
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,

[[Page 81617]]

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 and 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 and 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.
---------------------------------------------------------------------------

    \7\ LUXTURNA REIMBURSEMENT GUIDE FOR TREATMENT CENTERS. https://mysparkgeneration.com/uploads/2022/09/LUXTURNA-Reimbursement-Guide-for-Treatment-Centers-ISI-Update-April-2022-P-RPE65-US-320025.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 with comment period, 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 (Subretinal injection of a pharmacologic agent, 
including vitrectomy and 1 or more retinotomies) will be effective July 
1, 2023. We recognized the similarity between HCPCS code C9770 and CPT 
code 0810T; therefore, we proposed to delete HCPCS code C9770 effective 
December 31, 2023, and to recognize CPT code 0810T starting January 1, 
2024. We proposed 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 proposed 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 proposed 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 proposed to assign CPT code 0810T to 
APC 1563 for CY 2024. Additionally, we proposed 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 13 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 the CY 2024 OPPS/ASC proposed rule via the internet on 
the CMS website.

[[Page 81618]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.031

    Comment: We received three comments in support of our proposal to 
delete HCPCS code C9770 and reassign CPT code 0810T to APC 1563 for CY 
2024.
    Response: We thank the commenters for their support. After 
consideration of the public comment we received, we are finalizing our 
policy as proposed. Specifically, we are finalizing our proposal to 
delete HCPCS code C9770 and assign CPT code 0810T to APC 1563 (New 
Technology--Level 26 ($4001-$4500)) for CY 2024. We are also finalizing 
our proposal to designate CPT code 0810T as a low volume procedure 
under our universal low volume APC policy and use the greater of the 
geometric mean, arithmetic mean, or median cost calculated based on the 
available claims data for HCPCS code C9770 to calculate an appropriate 
payment rate for purposes of assigning CPT code 0810T to a New 
Technology APC.
    Based on updated claims data available for this final rule with 
comment period from the 4-year lookback period, we found the geometric 
mean cost for the service to be approximately $3,901.57, the arithmetic 
mean cost to be approximately $4,129.91, and the median cost to be 
approximately $4,141.06. The median was the statistical methodology 
that estimated the highest cost for the service. The payment rate 
calculated using this methodology falls within the cost band for New 
Technology APC 1563 (New Technology--Level 26 ($4001-$4500)). 
Therefore, we are assigning HCPCS code C9770 to APC 1563 for CY 2023. 
Please refer to Table 14 below for the final OPPS New Technology APC 
and status indicator assignments for HCPCS code C9770 and CPT code 
0810T for CY 2024. The final CY 2024 payment rates can be found in 
Addendum B to this final rule with comment period via the internet on 
the CMS website.

[[Page 81619]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.032

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 (eg, 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 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 proposed 
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 proposed to continue 
to assign HCPCS code C9751 to APC 1562 (New Technology--Level 25 
($3501-$4000)), with a proposed payment rate of $3,750.50 for CY 2024.
    Comment: We received one comment in support of our proposal to 
continue to assign HCPCS code C9751 to APC 1562.
    Response: We thank the commenter for their support. After 
consideration of the public comment we received, we are finalizing our 
policy as proposed. Please refer to Table 15 below for the final

[[Page 81620]]

OPPS New Technology APC and status indicator assignment for HCPCS code 
C9751 for CY 2024. The final CY 2024 payment rates can be found in 
Addendum B to this final rule with comment period via the internet on 
the CMS website.
[GRAPHIC] [TIFF OMITTED] TR22NO23.033

c. Cardiac Positron Emission Tomography (PET)/Computed Tomography (CT) 
Studies (APCs 1520, 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 were 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 proposed, 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 16 
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 proposed to apply our universal low volume APC policy 
and use the highest of the geometric mean cost, arithmetic mean cost, 
or median cost based on up to 4 years of claims data to assign CPT code 
78432 to the appropriate New Technology APC. 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 cost band 
for APC 1520 (New Technology--Level 20 ($1801-$1900)), where the 
procedure is currently assigned. Therefore, we proposed, 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 G12 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 16 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 the CY 2024 OPPS/ASC proposed rule via the internet on 
the CMS website.

[[Page 81621]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.034

    Comment: We received several comments disagreeing with the proposed 
payment rates for CPT codes 78431, 78432, and 78433. Several commenters 
stated that the proposed APC assignments for 2024 are not consistent 
with the resources needed to perform these services and requested that 
CMS assign all three CPT codes to New Technology APC 1523 (New 
Technology--Level 23 ($2501-$3000)). While commenters explained 
differences between each service, commenters still requested that all 
three codes be assigned to the same New Technology APC.
    Response: We thank the commenters for their input on our proposal. 
We do not agree that it would be appropriate to assign all three codes 
describing the services associated with cardiac PET/CT studies to the 
same New Technology APC. Since CPT codes 78431, 78432, and 78433 first 
became effective on January 1, 2020, they have all been assigned to 
different New Technology APCs based on the perceived resource 
expenditures stemming from clinical differences in their code 
descriptors. Since first receiving claims data for these codes for the 
CY 2023 rulemaking cycle, there are differences between the codes in 
terms of claims data and claims frequency that serve as further 
evidence for the need for variations in New Technology APC assignments. 
Additionally, public comments regarding the clinical and resource 
differences between each code further underscore the need for different 
New Technology APC assignments. Therefore, we are not accepting 
commenters' suggestion to reverse course at this time and assign the 
three codes describing different services associated with cardiac PET/
CT studies to the same New Technology APC.
    Comment: Some commenters urged that CMS maintain stable payment 
rates for three to five years to allow for

[[Page 81622]]

appropriate adoption and implementation of the cardiac PET/CT services.
    Commenters explained that it takes time for hospitals to gain 
experience with new codes and for providers to become aware of how to 
appropriately bill new codes. Commenters pointed out that CPT codes 
78431, 78432, and 78432 were made effective in 2020, which coincided 
with the COVID-19 public health emergency, and explained that there are 
still lingering effects of COVID-19 in terms of hospitals ordering and 
implementing new technology.
    Response: We note that we did not change the New Technology APC 
assignments for CPT codes 78431, 78432, and 78433 between CY 2020 
through CY 2022. Therefore, CPT codes 78431, 78432, and 78433 had the 
exact same payment rate for three full calendar years. We believe that 
the time that has already been provided is sufficient for interested 
parties to educate providers on coding and for hospitals to 
appropriately report the services performed. Additionally, it is 
generally not our policy to judge the accuracy of provider coding and 
charging for purposes of ratesetting. We rely on hospitals and 
providers to accurately report the use of HCPCS codes in accordance 
with their code descriptors, and CPT and CMS instructions, and to 
report services accurately on claims and charges and costs for the 
services on their Medicare hospital cost report.
    Comment: Commenters strongly disagreed with the proposed APC 
reassignment for CPT code 78432 from APC 1520 to APC 1518 for CY 2024, 
and urged that CMS reassign CPT code 78432 to New Technology APC 1523, 
the New Technology APC to which it was first assigned in CY 2020 when 
there were no claims data yet available for the code. Commenters stated 
that they believed that six single frequency claims is not sufficient 
data to set payment rates for CPT code 78432. Other commenters 
explained that CPT code 78432 uses more resources than CPT code 78431 
and requested that CMS consider collecting additional claims data in CY 
2024 for CPT code 78432 before proposing to make an APC reassignment. 
Some commenters stated that they did not believe that it would benefit 
hospitals to adjust APC assignments year to year. These commenters 
stated that changes in APC assignments causes instability in payments 
and angst for hospitals.
    Response: We thank the commenters for their input, but note that 
section 1833(t)(9)(A) of the Act requires that the Secretary review not 
less often than annually and revise the groups, the relative payment 
weights, and the wage and other adjustments to take into account, among 
other things, new cost data. For services assigned to New Technology 
APCs, 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). Therefore, we do not agree with commenters' suggestions that we 
should not regularly update the APC assignments for services like 
cardiac PET/CT.
    With that said, we are sympathetic to comments regarding the 
instability of the payment rate for CPT code 78432 if we were to 
finalize its proposed APC assignment based on the extremely limited 
number of claims that exist for the code. While there have been 2 more 
claims processed for CPT code 78432 since the time of the publication 
of the CY 2024 OPPS/ASC proposed rule, the claims frequency for CPT 
code 78432 remains extremely low at only 7 claims. As we have stated 
previously, low utilization of services assigned to a New Technology 
APC 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 in turn limits our ability to assign the 
service to an appropriate clinical APC (83 FR 58893). In order to 
mitigate the wide payment fluctuations that have occurred for new 
technology services with fewer than 100 claims and to provide more 
predictable payment for these services, in the CY 2019 OPPS/ASC final 
rule with comment period (83 FR 58893) we established that, in each of 
our annual rulemakings, we would seek public comments on which 
statistical methodology (arithmetic mean, geometric mean, or median) 
should be used for each low-volume service assigned to a New Technology 
APC. In addition, we explained that we would use our assessment of the 
resources used to perform a service and guidance from the developer or 
manufacturer of the service, as well as other stakeholders, to 
determine the most appropriate payment rate. For CY 2022, we proposed 
to continue to utilize our equitable adjustment authority under section 
1833(t)(2)(E) of the Act to calculate the geometric mean, arithmetic 
mean, and median using up to 4 years of claims data to select the 
appropriate payment rate for purposes of assigning services with fewer 
than 100 claims per year to a New Technology APC. Because there were 
fewer than 100 claims per year for CPT code 78432, we would usually 
apply our universal low volume APC policy to determine its New 
Technology APC assignment.
    However, we recognize that if we utilized our universal low volume 
APC policy to establish a New Technology APC assignment for CY 2024 for 
CPT 78432, the same negative impacts caused by wide variations in 
payment rate that we sought to mitigate by adopting the universal low 
volume APC policy would result if we assigned CPT 78432 to the APC we 
proposed based on our universal low volume APC policy. While some 
payment fluctuations are expected and would not justify deviating from 
applying our universal low volume APC policy or making regular 
ratesetting changes, we have concerns that if we were to apply the 
universal low volume APC policy in this case to CPT code 78432 as 
proposed, we would see even lower utilization of CPT code 78432 
compared to CPT codes 78431 and 78433, which have seen steady claims 
frequency increases since first being assigned to New Technology APCs. 
For example, for the CY 2023 OPPS/ASC final rule, we assigned CPT code 
78431 to New Technology APC 1523 based on over 18,000 claims and CPT 
code 78433 to APC 1521 based on nearly 1,000 claims. For CY 2024, the 
claims volumes for both CPT code 78431 and 78433 have continued to 
increase to over 24,000 and 1,300 claims respectively, while 
utilization for CPT code 78432 has remained extremely limited. 
Specifically, there are only two more claims, 7 total, that we can use 
to set the payment rate for CPT code 78432 for CY 2024 compared to CY 
2023. Because CPT code 78432 is one of three codes that describe the 
services associated with cardiac PET/CT studies, we have concerns that 
continued low claims frequency for CPT code 78432 will limit our 
ability to assign the service to an appropriate clinical APC. We 
believe that changing the APC payment rate based on an extremely low 
number of claims for CPT code 78432 for CY 2024 would further 
discourage utilization of the code as compared to CPT codes 78431 and 
78433. While it is possible that patients may have a greater need for 
the services described by CPT code 78431 or 78433 rather than the 
service described by CPT code 78432, such that claims volume may always 
be lower for CPT code 78432 than the other codes describing cardiac 
PET/CT imaging

[[Page 81623]]

services, we would not want to make a change in payment that may 
further discourage utility of CPT code 78432 without first confirming 
that this is the case. Furthermore, we did not receive any comments on 
our proposal that explained that the service described by CPT code 
78432 should only be furnished in extremely rare circumstances compared 
to CPT codes 78431 and 78433. Therefore, for CY 2024, we believe it is 
appropriate to utilize our equitable adjustment authority under section 
1833(t)(2)(E) of the Act to maintain the New Technology APC assignment 
for CPT code 78432 as finalized in the CY 2023 OPPS Final Rule for one 
additional year by assigning the code to New Technology APC 1520.
    Comment: Several commenters also disagreed with the proposal to 
reassign CPT code 78431 from APC 1523 to APC 1522 based on the claims 
data available. Although one commenter stated that with over 22,000 
claims considered for CPT code 78431, the proposed APC payment for CPT 
code 78431 appears to be based on a large volume of information and 
appears to be reliable, the commenter disagreed with the proposal due 
to the impact a $500 reduction in payment rate may have on service 
lines.
    Response: We disagree that it is inappropriate to change the APC 
assignment for CPT code 78431 based on the claims available. We based 
our proposal on over 22,000 claims for CPT code 78431, which 
demonstrate that the code had a geometric mean cost of approximately 
$2,300. Since the publication of the CY 2024 OPPS proposed rule (88 FR 
49552), there are over 2,000 additional claims available for rate 
setting for CPT code 78431 for CY 2024. With the significant number of 
claims available for CPT code 78431, we believe it is appropriate to 
modify the APC assignment for CPT code 78431 based on our claims data 
for CY 2024.
    Comment: Some commenters suggested that CMS consider alternatives 
to making adjustments in payment rates for services assigned to New 
Technology APCs that would allow for greater stability and 
predictability in payment rates from year to year. For example, one 
commenter suggested that CMS consider creating New Technology APCs with 
narrower cost bands between each APC or utilize several years of cost 
data--not unlike the low volume APC policy--to smooth the potential for 
large fluctuations.
    Response: We appreciate the commenters' feedback and will consider 
the suggestions for future rulemaking.
    Based on the comments received, we are finalizing our proposals for 
CPT codes 78431, 78432, and 78433 with modification. For CY 2024, we 
are finalizing the APC assignments for CPT codes 78431 and 78433 as 
proposed. Therefore, for CY 2024, we are assigning CPT code 78431 to 
New Technology APC 1522 and CPT code 78433 to New Technology APC 1521, 
as proposed. For CPT code 78432, we are invoking our equitable 
adjustment authority under section 1833(t)(2)(E) of the Act to maintain 
the New Technology APC assignment for CPT code 78432 as finalized in 
the CY 2023 OPPS final rule for an additional year. Therefore, we are 
assigning CPT code 78432 to APC 1520 for CY 2024.
    Please refer to Table 17 below for the final OPPS New Technology 
APC and status indicator assignments for CPT codes 7843, 78432, and 
78433 for CY 2024. The final CY 2024 payment rates can be found in 
Addendum B to this final rule with comment via the internet on the CMS 
website.
BILLING CODE 4150-28-P

[[Page 81624]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.035

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-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,

[[Page 81625]]

trans-esophageal echocardiography (TEE)/intracardiac echocardiography 
(ICE), and all imaging with or without guidance (e.g., 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 proposed 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 18 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 the CY 
2024 OPPS/ASC proposed rule via the internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TR22NO23.036

    Comment: We received one comment on our proposal. The commenter 
supports our assignment of HCPCS code C9758 to APC 1590 for CY 2024.
    Response: We appreciate the commenter's support for our proposal.
    After consideration of the public comments we received, we are 
finalizing our proposal without modification. Please refer to Table 19 
below for the final OPPS New Technology APC and status indicator 
assignments for HCPCS code C9758 for CY 2024. The final CY 2024 payment 
rates can be found in Addendum B to this final rule with comment via 
the internet on the CMS website.
BILLING CODE 4150-28-C

[[Page 81626]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.037

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 (e.g., 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 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 were 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 were estimated to be 
approximately $7,945 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

[[Page 81627]]

universal low volume APC policy calculations do not accurately capture 
the cost of the service. Therefore, we proposed to continue assigning 
HCPCS code C9760 to New Technology APC 1592.
    Please refer to Table 20 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 the CY 
2024 OPPS/ASC proposed rule via the internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TR22NO23.038

    Comment: We received one comment on our proposal. The commenter 
expressed support for finalizing the New Technology APC assignment as 
proposed. The commenter stated that continuing the current APC 
assignments is critical to ensure that HCPCS codes C9758 and C9760 can 
be furnished during ongoing CMS-approved IDE trials. The commenter 
further stated that the proposed APC assignment for HCPCS code C9760 
will enable studies to proceed, preserve beneficiary access, and allow 
a more robust claims history to be developed on which to base permanent 
clinical APC assignment in the future.
    Response: We appreciate the commenter's support for our proposal to 
assign HCPCS code C9760 to APC 1592.
    First, we note that based on update claims data available for this 
final rule with comment period, we received one additional claim for CY 
2022 since the publication of the CY 2024 OPPS proposed rule. Using the 
only two claims available for HCPCS code C9760, the geometric mean, 
arithmetic mean, and median costs are estimated to be approximately 
$10,520 for this service. However, because there are only two claims 
for HCPCS code C9760, we continue to believe its payment rate appears 
to be an outlier based on the cost information we received from the 
manufacturer. We continue to have concerns that application of the 
universal low volume APC policy in this case would not accurately 
capture the cost of the service. Therefore, after consideration of the 
public comment we received and our analysis of the extremely limited 
claims data available, we are finalizing our policy as proposed. 
Specifically, we are finalizing our proposal to assign HCPCS code C9760 
to APC 1592 New Technology--Level 41 ($25,001-$30,000) for CY 2024.
    After consideration of the public comment we received, we are 
finalizing our proposal without modification. Please refer to Table 21 
below for the final OPPS New Technology APC and status indicator 
assignments for HCPCS code C9760 for CY 2024. The CY 2024 payment rates 
can be found in Addendum B to this final rule with comment period via 
the internet on the CMS website.

[[Page 81628]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.039

f. Supervised Visits for Esketamine Self-Administration (APCs 1513 and 
1520)
    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)). This is the first FDA approval of esketamine for any 
use.
    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. Each 
device delivers two sprays containing a total of 28 mg of esketamine. 
Patients would require either two (2) devices (for a 56 mg dose) or 
three (3) devices (for an 84 mg dose) per treatment.
    Because of the risk of serious adverse outcomes resulting from 
sedation and dissociation caused by esketamine nasal spray 
administration, and the potential for misuse or abuse 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 the FDA can require for certain medications with serious 
safety concerns to help ensure the benefits of the medication outweigh 
its risks. The SpravatoTM REMS program requires the 
esketamine nasal spray to be dispensed and administered to enrolled 
patients in health care settings that are certified in the REMS. See 
www.fda.gov for more information regarding the SpravatoTM 
REMS program compliance requirements.
    A treatment session of esketamine consists of instructed nasal 
self-administration by the patient followed by a period of at least two 
(2) hours post-administration observation of the patient under direct 
supervision of a health care professional in the certified health care 
setting. Please refer to the CY 2020 PFS final rule and interim final 
rule for more information about supervised visits for esketamine nasal 
spray self-administration (84 FR 63102 through 63105).
    To facilitate prompt beneficiary access to the new, potentially 
life-saving treatment for TRD using esketamine, we created two new 
HCPCS G codes, G2082 and G2083, effective January 1, 2020. HCPCS code 
G2082 is for an outpatient visit for the evaluation and management of 
an established patient that requires the supervision of a physician or 
other qualified health care professional and provision of up to 56 mg 
of esketamine through nasal self-administration and includes two hours 
of post-administration observation. 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-
$1,000)) with a payment rate of $950.50. Updates to the APC assignments 
for G2082 and G2083 have been made in past rules. Please see the CY 
2021 OPPS/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).
    For CY 2024, we proposed to use CY 2022 available claims data to 
determine the payment rates for HCPCS codes G2082 and G2083. Therefore, 
for CY 2024, we proposed to assign these two HCPCS codes to New 
Technology APCs based on the codes' geometric mean costs. Specifically, 
we proposed to assign HCPCS code G2082 to New Technology APC 1513 (New 
Technology--Level 13 ($1,101-$1,200)) based on its geometric mean cost 
of $1,123. We also proposed to assign HCPCS code G2083 to New 
Technology

[[Page 81629]]

APC 1518 (New Technology--Level 18 ($1,601-$1,700)) based on its 
geometric mean cost of $1,628.
    The proposed New Technology APC and status indicator assignments 
for HCPCS codes G2082 and G2083 are shown in Table 22. The CY 2024 
payment rates can be found in Addendum B to this final rule with 
comment period via the internet on the CMS website.
BILLING CODE 4150-28-P
[GRAPHIC] [TIFF OMITTED] TR22NO23.040

    Comment: We received one comment in support of our proposals to 
assign HCPCS code G2082 to APC 1513 and HCPCS code G2083 to APC 1518.
    Response: We thank the commenter for their support.
    We note the geometric mean costs for both HCPCS code G2082 and 
HCPCS code G2083 have changed since the proposed rule. Based on the 
updated claims data available for this final rule, the approximate 
geometric mean cost for HCPCS code G2082 is $1,189.24. Even though the 
geometric mean cost has increased slightly since the proposed rule, the 
proposed APC assignment of APC 1513 (New Technology--Level 13 ($1,101-
$1,200)) is still appropriate and we are adopting this APC assignment 
as the final APC assignment for this HCPCS code G2082. Based on updated 
claims data available for this final rule with comment period, the 
approximate geometric mean cost for HCPCS code G2083 has increased to 
$1,821.48. Based on the updated claims available, we are finalizing a 
New Technology APC assignment for HCPCS code G2083 to APC 1520 (New 
Technology--Level 20 ($1,801-$1,900)) for CY 2024.
    As a final note, as we have begun to gather adequate claims data, 
we are considering placement of HCPCS codes G2082 and G2083 into 
clinical APCs through future rulemaking.
    Details about the New Technology APC and status indicator 
assignments for these HCPCS codes are shown in Table 23. The CY 2024 
payment rates can be found in Addendum B to this final rule with 
comment period via the internet on the CMS website.

[[Page 81630]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.041

BILLING CODE 4150-28-C
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, 2022, we did not have any claims data at the time of the CY 
2024 OPPS/ASC proposed rule. Therefore, for CY 2024, we proposed to 
continue to assign CPT code 0693T to APC 1505 with a proposed payment 
rate of $350.50.
    Please refer to Table 24 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 the CY 
2024 OPPS/ASC proposed rule via the internet on the CMS website.

[[Page 81631]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.042

    We did not receive any public comments on our proposal, and we 
still do not have any claims for the service. Therefore, for CY 2024, 
we are finalizing our proposal without modification. Specifically, for 
CY 2024, we are assigning CPT code 0693T to APC 1505 and SI ``S.'' The 
final New Technology APC and status indicator assignments for CPT code 
0693T for CY 2024 are found in Table 25. The CY 2024 payment rates can 
be found in Addendum B to this final rule with comment period via the 
internet on the CMS website. In addition, we refer readers to Addendum 
D1 of this final rule with comment period for the status indicator (SI) 
meanings for all codes reported under the OPPS. Addendum D1 can also be 
found via the internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TR22NO23.043

h. Liver Histotripsy Service (APC 1576)
    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

[[Page 81632]]

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 proposed to maintain CPT code 0686T's current APC assignment. 
Specifically, we proposed to assign CPT code 0686T to APC 1575 (New 
Technology--Level 38 ($10,001-$15,000)) with a payment rate of 
$12,500.50 as shown in Table 26.
[GRAPHIC] [TIFF OMITTED] TR22NO23.044

    Comment: Two commenters, including the developer of the liver 
histotripsy procedure have asked us to reassign CPT code 0686T to APC 
1577 (New Technology--Level 40 ($20,001-$25,000)) with a payment rate 
of $22,500.50 because on March 2, 2023, the FDA changed the device 
classification to a Category B IDE study, which allows a device that is 
used in the medical procedure to receive additional payment. The 
developer stated that the cost of the device used in the procedure was 
around $7,500 and asked us to assign the liver histotripsy to a higher-
paying new technology APC cost band that would reflect the cost of both 
the procedure and the device used in the procedure.
    Response: We agree with the commenters that payment for CPT code 
0686T should be increased to reflect that providers participating the 
Category B IDE study for the procedure may now receive payment for both 
the services provided and the device used to perform the procedure 
described by CPT code 0686T. However, we do not believe that a $10,000 
payment increase for the procedure is supported by the data when the 
device only costs $7,500 and there are only two claims for the service. 
Therefore, we are assigning CPT code 0686T to APC 1576 (New 
Technology--Level 39 ($15,001-$20,000)) with a payment rate of 
$17,500.50.
    HCPCS code 0686T (Histotripsy (that is, non-thermal ablation via 
acoustic energy delivery) of malignant hepatocellular tissue, including 
image guidance) will be assigned to APC 1576 (New Technology--Level 39 
($15,001-$20,000)) with a payment rate of $17,500.50. Please refer to 
Table 27 below for the OPPS New Technology APC and status indicator 
assignment for CPT code 0686T for CY 2024. The final CY 2024 payment 
rates can be found in Addendum B to this final rule via the internet on 
the CMS website.

[[Page 81633]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.045

i. Liver Multiscan Service (APC 1511)
    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 
proposed to apply our universal low volume APC policy and use the 
highest of the geometric mean cost, arithmetic mean cost, or median 
cost based on up to 4 years of claims data to assign CPT 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 with our SaaS Add-on Codes policy 
(87 FR 72032 and 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 Liver MultiScan would be assigned to 
the identical APC and status indicator to CPT code 0648T, the 
standalone code for the same service. Therefore, we proposed, 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 as shown in Table 
28.
BILLING CODE 4150-28-P

[[Page 81634]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.046

    Comment: Multiple commenters asked that we not change the APC 
assignment for both Liver Multiscan procedures. Many commenters stated 
that the cost of each of the services is at least $950, which is the 
current payment rate for these services. Other commenters noted that 
only 40 claims have been received for each service, which they believe 
is an insufficient number of claims to estimate the cost for these 
services.
    Response: We recognize that software-based technologies are rapidly 
evolving, like the product used for both CPT code 0648 and CPT code 
0649T. As noted in our comment solicitation on payment policy for 
software as a service (SaaS) procedures in the CY 2023 OPPS final rule 
(87 FR 72035 and 72036), we are considering for future rulemaking 
whether specific adjustments to payment policies and rate calculations 
are necessary to more accurately and appropriately pay for these 
products and services across settings of care. CMS remains open to 
feedback on these issues and welcomes engagement from interested 
parties, including from manufacturers, providers, and beneficiaries. We 
agree with the commenters that for both CPT code 0648 and CPT code 
0649T, we should wait for more claims data before adjusting the current 
payment rates for these services.
    Comment: One commenter supported our proposal because it would help 
lower the cost of non-invasive liver evaluations performed for liver 
fibrosis and liver fat quantification by encouraging providers to use a 
broader array of diagnostic approaches.
    Response: We appreciate the support of the commenter for our 
original proposal, but we are adopting a final policy not to change the 
payment rates for CPT code 0648T and CPT code 0649T in CY 2024.
    After consideration of the public comments we received, we are 
implementing our proposal with modifications. We will use our equitable 
adjustment authority under section 1833(t)(2)(E) to continue to assign 
CPT codes 0648T and 0649T to New Technology APC 1511 (New Technology--
Level 11 ($901-$1,000) with a payment rate of $950.50. Please refer to 
Table 29 below for the final OPPS New Technology APC and status 
indicator assignments for CPT codes 0648T and 0649T for CY 2024. The 
final CY 2024 payment rates can be found in Addendum B to this final 
rule via the internet on the CMS website.

[[Page 81635]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.047

BILLING CODE 4150-28-C
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 (e.g., irrigation and 
aspiration or phacoemulsification), complex, requiring devices or 
techniques not generally used in routine cataract surgery (e.g., iris 
expansion device, suture support for intraocular lens, or primary 
posterior capsulorrhexis) or performed on patients in the amblyogenic 
developmental stage; without endoscopic cyclophotocoagulation) or 66984 
(Extracapsular cataract removal with insertion of intraocular lens 
prosthesis (1-stage procedure), manual or mechanical technique (e.g., 
irrigation and aspiration or phacoemulsification); without endoscopic 
cyclophotocoagulation) 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 with insertion of intraocular lens 
prosthesis (1-stage procedure), manual or mechanical technique (e.g., 
irrigation and aspiration or phacoemulsification), complex, requiring 
devices or techniques not generally used in routine cataract surgery 
(e.g., iris expansion device, suture support for intraocular lens, or 
primary posterior capsulorrhexis) or performed on patients in the 
amblyogenic developmental stage; with insertion of intraocular (e.g., 
trabecular meshwork, supraciliary, suprachoroidal) anterior segment 
aqueous drainage device, without extraocular reservoir, internal 
approach, one or more) and 66991 (Extracapsular cataract removal with 
insertion of intraocular lens prosthesis (1 stage procedure), manual or 
mechanical technique (e.g., irrigation and aspiration or 
phacoemulsification); with insertion of intraocular (e.g., trabecular 
meshwork, supraciliary, suprachoroidal) anterior segment aqueous 
drainage device, without extraocular reservoir, internal approach, one 
or more); 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 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

[[Page 81636]]

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 proposed 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, $5000. 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. of the 
CY 2024 OPPS/ASC 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 30.

[[Page 81637]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.048

    Comment: We received three comments in support of our proposal to 
reassign CPT codes 66989 and 66991 to Proposed APC 5493 for CY 2024.
    Response: We appreciate the commenters' support for our proposals.
    After consideration of the public comments we received, we are 
finalizing our proposal without modification. Please refer to Table 31 
below for the final OPPS New Technology APC and status indicator 
assignment for CPT codes 66989 and 66991. The final CY 2024 payment 
rates can be found in Addendum B to this final rule with comment via 
the internet on the CMS website.

[[Page 81638]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.049

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 
($1801-$1900)) 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

[[Page 81639]]

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 proposed 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 proposed 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 ($1201-$1300)) 
with a payment rate of $1,250.50 for CY 2024 based on the arithmetic 
mean of $1,284.59 as shown in Table 32.
[GRAPHIC] [TIFF OMITTED] TR22NO23.050

    Comment: Multiple commenters asked that we continue to assign CPT 
code 0662T to APC New Technology 1520 (New Technology--Level 20 ($1801-
$1900)) with a payment rate of $1,850.50 for CY 2024. The commenters 
believe that 12 claims are not enough data to determine the cost of the 
procedure and that we should wait for more paid claims for the service 
before reducing payment for the service. Commenters stated that they 
had concerns with how hospital outpatient departments were billing CPT 
code 0662T and believed that they were incorrectly billing for the 
service.
    Response: We disagree with the commenters. First, it is generally 
not our policy to judge the accuracy of provider coding and charging 
for purposes of ratesetting. We rely on hospitals and providers to 
accurately report the use of HCPCS codes in accordance with their code 
descriptors, and CPT and CMS instructions, and to report services 
accurately on claims and charges and costs for the services on their 
Medicare hospital cost report. The 12 claims for CPT code 0662T have a 
geometric mean of around $833 which is over $1,000 below the current 
$1,850.50 payment rate for the service. While there may be some future 
variation with the geometric mean for this service, it is likely to be 
closer to $830 than $1,850. CPT code 0662T is eligible to be evaluated 
through the new technology service low volume APC policy and has a 
median of $780.47, an arithmetic mean of $1,217.74, and a geometric 
mean of $832.96. Therefore, we will assign CPT code 0662T to the APC we 
proposed, APC 1514 (New Technology--Level 14 ($1201-$1300)) with a 
payment rate of $1,250.50 based on the updated arithmetic mean for the 
service of $1,217.74.
    After consideration of the public comments we received, we are 
implementing our proposal without modification. Please refer to Table 
33 below for the final OPPS New Technology APC and status indicator 
assignment for CPT code 0662T. The final CY 2024 payment rates can be 
found in Addendum B to this final rule with comment via the internet on 
the CMS website.

[[Page 81640]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.051

l. 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 (for example, 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 proposed to continue 
assigning CPT codes 0721T and 0722T to New Technology APC 1508.
    Please refer to Table 34 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 the CY 2024 OPPS/ASC proposed rule via the internet on the CMS 
website.
[GRAPHIC] [TIFF OMITTED] TR22NO23.052

    We did not receive any public comments on our proposal and are 
finalizing it without modification. HCPCS codes 0721T and 0722T will be 
assigned to New Technology APC 1508 with a status indication of ``S'' 
for CY 2024. Please refer to Table 35 below for the final OPPS New 
Technology APC and status indicator assignment for CPT

[[Page 81641]]

codes 0721T and 0722T. The final CY 2024 payment rates can be found in 
Addendum B to this final rule with comment via the internet on the CMS 
website.
[GRAPHIC] [TIFF OMITTED] TR22NO23.053

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 (eg, 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 (eg, 
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 
proposed 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 
explained that 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, we explained that 
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 stated that we had 
concerns that the universal low volume APC policy calculations would 
not accurately capture the cost of the service. Therefore, for CY 2024, 
we proposed to continue assigning CPT code 0724T to New Technology APC 
1511 with a payment rate of $950.50.
    Please refer to Table 36 below for the proposed OPPS New Technology 
APC and status indicator assignment for HCPCS codes 0723T and 0724T for 
CY 2024. The proposed CY 2024 payment rates can be found in Addendum B 
to the CY 2024 OPPS/ASC proposed rule via the internet on the CMS 
website.

[[Page 81642]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.054

    We did not receive any public comments on our proposal and are 
finalizing it without modification. HCPCS codes 0723T and 0724T will be 
assigned to New Technology APC 1511 with a status indication of ``S'' 
for CY 2024. Please refer to Table 37 below for the final OPPS New 
Technology APC and status indicator assignment for HCPCS codes 0723T 
and 0724T. The final CY 2024 payment rates can be found in Addendum B 
to this final rule with comment via the internet on the CMS website.

[[Page 81643]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.055

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 proposed to 
continue assigning HCPCS code C9782 to New Technology APC 1590 with a 
payment rate of $17,050.50.
    Please refer to Table 38 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 the CY 
2024 OPPS/ASC proposed rule via the internet on the CMS website.

[[Page 81644]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.056

    We did not receive any public comments on our proposal and are 
finalizing it without modification. HCPCS code C9782 will be assigned 
to New Technology APC 1590 with a status indication of ``T'' for CY 
2024. Please refer to Table 39 below for the final OPPS New Technology 
APC and status indicator assignment for CPT code C9782. The final CY 
2024 payment rates can be found in Addendum B to this final rule with 
comment via the internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TR22NO23.057


[[Page 81645]]


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 ($8001-$8500)).
    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 proposed to continue to 
assign HCPCS code C9780 to APC 1534 with a proposed payment rate of 
$8,250.50 as shown in Table 40.
[GRAPHIC] [TIFF OMITTED] TR22NO23.058

    We did not receive any public comments on our proposal and are 
finalizing it without modification. There are no paid claims for the 
service described by HCPCS code 9780 for CY 2024. Therefore, we will 
continue to assign this service to APC 1534 with a proposed payment 
rate of $8,250.50. Please refer to Table 41 below for the final OPPS 
New Technology APC and status indicator assignment for HCPCS code C9780 
for CY 2024. The final CY 2024 payment rates can be found in Addendum B 
to this final rule via the internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TR22NO23.059

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 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

[[Page 81646]]

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 proposed 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 proposed 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, we 
stated the final 5-digit CPT code number would be listed in the CY 2024 
OPPS/ASC final rule with comment period. This information is summarized 
in Table 42.
[GRAPHIC] [TIFF OMITTED] TR22NO23.060

    Comment: One commenter, the manufacturer, claimed that in CY 2022 
two of the 21 paid claims for CPT code 0424T were inappropriately 
billed by hospitals that according to the manufacturer's records could 
not have purchased the device used in the procedure described by CPT 
code 0424T. The manufacturer asked that we exclude the two claims from 
our analysis to determine the payment rate for the procedure.
    Response: We appreciate the comment, but as have regularly stated 
since the establishment of the OPPS, it is the responsibility of 
providers and other interested parties to work with the MACs to fix any 
claims that may have been billed or paid inappropriately for a service. 
In this case, and in most cases, we assume that if a paid claim has 
been present on the claims file for several months that the claim as 
been paid appropriately. Therefore, we will not remove the two claims 
in question when performing our new technology low volume analyses to 
determine the payment rate for HCPCS code 0424T.
    After consideration of the public comments we received, we are 
implementing our proposal without modification. Our updated low volume 
analysis for HCPCS code 0424T finds that the median for paid claims for 
the service is $47,387.06, the arithmetic mean is $47,967.41, and the 
geometric mean is $43,063.94. The highest amount of the three values is 
the arithmetic mean of $47,967.41. Therefore, the service described by 
0424T and placeholder code 3X008 will be assigned to New Technology APC 
1580

[[Page 81647]]

(New Technology--Level 43 ($40,001-$50,000)) with a payment rate of 
$45,000.50. In addition, placeholder code 3X008 has been replaced with 
CPT code 33276 (Insertion of phrenic nerve stimulator system (pulse 
generator and stimulating lead[s]), including vessel catheterization, 
all imaging guidance, and pulse generator initial analysis with 
diagnostic mode activation, when performed).
    Please refer to Table 43 below for the final OPPS New Technology 
APC and status indicator assignment for CPT code 33276 for CY 2024. The 
final CY 2024 payment rates can be found in Addendum B to this final 
rule via the internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TR22NO23.061

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 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, and 0626T 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-$1000)) 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 were 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 explained that 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

[[Page 81648]]

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 
acknowledged 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 were concerned 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 proposed to maintain CPT code 0625T's current 
assignment. Specifically, for CY 2024, we proposed to continue to 
assign CPT code 0625T to New Technology APC 1511 with a payment rate of 
$950.50.
    Please refer to Table 44 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 the CY 
2024 OPPS/ASC proposed rule via the internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TR22NO23.062

    Comment: We received comments supporting our proposal for 0625T. 
Commenters stated that they agree with our reasoning that there are 
limited claims data available because CPT code 0625T was only made 
separately payable as part of the OPPS in October 2022. One commenter 
noted that there may also be a limited number of claims in CY 2023 and 
urged CMS to be cognizant of that in developing the CY 2025 payment 
rate for CPT code 0625T. The commenter also stated that there will 
likely be sufficient CY 2024 claims data for CMS to consider a 
different APC assignment for CPT code 0625T for CY 2026 with the 
availability of a new device that may be utilized with service 
described by CPT code 0625T.
    Response: We thank the commenters for their support of our 
proposal. We note that the policy being finalized in this final rule 
with comment with regard to CPT code 0625T applies only for CY 2024. 
Regarding the APC assignments for CPT code 0625T for future years, we 
will similarly consider the claims data available and public comments 
received in selecting the APC assignment for the code.
    We note that based on updated claims data available for this final 
rule with comment period, the low volume policy calculations have 
changed slightly. However, the concerns stated in the CY 2024 OPPS/ASC 
proposed rule regarding having insufficient claims data to justify 
reassignment to another New Technology APC remain. Therefore, after 
consideration of the public comments we received and the limited claims 
data available, we are finalizing the APC assignment for CPT code 0625T 
as proposed.
    Please refer to Table 45 below for the final OPPS New Technology 
APC and status indicator assignment for CPT code 0625T. The final CY 
2024 payment rates can be found in Addendum B to this final rule with 
comment via the internet on the CMS website.

[[Page 81649]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.063

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 the CY 2024 
OPPS/ASC 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 
brachytherapy APC has fewer than 100 single claims that can be used for 
ratesetting, under our low volume APC payment adjustment policy, we 
determine the APC cost as the greatest of the geometric mean cost, 
arithmetic mean cost, or median cost based on up to 4 years of claims 
data. We excluded APC 5853 (Partial Hospitalization for CMHCs) and APC 
5863 (Partial Hospitalization for Hospital-based PHPs) from our 
universal low volume APC policy given the different nature of policies 
that affect the partial hospitalization program. We also excluded APC 
2698 (Brachytx, stranded, nos) and APC 2699 (Brachytx, non-stranded, 
nos) as our current methodology for determining payment rates for non-
specified brachytherapy sources is appropriate.
    Based on claims data available for the CY 2024 OPPS/ASC proposed 
rule, we proposed 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 the 
CY 2024 OPPS/ASC proposed rule). Eight of the ten APCs were designated 
as low volume APCs in CY 2023. Based on data for the 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 proposed 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 
the CY 2024 OPPS/ASC 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 proposed to 
designate it as such for CY 2024.
    Table 46 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 4 years of 
claims data based on the APC's designation as a low volume APC; and the 
statistical methodology we proposed to use to determine the APC's cost 
for ratesetting purposes for CY 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 4 
years of claims data we proposed to use to calculate the costs for 
these APCs are CYs 2018, 2019, 2021, and 2022.

[[Page 81650]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.064

    Comment: One commenter requested clarification about the meaning of 
the statement ``using up to four years of data'' regarding the 
calculation of the geometric mean, arithmetic mean, and median for the 
universal low volume APC policy for clinical and brachytherapy APCs (88 
FR 49627). The commenter also requested more information on why there 
was a difference in the geometric mean amount reported in the CY 2024 
OPPS proposed rule in Table 27 for APC 5244 (Level 4 Blood Product 
Exchanges and Related Services), which was $52,105 based on claims from 
CY 2022 as compared to the geometric mean reported for APC 5244 in the 
2 times rule discussion for the CY 2024 OPPS proposed rule, which was 
$71,154 and also based on claims from CY 2022 (88 FR 49628).
    Response: When we state that we are using up to four years of data 
for the universal low volume APC policy for clinical and brachytherapy 
APCs, we mean that we will use four years of data

[[Page 81651]]

if four years of data is available for an APC, but we may need to use 
between one and three years of data if fewer years of data are 
available. We will use the greatest number of years of data available, 
unless there is a substantial reason not to use a particular year of 
data. The data will also be for consecutive years unless, again, there 
is substantial reason not to use a particular year of data. For 
example, we stated in the CY 2024 OPPS proposed rule (88 FR 49627) that 
we had concerns with CY 2020 claims data as a result of the COVID-19 
PHE, and that we were therefore using data from CYs 2018, 2019, 2021, 
and 2022.
    The commenter correctly noted that we inadvertently provided an 
outdated geometric mean cost for APC 5244 based on only CY 2022 claims 
data. Based on data available for the proposed rule, the correct 
geometric mean cost without low volume APC designation that should have 
been displayed in Table 27 for APC 5244 was $71,154.
    Comment: One commenter supports the universal low volume APC policy 
for clinical and brachytherapy APCs in general but requests that the 
policy only be invoked when application of the universal low volume 
policy would increase the payment amount for the low-volume APC.
    Response: The purpose of the universal low volume APC policy for 
clinical and brachytherapy APCs is to bring payment stability to these 
low-volume APCs rather than to ensure higher payment rates. With 
payment stability, whether it is limiting annual increases or decreases 
in the payment rate, providers are better able to plan what their 
expenses and compensation will be for performing certain low-volume 
services, and they can use that information to help budget for the cost 
of these low-volume services over several years.
    After consideration of the public comments we received, we are 
implementing our proposals without modification except where we are 
updating the payment rates for low-volume clinical and brachytherapy 
APCs with claims data updated through June 20, 2023.

E. APC-Specific Policies

1. Ablation of Bone Tumors CPT Code 20982 (APC 5115)
    CPT code 20982 (Ablation therapy for reduction or eradication of 1 
or more bone tumors (eg, metastasis) including adjacent soft tissue 
when involved by tumor extension, percutaneous, including imaging 
guidance when performed; radiofrequency) describes a primarily 
palliative procedure that reduces the size of bone tumors and lessens 
the pain from the tumors. For the CY 2024 OPPS proposed rule, CPT code 
20982 had a geometric mean of around $11,773 and we proposed to assign 
the procedure to APC 5114 (Level 4 Musculoskeletal Procedures), which 
has a payment rate of around $6,974.
    Comment: One commenter asked that we reassign CPT code 20982 from 
APC 5114 to APC 5115 (Level 5 Musculoskeletal Procedures) with a 
payment rate of around $13,421. The commenter noted that this bone 
tumor ablation procedure was one of the highest cost procedures 
assigned to APC 5114 and that the payment rate for APC 5114 only 
covered around 60 percent of the cost of CPT code 20982. The commenter 
also noted that while the bone tumor ablation procedure would be 
overpaid in APC 5115, the additional payment was only 13 percent of the 
cost of CPT code 20982.
    Response: We agree with the commenter. In addition to the 
underpayment and overpayment amounts cited by the commenter, we also 
found that if CPT code 20982 had enough claims to be a significant 
procedure in APC 5114, it would be in violation of the 2 times rule by 
over $1,000 as two times the lowest cost significant procedure in that 
APC was around $10,700 while the payment rate for CPT code 20982 is 
around $11,773.
    After consideration of the public comments we received, we are 
assigning CPT code 20982 to APC 5115 (Level 5 Musculoskeletal 
Procedures). Table 47 shows the finalized status indicator and APC 
assignment for this procedure code. We refer readers to Addendum B of 
this final rule with comment period for the payment rates for all codes 
reportable under the OPPS. Addendum B is available via the internet on 
the CMS website.
[GRAPHIC] [TIFF OMITTED] TR22NO23.065

2. Administration of Lacrimal Ophthalmic Insert Into Lacrimal 
Canaliculus (APC 5503)
    Dextenza, which is described by HCPCS code J1096 (Dexamethasone, 
lacrimal ophthalmic insert, 0.1 mg), is a drug indicated for ``the 
treatment of ocular inflammation and pain following ophthalmic 
surgery'' and for ``the treatment of ocular itching associated with 
allergic conjunctivitis.'' \11\
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    \11\ Dextenza. FDA Package Insert. https://www.accessdata.fda.gov/drugsatfda_docs/label/2021/208742s007lbl.pdf.
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    The manufacturer of the drug previously asserted that this drug is 
administered and described by CPT code 0356T (Insertion of drug-eluting 
implant (including punctal dilation and implant removal when performed) 
into lacrimal canaliculus, each). Interested parties also previously 
stated that Dextenza is inserted in a natural opening in the eyelid 
(called the punctum) and that the drug is designed

[[Page 81652]]

to deliver a tapered dose of dexamethasone to the ocular surface for up 
to 30 days. CPT code 0356T was deleted December 31, 2021, and replaced 
with CPT code 68841 (Insertion of drug-eluting implant, including 
punctal dilation when performed, into lacrimal canaliculus, each), 
effective January 1, 2022. Interested parties currently assert that the 
drug, Dextenza, is administered and described by CPT code 68841. We 
refer readers to the CY 2023 OPPS/ASC final rule with comment period 
for a detailed history on CMS payment assignments for CPT code 0356T 
and CPT code 68841 (87 FR 71840).
    In the CY 2024 OPPS/ASC proposed rule (87 FR 49765), we proposed 
that Dextenza (HCPCS code J1096) continues to function as a surgical 
supply that meets the criteria described at Sec.  416.174, and we 
proposed to continue to make separate payment for Dextenza as a non-
opioid pain management drug that functions as a supply in a surgical 
procedure under the ASC payment system for CY 2024. We proposed that 
payment for Dextenza would continue to be packaged when furnished in 
the HOPD but paid separately when furnished in an ASC. We proposed to 
package HCPCS code J1096 under the OPPS and assign the code to a status 
indicator of ``N'' (packaged). This is consistent with our packaging 
policy outlined at 42 CFR 419.2(b), which lists the types of items and 
services for which payment is packaged under the OPPS. Specifically, 
Sec.  419.2(b)(16) includes drugs and biologicals that function as 
supplies when used in a surgical procedure as packaged costs. 
Historically, we have stated that we consider all items related to the 
surgical outcome and provided during the hospital stay in which the 
surgery is performed, including postsurgical pain management drugs, to 
be part of the surgery for purposes of our drug and biological surgical 
supply packaging policy (79 FR 66875).
    For CY 2024, we proposed to continue to assign CPT code 68841 to 
APC 5503 (Level 3 Extraocular, Repair, and Plastic Eye Procedures) with 
a proposed payment rate of $2,249.64. We also proposed to continue to 
assign CPT code 68841 OPPS status indicator ``Q1'' and an ASC payment 
indicator of ``N1.''
    The issue of payment for CPT code 68841 was brought to the Advisory 
Panel on Hospital Outpatient Payment (also known as HOP Panel) in 2023 
for CY 2024 rulemaking. At the August 2023 meeting, based on the 
information presented, the Panel recommended that CMS assign HCPCS code 
68841 a status indicator (SI) of ``J1'' (Hospital Part B Services Paid 
Through a Comprehensive APC) as they believed this assignment would 
treat CPT code 68841 similarly to other clinically related codes.
    Comment: Several commenters stated that increased payment, and 
separate payment, for CPT code 68841, the code that describes the 
administration of the drug, was required to ensure continued 
beneficiary access to the drug Dextenza (HCPCS code J1096) in both the 
HOPD and ASC settings. Some commenters did not make a specific 
suggestion as to the final APC assignment but contended that the 
proposed payment was inadequate. Commenters cited various payment 
rates, such as $500, $1,200, $2,350, and $2,500 as potential 
appropriate payment rates for CPT 68841 under the OPPS and ASC payment 
system. Commenters emphasized that a change was needed to ensure 
adequate payment in the ASC setting, where the commenters stated the 
majority of these Dextenza administrations occur.
    Several commenters argued for a change in the OPPS status indicator 
and the ASC payment indicator to allow separate payment for CPT code 
68841. Some commenters stated that a ``Q1'' status indicator (STV-
Packaged Codes) was inappropriate but did not provide an alternative 
suggestion. However, some other commenters suggested assignment to a 
``J1''(Hospital Part B Services Paid Through a Comprehensive APC) 
status indicator. One commenter contended that a status indicator of 
``S'' (Procedure or Service, Not Discounted When Multiple) or ``T'' 
(Procedure or Service, Multiple Procedure Reduction Applies) would also 
be appropriate but believed that ``J1'' would be the most accurate and 
would generate consistency among APC 5503, as all other codes within 
APC 5503 are assigned to status indicator ``J1.''
    Several commenters pointed to the clinical importance of providing 
Dextenza to patients, noting that it reduces ocular pain and 
inflammation and reduces the burden of topical eyedrop application. 
Additionally, commenters stated that they usually perform the procedure 
to administer Dextenza in conjunction with ophthalmic surgeries. 
Commenters believed the procedure is a distinct surgical procedure that 
requires additional operating room time and resources. These commenters 
believed that the cataract surgery is conducted and concluded, as 
evidenced by the removal of the surgical drape and speculum, and then 
the Dextenza administration procedure begins. The commenters further 
mentioned that additional payment was needed to compensate for a 
variety of tasks associated with the administration of Dextenza, such 
as ordering, billing, counting inventory, technician training, surgical 
tools, and instrument sterilization, among others. Commenters also 
pointed to the fact that there are 112 single frequency claims as 
evidence that both Dextenza and its administration should be paid 
separately as there is no other procedure on the claim.
    Overall, commenters were concerned that the lack of increased or 
separate payment may reduce access to Dextenza, particularly in the ASC 
setting.
    Response: We thank commenters for their feedback. We agree with 
commenters that it is still appropriate to assign CPT code 68841 to APC 
5503 (Level 3 Extraocular, Repair, and Plastic Eye Procedures).
    For the CY 2024 OPPS update, based on claims submitted between 
January 1, 2022, and December 30, 2022, processed through June 30, 
2023, our analysis of the latest claims data for this final rule with 
comment period shows a geometric mean cost of approximately $1,993.20 
for predecessor CPT code 68841 based on 172 single claims, which is 
comparable to the geometric mean cost of about $2,288.49 for APC 5503. 
Based on the data, we continue to believe that assignment to APC 5503 
for CPT code 68841 is appropriate.
    We also continue to believe that assignment of CPT code 68841 to an 
OPPS status indicator of ``Q1'' and an associated ASC payment indicator 
of ``N1,'' is appropriate. We continue to believe that CPT code 68841 
is mostly performed during ophthalmic surgeries, such as cataract 
surgeries. A status indicator ``Q1,'' indicating a conditionally 
packaged procedure, describes a HCPCS code where the payment is 
packaged when it is provided with a significant procedure but is 
separately paid when the service appears on the claim without a 
significant procedure. Because ASC services always include a surgical 
procedure, HCPCS codes that are conditionally packaged under the OPPS 
are generally packaged (payment indictor ``N1'') under the ASC payment 
system. Although stakeholders state this is an independent surgical 
procedure and should not be packaged into the primary ophthalmic 
procedure in which the drug and drug administration are associated, 
based on observed clinical patterns as to how the drug is used, we do 
not agree. Based on claims data, out of over 7,000 total frequency 
claims, CPT code 68841 is used independently only about 2 percent of 
the time,

[[Page 81653]]

meaning that the other 98 percent of the time CPT code 68841 has its 
payment packaged into the primary procedure with which it is 
associated. These data reinforce our belief that Dextenza and CPT code 
68841 are not furnished independent of a surgical procedure and should 
be packaged into the primary ophthalmic procedure with which the drug 
and drug administration are associated.
    While we recognize that there are some claims that may only include 
CPT code 68841 without a primary ophthalmic surgery on the claim, we do 
not believe that this is a frequent occurrence based on our claims data 
and clinical use patterns; as previously mentioned, our claims data 
shows that only 172 out of 7,327 claims are performed independently of 
another primary procedure (only about 2 percent of claims).
    After consideration of the public comments, we are finalizing our 
proposal, without modification, to assign CPT code 68841 to APC 5503 
with OPPS status indicator ``Q1'' (STVPackaged Codes) for CY 2024, 
which typically means there will be a packaged APC payment if this code 
is billed on the same claims as a HCPCS code assigned to status 
indictor ``S,'' ``T,'' or ``V'' (Clinic or Emergency Department Visit). 
In addition, based on the OPPS assignments, we are finalizing an ASC 
payment indicator of ``N1'' (Packaged service/item; no separate payment 
made) for CPT code 68841 for CY 2024.
    For the final CY 2024 OPPS payment rates, we refer readers to OPPS 
Addendum B to this final rule with comment period. In addition, we 
refer readers to OPPS Addendum D1 to this final rule with comment 
period for the status indicator definitions for all codes reported 
under the OPPS. For the final CY 2024 ASC payment rates and payment 
indicators, we refer readers to Addendum AA and Addendum BB for the ASC 
payment rates, and Addendum DD1 for the ASC payment indicator and their 
definitions. The OPPS Addenda B and D1 and ASC Addenda AA, BB, and DD1 
are available via the internet on the CMS website.\12\
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    \12\ https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices.
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    Please refer to Table 48 for the code descriptor, APC assignment, 
status indicator assignment, and payment indicator assignment for CPT 
code 68841 for CY 2024.
[GRAPHIC] [TIFF OMITTED] TR22NO23.066

    Similar to our rationale outlined for CPT code 68841, we also find 
it appropriate to package Dextenza (HCPCS code J1096) based on its 
clinical use patterns. Consistent with our clinical review and 
commenters' input, we believe this drug is mostly administered during 
ophthalmic surgeries, such as cataract surgeries. The packaging of this 
drug is consistent with our regulations at 42 CFR 419.2(b). 
Specifically, 42 CFR 419.2(b)(16) includes among the items and services 
for which payment is packaged under the OPPS, drugs and biologicals 
that function as supplies when used in a surgical procedure. 
Historically, we have stated that we consider all items related to the 
surgical outcome and provided during the hospital stay in which the 
surgery is performed, including postsurgical pain management drugs, to 
be part of the surgery for purposes of our drug and biological surgical 
supply packaging policy (79 FR 66875). We therefore believe packaging 
of HCPCS code J1096 is appropriate in the HOPD setting for CY 2024.
    Although packaged under the OPPS, as discussed in section XIII.E. 
of this final rule with comment period, we believe Dextenza (HCPCS code 
J1096), meets the criteria described at Sec.  416.174; and we are 
finalizing our proposal to make separate payment for Dextenza as a non-
opioid pain management drug that functions as a supply in a surgical 
procedure under the ASC payment system for CY 2024. For more 
information on the ASC payment for HCPCS code J1096 for CY 2024, refer 
to section XIII.E. of this final rule with comment period.
    As a reminder, for OPPS billing, because charges related to 
packaged services are used for outlier and future rate setting, 
hospitals are advised to report both CPT code 68841, the administration 
service, and HCPCS code J1096, the Dextenza drug, on the claim whenever 
Dextenza is provided in the HOPD setting. It is extremely important 
that hospitals report all HCPCS codes consistent with their 
descriptors, CPT and/or CMS instructions and correct coding principles, 
and all charges for all services they furnish, whether payment for the 
services is made separately or is packaged.
    Finally, for the final CY 2024 OPPS payment rates, we refer readers 
to OPPS Addendum B to this final rule with comment period. In addition, 
we refer readers to OPPS Addendum D1 to this final rule with comment 
period for the status indicator definitions for all codes reported 
under the OPPS. For the final CY 2024 ASC payment rates and payment 
indicators, we refer readers to Addendum AA and Addendum BB for the ASC 
payment rates and Addendum DD1 for the ASC payment indicator and their 
definitions. The OPPS Addenda B and D1 and ASC Addenda AA, BB, and DD1 
are available via the internet on the CMS website.\13\
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    \13\ https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices.

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[[Page 81654]]

3. Aquabeam Waterjet Ablation Service CPT Code 0421T (APC 5376)
    CPT code 0421T (Transurethral waterjet ablation of prostate, 
including control of post-operative bleeding, including ultrasound 
guidance, complete (vasectomy, meatotomy, cystourethroscopy, urethral 
calibration and/or dilation, and internal urethrotomy are included when 
performed) describes the Aquabeam waterjet ablation service. According 
to the manufacturer, Aquabeam is for treating lower urinary tract 
symptoms (LUTS) due to benign prostatic hyperplasia (BPH) by using a 
high-velocity water stream to ablate and remove tissue from enlarged 
prostates.
    For the OPPS CY 2024 proposed rule, we calculated the geometric 
mean for CPT code 0421T to be $9,609.07, and we assigned the service to 
APC 5376 (Level 6 Urology and Related Services), which has a payment 
rate of $8,947.91. There were 2,375 claims used to calculate the 
geometric mean for CPT code 0421T.
    Comment: One commenter, the manufacturer of the Aquabeam system, 
requested that we assign CPT code 0421T to APC 5377 (Level 7 Urology 
and Related Services) with a payment rate of $12,712.15 instead of 
assigning the service to APC 5376 with a payment rate of $8,947.91. The 
commenter asserts that the Aquabeam procedure has more clinical and 
resource similarity to procedures in APC 5377 than in APC 5376 because, 
according to the commenter, the procedures in APC 5377 are device-
intensive procedures similar to how the Aquabeam procedure is a device-
intensive procedure. The commenter also notes that the Aquabeam 
procedure is one of the highest cost procedures assigned to APC 5376.
    Response: We disagree with the commenter. CPT code 0421T is one of 
the more costly procedures in APC 5376 but it is not the costliest. The 
cost of the procedure is around $800 more than the payment rate of APC 
5376, but it is over $2,700 less than the payment rate of APC 5377. The 
Aquabeam procedure also does not violate the 2 times rule in its 
current assignment in APC 5376, and several of the procedures with 
similar cost to the Aquabeam procedure are device-intensive procedures 
with a similar percentage device offset as the Aquabeam procedure. 
Finally, if CPT code 0421T were to be reassigned into APC 5377, its 
cost would be over $2,000 less than the lowest-cost significant 
procedure in that APC.
    After consideration of the public comments we received, we are 
finalizing our proposal without modification for CPT code 0421T. Table 
49 shows the finalized status indicator and APC assignment for all of 
the procedure codes. We refer readers to Addendum B of this final rule 
with comment period for the payment rates for all codes reportable 
under the OPPS. Addendum B is available via the internet on the CMS 
website.
[GRAPHIC] [TIFF OMITTED] TR22NO23.067

4. Aquadex[supreg] Ultrafiltration (APC 5241)
    CPT code 0692T (Therapeutic ultrafiltration) describes an apheresis 
procedure through which plasma water and sodium are removed from the 
blood using the Aquadex[supreg] SmartFlow System. The procedure is 
indicated in patients who are diagnosed with hypervolemia and are non-
responsive to the more traditional treatments such as diuretic 
medications. CPT code 0692T was established effective January 1, 2022, 
and since its establishment, the code has been assigned to APC 5241 
(Level 1 Blood Product Exchange and Related Services). At the August 
21, 2023, HOP Panel Meeting, a presenter provided information to the 
Panel on the description of the service and the cost of the 
Aquadex[supreg] Ultrafiltration device and procedure. At the conclusion 
of the presentation, the presenter advised the Panel to request that 
CMS reassign CPT code 0692T from APC 5241 to APC 5242. The HOP Panel 
had no recommendations. For CY 2024, we proposed to maintain the 
assignment to APC 5241, with a payment rate of $417.32.
    Comment: We received one comment from the manufacturer requesting 
that CMS reassign CPT code 0692T from APC 5241 with a payment of 
$426.24 to APC 5242 (Level 2 Blood Product Exchange and Related 
Services) with a payment of $1,504.13. The commenter stated that the 
proposed APC assignment and payment does not accurately reflect the 
resources, time, and costs necessary to complete the therapeutic 
ultrafiltration procedure. The commenter pointed out that the current 
APC assignment consists of mostly transfusion procedures, with CPT code 
36430 (Transfusion, blood or blood components) accounting for 99 
percent of the more than 200,000 single frequency claims for services 
assigned to this APC. They also note that there are several apheresis 
procedures assigned to APC 5242.
    Response: Under the OPPS, we review our claims data on an annual 
basis to determine the payment rates. For CY 2024, the OPPS payment 
rates are based on claims submitted between January 1, 2022, and 
December 31, 2022, processed through June 30, 2023. Because the code 
was new in 2022, we have very limited claims data (1 claim). However, 
we note that with all new codes for which we lack pricing information, 
our policy has been to assign the service to an existing APC based on 
input from a variety of sources, including, but not limited to, review 
of the clinical similarity of the

[[Page 81655]]

service to existing procedures, input from CMS medical advisors, and 
review of all other information available to us. The OPPS is a 
prospective payment system that provides payment for groups of services 
that share clinical and resource use characteristics. Based on our 
understanding of the service and input from our medical advisors, we do 
not agree that CPT code 0692T is dissimilar to other services in APC 
5241 such that it should be assigned to a different APC. In particular, 
our medical advisors noted the similarities between platelet apheresis 
(CPT code 36513) and the therapeutic ultrafiltration procedure. For CY 
2024, based on our evaluation, we are finalizing our proposal to 
continue the assignment to APC 5241 for CPT code 0692T.
    In summary, after consideration of the public comment, we are 
finalizing our proposal, without modification, to assign CPT code 0692T 
to APC 5241 for CY 2024. The final CY 2024 payment rate for the code 
can be found in Addendum B to this final rule with comment period. In 
addition, we refer readers to Addendum D1 of this final rule with 
comment period for the SI meanings for all codes reported under the 
OPPS. Addenda B and D1 are available via the internet on the CMS 
website.
5. Aqueous Shunt Procedure (APC 5492)
    For CY 2023, we assigned CPT code 66180 (Aqueous shunt to 
extraocular equatorial plate reservoir, external approach; with graft) 
to APC 5492 (Level 2 Intraocular Procedures) with a payment of 
$3,995.58. For CY 2024, as shown in OPPS Addendum B that was released 
with the CY 2024 OPPS/ASC proposed rule with comment period, we 
proposed to maintain the APC assignment to APC 5492 with a payment rate 
of $3,970.62 for CPT code 66180.
    Comment: One commenter suggested reassigning CPT code 66180 to APC 
5493 (Level 3 Intraocular Procedures, with a payment rate of $5,110.58, 
based on its similarity to CPT code 66179 (Aqueous shunt to extraocular 
equatorial plate reservoir, external approach; without graft), which is 
proposed in APC 5493. The commenter explained that CPT code 66180 and 
CPT code 66179 are very similar procedures but clarified that CPT code 
66180 requires additional time and resources to affix the scleral patch 
graft used in the procedure. Based on their similarity, the commenter 
urged CMS to reassign CPT code 66179 to APC 5493.
    Response: While the procedures may be the same, our claims data for 
this final rule with comment period shows that the resources to perform 
the procedures are significantly different. For 2024, the OPPS payment 
rates are based on claims submitted between January 1, 2022, and 
December 31, 2022, processed through June 30, 2023. Based on our 
evaluation of the claims data, the geometric mean cost for CPT code 
66180 is lower than CPT code 66179. Specifically, our claims data show 
a geometric mean cost of about $4,595 for CPT code 66180 based on 3,124 
single claims (out of 3,140 total claims). In contrast, the geometric 
mean cost for CPT code 66179 is slightly higher at approximately $4,988 
based on 134 single claims (out of 135 total claims). The cost range 
for the significant procedures assigned to APC 5492 is between 
approximately $3,138 (for CPT code 65820) and $4,694 (for CPT code 
66183), while the cost range for the significant procedures assigned to 
APC 5493 is between about $4,943 (for CPT code 66991) and $5,357 (for 
CPT code 66989). Based on the cost range for APC 5492 and 5493, we 
believe that the resource costs and clinical homogeneity for CPT code 
66180 are consistent with those procedures in APC 5492, rather than APC 
5493. Therefore, we believe we should continue to assign CPT code 66180 
to APC 5492.
    In summary, after consideration of the public comment we received, 
we are finalizing our proposal, without modification, to continue to 
assign CPT code 66180 to APC 5492 for CY 2024. We refer readers to 
Addendum B of this final rule with comment period for the payment rates 
for all codes reported under the OPPS. In addition, we refer readers to 
Addendum D1 of this final rule with comment period for the status 
indicator meanings for all codes reported under the OPPS. Addenda D1 
and Addendum B are available via the internet on the CMS website.
6. Arthrodesis, Sacroiliac Joint, Percutaneous, with Image Guidance, 
Including Placement of Intra-Articular Implant(s) (e.g., Bone 
Allograft[s], Synthetic Device[s]), Without Placement of Transfixation 
Device (APC 5116)
    The CPT Editorial Panel established CPT code 27278, to describe 
arthrodesis, sacroiliac joint, percutaneous, with image guidance, 
including placement of intra-articular implant(s) (e.g., bone 
allograft[s], synthetic device[s]), without placement of transfixation 
device, effective January 1, 2024. Because the final CY 2024 CPT code 
numbers were not available when we published the proposed rule, the 
code was listed as placeholder code 2X000 in the OPPS Addendum B of the 
CY 2024 OPPS/ASC proposed rule.
    For CY 2024, we proposed to assign CPT code 27278 to status 
indicator ``J1'' and APC 5116 (Level 6 Musculoskeletal Procedures) with 
a proposed payment rate of $20,692.25 based on clinical similarity and 
resource use to the predecessor code 0775T.
    Comment: One commenter supported our proposal to assign CPT code 
27278 to APC 5116 due to clinical similarity and resource use to the 
predecessor code 0775T.
    Response: We appreciate the commenter's feedback on this new CPT 
code and we agree with the commenter's recommendation to finalize the 
APC assignment.
    In summary, after reviewing the public comment for the proposal, we 
are adopting as final our proposal to assign CPT code 27278 to APC 
5116. The final CY 2024 payment rate for this code can be found in 
Addendum B to this final rule with comment period. In addition, we 
refer readers to Addendum D1 of this final rule with comment period for 
the status indicator meanings for all codes reported under the OPPS. 
Addenda B and D1 are available via the internet on the CMS website.
7. Artificial Iris Insertion Procedures (APC 5496)
    For the July 2020 update, the AMA's CPT Editorial Panel established 
three CPT codes to describe the CustomFlex Artificial Iris device 
implantation procedure. Table 50 below lists the long descriptors for 
the codes. In addition to the surgical CPT codes, as discussed in the 
CY 2021 OPPS/ASC final rule with comment period (85 FR 85990 through 
85992), we approved the associated device, specifically, the CustomFlex 
Artificial Iris, for pass-through status effective January 1, 2021, and 
established a new category for this device, specifically, HCPCS code 
C1839 (Iris prosthesis). The designation of pass-through status for the 
device indicates that, under the OPPS, the device is paid separately in 
addition to the surgical CPT codes.
    In the CY 2023 OPPS/ASC final rule with comment period (87 FR 
71889), we listed device category HCPCS code C1839 in Table 52 (Devices 
with Pass-Through Status (Or Adjusted Separate Payment) Expiring At The 
End of the Fourth Quarter of 2022, In 2023, or In 2024), as one of the 
device codes whose pass-through status would expire on December 31, 
2022. However, section 4141 (Extension of Pass-Through Status Under the 
Medicare Program for Certain Devices Impacted by COVID-19) of the 
Consolidated Appropriations Act, 2023 extended pass-through status for 
a 1-year period beginning on January 1,

[[Page 81656]]

2023, for devices whose pass-through status would have ended on 
December 31, 2022. Consequently, pass-through for HCPCS code C1839 will 
now expire on December 31, 2023.
    As listed in Table 50 below, for CY 2023, we assigned HCPCS code 
C1839 to status indicator ``H'' to indicate that the device is on pass-
through status. In addition, we assigned CPT codes 0616T-0618T to APC 
5495 (Level 5 Intraocular Procedures) with a payment rate of 
$18,089.98. For CY 2024, we proposed to reassign device category code 
C1839 from status indicator ``H'' (device pass-through) to status 
indicator ``N'' (packaged) since its pass-through status expires on 
December 31, 2023. With the additional costs from the expired pass-
through device, we proposed to reassign CPT codes 0616T, 0617T, and 
0618T from APC 5495 to APC 5496 (Level 6 Intraocular APC), which is a 
Low Volume APC and is discussed in further detail in section III.D of 
this final rule with comment period. In addition, the discussion 
related to device HCPCS code C1839 can be found in section IV.b of this 
final rule with comment period.
[GRAPHIC] [TIFF OMITTED] TR22NO23.068

    Comment: Some commenters applauded our proposal to reassign CPT 
codes 0616T, 0617T, and 0618T to APC 5496, and requested that CMS 
finalize the APC assignment.
    Response: As listed in Table 46 in section III.D. of this final 
rule with comment period, APC 5496 is designated as one of the low 
volume APCs for CY 2024. Based on our review of the claims data for APC 
5496, we found the cost for CPT code 0616T to be about $18,080 based on 
15 single claims, approximately $12,873 for CPT code 0617T based on 7 
claims, and about $17,733 for CPT code 1618T based on 13 single claims. 
Based on our analysis of the updated data for this final rule, we 
identified APC 5496 as a Low Volume APC with a cost of $16,990.74, and 
a final payment amount of $16,547.60 for CY 2024. We believe that APC 
5496 is the appropriate assignment for CPT codes 0616T, 0617T, and 
0618T based on their clinical characteristic and resource similarity to 
the procedure in the APC.
    In summary, after consideration of the public comments, we are 
finalizing our proposal, without modification, and assigning CPT codes 
0616T, 0617T, and 0618T to APC 5496 for CY 2024. Table 51 list the 
final OPPS SIs and APC for the codes. The final CY 2024 OPPS payment 
rate for the codes can be found in Addendum B to this final rule with 
comment period. In addition, we refer readers to Addendum D1 of this 
final rule with comment period for the status indicator (SI) meanings 
for all codes reported under the OPPS. Addenda B and D1 are available 
via the internet on the CMS website.

[[Page 81657]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.069

8. Autologous Adipose-Derived Regenerative Cell (ADRC) Therapy for 
Partial Thickness Rotator Cuff Tear (APC 5055)
    Effective July 1, 2022, the AMA's CPT Editorial Panel created two 
new Category III CPT codes to describe autologous adipose-derived 
regenerative cell (ADRC) therapy for partial thickness rotator cuff 
tear:
     0717T: Autologous adipose-derived regenerative cell (ADRC) 
therapy for partial thickness rotator cuff tear; adipose tissue 
harvesting, isolation and preparation of harvested cells, including 
incubation with cell dissociation enzymes, filtration, washing, and 
concentration of ADRCs
     0718T: Autologous adipose-derived regenerative cell (ADRC) 
therapy for partial thickness rotator cuff tear; injection into 
supraspinatus tendon including ultrasound guidance, unilateral
    These codes describe a prospective, randomized multicenter pivotal 
trial of autologous adult adipose-derived regenerative cell (ADRC) 
injection into partial-thickness rotator cuff tears that is currently 
in progress. The purpose of this investigation is to evaluate the 
safety and superior effectiveness in functional improvement in patients 
with partial-thickness rotator cuff tears (PTRCTs) after the 
administration of a single injection of adipose-derived regenerative 
cells (ADRCs) into the partial-thickness rotator cuff tear compared to 
the administration of a single corticosteroid injection into the 
associated subacromial space. For CY 2024, we proposed to assign CPT 
codes 0717T and 0718T to status indicator ``E1'' to indicate that these 
codes are not paid by Medicare when submitted on outpatient claims (any 
outpatient bill type) since, at the time, the clinical trial had not 
been approved by CMS as IDE Category B study.
    Comment: One commenter requested that we reassign CPT codes 0717T 
and 0718T from status indicator ``E1'' to status indicator ``J1'' and 
assign them to APC 5114 (Level 4 Musculoskeletal Procedures) with a 
proposed payment rate of $6,895.06. The commenter stated that this was 
the best placement based on clinical and resource coherence. The 
commenter also stated that this was consistent with their calculation 
that the total cost of the device was $3,186.11. The commenter stated 
that the cost of their procedure including the device was $6,316 in 
2022. The commenter noted that on August 24, 2023, the CMS Coverage and 
Analysis Group (CAG) approved their Category B IDE study and included 
it on the approved list of covered Category B IDE trials.
    Response: We thank the commenter for the recommendation. Because 
the clinical trial was approved by CMS as a Category B IDE study on 
August 24, 2023, we are assigning CPT codes 0717T and 0718T to separate 
payment under OPPS. Based on input from our medical advisors, we are 
assigning both CPT codes 0717T and 0718T to status indicator ``T'' and 
APC 5055 (Level 5 Skin Procedures) based on clinical similarity with 
CPT code 15771 (Grafting of autologous fat harvested by liposuction 
technique to trunk, breasts, scalp, arms, and/or legs; 50 cc or less 
injectate).
    The final 2024 payment rates for the codes can be found in Addendum 
B to this final rule with comment period. In addition, we refer readers 
to Addendum D1 of this final rule with comment period for the status 
indicator (SI) meanings for all codes reported under the OPPS. Addenda 
B and D1 are available via the internet on the CMS website.

[[Page 81658]]

9. Barostim CPT Code 0266T (APC 1580)
    Barostim is a fully implantable neurostimulator system with an 
indication to treat heart failure symptoms in a limited number of 
patients who meet the FDA-approved eligibility criteria. Barostim 
received device pass-through status in the OPPS starting in January 
2021 and its device pass-through status is scheduled to end on December 
31, 2023. In the OPPS, once pass-through status ends for a device, the 
cost of the device is packaged into its associated procedure, which for 
Barostim is CPT code 0266T (Implantation or replacement of carotid 
sinus baroreflex activation device; total system (includes generator 
placement, unilateral or bilateral lead placement, intra-operative 
interrogation, programming, and repositioning, when performed)).
    Claims from CY 2022 will be used to set the payment rate for the 
Barostim implant procedure. There are 123 claims for the Barostim 
implant procedure in CY 2022, and all claims report using Barostim as a 
part of the Barostim implant procedure. Therefore, the geometric mean 
cost of the Barostim implant procedure reflects the full cost of the 
device and the resources used to implant it. The Neurostimulator and 
Related Procedures APC has five payment levels. The estimated payment 
amount for CY 2024 for Level 5, which is the highest level, is around 
$30,700. The geometric mean cost of the Barostim implant procedure is 
nearly $46,000. In the CY 2024 OPPS proposed rule, we proposed to 
assign the Barostim implant procedure to APC 5465 (Level 5 
Neurostimulator and Related Procedures).
    Comment: The HOP Panel and multiple commenters including the 
manufacturer requested that CPT code 0266T be assigned to APC 1580 (New 
Technology--Level 43 ($40,001-$50,000)) with a payment rate of around 
$45,000. The commenters noted that in the CY 2023 OPPS/ASC final rule 
we assigned a different neurostimulator procedure whose geometric mean 
cost was over $25,000 more than the payment rate for APC 5465, CPT code 
0424T (Insertion or replacement of neurostimulator system for treatment 
of central sleep apnea; complete system (transvenous placement of right 
or left stimulation lead, sensing lead, implantable pulse generator)), 
to New Technology APC 1581 (New Technology--Level 44 ($50,001-$60,000) 
with a payment rate of around $55,000 as APC 1581 more closely 
reflected the cost of the service.
    Response: We agree with the commenters. The updated geometric mean 
for CPT code 0266T is around $47,300 which is nearly $17,000 more than 
the updated payment rate for APC 5465 of around $30,500. Also as noted 
by the commenters, we had in CY 2023 moved another neurostimulator 
procedure described by CPT code 0424T to a new technology APC when its 
geometric mean was found to be substantially higher than the payment 
rate for APC 5465.
    After consideration of the public comments we received, we are not 
adopting our proposal as final. Instead, we are adopting a final APC 
assignment for CPT code 0266T to APC 1580 (New Technology--Level 43 
($40,001-$50,000)). Table 52 shows the finalized status indicator and 
APC assignment for all of the procedure codes. We refer readers to 
Addendum B of this final rule with comment period for the payment rates 
for all codes reportable under the OPPS. Addendum B is available via 
the internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TR22NO23.070

10. Barricaid[supreg] Spine/Lumbar Disk Surgery (APC 5115)
    For CY 2024, we proposed to assign HCPCS code C9757 (Laminotomy 
(hemilaminectomy), with decompression of nerve root(s), including 
partial facetectomy, foraminotomy and excision of herniated 
intervertebral disc, and repair of annular defect with implantation of 
bone anchored annular closure device, including annular defect 
measurement, alignment and sizing assessment, and image guidance; 1 
interspace, lumbar) to APC 5115 (Level 5 Musculoskeletal Procedures) 
with a proposed payment rate of $13,269.40. The proposed short 
descriptor for HCPCS code C9757 was ``spine/lumbar disk surgery.''
    Comment: We received a comment from the manufacturer of the 
Barricaid[supreg] device, which is the bone-anchored annular closure 
device that is implanted during the procedure described by HCPCS code 
C9757. Specifically, the commenter requested that we revise the short 
descriptor for HCPCS code C9757 from ``spine/lumbar disk surgery'' to 
``spine bone-anchor implant surgery,'' which could help limit erroneous 
claims for HCPCS code C9757 that do not include the Barricaid[supreg] 
device. The commenter also requested that CMS issue a transmittal or 
Medicare Learning Network[supreg] (MLN) Matters article to educate 
hospital outpatient departments that a bone-anchored implant must be 
used to report HCPCS code C9757, and that the code cannot be reported 
using any other type of non-FDA approved technology or when a suture-
based supply is used.
    Response: We thank the commenter for their input. First, we note 
that coders are generally aware that they need to read the entire long 
descriptors, and not rely on short descriptors alone, for the codes 
they are billing to ensure they are

[[Page 81659]]

reporting the procedures, services, and items accurately. In addition, 
it is generally not our policy to judge the accuracy of provider coding 
and charging for purposes of ratesetting. We rely on hospitals and 
providers to accurately report the use of HCPCS codes in accordance 
with their code descriptors and CPT and CMS instructions, and to report 
services accurately on claims and charges and costs for the services on 
their Medicare hospital cost report. Nonetheless, we are sympathetic to 
the commenter's concern regarding the descriptor, and consequently, we 
believe that a slight modification to the short descriptor may be 
helpful to ensuring that a device is used every time the HCPCS code 
C9757 is billed on a claim. We note that there is a maximum number of 
characters that can be used for the short descriptor field. In light of 
this character field limitation and to further clarify that a device 
should be implanted each time HCPCS code C9757 is billed, for CY 2024 
we are revising the short descriptor for the code from ``Spine/lumbar 
disk surgery'' to ``Spine device implant surgery.''
    After consideration of the public comment, we are finalizing our 
proposal to assign HCPCS code C9757 to APC 5115 with one modification 
to the code's short descriptor. For CY 2024, the short descriptor for 
HCPCS code C9757 is ``Spine device implant surgery'' to clarify that a 
device must be implanted each time the service is performed. The final 
CY 2024 short descriptor for HCPCS code C9757 can be found in Addendum 
B to this final rule with comment period. Addendum B is available via 
the internet on the CMS website. We also refer readers to Addendum D1 
of this final rule with comment period for the SI meanings for all 
codes reported under the OPPS. Addenda B and D1 are available via the 
internet on the CMS website.
11. Biliary Endoscopy CPT Codes 47539 and 47564 (APCs 5361 and 5362)
    CPT code 47539 (Placement of stent(s) into a bile duct, 
percutaneous, including diagnostic cholangiography, imaging guidance 
(eg, fluoroscopy and/or ultrasound), balloon dilation, catheter 
exchange(s) and catheter removal(s) when performed, and all associated 
radiological supervision and interpretation; new access, without 
placement of separate biliary drainage catheter) with a geometric mean 
cost of around $7,576 and CPT code 47564 (Laparoscopy, surgical; 
cholecystectomy with exploration of common duct) with a geometric mean 
cost of around $7,576 describe procedures that are performed when a 
patient has a blockage of their bile duct. For the CY 2024 OPPS 
proposed rule, we proposed to assign both procedures to APC 5361 (Level 
1 Laparoscopy and Related Services) with a payment rate of around 
$5,608.
    Comment: One commenter requested that we assign both CPT code 47539 
and CPT code 47564 to APC 5362 (Level 2 Laparoscopy and Related 
Services) with a payment rate of around $9,984. The commenter noted 
that both of these procedures had a geometric mean cost that was more 
than 2-times the lowest-cost significant procedure assigned to APC 5361 
(CPT code 49587), with a 2-times limit of around $7,207, which is less 
than the $7,576 geometric mean rate for both procedures. The commenters 
contended the only reason there is not a 2-times violation is neither 
CPT code 47539 nor CPT code 47564 is a significant procedure for 
determining the payment rate for APC 5361. The commenter also noted 
that the procedures described by CPT codes 47539 and 47564 have 
clinical and resource similarities to both the procedures in the 
higher-cost portion of APC 5361 and the lower-cost portion of APC 5362, 
which was another reason the commenters believed the procedures should 
be moved to APC 5362.
    Response: We appreciate the request of the commenter. Since the 
release of the CY 2024 OPPS proposed rule, we have updated our 2-times 
analysis of claims from CY 2022 that are used to set rates for CY 2024. 
Our updated results find that the 2-times limit for APC 5361 based on 
CPT code 49587 as the lowest-cost significant procedure is around 
$7,318. The updated geometric mean cost for CPT code 47539 is around 
$7,316, which means by just $2 there would not be a 2 times rule 
violation if CPT code 47539 was a significant procedure in determining 
the payment rate for APC 5361. For CPT code 47564, the updated 
geometric mean cost for the procedure is $7,557, which means there 
would be a 2 times rule violation if the procedure was significant in 
APC 5361. Our review of the procedures assigned to APC 5361 and APC 
5362 found the procedure described by CPT code 47539 had more clinical 
and resource similarities with the procedures in APC 5361, while the 
procedure described by CPT code 47564 appeared to have more clinical 
and resource similarities with the procedures in APC 5362.
    After consideration of the public comments we received, we are 
implementing our proposal without modification for CPT code 47539 to 
assign the procedure to APC 5361 (Level 1 Laparoscopy and Related 
Services). We also are implementing our proposal with modification for 
CPT code 47564 by assigning the procedure to APC 5362 (Level 2 
Laparoscopy and Related Services). Table 53 shows the finalized status 
indicator and APC assignment for all of the procedure codes. We refer 
readers to Addendum B of this final rule with comment period for the 
payment rates for all codes reportable under the OPPS. Addendum B is 
available via the internet on the CMS website.

[[Page 81660]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.071

12. Bone Density Tests/Bone Mass Measurement: Biomechanical Computed 
Tomography (BCT) Analysis and Digital X-ray Radiogrammetry-Bone Mineral 
Density (DXR-BMD) Analysis) (APCs 5521, 5523, and 5731)
    CPT code 0743T (Bone strength and fracture risk using finite 
element analysis of functional data and bone mineral density (BMD), 
with concurrent vertebral fracture assessment, utilizing data from a 
computed tomography scan, retrieval and transmission of the scan data, 
measurement of bone strength and BMD and classification of any 
vertebral fractures, with overall fracture-risk assessment, 
interpretation and report) became effective January 1, 2023. This code 
describes the service associated with BCT analysis with concurrent 
vertebral fracture assessment (VFA).
    In addition to new CPT code 0743T, there are five existing CPT 
codes describing BCT analysis that were effective July 1, 2019. The 
codes and their long descriptors are listed below.
     0554T: Bone strength and fracture risk using finite 
element analysis of functional data and bone-mineral density utilizing 
data from a computed tomography scan; retrieval and transmission of the 
scan data, assessment of bone strength and fracture risk and bone-
mineral density, interpretation and report.
     0555T: Bone strength and fracture risk using finite 
element analysis of functional data and bone-mineral density utilizing 
data from a computed tomography scan; retrieval and transmission of the 
scan data.
     0556T: Bone strength and fracture risk using finite 
element analysis of functional data and bone-mineral density utilizing 
data from a computed tomography scan; assessment of bone strength and 
fracture risk and bone mineral density.
     0557T: Bone strength and fracture risk using finite 
element analysis of functional data and bone-mineral density utilizing 
data from a computed tomography scan; interpretation and report.
     0558T: Computed tomography scan taken for the purpose of 
biomechanical computed tomography analysis.
    In the CY 2023 OPPS/ASC notice of proposed rulemaking (NPRM), we 
proposed to reassign CPT codes 0554T-0558T to status indicator E1. In 
response to public comment on the proposal, in the CY 2023 OPPS/ASC 
final rule (87 FR71844 through 71846), we stated that, based on our 
review and understanding of the service, BCT analysis does not meet 
Medicare's definition of bone mass measurement, as specified in Sec.  
410.31(a), which specifies the coverage of, and payment for, bone mass 
measurements for Medicare beneficiaries. Therefore, we assigned CPT 
codes 0554T-0558T and CPT code 0743T to status indicator ``E1'' to 
indicate that these codes are not covered by Medicare, and not paid by 
Medicare when submitted on outpatient claims (any outpatient bill 
type).
    In the CY 2024 OPPS/ASC proposed rule, we proposed to continue to 
assign CPT codes 0554T-0558T and CPT code 0743T to status indicator 
``E1.''
    Comment: Several commenters stated that they disagree with the 
status indicator assignment of ``E1'' and that the BCT CPT codes 0554-
0558T and CPT Code 0743T (BCT+VFA) meet the regulatory definition of 
Bone Mass Measurement (BMM). Commenters contended that the BCT and 
BCT+VFA procedures are reasonable and necessary diagnostic tests that 
meet all aspects of both the statutory and regulatory definitions of 
BMM.
    Another commenter stated that they urge CMS to restore coverage for 
BCT codes and BCT with concurrent VFA as covered bone mass measurement 
and assign them to status indicators ``S.''
    Response: We appreciate these comments. While CMS further considers 
this issue, we will not finalize, as proposed, the status indicator of 
``E1'' for these codes, but instead are assigning certain BCT codes 
describing HOPD services to clinical APCs. Specifically, for CY 2024, 
we are assigning CPT code 0555T to APC 5731 (Level 1 Minor Procedures) 
and SI ``S,'' CPT code 0556T to APC 5523 (Level 3 Imaging without 
Contrast) and SI ``S,'' and CPT code 0558T to APC 5521 (Level 1 Imaging 
without Contrast) with SI of ``S,'' which were the same APC assignments 
for the codes between CY 2019 and CY 2022. In addition, we are 
assigning CPT codes 0554T, 0557T, and 0743T to SI ``M'' (Items and 
Services Not Billable to the MAC. Not paid under OPPS.) to indicate 
that these codes are not payable under the OPPS since they describe 
physician-only services. 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.

[[Page 81661]]

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 these services when the 
appropriate MAC determines that the service meets the relevant 
conditions for coverage and payment.
    In summary, after consideration of the public comments, we are not 
finalizing our proposal for CPT codes 0554T-0558T and CPT code 0743T. 
The final payment rates for the separately payable codes can be found 
in Addendum B to this final rule with comment period. In addition, we 
refer readers to Addendum D1 of this final rule with comment period for 
the status indicator (SI) meanings for all codes reported under the 
OPPS. Addenda B and D1 are available via the internet on the CMS 
website.
13. Cardiac Computed Tomography Angiography (CCTA) (APC 5571)
    For the 2006 update, the AMA's CPT Editorial Panel established six 
Category III CPT codes to describe cardiac computed tomography 
angiography with contrast materials effective January 1, 2006. The 
codes were active and separately payable under the OPPS between January 
1, 2006, through December 31, 2009. The CPT Editorial Panel deleted the 
Category III CPT codes and replaced them with Category I CPT codes 
75572 through 75574 effective January 1, 2010. With the deletion of the 
Category III CPT codes on December 31, 2009, we crosswalked the APC 
assignments from the Category III CPT codes (predecessor codes) to the 
new Category I CPT codes effective January 1, 2010. Since 2010, the 
Category I CPT codes describing cardiac computed tomography angiography 
with contrast materials are CPT codes 75572, 75573, and 75574. The 
codes and their long descriptors are listed below.
     75572: Computed tomography, heart, with contrast material, 
for evaluation of cardiac structure and morphology (including 3D image 
postprocessing, assessment of cardiac function, and evaluation of 
venous structures, if performed)
     75573: Computed tomography, heart, with contrast material, 
for evaluation of cardiac structure and morphology in the setting of 
congenital heart disease (including 3D image postprocessing, assessment 
of left ventricular (LV) cardiac function, right ventricular (RV) 
structure and function and evaluation of vascular structures, if 
performed)
     75574: Computed tomographic angiography, heart, coronary 
arteries and bypass grafts (when present), with contrast material, 
including 3D image postprocessing (including evaluation of cardiac 
structure and morphology, assessment of cardiac function, and 
evaluation of venous structures, if performed)
    For CY 2023, as we indicated in the CY 2023 OPPS/ASC final rule 
with comment period (87 FR 71847 through 71850), we assigned the codes 
to APC 5571 (Level 1 Imaging with Contrast). As listed in the OPPS 
Addendum A (OPPS APCs) that was released with the CY 2023 OPPS/ASC 
final rule with comment period, APC 5571 was assigned a payment rate of 
$180.34 effective January 1, 2023. We note that the OPPS payment rate 
applies only to the hospital outpatient facility and does not include 
the physician service payment. Physician services are paid under 
Medicare's Physician Fee Schedule (PFS). For reference, the 54 below 
shows the total CY 2023 Medicare reimbursement for CPT codes 75572, 
75573, and 75574.
[GRAPHIC] [TIFF OMITTED] TR22NO23.072

    For CY 2024, based on the latest claims data, we proposed to 
continue to assign the codes to APC 5571 with a proposed payment rate 
of $177.09. As a reminder, we update the OPPS payment rates on an 
annual basis consistent with the requirements set forth in section 
1833(t)(9)(A) of the Act that requires the HHS Secretary to review, not 
less often than annually, and revise the APC groups, the relative 
payment weights, and the wage and other adjustments to take into 
account changes in medical practice, changes in technology, the 
addition of new services, new cost data, and other relevant information 
and factors. We received several comments related to our proposed 
payment for the CCTA codes. Many of the comments, which were form 
letters, addressed the same issues that were brought to our attention 
in the CY 2021 OPPS/ASC final rule (85 FR 85956 through 85959). Below 
is a summary of the public comments to the CY 2024 OPPS/ASC proposed 
rule and our responses to the comments.
    Comment: Several commenters noted that the payment for the CCTA 
codes has declined since 2017 and expressed concern with the continued 
assignment to APC 5571. They indicated that the reimbursement amount is 
insufficient to cover the cost of providing the service and argued that 
the payment amount does not take into account the hospital resources 
required to perform the test, including the use of the equipment, 
medication administration, staff time, and scanner time. To pay 
appropriately for the service, many of the commenters requested the 
reassignment of CPT codes 75572 and 75573 to APC 5572 (Level 2 Imaging 
with Contrast), with a proposed payment of $369.86. These same 
commenters also requested the reassignment of CPT code 75574 to APC 
5573 (Level 3 Imaging with Contrast), with a proposed payment rate of 
$775.83.
    Response: Under the OPPS, we use the latest claims data to set the 
annual payment rates. Payment rates for CY 2024 are based on claims 
with dates of service between January 1, 2022, and December 31, 2022, 
processed through June 30, 2023. As illustrated in Table 55

[[Page 81662]]

below, analysis of our claims data shows that the geometric mean cost 
for the codes range between $150.58 and $219.06. Specifically, the 
geometric mean cost for CPT code 75572 is $150.57 based on 22,575 
single claims (out of 40,066 total claims), $219.06 for CPT code 75573 
based on 437 single claims (out of 678 total claims), and $193.29 for 
CPT code 75574 based on 55,871 single claims (out of 78,932 total 
claims). Based on our analysis, the geometric mean costs for all three 
codes are consistent with the geometric mean cost for APC 5571, whose 
geometric mean cost is $179.94. In contrast, the geometric mean costs 
for APCs 5572 and 5573 are $376.62 and $784.12, respectively. Based on 
the geometric mean costs for CPT codes 75572 (GMC $150.57) and 75573 
(GMC $219.06), we do not believe that reassigning the codes to APC 5572 
(GMC $376.62) would be appropriate. Similarly, based on the latest 
claims data for CPT code 75574 (GMC $193.29), we do not believe that 
reassigning the code to APC 5573 (GMC $784.11) would be appropriate. We 
believe that reassigning the codes to either APC 5572 or 5573 would 
significantly overpay for the service. Based on the claims data, we 
believe that assigning CPT codes 75572, 75573, and 75574 to APC 5571 
remains appropriate based on clinical characteristics and resource 
homogeneity to the other services in the APC. In addition, because the 
CCTA CPT codes have been in existence since 2010, we do not believe 
that hospital outpatient facilities have been coding these services 
inappropriately. Consequently, we believe our claims data reflect the 
cost of providing the service.
[GRAPHIC] [TIFF OMITTED] TR22NO23.073

    Comment: A commenter suggested discontinuing payment for CPT code 
75573 and instead reassigning the current payment rate for CPT code 
75573 for CPT codes 75574, 93571, and 93572. The commenter noted that 
in addition to CPT code 75574, CPT codes 93571 and 93572 are under-
reimbursed.
    Response: Under the OPPS, we cannot reallocate or remove the 
reimbursement from one active/existing code and distribute to other 
codes. In cases where

[[Page 81663]]

a code is deleted and replaced with another code, we will crosswalk the 
payment for the deleted code/predecessor code to the new code. However, 
in this case, CPT code 75573 is an active code under the OPPS, and its 
payment cannot be removed and reassigned to another code. Payment 
determination under the OPPS is based on analysis of the latest claims 
data. For CY 2024, OPPS payments are based on our analysis of claims 
with dates of service between January 1, 2022, and December 31, 2022, 
processed through June 30, 2023. As stated above, we have claims data 
for CPT code 75573, which indicates that the service is performed in 
the HOPD setting.
    With regard to CPT codes 93571 and 93572 codes, we note these codes 
are assigned status indicator ``N'' to indicate that their payment is 
packaged in the primary code. Below are the complete long descriptors 
for CPT codes 93571 and 93572:
     93571: Intravascular doppler velocity and/or pressure 
derived coronary flow reserve measurement (coronary vessel or graft) 
during coronary angiography including pharmacologically induced stress; 
initial vessel (list separately in addition to code for primary 
procedure)
     93572: Intravascular doppler velocity and/or pressure 
derived coronary flow reserve measurement (coronary vessel or graft) 
during coronary angiography including pharmacologically induced stress; 
each additional vessel (list separately in addition to code for primary 
procedure)
    The words ``list separately in addition to code for primary 
procedure'' are included in the long descriptors for CPT code 93571 and 
93572 to indicate that that the codes are considered ``add-ons'' to 
another primary code that cannot be reported independently. 
Specifically, add-on codes must always be reported with another primary 
code on the same day. The AMA states in the CPT 2024 Professional 
Edition (page xviii) that ``add-on codes are always performed in 
addition to the primary service or procedure and must never be reported 
as a stand-alone code.'' In most cases, add-on codes are typically 
ancillary and supportive to a primary diagnostic or therapeutic 
modality and are an integral part of the primary service they support. 
As specified under regulation 42 CFR 419.2(b)(18), add-on codes are 
generally packaged under the OPPS, and payment for the codes are 
bundled with the primary codes. Consequently, CPT codes 93571 and 93572 
are not paid separately under the OPPS, but instead, their payment is 
packaged into the primary code.
    In addition, because we have claims data for CPT code 75573, we 
would not reallocate the payment for the code to CPT codes 93571, 
93572, and 75574. As stated above, our claims data show a geometric 
mean cost of $219.06 for CPT code 75573 based on 437 single claims (out 
of 678 total claims). Therefore, we believe that CPT code 75573 should 
continue to be paid separately under APC 5571.
    Comment: Many commenters urged CMS to allow hospitals the 
flexibility to submit charges for cardiac CT procedures with other than 
the general CT revenue code (0350) or the general MRI revenue code 
(0610), thereby allowing future estimates to reflect the true cost of 
providing the service. Some commenters suggested that the Medicare 
Administrative Contractors (MACs) have made it mandatory to report only 
the general CT revenue code (0350) for the CCTA codes. Another 
commenter reported that MACs have applied edits to the CCTA codes that 
prevent hospitals from reporting a cardiac revenue code for cardiac CT 
services when appropriate.
    Response: Based on our evaluation, we have not found any MAC edits 
that prevent hospitals from reporting the appropriate revenue code for 
the CCTA codes. We analyzed our claims data and based on claims with 
dates of service between January 1, 2022, and December 31, 2022, 
processed through June 30, 2023, we found seven revenue codes reported 
with CPT codes 75572, 75573, and 75574, specifically, revenue codes 
0320, 0321, 0329, 0350, 0351, 0352, and 0359. Of these seven revenue 
codes, four apply to CT services, specifically, revenue codes 0350, 
0351, 0352, and 0359. As evidenced by the claims data, hospital 
outpatient facilities are reporting revenue codes that describe CT 
services for the CCTA codes. We note that the general MRI revenue code, 
specifically, revenue code 0610, was not reported with the CCTA codes. 
Moreover, as listed in Table 56 below, we included the costs for these 
revenue codes in the CY 2024 ratesetting. That is, the costs attributed 
to the CCTA codes are included in the payment for CPT codes 75572, 
75573, and 75574.

[[Page 81664]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.074

    Furthermore, as we stated in the CY 2023 OPPS/ASC final rule (87 FR 
71849), hospital outpatient facilities are responsible for reporting 
the appropriate cost centers and revenue codes. As stated in section 
20.5 in Chapter 4 (Part B Hospital) of the Medicare Claims Processing, 
CMS ``does not instruct hospitals on the assignment of HCPCS codes to 
revenue codes for services provided under OPPS since hospitals' 
assignment of cost vary. Where explicit instructions are not provided, 
HOPDs should report their charges under the revenue code that will 
result in the charges being assigned to the same cost center to which 
the cost of those services are assigned in the cost report.'' 
Therefore, hospital outpatient facilities must determine the most 
appropriate cost center and revenue code for the CCTA codes. This 
instruction is reiterated in the Medicare Administrative Contractor 
(MAC) instructions for revenue code reporting for CCT and CCTA 
services, as noted in the various articles listed in Table 57. As 
stated in Table 57, MACs ``may specify revenue codes to help providers 
identify those revenue codes typically used'' to report a service, 
however, the guidance is purely advisory, and not mandatory, which is 
in contrast to statements made by several commenters. The MAC 
instructions can be found on the CMS.gov website, specifically, on the 
Medicare Coverage Database website.

[[Page 81665]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.075

    In summary, after consideration of the public comments, we are 
finalizing our proposal, without modification, and assigning the CCTA 
CPT codes 75572, 75573, and 75574 to APC 5571. The final CY 2024 OPPS 
payment rates for the codes can be found in Addendum B to this final 
rule with comment period. In addition, we refer readers to Addendum D1 
of this final rule with comment period for the status indicator (SI) 
meanings for all codes reported under the OPPS. Addenda B and D1 are 
available via the internet on the CMS website.
14. Cardiac Leadless Pacemaker Procedures (APCs 5183, 5224, and 5741)
    For the July 2023 update, the CPT Editorial Panel established 10 
new codes effective July 1, 2023, to describe the various procedures 
related to three new leadless pacemaker systems, specifically, the 
Aveir VR, Aveir AR, and Aveir DR leadless pacemaker systems. The codes 
describe the insertion, removal and replacement, removal-only, and 
programming associated with the new devices. The codes, and their long 
descriptors are listed in Table 58. Based on our evaluation of the 
codes, we determined that the Aveir VR received FDA approval, however, 
the Aveir AR and Aveir DR Systems were still pending FDA approval. 
Because the Aveir VR System received FDA premarket approval (PMA) in 
March 2022 and was approved by CMS for Medicare coverage under Coverage 
with Evidence Development (CED) on June 21, 2022 (Study Title: Aveir VR 
Coverage With Evidence Development Post-Approval Study; 
Clinicaltrials.gov number: NCT05336877), we assigned the related CPT 
codes to specific status indicator and APC assignments effective July 
1, 2023. For the Aveir AR, and Aveir DR Systems that were still pending 
FDA approval, we assigned the codes to status indicator ``E1'' to 
indicate that they were not payable by Medicare when submitted on 
outpatient claims (any outpatient bill type) because the services 
associated with these codes are either not covered by any Medicare 
outpatient benefit category, statutorily excluded by Medicare, or not 
reasonable and necessary. These codes, and their OPPS SI and APC 
assignments were listed in the July 2023 OPPS quarterly update CR 
(Transmittal 12077, Change Request 13210, dated June 13, 2023). Table 
58 below list the codes, long descriptors, status indicators, and APC 
assignments for the 10 codes that were listed in the July 2023 OPPS 
quarterly update CR.
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    For CY 2024, as listed in the OPPS Addendum B that was released 
with the CY 2024 OPPS/ASC proposed rule, we proposed to continue to 
assign the 10

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codes to the same status indicator and APC assignments listed in Table 
58. In addition to the codes effective July 1, 2023, we also listed the 
four Aveir AR-related CPT codes, specifically, CPT codes 0823T, 0824T, 
0825T, and 0826T, that are effective January 1, 2024, in OPPS Addendum 
B, and proposed to assign them to status indicator ``E1'' since the 
device had not received FDA approval. The codes were listed in OPPS 
Addendum B with their placeholder codes since we had not received the 
final CPT code numbers from AMA in time for publication of the proposed 
rule.
     0823T (placeholder code X125T): Insertion of permanent 
right atrial single-chamber leadless pacemaker
     0824T (placeholder code X126T): Removal of permanent right 
atrial single-chamber leadless pacemaker
     0825T (placeholder code X127T): Removal and replacement of 
permanent right atrial single-chamber leadless pacemaker
     0826T (placeholder code X128T): Programming device 
evaluation, single chamber
    We note a commenter provided background information on the 
technology associated with the new codes, the FDA approval for the 
three leadless pacemaker systems, and the cost of the complete system. 
First, the commenter clarified that the new codes relate to the Aveir 
DR dual-chamber leadless pacemaker, which is a modular system, that 
consists of two implanted leadless pacemakers, specifically, the Aveir 
VR single-chamber right ventricular component, and the Aveir AR single-
chamber right atrial component. Secondly, the commenter clarified that 
the Aveir VR received FDA PMA approval in March 2022, and the Aveir DR 
and Aveir AR were approved by the FDA for commercial use through a PMA 
supplement on June 29, 2023. Additionally, the commenter reported that 
the price for the Aveir DR dual chamber leadless pacemaker is $24,000 
and includes the following components: one Aveir VR right ventricular 
leadless pacemaker, one Aveir AR right atrial leadless pacemaker, two 
delivery catheters, and one introducer. The commenter indicated that 
the Aveir VR and Aveir AR devices may be implanted at the same time, 
thus representing the complete Aveir DR dual-chamber leadless 
pacemaker. Alternatively, the single-chamber components (Aveir VR and 
Aveir AR) may be implanted separately.
    We received several comments related to our proposal. Below are the 
responses to the comments.
    Comment: A commenter disagreed with the proposed APC assignment for 
the codes describing insertion of a leadless pacemaker for the complete 
system and single-chamber devices. Specifically, the commenter 
disagreed with the proposed assignment of APC 5194 (Level 4 
Endovascular Procedures; proposed payment of $17,195.36) for CPT codes 
33274 and 0797T, and suggested assignment to APC 5524 (Level 4 
Pacemaker and Similar Procedures; proposed payment of $18,718.23). This 
same commenter disagreed with the status indicator assignment of ``E1'' 
for CPT codes 0795T, 0796T, and 0823T, and recommended revision to APC 
5524. Another device manufacturer also disagreed with the proposed 
status indicator assignment of ``E1'' for CPT codes 0795T, 0796T, and 
0823T, and recommended assignment to either APC 5231 (Level 1 ICD and 
Similar Procedures; proposed payment of $23,075.10) or APC 5224. This 
same device manufacturer recommended reassignment from status indicator 
``E1'' to APC 5194 (Level 4 Endovascular Procedures; proposed payment 
of $17,195.36) for CPT codes 0796T and 0823T.
    Response: Because the codes are new, specifically, CPT codes 0795T, 
0796T, 0797T, and 0823T, we have no claims data. In determining the 
appropriate APC placement for new codes, we generally rely on input 
from a variety of sources, including, but not limited to, review of the 
resource costs and clinical similarity of the service to existing 
procedures; input from CMS medical advisors; information from 
interested specialty societies; and review of all other information 
available to us. Based on our evaluation of the codes, we agree that 
these insertion codes are more appropriate in APC 5224 (Level 4 
Pacemaker and Similar Procedures) based on clinical similarity and 
resource homogeneity to the procedures in the APC. Therefore, we are 
assigning CPT codes 0795T, 0796T, 0797T, and 0823T, to APC 5224 for CY 
2024.
    With respect to CPT code 33274, which was effective January 1, 
2019, our analysis of the claims data for this final rule shows a 
geometric mean cost of about $19,560 based on 4,349 single claims (out 
of 4,408 total claims), which we believe is consistent with the 
geometric mean cost of approximately $19,082 for APC 5224. Therefore, 
we agree with the commenter that CPT code 33274 fits more appropriately 
in APC 5224 rather than APC 5194, whose geometric mean cost is about 
$17,173. Consequently, we are reassigning CPT code 33274 from APC 5194 
to APC 5224 for CY 2024.
    Comment: For the removal and replacement codes, specifically, CPT 
codes 0801T, 0802T, 0803T, and 0825T, some commenters disagreed with 
the proposed status indicator assignment of ``E1.'' For CPT code 0801T, 
the commenters recommended assignment to either APC 5224 or 5231, and 
for CPT code 0803T, they disagreed with assignment to APC 5194 and 
suggested assignment to APC 5224. For CPT codes 0802T and 0825T, the 
commenters recommended assignment to APC 5224.
    Response: Because these removal and replacement codes are new, we 
have no claims data. However, based on our review of the codes, input 
from our clinicians, and their clinical similarity to the procedures in 
APC 5224, we believe these codes should be assigned to APC 5224 and the 
corresponding status indicator ``J1.'' Therefore, for CY 2024, we are 
assigning CPT codes 0801T, 0802T, 0803T, and 0825T to APC 5224 and SI 
``J1.''
    Comment: For the removal-only codes, specifically, CPT codes 0798T, 
0799T, and 0824T, the commenters disagreed with the proposed status 
indicator assignment of ``E1.'' For CPT code 0798T, one commenter 
recommended assignment to APC 5183 (Level 3 Vascular Procedures; 
proposed payment of $3,054.97), while another commenter suggested 
assignment to APC 5184 (Level 4 Vascular Procedures; proposed payment 
of $5,284.18). Similarly, the commenters agreed that CPT codes 0799T 
and 0824T should be reassigned from status indicator ``E1'' to APC 
5183. Another commenter suggested assigning the new leadless pacemaker 
removal-only codes, specifically, CPT codes 0798T, 0799T, 0800T, and 
0824T, to the same APC as CPT code 33275 (APC 5183) since they all 
describe the same procedure.
    Response: With the exception of CPT code 33275, which was effective 
January 1, 2019, we have no claims data for the removal-only codes, 
specifically, 0798T, 0799T, 0800T, and 0824T. However, based on input 
from our clinicians, and their similarity to CPT code 33275, we agree 
that all five codes should be placed in APC 5183. Therefore, for CPT 
codes 0798T, 0799T, and 0824T, we are reassigning the codes from status 
indicator ``E1'' to APC 5183 for CY 2024. We note that we did not 
receive any alternative APC recommendations for CPT codes 33275 and 
0800T, therefore, we are finalizing their APC assignments as proposed.
    Comment: For the programming code, specifically, CPT code 0826T, 
the commenters disagreed with the

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proposed status indicator assignment of ``E1,'' and suggested 
assignment to APC 5741 (Level 1 Electronic Analysis of Devices; 
proposed payment of $36.79). One commenter recommended the assignment 
of CPT codes 0804T and 0826T to the same APC as existing CPT code 93279 
(APC 5741) since they describe the same service.
    Response: Because the code is new, we have no claims data. However, 
based on recommendations from our clinicians, and suggestions from the 
commenters, we are reassigning CPT code 0826T from status indicator 
``E1'' to APC 5741 for CY 2024. Similarly, for CPT code 0804T, because 
the code is new, we have no claims data. However, based on input from 
the commenters, and suggestions from our clinicians, we are finalizing 
our proposal, without modification, to assign the code to APC 5741. For 
CPT code 93279, our analysis of the claims data for this final rule 
shows a geometric mean cost of approximately $34 based on 13,655 single 
claims (out of 22,664 total claims), which is in line with the 
geometric mean cost of approximately $37 for APC 5741. Therefore, for 
CPT code 93279, we are finalizing our proposal, without modification, 
to assign the code to APC 5741.
    Comment: A device manufacturer reported that their suggested APCs 
for the new leadless pacemaker CPT codes do not include the device cost 
since they intend to submit a device pass-through application to CMS. 
They note that approval of the pass-through application would enable 
hospital outpatient facilities to receive separate payment for the 
device for a period of two to three years.
    Response: We appreciate the clarification, and suggest the 
commenter refer to the Medicare Electronic Application Request 
Information System (MEARIS), specifically, at https://mearis.cms.gov/public/home, to submit their device pass-through application.
    Comment: A commenter mentioned that in OPPS Addendum B of the CY 
2024 OPPS/ASC proposed rule, CMS proposed to continue to assign HCPCS 
code G2066 (Interrogation device evaluation(s), (remote) up to 30 days; 
implantable cardiovascular physiologic monitor system, implantable loop 
recorder system, or subcutaneous cardiac rhythm monitor system, remote 
data acquisition(s), receipt of transmissions and technician review, 
technical support and distribution of results) to APC 5741, however, in 
the CY 2024 PFS proposed rule (88 FR 52321), CMS proposed to delete the 
code, and assign the direct practice expense inputs to CPT codes 93297 
and 93298. The commenter requested clarification on whether HCPCS code 
G2066 will remain active for CY 2024, and if not, what alternative 
codes should be reported by the hospital outpatient facilities.
    Response: HCPCS code G2066 will be deleted December 31, 2023, with 
no replacement code. We note that HCPCS code G2066 does not describe an 
interrogation device evaluation associated with a leadless pacemaker 
system, rather, it describes an interrogation device evaluation for an 
implantable cardiovascular physiologic monitor system, implantable loop 
recorder system, or subcutaneous cardiac rhythm monitor system. Under 
the OPPS, the interrogation device evaluation code that should be 
reported for the leadless pacemaker systems is CPT code 93296. The code 
was effective January 1, 2009, and is assigned to APC 5741. Below is 
the complete long descriptor for the code:
     93296: Interrogation device evaluation(s) (remote), up to 
90 days; single, dual, or multiple lead pacemaker system, leadless 
pacemaker system, or implantable defibrillator system, remote data 
acquisition(s), receipt of transmissions and technician review, 
technical support and distribution of results.
    In addition, we did not receive any comments on our proposed APC 
assignment for CPT code 93296. Therefore, for CY 2024, we are 
finalizing our proposed APC for this code. In summary, after 
consideration of the comments that we received, we are finalizing our 
proposal to the status indicator and APC assignments for the 18 codes 
listed in Tables 59, 60, 61, 62, and 63 below. Because the codes for 
the leadless pacemaker are new, we have no claims data. We believe that 
the assignment to APC 5224 for the insertion, as well as for the 
removal and replacement procedure codes, is the best approach at this 
time. Similarly, we believe that the assignment to APC 5183 for the 
removal-only codes are appropriate. We also believe that the assignment 
to APC 5741 for the programming and the interrogation device evaluation 
codes is appropriate at this time. We reiterate that we analyze our 
claims data on an annual basis to establish the annual OPPS payment 
rates. Once we have data, we will reevaluate and, if necessary, 
reassign the codes to appropriate APCs based on the latest claims data. 
Finally, the final payment rates for the codes can be found in Addendum 
B to this final rule with comment period. In addition, we refer readers 
to Addendum D1 of this final rule with comment period for the status 
indicator (SI) meanings for all codes reported under the OPPS. Addenda 
B and D1 are available via the internet on the CMS website.
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15. Cardiac Magnetic Resonance Imaging (APC 5572)
    For CY 2023, we assigned CPT code 75561 (Cardiac magnetic resonance 
imaging for morphology and function without contrast material(s), 
followed by contrast material(s) and further sequences) to APC 5572 
(Level 2 Imaging with Contrast) with a payment rate of $368.43. For CY 
2024, as listed in OPPS Addendum B that was released with the CY 2024 
OPPS/ASC proposed rule, we proposed to maintain the assignment to APC 
5572 with a payment rate of $369.86.
    Comment: A commenter disagreed with the assignment to APC 5572 for 
CPT code 75561 and requested a change to APC 5573. The commenter 
indicated that the service described by the code is clinically similar 
to the service described by CPT code 75563 (Cardiac magnetic resonance 
imaging for morphology and function without contrast material(s), 
followed by contrast material(s) and further sequences; with stress 
imaging), which is proposed to be assigned to APC 5573 (Level 3 Imaging 
with Contrast), with a payment of $775.83.
    Response: We reviewed our claims data for this final rule, which is 
based on claims submitted between January 1, 2022, and December 31, 
2022, processed through June 30, 2023, and found that the resource 
costs associated with CPT codes 75561 and 75563 are very different. 
Specifically, our claims data show a geometric mean cost of about $440 
for CPT code 75561 based on

[[Page 81674]]

23,451 single claims (out of 27,479 total claims), which is 
significantly lower than the geometric mean cost of approximately $833 
for CPT code 75563 based on 3,377 single claims (out of 3,818 total 
claims). We believe that the geometric mean cost of about $440 for CPT 
code 75561 is consistent with the geometric mean cost of approximately 
$377 for APC 5572, rather than APC 5573, whose geometric mean cost is 
approximately $784. Based on the data, we believe that the clinical and 
resource characteristics of CPT code 75561 are sufficiently similar to 
the other procedures assigned to APC 5572 and should continue to be 
assigned to the APC.
    In summary, after consideration of the public comment, we are 
finalizing our proposal, without modification, to assign CPT code 75561 
to APC 5572 for CY 2024. The final CY 2024 payment rate for the code 
can be found in Addendum B to this final rule with comment period. In 
addition, we refer readers to Addendum D1 of this final rule with 
comment period for the SI definitions for all codes reported under the 
OPPS. Addenda B and D1 are available via the internet on the CMS 
website.
16. Cardiac Resynchronization Therapy Procedures (APCs 5054, 5221, 
5223, 5231, 5731, and 5741)
    On November 1, 2016, CMS approved for Medicare coverage the 
Category B Investigational Device Exemption (IDE) study associated with 
EBR System's WiSE System for cardiac resynchronization therapy (Study 
Title: Stimulation Of the Left Ventricular Endocardium for Cardiac 
Resynchronization Therapy in Non-Responders and Previously Untreatable 
Patients, SOLVE CRT; NCT number NCT02922036; IDE number G150244). In 
2019, AMA established eight Category III CPT codes associated with the 
WiSE System effective January 1, 2019. The codes are CPT codes 0515T 
through 0522T, and describe the implant, removal and replacement, 
revision, interrogation, and programming of the system. For 2024, the 
AMA's CPT Editorial Panel revised the descriptors for existing CPT 
codes 0517T, 0518T, 0519T, 0520T, and established three new codes, 
specifically, CPT codes 0861T, 0862T, and 0863T, effective January 1, 
2024.
    For the 2024 update, as listed in OPPS Addendum B that was released 
with the CY 2024 OPPS/ASC proposed rule, we proposed to assign the 
codes to the SIs and APCs listed in Table 64 below, for the existing, 
new, and revised codes.
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    We received comments from the WiSE System manufacturer on our 
proposed assignments for the codes listed in Table 64. The commenter 
clarified that the

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IDE clinical trial associated with the WiSE System has ended and that 
they expect FDA PMA approval in the second quarter of 2024. The 
commenter also provided the following target pricing for the components 
of the WiSE System:
     WiSE System: $45,000
     Electrode: $17,300
     Battery: $9,000
     Transmitter: $18,700
     Battery and Transmitter: $27,700
    Of the 11 codes, the device manufacturer disagreed with the 
proposed APC assignments for seven codes listed in Table 64. Below are 
the comments associated with certain codes, their suggested APC 
assignments, and our responses to the comments.
    Comment: For CPT code 0515T (Insertion of wireless cardiac 
stimulator for left ventricular pacing, including device interrogation 
and programming, and imaging supervision and interpretation, when 
performed; complete system (includes electrode and generator 
[transmitter and battery])), we proposed to continue to assign to APC 
5231 (Level 1 ICD and Similar Procedures; proposed payment of $ 
23,075.10). The device manufacturer disagreed with the assignment and 
suggested reassignment to APC 1581 (New Technology--Level 44 ($50,001-
$60,000)) with a proposed payment of $55,000.50, based on its target 
price of $45,000 for the complete WiSE System.
    Response: CPT code 0515T was effective January 1, 2019. We note 
that the 2024 OPPS payment rates are based on claims submitted between 
January 1, 2022, and December 31, 2022, processed through June 30, 
2023. Analysis of our claims data show a geometric mean cost of about 
$43,974 based on 2 single claims (out of 2 total claims). The commenter 
reported a target price of $45,000 for the complete system, however, 
based on the low volume of only 2 single claims, we believe that we 
should maintain the code's assignment to APC 5231 before reassigning to 
a more appropriate APC. We believe that the continued assignment to APC 
5231 will enable Medicare to track the services accordingly and 
establish an appropriate payment for the code. Therefore, we are 
finalizing our proposal to APC 5231 for CPT code 0515T.
    Comment: The device manufacturer disagreed with our proposal to 
continue to assign CPT code 0516T to APC 5222 (Level 2 Pacemaker and 
Similar Procedures; proposed payment of $8,264.84) and recommended 
reassignment to APC 5224 (Level 4 Pacemaker and Similar Procedures; 
proposed payment of $18,718.23).
    Response: CPT code 0516T was also effective January 1, 2019. Our 
claims data show a geometric mean cost of about $9,645 based on 2 
single claims (out of 2 total claims). Based on our evaluation of the 
procedure, opinion from our clinicians, and the similarity of the 
procedure to CPT code 33207 (Insertion of new or replacement of 
permanent pacemaker with transvenous electrode(s); ventricular), which 
we proposed for assignment to APC 5223 (Level 3 Pacemaker and Similar 
Procedures; proposed payment of $10,354.26), we believe that APC 5223 
is the more appropriate assignment for CPT code 0516T. Therefore, for 
CY 2024, we are finalizing our proposal with modification, and 
assigning CPT code 0516T to APC 5223.
    Comment: As noted in Table 64, the code descriptor for CPT code 
0517T in CY 2023 described the insertion of the battery and/or 
transmitter only; however, for 2024, the revised descriptor describes 
the insertion of both the battery and transmitter. We proposed to 
continue to assign CPT code 0517T to APC 5222 (Level 2 Pacemaker and 
Similar Procedures; proposed payment of $8,264.84). A commenter 
disagreed with the assignment and recommended reassignment to APC 5232 
(Level 2 ICD and Similar Procedures; proposed payment of $31,975.11). 
We note the commenter listed APC 5231 (Level 1 ICD; proposed payment of 
$23,075.10) but included in parentheses the proposed payment of 
$31,975.11, which is the proposed payment for APC 5232 (Level 2 ICD). 
We believe the commenter meant to suggest APC 5232 rather than APC 
5231.
    Response: Based on our analysis of the data for this final rule, 
our claims data shows a geometric mean cost of approximately $51,240 
based on 2 single claims (out of 2 total claims) for CPT code 0517T. 
Based on the revised descriptor which describes insertion of a battery 
and a transmitter, as well as input from our clinicians, we believe we 
should reassign the code from APC 5222 (Level 2 Pacemaker and Similar 
Procedures; proposed payment of $8,264.84) to APC 5223 (Level 3 
Pacemaker and Similar Procedures; proposed payment of $10,354.26). 
Because the IDE clinical study associated with the WiSE System has just 
ended and the device is still pending FDA PMA approval, we do not 
believe that we should reassign CPT code 0517T to APC 5232 at this 
time. We believe that assignment to APC 5223 for CPT code 0517T is the 
best approach at this time. Therefore, for CY 2024, we are finalizing 
our proposal with modification, and reassigning CPT code 0517T to APC 
5223. We will evaluate the APC assignment for CPT code 0517T in next 
year's rulemaking to determine whether another APC would be more 
appropriate.
    Comment: As noted in Table 64, for CY 2023, CPT code 0518T 
described the removal of the ``battery and/or transmitter'' and was 
assigned to APC 5221 (Level 1 Pacemaker and Similar Procedures). 
However, for 2024, based on its revised description of removal of 
``battery component only,'' we proposed to reassign the code to APC 
5211 (Level 1 Electrophysiologic Procedures; proposed payment of 
$1,146.59) to reflect the reduced resources to perform the procedure. A 
commenter disagreed with the proposed assignment and suggested 
reassignment to APC 5222 (Level 2 Pacemaker and Similar Procedures; 
proposed payment of $8,264.84) consistent with the APC assignment for 
CPT code 33233 (Removal of permanent pacemaker pulse generator only).
    Response: Based on our analysis of the data for this final rule, we 
have no claims data for CPT code 0518T. However, based on input from 
our clinicians and the code's similarity to 33241 (Removal of 
implantable defibrillator pulse generator only), which is proposed to 
be assigned to APC 5221 (Level 1 Pacemaker and Similar Procedures), we 
believe that we should reassign the code to APC 5221. Therefore, for CY 
2024, we are finalizing our proposal with modification, and reassigning 
CPT code 0518T to APC 5221.
    Comment: As noted in Table 64, for CY 2023, CPT code 0519T 
described removal and replacement of the battery and/or transmitter. 
However, for CY 2024, the code has been revised to describe the removal 
and replacement of both the battery and transmitter. For CY 2024, we 
proposed to continue to assign the code to APC 5221 (Level 1 Pacemaker 
and Similar Procedures; proposed payment of $ 3,903.23). A commenter 
disagreed with the assignment and suggested reassignment to APC 5232 
(Level 2 ICD and Similar Procedures; proposed payment of $31,975.11). 
Similar to CPT code 0517T, the commenter listed APC 5231 (Level 1 ICD; 
proposed payment of $23,075.10) but included in parentheses a proposed 
payment amount of $31,975.11, which is the proposed payment for APC 
5232 (Level 2 ICD). We believe the commenter meant to suggest APC 5232 
rather than APC 5231.
    Response: Analysis of our claims data show a geometric mean cost of 
about $6,127 for CPT code 0519T based on 4

[[Page 81677]]

single claims (out of 4 total claims). Because the revised code 
describes the removal and replacement of the battery and transmitter, 
we believe this code should be assigned to the same APC as CPT code 
0517T. Therefore, for CY 2024, we are finalizing our proposal with 
modification, and assigning CPT code 0519T to APC 5223.
    Comment: As noted in Table 64, for CY 2023, CPT code 0520T 
described the removal and replacement of a pulse generator, including a 
new electrode, and was assigned to APC 5231 (Level 1 ICD and Similar 
Procedures) with a payment rate of $22,818.32. However, for 2024, the 
code descriptor has been revised significantly and now describes the 
removal and replacement of the battery component only. Based on the 
reduced work associated with the revised descriptor, we proposed to 
reassign CPT code 0520T to APC 5221 (Level 1 Pacemaker and Similar 
Procedures; proposed payment of $3,903.23). The device manufacturer 
disagreed with the proposal and suggested assignment to APC 5223 (Level 
3 Pacemaker and Similar Procedures; proposed payment of $10,354.26), 
consistent with the APC assignment for CPT code 33206 (Insertion of new 
or replacement of permanent pacemaker with transvenous electrode(s); 
atrial)).
    Response: We have no claims data for CPT code 0520T, however, based 
on our evaluation of the procedure and recommendation from our 
clinicians, we agree with the commenter that the code should be 
reassigned to APC 5223. Therefore, for CY 2024, we are finalizing our 
proposal with modification, and assigning CPT code 0520T to APC 5223.
    Comment: CPT code 0861T is a new code for CY 2024. We proposed to 
assign the code to APC 5211 (Level 1 Electrophysiologic Procedures; 
proposed payment rate of $ 1,146.59), based on its similarity to CPT 
code 0518T (Removal of only pulse generator component(s) (battery and/
or transmitter) of wireless cardiac stimulator for left ventricular 
pacing), which is also proposed to APC 5211. The commenter disagreed 
with the proposal, and recommended assignment to APC 5222 (Level 2 
Pacemaker and Similar Procedures; proposed payment of $8,264.84).
    Response: Consistent with our final policy for CPT code 0518T, we 
believe that we should reassign CPT code 0861T to APC 5221. Therefore, 
for CY 2024, we are finalizing our proposal with modification, and 
assigning CPT code 0861T to APC 5221.
    Comment: As listed in Table GX1, we proposed to assign CPT codes 
0862T, 0863T, 0521T, and 0522T, to the APCs listed in Table GX1. The 
device manufacturer agreed with our APC assignments for the codes.
    Response: We appreciate the commenter's feedback. Therefore, for CY 
2024, we are finalizing our proposal without modification for CPT codes 
0862T, 0863T, 0521T, and 0522T.
    Finally, we remind the commenter that 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 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. For new procedures and items, we get many requests from 
manufacturers to increase the reimbursement for the code associated 
with their procedures and items. 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. On balance, 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).
    In summary, after consideration of the public comment that we 
received, we are finalizing the APC assignments for CPT codes 0515T 
through 0522T, and 0861T through 0863T to the APCs listed in Table 65 
below. As we do every year, we will reevaluate the APC assignments for 
these codes in the next rulemaking cycle. We remind hospitals that we 
review, on an annual basis, the APC assignments for all items and 
services paid under the OPPS. The final payment rates for the codes can 
be found in Addendum B to this final rule with comment period. In 
addition, we refer readers to Addendum D1 of this final rule with 
comment period for the status indicator (SI) meanings for all codes 
reported under the OPPS. Addenda B and D1 are available via the 
internet on the CMS website.

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17. Catheter Placement Codes (APCs 5181 Through 5184)
    For CY 2024, we proposed to continue to assign catheter placement 
CPT codes 36555-36597 status indicator ``J1'' and to APCs 5181 through 
5184 with the proposed payment rates listed in table 66.
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    Comment: We received one comment where the commenter requested that 
we change the status indicator for all catheter placements CPT codes in 
the 365XX series from status indicator ``J1'' to status indicator 
``T.'' This commenter stated that there are times that patients require 
placement of such a catheter and then receive an infusion of a drug 
such as chemotherapy. Because several of those codes are assigned to 
status indicator ``J1,'' the drug cost, unless the drug is a pass-
through drug, is not reimbursed. For one infusion, Lutathera (HCPCS 
code A9513), the drug cost is $55,000 and the $1,487 payment for C-APC 
5182 clearly does not cover that cost. The commenter noted that while 
outlier payment will apply, it is inadequate to compensate for the 
actual expenditure for the treatment.
    Response: The Outpatient Coding Editor (IOCE) will package the drug 
cost into the Comprehensive APC, even if we change the status 
indicators for the catheter placement codes from ``J1'' to ``T'' 
because the APCs that the catheter placement codes are assigned to are 
assigned to status indicator ``J1.'' Therefore, the drug costs would 
not be reimbursed separately if we change the status indicators for the 
catheter placement codes from ``J1'' to ``T.'' Because of this, the 
only way to receive separate payment for the individual

[[Page 81683]]

procedures in these situations would be for the status indicator of the 
APC and all services assigned to the APC to be ``T.'' We continue to 
believe that this APC is appropriately assigned to comprehensive 
status. While there may be cases that would involve more complexity and 
cost, those packaged costs are reflected in claims used for ratesetting 
and the HCPCS and APC geometric mean costs, to the degree that they are 
performed in that manner. Nevertheless, we appreciate the comment, and 
we will take the commenter's recommendation into consideration in 
future rulemaking.
    In summary, after consideration of the comment we have received, we 
are finalizing our proposal without modification. Specifically, we will 
continue to assign catheter placement codes listed in Table 66 to 
status indicator ``J1'' for CY2024. We plan to review the comprehensive 
APC policy for CY 2025 to determine if we need to adopt any packaging 
changes as part of that rulemaking. The final CY 2024 OPPS payment 
rates for these codes can be found in Addendum B to this final rule 
with comment period. In addition, we refer readers to Addendum D1 of 
this final rule with comment period for the status indicator meanings 
for all codes reported under the OPPS. Addenda B and D1 are available 
via the internet on the CMS website.
18. Cerene Cryotherapy Endometrial Ablation Procedure (APC 5415)
    For CY 2023, we assigned CPT code 58356 (Endometrial cryoablation 
with ultrasonic guidance, including endometrial curettage, when 
performed) to APC 5415 (Level 5 Gynecologic Procedures) with a payment 
rate of $4,635.11. For CY 2024, as listed in OPPS Addendum B that was 
released with the CY 2024 OPPS/ASC proposed rule, we proposed to 
maintain the assignment for the code to APC 5415 with a payment rate of 
$4,783.96.
    Comment: A commenter requested that we finalize the proposed 
assignment to APC 5415 for CPT code 58356.
    Response: We reviewed our claims data for this final rule with 
comment period, which is based on claims submitted between January 1, 
2022, and December 31, 2022, processed through June 30, 2023, and found 
no claims data for CPT code 58356. However, because the code has been 
in existence since January 1, 2005, we reviewed our historical claims 
data for the last 5 years, specifically, the historical cost statistics 
released with the CY 2019 through CY 2023 OPPS/ASC final rules, and 
found some claims for the code. Specifically, our historical claims 
data show a geometric mean cost that ranged between $1,712 and $5,032, 
based on 3 and 5 single claims. Because the code has been assigned to 
this same APC for many years now, we believe we should the maintain the 
assignment to APC 5415 for CPT code 58356. We note that we review, on 
an annual basis, the APC assignments for all services and items paid 
under the OPPS.
    In summary, after consideration of the public comment, we are 
finalizing our proposal, without modification, to assign CPT code 58356 
to APC 5415 for CY 2024. The final CY 2024 payment rate for the code 
can be found in Addendum B to this final rule with comment period. In 
addition, we refer readers to Addendum D1 of this final rule with 
comment period for the SI meanings for all codes reported under the 
OPPS. Addenda B and D1 are available via the internet on the CMS 
website.
19. Complex Bunion Correction Procedures CPT Codes 28297 and 28740 (APC 
5114)
    CPT code 28297 (Correction, hallux valgus (bunionectomy), with 
sesamoidectomy, when performed; with first metatarsal and medial 
cuneiform joint arthrodesis, any method) with a geometric mean cost of 
around $10,664 and CPT code 28740 (Arthrodesis, midtarsal or 
tarsometatarsal, single joint) with a geometric mean cost of around 
$10,376 describe complex bunion correction procedures. For the CY 2024 
OPPS proposed rule, we proposed assigning both procedures to APC 5114 
(Level 4 Musculoskeletal Procedures) with a payment rate of around 
$6,974.
    Comment: One commenter noted that CPT codes 28297 and 28740 were 
close to violating the 2 times rule in APC 5114 and eligible for 
reassignment to APC 5115 (Level 5 Musculoskeletal Procedures) with a 
payment rate of around $13,421 if these procedures had been identified 
as significant procedures for 2 times rule purposes as the lowest-cost 
significant procedure. The lowest cost significant procedure in APC 
5114 (CPT code 27385) had a geometric mean cost of around $5,357 and 
two times the amount would have been $10,714, which is just $50 more 
than the cost of CPT 28297 and about $350 more than the cost of CPT 
28740. The commenter believed that there was a good chance that these 
procedures may have geometric means exceeding the 2 times rule 
requirements once the CY 2024 claims data were updated.
    Response: Our review of updated data for CY 2024 found that neither 
CPT code 28297 nor CPT code 28740 violates the 2 times rule in their 
current assignment to APC 5114 if the procedures were significant. The 
updated estimated 2-times limit based on CPT code 27385 was around 
$10,797. CPT code 28297's updated geometric mean cost was around 
$10,728 and CPT code 28740 updated geometric mean cost was around 
$10,565. Also, these procedures were towards the higher-cost end of APC 
5114 but moving them to APC 5115 would group CPT codes 28297 and 28740 
with procedures that are generally more complex and resource-intensive 
than the procedures described by CPT codes 28297 and 28740.
    After consideration of the public comments we received, we are 
implementing our proposal without modification for CPT codes 28297 and 
28740. Table 67 shows the finalized status indicator and APC assignment 
for all of the procedure codes. We refer readers to Addendum B of this 
final rule with comment period for the payment rates for all codes 
reportable under the OPPS. Addendum B is available via the internet on 
the CMS website.

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20. Cryoablation of the Prostate (APC 5376)
    CPT code 55873 (Cryosurgical ablation of the prostate (includes 
ultrasonic guidance and monitoring)) describes the procedure associated 
with cryoablation of the prostate. For CY 2023, we assigned the code to 
APC 5376 (Level 6 Urology and Related Services), with a payment rate of 
$8,557.53. For CY 2024, as listed in OPPS Addendum B that was released 
with the CY 2024 OPPS/ASC proposed rule, we proposed to continue the 
code's assignment to APC 5376 with a payment rate of $8,847.08.
    Comment: A commenter requested that we finalize the proposed 
assignment to APC 5376 for CPT code 55873.
    Response: We note that the CY 2024 OPPS payment rates are based on 
claims submitted between January 1, 2022, and December 31, 2022, 
processed through June 30, 2023. We reviewed the claims data for this 
final rule, and based on our review, we found the geometric mean cost 
of approximately $8,942 for CPT code 55873 based on 938 single claims 
(out of 942 total claims), is consistent with the geometric mean cost 
of about $9,022 for APC 5376. Based on the resource costs, we believe 
that CPT code 55873 appropriately fits in APC 5376 based on its 
clinical similarity and resource homogeneity to the codes in the APC.
    In summary, after consideration of the public comment, we are 
finalizing our proposal, without modification, to assign CPT code 55873 
to APC 5376 for CY 2024. The final CY 2024 payment rate for the code 
can be found in Addendum B to this final rule with comment period. In 
addition, we refer readers to Addendum D1 of this final rule with 
comment period for the SI meanings for all codes reported under the 
OPPS. Addenda B and D1 are available via the internet on the CMS 
website.
21. Drug Induced Sleep Endoscopy Evaluation CPT Code 42975 (APC 5153)
    For the CY 2024 OPPS final rule, we proposed that CPT code 42975 
(Drug-induced sleep endoscopy, with dynamic evaluation of velum, 
pharynx, tongue base, and larynx for evaluation of sleep-disordered 
breathing, flexible, diagnostic) with a geometric mean around $1,291 be 
assigned to APC 5153 (Level 3 Airway Endoscopy) with a payment rate of 
around $1,657.
    Comment: One commenter supported our decision to assign CPT code 
42975 to APC 5153.
    Response: We appreciate the support of the commenter.
    After consideration of the public comment we received, we are 
implementing our proposal without modification for CPT code 42975 to 
continue to assign the procedure to APC 5153 (Level 3 Airway 
Endoscopy). Table 68 shows the finalized status indicator and APC 
assignment for all of the procedure codes. We refer readers to Addendum 
B of this final rule with comment period for the payment rates for all 
codes reportable under the OPPS. Addendum B is available via the 
internet on the CMS website.
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[[Page 81685]]


22. EchoGo Echocardiography Image Processing Service (APC 5743)
    Effective July 1, 2023, based on a New Technology application 
received by CMS for an echocardiography image processing service, CMS 
established C9786 (Echocardiography image post processing for computer 
aided detection of heart failure with preserved ejection fraction, 
including interpretation and report) and assigned it to APC 5742 (Level 
2 Electronic Analysis of Devices). For CY 2024, CMS proposed to 
continue to assign HCPCS code C9786 to APC 5742.
    Comment: One commenter supported the establishment of HCPCS code 
C9786 to describe the service and believed that the clinical APC group 
to which we proposed to assign the code for C9786 was appropriate. The 
commenter recommended that we work with the manufacturer to ensure 
proper accounting of hospital resources used to furnish the service.
    Response: We thank the commenter for their support. We welcome 
ongoing dialogue and engagement from interested parties, including 
manufacturers, regarding hospital resource costs and suggestions for 
payment changes for consideration in future rulemaking.
    Comment: We received a comment from the manufacturer requesting 
that HCPCS code C9786 be reassigned to APC 5743 (Level 3 Imaging 
without Contrast), which had a proposed payment rate of $277.18. The 
commenter believes that assigning HCPCS code C9786 to APC 5743 would be 
more appropriate based on resources involved in furnishing the service. 
The commenter explained that in addition to a per-service cost, there 
are a number of other costs incurred by hospitals to furnish the 
service, including a cardiac sonographer, use of a Picture Archiving 
and Communication System (PACS) workstation, and IT related costs. The 
commenter explained that the combined costs incurred by hospitals to 
furnish C9786 are considerably greater than those for procedures 
assigned to APC 5742, but are similar to the costs incurred for 
procedures assigned to APC 5743.
    Response: We thank the commenter for their recommendation. Based on 
our evaluation of the additional information provided and the services 
assigned to APC 5743, we agree that there are more resource 
similarities between HCPCS code C9786 and the codes assigned to APC 
5743 than to the codes assigned to APC 5742. Therefore, for CY 2024 we 
are finalizing assigning HCPCS code C9786 to APC 5743.
    After consideration of the public comments, we are finalizing the 
assignment of HCPCS code C9786 to APC 5743. The final CY 2024 payment 
rate for these codes can be found in Addendum B to this final rule with 
comment period. We also refer readers to Addendum D1 of this final rule 
with comment period for the SI meanings for all codes reported under 
the OPPS. Addenda B and D1 are available via the internet on the CMS 
website. In addition, we note that CMS recognizes that software-based 
technologies are rapidly evolving, like the product used for HCPCS code 
C9786. Consistent with our comment solicitation on payment policy for 
software as a service (SaaS) procedures in the CY 2023 OPPS final rule 
(87 FR 72035 and 72036), we are considering, for future rulemaking, 
whether or not specific adjustments to payment policies and rate 
calculations are necessary to more accurately and appropriately pay for 
these products and services across settings of care. CMS remains open 
to feedback on these issues and welcomes engagement from interested 
parties, including from manufacturers, providers, and beneficiaries.
23. Endoscopic Procedure--Upper GI Tract CPT Code 43252 (APC 5302)
    CPT code 43252 (Esophagogastroduo- denoscopy, flexible, transoral; 
with optical endomicroscopy) describes a service that is used to 
visualize the upper portions of the GI tract from the esophagus to the 
duodenum. For the CY 2024 OPPS proposed rule, the geometric mean cost 
for this procedure was around $1,611, and we proposed to assign CPT 
code 43252 to APC 5302 (Level 2 Upper GI Procedures) with a payment 
rate of around $1,854. The payment rate for APC 5302 is approximately 
$240 more than the geometric mean cost of CPT code 43252.
    Comment: Two commenters requested that we assign CPT code 43252 to 
APC 5303 (Level 3 Upper GI Procedures) with a payment rate of around 
$3,803 for CY 2024. The procedure is assigned to APC 5303 for CY 2023 
APC. Commenters assert that the payment amount for APC 5302 is too low 
for the procedure described by CPT code 43252. One commenter referenced 
an independent data analysis showing the number of claims for the 
service declined from around 340 services in CY 2021 to around 213 
services in CY 2022. The commenter had questions about the quality of 
the CY 2022 data as some providers who had previously performed the 
procedure described by CPT code 43252 did not perform the procedure in 
CY 2022.
    Response: As we have stated regularly over the history of the OPPS, 
it is the responsibility of providers and other interested parties and 
not CMS to resolve potential claims and reporting issues for individual 
CPT codes and medical services payable by Medicare. There is no clear 
systematic error with the claims data for CPT code 43252. Also, the 
geometric mean cost for the service, which is around $1,596, is 
substantially lower than the payment rate for APC 5302 which is around 
$1,863. We note as well that in CY 2021, the geometric mean cost for 
CPT code 43252, which was around $1,985 was roughly $1,350 less than 
the payment rate for APC 5303, which was around $3,350. Therefore, it 
is not unexpected that the procedure would be reassigned to a lower-
paying APC for CY 2024.
    After consideration of the public comments we received, we are 
implementing our proposal without modification for CPT code 43252 to 
continue to assign the procedure to APC 5302 (Level 2 Upper GI 
Procedures). Table 69 shows the finalized status indicator and APC 
assignment for the procedure code. We refer readers to Addendum B of 
this final rule with comment period for the payment rates for all codes 
reportable under the OPPS. Addendum B is available via the internet on 
the CMS website.

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24. Endovascular Procedures With Coronary And Peripheral Intravascular 
Lithotripsy (IVL) (APC 5192, 5193, 5194)
    Coronary IVL is a device that, according to its manufacturer, can 
help surgeons perform a safe and effective angioplasty procedure when 
arterial plaque is calcified. These procedures also are known as 
percutaneous coronary intervention (PCI). Coronary IVL received device 
pass-through status in the OPPS on July 1, 2021, and the device pass-
through status is scheduled to expire on June 30, 2024. The device is 
described by HCPCS code C1761 (Catheter, transluminal intravascular 
lithotripsy, coronary) and is currently assigned to APC 2033 (Cath, 
trans intra litho/coro). The procedure also is reported with add-on CPT 
code 0715T (Percutaneous transluminal coronary lithotripsy (list 
separately in addition to code for primary procedure)), which is 
packaged in the OPPS. In CY 2024, CPT code 0715T is being replaced by 
CPT code 92972 (Percutaneous transluminal coronary lithotripsy (list 
separately in addition to code for primary procedure)). We propose to 
package this code as well.
    According to the manufacturer, the Coronary IVL device is used 
primarily with four endovascular procedures:
     C9600 (Percutaneous transcatheter placement of drug 
eluting intracoronary stent(s), with coronary angioplasty when 
performed; single major coronary artery or branch);
     92928 (Percutaneous transcatheter placement of 
intracoronary stent(s), with coronary angioplasty when performed; 
single major coronary artery or branch);
     92943 (Percutaneous transluminal revascularization of 
chronic total occlusion, coronary artery, coronary artery branch, or 
coronary artery bypass graft, any combination of intracoronary stent, 
atherectomy and angioplasty; single vessel); and
     92920 (Percutaneous transluminal coronary angioplasty; 
single major coronary artery or branch).
    For the OPPS CY 2024 proposed rule, we proposed to assign these 
procedures to either APC 5192 (Level 2 Endovascular Procedures) or APC 
5193 (Level 3 Endovascular Procedures), based on the geometric mean 
cost of each procedure. Because both APC 5192 and APC 5193 are 
comprehensive APCs, claims with higher costs for the PCI procedures 
described are eligible for a complexity adjustment which can provide 
one higher APC level of payment for these procedures. We also proposed 
to continue to assign HCPCS code C1761 to APC 2033 until June 30, 2024, 
when device pass-through status ends for HCPCS code C1761. Starting 
July 1, 2024, HCPCS code C1761 is proposed to be packaged with its 
associated endovascular procedures.
    Comment: Three commenters including the manufacturer of the 
Coronary IVL have requested that we take action to preserve the 
additional payment for the device described by HCPCS code C1761 that is 
used for PCI procedures through the end of CY 2024. The commenters 
suggest that we either use our equitable adjustment authority to extend 
pass-through status for HCPCS code C1761 through December 31, 2024, or 
increase the payment for the procedures most frequently used with 
Coronary IVL starting on July 1, 2024.
    Response: We appreciate the commenters' request to ensure 
consistent payment throughout CY 2024 for PCI procedures (HCPCS code 
C9600, CPT codes 92928, 92943, and 92920) that are performed using the 
Coronary IVL device described by HCPCS code C1761. However, only a 
small share of the PCI procedures are using the Coronary IVL device. 
Less than 6 percent of the procedures billed with HCPCS code C9600, CPT 
code 92928, and CPT code 92943 use the device described by HCPCS code 
C1761. For CPT code 92920, the percentage of procedures using the 
Coronary IVL device is less than 0.5 percent. The low amount of 
utilization of the Coronary IVL device with these PCI procedures means 
that it would not be appropriate to assign these procedures to a 
higher-paying APC to account for the cost of the device. These code 
combinations would also not meet the criteria for a complexity 
adjustment, as discussed in section II.A.2.b of this final rule with 
comment period. Likewise, we do not see a justification for extending 
device pass-through status for HCPCS code C1761. Device pass-through 
did not start for the Coronary IVL device until after the most serious 
disruptions in medical care occurred with the COVID-19 PHE, and none of 
the commenters suggested that CMS did not get adequate cost data for 
the device. In fact, the manufacturer was even willing to have pass-
through status end early for HCPCS code C1761 because they felt enough 
cost data regarding the device had been collected.
    After consideration of the public comments we received, we are 
implementing our proposal without modification for HCPCS codes C1761 
and C9600 and CPT codes 92920, 92928, 92943, and 92972. Table 70 shows 
the finalized status indicator and APC assignment for all of the 
procedure codes. We refer readers to Addendum B of this final rule with 
comment period or the payment rates for all codes reportable under the 
OPPS. Addendum B is available via the internet on the CMS website.
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BILLING CODE 4150-28-C
25. Extracorporeal Shock Wave Lithotripsy CPT Code 50590 (APC 5374)
    Extracorporeal shock wave lithotripsy is a procedure used to break 
up stone in the urinary tract using directed shock wave therapy. Shock 
waves are generated by a lithotripter which is a machine and capital 
equipment for the provider. The procedure is described by CPT code 
50590 (Lithotripsy, extracorporeal shock wave). For the CY 2024 OPPS 
proposed rule, CPT code 50590 had a geometric mean of around $3,450, 
and we proposed to assign the

[[Page 81688]]

service to APC 5374 (Level 4 Urology and Related Services).
    Comment: The HOP Panel and multiple commenters requested that CPT 
code 50590 be reassigned to APC 5375 (Level 5 Urology and Related 
Services) with a payment rate of around $5,016 to account for some of 
the capital cost of the procedure. The capital costs identified were 
primarily the purchase and maintenance of the lithotripter which, 
according to one commenter, cost $600,000 to purchase and another 
$60,000 a year to maintain. The commenters also stated that the 
procedure described by CPT code 50590 has clinical and resource 
similarity with procedures currently assigned to APC 5375.
    Response: We disagree with the commenters. Payments for services 
are for costs for providing individual procedures, but capital costs, 
depreciation, and other similar costs are largely excluded from our 
determination of the cost of a procedure. We note that the OPPS is a 
budget neutral system and, as such, the OPPS does not pay the full 
hospital cost of services, including for services that require the 
purchase and maintenance of high-cost capital equipment. We also 
compared the cost of CPT code 50590 to the cost of procedures currently 
assigned to APC 5375. While the cost of the procedure described by CPT 
code 50590 is around the middle of the cost range for APC 5374, it 
would be one of the lowest cost procedures in APC 5375. The number of 
procedures for CPT code 50590 would mean it would be a significant 
procedure in APC 5375, but its cost is around $700 lower than the 
current lowest-cost significant procedure for that APC. In addition, 
CPT code 50590 would be overpaid by around $1,500 if it was reassigned 
to APC 5375. Accordingly, we are continuing to assign CPT code 50590 to 
APC 5374.
    After consideration of the public comments we received, we are 
implementing our proposal without modification for CPT code 50590 to 
continue to assign the procedure to APC 5374 (Level 4 Urology and 
Related Services). Table 71 shows the finalized status indicator and 
APC assignment for all of the procedure codes. We refer readers to 
Addendum B of this final rule with comment period for the payment rates 
for all codes reportable under the OPPS. Addendum B is available via 
the internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TR22NO23.093

26. Eye-Movement Analysis Without Spatial Calibration (APC 5734)
    The CPT Editorial Panel established CPT code 0615T (Eye-movement 
analysis without spatial calibration, with interpretation and report), 
effective July 1, 2020, to describe eye-movement analysis without 
spatial calibration that involves the use of the EyeBOX system as an 
aid in the diagnosis of concussion, also known as mild traumatic brain 
injury (mTBI). The EyeBOX is intended to measure and analyze eye 
movements as an aid in the diagnosis of concussion within one week of 
head injury in patients 5 through 67 years of age in conjunction with a 
standard neurological assessment of concussion. A negative EyeBOX 
classification may correspond to eye movement that is consistent with a 
lack of concussion. A positive EyeBOX classification corresponds to eye 
movement that may be present in both patients with or without a 
concussion.
    For CY 2023, we assigned CPT code 0615T to APC 5734 (Level 4 Minor 
Procedures) with a payment rate of $116.11. For CY 2024, we proposed to 
continue to assign the code to APC 5734 with a payment rate of 
$123.302.
    Comment: A device manufacturer disagreed with the proposed APC 
assignment and requested a revision to APC 5722 (Level 2 Diagnostic 
Tests and Related Services) with a payment rate of $ 304.35. The device 
manufacturer indicated that the proposed payment is insufficient since 
the cost to provide the service is about $250. The commenter noted that 
the proposed reimbursement of $123.302 does not include the cost of 
providing the EyeBox service, along with the other services provided on 
the same day (clinic visit and other services). The device manufacturer 
suggested reassigning CPT code 0615T to APC 5722 (Level 2 Diagnostic 
Tests and Related Services) to ensure appropriate payment for the 
service associated with the EyeBOX test.
    Response: For 2024, the OPPS payment rates are based on claims 
submitted between January 1, 2022, and December 31, 2022, processed 
through June 30, 2023. Even with the latest claims data for this final 
rule with comment period, we still have no claims data for CPT code 
0615T. We discussed in the CY 2023 OPPS/ASC final rule with comment 
period that based on the claims used for the CY 2023 OPPS update, we 
saw no claims associated with this code (87 FR 71858). Thus, this is 
the second year in which we have no claims data for the code. We 
believe that EyeBOX may not be utilized by Medicare patients, and this 
may be the reason we have no claims data for the code. Based on the 
lack of claims data, we believe that we should maintain the assignment 
to APC 5734 for CPT code 0615T. Therefore, we are not revising the APC 
assignment for CY 2024 for CPT code 0615T. We remind the commenter that 
we review, on an annual basis, the APC assignments for all services and 
items paid under the OPPS.
    In summary, after consideration of the public comment we received, 
we are finalizing our proposal, without modification, to continue 
assignment to APC 5734 for CPT code 0615T for CY 2024. We refer readers 
to Addendum B of this final rule with comment period for the payment 
rates for all codes reported under the OPPS. In addition, we refer 
readers to Addendum A of this final rule with comment period for the 
status indicator meanings for all codes reported under the OPPS. 
Addenda A and Addendum B are available via the internet on the CMS 
website.

[[Page 81689]]

27. Femoral Popliteal Revascularization Procedure (APC 5192)
    For CY 2023, we assigned CPT code 37224 (Revascularization, 
endovascular, open or percutaneous, femoral, popliteal artery(s), 
unilateral; with transluminal angioplasty) to APC 5192 (Level 2 
Endovascular Procedures), with a payment rate of $5,215.40. For CY 
2024, as listed in OPPS Addendum B that was released with the CY 2024 
OPPS/ASC proposed rule, we proposed to maintain the assignment to APC 
5192 with a payment rate of $5,500.17.
    Comment: A commenter requested an APC reassignment for CPT code 
37224 from APC 5192 to APC 5193 (Level 3 Endovascular Procedures), with 
a payment rate of $10,602.57, based on resource cost and clinical 
comparability to the procedures in the APC 5193.
    Response: The CY 2024 OPPS payment rates are based on claims 
submitted between January 1, 2022, and December 31, 2022, processed 
through June 30, 2023. We analyzed the claims data for this final rule, 
and based on our review, we found the geometric mean cost of 
approximately $8,211 for CPT code 37224 based on 6,690 single claims 
(out of 6,730 total claims), is consistent with the geometric mean cost 
of about $5,598 for APC 5192, rather than the geometric mean cost of 
approximately $10,774 for APC 5193. Based on the claims data, we 
believe that CPT code 37224 fits more appropriately in APC 5192 rather 
than in APC 5193 based on resource cost and clinical similarity and to 
the procedures in APC 5192. We note that we review, on an annual basis, 
the APC assignments for all services and items paid under the OPPS 
based on our analysis of the latest claims data.
    In summary, after consideration of the public comment, we are 
finalizing our proposal, without modification, to assign CPT code 37224 
to APC 5192 for CY 2024. The final CY 2024 payment rate for the code 
can be found in Addendum B to this final rule with comment period. In 
addition, we refer readers to Addendum D1 of this final rule with 
comment period for the SI meanings for all codes reported under the 
OPPS. Addenda B and D1 are available via the internet on the CMS 
website.
28. Fluorescence In Situ Hybridization (FISH) Laboratory Service (APC 
5672)
    For CY 2024, we proposed to reassign CPT code 88366 ((In situ 
hybridization (eg, FISH), per specimen; each multiplex procedure) from 
APC 5673 (Level 3 Pathology) to APC 5672 (Level 2 Pathology) with a 
proposed payment rate of $165.41.
    Comment: We received two comments explaining that CMS's proposal to 
reassign CPT code 88366 to APC 5672 would not capture the resource 
costs of the service. The commenters stated that, while not reflected 
in the OPPS claims data, the direct supply and equipment practice 
expense costs associated with the service reported under CPT code 88366 
are nearly $30 higher than the proposed CY 2024 payment rate for APC 
5672. The commenters requested that we continue to assign CPT code 
88366 to APC 5673, as CMS has in previous years.
    Response: We appreciate the commenters' feedback on our proposal. 
However, we have no reason to believe that the claims data used to 
calculate the cost for CPT code 88366 does not appropriately reflect 
the hospitals' cost for providing this service, as asserted by the 
commenter. The commenter did not provide an explanation as to why the 
OPPS claims data did not reflect the cost of the service. We examined 
our claims data for the last several years, given the concern raised by 
the commenter regarding the accuracy of the claims data. In our review 
of the claims data for CPT code 88366, we found a steadily moderate 
volume of claims, and geometric mean costs that have remained stable, 
and consistently lower than the geometric mean costs for APC 5673 while 
remaining close to the geometric mean cost for APC 5672. For example, 
for the CY 2021 and CY 2022 final rules, the single frequency claims 
for CPT code 88366 were approximately 350 per year and the geometric 
mean costs for the code were just slightly below the geometric mean 
cost of APC 5672. Similarly, when we reviewed the claims data for the 
CY 2024 proposed rule, the claims frequency remained consistent at 348 
single frequency claims and the geometric mean cost for CPT code 88366 
was $113.14, approximately $50 lower than the geometric mean for APC 
5672, which was $167.30. Therefore, based on our review of the 
available claims data, we believe that assigning CPT code 88366 to APC 
5672 would be clinically and resource appropriate.
    After consideration of the public comments, we are finalizing our 
proposal without modification to assign CPT code 88366 to APC 5672 for 
CY 2024. The final CY 2024 payment rate for the code can be found in 
Addendum B to this final rule with comment period. We also refer 
readers to Addendum D1 of this final rule with comment period for the 
SI meanings for all codes reported under the OPPS. Addenda B and D1 are 
available via the internet on the CMS website.
29. Fractional Flow Reserve Derived From Computed Tomography (FFRCT)/
HeartFlow (APC 5724)
    Fractional Flow Reserve Derived from Computed Tomography (FFRCT), 
also known by the trade name HeartFlow, is a noninvasive diagnostic 
service that allows physicians to measure coronary artery disease in a 
patient through the use of coronary CT scans. The HeartFlow service is 
indicated for clinically stable symptomatic patients with coronary 
artery disease, and, in many cases, may avoid the need for an invasive 
coronary angiogram procedure. HeartFlow uses a proprietary data 
analysis process performed at a central facility to develop a three-
dimensional image of a patient's coronary arteries, which allows 
physicians to identify the fractional flow reserve to assess whether 
patients should undergo further invasive testing (that is, a coronary 
angiogram).
    HeartFlow is currently described by CPT code 0503T (Noninvasive 
estimated coronary fractional flow reserve (ffr) derived from coronary 
computed tomography angiography data using computation fluid dynamics 
physiologic simulation software analysis of functional data to assess 
the severity of coronary artery disease; analysis of fluid dynamics and 
simulated maximal coronary hyperemia, and generation of estimated ffr 
model). On January 1, 2024, CPT code 0503T will be replaced by CPT code 
75580 (Noninvasive estimate of coronary fractional flow reserve (FFR) 
derived from augmentative software analysis of the data set from a 
coronary computed tomography angiography, with interpretation and 
report by a physician or other qualified health care professional). 
HeartFlow is currently assigned to APC 5724 (Level 4 Diagnostic Tests 
and Related Services), and we have proposed for CY 2024 to continue to 
assign HeartFlow (CPT code 75580) to APC 5724 with a payment rate of 
around $1,024.
    Comment: One commenter expressed concerns that HeartFlow is 
underpaid in its current and proposed APC assignment of APC 5724, which 
the commenter feels may limit access to the procedure.
    Response: The geometric mean cost for the HeartFlow procedure in CY 
2024 is around $860 which is substantially lower than the payment rate 
for APC 5724 which is around $1,024. The HeartFlow procedure is 
receiving a payment that is over $160 the estimated cost of the 
service, which means most providers are receiving sufficient payment 
for the service.

[[Page 81690]]

    Comment: Multiple commenters supported our proposal to continue to 
assign HeartFlow to APC 5724 for CY 2024.
    Response: We appreciate the support of the commenters of our 
policy.
    After consideration of the public comments we received, we are 
finalizing our proposal without modification. Table 72 shows the 
finalized status indicator and APC assignment for CPT code 75580 for CY 
2024. We refer readers to Addendum B of this final rule with comment 
period for the payment rates for all codes reportable under the OPPS. 
Addendum B is available via the internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TR22NO23.094

30. Gastric Electrophysiology Mapping with Simultaneously Validated 
Patient System Profiling (GEMS) Service (APC 5723)
    Effective July 1, 2023, based on a New Technology application 
received by CMS for the GEMS service, CMS established HCPCS code C9787 
(Gastric electrophysiology mapping with simultaneous patient symptom 
profiling) and assigned it to APC 5723 (Level 3 Diagnostic Tests and 
Related Services). For CY 2024, CMS proposed to continue to assign 
HCPCS code C9787 to APC 5723 with a proposed payment rate of $512.71 
for CY 2024.
    Comment: We received several comments, including a comment from the 
manufacturer, requesting that we reassign HCPCS code C9787 to New 
Technology APC 1520 (New Technology--Level 20 ($1801-$1900)) with a 
payment rate of $1,850 given the lack of resource coherence with APC 
5723. The commenters provided invoice costs and stated that the 
proposed APC assignment would be insufficient to cover the cost of 
furnishing the service and, therefore, may limit patient access. Per 
the comments received, hospitals would incur a minimum cost of $1,489 
for the single-use device and supply costs associated with the Gastric 
Alimetry System, in addition to capital equipment costs of $10,000 for 
the Gastric Alimetry Reader as well as other capital costs. Given these 
costs, one commenter stated that even reassigning HCPCS code C9787 to 
the highest level in the same APC series as proposed, APC 5724 (Level 4 
Diagnostic Tests and Related Services), would be insufficient to cover 
the costs of the service. While one commenter stated that the closest 
clinical APC with clinical and resource coherence for the GEMS service 
is APC 5302 (Level 2 Upper GI Procedures) with a proposed payment rate 
of $1,833.10 for CY 2024, the commenter still believed that assignment 
to a New Technology APC would be most appropriate because the service 
is new and the technology was first cleared by the FDA in June 2022. 
The commenter further stated that without an assignment to a New 
Technology APC, there is a significant risk that CMS will never 
generate the necessary claims data to assign the service to an 
appropriate clinical APC because hospitals will not offer the service 
when payment is less than a third of the cost to provide it.
    Response: We thank the commenters for their input.
    We disagree with the APC assignments recommended by commenters 
based on the purported costs of the service. Based on our review of the 
technology used as part of the service, clinical similarity of the 
service to existing procedures, input from CMS medical advisors, and 
review of all other information available to us, after further 
evaluation, we have found close resource and clinical similarities 
between HCPCS code C9787 and certain procedures currently assigned to 
APC 5723, including CPT code 0779T (Gastrointestinal myoelectrical 
activity study, stomach through colon, with interpretation and report). 
For example, both services are non-invasive diagnostic aids for 
gastrointestinal disorders that collect electrical signals through 
adhesive patches. From a resource perspective, we believe the costs 
associated with CPT code 0779T would be similar to those for HCPCS code 
C9787 based on similarities between the technologies and invoice 
prices. While the comments submitted focused on the purported resource 
costs of HCPCS code C9787, we did not find that the information 
provided was sufficient to differentiate between the service described 
by CPT code 0779T and that of HCPCS code C9787, and ultimately 
demonstrate that an assignment to APC 5723 is inappropriate. Because we 
believe that HCPCS code C9787 has similar clinical and resource 
characteristics as CPT code 0779T, we are finalizing our proposal to 
continue to assign C9787 to APC 5723 for CY 2024.
    After consideration of the public comments, we are finalizing our 
proposal to continue to assign HCPCS code C9787 to APC 5723. The final 
CY 2024 payment rate for the code can be found in Addendum B to this 
final rule with comment period. We also refer readers to Addendum D1 of 
this final rule with comment period for the SI meanings for all codes 
reported under the OPPS. Addenda B and D1 are available via the 
internet on the CMS website.
31. High Intensity-Focused Ultrasound (HIFU) of the Prostate (APC 5376)
    CPT code 55880 (Ablation of malignant prostate tissue, transrectal, 
with high intensity-focused ultrasound (hifu), including ultrasound 
guidance) was effective January 1, 2021. For CY 2023, we assigned the 
code to APC 5376 (Level 6 Urology and Related Services),

[[Page 81691]]

with a payment rate of $8,557.53. For CY 2024, as listed in OPPS 
Addendum B that was released with the CY 2024 OPPS/ASC proposed rule, 
we proposed to maintain the assignment to APC 5376 with a payment rate 
of $8,847.08.
    Comment: A commenter requested that we finalize the proposed 
assignment to APC 5376 for CPT code 55880.
    Response: Our analysis of the claims data for this final rule 
demonstrates that the geometric mean cost for CPT code 55880 is 
approximately $6,613, which is consistent with APC 5376, whose 
geometric mean cost ranges between $6,613 and $9,827. We believe the 
code fits appropriately in APC 5376 based on clinical similarity and 
resource homogeneity with the procedures in the APC.
    In summary, after consideration of the public comment, we are 
finalizing our proposal without modification to assign CPT code 55880 
to APC 5376 for CY 2024. The final CY 2024 payment rate for the code 
can be found in Addendum B to this final rule with comment period. In 
addition, we refer readers to Addendum D1 of this final rule with 
comment period for the SI meanings for all codes reported under the 
OPPS. Addenda B and D1 are available via the internet on the CMS 
website.
32. Hospital Outpatient Clinic Visit for Assessment and Management of a 
Patient (G0463)
    In 2014, CMS established HCPCS code G0463 to describe the service 
associated with a hospital outpatient clinic visit for assessment and 
management of a patient. In the CY 2014 OPPS/ASC final rule with 
comment period (78 FR 75042), we stated that the code is applicable for 
hospital use only representing any clinic visit under the OPPS. We 
further stated that HCPCS code G0463 replaces evaluation and management 
(E&M) CPT codes 99201-99205 (new patient) and 99211-99215 (established 
patient), thereby eliminating the distinction between new and 
established clinic visits.
    Comment: We received two comments requesting CMS revise the 
definition of HCPCS code G0463 (Hospital Outpatient Clinic Visit for 
Assessment and Management of a Patient), and issue guidance for the 
correct use of this code, or alternatively create a new HCPCS code that 
describes a hospital outpatient department assessment. Both commenters 
assert that commercial payers are processing institutional claims from 
hospitals which include HCPCS code G0463 and have implemented billing 
policies which inappropriately conflate HCPCS code G0463 as a 
professional Evaluation and Management (E/M) code. The commenters state 
that the misuse of HCPCS code G0463 does not support orderly, 
consistent, and standardized hospital outpatient coding and billing for 
outpatient visits, and it is CMS's responsibility to ensure that the 
code is used correctly.
    Response: HCPCS code G0463 was established for use under Medicare's 
hospital OPPS. We reiterate that HCPCS code G0463 is used to describe 
hospital outpatient clinic services, not professional services. As part 
of the Health Insurance Portability and Accountability Act (HIPAA) code 
set, third-party payers may use any HCPCS code, including HCPCS codes 
established by CMS, to implement their policies, however, CMS does not 
establish third-party payer payment policies. Because the request to 
modify the descriptor is to implement third-party payer payment 
policies, we disagree that CMS should be responsible for providing 
instructions for how the code should be reported on non-Medicare 
claims. Third-party payers routinely provide coding guidance for how 
providers should report services and items for payment under their 
specific policies. If the commenters have concerns with the 
instructions provided by the third-party payers, we recommend the 
commenters reach out to the third-party payer that provided the 
guidance. We note that under the OPPS, HCPCS code G0463 is used to 
report clinic visits and enable Medicare to pay appropriately for those 
visits. For more information on the history of HCPCS code G0463, refer 
to the CY 2014 OPPS/ASC final rule with comment period.
33. Imaging of Retina for Detection or Monitoring of Disease (CPT Code 
92229) (APC 5733)
    CPT code 92229 (Imaging of retina for detection or monitoring of 
disease; point-of-care autonomous analysis and report, unilateral or 
bilateral) is performed to screen patients with diabetes for signs of 
diabetic retinopathy and other eye diseases. The code was established 
in January 2021 and assigned to APC 5733 (Level 3 Minor Procedures). 
The code was assigned to Level 3 Minor Procedures because the service 
had clinical and resource similarity to long-established CPT code 92227 
(Imaging of retina for detection or monitoring of disease; with remote 
clinical staff review and report, unilateral or bilateral) which also 
is assigned to Level 3 Minor Procedures.
    In CY 2022, there were 174 claims for CPT code 92229 and the 
geometric mean for the service was $34.53. The cost of the procedure 
was substantially closer to the payment rate for APC 5732 (Level 2 
Minor Procedures) with a payment rate of $34.53 than to the payment 
rate for APC 5733 of $58.79. Based on these data, we proposed assigning 
CPT code 92229 to APC 5732 for CY 2024.
    Comment: Multiple commenters requested that we continue to assign 
CPT code 92229 to APC 5733 for CY 2024. The commenters asserted that 
there had not been enough claims data to accurately determine the cost 
of the procedure. Also, the commenters noted that the procedure 
described by CPT code 92229 had clinical and resource similarities to 
other procedures that had been assigned to either Level 3 Minor 
Procedures (APC 5733) or Level 4 Minor Procedures (APC 5734). Finally, 
the commenters also expressed concerns that assigning CPT code 92229 to 
APC 5732 would reduce access to retinal screenings for people with 
diabetes or at risk for eye diseases, especially for patients who are 
either poor or members of minority populations.
    Response: We note that CMS recognizes that software-based 
technologies are rapidly evolving, like the procedure described by CPT 
code 92229. In line with our comment solicitation on payment policy for 
software as a service (SaaS) procedures in the CY 2023 OPPS final rule 
(87 FR 72035 and 72036), CMS is considering, for future rulemaking, 
whether or not specific adjustments to payment policies and rate 
calculations are necessary in order to more accurately and 
appropriately pay for these products and services across settings of 
care. CMS remains open to feedback on these issues and welcomes 
engagement from interested parties, including from manufacturers, 
providers, and beneficiaries. We agree with the commenters that for CPT 
code 92229 we should wait for more claims data to be available before 
adjusting the current payment rates for these services.
    After consideration of the public comments we received, we are 
implementing our proposal with modification by maintaining the current 
assignment for CPT code 92229 in APC 5733 (Level 3 Minor Procedures). 
Table 73 shows the finalized status indicator and APC assignment for 
CPT code 92229 for CY 2024. We refer readers to Addendum B of this 
final rule with comment period for the payment rates for all codes 
reportable under the OPPS. Addendum B is available via the internet on 
the CMS website.

[[Page 81692]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.095

34. Imagio[supreg] Breast Imaging Service (APC 5522)
    Effective October 1, 2023, based on a New Technology application 
received by CMS for the Imagio[supreg] Breast Imaging System, CMS 
established HCPCS code C9788 (Opto-acoustic imaging, breast (including 
axilla when performed), unilateral, with image documentation, analysis 
and report, obtained with ultrasound examination) and assigned it to 
APC 5521 (Level 1 Imaging without Contrast). For CY 2024, CMS proposed 
to continue to assign HCPCS code C9788 to APC 5521. Additionally, the 
AMA established a new Category III code to describe the same service, 
which will be effective January 1, 2024. For CY 2024, CMS also proposed 
to assign CPT placeholder code X183T (Opto-acoustic imaging, breast, 
unilateral, including axilla when performed, real-time with image 
documentation, augmentative analysis and report (List separately in 
addition to code for primary procedure)) to APC 5521, the same APC to 
which HCPCS code C9788 is assigned. Since the release of the proposed 
rule, CPT placeholder code X183T has been finalized as CPT code 0857T. 
We note that because both HCPCS code C9788 and CPT code 0857T describe 
the same service, effective January 1, 2024, CMS will delete HCPCS code 
C9788 and only CPT code 0857T will be used to bill for the service. For 
clarity, we will refer only to CPT code 0857T throughout this 
discussion regarding the final payment policy for the service for CY 
2024.
    Comment: We received a comment from the manufacturer stating that 
the initial assignment to APC 5521 is inappropriately low to cover 
hospital costs to furnish the service. Based on resource costs, the 
commenter requested that CMS reassign CPT code 0857T from APC 5521 to 
APC 5523 (Level 3 Imaging without Contrast) with a proposed CY 2024 
payment rate of $236.31. Specifically, the commenter provided a 
breakdown of the per-use device cost by dividing the price of the 
capital equipment, the Imagio[supreg] Breast Imaging System, by its 
useful life of 5 years and further dividing it by an estimated total 
use per year. The commenter noted that the cost breakdown was provided 
based on figures that had been updated since the time of their New 
Technology APC application in December 2022. Based on the calculations 
of the per-use device cost, as well as the procedure costs for 
equipment, labor, and supply, the commenter stated that the proposed 
payment rate for APC 5523 was a more appropriate APC assignment for the 
service.
    Response: We thank the commenter for their comment. We note that, 
in a budget neutral environment, payments may not fully cover 
hospitals' costs in a particular circumstance, including those for the 
purchase and maintenance of capital equipment, like that of the 
Imagio[supreg] Breast Imaging System. 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). Therefore, 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 for new services that lack hospital claims data based on 
realistic Medicare utilization projections for all such services 
delivered in cost-efficient hospital outpatient settings.
    With that said, based on the comment received, including the cost 
information provided, and further review of the service, we agree that 
the proposed APC assignment for CPT code 0857T to APC 5521 is not 
appropriate. However, we also do not believe that Medicare should pay 
for the entire cost of capital equipment as provided by the 
manufacturer when hospitals will furnish the service using the same 
equipment for both Medicare and non-Medicare beneficiaries. Therefore, 
we believe that an APC assignment to APC 5522 (Level 2 Imaging without 
Contrast) with a proposed payment rate of $106.04 would be more 
resource appropriate.
    Comment: The commenter requested CMS's feedback on what cost data 
or cost analysis are accepted by CMS when products are new to the 
market. Specifically, when there are few claims submitted for a new 
device, the commenter asked whether CMS would be open to accepting 
invoices provided by the company or other documentation to ensure an 
appropriate initial APC assignment rather than having to go through 
multiple rounds of reassignment requests through multiple rulemaking 
cycles.
    Response: We appreciate the comment. We generally assign new CPT 
codes to an APC based on input from a variety of sources, including, 
but not limited to, review of the resource costs and clinical 
similarity of the service to existing procedures; input from CMS 
medical advisors; information from interested specialty societies; and 
review of all other information available to us. We also believe 
continued engagement with interested parties through notice and comment 
rulemaking is a fundamental piece of the OPPS and allows for CMS to 
gather additional information. Regarding invoice pricing, CMS considers 
invoices provided by commenters or manufacturers, as well as other 
available cost information when assigning services to clinical APCs. 
However, invoice pricing is not the only piece of information that we 
consider, and therefore, we may appropriately assign a service to a 
clinical APC based on clinical and resource similarities, with a 
payment rate that nevertheless may not match the initial invoice costs 
provided exactly.
    After consideration of the public comment, we are finalizing the 
assignment of CPT code 0857T to APC 5522. The final CY 2024 payment 
rate for the code can be found in Addendum B to this final rule with 
comment period. We also refer readers to

[[Page 81693]]

Addendum D1 of this final rule with comment period for the SI meanings 
for all codes reported under the OPPS. Addenda B and D1 are available 
via the internet on the CMS website.
35. InSpace Subacromial Tissue Spacer Procedure (APC 5115)
    For 2024, we proposed to continue to assign HCPCS code C9781 
Arthroscopy, shoulder, surgical; with implantation of subacromial 
spacer (e.g., balloon), includes debridement (e.g., limited or 
extensive), subacromial decompression acromioplasty, and biceps 
tenodesis when performed) to APC 5115 (Level 5 Musculoskeletal 
Procedures) with a proposed payment rate of $13,269.40.
    Comment: We received several comments that endorsed the proposed 
APC assignment. Commenters expressed strong support for CMS's proposed 
increase to the payment rates associated with the InSpace balloon 
placement procedure described by HCPCS code C9781. They stated that the 
payment rates ensure that both patients and healthcare providers are 
able to fully leverage the benefits this technology offers.
    Response: We appreciate the commenters' support of our proposal. 
Based on our review of claims data available for this final rule with 
comment period, we believe an assignment to APC 5115 for CPT code C9781 
is appropriate for CY 2024.
    In summary, after consideration of the public comments, we are 
finalizing our proposal without modification and assigning CPT code 
C9781 to APC 5115 for CY 2024. The final CY 2024 OPPS payment rate for 
the code can be found in Addendum B to this final rule with comment 
period.
36. Integrated Neurostimulation Services for Bladder Dysfunction (APCs 
5461 and 5464)
    For CY 2024, the CPT Editorial Panel established four new Category 
III CPT codes, specifically, CPT codes 0816T, 0817T, 0818T and 0819T to 
describe integrated neurostimulation services for bladder dysfunction, 
effective January 1, 2024. CPT code 0816T is associated with the eCoin 
System. Because the final CY 2024 CPT code numbers were not available 
when we published the proposed rule, the codes were listed as 
placeholder codes X129T, X130T, X131T and X132T in the OPPS Addendum B 
of the CY 2024 OPPS/ASC proposed rule.
     0816T: Open insertion or replacement of integrated 
neurostimulation system for bladder dysfunction including electrode(s) 
(e.g., array or leadless), and pulse generator or receiver, including 
analysis, programming, and imaging guidance, when performed, posterior 
tibial nerve; subcutaneous
     0817T: Open insertion or replacement of integrated 
neurostimulation system for bladder dysfunction including electrode(s) 
(e.g., array or leadless), and pulse generator or receiver, including 
analysis, programming, and imaging guidance, when performed, posterior 
tibial nerve; subfascial
     0818T: Revision or removal of integrated neurostimulation 
system for bladder dysfunction, including analysis, programming, and 
imaging, when performed, posterior tibial nerve; subcutaneous
     0819T: Revision or removal of integrated neurostimulation 
system for bladder dysfunction, including analysis, programming, and 
imaging, when performed, posterior tibial nerve; subfascial
    In the 2024 OPPS/ASC proposed rule, we proposed to assign CPT codes 
0816T and 0817T to APC 5464 (Level 4 Neurostimulator and Related 
Procedures) with a proposed payment rate of $21,376.53 based on 
clinical and resource similarity to CPT code 64590 (Insertion or 
replacement of peripheral or gastric neurostimulator pulse generator or 
receiver, direct or inductive coupling). In addition, we proposed to 
assign CPT codes 0818T and 0819T to APC 5461 (Level 1 Neurostimulator 
and Related Procedures) with a proposed payment rate of $3,364.67 based 
on clinical and resource similarity to CPT code 64595 (Revision or 
removal of peripheral or gastric neurostimulator pulse generator or 
receiver).
    Comment: Most commenters endorsed the assignment of CPT code 0816T 
to APC 5464. They were appreciative that CMS recognizes through this 
APC assignment the importance of advancing healthcare options for 
Medicare beneficiaries and the need for continued accessibility of new 
technologies, like the eCoin system procedure, into sites of service 
that best serve the complexities of treating some Medicare 
beneficiaries. One commenter stated that they believe the decision by 
CMS appropriately aligns the proposed payment level with the intended 
purpose and clinical complexity of the eCoin system described by CPT 
code 0816T. In doing so, the commenter stated, CMS continues to empower 
appropriate medical decision-making by providers for Medicare 
beneficiaries that will best align with each patient's unique 
healthcare needs. Another commenter expressed that they were very 
pleased with our decision to assign implantable tibial generator codes 
0816T and 0817T to Level 4 APC 5464 and revision/removal generator 
codes 0818T and 0819T to Level 1 APC 5461. This commenter stated that 
this decision creates resource and clinical parity with CPT code 64590 
(Insertion or replacement of peripheral or gastric neurostimulator 
pulse generator or receiver, direct or inductive coupling) which 
describes sacral neuromodulation (SNM) generator implant and CPT code 
64595 (Revision or removal of peripheral or gastric neurostimulator 
pulse generator or receiver) which describes revision/removal 
procedures which have the same Level 4 APC and Level 1 APC categories, 
respectively. This supports the fact that implantable tibial procedures 
require similar resources and support as SNM including pre-op time, 
recovery, fluoroscopy, patient follow-up, monitoring and anesthesia.
    Response: We appreciate the commenters' feedback on these new 
Category III CPT codes. We agree with commenters' recommendations to 
finalize the proposed APC assignments.
    In summary, after reviewing the public comments for the proposal, 
we are finalizing our proposal without modification to assign CPT codes 
0816T and 0817T to APC 5464 and to assign CPT codes 0818T and 0819T to 
APC 5461. The final CY 2024 payment rates for these codes can be found 
in Addendum B to this final rule with comment period. In addition, we 
refer readers to Addendum D1 of this final rule with comment period for 
the status indicator meanings for all codes reported under the OPPS. 
Addenda B and D1 are available via the internet on the CMS website.
    For additional discussion regarding the commenters' request to 
increase the device offset of CPT codes 0816T and 0817T refer to 
section IV.B. of this final rule with comment period.
37. LimFlow TADV Procedure CPT Code 0620T (APC 1578)
    The LimFlow TADV procedure which is described by CPT code 0620T 
(Endovascular venous arterialization, tibial or peroneal vein, with 
transcatheter placement of intravascular stent graft(s) and closure by 
any method, including percutaneous or open vascular access, ultrasound 
guidance for vascular access when performed, all catheterization(s) and 
intraprocedural roadmapping and imaging guidance necessary to complete 
the intervention, all associated radiological supervision and 
interpretation, when performed) is a new endovascular procedure that is 
used to treat patients with chronic limb-

[[Page 81694]]

threatening ischemia. According to the developer, these patients are no 
longer eligible for conventional endovascular or open bypass surgery to 
treat their artery blockage, and without this procedure, they are 
likely to face limb amputation.
    According to the developer, the LimFlow TADV procedure received 
full FDA PMA approval on September 11, 2023. Previously, the procedure 
could be performed through a Category B IDE study. CPT code 0620T, 
which describes the LimFlow TADV procedure was established in January 
of 2021 and was assigned to APC 5194 (Level 4 Endovascular Procedures) 
with a payment rate of around $17,400, which is the highest-paying APC 
for endovascular procedures. For the CY 2024 proposed rule, we proposed 
to continue to assign CPT code 0266T to APC 5194.
    Comment: The HOP Panel and two commenters, including the developer 
of LimFlow TADV procedure, requested that CPT code 0620T be reassigned 
to a New Technology APC that better reflects the cost of the procedure. 
Commenters were concerned that if CPT code 0620T continued to be 
assigned to APC 5194, the low payment for the procedure would 
discourage providers from performing the procedure and deny access to 
LimFlow TADV to vulnerable and underserved populations.
    Response: We agree with the HOP Panel and commenters that CPT code 
0620T should be reassigned to a New Technology APC that better reflect 
the costs of the procedure. Because there are only 15 claims for the 
procedure for CY 2021 and CY 2022, the LimFlow TADV procedure is 
subject to our new technology procedure low-volume policy. An analysis 
of the median, arithmetic mean, and geometric mean of CPT code 0620T 
found that the median was $25,801.85, the arithmetic mean was 
$28,628.62, and the geometric mean was $26,716.31. Based on our policy, 
we estimate the cost of the LimFlow TADV procedure to be $28,628.62 as 
the arithmetic mean has the highest value of the three cost statistics. 
Therefore, we plan to reassign CPT code 0620T to New Technology APC 
1578 (New Technology--Level 41 ($25,001-$30,000)) with a payment rate 
of around $27,500.
    After consideration of the public comments we received, we are 
implementing our proposal with modification for CPT code 0620T as we 
will update its APC assignment to APC 1578 (New Technology--Level 41 
($25,001-$30,000)). Table 74 shows the finalized status indicator and 
APC assignment for all of the procedure codes. We refer readers to 
Addendum B of this final rule with comment period for the payment rates 
for all codes reportable under the OPPS. Addendum B is available via 
the internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TR22NO23.096

38. Lixelle Apheresis
    Lixelle [beta]2-microglobulin Apheresis Column is indicated for use 
in the treatment of dialysis[hyphen]related amyloidosis (DRA), a 
disease that affects people with end-stage renal disease (ESRD). DRA is 
a metabolic disorder from the failure of the kidney to filter and 
remove [beta]2-microglobulin, typically from chronic hemodialysis 
(typically 5 years or longer). The Lixelle device is used in an 
apheresis procedure that selectively removes [beta]2-microglobulin from 
circulating blood and used pursuant to a physician prescription in 
conjunction with hemodialysis. It is intended to be used at each 
hemodialysis session (that is, frequency of treatment is expected to be 
3 times per week). In March 2015, FDA approved LIXELLE[supreg] as a 
Class III Humanitarian Use Device (HUD) with an approved Humanitarian 
Device Exemption (HDE). There are currently no specific HCPCS or CPT 
code that represent the Lixelle service.
    Comment: A commenter urged CMS to provide reimbursement for Lixelle 
to benefit patients with DRA. Another commenter requested separate 
payment under the Medicare ESRD PPS. This same commenter stated that if 
separate payment does not apply under the ESRD PPS, the service should 
be paid separately under the OPPS when furnished in the HOPD facility. 
Specifically, the commenter requested that CMS provide separate payment 
under the OPPS, and offered the following options:
    (1) establish a new HCPCS C code or G code for the Lixelle 
apheresis procedure and assign the code to APC 5242 (Level 2 Blood 
Product Exchange and Related Services); or
    (2) pay separately for the apheresis procedure used with the 
Lixelle device through CPT code 36516 (Therapeutic apheresis with 
extracorporeal immunoadsorption, selective adsorption or selective 
filtration and plasma

[[Page 81695]]

reinfusion), proposed to be assigned to APC 5243 (Level 3 Blood Product 
Exchange and Related Services) for CY 2024, and require the use of a 
modifier or add-on code when the Lixelle apheresis procedure is billed 
to reduce the payment for the procedure to the payment rate for APC 
5242 (Level 2 Blood Product Exchange and Related Services); or
    (3) allow separate payment for the dialysis performed as part of 
Lixelle apheresis procedure through HCPCS code G0257 (Unscheduled or 
emergency dialysis treatment for an ESRD patient in a hospital 
outpatient department that is not certified as an ESRD facility), which 
is assigned to APC 5401 (Dialysis) for CY 2024, and require the use of 
a modifier or add-on code to provide additional payment beyond that 
provided for APC 5401
    Response: We appreciate the recommendations and will consider them 
for future rulemaking. We note this complex, ongoing issue is still 
under consideration and a thorough evaluation is necessary to ensure 
the appropriate Medicare benefit category and payment for the service.
39. Meibomian Gland Repair (MGR) (APC 5733)
    For 2020, the AMA's Editorial Panel established CPT code 0563T 
(Evacuation of meibomian glands, using heat delivered through wearable, 
open-eye eyelid treatment devices and manual gland expression, 
bilateral), effective January 1, 2020, to describe the treatment 
associated meibomian gland dysfunction (MGD) and dry eye disease (DED). 
For CY 2023, we assigned the code to APC 5733 (Level 3 Minor 
Procedures) with a payment rate of $57.48. For CY 2024, we proposed to 
continue with the assignment to APC 5733 with a payment of $58.13.
    Comment: A commenter disagreed with proposed assignment to APC 5733 
and stated that the proposed payment for CPT code 0563T does not 
reflect the time, intensity, clinical resources, and technology 
required to provide the service. The commenter indicated that the time 
and resources required to perform the service is significantly greater 
than the proposed reimbursement for APC 5733. The commenter further 
stated that based on the clinical complexity of the service, CPT code 
0563T would be more appropriately placed in APC 5502 (Level 2 
Extraocular, Repair, and Plastic Eye Procedures) with a payment of 
$991.30, based on its clinical similarity to the procedures in the APC, 
and urged CMS to revise the assignment to APC 5502.
    Response: We reviewed our claims data for this final rule with 
comment period. We note that the CY 2024 OPPS payment rates are based 
on claims submitted between January 1, 2022, and December 31, 2022, 
processed through June 30, 2023. Based on our evaluation of the claims 
data for this final rule with comment period, we found no claims data 
for the code. Due to the lack of claims data, we believe that we should 
continue to assign the code to APC 5733. Once we have adequate claims 
data, we will review and determine whether a change in the APC 
assignment is necessary.
    In summary, after consideration of the public comment, we are 
finalizing our proposal without modification, and assigning CPT code 
0563T to APC 5733 for CY 2024. As we do every year, we will reevaluate 
the APC assignment for the code in the next rulemaking cycle. We note 
that we review, on an annual basis, the APC assignments for all items 
and services paid under the OPPS. The final CY 2024 OPPS payment rate 
for all the codes payable under the OPPS can be found in Addendum B to 
this final rule with comment period. In addition, we refer readers to 
Addendum D1 of this final rule with comment period for the SI meanings 
for all codes reported under the OPPS. Addendum D1 is available via the 
internet on the CMS website.
40. MindMotion[supreg] GO Neurorehabilitative Remote Therapy Service 
(APC 5741)
    Effective July 1, 2022, the CPT Editorial Panel created CPT codes 
0733T (Remote real-time, motion capture-based neurorehabilitative 
therapy ordered by a physician or other qualified health care 
professional; supply and technical support, per 30 days) and 0734T 
(Remote real-time, motion capture-based neurorehabilitative therapy 
ordered by a physician or other qualified health care professional; 
treatment management services by a physician or other qualified 
healthcare professional, per calendar month) to describe the clinician 
services associated with patient use of MindMotion[supreg] GO, a 
rehabilitative at home therapy program, remotely monitored by a 
therapist, for patients who have suffered certain neurological 
conditions. For CY 2024, CMS proposed to continue to assign CPT code 
0733T to APC 5741 (Level 1 Electronic Analysis of Devices) with a 
proposed payment rate of $36.79. CMS also proposed to continue to 
assign status indicator ``B'' to CPT code 0734T for CY 2024.
    Comment: We received a comment from the manufacturer requesting 
that we assign CPT code 0733T to a more clinically and resource 
appropriate APC for CY 2024. The commenter stated that the proposed APC 
assignment to APC 5741 for CPT code 0733T was not resource appropriate 
because it did not cover the cost of several items and capital 
equipment, including a mini-PC to run the treatment software, 3D 
motion-tracking camera to track patient movement, camera to enable 
certain hand rehabilitative exercises, and a pressure-sensitive 
peripheral to measure hand grip for different hand rehab exercises. The 
commenter did not provide invoice costs or estimated costs for these 
components. Additionally, the commenter stated that they believed APC 
5741 is not clinically appropriate for CPT code 0733T because the APC 
contains several monitoring services, and, per the commenter, CPT code 
0733T performs remote monitoring subsequent to its ability to provide 
treatment. Finally, the commenter pointed to CPT code 0693T 
(Comprehensive full body computer-based markerless 3D kinematic and 
kinetic motion analysis and report), which describes the service 
involving the DARI Motion Procedure and has a proposed APC assignment 
to New Technology APC 1505 (New Technology--Level 5 ($301-$400)) for CY 
2024, as a clinically similar service.
    Response: We thank the commenter for their input regarding the 
proposed CY 2024 APC assignment for CPT 0733T. First, because the code 
was first made effective on July 1, 2022, and is relatively new, we do 
not have any claims data at this time. However, we note that as is our 
policy for new codes for which we lack pricing information, we assign 
the service to an existing APC based on input from a variety of 
sources, including, but not limited to, review of the clinical 
similarity of the service to existing procedures, input from CMS 
medical advisors, and review of all other information available to us. 
Based on our understanding of the service and input from our medical 
advisors, we do not agree that CPT code 0733T is dissimilar to other 
services in APC 5741 such that it should be assigned to a different 
APC. We believe that CPT code 0733T is more similar to services in APC 
5741 than services in other APCs, including CPT code 0693T, which is 
currently assigned to New Technology APC. We note that the long 
descriptor for CPT code 0733T describes a remote service similar to 
other codes with remote components in APC 5741, including CPT code 
98976. Based on the

[[Page 81696]]

nature of the procedure and the information available to us, we 
continue to believe that CPT code 0733T is appropriate for assignment 
to APC 5741 for CY 2024.
    Comment: The manufacturer also commented to support the 
reassignment of the status indicator for CPT code 0734T from status 
indicator ``B'' to status indicator ``S,'' based on a public 
presentation at the Advisory Panel on Outpatient Payment (HOP Panel) on 
August 22, 2023, recommending that the status indicator assignment of 
CPT code 0734T and other remote monitoring codes change from ``B'' to 
``S'' and be assigned to APC 5741.
    Response: We first note that CMS did not propose to change the 
status indicator of CPT code 0734T from ``B'' to ``S'' for CY 2024. CPT 
code 0734T describes a professional service, specifically treatment 
management services by a physician or other qualified healthcare 
professional. Therefore, CPT code 0734T is not payable under the OPPS 
and would not be appropriate for separate payment as indicated by 
status indicator ``S.'' For CY 2024, we believe it is appropriate to 
finalize the status indicator for CPT 0734T as proposed.
    After consideration of the public comment, we are finalizing our 
proposal to continue to assign CPT code 0733T to APC 5741 as proposed. 
We are also finalizing our proposal to continue to assign status 
indicator ``B'' to CPT code 0734T. The final CY 2024 payment rate for 
CPT code 0733T can be found in Addendum B to this final rule with 
comment period. We also refer readers to Addendum D1 of this final rule 
with comment period for the SI meanings for all codes reported under 
the OPPS. Addenda B and D1 are available via the internet on the CMS 
website.
41. Minimally Invasive Glaucoma Surgery (MIGS) (APC 5493)
    CPT code 0671T (Insertion of anterior segment aqueous drainage 
device into the trabecular meshwork, without external reservoir, and 
without concomitant cataract removal, one or more) was effective 
January 1, 2022. For CY 2023, we assigned CPT code 0671T to APC 5491 
(Level 1 Intraocular Procedures) with a payment rate of $2,159.44. For 
CY 2024, as listed in OPPS Addendum B that was released with the CY 
2024 OPPS/ASC proposed rule, we proposed to reassign the code to APC 
5492 (Level 2 Intraocular Procedures), with a payment rate of 
$3,970.62. We received some comments related to the proposal.
    Comment: Several commenters agreed with our proposal and requested 
that we finalize the assignment to APC 5492. However, other commenters 
disagreed with the assignment to APC 5492, and instead suggested 
assignment to APC 5493 (Level 3 Intraocular Procedures), with a payment 
rate of $5,110.58. These commenters reported that CPT code 0671T is one 
of three MIG codes that the CPT Editorial Panel established effective 
January 1, 2022, and noted that the other two MIG codes (66989 and 
66991) are proposed for assignment to APC 5493. Because of its 
similarity to CPT codes 66989 and 66991, the commenters suggested 
reassignment to APC 5493 for CPT code 0671T.
    Response: We reviewed our claims data for this final rule with 
comment period. The CY 2024 OPPS payment rates are based on claims 
submitted between January 1, 2022, and December 31, 2022, processed 
through June 30, 2023. We note that CY 2024 is the first year that we 
have claims data for the code. Based on our analysis of the claims data 
for this final rule, the resource costs related to CPT code 0671T seems 
more appropriately in APC 5493 rather than APC 5492. Specifically, our 
claims data shows a geometric mean cost of about $5,610 for CPT code 
0671T based on 79 single claims (out of 79 total claims), which is 
consistent with the geometric mean cost of approximately $5,118 for APC 
5493, rather than the geometric mean cost of approximately $3,982 for 
APC 5492. Based on the resource costs to furnish the service associated 
with CPT code 0671T, which are consistent with APC 5493, we believe 
that reassignment to APC 5493 is appropriate. Therefore, we are 
revising the assignment for CPT code 0671T, to APC 5493 for CY 2024.
    With regard to the other two MIG codes mentioned by the commenter, 
specifically, CPT codes 66989 and 66991, refer to section III.C. of 
this final rule with comment period for the discussion related to the 
payment for the codes.
    In summary, after consideration of the public comments, we are 
finalizing the APC assignment for CPT code 0671T with modification. 
Specifically, we are revising the APC assignment for CPT code 0671T to 
APC 5493 for CY 2024. The final CY 2024 OPPS payment rate for this code 
can be found in Addendum B to this final rule with comment period. In 
addition, we refer readers to Addendum D1 of this final rule with 
comment period for the SI meanings for all codes reported under the 
OPPS. Addendum D1 is available via the internet on the CMS website.
42. Musculoskeletal Procedures (APCs 5111 Through 5116)
    Prior to the CY 2016 OPPS, payment for musculoskeletal procedures 
was primarily divided according to anatomy and the type of 
musculoskeletal procedure. As part of the CY 2016 reorganization to 
better structure the OPPS payments to utilize prospective payment 
packages, we consolidated these individual APCs so that they became a 
general Musculoskeletal APC series (80 FR 70397 and 70398).
    In the CY 2018 OPPS/ASC final rule with comment period (82 FR 
59300), we continued to apply a six-level structure for the 
Musculoskeletal APCs because doing so provided an appropriate 
distinction for resource costs at each level and provided clinical 
homogeneity. However, we indicated that we would continue to review the 
structure of these APCs to determine whether additional granularity 
would be necessary. In the CY 2019 OPPS proposed rule (83 FR 37096), we 
recognized that commenters had previously expressed concerns regarding 
the granularity of the current APC levels and, therefore, requested 
comment on the establishment of additional levels. Specifically, we 
solicited comments on the creation of a new APC level between the 
current Level 5 and Level 6 within the Musculoskeletal APC series. 
While some commenters suggested APC reconfigurations and requested 
changes to APC assignments, many commenters requested that we maintain 
the current six-level structure and continue to monitor the claims data 
as they become available. Therefore, in the CY 2019 OPPS/ASC final rule 
with comment period, we maintained the six-level APC structure for the 
Musculoskeletal Procedures APCs (83 FR 58920 and 58921).
    For CY 2024, based on the claims data available for the CY 2024 
OPPS/ASC proposed rule, we continued to believe that the six-level APC 
structure for the Musculoskeletal Procedures APC series is appropriate 
and we proposed to maintain it for the CY 2024 OPPS update.
    Comment: One commenter requested that CMS reassign CPT code 23472 
(Arthroplasty, glenohumeral joint; total shoulder) from APC 5115to APC 
5116 (Level 6 Musculoskeletal Procedures). According to the commenter, 
the requested assignment would more closely track hospital resources 
used in performing these procedures and appropriately align with other 
clinically similar procedures. The commenter stated that with regard to 
cost, according

[[Page 81697]]

to CMS's 2 Times Listing document released with the proposed rule, the 
geometric mean cost (GMC) of claims reporting total shoulder CPT 23472 
is $17,423.52, which represents the highest cost ``significant'' 
procedure within APC 5115. In fact, the GMC of CPT code 23472 exceeds 
the GMC of four ``significant'' procedures that CMS proposes to assign 
to APC 5116:
     CPT 22867 (Insertion of interlaminar/interspinous process 
stabilization/distraction device, without fusion, including image 
guidance when performed, with open decompression, lumbar; single 
level)--GMC of $14,803.74
     CPT 27279 (Arthrodesis, sacroiliac joint, percutaneous or 
minimally invasive (indirect visualization), with image guidance, 
includes obtaining bone graft when performed, and placement of 
transfixing device)--GMC of $15,788.69
     CPT 22856 (Total disc arthroplasty (artificial disc), 
anterior approach, including discectomy with end plate preparation 
(includes osteophytectomy for nerve root or spinal cord decompression 
and microdissection); single interspace, cervical)--GMC of $16,078.32
     CPT 22612 (Arthrodesis, posterior or posterolateral 
technique, single interspace; lumbar (with lateral transverse 
technique, when performed))--GMC of $16,870.82
    This commenter stated that the GMC of CPT code 23472 is about 
$500.00 closer to the GMC of APC 5116 ($20,928.08) than APC 5115 
($13,420.64), reinforcing that APC 5116 is a more appropriate 
assignment for CPT 23472 and furthermore, this payment misalignment--
resulting in a $4,000 opportunity cost to hospitals performing this 
procedure on average--threatens the availability of this procedure on 
an outpatient basis.
    The commenter also provided clinical information, stating that 
shoulder replacement and reverse shoulder replacement procedures 
represented by CPT code 23472 are very complex, involving three bones 
and limited access space due to the muscles, ligaments, and tendons 
surrounding the joint. These procedures are clinically comparable to 
other procedures assigned to APC 5116, such as total elbow arthroplasty 
(TEA) CPT code 24363. TEA and TSA procedures involve similar complexity 
and are typically performed by specialized, fellowship- or 
subspecialty-trained shoulder and elbow orthopaedic surgeons.
    Response: We appreciate the commenter's recommendation. Based on 
our analysis of the latest CY 2022 claims data available for CY 2024 
OPPS ratesetting, the geometric mean cost associated with CPT code 
23472 is $17,370.78 based on 51,120 single claims (out of 51,506 total 
claims), which is consistent with the geometric mean cost of $18,250.77 
for APC 5116. We also note that the APC 5115 has a range of HCPCS 
geometric mean costs for cost significant codes from $10,641.75 to 
$16,292.97with the geometric mean cost of CPT code 23472 being at the 
higher end of the cost range. The geometric mean cost for APC 5115 is 
$12,889.60.
    Based on the data, we believe that APC 5116 is the more appropriate 
assignment rather than APC 5115 for CPT code 23472. Therefore, we agree 
with the commenter and are reassigning CPT code 23472 from APC 5115 to 
APC 5116 for CY 2024. The final CY 2024 OPPS payment rates for the 
codes can be found in Addendum B to this final rule with comment 
period.
    After consideration of the public comments, we are finalizing our 
proposal to maintain the six-level Musculoskeletal Procedures APC 
structure. We are also finalizing an assignment of CPT code 23472 to 
APC 5116, rather than APC 5115, for the CY 2024 OPPS.
43. Noncontact Near-infrared (NIR) Spectroscopy (APC 5732)
    In July 2021, the AMA's CPT Editorial Panel established three new 
codes to describe the service related to noncontact near-infrared 
spectroscopy. For CY 2024, the CPT Editorial Panel made several changes 
to the codes to accurately describe the services currently performed in 
the medical setting for noncontact near-infrared spectroscopy. 
Specifically, the CPT Editorial Panel took the following actions for CY 
2024:
     deleted CPT code 0641T and 0642T, effective December 31, 
2023;
     revised the descriptor for existing CPT code 0640T to 
include the services previously described in CPT codes 0641T and 0642T; 
and
     established two new codes, specifically, CPT code 0859T, 
which was listed as placeholder code X1914T in the CY 2024 OPPS/ASC 
proposed rule, and CPT code 0860T, which was listed as placeholder code 
X171T, effective January 1, 2024.
    The complete long descriptors for the codes are listed below in 
Table 75, along with the CY 2023 and proposed CY 2024 OPPS status 
indicator and APC assignments (where applicable).

[[Page 81698]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.097

    Based on the code changes, we proposed to take the following 
actions for CY 2024:
     CPT code 0640T: With the revised descriptor to include the 
descriptions that were listed in CPT codes 0641T and 0642T, we proposed 
to revise the status indicator for CPT code 0640T from ``M'' 
(professional-only service) to ``T'' and assigned the code to APC 5732 
(Level 2 Minor Procedures), with a payment $ 37.05. Under the OPPS, the 
predecessor code for CPT code 0640T is CPT code 0641T.
     CPT code 0641T: We proposed to assign the code to status 
indicator ``D'' to indicate that the code would be deleted at the end 
of the year, and crosswalked the separate payment status indicator of 
``T'' and assignment of APC 5732 to CPT code 0640T.

[[Page 81699]]

     CPT code 0642T: We proposed to assign the code to status 
indicator ``D'' to indicate that the code would be deleted at the end 
of the year. Because the code was assigned to status indicator ``M'' 
(professional-only service), we did not crosswalk this code to any 
payable indicators or APC.
     CPT code 0859T: Because the code describes an add-on 
service to CPT code 0640T, and must always be reported on the same day 
with CPT code 0640T, we proposed to assign the code to status indicator 
``N'' to indicate that the code is packaged and payment is included in 
the primary service. Under the OPPS, most add-on codes are packaged, as 
specified in 42 CFR 419.2(b)(18).
     CPT code 0860T: We proposed to assign this code to status 
indicator ``E1'' to indicate that the code is not covered or payable by 
Medicare for CY 2024.
    We received several comments related to our proposals. Below are 
the comments and our responses.
    Comment: Many commenters requested separate payment for CPT code 
0860T and indicated that Medicare beneficiaries would benefit from 
essential screening for peripheral arterial disease (PAD). Some 
commenters clarified that one-third of patients over age 65 with 
diabetes or a history of smoking have PAD, and with the increased risk 
of death and other cardiovascular complications, including heart attack 
and stroke, the commenters believe that it is essential to diagnose and 
treat PAD as early as possible. The commenters urged CMS to make 
available PAD screening options to the Medicare population and 
requested separate payment for the service.
    Response: CPT code 0860T describes a screening for peripheral 
arterial disease (PAD). Currently, Medicare has not established 
coverage for screening for PAD. Specifically, this screening code does 
not qualify for Medicare coverage since there is no national coverage 
determination (NCD) for PAD screening. Consequently, we proposed to 
assign the code to status indicator ``E1'' to indicate that the code is 
not payable by Medicare when submitted on outpatient claims (any 
outpatient bill type) because the service associated with the code is 
either not covered by any Medicare outpatient benefit category, 
statutorily excluded by Medicare, or not reasonable and necessary.
    We note that on August 7, 2013, CMS published a Federal Register 
notice (78 FR 48164 through 48169), updating the process used for 
opening, deciding or reconsidering national coverage determinations 
(NCDs). If the commenter would like to request Medicare coverage for 
PAD screening, we strongly recommend submitting an application to CMS. 
New screening and preventive tests coverage are added through the 
National Coverage Determination (NCD) process. Information on the 
Medicare coverage determination process, the application process, as 
well how to request a new NCD, or revision to an existing NCD, can be 
found on the CMS website, specifically, at https://www.cms.gov/medicare/coverage/determination-process/request.
    Comment: Several commenters requested separate payment for CPT code 
0640T, and suggested reassignment to status indicator ``S'' (Procedure 
or Service, Not Discounted When Multiple. Paid under OPPS; separate APC 
payment.), and APC 5722 (Level 2 Diagnostic Tests; proposed payment of 
$304.35). The commenters reported that the NIR technology described by 
CPT code 0640T is similar to the technology described with CPT code 
0598T, which is assigned to status indicator ``S'' and APC 5722. 
Specifically, CPT code 0598T describes a hand-held device that detects 
bacteria in a wound through fluorescence color, while CPT code 0640T 
and CPT code 0859T describes a hand-held device that detect a wound's 
blood oxygen level at the point of care. Because of its similarity to 
CPT code 0598T, the commenters recommended reassignment to APC 5722 for 
CPT code 0640T.
    Response: Prior to the descriptor revision for CPT code 0640T, the 
technical service associated with noncontact near-infrared spectroscopy 
was described by CPT code 0641T, which was assigned to APC 5732 for CY 
2023. Under the OPPS, the predecessor code for CPT code 0640T is CPT 
code 0641T. We note that the CY 2024 OPPS payment rates are based on 
claims submitted between January 1, 2022, and December 31, 2022, 
processed through June 30, 2023. Based on our analysis of the claims 
data for this final rule with comment period, we found a geometric mean 
cost of about $14 for predecessor CPT code 0641T based on 46 single 
claims (out of 266 total claims). In contrast, we found a geometric 
mean cost of approximately $239 for CPT code 0598T based on 529 single 
claims (out of 1,317 total claims). Based on the data, the resource 
cost associated with noncontact real-time fluorescence imaging (CPT 
code 0598T), is significantly higher compared to noncontact near-
infrared (NIR) spectroscopy (CPT code 0640T/0641T). While both 
technologies may have the same indication, we disagree that the 
resource cost for noncontact near-infrared (NIR) spectroscopy is 
similar to noncontact real-time fluorescence imaging. Therefore, we do 
not agree that both technologies should be placed in the same APC. We 
believe that the code describing noncontact near-infrared (NIR) 
spectroscopy, specifically, CPT code 0640T, is appropriately placed in 
APC 5732.
    Comment: Many commenters requested separate payment for CPT code 
0859T, and suggested assignment to status indicator ``S'' and APC 5722.
    Response: Under the OPPS, CPT code 0859T is assigned to status 
indicator ``N'' to indicate that the payment is packaged in the primary 
code. The phrase ``list separately in addition to code for primary 
procedure'' is included in the long descriptor for CPT code 0859T to 
indicate that that the code is considered an ``add-on'' to another 
primary code and cannot be reported independently. Add-on codes must 
always be reported with another primary code on the same day. The AMA 
states in the CPT 2024 Professional Edition (page xviii) that ``add-on 
codes are always performed in addition to the primary service or 
procedure and must never be reported as a stand-alone code.'' In most 
cases, add-on codes are typically ancillary and supportive to a primary 
diagnostic or therapeutic modality and are an integral part of the 
primary service they support. As specified under regulation 42 CFR 
419.2(b)(18), add-on codes are packaged under the OPPS, and payment for 
the codes are bundled with the primary codes. Consequently, CPT code 
0859T is not paid separately under the OPPS, but instead, the payment 
is packaged into the primary code. In this instance, the primary code 
for CPT code 0859T is CPT code 0640T.
    In summary, after consideration of the public comments, we are 
finalizing the status indicators and APC assignment, without 
modification, for CPT codes 0640T, 0641T, 0642T, 0859T, and 0860T. 
Table 76 below list the final CY 2024 OPPS SI and APC assignment for 
the codes. As we do every year, we will reevaluate the APC assignment 
for the codes in the next rulemaking cycle. We note that we review, on 
an annual basis, the APC assignments for all items and services paid 
under the OPPS. The final CY 2024 OPPS payment rate for all the codes 
payable under the OPPS can be found in Addendum B to this final rule 
with comment period. In addition, we refer readers to Addendum D1 of 
this final rule with comment period for the SI meanings for all codes 
reported under the OPPS. Addendum D1 is available via the internet on 
the CMS website.

[[Page 81700]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.098

44. Optilume Benign Prostatic Hyperplasia (BPH) Procedure (APC 5376)
    On February 5, 2020, CMS approved for Medicare coverage the 
Category B Investigational Device Exemption (IDE) study associated with 
Urotronic's BPH Catheter System (Study Title: A Clinical Study to 
Evaluate the Safety and Efficacy of the OptilumeTM BPH 
Catheter System in Men With Symptomatic BPH (PINNACLE); NCT number 
NCT04131907; IDE number G190217). In July 2020, AMA's CPT Editorial 
Panel established CPT code 0619T (Cystourethroscopy with transurethral 
anterior prostate commissurotomy and drug delivery, including 
transrectal ultrasound and fluoroscopy, when performed), effective July 
1, 2020, to describe the surgery related to the BPH Catheter System.
    For 2023, we assigned CPT code 0619T to APC 5375 (Level 5 Urology 
and Related Procedures) with a payment rate of $4,702.18. For 2024, as 
listed in OPPS Addendum B that was released with the CY 2024 OPPS/ASC 
proposed rule, we proposed to maintain the assignment to APC 5375 with 
a payment of $4,959.89.
    Comment: A commenter made some requests related to CPT code 0619T. 
First, the commenter explained that the surgery associated with the 
code involves a $5,700 Optilume BPH Catheter System Kit that contains 
two balloon catheters, one that is drug-coated, and another that is 
non-drug coated. The commenter indicated that the estimate for the 
total surgery cost, which includes the cost of the device, is 
approximately $12,109. Based on their estimate for the total surgery 
cost, the commenter requested a reassignment from APC 5375 to APC 5377 
(Level 7 Urology and Related Procedures, proposed payment of 
$12,568.91), which would include the cost of both the procedure and the 
device kit. Secondly, as an alternative, if CMS is unable to reassign 
the code to APC 5377, the commenter requested the approval of their New 
Technology Procedure/Service application, and the establishment of a 
new HCPCS C-code to describe the procedure whose payment is assigned to 
New Technology APC 1575 with a payment of $12,500.50. In addition, the 
commenter clarified that the 2 claims for CPT code 0619T do not apply 
to the Optilume BPH procedure since the device received FDA Premarket 
Approval (PMA) just recently in June 2023.
    Response: First, with regards to the New Technology APC application 
submitted to CMS, in general, New Technology APC application 
determinations are not made via rulemaking. We note that in this 
specific case, the application is pending review and still under 
consideration. Therefore, we are unable to respond to the APC request 
for the New Technology APC application in this final rule with comment 
period.
    Secondly, we note that the CY 2024 OPPS payment rates are based on 
claims

[[Page 81701]]

submitted between January 1, 2022, and December 31, 2022, processed 
through June 30, 2023. We reviewed the claims data for this final rule, 
and based on our review, we found the geometric mean cost of 
approximately $6,218 for CPT code 0619T based on 3 single claims (out 
of 3 total claims). Although one commenter suggested that the 2 claims 
we have for the CY 2024 ratesetting are not valid because the device 
received FDA PMA approval in June 2023 and could not represent the 
Optilume BPH device, we note that Medicare approved coverage of the 
Category B IDE study that involves the use of this device in February 
2020. Although the Optilume BPH device received FDA approval in June 
2023, because the Category B IDE study was approved much earlier in 
February 2020, HOPD facilities may have reported the device on Medicare 
claims by using an unlisted device code (for example, C1889) or device 
revenue code (for example, 027X).
    Based on the comments received, evaluation of the procedure, and 
our assessment of the request, we believe that CPT code 0619T is most 
similar to CPT code 0421T (Transurethral waterjet ablation of prostate, 
including control of post-operative bleeding, including ultrasound 
guidance, complete (vasectomy, meatotomy, cystourethroscopy, urethral 
calibration and/or dilation, and internal urethrotomy are included when 
performed)), which is assigned to APC 5376 with a proposed payment rate 
of $8,847.08. We note that APC 5376 contains several BPH-related 
procedures, which include the following:
     0421T: Transurethral waterjet ablation of prostate, 
including control of post-operative bleeding, including ultrasound 
guidance, complete (vasectomy, meatotomy, cystourethroscopy, urethral 
calibration and/or dilation, and internal urethrotomy are included when 
performed)
     55873: Cryosurgical ablation of the prostate (includes 
ultrasonic guidance and monitoring
     55880: Ablation of malignant prostate tissue, transrectal, 
with high intensity-focused ultrasound (hifu), including ultrasound 
guidance), and
     C9740: Cystourethroscopy, with insertion of transprostatic 
implant; 4 or more implants
    Based on the similarity to CPT code 0421T and the other BPH-related 
procedures in APC 5376, we believe that assigning CPT code 0619T to APC 
5376 is the best approach at this time. We reiterate that we review our 
claims data on an annual basis to establish the OPPS payment rates. 
Once we have data, we will evaluate and, if necessary, reassign the 
code to an appropriate APC based on the latest claims data.
    Finally, we remind the commenter that 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 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. For new procedures and items, we get many requests from 
manufacturers to increase the reimbursement for the code associated 
with their procedures and items. 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. On balance, 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).
    In summary, after consideration of the public comment that we 
received, we are finalizing our proposal, with modification. 
Specifically, we are finalizing our proposal and assigning CPT code 
0619T to APC 5376 for CY 2024. The final payment rate for the code can 
be found in Addendum B to this final rule with comment period. In 
addition, we refer readers to Addendum D1 of this final rule with 
comment period for the status indicator (SI) meanings for all codes 
reported under the OPPS. Addenda B and D1 are available via the 
internet on the CMS website.
45. Optilume Urethral Stricture Procedure (APC 5375)
    Effective January 1, 2018, the AMA's CPT Editorial Panel 
established Category III CPT code 0499T (Cystourethroscopy, with 
mechanical dilation and urethral therapeutic drug delivery for urethral 
stricture or stenosis, including fluoroscopy, when performed) to 
describe the procedure related to the Optilume Urethral Stricture 
Device System. For 2024, AMA is deleting the Category III CPT code on 
December 31, 2023, and replacing it with a Category I CPT code, 
specifically, CPT code 52284 (Cystourethroscopy, with mechanical 
urethral dilation and urethral therapeutic drug delivery by drug-coated 
balloon catheter for urethral stricture or stenosis, male, including 
fluoroscopy, when performed), effective January 1, 2024. We note that 
CPT code 52284 was listed as placeholder code 5X000 in OPPS Addendum B 
and Addendum O that was released with the CY 2024 OPPS/ASC proposed 
rule with comment period. Because we had not received the final CPT 
code numbers from AMA for the new codes that would be effective January 
1, 2024, in time for the publication of the proposed rule, we listed 
the new CPT codes with their respective placeholder codes in OPPS 
Addendum B and Addendum O.
    For CY 2023, we assigned CPT code 0499T to APC 5374 (Level 4 
Urology and Related Services) with a payment rate of $4,702.18. Because 
CPT code 0499T was scheduled for deletion on December 31, 2023, and 
replaced with CPT code 52284 effective January 1, 2024, we proposed 
some changes to the codes for CY 2024. Specifically, for CY 2024, as 
listed in the OPPS Addendum B that was released with the CY 2024 OPPS/
ASC proposed rule, we proposed to:
     Assign CPT code 0499T to status indicator ``D'' to 
indicate that the code would be deleted at the end of the year; and
     Crosswalk the replacement code, specifically, CPT 52284, 
to APC 5374 with a payment rate of $3,337.81
    We note that at the August 21, 2023, HOP Panel Meeting, a 
presentation was made requesting the reassignment to APC 5375 for CPT 
code 52284 (placeholder code 5X000). Based on the information presented 
at the meeting, the Panel made no recommendation on the APC assignment 
for the code.
    Comment: Several commenters requested the reassignment for CPT code 
52284 from APC 5374 to APC 5375 (Level 5 Urology and Related Services), 
with a payment rate of $4,959.89. They indicated that the procedure 
involves

[[Page 81702]]

the use of a single-use device whose cost is $2,395, and they believe 
that the payment amount of approximately $3,338 for APC 5374 is 
insufficient to cover the total cost of the procedure. These commenters 
suggested the reassignment of CPT code 52284 to APC 5375. One commenter 
clarified that the Optilume Urethral Stricture device was commercially 
available in January 2022, however, prior to this date, the device was 
provided free of charge for clinical trials. This same commenter noted 
that the claims data in the CY 2024 OPPS/ASC proposed rule shows an 
increase in claims volume for predecessor CPT code 0499T, as well as an 
increase in the geometric mean cost, that they believe warrants a 
change in the assignment from APC 5374 to APC 5375.
    Response: The CY 2024 OPPS payment rates are based on claims 
submitted between January 1, 2022, and December 31, 2022, processed 
through June 30, 2023. We reviewed the claims data for this final rule, 
and based on our analysis, we found the geometric mean cost of 
approximately $4,489 for (predecessor code) CPT 0499T based on 77 
single claims (out of 79 total claims), which is consistent with the 
geometric mean cost of about $5,067 for APC 5375, rather than the 
geometric mean cost of approximately $3,414 for APC 5374. Based on our 
evaluation, we believe that the resource costs of furnishing the 
service associated with CPT code 52284 are higher than the resource 
costs associated with APC 5374. Consequently, we believe that CPT code 
52284 fits accurately in APC 5375 based on its clinical and resource 
homogeneity to the procedures in the APC.
    In summary, after consideration of the public comments, we are 
finalizing the APC assignment for CPT code 52284 with modification. 
Specifically, we are revising the APC assignment for CPT code 52284 to 
APC 5375 for CY 2024. The final CY 2024 OPPS payment rate for this code 
can be found in Addendum B to this final rule with comment period. In 
addition, we refer readers to Addendum D1 of this final rule with 
comment period for the SI meanings for all codes reported under the 
OPPS. Addendum D1 is available via the internet on the CMS website.
46. Payment for Procedures Using an Amniotic Membrane (APCs 5502 and 
5503)
    CPT code 65426 (Excision or transposition of pterygium; with graft) 
describes a surgical ocular procedure that requires the use of graft 
tissue. This procedure can be performed either with the patient's own 
tissue (a graft from the patient's eye) or with an amniotic membrane 
tissue product that is purchased by the provider. CPT code 65778 
(Placement of amniotic membrane on the ocular surface; without sutures) 
describes the placement of an amniotic membrane on the ocular surface. 
For the CY 2024 OPPS proposed rule, we proposed to assign CPT code 
65426 to APC 5503 (Level 3 Extraocular, Repair, and Plastic Eye 
Procedures) and we proposed to assign CPT code 65778 to APC 5502 (Level 
2 Extraocular, Repair, and Plastic Eye Procedures).
    Comment: One commenter, a manufacturer of the amniotic membrane 
used in both CPT codes 65426 and 65778, requested that payment for CPT 
code 65426 be increased from APC 5503 with a payment rate of around 
$2,300 to APC 5504 (Level 4 Extraocular, Repair, and Plastic Eye 
Procedures) with a payment rate of around $3,800. Likewise, the 
commenter requested that the payment for CPT code 65778 be increased 
from APC 5502 with a payment rate of around $1,000 to APC 5503 with a 
payment rate of around $2,300. The commenter requested the payment 
increases because the offset amounts for the amniotic membrane devices 
used in these procedures was substantially lower than the expected cost 
of the device. The commenter believes the cause of the low device 
percentage for these services is that many hospitals are not reporting 
the cost of the amniotic device, and an increased payment would ensure 
that providers receive a payment that recognizes the cost of the 
amniotic device.
    Response: We disagree with the request of the commenter. Reporting 
service charges and appropriately coding expenditures on claims is the 
responsibility of the provider, and we do not adjust service payments 
to remedy potential coding errors. The commenter believes there is some 
type of systemic coding error that is leading to the low device offsets 
for CPT codes 65426 and 65778. We encourage the commenter to engage in 
provider education to encourage more thorough reporting of the device 
costs of these procedures. The commenter may also choose to work with 
the MACs to develop approaches to ensure the cost of the amniotic 
membrane device is included more regularly with these procedures.
    After consideration of the public comments we received, we are 
implementing our proposal without modification for CPT codes 65426 and 
65778. Table 77 shows the finalized status indicator and APC assignment 
for all of the procedure codes. We refer readers to Addendum B of this 
final rule with comment period for the payment rates for all codes 
reportable under the OPPS. Addendum B is available via the internet on 
the CMS website.
[GRAPHIC] [TIFF OMITTED] TR22NO23.099


[[Page 81703]]


47. Peroral Endoscopic Myotomy (POEM) CPT Code 43497 (APC 5331)
    According to interested parties, the POEM (Peroral Endoscopic 
Myotomy) procedure is a newer technique for the management of achalasia 
and is similar to laparoscopic Heller Myotomy performed by both 
advanced gastroenterologists and endoscopic surgeons. Achalasia is a 
disease that occurs due to the inability of the lower esophageal 
sphincter to relax and is also associated with loss of peristalsis in 
the esophagus. This procedure is described by CPT code 43497 (Lower 
esophageal myotomy, transoral (i.e., peroral endoscopic myotomy 
[poem])), which has a geometric mean cost for CY 2024 of around $6,736. 
For the CY 2024 OPPS proposed rule, we proposed to assign the procedure 
to APC 5303 (Level 3 Upper GI Procedures) with a payment rate of around 
$3,803. APC 5303 is the highest-paying APC in the Upper GI Procedures 
APC series. CPT code 43497 is a significant procedure that contributes 
to the establishment of the overall payment rate for APC 5303.
    Comment: Two commenters requested that we assign CPT code 43497 to 
APC 5331 (Complex GI Procedures) to resolve a 2 times rule violation 
with the procedure. The commenters noted that the geometric mean cost 
of CPT code 43497, which is around $6,736 is more than twice the cost 
of the lowest-cost significant procedure (CPT code 43260), which is 
around $6,454. Also, the geometric mean cost of CPT code 43497 is 
nearly $3,000 more than the payment rate for APC 5303.
    Response: We agree with the request of the commenters that CPT code 
43497 should be reassigned from APC 5303 to APC 5331 not only because 
of the 2 times rule violation and the substantial difference between 
the cost of CPT code 43497 and the payment rate for APC 5303, but in 
addition, we determined that the procedure described by CPT code 43497 
has clinical and resource similarities with the other procedures of 
similar cost that are assigned to APC 5313.
    After consideration of the public comments we received, we are 
implementing our proposal with modification for CPT code 43497 as we 
will update its APC assignment to APC 5331 (Complex GI Procedures). 
Table 78 shows the finalized status indicator and APC assignment for 
all of the procedure codes. We refer readers to Addendum B of this 
final rule with comment period for the payment rates for all codes 
reportable under the OPPS. Addendum B is available via the internet on 
the CMS website.
[GRAPHIC] [TIFF OMITTED] TR22NO23.100

48. Transluminal Mechanical Thrombectomy, Noncoronary, Non-
intracranial, Arterial or Arterial Bypass Graft, Including Fluoroscopic 
Guidance and Intraprocedural Pharmacological Thrombolytic Injection(s); 
Initial Vessel (APC 5194)
    For 2024, we proposed to move CPT code 37184 (Primary percutaneous 
transluminal mechanical thrombectomy, noncoronary, non-intracranial, 
arterial or arterial bypass graft, including fluoroscopic guidance and 
intraprocedural pharmacological thrombolytic injection(s); initial 
vessel) from APC 5193 (Level 3 Endovascular Procedures) with a proposed 
payment rate of $10,602.57 to APC 5194 (Level 4 Endovascular 
Procedures) with a proposed payment rate of $17,195.36.
    Comment: One commenter supported our proposal to move CPT code 
37184 to APC 5194, stating that this APC assignment more accurately 
reflects the costs and resources associated with these procedures.
    Response: We thank the commenter for the support of the CMS' 
proposal. Based on our examination of the latest claims data for this 
final rule with comment period, we believe that the assignment of CPT 
code 37184 to APC 5194 is appropriate for CY 2024.
    In summary, after consideration of the public comment, we are 
finalizing our proposal without modification and assigning CPT code 
37184 to APC 5194. The final CY 2024 OPPS payment rates for this code 
can be found in Addendum B to this final rule with comment period. In 
addition, we refer readers to Addendum D1 of this final rule with 
comment period for the SI meanings for all codes reported under the 
OPPS. Addenda B and D1 are available via the internet on the CMS 
website.
49. ProSense Cryoablation Procedure (APC 5091)
    For CY 2023, we assigned CPT code 0581T (Ablation, malignant breast 
tumor(s), percutaneous, cryotherapy, including imaging guidance when 
performed, unilateral) to APC 5091 (Level 1 Breast/Lymphatic Surgery 
and Related Procedures) with a payment rate of $3,437.80. For CY 2024, 
as listed in OPPS Addendum B that was released with the CY 2024 OPPS/
ASC proposed rule, we proposed to maintain the assignment to the same 
APC with a payment rate of $3,652.27.
    Comment: A commenter disagreed with the assignment to APC 5091 for 
CPT code 0581T and requested a revision to APC 5092 (Level 2 Breast/
Lymphatic Surgery and Related Procedures), with a payment rate 
$6,241.92. The commenter clarified that the procedure described by the 
code involves the use of a single-use device that cost $2,200. With the 
device cost, the commenter estimated the total procedure cost to be 
$7,019.79. This estimate was derived from the CY 2023 Medicare 
Physician Fee Schedule Final Rule CMS Public Use File, which include 
cost estimates for labor, equipment, time, and supply. The commenter 
indicated that the proposed payment rate of $3,652.27 for APC 5091 is 
insufficient to cover the total procedure cost, and believes the 
proposed payment of $6,241.92 for APC 5092 is more appropriate. This 
same commenter explained that in CY 2022, CPT code was assigned to 
``E1,'' to indicate that the code was not

[[Page 81704]]

separately payable under the OPPS. To address the lack of claims data 
for CY 2022, the commenter performed their own data analysis that 
included claims for two procedures (0581T and 19105) as billed to 
Medicare and private payers. Based on the dataset, they found an 
average provider charge of $9,450 and with a maximum charge amount of 
$24,294 for CPT code 0581T (N=8 private payer, N=1 Medicare) based on 
fully paid claims for CY 2022 and the first half of 2023. The commenter 
further noted that CPT code 0581T violates the 2 times rule in APC 
5091, and therefore, should be reassigned to APC 5092 to correct the 
violation.
    Response: First, APC 5091 does not violate the 2 times rule. As 
specified in section III.B (OPPS Changes--Variations Within APCs) of 
this final rule with comment period, we consider only those HCPCS codes 
that are significant based on the number of claims to determine the 
APCs with2 times rule violation. For APC 5091, the geometric mean cost 
for the significant procedures range between approximately $2,745 (for 
CPT code 19120) and $4,807 (for CPT code 19371). Based on this range, 
APC 5091 does not violate the 2 times rule. Secondly, although CPT code 
0581T was not separately payable under the OPPS during CY 2022, some 
HOPDs submitted CPT code 0581T on Medicare claims. For this final rule 
we are using claims that were submitted for services between January 1, 
2022, and December 31, 2022, processed through June 30, 2023. This 
includes claims that potentially had different policies and SI and APC 
assignments applied to them in the claims year. Our ratesetting process 
takes those claims and simulates the prospective OPPS payment, in which 
we observed a geometric mean cost of approximately $4,357 for CPT code 
0581T based on 37 single claims (out of 37 total claims) for this code. 
Based on this information, we believe that we should maintain CPT code 
0581T in APC 5091 since the observed geometric mean cost of $4,357 is 
consistent with the geometric mean cost of approximately $3,733 for APC 
5091, rather than the geometric mean cost of about $6,386 for APC 5092. 
As we do every year, we will reevaluate the APC assignment for CPT code 
0581T for the CY 2025 rulemaking cycle. We remind the commenter, that 
we review, on an annual basis, the APC assignments for all services and 
items paid under the OPPS.
    In summary, after consideration of the public comment, we are 
finalizing our proposal, without modification, to assign CPT code 0581T 
to APC 5091 for CY 2024. The final CY 2024 payment rate for the code 
can be found in Addendum B to this final rule with comment period. In 
addition, we refer readers to Addendum D1 of this final rule with 
comment period for the SI meanings for all codes reported under the 
OPPS. Addenda B and D1 are available via the internet on the CMS 
website.
50. Radiofrequency Ablation Procedures--CPT Codes 32998, 47382, and 
50592 (APC 5361)
    For CY 2023, we assigned certain radiofrequency ablation 
procedures, specifically, CPT codes 32998, 47382, and 50592 to APC 5361 
(Level 1 Laparoscopy and Related Services), with a payment rate of 
$5,212.15. For CY 2024, as listed in OPPS Addendum B that was released 
with the CY 2024 OPPS/ASC proposed rule, we proposed to continue the 
assignment to APC 5361, with a payment rate of $5,544.60. Below are the 
long descriptors for CPT codes 32998, 47382, and 50592:
     32998: Ablation therapy for reduction or eradication of 1 
or more pulmonary tumor(s) including pleura or chest wall when involved 
by tumor extension, percutaneous, including imaging guidance when 
performed, unilateral; radiofrequency
     47382: Ablation, 1 or more liver tumor(s), percutaneous, 
radiofrequency
     50592: Ablation, 1 or more renal tumor(s), percutaneous, 
unilateral, radiofrequency
    Comment: A commenter disagreed with the proposed assignment to APC 
5361 and requested a revision to APC 5362 (Level 2 Laparoscopy and 
Related Services), with a payment rate of $9,871.90, based on clinical 
and resource homogeneity to the codes in the APC. The commenter 
indicated that CPT codes 32998, 47382, and 50592 are very similar to 
certain procedures in APC 5362, specifically, the laparoscopic ablation 
procedures described by CPT codes 47370, 47371, and 50542, and the 
percutaneous cryoablation procedures described by CPT codes 47383, 
50593, and 32994.
    Response: We note the CY 2024 OPPS payment rates are based on 
claims submitted between January 1, 2022, and December 31, 2022, 
processed through June 30, 2023. We analyzed our data, and below in 
Table 79 are the claims data for this final rule with comment period 
for the codes mentioned by the commenter.

[[Page 81705]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.101

    As illustrated in Table 79, the resource costs associated with the 
laparoscopic ablation procedures and the percutaneous cryoablation 
procedures are higher than the resource costs associated with the 
radiofrequency ablation procedures. In particular, we found the 
geometric mean cost for CPT codes 32998, 47382, and 50592 ranged 
between approximately $6,538 and $7,141, which is consistent with the 
geometric mean cost of about $5,651 for APC 5361. We do not agree that 
the resource costs to perform these procedures are similar to those of 
the laparoscopic ablation procedures described by CPT codes 47370, 
47371, and 50542, whose geometric mean cost range between $9,467 to 
$13,120, or the percutaneous cryoablation procedures described by CPT 
codes 47383, 50593, and 32994, whose geometric mean cost range between 
$8,189 and $9,269. We believe the resource costs related to the 
laparoscopic ablation procedures and percutaneous cryoablation 
procedures are appropriately reflected in APC 5362, whose geometric 
mean cost is approximately $10,081. Based on our analysis, we do not 
agree that the resource costs of the radiofrequency ablation procedures 
are similar to those of the laparoscopic ablation procedures or the 
percutaneous cryoablation procedures, which are in APC 5362. Therefore, 
we believe that CPT codes 32998, 47382, and 50592 should be maintained 
in APC 5361 based on clinical coherence and resource cost homogeneity.
    In summary, after consideration of the public comment, we are 
finalizing our proposal, without modification, to assign CPT codes 
32998, 47382, and 50592 to APC 5361 for CY 2024. The final CY 2024 
payment rate for the code can be found in Addendum B to this final rule 
with comment period. In addition, we refer readers to Addendum D1 of 
this final rule with comment period for the SI meanings for all codes 
reported under the OPPS. Addenda B and D1 are available via the 
internet on the CMS website.
51. Radiofrequency Ablation, Posterior Nasal Nerve CPT Code 31242 (APC 
5165)
    For the CY 2024 OPPS final rule, we proposed that CPT code 31242 
(placeholder code 3X016) (Nasal/sinus endoscopy, surgical; with 
destruction by radiofrequency ablation, posterior nasal nerve) be 
assigned to APC 5165 (Level 5 ENT Procedures) with a payment rate of 
around $5,647. There are currently no claims data available for the 
procedure.
    Comment: Two commenters expressed their support of our assignment 
of CPT code 31242/3X016 to APC 5165.
    Response: We appreciate the support of the commenters for payment 
rate proposal.
    After consideration of the public comments we received, we are 
finalizing our proposal without modification for CPT code 31242 (listed 
as placeholder code 3X016 in the CY 2024 OPPS/ASC proposed rule with 
comment period) to continue to assign the procedure to APC 5165 (Level 
5 ENT Procedures). Table 80 shows the finalized status indicator and 
APC assignment for all of the procedure codes. We refer readers to 
Addendum B of this final rule with comment period for the payment rates 
for all codes reportable under the OPPS. Addendum B is available via 
the internet on the CMS website.

[[Page 81706]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.102

52. Remote Physiological Monitoring Services
    For CY 2024, we proposed to continue to assign CPT codes 99457 
(Remote physiologic monitoring treatment management services, clinical 
staff/physician/other qualified health care professional time in a 
calendar month requiring interactive communication with the patient/
caregiver during the month; first 20 minutes) and 99458 (Remote 
physiologic monitoring treatment management services, clinical staff/
physician/other qualified health care professional time in a calendar 
month requiring interactive communication with the patient/caregiver 
during the month; each additional 20 minutes (list separately in 
addition to code for primary procedure) to status indicator ``B.''
    At the August 21, 2023, HOP Panel Meeting, a presenter advised the 
Panel to request that CMS reassign CPT code 99457 to APC 5741 (Level 1 
Electronic Data Analysis) with a proposed payment rate of $36.79 and 
CPT code 99458 is reassigned to status indicator ``N.''
    Based on the information presented at the meeting, the Panel 
recommended that CMS considered changing the SI for CPT codes 99457 and 
99458 to make them separately payable under the OPPS such that the 
services can be bundled with clinical visits in the month in which they 
occur and separately payable when no clinical visit with the 
appropriate supervising clinician occurs in the same month as the 
service.
    Comment: We received one public comment, and the commenter 
requested a separate payment under OPPS for RPM treatment management 
services CPT codes 99457 and 99458. The commenter stated that separate 
payment under the OPPS for 99457 and 99458 is appropriate because they 
closely mirror the time-based chronic care management (CCM), described 
by CPT code 99490 (Chronic care management services with the following 
required elements: multiple (two or more) chronic conditions expected 
to last at least 12 months, or until the death of the patient, chronic 
conditions that place the patient at significant risk of death, acute 
exacerbation/decompensation, or functional decline, comprehensive care 
plan established, implemented, revised, or monitored; first 20 minutes 
of clinical staff time directed by a physician or other qualified 
health care professional, per calendar month), which is assigned to 
status indicator ``S'' and APC 5822 (Level 2 Health and Behavior 
Services) with a proposed payment rate of $86.86.
    Response: We continue to believe that, since CPT code 99457 
primarily describes the work associated with the billing of 
professional services, which would not be paid separately under the 
OPPS, and CPT code 99458 describes an add-on service to CPT code 99457, 
neither service is appropriate for separate payment under the OPPS. 
Therefore, we will continue to assign these codes to status indicator 
``B'' for CY 2024.
    In summary, after consideration of the public comment, we are 
finalizing our proposal without modification. Specifically, we are 
continuing to assign HCPCS codes 99457 and 99458 to status indicator 
``B'' for CY 2024. We refer readers to Addendum D1 of this final rule 
with comment period for the status indicator (SI) meanings for all 
codes reported under the OPPS. Addendum D1 is available via the 
internet on the CMS website.
53. Remote Therapeutic Monitoring Treatment Management Services
    For CY 2024, we proposed to change the status indicator for CPT 
codes 98980 (Remote therapeutic monitoring treatment management 
services, physician or other qualified health care professional time in 
a calendar month requiring at least one interactive communication with 
the patient or caregiver during the calendar month; first 20 minutes) 
and 98981 (Remote therapeutic monitoring treatment management services, 
physician or other qualified health care professional time in a 
calendar month requiring at least one interactive communication with 
the patient or caregiver during the calendar month; each additional 20 
minutes (list separately in addition to code for primary procedure) 
from status indicator ``M'' to status indicator ``B'' since these 
services describe work associated with billing for professional 
services.
    At the August 21, 2023, HOP Panel Meeting, a presenter advised the 
Panel to request that CMS reassign CPT code 98980 to APC 5741 (Level 1 
Electronic Data Analysis) with a proposed payment rate of $36.79 and 
CPT code 98981 is reassigned to status indicator ``N.''
    Based on the information presented at the meeting, the Panel 
recommended that CMS considered changing the SI for CPT code 98980 to 
``S'' and assign the code to APC 5741 (Level 1 Electronic Analysis of 
Devices) and changed the status indicator for CPT code 98981 to ``N'' 
per OPPS policy.
    Comment: We received one comment and the commenter requested 
assigning a relative value unit (RVU) value for CPT codes 98980 and 
98981 and removing status indicator ``B.''
    Response: We thank the commenter for the input but note that the 
comment related to an assignment of the RVU value is out of scope for 
the purposes of this OPPS/ASC final rule with comment period as RVUs 
are used to value services paid under the PFS. We continue to believe 
that, since CPT code 98980 primarily describes the work associated with 
the billing of professional services, which would not be paid 
separately under the OPPS, and CPT code 98981 describes an add-on 
service to CPT code 98980, neither service is appropriate for payment 
under the OPPS. Therefore, we will continue to assign these codes to 
status indicator ``B'' to indicate that the codes are not paid under 
OPPS and that alternate codes that are recognized by OPPS may be 
available.
    In summary, after consideration of the public comment, we are 
finalizing our proposal without modification. Specifically, we are 
continuing to assign HCPCS codes 98980 and 98981 to status indicator 
``B'' for CY 2024. We will

[[Page 81707]]

review these codes again for future rulemaking. We refer readers to 
Addendum D1 of this final rule with comment period for the status 
indicator (SI) meanings for all codes reported under the OPPS. Addendum 
D1 is available via the internet on the CMS website.
54. RNS Neurostimulator Surgical Service (APCs 5113 and 5464)
    For CY 2024, the AMA CPT Editorial Board created three new CPT 
codes to describe the services associated with the RNS System, a skull-
mounted cranial neurostimulator and treatment option for persons with 
medically intractable epilepsy. Specifically, effective January 1, 
2024, the three new CPT codes are:
     61889 (placeholder code 619X1)--Insertion of skull-mounted 
cranial neurostimulator pulse generator or receiver, including 
craniectomy or craniotomy, when performed, with direct or inductive 
coupling, with connection to depth and/or cortical strip electrode 
array(s).
     61891 (placeholder code 619X2)--Revision or replacement of 
skull-mounted cranial neurostimulator pulse generator or receiver with 
connection to depth and/or cortical strip electrode array(s).
     61892 (placeholder code 619X3)--Removal of skull-mounted 
cranial neurostimulator pulse generator or receiver with cranioplasty, 
when performed.
    Because 61889 is only performed in the inpatient setting, CMS 
proposed to assign the code to status indicator ``C'' for CY 2024 and, 
therefore, did not assign the code to an APC. For CY 2024, CMS proposed 
to assign 61891 to APC 5463 (Level 3 Neurostimulator and Related 
Procedures) with a proposed payment rate of $13,899.52 and 61892 to APC 
5113 (Level 3 Musculoskeletal Procedures) with a proposed payment rate 
of $3111.88. We note that CPT codes 61889, 61891, and 61892 were listed 
as placeholder codes 619X1, 619X2, and 619X3, respectively, in OPPS 
Addendum B and Addendum O that were released with the CY 2024 OPPS/ASC 
proposed rule with comment period. Because we had not received the 
final CPT code numbers from AMA for the new codes that would be 
effective January 1, 2024, in time for the publication of the proposed 
rule, we listed the new CPT codes with their respective placeholder 
codes in OPPS Addendum B and Addendum O.
    Comment: We received several comments, including one from the 
manufacturer, requesting that we reassign CPT codes 61891 and 61892 to 
higher paying APCs based on cost concerns. The commenters requested 
that, for CY 2024, CMS assign CPT code 61891 to APC 5465 (Level 5 
Neurostimulator and Related Procedures) with a proposed payment rate of 
$30,354.65 and CPT code 61892 to APC 5463 (Level 3 Neurostimulator and 
Related Procedures) with a proposed payment rate of $13,899.52. One 
commenter stated that the proposed APC assignments for CPT codes 61891 
and 61892 would result in a 54 percent and a 78 percent reduction, 
respectively, in hospital outpatient payment, which they stated would 
impact Medicare beneficiary access. To support their requested APC 
changes, the commenter referred to two codes that are currently used to 
describe the services as predecessor codes for CPT codes 61891 and 
61892. The commenter stated that for purposes of APC assignment, CMS 
should consider CPT code 61886 (Insertion or replacement of cranial 
neurostimulator pulse generator or receiver, direct or inductive 
coupling; with connection to 2 or more electrode arrays) as the 
predecessor code for 61891 and CPT code 61888 (Revision or removal of 
cranial neurostimulator pulse generator or receiver) as the predecessor 
code for 61892.
    The commenter noted the change in the code descriptions of the new 
CPT codes (61891, 61892) compared to the code descriptors of the 
existing codes (61886, 61888) as related to revision procedures. The 
commenter stated that it was unknown to them why the new CPT codes 
included revision and replacement in the same code (61891) compared to 
the existing CPT codes where replacement is a separate code (61886) and 
removal and revision procedures are included in the same code (61888). 
However, the commenter pointed out that revisions of the RNS 
neurostimulator are exceedingly rare and that they expect the vast 
majority, if not all, of the procedures reported with 61891 to be a 
replacement of the RNS neurostimulator, rather than a revision, where 
no neurostimulator device is implanted. Finally, the commenter provided 
their own analyses comparing epilepsy vs non-epilepsy-related claims 
for CPT codes 61886 and 61888 to demonstrate that epilepsy related 
claims for both codes, for which the RNS neurostimulator surgical 
service would be used, had higher geometric mean costs than non-
epilepsy related claims.
    Response: We thank the commenters for their input on our proposal. 
First, we disagree with the commenter's assertion that we should use 
CPT code 61886 as the predecessor code for CPT code 61891 because the 
long descriptors for each code are substantially different. 
Specifically, while CPT code 61886 describes the insertion or 
replacement of a neurostimulator, where a neurostimulator device will 
be implanted each time the service is billed, CPT code 61891 describes 
the revision or replacement of the neurostimulator, where a 
neurostimulator device may or may not be implanted when the service is 
billed. While we appreciate the additional feedback from commenters 
explaining that revision procedures are extremely rare, we have an 
obligation to set APC assignments according to the long descriptor 
provided by the AMA. Because we believe the resource costs for a 
service where a high-cost neurostimulator device may or may not be 
implanted are lower than the resource costs for a service where a high-
cost neurostimulator device is implanted each time, we disagree that 
CPT code 61891 should be assigned to the same APC as CPT code 61886. 
However, in light of the comments provided regarding the rarity of 
revision procedures and based on clinical similarities between CPT code 
61891 and other cranial neurostimulator codes currently assigned to APC 
5464 (Level 4 Neurostimulators), we believe that assigning CPT code 
61891 to APC 5464 would be clinically and resource appropriate.
    Regarding the assignment for CPT code 61892, we also disagree with 
the comments recommending that we use CPT code 61888 as the predecessor 
code for CPT code 61892. While CPT code 61888 may describe a removal of 
the neurostimulator or a revision, CPT code 61892 only describes the 
removal procedure. Therefore, we do not believe that CPT code 61892 
should be assigned to the same APC as CPT code 61888 because the codes 
are different in terms of resource and clinical considerations based on 
the disparity between the codes' long descriptors. After review of the 
comments provided and further analysis from our medical advisors, we 
believe that the removal procedure described by CPT code 61892 is 
similar to the service described by CPT 69727 (Removal, entire 
osseointegrated implant, skull; with magnetic transcutaneous attachment 
to external speech processor, within the mastoid and/or involving a 
bony defect less than 100 sq mm surface area of bone deep to the outer 
cranial cortex), and should be assigned to the same clinical APC. 
Therefore, we continue to believe that an assignment to APC 5113 (Level 
3 Musculoskeletal Procedures) is

[[Page 81708]]

clinically and resource appropriate for CPT code 61892.
    After consideration of the public comments, we are finalizing the 
assignment of CPT code 61891 to APC 5464. Additionally, we are 
finalizing the assignment of CPT code 61892 to APC 5113. The final CY 
2024 payment rate for both codes can be found in Addendum B to this 
final rule with comment period. We also refer readers to Addendum D1 of 
this final rule with comment period for the SI meanings for all codes 
reported under the OPPS. Addenda B and D1 are available via the 
internet on the CMS website.
55. Scleral Reinforcement (APC 5492)
    For CY 2023, we assigned CPT code 67255 (Scleral reinforcement 
(separate procedure); with graft) to APC 5491 (Level 1 Intraocular 
Procedures) with a payment rate of $2,159.44. For CY 2024, as listed in 
OPPS Addendum B that was released with the CY 2024 OPPS/ASC proposed 
rule, we proposed to maintain assignment to APC 5491 (Level 1 
Intraocular Procedures) with a payment rate of $2,255.61.
    Comment: A commenter disagreed with the assignment to APC 5491 and 
suggested reassignment to APC 5492 (Level 2 Intraocular Procedures), 
with a payment rate of $3,970.62, based on the latest claims data.
    Response: We reviewed our claims data for this final rule with 
comment period. We note the CY 2024 OPPS payment rates are based on 
claims submitted between January 1, 2022, and December 31, 2022, 
processed through June 30, 2023. Based on our examination of the claims 
data, we found the geometric mean cost of approximately $3,990 for CPT 
code 67255 based on 111 single claims (out of 111 total claims), which 
is consistent with the geometric mean cost of about $3,982 for APC 
5492. We believe that the resource costs related to CPT code 67255 are 
higher compared to that of APC 5491, whose geometric mean cost is 
approximately $2,282, and more comparable to APC 5492. Therefore, we 
believe that we should reassign CPT code 67255 to APC 5492, since the 
procedure fits more appropriately in this APC based on clinical 
similarity and resource homogeneity.
    In summary, after consideration of the public comment, we are 
finalizing the APC assignment for CPT code 67255 with modification. 
Specifically, we are revising the APC assignment from APC 5491 to APC 
5492 for CPT code 67255 for CY 2024. The final CY 2024 OPPS payment 
rate for this code can be found in Addendum B to this final rule with 
comment period. In addition, we refer readers to Addendum D1 of this 
final rule with comment period for the SI meanings for all codes 
reported under the OPPS. Addendum D1 is available via the internet on 
the CMS website.
56. SpaceOAR Hydrogel Procedure (APC 5375)
    CPT code 55874 (Transperineal placement of biodegradable material, 
peri-prostatic, single or multiple injection(s), including image 
guidance, when performed) describes the procedure associated with the 
SpaceOAR Hydrogel, a perirectal spacer made of gel-like material that 
temporarily creates a space between the prostate and rectum in prostate 
patients undergoing radiation therapy. For CY 2023, we assigned the 
code to APC 5375 (Level 5 Urology and Related Services), with a payment 
rate of $4,702.18. For CY 2024, as listed in OPPS Addendum B that was 
released with the CY 2024 OPPS/ASC proposed rule, we proposed to 
continue the assignment to APC 5376 (Level 6 Urology and Related 
Services) with a payment rate of $4,959.89.
    Comment: Several commenters requested a reassignment to APC 5376 
based on the claims data for the CY 2024 update.
    Response: The CY 2024 OPPS payment rates are based on claims 
submitted between January 1, 2022, and December 31, 2022, processed 
through June 30, 2023. We reviewed the claims data for this final rule, 
and based on our analysis, we found the geometric mean cost of 
approximately $6,634 for CPT code 55874 based on 9,361 single claims 
(out of 9,470 total claims), is consistent with the geometric mean cost 
of about $5,067 for APC 5375, rather than the geometric mean cost of 
approximately $9,022 for APC 5376. Based on the resource costs, we 
believe that CPT code 55874 fits more appropriately in APC 5375 based 
on its clinical similarity and resource homogeneity to the procedures 
in the APC. We note that we review, on an annual basis, the APC 
assignments for all services and items paid under the OPPS based on our 
analysis of the latest claims data.
    In summary, after consideration of the public comment, we are 
finalizing our proposal, without modification, to assign CPT code 55874 
to APC 5375 for CY 2024. The final CY 2024 payment rate for the code 
can be found in Addendum B to this final rule with comment period. In 
addition, we refer readers to Addendum D1 of this final rule with 
comment period for the SI meanings for all codes reported under the 
OPPS. Addenda B and D1 are available via the internet on the CMS 
website.
57. Spinal Injection Service (APC 5115)
    For CY 2024, we proposed to assign CPT codes 0627T (Percutaneous 
injection of allogeneic cellular and/or tissue-based product, 
intervertebral disc, unilateral or bilateral injection, with 
fluoroscopic guidance, lumbar; first level) and 0629T (Percutaneous 
injection of allogeneic cellular and/or tissue-based product, 
intervertebral disc, unilateral or bilateral injection, with ct 
guidance, lumbar; first level) to APC 5115 (Level 5 Musculoskeletal 
Procedures) with a proposed payment rate of $13,269.40.
    Comment: We received a comment supporting our proposal to assign 
CPT codes 0627T and 0629T to APC 5115 (Level 5 Musculoskeletal 
Procedures).
    Response: We thank the commenter for support of our proposal to 
assign CPT codes to APC 5115.
    After consideration of the public comment received, we are 
finalizing our proposal without modification. The final CY 2024 payment 
rate for these codes can be found in Addendum B to this final rule with 
comment period. In addition, we refer readers to Addendum D1 of this 
final rule with comment period for the SI meanings for all codes 
reported under the OPPS. Addenda B and D1 are available via the 
internet on the CMS website.
58. Synchronized Diaphragmatic Stimulation (SDS) System for 
Augmentation of Cardiac Function
    For the 2022 update, the CPT Editorial Panel established 12 new 
codes, specifically, CPT codes 0674T through 0685T, to describe the 
various services related to the synchronized diaphragmatic stimulation 
(SDS) system that is used to treat certain patients with chronic heart 
failure. The codes were effective January 1, 2022, and describe the 
implanting, revising, removing and replacing the implantable stimulator 
and leads, as well as interrogation and programming of the SDS system. 
The complete long descriptors for the 12 codes are listed in Table 81 
below. For the 2022 and 2023 update, we assigned the codes to status 
indicator ``E1'' to indicate that they are not payable by Medicare when 
submitted on outpatient claims (any outpatient bill type) because the 
services associated with these codes are either not covered by any 
Medicare outpatient benefit category, statutorily excluded by Medicare, 
or not reasonable and necessary. For CY 2024, we proposed to continue 
to assign the codes to status indicator ``E1.''
    Comment: A device manufacturer reported that the device associated 
with the codes received Breakthrough Device

[[Page 81709]]

Designation from the FDA and is scheduled to start a Category B 
Investigational Device Exemption (IDE) clinical trial in early 2024. In 
anticipation of the clinical trial and to ensure that hospitals receive 
Medicare reimbursement for the clinical trial, the manufacturer 
requested a reassignment in the status indicator, and suggested 
specific APCs and status indicator assignments for the 12 codes. In 
particular, the commenter suggested specific APC assignments for nine 
of the 12 codes, and recommended the assignment of status indicator 
``N'' (packaged) for the three add-on codes. The manufacturer indicated 
that once they receive approval from the FDA for the IDE study, they 
intend to submit an application to CMS for Medicare coverage of their 
IDE clinical trial.
    Response: Because the IDE study protocol has not received FDA 
approval, and has not been approved for Medicare coverage, we believe 
that we should continue to assign CPT codes 0674T through 0685T to 
status indicator ``E1'' for CY 2024. If this technology later meets 
CMS' standards for coverage, we will reassess the status indicator and 
APC assignments in a future quarterly update and/or rulemaking cycle.
    In summary, after consideration of the public comment received, we 
are finalizing our proposal, without modification, to assign status 
indicator ``E1'' to CPT codes 0674T through 0685T. The final status 
indicator assignment for the codes is listed in Table 81. We refer 
readers to Addendum D1 of this final rule with comment period for the 
complete list of the OPPS payment status indicators and their 
definitions for CY 2024. Addendum D1 is available via the internet on 
the CMS website.
BILLING CODE 4150-28-P
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[[Page 81710]]


[GRAPHIC] [TIFF OMITTED] TR22NO23.104

BILLING CODE 4150-28-C
59. Transcatheter Renal Sympathetic Denervation Procedure (APC 5192)
    For CY 2023, we assigned CPT code 0338T and 0339T to APC 5192 
(Level 2 Endovascular Procedures), with a payment rate of $5,215.40. 
For CY 2024, as listed in OPPS Addendum B that was released with the CY 
2024 OPPS/ASC proposed rule, we proposed to continue the assignment to 
APC 5192 with a payment rate of $5,500.17. Below are the long 
descriptors for the codes:
     0338T: Transcatheter renal sympathetic denervation, 
percutaneous approach including arterial puncture, selective catheter 
placement(s) renal artery(ies), fluoroscopy, contrast injection(s), 
intraprocedural roadmapping and radiological supervision and 
interpretation, including pressure gradient measurements, flush 
aortogram and

[[Page 81711]]

diagnostic renal angiography when performed; unilateral
     0339T: Transcatheter renal sympathetic denervation, 
percutaneous approach including arterial puncture, selective catheter 
placement(s) renal artery(ies), fluoroscopy, contrast injection(s), 
intraprocedural roadmapping and radiological supervision and 
interpretation, including pressure gradient measurements, flush 
aortogram and diagnostic renal angiography when performed; bilateral
    Comment: A commenter requested a reassignment to APC 5193 (Level 3 
Endovascular Procedures, with a payment rate of $10,602.57, based on 
clinical similarity to the procedures in the APC.
    Response: The CY 2024 OPPS payment rates are based on claims 
submitted between January 1, 2022, and December 31, 2022, processed 
through June 30, 2023. We evaluated the claims data for this final 
rule, and based on our review, we found no claims for CPT code 0338T. 
We also reviewed our historical claims data for the last 5 years, 
specifically, the cost statistics data that was released with the CY 
2019 through CY 2023 OPPS/ASC final rules, and found that we have no 
claims data for CPT code 0338T. In contrast, we found some data for CPT 
code 0339T. For this final rule with comment period, our claims data 
show a geometric mean cost of about $16,423 for CPT code 0339T based on 
1 single claim (out of 1 total claim). Similar to CPT code 0338T, we 
reviewed our historical claims data for the last 5 years and found 
inconsistent cost information. Specifically, our claims data show a 
geometric mean cost that has ranged between $651 and $1,081, based on 1 
and 9 single claims. Based on the historical and current claims data 
for this final rule with comment period, we believe that both codes 
should be maintained in APC 5192.
    In summary, after consideration of the public comment, we are 
finalizing our proposal, without modification, to assign CPT code 0338T 
and 0339T to APC 5192 for CY 2024. The final CY 2024 payment rate for 
the code can be found in Addendum B to this final rule with comment 
period. In addition, we refer readers to Addendum D1 of this final rule 
with comment period for the SI meanings for all codes reported under 
the OPPS. Addenda B and D1 are available via the internet on the CMS 
website.
60. Transnasal EGD CPT Codes 0652T-0654T (APCs 5302 and 5303)
    For the CY 2024 OPPS final rule, we proposed to assign CPT code 
0652T (Esophagogastroduodenoscopy, flexible, transnasal; diagnostic, 
including collection of specimen(s) by brushing or washing, when 
performed (separate procedure)) with no claims data for CY 2024 and CPT 
code 0653T (Esophagogastroduodenoscopy, flexible, transnasal; with 
biopsy, single or multiple) with a geometric mean cost of around $3,987 
to APC 5302 (Level 2 Upper GI Procedures) with a payment rate of around 
$1,854. In addition, we proposed to assign CPT code 0654T 
(Esophagogastroduodenoscopy, flexible, transnasal; with insertion of 
intraluminal tube or catheter) with a geometric mean cost of around 
$2,057 to APC 5303 (Level 3 Upper GI Procedures) with a payment rate of 
$3,803.
    Comment: One commenter supported our decision to assign CPT codes 
0652T and 0653T to APC 5302. The commenter also supported our decision 
to assign CPT code 0654T to APC 5303.
    Response: We appreciate the commenter's support for our proposals.
    After consideration of the public comments we received, we are 
finalizing our proposal without modification to continue to assign CPT 
codes 0652T and 0653T to APC 5302 (Level 2 Upper GI Procedures). We 
also are finalizing our proposal without modification to continue to 
assign CPT code 0654T to APC 5303 (Level 3 Upper GI Procedures). Table 
82 shows the finalized status indicator and APC assignment for all of 
the procedure codes. We refer readers to Addendum B of this final rule 
with comment period for the payment rates for all codes reportable 
under the OPPS. Addendum B is available via the internet on the CMS 
website.
[GRAPHIC] [TIFF OMITTED] TR22NO23.105

61. Upper GI Tract Endoscopy Bile and Pancreatic Ducts (APC 5302)
    CPT code 43275 (Endoscopic retrograde cholangiopancreatography 
(ERCP); with removal of foreign body(s) or stent(s) from biliary/
pancreatic duct(s)) describes an endoscopy procedure that is performed 
to treat medical issues with the bile and pancreatic ducts. CPT code 
43275 has a geometric mean cost of around $2,725 for CY 2024. In the CY 
2024 OPPS proposed rule, we assigned CPT code 43275 to APC 5302 (Level 
2 Upper GI

[[Page 81712]]

Procedures) with a payment rate of around $1,854.
    Comment: One commenter requested that CPT code 43275 be reassigned 
to APC 5303 (Level 3 Upper GI Procedures) with a payment rate of around 
$3,803. The commenter states that performing endoscopic retrograde 
cholangiopancreatography (ERCP) requires more training and experience 
for gastrointestinal endoscopists as compared to other gastrointestinal 
endoscopic procedures leading to higher cost for the procedure 
described by CPT code 43275. The commenter also notes that CPT code was 
assigned to APC 5202 for CY 2023 where it is the lowest-cost 
significant procedure. Moving CPT code 43275 to APC 5302 would increase 
the 2 times rule threshold in APC 5303, which according to the 
commenter, may reduce the procedure code combinations that would be 
eligible for complexity adjustments. The commenter also notes that CPT 
code 43275 while in APC 5302 is less than $300 away from a 2 times rule 
violation in that APC. Finally, the commenter believes that there no 
significant financial impact whether CPT code 43275 is assigned to 
either APC 5302 or APC 5303.
    Response: We appreciate the request of the commenter. We note that 
while CPT code 43275 would be one of the higher-paid procedures in APC 
5302, the procedure will be underpaid by less than $900 and there are 
several other procedures in APC 5302 with similar geometric costs as 
CPT code 43275. Assigning CPT code 43275 to APC 5303 would make the 
procedure the second lowest-paid procedure in APC 5303. In addition, 
the payment rate of APC 5303 would be around $1,000 more than the 
geometric mean cost of CPT code 43275.
    After consideration of the public comments we received, we are 
finalizing our proposal without modification for CPT code 43275 to 
continue to assign the procedure to APC 5302 (Level 2 Upper GI 
Procedures). Table 83 shows the finalized status indicator and APC 
assignment for all of the procedure codes. We refer readers to Addendum 
B of this final rule with comment period for the payment rates for all 
codes reportable under the OPPS. Addendum B is available via the 
internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TR22NO23.106

62. Xen Glaucoma Treatment Procedure (APC 5493)
    For 2017, the AMA's Editorial Panel established two new codes, 
specifically, CPT code 0449T and 0450T, effective January 1, 2017, to 
describe the surgical procedure associated with the Xen Glaucoma 
Treatment System. The complete long descriptors for the codes, are 
listed below:
     0449T (Insertion of aqueous drainage device, without 
extraocular reservoir, internal approach, into the subconjunctival 
space; initial device)
     0450T (Insertion of aqueous drainage device, without 
extraocular reservoir, internal approach, into the subconjunctival 
space; each additional device (list separately in addition to code for 
primary procedure))
    For CY 2023, CPT code 0449T is assigned to APC 5492 (Level 2 
Intraocular Procedures) with a payment of $3,995.58. In addition, we 
assigned CPT code 0450T to status indicator ``N'' to indicate that the 
code is packaged, and payment for the service is included in the 
primary code. For CY 2024, we proposed to continue the assignment to 
APC 5492 for CPT code 0449T. Similarly, we proposed to maintain the 
assignment of status indicator ``N'' (packaged) for CPT code 0450T.
    Comment: A commenter reported that the proposed reassignment for 
CPT 66991, which is one of the existing MIG codes, from APC 1563 (New 
Technology--Level 26 ($4001-$4500)) to APC 5493 (Level 3 Intraocular 
Procedures), seems appropriate. However, the commenter indicated that 
the geometric mean cost for CPT code 0449T is higher than the cost of 
CPT code 66991, yet CPT code 0449T has been proposed to continue to be 
assigned to APC 5492. In addition, the commenter suggested that the 
work associated with CPT code 0449T is significantly more complex than 
that of CPT code 66991. Based on the claims data and the clinical 
complexity of the work associated with the service described by CPT 
code 0449T, the commenter urged CMS to reassign CPT code 0449T to APC 
5493, which is the same APC proposed for CPT code 66991.
    Response: We reviewed our claims data for this final rule with 
comment period. The CY 2024 OPPS payment rates are based on claims 
submitted between January 1, 2022, and December 31, 2022, processed 
through June 30, 2023. Based on our evaluation of the claims data for 
this final rule with comment period, we agree that the geometric mean 
cost for CPT code 0449T is higher compared to the geometric mean cost 
for CPT code 66991. Specifically, our claims data show a geometric mean 
cost of approximately $4,995 for CPT code 0449T based on 415 single 
claims (out of 421), which is higher than the geometric mean cost of 
about $4,943 for CPT code 66991 based on 6,011 single claims (out of 
6,069) total claims. We agree that CPT code 0449T should be reassigned 
to APC 5493 based on clinical and resource homogeneity with the 
procedures assigned to APC 5493. We believe the resource costs 
associated with CPT code 0449T are similar to those procedures in APC 
5493, rather than APC 5492. Therefore, we are revising the assignment 
for CPT code 0449T to APC 5493 for CY 2024.
    With regard to CPT code 66991 (MIG code) mentioned by the 
commenter, we refer readers to section III.C (New Technology APCs) of 
this final rule with comment period for the discussion

[[Page 81713]]

related to the CY 2024 payment for the code.
    In summary, after consideration of the public comments, we are 
finalizing the APC assignment for CPT code 0449T with modification. 
Specifically, we are revising the APC assignment from APC 5492 to APC 
5493 for CPT code 0449T for CY 2024. We note we did not receive any 
comment for CPT code 0450T, therefore, we are finalizing the proposed 
status indicator. The final CY 2024 OPPS payment rate for all the codes 
payable under the OPPS can be found in Addendum B to this final rule 
with comment period. In addition, we refer readers to Addendum D1 of 
this final rule with comment period for the SI meanings for all codes 
reported under the OPPS. Addendum D1 is available via the internet on 
the CMS website.
63. XV Lung Ventilation Analysis Software (APC 5722)
    Effective July 1, 2023, the CPT Editorial Panel created CPT codes 
0807T (Pulmonary tissue ventilation analysis using software-based 
processing of data from separately captured cinefluorograph images; in 
combination with previously acquired computed tomography (CT) images, 
including data preparation and transmission, quantification of 
pulmonary tissue ventilation, data review, interpretation and report) 
and 0808T (Pulmonary tissue ventilation analysis using software-based 
processing of data from separately captured cinefluorograph images; in 
combination with computed tomography (CT) images taken for the purpose 
of pulmonary tissue ventilation analysis, including data preparation 
and transmission, quantification of pulmonary tissue ventilation, data 
review, interpretation and report). Both CPT codes 0807T and 0808T are 
used with the XV Lung Ventilation Analysis Software, which is a 
respiratory imaging platform to identify respiratory deficiencies. The 
difference between the two codes is that CPT code 0808T includes a CT 
scan during the service, and CPT code 0807T does not. For CY 2024, we 
proposed to assign CPT code 0807T to APC 5721 (Level 1 Diagnostic Tests 
and Related Services) with a proposed payment rate of $151 and CPT code 
0808T to APC 5722 (Level 2 Diagnostic Tests and Related Services) with 
a proposed payment rate of $304.
    Comment: We received a comment from the manufacturer of the XV Lung 
Ventilation Analysis Software expressing support for the proposed APC 
assignment for 0808T.
    Response: We thank the commenter for their support for the APC 
assignment for CPT code 0808T and agree that the proposed APC 
assignment for CPT code 0808T accurately captures the costs associated 
with the service. Therefore, we are finalizing the APC assignment for 
CPT code 0808T as proposed.
    Comment: The manufacturer also commented on the proposed APC 
assignment for CPT code 0807T. The commenter stated that the proposed 
APC assignment for CPT code 0807T does not properly account for the 
costs associated with the required fluoroscopy imaging that is a part 
of the service. The commenter provided the CY 2024 proposed rule 
geometric mean costs for two fluoroscopy codes: CPT code 76000 
(Fluoroscopy (separate procedure), up to 1 hour physician or other 
qualified health care professional time) with a proposed geometric mean 
cost of $262, and CPT code 76496 (Unlisted fluoroscopic procedure (eg, 
diagnostic, interventional) with a proposed geometric mean cost of 
$133, and explained that the proposed APC assignment for CPT code 0807T 
would not cover the costs of the fluoroscopy based on the proposed 
geometric mean costs of the two fluoroscopy codes. To account for the 
costs of the fluoroscopy that is performed as part of the service, the 
commenter requested that CMS assign CPT code 0807T to APC 5722 for CY 
2024.
    Response: After further evaluation of CPT code 0807T, the resources 
required to perform the procedure, and input from our medical advisors, 
we believe it is appropriate to reassign CPT code 0807T to APC 5722. 
Based on our evaluation of the additional information provided to CMS 
as well as the claims data for existing fluoroscopy codes, we believe 
that the resource costs associated with CPT code 0807T are higher than 
those associated with the code's proposed APC assignment. Therefore, we 
are revising the APC assignment for CPT code 0807T for CY 2024.
    After consideration of the public comment, we are finalizing our 
proposal without modification to assign CPT code 0808T to APC 5722 for 
CY 2024. We are also finalizing the reassignment of CPT code 0807T to 
APC 5722 for CY 2024. The final CY 2024 payment rate for these codes 
can be found in Addendum B to this final rule with comment period. We 
also refer readers to Addendum D1 of this final rule with comment 
period for the SI meanings for all codes reported under the OPPS. 
Addenda B and D1 are available via the internet on the CMS website. In 
addition, we note that CMS recognizes that software-based technologies 
are rapidly evolving, like the product used for HCPCS code C9786. In 
line with our comment solicitation on payment policy for software as a 
service (SaaS) procedures in the CY 2023 OPPS final rule (87 FR 72035 
and 72036), CMS is considering, for future rulemaking, whether or not 
specific adjustments to payment policies and rate calculations are 
necessary in order to more accurately and appropriately pay for these 
products and services across settings of care. CMS remains open to 
feedback on these issues and welcomes engagement from interested 
parties, including from manufacturers, providers, and beneficiaries.
64. New Technology Applications Submitted to CMS
    Comment: We received comments regarding three pending New 
Technology APC applications, for the TriNavTM Infusion 
System, Trabeculocanalicular Outflow Restoration, and Optilume Benign 
Prostatic Hyperplasia (BPH) services.
    Response: We note that pending New Technology APC applications are 
reviewed via a sub-regulatory process, and therefore, application 
determinations are not made via rulemaking. As a result, we did not 
propose to create new codes for any of these services or assign them to 
New Technology APCs in the CY 2024 OPPS/ASC proposed rule. These New 
Technology APC applications are currently being reviewed and applicants 
will be notified of CMS's decision through our normal process.

IV. OPPS Payment for Devices

A. Pass-Through Payment for Devices

1. Beginning Eligibility Date for Device Pass-Through Status and 
Quarterly Expiration of Device Pass-Through Payments
a. Background
    The intent of transitional device pass-through payment, as 
implemented at Sec.  419.66, is to facilitate access for beneficiaries 
to the advantages of new and truly innovative devices by allowing for 
adequate payment for these new devices while the necessary cost data is 
collected to incorporate the costs for these devices into the procedure 
APC rate (66 FR 55861). Under section 1833(t)(6)(B)(iii) of the Act, 
the period for which a device category eligible for transitional pass-
through payments under the OPPS can be in effect is at least 2 years 
but not more than 3 years. Prior to CY 2017, our regulation at Sec.  
419.66(g) provided that this pass-through payment eligibility period 
began on the date CMS established a

[[Page 81714]]

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.\14\
---------------------------------------------------------------------------

    \14\ To apply for OPPS transitional device pass-through status, 
applicants complete an application that is subject to the Paperwork 
Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et seq.). This 
information collection (CMS-10052) is currently approved under OMB 
control number 0938-0857 and has 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 84 of this 
final rule with comment 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 final 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.
BILLING CODE 4150-28-P

[[Page 81715]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.107


[[Page 81716]]


BILLING CODE 4150-28-C
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 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 sub-regulatory 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 and 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

[[Page 81717]]

process promotes timely pass-through payment status for innovative 
devices, while also recognizing that such devices may not have a 
sufficient evidence base to demonstrate substantial clinical 
improvement at the time of FDA marketing authorization.
    More details on the requirements for device pass-through payment 
applications are included on the CMS website in the application form 
itself at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/passthrough_payment.html, in the 
``Downloads'' section. In addition, CMS is amenable to meeting with 
applicants or potential applicants to 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 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 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 solicited public comment on whether CavaClear meets the newness 
criterion at Sec.  419.66(b)(1).
    Comment: The applicant submitted a comment reiterating that 
CavaClear meets the newness criterion at 42 CFR 419.66(b)(1), stating 
that CMS 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.
    Response: We appreciate the commenter's input and agree that 
because we received the application for CavaClear on May 30, 2022, 
which is within 3 years of FDA approval on April 23, 2021, that 
CavaClear meets the newness criterion.
    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

[[Page 81718]]

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 invited public comment on whether CavaClear meets the 
eligibility criterion at Sec.  419.66(b)(3).
    Comment: The applicant submitted a comment reiterating that 
CavaClear satisfies the eligibility criterion at 42 CFR 419.66(b)(3) 
because the device 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.
    Response: We appreciate the commenter's input. Based on the 
information we have received and our review of the application, we 
agree with the applicant that CavaClear is integral to the service 
provided, used for one patient only, comes in contact with human 
tissue, and is surgically implanted or inserted. Therefore, we have 
determined that CavaClear meets the eligibility criteria 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 invited public comment on whether CavaClear meets the exclusion 
criterion at Sec.  419.66(b)(4).
    Comment: The applicant submitted a comment reiterating that 
CavaClear satisfies the exclusion criterion at 42 CFR 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.
    Response: We appreciate the commenter's input. Based on the 
information we have received and our review of the application, we 
agree with the applicant that CavaClear meets the device eligibility 
requirements of Sec.  419.66(b)(4) because it is not a piece of 
equipment, instrument, apparatus, implement, or item for which 
depreciation and financing expenses are recovered, and it is not a 
supply or material furnished incident to a service. We have therefore 
determined that CavaClear meets the device eligibility requirements of 
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 
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 forceps 
method to remove IVC filters. Per the applicant, 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.
    In the proposed rule, we noted, 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 noted that another existing pass-
through payment category may appropriately describe CavaClear. 
Specifically, we stated that we believed 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 invited public comment on whether CavaClear meets the device 
category criterion at Sec.  419.66(c)(1).
    Comment: In response to our concerns that CavaClear may be 
appropriately described by C2629 or C1773, the applicant and several 
commenters commented that CavaClear meets eligibility requirements of 
Sec.  419.66(c)(1), stating that CavaClear can be distinguished from 
the devices currently described by HCPCS codes C2629 and C1773 and, as 
such, meets the device category criterion. Specifically, the commenters 
asserted that CavaClear differs from devices described in C2629 and 
C1773 by mechanism of action, clinical use, impacted anatomy, and FDA 
clearance pathway.
    All commenters addressing the device category criterion offered 
support for approval of the application. Commenters stated that 
CavaClear's mechanism of action is unique because it uses laser energy 
to ablate scar tissue to facilitate the safe detachment and removal of 
indwelling IVC filters. Commenters also noted that CavaClear's 
photothermal laser tissue ablation is administered with individualized 
tools and a unique traction platform different from other devices. One 
commenter stated that there is no other device that uses excimer laser 
technology to ablate the scar tissue that embeds IVC filter struts. 
Finally, the applicant and multiple commenters provided that CavaClear 
is also the only device to address the unmet medical need identified by 
FDA safety communications on IVC retrievals.
    Multiple commenters also noted that CavaClear was granted De Novo 
classification by FDA, reflecting FDA's determination that there is no 
legally marketed predicate device for CavaClear. In addition, the 
applicant stated that CavaClear received Breakthrough Device 
designation from FDA, which they believe implies that CavaClear is the 
first device of its kind to address the condition for which it is 
designed and is the only FDA-cleared treatment option for advanced IVC 
filter removal.
    With respect to our concern that CavaClear may be appropriately 
described by C2629, the applicant stated that CavaClear differs 
significantly from devices described in the C2629 category (Introducer/
sheath, other than guiding, other than intracardiac

[[Page 81719]]

electrophysiological, laser). First, the applicant asserted, and 
multiple commenters agreed, that the devices described by C2629 are 
used to remove pacemaker and defibrillator leads from the superior vena 
cava (SVC) while CavaClear removes IVC filters from the inferior vena 
cava. Specifically, the applicant stated that CavaClear removes a 
different implant (IVC filter), as compared to other devices in need of 
removal (pacemaker and defibrillator leads). In addition, the impacted 
anatomy is different than that of the other products. The applicant 
explained that the IVC filter is placed in the IVC and the cardiac 
leads are placed via the SVC.
    The applicant also sought to clarify how, in comparison to the 
devices described in the C2629 category, CavaClear's mechanism of 
action is unique. The applicant asserted that CavaClear's mechanism of 
action is different and is based on four components: vessel access, 
traction platform, tissue separation, and physical removal of the 
implanted device. The applicant stated that the vessel access site for 
CavaClear is via internal jugular or femoral vein, as opposed to the 
subclavian vein for the other laser sheath devices. The applicant also 
asserted that CavaClear's traction platform is different than the other 
laser sheath products, with no additional rail required for traction 
other than a snare, and the tools used to perform extraction are 
specific to the CavaClear device. Further, the applicant and a few 
commenters provided that the photothermal cool tissue ablation cannot 
be administered without the individualized tools and traction platform.
    Finally, the applicant provided clarification regarding the 
physical removal of the implanted device using CavaClear. The applicant 
stated that to remove the IVC filter the CavaClear device interacts to 
collapse the filter in combination with the application of energy. By 
contrast, for other devices, there is no such interaction to physically 
alter the explanted device.
    With respect to our concern that CavaClear may be appropriately 
described by C1773, the applicant asserted that CavaClear differs 
significantly from devices described in C1773 (Retrieval device, 
insertable (used to retrieve fractured medical devices)).
    As with devices in the C2629 category, the applicant sought to 
clarify how, in comparison to the devices described in the C1773 
category, CavaClear's mechanism of action is unique. The applicant 
reiterated that CavaClear's mechanism of action is different and is 
based on four components: vessel access, traction platform, tissue 
separation, and physical removal of the implanted device through 
photothermal cool tissue laser ablation.
    Commenters asserted that CavaClear can be distinguished from the 
devices broadly described in C1773 because those described devices 
represent mechanical (non[hyphen]laser) or more rudimentary approaches 
to retrieval as compared to CavaClear. Specifically, the applicant 
provided that for the devices described in C1773 that retrieve IVC 
filters (for example, endovascular snares, goose neck snares), the 
mechanism of action relies on the device to capture the apical hook of 
the filter (often embedded in the wall of the IVC or encapsulated). If 
accessible, the snare requires straight pulling, sometimes 
substantially, of the filter into a sheath with equal and opposite 
traction/countertraction applied to the snare and sheath to disengage 
the filter from the IVC wall. The applicant asserted that excessive 
pull forces have a higher risk of vasculature injury, filter breakage 
and fragmentation, and a potential for fragment embolization to the 
heart and/or lungs.
    The applicant also clarified that devices in C1773 that do not 
retrieve IVC filters but are used for lead extraction (for example, 
Tightrail), generally feature a stainless steel cutting tool to 
mechanically dilate tissue surrounding a pacemaker or defibrillator 
lead. The device's stainless steel cutting tool features a handle, 
trigger, and drive mechanism that allows trigger pulls of the device to 
be converted into torque for mechanical dilation of tissue on the 
distal end. By contrast, CavaClear features fiberoptics for 
transmission of ultraviolet light to ablate tissue surrounding an IVC 
filter. Finally, the applicant noted that retrieval devices included in 
C1773 that are used to remove pacemaker and/or defibrillator cardiac 
implantable electronic devices are not indicated for and should not be 
used for retrieving IVC filters; the physician specialty performing 
lead extractions are electrophysiologists and cardiac surgeons, as 
compared to interventional radiologists and vascular surgeons who 
perform IVC filter removals; and the access site for these devices is 
different from CavaClear as the device is typically inserted into the 
subclavian vein as opposed to the jugular or femoral vein for 
CavaClear.
    Response: We appreciate the input provided by these commenters. We 
have taken this information into consideration in making our final 
determination of the device category criterion, discussed below.
    Comment: Along with the applicant, commenters urged CMS to 
establish a new pass-through payment category that describes CavaClear. 
The applicant asserted that CMS has set past precedent that would allow 
establishment of a narrower device category to account for new 
innovative technologies that were not contemplated when categories were 
first established. For example, CMS has established narrower device 
pass-through categories describing neurostimulators and transluminal 
angioplasty catheters to facilitate pass-through status for new 
technologies. Commenters asserted that these examples illustrate that 
CMS has, in the past, exercised flexibility in establishing new device 
categories that involve new technologies that appear to be described by 
existing broad categories. In doing so, the applicant asserted, CMS 
recognized that historical overly broad device categories may not 
necessarily be appropriate for new technologies that were not 
contemplated when the categories were established. The applicant urged 
CMS to exercise similar flexibility in evaluating CavaClear and 
creating a narrower device category to accurately describe the new 
technology. Several other commenters agreed with the applicant's 
assertion that CMS has the flexibility to create new device categories 
from existing broad categories to recognize technological advances 
within a device class.
    Response: We appreciate the commenters' input. We agree with the 
applicant and commenters that CMS has the flexibility to create new 
device categories when we recognize that the existing device categories 
do not accurately describe the new proposed technology. However, we 
note that we must clearly establish that a proposed device is not 
described by existing device categories prior to exercising that 
flexibility. After consideration of the public comments we received, we 
agree there is no existing pass-through payment category that 
appropriately describes CavaClear because no current category 
appropriately describes an insertable introducer/sheath retrieval 
device that utilizes a photothermal cool laser to ablate caval tissue 
and retrieve intact IVC filters that are no longer clinically 
indicated. Neither pass-through category C2629 nor C1773 fully 
describes CavaClear and its complex mechanism of action. Based on this 
information, we have determined that CavaClear meets the first 
eligibility criterion at Sec.  419.66(c)(1).
    We received additional public comments regarding Sec.  419.66(c)(1) 
that

[[Page 81720]]

did not impact our decision on whether or not CavaClear meets the Sec.  
419.66(c)(1) criterion, however we address these comments below.
    Comment: The applicant stated that they believe CMS is adopting an 
overly restrictive interpretation of the device category requirements, 
particularly as they relate to devices with FDA Breakthrough Device 
designation. The applicant asserted that CMS' interpretation of the 
criteria for a new device category for CavaClear suggests that any new 
technology that could be aligned to an existing category that was 
created more than 20 years ago, despite unique characteristics that 
differentiate it from other devices in the category, would 
automatically fail to meet the threshold for a new device category. The 
applicant further stated that both categories CMS identifies as 
potentially describing CavaClear (C2629 and C1773) were established 
over two decades ago and use very broad language to describe existing 
technologies and technology development at the time; however, 
technologies have advanced significantly since then, and thus, these 
broad categories may be unnecessarily restricting pass-through status 
for technologies that are indeed novel.
    Response: We appreciate the commenter's feedback; however, we 
disagree that our current interpretation of the device category 
requirements suggests that any new technology that could be aligned to 
a previous or existing device category would automatically fail to meet 
the threshold for a new device category. To the contrary, as the 
commenters noted, CMS has historically established device codes for new 
and innovative technologies when it has been determined that the 
proposed category is not appropriately described by any of the existing 
categories or by any category previously in effect. Device pass-through 
applications in no way automatically fail to meet the threshold for a 
new device category, rather, CMS' goal is to evaluate each application 
to clearly ascertain whether the proposed device is described by any of 
the existing categories or by any category previously in effect in 
order to determine if a new device category should be established.
    Comment: The applicant expressed concern that CMS' interpretation 
of the device category requirement will result in inappropriate limits 
upon the use of the Alternative Pathway for device pass-through and 
encouraged CMS to consider the totality of evidence when assessing 
whether a device falls into an existing device category. Specifically, 
the applicant encouraged CMS to consider factors such as different 
mechanisms of action, unmet medical need, and differentiated clinical 
use when evaluating a new category.
    Response: We appreciate the commenters' feedback. We disagree that 
our current interpretation of the device category requirement will 
result in inappropriate limits upon the use of the Alternative Pathway 
for device pass-through. CMS has established an evaluation process that 
ensures that we have the information we need to evaluate applications 
and make determinations based on the totality of the evidence; part of 
that evaluation is determining if a previous or existing device code 
appropriately describes the proposed device. We appreciate the 
suggestions made by the commenters regarding the factors CMS should use 
to evaluate the device category requirement and appreciate their 
support to our current process.
    Comment: The applicant requested that CMS modify the device pass-
through criteria to automatically consider devices with FDA 
Breakthrough Device designation to not be appropriately described by 
any of the existing or previous device categories, and therefore, meet 
the Sec.  419.66(c)(1) criterion. The applicant noted that when CMS 
established an alternative pathway for Breakthrough Devices seeking new 
technology add-on payment in the inpatient hospital setting, CMS 
stated, ``if a medical device is part of FDA's Breakthrough Devices 
Program and received FDA marketing authorization, it would be 
considered new and not substantially similar to an existing technology 
for purposes of the new technology add-on payment.'' The applicant 
argued that to ensure consistency in policy across payment systems, CMS 
should deem CavaClear new for the purpose of device pass-through, and 
not described by an existing or past category.
    Response: We appreciate the commenters' feedback. Under the IPPS, 
beginning with applications for FY 2021, a medical device designated 
under FDA's Breakthrough Devices Program that has received marketing 
authorization as a Breakthrough Device, for the indication covered by 
the Breakthrough Device designation, may qualify for the new technology 
add-on payment under an alternative pathway. Under an alternative 
pathway, a technology will be considered not substantially similar to 
an existing technology for purposes of the new technology add-on 
payment under the IPPS and will not need to meet the requirement that 
it represents an advance that substantially improves, relative to 
technologies previously available, the diagnosis or treatment of 
Medicare beneficiaries. These technologies must still be within the 2- 
to 3-year newness period to be considered ``new'' and must also still 
meet the cost criterion (88 FR 58919).
    When we adopted the alternative pathway for device pass-through 
payments under the OPPS, we stated that applications for devices that 
have received FDA marketing authorization and are part of the FDA 
Breakthrough Devices Program would not be evaluated in terms of the 
current substantial clinical improvement criterion at Sec.  
419.66(c)(2) for purposes of determining device pass-through payment 
status, but would continue to need to meet the other requirements for 
pass-through payment status in our regulations at Sec.  419.66(c)(1) 
(84 FR 61295). The commenter is correct that under the alternative 
pathway for device pass-through status under the OPPS, a device must 
still meet the device category criterion at Sec.  419.66(c)(1), 
consistent with the policy we adopted beginning in CY 2020. We 
recognize that this feature of the OPPS alternative pathway for 
Breakthrough Devices differs from the IPPS alternative pathway because 
Breakthrough Devices do not need to meet the substantial similarity 
requirement. Nonetheless, we do not believe that the current policy 
creates a barrier to devices with Breakthrough Device designation and 
note that we have previously granted OPPS device pass-through status 
for Breakthrough Devices that have applied for the alternative pathway, 
including the devices discussed in this final rule with comment period, 
because these devices have not been described by existing device 
categories or those previously in effect.
    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 FDA's Breakthrough Devices Program and has received 
FDA marketing authorization for the indication covered by the 
Breakthrough Device designation. We explained in the proposed rule that 
CavaClear has a Breakthrough Device designation and

[[Page 81721]]

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 85.
[GRAPHIC] [TIFF OMITTED] TR22NO23.108

    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.\15\ 
According to the applicant, the cost of CavaClear is $3,165.00.
---------------------------------------------------------------------------

    \15\ We noted 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 Notification 
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 the 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 stated that we believed 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 stated that 
we believed 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 stated that we 
believed that CavaClear meets the third cost significance requirement.
    We invited 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.
    Comment: The applicant reiterated that it believes it satisfies the 
criterion at 42 CFR 419.66(c)(3) and that the cost of the device is not 
insignificant as determined by CMS' analysis of the three cost 
significance criteria for CavaClear.
    Response: We appreciate the commenter's input. Based on our 
findings from the first, second, and third cost significant tests, we 
believe that CavaClear meets the cost significance criteria specified 
at Sec.  419.66(d).
    We invited public comment on whether CavaClear meets the device 
pass-through payment criteria discussed in this section.
    Comment: Several commenters, including the applicant, submitted 
comments in support of pass-through payment approval for CavaClear. A 
few commenters underlined that pass-through payment approval for 
CavaClear will help increase Medicare beneficiary access to 
technological advancements in treatment. Several commenters also stated 
that CavaClear addresses an unmet medical need and provides the ability 
to remove IVC filters that otherwise would remain in place, leaving 
patients with significant symptoms. They further asserted that 
CavaClear will have an impact on reducing complications from IVC filter 
removals, time spent on IVC filter removals, and associated healthcare 
costs.
    Response: We appreciate the commenters' input on the potential 
impact on Medicare beneficiary access, safety, and associated 
healthcare costs.
    After our review of the device pass-through application and 
consideration of the public comments we received, we have determined 
that CavaClear meets

[[Page 81722]]

the requirements for device pass-through status described at Sec.  
419.66. As stated previously, devices that are granted an FDA 
Breakthrough Device designation are not evaluated in terms of the 
current substantial clinical improvement criterion at Sec.  
419.66(c)(2)(i) for the purposes of determining device pass-through 
payment status but must meet the other criteria for device pass-through 
status. We believe CavaClear meets those other criteria, and therefore, 
effective beginning January 1, 2024, we are finalizing approval for 
device pass-through payment status for CavaClear under the alternative 
pathway for devices that have an FDA Breakthrough Device designation 
and have received FDA marketing authorization for the indication 
covered by the Breakthrough Device designation.
(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 (that is, 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) (for example, 
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 (that is, removed), 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).

[[Page 81723]]

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 invited public comment on whether CERAMENT[supreg] G meets the 
newness criterion at Sec.  419.6C6(b)(1).
    We did not receive public comments regarding whether 
CERAMENT[supreg] G meets the newness criterion at Sec.  419.66(b)(1). 
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 FDA Breakthrough Device designation 
effective March 12, 2020, and the FDA De Novo classification on May 17, 
2022. As such we have concluded that CERAMENT[supreg] G meets the 
newness criterion.
    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 invited public comment on whether CERAMENT[supreg] G meets the 
eligibility criterion at Sec.  419.66(b)(3).
    We did not receive public comments regarding whether 
CERAMENT[supreg] G meets the eligibility requirements at Sec.  
419.66(b)(3). Based on the information we have received and our review 
of the application, we determined that CERAMENT[supreg] G is integral 
to the service provided, used for one patient only, comes in contact 
with human tissue, and is surgically implanted or inserted. Therefore, 
based on our review of the application, we have determined that 
CERAMENT[supreg] G meets the eligibility criteria 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 invited public comment on whether CERAMENT[supreg] G meets the 
exclusion criterion at Sec.  419.66(b)(4).
    We did not receive public comments regarding whether 
CERAMENT[supreg] G meets the eligibility requirements at Sec.  
419.66(b)(4). Based on the information we have received and our review 
of the application, we determined that CERAMENT[supreg] G is not a 
piece of equipment, instrument, apparatus, implement, or item for which 
depreciation and financing expenses are recovered, and it is not a 
supply or material furnished incident to a service. Therefore, based on 
our review of the application, we have determined that CERAMENT[supreg] 
G meets the eligibility criteria 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.\16\
---------------------------------------------------------------------------

    \16\ 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 \17\ 
(devices described by HCPCS code C1734). We noted 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 referred 
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.\18\ 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 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

[[Page 81724]]

a chemo-attractant and mitogen for cells involved in wound healing and 
promotes 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.
---------------------------------------------------------------------------

    \17\ 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/.
    \18\ 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 are 
indicated 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 
require 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.
    We noted 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 noted 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 stated that 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 invited public comment on whether CERAMENT[supreg] G meets the 
device category criterion at Sec.  419.66(c)(1).
    Comment: In response to our concerns that CERAMENT[supreg] G may be 
appropriately described by C1734, the applicant commented that 
CERAMENT[supreg] G meets eligibility requirements of Sec.  
419.66(c)(1), stating that CERAMENT[supreg] G can be distinguished from 
the device currently described by HCPCS code C1734 and, as such, meets 
the device category criterion. Specifically, the applicant asserted 
that CERAMENT[supreg] G differs from the device described in C1734 by 
composition, mechanisms of action, indication for use, intended patient 
population, associated treatment cases and procedures, and by FDA 
designation and classification.
    All commenters addressing the CERAMENT[supreg] G transitional pass-
through application offered support for approval of the application and 
creation of a new device category. The applicant provided that 
CERAMENT[supreg] G was granted Breakthrough Device designation by FDA 
as a class II device with the following indication for use: 
CERAMENT[supreg] G is a resorbable, gentamicin-eluting ceramic bone 
void filler intended 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. The applicant further commented that one of the 
requirements of FDA class II designation was to assure that there is no 
risk of antimicrobial resistance from using the product, and that the 
antimicrobial properties of CERAMENT[supreg] G are unique, and robust 
clinical evidence demonstrates that recurrence of infection is reduced 
with the use of CERAMENT[supreg] G in the management of bone infection.
    With respect to our concern that CERAMENT[supreg] G may be 
appropriately described by C1734, the applicant stated that 
CERAMENT[supreg] G differs significantly from the device, 
AUGMENT[supreg], described in the C1734 category (Orthopedic/device/
drug matrix for opposing bone-to-bone or soft-tissue-to-bone 
(implantable)). The applicant asserted that the most important 
fundamental differences between CERAMENT[supreg] G and AUGMENT[supreg] 
is their composition and their intended patient population. 
Specifically, the applicant asserted, and all commenters agreed, that 
the antimicrobial properties in the CERAMENT[supreg] G composition are 
unique. Further, the applicant reiterated that CERAMENT[supreg] G is 
intended for patients with bone infection 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, with all commenters 
stating that CERAMENT[supreg] G is the only approved bone void filler 
that does this. The only device described by C1734, AUGMENT[supreg], 
does not contain an antimicrobial agent, is intended for patients 
requiring ankle and foot bone fusion due to arthritis-related 
conditions, avascular necrosis and/or joint instability, is not 
intended for use in patients with bone infection, and is 
contraindicated to local infection at the site of implantation.
    The applicant also sought to clarify how, in comparison to the 
device described in C1734 category, CERAMENT[supreg] G's mechanism of 
action is unique. Commenters stated that CERAMENT[supreg] G's mechanism 
of action is unique, in that it is the only approved bone void filler 
that elutes antibiotics directly into the site of infection and bone. 
Some commenters also noted that this unique mechanism of action allows 
for single-stage procedures in the outpatient setting for a patient 
with osteomyelitis compared to treatment that consists of six weeks or 
more of intravenous antibiotics that can lead to adverse events such as 
acute kidney injury and the development of multidrug resistant 
bacteria. The applicant reiterated that CERAMENT[supreg] G's unique 
mechanism of action is that it elutes gentamicin (the antimicrobial 
agent) to protect against gentamicin-sensitive microorganisms. 
Specifically, while both CERAMENT[supreg] G's and AUGMENT[supreg]'s 
mechanisms of action include providing an osteoconductive scaffold for 
new bone generation, CERAMENT[supreg] G also elutes gentamicin to 
protect against microorganisms, which AUGMENT[supreg] does not. The 
applicant further clarified that CERAMENT[supreg] G augments 
provisional hardware to help support bone fragments during the surgical 
procedure and acts only as a temporary support media and is not 
intended to provide structural support during the healing process. One 
commenter noted that having predictable and sustained release of 
gentamicin with CERAMENT[supreg] G is a major differentiator which 
contributes to successful clinical outcomes, and that CERAMENT[supreg] 
G's antimicrobial property is important to protect bone healing and in 
turn, prevent the recurrence of infection.
    The applicant also asserted that CERAMENT[supreg] G can be 
distinguished from the only device described in C1734, AUGMENT[supreg], 
based on their associated treatment cases and procedures. The applicant 
reiterated that CERAMENT[supreg] G's associated treatment cases are 
those addressing patients with a bone infection, whereas

[[Page 81725]]

AUGMENT[supreg]'s associated treatment cases are those addressing 
patients who require ankle and foot bone fusion. Further, the applicant 
clarified that CERAMENT[supreg] G's associated procedures (CPT codes) 
are in Musculoskeletal Procedure Levels 2, 3, and 4, which correspond 
to APC 5112, 5113, and 5114. In contrast, the procedures indicated for 
AUGMENT[supreg] are for Musculoskeletal Procedures Levels 5 and 6, 
which correspond to APC 5115 and 5116. The applicant noted that this 
results in distinct APC payment ranges for CERAMENT[supreg] G and 
AUGMENT[supreg]. Specifically, based on the corresponding APC for each 
device, the Medicare payment range for CERAMENT[supreg] G would be 
$1,535.85 to $6,895.06, and for AUGMENT[supreg] it is $13,269.40 to 
$20,692.25.
    Response: We appreciate the input provided by these commenters. We 
have taken this information into consideration in making our final 
determination of whether to establish a new device category for 
CERAMENT[supreg] G, discussed below.
    Comment: Along with the applicant, commenters urged CMS to 
establish a new device category that describes CERAMENT[supreg] G's 
unique composition and mechanism of action. The applicant asserted that 
CMS has set past precedent that would allow establishment of a new 
device category to account for new-technology antimicrobial products. 
For example, per the applicant, CMS has routinely recognized the 
diversity of physician-administered drugs and biologicals within its 
policy for granting transitional pass-through payment status and has 
not lumped all drugs and biologicals into a single category. The 
applicant asserted this unique antimicrobial composition and mechanism 
of action of CERAMENT[supreg] G merits a new and different device 
category than that described by C1734, and that a new category should 
acknowledge the antimicrobial properties of CERAMENT[supreg] G. The 
applicant urged CMS to exercise similar flexibility in evaluating 
CERAMENT[supreg] G and to create a new device category to accurately 
describe the new technology, in this case a new device/drug 
antimicrobial technology.
    Response: We appreciate the commenters' input. We agree with 
commenters that CMS has a precedent of establishing new device 
categories to account for new and innovative technologies not described 
by existing device categories. While the evaluation of physician-
administered drugs and biologicals provided as an example by the 
applicant is not applicable to our determination of whether to grant 
transitional pass-through payment status for a particular device, we 
nevertheless agree with the applicant and commenters that there are 
circumstances where a new device category must be created because the 
existing device categories do not describe a new technology.
    After consideration of the public comments we received, we agree 
there is no existing pass-through payment device category that 
appropriately describes CERAMENT[supreg] G because no current category 
appropriately describes bone void filler devices cleared or approved 
for use for single stage surgical reconstruction of bone defects that 
provide stability, promote bone formation, and support the surgical 
treatment of infection by antibiotic elution antimicrobial agent. Based 
on this information, we have determined that CERAMENT[supreg] G meets 
the first eligibility criterion at Sec.  419.66(c)(1).
    We received additional public comments regarding Sec.  419.66(c)(1) 
that did not impact our decision on whether or not CERAMENT[supreg] G 
meets the Sec.  419.66(c)(1) criterion, however we address these 
comments below.
    Comment: The applicant commented that antimicrobial products should 
receive equal benefits in the outpatient setting as they do in the 
inpatient setting. The applicant suggested that CMS should acknowledge 
the importance of preventing antimicrobial resistance and promoting 
antibiotic stewardship in the hospital outpatient setting by creating 
new device categories for device pass-through payment that 
differentiate antimicrobial products from non-antimicrobial products. 
Specifically, the applicant proposed that CMS adopt an initiative 
similar to the alternative technology add-on payment pathway for 
Qualified Infectious Disease Products (QIDPs) established in the FY 
2020 IPPS/LTCH PPS final rule.\19\ The applicant urged CMS to grant new 
device categories to technologies that promote CMS goal of confronting 
antimicrobial resistance, asserting that separating these technologies 
acknowledges the fact that products with antimicrobial fighting 
properties can be more expensive and ensures that companies are 
adequately reimbursed for their products while avoiding excessive 
reimbursement of less expensive non-antimicrobial devices.
---------------------------------------------------------------------------

    \19\ We refer readers to the FY 2020 IPPS/LTCH PPS final rule 
with comment period (84 FR 42294 through 42297) for a full 
discussion of the Qualified Infectious Disease Products (QIDPs) 
policy.
---------------------------------------------------------------------------

    The applicant requested that CMS take the antimicrobial performance 
of CERAMENT[supreg] G into account when considering approval of the 
device pass-through payment application. Specifically, the applicant 
further stated that the antimicrobial properties in CERAMENT[supreg] G 
effectively reduce the recurrence of infection. Citing McNally et 
al.,\20\ the applicant stated that mid- to long-term clinical outcomes 
of CERAMENT[supreg] G in a single-stage protocol show high levels of 
effectiveness where 94 percent of patients were infection-free after a 
mean follow-up of 6.05 years, and that in patients with recurrent 
infection, no cultures identified new resistance to gentamicin.
---------------------------------------------------------------------------

    \20\ McNally, M.A., Ferguson, J.Y., Scarborough, M., Ramsden, 
A., Stubbs, D.A., and Atkins, B.L. (2022) Mid- to long-term results 
of single-stage surgery for patients with chronic osteomyelitis 
using a bioabsorbable loaded ceramic carrier. The bone & joint 
journal, 104.B(9), 1095-1100.
---------------------------------------------------------------------------

    Response: We appreciate the commenters' feedback. Regarding the 
request to develop an alternative pathway for device pass-through 
payments for other special designations (other than those that are part 
of the FDA's Breakthrough Device program and have received marketing 
authorization for the indication covered by the Breakthrough Device 
designation, as previously discussed), we recognize that the goal of 
facilitating access to new technologies for Medicare beneficiaries 
could also apply to other designations, and we will keep these 
suggestions in mind for consideration in future rulemaking.
    With respect to the applicant's request that CMS take the 
antimicrobial performance of CERAMENT[supreg] G into account when 
considering approval of the device pass-through payment application, we 
appreciate the input provided by these commenters. We have taken this 
information into consideration in making our final determination of 
whether to establish a new device category for CERAMENT[supreg] G, 
discussed below.
    Comment: The applicant, and all commenters, asserted that without a 
new device category, CERAMENT[supreg] G will not be accessible in the 
outpatient setting because the reimbursement without a transitional 
pass-through payment would not cover the cost of outpatient surgery 
with CERAMENT[supreg] G. Specifically, the applicant reiterated the 
information in their application that the average cost per case treated 
with CERAMENT[supreg] G of $7,567 is much greater than the Medicare 
payment rates for the assigned APCs. The applicant further asserted 
that several doctors have expressed their concerns about being able to 
access and provide

[[Page 81726]]

CERAMENT[supreg] G to patients in the hospital outpatient setting 
without the additional transitional pass-through payment available to 
supplement the existing APC payment rates. Commenters noted that access 
to CERAMENT[supreg] G in the outpatient setting is in the interest of 
Medicare beneficiaries to allow for outpatient surgeries that are 
otherwise moved to inpatient care.
    Response: We appreciate the commenters' feedback and acknowledge 
the cost concerns related to the utilization of CERAMENT[supreg] G in 
the outpatient setting. 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. We address the cost of the CERAMENT[supreg] G and the cost 
significance criteria below.
    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 86.
BILLING CODE 4150-28-P

[[Page 81727]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.109


[[Page 81728]]


[GRAPHIC] [TIFF OMITTED] TR22NO23.110

BILLING CODE 4150-28-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 
noted 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 stated that 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 
stated that we believe 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

[[Page 81729]]

- $217.36)/$1,422.51) x 100 = 516.67 percent). Therefore, we stated 
that we believe CERAMENT[supreg] G meets the third cost significance 
requirement.
    We invited 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.
    We did not receive public comments regarding whether 
CERAMENT[supreg] G meets the cost criteria at Sec.  419.66(d)(1) 
through (3). Based on the information we have received, we have 
determined that CERAMENT[supreg] G meets the cost criterion for device 
pass-through payment status.
    After consideration of the public comments we received, and our 
review of the device pass-through application, we have determined that 
CERAMENT[supreg] G meets the requirements for device pass-through 
status described at Sec.  419.66. As stated previously, devices that 
are granted an FDA Breakthrough Device designation and have marketing 
authorization for the indication covered by the Breakthrough Device 
designation are not evaluated in terms of the current substantial 
clinical improvement criterion at Sec.  419.66(c)(2)(i) for the 
purposes of determining device pass-through payment status but must 
meet the other criteria for device pass-through status. We believe 
CERAMENT[supreg] G meets the criteria at Sec.  419.66, and therefore, 
effective beginning January 1, 2024, we are finalizing approval for 
device pass-through payment status for CERAMENT[supreg] G under the 
alternative pathway for devices that have an FDA Breakthrough Device 
designation and have received FDA marketing authorization for the 
indication covered by the Breakthrough Device designation.
(2) Traditional Device Pass-Through Applications
(a) Ambu[supreg] aScope\TM\ 5 Broncho HD
    Ambu Inc. submitted an application for a new device category for 
transitional pass- through payment status for the Ambu[supreg] 
aScope\TM\ 5 Broncho HD for CY 2024. Per the applicant, the 
Ambu[supreg] aScope\TM\ 5 Broncho HD is one component of the 
Ambu[supreg] aScope\TM\ 5 Broncho HD System which consists of: (1) the 
Ambu[supreg] aScope\TM\ 5 Broncho HD (5.0/2.2 or 5.6/2.8), a sterile, 
single-use, disposable flexible/rigid bronchoscope; and (2) 
Ambu[supreg] aBox\TM\ 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] aScope\TM\ 5 Broncho HD 
component.
    Per the applicant, the Ambu[supreg] aScope\TM\ 5 Broncho HD, 
consists of: (1) a handle, to hold the scope (designed for left or 
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] aBox\TM\ 2 display unit; (14) a cable, to transmit the 
image signal to the Ambu[supreg] aBox\TM\ 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] aScope\TM\ 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 
patients with pulmonary pathology. The device is intended for endoscopy 
and endoscopic surgery within the lungs, also known as bronchoscopy. 
According to the applicant, the Ambu[supreg] aScope\TM\ 5 Broncho HD 
was designed to perform a wide array of diagnostic and interventional 
pulmonology procedures. The applicant noted that the Ambu[supreg] 
aScope\TM\ 5 Broncho HD is a single-use bronchoscope designed to be 
used with the Ambu[supreg] aBox\TM\ 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] aBox\TM\ 2, and to allow passage of endotherapy 
instruments via its working channel.
    Per the applicant, the Ambu[supreg] aScope\TM\ 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] aScope\TM\ 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] aScope\TM\ 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] aScope\TM\ 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] aScope\TM\ 5 Broncho HD on February 28, 2023, which is 
within 3 years of the date of the initial FDA marketing authorization.
    We invited public comment on whether the Ambu[supreg] aScope\TM\ 5 
Broncho HD meets the newness criterion at Sec.  419.66(b)(1).
    We did not receive public comments regarding whether the 
Ambu[supreg] aScope\TM\ 5 Broncho HD meets the newness criterion at 
Sec.  419.66(b)(1). We received the application for a new device 
category for transitional pass-through payment status for Ambu[supreg] 
aScope\TM\ 5 Broncho HD on February 28, 2023, which is within 3 years 
of July 25, 2022, the date of FDA 510(k) approval to market the 
Ambu[supreg] aScope\TM\ 5 Broncho HD, and as such we have concluded 
that the Ambu[supreg] aScope\TM\ 5 Broncho HD meets the newness 
criterion.
    With respect to the eligibility criterion at Sec.  419.66(b)(3), 
according to the

[[Page 81730]]

applicant, the Ambu[supreg] aScope\TM\ 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.  
4189.66(b)(3).
    We invited public comment on whether the Ambu[supreg] aScope \TM\ 5 
Broncho HD meets the criterion at Sec.  419.66(b)(3).
    We did not receive any comments on whether the Ambu[supreg] aScope 
\TM\ 5 Broncho HD meets the eligibility criteria at Sec.  419.66(b)(3). 
Based on the information we have received and our review of the 
application, we agree with the applicant that Ambu[supreg] aScope \TM\ 
5 Broncho HD is integral to the service provided, used for one patient 
only, comes in contact with human tissue, and is surgically implanted 
or inserted. Therefore, we have determined that Ambu[supreg] aScope 
\TM\ 5 Broncho HD 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 the Ambu[supreg] aScope \TM\ 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] aScope \TM\ 5 Broncho HD is a supply 
or material furnished incident to a service.
    We invited public comment on whether the Ambu[supreg] aScope\TM\ 5 
Broncho HD meets the exclusion criterion at Sec.  419.66(b)(4).
    Comment: The applicant asserted that the Ambu[supreg] aScope\TM\ 5 
Broncho HD meets the eligibility requirements at Sec.  419.66(b)(4). 
The applicant clarified that the device is not equipment, an 
instrument, apparatus, implement, or item for which depreciation and 
financing are recovered. The applicant indicated that the device is not 
a material or supply furnished incident to a service. The applicant 
stated that the device is purely an operating cost and is not subject 
to capitalization or a depreciation schedule.
    Response: We appreciate the applicant's input. Based on the 
information we have received and our review of the application, we 
agree with the applicant that the Ambu[supreg] aScope\TM\ 5 Broncho HD 
meets the device eligibility requirements of Sec.  419.66(b)(4) because 
it is not a piece of equipment, instrument, apparatus, implement, or 
item for which depreciation and financing expenses are recovered, and 
it is not a supply or material furnished incident to a service. 
Therefore, we have determined that the Ambu[supreg] aScope\TM\ 5 
Broncho HD meets the eligibility 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] aScope\TM\ 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] aScope\TM\ 5 Broncho HD is different from other endoscopes 
because it is a single-use endoscope indicated 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 (that is, 
disposable), upper gastrointestinal tract (GI), imaging/illumination 
device (insertable)); and C1747 (Endoscope, single-use (that is, 
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, bronchoscope for use 
in pulmonary procedures. We noted 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 invited public comment on whether the Ambu[supreg] aScope\TM\ 5 
Broncho HD meets the device category criterion at Sec.  419.66(c)(1).
    Comment: The applicant reiterated that the device is not 
appropriately described by any existing device categories. The 
applicant noted that although HCPCS codes C1747 and C1748 do describe 
single-use endoscopes and have imaging capabilities, they are intended 
to be used in different anatomical areas, specifically the urinary 
tract and the upper GI tract, respectively. The applicant asserted that 
the device is used in pulmonary procedures and meets the device 
category criterion. Another commenter referenced an FDA guidance \21\ 
on the 510(k) Program issued on July 28, 2014, to support the 
applicant's assertion by stating that the device was cleared for 
marketing under 21 CFR 874.4680, and therefore the device cannot be 
legally labeled for use or otherwise promoted for GI/urology use.
---------------------------------------------------------------------------

    \21\ FDA Guidance July 28, 2014. ``The 510(k) Program: 
Evaluating Substantial Equivalence in Premarket Notification 
[510(k)]: Guidance for Industry and Food and Drug Administration 
Staff''.
---------------------------------------------------------------------------

    Response: We appreciate the applicant and commenter's input. Based 
on the information we have received and our review of the application, 
we agree there is no existing pass-through payment category that 
appropriately describes the Ambu[supreg] aScope\TM\ 5 Broncho HD 
because no current or previously in effect category describes a single-
use endoscope indicated for use in the respiratory system. Based on 
this information, we have determined that the Ambu[supreg] aScope\TM\ 5 
Broncho HD meets the eligibility criterion at Sec.  419.66(c)(1).
    The second criterion for establishing a device category, at Sec.  
419.66(c)(2), provides that CMS determines either of the following: (i) 
that a device to be included in the category has demonstrated that it 
will substantially improve the diagnosis or treatment of an illness or 
injury or improve the functioning of a malformed body part compared to 
the benefits of a device or devices in a previously established 
category or other available treatment; or (ii) for devices for which 
pass-through status will begin on or after January 1, 2020, as an 
alternative to the substantial clinical improvement criterion, the 
device is part of 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] aScope\TM\ 5 Broncho HD represents a substantial clinical 
improvement over existing technologies by: (1) eliminating complex 
cleaning/reprocessing procedures, (2) reducing microbial transmission 
and infection since it is single-use, (3) eliminating the need for 
continuous training of reprocessing staff, (4) minimizing the risk of 
patient

[[Page 81731]]

cross-contamination, (5) assuring that a sterilized scope will be used 
each time, and (6) assuring 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] aScope\TM\ 
5 Broncho HD eliminates complex cleaning/reprocessing procedures 
because it is a single-use device, the applicant referenced an FDA 
Reprocessing Final Guidance document \22\ 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, the 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.
---------------------------------------------------------------------------

    \22\ 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] aScope\TM\ 
5 Broncho HD reduces microbial transmission and infection because it is 
single use, the applicant referenced an FDA safety notice \23\ 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 the continued use of devices despite integrity, 
maintenance, and mechanical issues. FDA provided additional 
recommendations for health care facilities and staff that reprocess 
flexible bronchoscopes, and for patients considering bronchoscopy 
procedures, but did not reference single-use bronchoscopes in the 
notice.
---------------------------------------------------------------------------

    \23\ 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] aScope\TM\ 
5 Broncho HD eliminates the need for continuous training of 
reprocessing staff, the applicant referenced a study by 
Ch[acirc]teauvieux et al.,\24\ 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-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.
---------------------------------------------------------------------------

    \24\ 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 \25\ 
to support its claim that the use of Ambu[supreg] aScope\TM\ 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.
---------------------------------------------------------------------------

    \25\ 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 \26\ by Ofstead et 
al.\27\ in 2019, in support of its claim that the use of the 
Ambu[supreg] aScope\TM\ 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 \28\ 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 
was found on 58 percent of the patient-ready bronchoscopes. Then, in 
2019, Ofstead et al. conducted a 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.

[[Page 81732]]

(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.
---------------------------------------------------------------------------

    \26\ 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.
    \27\ 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.
    \28\ Ofstead C.L., Quick M.R., Wetzler H.P., et al. (2018) 
Effectiveness of reprocessing for flexible bronchoscopes and 
endobronchial ultrasound bronchoscopes. Chest, 154(5):1024-34.
---------------------------------------------------------------------------

    The applicant referenced a review article by Kovaleva et al.\29\ in 
support of its claim that the Ambu[supreg] aScope\TM\ 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.\30\ 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.
---------------------------------------------------------------------------

    \29\ 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.
    \30\ Ibid.
---------------------------------------------------------------------------

    The applicant cited a self-sponsored, laboratory study by Kurman et 
al.,\31\ 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 
(that is, corpse) model, benchtop fixturing, and an artificial plastic 
lung model. The study compared the Ambu[supreg] aScope\TM\ 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] aScope\TM\ 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.
---------------------------------------------------------------------------

    \31\ 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] aScope\TM\ 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 noted 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 including the 
optical system, bending section, diameter of insertion cord and distal 
end, and insertion portion length. Furthermore, the 510(k) summary 
indicated that both have the same technical characteristics, which 
include a maneuverable tip controlled by the user, flexible insertion 
cord, camera and a LED light source at the distal tip. Both are 
sterilized by ethylene oxide, are single-use devices, and have the 
ability to aspirate and collect samples in bronchoalveolar lavage and 
bronchial wash procedures.
    We noted 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] aScope\TM\ 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] aScope\TM\ 5 Broncho HD is used. The 
applicant stated that the Ambu[supreg] aScope\TM\ 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.\32\ concluded that patients with larger lesions, 
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.\33\ 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

[[Page 81733]]

studies from the U.S. and four European countries. Travis et al.\34\ 
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.,\35\ 
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 \36\ referencing the findings from Ofstead et 
al.,\37\ the review by Mouristen et al., and the Emergency Care 
Research Institute's (ECRI's) report.\38\ Of note, ECRI highlighted the 
recontamination of flexible endoscopes due to mishandling or improper 
storage as one of the top 10 health technology hazards.
---------------------------------------------------------------------------

    \32\ 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.
    \33\ 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.
    \34\ Ibid.
    \35\ Mouritsen, J.M., Ehlers, L., Kovaleva, J., Ahmad, I., & El-
Boghdadly, K. (2020). A systematic review and cost effectiveness 
analysis of reusable vs. single-use flexible bronchoscopes. 
Anaesthesia, 75(4), 529-540.
    \36\ 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.
    \37\ Ofstead C.L., Quick M.R., Wetzler H.P., et al. (2018) 
Effectiveness of reprocessing for flexible bronchoscopes and 
endobronchial ultrasound bronchoscopes. Chest, 154(5):1024-34.
    \38\ 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 noted the 
following concerns: We noted concern about whether the Ambu[supreg] 
aScope\TM\ 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.,\39\ Barron and Kennedy, Kurman et al., and Ofstead et al., 
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 noted 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 noted that the 
applicant's self-sponsored study by Kurman, et al. was conducted in the 
laboratory (that is, 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.
---------------------------------------------------------------------------

    \39\ 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.
---------------------------------------------------------------------------

    Furthermore, we noted that the Ch[acirc]teauvieux et al.\40\ and 
Barron and Kennedy \41\ studies suggested limiting the use of single-
use bronchoscope device to specific situations (that is, after hours or 
emergency), immunocompromised patients, and in rare cases of preventing 
prior contamination in the inpatient setting. We believed that further 
investigation with comparators in these specified cases would be 
particularly helpful to determine whether the device demonstrates a 
substantial clinical improvement over currently available treatment 
options in the clinical setting where it is most likely to be used.
---------------------------------------------------------------------------

    \40\ Ibid.
    \41\ 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 noted 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] aScope\TM\ 5 Broncho HD. We noted that Shimizu et 
al.,\42\ Travis et al.,\43\ Barron and Kennedy,\44\ and Ofstead et 
al.\45\ provided information about the risks associated with 
reprocessing reusable devices and reported mixed results.
---------------------------------------------------------------------------

    \42\ 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.
    \43\ 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.
    \44\ 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.
    \45\ 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 noted that the 2015 FDA safety notice \46\ 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 noted 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.,\47\ 
Shimizu et al.,\48\ Travis et al.,\49\ and Mouritsen et al.\50\ have 
small sample sizes. Furthermore, the Barron and Kennedy,\51\ Travis et 
al.,\52\ and Mouritsen et al.\53\ studies used different

[[Page 81734]]

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 did not believe that we had sufficient information on 
the prevalence of infection to evaluate the applicant's substantial 
clinical improvement claims for the nominated device. We sought 
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.
---------------------------------------------------------------------------

    \46\ 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.
    \47\ 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.
    \48\ 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.
    \49\ 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.
    \50\ Mouritsen, J.M., Ehlers, L., Kovaleva, J., Ahmad, I., & El-
Boghdadly, K. (2020). A systematic review and cost effectiveness 
analysis of reusable vs. single-use flexible bronchoscopes. 
Anaesthesia, 75(4), 529-540.
    \51\ 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.
    \52\ 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.
    \53\ Mouritsen, J.M., Ehlers, L., Kovaleva, J., Ahmad, I., & El-
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 questioned the relevance of 
the 2015 FDA safety notice \54\ 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 expressed concern 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. We expressed 
concern that the applicant provided studies with small sample sizes and 
other limitations, as described above, as their only support. We noted 
that the applicant provided background information on the established 
reprocessing guidelines \55\ 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.
---------------------------------------------------------------------------

    \54\ 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.
    \55\ 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 invited public comment on whether the Ambu[supreg] aScope\TM\ 5 
Broncho HD meets the substantial clinical improvement criterion at 
Sec.  419.66(c)(2)(i).
    Comment: The applicant and several commenters responded to our 
concern about whether the Ambu[supreg] aScopeTM 5 Broncho HD could 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 and that four of the 
studies the applicant submitted, Ch[acirc]teauvieux et al., Barron and 
Kennedy, Kurman et al.,\56\ and Ofstead et al., investigated and 
provided data on the applicant's earlier models of the device, but did 
not provide comparisons to the nominated device. The applicant and 
commenters provided feedback that Ambu[supreg] aScope\TM\ 5 Broncho HD 
improves clinical applications and reduces cross-contamination compared 
to other single-use and reusable bronchoscopes, including its predicate 
device. Several commenters stated that the device can perform advanced 
bronchoscopy procedures, without concern for contamination, infection, 
and scope damage. One commenter stated that they have witnessed the 
usage of this bronchoscope for advanced procedures without incident, 
noting that it is the preferred device in their clinical practice for 
valve placement, rigid bronchoscopy, and all cases outside of the 
endoscopy suite. Another commenter noted that reusable bronchoscopes 
have a complex design with variable disinfection/sterilization 
requirements which leads to issues with reprocessing. Multiple 
commenters stated that single-use bronchoscopes create an assurance 
that a sterilized scope will be used each time, reduce the risk of 
patient cross-contamination in the ICUs, and allow improved patient 
access and room turnover compared with reusable scopes. One commenter 
asserted that the nominated device is superior to other devices in 
specific patient populations needing interventional pulmonology 
procedures.
---------------------------------------------------------------------------

    \56\ 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.
---------------------------------------------------------------------------

    Commenters cited personal experience with Ambu[supreg] aScope\TM\ 5 
Broncho HD, asserting that transitioning to the nominated device 
several months ago has eliminated iatrogenic bronchoscopy-related 
transmission of infection in their health care facility and 
Ambu[supreg] aScope\TM\ 5 Broncho HD has directly led to clinical 
improvement in cases of endobronchial valve insertion in their 
facility, as more patients can be treated with endobronchial valve 
insertion for bronchoscopic lung volume reduction. The applicant 
provided that after being commercially available for one year in 
Europe, the USA, Canada, Australia, New Zealand, and Japan, they 
observed that more than 80 percent of users have adopted the nominated 
device into their bronchoscopy suites for advanced procedures, 
including but not limited to tumor debulking, endobronchial valve 
placement, cryobiopsy, as well as endobronchial and transbronchial 
biopsies, which single-use bronchoscopes were previously unable to 
perform. The applicant reiterated that the device is the only single-
use flexible bronchoscopy (FB) capable of performing advanced 
bronchoscopy as it has superior bending angles, an HD imaging chip, and 
is compatible with argon gas plasma coagulation, cryotherapy, and 
laser. The applicant also asserted that early clinical feedback 
suggests that the device is a viable alternative to reusable 
bronchoscopes due to its superior angulation range and flexibility. 
Further, the applicant clarified that the Kurman et al.\57\ study did 
provide data on the nominated device, including table providing a side-
by-side comparison of the technical specs of the Ambu[supreg] 
aScope\TM\ 5 Broncho HD and its comparators which showed that the 
nominated device had better flexion and extension without tools 
compared to the reusable scope, the nominated device had the most 
degrees of flexion and extension with all accessory tools compared to 
other single-use scopes and the reusable scope, the nominated the 
device was able to reach the same anatomical location with biopsy 
forceps in the right-upper lobe segment, and the nominated device rated 
similar to the reusable scope and better than the other single-use 
scopes in image sharpness and near and far field resolutions.
---------------------------------------------------------------------------

    \57\ Ibid.
---------------------------------------------------------------------------

    Finally, the applicant asserted that while there are similarities 
between Ambu[supreg] aScope\TM\ 5 Broncho HD and the predicate devices, 
the Ambu[supreg] aScope\TM\ 5 Broncho HD can be distinguished from the 
predicate devices because its technical characteristics, such as a 
rotation mechanism on the handle and superior articulation, which allow 
it to perform more complex bronchoscopy procedures, are unique to the 
Ambu[supreg] aScope\TM\ 5 Broncho HD.
    Response: We appreciate the commenters' examples supporting the 
superiority of the Ambu[supreg] aScope\TM\ 5 Broncho HD. In addition, 
we appreciate the clarification on the Kurman et al.\58\

[[Page 81735]]

study along with the table providing a side-by-side comparison of the 
technical specs of the Ambu[supreg] aScope\TM\ 5 Broncho HD and its 
comparators. After reviewing the information provided in the public 
comment and clarifications from the applicant on the Kurman et al.\59\ 
study that directly compare the nominated device with other single-use 
scopes, we agree with the commenters' and the applicant's statements 
that the device 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.
---------------------------------------------------------------------------

    \58\ Ibid.
    \59\ Ibid.
---------------------------------------------------------------------------

    Comment: In response to our concern that the nominated device was 
determined to be substantially equivalent to the earlier device that 
the applicant had previously legally marketed, and the FDA 510(k) 
summary indicated that both devices have the same technical 
characteristics, the applicant along with a few commenters expressed 
their belief that the FDA 510K term ``substantially equivalent'' does 
not imply the device is the same as its predicate device. Rather, the 
applicant asserted that the 510(k) term ``substantially equivalent'' 
indicates that a nominated device is as safe and effective as its 
predicate device. One commenter noted that as defined in 21 CFR part 
807,\60\ every 510(k)-cleared medical device has been found 
substantially equivalent to one or more predicate devices. One 
commenter suggested that the regulatory substantial equivalence cannot 
be used to conclude the inability to demonstrate substantial clinical 
improvement in the context of CFR 419.66(c)(2).
---------------------------------------------------------------------------

    \60\ 21 CFR part 807, subpart E.
---------------------------------------------------------------------------

    Response: We appreciate the comments regarding the FDA 510K term 
``substantially equivalent'' and the reference to 21 CFR part 807.\61\ 
We agree that FDA determination of substantial equivalence cannot alone 
be used to conclude that a device cannot to demonstrate substantial 
clinical improvement as required by the regulation at 42 CFR 
419.66(c)(2). However, we note that the FDA 510(k) summary provided by 
the applicant indicated that both nominated and predicate devices share 
similar technological characteristics such as optical system, bending 
section, diameter of insertion cord and distal end, and insertion 
portion length. We expressed concern in the proposed rule regarding the 
language in the FDA 510(k) summary because we could not determine, 
based on the information available to us at the time, whether the 
Ambu[supreg] aScope\TM\ 5 Broncho HD could 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. Neither could we determine exactly how the nominated 
device is superior to its earlier legally marketed device, as per the 
applicant's assertion. As noted above, after reviewing the information 
provided in the public comment, particularly the Kurman et al.\62\ 
study, we agree with the commenters' and the applicant's statements 
that the device 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.
---------------------------------------------------------------------------

    \61\ Ibid.
    \62\ 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.
---------------------------------------------------------------------------

    Comment: In response to the concern that the applicant's self-
sponsored study by Kurman et al.\63\ may not be sufficient to show 
improved clinical outcomes because it was conducted in the laboratory 
(that is, on cadaver, benchtop fixturing, and artificial plastic lung) 
and not in the clinical setting, the applicant asserted that the 
benchtop studies in this category are considered the industry standard 
and have been well accepted as the best way to compare single use and 
reusable bronchoscopes. In support of this assertion, the applicant 
provided six studies 64 65 66 67 68 69 as examples and 
indicated that there is no feasible way to accurately measure the 
flexion and deflection angles of a tool in vivo. Commenters supported 
the applicant's assertion and indicated that benchtop studies are 
standard and commonly utilized throughout the medical community. The 
applicant referenced results of one benchtop study (among the six 
examples referenced earlier) by Ho et al.,\70\ published prior to the 
device's release. The study reviewed the published evidence on the 
applications of single-use (SU) and reusable bronchoscopes in 
bronchoscopy suites and intensive care units, and concluded that the 
portability, immediate availability, and theoretical reduced risk of 
clinically relevant infections confer an advantage of using SUFB over 
reusable FB in certain scenarios in the bronchoscopy and intensive care 
units. The applicant stated that improvements in maneuverability, angle 
tip deflection, and image quality are critical for a broader adoption 
of single-use FBs in more complex procedures.
---------------------------------------------------------------------------

    \63\ Ibid.
    \64\ Liu, L., Wahidi, M., Mahmood, K., Giovacchini, C., Shofer, 
S., Cheng, G. (2020) Operator perception of a single-use flexible 
bronchoscope: comparison with current standard bronchoscopes. 
Respiratory care, 65(11):1655-1662. Doi: 10.4187/respcare.07574. 
Epub 2020 Jun 2. PMID: 32487752.
    \65\ Darrell, N., Grant, S., Abdurrahman, H., Matthew, N., 
Russell, M., et al. (2022). Operator perception of the performance 
of multiple single-use bronchoscopes compared to standard re-usable 
bronchoscope. Am J Biomed Sci & Res, 17(2). AJBSR.MS.ID: 002333, 
DOI: 10.34297/AJBSR.2022.17.002333.
    \66\ Lamb, C.R., Yavarovich, E., Kang, V. et al. (2022). 
Performance of a new single-use bronchoscope versus a marketed 
single-use comparator: a bench study. BMC Pulm Med 22, 189). 
Retrieved from: https://bmcpulmmed.biomedcentral.com/articles/10.1186/s12890-022-01982-4.
    \67\ Ho, E., Wagh, A., Hogarth, K., Murgu, S. (2022). Single-use 
and reusable flexible bronchoscopes in pulmonary and critical care 
medicine. Diagnostics, 12(1):174. Retrieved from: https://doi.org/10.3390/diagnostics12010174.
    \68\ Liang, Z., Zhou, G., Li, Y. et al. (2022). Evaluation of a 
new developed disposable and portable bronchoscopy system. BMC 
PulmMed 22, 136. https://doi.org/10.1186/s12890-022-01933-z.
    \69\ Deasy, K.F., Sweeney, A.M., Danish, H., O'Reilly, E., 
Ibrahim, H., Kennedy, M.P. (2023). Single use or disposable flexible 
bronchoscopes: bench top and preclinical comparison of currently 
available devices. J Intensive Care Med, 38(6):519-528. Doi:10.1177/
08850666221148645. Epub 2023 Jan 7. PMID: 36609193; PMCID: 
PMC10114257.
    \70\ Ho, E., Wagh, A., Hogarth, K., Murgu, S. (2022). Single-use 
and reusable flexible bronchoscopes in pulmonary and critical care 
medicine. Diagnostics, 12(1):174. Retrieved from: https://doi.org/10.3390/diagnostics12010174.
---------------------------------------------------------------------------

    Response: We thank the commenters for their input. While we 
maintain our belief that data which indicates that a device 
demonstrates substantial clinical improvements over currently available 
treatments in the clinical setting where it is most likely to be used 
is beneficial, we recognize that obtaining such data is not always 
feasible. After reviewing the information provided in the public 
comment, including clarifications from the applicant on the Kurman et 
al.\71\ study, the additional six benchtop studies (as referenced 
above) supplied by the applicant, and the comments supporting the 
applicant's assertion that benchtop studies for bronchoscopes are 
considered to be the industry standard and have been well accepted as 
the best way to compare single-use and reusable bronchoscopes, we agree 
that the applicant's self-sponsored study by Kurman et al.\72\ is 
sufficient to show improved clinical outcomes.
---------------------------------------------------------------------------

    \71\ 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.
    \72\ Ibid.
---------------------------------------------------------------------------

    Comment: In response to our concern that the submitted evidence of 
substantial clinical improvement

[[Page 81736]]

discussed potential adverse events from reusable bronchoscope 
procedures, but did not directly show any clinical improvement that 
resulted from the use of the Ambu[supreg] aScope\TM\ 5 Broncho HD, the 
applicant reiterated that the single use nature of the Ambu[supreg] 
aScope\TM\ 5 Broncho HD avoids the adverse issues and risk associated 
with reprocessing detailed in the articles referenced in its 
application as there is no reprocessing or reuse of the bronchoscope. 
The applicant noted that, the successful Uretero 1 device pass-through 
application included the Bozzini et al. study which does not include 
the nominated device as the comparator. The applicant stated that, in 
the same fashion as the Uretero 1 device pass-through application, the 
Ambu[supreg] aScope\TM\ 5 Broncho HD application is using the 
transitive property to highlight that because clinical benefits can be 
seen with single-use endoscopes and the nominated device is single-use, 
the nominated device is therefore an improvement over reusable 
endoscopes. Another commenter referenced the CY 2023 OPPS/ASC final 
rule with comment period, wherein CMS approved the Uretero 1 device 
pass-through application and established device pass-through code HCPCS 
C1747 (Endoscope, single-use (that is, disposable), urinary tract, 
imaging/illumination device (insertable)). Specifically, the commenter 
pointed out that CMS stated that we agreed that the evidence 
demonstrating the improved patient outcomes and reduced patient risk 
associated with the disposable device in comparison with reusable 
devices represents substantial clinical improvement. This commenter 
suggested that this conclusion should also apply to single-use 
bronchoscopes as well. The commenters believed that single-use scopes 
reduce reprocessing-related bronchoscope infection risk, and that this 
risk reduction is a substantial clinical improvement.
    Response: We appreciate the commenters' input. As the applicant and 
commenter indicated, CMS approved Uretero1 \73\ for transitional pass-
through payment status in the CY 2023 OPPS/ASC final rule with comment 
period. We note that we expressed similar concerns relating to the lack 
of comparative studies between the single-use Uretero1 device and other 
disposable devices and indicated that, while we ultimately agreed that 
the totality of evidence demonstrated improved patient outcomes and 
reduced patient risk associated with the disposable device in 
comparison with reusable devices represents substantial clinical 
improvement, it would have been helpful to see comparative studies. The 
applicant and the commenter seem to suggest that because we determined 
that the Uretero 1 device demonstrated substantial clinical improvement 
despite providing a study which does not include the nominated device 
as a comparator, that we should similarly determine that the type of 
evidence submitted by Ambu[supreg] aScope\TM\ 5 Broncho HD represents 
substantial clinical improvement. We note that we do not believe that 
this implied approach to application evaluation is appropriate. Rather, 
we continue to believe that our current process wherein we evaluate all 
evidence submitted for each device pass-through application as it 
applies to the nominated device is appropriate. Due to inherent 
differences in the devices themselves and the supporting documentation 
submitted, CMS may have different concerns as they relate to the 
nominated device. In addition, we are not precluded from evaluating 
evidence and expressing concerns regarding evidence submitted in 
support of an application simply because that type of evidence has been 
submitted in support of a previous application. While we encourage 
applicants to read the application summaries presented in previous 
OPPS/ASC rules as they can help applicants determine the types of 
documentation that have been submitted and assess areas of potential 
concern with their technology, we caution applicants not to rely solely 
on the presumption that previously submitted types of evidence, 
evaluated for a different device, either need not be submitted or need 
not be fully addressed as it relates to their technology. Further, we 
encourage applicants to submit all relevant supporting evidence with 
their device pass-through application to allow us to adequately 
evaluate and include the data in the notice of proposed rulemaking.
---------------------------------------------------------------------------

    \73\ In the CY 2023 OPPS/ASC final rule with comment period CMS 
approved Uretero1 as a new device category for transitional pass-
through payment status and established HCPCS code C1747 as a new 
device category beginning in January 2023 (87 FR 7129 through 71934) 
effective January 1, 2023.
---------------------------------------------------------------------------

    With regard to our concern that the submitted evidence of 
substantial clinical improvement discussed potential adverse events 
from reusable bronchoscope procedures but did not directly show any 
clinical improvement that resulted from the use of the Ambu[supreg] 
aScope\TM\ 5 Broncho HD, we indicated that it would be helpful to see 
published peer-reviewed comparative studies between the single-use 
Ambu[supreg] aScope\TM\ 5 Broncho HD device and other disposable 
devices. After reviewing the information provided in the public 
comment, specifically the 2021 FDA safety notice,\74\ the Ho et al.\75\ 
study that supported the increased risks associated with using reusable 
devices, and the Kurman et al. study which distinguished the device 
from similar devices on the market and the earlier versions of the 
nominated device on the market, we agree that the evidence demonstrates 
there are improved patient outcomes and reduced patient risk associated 
with the single-use Ambu[supreg] aScope\TM\ 5 Broncho HD device in 
comparison with reusable devices.
---------------------------------------------------------------------------

    \74\ FDA Safety Communications, Flexible Bronchoscopes and 
Updated Recommendations for Reprocessing: FDA Safety Communication, 
issued June 25, 2021. https://www.fda.gov/medical-devices/safety-communications/flexible-bronchoscopes-and-updated-recommendations-reprocessing-fda-safety-communication.
    \75\ Ho, E., Wagh, A., Hogarth, K., Murgu, S. (2022). Single-use 
and reusable flexible bronchoscopes in pulmonary and critical 
caremedicine. Diagnostics, 12(1):174. Retrieved from: https://doi.org/10.3390/diagnostics12010174.
---------------------------------------------------------------------------

    Comment: In response to the concern regarding the relevance of the 
2015 FDA safety notice to the nominated device, specifically that the 
guidance appeared to apply to reprocessed flexible bronchoscopes 
broadly, not to disposable, single-use devices comparable to the 
nominated device, and 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, the applicant submitted a 2021 FDA safety notice \76\ 
showing FDA's analysis of Medical Device Reports (MDRs) related to 
infections or device contamination associated with reusable flexible 
bronchoscopes from 2015-2021. The document states that between January 
2010 and June 2015, the FDA received 109 MDRs related to infections or 
device contamination associated with reusable flexible bronchoscopes, 
and between July 2015 and January 2021, the FDA received 867 additional 
MDRs. Of the 867 reports received between July 2015 and January 2021, 
there were seven reports of deaths. Since 2015, the number of MDRs 
relevant to infection or contamination submitted to the FDA has 
increased from under 100 per year to between 100-200 per year. In 
addition, the applicant noted that FDA received at

[[Page 81737]]

least 226 bronchoscope-related MDRs from July 2021 to July 2023. The 
applicant asserted that the latest MDR numbers highlight the sustained 
increase of these MDRs. The applicant also noted that the MDR system is 
a passive surveillance system and may undercount the true number of 
bronchoscope infections and/or contaminations.
---------------------------------------------------------------------------

    \76\ FDA Safety Communications, Flexible Bronchoscopes and 
Updated Recommendations for Reprocessing: FDA Safety Communication, 
issued June 25, 2021. https://www.fda.gov/medical-devices/safety-communications/flexible-bronchoscopes-and-updated-recommendations-reprocessing-fda-safety-communication.
---------------------------------------------------------------------------

    In reference to CMS's concern regarding the relevance of the 2015 
FDA safety notice, the applicant stated that CMS determined that a 
similar communication (FDA advisory notice) was sufficient to 
demonstrate substantial clinical improvement for Uretero 1 in CY 2023. 
The applicant further provided that compared to ureteroscopes, which 
received 450 reports from 2017-2021 (from roughly 600,000 cases per 
year), reusable bronchoscopes received 867 from 2015-2021 (out of 
roughly 500,000 cases per year). The applicant asserted that given CMS' 
previous acceptance of FDA guidance documents as evidence of 
substantial clinical improvement and the increased incidents of MDRs 
for bronchoscopes when compared to ureteroscopes, the bronchoscope MDR 
data provided must also be considered sufficient evidence.
    A few commenters, including the applicant, pointed out that the 
supplemental update \77\ issued on June 25, 2021, directly addresses 
the omission of single-use medical devices from the FDA safety 
communication \78\ originally dated September 17, 2015, regarding 
infections associated with reprocessed flexible bronchoscopes. The 
commenters stated that the supplemental update urges health care 
providers to consider using single-use bronchoscopes in situations 
where there is an increased risk of spreading infection and recommends 
the use of sterilization instead of high-level disinfection for all 
flexible bronchoscope reprocessing. One commenter clarified that some 
reusable flexible bronchoscopes are physically incompatible with some 
or all sterilization methods, while others may be capable of 
withstanding the sterilization process, but the manufacturers have not 
provided a validated sterilization process in the 510(k) cleared device 
labeling. Another commenter stated that the single-use flexible 
bronchoscopes minimize the risk of patient cross-contamination and 
agreed with the applicant's assertation that reusable bronchoscopes 
frequently lead to issues of cross-contamination and infection because 
of complex designs and issues with reprocessing, especially for 
patients who are immunocompromised.
---------------------------------------------------------------------------

    \77\ Ibid.
    \78\ 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.
---------------------------------------------------------------------------

    A few commenters also provided additional data on the prevalence of 
inadequately reprocessed bronchoscopes posing an increased risk of 
remaining contaminated and cross-infecting patients with multidrug-
resistant organisms. One commenter cited a recently published peer-
reviewed article by Mehta and Muscarella (2020),\79\ which provides 
evidence both for the significance of this application and the 
prevalence of infection due to, among other risk factors, the 
inadequate reprocessing of reusable bronchoscopes. The primary 
objectives of the study were to investigate the risk of bronchoscopes 
transmitting infections of carbapenem-resistant Enterobacteriaceae 
(CRE) and related multidrug-resistant organisms (MDROs). This study's 
findings suggest that bronchoscopes may pose an under-recognized 
potential for transmission of CRE and related MDROs, warranting greater 
public awareness, enhanced preventive measures, and updated 
reprocessing guidance. Per the commenter, this study's data suggests 
that the cleaning and high-level disinfection of bronchoscopes 
performed in accordance with published guidelines and manufacturer 
instructions may not always be sufficiently effective to eliminate this 
risk. The study concluded that inadequate reprocessing of reusable 
bronchoscopes is positively correlated with heightened risk of 
infection. Another commenter indicated that while it is important for 
hospitals to improve reprocessing practices in general, a clean 
reusable scope will never be as clean as a sterile, single-use scope, 
even following the most rigorous cleaning protocols. The commenter 
stated that while CMS highlighted the low number of reported infections 
given the number of bronchoscopies that occur each year, unlike many 
other types of endoscopes that enter a sterile or otherwise clean 
anatomy (ureter), patients who need a bronchoscopy often require such 
procedures due to potential infection which could mask bronchoscope-
mediated transmission of infectious agents.
---------------------------------------------------------------------------

    \79\ Mehta, A.C., Muscarella, L.F. (2020). Bronchoscope-related 
``superbug'' infections. Chest, 157(2):454-469.
---------------------------------------------------------------------------

    Response: We appreciate the applicant's and the commenters' 
responses and additional evidence. We found the data contained in the 
updated 2021 FDA safety notice \80\ compelling. While FDA noted in the 
2015 FDA safety notice submitted as part of the application that when 
compared to the number of bronchoscopy procedures performed in the U.S. 
each year this is considered a small number of MDRs, we agree with the 
applicant's assertion that the latest MDR numbers provided in the 2021 
FDA safety notice \81\ highlight the sustained increase of these MDRs. 
While we acknowledge some of the data limitations, after reviewing the 
information provided in the public comment and the 2021 FDA safety 
notice,\82\ we agree with the commenters that reusable bronchoscopes 
present a risk of cross-infection due to contamination. We understand 
that despite strictly adhering to the manufacturers' recommendations 
for reprocessing, some bronchoscopes still show evidence of biofilms, 
which are a source of cross-contamination. The applicant and other 
commenters provided sources: Mehta and Muscarella (2020) \83\ and the 
2021 FDA safety notice,\84\ that demonstrate that even ``properly'' re-
processed bronchoscopes have positive microbial growth via reusable 
bronchoscopes which is mitigated by single-use bronchoscopes like Ambu 
aScopeTM 5 Broncho HD sufficiently to demonstrate 
substantial clinical improvement in situations where there is an 
increased risk of spreading infection. After consideration of the 
public comments received, we believe that commenters have addressed our 
concerns regarding whether the Ambu[supreg] aScope\TM\ 5 Broncho HD 
meets the substantial clinical improvement criterion and that the 
Ambu[supreg] aScope\TM\ 5 Broncho HD represents a substantial clinical 
improvement over existing technologies due to compelling evidence from 
the applicant and other commenters as discussed above,

[[Page 81738]]

specifically the 2021 FDA safety notice \85\ and Ho et al.\86\ study 
that demonstrated the increased risks associated with using reusable 
devices
---------------------------------------------------------------------------

    \80\ FDA Safety Communications, Flexible Bronchoscopes and 
Updated Recommendations for Reprocessing: FDA Safety Communication, 
issued June 25, 2021. https://www.fda.gov/medical-devices/safety-communications/flexible-bronchoscopes-and-updated-recommendations-reprocessing-fda-safety-communication.
    \81\ Ibid.
    \82\ Ibid.
    \83\ Mehta, A.C., Muscarella, L.F. (2020). Bronchoscope-related 
``superbug'' infections. Chest, 157(2):454-469.
    \84\ FDA Safety Communications, Flexible Bronchoscopes and 
Updated Recommendations for Reprocessing: FDA Safety Communication, 
issued June 25, 2021. https://www.fda.gov/medical-devices/safety-communications/flexible-bronchoscopes-and-updated-recommendations-reprocessing-fda-safety-communication.
    \85\ Ibid.
    \86\ Ho, E., Wagh, A., Hogarth, K., Murgu, S. (2022). Single-use 
and reusable flexible bronchoscopes in pulmonary and critical 
caremedicine. Diagnostics, 12(1):174. Retrieved from: https://doi.org/10.3390/diagnostics12010174.
---------------------------------------------------------------------------

    In response to the applicant's comments comparing the Uretero 1 
application summary included in the CY 2023 OPPS/ASC final rule with 
comment period with the application summary for the nominated device 
included in this final rule with comment period, we note that we 
expressed a similar concern in the Uretero 1 application summary that 
the FDA advisory letter regarding ureteroscopes did not mention single-
use devices and it was not clear how the recommendations in the letter 
supported the applicant's claims of substantial clinical improvement 
related to Uretero1. While we ultimately determined that evidence was 
sufficient to demonstrate substantial clinical improvement, we would 
like to reiterate that we evaluate all evidence submitted for each 
device pass-through application as it applies to the nominated device. 
While we agree that data provided regarding the increased incidents of 
MDRs for bronchoscopes and the nominated devices' impact of mitigating 
infection risk, we do not agree that CMS' previous acceptance of FDA 
guidance documents must be considered sufficient evidence of 
substantial clinical improvement for the nominated device. The ultimate 
determination of whether evidence demonstrates substantial clinical 
improvement for one application, while taken into consideration as 
appropriate, is not controlling on future determinations. Again, due to 
inherent differences in the devices themselves and the supporting 
documentation submitted, CMS may have different concerns as they relate 
to the nominated device. In addition, we are not precluded from 
evaluating evidence and expressing concerns regarding types of evidence 
submitted in support of an application simply because that type of 
evidence has been submitted in support of a previous application. As we 
stated previously, while we encourage applicants to read the 
application summaries presented in previous OPPS/ASC rules as they can 
help applicants determine the types of documentation that have been 
submitted and assess areas of potential concern with their technology, 
we caution applicants from relying solely on the presumption that 
previously submitted types of evidence, evaluated for a different 
device, either need not be submitted or need not be fully addressed as 
it relates to their technology. We encourage applicants to submit all 
relevant supporting evidence with their device pass-through application 
to allow us to adequately evaluate and include the data in the notice 
of proposed rulemaking.
    Comment: In response to our concern that the Ch[acirc]teauvieux et 
al.\87\ and Barron and Kennedy \88\ studies suggested limiting the use 
of single-use bronchoscope devices to specific situations (that is, 
after hours or emergency), immunocompromised patients, and in rare 
cases of preventing prior contamination in the inpatient setting, the 
applicant asserted that this recommendation was made due to the 
potential cost burdens of reusable scopes referenced in the study. The 
applicant further asserted that if cost was not a barrier and 
facilities widely adopted single-use bronchoscopes, such as the 
Ambu[supreg] aScope\TM\ 5 Broncho HD, the benefits of advanced 
bronchoscopy procedures would be more accessible. One commenter, 
writing in support of approval of the nominated device for pass-through 
payment, expressed concern that the cost of Ambu[supreg] aScope\TM\ 5 
Broncho HD created a barrier to utilization, and agreed with the 
applicant that Ch[acirc]teauvieux et al.\89\ and Barron and Kennedy 
\90\ suggest limiting single-use scopes to specific case types because 
of cost. However, this commenter noted that studies by Maerkedahl et 
al., Mouritsen et al., and Kurman et al. all found that single-use 
scopes are economically advantageous relative to reusable scopes. This 
commenter stated that despite these findings, cost does admittedly 
remain a major barrier to broader adoption of single-use scopes. This 
commenter noted that improving reimbursement would help mitigate this 
barrier and allow more physicians to use the device for advanced 
bronchoscopy cases where it is now the preferred option. The applicant, 
in response to this comment indicated that, as this section (the 
substantial clinical improvement section under which the comment was 
submitted) is not about cost, it is not relevant to whether the 
Ambu[supreg] aScope\TM\ 5 Broncho HD can provide a substantial clinical 
improvement.
---------------------------------------------------------------------------

    \87\ 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.
    \88\ 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.
    \89\ 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.
    \90\ 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.
---------------------------------------------------------------------------

    Response: We appreciate the commenters' input. While the applicant 
did not provide in its application additional information about 
situations where use of single-use bronchoscopes would be optimal, we 
appreciate the insight provided from the applicant and several 
commenters who gave specific examples for how the device allows for 
advanced bronchoscopy procedures to be performed with a single-use 
scope, without concern for contamination, specifically for procedures 
that include but are not limited to: transbronchial biopsy, airway 
inspection for high-risk/immunocompromised patients, and procedures 
with high-frequency tools.
    While we maintain our belief that further investigation with 
comparators in these specified cases would more directly establish 
whether the device demonstrates a substantial clinical improvement over 
currently available treatment options in the clinical setting where it 
is most likely to be used, we understand that this data may not be 
available. We agree with the commenters that Ch[acirc]teauvieux et 
al.\91\ and Barron and Kennedy \92\ studies suggested limiting the use 
of single-use bronchoscope device to specific situations, in part, due 
to cost considerations. After consideration of the public comments 
received, we agree that the evidence demonstrates that the device is a 
substantial clinical improvement over currently available treatment 
options in the clinical setting.
---------------------------------------------------------------------------

    \91\ 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.
    \92\ 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.
---------------------------------------------------------------------------

    In addition, we thank the commenter for their input on how approval 
would impact existing barriers to broader adoption of single-use 
scopes. While the

[[Page 81739]]

applicant is correct that we do not assess cost in Sec.  419.66(c)(2), 
CMS recognizes the importance of addressing cost as a barrier to 
utilization, and as stated in section 2.a., a goal of transitional 
pass-through is to target pass-through payments for those devices where 
cost considerations are most likely to interfere with patient access 
(66 FR 55852; 67 FR 66782; and 70 FR 68629). We address the cost of 
Ambu[supreg] aScope\TM\ 5 Broncho HD and the cost significance criteria 
below.
    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] 
aScope\TM\ 5 Broncho HD would be reported with HCPCS codes listed in 
Table 87.
BILLING CODE 4150-28-P

[[Page 81740]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.111


[[Page 81741]]


[GRAPHIC] [TIFF OMITTED] TR22NO23.112


[[Page 81742]]


[GRAPHIC] [TIFF OMITTED] TR22NO23.113

BILLING CODE 4150-28-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 noted 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] aScope\TM\ 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] aScope\TM\ 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 stated that we believe 
the Ambu[supreg] aScope\TM\ 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] aScope\TM\ 5 Broncho HD has an 
estimated average reasonable cost of $799.00, we stated that we believe 
the Ambu[supreg] aScope\TM\ 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] aScope\TM\ 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 stated that we believe the Ambu aScope\TM\ 5 Broncho HD 
meets the third cost significance requirement.
    We invited public comment on whether the Ambu[supreg] aScope\TM\ 5 
Broncho HD meets the device pass-through payment criteria discussed in 
this section, including the cost criterion for device pass-through 
payment status.
    We did not receive any comments with regard to any of the cost 
significance requirements specified at Sec.  419.66(d). Based on our 
findings from the first, second, and third cost significant tests, we 
believe that the Ambu[supreg] aScopeTM 5 Broncho HD device

[[Page 81743]]

meets the cost significance criterion specified at Sec.  419.66(d).
    After consideration of the public comments we received and our 
review of the device pass-through application, we have determined that 
the Ambu[supreg] aScope\TM\ 5 Broncho HD meets the criteria for device 
pass-through status. We are approving this application because the 
documentation (namely the FDA document and additional studies) that 
were submitted in response to the proposed rule address our concerns 
and provide evidence of substantial clinical improvement that is 
required. Therefore, we are approving the Ambu[supreg] aScope\TM\ 5 
Broncho HD for transitional pass-through payment status beginning 
January 1, 2024.
(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 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) a single CytoCore biopsy instrument, powered by 
an alkaline type battery; (2) three luer adaptors; (3) a 5ml syringe; 
and (4) an instructions for use (IFU) booklet. 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 
resulting from inadequate cellular samples obtained using standard fine 
needle aspiration (FNA). 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 
biopsies to be as high as 30 to 50 percent using FNA biopsy.\93\
---------------------------------------------------------------------------

    \93\ CMS made minor edits to the device description in this 
final rule with public comment to improve clarity.
---------------------------------------------------------------------------

    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 invited public comments on whether CytoCore meets the newness 
criterion at Sec.  419.66(b)(1).
    We did not receive public comments regarding whether CytoCore meets 
the newness criterion at Sec.  419.66(b)(1). 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 
of the initial FDA marketing authorization on March 31, 2020, and as 
such, we have concluded that CytoCore meets the newness criterion.
    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 noted 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 noted 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 or whether the device is surgically implanted or 
inserted (either permanently or temporarily) or applied in or on a 
wound or other skin lesion, as required by Sec.  419.66(b)(3). However, 
in the CY 2000 OPPS interim final rule with comment period (65 FR 67804 
and 67805), we explained how we interpret the exclusion criterion at 
Sec.  419.66(b)(3). 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

[[Page 81744]]

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 invited public comments on whether CytoCore meets the exclusion 
criteria at Sec.  419.66(b)(3) and (4).
    Comment: The applicant asserted that CytoCore meets the eligibility 
requirements at Sec.  419.66(b)(3) and (4). In response to our concerns 
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), the 
applicant asserted that CytoCore is integral to the service provided 
for Fine Needle Aspiration (FNA) of suspicious thyroid nodules because 
the CytoCore motorized device is an essential component, offering 
precise control with a needle that is attached to the device, and 
CytoCore is adaptable for various lesion characteristics. Further, the 
applicant explained that, using ultrasound guidance, the needle is 
advanced through the patient's skin into the nodule, ensuring 
collection of adequate material.
    In response to our concerns that Cytocore may be considered a 
supply or material furnished incident to a service as described in 
Sec.  419.66(b)(4), the applicant stated that CytoCore does not 
function as a surgical tool. In support of this assertion, the 
applicant referenced the FDA definition of a manual surgical instrument 
(21 CFR 878.4800). The applicant stated that, because CytoCore is 
powered and non-resuable, it does not meet the definition of a 
``surgical instrument'' per the FDA definition.
    Response: We appreciate the commenter's input regarding whether 
CytoCore meets the eligibility criteria at Sec.  419.66(b)(4). However, 
we do not believe that CytoCore meets the eligibility criteria 
described at Sec.  419.66(b)(4).
    With respect to the eligibility criterion at Sec.  419.66(b)(4), 
while we appreciate the assertion that CytoCore may not be defined as a 
``surgical instrument'' according to the FDA definition (21 CFR 
878.4800), we note that FDA and CMS utilize different definitions for 
many terms. In this instance, CMS has established a clear definition 
for a supply or material furnished incident to a service for the 
purposes of determining OPPS device pass-through payment eligibility.
    In the proposed rule, we reiterated that for the criteria at Sec.  
419.66, CMS adopted the interpretation of Sec.  419.66(b)(4) in the CY 
2006 OPPS final rule with comment period (70 FR 68629 and 68630). 
Specifically, we stated that CMS does not consider an item used to cut 
or otherwise create a surgical opening to be a device that is 
surgically implanted or inserted. CMS considers 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. Further, we provided that 
CMS considers 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. The function of these 
items is different and distinct from surgical implantation or insertion 
and CMS expects 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.
    With respect to the eligibility criterion at Sec.  419.66(b)(4), 
based on the information we received in the application and the public 
comments as well as discussion of the criterion in Sec.  419.66(b)(4) 
that we adopted in the CY 2006 OPPS final rule with comment period (70 
FR 68629 and 68630), we have determined that CytoCore is a biopsy 
apparatus and, as such, is a material or supply furnished incident to a 
service, in accordance with the device eligibility requirements in the 
proposed rule and, as such, does not meet the eligibility criteria at 
Sec.  419.66(b)(4).
    CytoCore does not meet the eligibility criteria to be considered a 
device for transitional pass-through payment. Therefore, we did not 
evaluate whether the product meets the other criteria required for 
transitional pass-through payment for devices, including whether it is 
described by existing or previous categories, whether it is a 
substantial clinical improvement, or whether it meets the cost 
criteria. We are not approving CytoCore for transitional pass-through 
payment status for CY 2024 because the product does not meet the 
eligibility criteria at Sec.  419.66(b)(4).
    We note that we received public comments with regard to the 
substantial clinical improvement criterion for this device, but because 
we have determined that the device does not meet the eligibility 
criteria and therefore, is not eligible for approval for transitional 
pass-through payment status for CY 2024, we are not summarizing 
comments received or making a determination on that criterion in this 
final rule.
(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. 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 
endoscopy 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 into the 
echoendoscope which is then 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,

[[Page 81745]]

including during the infusion of fluids and therapeutic and diagnostic 
agents.\94\
---------------------------------------------------------------------------

    \94\ CMS made minor edits to the device description in this 
final rule with public comment to improve clarity.
---------------------------------------------------------------------------

    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).
    We invited public comment on whether EchoTip[supreg] meets the 
newness criterion at Sec.  419.66(b)(1).
    Comment: With respect to the newness criterion at Sec.  
419.66(b)(1), the applicant reiterated their belief that 
EchoTip[supreg] meets the newness criterion. The applicant stated that 
the FDA granted de Novo authorization on November 20, 2019, therefore 
meeting the criteria at Sec.  419.66(b)(1) because the application is 
within 3 years of the date of the initial FDA marketing authorization 
on November 20, 2019.
    Response: We appreciate the commenter's input and agree that 
because we received the application for EchoTip[supreg] on June 29, 
2022, which is within 3 years of FDA approval on November 20, 2019, 
EchoTip[supreg] meets the newness criterion.
    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 invited public comment on whether EchoTip[supreg] meets the 
integral part of the service criterion at Sec.  419.66(b)(3).
    Comment: The applicant asserted that EchoTip[supreg] meets the 
eligibility requirements at Sec.  419.66(b)(3), stating that 
EchoTip[supreg] is a prescription, single-use device consisting of the 
EchoTip[supreg] Insight Needle, a connecting tube, and a Compass CT 
transducer that is integral to the service provided.
    Response: After consideration of the public comments we received, 
we agree that the applicant meets the eligibility criterion at Sec.  
419.66(b)(3) because it is integral to the service provided, is used 
for one patient only, and punctures the hepatic vein and portal vein 
through the liver parenchyma to obtain pressure measurements.
    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 invited public comment on whether EchoTip[supreg] meets the 
exclusion criterion at Sec.  419.66(b)(4).
    Comment: The applicant asserted 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.
    Response: We appreciate the commenter's input. We agree with the 
applicant that EchoTip[supreg] meets the device eligibility 
requirements at Sec.  419.66(b)(4) because it is not a piece of 
equipment, instrument, apparatus, implement, or item for which 
depreciation and financing expenses are recovered, and it is not a 
supply or material furnished incident to a service. Therefore, based on 
the public comments we have received and our review of the application, 
we have determined that EchoTip[supreg] meets the eligibility criteria 
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 that 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. We stated in the CY 2024 OPPS/ASC 
proposed rule that, upon review, it does not appear that there are any 
existing pass-through payment categories that might apply to 
EchoTip[supreg].
    We invited public comment on whether EchoTip[supreg] meets the 
device category criterion at Sec.  419.66(c)(1).
    Comment: Regarding the eligibility criterion at Sec.  419.66(c)(1), 
the applicant reiterated that there is no comparable existing pass-
through payment category that describes EchoTip[supreg].
    Response: We appreciate the commenter's input. After consideration 
of the public comments we received, we continue to believe that there 
is not an existing pass-through payment category that describes 
EchoTip[supreg], and therefore, EchoTip[supreg] meets the device 
category eligibility criterion at Sec.  419.66(c)(1).
    The second criterion for establishing a device category, at Sec.  
419.66(c)(2), provides that CMS determines either of the following: (i) 
that a device to be included in the category has demonstrated that it 
will substantially improve the diagnosis or treatment of an illness or 
injury or improve the functioning of a malformed body part compared to 
the benefits of a device or devices in a previously established 
category or other available treatment; or (ii) for devices for which 
pass-through status will begin on or after January 1, 2020, as an 
alternative to the substantial clinical improvement criterion, the 
device is part of the FDA's Breakthrough Devices Program and has 
received FDA marketing authorization for the indication covered by the 
Breakthrough Device designation. The applicant claimed that 
EchoTip[supreg] represents a substantial clinical improvement over 
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.\95\
---------------------------------------------------------------------------

    \95\ 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.

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[[Page 81746]]

    In support of the first claim, the applicant submitted an article 
on a prospective, single-armed, single-academic center study.\96\ 
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.
---------------------------------------------------------------------------

    \96\ 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.\97\ 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 percent 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.
---------------------------------------------------------------------------

    \97\ Choi, A., Chang, K., Samaransena, J. et al. (2022). 
Endoscopic ultrasound-guided porto-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 \98\ 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 (that is, cirrhosis) the pressure equalizes 
throughout the interconnected sinusoidal network, and results in 
minimal gradient (that is, normal; up to 4 mmHg). Thus, according to 
the authors, HVPG does not provide useful information regarding 
prehepatic or presinusoidal portal hypertension (PH) (that is, 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.\99\ 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.
---------------------------------------------------------------------------

    \98\ 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.
    \99\ Huang, J.Y., Samarasena, J.B., Tsujino, T., Chang, K.J. 
(2016). EUS-guided portal pressure gradient measurement with a novel 
25-gauge needle device versus standard transjugular approach: A 
comparison animal study. Gastrointest Endosc, 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.\100\ According to the 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), assessing patient 
experience, and analyzing 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 noted that

[[Page 81747]]

this source did not include the original retrospective study, only a 
letter referencing it and highlighting its potential value to further 
research.
---------------------------------------------------------------------------

    \100\ 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 noted 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,\101\ which was submitted in 
support of 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 et al. study,\102\ which was 
submitted 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 et al. study included 64 
patients.
---------------------------------------------------------------------------

    \101\ 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.
    \102\ Choi, A., Chang, K., Samaransena, J. et al. (2022). 
Endoscopic ultrasound-guided porto-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 noted that the Hajifathalian et al. study results 
did not demonstrate 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 expressed concern 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 noted that 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.\103\ 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.
---------------------------------------------------------------------------

    \103\ 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 invited public comment on whether EchoTip[supreg] meets the 
substantial clinical improvement criterion at Sec.  419.66(c)(2)(i).
    Comment: In response to our concern that the applicant has not 
demonstrated the endoscopic ultra-sound-guided direct portal-systemic 
pressure gradient measurement (EUS-PPG) is clinically safer and more 
accurate than hepatic venous pressure gradient (HVPG) and technically 
superior to HVPG without directly comparing EUS-PPG and HVPG, we 
received comments from the applicant reiterating that the Huang et 
al.\104\ studies compared EchoTip[supreg] direct EUS-PPG with the 
indirect HVPG method in a swine model using rapid dextran infusion to 
create transient portal hypertension and confirmed EchoTip[supreg] 
direct EUS-PPG matches pressures measured using a transjugular balloon 
catheter. The applicant asserted that the findings comparing 
preoperative EchoTip[supreg] direct EUS-PPG with HVPG in patients with 
cirrhosis or suspected cirrhosis undergoing abdominal surgery showed 
results that match findings from literature substantiating that direct 
portal vein pressures (PVP) correlate to the indirect Wedged Hepatic 
Vein Pressures (WHVP). The applicant commented that an additional 
finding was that patients preferred the EchoTip[supreg] procedure to 
the transjugular HVPG.
---------------------------------------------------------------------------

    \104\ Huang, J.Y., Samarasena, J.B., Tsujino, T., et al. (2016). 
EUS-guided portal pressure gradient measurement with a novel 25-
gauge needle device versus standard transjugular approach: a 
comparison animal study. Gastrointest Endosc 84(2); 358-362.
---------------------------------------------------------------------------

    The applicant further summarized multiple historical documents from 
the 1950s,105 106 1970s,107 108 109 1980s,\110\ 
and early 2000s 111 112 demonstrating the limitations of 
HVPG especially in diabetic patients. The applicant, through these 
historical studies, asserted that it has been well established that 
direct measurement of portal venous pressure correlates with indirect 
measurement of portal pressure using WHVP, and that the HVPG determined 
using either direct PVP or indirect WHVP correlate with one another in 
patients with sinusoidal portal hypertension.
---------------------------------------------------------------------------

    \105\ Meyers, J.D., Taylor, J.W. (1951). An estimation of portal 
venous pressure by occlusive catheterization on a hepatic venule. J 
Clin Invest 30: 662.
    \106\ Taylor, J.W., Myers, J.D. (1956). Occlusive hepatic venous 
catheterization in the study of normal liver, cirrhosis of the 
liver, and noncirrhotic portal hypertension. Circulation 13:368-379.
    \107\ Reynolds, T.B., Ito, S., Iwatsuki, S. (1970). Measurement 
of portal pressure and its clinical application. Am J Med 49: 649-
657.
    \108\ Grozmann, R.J., Glickmann, M., Blei, A., et al. (1979). 
Wedged and free hepatic venous pressure measured with a balloon 
catheter. Gastroenterology 77: 253-258.
    \109\ Viallet, A., Joly, J.G., Marleau, D., Lavoie, P. (1970). 
Comparison of free portal venous pressure and wedged hepatic venous 
pressure in patients with cirrhosis of the liver. Gastroenterology, 
59:372-5.
    \110\ Marleau, D., Cote, J., et al. (1985). Presinusoidal portal 
hypertension in nonalcoholic cirrhosis. Hepatology, 5: 415-8.
    \111\ Keiding, S., Vilstrup, H. (2002). Intrahepatic 
heterogeneity of hepatic venous pressure gradient in human 
cirrhosis. Scand J Gastroenterol, 37: 960-4.
    \112\ Thalheimer, U., Leandro, G., Samonakis, D.N., et.al. 
(2005). Assessment of the agreement between wedge hepatic vein 
pressure and portal vein pressure in cirrhotic patients. Digestive 
and Liver Disease, 37:601-608.
---------------------------------------------------------------------------

    The applicant asserted that direct measurement with EchoTip[supreg] 
addresses known limitations of the transjugular HVPG and non-invasive 
assessment. The applicant asserted HVPG with the indirect method can 
provide erroneous results. According to the applicant, Tandon et al. 
has shown good interobserver agreement between appropriately performed 
transjugular HVPG, but that adherence to specific techniques is 
critical for accurate measurement.\113\ However, because of the variety 
of complicated portal hemodynamics and because the procedure is so 
complicated, the HVPG may not always reflect the substantial severity 
of portal hypertension in over 16 percent of patients with sinusoidal 
portal hypertension. The applicant also submitted preliminary findings 
from the Lim, et al. study comparing preoperative EchoTip[supreg] 
direct EUS-PPG with HVPG

[[Page 81748]]

in patients with cirrhosis or suspected cirrhosis undergoing abdominal 
surgery. The applicant stated that the study showed the median pressure 
gradient was similar between the EUS-PPG measurements and transjugular 
HVPG measurements, with a high correlation coefficient between the two 
techniques (r = 0.972; P = 0.006). The applicant stated that while only 
six patients were included, the results match findings from the 
considerable literature substantiating that direct portal vein 
pressures (PVP) correlate to the indirect Wedged Hepatic Vein Pressures 
(WHVP). The applicant stated that an additional finding was that 
patients preferred the EchoTip[supreg] procedure to the transjugular 
HVPG.
---------------------------------------------------------------------------

    \113\ Tandon, P., Ripoll, C., Assis, D., et. al. (2016). The 
interpretation of hepatic venous pressure gradient tracings--
excellent interobserver agreement unrelated to experience. Liver 
Int, 36(8): 1160-6.
---------------------------------------------------------------------------

    Response: We thank the applicant for their comments. However, we 
maintain the concerns we articulated in the proposed rule. While we 
agree that the limitations of HVPG for obtaining clinical information 
are well established, the additional literature provided does not 
address our concern about the lack of data comparing EUS-PPG to HVPG. 
The additional literature is based on patient data that is several 
decades out of date that may not be comparable to more recent patient 
data or clinical practices and does not rely on direct comparison 
between HVPG and other measurements, and rather only cites the 
limitations of HVPG in certain patient populations. The applicant 
restated its references to the Huang, et al. study, which offers the 
only direct comparison between EchoTip[supreg] and HVPG and provided 
new references to the Lim et al. study, in which the human patient 
model only included six study participants. We do not agree that data 
from animal studies is sufficient to extrapolate to human populations 
for the purposes of demonstrating substantial clinical improvement. 
Furthermore, we cited concerns about small sample sizes specifically in 
the Hajifathalian et al. and the Choi et al. studies, which included 24 
and 64 patients respectively, while the applicant's more recently 
submitted data in the Lim et al. study includes even fewer patients.
    Comment: In response to our concern that the Hajifathalian et al. 
study results did not achieve correlation with fibrosis stage obtained 
from concurrent EUS-guided liver biopsy sampling, the applicant 
asserted that the lack of correlation was due to a small heterogenous 
sample, but offered that the authors noted good correlation in true 
negatives and true positives. The applicant further asserted that 
direct comparison between EchoTip[supreg] PPG and HVPG and concurrent 
liver biopsy during the same encounter could only be accomplished in a 
highly specialized and controlled setting due to the need for 
simultaneous endoscopic ultrasound and transjugular catheterization. 
The applicant reiterated that in the Choi, et al. study included in 
their application, EUS-PPG was significantly associated with fibrosis 
stage >= 3 on EUG-liver biopsy (LR 27.0, 95 percent CI = 1.653-360.597, 
p = 0.004).\114\
---------------------------------------------------------------------------

    \114\ Choi, A., Chang, K., Samaransena, J. et al. (2022). 
Endoscopic ultrasound-guided porto-systemic pressure gradient 
measurement correlates with histological hepatic fibrosis. Digestive 
Diseases and Sciences. https://doi.org/10.1007/s10620-022-07418-7.
---------------------------------------------------------------------------

    Response: We thank the applicant for their comments and the 
additional context. However, we maintain the concerns we articulated in 
the proposed rule, specifically, as indicated by the applicant, that 
the Hajifathalian et al. study is too small to show significant 
clinical improvement. In addition, the comments do not address our 
earlier concerns with the Hajifathalian et al. and Choi et al. studies 
regarding the lack of direct comparison between HVPG and EUS-PPG.
    Comment: In response to our concern that supporting evidence, 
preferably published peer-reviewed clinical trials, that show improved 
clinical outcomes would help inform our assessment of whether 
EchoTip[supreg] demonstrates substantial clinical improvement over 
existing technologies, the applicant submitted comments stating that 
the goal for both the referring physician and general 
gastroenterologist is to identify patients truly in need of specialized 
care from the hepatology specialist. The applicant stated that most 
gastroenterology practices have access to interventional 
gastroenterologists who can perform the EchoTip[supreg] procedure and 
can identify patients who need to be referred to the appropriate 
practitioner for intervention to manage their disease. In addition, 
EchoTip[supreg] fits into existing workflow in the endoscopy suite and 
eliminates the concerns with the high false positive rates found with 
non-invasive tests such as transient elastography and various risk 
score calculations. The applicant stated that therefore, 
EchoTip[supreg] does meet the criterion for substantial clinical 
improvement by offering an efficient way to identify patients needing 
specialty hepatology care, overcomes the issues with the traditional 
transjugular HVPG in the population with metabolic associated 
steatohepatitis (MASH) and metabolic dysfunction-associated steatotic 
liver disease (MASLD), and prevents misclassification of disease 
severity with non-invasive tests.
    In support of the claim that direct portal vein pressure 
measurement is more accurate for determining the presence of portal 
hypertension in certain cases, the applicant submitted additional 
literature on the use of EchoTip[supreg] in clinical care. The 
applicant discussed the Jirapinyo et al. study,\115\ in which the 
author found a significant reduction in PPG, with 79 percent of 
patients experiencing a reduction of over 20 percent within 6 months 
after use of EchoTip[supreg] during the endoscopic gastric plication 
(EGP) procedure. The applicant also referenced a case study in which 
EchoTip[supreg] was used to clear a patient for a successful EGP after 
previous endoscopic findings showed esophageal varicosities.\116\ The 
applicant also asserted that EchoTip[supreg] can be used by 
gastroenterologists, in addition to hepatology specialists who may be 
less accessible.
---------------------------------------------------------------------------

    \115\ Jirapinyo, P., Thompson, C., Garcia-Tsao, L., et al. 
(2023). Endoscopic gastric plication reduces portosystemic pressure 
gradients in patients with nafld and compensated advanced chronic 
liver disease. Endoscopy. DOI: 10.1055/a-2146-8857.
    \116\ Krishnan, A., Shah-Khan, S.M., Hadi, Y., et al. (2023). 
Convergence of endobariatrics and endohepatology for evaluation and 
treatment of obesity and nonalcoholic fatty liver disease. 
Endoscopy, 55: E841-E843. DOI 10.1055/a-2094-9794.
---------------------------------------------------------------------------

    Response: We thank the applicant for their comments and additional 
literature. However, while the literature discusses the limitations of 
HVPG and the need for direct measurement, it did not provide peer-
reviewed literature on whether EchoTip[supreg] improves clinical 
outcomes in comparison to HVPG. In addition, while the applicant 
referenced the Jirapinyo et al. study and a case study to show a 
significant reduction in PPG associated with a reduction in the risks 
of variceal bleeding and death, the full studies were not included with 
the submitted comments. We understand the applicant claims 
EchoTip[supreg] may be more readily available in settings where 
hepatologists are not easily accessible, however, the applicant has not 
addressed our concern as to whether EchoTip[supreg] direct EUS-PPG is a 
substantial clinical improvement over HVPG.
    Comment: Several commenters stated support for EchoTip[supreg]'s 
eligibility for transitional pass-through status, stating that 
EchoTip[supreg] is helpful in the measurement of portal hypertension 
and diagnosis of multiple conditions related to elevated pressures of 
the liver.
    One commenter asserted EchoTip[supreg] meets substantial clinical 
improvement because EchoTip[supreg] identifies patients that need 
intensive hepatology care

[[Page 81749]]

based on the gold standard of portal pressure measurement. According to 
the commenter, it offers a solution to the inaccuracies in the current 
standard of care (transjugular hepatic venous pressure gradient (HVPG)) 
in patients who have pre-sinusoidal conditions, such as nonalcoholic 
steatohepatitis (NASH) and nonalcoholic fatty liver disease (NAFLD). 
The commenter also asserted EchoTip[supreg] improves patient safety by 
eliminating radiation exposure risks with HVPG.
    A few commenters stated EchoTip[supreg] allows for a single 
procedure in a single setting compared to other clinical options that 
might require multiple visits across multiple specialties. In addition, 
a few commenters stated their patients preferred EchoTip[supreg] to 
other procedures. One commenter stated using EchoTip[supreg] was 
particularly useful for patients with morbid obesity where other 
options may not be available or as accurate, further stating that in 
such cases PPG measurement has been invaluable because it has given 
very good and accurate clinical information that could not be obtained 
from other means such as CT scan, fibroscan, etc. The commenter also 
stated that EchoTip[supreg] has significant clinical value because it 
obviates the need for patient to go to two separate procedures--HVPG 
measurement and then a separate session to get a percutaneous liver 
biopsy. One commenter stated that EchoTip[supreg] has been very 
beneficial by differentiating patients that have cirrhosis as a new 
diagnosis and those that were mislabeled, leading to life-changing 
consequences. One commenter stated that EchoTip[supreg] allows them to 
determine which patients with liver disease are safe to undergo 
surgery. Another commenter stated that EchoTip[supreg] has a unique yet 
intuitive design that offers the capability to accurately measure 
portal pressures and commented that a distinctive feature is its 
echogenic tip. The commenter opined that this aspect of the device 
dramatically enhances procedural accuracy, ensuring that the needle tip 
is correctly positioned within the desired vein each time. The 
commenter stated that additionally, the use of a 25-gauge needle 
simplifies access to both the portal and hepatic veins, minimizing 
tissue disruption and elevating the overall patient experience. The 
commenter further praised the device's compact design, and integration 
of a display with the system's self-calibrating transducer which 
provides clear, real-time pressure readings to aid in making informed 
clinical decisions. The commenter concluded that the device has 
significantly enhanced diagnostic precision for cases indicating portal 
hypertension, thereby assisting their team in treatment planning and 
improved patient outcomes.
    Response: We thank the commenters for their responses. We 
appreciate that EchoTip[supreg] has changed the way some physicians 
practice, but due to the concerns stated above concerning small sample 
size and a lack of peer-reviewed direct comparison between 
EchoTip[supreg] and HVPG, we do not believe there is enough data to 
support the applicant's claims about significant clinical improvement 
over existing methods for measurement of portal gradient pressures. 
Further, despite the prognostic information measurement of portal 
gradient pressure provides, given all other current and evolving non-
invasive technologies, it remains unclear whether obtaining this 
measurement is the standard of care in the management of patients with 
CLD. As noted by Rudnick et al., with the exception of intrahepatic 
portosystemic shunts and trans-jugular liver biopsies, HVPG 
measurements are not routinely obtained.\117\ Additionally, we were not 
provided any literature to support the claim that EchoTip[supreg] 
eliminates radiation exposure risks with HVPG.
---------------------------------------------------------------------------

    \117\ 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.
---------------------------------------------------------------------------

    After consideration of the public comments we received, we are not 
approving EchoTip[supreg] for transitional pass-through payment status 
in CY 2024 because the technology does not meet the substantial 
clinical improvement criterion at Sec.  419.66(c)(2)(i). Because we 
have determined that EchoTip[supreg] does not meet the substantial 
clinical improvement criterion, we are not evaluating whether the 
device meets the cost criterion.
    We note that we received public comments with regard to the cost 
criteria for EchoTip[supreg], but because we have determined that the 
device does not meet the substantial clinical improvement eligibility 
criterion and therefore, is not eligible for approval for transitional 
pass-through payment status for CY 2024, we are not summarizing 
comments received or making a determination on those criteria in this 
final rule.
(d) FLEX Vessel PrepTM System
    Venture Med Group, Inc. submitted an application for a new device 
category for transitional pass-through payment status for FLEX Vessel 
PrepTM System (FLEX VPTM) for CY 2024. Per the 
applicant, FLEX VPTM 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 VPTM is used with 
percutaneous transluminal angioplasty (PTA) catheters to facilitate 
dilation of stenoses and for the treatment of in-stent restenosis of 
balloon expandable and self-expanding stents in the peripheral 
vasculature. The applicant asserted that FLEX VPTM 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 VPTM'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 could 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 VPTM 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.

[[Page 81750]]

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.\118\
---------------------------------------------------------------------------

    \118\ CMS made minor edits to the device description in this 
final rule with public comment to improve clarity.
---------------------------------------------------------------------------

    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 VPTM 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 VPTM on February 28, 2023, which is 
within 3 years of the date of the initial FDA marketing authorization.
    We invited public comment on whether FLEX VPTM meets the 
newness criterion at Sec.  419.66(b)(1).
    Comment: With respect to the newness criterion at Sec.  
419.66(b)(1), the applicant reiterated that FLEX VPTM 
received 510(k) clearance from the FDA on September 11, 2020, and that 
CMS received VentureMed Group's application for a new device category 
on February 28, 2023, which is within 3 years of the date of FDA 
clearance. Since CMS received the application within the required 3 
years, the applicant stated that it is clear FLEX VPTM meets 
the newness criterion.
    Response: We appreciate the applicant's input and agree that 
because we received the application for FLEX VPTM on 
February 28, 2023, which is within 3 years of the FDA clearance date of 
September 11, 2020, FLEX VPTM meets the newness criterion.
    With respect to the eligibility criterion at Sec.  419.66(b)(3), 
according to the applicant, FLEX VPTM 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). Prior to balloon 
angioplasty, FLEX VPTM is inserted through an incision, over 
an endovascular guidewire until the device is positioned distal to the 
lesion to be treated.
    We invited public comment on whether FLEX VPTM meets the 
integral part of the service criterion at Sec.  419.66(b)(3).
    Comment: With respect to the eligibility criterion at Sec.  
419.66(b)(3), the applicant reiterated that FLEX VPTM is 
integral to the service provided, is used for one patient only, comes 
in contact with human skin, and is applied through an incision. Because 
of these attributes the applicant stated it is clear that FLEX 
VPTM meets the eligibility criteria at Sec.  419.66(b)(3).
    Response: We appreciate the applicant's input. We agree with the 
applicant and have determined that FLEX VPTM meets the 
eligibility criterion at Sec.  419.66(b)(3).
    With respect to the exclusion criterion at Sec.  419.66(b)(4), the 
applicant claimed that FLEX VPTM 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 invited public comment on whether FLEX VPTM meets the 
exclusion criterion at Sec.  419.66(b)(4).
    Comment: With respect to the exclusion criterion at Sec.  
419.66(b)(4), the applicant reiterated that FLEX VPTM 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. Accordingly, the 
applicant stated it is clear that FLEX VPTM meets the 
exclusion criterion at Sec.  419.66(b)(4).
    Response: We appreciate the applicant's input. We agree with the 
applicant and have determined that 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 did not appear that there are any existing pass-through 
payment categories that might apply to FLEX VPTM.
    We invited public comment on whether FLEX VPTM meets the 
device category criterion at Sec.  419.66(c)(1).
    Comment: With respect to the new device category criterion at Sec.  
419.66(c)(1), the applicant reiterated that no pass-through payment 
categories now exist that might apply to the FLEX VPTM and, 
therefore, the device meets the new device category criterion at Sec.  
419.66(c)(1).
    Response: We appreciate the applicant's input. We continue to 
believe that there is not an existing pass-through payment category 
that describes FLEX VPTM, and therefore, that FLEX 
VPTM meets the device category eligibility criterion at 
Sec.  419.66(c)(1).
    The second criterion for establishing a device category, at Sec.  
419.66(c)(2), provides that CMS determines either of the following: (i) 
that a device to be included in the category has demonstrated that it 
will substantially improve the diagnosis or treatment of an illness or 
injury or improve the functioning of a malformed body part compared to 
the benefits of a device or devices in a previously established 
category or other available treatment; or (ii) for devices for which 
pass-through status will begin on or after January 1, 2020, as an 
alternative to the substantial clinical improvement criterion, the 
device is part of 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 six months after patients were 
treated with FLEX VPTM followed by balloon angioplasty 
(Aruny et al.),\119\ and the

[[Page 81751]]

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).\120\ 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.
---------------------------------------------------------------------------

    \119\ 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.
    \120\ 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 open 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, per the literature, the results of dialysis 
access circuit primary patency 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 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 
hemodialysis patients overall. 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).\121\
---------------------------------------------------------------------------

    \121\ Ibid.
---------------------------------------------------------------------------

    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.\122\ The applicant also 
presented results 12 months post-treatment.\123\ 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.
---------------------------------------------------------------------------

    \122\ 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.
    \123\ 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); females 
had more prior AV access interventions (p<0.05). According to the 
applicant, this potentially suggests that female

[[Page 81752]]

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.\124\
---------------------------------------------------------------------------

    \124\ 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 dialysis access and 
frequency of recurrence results. 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 obtained from the literature for PTA 
only was 66.4 percent for CA cases.\125\ 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.\126\
---------------------------------------------------------------------------

    \125\ Ibid.
    \126\ 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.\127\ 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.
---------------------------------------------------------------------------

    \127\ 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 percent cephalic arch lesions 
result in vessel rupture and about 12 percent of PTAs in B/AA patients 
are reported to result in major complications.\128\
---------------------------------------------------------------------------

    \128\ 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.\129\ 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 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.\130\
---------------------------------------------------------------------------

    \129\ 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.
    \130\ 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 noted 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 noted 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 noted 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 noted 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 potentially be 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 invited public comment on whether FLEX VPTM meets the 
substantial clinical improvement criterion at Sec.  419.66(c)(2)(i).
    Comment: All commenters addressing the substantial clinical 
improvement criterion offered support for approval of the FLEX 
VPTM application. Commenters highlighted a number of added 
benefits when FLEX VPTM was used prior to PTA in 
hemodialysis patents, including: positive outcomes for a cephalic arch 
and AV graft case; reduction on barotrauma associated with angioplasty; 
and its effectiveness and easy usability, specifically during AV 
interventions. A few commenters,

[[Page 81753]]

including the applicant, explained that reporting procedural 
complications was based on the Society of Interventional Radiology 
(SIR) typology and under this typology all complications reported in 
the AV registry were minor. With zero major complications reported, all 
commenters agreed on the safety of FLEX VPTM compared to 
what is reported in the peer-reviewed literature. One commenter stated 
that FLEX VPTM substantially reduced procedural 
complications for patients by lowering the need for bail-out stenting. 
Several commenters, including the applicant, stated that the use of 
FLEX VPTM prior to PTA enables a longer and lasting patency 
for AV procedures, thereby reducing the frequency of interventions as 
patients treated using the device returned for access repair less often 
than patients without the use of FLEX VPTM. A few 
commenters, including the applicant, noted the FLEX VPTM 
benefits for patient populations underserved and underrepresented in 
trials as demonstrated through the studies submitted with the 
application. One commenter stated that dialysis patients should have 
every option available that will improve clinical outcomes for their AV 
access and quality of care.
    Response: We appreciate the input provided by these commenters. We 
have taken this information into consideration in making our final 
determination of whether FLEX VPTM meets the substantial 
clinical improvement criterion, discussed below.
    Comment: To address our concerns that the evidence presented with 
the application regarding the benefits to patients on hemodialysis was 
not peer-reviewed; the applicant and a commenter noted that the data in 
the application is now published in three separate peer-reviewed 
journals.131 132 133
---------------------------------------------------------------------------

    \131\ Aruny, J., et al. (2023). Longitudinal micro-incision 
creation prior to balloon angioplasty for treatment of arteriovenous 
access dysfunction in a real-world patient population: 6-month 
cohort analysis. Hemodialysis International 2023 Aug 17: 1-10. 
(Online ahead of print) https://onlinelibrary.wiley.com/doi/10.1111/hdi.13111.
    \132\ Aruny et al. (2023). Longitudinal micro-incision prior to 
balloon angioplasty for treatment of arteriovenous access 
dysfunction in a real-world patient population: 12-month cohort 
analysis. Journal of Interventional Nephrology, 6(4): 88-97. https://www.openaccessjournals.com/articles/longitudinal-microincisions-prior-to-balloon-angioplasty-for-treatment-ofarteriovenous-access-dysfunction-in-a-realworld-patient-16713.htm.
    \133\ Davis, O., et al. (2023). Novel device prior to balloon 
angioplasty for dysfunctional arteriovenous access: Analysis of a 
real-world registry by race and sex cohorts. Journal of 
Interventional Nephrology, 6(4): 158-164. https://www.openaccessjournals.com/articles/novel-device-prior-to-balloon-angioplasty-for-dysfunctional-arteriovenousaccess-analysis-of-a-realworld-registry-by-race-and-sex-16852.html.
---------------------------------------------------------------------------

    Response: We appreciate the applicant's and the commenter's 
responses to our concern regarding publication of the data presented in 
the application and for including the references. We agree with 
commenters that the published peer-reviewed clinical data shows 
improved clinical outcomes through the reduction in the frequency of 
subsequent interventions to maintain patency in hemodialysis patients 
with AV grafts.
    Comment: To address our concerns that, due to the clinical trial 
design, there was insufficient data on the impact of angioplasty with 
drug coated balloons (DCBs), as presented by the applicant, and that 
the drug in these balloons may play a role in the improvement of 
patency or openness durability, the applicant commented that DCBs are 
not the standard of care for AV access interventions, and that is the 
reason for the low number of DCB interventions captured in the FLEX 
VPTM Registry (also referred to as the AV Registry by 
commenters). Additionally, the applicant discussed the results of a 
meta-analysis suggesting that DCBs did not improve primary patency in 
target lesions at six months and 12 months when compared to 
conventional balloon angioplasty.\134\ A few commenters also stated 
that DCBs are not the standard of care relative to angioplasty with 
traditional balloons for AV access procedures. The applicant asserted 
that DCBs are not approved for use with AV grafts in the United States. 
In addition to the applicant, a few commenters noted that drug collated 
balloons (DCBs) were infrequently included in the real-world registry 
used on the studies presented in the application. A commenter stated 
that although the body of positive evidence for DCBs is growing, debate 
remains about their broad application to AV access procedures and 
suggested that FLEX VPTM may enhance the benefits of DCBs.
---------------------------------------------------------------------------

    \134\ Liao, M.T., et al. (2020). Drug-coated balloon versus 
conventional balloon angioplasty of hemodialysis arteriovenous 
fistula or graft: A systematic review and meta-analysis of 
randomized controlled trials. PloS One, 15(4): e0231463. DOI: 
10.1371/jounal.pone.0231463.
---------------------------------------------------------------------------

    Response: We appreciate the applicant's and other commenters' 
responses to our concern that there is insufficient data on the impact 
of angioplasty with DCB. We have taken this information into 
consideration in making our final determination of the substantial 
clinical improvement criterion, discussed below.
    Comment: To address our concerns that the applicant did not present 
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 the literature, the applicant 
asserted that specific data was collected in the AV Registry related to 
the following procedural complications: dissections, perforations, and 
embolization. The applicant stated that the data collected in the AV 
Registry on procedural complications would be considered minor 
complications in the SIR typology. One commenter agreed with the 
approach to use SIR typology to address complications. The applicant 
stated that the AV Registry data shows zero major complications for 
FLEX VPTM plus PTA in their studies. The applicant added 
that a review of recent literature found that: ``The major complication 
rates following PTA for failing AVFs ranged from 0 to 2.1 percent, 
while for the AVGs ranged from 2.1 to 6 percent. Papers with mixed AVGs 
and AVFs reported major complication rates of 3-5 percent.'' \135\
---------------------------------------------------------------------------

    \135\ Raman, L., et al. (2023). Dialysis access maintenance: 
Plain balloon angioplasty. Cardiovascular Interventional Radiology, 
published online May 8, 2023. https://doi.org/10.1007/s00270-023-03441-x. Internal footnotes to the studies summarized are omitted in 
this quotation. (``The most significant complications reported are 
thrombosis, rupture and dissection requiring either stent graft 
placement or surgical revision of the fistula.'')
---------------------------------------------------------------------------

    Response: We appreciate the applicant's and commenter's responses 
to our concerns that the applicant did not present 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 the literature. We agree with the commenter's assertions, 
including the applicant, that according to SIR typology, the data on 
procedural complications using FLEX VPTM resulted in minor 
complications only. We agree with the applicant's and commenter's 
assertions that DCB interventions were infrequent in the AV Registry 
because this procedure is not the standard of care for AV 
interventions. We also agree with the suggestion from the applicant and 
the commenters that FLEX VPTM could enhance the benefits of 
DCBs. Finally, we agree with the applicant's and commenter's assertions 
that the published peer-reviewed clinical data shows improved clinical 
outcomes through the reduction in the frequency of subsequent 
interventions to maintain patency. After consideration of the

[[Page 81754]]

applicant's response and the public comments received, we believe that 
commenters have addressed our concerns regarding whether FLEX 
VPTM meets the substantial clinical improvement criterion 
and that FLEX VPTM represents a substantial clinical 
improvement over existing technologies.
    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 88.
[GRAPHIC] [TIFF OMITTED] TR22NO23.114

    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.\136\ According to the applicant, the cost of FLEX 
VPTM is $1,995.00.
---------------------------------------------------------------------------

    \136\ We noted that the applicant selected a value of $1391.99 
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 Notification 
OPPS Addendum (87 FR 2060). We selected the value of $1271.04, which 
we believe is the accurate value. Based on our initial assessment 
for the proposed rule, using the device offset amount of $1271.04 
would result in FLEX VPTM 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 $1,995.00 for FLEX VPTM is 39.41 
percent of the applicable APC payment amount for the service related to 
the category of devices of $5,061.89 (($1,995.00/$5,061.89) x 100 = 
39.41 percent). Therefore, we stated that we believe FLEX 
VPTM 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 VPTM 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 
stated that we believe that FLEX VPTM 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 VPTM 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 stated that we believed that FLEX VPTM meets the third 
cost significance requirement.
    We invited public comment on whether FLEX VPTM meets the 
device pass-through payment criteria discussed in this section, 
including the cost criterion for device pass-through payment status.
    Comment: With respect to cost significance criteria, the applicant 
reiterated that FLEX VPTM meets all three of the cost 
significance criteria.
    Response: We appreciate the commenter's input. Based on our 
findings from the first, second, and third cost significant tests, we 
believe that FLEX VPTM meets the cost significance criteria 
specified at Sec.  419.66(d).
    Comment: A commenter expressed concerns on how the device offset 
amounts are calculated and stated that CMS should calculate the device-
related portion of APCs for purposes of determining transitional pass-
through eligibility and the device offset using only the cost of the 
devices replaced by the proposed transitional pass-through device 
category. The commenter asserted that this approach results in adequate 
reimbursement to facilities. The commenter recommended that CMS

[[Page 81755]]

apply this methodology to FLEX VPTM if applicable.
    Response: We appreciate the commenter's input. As we have done in 
prior years, CMS continues to evaluate the application of the device 
offset amount on a case-by-case basis to ensure the appropriate payment 
is made for a device on pass-through status. In cases where a device on 
pass-through status replaces previously existing technologies, we 
continue to believe it is appropriate to apply the device offset 
amount. We have reviewed FLEX VPTM offset amounts and 
confirm that the device offset amount is accurate.
    After considering the public comments we received and consideration 
of the cost criterion, we have determined that FLEX VP TM 
meets the cost criterion for device pass-through status.
    After considering the public comments we received and our review of 
the device pass-through application, we have determined that FLEX VP 
TM meets the criteria for device pass-through status. 
Therefore, we are finalizing approval for device pass-through payment 
status for FLEX VP TM effective beginning January 1, 2024.

B. Device-Intensive Procedures

1. Background
    Under the OPPS, prior to CY 2017, device-intensive status for 
procedures was determined at the APC level for APCs with a device 
offset percentage greater than 40 percent (79 FR 66795). Beginning in 
CY 2017, CMS began determining device-intensive status at the HCPCS 
code level. In assigning device-intensive status to an APC prior to CY 
2017, the device costs of all the procedures within the APC were 
calculated and the geometric mean device offset of all of the 
procedures had to exceed 40 percent. Almost all of the procedures 
assigned to device-intensive APCs utilized devices, and the device 
costs for the associated HCPCS codes exceeded the 40-percent threshold. 
The no cost/full credit and partial credit device policy (79 FR 66872 
and 66873) applies to device-intensive procedures and is discussed in 
detail in section IV.B.4 of this final 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 final 
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 final 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 final 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.
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,

[[Page 81756]]

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:
    ++ 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
    ++ 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, 37109, 58945, and 58946, 
respectively), in accordance with our policy stated previously to lower 
the device offset percentage threshold for procedures to qualify as 
device-intensive from greater than 40 percent to greater than 30 
percent, for CY 2019 and subsequent years, we modified this policy to 
apply a 31-percent default device offset to new HCPCS codes describing 
procedures requiring the implantation of a device that do not yet have 
associated claims data until claims data are available to establish the 
HCPCS code-level device offset for the procedures. In conjunction with 
the policy to lower the default device offset from 41 percent to 31 
percent, we continued our current policy of, in certain rare instances 
(for example, in the case of a very expensive implantable device), 
temporarily assigning a higher offset percentage if warranted by 
additional information such as pricing data from a device manufacturer 
(81 FR 79658). Once claims data are available for a new procedure 
requiring the implantation or insertion of a device, device-intensive 
status is applied to the code if the HCPCS code-level device offset is 
greater than 30 percent, according to our policy of determining device-
intensive status by calculating the HCPCS code-level device offset.
    In addition, in the CY 2019 OPPS/ASC final rule with comment 
period, we clarified that since the adoption of our policy in effect as 
of CY 2018, the associated claims data used for purposes of determining 
whether or not to apply the default device offset are the associated 
claims data for either the new HCPCS code or any predecessor code, as 
described by CPT coding guidance, for the new HCPCS code. Additionally, 
for CY 2019 and subsequent years, in limited instances where a new 
HCPCS code does not have a predecessor code as defined by CPT, but 
describes a procedure that was previously described by an existing 
code, we use clinical discretion to identify HCPCS codes that are 
clinically related or similar to the new HCPCS code but are not 
officially recognized as a predecessor code by CPT, and to use the 
claims data of the clinically related or similar code(s) for purposes 
of determining whether or not to apply the default device offset to the 
new HCPCS code (83 FR 58946). Clinically related and similar procedures 
for purposes of this policy are procedures that have few or no clinical 
differences and use the same devices as the new HCPCS code. In 
addition, clinically related and similar codes for purposes of this 
policy are codes that either currently or previously describe the 
procedure described by the new HCPCS code. Under this policy, claims 
data from clinically related and similar codes are included as 
associated claims data for a new code, and where an existing HCPCS code 
is found to be clinically related or similar to a new HCPCS code, we 
apply the device offset percentage derived from the existing clinically 
related or similar HCPCS code's claims data to the new HCPCS code for 
determining the device offset percentage. We stated that we believe 
that claims data for HCPCS codes describing procedures that have minor 
differences from the procedures described by new HCPCS codes will 
provide an accurate depiction of the cost relationship between the 
procedure and the device(s) that are used, and will be appropriate to 
use to set a new code's

[[Page 81757]]

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 
outpatientpps@ cms.hhs.gov. 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.
    Comment: Commenters requested that we assign device-intensive 
status to the following procedures:
     CPT code 0581T (Ablation, malignant breast tumor(s), 
percutaneous, cryotherapy, including imaging guidance when performed, 
unilateral)
     CPT code 31242 (Nasal/sinus endoscopy, surgical; with 
destruction by radiofrequency ablation, posterior nasal nerve)
     CPT code 52284 (Cystourethroscopy, with mechanical 
urethral dilation and urethral therapeutic drug delivery by drug-coated 
balloon catheter for urethral stricture or stenosis, male, including 
fluoroscopy, when performed)
     CPT code 53854 (Transurethral destruction of prostate 
tissue; by radiofrequency generated water vapor thermotherapy)
     HCPCS code C9757 (Laminotomy (hemilaminectomy), with 
decompression of nerve root(s), including partial facetectomy, 
foraminotomy and excision of herniated intervertebral disc, and repair 
of annular defect with implantation of bone anchored annular closure 
device, including annular defect measurement, alignment and sizing 
assessment, and image guidance; 1 interspace, lumbar);
     HCPCS code C9761 (Cystourethroscopy, with ureteroscopy 
and/or pyeloscopy, with lithotripsy, and ureteral catheterization for 
steerable vacuum aspiration of the kidney, collecting system, ureter, 
bladder, and urethra if applicable (must use a steerable ureteral 
catheter)
    Response: Based on CY 2022 claims data available for this final 
rule, the procedures requested by commenters do not have device offset 
percentages that exceed the 30-percent threshold required for device-
intensive status under the OPPS or ASC payment system and, therefore, 
are not eligible to be assigned device-intensive status. CPT codes 
31242 and 52284 were issued after publication of the proposed rule and 
have an effective date of January 1, 2024. CPT code 52284 is replacing 
CPT code 0499T (Cystourethroscopy, with mechanical dilation and 
urethral therapeutic drug delivery for urethral stricture or stenosis, 
including fluoroscopy, when performed), which has a device offset 
percentage of 25.33 percent based on the most recent claims data. Since 
the predecessor code of CPT code 52284, CPT code 0499T, would not meet 
our criteria for device-intensive status, we are not accepting the 
commenter's recommendation to assign device-intensive status to CPT 
code 52284 for CY 2024.
    However, CPT code 31242 does not have claims data from a 
predecessor code that may be used to determine a device offset 
percentage. After reviewing the clinical description and 
characteristics of the procedure, we agree with commenters that CPT 
code 31242 meets our requirements to be assigned device-intensive 
status. Therefore, for CY 2024, we are assigning CPT code 31242 device-
intensive with a default device offset percentage of 31 percent.
    Comment: Two commenters requested that we assign the device offset 
percentage for CPT codes 0816T (Open insertion or replacement of 
integrated neurostimulation system for bladder dysfunction including 
electrode(s) (eg, array or leadless), and pulse generator or receiver, 
including analysis, programming, and imaging guidance, when performed, 
posterior tibial nerve; subcutaneous) and 0817T (Open insertion or 
replacement of integrated neurostimulation system for bladder 
dysfunction including electrode(s) (eg, array or leadless), and pulse 
generator or receiver, including analysis, programming, and imaging 
guidance, when performed, posterior tibial nerve; subfascial) using 
claims data from CPT code 64590 (Insertion or replacement of 
peripheral, sacral, or gastric neurostimulator pulse generator or 
receiver, direct or inductive coupling requiring pocket creation and 
connection between electrode array and pulse generator or receiver) 
rather than using the default 31 percent device offset percentage. 
Commenters suggested claims data for CPT code 64590 would provide a 
more accurate device offset amount.
    Response: We are not accepting the commenters' recommendation. 
While we may assign device-intensive status to new procedures that have 
significant device costs, we generally assign the percentage of such 
device costs at 31 percent of total procedure costs until claims data 
become available. However, if there is available claims data from the 
predecessor code of a new procedure or claims data from a clinically 
similar procedure that uses the same device, our current policy allows 
us to use this proxy claims data to establish a device offset 
percentage in lieu of the default 31 percent. We do not agree that CPT 
code 64590 was the predecessor code for either CPT code 0816T or 0817T 
and believe that CPT code 64999 (Unlisted procedure, nervous system) 
was the CPT code previously used when reporting the procedures 
described by the new CPT codes 0816T and 0817T. CPT code 64999 does not 
exceed our device-intensive threshold under the OPPS; and, since this 
CPT code can be used for various types of unlisted procedures, we do 
not believe this procedure would be an accurate reflection of the 
device costs of CPT code 0816T or 0817T. Because 0816T and 0817T do not 
have claims data from a predecessor code or a similar code that uses 
the same device, we are finalizing our proposal to assign the default 
31 percent device offset percentage to CPT codes 0816T and 0817T for CY 
2024.
    Comment: Two commenters requested that we increase the device 
offset for CPT code 0629T (Percutaneous injection of allogeneic 
cellular and/or tissue-based product, intervertebral disc, unilateral 
or bilateral injection, with ct guidance, lumbar; first level) to be in 
alignment with CPT code 0627T (Percutaneous injection of allogeneic 
cellular and/or tissue-based product, intervertebral disc, unilateral 
or bilateral injection, with fluoroscopic guidance, lumbar; first 
level) as both procedures use the same device.

[[Page 81758]]

    Response: We thank the commenters for their suggestion. We stated 
in the CY 2023 OPPS/ASC final rule with comment period (87 FR 71941) 
that we did not have any claims data for CPT code 0629T to determine a 
device offset percentage. Under our current policy, we may assign an 
alternative device offset percentage if we have claims data from a 
clinically similar procedure code that uses the same device. We agreed 
with commenters to apply the device offset percentage from claims data 
for CPT code 0627T to CPT code 0629T for CY 2023 as the procedures are 
clinically similar and utilize the same device. Similarly, for CY 2024, 
because we do not have claims data to determine a device offset 
percentage for CPT code 0629T, we are accepting the commenters' 
recommendation and will continue to use the most recent claims data 
from CPT code 0627T to assign the device offset percentage for CPT code 
0629T.
    Comment: One commenter requested that we reexamine the claims data 
for CPT codes 31296, 31297, and 31298 and designate them as device-
intensive procedures.
    Response: After examining the claims data for CPT codes 31296, 
31297, and 31298, we have determined that the device offset percentages 
for these procedures do not exceed the 30 percent device-intensive 
threshold. Therefore, we are not assigning device-intensive status to 
these procedures for CY 2024.
    The full listing of the final CY 2024 device-intensive procedures 
can be found in Addendum P to this final rule with comment period 
(which is available via the internet on the CMS website). Further, our 
claims accounting narrative contains a description of our device offset 
percentage calculation. Our claims accounting narrative for this final 
rule with comment period can be found under supporting documentation 
for this CY 2024 OPPS/ASC final rule with comment period 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 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 costs 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 proposed to reassign to a new Level 6 
Intraocular APC (APC 5496) in section III.E of the CY 2024 OPPS/ASC 
proposed rule, describe the implantation of 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).

[[Page 81759]]

    We proposed 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 explained that 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 noted that 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 stated that 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 solicited 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.
    Comment: We received one comment in support of the proposed 
procedure-to-device edit for CPT code 0308T. We also received one 
comment in support of the proposed procedure-to-device edits for CPT 
codes 0616T, 0617T, and 0618T.
    Response: We thank the commenters for their support. After 
consideration of the public comments we received, we are finalizing 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.
    Comment: One commenter requested that CMS restore the device-to-
procedure and procedure-to-device edits. The commenter recommended that 
we apply such edits to specific procedures, such as total hip 
arthroplasty or total knee arthroplasty procedures, and require a 
specific device code rather than any device code. We also received one 
comment requesting that we create device-to-procedure edit for HCPCS 
code C9761 and CPT code 0715T due to rejected claims.
    Response: We are not accepting the commenters' recommendations and 
do not believe additional device-to-procedure edits are warranted for 
the situations the commenters described. We are finalizing our proposal 
to reinstate device-to-procedure edits for procedures assigned APC 5496 
(Level 6 Intraocular APC) to improve the payment structure for that APC 
as well as the Intraocular APC family. The high cost, low-volume nature 
of that APC represents a unique situation that we believe would benefit 
from a device-to-procedure edit and place extremely little reporting 
burden on providers. However, as we stated in the CY 2015 OPPS/ASC 
final rule with comment period (79 FR 66794) and have reiterated in 
subsequent rulemaking, we continue to believe that the elimination of 
device-to-procedure edits and procedure-to-device edits is appropriate 
due to the experience hospitals now have in coding and reporting these 
claims fully. Under our current policy, hospitals are still expected to 
adhere to the guidelines of correct coding and append the correct 
device code to the claim when applicable. We believe our current device 
edits policy, which requires that a device code be reported on a claim 
for procedures that have significant device costs, continues to 
accurately capture the device costs associated with device-intensive 
procedures and provides the necessary flexibility to hospitals to code 
claims accurately.
    Comment: One commenter suggested that there is confusion among 
hospitals as to whether to report a device code for certain procedures 
in the HCPCS C-code range and urged CMS establish a device-to-procedure 
edit for all C-code procedures to ensure appropriate device costs are 
collected.
    Response: We thank the commenter for the suggestion; however, we 
believe our current policy already addresses the commenter's concern. 
We are not aware of any provider confusion as to reporting device costs 
for certain device-intensive procedures in the HCPCS C-code range. 
However, if such procedures are assigned device-intensive status, then 
they are subject to our device edits policy; and hospitals would 
already be required to report a device code on the claim when billing 
the procedure code.
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

[[Page 81760]]

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 and 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 
and 79660), for CY 2017 and subsequent years, we finalized a policy to 
reduce OPPS payment for device-intensive procedures, by the full or 
partial credit a provider receives for a replaced device, when a 
hospital furnishes a specified device without cost or with a full or 
partial credit. Under our current policy, hospitals continue to be 
required to report on the claim the amount of the credit in the amount 
portion for value code ``FD'' when the hospital receives a credit for a 
replaced device that is 50 percent or greater than the cost of the 
device.
    In the CY 2014 OPPS/ASC final rule with comment period (78 FR 75005 
through 75007), we adopted a policy of reducing OPPS payment for 
specified APCs when a hospital furnishes a specified device without 
cost or with a full or partial credit by the lesser of the device 
offset amount for the APC or the amount of the credit. We adopted this 
change in policy in the preamble of the CY 2014 OPPS/ASC final rule 
with comment period and discussed it in sub-regulatory 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, 86018, and 86302), we made conforming changes to our 
regulations at Sec.  419.45(b)(1) and (2) that codified this policy.
    We did not propose any changes, and we did not receive any public 
comments related to our policies regarding payment for no cost/full 
credit and partial credit devices for CY 2024.

V. OPPS Payment for Drugs, Biologicals, and Radiopharmaceuticals

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

1. Background
    Section 1833(t)(6) of the Act provides for temporary additional 
payments or ``transitional pass-through payments'' for certain drugs 
and biologicals. Throughout this final rule with comment period, the 
term ``biological'' is used because this is the term that appears in 
section 1861(t) of the Act. A ``biological'' as used in this final rule 
with comment period 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. Final CY 2024 pass-through drugs and 
biologicals and their designated APCs are assigned status indicator 
``G'' in Addenda A and B to this CY 2024 OPPS/ASC final rule with 
comment period (which are available on the CMS website).\137\
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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 this final rule with comment period, 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/payment/fee-for-service-providers/part-b-drugs/average-drug-sales-price.
    The pass-through application \138\ and review process for drugs and 
biologicals

[[Page 81761]]

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    \138\ To apply for OPPS transitional Pass-Through Payment Status 
and New Technology Ambulatory Payment Classification (APC), 
applicants complete an application that is subject to the Paperwork 
Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et seq.). This 
information collection (CMS-10008) is currently approved under OMB 
control number of 0938-0802 and has an expiration date of January 
31, 2025.
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2. Transitional Pass-Through Payment Period for Pass-Through Drugs, 
Biologicals, and Radiopharmaceuticals and Quarterly Expiration of Pass-
Through Status
    As required by statute, transitional pass-through payments for a 
drug or biological described in section 1833(t)(6)(C)(i)(II) of the Act 
can be made for a period of at least 2 years, but not more than 3 
years, after the payment was first made for the drug or biological as a 
hospital outpatient service under Medicare Part B. Our current policy 
is to accept pass-through applications on a quarterly basis and to 
begin pass-through payments for approved pass-through drugs and 
biologicals on a quarterly basis through the next available OPPS 
quarterly update after the approval of a drug's or biological's pass-
through status. However, prior to CY 2017, we expired pass-through 
status for drugs and biologicals on an annual basis through notice-and-
comment rulemaking (74 FR 60480). In the CY 2017 OPPS/ASC final rule 
with comment period (81 FR 79662), we finalized a policy change, 
beginning with pass-through drugs and biologicals approved in CY 2017 
and subsequent calendar years, to allow for a quarterly expiration of 
pass-through payment status for drugs, biologicals, and 
radiopharmaceuticals to afford a pass-through payment period that is as 
close to a full 3 years as possible for all pass-through drugs, 
biologicals, and radiopharmaceuticals.
    This change eliminated the variability of the pass-through payment 
eligibility period, which previously varied based on when a particular 
application was initially received. We adopted this change for pass-
through approvals beginning on or after CY 2017, to allow, on a 
prospective basis, for the maximum pass-through payment period for each 
pass-through drug without exceeding the statutory limit of 3 years. 
Notice of drugs for which pass-through payment status is ending during 
the calendar year is included in the quarterly OPPS Change Request 
transmittals.
3. Drugs and Biologicals With Expiring Pass-Through Payment Status in 
CY 2023
    There are 43 drugs and biologicals for which pass-through payment 
status expires by December 31, 2023, as listed in Table 89. 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 will be $135 for CY 2024), as discussed further in 
section V.B.1 of this final rule with comment period. 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 final rule with comment period.
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    Comment: One commenter requested CMS use its equitable adjustment 
authority to extend the pass-through eligibility period for three 
radiopharmaceuticals whose pass-through payment status will expire 
between September 30, 2023, and December 31, 2023. The commenter stated 
that if CMS does not unpackage diagnostic radiopharmaceuticals in 2024, 
they recommended extending pass-through status through at least CY 2024 
due to the effect of the PHE on claims data used for ratesetting. This 
same commenter supported CMS's policy under which radiopharmaceuticals 
are treated as drugs that are eligible for pass-through status. This 
commenter additionally commended CMS for proposing to continue its 
policy to provide for quarterly expiration of pass-through payment 
status.

[[Page 81765]]

    Response: We thank the commenter for their comment, but we continue 
to believe that the data collected for CY 2024 ratesetting will result 
in the necessary cost data being collected and incorporated into the 
costs for expiring pass-through drugs, biologicals, and devices into 
the procedure APC rate. Therefore, we believe that the claims data used 
in CY 2024 OPPS ratesetting for procedures including these drugs, 
biologicals, and devices with expiring pass-through status is 
sufficient and an additional extension of separate payment to mimic 
pass-through status is neither necessary nor appropriate. We refer 
readers to section IV of the CY 2023 OPPS/ASC final rule with comment 
period (87 FR 71887) for a full discussion of CMS's final decision not 
to provide any additional quarters of separate payment for any drug, 
biological, or device category whose pass-through payment status will 
expire between December 31, 2022, and December 31, 2023. We appreciate 
commenters' support for our policy to treat radiopharmaceuticals as 
drugs that are eligible for drug pass-through status and to continue 
quarterly expiration of pass-through status.
4. Drugs, Biologicals, and Radiopharmaceuticals With Pass-Through 
Payment Status Expiring in CY 2024
    We proposed 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 90. 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 the CY 2024 OPPS/ASC proposed rule (which are available on the CMS 
website).\139\ The APCs and HCPCS codes for these drugs and biologicals 
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 applicable 
OPD fee schedule that the Secretary determines is associated with the 
drug or biological. For CY 2024 and subsequent years, we proposed to 
continue to pay for pass-through drugs and biologicals using the ASP 
methodology, meaning a payment rate based on ASP, WAC, or AWP, as 
applicable. 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 proposed 
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 proposed 
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 explained that we 
do not believe the policies need to be reproposed 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 proposed 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. We 
proposed that this 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 final rule with comment period. We proposed this 
policy because, if not for the pass-through payment status of these 
policy-packaged products, payment for these products would be packaged 
into the associated procedure and therefore, there are associated OPD 
fee schedule amounts for them.
    We proposed to continue to update pass-through payment rates on a 
quarterly basis on the CMS website during CY 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 proposed 
to continue to provide payment for both diagnostic and therapeutic 
radiopharmaceuticals that are granted pass-through payment status based 
on the ASP methodology. As stated earlier, for purposes of pass-through 
payment, we consider radiopharmaceuticals to be drugs under the OPPS. 
Therefore, if a diagnostic or therapeutic radiopharmaceutical receives 
pass-through payment status during CY 2024 or subsequent years, we 
proposed to follow the standard ASP methodology to determine the pass-
through payment rate that drugs receive under section 1842(o) of the 
Act, which is generally ASP plus 6 percent. If ASP data are not 
available for a radiopharmaceutical, we proposed to provide pass-
through payment at WAC plus 3 percent (consistent with our policy in 
section V.B.2.a of the CY 2024 OPPS/ASC proposed rule (88 FR 49680)), 
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.a of this CY 2024 OPPS/ASC 
final rule with comment period. If WAC information also is not 
available, we proposed to provide payment for the pass-through 
radiopharmaceutical at 95 percent of its most recent AWP.
    We refer readers to Table 90 below for the list of drugs and 
biologicals with pass-through payment status expiring during CY 2024. 
We did not receive any public comments on this section.
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5. Drugs, Biologicals, and Radiopharmaceuticals With Pass-Through 
Payment Status Continuing Through CY 2024
    We proposed 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 October 1, 2023, are listed in Table 91. 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 final rule 
with comment period (which are available on the CMS website).\140\
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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 proposed 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 proposed that a $0 pass-
through payment amount would be paid for pass-through drugs and 
biologicals that are not policy-packaged under the

[[Page 81769]]

CY 2024 OPPS or 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 proposed 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 final rule with comment period. We proposed this 
policy because, if not for the pass-through payment status of these 
policy-packaged products, payment for these products would be packaged 
into the associated procedure and therefore, there are associated OPD 
fee schedule amounts for them.
    We proposed to continue to update pass-through payment rates on a 
quarterly basis on our website during CY 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 proposed 
to continue to provide payment for both diagnostic and therapeutic 
radiopharmaceuticals that are granted pass-through payment status based 
on the ASP methodology. As stated earlier, for purposes of pass-through 
payment, we consider radiopharmaceuticals to be drugs under the OPPS. 
Therefore, if a diagnostic or therapeutic radiopharmaceutical receives 
pass-through payment status during CY 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.a of this final 
rule with comment period), 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.a of this final rule with comment period. 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 proposed that the other policies 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 reproposed- annually and should apply for subsequent years until 
such time as we propose to change them.
    The drugs and biologicals that we proposed would have pass-through 
payment status expire after December 31, 2024, are shown in Table 91. 
We did not receive any public comments on this section.
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BILLING CODE 4150-28-C
6. Provisions for Reducing Transitional Pass-Through Payments for 
Policy-Packaged Drugs, Biologicals, and Radiopharmaceuticals To Offset 
Costs Packaged Into APC Groups
    Under the regulation at 42 CFR 419.2(b)(15), nonpass-through drugs, 
biologicals, and radiopharmaceuticals that function as supplies when 
used in a diagnostic test or procedure are packaged in the OPPS. This 
category includes diagnostic radiopharmaceuticals, contrast agents, 
stress agents, and other diagnostic drugs. Also, under the regulation 
at 42 CFR 419.2(b)(16), nonpass-through

[[Page 81775]]

drugs and biologicals that function as supplies in a surgical procedure 
are packaged in the OPPS. This category includes skin substitutes and 
other surgical-supply drugs and biologicals. Finally, under the 
regulation at 42 CFR 419.2(b)(4), anesthesia drugs are packaged in the 
OPPS. As described earlier, section 1833(t)(6)(D)(i) of the Act 
specifies that the transitional pass-through payment amount for pass-
through drugs and biologicals is the difference between the amount paid 
under section 1842(o) of the Act and the otherwise applicable OPD fee 
schedule amount. Because a payment offset is necessary in order to 
provide an appropriate transitional pass-through payment, we deduct 
from the pass-through payment for policy-packaged drugs, biologicals, 
and radiopharmaceuticals an amount reflecting the portion of the APC 
payment associated with predecessor products in order to ensure no 
duplicate payment is made. This amount reflecting the portion of the 
APC payment associated with predecessor products is called the payment 
offset.
    The payment offset policy applies to all policy-packaged drugs, 
biologicals, and radiopharmaceuticals. For a full description of the 
payment offset policy as applied to policy-packaged drugs, which 
include diagnostic radiopharmaceuticals, contrast agents, stress 
agents, and skin substitutes, we refer readers to the discussion in the 
CY 2016 OPPS/ASC final rule with comment period (80 FR 70430 through 
70432). For CY 2024 and subsequent years, as we did in CY 2023, we 
proposed to continue to apply the same policy-packaged offset policy to 
payment for pass-through diagnostic radiopharmaceuticals, pass-through 
contrast agents, pass-through stress agents, and pass-through skin 
substitutes. We proposed 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 reproposed 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 92. We note that in the CY 2024 OPPS/ASC proposed rule (88 FR 
49676), we erroneously labeled these APCs as ``CY 2023'' rather than 
the correct ``CY 2024.''
[GRAPHIC] [TIFF OMITTED] TR22NO23.136

    We proposed to continue to post annually on our website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/annual-policy-files a file that contains the APC offset 
amounts that will be used for that year for purposes of both evaluating 
cost significance for candidate pass-through payment device categories 
and drugs and biologicals and establishing any appropriate APC offset 
amounts. Specifically, the file will continue to provide the amounts 
and percentages of APC payment associated with packaged implantable 
devices, policy-packaged drugs, and threshold packaged drugs and 
biologicals for every OPPS clinical APC.
    Comment: One commenter requested that we establish a ``two-times 
rule'' for diagnostic radiopharmaceuticals since they are packaged into 
the cost of the associated testing or administration procedure. While 
the commenter did not describe their precise goal, it appears they 
support a policy where, if the per-day cost of a diagnostic 
radiopharmaceutical is more than twice the cost of testing or the 
administration procedure where the product would be used, we should use 
our process under the OPPS to create a temporary HCPCS code to describe 
a new testing or administration procedure. The temporary HCPCS code for 
the new testing or administrative procedure would only be used with 
high-cost diagnostic radiopharmaceuticals for which the commenter 
believes payment is not sufficient. The commenter believed creating a 
temporary code for testing or administrative procedures for

[[Page 81776]]

use only with high-cost diagnostic radiopharmaceuticals would better 
reflect the cost of the high-cost diagnostic radiopharmaceutical 
products as lower-cost products would not be billed with, and would 
thus be excluded from the cost of, the test or procedure for which the 
temporary HCPCS would be established.
    Response: Our packaged payment policies for diagnostic 
radiopharmaceuticals are designed to encourage the use of the most 
cost-effective items and services for Medicare beneficiaries. Creating 
separate HCPCS codes for procedures utilizing high-cost diagnostic 
radiopharmaceuticals would segment payment for diagnostic 
radiopharmaceuticals and would reduce the prospective nature of the 
OPPS. We believe that the policy the commenter is suggesting may 
discourage the use of effective, lower-cost products.
    However, we appreciate the comment and will consider it as we 
explore possible changes to our diagnostic radiopharmaceutical payment 
policy, which may include new payment and coding approaches for high-
cost diagnostic radiopharmaceuticals in the outpatient hospital setting 
in future rulemaking. Additionally, please refer to section II.A.3 of 
this final rule with comment period for a discussion of our comment 
solicitation regarding possible new approaches for the payment of 
diagnostic radiopharmaceuticals.
    Comment: One commenter asked for an analysis of how we incorporate 
the cost of diagnostic radiopharmaceuticals with pass-through status 
into the payment for the associated test or administration procedure 
when the pass-through status of the diagnostic radiopharmaceutical 
ends.
    Response: We identify single procedure claims that describe a 
procedure where a diagnostic radiopharmaceutical whose pass-through 
status is ending is used. The separate cost of the diagnostic 
radiopharmaceutical is added to the payment rate of the associated 
single procedure minus any existing drug offset for the service. We 
then calculate the geometric mean cost of all existing claims for the 
associated procedure. In many cases, there may be several diagnostic 
radiopharmaceuticals that can be used with a given procedure. The cost 
of the procedure will reflect the resource cost to perform the 
procedure along with the share of the procedures performed with the 
drug for which pass-through status is ending and the share of other 
diagnostic radiopharmaceuticals that may already be packaged into the 
cost of the associated procedure.
    We advise the commenter to refer to the CY 2024 OPPS final rule 
claims accounting narrative and to section II.A.3 of this final rule 
with comment period for information on how costs from drugs, including 
diagnostic radiopharmaceuticals, and other ancillary services are 
included in the cost of their associated procedures when payment for 
those drugs and ancillary services is packaged.
    Comment: One commenter requested that CMS release a copy of the APC 
offset file with future OPPS/ASC proposed rules to enable the public to 
calculate the percentage of APC payment associated with packaged drug 
costs using APC offset data for the upcoming calendar year.
    Response: We thank the commenter for their suggestion, and we will 
consider it for future rulemaking.
    Comment: One commenter supported keeping four payment levels (APC 
5591 through APC 5594) for the Nuclear Medicine and related services 
APC.
    Response: We appreciate the support of the commenter.
    After consideration of the public comments we received, we are 
finalizing our proposals without modification regarding the APCs where 
drug offsets for policy-packaged drugs or radiopharmaceuticals could 
apply. We are also finalizing our proposal, without modification, to 
continue to annually post a file that contains the APC offset amounts.

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

1. Criteria for Packaging Payment for Drugs, Biologicals, and 
Radiopharmaceuticals
a. Packaging Threshold
    In accordance with section 1833(t)(16)(B) of the Act, the threshold 
for establishing separate APCs for payment of drugs and biologicals was 
set to $50 per administration during CYs 2005 and 2006. In CY 2007, we 
used the four-quarter moving average Producer Price Index (PPI) levels 
for Pharmaceutical Preparations (Prescription) to trend the $50 
threshold forward from the third quarter of CY 2005 (when the Pub. L. 
108-173 mandated threshold became effective) to the third quarter of CY 
2007. We then rounded the resulting dollar amount to the nearest $5 
increment in order to determine the CY 2007 threshold amount of $55. 
Using the same methodology as that used in CY 2007 (which is discussed 
in more detail in the CY 2007 OPPS/ASC final rule with comment period 
(71 FR 68085 and 68086)), we set the packaging threshold for 
establishing separate APCs for drugs and biologicals at $135 for CY 
2023 (87 FR 71960 and 71961).
    Following the CY 2007 methodology, for the CY 2024 OPPS/ASC 
proposed rule, we used the most recently available four quarter moving 
average PPI levels to trend the $50 threshold forward from the third 
quarter of CY 2005 to the third quarter of CY 2024 and rounded 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 indexes including the 
PPI Pharmaceuticals for Human Use (Prescription). Based on these 
calculations using the CY 2007 OPPS methodology, we proposed a 
packaging threshold for CY 2024 of $140.
    Comment: One commenter requested that the drug packaging threshold 
not be increased for CY 2024, but instead be maintained at $135 per 
day. The commenter believes that the level of the drug packaging 
threshold has increased faster over the last several years than the 
rate of increase in OPPS payment rates.
    Response: Consistent with our longstanding policy and practices, 
for the final rule, we recalculated the drug packaging threshold amount 
with updated data for the four-quarter moving average PPI level. When 
we trended the $50 threshold forward from the third quarter of CY 2005 
to the third quarter of CY 2024 and rounded the resulting dollar amount 
($137.36) to the nearest $5 increment, we calculated a threshold amount 
of $135, which is $5 less than our proposed threshold. We note, 
however, that we are not changing the methodology by which we calculate 
the threshold. Rather, recalculating the threshold amount using the 
updated data for the four-quarter moving average PPI level resulted in 
a lower amount that rounded to $135.
    After consideration of the public comments we received and 
consistent with our standard methodology, we are finalizing our 
proposal with modification. We will maintain the drug packaging 
threshold for CY 2024 at $135 per day, as the updated threshold amount 
calculated rounded to the

[[Page 81777]]

nearest $5 increment is now $135, rather than the proposed $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 
final rule with comment period, 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 used the methodology that was described in detail 
in the CY 2006 OPPS proposed rule (70 FR 42723 and 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 final rule with comment period) 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 proposed 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 the CY 2024 OPPS 
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 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 proposed 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 the OPPS CY 2024 proposed rule (which is 
available on the CMS website) \141\ for proposed payment in CY 2024.
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    \141\ https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient.
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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 the CY 2024 OPPS proposed 
rule, we proposed 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 proposed to use these 
data for budget neutrality estimates and impact analyses for the CY 
2024 OPPS proposed rule.
    Payment rates for HCPCS codes for separately payable drugs and 
biologicals included in Addenda A and B of the CY 2024 OPPS 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 the 
CY 2024 OPPS proposed rule to determine their final per day cost.
    Consequently, the packaging status of some HCPCS codes for drugs, 
biologicals, and therapeutic radiopharmaceuticals in the OPPS/ASC 
proposed rule may be different from the same drugs' HCPCS codes' 
packaging status determined based on the data used for this final rule 
with comment period. Under such circumstances, we proposed to continue 
to follow the established policies initially adopted for the CY 2005 
OPPS (69 FR 65780) in order to more equitably pay for those drugs whose 
costs fluctuate relative to the proposed CY 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 proposed 
to apply the following policies to those HCPCS codes for drugs, 
biologicals, and therapeutic radiopharmaceuticals whose relationship to 
the drug packaging threshold changes based on the updated drug 
packaging threshold and on the final updated data:
     HCPCS codes for drugs and biologicals that were paid 
separately in CY 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 81778]]

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.
    We did not receive any public comments on our proposal, and we are 
finalizing our proposal with modification because of the change in the 
amount of the drug packaging threshold that was described in section 
V.B.1.a of this final rule with comment period. We will package items 
with a per day cost less than or equal to $135 and identify items with 
a per day cost greater than $135 as separately payable unless they are 
policy-packaged. In addition, we are finalizing, without modification, 
our proposal to recalculate the mean unit cost for items that do not 
currently have an ASP-based payment rate from all of the CY 2022 claims 
data and updated cost report information available for this CY 2024 
final rule with comment period to determine their final per day cost.
    We also did not receive any public comments on our proposal to 
continue to follow the established policies, initially adopted for the 
CY 2005 OPPS (69 FR 65780), when the packaging status of HCPCS codes 
for drugs, biologicals, and therapeutic radiopharmaceuticals in the 
proposed rule is different from the same drug's HCPCS code's packaging 
status determined based on the data used for the final rule with 
comment period. For CY 2024, we are finalizing these two proposals 
without modification. Please refer to Addendum B to this final rule 
with comment period, which is available on the CMS website, for 
information on the packaging status of drugs, biologicals, and 
therapeutic radiopharmaceuticals.
c. Policy-Packaged Drugs, Biologicals, and Radiopharmaceuticals
    As mentioned earlier in this section, under the OPPS, we package 
several categories of nonpass-through drugs, biologicals, and 
radiopharmaceuticals, regardless of the cost of the products. Because 
the products are packaged according to the policies in 42 CFR 419.2(b), 
we refer to these packaged drugs, biologicals, and radiopharmaceuticals 
as ``policy-packaged'' drugs, biologicals, and radiopharmaceuticals. 
These policies are either longstanding or based on longstanding 
principles and inherent to the OPPS and are as follows:
     Anesthesia, certain drugs, biologicals, and other 
pharmaceuticals; medical and surgical supplies and equipment; surgical 
dressings; and devices used for external reduction of fractures and 
dislocations (Sec.  419.2(b)(4));
     Intraoperative items and services (Sec.  419.2(b)(14));
     Drugs, biologicals, and radiopharmaceuticals that function 
as supplies when used in a diagnostic test or procedure (including, but 
not limited to, diagnostic radiopharmaceuticals, contrast agents, and 
pharmacologic stress agents) (Sec.  419.2(b)(15)); and
     Drugs and biologicals that function as supplies when used 
in a surgical procedure (including, but not limited to, skin 
substitutes and similar products that aid wound healing and implantable 
biologicals) (Sec.  419.2(b)(16)).
    The policy at Sec.  419.2(b)(16) is broader than that at Sec.  
419.2(b)(14). As we stated in the CY 2015 OPPS/ASC final rule with 
comment period: ``We consider all items related to the surgical outcome 
and provided during the hospital stay in which the surgery is 
performed, including postsurgical pain management drugs, to be part of 
the surgery for purposes of our drug and biological surgical supply 
packaging policy'' (79 FR 66875). The category described by Sec.  
419.2(b)(15) is large and includes diagnostic radiopharmaceuticals, 
contrast agents, stress agents, and some other products. The category 
described by Sec.  419.2(b)(16) includes skin substitutes and some 
other products. We believe it is important to reiterate that cost 
consideration is not a factor when determining whether an item is a 
surgical supply (79 FR 66875).
    Comment: One commenter recommended that CMS continue to apply 
radiolabeled product edits to the nuclear medicine procedures to ensure 
that all packaged costs are included on nuclear medicine claims in 
order to establish appropriate payment rates in the future. The 
commenter was concerned that many providers performing nuclear medicine 
procedures are not including the cost of diagnostic 
radiopharmaceuticals used for the procedures in their claim 
submissions. The commenter believes this lack of drug cost reporting 
could be causing the cost of nuclear medicine procedures to be 
underreported and therefore requested that the radiolabeled product 
edits be reinstated.
    Response: We appreciate the commenter's feedback; however, we are 
not reinstating the radiolabeled product edits for nuclear medicine 
procedures, which required a diagnostic radiopharmaceutical to be 
present on the same claim as a nuclear medicine procedure for payment 
to be made under the OPPS. As previously discussed in the CY 2020 OPPS/
ASC final rule with comment period (85 FR 86033 and 86034), the edits 
were in place between CY 2008 and CY 2014 (78 FR 75033). We believe the 
period of time in which the edits were in place was sufficient for 
hospitals to gain experience reporting procedures involving 
radiolabeled products and to become accustomed to ensuring that they 
code and report charges so that their claims fully and appropriately 
reflect the costs of those radiolabeled products. As with all other 
items and services recognized under the OPPS, we expect hospitals to 
code and report their costs appropriately, regardless of whether there 
are claims processing edits in place.
    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 
and 60491), we finalized a policy to make a single packaging 
determination for a drug, rather than an individual HCPCS code, when a 
drug has multiple HCPCS codes describing different dosages because we 
believe that adopting the standard HCPCS code-specific packaging 
determinations for these codes could lead to inappropriate payment 
incentives for hospitals to report certain HCPCS codes instead of 
others. We continue to believe that making packaging determinations on 
a drug-specific basis eliminates payment incentives for hospitals to 
report certain HCPCS codes for drugs and allows hospitals flexibility 
in choosing to report all HCPCS codes for different dosages of the same 
drug or only the lowest dosage HCPCS code. Therefore, we proposed to 
continue our policy to make packaging determinations on a drug-specific 
basis, rather than a HCPCS code-specific basis, for those HCPCS codes 
that describe the same drug or biological but different dosages in CY 
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

[[Page 81779]]

day of the drug or biological in terms of the HCPCS code with the 
lowest dosage descriptor. The following drugs did not have pricing 
information available for the ASP methodology for the CY 2024 OPPS/ASC 
proposed rule; and, as is our current policy for determining the 
packaging status of other drugs, we used the mean unit cost available 
from the CY 2022 claims data to make the proposed packaging 
determinations for them: HCPCS code C9257 (Injection, bevacizumab, 0.25 
mg); HCPCS code J1840 (Injection, kanamycin sulfate, up to 500 mg); 
HCPCS code J1850 (Injection, kanamycin sulfate, up to 75 mg); HCPCS 
code J3472 (Injection, hyaluronidase, ovine, preservative free, per 
1000 usp units); HCPCS code J7100 (Infusion, dextran 40, 500 ml); and 
HCPCS code J7110 (Infusion, dextran 75, 500 ml).
    For all other drugs and biologicals that have HCPCS codes 
describing different doses, we then multiplied the proposed weighted 
average ASP 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 93.
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[GRAPHIC] [TIFF OMITTED] TR22NO23.137

BILLING CODE 4150-28-C
    We did not receive any public comments on our proposal, and we are 
finalizing our proposal with the only modification being that the final 
CY 2024 drug packaging threshold will be $135 per day as described in 
section V.B.1.a. of this final rule with comment period. All other 
parts of the proposal are finalized without modification.
2. Payment for Drugs and Biologicals Without Pass-Through Status That 
Are Not Packaged
a. Payment for Specified Covered Outpatient Drugs (SCODs) and Other 
Separately Payable Drugs and Biologicals
    Section 1833(t)(14) of the Act defines certain separately payable 
radiopharmaceuticals, drugs, and biologicals and mandates specific 
payments for these items. Under section 1833(t)(14)(B)(i) of the Act, a 
``specified covered outpatient drug'' (known as a SCOD) is defined as a 
covered outpatient drug, as defined in section 1927(k)(2) of the Act, 
for which a separate APC has been established and that either is a 
radiopharmaceutical agent or 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

[[Page 81781]]

included in the definition of SCODs. These exceptions are--
     A drug or biological for which payment is first made on or 
after January 1, 2003, under the transitional pass-through payment 
provision in section 1833(t)(6) of the Act.
     A drug or biological for which a temporary HCPCS code has 
not been assigned.
     During CYs 2004 and 2005, an orphan drug (as designated by 
the Secretary).
    Section 1833(t)(14)(A)(iii) of the Act requires that payment for 
SCODs in CY 2006 and subsequent years be equal to the average 
acquisition cost for the drug for that year as determined by the 
Secretary, subject to any adjustment for overhead costs and taking into 
account the hospital acquisition cost survey data collected by the 
Government Accountability Office (GAO) in CYs 2004 and 2005, and later 
periodic surveys conducted by the Secretary as set forth in the 
statute. If hospital acquisition cost data are not available, the law 
requires that payment be equal to payment rates established under the 
methodology described in section 1842(o), section 1847A, or section 
1847B of the Act, as calculated and adjusted by the Secretary as 
necessary for purposes of paragraph (14). We refer to this alternative 
methodology as the ``statutory default.'' Most physician Part B drugs 
are paid at ASP 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.\142\
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    \142\ 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 through 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 through 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 through 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 the CY 2024 OPPS/ASC proposed rule 
(available on the CMS website),\143\ 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 the 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

[[Page 81782]]

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 biologicals in Addenda A and B to the 
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 the 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 the CY 2024 OPPS/ASC proposed rule.
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    \143\ https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient.
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    For CY 2024, we did not propose 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 did, however, propose 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.
    Comment: A few commenters supported separate payment for specific 
drugs, biologicals, and radiopharmaceuticals for CY 2023. Commenters 
also supported CMS paying for all separately payable drugs and 
biologicals as SCODs. Multiple commenters expressed their approval for 
our proposal to pay for separately payable drugs and biologicals at ASP 
plus 6 percent.
    Response: We appreciate the commenters' feedback and support.
    Comment: One commenter requested that an add-on percentage of 
greater than 6 percent of ASP be paid for separately payable 
radiopharmaceuticals to reflect higher overhead and handling costs for 
these products.
    Response: The add-on percentage of 6 percent is generally viewed as 
reflecting the overhead and handling cost of most drugs, 
radiopharmaceuticals, and biologicals that are separately payable in 
the OPPS even though the overhead and handling costs for individual 
products may be higher or lower than 6 percent of the ASP. We believe 
that the add-on percentage of 6 percent is appropriate for separately 
payable radiopharmaceuticals.
    Comment: One commenter requested that we exclude 
radiopharmaceuticals from our proposed policy, explaining that during 
an initial sales period in which cost data for the drug or biological 
are not sufficiently available from the manufacturer, payments can be 
made for drugs using WAC pricing plus a 3 percent price add-on. The 
commenters believe the cost of preparing radiopharmaceuticals is higher 
than the cost of preparing other drugs and biologicals and a 6 percent 
price add-on should be required anytime that we use WAC to price a 
radiopharmaceutical.
    Response: The WAC of a drug or biological is defined in section 
1847A(c)(6)(B) of the Act as the manufacturer's list price for the drug 
or biological to wholesalers or direct purchasers in the United States, 
not including prompt pay or other discounts, rebates or reductions in 
price, for the most recent month for which the information is 
available, as reported in wholesale price guides or other publications 
of drug or biological pricing data. Because the WAC does not include 
discounts, it typically exceeds ASP, and the use of a WAC-based payment 
amount for the same drug results in higher dollar payments than the use 
of an ASP-based payment amount. Also, MedPAC, in their June 2017 Report 
to the Congress (https://www.medpac.gov/wp-content/uploads/import_data/scrape_files/docs/defaultsource/reports/jun17_reporttocongress_sec.pdf), suggested that greater parity between ASP-based acquisition 
costs and WAC-based payments for Part B drugs could be achieved and 
recommended changing the 6 percent add-on for WAC-based payments to 3 
percent. Given this evidence that WAC pricing tends to overestimate 
drug cost, we believe our current policy to pay for drugs at WAC plus 3 
percent for drugs, biologicals, and radiopharmaceuticals when ASP is 
not available more accurately reflects the cost of new products 
recently entering the market than does WAC plus 6 percent.
    For CY 2024, we did not propose 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 did, however, propose 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. After consideration of the 
comments received, we are finalizing the proposal without modification.
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 product for 
a period of 5 years. We implemented section 11403 of the IRA under 
program instruction,144 145 as permitted under section 
1847A(c)(5)(C) of the Act.
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    \144\ https://www.cms.gov/files/document/r11496cp.pdf.
    \145\ https://www.cms.gov/medicare/payment/fee-for-service-providers/part-b-drugs/average-drug-sales-price.
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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 are 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

[[Page 81783]]

payment methodology in effect on November 1, 2003, or (2) 106 percent 
of the lesser of the WAC or ASP of the reference product, or in the 
case of a selected drug during a price applicability period, 106 
percent of the maximum fair price of the reference product. We referred 
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 (88 FR 52384 and 52385).
    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.\146\ 
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 product 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 product'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 
referred 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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    \146\ 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 and 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 proposed 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 
proposed 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 proposed 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 proposed to codify the 
requirements in sections 1847A(c)(4)(A) and 1847A(b)(8)(B)(iii). We 
referred readers to the PFS proposed rule for more information about 
those proposed regulations.
    We did not receive any public comments on our proposal and, for CY 
2024, we are finalizing as proposed our proposal that the OPPS payment 
amount 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 will be the amount determined under 
section 1847A, subject to the temporary payment increase under section 
1847A(b)(8)(B)(iii). For CY 2024, we are finalizing as proposed our 
proposal 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 final 
regulation text cross-references the regulation text included in the 
PFS final rule, which codifies the requirements in sections 
1847A(c)(4)(A) and 1847A(b)(8)(B)(iii). We refer readers to the PFS 
final rule for more information about those regulations.
(2) Proposal To Except Biosimilars From the OPPS Packaging Threshold 
When Their Reference Products Are Separately Paid
    Medicare Part B spending for biologicals and biosimilars has 
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.\147\ 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.\148\ 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.\149\
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    \147\ 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.
    \148\ 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.
    \149\ 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 product's ASP.\150\ 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

[[Page 81784]]

increased the payment limit for certain biosimilars.
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    \150\ 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 products. For CY 2016 and CY 
2017, we finalized a policy to pay for biosimilar biological products 
based on the payment allowance of the product as determined under 
section 1847A of the Act and to subject nonpass-through biosimilar 
biological products to our annual threshold-packaged policy (for CY 
2016, 80 FR 70445 and 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 through 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 product 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 nonpass-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 product 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 products. Accordingly, for CY 2024, we proposed to except 
biosimilars from the OPPS threshold packaging policy when their 
reference products 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 products are separately paid would 
preserve our policy intent to promote biosimilar use as a lower cost 
alternative to higher cost reference products.
    In addition, if a reference product's per-day cost falls below the 
threshold packaging policy, we proposed 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 product. For the purpose of identifying biosimilar(s) related 
to a reference product, we would rely on the product's FDA approval 
under section 351(k) of the Public Health Service Act. For example, 
filgrastimsndz (Zarxio), filgrastim-aafi (Nivestym), and filgrastim-
ayow (Releuko-) are biosimilars related to filgrastim (Neupogen).\151\
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    \151\ https://purplebooksearch.fda.gov/results?query=filgrastim&title=Zarxio.
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    Comment: Several commenters expressed support for our proposal to 
except biosimilars from the drug packaging threshold when their 
reference products are separately paid and not packaged.
    Response: We thank the commenters for their support to except 
biosimilars from the current threshold packaging policies when their 
reference product is above the threshold and paid separately. As stated 
earlier, 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 products. Our threshold packaging 
policy's intent is to create incentives for efficiency, but we have 
concerns that packaging biosimilars when the reference product or other 
marketed biosimilars are separately paid may create financial 
incentives for providers to select more expensive, but clinically 
similar, products. We believe the threshold packaging exception for 
biosimilars when their reference products are separately paid would 
preserve our policy intent to promote biosimilar use as a lower cost 
alternative to higher cost reference products.
    Comment: Commenters generally opposed our proposal to package 
payment for biosimilar(s) when its reference product is below the drug 
packaging threshold and packaged. The commenters contended the current 
threshold packaging policy imposes inflationary pressure on drug costs 
by incentivizing manufacturers to maintain the ASP above the packaging 
threshold to ensure separate payment while providers are incentivized 
to select the higher cost biologicals for a similar reason.
    Response: We thank the commenters for their insights on this 
subject. The threshold-packaging policy's intent is to create 
incentives for efficiency. We proposed the threshold-packaging 
exception for biosimilars when its reference product is separately paid 
to remove the financial incentives for providers to select a more 
expensive biological. We believe there are merits to our proposal to 
package biosimilars when their reference product's per day cost is 
below the drug packaging threshold and payment for the reference 
product is packaged. We believe this corresponding policy proposal 
would also remove the financial incentive to use the more expensive 
biologic, in this scenario, the biosimilar(s) (the more

[[Page 81785]]

expensive and separately paid product) when its reference product falls 
below the packaging threshold. At the same time, we acknowledge that 
the scenario of the per day cost of a reference product falling below 
the packaging threshold while the per day cost of a biosimilar remains 
above the packaging threshold has not yet occurred. For this reason, 
for CY 2024, we are not finalizing our proposal to package 
biosimilar(s) when their related reference product's per day cost is 
below the drug packaging threshold and payment for the reference 
product is packaged. We will continue to monitor Part B drug 
utilization and spending for biologicals and potentially revisit this 
issue in future rulemaking.
    Comment: We received several comments requesting that the policy of 
excepting biosimilars from the OPPS drug packaging threshold be applied 
retroactively beginning with CY 2023. One commenter indicated that 
making this policy change retroactive to CY 2023 would support the 
continued use of biosimilars.
    Response: Under the statute, retroactive rulemaking authority is 
reserved for certain special circumstances that do not apply here. We 
believe it would be inappropriate to apply our retroactive rulemaking 
authority under section 1871(e)(1)(A) of the Act in this case.
    Comment: Some commenters recommended that CMS categorically exempt 
reference and biosimilar biological products from its threshold 
packaging policy. The commenters believed the threshold packaging 
policy imposes inflationary pressures on drug costs by incentivizing 
manufacturers to price their products above the packaging threshold 
and, as a result, incentivizing providers to switch to those products 
above the packaging threshold, which would be paid separately.
    Response: We thank the commenters for their comment. We believe our 
threshold packaging policy encourages efficiency and is an essential 
component of a prospective payment system. However, we will continue to 
review new policy ideas that promote the use of biosimilars as a less 
expensive alternative to their reference products for future 
rulemaking.
    Comment: One commenter stated the best policy is to treat 
biosimilars and their reference product similarly by either packaging 
all of them or paying separately for all of them. The commenter stated 
that if any one of the related products (a biosimilar or reference 
product) is below the packaging threshold, it would be appropriate to 
package all of them. Conversely, the commenter believed biosimilars and 
their reference products should be separately payable only if the per 
day costs of all of the products exceed the packaging threshold.
    Response: We thank the commenter for their feedback. As mentioned 
above, we believe the threshold packaging exception for biosimilars 
when their reference products are separately paid is consistent with 
our broader policy intent to promote biosimilar use as a lower cost 
alternative to higher cost reference products. However, we will not 
finalize our proposal to package biosimilar(s) when their related 
reference product's per day cost is below the drug packaging threshold 
and payment for the reference product is packaged for CY 2024.
    After consideration of the public comments we received, we are 
finalizing our proposal with modification. Specifically, we are 
finalizing the exception of biosimilars from the OPPS threshold 
packaging policy when their reference products are separately paid, 
meaning for CY 2024, we would pay separately for these biosimilars even 
if their per-day cost is below the threshold packaging policy. We 
believe creating a threshold-packaging exception for biosimilars when 
their reference products are separately paid will remove the financial 
incentive to use a more expensive separately payable biologic and 
preserve our policy intent to promote biosimilar use as a lower cost 
alternative to higher cost reference products. However, we believe our 
policy proposal to package biosimilar(s) when the reference product's 
per-day cost falls below the packaging threshold would be unnecessary 
at this time since this scenario has not yet occurred. We will examine 
the claims data, monitor Part B drug utilization and spending for 
biologics, and address this issue in future rulemaking if necessary.
(3) Comment Solicitation on Packaging Policy for Reference Products and 
Biosimilars
    While we proposed to except biosimilars from the threshold 
packaging policy when their reference products are separately paid, we 
also solicited comment on the packaging of payment for a reference 
product and its biosimilar(s) into the payment for the associated 
service or procedure when the per-day cost of the reference product, 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 product is paid separately, whereas here 
we sought comment on a policy that would result in packaged payment for 
a biologic if the reference product 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 sought comment on other ways to structure payment 
for biologicals and biosimilars that would encourage efficiency while 
maintaining beneficiary access.
    Comment: Commenters generally opposed our comment solicitation to 
package payment for biosimilar(s) and the reference product when the 
per-day cost of any of the products fall below the packaging threshold.
    Response: At this time, we are only finalizing our proposed policy 
to except biosimilars from the OPPS threshold-packaging policy when 
their reference products are separately paid, meaning that CMS will pay 
separately for these biosimilars even if their per-day cost falls below 
the cost threshold of the threshold-packaging policy. At this time, we 
are not implementing a policy that packages payment for reference 
products and biosimilars if the per-day cost of any product drops below 
the OPPS drug packaging threshold. It is important to note that we have 
not yet encountered a situation where the per-day cost of the reference 
product is below the packaging threshold and the per-day cost of 
biosimilar products is above the packaging threshold. CMS will continue 
to monitor payment and utilization patterns as well as overall Part B 
spending for biosimilars and their reference products and address any 
problematic pricing trends that may develop in future rulemaking.
    Comment: MedPAC stated that if any one of the products (the 
biosimilar or reference product) is below the packaging threshold, they 
should all be treated similarly and packaged, and that biosimilar 
products and their reference product should be separately payable only 
if the cost of all of the products exceeds the packaging threshold.
    Response: We thank MedPAC for their response to this comment 
solicitation. As mentioned above, we believe our final policy to except 
biosimilars from the OPPS threshold-packaging policy when their 
reference products are

[[Page 81786]]

separately paid will remove the financial incentive to use a more 
expensive separately payable biological. We believe this policy is 
consistent with broader agency goals of promoting biosimilars as a 
lower cost alternative to higher cost reference products.
    Comment: One commenter appreciated that we solicited comments on 
alternative methods to structure payments for biosimilars. The 
commenter noted that the current ASP-based payment methodology for 
biosimilars has resulted in declining provider reimbursement that may 
disincentivize use of these products.
    Response: We thank the commenter for sharing their concerns. We do 
not have any data to support the assertion that the current ASP-based 
payment methodology for biosimilars has resulted in declining provider 
reimbursement that may disincentivize provider use. We reiterate that 
the ACA requires the ASP add-on for biosimilars to be 6 percent of the 
reference product's ASP. Additionally, section 11403 of the IRA amended 
section 1847A(b)(8) of the Act by establishing a temporary payment 
limit increase for qualifying biosimilar biological products of ASP 
plus 8 percent of the reference product's ASP rather than 6 percent 
during the applicable 5-year period. Consistent with these authorities 
and with the policy we are finalizing to except biosimilars from the 
threshold packaging policy when their reference products are separately 
paid, we seek to promote the use of biosimilars as a less expensive 
alternative to their reference products, to provide more options to 
patients and physicians, and to encourage competition to provide a 
robust and comprehensive selection of choices for patients at a fair 
price.
    Comment: One commenter urged CMS to work with stakeholders to 
develop new payment approaches for Part B biosimilars to ensure 
sustainability.
    Response: We thank the commenter, and we believe in a strong 
working relationship with the interested parties on Part B issues. We 
continue to believe that biosimilars are a less expensive alternative 
to their reference products. For CY 2016 and CY 2017, we finalized a 
policy to provide for the separate coding and payment for products 
approved under each individual abbreviated application, rather than 
grouping all biosimilars with a common reference product into codes (80 
FR 70445 and 70446 and 81 FR 79674). Additionally, as required by 
section 11403, we established a temporary payment limit increase for 
qualifying biosimilar biological products of ASP plus 8 percent of the 
reference product's ASP rather than 6 percent during the applicable 5-
year period. We believe that these policies together will encourage 
greater manufacturer participation in the marketplace and the 
introduction of more biosimilar products, thus driving competition and 
providing savings in the long term.
    Comment: One commenter urged CMS to consider how the Agency can 
encourage other payers to similarly promote biosimilars.
    Response: We thank the commenter, but we note this comment is out 
of scope for this final rule.
    We thank commenters for their valuable feedback, and we will 
continue to explore policy ideas to increase healthcare efficiency and 
promote biosimilar use in future rulemaking.
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, this payment policy for therapeutic radiopharmaceuticals 
continues to apply 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 and 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 and 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 the CY 2024 OPPS/ASC proposed rule (which are available on the CMS 
website).\152\
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    \152\ https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient.
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    We did not receive any public comments on our payment policy for 
therapeutic radiopharmaceuticals or our proposed CY 2024 final payment 
rates for nonpass-through, separately payable therapeutic 
radiopharmaceuticals, and we are finalizing our proposed rates without 
modification.
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 and 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 for CY 2023 and subsequent years a policy 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

[[Page 81787]]

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/payment/fee-for-service-providers/part-b-drugs/average-drug-sales-price.
    We did not receive any public comments on our proposed payment 
policy for blood clotting factors and are finalizing our proposal 
without modification. For CY 2024, we will continue to pay for blood 
clotting factors using the same methodology as other separately payable 
drugs and biologicals under the OPPS and will continue to pay an 
updated furnishing fee. We will announce the actual figure of the 
percent change in the applicable CPI and the updated furnishing fee 
calculation based on that figure through the applicable program 
instructions and posting on the CMS website.
5. Payment for Nonpass-Through Drugs, Biologicals, and 
Radiopharmaceuticals With HCPCS Codes But Without OPPS Hospital Claims 
Data
    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. Therefore, for CY 2024, this policy will continue to apply. 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 and 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 one day in the 
hospital outpatient setting and utilized the ASP methodology to 
determine whether their payment will be packaged as well as their 
payment status indicators. We refer readers to Table 94 below for the 
final 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 rule 
on the CMS website.\153\
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    \153\ https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient.
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BILLING CODE 4150-28-P

[[Page 81788]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.126


[[Page 81789]]


[GRAPHIC] [TIFF OMITTED] TR22NO23.127

BILLING CODE 4150-28-C
    We did not receive any specific public comments regarding our 
payment for non-pass-through drugs, biologicals, and 
radiopharmaceuticals with HCPCS codes but without OPPS hospital claims 
data. For CY 2024, we will continue to assign drug or biological 
products status indicator ``K'' and pay for these products separately 
for the remainder of CY 2024 if pricing information becomes available. 
The CY 2024 payment status of each of the nonpass-through drugs, 
biologicals, and radiopharmaceuticals with HCPCS codes but without OPPS 
hospital claims data is listed in Addendum B to this final rule with 
comment period, which is available on the CMS website.
6. OPPS Payment Methodology for 340B Purchased Drugs 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 \154\ and MedPAC 
\155\ 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 
through 52511).
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    \154\ 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.
    \155\ 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

[[Page 81790]]

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 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.\156\
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    \156\ Vacating Differential Payment Rate for 340B-Acquired Drugs 
in 2022 Outpatient Prospective Payment System Final Rule with 
Comment Period. https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient.
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    Comment: Many commenters supported our proposal to continue to pay 
a rate of ASP plus 6 percent, or equivalent, for 340B-acquired drugs 
and biologicals. Several commenters acknowledged the benefit of the 
340B program for their particular hospital and reiterated their belief 
that CMS should maintain the same payment rate for 340B-acquired drugs 
and those drugs not acquired through the 340B program. When explaining 
the benefit of the 340B program, one commenter asked CMS to work with 
HRSA, Congress, and others to protect the 340B program.
    Response: We thank commenters for their support. We note that the 
340B Drug Pricing Program is a program administered by HRSA and 
comments regarding its administration are outside the scope of this 
final rule with comment period.
    Comment: Some commenters believed that CMS should not continue the 
increased ASP plus 6 percent payment rate for 340B-acquired drugs. 
These commenters believed that this would increase out-of-pocket costs 
for beneficiaries for these drugs and were concerned about the benefit 
of the 340B drug pricing program to vulnerable patients. One commenter 
spoke about the perverse incentive that the significant difference 
between 340B drug acquisition costs and the Medicare payment rate 
creates. The commenter was concerned that this incentive could further 
exacerbate the issue of increased drug spending and drug prices. 
Several commenters encouraged CMS to take appropriate steps to curtail 
payments that are significantly greater than the rate at which 
hospitals acquire 340B drugs and noted that a survey of hospital 
acquisition costs could help CMS achieve significant drug savings. 
Similarly, one commenter believed that CMS's proposed policy would be 
paying hospitals close to 50 percent more than their 340B drug 
acquisitions costs and that CMS has already determined that a generous 
reimbursement rate for 340B-acquired drugs would be ASP minus 28.7 
percent per a previous drug acquisition cost survey. This commenter was 
concerned that CMS was ignoring the Supreme Court ruling that, in their 
view, stated that the CMS could vary reimbursement rates based on 
survey data and that payment rates based on ASP plus 6 percent were 
arbitrary. There were also concerns from this commenter that CMS 
violated the Administrative Procedure Act by not acknowledging and 
using this survey data to inform payment rates.
    Response: We thank the commenters for their viewpoints expressed 
here and for their suggestions regarding drug cost surveys. For CY 
2024, we are continuing our policy to apply to longstanding payment 
methodologies for 340B-acquired drugs that existed prior to CY 2018. In 
the CY 2021 OPPS/ASC final rule with comment period, we adopted as 
final our proposal to continue the Medicare payment policy for 340B 
drugs in place at that time (that is, the policy to pay a general rate 
of ASP minus 22.5 percent), rather than finalizing our alternative 
proposal to pay for 340B drugs at a rate of ASP minus 28.7 percent 
based on survey data (86 FR 63646 through 63648). We stated that while 
we believed our methods to conduct the 340B drug acquisition cost 
survey referenced in that rule, as well as the methodology we used to 
calculate the proposed average or typical discount received by 340B 
entities on 340B drugs, were valid, we nonetheless recognized that we 
received many comments on that survey from stakeholders. We noted that 
using survey data is complex, and we emphasized that we wished to 
continue to evaluate how to balance and weigh the use of survey data, 
the necessary adjustments to the data, and the weighting and 
incorporation of ceiling prices--all to determine how best to take the 
relevant factors into account for potentially using the survey to set 
Medicare OPPS drug payment policy (86 FR 63646). Since the CY 2021 
OPPS/ASC final rule with comment period was issued, the Supreme Court 
held that because CMS had not conducted a survey of hospitals' 
acquisition costs, it could not vary the payment rates for outpatient 
prescription drugs by hospital group. See Am. Hosp. Ass'n v. Becerra, 
142 S. Ct. 1896, 1906 (2022). We are concerned that using data from the 
2020 survey, which surveyed only 340B hospitals, might not comport with 
the Supreme Court's decision.
    We are also mindful of the burden surveys place on hospitals and 
CMS, should we decide to conduct an updated survey. The survey we 
previously conducted was just a survey of 340B hospitals; we did not 
conduct a survey of additional hospital groups at that time. And while 
that more limited survey placed a certain burden on 340B providers (a 
comment we received at the time), a survey of all hospital groups would 
be a much larger, more complex endeavor. According to the GAO hospitals 
survey in 2005, surveys may be useful on occasion to validate 
ratesetting data CMS receives, such as ASP. However, they also create 
significant work for hospitals and CMS as the data collector. For these 
reasons, GAO recommended that CMS survey hospitals only occasionally to 
validate hospital acquisition costs. We are mindful of these concerns 
but will take the commenters' feedback regarding a survey of hospital 
drug acquisition costs into consideration as we consider potential 
future rulemaking.
    After a consideration of comments received, for CY 2024, we are 
finalizing the general payment rate of ASP plus 6 percent as the 
default payment rate for drugs and biologicals acquired under the 340B 
program and will pay for these drugs and biologicals no differently 
than we pay for those drugs and biologicals that are not acquired under 
the 340B program.
    We note that many commenters also referenced the 340B Remedy 
proposed rule (88 FR 44078) in their comments. We note that these 
comments were out of scope for purposes of this CY 2024 OPPS/ASC final 
rule with comment period; however, the 340B Remedy final rule publishes 
in the Federal Register of November 8, 2023 (FR Doc. 2023-24407), and 
the summaries of and our responses to the public comments can be found 
on the CMS OPPS website.\157\

[[Page 81791]]

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 of 2023, CMS published a proposed rule, referred to as the 
``remedy proposed rule'' to address the reduced payment amounts to 340B 
hospitals under the reimbursement rates in effect 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 or 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 (88 FR 44078) for a full 
description of the proposed remedy policy as well as the 340B Remedy 
final rule.
c. CY 2024 Proposed 340B Drug Payment Policy
    For CY 2024, consistent with our policy finalized for CY 2023, we 
proposed 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.\158\ 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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    \158\ 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 
believed the 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 proposed 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 noted 
that the proposal, if finalized, would update the December 20, 2022, 
guidance titled ``Part B Inflation Rebate Guidance: Use of the 340B 
Modifiers.'' \159\ 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 the modifier 
requirement changes for 340B covered entity hospitals paid under the 
OPPS.
---------------------------------------------------------------------------

    \159\ https://www.cms.gov/files/document/part-b-inflation-rebate-guidance340b-modifierfinal.pdf.
---------------------------------------------------------------------------

    For more information on the Medicare Part B inflation rebate 
program, please visit ``Inflation Rebates in Medicare'' at https:// 
www.cms.gov/inflation-

[[Page 81792]]

reduction-act-and-medicare/inflation-rebates-medicare.
    Comment: Commenters generally opposed the continued requirement to 
report the 340B modifiers, citing the administrative burden associated 
with the required reporting. Commenters believed CMS should abandon the 
requirement of any 340B modifiers after the Supreme Court decision that 
the 340B drug payment policy was unlawful.
    Response: We thank the commenters for their feedback. We reiterate 
that the 340B modifier requirement is to identify and exclude 340B-
acquired drugs and biologicals from the definition of units for the 
purpose of Part B inflation rebate liability. We note that the 
requirement for the 340B modifier(s) was not the subject of the Supreme 
Court 340B decision. We believe it is appropriate to consolidate the 
340B modifier to a single modifier, which will allow for greater 
operational simplicity to achieve the IRA policy objective.
    Comment: A commenter requested that CMS clarify the purpose for the 
continued requirement of a 340B modifier. The commenter stated the CY 
2024 OPPS/ASC proposed rule on this subject is unclear if the only 
purpose of the modifier is for implementing the Inflation Reduction Act 
requirements related to Part B inflation rebates.
    Response: We thank the commenter for their feedback. We reiterate 
the purpose of the 340B modifier requirement is to is to identify and 
exclude 340B-acquired drugs and biologicals from the definition of 
units for the purpose of Part B inflation rebate liability.
    Comment: Commenters stated that the 340B modifier requirement 
presents a considerable administrative burden for 340B hospitals, 
demanding substantial staff time and resources. One commenter explained 
that hospital pharmacists devote significant time to determining if new 
drug codes require the 340B modifier. Once the drugs have been 
identified, the pharmacists must then communicate with other 
departments to ensure the drugs are properly coded and billed. This is 
in addition to the regular self-audits pharmacists perform. Some 
commenters stated that reporting only one 340B modifier could 
eventually be less burdensome (by reducing potential confusion) than 
the current two modifiers. However, they noted that hospitals currently 
billing with the ``JG'' modifier will still be required to change their 
processes and bill using the ``TB'' modifier by January 1, 2025, 
presenting an additional unnecessary administrative burden. The 
commenters stated it is not necessary for CMS to collect the 
information via the 340B modifier(s) in order to comply with the IRA 
and that CMS could exclude all drug claims with the status indicator 
``K'' that are billed by 340B hospitals from the IRA rebate 
calculations as a less burdensome alternative.
    Response: We thank commenters for their feedback. As mentioned 
above, we note that this continued requirement for the 340B modifier is 
to identify and exclude 340B-acquired drugs and biologicals from the 
Part B inflation rebate liability. Many 340B hospitals have been 
reporting the 340B modifiers since CY 2018, and many hospitals already 
report a modifier through their State Medicaid program. We believe that 
the continued requirement for a single 340B modifier on outpatient 
claims for 340B-acquired drugs would promote consistency between the 
two programs.
    We disagree with commenters that CMS could accurately exclude 340B 
drugs from the IRA rebate calculation without imposing a burden on 340B 
providers. Some 340B covered entities provide healthcare services to 
both 340B and non-340B patients, and the payment status indicator ``K'' 
does not differentiate between340B and non-340B claims. Therefore, the 
340B modifier is needed to identify 340B drugs.
    Comment: Some commenters supported the requirement of a single 340B 
modifier and agreed a single modifier will simplify the identification 
of 340B drugs or biologicals and help support reducing duplicate 
discounts and diversion. They also stated that their study showed 340B 
participating rural referral centers and sole community centers 
reported only 61 percent of Part B separately payable products with the 
applicable 340B modifiers. The commenters noted that there is no 
penalty for 340B providers that choose not to comply with the policy 
and recommended that CMS establish a robust audit process with 
appropriate penalties to deter abuses of the 340B program. They also 
suggested CMS adopt a ``non-340B'' modifier to enhance enforcement of 
the policy to report the appropriate modifier, thereby reducing 
duplicate discounts and diversion.
    Response: We thank the commenters for their feedback. We are not 
aware that covered entities are underreporting 340B claims. We note 
that some 340B covered entities often provide healthcare services to 
both 340B and non-340B patients, but it is their responsibility to 
submit accurate claims. Under the False Claims Act 31, U.S.C. 3729-
3733, Medicare has the authority to fine providers who knowingly, 
willfully, and repeatedly bill inaccurately coded claims. Providers are 
required to maintain current knowledge of Medicare billing policies and 
to submit accurate claims. Providers are also required to maintain all 
documentation to support the validity of the services reported on the 
claim and ensure this information is available upon request.
    We noted that we had received a similar suggestion for a ``non-
340B'' modifier in the CY 2018 OPPS/ASC final rule with comment period 
(82 FR 52508 and 52509). We disagree with the commenters and as noted 
in the 2018 OPPS/ASC final rule with comment period, we believe a 
consistent application of the modifier being required for a drug that 
was purchased under the 340B Program instead of a drug not purchased 
under the 340B Program will help improve program integrity by helping 
ensure that hospitals are not receiving ``duplicate discounts'' through 
both the Medicaid rebate program and the 340B Program.
    After consideration of the public comments we received, we are 
finalizing our proposal without modification to require that all 340B 
covered entity hospitals paid under the OPPS report the ``TB'' modifier 
effective January 1, 2025, even if the hospital previously reported the 
``JG'' modifier, for 340B-acquired drugs and biologicals. We believe 
the transition to a single 340B modifier ``TB'' will allow for greater 
simplicity, especially because both modifiers are used for the same 
purpose 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. We believe this policy will reduce the 
burden on providers as they would only have to report one modifier for 
all scenarios in which a 340B drug is acquired. The ``JG'' modifier 
will remain effective through December 31, 2024. Hospitals that 
currently report the ``JG'' modifier may choose to continue to use it 
in CY 2024 or choose to transition to use of the ``TB'' modifier 
sooner, provided all hospitals are using the ``TB'' modifier by January 
1, 2025.
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

[[Page 81793]]

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) (Addenda A and B are available on the CMS 
website: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices).
    We have continued the high-cost/low-cost categories policy since CY 
2014, and we proposed 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 and 
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 59347); the CY 2019 OPPS/ASC final rule 
with comment period (83 FR 58967 and 58968); and the CY 2020 OPPS/ASC 
final rule with comment period (84 FR 61328 through 61331).
b. Proposals for Packaged Skin Substitutes for CY 2024
    For CY 2024, consistent with our policy since CY 2016, we proposed 
to continue to determine the high-cost/low-cost status for each skin 
substitute product based on either a product's geometric MUC exceeding 
the geometric MUC threshold or the product's PDC (the total units of a 
skin substitute multiplied by the MUC and divided by the total number 
of days) exceeding the PDC threshold. Consistent with the methodology 
as established in the CY 2014 OPPS/ASC through CY 2018 OPPS/ASC final 
rules with comment period, we analyzed CY 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'

[[Page 81794]]

PDCs). The proposed CY 2024 MUC threshold was $47 per cm\2\ (rounded to 
the nearest $1) and the proposed CY 2024 PDC threshold was $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 proposed to assign each skin 
substitute that exceeds either the MUC threshold or the PDC threshold 
to the high-cost group. In addition, we proposed to assign any skin 
substitute that does not exceed either the MUC threshold or the PDC 
threshold to the low-cost group except that we proposed that any skin 
substitute product that was assigned to the high-cost group in CY 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 proposed to continue to assign skin substitutes 
with pass-through payment status to the high-cost category. We proposed 
to assign skin substitutes with pricing information but without claims 
data to calculate a geometric MUC or PDC to either the high-cost or 
low-cost category based on the product's ASP plus 6 percent payment 
rate as compared to the MUC threshold. If ASP is not available, we 
proposed 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 proposed to use 95 percent of AWP to assign a skin 
substitute to either the high-cost or low-cost category. We proposed to 
continue to use WAC plus 3 percent instead of WAC plus 6 percent to 
conform to our proposed policy described in section V.B.2.b of the CY 
2024 OPPS/ASC 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 proposed 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).
    Comment: The HOP Panel recommended, and several commenters 
supported, ending the packaging of the graft skin substitute 
administration add-on codes (CPT codes 15272, 15274, 15276, and 15278; 
HCPCS codes C5272, C5274, C5276, and C5278). The HOP Panel and the 
commenters requested that these codes be assigned to APCs that reflect 
the estimated costs of these service codes. Commenters claim that 
packaging the graft skin substitute administration add-on codes 
eliminates the variation in payment for wound care treatments based on 
the size of the wound. They assert that providers are discouraged from 
treating wounds between 26 and 99 cm\2\ and over 100 cm\2\ in the 
outpatient hospital setting because of the financial losses they 
experience to provide such care. Commenters believe that packaging 
graft skin substitute administration add-on codes disrupts the 
methodology of how the American Medical Association (AMA), the 
organization that manages CPT service codes, intended graft skin 
substitute procedures to be paid. The CPT codes describe the actual 
amount of the graft skin substitute product that is used for an 
individual service when the amount of product used is 25 cm\2\ or more. 
Commenters request that providers receive additive payment for the 
actual amount of skin substitute product used for the individual 
service as described by both the procedure code and the associated add-
on code.
    Response: We do not agree with the HOP Panel or the commenters that 
we should pay separately for graft skin substitute add-on codes under 
the OPPS. The OPPS is a prospective payment system and not a fee-for-
service payment system. That means that we generally attempt to make 
one payment for all of the services billed with the primary medical 
procedure, including add-on procedures such as the ones described by 
CPT codes 15272, 15274, 15276, and 15278, and HCPCS codes C5272, C5274, 
C5276, and C5278.
    More specifically, we calculate the OPPS payment rate by first 
calculating the geometric mean cost of the procedure. This calculation 
includes claims for individual services that used a lower level of 
resources and claims for individual services that used a higher level 
of resources. The resulting geometric mean cost will reflect the median 
service cost for a given medical procedure. Next, we group the medical 
procedure with other medical procedures with clinical and resource 
similarity in an APC and calculate the geometric mean of these related 
procedures to generate a base payment rate for all procedures assigned 
to the APC. Skin substitutes are surgical supplies and are packaged 
into the cost of the associated procedure. The application of graft 
skin substitutes cannot occur unless a graft skin substitute is used. 
So, the cost of the product will be reflected in the overall cost of 
the application procedure.
    A prospective payment system like the OPPS is designed to pay 
providers the median cost of the primary service they provide, and such 
a system encourages efficiencies and cost-savings in the administration 
of health care. However, a prospective payment system is not intended 
to discourage providers from rendering medically necessary care to 
patients. For example, it is possible that a provider could experience 
a financial loss when they perform a service where a patient receives 
85 cm\2\ of a graft skin substitute product, but that same provider 
could see a financial gain when the next patient receives a skin graft 
where only 10 cm\2\ of product is used. Paying separately for add-on 
codes for the administration of graft skin substitutes in a prospective 
payment system defeats the goals of such a payment system. Therefore, 
we will continue to package the add-on codes for the administration of 
graft skin substitutes in the OPPS to encourage cost-savings and 
efficiencies with wound care treatment. If providers are paid at cost 
or nearly at cost for each individual service they render, there is no 
incentive for them to control costs. Add-on codes for the 
administration of graft skin substitutes should be packaged with the 
primary medical service to be able to establish a median payment rate 
that gives providers incentives to keep their costs in line with 
typical providers throughout the Medicare program. The need for cost 
efficiencies in the application of graft skin substitutes to treat 
wounds is no different than need for cost efficiencies in other 
procedures administered in the outpatient hospital setting. Therefore, 
we believe that add-on codes, including the add-on codes for the 
administration

[[Page 81795]]

of graft skin substitutes, should remain packaged to maintain the 
integrity of the OPPS.
    Comment: The HOP Panel recommended, and several commenters 
supported, ensuring that the payment rate for graft skin substitute 
procedures be the same no matter where on the body the graft skin 
substitute product is applied to the patient. There are four graft skin 
substitute application procedures for high-cost skin substitute 
products (CPT codes 15271, 15273, 15275, and 15277) and a similar four 
graft skin substitute application procedures for low-cost skin 
substitute products (HCPCS codes C5271, C5273, C5275, and C5277). 
Commenters claim that the cost to apply graft skin substitute products 
does not depend on the location of the wound because the same amount of 
product is used on the wound and the same clinical resources are used 
to treat the wound independent of the location of the wound.
    Other commenters made a similar request, asking that CPT code 15277 
(Application of skin substitute graft to face, scalp, eyelids, mouth, 
neck, ears, orbits, genitalia, hands, feet, and/or multiple digits, 
total wound surface area greater than or equal to 100 sq cm; first 100 
sq cm wound surface area, or 1 percent of body area of infants and 
children) that is currently assigned to APC 5054 (Level 4 Skin 
Procedures) be reassigned to APC 5055 (Level 5 Skin Procedures). That 
would mean that the two graft skin substitute application procedures 
for the application of high-cost skin substitute products for wounds 
greater than 100 cm\2\ (CPT code 15273 and 15277) would be in the same 
APC.
    Response: The reason there are four CPT codes describing graft skin 
substitute application services is that there are different CPT codes 
for applying graft skin substitutes for wounds up to 100 cm\2\ and for 
wounds that are greater than 100 cm\2\; and there are different CPT 
codes for applying graft skin substitutes to the trunk, arms, and legs 
as compared to the face, scalp, eyelids, mouth, neck, ears, orbits, 
genitalia, hands, feet, fingers, and toes. We appreciate commenters' 
concerns and note that current codes describing the application of 
high-cost graft skin substitutes for wounds less than 100 cm\2\ (CPT 
codes 15271 and 15275) have been assigned to the same APC (5054), and 
the current codes describing the application of low-cost graft skin 
substitutes for wounds less than 100 cm\2\ (HCPCS codes C5271 and 
C5275) have been assigned to the same APC (5053). Because they are 
currently included in the same APC, the OPPS payment for them is the 
same; and this payment policy is consistent with the recommendation 
from the HOP Panel and other commenters. This means for the application 
of graft skin substitute products up to 100 cm\2\, the location where 
the graft skin substitute is applied does not affect the payment rate 
for the service. We note that the code describing the application of 
high-cost products for wounds that are greater than 100 cm\2\ on the 
trunk, arms, and legs (CPT code 15273) has been assigned to a higher-
paying APC (APC 5055) than the APC assignment for the code describing 
the application of high-cost graft skin substitute products for wounds 
greater than 100 cm\2\ on the face, scalp, eyelids, mouth, neck, ears, 
orbits, genitalia, hand, feet, fingers, and toes (CPT code 15277), 
which is assigned to APC 5054. Likewise, the code describing the 
application of low-cost products for wounds that are greater than 100 
cm\2\ on the trunk, arms, and legs (HCPCS code C5273) has been assigned 
to a higher-paying APC (APC 5054) than the code for the application of 
low-cost graft skin substitute products for wounds greater than 100 
cm\2\ on the face, scalp, eyelids, mouth, neck, ears, orbits, 
genitalia, hand, feet, fingers, and toes (HCPCS code C5277), which is 
assigned to APC 5054. The differences in costs that have determined APC 
assignments for these services for wounds greater than 100 cm\2\ have 
been supported by historical cost data. We also note that none of these 
service codes are in violation of the 2 times rule, which requires that 
the geometric mean cost of significant items and services within an APC 
group to be no more than two-times the geometric mean cost of the 
lowest geometric mean cost for a significant item or service within the 
same APC group.
    Comment: The HOP Panel recommended, and several commenters 
supported, having us realign both the high-cost and low-cost 
application procedure codes to potentially higher-paying APC groups 
that reflect the current average sales prices of graft skin substitute 
products as manufacturers now are required to submit average sales 
prices for graft skin substitute products. Commenters believe combining 
ASP prices for graft skin substitutes and the cost of the graft skin 
substitute application procedures would better reflect the costs of 
those procedures than our current methodology of using cost data from 
claims to assign application procedures to APCs. Commenters believe 
that the product cost information that is packaged into the graft skin 
substitute application procedures is lower than the ASP price for graft 
skin substitute products and leads to the graft skin substitute 
application procedures being assigned APCs with lower payment rates 
than the actual cost of the procedures. Commenters feel that this 
approach also may provide more cost stability to the APC assignments 
for the graft skin substitute application procedures.
    Response: We disagree with the commenters that using ASP pricing 
instead of using claims cost data would be a preferrable method for 
estimating the graft skin substitute product cost of graft skin 
substitute application procedures. It is unclear from the commenters' 
suggestion how the product cost of the graft skin substitute would be 
calculated if not using the charges reported by providers. Presumably, 
their approach would involve extracting the units of graft skin 
substitute product used on a particular packaged service and then 
multiplying by an ASP on file to revise the cost of packaged procedure 
to reflect the ASP price of the graft skin substitute product units. We 
do not believe this is a feasible approach for CY 2024, and it appears 
to be a different approach to pricing one group of packaged supplies as 
compared to how all other packaged supplies are priced in the OPPS. We 
normally use a provider's reported charges for supplies and use the 
appropriate cost-to-charge ratio to estimate the contribution of the 
supply cost to the overall cost of the procedure. However, we remain 
open to new payment methodologies. We welcome feedback from interested 
parties in future rulemaking about how this payment approach could work 
and why it would improve the pricing of graft skin substitute 
application procedures.
    Comment: Two commenters asked that we eliminate the high-cost and 
low-cost skin substitute groups for graft skin substitute products. 
Instead, the commenter requested that we no longer policy package skin 
substitute products in the OPPS. The commenter suggested we should pay 
for graft skin substitutes separate from the application procedure 
based on their ASP plus 6 percent price where available.
    Response: A substantial portion of the cost of a skin substitute 
graft application procedure is the graft skin substitute product 
itself, and the cost of the skin substitute graft products is reflected 
in the cost of the overall procedure. Packaging the cost of graft skin 
substitute products into the affiliated procedures leads to cost 
savings and efficiencies in the use of graft skin substitute products. 
Providers have the opportunity to assess the value of products of 
varying costs. The payment

[[Page 81796]]

rates for the application procedures for graft skin substitute products 
reflect the decisions of providers across the United States between the 
costs and benefits of all available products and should limit the use 
of the highest-cost graft skin substitute products over lower-cost 
products unless the highest-cost products are found to be clinically 
superior. Packaging of graft skin substitute products helps to reduce 
costs for graft skin substitute procedures and allows more Medicare 
resources to be used for other categories of medical services.
    Comment: The HOP Panel recommended, and several commenters 
supported, that all new graft skin substitute products be assigned to 
the low-cost group whether they have a Q-code or an A-code until cost 
data become available for the product. Commenters believe it is not 
appropriate that products assigned Q-codes are assigned to the low-cost 
group while products assigned A-codes are assigned to the high-cost 
group. Commenters note that A-codes are being assigned to graft skin 
substitute products that have FDA 510(k) clearance but are not 
synthetic products, which conflicts with the expectation that only 
graft skin substitute products that would have been described by the 
now-deleted HCPCS code C1849 (Skin substitute, synthetic, resorbable, 
per square centimeter) be assigned to the high-cost group. More 
broadly, commenters believed that no category of graft skin substitute 
products should be assigned to the high-cost group until there is cost 
data supporting that assignment.
    Response: We appreciate the concerns of the commenters. However, we 
decided on an approach that would ensure that any graft skin substitute 
product that could potentially have been described by deleted HCPCS 
code C1849 be included in the high-cost group. As explained in the CY 
2023 OPPS final rule (87 FR 71980 and 71981), we wanted to ensure that 
graft skin substitute products that were described by HCPCS code C1849 
or could potentially be described by HCPCS code C1849 would be granted 
time to develop the cost data necessary to allow us to determine if the 
product should stay in the high-cost group, which provides stability 
for the payment of these graft skin substitute products. We wanted to 
avoid having products with less than two years of claims data that were 
originally in the high-cost group be reassigned to the low-cost group 
simply because of a lack of available data.
    Also, as discussed in the CY 2023 OPPS final rule (87 FR 71981), 
the current categorization of skin substitutes as either synthetic or 
non-synthetic is not mutually exclusive given the expansion of skin 
substitute products that may contain both biological and synthetic 
elements. Having products with both biological and synthetic elements 
leads to difficulty defining which of the products assigned to the 
A2XXX series would be considered ``synthetic'' and described by HCPCS 
code C1849. Therefore, for CY 2023, we finalized a policy, which will 
continue for CY 2024, to assign to the high-cost group any skin 
substitute product that is assigned a code in the HCPCS A2XXX series 
including new products without pricing information. This policy gives 
the broadest definition of products that could have been described by 
HCPCS code C1849 and ensures that none of those graft skin substitute 
products would be assigned to the low-cost group until we receive cost 
data for them.
    Comment: The HOP Panel recommended, and several commenters 
supported, our current policy not to assign graft skin substitute 
products that are not in sheet form (e.g., gel, powder, ointment, foam, 
liquid, or injected) to any APC group, because these products cannot be 
reported with the graft skin substitute application codes of CPT codes 
15271 through 15278 (the high-cost group) or with HCPCS codes C5271 
through C5278 (the low-cost group). Commenters note that skin 
substitutes that are not in sheet form are used primarily for clinic 
visits and the debridement of chronic wounds. Also, according to the 
commenters, the use of skin substitutes that are not in sheet form does 
not conform to the AMA's directions for the application of skin 
substitute products.
    Response: We appreciate the HOP Panel's and the commenters' support 
of our policy.
    Comment: One commenter disagreed with the HOP Panel recommendation 
not to assign graft skin substitute products that are not in sheet form 
(e.g., gel, powder, ointment, foam, liquid, or injected) to any APC 
group. The commenter understands that current coding guidelines for CPT 
codes 15271 through 15278 precludes products that are not in sheet form 
from being billed with these CPT codes. However, the commenter 
anticipates that in the future procedure codes for the application of 
non-sheet products will be created; and the commenter thinks it is best 
for us to prepare for the establishment of these new procedure codes.
    Response: We appreciate the views of the commenter, but we did not 
make any proposals related to payment for application of non-sheet skin 
substitute products in this year's OPPS proposed rule. We may consider 
this topic for future rulemaking if CPT or HCPCS codes are established 
for the application of non-sheet skin substitute products.
    Comment: Several commenters supported our current skin substitute 
payment policy to assign graft skin substitute products to either a 
high-cost or a low-cost group based on the product's cost. Likewise, 
commenters also supported our policy of keeping graft skin substitute 
products in the high-cost group once the cost of the product exceeds 
either the MUC or the PDC threshold for at least one year even if in 
future years the cost of the product is less than either the MUC or PDC 
threshold.
    Response: We appreciate the commenters' support of our policies.
    Comment: Manufacturers of two products that are not traditional 
graft skin substitute products requested that their products be 
assigned to either of the high-cost skin or low-cost skin substitute 
groups based on the cost of their products. One product is HCPCS code 
A2014 (Omeza collagen matrix, per 100 mg) that is an amorphous solid, 
which, according to its manufacturer, Omeza, is used to treat wounds 
similar to the wounds treated by graft skin substitute products. The 
second product is HCPCS code A2025 (Miro3d, per cubic centimeter) that 
is a dry, thick sheet of uncompressed decellularized porcine liver that 
has enough thickness for its base unit to be a cubic centimeter. 
According to its manufacturer, Reprise Biomedical, Miro3d must be 
rehydrated before being applied.
    Response: We do not believe either HCPCS code A2014 (Omeza collagen 
matrix, per 100 mg) or HCPCS code A2025 (Miro3d, per cubic centimeter) 
should be assigned to either the high-cost or low-cost group. Regarding 
Omeza collagen matrix, an amorphous solid is not a graft skin 
substitute product even if the product forms a sheet-like layer after 
application. Therefore, we cannot assign the product to either the 
high-cost skin or the low-cost skin substitute group. For Miro3d, 
normally a product with a base unit of cubic centimeter is a liquid 
product. This is the first product with a base unit of a cubic 
centimeter that we are aware of to be in solid form. We request further 
information regarding this product to help us to determine whether 
Miro3d should be assigned to the high-cost or low-cost skin substitute 
group in a future OPPS quarterly update, including whether the product 
could be reported with either CPT codes 15271

[[Page 81797]]

through 15278 or HCPCS codes C5271 through C5278.
    Comment: The manufacturer of the product described by HCPCS code 
Q4278 (Epieffect, per square centimeter) requested that the product be 
assigned to the high-cost skin substitute group based on its ASP as 
reported in a pricing compendium.
    Response: We request that the manufacturer provide us with the 
pricing information that they have cited regarding HCPCS code Q4278. 
Once we receive this information, we will determine if HCPCS code Q4278 
should be assigned to the high-cost group.
    Comment: The manufacturer of the products described by HCPCS codes 
Q4122 (Dermacell, dermacell awm or dermacell awm porous, per square 
centimeter) and Q4150 (Allowrap dds or dry, per square centimeter) 
requested that these graft skin substitute products continue to be 
assigned to the high-cost skin substitute group for CY 2024.
    Response: Based on their cost data and our policies, both HCPCS 
codes Q4122 (Dermacell, dermacell awm or dermacell awm porous, per 
square centimeter) and Q4150 (Allowrap dds or dry, per square 
centimeter) will remain in the high-cost group for CY 2024.
    After consideration of the public comments we received, we are 
adopting our proposals without modification. Our final policies are to:
     Continue assign skin substitutes with pass-through payment 
status to the high-cost category.
     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 for the product, we will 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 will use 95 percent of AWP to 
assign a skin substitute to either the high-cost or low-cost category.
     Continue to use WAC plus 3 percent instead of WAC plus 6 
percent to conform to our policy described in section V.B.2.b of this 
final rule with comment period to establish a payment rate of WAC plus 
3 percent for separately payable drugs and biologicals that do not have 
ASP data available.
     Assign any skin substitute product that is assigned a code 
in the HCPCS A2XXX series 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.
    Finally, we have updated the MUC and PDC thresholds for CY 2024. 
The final MUC threshold will be $47 per cm\2\ (rounded to the nearest 
$1) and the final PDC threshold will be $807 (rounded to the nearest 
$1). Table 95 includes the final CY 2024 cost category assignment for 
each skin substitute product.
BILLING CODE 4150-28-P

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BILLING CODE 4150-28-C
8. Radioisotopes Derived From Non-Highly Enriched Uranium (non-HEU) 
Sources
    Radioisotopes are widely used in modern medical imaging, 
particularly for cardiac imaging and predominantly for the Medicare 
population. Some of the Technetium-99 (Tc-99m), the radioisotope used 
in the majority of such diagnostic imaging services, has been produced 
in legacy reactors outside of the United States using highly enriched 
uranium (HEU).
    The United States wanted to eliminate domestic reliance on these 
reactors and has been promoting the conversion of all medical 
radioisotope production to non-HEU sources. Alternative methods for 
producing Tc-99m without HEU are technologically and economically 
viable, but it was expected that this change in the supply source for 
the radioisotope used for modern medical imaging would introduce new 
costs into the payment system that were not accounted for in the 
historical claims data.
    Therefore, beginning in CY 2013, we finalized a policy to provide 
an additional payment of $10 for the marginal cost for radioisotopes 
produced by non-HEU sources (77 FR 68323). Under this policy, hospitals 
report HCPCS code Q9969 (Tc-99m from non-highly enriched uranium 
source, full cost recovery add-on per study dose) once per dose along 
with any diagnostic scan or scans furnished using Tc-99m as long as the 
Tc-99m doses used can be certified by the hospital to be at least 95 
percent derived from non-HEU sources (77 FR 68323).
    We stated in the CY 2013 OPPS/ASC final rule with comment period 
(77 FR 68321) that our expectation was that this additional payment 
would be needed for the duration of the industry's conversion to 
alternative methods of producing Tc-99m without HEU. We also stated 
that we would reassess, and propose, if necessary, on an annual basis 
whether such an adjustment continued to be necessary and whether any 
changes to the adjustment were warranted (77 FR 68321). A 2016 report 
from the National Academies of Sciences, Engineering, and Medicine 
anticipated the conversion of Tc-99m production from non-HEU sources 
would be completed at the end of 2019.\160\ 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.
---------------------------------------------------------------------------

    \160\ National Academies of Sciences, Engineering, and Medicine. 
2016. Molybdenum-99 for Medical Imaging. Washington, DC: The 
National Academies Press. Available at: https://doi.org/10.17226/23563.
---------------------------------------------------------------------------

    The Secretary of Energy issued a new certification regarding the 
supply of non-HEU- sourced Mo-99 effective January 2, 2022 (86 FR 
73270). This certification stated that there 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

[[Page 81803]]

CY 2024 (likely CY 2022 claims data) contain claims for diagnostic 
radiopharmaceuticals that reflect both HEU-sourced Tc-99m and non-HEU-
sourced Tc99m, 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 proposed 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.
    Comment: Multiple commenters supported making the additional $10 
payment permanent rather than ending it after December 31, 2025. Some 
of the commenters wanted a permanent $10 payment to help encourage the 
domestic production of Tc-99m starting in CY 2026. One of the 
commenters suggested adding a new claim edit to require providers to 
identify whether the Tc-99m radiopharmaceutical product they use is 
sourced from non-HEU or HEU reactors to confirm the transition from 
HEU-sourced to non-HEU-sourced Tc-99m products has been completed. 
Multiple commenters also requested that the $10 additional payment be 
increased to an amount that reflects what the payment would have been 
if it was adjusted annually by the hospital market basket since it was 
implemented in 2013. The commenters also requested that the copayment 
amount for HCPCS code Q9969 be eliminated because they are concerned 
that the administrative burden of handling the beneficiary copayment is 
discouraging providers from reporting the $10 additional payment.
    Response: As stated in the CY 2023 OPPS final rule, the purpose of 
the $10 additional payment is limited to mitigating any adverse impact 
of transitioning to non-HEU sources (87 FR 71986). As the transition is 
now complete, we do not think it is necessary to increase the amount of 
the adjustment for its final two years. Once the transition is complete 
and payment rates reported for Tc-99m radiopharmaceuticals no longer 
include costs from HEU-sourced Tc-99m, the original purpose of the $10 
additional payment to encourage the use of non-HEU-sourced Tc-99m will 
be achieved. We will take the comments regarding using the $10 
additional payment to encourage the domestic production of Tc-99m into 
consideration for future rulemaking.
    We also disagree with the request to waive the copayment for HCPCS 
code Q9969 as we do not believe the administrative burden associated 
with collecting copayments in this situation is unique or significant 
to justify such an action. Providers regularly collect copayments for 
services paid under the OPPS, and we do not believe that collecting a 
copayment for the additional $10 payment is a significant added burden 
for providers. Likewise, we do not agree with the suggestion to require 
a claim edit to identify a radiopharmaceutical as non-HEU or HEU 
sourced. We believe such a requirement would likely increase the 
administrative burden on providers unnecessarily, because the 
adjustment will only be in place for two more years and very few claims 
will report Tc-99m radiopharmaceuticals that are HEU sourced.
    Comment: Multiple commenters supported the portion of our proposal 
that would continue the $10 additional payment for non-HEU sourced Tc-
99m radiopharmaceuticals through December 31, 2025.
    Response: We appreciate the support of the commenters.
    After consideration of the public comments we received, we are 
finalizing without modification our proposal to continue the additional 
$10 payment for CYs 2024 and 2025 to ensure providers receive 
sufficient payment for diagnostic radiopharmaceuticals containing Tc99m 
until such time as the full cost of non-HEU-sourced Tc-99m is reflected 
in the Medicare claims data. We also are finalizing without 
modification our proposal that the additional $10 payment will end 
after December 31, 2025, as, beginning with 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 redesignate 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

[[Page 81804]]

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 Physician Fee Schedule (PFS) 
proposed rule for a full description of the proposed policy. Interested 
parties were asked to submit comments on any proposals related to 
implementation of section 90004 of the Infrastructure Act on the CY 
2024 PFS proposed rule. We stated that public comments on these 
proposals would be addressed in the CY 2024 PFS final rule with comment 
period. We note that this same notice appeared in section XIII.D.3 of 
the proposed rule.
    As explained in the CY 2024 OPPS/ASC proposed rule (88 FR 49759), 
because the CY 2024 PFS proposed rule discussed and proposed to codify 
certain billing requirements for HOPDs and ASCs, we wanted to ensure 
interested parties were aware of them and knew to refer to that rule 
for a full description of the proposed policy. Interested parties were 
asked to submit comments on this and any other proposals to implement 
section 90004 of the Infrastructure Act in response to the CY 2024 PFS 
proposed rule. We stated public comments on these proposals would be 
addressed in the CY 2024 PFS final rule.
    We thank commenters for their feedback on the proposal. For final 
details on this policy, we refer readers to the CY 2024 PFS final rule.

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

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

    Section 1833(t)(6)(E) of the Act limits the total projected amount 
of transitional pass-through payment for drugs, biologicals, and 
categories of devices for a given year to an ``applicable percentage,'' 
currently not to exceed 2.0 percent of total program payments estimated 
to be made for all covered services under the OPPS furnished for that 
year. If we estimate before the beginning of the calendar year that the 
total amount of pass-through payments in that year would exceed the 
applicable percentage, section 1833(t)(6)(E)(iii) of the Act requires a 
uniform prospective reduction in the amount of each of the transitional 
pass-through payments made in that year to ensure that the limit is not 
exceeded. We estimate the pass-through spending to determine whether 
payments exceed the applicable percentage and the appropriate pro rata 
reduction to the conversion factor for the projected level of pass-
through spending in the following year to ensure that total estimated 
pass-through spending for the prospective payment year is budget 
neutral, as required by section 1833(t)(6)(E) of the Act.
    For devices, developing a proposed estimate of pass-through 
spending in CY 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 proposed to 
include an estimate of any skin substitutes and similar products in our 
estimate of pass-through spending for devices.
    For drugs and biologicals eligible for pass-through payment, 
section 1833(t)(6)(D)(i) of the Act establishes the pass-through 
payment amount as the amount by which the amount authorized under 
section 1842(o) of the Act (or, if the drug or biological is covered 
under a competitive acquisition contract under section 1847B of the 
Act, an amount determined by the Secretary equal to the average price 
for the drug or biological for all competitive acquisition areas and 
year established under such section as calculated and adjusted by the 
Secretary) exceeds the portion of the otherwise applicable fee schedule 
amount that the Secretary determines is associated with the drug or 
biological. Consistent with current policy, we proposed 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 was $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 
the CY 2024 OPPS/ASC proposed rule (88 FR 49678). Consistent with 
current policy, we proposed that all of these policy-packaged drugs and 
biologicals with pass-through payment status will be paid at ASP+6 
percent, like other pass-through drugs and biologicals, for CY 2024, 
less the policy-packaged drug APC offset amount described below. Our 
estimate of pass-through payment for policy-packaged drugs and 
biologicals with pass-through payment status approved prior to CY 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 the CY

[[Page 81805]]

2024 OPPS/ASC proposed rule (88 FR 49675 and 49676), we discuss our 
policy to determine if the costs of certain policy-packaged drugs or 
biologicals are already packaged into the existing APC structure. If we 
determine that a policy-packaged drug or biological approved for pass-
through payment resembles predecessor drugs or biologicals already 
included in the costs of the APCs that are associated with the drug 
receiving pass-through payment, we proposed to offset the amount of 
pass-through payment for the policy-packaged drug or biological. For 
these drugs or biologicals, the APC offset amount is the portion of the 
APC payment for the specific procedure performed with the pass-through 
drug or biological, which we refer to as the policy-packaged drug APC 
offset amount. 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 proposed to reduce our estimate of 
pass-through payments for these drugs or biologicals by the APC offset 
amount.
    Similar to pass-through spending estimates for devices, the first 
group of drugs and biologicals requiring a pass-through payment 
estimate consists of those products that were recently made eligible 
for pass-through payment and that will continue to be eligible for 
pass-through payment in CY 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 drugs and biologicals with pass-through payment 
status.

B. Estimate of Pass-Through Spending for CY 2024

    For CY 2024, we proposed 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 71989). 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 estimated 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 proposed an estimate for the first group of devices of 
$93.7 million.
    We did not receive any public comments on our proposal. Using our 
methodology for this final rule with comment period, we estimate that 
HCPCS code C1747 will cost $37.5 million in pass-through expenditures 
in CY 2024, HCPCS code C1761 will cost $19.4 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 $266,665 in pass-through expenditures in CY 2024, HCPCS code C1832 
will cost $44,830 in pass-through expenditures in CY 2024, and HCPCS 
code C1833 will cost $278,751 in pass-through expenditures in CY 2024. 
Therefore, we have finalized the CY 2024 spending estimate for this 
first group of devices of approximately $93.7 million.
    In estimating our proposed CY 2024 pass-through spending for device 
categories in the second group, we included the following: (1) 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; (2) additional device categories that we estimated could be 
approved for pass-through status after the development of the CY 2024 
OPPS/ASC proposed rule (88 FR 49696) and before January 1, 2024; and 
(3) contingent projections for new device categories established in the 
second through fourth quarters of CY 2024. For CY 2024, we proposed to 
use the general methodology described in the CY 2008 OPPS/ASC final 
rule with comment period (72 FR 66778), while also taking into account 
recent OPPS experience in approving new pass-through device categories. 
For the CY 2024 OPPS/ASC proposed rule (88 FR 49696), the proposed 
estimate of CY 2024 pass-through spending for this second group of 
device categories was $40.4 million.
    We did not receive any public comments on the proposal. As stated 
earlier in this final rule with comment period, we are approving four 
devices for pass-through payment status in the CY 2024 rulemaking 
cycle: Ambu[supreg] aScope\TM\ 5 Broncho HD; FLEX Vessel 
PrepTM System; CavaClear Inferior Vena Cava (IVC) Filter 
Removal Laser Sheath; and CERAMENT[supreg] G. The manufacturers of 
these systems provided utilization and cost data that indicate the 
amount of spending for the devices would be approximately $14.4 million 
for Ambu[supreg] aScope\TM\ 5 Broncho HD; $6.0 million for FLEX Vessel 
PrepTM System; $5.2 million for CavaClear Inferior Vena Cava 
(IVC) Filter Removal Laser Sheath; and $8.2 million for 
CERAMENT[supreg] G. Therefore, we are finalizing an estimate of $33.8 
million for this second group of devices for CY 2024.
    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 proposed to use the CY 2022 Medicare hospital outpatient 
claims data regarding their utilization, information provided in their 
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 be continuing 
on pass-through payment status in CY 2024, we estimated the pass-
through payment amount as the difference between the general payment 
rate of ASP+6 percent and the payment rate for non pass-through drugs 
and biologicals that would be separately paid. Because we proposed to 
utilize a payment rate of ASP plus 6 percent for most separately 
payable drugs and biologicals in the proposed rule, the proposed 
payment rate difference between the pass-through payment

[[Page 81806]]

amount and the non pass-through payment amount was $0 for this group of 
drugs.
    We did not receive any comments on our proposal. Because payment 
for policy-packaged drugs and biologicals is packaged if the product is 
not paid separately due to its pass-through payment status, we proposed 
to include in the CY 2024 pass-through estimate the difference between 
payment for the policy-packaged drug or biological at ASP+6 percent (or 
WAC+6 percent, or 95 percent of AWP, if ASP or WAC information is not 
available) and the policy-packaged drug APC offset amount, if we 
determine that the policy-packaged drug or biological approved for 
pass-through payment resembles a predecessor drug or biological already 
included in the costs of the APCs that are associated with the drug 
receiving pass-through payment. For this first group of policy-packaged 
drugs and biologicals, we estimated a pass-through for CY 2024 spending 
of $90 million.
    We did not receive any public comments on our proposal. Using our 
methodology for this final rule with comment period, we calculated the 
CY 2024 spending estimate for this first group of drugs and biologicals 
of approximately $90 million using a rate of ASP+6 percent, which 
remained unchanged from the proposed rule.
    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 the CY 2024 OPPS/ASC proposed rule 
(88 FR 49696) were newly eligible or recently became eligible for pass-
through payment in CY 2024, additional drugs and biologicals that we 
estimated could be approved for pass-through status subsequent to the 
development of the CY 2024 OPPS/ASC proposed rule (88 FR 49696) 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 proposed to use utilization 
estimates from pass-through applicants, pharmaceutical industry data, 
clinical information, recent trends in the per unit ASPs of hospital 
outpatient drugs, and projected annual changes in service volume and 
intensity as our basis for making the CY 2024 pass-through payment 
estimate. We also proposed to consider the most recent OPPS experience 
in approving new pass-through drugs and biologicals. Using our proposed 
methodology for estimating CY 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 did not receive any public comments on our proposal. Since the 
release of the CY 2024 OPPS/ASC proposed rule, we have identified two 
additional policy-packaged drugs in addition to the two policy-packaged 
drugs that had pass-through status when the proposed rule was released. 
Therefore, we have identified a total of four policy-packaged drugs 
that have pass-through status. Our original proposed estimate of $10 
million of additional pass-through payments for the second group of 
drugs and biologicals did anticipate the approval of some of the 
additional policy-packaged drugs and biologicals with pass-through 
status, but not all of them. Therefore, for this final rule with 
comment period, we are revising our estimate of pass-through spending 
for the second group of drugs and biologicals to be $18.5 million.
    We estimated for the CY 2024 OPPS/ASC proposed rule (88 FR 49696) 
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 represented 0.26 percent of total projected OPPS 
payments for CY 2024 (approximately $88.6 billion). Therefore, we 
estimated for the proposed rule that pass-through spending in CY 2024 
would not amount to 2.0 percent of total projected OPPS CY 2024 program 
spending.
    We estimate for this final rule with comment period that the amount 
of pass-through spending for the device categories and the drugs and 
biologicals that are continuing to receive pass-through payment in CY 
2024 and the amount of pass-through spending for those device 
categories, drugs, and biologicals that first become eligible for pass-
through payment during CY 2024 would be approximately $236 million 
(approximately $127.5 million for device categories and approximately 
$108.5 million for drugs and biologicals), which represents only 0.27 
percent of total projected OPPS payments for CY 2024 (approximately 
$88.9 billion). Therefore, we estimate that pass-through spending in CY 
2024 will not exceed the 2.0 percent of total projected OPPS CY 2024 
program spending limit provided for in section 1833(t)(6)(E) of the 
Act.

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

    For CY 2024, we proposed 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 proposed 
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 
rule with comment period (78 FR 75043).
    We did not receive any comments on our proposals to continue our 
current ED outpatient visits and critical care payment policies for CY 
2024 and are finalizing our proposals without modification.
    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 2022 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 2022 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.
    The following is a summary of the comments we received and our 
responses to those comments.
    Comment: We received several comments on our overall clinic visit 
payment policy. Many commenters continued to express the belief that 
this policy undermines Congressional intent and exceeds the agency's 
legal authority. As they have in previous years, commenters stated that 
the policy is based on flawed assumptions and urged CMS to eliminate it 
altogether. One of these commenters additionally requested that CMS 
immediately restore the higher payment rates for clinic visits 
furnished by excepted off-campus PBDs that existed before 
implementation of the clinic visit payment policy and promptly repay 
hospitals the difference between the amounts they would have received 
under those higher rates and

[[Page 81807]]

the amounts they were paid under the policy.
    Response: We continue to believe that section 1833(t)(2)(F) of the 
Act gives the Secretary authority to develop a method for controlling 
unnecessary increases in the volume of covered OPD services, including 
a method that controls unnecessary volume increases by removing a 
payment differential that is driving a site-of-service decision, and as 
a result, is unnecessarily increasing service volume.\161\ As we noted 
in the CY 2019 OPPS/ASC proposed rule (83 FR 37138 through 37143), 
``[a] large source of growth in spending on services furnished in 
hospital outpatient departments (HOPDs) appears to be the result of the 
shift of services from (lower cost) physician offices to (higher cost) 
HOPDs.'' We continue to believe that these shifts in the sites of 
service are unnecessary if the beneficiary can safely receive the same 
services in a lower cost setting but instead receives care in a higher 
cost setting due to payment incentives. In most cases, the difference 
in payment is leading to unnecessary increases in the volume of covered 
outpatient department services, and we remain concerned that this shift 
in care setting increases beneficiary cost-sharing liability because 
Medicare payment rates for the same or similar services are generally 
higher in hospital outpatient departments than in physician offices. We 
continue to believe that our method addresses the concerns described in 
the CY 2019 OPPS/ASC final rule with comment period (83 FR 59005).
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    \161\ Available at: https://www.ssa.gov/OP_Home/ssact/title18/1833.htm.
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    Additionally, we note that this policy has been litigated. On July 
17, 2020, the United States Court of Appeals for the District of 
Columbia Circuit (D.C. Circuit) ruled in our favor, holding that our 
regulation was a reasonable interpretation of the statutory authority 
to adopt a method to control for unnecessary increases in the volume of 
the relevant service. The appellees petitioned the United States 
Supreme Court for a writ of certiorari. On June 29, 2021, the Supreme 
Court denied the petition.
    Comment: We received comments supporting CMS's efforts to continue 
implementing its method to control for unnecessary increases in the 
volume of outpatient services. These commenters asked that CMS continue 
to consider ways to expand the current site-neutral payment policies to 
other services and settings. Some of these commenters suggested that 
CMS apply the site-neutral payment policy to a list of 57 APCs for 
which MedPAC determined it would be reasonable and appropriate to align 
the OPPS and ASC payment rates with those set in the physician fee 
schedule (PFS).\162\ Other commenters recommended that CMS consider 
expanding the site-neutral payment policy to all services provided by 
excepted, off-campus PBDs. Others suggested that the site-neutral 
policy be extended to on-campus PBDs, ASCs, and emergency departments.
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    \162\ Found at https://www.medpac.gov/wp-content/uploads/2022/06/Jun22_MedPAC_Report_to_Congress_v4_SEC.pdf.
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    Response: We appreciate the commenters' support and we will 
continue to monitor this policy and take commenters' suggestions into 
consideration for potential future rulemaking.
    After consideration of the public comments, we are continuing the 
volume control method under which we utilize a PFS-equivalent payment 
rate for the hospital outpatient clinic visit service described by 
HCPCS code G0463 when it is furnished by excepted off-campus PBDs 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 
proposed to continue to exempt excepted off-campus PBDs of rural SCHs 
from the clinic visit payment policy. We stated that we will continue 
to monitor the effect of this change in Medicare payment policy, 
including on the volume of these types of OPD services.
    The following is a summary of the comments we received and our 
responses to those comments.
    Comment: All commenters supported our proposal to continue to 
exempt excepted off-campus PBDs of rural SCHs from the clinic visit 
payment policy for CY 2024. One commenter stated that the continuation 
of the exemption is an important step in maintaining access to care for 
a segment of the population that is underserved. This commenter 
additionally stated that the continuation will not only improve patient 
outcomes by allowing easily treatable conditions to be addressed in a 
timely manner but will also reduce total Medicare spending as these 
conditions will be treated in the most appropriate setting. Another 
commenter praised the continuation of the exemption as a recognition on 
CMS's part of the important role rural providers play in the delivery 
of care and the financial pressures they face.
    Response: We thank the commenters for their support.
    Comment: Several of these commenters requested that CMS consider 
expanding the exemption to excepted off-campus PBDs of rural hospitals 
with fewer than 100 beds, Medicare Dependent Hospitals (MDHs), and Low 
Volume Hospitals in a future rulemaking cycle, arguing that the same 
reasoning that led CMS to propose to exempt SCHs also applies to these 
hospitals. One commenter noted that MDHs have a larger percentage of 
inpatient days or discharges for Medicare patients and that they are 
therefore more vulnerable to inadequate Medicare payments than other 
hospitals because they are less able to cross-subsidize inadequate 
Medicare payments with more generous payments from private payers. The 
commenter expressed that this greater dependence on Medicare may make 
certain hospitals more financially vulnerable and thus, more worthy of 
being exempt from the clinic visit policy. This commenter also 
suggested that it would be appropriate to extend the exemption to urban 
SCHs and provided specific examples of instances where an SCH is 
designated urban by CMS, but the hospital is actually a considerable 
distance from the nearest urban area. This commenter expressed that 
there are many factors that underscore why urban SCHs and MDHs should 
also receive the payment exemption, including below-average patient 
care margins at these types of hospitals. The commenter also argued 
that extending this exemption to MDHs and urban SCHs would only add 
nominally to the cost of the proposed policy.
    Response: In the CY 2006 OPPS final rule with comment period (70 FR 
68556 through 68561) we uniquely identified rural SCHs as providers 
with demonstrated additional resource costs. We found that rural SCHs 
have significantly higher costs per unit than urban hospitals. We have 
continued to adjust payments for rural SCHs by 7.1 percent each year 
since 2006. Building upon that foundation, for CY 2018 we

[[Page 81808]]

finalized a policy to exclude rural SCHs from our 340B drug payment 
policy and continued to do so until September 27, 2023, when the 340B 
drug payment policy ended and we resumed paying for 340B drugs and 
biologicals under the OPPS at the same rates we pay for non-340B drugs 
and biologicals (generally, ASP plus 6 percent)). We believe exempting 
rural SCHs, which have demonstrated additional resource costs, is 
appropriate to ensure these hospitals can remain open to serve the 
beneficiaries who rely on them for their care. We share commenters' 
concerns about the financial difficulties associated with maintaining 
access to care in medically vulnerable communities. However, in each of 
these cases, the Congress did not determine that any of these hospital 
types required additional payments for outpatient services. Section 
1833(t)(13)(B) of the Act authorizes an appropriate adjustment for 
hospitals located in rural areas where the Secretary determines, based 
on a study, that the costs incurred by these hospitals by APC group 
exceed costs incurred by hospitals in urban areas. In the CY 2006 OPPS 
final rule with comment period (70 FR 68556 through 68561), we 
summarized our study of the cost of covered outpatient department 
services to hospitals in rural areas and found that rural SCHs were the 
only rural hospital type that had higher resource costs for covered 
outpatient department services. Rural SCHs demonstrated significantly 
higher cost per unit than urban hospitals after controlling for labor 
input prices, service-mix complexity, volume, facility size, and type 
of hospital. In the CY 2006 OPPS final rule with comment period (70 FR 
68556 through 68561) we stated that we found no significant difference 
in cost between all small rural hospitals with 100 or fewer beds and 
urban hospitals. We found that there was insufficient evidence to 
conclude that rural hospitals with 100 or fewer beds have higher costs 
than urban hospitals. We proposed a narrow exception to our clinic 
visit policy largely based upon the historical treatment and documented 
additional resource costs of rural SCHs under the OPPS. We are only 
excepting rural SCHs because we continue to believe that the underlying 
principles of the clinic visit policy continue to justify application 
of the volume control method for clinic visits to the remaining 
hospital types, including most rural and safety-net providers. Where 
the difference in payment is leading to unnecessary increases in the 
volume of covered outpatient department services, we remain concerned 
that this shift in care setting increases beneficiary cost-sharing 
liability because Medicare payment rates for the same or similar 
services are generally higher in hospital outpatient departments than 
in physician offices. Further, we do not believe that commenters 
provided sufficient reasoning or data to show that the other provider 
types suggested (Medicare Dependent Hospitals, Urban Sole Community 
Hospitals, and Low-Volume Adjustment Hospitals) demonstrate the 
additional resource costs that rural SCHs do and should therefore also 
be exempted from this OPPS payment policy. We share commenters' 
concerns about maintaining access to care in urban and rural settings 
and enhancing access to care in medically vulnerable communities. We 
also share commenters' concerns about profit margins. However, we must 
balance the concerns of providers with the concerns of beneficiaries 
regarding the affordability of their care. For hospitals subject to the 
clinic visit policy, the proposed PFS-equivalent rate for a clinic 
visit brings the approximate average copayment down from $26 to $10. We 
will continue to study access and cost to see if further exemptions to 
the clinic visit policy are appropriate.
    Comment: One commenter noted that, while it is necessary to 
distinguish between urban and rural hospitals for a number of payment 
and policy mechanisms, they believe the Metropolitan Statistical Areas 
(MSAs) CMS uses to delineate between these areas are not the most 
precise tool. This commenter argued that CMS should extend this 
exemption to urban SCHs because using MSAs to determine urban and rural 
areas is imprecise and unfairly disadvantages urban SCHs that may be 
the sole source of hospital services in their communities.
    Response: We acknowledge the commenters' points about the important 
role that urban SCHs serve in their communities. However, we have not 
found that urban SCHs have the additional resource costs for covered 
outpatient department services that rural SCHs have, and as such, we 
are only applying the clinic visit policy exemption to rural SCHs.
    Comment: A few commenters suggested extending the exemption to 
hospitals that provide a disproportionate share of the nation's 
uncompensated care, and serve high proportions of Medicaid, Medicare, 
and uninsured patients. The commenters argued that PBDs of these 
hospitals are disproportionately impacted by site-neutral payment 
policies and shielding these PBDs from the impact of these policies 
would ensure they can continue to cover the costs associated with 
providing comprehensive, coordinated care to complex patient 
populations in underserved areas. The commenters did acknowledge that 
CMS has not defined hospitals that meet these criteria and would need 
to do so in order to exempt associated PBDs from the clinic visit 
policy. They further recognized that rural SCHs are easily identified 
because there is an existing definition to capture the hospitals that 
fall into this group. They recommended that CMS first define a group of 
hospitals that meet these criteria and then exclude those hospitals' 
excepted PBDs from the clinic visit policy to ensure continued access 
for marginalized communities without other reliable sources of care.
    Response: As the commenter stated, we have not created a definition 
for the group of hospitals the commenter cited and would need to do so 
in order use this definition to exempt associated PBDs from the clinic 
visit policy. We will continue to monitor this issue and revisit any 
additional exemptions in future rulemaking as appropriate.
    Comment: One commenter presented data showing that 56 percent of 
rural SCHs, 73 percent of urban SCHs, and 60 percent of Medicare 
Dependent Hospitals (MDHs) are located in at least one type of 
medically underserved area (MUA) as designated by the Health Resources 
& Services Administration.
    Response: We do not currently utilize MUA designations to determine 
payment for covered outpatient department services under the OPPS. We 
believe our policy to exempt rural SCHs is consistent with our other 
policies that target this hospital type, which we have determined have 
higher resource costs for covered outpatient department services, and 
therefore, that our policy to exempt them is appropriate from an OPPS 
perspective.
    Comment: One commenter recommended that CMS broaden the scope of 
exempted hospitals to support patient access to care and encouraged CMS 
to work with interested parties to identify the additional types of 
hospitals that would be eligible to receive an exemption.
    Response: We appreciate the commenter's suggestion and will 
consider it for future rulemaking.
    After consideration of the public comments we received, we are 
finalizing our proposal to continue to exempt excepted off-campus PBDs 
of rural SCHs from the clinic visit payment policy in CY 2024.

[[Page 81809]]

VIII. Payment for Partial Hospitalization and Intensive Outpatient 
Services

    This section discusses 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 (SUD). 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 and 43622) and 
CY 2015 OPPS/ASC final rule with comment period (79 FR 66902 through 
66908), we continued to apply our established policies to calculate the 
four PHP APC per diem payment rates based on geometric mean per diem 
costs using the most recent claims data for each provider type. For a 
detailed discussion on this policy, we refer readers to the CY 2014 
OPPS/ASC final rule with comment period (78 FR 75047 through 75050). In 
the CY 2016, we described our extensive analysis of the claims and cost 
data and ratesetting methodology, corrected a cost inversion that 
occurred in the final rule data with respect to hospital-based PHP 
providers and renumbered the PHP APCs. In CY 2017 OPPS/ASC final rule 
with comment period (81 FR 79687 through 79691), we continued to apply 
our established policies to calculate the PHP APC per diem payment 
rates based on geometric mean per diem costs and finalized a policy to 
combine the Level 1 and Level 2 PHP APCs for CMHCs and for hospital-
based PHPs. We also implemented an eight-percent outlier cap for CMHCs 
to mitigate potential outlier billing vulnerabilities. For a 
comprehensive description of PHP payment policy, including a detailed 
methodology for determining PHP per diem amounts, we refer readers to 
the CY 2016 and CY 2017 OPPS/ASC final rules with comment period (80 FR 
70453 through 70455 and 81 FR 79678 through 79680, 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

[[Page 81810]]

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 
and 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 
section VIII.A.2 of this CY 2024 OPPS/ASC final 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 proposed 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 did not propose any changes to the existing 
physician certification requirements for PHP, including that the 
patient would require inpatient hospitalization if they did not receive 
PHP services, which will 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 stated in the proposed rule that 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 noted that we do not believe the 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 proposed 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 stated that we believe this interval is consistent with the CAA, 
2023 requirement that the physician's

[[Page 81811]]

determination of the need for PHP services at least 20 hours per week 
must occur no less frequently than monthly.
    Comment: Overall, commenters agreed that the proposed modification 
to the regulation at Sec.  424.24(e)(1)(i) is consistent with the CAA, 
2023 requirement that the physician certifies the need for PHP services 
for at least 20 hours per week. One commenter recommended CMS consider 
allowing any addiction treatment professional operating within their 
scope of practice under state regulation to certify the need for PHP 
for SUD treatment.
    Response: We appreciate the commenters' support. Section 4124(a) of 
the CAA, 2023 specifically states that the certification must be 
determined by a physician. Section 1861(r) of the Act defines 
``physician'' as a doctor of medicine or osteopathy legally authorized 
to practice medicine and surgery by the State in which he performs such 
function or action. Therefore, we do not believe we are able to expand 
the certification of the need for PHP services to any addiction 
treatment professional.
    Comment: Commenters recommended that CMS reconsider the timing 
associated with the initial PHP recertification requirement. Commenters 
noted section 1861(ff)(1) of the Act, as amended by section 4124(a) of 
the CAA, 2023, specifies that recertification should occur ``not less 
frequently than monthly''. The commenters further noted that the 
current regulation at Sec.  424.24(e)(3)(ii) requires the initial PHP 
recertification as of the 18th day of partial hospitalization services, 
which is significantly earlier than one month after the patient begins 
receiving PHP services. The commenters stated it may be clinically 
beneficial for the PHP to have more days of furnishing partial 
hospitalization before determining whether recertification is warranted 
for the person.
    Response: We appreciate the commenter's concerns regarding the 
timing of the first recertification of PHP services. We did not propose 
to modify the regulation at Sec.  424.24(e)(3)(ii) which requires the 
first recertification of PHP services occur as of the 18th day of 
partial hospitalization services. As discussed in the April 2000 OPPS 
final rule with comment period (65 FR 18454), because partial 
hospitalization is the outpatient substitute for inpatient psychiatric 
care, we stated that we believed it was appropriate to adopt the 
standard used for inpatient psychiatric care at that time. The 
requirement for initial recertification by the 18th day of an inpatient 
psychiatric stay was codified in regulation at Sec.  424.14(d)(2) in 
the March 1988 final rule with comment period (53 FR 6636 and 6637). We 
later modified the initial recertification interval from 18 days to 12 
days. As we explained in the RY 2007 IPF PPS final rule (71 FR 27076 
and 27077), the standard for IPF initial recertification was determined 
by the average length of stay (LOS) for inpatient psychiatric 
hospitalization in the 1980s, which was 18 days. For RY 2007, we 
amended the regulation at Sec.  424.14(d)(2) to require the initial 
recertification for IPF patients as of the 12th day of hospitalization. 
This change was based on analysis of the MedPAR 2002 claims data for 
IPF services. Although the timing requirement for inpatient psychiatric 
hospitalization was shortened, we continue to believe that the current 
timing requirements for PHP initial recertification--that is, as of the 
18th day of PHP services--is appropriate. We note that our analysis 
shows that 18 days generally corresponds to the median length of stay 
for PHP patients.
    Final Decision: After consideration of the public comments we 
received, we are finalizing our proposed revision to 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.

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 SUD. 
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 final rule with comment 
period.
    This final rule establishes payment and program requirements for 
the IOP benefit in all of the above-described settings. Section 
VIII.B.2 of this final rule with comment period discusses the scope of 
benefits for IOP services, and section VIII.B.3 of this final rule with 
comment period discusses physician certification requirements. Section 
VIII.C of this final rule with comment period discusses coding and 
billing for

[[Page 81812]]

both PHP and IOP services under the OPPS beginning in CY 2024. Section 
VIII.D of this final rule with comment period discusses the payment 
methodology. Section VIII.E of this final rule with comment period 
discusses the outlier policy for CMHCs. Section VIII.F of this final 
rule with comment period discusses payment for IOP services in FQHCs 
and RHCs, and section VIII.G of this final rule with comment period 
discusses payment for IOP services 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 reasonable expectation of patient improvement.
    Consistent with the statutory definition of intensive outpatient 
services under section 1861(ff)(2) of the Act, we proposed 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 proposed 
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) of the Act 
shall not apply. As further discussed in section VIII.B.3 of this final 
rule with comment period, we proposed 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 proposed to revise certain existing regulations at 
Sec. Sec.  410.2, 410.3, 410.10, 410.27, 410.150, and 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 proposed 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 
proposed 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 our proposals and the 
comments we received in the following paragraphs.
a. Definition of Intensive Outpatient Services
    We proposed 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 noted 
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 
included a clarification in the regulatory definition of ``intensive 
outpatient services'' that they are not required to be provided in lieu 
of inpatient hospitalization. We stated that we included this 
clarification in order to more clearly differentiate between the 
definitions of partial hospitalization and intensive outpatient at 
Sec.  410.2.
    Comment: Commenters were generally supportive of the proposed 
definition at Sec.  410.2 for intensive outpatient services. However, 
commenters recommended that language specifying IOP represents a less 
intensive service than partial hospitalization be included in the 
definition. The commenters stated this addition could avoid any 
misconception that IOP is substantively different from PHP.
    Response: We thank commenters for their suggestions. We proposed 
the regulations for IOP to be similar to PHP due to the similarities of 
both programs as enacted by section 4124(b) of the CAA, 2023. The key 
distinctions between IOP and PHP can be found in the proposed 
regulations at Sec.  424.24(d). The proposed regulations at Sec.  
424.24(d) outline the content of certification and plan of treatment 
requirements for IOP, which differ from PHP requirements. Specifically, 
proposed regulations at Sec.  424.24(d)(1) do not include a requirement 
that individuals receiving IOP would require inpatient psychiatric care 
in the absence of such services, which is required under PHP at Sec.  
424.24(e)(1)(i). Additionally, the proposed modification to the PHP 
regulation at Sec.  424.24(e)(1)(i) requires individuals receiving PHP 
be certified by a physician to need a minimum of 20 hours per week of 
such services; while the proposed IOP regulation at Sec.  
424.24(d)(1)(i) requires individuals receiving IOP be certified by a 
physician to need a minimum of 9 hours per week of such services. 
Therefore, we believe the proposed definition at Sec.  410.2 for 
intensive outpatient services sufficiently defines an intensive 
outpatient program.
    Comment: A few commenters were concerned CMS did not propose to 
include IOP services furnished remotely. Commenters noted how the 
availability of remote PHP services during the COVID-19 public health 
emergency (PHE) has increased access to these services, especially in 
rural areas. The commenters stated remote IOP services would also be 
beneficial to increase access to the benefit.
    Response: We appreciate the comments on how the availability of 
remote services increased access during the COVID-19 PHE. Section

[[Page 81813]]

1861(ff)(3)(A) of the Act does not allow Medicare to pay for partial 
hospitalization services furnished to beneficiaries in a home or 
residential setting. As discussed in the CY 2023 OPPS/ASC final rule 
with comment period (87 FR 72000 through 72002), we did not propose to 
recognize OPPS remote services, as described in section X.A.5 of the CY 
2023 OPPS/ASC final rule with comment period (87 FR 72014 through 
72017), as PHP services, because we do not have statutory authority to 
pay for services furnished in a home or residential setting as partial 
hospitalization services. However, we clarified that none of the PHP 
regulations would preclude a patient that is under a PHP plan of care 
from receiving other reasonable and medically necessary non-PHP 
services from a hospital. This means that patients in a PHP are not 
precluded from receiving remote mental health services provided outside 
of the PHP by the same or another hospital, when such services are 
reasonable and medically necessary. In response to IOP services being 
furnished remotely to beneficiaries in their homes, we note that 
section 1861(ff) of the Act, as amended by section 4124(b)(2)(B) of the 
CAA, 2023 adopts much of the statutory definition for PHP and applies 
it to IOP. Specifically, section 1861(ff)(3)(A) prohibits both PHP and 
IOP services from being furnished other than in an individual's home or 
in an inpatient or residential setting. However, as we discussed in the 
CY 2023 OPPS/ASC final rule with comment period for PHP, we are 
clarifying in this final rule that none of the proposed IOP regulations 
would preclude a patient that is under an IOP plan of care from 
receiving other reasonable and medically necessary non-IOP services 
from a hospital.
    Additionally, we are reiterating and clarifying in this final rule 
that we would expect that a physician would update the patient's PHP or 
IOP plan of care to appropriately reflect any change to the type, 
amount, duration, or frequency of the therapeutic services planned for 
that patient in circumstances when a PHP or IOP patient receives non-
PHP/IOP remote mental health services from a hospital outpatient 
department. We also note that the medical documentation should continue 
to support the patient's eligibility for participation in a PHP or IOP.
    Final Decision: After consideration of the public comments we 
received, we are finalizing the proposed 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.
    The conditions and exclusions for partial hospitalization services 
are included in the regulation at Sec.  410.43. We proposed 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 proposed 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 proposed 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 proposed 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.
     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 final rule with comment period, we 
solicited comments on whether additional codes should be added to the 
list of services recognized as appropriate for PHP and IOP. We discuss 
the comments we received and provide our responses in that section of 
this final rule with comment period, and we note that none of the codes 
we are adopting in that section of this final rule with comment period 
necessitate changes to the proposed list at Sec.  410.44(a)(4).
    In the proposed rule, we further noted 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.'' We explained that 
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 
SUD to be included under this statutory definition and the regulatory 
definition of PHP at Sec.  410.43(a)(4). We stated that 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 clarified in the 
proposed rule that the terms ``trained psychiatric nurses, and other 
staff trained to work with psychiatric patients,'' as used in 
Sec. Sec.  410.43(a)(4) and 410.44(a)(4) would include trained SUD 
nurses and other staff trained to work with SUD patients. Under Sec.  
410.44(b), we proposed that the following services are separately 
covered and not paid as intensive 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

[[Page 81814]]

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 proposed to establish patient 
eligibility criteria for intensive outpatient services. Specifically, 
we proposed 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 noted 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 clarified 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 noted that interested parties have 
raised concerns that this policy may not be clear. Therefore, we 
clarified 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.
    Comment: Commenters suggested the proposed regulation at Sec.  
410.44(a)(2) codifying the condition that IOP services ``are reasonably 
expected to improve or maintain the individual's condition and 
functional level and to prevent relapse or hospitalization'' be 
modified. Specifically, commenters suggested the regulation at Sec.  
410.44(a)(2) be modified to read as follows: ``Are reasonably expected 
to improve or maintain the individual's condition and functional level 
and to prevent relapse or worsening of the individual's condition.'' 
The commenters stated that as IOP is not provided in lieu of 
hospitalization, more expansive language may be appropriate.
    Response: We appreciate the concern that commenters raised that 
more expansive language may be appropriate for patients of an IOP. As 
discussed above, at new Sec.  410.44, we proposed 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. The regulatory language for IOP and PHP is derived 
from the language of section 1861(ff)(2) of the Act. We do not believe 
it is appropriate to revise the language for IOP.
    Comment: A majority of commenters appreciated the clarification 
that the terms ``trained psychiatric nurses, and other staff trained to 
work with psychiatric patients,'' as referenced in Sec.  410.43(a)(4) 
and proposed Sec.  410.44(a)(4) would include trained SUD nurses and 
other staff trained to work with SUD patients; however, they requested 
CMS codify this interpretation in the regulations. Specifically, 
commenters requested that CMS amend the regulations at Sec.  
410.43(a)(4)(i) and (iii), proposed Sec.  410.44(a)(4)(i) and (iii) for 
PHP and IOP, respectively, to include services furnished by SUD 
counselors, and reference individuals with mental health or SUD 
diagnoses. In addition, commenters requested CMS amend Sec.  
410.43(c)(5) and proposed Sec.  410.44(c)(5) to reference ``mental 
health or SUD diagnosis'' as acceptable for both the PHP and IOP 
benefits.
    Response: As discussed in the CY 2024 OPPS/ASC proposed rule (88 FR 
49700 and 49701) 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 SUD to be included under this statutory 
definition and the regulatory definition of PHP at Sec.  410.43(a)(4). 
After consideration of the public comments received, and the 
misconception we have heard that Medicare does not cover PHP for the 
treatment of SUD, we are finalizing an amendment the PHP regulations at 
Sec.  410.43(a)(4)(i) and (iii) to include references to SUD 
professionals and patients with SUD, respectively. Additionally, we are 
finalizing a modification to the proposed IOP regulations at Sec. Sec.  
410.44 (a)(4)(i) and 410.43(a)(4)(iii) to include references to SUD 
professionals and patients with SUD, respectively. Furthermore, we are 
finalizing a modification to the PHP regulation at Sec.  410.43(c)(5), 
as well as the proposed IOP regulation at Sec.  410.44(c)(5), to 
include references to SUD diagnoses.
    We remind readers that the inclusion of SUD in these regulations 
does not change the applicability of any other existing PHP regulations 
or proposed IOP regulations. In all cases, these services must be 
reasonable and necessary, furnished in accordance with a physician 
certification and plan of treatment, and provided by an individual 
working within his or her scope of practice. Further, in the case of 
PHP services for the treatment of SUD, such services must be provided 
in lieu of inpatient hospitalization.
    Comment: Some commenters requested that CMS amend the regulation at 
Sec.  410.43(a)(4)(iii) to specifically reference that the services of 
marriage and family therapists (MFTs) and mental health counselors 
(MHCs) comprise a portion of partial hospitalization services; while 
other commenters requested CMS amend the regulatory exclusions at Sec.  
410.43(b) and proposed Sec.  410.44(b) of PHP and IOP, respectively, to 
encompass the professional services of MFTs and MHCs.
    Response: As we discussed in the 2000 OPPS final rule (65 FR 
18452), payment for partial hospitalization services under the OPPS 
represents the provider's overhead costs, support staff, and the 
services of clinical social workers (CSWs) and occupational therapists 
(OTs), whose professional services are considered to be partial 
hospitalization services for which payment is made to the provider. 
These same components of cost discussed in that 2000 OPPS final rule 
were used to determine the per diem costs for both PHP and IOP for this 
CY 2024 OPPS/ASC final rule. Although we did not propose to name MHCs 
or MFTs in the regulatory language of Sec.  410.43(a) or Sec.  
410.44(a), the services of these providers, when furnished to PHP or 
IOP patients, would constitute services of ``other mental health 
professionals'' under Sec. Sec.  410.43(a)(4)(i) and 410.44(a)(4)(i). 
We did not propose to exclude MHCs or MFTs under Sec.  410.43(b) or 
Sec.  410.44(b), and in accordance with our longstanding policy, to 
maintain the historical patterns of treatment billed during the base 
year, we are clarifying that the services of MFTs and MHCs are 
considered to be partial hospitalization and intensive outpatient 
services. The services of MFTs and MHCs should not be billed separately 
when provided to PHP or IOP patients, because they are included within 
the overhead costs and costs for support staff which are made

[[Page 81815]]

to the provider through the per diem PHP or IOP payment.
    Comment: Commenters requested CMS remove the proposed regulation at 
Sec.  410.44(c)(4) which states an IOP is intended for patients who 
have an adequate support system while not actively engaged in the 
program. Commenters noted that while mental health outcomes are 
enhanced by a patient's support system, many IOP patients have housing 
insecurities or are at risk of being housing insecure. The commenters 
stated conditioning treatment on a patient's support system may 
prohibit patients from enrolling in an IOP.
    Response: As discussed in the CY 2009 OPPS/ASC final rule with 
comment period (73 FR 68695) our goal is to improve the level of 
service furnished in a PHP day, while also ensuring that the partial 
hospitalization benefit is being utilized by the appropriate 
population. In addition, for the program to be fully beneficial, a PHP 
participant should have a strong support system outside of the PHP 
program to help to ensure success. We also believe having a strong 
support system outside of the IOP program to help ensure success will 
further our goal to improve the level of service across the mental 
health continuum of care.
    Final Decision: After consideration of the public comments we 
received, we are finalizing the proposed regulations at Sec.  410.44 
with modifications to include references to SUD. In addition, we are 
modifying the parallel existing regulations for PHP at Sec.  410.43 to 
include the same references to SUD.
b. Coverage of IOP as Medical and Other Health Services Paid under Part 
B
    We proposed 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 proposed conforming changes to the regulations at Sec.  
410.27(a)(2) and (e) introductory text to include references to 
intensive outpatient services.
    We did not receive any public comments on our proposal, and we are 
finalizing our proposal without modification 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. Additionally, we are 
finalizing our proposal to codify conforming changes to the regulations 
at Sec.  410.27(a)(2) and (e) introductory text to include references 
to intensive outpatient services.
c. Technical Changes to Codify Requirements for IOP at CMHCs
    We proposed technical changes to the regulations at 42 CFR parts 
488 and 489.
    First, we proposed 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 proposed 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 proposed 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.
    Comment: Commenters expressed concern that there may be a mistaken 
impression that 42 CFR 489.2 means that the only clinical activities 
for which an entity enrolled as a CMHC may bill Medicare are PHP and 
IOP services. The commenters requested CMS clarify that nothing in the 
CMHC conditions for participation prevents or discourages entities 
enrolled as CMHCs from also being enrolled in Medicare as Part B 
suppliers (physician groups) furnishing outpatient behavioral health 
services covered under the Physician Fee Schedule (PFS).
    Response: We thank the commenters for raising concerns about a 
potential misinterpretation of Sec.  489.2 to mean that an entity 
enrolled as a CMHC may only bill Medicare for PHP and IOP services. In 
response to these concerns, we are clarifying that nothing in 
regulation, including the CMHC conditions of participation, prohibits 
an entity from enrolling as a CMHC and also enrolling in Medicare as a 
physician group to provide and bill for outpatient behavioral health 
services under Medicare Part B. In fact, CMHC conditions of 
participation at Sec.  485.918(b) require CMHCs to provide a broad 
array of outpatient behavioral health services to the individuals they 
serve. When billing for PHP or IOP, the CMHC would submit a facility 
bill for payment under the OPPS at the applicable PHP or IOP per diem 
rate. When billing for other outpatient behavioral health services 
under Medicare Part B, including services for PHP and IOP patients that 
are excluded under Sec. Sec.  410.43(b) and 410.44(b) and paid 
separately, the billing practitioner would bill for the services 
provided, subject to all applicable billing requirements under the PFS. 
We also note that CMHC conditions of participation under part 485, 
subpart J, apply to all patients of the CMHC, so if a patient is 
discharged from a PHP or IOP and begins receiving behavioral health 
services billed under Medicare Part B, the CMHC conditions of 
participation would continue to apply.
    Final Decision: After consideration of the public comments we 
received, we are finalizing our proposals without modification to add 
the statutory basis for IOP at CMHCs at Sec.  488.2 and to revise the 
provision at 42 CFR 489.2(c)(2) so that CMHCs may enter into provider 
agreements to furnish IOP services.
d. Technical Changes to Codify Coverage of IOP at CMHCs
    We proposed several technical changes and additions to the 
regulations at Sec. Sec.  410.2, 410.3, 410.111, 410.150, and 410.173.
    First, we proposed to revise the definition of ``Community Mental 
Health Center (CMHC)'' at Sec.  410.2 to refer to intensive outpatient 
services. Specifically, we proposed 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 proposed to revise the 
definition of ``Participating'' at Sec.  410.2 to refer to intensive 
outpatient services as services that CMHCs can provide. Specifically, 
we proposed 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 clarified that the 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

[[Page 81816]]

types of services in order to be considered participating.
    Comment: Commenters appreciated the clarification that 
organizations need not furnish both PHP and IOP in order to qualify as 
a CMHCs and were generally supportive of the proposed regulation at 
Sec.  410.2 to refer to intensive outpatient services as part of the 
definition of ``Community Mental Health Center (CMHC)''. However, 
commenters requested clarification on why the reference to psychosocial 
rehabilitation is included in the definition of CMHC. The commenters 
stated their understanding that PHP and IOP are the only two discrete 
Medicare services for which CMHCs may bill the program under the CMHC 
enrollment.
    Response: We appreciate commenters' support of the proposed 
definition of CMHC at regulation Sec.  410.2. In response to the 
comments regarding CMHCs providing psychosocial rehabilitation, as 
discussed in the 1994 interim final rule with comment period (59 FR 
6571) section 1916(c)(4) of the Public Health Service (PHS) Act (42 
U.S.C. 300x-4(c)(4)) requires a CMHC to provide specialized outpatient 
services; 24-hour-a-day emergency care services; day treatment, other 
partial hospitalization services, or psychosocial rehabilitation 
services; screenings to determine appropriateness of admission to State 
mental health facilities; and consultation and education services. 
Accordingly, in that same interim final rule with comment period (59 FR 
6577) CMS (formerly known as Health Care Financing Administration 
(HCFA)) finalized the definition of CMHC in regulation at Sec.  410.2 
to include an entity that provides psychosocial rehabilitation 
services.
    In addition, we proposed 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 final rule with comment 
period for discussion on the proposed amendments to regulations at 
Sec.  485.918(b)(1)(iii).
    We did not receive any public comments on our proposal and are 
finalizing a revision to 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.
    In addition, subpart E of part 410 includes requirements for 
Community Mental Health Centers (CMHCs) Providing Partial 
Hospitalization Services. We proposed to modify the subpart E heading 
to include a reference to intensive outpatient services as well. Under 
subpart E, we proposed to add a new Sec.  410.111 to set forth 
Requirements for coverage of intensive outpatient services furnished in 
CMHCs. We proposed 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).
    We did not receive any public comments on our proposals and are 
finalizing a modification to the subpart E heading to include a 
reference to intensive outpatient services, and the addition of a new 
Sec.  410.111 to set forth Requirements for coverage of intensive 
outpatient services furnished in CMHCs.
    Additionally, we proposed to revise Sec.  410.150(b)(13) to include 
a reference to intensive outpatient services. Specifically, we proposed 
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.
    We did not receive any public comments on our proposal and are 
finalizing a revision to Sec.  410.150(b)(13) to include a reference to 
intensive outpatient services.
    We also proposed to add a new Sec.  410.173 to establish conditions 
of payment for IOP services furnished in CMHCs. We proposed to state 
that 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.
    We did not receive any public comments on our proposal and are 
finalizing the addition of Sec.  410.173 as proposed.
    Lastly, we proposed 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. The 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 the payment methodology under the OPPS for intensive 
outpatient services is found in section VIII.D of this final rule with 
comment period.
    Final Decision: After consideration of the public comments we 
received, we are finalizing the proposed technical changes and 
additions to the regulations at Sec. Sec.  410.2, 410.3, 410.111, 
410.150, and 419.21 as proposed.
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 proposed 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.
    Comment: Commenters were supportive of the proposal 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. However, 
commenters requested clarification whether the proposed regulation at 
42 CFR 410.155(b)(2)(iii) means that the mental health treatment 
limitation does not apply to the professional services furnished to PHP 
or IOP participants, under the PHP or IOP plan of care, by clinicians 
other than physicians even though those services are billed under the 
Part B PFS rather than the OPPS.
    Response: Under Sec.  410.155(b)(1), services furnished by 
physicians and other practitioners, whether furnished directly or 
incident to those practitioners' services, are subject to the 
limitation if they are furnished in connection with the treatment of a 
mental, psychoneurotic, or personality disorder and are furnished to an 
individual who is not an inpatient of a hospital. This includes 
services furnished directly by physicians to PHP

[[Page 81817]]

and IOP patients. However, we are clarifying that since CY 2014, under 
current regulation at Sec.  410.155(a)(5), 100 percent of the expenses 
incurred for such services during a calendar year are considered 
incurred expenses under Medicare Part B when determining the amount of 
payment and deductible.
    Final Decision: After consideration of the public comments we 
received, we are finalizing without modification our proposed 
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 proposed to codify the content of the certification and plan of 
treatment requirements for intensive outpatient services at Sec.  
424.24(d). Specifically, we proposed 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 noted 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.
    Comment: Commenters disagreed that the certification for IOP 
services should be limited to a physician. Commenters requested that 
CMS explicitly allow psychiatric nurse practitioners to certify the 
need for IOP services and plan of care.
    Response: We understand the commenter's request to expand the 
certification of IOP services to non-physician mental health 
professionals. However, section 1861(ff) of the Act, as amended by 
section 4124(b)(2)(B) of the CAA, 2023, specifically states the 
certification must be determined by a physician. Section 1861(r) of the 
Act defines ``physician'' as a doctor of medicine or osteopathy legally 
authorized to practice medicine and surgery by the State in which he 
performs such function or action. Therefore, we do not believe we have 
the ability to expand the certification of the need for IOP services to 
psychiatric nurse practitioners or other mental health professionals.
    Comment: A few commenters requested that CMS revise the minimum 
hours per week for the IOP program from 9 hours per week to 6 hours per 
week. The commenters stated that IOPs should be highly flexible and 
reducing the number of required hours would allow a patient to ``step 
down'' within the confines of IOP treatment, without immediately 
jumping to individual mental health services.
    Response: We appreciate the commenter's suggestions to provide 
greater flexibility within the mental health continuum of care. 
However, section 1861(ff) of the Act, as amended by section 
4124(b)(2)(B) of the CAA, 2023 specifically states that a patient must 
require a minimum of 9 hours of IOP services per week. As discussed in 
section VIII.D.3 of this final rule with comment period, we proposed 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) for days with three or fewer services while we 
monitor the initial utilization of IOP services. In addition, patients 
who do not meet the requirement of needing at least 9 hours per week of 
IOP services may still receive individual mental health services under 
the OPPS.
    Additionally, we proposed 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 stated that 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 stated that we believe 
that a consistent 60-day interval would be the most appropriate way to 
implement the statutory recertification requirement for IOP.
    We solicited 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 
requested 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 requested that commenters provide as 
much detail as possible about the rationale for a shorter 
recertification interval, if appropriate.
    Lastly, we proposed to 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.
    Comment: Most commenters supported the proposal 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. These commenters 
agreed that the proposal is consistent with the CAA, 2023 requirements 
and that a shorter than 60-day recertification interval for IOP 
patients would not be beneficial.
    A few other commenters stated the recertification interval should 
be no less frequently than every 30 days. The commenters advocating for 
a 30-day recertification interval argued that patients at the IOP level 
of care should be in a significantly more stable condition than at the 
PHP level of care, and after 30 days of service, should continue to 
improve their stability. Further, the commenters stated a 60-day 
recertification interval may encourage a longer length of stay and go 
against the preference for always keeping the patient at the least 
restrictive level of care.
    Response: We appreciate the input from commenters. As we stated in 
the CY 2024 OPPS/ASC proposed rule (88 FR 49702) we believe that a 
consistent 60-day interval would be the most appropriate way to 
implement the statutory recertification requirement for IOP. We intend 
to monitor the provision of services and lengths of stay in the IOP 
program, and may consider changes to

[[Page 81818]]

the IOP recertification interval, if necessary, in future rulemaking.
    Final Decision: After consideration of the public comments we 
received, we are finalizing, without modification, our proposal to 
codify the content of the certification and plan of treatment 
requirements for intensive outpatient services at Sec.  424.24(d).

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

1. Condition Code 41 and 92
    In the CY 2024 OPPS/ASC proposed rule, we explained that 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 
stated that 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.
    We noted that 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. 
We explained that in order to differentiate between IOP and PHP for 
billing purposes, the National Uniform Billing Committee (NUBC) has 
approved a new condition code, condition code 92, to identify intensive 
outpatient claims. Therefore, we proposed to require hospitals and 
CMHCs to report condition code 92 on claims to indicate that a claim is 
for intensive outpatient services. We proposed 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 proposed to require 
CMHCs to report condition code 41 for partial hospitalization claims. 
We stated that we believe this requirement would better allow us to 
identify which claims are for PHP and which are for IOP. We solicited 
comment on these proposed reporting requirements for PHP and IOP.
    Comment: Commenters supported the proposal that hospitals and CMHCs 
report condition code 41 to identify partial hospitalization claims, 
and condition code 92 to identify intensive outpatient claims. The 
commenters agreed with the importance of distinguishing between PHP and 
IOP claims.
    Response: We appreciate the commenters' support. Beginning January 
1, 2024, we will require the use of condition code 41 on all PHP claims 
from hospitals and CMHCs and require the use of condition code 92 on 
all IOP claims from hospitals and CMHCs. We will issue operational 
guidance explaining the use of these condition codes in further detail.
2. Proposed HCPCS Coding for CY 2024
    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 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 
proposed 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 96.
    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 individual mental health 
services. Therefore, we proposed to add several HCPCS codes that are 
currently recognized as mental health codes under the OPPS, but are not 
recognized as PHP codes, to the list of codes that would be recognized 
for PHP payment. We proposed to maintain all of the existing PHP codes, 
except for one. We proposed to remove 90865 Narcosynthesis, because we 
stated that 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 proposed that the HCPCS codes listed 
in Table 43 of the CY 2024 OPPS/ASC proposed rule (88 FR 49704 and 
49705) would be payable when furnished by PHPs or IOPs. For reference, 
this list of codes is reproduced in Table 96 of this final rule with 
comment period.
BILLING CODE 4150-28-P

[[Page 81819]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.133


[[Page 81820]]


[GRAPHIC] [TIFF OMITTED] TR22NO23.134

    We proposed to add 18 codes to the list of recognized PHP/IOP 
codes, as shown in Table 96 of this final rule with comment period. 
These codes are currently recognized as mental health codes under the 
OPPS, and we stated we believe it would be appropriate to recognize 
them for PHP and IOP as well. Additionally, we proposed 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 96, we proposed to add CPT code 90853 Group 
psychotherapy to the list of service codes recognized for PHP and IOP. 
We stated we believe there could be overlap between 90853 and two 
existing Level II HCPCS codes for PHP group psychotherapy, specifically 
G0410 and G0411. We stated that we considered 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 
solicited comments on this topic, and were interested in hearing 
specific reasons commenters believe support either keeping G0410 and 
G0411 on the list or removing them. We stated that we were 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 proposed to use the list of HCPCS codes in Table 96 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 final rule with comment period. In addition, as 
discussed in section VIII.D of this final rule with comment period, we 
proposed to calculate the costs for 3-service and 4-service days based 
on the list of HCPCS codes in Table 96. We reminded 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, and we identified the services that are currently included in the 
Partial Hospitalization Primary list along with those which we proposed 
to add based on our analysis of the services included on days with 
three and four services from the proposed list shown in Table 96 of 
this final rule with comment period. We proposed to maintain this 
requirement for CY 2024 and subsequent years to qualify for payment at 
the PHP or IOP APC. Thus, we proposed 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 
proposed 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, 
which is reproduced in Table 97 of this final rule with comment period 
for reference.

[[Page 81821]]

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BILLING CODE 4150-28-C
    Lastly, we proposed that in the future, in the event there are new 
codes that represent the PHP and IOP services described under 
Sec. Sec.  410.43(a)(4) and 410.44(a)(4), respectively, we would add 
such codes to Table 96 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 proposed this sub-regulatory process in order to pay 
expeditiously when new codes are created that describe any of the 
services enumerated at Sec. Sec.  410.43(a)(4) and 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. 
We proposed that 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 invited public comment on the proposed consolidated list of 
HCPCS codes that would be payable when furnished in a PHP and IOP. As 
discussed in the following section of this CY 2024 OPPS/ASC final rule, 
we also solicited comment on any additional codes that we should 
consider adding. Specifically, we stated that we were 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 shown in Table 96 of this final rule with 
comment period.
    Comment: Commenters supported the removal of 90865 Narcosynthesis 
and agreed this code is not widely used in the provision of PHP. The 
commenters also supported a consolidated list of HCPCS codes that would 
align both the PHP and IOP benefits.
    Response: We appreciate the commenters' support. After 
consideration of the public comments we received, we are finalizing the 
removal of 90865 Narcosynthesis from the list of HCPCS codes applicable 
for PHP and IOP.
    Comment: One commenter expressed support for adding 90839 (Psytx 
crisis initial 60 min) to the PHP and IOP code list, but also requested 
that CMS include 90840 (Psytx crisis ea addl 30 min) to recognize the 
time associated with additional crisis psychotherapy services.
    Response: We appreciate the commenter's suggestion, and we agree 
that this code would be appropriate to recognize for PHP and IOP. We 
have

[[Page 81822]]

included 90840 (Psytx crisis ea addl 30 min) in Table 98 of this final 
rule with comment period.
    Comment: Commenters supported adding 90853 (Group psychotherapy) as 
well as maintaining G0410 (Grp psych partial hosp/IOP 45-50) and G0411 
(Inter active grp psych PHP/IOP) on the list of HCPCS codes applicable 
to PHP and IOP. The commenters stated there are differences in the 
application and descriptions between these codes. Accordingly, 
commenters stated including codes G0410, G0411, and 90853 on the list 
would avoid unintentional billing errors.
    Response: We appreciate the commenters' input. After consideration 
of the public comments we received, we are finalizing adding code 90853 
Group psychotherapy and maintaining G0410 and G0411 on the list of 
HCPCS codes applicable to PHP and IOP. We intend to monitor the 
utilization of these codes and may consider changes in future 
rulemaking, if necessary.
    Comment: Commenters supported adding codes to the list of HCPCS 
applicable for PHP and IOP through a sub-regulatory process when the 
codes added describe a service already enumerated at Sec.  410.43(a)(4) 
or Sec.  410.44(a)(4).
    Response: We appreciate the commenters' support. After 
consideration of the public comments we received, we are finalizing our 
proposal to add codes to the list of HCPCS applicable for PHP and IOP 
through a sub-regulatory process when the codes to be added describe a 
service already enumerated at Sec.  410.43(a)(4) or Sec.  410.44(a)(4).
    Comment: Commenters did not support the proposal requiring that to 
qualify for payment for the IOP APC (5851, 5852, 5861 or 5862) one 
service must be from the Partial Hospitalization and Intensive 
Outpatient Primary list. The commenters stated that the requirement of 
a primary service may undermine the flexibility to provide the full 
scope of services within IOP. Commenters suggested CMS review 
utilization data to determine which services should be added or removed 
from the Partial Hospitalization and Intensive Outpatient Primary 
Services list.
    Response: While we appreciate commenters' input, we disagree that 
requiring one service from the Partial Hospitalization and Intensive 
Outpatient Primary list in order to qualify for payment for under IOP 
may undermine the flexibility to provide the full scope of services. To 
ensure program integrity, we expect that at least one of the services 
on the Partial Hospitalization and Intensive Outpatient Primary list 
will be indicated per day for patients who need the level of care 
offered by a PHP or IOP program.
    Final Decision: After consideration of the public comments we 
received, we are finalizing our proposal to add code 90853 Group 
psychotherapy, as well as to maintain G0410 and G0411 on the list of 
HCPCS codes applicable to PHP and IOP, as well as to add additional 
codes describing a service already enumerated at Sec.  410.43(a)(4) or 
Sec.  410.44(a)(4) through a sub-regulatory process.
    Further, we are finalizing that at least one service must be from 
the Partial Hospitalization and Intensive Outpatient Primary Services 
list to qualify for payment for the PHP or IOP APC. The final list of 
Partial Hospitalization and Intensive Outpatient Primary Services is 
found in table 99 of this final rule with comment period.
3. Additional HCPCS Codes Considered for CY 2024 in Response to 
Comments
    As we noted in the prior section, we solicited comment in the CY 
2024 OPPS/ASC proposed rule on any additional codes that we should 
consider adding to the list of HCPCS Applicable for PHP and IOP. 
Specifically, we stated that we were 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 shown in Table 96 of this final rule with comment period.
    We provided some examples of such services for public consideration 
and comment, including caregiver-focused services, services of peer 
support specialists, and services related to discharge planning and 
care coordination. In addition, commenters suggested additional 
services for consideration, as discussed in the following sections.
a. Caregiver-Focused Services
    In the proposed rule, we explained that we were particularly 
interested in whether it would be appropriate to include caregiver-
focused services in the list of recognized services for PHP and IOP. We 
identified and solicited comment on including 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 TRAINING 1ST 30 MIN
     9X016 CAREGIVER TRAINING EA ADDL 15
     9X017 GROUP CAREGIVER TRAINING
    We noted that the CMHC conditions of participation at Sec.  
485.916(b) and (c) already include references to the role of caregivers 
in the development and implementation of the individualized treatment 
plan for PHP patients, and we referred readers to section XVII.B.4 of 
the CY 2024 OPPS/ASC proposed rule for discussion of proposed 
amendments to the regulations at Sec.  485.916(d). We solicited 
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 
noted 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.
    Comment: Many commenters supported the inclusion of caregiver-
focused services, such as codes 96202, 96203, 96161, 9X015, 9X016, and 
9X017, in the list of recognized services for PHP and IOP. A majority 
of commenters advocated for both including caregiver-focused services 
in the cost per day and in the determination of the number of services 
provided per day. One commenter supported including caregiver-focused 
services in the cost per day but excluding them from the determination 
of number of services provided per day.
    Response: In light of commenters' input, we are adopting the 
identified codes for caregiver-focused services in the final 
consolidated list of HCPCs codes recognized for PHP and IOP. We note 
that placeholder codes 9X015, 9X016, and 9X017 have been replaced with 
CPT codes 97550, 97551, and 97552 respectively. We believe that 
including caregiver services as covered under the PHP and IOP benefits 
supports the directive to consider family caregivers across policies 
and programs under the Executive Order on Increasing

[[Page 81823]]

Access to High-Quality Care and Supporting Caregivers.\163\
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    \163\ https://www.whitehouse.gov/briefing-room/presidential-actions/2023/04/18/executive-order-on-increasing-access-to-high-quality-care-and-supporting-caregivers/.
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    We believe that these services can be appropriately considered 
patient training and education services under Sec. Sec.  
410.43(a)(4)(vii) and 410.44(a)(4)(vii), and therefore we are not 
making any changes to the conditions and exclusions for PHP or IOP in 
adopting these codes. When these codes are reported, they will not 
count toward payment for a 3-service or 4-service day; however, we will 
include the costs associated with providing such services when 
calculating the PHP and IOP payment rates in future years.
b. Discharge and Transition Planning
    In addition, we solicited 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 proposed 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 noted that we 
proposed the same requirement for IOP at Sec.  424.24(d)(3)(iii)(C), 
which we are finalizing in this final rule. 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 
solicited comments on whether the proposed codes shown in Table 96 of 
this final rule with comment period 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 asked 
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.
    Comment: Commenters supported the inclusion of services related to 
discharge and transition between one level of care to another. 
Specifically, commenters suggested codes for discharge-related 
services, care coordination, and case management services, such as 
99484 (Coordinated care services/care coordination). One commenter 
suggested codes 99424-99427 (Principal care management services), 99437 
and 99439 (Chronic care management services), and 99489-99491 (Complex 
chronic care management services). Commenters stated these services are 
especially important for patients with co-occurring conditions that are 
being treated in multiple settings simultaneously. Several commenters 
recommended that CMS recognize proposed coding for Principal Illness 
Navigation (PIN), social determinants of health (SDOH) risk assessment, 
and community health integration (CHI) under the Physician Fee Schedule 
as PHP and IOP codes.
    Response: We thank commenters for their suggestions to consider 
adopting PIN, CHI, and SDOH risk assessment codes, which are described 
in the CY 2024 Physician Fee Schedule proposed rule (88 FR 52325 
through 52336), for inclusion in the list of PHP and IOP codes. As 
discussed in the CY 2024 PFS proposed rule (88 FR 52325), the proposed 
PIN, CHI, and SDOH risk assessment codes are intended to better 
identify and value practitioners' work when they incur additional time 
and resources helping patients with serious illnesses navigate the 
healthcare system or removing health-related social barriers that are 
interfering with the practitioner's ability to execute a medically 
necessary plan of care.
    CMS proposed the following descriptions for CHI codes:
    GXXX1 Community health integration services performed by certified 
or trained auxiliary personnel, including a community health worker, 
under the direction of a physician or other practitioner; 60 minutes 
per calendar month, in the following activities to address social 
determinants of health (SDOH) need(s) that are significantly limiting 
ability to diagnose or treat problem(s) addressed in an initiating E/M 
visit:
     Person-centered assessment, performed to better understand 
the individualized context of the intersection between the SDOH need(s) 
and the problem(s) addressed in the initiating E/M visit.
    ++ Conducting a person-centered assessment to understand patient's 
life story, strengths, needs, goals, preferences and desired outcomes, 
including understanding cultural and linguistic factors.
    ++ Facilitating patient-driven goalsetting and establishing an 
action plan.
    ++ Providing tailored support to the patient as needed to 
accomplish the practitioner's treatment plan.
     Practitioner, Home-, and Community-Based Care 
Coordination.
    ++ Coordinating receipt of needed services from healthcare 
practitioners, providers, and facilities; and from home- and community-
based service providers, social service providers, and caregiver (if 
applicable).
    ++ Communication with practitioners, home- and community-based 
service providers, hospitals, and skilled nursing facilities (or other 
health care facilities) regarding the patient's psychosocial strengths 
and needs, functional deficits, goals, preferences, and desired 
outcomes, including cultural and linguistic factors.
    ++ Coordination of care transitions between and among health care 
practitioners and settings, including transitions involving referral to 
other clinicians; follow-up after an emergency department visit; or 
follow-up after discharges from hospitals, skilled nursing facilities 
or other health care facilities.
    ++ Facilitating access to community-based social services (e.g., 
housing, utilities, transportation, food assistance) to address the 
SDOH need(s).
     Health education--Helping the patient contextualize health 
education provided by the patient's treatment team with the patient's 
individual needs, goals, and preferences, in the context of the SDOH 
need(s), and educating the patient on how to best participate in 
medical decision-making.
     Building patient self-advocacy skills, so that the patient 
can interact with members of the health care team and related 
community-based services addressing the SDOH need(s), in ways that are 
more likely to promote personalized and effective diagnosis or 
treatment.
     Health care access/health system navigation
    ++ Helping the patient access healthcare, including identifying 
appropriate practitioners or providers for clinical care and helping 
secure appointments with them.
     Facilitating behavioral change as necessary for meeting 
diagnosis and treatment goals, including promoting patient motivation 
to participate in care and reach person-centered diagnosis or treatment 
goals.
     Facilitating and providing social and emotional support to 
help the patient cope with the problem(s) addressed in the initiating 
visit, the SDOH need(s), and adjust daily routines to better meet 
diagnosis and treatment goals.

[[Page 81824]]

     Leveraging lived experience when applicable to provide 
support, mentorship, or inspiration to meet treatment goals.
    GXXX2--Community health integration services, each additional 30 
minutes per calendar month (List separately in addition to GXXX1).
    CMS proposed the following description for PIN codes:
    GXXX3 Principal Illness Navigation services by certified or trained 
auxiliary personnel under the direction of a physician or other 
practitioner, including a patient navigator or certified peer 
specialist; 60 minutes per calendar month, in the following activities:
     Person-centered assessment, performed to better understand 
the individual context of the serious, high-risk condition.
    ++ Conducting a person-centered assessment to understand the 
patient's life story, strengths, needs, goals, preferences, and desired 
outcomes, including understanding cultural and linguistic factors.
    ++ Facilitating patient-driven goal setting and establishing an 
action plan.
    ++ Providing tailored support as needed to accomplish the 
practitioner's treatment plan.
     Identifying or referring patient (and caregiver or family, 
if applicable) to appropriate supportive services.
     Practitioner, Home, and Community-Based Care Coordination
    ++ Coordinating receipt of needed services from healthcare 
practitioners, providers, and facilities; home- and community-based 
service providers; and caregiver (if applicable).
    ++ Communication with practitioners, home-, and community-based 
service providers, hospitals, and skilled nursing facilities (or other 
health care facilities) regarding the patient's psychosocial strengths 
and needs, functional deficits, goals, preferences, and desired 
outcomes, including cultural and linguistic factors.
    ++ Coordination of care transitions between and among health care 
practitioners and settings, including transitions involving referral to 
other clinicians; follow-up after an emergency department visit; or 
follow-up after discharges from hospitals, skilled nursing facilities 
or other health care facilities.
    ++ Facilitating access to community-based social services (e.g., 
housing, utilities, transportation, food assistance) as needed to 
address SDOH need(s).
     Health education--Helping the patient contextualize health 
education provided by the patient's treatment team with the patient's 
individual needs, goals, preferences, and SDOH need(s), and educating 
the patient (and caregiver if applicable) on how to best participate in 
medical decision-making.
     Building patient self-advocacy skills, so that the patient 
can interact with members of the health care team and related 
community-based services (as needed), in ways that are more likely to 
promote personalized and effective treatment of their condition.
     Health care access/health system navigation.
    ++ Helping the patient access healthcare, including identifying 
appropriate practitioners or providers for clinical care, and helping 
secure appointments with them.
    ++ Providing the patient with information/resources to consider 
participation in clinical trials or clinical research as applicable.
     Facilitating behavioral change as necessary for meeting 
diagnosis and treatment goals, including promoting patient motivation 
to participate in care and reach person-centered diagnosis or treatment 
goals.
     Facilitating and providing social and emotional support to 
help the patient cope with the condition, SDOH need(s), and adjust 
daily routines to better meet diagnosis and treatment goals.
     Leverage knowledge of the serious, high-risk condition 
and/or lived experience when applicable to provide support, mentorship, 
or inspiration to meet treatment goals.
    GXXX4--Principal Illness Navigation services, additional 30 minutes 
per calendar month (List separately in addition to GXXX3).
    CMS proposed the following description for SDOH risk assessment:
    GXXX5, Administration of a standardized, evidence-based Social 
Determinants of Health Risk Assessment, 5-15 minutes, not more often 
than every 6 months
    We note that placeholder codes GXXX1 and GXXX2 have been replaced 
with GCPCS codes G0019 and G0022, respectively; placeholder codes GXXX3 
and GXXX4 have been replaced with HCPCS codes G0023 and G0024 
respectively; and placeholder code GXXX5 has been replaced with HCPCS 
code G0136.
    As described above, all of these proposed codes include activities 
related to addressing social needs. Both PIN and CHI include certain 
care coordination activities and care transitions for the patient. 
However, there are distinct differences in the primary focus of PIN and 
CHI codes. As discussed in the CY 2024 PFS proposed rule (88 FR 52334), 
CMS proposed that in order to bill for PIN, time spent providing such 
services must be documented in the medical record in its relationship 
to the serious, high-risk illness. On the other hand, in the case of 
CHI services, CMS proposed that time spent providing such services must 
be documented in the patient's medical record in its relationship to 
the SDOH need(s) they are intended to address and the clinical 
problem(s) they are intended to help resolve (88 FR 52329).
    As discussed in the CY 2024 Physician Fee Schedule proposed rule 
(88 FR 52335), CMS proposed that a practitioner could bill separately 
for other care management services during the same month as PIN or CHI, 
if time and effort are not counted more than once, requirements to bill 
the other care management services are met, and the services are 
medically reasonable and necessary. However, in the case of a patient 
participating in a PHP or IOP, we anticipate that the time and effort 
of facility staff in addressing the components of PIN services would 
generally be duplicative of the time and effort of providing CHI 
services. Furthermore, because PIN also includes an assessment of and 
activities related to addressing social needs, we believe that for PHP 
and IOP patients, the time and effort of facility staff associated with 
PIN services would generally be duplicative of the time and effort of 
providing SDOH risk assessment services.
    We believe PIN would generally be the most appropriate code for 
patients participating in a PHP or IOP, because a patient's 
participation in one of these programs indicates the presence of a 
serious, high-risk mental health condition (inclusive of SUD). In 
addition, participation in a PHP or IOP requires certification and 
periodic recertification of the need for such services by a physician, 
which we believe is analogous to an initiating visit that is required 
for PIN services billed under the PFS. Therefore, after consideration 
of the public comments we received, we are adopting PIN services as 
applicable for PHP and IOP. We believe the PIN services described by 
codes G0023, G0024 appropriately describe the broad range of services 
that PHP and IOP staff provide to program participants each patient 
month, which include discharge and transition planning, care 
coordination, and case management services within PHPs and IOPs. We 
note that as discussed in the CY 2024 PFS final rule, CMS is removing 
references to peer support specialists from the final descriptions for 
G0023 and G0024, and is finalizing separate codes that better represent 
the

[[Page 81825]]

scope of practice for peer support specialists.
    In addition, we note that these PIN services are reported monthly 
and represent time spent throughout the month; therefore, we will not 
count PIN services in the evaluation of whether a PHP or IOP day 
receives the 3-service or 4-service day for payment; however, we intend 
to analyze utilization and cost data for these services and consider 
any payment changes in future rulemaking to better recognize such 
costs.
    We are not adopting SDOH risk assessment or CHI services described 
by G0136, G0019, and G0022 because we believe the inclusion of these 
codes would likely be duplicative of PIN services for a patient 
participating in a PHP or IOP. With respect to the principal care 
management, chronic care management, and complex chronic care 
management services that commenters suggested, we discussed these 
recommendations with CMS medical officers and have determined these 
services are more appropriate for the primary care setting, rather than 
a defined program of services like a PHP or IOP.
c. Peer Support Specialists
    Additionally, we solicited comments in the proposed rule 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.\164\ We 
stated in the CY 2024 OPPS/ASC proposed rule that we were interested in 
information about any available codes that would appropriately describe 
such services.
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    \164\ https://www.samhsa.gov/brss-tacs/recovery-support-tools/peers.
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    Comment: Commenters strongly supported the inclusion of peer 
support services in the list of codes recognized for PHP and IOP.
    Response: As discussed above, we are adopting coding for PIN 
services. Additionally, as discussed in the CY 2024 PFS final rule, CMS 
is finalizing additional PIN codes which describe the set of services 
that are within the scope of practice of peer support specialists. As 
shown in Table 98 of this final rule with comment period, we are 
adopting these codes as applicable for PHP and IOP. We believe it is 
appropriate to recognize the services of peer support specialists 
working within the scope of practice for which they are licensed or 
certified under applicable State law, or meeting the requirements set 
forth in the CY 2024 PFS final rule if no applicable State requirements 
exist, as the services of staff trained to work with psychiatric 
patients, which is included under section 1861(ff)(2)(c) and which we 
have codified under the PHP benefit at Sec.  410.43(a)(4)(iii) and are 
finalizing under the IOP benefit at Sec.  410.44(a)(4)(iii) in this 
final rule.
    As we noted above for PIN services, these peer support PIN service 
codes are reported monthly and represent time spent throughout the 
month; therefore, we will not count them in the evaluation of whether a 
PHP or IOP day receives the 3-service or 4-service day for payment; 
however, we intend to analyze utilization and cost data for these 
services and consider any payment changes in future rulemaking to 
better recognize such costs.
d. Testing and Diagnostic Services
    We noted in the proposed rule 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. We included testing and diagnostic services in the proposed 
list of codes shown in Table 96 of this final rule with comment period, 
and we proposed to cover such services under the IOP benefit as well. 
We noted 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 stated that we believe 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 welcomed 
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 shown in Table 96 of this final 
rule with comment period, that could better describe the testing and 
diagnostic services that are provided to PHP patients. In addition, we 
stated that we are interested in understanding whether these services 
are typically provided by an entity other than the PHP, such as by a 
referring provider.
    Comment: Commenters provided useful information about why PHPs are 
not more frequently billing for testing and diagnostic services. 
Specifically, the commenters stated that the vast majority of PHPs and 
IOPs are generally designed to treat common types of behavioral health 
issues and typically focus on depression, anxiety, bipolar disorder, 
and self-harm. Commenters stated that testing and diagnostic services 
are usually more common in specialty programs such as eating disorders, 
obsessive-compulsive disorders, anger management, and child/adolescent 
programs. Additionally, commenters stated that while diagnostic 
services are covered under the PHP benefit, since PHP is intended for 
patients who have a mental health diagnosis, patients that are admitted 
to a PHP typically have a mental health diagnosis from a referring 
provider.
    Response: We appreciate the information that commenters provided 
regarding testing and diagnostic services. While we recognize that 
these may not be used in most programs, we note that section 
1861(ff)(2)(H) specifically includes diagnostic services in the 
definition of partial hospitalization and intensive outpatient 
services. We continue to believe it is appropriate to include these 
codes in the available PHP and IOP code set for those programs that do 
provide these services. We intend to monitor the provision of these 
services for PHP and IOP patients and may consider coding changes in 
the future.
e. Other Categories of Services
    Comment: One commenter suggested including a variety of codes 
commonly billed for occupational therapy. For example, codes 97165-
97167 for low, moderate, and high complexity occupational therapy 
evaluations; and code 97168 Occupational therapy re-evaluation.
    Response: We appreciate the commenter's recommendation to adopt 
more detailed coding for occupational therapy. We note that 
occupational therapy services are an important part of PHPs, 
specifically listed under 1861(ff)(2)(B) and Sec.  410.43(a)(4)(ii). We 
also proposed to include occupational therapy services under Sec.  
410.44(a)(4). We proposed to include G0129, which is the currently 
recognized code for

[[Page 81826]]

occupational therapy services provided for PHP patients, and we 
proposed to recognize this code for IOP patients beginning in CY 2024 
as well. We are not including the more detailed list of CPT codes that 
the commenter recommended; however, we will take this comment into 
consideration to potentially inform future rulemaking.
    Comment: Commenters suggested adding SUD screening and diagnostic 
evaluations (including G0396 and G0397), GXXX5 Social determinants of 
health assessment, and individual and group SUD counseling. 
Additionally, commenters suggested including codes 99446-99449 
Interprofessional phone/internet/electronic health record consultation 
services, as well as withdrawal management, medication management, and 
psychoeducation services. One commenter advocated the creation of a new 
add-on code for psychoeducation services.
    Response: After consideration of the public comments received, we 
do not believe SUD screening and diagnostic evaluations, social 
determinants of health assessment, individual and group SUD counseling, 
withdrawal management, medication management, or psychoeducation 
services are appropriate for the PHP or IOP benefits. We consulted with 
physicians and have determined these services are typically provided by 
a primary care provider for screening purposes.
    Comment: A few commenters suggested including transportation and 
meals.
    Response: While we appreciate the commenters' input, we remind 
readers that section 1861(ff)(2)(I) of the Act excludes transportation 
and meals from the items and services that may be offered provided 
under the PHP and IOP benefits.
    Final Decision: After consideration of the public comments we 
received, we are adopting as final the following list of PHP and IOP 
codes for CY 2024, which is presented in Table 98.
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BILLING CODE 4150-28-P

D. Payment Rate Methodology for PHP and IOP

    In summary, we proposed for CY 2024 to revise our methodology for 
calculating PHP payment rates. We proposed 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 proposed 
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 proposed to establish consistent coding and 
payment between the PHP and IOP benefits, we proposed to consider all 
OPPS data for PHP days and non-PHP days that include 3 or more of the 
same service codes. We proposed to establish four separate IOP APC per 
diem payment rates at the same rates we proposed 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). We received public comments on 
these proposals, which we discuss and provide responses to in the 
following sections of this CY 2024 OPPS/ASC final rule.

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

[[Page 81830]]

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 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 and 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 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 proposed 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 proposed not to apply PHP-specific trims 
and data exclusions, but rather to apply the same trims and data 
exclusions consistent with the OPPS.
    We did not receive any public comments regarding the proposal, and 
we are finalizing it as proposed. Additional information about the data 
trims, data exclusions, and CCR adjustments applicable to the data used 
for this final rule can be found online at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html).\165\
---------------------------------------------------------------------------

    \165\ Click on the link labeled ``CY 2024 OPPS/ASC Notice of 
Final Rulemaking'', which can be found under the heading ``Hospital 
Outpatient Prospective Payment System Rulemaking'' and open the 
claims accounting document link at the bottom of the page, which is 
labeled ``2024 NFRM OPPS Claims Accounting (PDF)''.
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3. CY 2024 Payment Rate Methodology for PHP and IOP
    As we noted in the proposed rule, 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.
    We stated in the proposed rule that while no IOP benefit existed 
prior to the CAA, 2023, 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, we stated that 
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.
    We explained that 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 stated that we believe 
it is appropriate to use the same data and methodology for calculating 
payment rates for both PHP and IOP for CY 2024. We explained that 
although PHP claims can be specifically identified, there is no 
specific identifier or billing code to indicate IOP services. However, 
we noted that 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 
proposed to set IOP payment rates at the same rates as PHP. We stated 
that the primary goal in developing the proposed payment rate 
methodology for IOP and PHP services was to pay providers an 
appropriate amount relative to the patients' needs, and to avoid cost 
inversion in future years.
    For CY 2024, we proposed 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 stated that we believe using the 
broader OPPS data set would allow us to capture data from claims that 
are not identified as PHP, but that include the service codes and 
intensity required for a PHP day. We stated that the larger data set 
would expand the sample size to allow for more precise rate 
calculations. In addition, we proposed to calculate the 3 services per 
day and 4 services per day PHP rates for CMHCs and hospital-based 
programs separately.
    We also proposed to set payment rates for IOP APCs at amounts equal 
to the payment rates for PHP APCs. We stated that 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, we explained that 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 stated that we expect it would be 
appropriate to pay the same per diem rates for IOP and PHP services 
unless future data analysis supports calculating rates independently. 
Table 100 below shows the proposed APCs and the calculated

[[Page 81831]]

geometric mean per diem costs for the CY 2024 OPPS/ASC proposed rule.
[GRAPHIC] [TIFF OMITTED] TR22NO23.141

    For beneficiaries in a PHP or IOP, we proposed 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 proposed 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 noted would be a 
departure from our current policy. We explained that under our current 
policy, we do not make payment for any PHP days with fewer than three 
services. We stated that 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 stated 
that we believe 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 stated that we believe utilizing 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) 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 stated that we expect days with fewer than three 
services would be very infrequent, and that we intend to monitor the 
provision of these days among providers and individual patients.
    Additionally, we proposed 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 explained that 
setting the 3 service per day hospital-based PHP APC per diem payment 
amount as the daily mental health cap would be 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, we noted that consistency with the current 
daily mental health cap would be maintained. Additionally, we stated 
that 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 
stated that 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 noted 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 noted 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. We explained that 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 stated that we continue 
to observe that CMHCs incur significantly different costs than 
hospitals in the provision of PHP services, and stated that we 
anticipate in the future there will be significant differences between 
CMHCs' and hospitals' costs of furnishing IOP services as well. We 
explained that we believe it is appropriate to continue to recognize 
the differences in cost structures for different providers of PHP. We 
further explained that 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 proposed to continue calculating CMHC payment rates based 
solely on CMHC claims. However, we stated that we were 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 calculated combined payment rates for the proposed 
rule by using the broader OPPS data from both hospitals and CMHCs to 
estimate the costs associated

[[Page 81832]]

with providing days with three and four services from the proposed list 
of services, which is reproduced in Table 96 of this final rule with 
comment period. We provided these alternative cost calculations in 
Table 46 in section VIII.D.3.b of the CY 2024 OPPS/ASC proposed rule. 
We solicited comments on whether this approach would be more 
appropriate to consider for establishing payment beginning in CY 2024. 
Specifically, we stated that we were 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 also solicited comments on any ways IOP 
days could differ from PHP days, and considerations that could affect 
payment.
    We received a number of public comments on these proposals. Our 
summaries and responses to the comments we received are included in the 
following paragraphs.
    Comment: Overall, commenters expressed support for the proposed 
methodology of calculating PHP and IOP rates using a broader set of 
OPPS data. Several commenters expressed support for the proposed 
payment for intensive outpatient services and the proposed increases to 
payment rates for partial hospitalization services for CY 2024. One 
commenter raised concerns that using a broader set of OPPS data may 
result in inadequate reimbursement for hospital-based PHPs that furnish 
IOPs, given the additional resource costs associated with these sites 
of care.
    Response: We appreciate the support from commenters. As noted 
earlier, we proposed to use a broader set of OPPS data in order to 
capture data from claims that are not identified as PHP, but that 
include the service codes and intensity required for a PHP day. In 
general, our analysis finds that non-PHP days furnished in the hospital 
outpatient setting that include 3 services and 4 or more services 
generally have comparable costs to PHP days furnished in the hospital 
setting with a comparable number of services provided. As we have 
discussed in prior rulemaking (85 FR 86075; 84 FR 61343), data from a 
small number of providers with low service costs per day have driven 
fluctuations in PHP payment rates, which has necessitated certain 
policies to stabilize payment in the past. We believe that using a 
broader set of OPPS data for days with a similar type and number of 
services appropriately provides stability for the calculation of PHP 
and IOP payment rates for CY 2024.
    Comment: Commenters strongly supported the proposal to stratify 
payment for PHP and IOP days into 3-service and 4-service days. Several 
commenters stated that bifurcating each service into two tiers takes 
into account the varying levels of need among individuals receiving 
services. Commenters also strongly supported our proposal to make 
payment at the applicable 3-service rate for PHP and IOP days with 
fewer than 3 services. Commenters expressed that this flexibility is 
particularly important for ensuring that the new IOP benefit is made 
available to patients.
    Response: We appreciate the support for the proposal to stratify 
payment and to make payment for days with fewer than 3 services. We 
share the commenters' view that these proposed policies are important 
for supporting access to the new IOP benefit and appropriately matching 
payment to daily service intensity for patients participating in both 
PHPs and IOPs. We are reiterating our expectation that days with fewer 
than three services should be very infrequent, and we are reminding 
readers that we intend to monitor the provision of these days among 
providers and individual patients.
    Comment: Commenters generally supported the proposal to calculate 
the per diem payment rates for IOP based on the proposed per diem 
payment rates for PHP. As noted earlier in this final rule, several 
commenters raised concerns that the proposal to pay the same rates for 
PHP and IOP may be driving the proposed requirement that a service from 
the ``primary list'' be provided for each day that received payment. 
These commenters encouraged CMS to revisit this question in future 
rulemaking as cost and claims data are available, to analyze the key 
differences between IOP and PHP, including the prevalence of certain 
services within the bundle.
    Response: We appreciate the support from commenters regarding the 
proposal. As we stated in the proposed rule, we proposed to use the PHP 
rates, calculated using the broader OPPS data set, as the basis for the 
proposed CY 2024 IOP rates, because IOP is a newly established benefit 
for which we do not have definitive data on utilization.
    Regarding the statement that the proposed payment policy is the 
reason for the proposal to require a primary service for each day that 
receives payment, we are clarifying that this is not the case. As we 
noted earlier in this CY 2024 OPPS/ASC final rule, the purpose of the 
primary list is to ensure that IOPs and PHPs are being provided with an 
appropriate level of intensity to ensure program integrity. Although we 
expect IOPs to be less intensive than PHPs and to involve fewer weekly 
hours, we nevertheless expect the services provided to be of an 
intensity that is commensurate with treating the patient's condition. 
Because we have proposed to pay IOP on a per diem basis, we believe it 
is important to ensure a minimum standard of program intensity for each 
date of service.
    Comment: A few commenters expressed support for establishing 
separate payment rates that recognize the cost differences between 
hospital outpatient departments and CMHCs. These commenters agreed with 
CMS that hospitals and CMHCs have different cost structures, and 
encouraged CMS to finalize payment rates that reflect these 
differences.
    In contrast, several commenters opposed the proposal to establish 
separate payment rates for hospital outpatient departments and CMHCs, 
advocating for the alternative combined site-neutral payment rates 
presented in the proposed rule. These commenters stated that the stark 
discrepancy in rates between HOPDs and CMHCs for partial 
hospitalization services may not be representative of these entities' 
true cost structures. These commenters further noted that the addition 
of IOP to the Medicare service array may encourage additional 
facilities around the country to elect to enroll in Medicare as CMHCs. 
Commenters advocating for site-neutral payment responded to CMS' 
concerns regarding coinsurance burdens for CMHC patients by stating a 
large percentage of the low-income patients served by community-based 
behavioral health providers are dual eligible beneficiaries, for whom 
Medicaid typically covers Medicare coinsurance costs.
    Response: We appreciate the comments we received on this topic. As 
we noted in the proposed rule, the best available data that we have at 
this time for assessing the cost of IOP services comes from PHP and 
OPPS days with similar services provided at the expected intensity 
level. Current data for partial hospitalization do reflect significant 
cost structure differences between hospitals and CMHCs, and our 
longstanding payment policies reflect those differences. We have no 
factual basis at this time on which to assume, as many commenters 
suggest, that the stark difference between hospital and CMHC payment 
rates for PHP services indicate that such services do not reflect the 
actual cost structure differences between facility types.
    We recognize that there is uncertainty about the cost structures of 
CMHCs that

[[Page 81833]]

may in the future enroll in Medicare to provide IOP services. As we 
noted in the proposed rule, we intend to analyze actual IOP utilization 
data beginning in CY 2024 to understand the actual structure and costs 
associated with these programs. We are not adopting the commenter's 
recommendation to finalize the alternative site neutral payment rates 
for this CY 2024 OPPS/ASC final rule, but we will take these comments 
into consideration to potentially inform future rulemaking.
    Comment: Interested parties overwhelming advocated for establishing 
the OPPS daily mental health cap based on proposed APC 5864, rather 
than APC 5863 as proposed. Commenters stated that this would be 
consistent with CMS's historical use of the highest PHP per diem 
payment amount as the basis for the OPPS daily mental health cap.
    Response: We appreciate the comments' feedback regarding the 
proposal. We agree with commenters that the proposed APC 5864 would be 
the most resource intensive mental health service and would be 
appropriate to finalize as the basis for the OPPS daily mental health 
cap in CY 2024. As discussed in section II.A.2.c.(1) of this CY 2024 
OPPS/ASC final rule, we are finalizing the use of APC 5864 to establish 
the payment rate for APC 8010 in CY 2024, rather than using APC 5863 as 
proposed.
    Final Decision: After consideration of the public comments we 
received, we are finalizing our proposal to establish separate APC per 
diem payment rates for PHP days with 3 services and 4 or more services 
and to establish separate APC per diem payment rates for CMHCs and 
hospital-based PHPs. We are also finalizing our proposal to set APC per 
diem payment rates for IOP days based on the APC per diem payment rates 
for PHP in CY 2024. Lastly, we are finalizing our proposal to make 
payment at the 3-service rate for PHP or IOP days that have fewer than 
3 services.
a. PHP APC Changes and Effects on Geometric Mean Per Diem Costs
    For CY 2024 and subsequent years, we are finalizing 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 are finalizing our proposal to use the latest available CY 
2022 claims data, and CY 2021 cost data. This is consistent with the 
overall use of cost data for the OPPS, which is discussed in section 
II.A.1.a. of this final rule with comment period. In addition, we are 
establishing 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 methodology, we will use the geometric 
mean per diem cost of $90.02 for CMHCs providing 3-service days (APC 
5853), and the geometric mean per diem cost of $161.80 for CMHCs 
providing 4-service days (APC 5854), as the basis for developing the CY 
2024 CMHC PHP APC per diem rates. Additionally, we will use the 
geometric mean per diem cost of $266.35 for hospital-based providers 
providing 3-service days (APC 5863), and the geometric mean per diem 
cost of $367.79 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 are establishing 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 finalized 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 this CY 2024 final rule, 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 final rule with comment period for more detailed information on 
the consolidated list of HCPCS codes applicable for IOP and PHP 
services.
    We calculated the final payment rates for hospital-based providers 
based on costs for days with three services and days with four services 
using the data from all OPPS claims for hospitals and calculated the 
final 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 proposed and believe it is appropriate to finalize 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 for PHP.
    We analyzed all CMHC and hospital claims data under the OPPS used 
to set final rates for this CY 2024 final rule. We identified all 
patient days that included three or more services from the list in 
Table 98. As discussed in section VIII.D.3 of this final rule with 
comment period, we calculated PHP payment rates for days with three 
services and days with four or more services, and we utilized these PHP 
payment rates for the IOP APCs as well. We are finalizing our proposal 
to calculate separate rates for hospitals and CMHCs.
c. CY 2024 PHP and IOP APC Geometric Mean Per Diem Costs
    Following this structure, the final calculated CY 2024 PHP 
geometric mean per diem cost for all CMHCs for providing 3 services per 
day is $90.02, which we will use for calculating the payment rate for 
the 3-service day APC, CMHC APC 5853. The final calculated CY 2024 
geometric mean per diem cost for all CMHCs for providing four or more 
services per day is $161.80, which we will 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 $266.35, which we will 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 or more services per day is $367.79, which 
we will 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

[[Page 81834]]

CMHCs for providing 3 services per day is $90.02, which we will 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 $161.80, which we will 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 $266.35, which we will 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 
$367.79, which we proposed 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 we are 
finalizing our proposal 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 solicited comments on 
the service mix used to develop the per diem amounts for both PHP and 
IOP. We stated that we are interested in whether the proposed approach 
is appropriate, and any feedback commenters have on the service mix 
provided within each program.
    The final CY 2024 PHP geometric mean per diem costs are shown in 
Table 101 and are used to derive the final CY 2024 PHP APC per diem 
rates for CMHCs and hospital-based PHPs-. As stated in section VIII.D.3 
of this final rule with comment period, we are finalizing our proposal 
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 
final CY 2024 PHP and IOP APC per diem rates are included in Addendum A 
to this final rule with comment period (which is available on our 
website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html) and in Table 101.
[GRAPHIC] [TIFF OMITTED] TR22NO23.142

E. Outlier Policy for CMHCs

    For CY 2024, we proposed 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 final rule with comment period 
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 
and 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 
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 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

[[Page 81835]]

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 final rule with comment period, 
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 final rule with comment period, 
so any provider's costs that exceed the CMHC outlier cap will have its 
payments adjusted downward. After accounting for the CMHC outlier cap, 
we sum all of the estimated outlier payments to determine the estimated 
total CMHC outlier payments.
    (Each Provider's Estimated Costs - Each Provider's Estimated 
Multiplier Threshold) = A. If A is greater than 0, then (A x 0.50) = 
Estimated CMHC Outlier Payment (before cap) = B. If B is greater than 
(0.08 x Provider's Total Estimated Per Diem Payments), then cap 
adjusted B = (0.08 x Provider's Total Estimated Per Diem Payments); 
otherwise, B = B. Sum (B or cap-adjusted-B) for Each Provider = Total 
CMHC Outlier Payments.
     Step 3: We determine the percentage of all OPPS outlier 
payments that CMHCs represent by dividing the estimated CMHC outlier 
payments from Step 2 by the total OPPS outlier payments from Step 1: 
(Estimated CMHC Outlier Payments/Total OPPS Outlier Payments).
    We proposed to continue to calculate the CMHC outlier percentage 
according to previously established policies. However, beginning in CY 
2024, CMHCs will be permitted to provide and bill for intensive 
outpatient services for Medicare patients. Therefore, we proposed 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 proposed 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 proposed to designate approximately less 
than 0.01 percent of the estimated 1.0 percent hospital outpatient 
outlier threshold for CMHCs. This percentage is based upon the formula 
given in Step 3.
    We did not receive any public comments on our proposal and are 
finalizing our proposal as proposed.
3. Cutoff Point and Percentage Payment Amount
    As described in the CY 2018 OPPS/ASC final rule with comment period 
(82 FR 59381), our policy has been to pay CMHCs for outliers if the 
estimated cost of the day exceeds a cutoff point. In CY 2006, we set 
the cutoff point for outlier payments at 3.4 times the highest CMHC PHP 
APC payment rate implemented for that calendar year (70 FR 68551). For 
CY 2018, the highest CMHC PHP APC payment rate 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 proposed to continue 
to pay for partial hospitalization services that exceed 3.4 times the 
proposed CMHC PHP APC payment rate at 50 percent of the CMHC PHP APC 
geometric mean per diem costs over the cutoff point. In addition, we 
proposed 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)))].
    We did not receive any public comments on our proposal and are 
finalizing our proposed policy as proposed.
4. Outlier Reconciliation
    In the CY 2009 OPPS/ASC final rule with comment period (73 FR 68594 
through 68599), we established an outlier reconciliation policy to 
address charging aberrations related to OPPS outlier payments. We 
addressed vulnerabilities in the OPPS outlier payment system that 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 period (83 FR 58874 and 58875 and 81 FR 79678 through 79680).
    We proposed 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

[[Page 81836]]

intensive outpatient services for Medicare patients we proposed 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).
    We did not receive any public comments on our proposal and are 
finalizing our proposed policy as proposed.
5. Outlier Payment Cap
    In the CY 2017 OPPS/ASC final rule with comment period, we 
implemented a CMHC outlier payment cap to be applied at the provider 
level, such that in any given year, an individual CMHC will receive no 
more than a set percentage of its CMHC total per diem payments in 
outlier payments (81 FR 79692 through 79695). 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 and 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 proposed 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 rule, beginning in 
CY 2024, CMHCs will be permitted to provide and bill for intensive 
outpatient services for Medicare patients. Therefore, we proposed 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 proposed 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.
    We did not receive any public comments on our proposal and 
therefore, we are finalizing as proposed.
6. Fixed-Dollar Threshold
    In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59267 
and 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 proposed 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).
    Comment: Several commenters urged CMS to implement a site-neutral 
payment for CMHCs and hospital-based providers for PHP and IOP 
services. Commenters stated that a site-neutral payment would eliminate 
the need for a separate outlier policy for CMHCs.
    Response: We disagree with commenters who believe that a site-
neutral payment would eliminate the need for a separate outlier policy 
for CMHCs. As discussed in the CY 2004 OPPS final rule with comment 
period (68 FR 63469 and 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. Furthermore, 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 and 
79695) to limit the impact of inflated CMHC charges on outlier 
payments. In conclusion, CMS does not believe payment methodology has 
any effect on outlier policy.
    Final Decision: After consideration of the public comments we 
received, we are finalizing our proposed policy as proposed.

[[Page 81837]]

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) of the 
Act to extend Medicare and Medicaid entitlement and payment for rural 
health clinics (RHCs), which are defined as being primarily engaged in 
furnishing outpatient services 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 1861(aa)(2) of the Social Security Act (42 U.S.C. 
1395x(aa)(2)) defines the term ``rural health clinic'', in relevant 
part, as a facility that is located in an area that is not an urbanized 
area and in which there are insufficient numbers of needed health care 
practitioners and is not a rehabilitation agency or a facility 
primarily for the care and treatment of mental diseases. Additionally, 
the law includes a basic requirement that the facility is primarily 
engaged in providing health care services furnished by physicians, 
physician assistants, nurse practitioners, clinical psychologists, and 
clinical social workers to outpatients.
    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 Affordable Care Act 
(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, certified nurse-midwife (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 (88 FR 52398). 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 Indian Self-

[[Page 81838]]

Determination and Education Assistance Act (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.
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 we discuss in the CY 2024 OPPS proposed rule (88 FR 49714 and 
49715) section 4124 of Division FF of the CAA, 2023 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.
    We explained that 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. We 
noted 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.
    As discussed in the CY 2024 OPPS proposed rule (88 FR 49715), 
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. We explained that, 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

[[Page 81839]]

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.
    In the CY 2024 OPPS proposed rule (88 FR 49715), we stated that, in 
order to be consistent with the scope of benefits required for IOP 
services under section 1861(ff)(2) of the Act, we proposed to adopt the 
same standards for IOP services furnished in RHCs and FQHCs as they 
were proposed for the outpatient hospital setting. For the outpatient 
hospital setting, we proposed to add regulations at Sec.  410.44 to set 
forth the conditions and exclusions that would apply for intensive 
outpatient services (88 FR 49700). Therefore, to be consistent with the 
statute, we proposed revisions to the RHC and FQHC regulations at 42 
CFR part 405, subpart X, that would crosswalk to Sec.  410.44. 
Specifically, we proposed the following conforming regulatory changes:
     At Sec.  405.2401, Scope and definitions, we proposed to 
amend the section to add IOP services.
     At Sec.  405.2411, Scope of benefits, we proposed to amend 
the section to include IOP services.
     At Sec.  405.2446, Scope of services, we proposed to amend 
this section to include IOP services.
    We noted that these proposals would expand access to behavioral 
health treatment for Medicare beneficiaries and to ensure continuity of 
care for IOP services to best meet patient needs.
    The following is a summary of the public comments received on the 
scope of benefits for IOP services furnished in RHCs/FQHCs and our 
responses:
    Comment: Many commenters supported our proposal to use the same 
standards for IOP services furnished in RHCs/FQHCs as in other 
settings. Commenters stated that these services would expand access to 
affordable and culturally competent services for the most vulnerable 
Medicare beneficiaries and hopefully increase rural uptake of this 
program. One commenter urged CMS to implement these proposals 
permanently as they will reduce barriers for patients, increase access 
to crucial services, and improve equity. One commenter encouraged CMS 
to continue to seek ways to clarify and enhance occupational therapy's 
role within FQHCs and RHCs. Other commenters urged CMS to provide 
additional guidance to health centers on classifying professional 
services furnished by physicians, NPs, PAs, and psychologists during an 
IOP service.
    Response: We appreciate the commenters support. As we noted in the 
CY 2024 OPPS proposed rule (88 FR 49714) and as discussed in section 
VIII.B.2 of this final rule with comment period, section 4124 of the 
CAA, 2023 established Medicare coverage for IOP services to be 
furnished by FQHCs and RHCs, effective January 1, 2024. Therefore, 
beginning January 1, 2024, IOP is a permanent benefit that RHCs and 
FQHCs will be able to furnish in their respective settings.
    Regarding occupational therapy's role within RHCs and FQHCs, we 
note the IOP benefit includes occupational therapy as part of its list 
of items and services. To reiterate, the types of services covered as 
intensive outpatient services and the classifications of the types of 
professional that can provide some of the 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, provided by an occupational therapist, or under appropriate 
supervision of a qualified occupational therapist by an occupational 
therapy assistant; services of social workers, trained psychiatric 
nurses, and other staff trained to work with psychiatric patients; 
drugs and biologicals furnished for therapeutic purposes; 
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; and 
diagnostic services. CMS is unclear about what the commenter meant by 
``classifying professional services,'' but we note that physicians, 
NPs, PAs, and psychologists are practitioners in FQHCs and as such can 
furnish IOP services. As with any new benefit under Medicare for RHCs 
and FQHCs, we will be updating our sub-regulatory guidance and 
providing outreach and education.
    After consideration of the public comments we received, we are 
finalizing our proposal to adopt the same standards for IOP services 
furnished in RHCs and FQHCs as in the outpatient hospital and CMHC 
settings, as proposed. That is, 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 can be 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. 
Accordingly, we are finalizing our proposal to make conforming 
regulatory changes to Sec. Sec.  405.2401, 405.2411, and 405.2446. We 
note a detailed discussion regarding the final policies under Sec.  
410.44 are available in section VIII.B.2 of this final rule with 
comment period.
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.
    In the CY 2024 OPPS proposed rule (88 FR 49716), we stated to be 
consistent with physician certification and plan of care requirements 
required for IOP under section 1861(ff)(4) of the Act, we proposed to 
adopt the same standards for RHCs and FQHCs as they were proposed for 
the outpatient hospital setting. For the outpatient hospital setting, 
we proposed to codify the content of the certification and plan of 
treatment requirements for intensive outpatient services at Sec.  
424.24(d) (88 FR 49702). We explained that physicians would be required 
to certify that an

[[Page 81840]]

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. Therefore, to be consistent with the statute, 
we proposed 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).
    As discussed in the CY 2024 OPPS proposed rule (88 FR 49716), we 
also proposed to establish the same patient eligibility criteria for 
intensive outpatient services as described in proposed Sec.  410.44(c). 
Specifically, we proposed 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.
    The following is a summary of the public comments received on the 
certification and plan of care requirements for IOP services furnished 
in RHCs/FQHCs and our responses:
    Comment: Commenters were supportive of CMS' proposal to adopt the 
same standards of physician certification and plan of care requirements 
for IOP services furnished in RHCs and FQHCs. One commenter recommended 
that CMS ensure that IOP certification appointments count as FQHC 
visits by amending the Medicare FQHC-specific payment codes to allow 
for a physician visit with the purpose of evaluating a patient for IOP 
(or recertifying the patient) to qualify as a billable mental health 
``visit.''
    Response: We appreciate the support received from commenters. In 
response to comments regarding the IOP certification appointments 
counting as an FQHC visit, we note that 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. We believe that the physician determination of the need for a 
patient to receive IOP services, certification for IOP services and 
recertification would generally be tied to an E/M visit and qualify as 
an RHC or FQHC billable visit. We believe that the FQHC Specific 
Payment Code list of qualifying visits under FQHC PPS \166\ includes an 
array of services and appears to capture the type of visit, that is a 
medical or mental health service that could determine a patient's need 
for IOP and certification or recertification.
---------------------------------------------------------------------------

    \166\ https://www.cms.gov/medicare/medicare-fee-for-service-payment/fqhcpps/downloads/fqhc-pps-specific-payment-codes.pdf.
---------------------------------------------------------------------------

    Comment: We received a comment from an RHC association in response 
to the comment solicitation in the CY 2024 OPPS proposed rule on peer 
services, and whether these would be appropriate to include for PHPs 
and IOPs (88 FR 49707). The commenter supports including services that 
are furnished by a peer support specialist as IOP services. They stated 
that rural areas are facing a dearth of behavioral health practitioners 
and oftentimes rely upon professionals with less intensive education 
and training requirements, like peer support specialists. The commenter 
further stated that peer support specialists also bring lived 
experience to their work, which can help them address the unique needs 
of rural beneficiaries with behavioral health diagnoses and that peer 
support specialists could be treated similarly to community health 
workers in CMS' proposed community health integration services.
    Response: We thank the commenter for raising this concern. As 
discussed in section VIII.C of this final rule with comment period, CMS 
is adopting principal illness navigation (PIN) services as applicable 
to IOP to be included as IOP services after consideration of the 
comments received in support of the inclusion of peer support 
specialist services. Specifically, we discuss the appropriateness of 
the PIN services described by codes G0023, G0024, G0140, and G0146. 
Consequently, to the extent that such services are permissible under 
Sec.  410.44, RHCs and FQHCs could provide them as part of the IOP 
benefit.
    We believe 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.
    With regard to RHCs and FQHCs, we believe that peer support 
specialists are considered auxiliary personnel, and as such can provide 
RHC/FQHC services under the direct supervision of the RHC or FQHC 
practitioner, as long as the peer support specialists are certified or 
trained to provide all elements in the corresponding service and be 
authorized to perform them under applicable State law and regulations. 
A detailed discussion regarding PIN services is available in section 
II.E of the CY 2024 PFS final rule.
    After consideration of the public comments we received, we are 
finalizing our proposal to adopt the same standards for physician 
certification and plan of care requirements for RHCs and FQHCs 
providing IOP services as in the outpatient hospital and CMHC settings. 
In summary, certification requirements include the physician certifying 
and documenting that the patient has a need for a minimum of 9 hours of 
IOP services and must occur at least once every other month.\167\ The 
patient's individualized plan of treatment should address all of the 
conditions that are being treated by the IOP. Recertification of IOP 
should occur at least every 60 days.
---------------------------------------------------------------------------

    \167\ We note in the CY 2024 OPPS proposed rule (88 FR 49716), 
we incorrectly summarized the proposed language for Sec.  424.24(d), 
that is, (1) that the physician must also certify that an individual 
needs IOP services for no more than 19 hours per week and (2) that 
it is a requirement for the first certification take place as of the 
30th day of IOP services.
---------------------------------------------------------------------------

    Accordingly, we are finalizing that for the purpose of furnishing 
IOP services, RHCs and FQHCs must similarly meet the certification and 
plan of care requirements at Sec.  424.24(d). This provision is 
codified in the RHC/FQHC regulations in the final revisions to 
Sec. Sec.  405.2401, 405.2411, and 405.2446 by way of the crosswalk to 
Sec.  410.44 as finalized above in section VIII.B.3. of this final rule 
with comment period. That is, in Sec.  410.44(a)(3) we have finalized 
requirements that intensive outpatient services are furnished in

[[Page 81841]]

accordance with a physician certification and plan of care as specified 
under Sec.  424.24(d). We note a detailed discussion regarding the 
final policies under Sec.  424.24(d) are available in section VIII.B.3 
of this final rule with comment period.
    In addition, we are finalizing the same patient eligibility 
criteria for intensive outpatient services as described Sec.  
410.44(c), as proposed. Specifically, we are finalizing requirements 
that intensive outpatient services are available for patients who meet 
the following criteria: (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 
a detailed discussion regarding the final policies under Sec.  
410.44(c) are available in section VIII.B.2.a. of this final rule with 
comment period.
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) of 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). 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 and 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.
    As we discuss in the CY 2024 OPPS proposed rule (88 FR 49716 and 
49717), 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.
    In the CY 2024 OPPS proposed rule (88 FR 49707 through 49711), we 
provide a detailed discussion of the proposed CY 2024 payment rate 
methodology for IOP. We proposed 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).
    Consequently, in the CY 2024 OPPS proposed rule (88 FR 49716 and 
49717), we addressed our proposed payment policy for RHCs and FQHCs 
that furnish IOP services. We stated that 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 proposed that the 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 proposed 
that payment be based on the lesser of a FQHC's actual charges or the 
rate determined for APC 5861. Additionally, we proposed that 
grandfathered tribal FQHCs will

[[Page 81842]]

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 proposed 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.
    In addition, we solicited 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 solicited comment on whether the 
hospital-based IOP APC 5862 for 4-service days would be appropriate for 
RHCs and FQHCs.
    In the CY 2024 OPPS proposed rule (88 FR 49716 and 49717), we 
discussed the proposals for coding and billing for IOP services under 
the OPPS. We explained that beginning January 1, 2024, the hospital 
outpatient department and CMHCs would be able to furnish items and 
services of both PHPs and IOPs. We stated that we believed it was 
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 
explained that those settings are paid under the OPPS and since they 
can furnish either PHP or IOP, when submitting a claim to CMS for 
payment they would be required to report a new condition code 92 to 
differentiate between PHP and IOP.
    We explained that, while RHCs and FQHCs are not authorized to 
furnish PHP services, we proposed to also require RHCs and FQHCs to 
report condition code 92 to identify intensive outpatient claims. Since 
RHCs and FQHCs are paid for IOP services outside of the RHC AIR 
methodology and FQHC PPS, 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. In addition, we proposed 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.
    We stated, 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. 
Therefore, we proposed conforming revisions under Sec.  405.2468. In 
addition, we stated conforming revisions would be made to the cost 
reporting instructions to account for these changes.
    We received many comments on our proposals to implement the special 
payment rule provisions required by section 4124(c)(1) and (2) of the 
CAA, 2023. The following is a summary of the public comments received 
on the special payment rules for IOP services furnished in RHCs/FQHCs 
and our responses:
    Comment: Commenters were generally supportive of payment for IOP 
services furnished by RHCs/FQHCs to be paid outside of the RHC AIR and 
the FQHC PPS and be paid at the hospital outpatient department (HOPD) 
rate. Commenters were supportive of CMS' proposal for establishing an 
IOP APC per diem payment rates for hospital-based IOP for a 3-service 
day and the use of the condition code for IOP services and agreed with 
the applicability for RHCs and FQHCs. Commenters also supported CMS' 
calculation of the IOP payment methodology. Commenters stated that they 
understood that the statutory language is clear on RHC payment being 
``equal to the amount that would have been paid under this title for 
such services had such services been covered HOPD services furnished by 
a hospital.''
    Response: We appreciate the commenters support on the special 
payment rules as it relates to payment for IOP services at the HOPD 
rate.
    Comment: One commenter stated that flexibilities granted within 
this new benefit for other providers should be extended to RHCs as well 
and asked CMS to allow RHCs to bill for the 3-service day, in the 
occasional instance when a patient completes three or fewer services in 
a day, as well.
    Response: As we discuss above, in the CY 2024 OPPS proposed rule 
(88 FR 49717) we proposed to align with the requirement under the OPPS, 
that in order to qualify for IOP payment, at least one service must be 
from the Intensive Outpatient Primary list. We note Table 99 of this 
final rule with comment period identifies the list of intensive 
outpatient primary services. We believe that this policy is consistent 
with the commenter's request. In addition, since we otherwise did not 
receive comment on the proposal, we are finalizing it as proposed. We 
continue to 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.
    Comment: We received a few comments with respect to CMS' 
solicitation of comments on whether the hospital-based IOP APC 5862 for 
4-service days would be appropriate for RHCs and FQHCs. Several 
commenters requested that CMS apply the hospital-based IOP rate for 4-
service days to RHCs/FQHCs to account for any variations in the cost of 
furnishing these services in RHCs compared to other settings and 
geographic areas. One commenter stated that to help address disparities 
that hinders access to diagnosis and treatment for severe mental 
illness (SMI), major depressive disorder (MDD), and postpartum 
depression (PPD) due to severe mental health provider shortages, CMS 
should finalize an upward variation in the payment rate. The commenter 
stated that this issue disproportionately impacts rural communities and 
minorities. Another commenter stated that given IOP is an entirely new 
benefit and that there is no data on its utilization or cost, CMS 
should grant broad flexibilities to all providers eligible for the 
benefit so it can be used as necessary for patients whether three or 
four separate qualifying IOP services are reported on the claim with 
condition code 92, the RHC should be eligible to receive the associated 
payment, $284.00 or $368.18, respectively, similar to how the program 
will be structured for hospital-based IOPs.
    Response: We appreciate feedback in response to our comment 
solicitation on whether the hospital-based IOP APC 5862 for 4-service 
days would be appropriate for RHCs and FQHCs. We did not propose the 
stratified payment rate structure in the initial year of this new 
benefit for a couple reasons. Section 1861(aa)(2)(K)(iv) of the Act 
describes an RHC and states that an RHC is not a rehabilitation agency 
or a facility which is primarily for the care and treatment of mental 
diseases. Given this statutory provision, we believe uptake will be 
slow since these settings currently focus on primary care service. We 
believe providing a single payment rate valued at 3 services is 
adequate in these settings since the expected acuity of the patients 
are such that they

[[Page 81843]]

typically do not need more than 3 services per day.
    We do not believe that access would be hindered in these early 
stages of a new benefit. Considering a week's worth of care which is 
how the physician certifies the individual, RHCs and FQHCs will be paid 
each day an IOP service is furnished whether it is 1 or more so in the 
rare occasion someone is in the clinic and receives 4 services (but is 
paid for 3), there could be days that week where someone is in the 
clinic and receives 1 service (but is paid for 3).
    Since this is a new program for these settings, we encourage RHCs 
and FQHCs to report all of the IOP services they furnish on the claim 
so that we can gather data. We are excited for RHCs and FQHCs to have 
the opportunity to furnish IOP services and we are interested to see 
these programs grow. We plan to monitor utilization of IOP services in 
these and other settings to inform refinements in the future.
    Comment: A few commenters requested that CMS clarify that an FQHC's 
payment amount for IOP services would be the lesser of the FQHC's 
actual charges for IOP services or the payment amount for a hospital 
outpatient department providing IOP services.
    Response: In response to commenters request that CMS clarify FQHC 
payment, we refer the commenter to the discussion in the proposed rule 
(88 FR 49716 and 49717), that the statutory payment requirements for 
FQHC services are set forth in section 1834(o) of the Act. In addition, 
section 1833(a)(1)(Z) of 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.
    When we apply this framework, section 1834(o)(5)(A) of the Act as 
amended by CAA, 2023 requires 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. Therefore, this payment amount determined 
under section 1834(o) of the Act, is subject to the lesser of 
provisions required under section 1833(a)(1)(Z) of the Act. To clarify, 
as we finalize above, an FQHC's payment amount for IOP services would 
be the lesser of the FQHC's actual charges for IOP services or the rate 
determined for APC 5861.
    Comment: With respect to CMS' solicitation of comments on whether 
the payment rate for IOP services furnished in RHCs/FQHCs should be 
adjusted to reflect the variations in cost of furnishing services in 
different geographic areas, one commenter stated that to offer these 
services, RHCs may need to recruit and retain additional providers and 
staff or make additional investments in their clinics with associated 
expenses that may be higher due to their rural locations. The commenter 
further stated that many RHCs face challenges with reliable broadband 
connection, limited professional staff, etc. Therefore, they would 
support a payment adjustment of 5% for rural providers (practicing in 
areas of 50,000 or less) offering IOP services.
    A few commenters did not support a geographic adjustment for 
reimbursement of IOP services furnished in RHCs because RHC 
reimbursement methodology for the Original Medicare program does not 
have a mechanism for applying a geographic adjustment, and adding the 
geographic adjustment as an additional factor will result in 
inconsistency and unnecessary complexity. Other commenters stated that 
they did not believe the application of a geographical adjuster is 
statutorily required or required by regulation since payment for IOP is 
not under the FQHC PPS and did not believe a geographical adjuster is 
necessary for the purposes of payment for IOP services. These 
commenters urged CMS adopt policies that ensure payments for IOP 
services are equal, no matter the location of the health center.
    Response: We appreciate feedback in response to our comment 
solicitation 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 and 
may take this information into consideration for future rulemaking.
    Comment: There were a few comments related to billing for IOP 
services. Some commenters stated that the proposal did not mention 
whether RHCs/FQHCs will be required to use specific coding (i.e., list 
each HCPCS code for each discreet service provided in an IOP service 
day) on IOP claims and think that doing so would be beneficial in that 
it would improve CMS' access to complete information on the provision 
of IOP across various settings. Other commenters stated that CMS should 
clarify if FQHCs should bill for professionals' services (i.e., MD, 
NPs, PA, and psychologists) via the FQHC PPS or use their Part B 
enrollment. These commenters believe that health centers should be 
permitted to allocate the allowable costs like salary, contracting and/
or benefits costs associated with these professionals' time under the 
``FQHC services'' cost report, if it cannot be included under their IOP 
cost report. Some commenters requested that CMS provide operational 
clarifications on how it plans to require FQHCs to bill for IOP 
services.
    Response: We thank the commenters for their questions on billing 
for IOP services. We agree that specific coding for IOP services will 
improve CMS access to complete information and provide us with more 
data with which to monitor IOP services. In response to comments on the 
use of specific coding on IOP claims, we stated in CY 2024 OPPS 
proposed rule (88 FR 49717), we proposed 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 will 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 and therefore we proposed to adopt the 
same list of services. The list of proposed HCPCS codes is included in 
Table 96 of this final rule with comment period for reference. In 
addition, we proposed 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 97 of this final 
rule with comment period identifies the proposed list of intensive 
outpatient primary services. Regarding commenters' request for CMS to 
clarify if FQHCs should bill for professionals' services (i.e., MD, 
NPs, PA, and psychologists) via the FQHC PPS or use their Part B 
enrollment, as IOP services are a new benefit for RHCs and FQHCs, the 
service is billed on the FQHC claim and not on a professional claim 
using the practitioners Part B enrollment. Therefore, we would like to 
reiterate that although RHCs and FQHCs are paid outside of the RHC AIR 
methodology and FQHC PPS, respectively, for IOP services, FQHCs should 
bill the same way that they currently bill today, that is, on the FQHC 
claim. We will be issuing sub regulatory guidance and billing 
instructions related to the RHC and FQHC IOP policies finalized in this 
final rule as is typically done with any new service.
    Comment: One commenter agrees and supports the proposal to pay 
Grandfathered Tribal FQHCs that furnish IOP services based on the 
outpatient per visit rate via the IHS AIR.

[[Page 81844]]

    Response: We appreciate the support received from the commenter.
    After consideration of the public comments we received, we are 
finalizing our proposal to implement the special payment rules for IOP 
services as proposed. We are finalizing that the rate determined for 
APC 5861 (Intensive Outpatient (3 services per day) for hospital-based 
IOPs) is the payment rate for IOP services furnished in an RHC. For IOP 
services furnished in FQHCs, the payment is based on the lesser of a 
FQHC's actual charges or the rate determined for APC 5861. 
Additionally, 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. 
Accordingly, we are finalizing revisions to 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. Finally, we are finalizing to require RHCs and FQHCs to 
report condition code 92 to identify intensive outpatient claims. 
Tables 98 and 99 of this final rule with comment period display the 
final HCPCS applicable for IOP and the final IOP primary services, 
respectively.
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.
    In the CY 2024 OPPS proposed rule (88 FR 49717), we stated that we 
believe 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 proposed to make revisions 
under Sec.  405.2469 to reflect these changes.
    The following is a summary of the public comments received on the 
FQHC supplemental payment for IOP services furnished in FQHCs and our 
responses:
    Comment: Commenters were generally supportive of CMS' proposal on 
the FQHC supplemental payments. Some commenters stated that the 
proposed rule failed to acknowledge that health centers are reimbursed 
outside of the FQHC PPS rate for IOP, which requires a different 
supplemental payment rate methodology and strongly urged CMS to adopt a 
broader interpretation of the special payment rule to ensure health 
centers are paid up to the original Medicare amount that would be paid 
for IOP services, which is not FQHC PPS. Commenters requested that CMS 
clarify in the final rule that supplemental payments for Medicare 
Advantage (MA) beneficiaries cover the difference between the contract 
rate and the IOP service rate.
    Response: We would like to reiterate that we stated in the CY 2024 
OPPS proposed rule (88 FR 49717), that IOP services provided in an FQHC 
are also subject to the wrap-around payment. We stated that this 
provision ensures FQHCs are paid at least the Medicare amount for FQHC 
services, which includes FQHC PPS and now IOP services. Therefore, if 
the MA organization contract rate is lower than the amount Medicare 
would otherwise pay for FQHC IOP services, FQHCs that contract with MA 
organizations would receive a wraparound payment from Medicare to cover 
the difference (see Sec.  422.316). We further stated that if the MA 
organization contract rate is higher than the amount Medicare would 
otherwise pay for FQHC IOP services, there is no additional payment 
from Medicare for IOP services.
    After consideration of the public comments, we are finalizing our 
proposal as proposed, that is revising Sec.  405.2469 to reflect that 
payment for IOP services are subject to the wrap-around payments.
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.
    In the CY 2024 OPPS proposed rule (88 FR 49717), we explained that 
since IOP services are behavioral health services, we did 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 proposed 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.
    The following is a summary of the public comments received on 
multiple visits for IOP services furnished in FQHCs and our responses:
    Comment: We received a few comments on multiple visits. Commenters 
were generally supportive of CMS' proposal. Some commenters suggested 
that CMS allow, at a minimum, for an exception so that under emergency 
circumstances, an FQHC/RHC mental health visit could be furnished (and 
billable) on the same day that IOP services are provided. The 
commenters understood that that payment for IOP in FQHCs/RHCs, like IOP 
in other settings, will be subject to the clinician exclusions 
described in proposed 42 CFR 410.44(b) and that under this provision, 
the clinical services of various professionals, when delivered as part 
of an IOP care plan, are nonetheless unbundled and not paid for as IOP 
services under the OPPS, but instead, under the relevant Part B 
methodology. However, given that this provision will also apply to IOP 
furnished in FQHCs/RHCs, commenters stated that a prohibition on same-
day payment for mental health visits in RHC/FQHC settings may be 
inappropriate. Other commenters strongly urged CMS to allow for a FQHC 
``mental health visit'' to occur on the same day as IOP services. These 
commenters expressed concern that under the proposed rule, health 
centers risk providing a range of services to a patient without 
adequate reimbursement due to same-day billing restrictions and believe 
there could be instances where same-day IOP and mental health visits 
could occur. They stated as an example that when an IOP patient 
receives individual therapy sessions with physicians or psychologists 
as part of an IOP day, it appears that such a service would be billed 
separately under the relevant methodology (FQHC PPS). They further 
state that as patient centered medical homes, health centers should not 
be precluded from providing two different services to a patient on a 
single day and should be able to bill an FQHC PPS

[[Page 81845]]

mental health service and IOP service if delivered on the same day. 
Another commenter recommended CMS clarify that the IOP benefit does not 
preclude beneficiaries from receiving other services, including remote 
mental health services.
    Response: We thank the commenters for raising these concerns. As we 
stated in the proposed rule (88 FR 49717), IOP services are behavioral 
health services, and we did not believe it would be appropriate to pay 
for a mental health visit and IOP services on the same day. We 
understand that in the HOPD setting, additional mental health services 
may be provided, but are capped at a payment amount not to exceed the 
IOP or PHP payment amounts. We did not intend to imply that additional 
services would not be reportable. Under the RHC AIR and FQHC PPS, when 
there are multiple visits on the same day, we permit those services to 
be reported, however, we only pay for one visit. We believe the same 
situation applies here, that is, if additional mental health visits are 
needed in addition of the 3-IOP services per day, we would expect an 
RHC or FQHC to report those services on the claim. Payment for the 
service would be included in the IOP rate similar to how the additional 
mental health services would be paid for under the OPPS.
    After consideration of the public comments, we are finalizing our 
proposal with a clarification. We are amending Sec.  405.2463(c) in the 
regulations to state that we will pay a mental health visit or IOP 
services on the same day as a medical visit. We are clarifying that if 
a mental health visit is furnished the same day as IOP services, all 
services are covered under Medicare Part B, however, we will only pay 
the IOP rate and the mental health visit will be considered packaged. 
While there could be emergency circumstances for which a mental health 
visit and IOP services are furnished, at this time we believe that it 
is unlikely that an FQHC or RHC would simultaneously have a specific 
patient enrolled in the IOP and need a separate and distinct mental 
health service delivered at the same FQHC or RHC, in a given day of 
service. In addition, we believe that the payment amount is adequate if 
these situations occur, since the rate is based on the costs associated 
with administering an IOP in the hospital setting which represent a 
resource intensive program and, therefore, we should not pay more for a 
day with individual services. As we mentioned above, we recognize that 
this is a new program for these settings, we encourage RHCs and FQHCs 
to report all of the services they furnish on the claim so that we can 
gather data. We plan to monitor utilization of IOP services in these 
and other settings to inform refinements in the future.
6. Other Regulatory Updates
    In addition to the regulatory changes described in this section of 
the rule, we proposed 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 believed 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).
    We did not receive any comments on the proposal. Therefore, we are 
finalizing our proposal as proposed to revise Sec.  405.2400 to reflect 
that 42 CFR part 405, subpart X, is not based 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.

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 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 and bundled payments 
for weekly episodes of care that include methadone, oral 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 proposed 
modifications to the regulations and policies governing Medicare 
coverage and payment for OUD treatment services furnished by OTPs in 
both the CY 2024 OPPS proposed rule (88 FR 49717 through 49723) as well 
as the CY 2024 PFS proposed rule (88 FR 52413 through 52416).
2. Statutory Authority for Coverage of Opioid Use Disorder Treatment 
Service 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 (SUDs). 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.\168\ IOPs can be housed in an OTP, specialty 
addiction treatment facility, community mental health center (CHMC), or 
another setting.\169\ 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).\170\ Section 4124 of the Consolidated Appropriations 
Act (CAA), 2023, which was enacted on December 29, 2022, provides for 
Medicare coverage and payment for IOP services in hospital outpatient 
department (HOPDs), CMHCs, rural health clinics (RHCs), and federally 
qualified health centers (FQHCs). However, section 4124 of the CAA, 
2023 did not address coverage for IOP services furnished in OTP 
settings.
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    \168\ https://www.ncbi.nlm.nih.gov/books/NBK64088/.
    \169\ 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 2.
    \170\ 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 OUD, including FDA-approved opioid agonist and 
antagonist

[[Page 81846]]

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)(2) 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 SUD treatment for Medicare beneficiaries 
(87 FR 45943 and 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 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.\171\ 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.\172\ Among Medicare 
beneficiaries with a SUD, one-third reported that financial barriers 
were a reason for not receiving treatment. Research from the Office of 
the Assistant Secretary for Planning and Evaluation (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.\173\ 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

[[Page 81847]]

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.\174\ 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.\175\ 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,\176\ 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.\177\ 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.\178\ 
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.\179\ 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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    \171\ https://www.sciencedirect.com/science/article/pii/S0749379721000921?via%3Dihub.
    \172\ https://doi.org/10.15585/mmwr.mm675152e1.
    \173\ https://aspe.hhs.gov/sites/default/files/private/pdf/260791/BestSUD.pdf.
    \174\ https://www.samhsa.gov/data/sites/default/files/reports/rpt35326/2021NSDUHSUChartbook102221B.pdf.
    \175\ https://www.sciencedirect.com/science/article/pii/S0376871619302443.
    \176\ https://pubmed.ncbi.nlm.nih.gov/36645315/.
    \177\ https://www.samhsa.gov/data/sites/default/files/reports/rpt39450/2021%20N-SUMHSS%20Annual%20Detailed%20Tables_508_Compliant_2_8_2023.pdf.
    \178\ https://www.sciencedirect.com/science/article/pii/S0749379722001040.
    \179\ https://www.cms.gov/cms-behavioral-health-strategy.
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3. Coverage of IOP Services Furnished by OTPs
a. Inclusion of IOP Services Furnished by OTPs in the Definition of 
Opioid Use Disorder Treatment Service
    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, in the CY 2024 OPPS/ASC proposed 
rule CMS proposed 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 treatment service'' as items and services that 
are furnished by an OTP for the treatment of OUD, 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, 
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.\180\ 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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    \180\ 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 proposed to add a new paragraph 
(ix) to the definition of ``opioid use disorder treatment service'' in 
Sec.  410.67(b) defining a new category of services called ``OTP 
intensive outpatient services'' and incorporate OTP intensive 
outpatient services in the definition that are covered under the Part B 
OTP benefit. Specifically, we proposed 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 proposed 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 proposed to be 
considered OTP intensive outpatient services would include any of the 
following:

[[Page 81848]]

     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.
     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 proposed 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 solicited 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). We explained that this information would 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 
proposed 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 service'' and 
paid for as part of the weekly bundled payment for an episode of care.
    We received many public comments from a variety of commenters on 
our proposal to establish coverage for IOP services provided by OTPs 
and to include IOP services furnished by OTPs in the definition of 
opioid use disorder treatment service. The comments and our responses 
to these comments are included below.
    Comment: We received many comments in strong support of our 
proposal to establish coverage for IOP services provided by OTPs, with 
some commenters expressing appreciation specifically for the proposed 
inclusion of ``OTP intensive outpatient services'' under ``OUD 
treatment services'' at Sec.  410.67(b). Commenters agreed with CMS 
exercising its authority under sections 1861(jjj)(1)(F) and 1834(w) of 
the Act to establish coverage and payment for IOP services furnished at 
OTPs for beneficiaries who have an OUD. Commenters expressed that the 
proposal would improve access to OUD treatment, enhance continuity of 
care for patients with an OUD who need more intensive support and 
services, ensure that OTPs are reimbursed by Medicare for the full 
range of services they provide to beneficiaries, and promote efforts to 
improve health equity for racial/ethnic populations and older 
beneficiaries. Commenters expressed that establishing coverage for IOP 
services at additional sites of care, like OTPs, would further drive 
value for patients and provide another tool for providers to fight the 
ongoing opioid epidemic. Another commenter expressed support for our 
proposal and stated that our proposal goes beyond what was required of 
CMS in the original provisions specified in the CAA, 2023, which first 
authorized coverage and payment for IOP services under Medicare in only 
hospital outpatient departments, CMHCs, RHCs, and FQHCs.
    Response: We appreciate the support from commenters for our 
proposal to extend coverage for IOP services to OTPs for the treatment 
of OUD among Medicare beneficiaries and for recognition that our 
proposal would extend coverage for IOP services beyond the care 
settings addressed in the CAA, 2023 by allowing IOP services to be 
furnished in OTP settings. We agree that establishing coverage for IOP 
services at OTPs and including OTP intensive outpatient services under 
the definition of OUD treatment services could improve continuity of 
care between different treatment settings and levels of care, expand 
access to treatment for Medicare beneficiaries with an OUD, and further 
promote health equity among Medicare beneficiaries.
    Comment: Several commenters agreed with the proposal 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 (e.g, methadone, buprenorphine, 
naltrexone, and naloxone) from the definition of OTP intensive 
outpatient services since 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 and since all necessary and 
appropriate Medications for Opioid Use Disorder (MOUD) should already 
be included in the bundle. Additionally, one commenter responded to our 
comment solicitation requesting additional details on the types of 
drugs or biologicals that can be provided within an IOP program, and if 
these drugs or biologicals overlap with existing medications included 
in the OTP weekly bundles or add-on codes for take-home medications. 
They stated that often medications administered as part of an IOP 
include drugs that cannot be self-administered such as extended-release 
formulations of buprenorphine and naltrexone used to treat OUD. The 
same commenter further requested that CMS provide clarification on 
whether the service associated with the administration of extended-
release formulations of buprenorphine and naltrexone would be billed 
outside the add-on code for IOP services.
    Response: We thank commenters for agreeing with our proposal to 
exclude FDA-approved opioid agonist or antagonist medications for the 
emergency treatment of known or suspected opioid overdose from the 
definition of OTP intensive outpatient services. We also thank the 
commenter

[[Page 81849]]

who submitted additional information on the types of medications that 
are typically administered under an IOP. We note that extended-release 
formulations of buprenorphine and naltrexone, which the commenter 
stated are common medications used in IOP settings, and their 
administration by a healthcare professional are already covered under 
the existing weekly bundles described by HCPCS codes G2069 (medication-
assisted treatment, buprenorphine (injectable)) and G2073 (medication-
assisted treatment, naltrexone). Therefore, these services should 
continue to be billed using the existing codes describing weekly 
bundled payments to OTPs and not by billing the add-on payment for IOP 
services furnished by OTPs.
    Comment: One commenter stated that they supported CMS' proposal 
that would permit IOP and partial hospitalization program (PHP) 
services to be offered in OTPs.
    Response: We would like to clarify that the CY 2024 OPPS/ASC 
proposed rule included a proposal to provide coverage for IOP services 
furnished at OTPs, but not a proposal to provide coverage for PHP 
services furnished at OTPs. PHPs provide services to patients needing 
higher levels of care, requiring 20 or more hours of services per week 
(ASAM Level of Care 2.5), compared to IOPs which consists of at least 9 
hours and no more than 20 hours per week of treatment services (ASAM 
Level of Care 2.1).\181\
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    \181\ https://www.asam.org/asam-criteria/about-the-asam-criteria.
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    Comment: One commenter requested that the requirement for an 
``adequate support system while not engaged in the program'' be 
removed, since this requirement is not reflected in the eligibility 
criteria for many other Medicare services and since individuals who 
need IOP services often do not have an adequate support system.
    Response: We clarify here that the requirement for an ``adequate 
support system while not engaged in the program'' was not proposed as a 
requirement for beneficiaries in need of IOP services in OTP settings. 
Rather, we proposed requirements under paragraph (ix) of the definition 
of ``opioid use disorder treatment service'' in 42 CFR 410.67(b) that 
``OTP intensive outpatient services'' must be ``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, in which a physician must certify that 
the individual has a need for at least 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.'' We note that 
this requirement for an ``adequate support system while not engaged in 
the program'' applies to PHP programs and for IOP services in other 
settings but not OTPs. For a discussion of this requirement and other 
conditions and exclusions pertaining to IOP services furnished in other 
settings, please reference section VIII.B.2.a of this final rule with 
comment period.
    Comment: We received multiple comments encouraging CMS to allow IOP 
services furnished by OTPs under Medicare to be extended to individuals 
with mental health conditions and SUDs other than OUD. Another 
commenter recommended that CMS articulate these broader diagnostic 
eligibilities for OTP intensive outpatient services in regulation.
    Response: We thank commenters for this feedback and acknowledge 
that OTPs may be treating individuals with a variety of mental health 
and SUD-related conditions, as well as co-occurring conditions in 
addition to OUD. However, section 1861(jjj)(1) of the Act, as added by 
section 2005 of the SUPPORT Act, established Medicare coverage for OUD 
treatment services furnished by OTPs and defined ``opioid use disorder 
treatment services'' as ``items and services that are furnished by an 
opioid treatment program for the treatment of opioid use disorder.'' 
Therefore, Medicare payment to OTPs must be for the purposes of 
treating OUD. When OTPs provide mental health and/or SUD services to 
individuals for primary conditions other than OUD, they would not be 
payable under Medicare. However, IOP services for the treatment of 
mental health and/or SUD services are payable under Medicare at 
hospital outpatient departments, CMHCs, FQHCs, and RHCs.
    Comment: One commenter requested that CMS remove the requirement 
for a minimum of 9 hours per week to receive coverage for IOP services, 
since they believed that some patients may face challenges meeting 
these standards if they do not have adequate means or resources. In 
contrast, several other commenters stated that CMS' proposal to require 
nine hours of services per week is appropriate.
    Response: We did not propose to require a minimum of 9 hours of 
services per week for IOP services furnished by an OTP, as the 
commenter suggests. Rather, we proposed, at paragraph (ix) of the 
definition of ``opioid use disorder treatment service'' in Sec.  
410.67(b) that ``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.'' Requiring a physician to certify this level 
of need, that is, a minimum of 9 hours of IOP services per week, is 
consistent with existing clinical standards that describe the intensity 
of these services as specified under the Substance Abuse and Mental 
Health Services Administration's (SAMHSA) treatment guidance. 
Additionally, we proposed that by billing for IOP services, OTPs would 
be attesting to the fact that they have 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 the CY 2024 
OPPS proposed rule (88 FR 49720). We acknowledge that not all services 
will necessarily be 60 minutes in duration, therefore, if an OTP 
furnishes a minimum of nine services, regardless of the length of each 
service, these would meet the threshold to bill for IOP services for 
the treatment of OUD. We understand that there may be weeks where 
beneficiaries do not necessarily meet the minimum of 9 services per 
week for IOP services, and we note that if a beneficiary does not meet 
the minimum of 9 services per week of IOP services, an OTP can still 
continue to bill the weekly bundles and add-on codes described by G2067 
through G2080, and G2115, G2216, and G1028, as long as all applicable 
requirements are met.
    Comment: Several commenters requested additional services be 
considered for the purposes of payment for IOP services, including FDA-
approved medical devices that aid in the reduction of withdrawal 
symptoms associated with SUDs, community health integration (CHI), 
social determinants of health, principal illness navigation services, 
and case management and care coordination services.
    Response: We appreciate commenters raising awareness of other types 
of services that could be considered as potential IOP services 
furnished by an OTP. In the proposed rule, we proposed to include 
coverage for IOP services furnished by OTPs for the treatment of OUD in 
a manner that would be consistent with the scope of services proposed 
in other settings as specified in the proposed 42 CFR 410.44(a)(4). We

[[Page 81850]]

believed this would help ensure Medicare beneficiaries have access to 
the same types of services across benefit categories and settings of 
care for IOP services. For a more in-depth discussion regarding the 
list of potential services for IOP payment, please see the discussion 
in section VIII.B.2.a of this final rule with comment period. We may 
consider future updates to this list of services for Medicare payment 
purposes, including to OTPs through future rulemaking.
    Comment: Multiple commenters recommended that CMS specify the 
practitioners who would be permitted to deliver OTP IOP services. Other 
commenters requested that CMS ensure flexibility in the types of 
professionals that are able to provide counseling to patients as it 
does with the existing OTP benefit.
    Response: We thank the commenters for this comment. In the proposed 
rule, we did not propose to limit the types of professionals that can 
provide IOP services. Instead, in section VIII.G.3.a of the CY 2024 
OPPS proposed rule (88 FR 49720), as reflected in proposed paragraph 
(ix) of the definition of ``opioid use disorder treatment service'' in 
Sec.  410.67(b) in the cross reference to Sec.  410.44(a)(4), we listed 
examples of the types of professionals who could potentially provide 
OTP IOP services, such as physicians, psychologists, occupational 
therapists, social workers, trained psychiatrist nurses, or other 
mental health professionals to the extent authorized under State law 
and scope of practice requirements. However, this was not a 
comprehensive list. We additionally note that if any professionals are 
not authorized under state law or scope of practice requirements to 
furnish therapy and counseling services, the therapy or counseling 
services provided by these professionals would not be covered as OTP 
intensive outpatient services. This would also be consistent with 
existing guidance for counseling and therapy services under the non-
drug component of the existing OTP weekly bundles.\182\
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    \182\ Page 5, 40.1.1 Aspects of the Bundle, Non-drug component: 
https://www.cms.gov/files/document/chapter-17-opioid-treatment-programs-otps.pdf.
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    Comment: One commenter said they would appreciate if CMS could 
clarify any distinction between the existing scope of services included 
in the OTP benefit and the scope of services described under the 
proposed add-on payment adjustment for IOP services. They also stated 
they would appreciate learning how billing and coding requirements may 
differ under the proposed IOP add-on payment adjustment versus the 
existing OTP bundles and/or add-on codes.
    Response: We appreciate this request for clarification. The 
existing OTP weekly bundled payment includes both non-drug and drug 
components for an episode of care, as well as add-on codes for 
additional services furnished and take-home medications, as specified 
in 42 CFR 410.67(d)(2) and (4). Specifically, these are described by 
HCPCS codes G2067 through G2080, and G2115, G2216, and G1028. OTP 
services that are currently covered under the OTP benefit are at the 
Outpatient (Level 1) level of care and typically require less than 9 
hours of care per week, according to ASAM's criteria for the continuum 
of care.\183\ The services included as part of the OTP bundles and/or 
add-on codes, which are specified at 42 CFR 410.67(b) in the definition 
of ``opioid use disorder treatment service,'' include FDA-approved 
opioid agonist and antagonist medications (buprenorphine, methadone, 
and naltrexone) or opioid antagonist medications for the emergency 
treatment of known or suspected opioid overdose; overdose education; 
dispensing and administering of MOUD, if applicable; substance use 
counseling; individual and group therapy; toxicology testing; intake 
activities; and periodic assessments. For these services, at least one 
OUD treatment service must be furnished (from either the drug or non-
drug component) to the patient in order to meet the threshold to bill 
for an episode of care.
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    \183\ https://www.asam.org/asam-criteria/about-the-asam-criteria.
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    Some of the services included in the non-drug component of the OTP 
bundled payments may be furnished via telecommunications technology. 
Individual and group therapy and substance use counseling may be 
furnished using audio-video technology, as clinically appropriate, and 
via audio-only technology if two-way audio/video communications 
technology is not available to the beneficiary, provided all other 
applicable requirements are met, as specified in paragraphs (iii) and 
(iv) of the definition of ``opioid use disorder treatment service'' in 
42 CFR 410.67(b). Initiation of treatment with buprenorphine (but not 
methadone) via the OTP intake add-on code may be furnished via two-way 
audio-video communications technology, and via audio-only communication 
technology when audio-video technology is not available to the 
beneficiary, to the extent that the use of audio-video 
telecommunications technology to initiate treatment with buprenorphine 
is authorized by the Drug Enforcement Administration (DEA) and SAMHSA 
at the time the service is furnished, as specified in paragraph (vi) of 
the definition of ``opioid use disorder treatment service'' in 42 CFR 
410.67(b). Additionally, as of CY 2023, these services furnished via 
OTP mobile units are considered for the purposes of determining 
Medicare payments to OTPs under the bundled payment codes and/or add-on 
codes to the extent that the services are medically reasonable and 
necessary and are furnished in accordance with SAMHSA and DEA guidance. 
Currently, periodic assessments are allowed to be furnished via audio-
only telecommunication through CY 2023, and finalized in the CY 2024 
PFS final rule (87 FR 69404; November 18, 2023) so that these services 
may be furnished audio-only through the end of CY 2024, to the extent 
that use of audio-only communications technology is permitted under the 
applicable SAMHSA and DEA requirements at the time the service is 
furnished, and all other applicable requirements are met. For 
additional details regarding existing flexibilities regarding use of 
telecommunications under the OTP benefit, commenters can also reference 
Chapter 17 of the Medicare Benefit Policy Manual for Opioid Treatment 
Programs.\184\
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    \184\ https://www.cms.gov/files/document/chapter-17-opioid-treatment-programs-otps.pdf.
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    In contrast, IOP services correspond to Level 2.1 of ASAM's 
continuum of care and range between 9 hours or more per week and no 
more than 20 hours per week for adults requiring a higher acuity of 
care compared to those at the outpatient level of care (Level 1), which 
reflects the intensity of services currently described by the existing 
OTP benefit. The proposed adjustment for IOP services furnished at OTPs 
for the treatment of OUD would serve as an add-on code that can be 
billed in conjunction with the existing weekly bundles for medication 
assisted treatment, such as HCPCS codes G2067 through G2075, and would 
reflect additional services required for patients with an OUD who need 
more intensive and more frequent care than is typical at the outpatient 
level. The proposed list of services for IOP services furnished at 
OTPs, which is reflected in proposed paragraph (ix) of the definition 
of ``opioid use disorder treatment service'' in Sec.  410.67(b) by the 
inclusion of the language, ``one or more services specified in Sec.  
410.44(a)(4),'' includes

[[Page 81851]]

individual and group therapy with physicians or psychologists or other 
mental health professionals to the extent authorized under State law, 
which may be more intensive in nature than other therapy services 
delivered to patients at Level 1 of the ASAM continuum of care as in 
the existing OTP benefit; 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; 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; 
and, 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 proposed, at Sec.  
410.67(d)(4)(i)(F), that at least nine IOP services per week would need 
to be furnished by an OTP in order to reach the threshold to bill for 
IOP services.
    Lastly, we note that while certain services under the existing OTP 
benefit have additional flexibilities for being furnished via audio-
only/audio-video technologies, we did not propose similar 
telecommunications technology flexibilities for OTP intensive 
outpatient services and are not finalizing these type of flexibilities 
for intensive outpatient services at this time. Not extending 
telecommunications technology flexibilities to OTP intensive outpatient 
services is consistent with policies being finalized in HOPDs, CMHCs, 
RHCs, and FQHCs that are also not permitting these types of 
flexibilities for IOP services. This will also allow CMS additional 
time to examine the clinical evidence and guidance to ensure that any 
IOP services furnished to beneficiaries with an OUD can be conducted in 
a manner that maintains safety and a high quality of care for Medicare 
beneficiaries.
    After consideration of the public comments we received, we are 
finalizing our proposal to add a new paragraph (ix) to the definition 
of ``opioid use disorder treatment service'' in Sec.  410.67(b) 
defining a new category of services called ``OTP intensive outpatient 
services'' and incorporating ``OTP intensive outpatient services'' in 
the definition of OUD treatment services that are covered under the 
Part B OTP benefit. We are excluding 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, 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. Additionally, we are finalizing our proposal to 
exclude toxicology testing from the types of diagnostic services that 
would be included in the definition of ``OTP intensive outpatient 
services'' because, similarly, toxicology testing is already included 
as part of the bundled payment for an episode of care.
b. Establishment of a Weekly Payment Adjustment for IOP Services 
Furnished by OTPs
    Section 1834(w)(2) of the Act provides the Secretary discretion to 
implement one or more payment bundles based on the type of medication 
provided, frequency of services, scope of services furnished, 
characteristics of the individuals furnished such services, and other 
factors as the Secretary determines 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.\185\ In order to appropriately reflect 
the more intensive treatment profile for those individuals receiving 
IOP services versus OTP services, we proposed 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 stated in the CY 2024 OPPS 
proposed rule that we believe that a code billed on a weekly basis 
would 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 the proposal, we proposed that an OTP 
could bill for the weekly add-on code for OTP intensive services in the 
same week for the same beneficiary as the existing coding describing a 
weekly OTP bundle, so long as all applicable billing requirements for 
each code are met (88 FR 49720). However, we noted that under the 
proposal, each OTP intensive outpatient service must be medically 
reasonable and necessary and not duplicative of any service(s) for 
which OTPs received bundled payments for an episode of care in a given 
week.
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    \185\ https://americanaddictioncenters.org/rehab-guide/asam-criteria-levels-of-care.
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    For OTP intensive outpatient services, we proposed 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. (88 FR 49721)
    We proposed 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 consists of 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.\186\ 
Moreover, the definition of intensive outpatient services in section 
4124(b)(2)(B) of the CAA, 2023 specifies

[[Page 81852]]

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. Therefore, we proposed to 
calculate the payment rate for add-on code GOTP1 based on 9 services 
per week. We welcomed comments on whether 9 services per week is 
representative of the typical number of services furnished to patients 
with an OUD who receive IOP services at OTPs. (88 FR 49721)
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    \186\ 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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    We proposed 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 the CY 2024 OPPS 
proposed rule. We acknowledged that not all OTP intensive outpatient 
services will necessarily be 60 minutes in duration, or be a time-based 
service, therefore, we proposed 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 noted that this 
aspect of our proposal differs from the proposed requirement for 
physician certification, discussed in section VIII.G.3.c. of the CY 
2024 OPPS 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.
    Under the proposal to establish a weekly add-on payment for OTP 
intensive outpatient services, we stated that no single service could 
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 recognized that some services furnished as part of OTP intensive 
outpatient services may be required multiple times a week (for example, 
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.
    We noted that the 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. We stated that we believed 
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. Please see a more detailed discussion regarding this payment 
methodology in section VIII.D of this final rule.
    We acknowledged that, since IOP services have not been covered or 
paid under Medicare to date, CMS did 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 of the CY 2024 OPPS proposed 
rule (88 FR 49704 and 49705). 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, at the time of drafting 
the proposed rule; 3 services per day for 3 days a week would therefore 
be equal to $842.40. Because we proposed 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 proposed to subtract the amount that corresponds to 
the individual and group therapy 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 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 Clinical Laboratory Fee Schedule 
(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 was 
$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 
proposed an add-on payment adjustment of approximately $719.67 for 
HCPCS code GOTP1 ($842.40-($28.36 + $94.37)). We sought comment on 
whether the proposed add-on payment adjustment accurately reflects the 
typical resource costs involved in furnishing IOP services at OTPs. We 
also sought 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 proposed 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 proposed to apply a geographic adjustment to the payment 
for HCPCS

[[Page 81853]]

code GOTP1 based on the Geographic Adjustment Factor (GAF), 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 also sought comment on the impact the 
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 recognized in the CY 2024 OPPS proposed rule (88 FR 49722) that 
we proposed 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 also sought 
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 sought 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 stated that we believed 
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 proposed to add a new paragraph (d)(4)(i)(F) to Sec.  410.67 in 
order to describe the new adjustment to the bundled payment for OTP 
intensive outpatient services. Additionally, we proposed 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 
proposed 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).
    We received many public comments on our proposal to establish a 
weekly payment adjustment for IOP services furnished by OTPs. These 
public comments and our responses to these comments are addressed in 
the section below.
    Comment: We received a few comments regarding our proposal to apply 
a beneficiary copayment amount of zero for OTP intensive outpatient 
services, which is consistent with the policy for other OUD treatment 
services furnished by OTPs. Commenters were very supportive of this, 
since they stated patient out of pocket costs, even if they are small, 
are one of the largest deterrents for patients being able to access 
care.
    Response: We thank commenters for expressing their support for this 
policy regarding beneficiary copayment amounts.
    Comment: Many commenters submitted comments regarding the frequency 
of payment (per-diem or weekly) for the proposed payment rate 
methodology. The comments were mixed regarding whether a per-diem 
versus a weekly payment rate would be more appropriate in an OTP 
setting. Commenters in support of a per-diem approach raised that a 
beneficiary may need nine or more hours of IOP services per week but 
may not be able to always attend all the scheduled services each week 
due to extenuating circumstances. Commenters also noted that in these 
cases especially, a per diem rate may better approximate the actual 
number of services delivered in a given week. One commenter recommended 
a mixed approach, requesting that CMS make a per diem rate available 
for providers to bill in cases where patients are unable to receive all 
the scheduled services in a given week, but that CMS should also allow 
providers to bill the weekly rate when the minimum nine services 
requirement is met. This commenter also stated that providers should 
not be penalized if patients cannot attend the minimum number of nine 
services per week. Many other commenters supported the weekly billing 
approach. A few commenters stated that a weekly structure would be the 
easiest to implement, given that Medicare already pays OTPs on a weekly 
basis, as well as TRICARE, and many State Medicaid programs. One 
commenter encouraged CMS to allow some level of flexibility if a weekly 
payment is finalized, such as partial payment or allowing OTPs to 
average the number of service hours over multiple weeks, so that an OTP 
is not expected to go without payment for the week when less than nine 
services are furnished.
    Response: We appreciate the comments related to the proposed 
frequency of payment for OTP intensive outpatient services. We 
understand that a beneficiary may have one or a number of extenuating 
circumstances, which may make it difficult in a given week to meet the 
weekly minimum nine services requirement for the weekly payment 
approach. However, in the CY 2024 OPPS/ASC proposed rule, we stated 
that a code billed on a weekly basis may allow greater flexibility than 
a per diem approach with respect to how IOP services are rendered. We 
believe that a weekly payment approach would allow more flexibility for 
how service hours could be distributed over a given week to best meet 
patient needs, including in a manner to balance frequent IOP treatment 
with other obligations such as work, childcare, school, household 
activities, etc., compared to a per-diem approach that would require a 
specific number of service hours per day. Furthermore, we believe that 
a weekly billing structure may allow OTPs to more easily verify that 
the required number of IOP services have been furnished. Statutory 
requirements, SAMHSA treatment guidance, and clinical standards from 
ASAM indicate that a minimum of nine skilled treatment services is 
standard for IOPs. The proposed payment amount for GOTP1 is based on 
nine services per week, which is consistent with these existing 
standards. Additionally, less than nine IOP services rendered per week 
would be consistent with the intensity of care at the outpatient level, 
which is already reflected in the existing OTP benefit. In response to 
commenters' who stated that OTPs should not be penalized if patients 
cannot attend the minimum number of nine services per week, we affirm 
that OTPs can continue to bill the weekly bundles and add-on codes 
described by G2067 through G2080, and G2115, G2216, and G1028, to 
receive payment for treating Medicare beneficiaries with an OUD, as 
long as all applicable requirements are met.
    Finally, most comments in response to the CY 2023 PFS comment 
solicitation on IOPs and in response to the proposed rule indicated a 
preference for a weekly billing structure in OTP settings. We continue 
to believe that a weekly billing structure is appropriate at this time. 
However, we will continue to monitor the billing structure to ensure 
that Medicare beneficiaries with an OUD do not face barriers to 
accessing OTP intensive outpatient services and may consider 
adjustments as needed through future rulemaking.
    Comment: Multiple commenters expressed concern regarding our 
proposal to subtract the payment rate for individual and group therapy 
when

[[Page 81854]]

calculating the weekly payment adjustment for IOP services furnished by 
OTPs. Commenters stated that OTPs who offer individual and group 
therapy services as part of an IOP conduct these services in a way that 
is separate and distinct from the therapy services they are already 
providing to Medicare beneficiaries under the existing OTP benefit. 
Commenters further explained that these individual and group therapy 
services are more intensive and would be additional, not duplicative 
services, compared to the existing covered therapy services built into 
the weekly bundled payment. Commenters also stated that an IOP is a 
critically important level of care for individuals who need more 
intensive and structured treatment than outpatient services, but who 
can live safely in their homes and communities without needing 24-hour 
treatment in residential or inpatient settings. Therefore, commenters 
requested that CMS not exclude the payment amount for individual and 
group counseling services from the payment methodology for the IOP 
payment adjustment.
    Response: We appreciate commenters raising these concerns. We 
proposed to deduct the payment rates for individual and group therapy 
services from the payment rate for IOP services because we believed 
that these therapy services may be duplicative of services included in 
the non-drug component of the OTP bundled payment. However, we are 
persuaded by the public comments received that requested that we do not 
deduct the payment rate for individual and group therapy services from 
the payment methodology for the IOP payment adjustment. Commenters 
explained that the individual and group therapy services furnished as 
part of an IOP are more intensive in nature and may be furnished on a 
more frequent basis than those therapy services in the non-drug 
component of the OTP bundled payment, thus they would not be 
duplicative in nature. Additionally, we were persuaded by the rationale 
that IOP services are often more intense than at an outpatient level 
since they are often provided as a step-down from residential or 
inpatient settings, whereby patients may still need intensive therapy 
services at a higher acuity of care but may not necessarily require 24-
hour treatment. Furthermore, in response to the comment solicitation 
for IOP services in the CY 2023 PFS proposed rule, commenters raised 
that therapy services furnished in IOP services are structured, goal-
oriented, and often focus on social skill rehabilitation and ongoing 
engagement. We also note that IOP services are usually provided at 
Level 2.1 of the ASAM continuum of care, which is likely to reflect 
therapy services that are more intensive, compared to services provided 
at the outpatient level within the existing OTP benefit and that are 
described by Level 1 of the ASAM continuum of care. We understand that 
individual and group therapy services are fundamental to many IOPs. We 
do not want to disincentivize OTPs furnishing necessary care for 
Medicare beneficiaries with an OUD who need more intensive therapy, by 
establishing a payment rate that does not reflect the resources 
involved in furnishing these services. Therefore, in consideration of 
these comments, we are finalizing a payment methodology for the IOP 
payment adjustment that does not deduct the amount for individual 
therapy (based on the CY 2019 non-facility rate for CPT code 90834, 
which was $91.18) and for group therapy (based on the CY 2019 non-
facility rate for CPT code 90853, which was $27.39) and their annual 
update adjustments. The finalized payment amount for GOTP1 for CY 2024 
is $778.20. We are reflecting this policy change in new Sec.  
410.67(d)(4)(i)(F) by removing the proposed language, ``excluding an 
amount equivalent to the amount included in the OTP weekly bundled 
payment for individual and group therapy.''
    Comment: We received a few comments regarding payment neutrality 
among multiple care settings. Specifically, commenters advocated that a 
site-neutral set of payment rates should be applied to all providers of 
IOP services, including hospital outpatient departments, CMHCs, FQHCs, 
RHCs, and OTPs. One commenter further noted that as additional claims 
and cost data become available in the years after the IOP benefit is 
implemented, CMS can then evaluate whether adjustments and different 
payment rates are appropriate for different settings.
    Response: We thank the commenters for their feedback. As we stated 
in the proposed rule, we did not have direct data to estimate 
utilization and cost of IOP services at the time of setting proposed 
payment rates since IOP services have not been covered or paid under 
Medicare to date. We agree with the commenter that it would be 
appropriate to continue to monitor cost and utilization data over time, 
and if future adjustments are needed, we may consider these refinements 
to the payment rate for future rulemaking. Additionally, we note that 
by finalizing a policy to not deduct an amount for individual and group 
therapy from the adjustment for IOP services furnished by OTPs, as 
detailed in the discussion above, the payment rate for OTPs would be 
consistent with the payment rate for most other settings under 
Medicare. We would continue to base our payment rate for OTPs on APC 
5861 (Intensive Outpatient (1-3 services) for Hospital-based IOPs), 
which is reflected in the payment methodologies for the other settings 
and would help promote site neutrality.
    Comment: One commenter expressed appreciation that CMS clarified 
that OTP intensive outpatient services do not necessarily need to be 
one hour in duration and that the same IOP service can be performed 
more than once per week to meet the nine-services threshold per week. 
The commenter requested that CMS finalize these flexibilities.
    Response: We thank the commenter for their support of these 
proposed flexibilities for OTPs furnishing intensive outpatient 
services.
    Comment: One commenter expressed concern regarding the proposal to 
update the payment for OTP intensive outpatient services annually using 
the Medicare Economic Index (MEI). The commenter stated that the MEI 
reflects the cost of physician practices but does not adequately 
capture the cost and care delivery structures in the OTP setting. The 
commenter raised that OTPs are more similar to hospital outpatient 
departments because they include interdisciplinary teams, case 
management services, Clinical Laboratory Improvement Amendments (CLIA)-
waived services, medication management and diversion control systems, 
and other services. The commenter further added that OTPs are subject 
to rigorous oversight, accreditation, and certification standards. For 
these reasons, and because the MEI mirrors general inflation more than 
medical inflation, the commenter contended that the MEI is not an 
appropriate update factor and suggested that instead the Inpatient 
Prospective Payment System (IPPS) market basket update would be a 
better indicator for annual price growth.
    Response: We appreciate hearing from the commenter on this issue. 
However, we note that the payment amounts for other services under the 
existing OTP benefit are annually updated by the MEI, as described in 
42 CFR 410.67(d)(4)(iii). We did not propose to modify the update 
factor for the non-drug component of the bundled payment for an episode 
of care, and we do not believe it would be appropriate to apply a 
different update factor for IOP

[[Page 81855]]

services furnished by OTPs without also adjusting the update factor for 
the non-drug component in the existing weekly bundle. However, we may 
consider this issue for future rulemaking.
    Comment: One commenter did not object to the payment methodology 
for setting the weekly payment rate for IOP services furnished in OTPs 
or the actual payment amount, but pointed out that OTPs may be 
benefitting from a higher payment rate for IOP services than CMHCs. The 
same commenter believed it would be inequitable for CMS to provide the 
higher IOP rate to new entity types furnishing IOP services compared to 
CMHCs.
    Response: We thank the commenter for their feedback. While we are 
uncertain how long OTPs have historically furnished IOP services, we do 
note that SAMHSA data suggests that approximately 557 OTPs offer IOP 
services nationwide as of 2021, thus we do not necessarily believe OTPs 
would be new entities furnishing intensive outpatient services.\187\ In 
establishing payment to OTPs for these services, we are seeking to 
finalize a payment rate that would be consistent with the payment rate 
for IOP services in most other settings under Medicare, which would 
promote site neutrality. For additional information on the payment 
methodology for IOP services delivered in CMHCs, please reference 
section VIII.D.3. of this final rule with comment period.
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    \187\ 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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    Comment: In response to our request for comment regarding the 
experiences of furnishing IOP services within OTP settings, including 
to the extent to which it is similar to or different than furnishing 
IOP services in other settings, several commenters expressed that 
Medicare beneficiaries who need IOP services in addition to other 
traditional OTP services often have complex and co-occurring SUDs and/
or mental health conditions. One commenter described that often 
patients in an OTP will have OUD in addition to co-occurring SUDs and 
or mental health conditions, where patients in other settings may not. 
Another commenter mentioned that some OTPs may be treating other 
individuals who only have a mental health condition and are receiving 
IOP treatment, but who do not receive other treatment at the OTP. 
Finally, one commenter urged CMS to develop payment policies or 
crosswalk codes that enable OTPs to deliver IOP services to patients 
who have mental health conditions or SUDs that are not just OUD.
    Response: We appreciate commenters sharing this valuable 
information regarding various experiences of furnishing IOP services in 
an OTP setting. As previously stated, we note that section 1861 of the 
Act requires Medicare coverage for services furnished by OTPs to be for 
the treatment of OUD. However, we may consider these issues, including 
ways to further improve access to care for Medicare beneficiaries with 
an OUD who experience other co-occurring conditions, for future 
rulemaking.
    After considering public comments, we are modifying our proposed 
payment methodology for calculating the payment adjustment for IOP 
services furnished by OTPs in one respect. We are finalizing our 
proposal to add a new paragraph (d)(4)(i)(F) to Sec.  410.67 to 
describe the new adjustment to the bundled payment for OTP intensive 
outpatient services. However, we are not finalizing our proposal to 
deduct the amount for individual and group therapy that is included in 
the non-drug component of the OTP bundled rates. Accordingly, we are 
revising the proposed new Sec.  410.67(d)(4)(i)(F) to strike ``, 
excluding an amount equivalent to the amount included in the OTP weekly 
bundled payment for individual and group therapy,'' in response to the 
public comments. We are finalizing that the adjustment will be made 
when at least nine services of OTP intensive outpatient services are 
furnished in a week. We are also finalizing a payment methodology to 
price HCPCS code GOTP1 based on the estimated payment rate of 3 
services per day based on APC 5861 (Intensive Outpatient (1-3 services) 
for Hospital-based IOPs), which is $259.40, multiplied by 3 to reflect 
3 days a week (for a weekly payment methodology), which results in a 
final payment rate of $778.20.\188\ Additionally, we note that GOTP1 
was a placeholder code for OTPs to bill for providing IOP services and 
that the final code is HCPCS code G0137 (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; 
drugs and biologicals furnished for therapeutic purposes, 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 
that training and educational activities are closely and clearly 
related to individual's care and treatment); diagnostic services (not 
including toxicology testing); (provision of the services by a 
Medicare-enrolled Opioid Treatment Program); List separately in 
addition to code for primary procedure, if applicable).
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    \188\ We note that in the CY 2024 OPPS/ASC proposed rule, the 
payment rate of 3 services per day for APC 5861 (Intensive 
Outpatient (1-3 services) for Hospital-based IOPs) was $280.80. 
However, this payment rate has been updated to $259.40 following the 
publication of the proposed rule based on more recent cost data and 
is used as the base rate for IOP services furnished by OTPs.
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    We are also finalizing our proposal to amend Sec.  410.67(d)(4)(ii) 
to add that the payment amount for OTP intensive outpatient services 
will be geographically adjusted using the Geographic Adjustment Factor 
(GAF) described in Sec.  414.26. Lastly, we are finalizing our proposal 
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 proposed to adopt the same standards set forth in Sec.  
424.24(d)(1) through (3) for OTPs providing OTP intensive outpatient 
services (for more detailed discussions of these proposed standards, 
please see section VIII.B.3 of the CY 2024 OPPS proposed rule). 
Specifically, under the 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

[[Page 81856]]

Level 2.1 of care for IOP services.\189\ 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 of 
services per week; the first recertification as of the 30th day of IOP 
services; and that the certification of IOP services occur no less 
frequently than every other month. Accordingly, we proposed to revise 
Sec.  410.67 of our regulations to add a paragraph (c)(5) to specify 
that OTPs must furnish OTP intensive outpatient services consistent 
with the requirements regarding content of certification, plan of care 
requirements, and recertification requirements as set forth under 
proposed Sec.  424.24(d)(1) through (3).
---------------------------------------------------------------------------

    \189\ 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 proposed 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 noted 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 proposed to adopt the same approach here. We welcomed 
comments on these proposals.
    We noted that the 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 stated 
that we believed it would be administratively simpler for OTPs to count 
the number of services furnished rather than to 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. of this final rule with comment period, our proposed 
payment rate was 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 stated that we believed 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.\190\ 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 
welcomed comments on both of these proposals, including whether this 
distinction accurately reflects the practice patterns of OTPs 
furnishing IOP services.
---------------------------------------------------------------------------

    \190\ 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.
---------------------------------------------------------------------------

    We received multiple comments on our proposal for certification and 
plan of care requirements for IOPs in OTP settings. The comments and 
our responses to these commenters are included below.
    Comment: A few commenters requested that CMS not finalize the 
proposed requirement for recertification for OTP intensive outpatient 
services ``as of the 30th day'' of IOP services as written in proposed 
paragraph (c)(5) to Sec.  410.67. Commenters raised that they did not 
believe it is appropriate to consider finalizing a shorter interval for 
the first recertification or for the subsequent recertification. 
Instead, they suggested that the first recertification should be 
modified for OTPs to be consistent with the proposal for 
recertification in other settings at Sec.  424.24(d)(3)(ii), which 
states, ``no less frequently than every 60 days.'' Commenters believed 
this may reduce burden and unnecessary documentation requirements on 
providers. Another commenter did not believe that recertification 
should be required every other month and instead recommended that a 
redetermination occur when it is clinically necessary according to the 
treatment plan, such as when a new episode of care begins. A different 
commenter urged CMS to consider extending recertification to every 90 
days instead.
    Response: We appreciate commenters raising these issues regarding 
the shorter interval for the first recertification in OTP settings. In 
the CY 2024 OPPS proposed rule (88 FR 49722), we stated that ``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.'' In the 
proposed regulatory text, we stated ``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) may occur any 
time during an episode of care in which the 30th day from the start of 
IOP services falls.'' We are persuaded by the majority of commenters 
who requested that we not require a recertification ``as of the 30th 
day of services,'' as we agree that the recertification requirements 
should be consistent with the other settings paying for IOP services 
under Medicare. Accordingly, we are not finalizing our proposal to 
require a recertification as of the 30th date of services, and are 
instead finalizing that recertification must occur no less frequently 
than every 60 days, which is consistent with the requirement at Sec.  
424.24(d)(3)(ii). We believe this change will promote consistency with 
the requirements for IOP services in other care settings under 
Medicare, as well as limit potential additional and unnecessary 
administrative requirements for OTPs. Accordingly, we are deleting the 
phrase ``, 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'' 
from paragraph (c)(5) of Sec.  410.67.
    Comment: Multiple commenters requested that CMS modify the 
physician certification and plan of care requirements to include other 
behavioral health professionals. A few commenters recommended that CMS 
align these requirements for certification and plan of care with 
existing clinical standards of practice and state requirements to 
permit other non-physician professionals, including psychologists, 
clinical social workers, and other behavioral health professionals to 
perform eligibility assessments, develop treatment plans, and certify 
the need for services. Multiple commenters noted that requiring only a 
physician to complete these requirements would be a significant barrier 
to care and add additional burden on providers. Other commenters noted 
that ASAM level of

[[Page 81857]]

care determinations do not require a physician to complete the 
assessment and that anyone trained to do level of care determinations 
may complete them and that SUD counselors are certified and licensed 
differently at the state level and this should be explicitly permitted 
and addressed.
    Response: We thank commenters for raising this important issue. 
After considering the public comments, we understand that requiring a 
physician to conduct certification and develop a plan of care may 
create additional issues for practices and regions that face a provider 
shortage and/or limited capacity to regularly complete these 
requirements. Evidence indicates that there is less access to OTPs in 
rural areas,\191\ and also that nearly 60 percent of all mental health 
professional shortage areas are located in rural areas.\192\ 
Additionally, we recognize that evidence has shown physicians spend up 
to one-fifth of working hours per week on administrative tasks with 
psychiatrists spending the highest proportion of their time on 
administration compared to other types of physicians.\193\ We also 
understand that other non-physician practitioners, including but not 
limited to, clinical social workers, psychologists, nurse 
practitioners, mental health counselors, and marriage and family 
therapists, have increasingly played a critical role in 
interdisciplinary care teams and filling important gaps in care.
---------------------------------------------------------------------------

    \191\ https://pubmed.ncbi.nlm.nih.gov/35512612/.
    \192\ Designated Health Professional Shortage Areas Statistics, 
Third Quarter of Fiscal Year 2023, Designated HPSA Quarterly 
Summary: https://data.hrsa.gov/default/generatehpsaquarterlyreport quarterlyreport.
    \193\ https://pubmed.ncbi.nlm.nih.gov/25626223/.
---------------------------------------------------------------------------

    We note that section 4124 of the CAA, 2023 includes provisions for 
physician certification and plan of care requirements that require a 
physician to certify a need for IOP services. However, while the CAA, 
2023 does not address IOP services furnished in OTP settings, our 
proposals to pay for IOP services in OTP settings were made under the 
statutory authority of sections 1861(jjj)(1) and 1834(w)(2) of the Act. 
We are persuaded by the commenters that practitioners other than 
physicians can appropriately conduct the certification, 
recertification, and plan of care requirements, and we agree that 
allowing additional practitioner types to perform the certification, 
recertification, and plan of care requirements will likely help to 
expand access to care. We believe we have statutory flexibility to 
finalize that the certification, recertification, and plan of care 
requirements may be performed by non-physician practitioners, as 
permitted by state law and consistent with scope of practice 
requirements. Additionally, we note that certain non-physician 
practitioners are authorized under Medicare to perform certification 
activities.\194\ Therefore, we are finalizing that in addition to 
physicians, the following non-physician practitioners may perform the 
required certification and plan of care requirements for IOP services 
furnished in the OTP setting: nurse practitioners, physician 
assistants, clinical psychologists, clinical social workers, mental 
health counselors, marriage and family therapists, and any other non-
physician practitioners as defined in section 1842(b)(18)(C) of the 
Act, as permitted by state law and consistent with scope of practice 
requirements. These flexibilities would also be extended to any 
physician requirements, pertaining to the individual being under the 
care of a physician and to a physician's diagnosis, as described in 
Sec.  424.24(d)(1)(ii) and (d)(2)(A), so that they could also be 
performed by non-physician practitioners.
---------------------------------------------------------------------------

    \194\ https://www.cms.gov/medicare/enrollment-renewal/providers-suppliers/chain-ownership-system-pecos/ordering-certifying#eligible-specialty-types.
---------------------------------------------------------------------------

    Comment: We received comments on several topics that were outside 
the scope of the proposed rule. Those topics included the following: a 
recommendation that CMS develop crosswalk codes that enable IOP to be 
delivered in freestanding community-based SUD treatment facilities; a 
request that CMS allow structured outpatient addiction programs to bill 
the add-on payment adjustment for OTP intensive outpatient services; 
and a request that CMS develop an add-on code for contingency 
management services in OTPs for individuals with a stimulant use 
disorder.
    Response: While some of these comments are either outside of our 
statutory authority and/or out of scope for this final rule because 
they do not relate to the specific proposals included in the proposed 
rule, we appreciate the feedback and may consider these recommendations 
for future rulemaking.
    After consideration of the public comments received, we are 
finalizing our proposed definition of OTP intensive outpatient services 
in paragraph (ix) of definition of ``opioid use disorder treatment 
service'' at 42 CFR 410.67(b), with modifications to specify that non-
physician practitioners, in addition to physicians, may perform the 
required certification that the individual has a need for such 
services, plan of treatment requirements, and recertification 
requirements, as permitted by state law and consistent with scope of 
practice requirements. These non-physician practitioners may include, 
but are not limited to, nurse practitioners, physician assistants, 
clinical psychologists, clinical social workers, mental health 
counselors, licensed marriage and family therapists, and other non-
physician practitioners, as defined in section 1842(b)(18)(C) of the 
Act.
    We are finalizing a modification to our proposal for certification 
and plan of care requirements for OTP intensive outpatient services at 
proposed new paragraph (c)(5) at Sec.  410.67 by specifying that, for 
the standards set forth in the proposed Sec.  424.24(d)(1) through (3), 
a physician and/or non-physician practitioner could perform the 
requirements for certification, plan of care, and recertification for 
the purposes of furnishing OTP intensive outpatient services, as 
permitted by state law and scope of practice requirements. We are also 
striking language that states ``in which the 30th day from the start of 
IOP services falls'' for consistency with policies in other care 
settings under Medicare. We are finalizing that the first 
recertification and subsequent recertifications for OTP intensive 
outpatient services must occur no less frequently than every 60 days, 
consistent with Sec.  424.24(d)(3)(ii). Accordingly, we are finalizing 
at Sec.  410.67(c)(5) that OTPs that provide OTP intensive outpatient 
services must meet the requirements set forth in Sec.  424.24(d)(1) 
through (3) 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) may occur any time during an episode of care.
d. Correction to the OTP Regulation Text
    We also proposed 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

[[Page 81858]]

bundled payment for an episode of care.''
    We did not receive any public comments on our proposal to correct a 
typographical error at Sec.  410.67(d)(3). We are finalizing our 
proposal to revise Sec.  410.67(d)(3) to instead state ``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. Payment for PHP and IOP Furnished by Nonexcepted Off-Campus Hospital 
Outpatient Departments
    As discussed in section VIII.D of the CY 2024 OPPS/ASC proposed 
rule, we proposed to change our methodology for calculating PHP payment 
rates by establishing separate payment rates for 3-service and 4-
service days. We also proposed 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 proposed to establish 
separate CMHC and hospital rates for 3-service and 4-service PHP and 
IOP days. We proposed 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 proposed 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 proposed 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 the CY 2024 OPPS/ASC proposed 
rule, we solicited 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 also considered 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 
solicited comments on alternative methodologies commenters believed 
would be appropriate. For example, we considered 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.
    Comment: Several commenters urged CMS to implement a site-neutral 
payment for nonexcepted off-campus provider-based hospital departments 
(PBDs). Commentors argued that Congress' goal for enacting section 603 
of the Bipartisan Budget Act (BBA) of 2015 (Pub. L. 114-74, November 2, 
2015) and CMS's 2017 transition to PFS payment rates for PBDs was 
motivated by a desire to move to a site-neutral payment methodology. 
Furthermore, commenters stated that providing reduced payment for PHP 
and IOP services furnished by excepted off-campus PBDs could reduce 
beneficiaries' access to behavioral health services.
    Response: We appreciate the concerns that commenters raised about 
Medicare beneficiaries' access to behavioral and mental health 
services. We note that our longstanding policy to pay nonexcepted off-
campus provider-based departments at the CMHC rate for PHP services 
aligns with section 603 of the BBA of 2015, while also preserving 
access to PHP services. We do not believe that this policy reduces 
access to behavioral health services, because 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.
    After consideration of the public comments we received, we are 
finalizing our proposal to apply the CMHC PHP and IOP per diem rates as 
the MPFS rates for PHP and IOP services furnished by nonexcepted off-
campus PBDs.

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 81859]]

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 as follows:
    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 by reviewing 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 and 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 did 
not propose to remove any services from the IPO list for CY 2024.
    We proposed 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 CPT codes 0790T, 22836, 22837, 22838, 
61889, 76984, 76987, 76988, and 76989 (described by placeholder codes 
X114T, 2X002, 2X003, 2X004, 619X1, 7X000, 7X001, 7X002, and 7X003 
respectively in the CY 2024 OPPS/ASC proposed rule) 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 proposed to assign these services to status indicator ``C'' 
(Inpatient Only) for CY 2024. Additionally, we proposed 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

[[Page 81860]]

payment indicators are displayed in Table 102.
    Table 102 below contains the proposed changes to the IPO list for 
CY 2024. The complete list of codes describing services that we 
proposed to designate as inpatient only services beginning in CY 2024 
was also included as Addendum E to the CY 2024 OPPS/ASC proposed rule, 
which is available via the internet on the CMS website.
BILLING CODE 4150-28-P
[GRAPHIC] [TIFF OMITTED] TR22NO23.143

BILLING CODE 4150-28-C
    Comment: We received several comments in support of our proposal to 
add the ten services listed in Table 102 above to the IPO list for CY 
2024.
    Response: We thank the commenters for their support.

[[Page 81861]]

    Comment: We received one comment requesting that we remove CPT 
codes 49596 (Repair of anterior abdominal hernia(s) (i.e., epigastric, 
incisional, ventral, umbilical, spigelian), any approach (i.e., open, 
laparoscopic, robotic), initial, including placement of mesh or other 
prosthesis when performed, total length of defect(s); greater than 10 
cm, incarcerated or strangulated), 49616 (Repair of anterior abdominal 
hernia(s) (i.e., epigastric, incisional, ventral, umbilical, 
spigelian), any approach (i.e., open, laparoscopic, robotic), 
recurrent, including placement of mesh or other prosthesis when 
performed, total length of defect(s); 3 cm to 10 cm, incarcerated or 
strangulated), 49617 (Repair of anterior abdominal hernia(s) (i.e., 
epigastric, incisional, ventral, umbilical, spigelian), any approach 
(i.e., open, laparoscopic, robotic), recurrent, including placement of 
mesh or other prosthesis when performed, total length of defect(s); 
greater than 10 cm, reducible), 49618 (Repair of anterior abdominal 
hernia(s) (ie, epigastric, incisional, ventral, umbilical, spigelian), 
any approach (i.e., open, laparoscopic, robotic), recurrent, including 
placement of mesh or other prosthesis when performed, total length of 
defect(s); greater than 10 cm, incarcerated or strangulated), 49621 
(Repair of parastomal hernia, any approach (i.e., open, laparoscopic, 
robotic), initial or recurrent, including placement of mesh or other 
prosthesis, when performed; reducible), and 49622 (Repair of parastomal 
hernia, any approach (i.e., open, laparoscopic, robotic), initial or 
recurrent, including placement of mesh or other prosthesis, when 
performed; incarcerated or strangulated) from the IPO list for CY 2024. 
The commenter stated that these codes were related to predecessor codes 
that were not on the IPO list. The commenter also stated that while 
patients will typically be admitted to the hospital as inpatients for 
these services, there are instances when it will be appropriate for the 
patient to undergo these procedures on an outpatient basis.
    Response: We thank the commenter for their recommendation. Our 
clinical analysis of these services indicates that they require a 
hospital inpatient admission or stay. While these services are 
associated with predecessor codes that were not on the IPO list, our 
OPPS claims review found that many of those predecessor codes had 
lengths of stay greater than 2 days. Without further evidence that 
these procedures can be safely performed in the outpatient setting on 
the majority of the Medicare population, we do not believe that these 
services can be appropriately removed from the IPO list at this time. 
Additionally, as we stated in the CY 2022 OPPS/ASC final rule with 
comment period, while we recognize that there are services currently 
classified as inpatient only that may be appropriate in the hospital 
outpatient setting for some Medicare beneficiaries, we continue to 
strive to balance the goals of increasing physician and patient choice 
of setting of care with consideration for patient safety for all 
Medicare beneficiaries (86 FR 63673). Therefore, we are finalizing our 
proposal to continue to assign these services to status indicator ``C'' 
for CY 2024.
    Comment: We received a few comments requesting that CMS consider 
reinstating the elimination of the IPO list that was halted in the CY 
2022 OPPS/ASC final rule with comment period.
    Response: We thank the commenters for their feedback. We are not 
considering eliminating the IPO list at this time. As stated in the CY 
2022 OPPS/ASC final rule with comment period, we believe the IPO list 
is a valuable tool for ensuring that the OPPS only pays for services 
that can safely be performed in the hospital outpatient setting and 
remains a necessary safeguard. In that final rule, we explained that we 
recognized that while physicians are able to make safety determinations 
for a specific beneficiary, CMS is in the position to make safety 
determinations for the broader population of Medicare beneficiaries, 
that is, the typical Medicare beneficiary. Furthermore, we explained 
that while we want to afford physicians and hospitals the maximum 
flexibility in choosing the most clinically appropriate site of service 
for the procedure, as long as the characteristics of the procedure are 
consistent with the criteria listed above. For further discussion on 
our decision to halt the elimination of the IPO list, we refer readers 
to the CY 2022 OPPS/ASC final rule with comment period (86 FR 63671 
through 63711).
    Comment: We received multiple comments requesting that we assign 
services newly removed from the IPO list to New Technology APCs until 
sufficient data is collected to assign these services to clinical APCs.
    Response: We thank the commenters for their input. As we previously 
stated in the CY 2021 OPPS/ASC final rule with comment period (85 FR 
86093), consistent with our regulation at 42 CFR 419.31(a)(1), we 
classify outpatient services and procedures that are comparable 
clinically and in terms of resource use into APC groups. As we stated 
in the CY 2012 OPPS/ASC final rule (76 FR 74224), the OPPS is a 
prospective payment system that provides payment for groups of services 
that share clinical and resource use characteristics. It should be 
noted that for all codes newly paid under the OPPS, including codes 
removed from the IPO list, our policy has been to assign the service or 
procedure to an APC based on feedback from a variety of sources, 
including but not limited to, review of the clinical similarity of the 
service to existing procedures; advice from CMS medical advisors; 
information from interested specialty societies; and review of all 
other information available to us, including information provided to us 
by the public, whether through meetings with stakeholders or additional 
information that is mailed or otherwise communicated to us (84 FR 
61229). Therefore, we believe assigning procedures removed from the IPO 
list to existing clinical APCs that are similar in clinical 
characteristics and resource costs is appropriate. We note that 
procedures assigned to New Technology APCs cannot be placed in clinical 
APCs due to insufficient clinical and cost data, unlike the procedures 
transitioning from the IPO list.
    Comment: One commenter wrote that the following statement in the CY 
2024 OPPS/ASC proposed rule was incorrect: ``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). The 
commenter stated that this was incorrect because in the Change Request 
9097 published on March 13, 2015, CMS revised its billing instructions 
to allow payment for procedures on the IPO list that are provided to a 
patient in the outpatient setting on the date of the inpatient 
admission or during the 3-calendar days preceding the date of inpatient 
admission to be bundled into the billing of the inpatient admission.
    Response: The commenter is correct services on the IPO list 
performed in the outpatient setting can receive IPPS payment if the 
patient is admitted on the day of the procedure or within the following 
3-calendar days. However, services on the IPO list will not receive 
payment under the OPPS.
    In summary, after consideration of the public comments we received, 
we are finalizing our proposal to assign CPT codes 0790T, 22836, 22837, 
22838, 61889, 76984, 76987, 76988, 76989, and

[[Page 81862]]

0646T to status indicator ``C'' for CY 2024. Table 103 below contains 
the changes to the IPO list for CY 2024. The complete list of codes 
describing services that are designated as inpatient only services 
beginning in CY 2024 is also included as Addendum E to this final rule 
with comment period, which is available via the internet on the CMS 
website.
BILLING CODE 4150-28-P
[GRAPHIC] [TIFF OMITTED] TR22NO23.144


[[Page 81863]]


BILLING CODE 4150-28-C

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

    We solicited 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 specifically requested information 
or evidence that these services can be performed safely on the Medicare 
population in the outpatient setting. We also sought 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.
    Comment: We received a significant number of comments in support of 
maintaining CPT codes 43775, 43644, 43645, and 44204 on the IPO list, 
many of which were from bariatric surgery healthcare providers and 
societies. Commenters strongly recommended keeping these four services 
on the IPO list, with safety being the primary concern. Some commenters 
noted that while these services can be safely performed in the 
outpatient setting, those patients are carefully selected and tend to 
be a younger and healthier population. Commenters had great concern 
about the safety of performing these services on the Medicare 
population in the outpatient setting, noting that Medicare 
beneficiaries tend to be an older population with more comorbidities, 
even among those younger than 65. Commenters noted that performing 
these procedures in the outpatient setting could lead to greater risks 
and complications following the procedures. Many commenters also noted 
logistical concerns. Commenters wrote that receiving these services in 
the outpatient setting often requires additional follow-up appointments 
and at-home care, which many Medicare beneficiaries may not have access 
to. Patients may need to travel extended distances to receive these 
surgeries and follow-up care, however transportation may be difficult 
for some beneficiaries, especially in rural areas. Access to these 
services for Medicare beneficiaries if they are removed from the IPO 
list was another major concern among commenters, stating that if these 
services are removed from the IPO list, access to these services at 
their facilities in the inpatient setting may be limited, affecting 
those who would require inpatient care. Additionally, several 
commenters agreed that these services did not meet the criteria to be 
removed from the IPO list.
    Response: We thank the commenters for their feedback.
    Comment: We received a few comments in support of removing the four 
laparoscopic services from the IPO list for CY 2024, with commenters 
stating that these procedures can be safely performed in the outpatient 
setting. The commenters noted that advances in medical technology and 
surgical techniques have increased the safety of these surgeries.
    Response: We thank the commenters for their feedback. However, we 
did not receive additional literature or evidence that these services 
can be performed safely on the Medicare population in the outpatient 
setting. We continue to believe that these services do not meet the 
criteria to be removed from the IPO list. Therefore, after 
consideration of the public comments we received, we are maintaining 
CPT codes 43775, 43644, 43645, and 44204 on the IPO list for CY 2024.

X. 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 proposed 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 proposed to amend 
Sec. Sec.  410.47 and 410.49 to provide that supervision of PR, CR, and 
ICR services can be provided by a physician, PA, NP, or CNS.
2. 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. Sec.  410.47 and 410.49, we proposed 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.
    We explained that 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 proposed 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, we explained that this would have the effect of expanding who 
may provide supervision for CR, ICR and PR services under Sec.  410.27 
to include PAs, NPs, and CNSs under Sec.  410.27.
    In the interim final rule with comment period (IFC) 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

[[Page 81864]]

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.  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 and 
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 ICR under the OPPS and 
PFS, we proposed 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 to extend this policy to the nonphysician practitioners, that 
is NPs, PAs, and CNSs, who are eligible to supervise these services in 
CY 2024. We solicited 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 final revisions to Sec. Sec.  
410.47 and 410.49, we refer readers to the CY 2024 PFS final rule.
    The following is a summary of the comments we received and our 
responses to those comments.
    Comment: All commenters supported our proposal to make conforming 
revisions to Sec.  410.27 to expand who may provide supervision for CR, 
ICR, and PR to include Pas, NPs, and CNSs and to allow for the direct 
supervision requirement for CR, ICR, and PR to include the virtual 
presence of the physician/nonphysician practitioner through audio-video 
real-time communications technology (excluding audio-only) through 
December 31, 2024. These commenters indicated that these changes will 
improve patient access to historically underutilized services, reduce 
burden on providers, and be of particular value in rural and other 
underserved areas where workforce shortages remain acute.
    Response: We thank commenters for their support.
    Comment: Many of these commenters requested that the availability 
of virtual direct supervision of these services be made permanent. One 
of these commenters additionally requested that once the policy is made 
permanent that CMS retire the requirement for a service-level modifier 
to identify when direct supervision is provided via appropriate 
telehealth technology.
    Response: We appreciate the commenters' suggestions to make the 
virtual direct supervision of ICR, CR, and PR permanent. One of our 
motives for extending the availability of virtual direct supervision of 
these services until the end of CY 2024 is to allow us to continue to 
evaluate safety, quality of care, and other considerations related to 
virtual direct supervision. As such, we will take commenter's 
suggestions into account in future rulemaking.
    Comment: One commenter requested clarity as to how a hospital 
registered patient could continue to receive CR and PR remotely in 
their home. The commenter suggested that CMS create a separate HCPCS 
code for remote cardiac and/or remote pulmonary rehabilitation 
services, which would temporarily permit hospitals to continue to 
furnish these services remotely to patients in their homes and receive 
reimbursement under the OPPS. Another commenter requested that CMS 
reinstate the PHE flexibilities that allowed a beneficiary's home to 
serve as a provider-based department of a hospital for cardiac and 
pulmonary rehabilitation services. Acknowledging that the waiver 
related to the PHE allowing for this flexibility has ended, this 
commenter suggested that CMS rely on other waiver authority (such as 
section 402 demonstration authority) to ensure the continuation of the 
flexibility.
    Response: We appreciate commenters' interest in providing cardiac 
and pulmonary rehabilitation services remotely to a patient in their 
home. However, a hospital registered patient cannot currently receive 
CR or PR remotely in their home. The flexibility to provide CR, PR, and 
ICR services remotely to a beneficiary in his or her home ended with 
the expiration of the PHE on May 11, 2023.
    Comment: One commenter requested that CMS revise the definition of 
``physician prescribed exercise'' under Sec. Sec.  410.47(a) and 
410.49(a) to include Pas. Citing the 2014 final decision memorandum for 
Cardiac Rehabilitation (CR) Programs--Chronic Heart Failure,\195\ this 
commenter stated that CMS previously declined to modify language in 
this manner because the Act specifies that the program is under the 
supervision of a physician. This commenter believed that since this 
section of the Act has been revised to allow Pas to supervise these 
programs, CMS should now modify this language accordingly to ``provider 
prescribed exercise.'' This commenter further requested that if the 
exact wording cannot be modified due to statutory constraints, CMS 
should reinterpret the intent of this section to indicate that health 
professionals authorized to supervise may also prescribe exercise. 
Additionally, this commenter urged CMS to work with Congress to modify 
physician-centric language in U.S. Code that prohibits Pas and other 
health

[[Page 81865]]

professionals from ordering PR, CR, and ICR. Another commenter noted 
that under the Accountable Care Organization Realizing Equity, Access, 
and Community Health (ACO REACH) model, NPs are allowed to establish, 
review and sign a written care plan for PR and CR and requested that 
this waiver be standardized across all relevant payment models and that 
CMS should explore regulatory avenues to remove the barrier for 
patients to be seen by NPs to increase PR and CR participation.
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    \195\ https://www.cms.gov/medicare-coverage-database/view/ncacal-decision-memo.aspx?proposed=N&NCAId=270.
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    Response: In the 2014 final decision memorandum for Cardiac 
Rehabilitation (CR) Programs--Chronic Heart Failure \196\ public 
comment section, CMS responded to a similar request that the language 
describing CR be changed from ``physician prescribed'' to ``provider 
prescribed.'' In response to this comment, CMS reiterated that per the 
Act a CR program (at the time) ``means a physician-supervised program'' 
at section 1861(eee)(1) of the Act. CMS then further explained that 
``physician-prescribed exercise'' is one of the required items listed 
in section 1861(eee)(3). While the BBA of 2018 expanded the types of 
practitioners that may supervise PR in section 1861(fff)(1) and CR/ICR 
in section 1861(eee)(1), it did not amend the items and services that 
these programs must furnish to also include exercise prescribed by 
other practitioners in addition to physicians, as section 
1861(fff)(2)(A) for PR and section 1861(eee)(3)(A) for CR/ICR were not 
amended. We understand commenters' requests to expand the role for NPPs 
in prescribing and ordering these services, and establishing, 
reviewing, and signing plans of care, however the statutory language 
does not support the requested changes and CMS does not interpret the 
statutory changes to allow for such modifications using only a 
regulatory pathway. We encourage interested parties to work with 
Congress to explore further statutory changes to support these 
requests.
---------------------------------------------------------------------------

    \196\ https://www.cms.gov/medicare-coverage-database/view/ncacal-decision-memo.aspx?proposed=N&NCAId=270.
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    Comment: One commenter objected to the term ``nonphysician 
provider'' and encouraged CMS to fully transition to the use of the 
practitioner's professional title or to utilize the term ``advanced 
practice providers'' (APPs) when necessary and to remove all references 
to ``nonphysician practitioner'' within regulations, guidance, and 
information collection instruments. The commenter argues that CMS 
should do so because the term ``nonphysician provider'' fails to 
recognize the established scope of practice for APPs and their 
authority to practice to the full extent of their education and 
clinical preparation.
    Response: We appreciate the commenter's concerns and agree with the 
importance of employing the appropriate designations for practitioners. 
We note that Sec.  410.27(g) specifically lists the individual 
practitioners (clinical psychologist, licensed clinical social worker, 
PA, NP, CNS, or certified nurse-midwife) that are included in the term 
``nonphysician practitioner'' for purposes of Sec.  410.27 and 
Sec. Sec.  410.47(a) and 410.49(a), which Sec.  410.27, as finalized, 
now cross-references, specifically lists the individual practitioners 
(PA, NP, and CNS) that are included in the term ``nonphysician 
practitioner'' for the purposes of the supervision of ICR, CR and PR. 
It is therefore unnecessary and would be impractical to replace all 
instances of ``nonphysician practitioner'' throughout each regulation 
with a list of each practitioner's professional titles. With respect to 
replacing ``nonphysician practitioner'' with ``advance practice 
providers,'' we understand the importance of using the most relevant 
and up to date terminology to describe these practitioners. However, as 
acknowledged by the commenter, ``nonphysician practitioner'' is used in 
multiple regulations, guidance, and other documents and any change in 
terminology would need to be considered in light of ensuring 
consistency across these authorities. We will take this suggestion into 
consideration for future rulemaking.
    Comment: One commenter requested clarification as to whether the 
flexibility for Pas, NPs, and CNSs to directly supervise ICR, CR and PR 
applies to both PPS hospitals and CAHs.
    Response: Yes, the flexibility for Pas, NPs, and CNSs to directly 
supervise ICR, CR and PR applies to ICR, CR and PR services furnished 
by CAHs.
    Comment: One commenter requested that CMS not restrict direct 
supervision through virtual presence to a subset of services. In the 
commenter's view, the decision whether to provide direct supervision 
through virtual presence via real-time, two-way audio/virtual 
telecommunications should be left up to the practitioner overseeing the 
patient's care.
    Response: We thank the commenter for their comment and note that 
for therapeutic services under Sec.  410.27, ICR, CR and PR, are the 
only services that are subject to direct supervision requirements when 
furnished to hospital outpatients. For a full discussion of the change 
in the generally applicable minimum required level of supervision for 
hospital outpatient therapeutic services from direct supervision to 
general supervision for services furnished by hospitals and CAHs, we 
refer readers to the CY 2020 OPPS final rule (84 FR 61359 through 
61363) and the CY 2021 OPPS final rule with comment period (85 FR 86110 
and 86111).
    Comment: Several commenters provided input in response to our 
comment solicitation as to the existence of safety and/or quality of 
care concerns regarding the adoption of virtual supervision beyond the 
current (end of 2023) or proposed (end of 2024) extensions and what 
policies CMS might adopt to address any such concerns if the policy 
were extended beyond 2023. One commenter opined that requiring the 
physician or other supervising professional to be physically present in 
the same building has negligible patient-safety benefits because a 
physician's office, clinic, or hospital outpatient department typically 
has many other practitioners on site who would be available to assist 
if a physical presence was required. This commenter further contended 
that a virtually available supervisor might actually enhance patient 
safety in an emergency because the most appropriate course of action in 
an emergency is to transfer the patient to an emergency department, not 
wait for the supervising physician or other practitioner to arrive. The 
commenter noted that a virtually available supervisor may facilitate a 
faster transfer of the patient to the emergency department.
    Another commenter indicated that they and other interested parties 
had previously provided CMS with literature on the absence of safety 
issues when supervision is provided virtually and offered to provide 
additional information to this effect for CMS's consideration for 2025 
rulemaking.
    A third commenter stated that because the option to provide direct 
supervision virtually has only become available recently as a 
consequence of the PHE, it is unlikely there are any peer-reviewed 
studies that focus on this aspect of virtual care. However, the 
commenter indicated that they had included with their comment numerous 
studies demonstrating the effectiveness and safety of virtual CR and PR 
services. In the commenter's view, the studies demonstrate that virtual 
and hybrid delivery of CR and PR services provided by staff are safe, 
improve health outcomes and adherence, and address barriers to access.

[[Page 81866]]

    Finally, a commenter, prefacing their remarks with a statement that 
they do not share CMS's concern that virtual supervision inherently 
gives rise to patient safety issues, indicated that in their 
experience, numerous clinical staff and auxiliary personnel perform a 
wide range of tasks easily supervised virtually. The commenter argues 
that such staff categorically do not perform ``complex, high-risk, 
surgical, interventional, or endoscopic procedures, or anesthesia 
procedures'' that CMS has described in the past to explain its concerns 
with virtual direct supervision and that nonphysician practitioners, to 
the extent that they assist with such procedures, are subject to higher 
standards, certifications, and oversight.
    Response: We thank commenters for their input regarding safety and/
or quality of care concerns related to virtual direct supervision. We 
will take these comments into consideration for future rulemaking.
    Comment: Several commenters appeared to assume that our proposal to 
extend the availability of virtual direct supervision until the end of 
2024 included both outpatient hospital therapeutic services (under 
Sec.  410.27) and outpatient hospital diagnostic services (under Sec.  
410.28), in the same way that the PFS proposed rule proposed to extend 
the availability of virtual direct supervision to both therapeutic and 
diagnostic services (under Sec.  410.32) furnished by physicians (88 FR 
52302).
    One commenter encouraged CMS to extend ``virtual direct 
supervision'' through the end of 2024, if not beyond, ``and in a manner 
comparable to the physician fee schedule,'' to ensure that patients 
continued to have access to robust healthcare choices.
    Another commenter submitted complementary comments to both the CY 
2024 proposed PFS rule and CY 2024 proposed OPPS rule, referring to the 
two rules' overlap with respect to certain policies and using nearly 
identical language to describe its endorsement of both rules' proposals 
relating to the extension of the availability of virtual direct 
supervision through 2024. In its comment to the CY 2024 proposed PFS 
rule, this commenter stated: ``The Agency proposes extending through 
CY2024 several PHE-era policies not directly addressed by CAA2023, 
including permitting virtual Direct Supervision of auxiliary personnel 
by physicians and/or non-physician practitioners. We support the 
Agency's proposal to extend the present Direct Supervision waiver 
policies through CY2024.'' In the commenter's corresponding comment to 
the CY 2024 proposed OPPS rule, they similarly stated: ``The Agency 
also proposes extending through CY2024 several PHE-era virtual care 
policies not directly addressed by The Consolidated Appropriations Act 
of 2023 (``CAA2023''), including permitting virtual Direct Supervision 
of auxiliary personnel by physicians and/or non-physician 
practitioners. . . [commenter] strongly supports extending all of those 
policies in their present state through CY2024. We direct the Agency to 
our public response to the 2024 MPFS proposed rule for a full 
discussion.''
    Another commenter, in support of their suggestion to make the 
flexibility to provide direct supervision through real-time audio/video 
technology permanent, attested to their experience of successfully 
providing ``clinically appropriate supervision for impacted services 
such as diagnostic tests and incident-to services through synchronous 
audio-visual telehealth.''
    Response: We appreciate commenters' support and would like to make 
a clarification with respect to the availability of the virtual direct 
supervision of hospital and CAH diagnostic services furnished to 
outpatients in CY 2024. Historically, our policy has been to require 
that all hospital diagnostic services that are provided directly or 
under arrangement, whether provided in the main buildings of the 
hospital, in a PBD of a hospital, or at a nonhospital location, follow 
the physician supervision requirements adopted in the annual PFS 
rulemaking (74 FR 60590). Consistent with this policy, until CY 2023 
the regulation at 42 CFR 410.28 regarding diagnostic tests furnished to 
hospital outpatients cross-referenced the definition of supervision 
levels for diagnostic services in the regulation at 42 CFR 
410.32(b)(3), thereby incorporating the definitions of levels of 
supervision for diagnostic tests for which payment is made under the 
PFS. This policy--to align the supervision levels for diagnostic 
services furnished to hospital outpatients with those provided for in 
the regulation at 42 CFR 410.32(b)(3)--is also reflected in section 
20.4.4 of Chapter 6 of the Medicare Benefit Policy Manual,\197\ which 
provides that the supervision levels listed in the quarterly updated 
Medicare PFS Relative File apply to individual outpatient diagnostic 
tests.
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    \197\ Available at https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/bp102c06.pdf.
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    In the CY 2023 OPPS/ASC final rule with comment period, we revised 
the regulation at Sec.  410.28 to remove the cross-reference to Sec.  
410.32 and include within the regulation text in that provision the 
definitions of different levels of supervision. Although we removed the 
cross-reference to section Sec.  410.32, our intent was to continue to 
align the rules regarding the supervision levels for diagnostic 
services furnished to hospital outpatients with the rules for 
supervision levels for diagnostic services described in section Sec.  
410.32.
    When we removed the cross-references in 42 CFR 410.28 to 42 CFR 
410.32, we anticipated continuing to make changes to Sec.  410.28 to 
ensure that the definitions of the supervision levels remained 
consistent between the two provisions. Consequently, when the CY 2024 
PFS proposed rule proposed to revise Sec.  410.32 to extend the 
availability of the virtual supervision of direct supervision until the 
end of 2024, we intended to propose a corresponding revision to Sec.  
410.28 in the proposed 2024 OPPS rule to provide for this flexibility 
for diagnostic services furnished to hospital outpatients. 
Unfortunately, we inadvertently failed to propose this revision.
    Because until CY 2023, an update to the supervision requirements 
under Sec.  410.32 applied to diagnostic services furnished to hospital 
outpatients because of the cross-reference to Sec.  410.32 in the 
regulation at Sec.  410.28, we believe it is possible that the public, 
long accustomed to section Sec.  410.28 incorporating the definitions 
in Sec.  410.32 through the cross-reference to that provision, did not 
realize that an update to Sec.  410.28 had not been proposed and thus 
did not comment on our unintended failure to update Sec.  410.28. This 
is supported by comments we received that suggested that commenters 
were unaware that we had not proposed a revision to the regulation at 
Sec.  410.28 to extend the virtual supervision of outpatient diagnostic 
services through the end of 2024. Instead, commenters seemed to assume 
that our proposal to extend the ability of practitioners to meet the 
direct supervision requirement through virtual presence included all 
diagnostic services, whether furnished in a hospital outpatient 
department or otherwise. Because our intention was to propose a 
corresponding revision to the regulation text at Sec.  410.28 for 
consistency with the proposed revision to Sec.  410.27 and commenters 
supported such a policy, we are812inalizingg a revision to Sec.  
410.28(e)(2)(iii) to allow for the direct supervision of diagnostic 
services to include the virtual presence of the physician or 
nonphysician practitioner through audio/video real-time communications 
technology

[[Page 81867]]

(excluding audio-only) through December 31, 2024.
    After consideration of the public comments we received, we are also 
finalizing, without modification, our proposal to revise Sec.  
410.27(a)(1)(iv)(B)(1) to expand the practitioners who may supervise 
CR, ICR, and PR services to include NPs, Pas, and CNSs and to allow for 
the direct supervision requirement for CR, ICR, and PR to include the 
virtual presence of the physician, NP, PA or CNS through audio-video 
real-time communications technology (excluding audio-only) through 
December 31, 2024.

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 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).

[[Page 81868]]

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 
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 104.
[GRAPHIC] [TIFF OMITTED] TR22NO23.145

    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 proposed 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 proposed to exclude ICR from the 40 
percent PFS 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 solicited 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.
    The following is a summary of the comments we received and our 
responses to those comments.
    Comment: All commenters supported our proposal to exclude ICR from 
the 40 percent PFS Relativity Adjuster at the code level by modifying 
the claims processing of HCPCS codes G0422 and G0423 so that 100 
percent of the OPPS rate for CR is paid irrespective of the presence of 
the ``PN'' modifier on the claim. These commenters indicated that this 
change will increase patient access to an underutilized program, 
particularly in rural and underserved areas.
    Response: We thank commenters for their support.
    Comment: Many commenters requested that we retroactively review 
payments made from CY 2017 through CY 2023 for ICR services (HCPCS 
codes G0422 and G0423) provided by a non-excepted, off-campus PBD and 
prospectively adjust payment rates to reimburse off-campus PBDs the 
difference between what was paid what should have been paid.
    Response: We appreciate commenters' suggestion and will consider it 
for future rulemaking.
    Comment: Several commenters provided input in response to our 
request for 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.
    One commenter stated that the OPPS rate is unconditionally used 
under the PFS for the technical component of all diagnostic services 
subject to the OPPS imaging cap mandated by section 1848(b)(4) of the 
Act, which limits the

[[Page 81869]]

PFS rate to no more than the OPPS rate. The commenter contends that it 
is illogical to apply a PFS Relative Adjustor to the OPPS rates for 
these services when doing so results in payment that is lower than what 
a physician's office would receive, particularly since the OPPS payment 
rates include packaging of drugs, devices, laboratory, and other 
ancillary services that are all separately billed by an office. This 
commenter requested that CMS exempt all imaging tests whereby the OPPS 
imaging cap is applied and pay these services at 100 percent of the 
OPPS rate when furnished in a non-excepted, off-campus location.
    Response: We do not agree that the OPPS rate is unconditionally 
used under the PFS for the technical component of all diagnostic 
services subject to the OPPS imaging cap mandated by section 
1848(b)(4), such that these services should be treated similarly for 
purposes of payment to off-campus, non-excepted provider-based 
departments of hospitals. There is a fundamental difference between 
section 1848(j)(3), which is intended to ensure site neutrality between 
the PFS and the OPPS for payment for ICR rehabilitation services, and 
section 1848(b)(4), which is intended to impose a limit on the PFS 
payment for certain imaging services if the payment rate for a 
particular imaging service exceeds the OPPS payment rate for the same 
service in a given year.
    Comment: The remaining responses to our comment solicitation did 
not identify any other services for which the OPPS rate is 
unconditionally used under the PFS but instead suggested services that 
commenters believed should be excluded from the 40 percent PFS 
Relativity Adjuster based on payment rate comparisons and other 
considerations. One commenter, while acknowledging that CR services 
were not included in the original MIPPA statute that directs coverage 
and payment of ICR, argued that since CR services are clinically very 
similar to ICR services and are also underutilized services with a 
proven record of improving patient quality of life and 
rehospitalization outcomes, that it would be appropriate for CMS to 
also exclude 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)) from the 
40 percent PFS Relativity Adjuster. Another commenter requested that 
CMS consider exempting both CR and PR. Two commenters referred CMS to a 
recent report by MedPAC which stated that some services are more safely 
provided in the PBD setting and that limiting payment for these 
services could limit beneficiary access. These commenters suggested 
that CMS identify the ambulatory payment classifications for these 
services and exclude them from the 40 percent PFS Relativity Adjuster. 
Additionally, these commenters requested that CMS identify payment 
codes for which payment to freestanding physician offices under the PFS 
is higher than 40 percent of the OPPS rate and exclude them from the 40 
percent PFS Relativity Adjuster. One of these commenters also requested 
that CMS conduct a comprehensive review of services provided in the 
physician office and PBD settings to identify other services that 
should be paid at the OPPS rate to ``preserve beneficiary access.'' 
Finally, one commenter reported that they compared the non-facility 
practice expense (PE) national payment amounts to 40 percent of the 
OPPS rate for the service and discovered 602 HCPCS services for which 
40 percent of the OPPS rate is less than the non-facility PE rate. 
Acknowledging that many of these codes are the imaging codes previously 
discussed, the commenter stated that the list also included codes for 
services that are not covered or allowed to be paid in the non-facility 
setting and for which facility resources are not included in the non-
facility PE RVUs. The commenter stated that these procedures should be 
paid 100 percent of OPPS and not be subject to the PFS Relatively 
Adjustor because they are not allowed to be performed in physicians' 
offices. The commenter additionally requested that CMS review a 
selection of services included in an appendix to the comment, which 
highlights instances where 40 percent of the OPPS payment rate is less 
than the non-facility PE payment rate and requests that, where the PFS 
Relatively Adjustor is less than the non-facility PE payment rate from 
the MPFS, that CMS pay either 100 percent of the OPPS rate or, at a 
minimum, use the non-facility PE payment rate as a floor.
    Response: We appreciate commenters' many thoughtful responses to 
our comment solicitation as well as their many nominations of services 
that they believe should be excluded from the 40 percent PFS Relativity 
Adjuster based on payment rate comparisons and other non-statutory 
considerations. While we will take these suggestions into consideration 
in future rulemaking, we emphasize that our primary rationale for 
making this change was adherence to the statute which explicitly 
requires the PFS rate for ICR services be the same as the OPPS rate for 
CR services.
    After consideration of the public comments we received, we are 
finalizing, without modification, our proposal to exclude ICR from the 
40 percent PFS Relativity Adjuster at the code level by modifying the 
claims processing of HCPCS codes G0422 and G0423 so that 100 percent of 
the OPPS rate for CR is paid irrespective of the presence of the ``PN'' 
modifier on the claim.

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

    In the May 8, 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 8, 
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 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

[[Page 81870]]

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.\198\ 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 proposed to delete HCPCS code C9803 effective January 1, 
2024; and we solicited comment on our proposal to delete this code for 
CY 2024.
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    We received two comments in support of maintaining the code for 
purposes of reporting and reimbursement. One commenter requested that 
if we do retire the code, that we implement a similar code for ongoing 
nasopharyngeal swab specimen collection. After consideration of the 
public comments we received, we do not believe it is necessary for the 
code to remain active in CY 2024 with the conclusion of the COVID-19 
PHE. We continue to believe that the utility of HCPCS code C9803 ended 
when the COVID-19 PHE ended. Therefore, we believe it appropriate to 
delete HCPCS code C9803 effective January 1, 2024. However, we will 
continue to explore coding opportunities for nasopharyngeal swab 
specimen collection, where appropriate.

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 105 for the C-code numbers and their descriptors.
[GRAPHIC] [TIFF OMITTED] TR22NO23.146

    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 proposed to create a 
new, untimed, HCPCS C-code describing group therapy. Please see Table 
106 for the proposed C-code and long descriptor.

[[Page 81871]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.147

    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 proposed 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 107 for the proposed 
SI and APC assignments and payment rates for HCPCS code C79XX.
[GRAPHIC] [TIFF OMITTED] TR22NO23.148

    We sought 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 sought 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 sought 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 proposed to 
revise the code descriptors to remove the word ``initial.'' We also 
proposed to revise the descriptor for HCPCS code C7902 to limit billing 
with HCPCS code C7901. See Table 108 for revised code descriptors.

[[Page 81872]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.149

    The following is a summary of the comments we received and our 
responses to those comments.
    Comment: Most commenters supported our proposal to create to a new, 
untimed, HCPCS C-code (C79XX) describing group therapy, citing reduced 
confusion and administrative burden, and ensuring appropriate patient 
access to the services.
    Response: We thank commenters for their support.
    Comment: Several commenters opposed the creation of the group 
therapy code, objecting to our proposal to assign the code to an APC 
based on the facility payment amount for a similar service (CPT code 
90853 Group Psychotherapy (other than of a multiple-family group)) 
under the PFS. Several other commenters neither supported nor objected 
to the creation of the group therapy code but expressed concern with 
basing reimbursement on the facility PFS payment for remote mental 
health services generally. These commenters disagreed with CMS's 
assumption that 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. These commenters pointed to 
many factors in support of their contention, including investments in 
infrastructure, equipment, and technology to provide remote services, 
the clinical and administrative staff necessary to provide remote 
services while maintaining access to in-person care, the staff time and 
resources necessary to make the remote visit run smoothly (scheduling 
and setting up the appointment, assisting patients with connecting to 
the appointment, screening patients, making referrals and scheduling 
follow ups), the fact that salaries and operating costs do not decrease 
simply because some services are provided remotely and that the only 
cost savings are for supplies, which are negligible because the 
services being provided remotely are mental health services. In 
recognition of these costs, these commenters requested payment for 
remote mental health services at the full OPPS rate. One commenter 
supported CMS's conclusion that mental health services provided 
remotely cost less than mental health services provided in-person, 
noting that even though the work RVU remains the same, the practice 
expenses are significantly reduced.
    Response: We continue to believe that when beneficiaries are in 
their homes and not physically within the hospital, that the hospital 
is not accruing all the costs associated with an in-person service and 
as such the full OPPS rate would not accurately reflect these costs. 
However, we do agree that the non-facility payment rate is likely a 
better reflection of the resources associated with furnishing these 
services than the facility payment rate. However, as demonstrated in 
Table 109 below, using the non-facility rate to inform the APC 
assignment still results in assignment to the same APCs.

[[Page 81873]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.150

    We appreciate commenters insights and will consider further updates 
to the payment rates as needed in future rulemaking.
    Comment: All commenters supported our proposal to revise the code 
descriptors C7900 and C7901 to remove the word ``initial.''
    Response: We thank commenters for their support.
    Comment: One commenter, in response to CMS's request for comment on 
the HCPCS codes C7900-7902, stated that because the nomenclature and 
minutes in these codes are similar to other HCPCS codes, the commenter 
would support keeping the codes as currently written.
    Response: We thank the commenter for this input.
    Comment: One commenter encouraged CMS to clearly define a 
beneficiary's home as broadly as possible, in recognition that not all 
beneficiaries own, rent, or occupy a space that might traditionally be 
considered a ``home.'' This commenter points out that shelters, tents, 
parked vehicles, and other settings may well be considered a ``home'' 
to some or might offer a safe environment that is necessary for the 
beneficiary to openly engage with their clinician during a mental 
health disorder, or other, visit.
    Response: We appreciate commenter's suggestion and agree that one's 
home can cover a wide breadth of settings and arrangements. As we have 
previously explained, our definition of ``home,'' both in general and 
in terms of a mental healthcare delivery site, is broad and includes 
temporary lodging such as hotels and homeless shelters (86 FR 65048 and 
65049).
    Comment: One commenter stated that the new remote mental health 
services are not fully understood by many providers and therefore not 
utilized as often as they could be. The commenter expressed concern 
that there will be significant confusion in the community between these 
services (which are sometimes used to bill for remote IOP services) and 
the new IOS services covered by Medicare. The commenter requests that 
CMS issue informational materials to smaller rural providers (like 
CAHs) to help them to understand the circumstances under which each 
service is appropriate and how each option would help them to meet the 
needs of their patient populations.
    Response: We appreciate the commenter's suggestion and will 
consider the creation of additional informational materials related to 
remote mental health services.
    Comment: One commenter emphasized the importance of CMS providing 
explicit billing guidance when clinicians in hospitals furnish 
telehealth services to patients in their homes. The commenter requested 
that CMS confirm the appropriate billing and payment for telehealth 
services when the clinician is in the hospital and the patient is in 
the home and asked several specific billing questions.
    Response: We direct the commenter to the CY 2024 PFS final rule for 
specific information relating to billing for telehealth services 
furnished to patients in their homes. We will consider additional sub-
regulatory clarifications, as needed, in the future.
    Comment: One commenter emphasized that remote monitoring tools must 
play a central role in CMS's efforts to make its OPPS more efficient 
and effective and encouraged CMS to fully support the use of remote 
monitoring (both physiologic and therapeutic) through its OPPS 
policies. This commenter also requested that CMS ensure that critical 
access hospitals (CAHs) and REHs be able to provide services via the 
most appropriate and accessible modality, whether live voice/video or 
asynchronous modalities, including remote monitoring. The commenter

[[Page 81874]]

argued that CAHs and REHs should enjoy the same fee-for-service carve 
out that FQHCs and RHCs already enjoy for Chronic Care Management 
(CCM), Transitional Care Management (TCM), and Behavioral Health 
Integration (BHI) services. The commenter urged CMS to act to support 
the use of Remote Patient Monitoring (RPM) and Remote Therapeutic 
Management (RTM) by CAHs and REHs. Finally, the commenter notes that 
CMS has proposed to provide new support for RPM and RTM to FQHCs and 
RHCs, and requests that the OPPS rules provide similar support for CAHs 
and REHs.
    Response: We appreciate the commenter's input and recommendations 
with respect to remote monitoring tools and we will consider them for 
future rulemaking. After consideration of the public comments we 
received, we are finalizing, without modification, our proposal to 
create a new, untimed, HCPCS C-code, specifically, C7903, describing 
group therapy and to assign that code 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. 
We are also finalizing our proposal to revise the code descriptors for 
HCPCS codes C7900 and C7901 to remove the word ``initial'' and HCPCS 
code C7902 to limit billing with HCPCS code C7901.

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 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 proposed 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. The following is a summary of the comments we 
received and our responses to those comments.
    Comment: All commenters supported our proposal to delay the in-
person requirements and the majority of those commenters requested that 
CMS work with Congress to eliminate the in-person requirements 
altogether. These commenters stated that the in-person requirements 
should be eliminated because the requirements are arbitrary and not 
based upon any clinical guidelines or evidence, they create logistical 
hurdles for patients and providers, they perpetuate stigma related to 
receiving mental health care, they are problematic for those in rural 
communities and those with inconsistent transportation accessibility, 
remote mental health services were overwhelmingly successful during the 
PHE when there were no in-person visit requirements, and clinicians, 
rather than the government, should make the determination of the need 
for an in-person visit on a patient-by-patient basis.
    Response: We thank commenters for their support and appreciate 
their concerns related to the in-person requirements. As acknowledged 
by commenters, Congressional legislation would be required to eliminate 
these requirements.
    Comment: One of these commenters requested that in future 
rulemaking CMS consider changing the in-person visit requirements to 
allow a broader array of practitioners to fulfill the in-person 
obligation. Another commenter requested that CMS implement a broad 
exception to the in-person visit requirements criteria based on 
clinical discretion, as well as an expansive view of the types of in-
person visits that can meet the requirements.
    Response: We thank commenters for their suggestions and will take 
them into consideration for future rulemaking. We note, however, that 
in the CY 2023 final OPPS rule (87 FR 72017), we finalized an exception 
to the requirement that there be an in-person service within 12 months 
of each remotely furnished mental health service. This exception may be 
exercised when the hospital clinical staff member and beneficiary agree 
that the risks and burdens of an in-person service outweigh the 
benefits of it and a clear justification for the exception is 
documented in the beneficiary's medical record, including the 
clinician's professional judgement that the patient is clinically 
stable and/or that an in-person visit has the risk of worsening the 
person's condition, creating undue hardship on the person or their 
family, or would otherwise result in disengaging with care that has 
been effective in managing the person's illness. Hospitals must also 
document that the patient has a regular source of general medical care 
and has the ability to obtain any needed point of care testing, 
including vital sign monitoring and laboratory studies.
    After consideration of the public comments we received, we are 
finalizing, without modification, our proposal 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 proposed to continue

[[Page 81875]]

to make payment for outpatient therapy (physical therapy (PT), 
occupational therapy (OT), and speech-language pathology (SLP)) 
services, Diabetes Self-Management Training (DSMT), and Medical 
Nutrition Therapy (MNT) when furnished via telehealth by qualified 
employed staff of institutional providers through the end of CY 2024. 
We note that the 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 final 
rule. The following is a summary of the comments we received and our 
responses to those comments.
    Comment: All commenters supported our proposal to make payment for 
outpatient therapy, DSMT, and MNT when furnished via telehealth by 
qualified employed staff of institutional providers, including staff of 
hospital outpatient departments, through the end of 2024. One commenter 
stated that the extension would provide the flexibility needed to offer 
these outpatient therapy services to patients, especially those who 
have difficulty traveling to a hospital and otherwise would not have 
access to these critical services. Another commenter opined that 
enabling Medicare beneficiaries to engage with their hospital's 
dietary/nutrition staff from the comfort of their homes allows more 
frequent and productive communication that helps ensure patients 
persevere through the difficult dietary and lifestyle changes necessary 
to manage endemic chronic conditions associated with obesity and 
malnutrition alike, diabetes in particular. The commenter further 
stated that permitting hospitals to bill for these services delivered 
via telehealth helps ensure their availability, especially in rural 
communities where the local hospital may be the only available 
provider. Another commenter stated that it finds the inclusion of these 
therapists as eligible telehealth provider types to be particularly 
representative of CMS's stated goals of building in health equity and 
access measures to its program offerings.
    Response: We thank commenters for their support and note that 
additional comments on the proposal to make payment for PT, OT, SLP, 
DSMT, and MNT when furnished via telehealth by qualified employed staff 
of institutional providers, including staff of hospital outpatient 
departments, through the end of 2024 are discussed in the CY 2024 PFS 
final rule.
    Comment: One commenter requested that CMS provide billing 
instructions to hospitals about how PT, OT, SLP, DSMT, and MNT 
therapists are allowed to furnish rehabilitation and that hospitals can 
receive Part B MPFS payment.
    Response: We direct the commenter to the CY 2024 PFS final rule for 
specific information relating to billing for telehealth services 
furnished to patients in their homes. We will consider additional sub-
regulatory clarifications, as needed, in the future.
    We refer readers to the CY 2024 PFS final rule for details relating 
to the final policy for payment for outpatient therapy (PT, OT, and 
SLP) services, DSMT, and MNT when furnished via telehealth by qualified 
employed staff of institutional providers, including staff of hospital 
outpatient departments, through the end of CY 2024.
E. OPPS Payment for Dental Services
1. 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 Fee-
For-Service (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 and 
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 directed 
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.
    We explained that 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

[[Page 81876]]

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 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 directed readers to the 
CY 2023 OPPS/ASC final rule with comment period for a full discussion 
on HCPCS code G0330 (87 FR 71882 and 71883). For CY 2024, we proposed 
to continue to assign HCPCS code G0330 to APC 5871 (Dental Procedures).
    Comment: We received several comments requesting clarification on 
the billing of HCPCS code G0330 in light of our proposal to price 
additional dental codes. Commenters stated that CMS should provide 
guidance as to whether HCPCS code G0330 should also be reported when 
one or more of the 229 dental codes are performed in an operating room 
under anesthesia. A few commenters asked whether G0330 should be billed 
under the OPPS similarly to how we proposed for the code to be billed 
when the service is performed in an ASC setting.
    Response: We appreciate the opportunity to provide clarification 
regarding billing of HCPCS code G0330 under the OPPS. Under the OPPS, 
HCPCS code G0330 is payable without requiring the billing of any other 
code on the same day, so long as the service performed meets all 
Medicare coverage and payment requirements. We are clarifying that 
providers should bill any other more specific CPT and/or CDT codes 
assigned to APCs that describe the service performed, instead of HCPCS 
code G0330, whenever possible. HCPCS code G0330 should only be billed 
when no other, more specific code is available to describe the service 
performed. For instance, if a dentist performs a prophylactic cleaning 
(CPT code D1110), several imaging services (e.g., D705-D709), and 
alveoloplasty with extraction (D7310), each of these codes are assigned 
to APCs, and, therefore, even if the services meet the description of 
HCPCS code G0330, hospital outpatient departments should only bill the 
more specific codes without HCPCS code G0330. We believe that as we 
continue to price additional codes describing dental services, the 
situations where it is necessary to bill HCPCS code G0330 will be 
increasingly limited. However, we believe HCPCS code G0330 is still 
necessary to fill the need for a billing and payment mechanism for 
dental rehabilitation services performed under monitored anesthesia in 
an operating room that meets Medicare coverage and payment 
requirements, but has not been assigned to an APC. Finally, the 
clarification regarding billing of HCPCS code G0330 provided here only 
applies to billing and payment under the OPPS. For information 
regarding the billing and payment for HCPCS code G0330 in the ASC 
setting, we refer readers to our discussion on this issue in section 
XIII.D of this final rule with comment period.
    Comment: We received several comments expressing concern over the 
impact of the proposed payment rate for HCPCS code G0330 for CY 2024. 
One commenter requested that we recalculate the payment rate for the 
APC. Another commenter stated that because the proposed G0330 payment 
rate for HCPCS code G0330 is 45 percent lower than the CY 2023 payment 
rate, and even lower for the ASC payment, the payment rate may be 
insufficient in light of specialized dental equipment and personnel 
required to furnish these services in hospital outpatient departments 
and ASCs. Another commenter stated that the inadequacy of the proposed 
payment rates for HCPCS code G0330 for both hospital and ASC settings 
is likely to stymie use of the code. Several commenters urged CMS to 
not finalize our proposal to continue to assign HCPCS code G0330 to APC 
5871 due to concerns over the APC's payment rate. Some commenters 
requested that CMS finalize an APC reassignment for HCPCS code G0330 
from APC 5871 to APC 5164 (Level 4 ENT Procedures) with a proposed 
payment rate of $3,087.88 for CY 2024. One commenter stated that 
reassignment to APC 5164 would be consistent with available cost and 
charge data for dental procedures likely to be reported using HCPCS 
code G0330. To support their request for reassignment to APC 5164, 
commenters stated that prior to CMS's establishment of HCPCS code 
G0330, these same dental rehabilitation procedures were reported using 
unlisted CPT code 41899, with a geometric mean cost of approximately 
$2,200, which is within the range of costs for procedures classified 
into APC 5164. Another commenter stated that CMS's proposal to allow 
for multiple procedure discounting for HCPCS code G0330 by proposing to 
assign status indicator ``T'' to the code would further lower the 
payment rate for services described by the code.
    Response: We thank the commenters for their input. First, we note 
that APC geometric mean costs can change from year to year as a result 
of data updates and policy changes. In this case, we proposed to assign 
229 dental procedures to APCs, with many proposed for assignment to APC 
5871, the same APC to which HCPCS code G0330 was proposed to be 
assigned. Additionally, we proposed to change the APC assignments of 
some codes that were previously paid under the OPPS based on clinical 
similarity, including codes describing dental imaging services. We also 
note, APC 5871 is an APC with a low volume of claims and, therefore, is 
more prone to volatility in its geometric mean cost and payment rate 
changes from year to year based on the claims data available for 
ratesetting. The proposed coding changes, as well as the fact that APC 
5871 has a low volume of claims, resulted in an unintentional reduction 
to APC 5871's geometric mean cost and payment rate for CY 2024. As we 
explained in our proposal for CY 2024, we encountered various 
challenges in securing accurate cost information for the hospital 
outpatient setting for the dental codes we proposed to assign to APC 
payment rates. We believe that as utilization increases and we receive 
claims data on the codes that we proposed to assign to various APCs for 
CY 2024, we will make changes to APC assignments and APC groups, 
including considering creating additional APC levels and new clinical 
APCs in future rulemaking, based on clinical and resource needs.
    We reiterate that the proposed payment rate for the services 
assigned to the Dental Procedures APC was the result of our ratesetting 
process, which we apply consistently to set the payment rates for other 
clinical APCs. With that said, we are sympathetic to commenters' 
concerns regarding the reduction in the proposed payment rate for HCPCS 
code G0330 from CY 2023 to CY 2024, especially without having claims 
data for the code that would indicate that the proposed payment rate

[[Page 81877]]

is appropriate. Based on comments received stating that CPT code 41899 
was used to describe the services currently described by HCPCS code 
G0330 prior to the code's effective date of January 1, 2023, we 
analyzed the available claims data for surgical claims for CPT code 
41899 in CY 2021 to get a benchmark for the geometric mean costs of 
services that are described by HCPCS code G0330. While CPT code 41899 
is an unlisted code describing unlisted procedures on the dentoalveolar 
structures that may or may not be surgical in nature and performed 
under the same conditions as described by HCPCS code G0330, we ran a 
study to isolate the claims performed with monitored anesthesia codes 
to more closely mimic the conditions required for services billed under 
HCPCS code G0330. Based on this analysis, we believe that the proposed 
APC assignment for HCPCS code G0330 for CY 2024 would be inappropriate 
in terms of estimated resource costs. Therefore, for CY 2024, we are 
not finalizing the APC assignment of HCPCS code G0330 to APC 5871 as 
proposed.
    Although we believe isolating the surgical claims gives us a better 
idea of the geometric mean costs of HCPCS code G0330, we also believe 
that the approximation using surgical services billed with CPT code 
41899 will not be as accurate as the claims information we will receive 
for HCPCS code G0330 in future years. We also note the crosswalk to CPT 
code 41899 is not a perfect comparator given that it is an unlisted 
code, which, per our billing instructions, should only be used when 
there is no other more specific code available. Therefore, we will 
determine whether the APC assignment we are finalizing for HCPCS code 
G0330 is appropriate based on claims data received in future years and 
consider further APC assignment changes in future rulemaking. However, 
based on the comments received, the fact that we do not have existing 
claims data for HCPCS code G0330 at this time, and our analysis of 
surgical claims using CPT code 41899, which demonstrate that the 
geometric mean costs for surgical claims for CPT code 41899 are notably 
higher than the proposed payment rate for procedures assigned to APC 
5871 for CY 2024, we believe reassigning HCPCS code G0330 from APC 5871 
to APC 5164 is appropriate for CY 2024.
    After consideration of the public comments we received, we are 
finalizing an APC reassignment for HCPCS code G0330 from APC 5871 to 
APC 5164 with status indicator ``J1'' for CY 2024. We refer readers to 
Addendum B to this final rule with comment period rule for the final CY 
2024 APC assignment and associated payment rate for HCPCS code G0330. 
Addendum B is available via the internet on the CMS website. We also 
refer readers to Addendum D1 for a definition of status indicators 
including ``J1.''
2. 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 proposed to assign additional dental codes to APCs 
for CY 2024. Specifically, for CY 2024, we proposed 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. We 
explained that 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 noted two things for readers' 
awareness. First, OPPS payment will only be made for a dental code that 
we proposed 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 proposed APC assignments in the CY 
2024 OPPS/ASC 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 believed we needed 
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 
included a proposal in the CY 2024 PFS proposed rule to codify this 
example

[[Page 81878]]

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)(i)(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 proposed APC assignments 
(e.g., D0120, D0140, D0150, D0160, D0170, D0180, D0191, D0171). Section 
411.15(i)(3)(i)(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 proposed APC assignments.
    While it is appropriate for CMS to assign certain dental codes to 
APCs for payment under the OPPS, we explained that 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 proposed that HOPDs would use 
the existing CPT codes to bill for the services performed. We also did 
not propose 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 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 did 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 did not propose 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 proposed to assign the 229 
additional dental codes listed in Table 110 below to various clinical 
APCs for CY 2024:
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    We requested comments on the list of 229 dental codes that we 
proposed to assign to APCs for OPPS payment for CY 2024. We also 
requested 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.
    Comment: Commenters supported our proposal to assign 229 dental 
codes to various APCs and considered it a positive step towards 
increased access to dental services for Medicare beneficiaries. 
Commenters requested that CMS continue to expand Medicare coverage of 
dental services. Many commenters expressed support for the dental 
proposals regarding Medicare payment for dental services in the CY 2024 
PFS proposed rule. Other commenters suggested additional covered 
medical services for which they believe Medicare should pay for dental 
care.
    Response: We appreciate the support from commenters but want to 
make a few clarifications on the policy proposal. First, we are 
clarifying that our proposal to assign additional dental codes to APCs 
is not a coverage determination. Billed services will only be paid 
under the OPPS when the applicable payment and coverage requirements 
are met. That said, we appreciate commenters' support for our proposal 
to assign additional dental codes to APCs, to enable payment when 
Medicare coverage and payment requirements are met. The comments 
received on the payment proposals in the CY 2024 PFS proposed rule are 
outside of the scope of this final rule with comment period. We direct 
readers to the discussion of dental services in the CY 2024 PFS 
proposed and final rules (88 FR 52371 through 52384) for more 
information on Medicare payment for dental services.
    Comment: We received one comment requesting CMS assign an 
additional 18 CDT codes to APCs for CY 2024. The commenter explained 
that it would be appropriate to assign the 18 additional codes to APCs 
because they may be necessary to treat oral or dental infections for 
patients with certain acute conditions.
    Response: We thank the commenter for their suggestion. We reviewed 
the list of codes recommended and believe some of the codes commenters 
suggested identify services that would be payable consistent with the 
dental payment policies specified in the CY 2023 PFS final rule, 
provided conditions for payment and coverage are met. Specifically, we 
believe some of the codes recommended for APC assignment describe 
dental services that may be considered medically necessary diagnostic 
and treatment services immediately necessary to eliminate or eradicate 
an oral or dental infection prior to, or contemporaneously with, 
certain Medicare-covered medical services specified in the CY 2023 PFS 
final rule, including organ transplant, cardiac valve replacement, or 
valvuloplasty procedures (42 CFR 411.15). The recommended codes that we 
believe are consistent with the dental payment policies specified in 
the CY 2023 PFS final rule are the following: CDT codes D7251 
(Coronectomy), D7280 (Exposure of unerupted tooth), D7410 (Rad exc 
lesion up to 1.25 cm), D7411 (Excision benign lesion>1.25c), D7412 
(Excision benign lesion compl), D7413 (Excision malig lesion<=1.25c), 
D7414 (Excision malig lesion>1.25cm), D7415 (Excision malig les 
complicat), D7440 (Malig tumor exc to 1.25 cm), D7441 (Malig tumor 
>1.25 cm), D7450 (Rem odontogen cyst to 1.25cm), D7451 (Rem odontogen 
cyst >1.25 cm), D7530 (Removal fb skin/areolar tiss), and D7540 
(Removal of fb reaction). We note that Medicare would only pay for 
these services when all payment and coverage requirements are met but 
we are finalizing APC assignments for these codes to make payment 
available in circumstances when those requirements are met. We would 
need additional information on how certain codes the commenter 
recommended for APC assignment, including CDT codes D7471 (Rem 
exostosis any site), D7283 (Place device impacted tooth), D7320 
(Alveoplasty w/o extraction), and D7321 (Alveoloplasty not w/extracts), 
are consistent with the dental payment policies provided in the CY 2023 
PFS final rule, and will revisit the issue in future rulemaking. We 
refer readers to Addendum B to this final rule with comment period for 
the finalized CY 2024 APC assignments and associated payment rates for 
the dental codes. Addendum B is available via the internet on the CMS 
website.
    Comment: Some commentors requested additional information regarding 
how CMS arrived at its dental proposal. One commenter stated that CMS 
did not specify the criteria used to determine which dental procedures 
to assign to APCs.
    Response: We thank the commenters for their feedback but disagree 
that we did not specify how we determined which dental procedures to 
assign to APCs for CY 2024. The dental services we proposed to assign 
to APCs in the CY 2024 OPPS/ASC 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

[[Page 81885]]

other covered services. As we stated in our proposal, we generated a 
list of codes to assign to APCs based on the specific dental services 
and clinical vignettes provided in the CY 2023 PFS final rule. This 
list was reviewed by our medical experts to ensure that the codes 
identified would be appropriate for payment under the OPPS when 
relevant conditions for payment and coverage are met.
    After consideration of the public comments we received, we are 
finalizing our initial list of proposed dental codes for assignment to 
clinical APCs as well as assigning additional dental codes to APCs for 
CY 2024. Specifically, we are assigning the following CDT codes to APCs 
for CY 2024: D7251, D7280, D7410, D7411, D7412, D7413, D7414, D7415, 
D7440, D7441, D7450, D7451, D7530, and D7540. Table 111 contains the 
list of dental codes assigned to a clinical APC for CY 2024. We note 
that the assignment of these codes to APCs is not a determination of 
Medicare coverage or payment. We refer readers to Addendum B to this 
final rule with comment period for the finalized CY 2024 APC 
assignments and associated payment rates for the dental codes. Addendum 
B is available via the internet on the CMS website.
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3. 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 (that is, 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 (that is, 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 proposed to assign D0210 to 
APC 5523 based on the crosswalk analysis.
    With regard to resource similarity, because the 229 dental codes we 
proposed 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

[[Page 81892]]

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 solicited comments regarding the proposed APC 
assignments for the dental codes for CY 2024. We refer readers to 
Addendum B to the CY 2024 OPPS/ASC 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.
    Comment: One commenter asked for clarification on which crosswalks 
were used to determine the proposed APC assignments, and for data 
validation on these crosswalks. The commenter provided two examples of 
proposed APC assignments that they believed did not reflect relative 
clinical complexity and resource use. Specifically, the commenter 
disagreed with the proposed APC assignment for CDT code D4240 (Gingival 
flap proc w/planin) because they believed that the clinical intensity, 
resource utilization, and supply costs for CDT code D4240 would be 
expected to be greater than CDT code D4210 (Gingivectomy/plasty 4 or 
mor), which was proposed to be assigned to a higher paying APC. 
Similarly, the commenter disagreed with the proposed APC assignment for 
CDT code D7210 (Rem imp tooth w mucoper flp) because they believed that 
the clinical intensity, and resource use would be similar to those for 
CDT code D7310 (Alveoplasty w/extraction), which was proposed to be 
assigned to a higher paying APC.
    Response: We appreciate the opportunity to provide additional 
information on our proposed APC assignments for dental services for CY 
2024. Our proposals for APC assignments for the 229 dental codes were 
made using a process that is consistent with our processes for 
assigning non-dental codes and services for which we do not have 
pricing information to clinical APCs. As we stated in our proposal, we 
do not yet have claims data or pricing information available for the 
dental codes we proposed to assign to APCs for CY 2024. As is our 
policy for all new HCPCS codes for which we lack pricing information, 
we proposed to assign the dental codes to existing APCs based on input 
from a variety of sources, including, but not limited to, review of the 
clinical similarity of the service to existing procedures including by 
using CPT crosswalk analyses, input from CMS medical advisors, and 
review of all other information available to us. The OPPS is a 
prospective payment system that provides payment for groups of services 
that share clinical and resource use characteristics. Therefore, we 
proposed to assign the dental codes to various APCs based on our 
evaluation of their clinical and resource similarities to other codes 
using the information available to us. Regarding releasing the 
crosswalks for all 229 dental codes we proposed to assign to APCs for 
CY 2024, it is not our policy to release crosswalks for every single 
code we assign to APCs in either our quarterly updates or in annual 
rulemaking. Additionally, as we have stated, CPT crosswalk analyses are 
just one method we use to assign codes to APCs for which we have no 
pricing information, and therefore, releasing CPT crosswalk codes would 
not fully explain our reasons for proposing to assign every dental code 
to a clinical APC.
    Regarding the specific examples of inaccurate proposed APC 
assignments and the explanations provided by the commenter regarding 
resource and clinical similarities to codes in different clinical APCs 
than proposed, we agree with the commenter's concerns. Therefore, based 
on the commenter's arguments explaining the clinical and resource 
similarities to codes assigned to other clinical APCs than what was 
proposed we will finalize APC assignments according to the commenter's 
suggestions.
    Comment: We received comments requesting that a dentist or dental 
specialist serve on the Advisory Panel on Hospital Outpatient Payment 
to be able to issue recommendations to CMS on dental issues brought 
forth to the Panel, including the appropriate APC assignments for 
dental services.
    Response: We welcome nominations for representatives of providers 
to serve on the Advisory Panel on Hospital Outpatient Payment through 
the MEARISTM module. We direct readers and interested 
parties to the CMS website for additional information regarding the 
purpose, responsibilities of the Advisory Panel on Hospital Outpatient 
Payment, and member requirements at: https://www.cms.gov/medicare/regulations-guidance/advisory-committees/hospital-outpatient-payment.
    Comment: We received a comment from an organization representing 
the interests of people with disabilities expressing concern that our 
CY 2024 dental proposal may have the impact of ultimately prohibiting 
people with disabilities, particularly those residing in rural 
communities or who are otherwise unable to access a hospital outpatient 
department, from getting the dental procedures they need for their 
health and wellbeing.
    Response: We appreciate the comment. It is unclear whether the 
commenter's concern was that the proposal to assign additional dental 
codes to APCs or the proposed payment rates for certain dental codes 
would have the negative effects described in their comment. 
Nonetheless, we take the concerns raised by the commenter seriously but 
reiterate that we believe our proposal to set payment rates for over 
200 dental services, which would allow for payment under the OPPS when 
Medicare payment and coverage requirements are met, will improve access 
to dental services for Medicare beneficiaries, including beneficiaries 
with disabilities. As we stated in the CY 2023 PFS final rule (87 FR 
69675), the policy changes for payment under Medicare Parts A and B for 
dental services that meet the conditions specified in that rule have 
the potential to advance health equity for people who are medically 
underserved. Finally, CMS will continue to consider how our dental 
policies may impact beneficiaries with disabilities.
    Comment: We received two comments requesting that we remain 
vigilant and aware of unintended consequences that may occur if we were 
to finalize the proposed APC assignments for dental codes in the CY 
2024 OPPS proposed rule. One commenter stated that CMS should 
diligently monitor the impacts the proposed APC assignments would have 
on APCs. Another commenter

[[Page 81893]]

cautioned CMS that if the OPPS payment rate for dental services is 
higher than other settings of care, our policies may have the 
unintended effect of shifting procedures that have traditionally been 
done in a dentist's office to the hospital outpatient setting. The 
commenter encouraged CMS to ensure that we are not creating a financial 
incentive to shift dental care services to the hospital outpatient 
department.
    Response: We understand and appreciate the commenters' concerns and 
agree that the potential for higher payments in the hospital outpatient 
setting may incentivize providing dental care in the hospital 
outpatient department setting rather than dental offices. In an effort 
to control costs and promote more efficient care, our proposal for CY 
2024 would package payment and implement multiple procedure discounting 
for almost every code that was proposed to be assigned to an APC. As we 
do every year, we will review the APC assignments for all services and 
items paid under the OPPS, including dental services, and make changes 
as appropriate. We anticipate that we will make adjustments in APC code 
assignments and APC groups to more accurately pay for dental services 
in future rulemaking based on claims data we collect. Finally, we 
encourage interested parties to continue to communicate their concerns 
and ideas with CMS so that we may address adverse incentives.
    Comment: We received one comment requesting additional changes to 
the proposed APC assignments for dental codes. The commenter submitted 
a list of over 40 dental codes for which they requested different APC 
assignments than the ones we proposed. The commenter included CPT 
crosswalks for some of the dental codes to justify their suggested APC 
assignment changes, but not all. The commenter also did not provide a 
justification or their reasoning for why their suggested APC 
assignments were appropriate.
    Response: We thank the commenter for their suggestions. However, 
based on the comment received, we do not have sufficient information to 
make the suggested APC assignment changes because minimal or sometimes 
no justification for the changes was provided. For example, additional 
information, including why a certain CPT crosswalk was chosen as well 
as the clinical or resource appropriateness of the suggested APC 
assignment change is necessary for us to assess the suggested APC 
assignments.
    After consideration of the public comments we received, we are 
finalizing our proposed APC assignments for the dental codes as 
proposed with slight modifications. Specifically, for CY 2024, we are 
reassigning CDT code D7210 from APC 5871 to APC 5163, and CDT code 
D4240 to APC 5164. We refer readers to Addendum B to this final rule 
with comment period for the finalized CY 2024 APC assignments and 
status indicators for the dental codes. Addendum B is available via the 
internet on the CMS website.
4. Packaged Payment and Associated Status Indicators for Dental Codes
    For CY 2024, we proposed 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 explained that we believe 
packaged payments are appropriate for dental services paid under the 
OPPS. We noted that 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 stated 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 explained that 
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 stated that 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 proposed 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 proposed 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 the CY 2024 
OPPS/ASC 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 the CY 
2024 OPPS/ASC proposed rule.
    Comment: We received one comment supporting the proposal to assign 
``N'' and ``Q1'' status indicators for certain dental services. The 
commenter stated that they believed the codes identified to be packaged 
with a primary service were appropriate.
    Response: We thank the commenter for their support of our proposal 
to

[[Page 81894]]

assign ``N'' and ``Q1'' status indicators to certain dental codes.
    Comment: We received one comment regarding finalizing proposed 
status indicator ``T'' for HCPCS code G0330. The commenter stated that 
since HCPCS code G0330 is used to report the performance of multiple 
procedures that otherwise would be separately billable, it is 
inappropriate to apply the multiple surgical procedure discount by 
assigning status indicator ``T'' to hospital dental rehabilitation 
claims.
    Response: For CY 2024, we are not finalizing the APC assignment for 
HCPCS code G0330 as proposed. Based on our discussion of the final 
policy in this final rule with comment period, we are assigning HCPCS 
code G0330 to APC 5164 with status indicator ``J1.'' As stated in 
Addendum D1 to this final rule with comment period, services that are 
assigned a status indicator ``J1'' are paid under the OPPS. All covered 
Part B services on the same claim as a service with status indicator 
``J1'' are packaged with the primary ``J1'' on the claim, with certain 
exceptions. We direct readers to Addendum D1 to this final rule with 
comment period for more information on the ``J1'' status indicator.
    Comment: A few commenters stated that they did not support 
assigning status indicators that would package payments for any of the 
dental codes we proposed to assign to APCs due to concerns that 
packaged payments may not be appropriate for dental services and may 
result in lower payments.
    Response: We disagree with commenters and continue to believe that 
packaging payment for certain dental services is appropriate. As stated 
in our proposal, there are certain packaging principles that are 
applied to all services paid under the OPPS, whether dental or medical. 
Additionally, we believe packaging payments will promote clinical 
resource efficiencies. We direct readers to our discussion on packaged 
payments for dental services in this final rule with comment for more 
information.
    Comment: One commenter stated that there may be significant room 
for interpretation in terms of packaging. The commenter also stated 
they did not believe that when a dentist performs dental procedures 
described by add-on codes, like CPT code D2953 (each addtnl cast post), 
on the same patient that other dentists are similarly engaging in the 
same activity.
    Response: We believe that the commenter is trying to explain that 
they do not believe providing a single payment for multiple services, 
including those described by add-on codes, would be appropriate because 
when multiple services are performed by multiple dentists on the same 
patient, the dentists are furnishing separate services, which should be 
paid for individually. First, we are clarifying that the OPPS is the 
Medicare payment system for hospital outpatient department services, 
not for the services of individual physicians, dentists, or other 
practitioners. Medicare payment for physicians' services is made 
through the PFS to the physicians, health care practitioners, and other 
suppliers that furnish these services. Second, we reiterate that it is 
our policy to package payment for most add-on codes, whether dental or 
medical, as these are codes that describe a procedure or service always 
performed in addition to a primary service or procedure. Since whenever 
CPT code D2953 is performed, it would always be performed with a 
primary service, its payment would always be packaged even though it 
may not be furnished every time the primary service is performed. 
Finally, we direct the commenter to section XI ``CY 2024 Payment Status 
and Comment Indicators'' of this final rule with comment period for a 
discussion of the various status indicators, including the packaged 
status indicator ``N,'' used under the OPPS. The complete list of the 
final status indicators and their definitions is provided in Addendum 
D1 to this final rule with comment period.
    After consideration of the public comments we received, we are 
finalizing our proposal to package payment for certain dental services 
under the OPPS. We refer readers to Addendum B to this final rule with 
comment period for the finalized CY 2024 APC assignments and status 
indicators for the dental codes. Addendum B is available via the 
internet on the CMS website.
    In summary, we are finalizing the following dental policy changes 
for CY 2024. First, after consideration of the public comments we 
received, we are finalizing the proposed list of dental codes for 
assignments to APCs for CY 2024 as well as some of the additional codes 
commenters suggested we make payable under the OPPS when coverage and 
payment requirements are met. Specifically, in addition to the codes we 
proposed to assign to APCs for CY 2024, we are assigning the following 
additional CDT codes to APCs for CY 2024: D7251, D7280, D7410, D7411, 
D7412, D7413, D7414, D7415, D7440, D7441, D7450, D7451, D7530, and 
D7540. We note that the assignment of these codes to APCs is not a 
determination of coverage or Medicare payment.
    Second, we are finalizing our proposed APC assignments for the 
dental codes as proposed with slight modifications. Specifically, for 
CY 2024, we are assigning CDT code D7210 to APC 5163 and assigning CDT 
code D4240 to APC 5164, rather than finalizing their proposed APC 
assignments. Additionally, we are finalizing an APC reassignment for 
HCPCS code G0330 from APC 5871 to APC 5164 for CY 2024. We refer 
readers to Addendum B to this final rule with comment period for the 
finalized CY 2024 APC assignments and status indicators for the dental 
codes. Addendum B is available via the internet on the CMS website.
    Finally, we are finalizing our proposal to package payments for 
certain dental services under the OPPS. We refer readers to Addendum B 
to this final rule with comment period for the specific finalized CY 
2024 APC assignments and status indicators for the dental codes. 
Addendum B is available via the internet on the CMS website.

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 the CY 2024 OPPS/ASC 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

[[Page 81895]]

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 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 and 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 proposed to use the CY 2022 claims for the CY 2024 OPPS/ASC 
ratesetting process. In addition, we proposed 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 
generally do not propose any modifications to our usual OPPS 
ratesetting methodologies with regard to the use of updated claims and 
cost report data to account for the impact of COVID-19 on the 
ratesetting data.
    We did not receive any public comments on our proposal, and we are 
finalizing our proposal without modification to resume our typical data 
update process, using CY 2022 claims data and the most recently 
available cost report data, in the CY 2024 OPPS ratesetting process.

[[Page 81896]]

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

    In the CY 2000 OPPS 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 OPPS 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), which specifies 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.
    In the intervening years, IHS and tribal 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 is $620 for 
the lower 48 States and $801 for Alaska.
    IHS and tribal 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 tribal 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 tribal hospital outpatient specialty 
programs currently in operation and provide less incentive to IHS 
hospitals and tribal facilities not currently offering specialty 
services to begin doing so.
    Consequently, we sought comment on a number of potential policies 
to address payment to IHS and tribal facilities for certain high-cost 
drugs and services. We sought comment on whether Medicare should pay 
separately for high-cost drugs provided by IHS and tribal facilities. 
We requested input on the following:
     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 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 tribal 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 sought comment on whether an outlier policy might be 
an appropriate mechanism for addressing high-cost drugs and services 
provided by IHS and tribal facilities.
    We welcomed 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 tribal facilities.
    Comment: We received a total of nine comments in response to this 
comment solicitation, including from a tribal facility, organizations 
representing IHS and tribal healthcare providers, pharmaceutical 
companies, and other interested parties. All of the commenters 
supported establishing a payment methodology that would allow IHS and 
Tribal healthcare facilities to receive separate payment outside of the 
AIR for oncology drugs and services whose costs exceed the AIR.
    Commenters discussed the different payment approaches that would 
cover the cost of oncology drugs and services above the AIR payment 
rate. The preferred approach of the commenters was to treat the AIR 
payment amount as a payment threshold. If the cost of a drug or service 
is less than the AIR, the provider would be paid the AIR. If the cost 
of the drug or service is more than the AIR, then the provider would 
receive separate payment for the drug or service. Commenters noted that 
this payment approach is currently being used for drugs receiving 
payment through Arizona Medicaid (AHCCCS) for IHS and tribal facilities 
located in Arizona. The commenters explained that the AHCCCS payment 
methodology was established through a state plan amendment to the 
AHCCCS program that was approved by CMS.
    There was less enthusiasm for other possible payment approaches to 
cover the costs of high-cost oncology drugs and services. One commenter 
opposed establishing a fixed list of medications that would be eligible 
for separate payment because of frequent changes in treatment and 
therapy approaches and the entry of new drugs onto the market. Instead, 
the commenter would support separate payment for defined classes of 
drugs using HCPCS coding that would remain stable over several years. 
The commenter noted that this payment approach would not accommodate 
separate payment for radiation oncology services. The commenter also 
was skeptical about using outlier payments for high-cost oncology drugs 
and services. They stated that while this approach may cover costs that 
are not currently covered by the AIR, the high threshold to initiate an 
outlier payment and the limited additional payment would still leave 
IHS and Tribal

[[Page 81897]]

facilities who provide high-cost oncology drugs and other high-cost 
services with significant uncompensated expenditures.
    Multiple commenters requested that separately payable drugs 
furnished by IHS and tribal facilities be paid at a rate of ASP + 6 
percent rather than using the Federal Supply Schedule rate. Commenters 
assert that the IHS is chronically underfunded and that paying ASP + 6 
percent for high-cost drugs could help with remedying those funding 
issues.
    Commenters also wanted to ensure the integrity of the AIR if there 
is separate payment for high-cost oncology drugs and other high-cost 
services. They did not support applying offsets to the AIR to avoid 
double payment to IHS and tribal healthcare providers for separately 
payable high-cost oncology drugs or for high-cost services that may 
receive separate payment.
    Response: We appreciate the suggestions and feedback from the 
interested parties who responded to this comment solicitation. We will 
consider the public comments for potential future rulemaking.

H. Technical Changes to Hospital Billing for Marriage and Family 
Therapist Services and Mental Health Counselor Services

    Section 4121(a) of Division FF, Title IV, Subtitle C of the 
Consolidated Appropriations Act of 2023 (CAA, 2023) (Pub. L. 117-328, 
December 29, 2022), Coverage of Marriage and Family Therapist Services 
and Mental Health Counselor Services under Part B of the Medicare 
Program, provides for Medicare coverage of and payment for the services 
of mental health care professionals who meet the qualifications for 
marriage and family therapists (MFTs) and mental health counselors 
(MHCs) when billed by these professionals.
    Specifically, section 4121(a)(1) of the CAA, 2023 amended section 
1861(s)(2) of the Act by adding a new benefit category under Medicare 
Part B in new subparagraph (II) to include marriage and family 
therapist services (as defined in an added section 1861(lll)(1) of the 
Act) and mental health counselor services (as defined in an added 
section 1861(lll)(3) of the Act).
    Section 4121(a)(2) of the CAA, 2023 added a new subsection (lll) to 
section 1861 of the Act, which defines marriage and family therapist 
services, marriage and family therapist (MFT), mental health counselor 
services, and mental health counselor (MHC). Section 1861(lll)(1) of 
the Act defines ``marriage and family therapist services'' as services 
furnished by an MFT for the diagnosis and treatment of mental illnesses 
(other than services furnished to an inpatient of a hospital), which 
the MFT is legally authorized to perform under State law (or the State 
regulatory mechanism provided by State law) of the State in which such 
services are furnished, as would otherwise be covered if furnished by a 
physician or as an incident to a physician's professional service. 
Section 1861(lll)(2) of the Act defines the term MFT to mean an 
individual who:
     Possesses a master's or doctor's degree which qualifies 
for licensure or certification as a MFT pursuant to State law of the 
State in which such individual furnishes marriage and family therapist 
services;
     Is licensed or certified as a MFT by the State in which 
such individual furnishes such services;
     After obtaining such degree has performed at least 2 years 
of clinical supervised experience in marriage and family therapy; and
     Meets such other requirements as specified by the 
Secretary.
    Section 1861(lll)(3) of the Act defines ``mental health counselor 
services'' as services furnished by a mental health counselor (MHC) for 
the diagnosis and treatment of mental illnesses (other than services 
furnished to an inpatient of a hospital), which the MHC is legally 
authorized to perform under State law (or the State regulatory 
mechanism provided by the State law) of the State in which such 
services are furnished, as would otherwise be covered if furnished by a 
physician or as incident to a physician's professional service. Section 
1861(lll)(4) of the Act defines MHC as an individual who:
     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 State law of 
the State in which such individual furnishes MHC services;
     Is licensed or certified as a mental health counselor, 
clinical professional counselor, or professional counselor by the State 
in which the services are furnished;
     After obtaining such degree has performed at least 2 years 
of clinical supervised experience in mental health counseling; and
     Meets such other requirements as specified by the 
Secretary.
    In the CY 2024 Physician Fee Schedule proposed rule, we proposed to 
create two new regulation sections at Sec. Sec.  410.53 and 410.54 to 
codify the coverage provisions for MFTs and MHCs, respectively. We 
proposed a number of changes (88 FR 52361 through 52364) to implement 
the amendments made by section 4121 of CAA, 2023. Generally, these 
amendments added MFTs and MHCs as types of non-physician practitioners 
who can enroll in Medicare and bill for their professional services to 
diagnose and treat mental illnesses and specified that payment is made 
for these services at 80 percent of the lesser of the actual charges 
for the services or 75 percent of the amount determined under the PFS 
for services of a clinical psychologist (CP).
    We received public comments in response to the OPPS proposed rule 
regarding section 4121 of the CAA, 2023. The following is a summary of 
the comments we received and our responses.
    Comment: Several commenters requested that CMS amend the 
regulations at Sec.  419.22 to add the services of MFTs and MHCs to the 
list of services that are not paid for under the Hospital Outpatient 
Prospective Payment System (OPPS) (except when packaged as part of a 
bundled payment) in order to clarify that MHC and MFT services are 
excluded from payment under the OPPS. This subject regulation at Sec.  
419.22 lists those services that are authorized by Medicare law to be 
paid under payment systems other than the OPPS, such as the Physician 
Fee Schedule (PFS), the Skilled Nursing Facility Prospective Payment 
System (SNF PPS), and the End Stage Renal Disease Prospective Payment 
System (ESRD PPS).
    Response: We thank the commenters for bringing this inadvertent 
omission to our attention. As noted above, we proposed a number of 
changes (88 FR 52361 through 52364) to implement the amendments made by 
section 4121 of the CAA, 2023. Generally, these amendments added MFTs 
and MHCs as types of non-physician practitioners who can enroll in 
Medicare and bill for their professional services to diagnose and treat 
mental illnesses and specified that payment is made for these services 
at 80 percent of the lesser of the actual charges for the services or 
75 percent of the amount determined under the PFS for services of a 
clinical psychologist (CP).
    In proposing to implement section 4121, we inadvertently did not 
discuss excluding MFT and MHC services from payment under the hospital 
outpatient prospective payment system (OPPS). Services paid under fee 
schedules or other payment systems, including the professional services 
of physicians or nonphysician practitioners, are not paid

[[Page 81898]]

under the OPPS (69 FR 65685). The regulation at 42 CFR 419.22 lists the 
services excluded from payment under the OPPS and includes services of 
qualified psychologists, as defined in section 1861(ii) of the Act. 
Because MHC and MFT services are professional services of nonphysician 
practitioners for which payment is made under the PFS at 75 percent of 
the amount of payment for services of a psychologist, we believe that 
in implementing the amendments to the Act made by section 4121 of the 
CAA, 2023, we must also exclude these services from payment under the 
OPPS. Accordingly, we are amending the regulation at 42 CFR 419.22 to 
add the services of MFTs as defined in 1861(lll)(1) and the services of 
MHCs as defined in section 1861(lll)(3) to the list of hospital 
services excluded from payment under the OPPS, at new sections (w) and 
(x), respectively.
    Comment: A few commenters requested that the regulation at 42 CFR 
410.27, which permits certain hospital services to be furnished 
incident to a physician or nonphysician practitioner's service, be 
updated to expand the definition of ``nonphysician practitioner'' to 
include MFTs and MHCs.
    Response: We thank the commenters for bringing this inadvertent 
omission to our attention. We are amending the regulation at 42 CFR 
410.27(g) to revise the definition of ``nonphysician practitioner'' to 
include MFTs and MHCs, consistent with section 4121 of the CAA, 2023, 
and the amendments to the regulations at Sec. Sec.  410.53 and 410.54 
that we are adopting in the CY 2024 PFS final rule.
    After consideration of the public comments, we are amending the 
regulations at Sec. Sec.  410.27 and 419.22, as described above.

XI. CY 2024 OPPS Payment Status and Comment Indicators

A. 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 proposed 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 the CY 2024 OPPS/ASC 
proposed rule. We did not propose 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/payment/prospective-payment-systems/hospital-outpatient/regulations-notices.
    We solicited public comments on the proposed definitions of the 
OPPS payment status indicators for 2024. We did not receive any public 
comments on our proposal, and we are finalizing our proposal to change 
the definition of status indicator ``P'' from ``Partial 
Hospitalization'' to ``Partial Hospitalization or Intensive Outpatient 
Program''.
    The complete list of CY 2024 payment status indicators and their 
definitions is displayed in Addendum D1 to this final rule with comment 
period, which is available on the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices.
    The CY 2024 payment status indicator assignments for APCs and HCPCS 
codes are shown in Addendum A and Addendum B, respectively, to this 
final rule with comment period, which are available on the CMS website 
at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices.

B. CY 2024 Comment Indicator Definitions

    We proposed to use four comment indicators for the CY 2024 OPPS/
ASC. These comment indicators, ``CH,'' ``NC,'' ``NI,'' and ``NP,'' are 
in effect for CY 2023; and we proposed 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 
requested comments in the CY 2024 OPPS/ASC proposed rule, final APC 
assignment; comments will not be accepted on the final APC assignment 
for the new code.
     ``NI''--New code for the next calendar year or existing 
code with substantial revision to its code descriptor in the next 
calendar year, as compared to current calendar year, interim APC 
assignment; comments will be accepted on the interim APC assignment for 
the new code.
     ``NP''--New code for the next calendar year or existing 
code with substantial revision to its code descriptor in the next 
calendar year, as compared to current calendar year, proposed APC 
assignment; comments will be accepted on the proposed APC assignment 
for the new code.
    The definitions of the OPPS comment indicators for CY 2024 are 
listed in Addendum D2 to this final rule with comment period, which is 
available on the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices.
    We explained that we believe that the existing CY 2024 definitions 
of the OPPS/ASC comment indicators continue to be appropriate for CY 
2024. Therefore, we proposed to use those definitions without 
modification for CY 2024. We solicited public comments on our proposed 
definitions of the OPPS/ASC comment indicators for 2024.
    We did not receive any public comments on our proposal and are 
finalizing those definitions without modification for CY 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.\199\

[[Page 81899]]

We appreciate MedPAC's recommendation and, as discussed further in 
section II.B of the CY 2024 OPPS/ASC proposed rule, we proposed to 
increase the OPPS payment rates by the amount specified in current law. 
Comments received from MedPAC for other OPPS policies are discussed in 
the applicable sections of this final rule with comment period.
---------------------------------------------------------------------------

    \199\ 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, in the CY 2024 OPPS/ASC proposed rule, 
we stated that we look forward to working with Congress and sought 
comments on approaches CMS could take. We did not receive any public 
comments in response to our comment solicitation regarding MedPAC's 
MSNI recommendation.

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

    \200\ 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 did not propose 
any cost reporting requirements for ASCs in the CY 2024 OPPS/ASC 
proposed rule, as in previous years, we sought 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. We did not receive any public 
comments on our comment solicitation regarding methods to mitigate the 
burden of ASC cost reporting and data collection. Comments received 
from MedPAC for other ASC payment system policies are discussed in the 
applicable sections of this final rule with comment period.

XIII. 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 and 
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 and 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. 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 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

[[Page 81900]]

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 the 
proposed rule (and respond to those comments in this final rule with 
comment period) or whether we will be soliciting public comments in 
this 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 the CY 2024 OPPS/ASC proposed rule 
(88 FR 49745) displayed the new Level II HCPCS codes that were 
implemented April 1, 2023. These new codes that were effective April 1, 
2023, were assigned to comment indicator ``NP'' in Addendum BB to the 
proposed rule to indicate that the codes were assigned to an interim 
APC assignment and that comments would be accepted on their interim APC 
assignments. In addition, we note that the entire ASC addenda, which 
consist of the addenda listed below, are available via the internet on 
the CMS website, specifically, at https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices:
     ASC Addendum AA: ASC Covered Surgical Procedures 
(Including Surgical Procedures for Which Payment is Packaged)
     ASC Addendum BB: Covered Ancillary Services Integral to 
Covered Surgical Procedures (Including Ancillary Services for Which 
Payment is Packaged)
     ASC Addendum DD1: ASC Payment Indicators (PI)
     ASC Addendum DD2: ASC Comment Indicators (CI)
     ASC Addendum EE: Surgical Procedures Excluded from Payment 
in ASCs
     ASC Addendum FF: ASC Device Offset Percentages
     Addendum O: Long Descriptors for New Category I CPT Codes, 
Category III CPT Codes, C-codes, and G-Codes Effective January 1, 2024
    We invited 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, and as listed 
in Table 112 (New Level II HCPCS Codes for Ancillary Services Effective 
April 1, 2023). The new codes that were effective April 1, 2023, were 
assigned to comment indicator ``NP'' in ASC Addendum BB to the CY 2024 
OPPS/ASC proposed rule to indicate that the codes are assigned to 
interim payment indicators and comments would be accepted on their 
interim assignments. We proposed to finalize the payment indicators in 
this CY 2024 OPPS/ASC final rule with comment period. We did not 
receive any comments on the proposed ASC payment indicator assignments 
for the new Level II HCPCS codes implemented in April 2023 and are 
finalizing the proposed ASC payment indicator assignments for these 
codes.
    We note that several of the temporary drug HCPCS C-codes have been 
replaced with permanent drug HCPCS J-codes. Their replacement codes are 
also listed in Table 112. In addition, although in prior years we 
included the final ASC payment indicators in the coding tables in the 
preamble, because we include the same information in the ASC addenda, 
we have not included them in Table 112. Therefore, readers are advised 
to refer to the ASC addenda for the final ASC payment indicators and 
payment rates for all codes reported under the ASC payment system. The 
list of ASC payment indicators and definitions used under the ASC 
payment system can be found in the ASC addenda. We note that the ASC 
addenda (AA, BB, DD1, DD2, EE, and FF) are available via the internet 
on the CMS website.

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[GRAPHIC] [TIFF OMITTED] TR22NO23.163

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, which was subsequently rescinded 
and replaced with Transmittal 12122, Change Request 13216, dated July 
5, 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 the CY 2024 OPPS/
ASC proposed rule (88 FR 49746) displayed the new HCPCS codes that were 
effective July 1, 2023. We invited public comments on the proposed 
payment indicators for these Level II HCPCS codes, and indicated that 
the proposed comment indicators, payment indicators, and payment rates 
for these codes were listed in Addendum AA and Addendum BB of the 
proposed rule. These new codes that were effective July 1, 2023, were 
assigned to comment indicator ``NP'' in ASC Addendum AA and Addendum BB 
to the CY 2024 OPPS/ASC proposed rule to indicate that the codes were 
assigned to an interim payment indicators and

[[Page 81902]]

comments would be accepted on their interim assignments. We further 
stated that we proposed to finalize the payment indicators in this CY 
2024 OPPS/ASC final rule with comment period. We note that several of 
the temporary drug HCPCS C-codes have been replaced with HCPCS J-codes 
and HCPCS Q-codes. Their replacement codes are also listed in Table 
113. In addition, in prior years we included the final ASC payment 
indicators the coding preamble tables, however, because the same 
information can be found in Addendum AA and Addendum BB, we are no 
longer including them in Table 113. Therefore, readers are advised to 
refer to the ASC addenda for the final ASC payment indicators and 
payment rates for all codes reported under the ASC payment system.
    We did not receive any comments on the proposed ASC payment 
indicator assignments for the new Level II HCPCS codes that were added 
to the list of covered surgical procedures and ancillary services 
implemented in July 2023. Therefore, we are finalizing the proposed ASC 
payment indicator assignments for the codes.
BILLING CODE 4150-28-P

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[[Page 81904]]


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BILLING CODE 4150-28-C
4. October 2023 HCPCS Codes Final Rule Comment Solicitation
    For CY 2024, consistent with our established policy, we proposed in 
the CY 2024 OPPS/ASC proposed rule (88 FR 49747) that the Level II 
HCPCS codes that would be effective October 1, 2023, would be flagged 
with comment indicator ``NI'' in Addendum BB in the CY 2024 OPPS/ASC 
final rule with comment period to indicate that we have assigned the 
codes to interim ASC payment indicators for CY 2024. In the October 
2023 ASC quarterly update (Transmittal 12229, Change Request 13353, 
dated August 31, 2023), we added several separately payable Level II 
HCPCS codes to the list of covered surgical procedures and covered 
ancillary services. Table 114 below list the codes that were effective 
October 1, 2023. We note that several of the temporary C-codes have 
been replaced with permanent J-codes effective January 1, 2024. We are 
inviting public comments on this final rule with comment period on the 
interim payment indicators, which would be finalized in the CY 2025 
OPPS/ASC final rule with comment period. We note these same codes will 
be subject to comment in the CY 2025 OPPS/ASC proposed rule with 
comment period, which would be finalized in the CY 2025 OPPS/ASC final 
rule with comment period.

[[Page 81905]]

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5. January 2024 HCPCS Codes
a. New 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 C and G-codes listed in Addendum O to the CY 2024 OPPS/ASC 
proposed rule, most Level II HCPCS codes are not released until 
sometime around November to be effective January 1. Because these codes 
are not available until November, we were unable to include them in the 
OPPS/ASC proposed rule; however, the codes are flagged with comment 
indicator ``NI'' in ASC Addendum AA and Addendum BB to this final rule 
with comment period to indicate that we are assigning them an interim 
payment status, which is subject to public comment. Therefore, as we 
stated in the CY 2024 OPPS/ASC proposed rule, these Level II HCPCS 
codes that will be effective January 1, 2024 are included in this final 
rule with comment period and will also be released to the public 
through in the January 2024 ASC Update CR and the CMS HCPCS website. We 
are inviting public comments in this final rule with comment period on 
the payment indicator assignments, which would be finalized in the CY 
2025 OPPS/ASC final rule with comment period. Similar to the codes 
effective October 1, 2023, these new Level II HCPCS codes that will be 
effective January 1, 2024, will be subject to comment in the CY 2025 
OPPS/ASC proposed rule with comment period, which would be finalized in 
the CY 2025 OPPS/ASC final rule with comment period.
b. New CY 2024 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 the 
CY 2024 OPPS/ASC proposed rule. The new, revised, and deleted CPT codes 
were included in Addendum AA and Addendum BB to the CY 2024 OPPS/

[[Page 81906]]

ASC proposed rule, which is available via the internet on the CMS 
website. We note that the new and revised CPT codes were assigned to 
comment indicator ``NP'' in ASC Addendum AA and Addendum BB of the CY 
2024 OPPS/ASC proposed rule to indicate that the code is new for the 
next calendar year, or the code is an existing code with substantial 
revision to its code descriptor in the next calendar year as compared 
to the current calendar year with a proposed payment indicator 
assignment. We stated that we would accept comments and finalize the 
payment indicators in this CY 2024 OPPS/ASC final rule with comment 
period. Further, we reminded readers that the CPT code descriptors that 
appeared 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 the CY 
2024 OPPS/ASC proposed rule so that the public could comment on our 
proposed payment indicator assignments. The 5-digit placeholder codes 
were listed in Addendum O to the CY 2024 OPPS/ASC proposed rule, 
specifically under the column labeled ``CY 2024 OPPS/ASC Proposed Rule 
5-Digit Placeholder Code.'' We also stated that we would include the 
final CPT code numbers in this CY 2024 OPPS/ASC final rule with comment 
period.
    We did not receive any comments on the proposed ASC payment 
indicators for the new CPT codes effective January 1, 2024, so we are 
finalizing these codes as proposed.
    Finally, in Table 115, 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.
[GRAPHIC] [TIFF OMITTED] TR22NO23.167

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.

[[Page 81907]]

    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.
    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. Final ASC Payment and Comment Indicators for CY 2024
    For CY 2024, we proposed new and revised Category I and III CPT 
codes as well as new and revised Level II HCPCS codes. Final Category I 
and III CPT codes that are new and revised for CY 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 the proposed rule and labeled with 
comment indicator ``NP'' to indicate that these CPT and Level II HCPCS 
codes were open for comment as part of the CY 2024 OPPS/ASC proposed 
rule.
    For CY 2024, we proposed to add two ASC payment indicators for new 
proposed dental codes. Section XIII.D of the proposed rule described 
the proposed addition of dental codes to the ASC CPL and ancillary 
services list for CY 2024. We proposed 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 the proposed rule described how these payment 
indicators would be used in claims processing for dental services. We 
solicited comment on these proposed new payment indicators, including 
whether their descriptors are appropriate, and any considerations 
interested parties believe we should consider when structuring payment 
for the procedures for which we propose to use payment indicators D1 
and D2.
    We did not receive any public comments on our proposals, and we are 
finalizing them as proposed without modification. We refer readers to 
Addenda DD1 and DD2 of this CY 2024 OPPS/ASC final rule (these addenda 
are available via the internet on the CMS website) for the complete 
list of ASC payment and comment indicators finalized for the CY 2024 
update.

C. Payment Policies Under the ASC Payment System

1. Final ASC Payment for Covered Surgical Procedures
a. Background
    Our ASC payment policies for covered surgical procedures under the 
revised ASC payment system are described in the CY 2008 OPPS/ASC final 
rule with comment period (72 FR 66828 through 66831). Under our 
established policy, we use the ASC standard ratesetting methodology of 
multiplying the ASC relative payment weight for the procedure by the 
ASC conversion factor for that same year to calculate the national 
unadjusted payment rates for procedures with payment indicators ``G2'' 
and ``A2.'' Payment indicator ``A2'' was developed to identify 
procedures that were included on the list of ASC covered surgical 
procedures in CY 2007 and, therefore, were subject to transitional 
payment prior to CY 2011. Although the 4-year transitional period has 
ended and payment indicator ``A2'' is no longer required to identify 
surgical procedures subject to transitional payment, we have retained 
payment indicator ``A2'' because it is used to identify procedures that 
are exempted from the application of the office-based designation.
    Payment rates for office-based procedures (payment indicators 
``P2,'' ``P3,'' and ``R2'') are the lower of the PFS nonfacility PE 
RVU-based amount or the amount calculated using the ASC standard rate 
setting methodology for the procedure. As detailed in section 
XIII.C.3.b of this CY 2024 OPPS/ASC final rule, we update the payment 
amounts for office-based procedures (payment indicators ``P2,'' ``P3,'' 
and ``R2'') using the most recent available MPFS and OPPS data. We 
compare the estimated current year rate for each of the office-based 
procedures, calculated according to the ASC standard rate setting 
methodology, to the PFS nonfacility PE RVU-based amount to determine 
which is lower and, therefore, would be the current year payment rate 
for the procedure under

[[Page 81908]]

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 final rule.
    In the CY 2014 OPPS/ASC final rule with comment period (78 FR 
75081), we finalized our proposal to calculate the CY 2014 payment 
rates for ASC covered surgical procedures according to our established 
methodologies, with the exception of device removal procedures. For CY 
2014, we finalized a policy to conditionally package payment for device 
removal procedures under the OPPS. Under the OPPS, a conditionally 
packaged procedure (status indicators ``Q1'' and ``Q2'') describes a 
HCPCS code where the payment is packaged when it is provided with a 
significant procedure but is separately paid when the service appears 
on the claim without a significant procedure. Because ASC services 
always include a covered surgical procedure, HCPCS codes that are 
conditionally packaged under the OPPS are always packaged (payment 
indicator ``N1'') under the ASC payment system. Under the OPPS, device 
removal procedures are conditionally packaged and, therefore, would be 
packaged under the ASC payment system. There is no Medicare payment 
made when a device removal procedure is performed in an ASC without 
another surgical procedure included on the claim; therefore, no 
Medicare payment would be made if a device was removed but not 
replaced. To ensure that the ASC payment system provides separate 
payment for surgical procedures that only involve device removal--
conditionally packaged in the OPPS (status indicator ``Q2'')--we have 
continued to provide separate payment since CY 2014 and assign the 
current ASC payment indicators associated with these procedures.
b. Update to ASC Covered Surgical Procedure Payment Rates for CY 2024
    We proposed 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 final rule. As the proposed OPPS 
relative payment weights are generally based on geometric mean costs, 
we proposed that the ASC payment system will generally use the 
geometric mean cost to determine proposed relative payment weights 
under the ASC standard methodology. We proposed to continue to use the 
amount calculated under the ASC standard ratesetting methodology for 
procedures assigned payment indicators ``A2'' and ``G2.''
    We proposed to calculate payment rates for office-based procedures 
(payment indicators ``P2,'' ``P3,'' and ``R2'') and device-intensive 
procedures (payment indicator ``J8'') according to our established 
policies and to identify device-intensive procedures using the 
methodology discussed in section XIII.C.4 of this final rule. 
Therefore, we proposed to update the payment amount for the service 
portion (the non-device portion) of the device-intensive procedures 
using the standard ASC ratesetting methodology and the payment amount 
for the device portion based on the proposed CY 2024 device offset 
percentages that have been calculated using the standard OPPS APC 
ratesetting methodology. We proposed that payment for office-based 
procedures would be at the lesser of the proposed CY 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 proposed to 
continue our policy for device removal procedures, such that device 
removal procedures that are conditionally packaged in the OPPS (status 
indicators ``Q1'' and ``Q2'') will be assigned the current ASC payment 
indicators associated with those procedures and will continue to be 
paid separately under the ASC payment system.
    We did not receive any comments on the broader rate calculation 
methodologies for these procedures and we are finalizing our proposed 
policies without modification to calculate the CY 2024 payment rates 
for ASC covered surgical procedures according to our established rate 
calculation methodologies under Sec.  416.171 and our device-intensive 
payment policy, as discussed in section XIII.C.4. of this CY 2024 OPPS/
ASC final rule with comment period. For covered office-based surgical 
procedures, the payment rate is the lesser of the final CY 2024 MPFS 
nonfacility PE RVU-based amount or the final CY 2024 ASC payment amount 
calculated according to the ASC standard ratesetting methodology. The 
final payment indicators and rates set forth in this final rule with 
comment period are based on a comparison using the PFS PE RVUs and the 
conversion factor effective January 1, 2024. For a discussion of the 
PFS rates, we refer readers to the CY 2024 PFS final rule with comment 
period.
c. Final 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 final rule, we apply a complexity adjustment 
by promoting qualifying paired ``J1'' service code combinations or 
paired code combinations of ``J1'' services and add-on codes from the 
originating Comprehensive APC (C-APC) (the C-APC to which the 
designated primary service is first assigned) to the next higher paying 
C-APC in the same clinical family of C-APCs. A ``J1'' status indicator 
refers to a hospital outpatient service paid through a C-APC. We 
package payment for all add-on codes, which are codes that describe a 
procedure or service always performed in addition to a primary service 
or procedure, into the payment for the C-APC. However, certain 
combinations of primary service codes and add-on codes may qualify for 
a complexity adjustment.
    We apply complexity adjustments when the paired code combination 
represents a complex, costly form or version of the primary service 
when the frequency and cost thresholds are met. The frequency threshold 
is met when there are 25 or more claims reporting the code combination, 
and the cost threshold is met when there is a violation of the 2 times 
rule, as specified in section 1833(t)(2) of the Act and described in 
section III.A.2.b of this final rule, in the originating C-APC. These 
paired code combinations that meet the frequency and cost threshold 
criteria represent those that exhibit materially greater resource 
requirements than the primary service. After designating a single 
primary service for a claim, we evaluate that service in combination 
with each of the other procedure codes reported on the claim that are 
either assigned to status indicator ``J1'' or add-on codes to determine 
if there are paired code

[[Page 81909]]

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 final complexity adjustments for ``J1'' and add-on 
code combinations for CY 2024, along with all of the other final 
complexity adjustments, in Addendum J to this final rule (which is 
available via the internet on the CMS website at https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices).
(2) CY 2024 ASC Special Payment Policy for OPPS Complexity-Adjusted C-
APCs
    Comprehensive APCs cannot be adopted in the ASC payment system due 
to limitations of the ASC claims processing systems. Thus, we do not 
use the OPPS comprehensive services ratesetting methodology in the ASC 
payment system. Under the standard ratesetting methodology used for the 
ASC payment system, comprehensive ``J1'' claims that exist under the 
OPPS are treated the same as other claims that contain separately 
payable procedure codes. As comprehensive APCs do not exist under the 
ASC payment system, there is not a process similar to the OPPS 
complexity adjustment policy in the ASC payment system to provide 
higher payment for more complex code combinations. In the ASC payment 
system, when multiple procedures are performed together in a single 
operative session, most covered surgical procedures are subject to a 
50-percent reduction for the lower-paying procedure (72 FR 66830). This 
multiple procedure reduction gives providers additional payment when 
they perform multiple procedures during the same session, while still 
encouraging providers to provide necessary services as efficiently as 
possible. Add-on procedure codes are not separately payable under the 
ASC payment system and are always packaged into the ASC payment rate 
for the procedure. Unlike the multiple procedure discounting process 
used for other surgical procedures in the ASC payment system, providers 
do not receive any additional payment when they perform a primary 
service with 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 with comment period, 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 
with comment period (87 FR 72079 and 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''

[[Page 81910]]

(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 and 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 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 the 
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 the 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

[[Page 81911]]

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 proposed 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 final 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 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 the proposed 
payment policy has changed slightly from the previous year.
    Comment: Commenters who commented on to this policy were supportive 
of continuing the ASC complexity adjustment policy and urged CMS to 
finalize the proposal for CY 2024. They noted this policy was important 
in mitigating financial disincentives to perform critical services in 
the ASC and improving patient access.
    Response: We thank the commenters for their support.
    Comment: Several commenters disagreed with the C-code creation and 
descriptors and requested CMS delete these codes or change the 
descriptors to be consistent with the current CPT code descriptors. 
Commenters stated this could cause inaccurate reporting, inconvenience, 
and safety risk to patients in the OPPS setting.
    Response: We note that there appears to be a misunderstanding. We 
created these C-codes solely for the ASC setting to allow for special 
complexity adjustments in this setting due to the limitations of the 
ASC claims processing systems. These codes cannot be billed in the OPPS 
setting, as they are assigned status indicator ``E1'' (Not paid by 
Medicare when submitted on outpatient claims (any outpatient bill 
type)).
    Comment: Some commenters were concerned that the CY 2024 OPPS/ASC 
final rule would have fewer ASC complexity adjustment codes, relative 
to CY 2023. They recommended CMS continue to explore how the inherent 
costs of add-on services provided in the ASC could be more 
appropriately reflected in reimbursement, where add-on procedures could 
be unpackaged for clinical reasons, and how the ASC complexity 
adjustment policy can be applied more broadly to ensure appropriate 
payment in the ASC.
    Response: We thank the commenters for their input. We will take 
these suggestions into consideration for future rulemaking.
    After consideration of the public comments we received, we are 
finalizing the ASC special payment policy for OPPS complexity-adjusted 
C-APCs, as proposed. The final C codes for CY 2024 can be found in ASC 
Addendum AA.
d. Final Low Volume APCs and Limit on ASC Payment Rates for Procedures 
Assigned to Low Volume APCs
    As stated in section XIII.D.1.b of the CY 2024 OPPS/ASC proposed 
rule, the ASC payment system generally uses OPPS geometric mean costs 
under the standard methodology to determine proposed relative payment 
weights under the standard ASC ratesetting methodology. In the CY 2022 
OPPS/ASC final rule with comment period (86 FR 63743 through 63747), we 
adopted a universal Low Volume APC policy for CY 2022 and subsequent 
calendar years. Under our policy, we expanded the low volume adjustment 
policy that is applied to procedures assigned to New Technology APCs to 
also apply to clinical and brachytherapy APCs. Specifically, a clinical 
APC or brachytherapy APC with fewer than 100 claims per year would be 
designated as a Low Volume APC. For items or services assigned to a Low 
Volume APC, we use up to 4 years of claims data to establish a payment 
rate for the APC as we currently do for low volume services assigned to 
New Technology APCs. The payment rate for a Low Volume APC or a low 
volume New Technology procedure would be based on the highest of the 
median cost, arithmetic mean cost, or geometric mean cost calculated 
using multiple years of claims data.
    Based on claims data available for the CY 2024 OPPS/ASC proposed 
rule, we proposed to designate four clinical APCs and five 
brachytherapy APCs as Low Volume APCs under the ASC payment system (88 
FR 49753). The four clinical APCs and five brachytherapy APCs shown in 
Table 57 of the CY 2024 OPPS/ASC proposed rule (88 FR 49753) met our 
criteria of having fewer than 100 single claims in the claims year (CY 
2022 for the CY 2024 OPPS/ASC proposed rule) and therefore, we proposed 
that they would be subject to our universal Low Volume APC policy and 
the APC cost metric would be based on the greater of the median cost, 
arithmetic mean cost, or geometric mean cost using up to 4 years of 
claims data. Eight of the nine APCs were designated as low volume APCs 
in CY 2023. In addition, based on data for the CY 2024 OPPS/ASC 
proposed rule, APC 2642 (Brachytx, stranded, C-131) met our criteria to 
be designated a Low Volume APC, and we proposed to designate it as such 
for CY 2024.
    We did not receive any public comments on our proposal to assign 
the 4 clinical APCs and 5 brachytherapy APCs as Low Volume APCs under 
the ASC payment system. Based on claims data available for this final 
rule with comment period, we are finalizing our proposal to designate 
the 4 clinical APCs and 5 brachytherapy APCs shown in Table 116 as Low 
Volume APCs under the ASC payment system, because they continue to meet 
our criteria of having fewer than 100 single claims in the relevant 
claims year (2022). The APC cost metric for these APCS is based on the 
greatest of the median cost, arithmetic mean cost, or geometric mean 
cost using up to 4 years of claims data, as proposed.

[[Page 81912]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.168

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 and 
68458), we further clarified our policy regarding the payment indicator 
assignment for procedures that are conditionally packaged in the OPPS 
(status indicators ``Q1'' and ``Q2''). Under the OPPS, a conditionally 
packaged procedure describes a HCPCS code where the payment is packaged 
when it is provided with a significant procedure but is separately paid 
when the service appears on the claim without a significant procedure. 
Because ASC services always include a surgical procedure, HCPCS codes 
that are conditionally packaged under the OPPS are generally packaged 
(payment indictor ``N1'') under the ASC payment system (except for 
device removal procedures, as discussed in the CY 2022 OPPS/ASC 
proposed rule (86 FR 42083)). Thus, our policy generally aligns ASC 
payment bundles with those under the OPPS (72 FR 42495). In all cases, 
in order for ancillary items and services also to be paid, the 
ancillary items and services must be provided integral to the 
performance of ASC covered surgical procedures for which the ASC bills 
Medicare.
    Our ASC payment policies generally provide separate payment for 
drugs and biologicals that are separately paid under the OPPS at the 
OPPS rates and package payment for drugs and biologicals for which 
payment is packaged under the OPPS. However, as discussed in the CY 
2022 OPPS/ASC final rule with comment period, for CY 2022, we finalized 
a policy to unpackage and pay separately at ASP plus 6 percent for the 
cost of non-opioid pain management drugs and biologicals that function 
as a supply when used in a surgical procedure as determined by CMS 
under Sec.  416.174 (86 FR 63483).
    We generally pay for separately payable radiology services at the 
lower of the PFS nonfacility PE RVU-based (or technical component) 
amount or the rate calculated according to the ASC standard ratesetting 
methodology (72 FR 42497). However, as finalized in the CY 2011 OPPS/
ASC final rule with comment period (75 FR 72050), payment indicators 
for all nuclear medicine procedures (defined as CPT codes in the range 
of 78000 through 78999) that are designated as radiology services that 
are paid separately when provided integral to a surgical procedure on 
the ASC list are set to ``Z2'' so that payment is made based on

[[Page 81913]]

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, 42508, and 
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 
and 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 and 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. Final Payment for Covered Ancillary Services for CY 2024
    We did not receive any public comments on and are finalizing our 
proposal to update the ASC payment rates and to make changes to ASC 
payment indicators, as necessary, to maintain consistency between the 
OPPS and ASC payment system regarding the packaged or separately 
payable status of services and the final CY 2024 OPPS and ASC payment 
rates and subsequent years' payment rates. We did not receive any 
public comments on and are also finalizing our proposal 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 final payment indicators for 
CY 2024 are listed in Addendum BB of this final rule (which is 
available via the internet on the CMS website). For those covered 
ancillary services where the payment rate is the lower of the rate 
under the ASC standard rate setting methodology and the PFS proposed 
rates (similar to our office-based payment policy), the final payment 
indicators and rates set forth in this final rule with comment period 
are based on a comparison using the final PFS rates effective January 
1, 2024. For a discussion of the PFS rates, we refer readers to the CY 
2024 PFS final rule.
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 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-

[[Page 81914]]

based), permanently office-based, or nonoffice-based, after taking into 
account updated volume and utilization data.
b. CY 2024 Final 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 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 and 
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 proposed to permanently designate as 
office-based for CY 2024 are listed in Table 117.
[GRAPHIC] [TIFF OMITTED] TR22NO23.169

    Comment: A few commenters do not support the assignment of CPT code 
15275 ((Application of skin substitute graft to face, scalp, eyelids, 
mouth, neck, ears, orbits, genitalia, hands, feet, and/or multiple 
digits, total wound surface area up to 100 sq cm; first 25 sq cm or 
less wound surface area)) to a permanent office-based designation. 
Commenters did not believe was appropriate to assign office-based 
status to a code in which items are packaged in the OPPS and ASC but 
not packaged in the physician office, as payment is typically less in 
the physician office setting. Commenters requested CMS assign CPT code 
15275 to a non office-based surgical procedure payment indicator 
``G2''.
    Response: We are not accepting the commenters' recommendation. We 
assign procedures to be permanently designated as office-based based on 
physician claims that report the procedure across all settings of care, 
both inpatient and outpatient. If the office-based utilization exceeds 
50

[[Page 81915]]

percent of total utilization across all settings of care and total 
utilization exceeds 50 claims, we propose such procedures be 
permanently designated as office-based unless the procedure otherwise 
may be designated as device-intensive. As we stated in the CY 2023 
OPPS/ASC final rule with comment period (87 FR 72060), the volume for 
this procedure in the physician office setting was more than sufficient 
to make a permanent office-based designation to CPT code 15275 under 
our current policy.
    After consideration of the comments we received, we are finalizing 
our proposal, without modification, to permanently designate the 
procedures in Table 118 as office-based procedures.
[GRAPHIC] [TIFF OMITTED] TR22NO23.170

    As discussed in the August 2, 2007 ASC final rule (72 FR 42533 
through 42535), we finalized our policy to designate certain new 
surgical procedures as temporarily office-based until adequate claims 
data are available to assess their predominant sites of service, 
whereupon if we confirm their office-based nature, the procedures are 
permanently assigned to the list of office-based procedures. In the 
absence of claims data, we use other available information, including 
our clinical advisors' judgment, predecessor CPT and Level II HCPCS 
codes, information submitted by representatives of specialty societies 
and professional associations, and information submitted by commenters 
during the public comment period.
    We reviewed CY 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 119, 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 proposed 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 proposed to no longer 
designate this procedure as temporarily office-based. For CY 2024, we 
proposed 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).
BILLING CODE 4150-28-P

[[Page 81916]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.171

    We did not receive any public comments on our proposal to no longer 
designate the procedures listed in Table 120 as temporarily office-
based and permanently designate these procedures as office-based 
procedures. Therefore, we are finalizing our proposal, without 
modification, to designate the procedures shown in Table 120 as 
permanently office-based for CY 2024.

[[Page 81917]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.172

BILLING CODE 4150-28-C
    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 121, we proposed 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 proposed to designate three new CY 2024 CPT codes 
for ASC covered surgical procedures as temporarily office-based--CPT 
codes 67516 (CPT placeholder code 6X000), 64598 (CPT placeholder code 
64XX4), and 0864T (CPT placeholder code 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 67516 (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 designated as an office-based 
procedure. Additionally, CPT placeholder code 64598 (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 0864T (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 121, we proposed to 
designate these three new CPT codes as temporarily office-based for CY 
2024.
BILLING CODE 4150-28-P

[[Page 81918]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.173

    Comment: One commenter supported our proposal to assign a temporary 
office-based designation to CPT code 0864T (Low-intensity 
extracorporeal shock wave therapy involving corpus cavernosum, low 
energy).
    Response: We appreciate the commenter's support of our office-based 
designation for CPT code 0864T.
    After consideration of the public comment we received, we are 
finalizing our proposal to designate the procedures shown in Table 122 
as temporarily office-based for CY 2024.
    The procedures for which the final office-based designation for CY 
2024 is temporary are indicated by an asterisk in Addendum AA to this 
final 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).
BILLING CODE 4150-28-C

[[Page 81919]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.174

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 Final 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

[[Page 81920]]

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 did not propose any changes related to designating surgical 
procedures as device-intensive under the ASC payment system for CY 
2024.
    Comment: Some commenters recommended that we refrain from wage-
adjusting the device portion of device-intensive procedures by the wage 
index for that particular area and only wage-adjust non device portions 
of the ASC payment rate. The commenters contend that wage-adjusting 50 
percent of the ASC payment rate by the wage index for a particular area 
can reduce ASC payment rates below the cost of certain devices.
    Response: We appreciate the commenters' recommendation. We did not 
propose such a change to our application of the ASC wage index but, as 
we stated in the CY 2019 OPPS/ASC final rule with comment period (83 FR 
59042), such a policy would increase payment for providers with a 
relatively low wage index (that is, a wage index value of less than 1) 
and decrease it for providers with a relatively high wage index (that 
is, a wage index value of greater than 1). We will consider the 
feasibility of this change and take this comment into consideration for 
future rulemaking.
    Comment: One commenter requested that we consider a modification to 
our established policy that would allow the continuation of the default 
device offset of 31 percent for procedures for which there were fewer 
than 100 claims used to calculate the device offset percentage.
    Response: We appreciate the commenter's request. We are concerned 
that such a policy would inaccurately assign device-intensive status to 
procedures that would otherwise consistently be ineligible for device-
intensive assignment. While we do not believe at this time that 
continuing the default device offset percentage over available claims 
data for procedures for which there are fewer than 100 claims would be 
an improvement to our methodology for determining device offset amounts 
and device-intensive status for such procedures; however, we will take 
this comment into consideration for future rulemaking.
    Comment: Commenters requested that we assign device-intensive 
status to the following procedures:
     CPT code 0581T (Ablation, malignant breast tumor(s), 
percutaneous, cryotherapy, including imaging guidance when performed, 
unilateral)
     CPT code 31242 (Nasal/sinus endoscopy, surgical; with 
destruction by radiofrequency ablation, posterior nasal nerve)
     CPT code 52284 (Cystourethroscopy, with mechanical 
urethral dilation and urethral therapeutic drug delivery by drug-coated 
balloon catheter for urethral stricture or stenosis, male, including 
fluoroscopy, when performed)
     CPT code 53854 (Transurethral destruction of prostate 
tissue; by radiofrequency generated water vapor thermotherapy)
     HCPCS code C9757 (Laminotomy (hemilaminectomy), with 
decompression of nerve root(s), including partial facetectomy, 
foraminotomy and excision of herniated intervertebral disc, and repair 
of annular defect with implantation of bone anchored annular closure 
device, including annular defect measurement, alignment and sizing 
assessment, and image guidance; 1 interspace, lumbar);
     HCPCS code C9761 (Cystourethroscopy, with ureteroscopy 
and/or pyeloscopy, with lithotripsy, and ureteral catheterization for 
steerable vacuum aspiration of the kidney, collecting system, ureter, 
bladder, and urethra if applicable (must use a steerable ureteral 
catheter)

[[Page 81921]]

    Response: Based on CY 2022 claims data available for this final 
rule, the procedures requested by commenters do not have device offset 
percentages that exceed the 30-percent threshold required for device-
intensive status under the OPPS or ASC payment system and, therefore, 
are not eligible to be assigned device-intensive status.
    Comment: Commenters supported the proposed device offset 
percentages for the following procedures:
     CPT code 0627T (Percutaneous injection of allogeneic 
cellular and/or tissue-based product, intervertebral disc, unilateral 
or bilateral injection, with fluoroscopic guidance, lumbar; first 
level)
     CPT code 0671T (Insertion of anterior segment aqueous 
drainage device into the trabecular meshwork, without external 
reservoir, and without concomitant cataract removal, one or more)
     CPT code 66989 (Extracapsular cataract removal with 
insertion of intraocular lens prosthesis (1-stage procedure), manual or 
mechanical technique (e.g., irrigation and aspiration or 
phacoemulsification), complex, requiring devices or techniques not 
generally used in routine cataract surgery (e.g., iris expansion 
device, suture support for intraocular lens, or primary posterior 
capsulorrhexis) or performed on patients in the amblyogenic 
developmental stage; with insertion of intraocular (e.g., trabecular 
meshwork, supraciliary, suprachoroidal) anterior segment aqueous 
drainage device, without extraocular reservoir, internal approach, one 
or more)
     CPT code 66991(Extracapsular cataract removal with 
insertion of intraocular lens prosthesis (1 stage procedure), manual or 
mechanical technique (e.g., irrigation and aspiration or 
phacoemulsification); with insertion of intraocular (e.g., trabecular 
meshwork, supraciliary, suprachoroidal) anterior segment aqueous 
drainage device, without extraocular reservoir, internal approach, one 
or more)
     CPT code 58356 (Endometrial cryoablation with ultrasonic 
guidance, including endometrial curettage, when performed)
     CPT code 31242 (Nasal/sinus endoscopy, surgical; with 
destruction by radiofrequency ablation, posterior nasal nerve)
     CPT code 31243 (Nasal/sinus endoscopy, surgical; with 
destruction by cryoablation, posterior nasal nerve)
     CPT code 31295 (Nasal/sinus endoscopy, surgical, with 
dilation (e.g., balloon dilation); maxillary sinus ostium, transnasal 
or via canine fossa)
     HCPCS code C9757 (Laminotomy (hemilaminectomy), with 
decompression of nerve root(s), including partial facetectomy, 
foraminotomy and excision of herniated intervertebral disc, and repair 
of annular defect with implantation of bone anchored annular closure 
device, including annular defect measurement, alignment and sizing 
assessment, and image guidance; 1 interspace, lumbar);
     HCPCS code C9781 (Arthroscopy, shoulder, surgical; with 
implantation of subacromial spacer (e.g., balloon), includes 
debridement (e.g., limited or extensive), subacromial decompression, 
acromioplasty, and biceps tenodesis when performed)
    Response: We appreciate the commenters' support. We are finalizing 
our proposed device offset amounts for CPT codes 0627T, 0671T, 66989, 
66991, 58356, 31242, 31243, 31295 and HCPCS codes C9757 and C9781. For 
final CY 2024 device offset percentages based on available claims data 
for this final rule with comment period, we refer readers to Addendum 
FF of this final rule with comment period.
    Comment: Two commenters requested that we increase the device 
offset for CPT code 0629T (Percutaneous injection of allogeneic 
cellular and/or tissue-based product, intervertebral disc, unilateral 
or bilateral injection, with ct guidance, lumbar; first level) to be in 
alignment with CPT code 0627T (Percutaneous injection of allogeneic 
cellular and/or tissue-based product, intervertebral disc, unilateral 
or bilateral injection, with fluoroscopic guidance, lumbar; first 
level) as both procedures use the same device.
    Response: We thank the commenters for their suggestion. We stated 
in the CY 2023 OPPS/ASC final rule with comment period (87 FR 71941) 
that we did not have any claims data for CPT code 0629T to determine a 
device offset percentage. Under our current policy, we may assign an 
alternative device offset percentage if we have claims data from a 
clinically similar procedure code that uses the same device; however, 
since we have claims data for CPT code 0629T to determine a device 
offset percentage under the ASC payment system, we are not accepting 
the commenters' recommendation.
    Comment: One commenter requested that we increase the device offset 
amount for CPT code 30469 (Repair of nasal valve collapse with low 
energy, temperature-controlled (i.e., radiofrequency) subcutaneous/
submucosal remodeling), and asked that we align the device offset 
amount with the valuation that CMS has adopted for the cost of the 
VivAer Stylus device under the 2024 Physician Fee Schedule.
    Response: We are not accepting the commenter's recommendation. 
While we do not have claims data to determine a device offset 
percentage for CPT code 30469, in the absence of available claims data, 
predecessor code data, or a clinically similar code that utilizes the 
same device, our established policy is to assign a default device 
offset percentage of 31 percent for procedures that we believe have 
significant device costs and that otherwise meet our device-intensive 
criteria. We believe our proposed default device offset percentage of 
31 percent for CPT code 30469 for CY 2024 provides a reasonable and 
appropriate device offset amount until claims data become available.
    Comment: Several commenters requested that we assign the new CPT 
codes 0816T (Open insertion or replacement of integrated 
neurostimulation system for bladder dysfunction including electrode(s) 
(e.g., array or leadless), and pulse generator or receiver, including 
analysis, programming, and imaging guidance, when performed, posterior 
tibial nerve; subcutaneous) and 0817T (Open insertion or replacement of 
integrated neurostimulation system for bladder dysfunction including 
electrode(s) (e.g., array or leadless), and pulse generator or 
receiver, including analysis, programming, and imaging guidance, when 
performed, posterior tibial nerve; subfascial) to the same device 
offset percentage as CPT code 64590, instead of the default 31 percent. 
The commenters state that the services described by these codes were 
previously billed using CPT code 64590 (Insertion or replacement of 
peripheral or gastric neurostimulator pulse generator or receiver, 
direct or inductive coupling).
    Response: We are not accepting the commenters' recommendation. 
While we may assign device-intensive status to new procedures that have 
significant device costs, we generally assign the default device offset 
percentage of 31 percent of total procedure costs until such claims 
data becomes available. However, if there is available claims data from 
the predecessor code of a new procedure or claims data from a 
clinically similar procedure that uses the same device, our current 
policy allows us to use this proxy claims data to establish a device 
offset percentage in lieu of the default 31 percent. We do not agree 
that CPT code 64590 was the predecessor code for either CPT code 0816T 
and 0817T and believe that CPT code 64999 (Unlisted procedure,

[[Page 81922]]

nervous system) was the CPT code previously used when reporting the 
procedures described by the new CPT codes 0816T and 0817T. CPT code 
64999 does not exceed our device-intensive threshold under the OPPS or 
ASC payment system, and, since this CPT code can be used for various 
types of unlisted surgical procedures of the nervous system, we do not 
believe this procedure would be an accurate reflection of the device 
costs of CPT code 0816T and 0817T. Since 0816T and 0817T do not have 
claims data from a predecessor code or a similar code that uses the 
same device, we are finalizing our proposal to assign the default 31 
percent device offset percentage for CY 2024.
    Comment: One commenter requested that we assign HCPCS code C9734 
(Focused ultrasound ablation/therapeutic intervention, other than 
uterine leiomyomata, with magnetic resonance (mr) guidance) to payment 
indicator ``J8'' and the default device offset of 31 percent.
    Response: We are finalizing the addition of HCPCS code C9734 to the 
ASC CPL for CY 2024. After reviewing the clinical characteristics of 
the procedure, we agree with the commenter that HCPCS C9734 meets the 
requirements to be assigned device-intensive status. Therefore, we are 
accepting the commenter's recommendation and are assigning device-
intensive status with a default device offset percentage of 31 percent 
to HCPCS code C9734 and assigning a payment indicator of ``J8,'' which 
indicates a device-intensive procedure, 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 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 
and 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

[[Page 81923]]

than 100 percent) of the cost of the device. To report that the ASC 
received a partial credit of 50 percent or more (but less than 100 
percent) of the cost of a device, ASCs have the option of either: (1) 
submitting the claim for the device intensive procedure to their 
Medicare contractor after the procedure's performance, but prior to 
manufacturer acknowledgment of credit for the device, and subsequently 
contacting the contractor regarding a claim adjustment, once the credit 
determination is made; or (2) holding the claim for the device 
implantation or insertion procedure until a determination is made by 
the manufacturer on the partial credit and submitting the claim with 
the ``FC'' modifier appended to the implantation procedure HCPCS code 
if the partial credit is 50 percent or more (but less than 100 percent) 
of the cost of the device. Beneficiary coinsurance would be based on 
the reduced payment amount. We did not receive any comments on our 
policies related to no/cost full credit or partial credit devices, and 
we are continuing our existing policies for CY 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 were 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 are addressed in the CY 2024 
PFS final rule with comment period. We note that this same notice 
appears in section V.C of this final rule.
    As explained in the CY 2024 OPPS/ASC proposed rule (88 FR 49759), 
because the CY 2024 PFS proposed rule discussed and proposed to codify 
certain billing requirements for HOPDs and ASCs, we explained that we 
wanted to ensure interested parties were aware of them and knew to 
refer to that rule for a full description of the proposed policy. 
Interested parties were asked to submit comments on this and any other 
proposals to implement section 90004 of the Infrastructure Act in 
response to the CY 2024 PFS proposed rule. We stated that public 
comments on the proposals would be addressed in the CY 2024 PFS final 
rule.
    We thank commenters for their feedback. For final details on this 
policy, we refer readers to the CY 2024 PFS final rule.
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 policy and changes to the regulatory 
text, which are discussed in further detail in section II.H.I of this 
final rule.

D. 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 two 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 
and 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).

[[Page 81924]]

2. Final 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 proposed to update the ASC CPL by adding 26 dental 
surgical procedures to the list for CY 2024, as shown in Table 123 
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 believed these 
procedures may all be appropriately performed in an ASC and proposed 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 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 and 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 and 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 
proposed to add G0330 to the ASC CPL. We also proposed 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.'' \201\ 
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 (Full 
mouth debridement to enable a comprehensive periodontal evaluation and 
diagnosis on a subsequent visit), or to enable excision of a gum 
lesion, as described by CPT 41827 (Excision of lesion or tumor (except 
listed above), dentoalveolar structures; with complex repair), 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

[[Page 81925]]

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 final 
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.
---------------------------------------------------------------------------

    \201\ See section XIII.B.6.b for a detailed discussion of 
payment indicators ``D1'' and ``D2.''
---------------------------------------------------------------------------

    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.
    Comment: Commenters supported the proposed addition of 26 dental 
procedures, noting that access to medically necessary oral health care 
may be critical to successful outcomes for patients with certain acute 
conditions. A subset of these commenters requested that CMS extend 
payment to all inextricably linked and medically necessary dental 
surgical services paid under the PFS and OPPS to the ASC CPL to better 
ensure access across settings and reduce administrative burden. One 
commenter requested that non-surgical dental procedures be added to the 
CPL to increase access.
    Response: We thank commenters for their support and their feedback. 
We anticipate that we will continue to assess our policies for ASC 
payment for dental services in future rulemaking. We believe that as we 
collect data, gather input from the public and interested parties, and 
learn more about the services performed in the ASC setting, we will be 
able to make more informed decisions regarding policies for dental 
services. We encourage interested parties to continue to communicate 
their concerns and ideas with CMS so that we may address adverse 
incentives in the health care system.
    Comment: A few interested parties expressed disappointment that CMS 
did not propose any surgical codes suggested by ASCs prior to proposed 
rulemaking. These commenters felt there was ambiguity and a lack of 
transparency in the addition of procedures, with CMS not required to 
provide specific rationales, guidance around supporting documentation, 
or more clarity on the typical Medicare beneficiary definition. These 
commenters also requested more information on the pre-proposed rule 
recommendation process, asking for supporting information and guidance 
to be published as soon as possible.
    Response: We appreciate this input from commenters. After 
evaluating the procedure recommendations and supporting evidence 
received during the public comment period, we are adding 11 additional 
surgical codes to the ASC CPL, as reflected in the Table 123 below. As 
part of our evaluation process, we assess recommended procedures 
against the specific list of ASC CPL criteria at 42 CFR 416.166, 
examining clinical data on these procedures from multiple sites of 
services, reviewing the literature and experiential data provided in 
public comments, and examining claims volume to ensure that procedures 
are not expected to pose a significant risk to beneficiary safety when 
performed in an ASC. We also provide rationales for codes we do not add 
to the CPL by procedure category in the final rule each year. We will 
continue to monitor clinical data on these services in the ASC setting 
and address any new trends in future rulemaking. We remain open to 
engaging with interested parties on ways we can make the ASC CPL 
evaluation process more transparent.
    Regarding the pre-proposed rule recommendation process, we have 
fully developed an online module, which is currently undergoing the 
Paperwork Reduction Act (PRA) process.202 203 We anticipate 
that this module will be live on January 1, 2024, as discussed in the 
CY 2023 OPPS/ASC final rule (87 FR 72076).
---------------------------------------------------------------------------

    \202\ 88 FR 57462 (August 23, 2023); https://www.federalregister.gov/documents/2023/08/23/2023-18154/agency-information-collection-activities-submission-for-omb-review-comment-request.
    \203\ 88 FR 39255 (June 15, 2023); https://www.federalregister.gov/documents/2023/06/15/2023-12773/agency-information-collection-activities-proposed-collection-comment-request.
---------------------------------------------------------------------------

    Comment: Most commenters on this policy recommended specific codes 
to be added to the ASC CPL including total shoulder arthroplasty, 
prostate ablations, cardiac ablations, endoscopic sleeve gastroplasty, 
and dental procedures. We received over 200 procedure recommendations 
for the CPL, listed in Table 124, below. There were multiple letters 
from orthopedic providers requesting total shoulder arthroplasty be 
added to the CPL, based on claims of safe and routine performance in 
ASCs with good outcomes, high patient satisfaction, and financial 
savings.
    Response: We thank commenters for their recommendations. We 
individually assessed each of the recommended procedures, evaluating 
clinical data on these procedures from multiple sites of service, 
reviewing the literature and experiential data provided in public 
comments, and examining claims volume to determine whether these 
procedures meet each of the regulatory criteria at 42 CFR 416.166.
    Based on our review of the clinical characteristics of the 
procedures and their similarity to other procedures that are currently 
on the ASC CPL, we believe that 11 procedures (HCPCS code C9734 and CPT 
codes 21194, 21195, 23470, 23472, 27702, 27006, 29868, 33289, 37192, 
60260) out of the 235 procedure recommendations we received can be 
safely performed for the typical beneficiary in the ASC setting and 
meet the general standards and exclusion criteria for the ASC CPL as 
set forth in 42 CFR 416.166(b) and (c), respectively. These 11 codes 
correspond to procedures that are frequently performed in outpatient 
settings and increasingly show lower risks of serious complications and 
inpatient admissions. We agree with commenters who provided support and 
evidence stating that these procedures can be safely performed in an 
ASC setting. We will continue to monitor clinical data on these 
services in the ASC setting and address any new trends in future 
rulemaking These procedures, listed in Table 123 below, are:

[ssquf] 21194 (Reconstruction of mandibular rami, horizontal, vertical, 
c, or l osteotomy; with bone graft (includes obtaining graft))
[ssquf] 21195 (Reconstruction of mandibular rami and/or body, sagittal 
split; without internal rigid fixation)
[ssquf] 23470 (Arthroplasty, glenohumeral joint; hemiarthroplasty)
[ssquf] 23472 (Arthroplasty, glenohumeral joint; total shoulder 
(glenoid and proximal humeral replacement (eg, total shoulder))
[ssquf] 27006 (Tenotomy, abductors and/or extensor(s) of hip, open 
(separate procedure))
[ssquf] 27702 (Arthroplasty, ankle; with implant (total ankle))

[[Page 81926]]

[ssquf] 29868 (Arthroscopy, knee, surgical; meniscal transplantation 
(includes arthrotomy for meniscal insertion), medial or lateral)
[ssquf] 33289 (Transcatheter implantation of wireless pulmonary artery 
pressure sensor for long-term hemodynamic monitoring, including 
deployment and calibration of the sensor, right heart catheterization, 
selective pulmonary catheterization, radiological supervision and 
interpretation, and pulmonary artery angiography, when performed)
[ssquf] 37192 (Repositioning of intravascular vena cava filter, 
endovascular approach including vascular access, vessel selection, and 
radiological supervision and interpretation, intraprocedural 
roadmapping, and imaging guidance (ultrasound and fluoroscopy), when 
performed)
[ssquf] 60260 (Thyroidectomy, removal of all remaining thyroid tissue 
following previous removal of a portion of thyroid)
[ssquf] C9734 (Focused ultrasound ablation/therapeutic intervention, 
other than uterine leiomyomata, with magnetic resonance (mr) guidance)

    Due to patient safety concerns, we believe the remaining 
recommended procedures should not be added to the ASC CPL. Below, we 
explain our rationale for not including the 224 remaining recommended 
procedures, organized by category.
     10 cardiovascular codes, including arterial 
revascularization, coronary atherectomies, cardioversion, and 
echocardiography. The coronary intervention codes have associated 
inpatient admissions, where the beneficiary requires active medical 
monitoring and care at midnight following the procedure. Additionally, 
these procedures would pose a significant safety risk to beneficiaries 
without post-operative inpatient care and because patients requiring 
these procedures are often higher risk at baseline. The cardioversion 
and echocardiography codes are non-surgical procedures, which means 
they would not qualify for addition to the ASC CPL, and most of these 
codes are not integral to a covered surgical procedure.
     77 dental codes, including resin composites, amalgam, 
porcelain crowns, prefabricated crows, pulpal therapy, endodontic 
therapy, gingivectomy, and lesion excision codes. Many of the codes 
recommended, including the gingivectomies, periodontal scaling, and 
impacted tooth removal, are already on the ASC CPL as separately 
payable surgical procedures. A subset of these procedures, including 
coronectomies and lesion excisions, are not currently separately paid 
in the OPPS and would not be eligible to be added to the ASC CPL. The 
remaining dental recommendations are ancillary codes that are currently 
on the covered ancillary services list, and we believe they are 
appropriately placed as integral to the G0330 code for CY 2024.
     3 endocrine codes, including thyroidectomy and 
parathyroidectomy procedures. While these procedures have increasing 
outpatient volume, there are inpatient admissions associated with these 
procedures, indicating the beneficiary would be expected to stay past 
midnight following the procedure. Additionally, the intraservice time 
for these procedures can vary greatly, often becoming a prolonged 
invasion of body cavities.
     23 gastrointestinal codes, including appendectomy, 
proctectomy, hernia repairs, gastric motility studies, and laparoscopic 
gastric restrictive procedures. Several of the hernia repair and 
protectomy procedures are still on the inpatient only list and would 
not be eligible for the ASC CPL. For other surgical procedures, while 
some of these procedures show increasing outpatient volume, many still 
have inpatient admissions and potential procedure risks, indicating 
that the beneficiary would require active monitoring and care past 
midnight following the procedure. Additionally, these procedures can 
involve prolonged invasion of body cavities, and be life-threatening or 
emergent in nature. Additionally, several of these procedures are less 
commonly done in Medicare patients and more frequently performed in a 
younger population. The study and imaging codes are non-surgical and 
not eligible for addition to the CPL.
     8 genitourinary codes, including hysterectomy, cystectomy, 
and prostatectomy codes. Several of these codes are not commonly done 
in Medicare populations. Additionally, these procedures would require 
active medical monitoring and care at midnight following the procedure 
and pose a significant safety risk to beneficiaries when performed in 
an ASC, as some require major or prolonged invasion of body cavities.
     19 medicine codes, including esophageal recordings, intra-
atrial and intra-ventricular recordings, comprehensive 
electrophysiologic evaluations. These codes are inherently non-surgical 
and would not qualify for the ASC CPL.
     17 musculoskeletal codes, including total ankle 
arthroplasty procedures, mandibular reconstruction, osteotomy, and 
midface reconstruction. Several of these procedures are inpatient only 
and would not qualify for the ASC CPL. Although a few of these 
procedures have some claims volume in the outpatient setting, many are 
mostly performed in the inpatient setting. These are complex procedures 
with inpatient admissions and multiple post-operative inpatient days, 
indicating that the beneficiary would require active monitoring and 
care past midnight following the procedure.
     1 nervous system code, which is a laminectomy procedure. 
This code has associated inpatient admissions and multiple post-
operative days, indicating that the beneficiary would require active 
monitoring and care past midnight following the procedure. This 
procedure could also pose a significant safety risk to the beneficiary 
when close post-operative surveillance is not provided.
     22 radiology codes, including angiography, aortography, 
venography, and computed tomography. Most of these codes are currently 
on the covered ancillary services list. As they are non-surgical, they 
would not qualify as separately payable surgical procedures on the ASC 
CPL.
     8 unlisted codes. Unlisted codes are not eligible to be 
added to the ASC CPL.
     35 vascular codes, including catheter placements. Nearly 
all the catheter placement codes recommended are already on the ASC CPL 
as packaged procedures. We believe this placement is appropriate, given 
that these procedures are in support of a service. The remaining 
vascular codes related to atherectomies and revascularization directly 
involve major blood vessels and many of these procedures have 
associated inpatient admissions, where the beneficiary requires active 
medical monitoring and care at midnight following the procedure.
    Given these considerations, we believe that these 224 codes do not 
meet the criteria to be included on the ASC CPL due to the following 
factors: likelihood of inpatient admissions, the need for multiple-day 
stays past midnight, safety risks posed to the typical beneficiary 
without active post-operative monitoring, involvement of major blood 
vessels, prolonged invasion of a body cavity, the risk of being life-
threatening or emergent, less commonly performed in Medicare 
beneficiaries, or are non-surgical.
    Therefore, in this CY 2023 OPPS/ASC final rule with comment period, 
we are finalizing 37 procedures, 26 proposed dental procedures and 11 
additional

[[Page 81927]]

procedures evaluated during the public comment period, to be added to 
the ASC CPL. These procedures are listed below in Table 123 of this CY 
2024 OPPS/ASC final rule with comment period.
    Comment: Commenters also offered suggestions on different 
approaches for CMS to consider for the ASC CPL, including standardizing 
CPL additions by covering all surgical procedures paid separately under 
the OPPS, unless the procedure meets the exclusionary criteria, and 
allowing clinicians to decide whether their patients are eligible for 
care in an ASC.
    Response: We thank the commenters for their suggestions. We believe 
that standardizing this process by adding all eligible procedures paid 
separately under the OPPS and excluding certain procedures for safety 
risks would not produce a different outcome than our current review 
process, since we are already adding procedures that meet these 
criteria to the CPL. As we previously discussed in the CY 2022 OPPS/ASC 
final rule (86 FR 63779), we believe that reviewing procedures against 
the general standards and exclusion criteria before adding them to the 
ASC CPL is the most appropriate way to ensure that procedures that 
cannot be safely performed on an ambulatory basis for Medicare 
beneficiaries are not added to the ASC CPL and payable under the ASC 
payment system. We will take these suggestions into consideration for 
future rulemaking.
BILLING CODE 4120-01-P

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BILLING CODE 4120-01-C
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 
and 59063), consistent with the established ASC payment system policy 
(72 FR 42497), we finalized the policy to update the ASC list of 
covered ancillary services to reflect the payment status for the 
services under the OPPS and to continue this reconciliation of packaged 
status for subsequent calendar years. As discussed in prior rulemaking, 
maintaining consistency with the OPPS may result in changes to ASC 
payment indicators for some covered ancillary services. For example, if 
a covered ancillary service was separately paid under the ASC payment 
system in CY 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 final rule. All ASC covered 
ancillary services and their final payment indicators for CY 2024 are 
also included in Addendum BB to this final 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 an addition to the ASC CPL for CY 2024, 
as discussed in section XIII.D.1 of this final 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 
proposed that code 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 code 
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 code 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 an 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 final 
ASC dental indicators can be found in section XIII.B.6 of this final 
rule.
    Comment: Several commenters requested guidance on hospital 
outpatient reporting of HCPCS code G0330. Since CMS proposed to require 
that code G0330 be reported in addition

[[Page 81946]]

to one or more of the ancillary dental codes with payment indicator 
``D1'' when performed in an operating room under anesthesia in the ASC 
setting, hospitals expected the same explicit guidance.
    Response: The claims processing limitations around code G0330, for 
example, the requirement that code G0330 must be billed with a covered 
dental ancillary procedure with payment indicator ``D1,'' are only 
applicable in the ASC setting, allowing us to ensure that only covered 
ancillary services we have evaluated for safety in the ASC setting can 
be performed with code G0330.
    After consideration of the public comments we received, we are 
finalizing this policy as proposed.

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 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). 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)) (86 FR 63496).
2. 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

[[Page 81947]]

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 was 
proposed to be $140. However, based on updated data, we are finalizing 
a threshold of $135 for CY 2024. For more information on the drug 
packaging threshold, see section V.B.1.a of this CY 2024 OPPS/ASC final 
rule with comment period.
    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 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, including consideration of comments, 
of whether these non-opioid alternatives meet the criteria established 
at Sec.  416.174 for CY 2024.
(a) Finalized 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).
    In the CY 2024 (88 FR 49763) proposed rule, 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 proposed 
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 proposed 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 of this CY 2024 OPPS/ASC final rule for additional details on the 
pass-through status of HCPCS code C9144. We welcomed comment on our 
evaluations in the proposed rule, and below is our finalized policy for 
CY 2024.
    Comment: There was overall general support for our proposal to pay 
separately in the ASC setting for the four drugs proposed in the 
proposed rule.
    Response: We thank the commenters for their support.
(b) Finalized Eligibility Evaluation for the Separate Payment of 
Exparel
    Based on our internal review as described in the proposed rule, we 
believe that Exparel, described by HCPCS code C9290 (Injection, 
bupivacaine liposome, 1 mg), meets the criteria described at Sec.  
416.174; and we proposed 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.\204\ 
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.'' \205\ No component 
of Exparel is opioid-based. Accordingly, we proposed that Exparel meets 
the criterion described at Sec.  416.174(a)(1). Under the methodology 
described at V.B.1.a. of the proposed rule (88 FR 49676), the per-day 
cost of Exparel exceeded the proposed $140 per-day cost threshold. 
Therefore, we proposed that Exparel meets the criterion described at 
Sec.  416.174(a)(2). Additionally, Exparel will not have transitional 
pass-through payment status under Sec.  419.64 in CY 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 proposed that Exparel meets the criteria in the 
regulation text at Sec.  416.174(a)(3) and (4).
---------------------------------------------------------------------------

    \204\ Exparel. FDA Letter. 28 October 2011. https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2011/022496s000ltr.pdf.
    \205\ Exparel. FDA Package Insert. 22 March 2021. https://www.accessdata.fda.gov/drugsatfda_docs/label/2021/022496s035lbl.pdf.
---------------------------------------------------------------------------

    Based on the above discussion, we believed that Exparel meets the 
criteria described at Sec.  416.174; and we proposed to continue making 
separate payment for it as a non-opioid pain management drug that 
functions as a supply in a surgical procedure under the ASC payment 
system for CY 2024.
    Comment: We received general support on our proposal to continue 
making separate payment for Exparel as a non-opioid pain management 
drug that functions as a supply in a surgical procedure under the ASC 
payment system for CY 2024.
    Response: We thank commenters for their support on our proposal to 
pay separately for Exparel in the ASC setting as a non-opioid pain 
management drug that functions as a surgical supply. After 
consideration of the public comments we received, we believe that 
Exparel, described by HCPCS code C9290 (Injection, bupivacaine 
liposome, 1 mg), continues to meet the criteria described at Sec.  
416.174. We note that our proposed rule evaluation continues to be 
accurate. We note that the per-day cost of Exparel exceeded the 
proposed $140 per-day cost threshold and continues to exceed the 
finalized $135 per-day cost threshold, so Exparel continues to meet the 
criterion described at Sec.  416.174(a)(2). We are finalizing that we 
will continue to pay separately for Exparel as a non-opioid pain 
management drug that functions as a supply in a surgical procedure 
under the ASC payment system for CY 2024.

[[Page 81948]]

(c) Finalized Eligibility Evaluation for the Separate Payment of 
Omidria
    Based on our internal review as described in the proposed rule, 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 proposed 
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.\206\ 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.'' \207\ 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 section V.B.1.a. of 
the proposed rule (88 FR 49676), the per-day cost of Omidria exceeds 
the proposed $140 per-day cost threshold. Therefore, we proposed that 
Omidria meets the criterion described at Sec.  416.174(a)(2). 
Additionally, we believed 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 proposed that Omidria meets the criteria in the 
regulation text at Sec.  416.174(a)(3) and (4).
---------------------------------------------------------------------------

    \206\ Omidria. FDA Letter. 30 May 2014. https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2014/205388Orig1s000ltr.pdf.
    \207\ Omidria. FDA Package Insert. December 2017. https://www.accessdata.fda.gov/drugsatfda_docs/label/2017/205388s006lbl.pdf.
---------------------------------------------------------------------------

    Based on the above discussion, we proposed that Omidria meets the 
criteria described at Sec.  416.174 and should receive separate payment 
as a non-opioid pain management drug that functions as a supply in a 
surgical procedure under the ASC payment system for CY 2024.
    Comment: We received general support on our proposal to continue 
making separate payment for Omidria as a non-opioid pain management 
drug that functions as a supply in a surgical procedure under the ASC 
payment system for CY 2024. A commenter also provided updated clinical 
information regarding the use of Omidria and demonstrated how separate 
payment of Omidria in the ASC setting has supported utilization of the 
drug.
    Response: We thank commenters for their support and for their 
helpful comments and data analysis regarding the use of Omidria across 
different settings of care. We will continue to consider this 
information for future policy development.
    After consideration of the public comments we received, we believe 
that Omidria, described by HCPCS code J1097 (Phenylephrine 10.16 mg/ml 
and ketorolac 2.88 mg/ml ophthalmic irrigation solution, 1 ml), 
continues to meet the criteria described at Sec.  416.174. We note that 
our proposed rule evaluation continues to be accurate. We note that the 
per-day cost of Omidria exceeded the proposed $140 per-day cost 
threshold and continues to exceed the finalized $135 per-day cost 
threshold, so Omidria continues to meet the criterion described at 
Sec.  416.174(a)(2). We are finalizing that we will continue to pay 
separately for Omidria as a non-opioid pain management drug that 
functions as a supply in a surgical procedure under the ASC payment 
system for CY 2024.
(d) Finalized Eligibility Evaluation for the Separate Payment of 
Xaracoll
    Based on our internal review as described in the proposed rule, we 
believe Xaracoll, described by C9089 (Bupivacaine, collagen-matrix 
implant, 1 mg), meets the criteria described at Sec.  416.174(a), and 
we proposed to continue paying separately for it under the ASC payment 
system for CY 2023. Xaracoll was approved by the FDA with a New Drug 
Application (NDA  209511) under section 505(c) of the Federal 
Food, Drug, and Cosmetic Act on August 28, 2020.\208\ 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.'' \209\ No component of Xaracoll is opioid-based. 
Accordingly, we proposed that Xaracoll meets the criterion described at 
Sec.  416.174(a)(1). Under the methodology described at section 
V.B.1.a. of the proposed rule (88 FR 49676), the per-day cost of 
Xaracoll exceeds the proposed $140 per-day cost threshold. Therefore, 
we proposed that Xaracoll meets the criterion described at Sec.  
416.174(a)(2). Additionally, at this time we do not believe that 
Xaracoll will have transitional pass-through payment status under Sec.  
419.64 in CY 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 proposed that Xaracoll 
meets the criteria in the regulation text at Sec.  416.174(a)(3) and 
(4).
---------------------------------------------------------------------------

    \208\ Xaracoll. FDA Letter. August 2020. https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2020/209511Orig1s000ltr.pdf.
    \209\ Xaracoll. FDA Labeling. August 2020. https://www.accessdata.fda.gov/drugsatfda_docs/label/2020/209511s000lbl.pdf.
---------------------------------------------------------------------------

    Based on the above discussion, we proposed that Xaracoll meets the 
criteria described at Sec.  416.174 and should receive separate payment 
as a non-opioid pain management drug that functions as a supply in a 
surgical procedure under the ASC payment system for CY 2024.
    Comment: We received general support on our proposal to continue 
making separate payment for Xaracoll as a non-opioid pain management 
drug that functions as a supply in a surgical procedure under the ASC 
payment system for CY 2024.
    Response: We thank commenters for their support on our proposal to 
pay separately for Xaracoll in the ASC setting as a non-opioid pain 
management drug that functions as a surgical supply.
    After consideration of the public comments we received, we believe 
that Xaracoll, described by C9089 (Bupivacaine, collagen-matrix 
implant, 1 mg), continues to meet the criteria described at Sec.  
416.174. We note that our proposed rule evaluation continues to be 
accurate. We note that the per-day cost of Xaracoll exceeded the 
proposed $140 per-day cost threshold and continues to exceed the 
finalized $135 per-day cost threshold, so Xaracoll continues to meet 
the criterion described at Sec.  416.174(a)(2). We are finalizing that 
we will continue to pay separately for Xaracoll as a non-opioid pain 
management drug that functions as a supply in a surgical procedure 
under the ASC payment system for CY 2024.
(e) Finalized Eligibility Evaluation for the Separate Payment of 
Dextenza
    Based on our internal review as described in the proposed rule, 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 proposed 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.\210\ 
Dextenza's FDA-approved indication is

[[Page 81949]]

as ``a corticosteroid indicated for the treatment of ocular pain 
following ophthalmic surgery'' and ``the treatment of ocular itching 
associated with allergic conjunctivitis.'' \211\ No component of 
Dextenza is opioid-based. Accordingly, we proposed that Dextenza meets 
the criterion described at Sec.  416.174(a)(1). Under the methodology 
described at section V.B.1.a. of the proposed rule, the per-day cost of 
Dextenza exceeds the proposed $140 per-day cost threshold (88 FR 
49676). Therefore, we proposed that Dextenza meets the criterion 
described at Sec.  416.174(a)(2). Additionally, we believed 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 proposed 
that Dextenza meets the criteria in the regulation text at Sec.  
416.174(a)(3) and (4).
---------------------------------------------------------------------------

    \210\ Dextenza. FDA Letter. November 2018. https://www.accessdata.fda.gov/drugsatfda_docs/nda/2018/208742Orig1s000Approv.pdf.
    \211\ Dextenza. FDA Labeling. October 2021. https://www.accessdata.fda.gov/drugsatfda_docs/label/2021/208742s007lbl.pdf.
---------------------------------------------------------------------------

    Based on the above discussion, we proposed 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.
    Comment: We received general support on our proposal to continue 
making separate payment for Dextenza as a non-opioid pain management 
drug that functions as a supply in a surgical procedure under the ASC 
payment system for CY 2024. We received many comments indicating the 
clinical benefit of Dextenza, and many of these comments requested 
separate payment for Dextenza.
    Response: We thank commenters for their support on our proposal to 
pay separately for Dextenza in the ASC setting as a non-opioid pain 
management drug that functions as a surgical supply.
    Comment: One commenter made a general statement regarding the use 
of Dextenza within their practice and stated that, in their view, the 
drug does not have the value that is currently assigned to it. Meaning, 
in their view, there are other options that give the same clinical 
results at a fraction of the cost.
    Response: We thank this commenter for their input; however, it is 
not directly relevant to our analysis of whether Dextenza meets the 
criteria outlined in Sec.  416.174. We may, however, take this input 
into consideration for future policy consideration.
    After consideration of the public comments we received, we believe 
that Dextenza, described by HCPCS code J1096 (Dexamethasone, lacrimal 
ophthalmic insert, 0.1 mg), continues to meet the criteria described at 
Sec.  416.174. We note that our proposed rule evaluation continues to 
be accurate. We note that the per-day cost of Dextenza exceeded the 
proposed $140 per-day cost threshold and continues to exceed the 
finalized $135 per-day cost threshold, so Dextenza continues to meet 
the criterion described at Sec.  416.174(a)(2). We are finalizing that 
we will continue to pay separately for Dextenza as a non-opioid pain 
management drug that functions as a supply in a surgical procedure 
under the ASC payment system for CY 2024. Also, please see section 
III.E.2 of this final rule with comment period for details on the 
status of HCPCS code J1096 in the HOPD, as well as CPT code 68841.
(f) Finalized Eligibility Evaluation for the Separate Payment of 
Posimir
    Based on our internal review as described in the proposed rule, 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 did 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.\212\ 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.'' \213\
---------------------------------------------------------------------------

    \212\ Posimir. FDA Approval Letter. https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2021/204803Orig1s000ltr.pdf.
    \213\ Posimir. FDA Package Insert. https://www.accessdata.fda.gov/drugsatfda_docs/label/2022/204803Orig1s001lbl.pdf.
---------------------------------------------------------------------------

    No component of Posimir is opioid-based. Accordingly, we proposed 
that Posimir meets the criterion described at Sec.  416.174(a)(1). 
Under the methodology described at V.B.1.a. of the proposed rule (88 FR 
49676), the per-day cost of Posimir exceeds the proposed $140 per-day 
cost threshold. Therefore, we proposed 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 proposed 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 proposed 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, we stated that HCPCS code C9144 
will continue to receive separate payment under its pass-through status 
as outlined in section V of the proposed rule (88 FR 49674).
    We did not receive any public comments on our proposal and are 
finalizing our proposal 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 
final rule.
Comment Solicitation on New Products That Meet the Criteria Specified 
in Sec.  416.174
    We solicited comment on additional non-opioid pain management drugs 
and biologicals that function as surgical supplies that may meet the 
criteria specified in Sec.  416.174 and 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. We stated if we found that any additional 
drugs or biologicals described by commenters do satisfy the criteria 
established at Sec.  416.174, we would finalize their separate payment 
status for CY 2024 in the ASC setting in the CY 2024 OPPS/ASC final 
rule with comment period.
    We did not receive any public comments detailing additional new 
products that may meet the criteria specified at Sec.  416.174 and 
therefore, we are not finalizing any additional new drugs or 
biologicals as meeting the criteria at Sec.  416.174 to receive 
separate payment in the ASC setting.
    Comment: Some commenters supported CMS continuing the objective 
criteria outlined at Sec.  416.174 as they believe this policy has 
proven effective

[[Page 81950]]

in expanding patient access to alternatives of opioids.
    Response: We thank commenters for their support.
    Comment: One commenter suggested that certain drugs should be 
grandfathered into this policy for a period of two to three years in 
order to allow them adequate time to receive an FDA indication for pain 
management or analgesia. These commenters believed that a temporary 
grandfathering policy would provide manufacturers the time and 
opportunity to complete new clinical trials in order to allow their 
products to apply for the necessary FDA approved indications. These 
commenters thought this was appropriate as they believed drugs, such as 
Dexycu, were already being used as pain management alternatives to 
opioids, despite not yet having FDA indications for pain management or 
analgesia.
    Response: We thank the commenter for this feedback. We remind 
interested parties that we did not propose any modifications to our 
policy at Sec.  416.174 but may consider this feedback in future 
rulemaking.
    Comment: Many commenters encouraged CMS to consider a policy that 
unpackages non-opioid pain management drugs in the HOPD setting for CY 
2024 in order to align with the current ASC payment policy for non-
opioid pain management drugs that function as a surgical supply and to 
pay for the four separately payable drugs in the ASC setting in the 
HOPD setting as well. These commenters stated that the same reasons 
underlying separate payment for drugs in the ASC setting support 
separate payment for drugs in the HOPD setting. Many stated that 
utilization in the HOPD has decreased as a result of packaged payment 
and could be higher with separate payment and that they believed opioid 
alternatives serve a valuable clinical purpose and their use should be 
encouraged in all settings of care. Several commenters provided data 
regarding how packaging negatively impacted the utilization of their 
products in the HOPD setting. We note that many commenters were non-
specific as to whether their request was for CMS to expand the policy 
outlined at Sec.  416.174 to include payment in the HOPD setting or 
whether their request was for CMS to enact section 4135 of the 
Consolidated Appropriations Act a year earlier, which is discussed in 
the next section of this rule.
    Similarly, one commenter stated that CMS has failed to conduct any 
review of payments in OPPS for these non-opioid drugs or provide 
justification for continuing to package payment for non-opioid pain 
management drugs in the HOPD. The commenter urged CMS to take a more 
comprehensive look at whether its OPPS drug packaging policies are 
negatively impacting quality of care for Medicare beneficiaries.
    Response: We thank commenters for their input, and we appreciate 
the comments urging expansion of this policy to the HOPD setting. We 
will take these comments into consideration for future rulemaking. We 
remind interested parties that we did not propose to modify, and we are 
not modifying our policy at Sec.  416.174 or creating new policies in 
response to these comments at this time.
    Comment: We received comments from interested parties who advocated 
for payment changes. Many commenters were non-specific as to whether 
their request was for CMS to expand the policy outlined at Sec.  
416.174 or whether their comment was in response to CMS' comment 
solicitation on enacting section 4135 of the Consolidated 
Appropriations Act, 2023. Specifically, however, some commenters 
expressed their support for CMS for unpackaging and paying separately 
for non-opioid alternative devices and claimed that assessing 
utilization of a product is not appropriate in determining whether 
there is an access issue. These commenters requested that CMS revise 
the current eligibility criteria to permit medical devices to be 
eligible for separate payment under Sec.  416.174. Some commenters 
recommended CMS implement a peer review literature requirement for such 
devices. Other commenters recommended a longer-term solution, such as a 
finalization of policy for several years to provide stability. 
Similarly, commenters requested CMS educate providers on the 
availability of the various opioid alternative modalities available to 
them.
    Response: We thank commenters for these policy suggestions. We may 
take these comments into consideration for future rulemaking. We remind 
interested parties that we did not propose to modify, and we are not 
modifying our policy at Sec.  416.174 at this time.
    We note that the current policy outlined at Sec.  416.174 is 
different from the policy contained within section 4135 of the 
Consolidated Appropriations Act, 2023 and we intend to make a proposal 
for the implementation of section 4135 in the CY 2025 OPPS/ASC proposed 
rule. We also intend to discuss the interaction of such proposal and 
our current policy outlined at Sec.  416.174 in the CY 2025 OPPS/ASC 
proposed rule.
    In summary, after consideration of the public comments received, we 
are finalizing without modification, that the drugs 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), continue to function as non-opioid pain 
management drugs and biologicals that function as surgical supplies and 
meet the criteria at Sec.  416.174. Similarly, we are finalizing our 
proposal that HCPCS code C9144 (Injection, bupivacaine (posimir), 1 
mg), no longer meets all of the criteria at Sec.  416.174 and will not 
receive separate payment in the ASC setting under that policy.
    Table 125 below lists the four drugs that we proposed and are 
finalizing as eligible to receive separate payment as a non-opioid pain 
management drug that functions as a supply in a surgical procedure 
under the ASC payment system and meets the criteria at Sec.  416.174(a) 
for CY 2024.

[[Page 81951]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.193

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 stated in the proposed rule (88 FR 49767) that we plan to 
include our proposals to implement the section 4135 amendments in the 
CY 2025 OPPS/ASC proposed rule. We specifically sought comment on the 
issues discussed in the following sections, as well as comments on the 
implementation of all facets of this provision.
2. Comment Solicitation for CY 2025 Implementation
a. Potential Qualifying Drugs, Biologicals, and Devices
    In preparation for implementing section 4135 of the CAA, 2023, for 
CY 2025, we sought 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 1833(t)(16)(G)(iv) of the Act. 
We encouraged 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 solicited 
comment on appropriate codes and descriptors if no HCPCS codes 
currently exist for the product. We noted that we will evaluate these 
products, including the information submitted by commenters, and 
proposed 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.

[[Page 81952]]

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 sought 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 sought 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 
sought comment on the scenarios outlined below. Additionally, we 
welcomed 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 126), 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 
note that we have rounded these numbers for ease of illustration for 
this example. 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 the proposed rule (88 FR 49676) 
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. We note, for CY 2024, the OPPS drug 
packaging threshold was proposed to be $140. However, based on updated 
data, we are finalizing a threshold of $135 for CY 2024. For more 
information on the drug packaging threshold, see section V.B.1.a of 
this CY 2024 OPPS/ASC final rule with comment period.

[[Page 81953]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.194

    We welcomed comments on this approach. We sought comment on whether 
utilizing the top five services by volume is an appropriate method by 
which to establish this payment limit. We also sought 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 sought 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 sought comment on this 
approach as well as other approaches of interest to commenters.
    We welcomed comment from interested parties on the implementation 
of all facets of section 4135.
    Comment: We received a significant number of comments in response 
to our comment solicitation and we are including a high-level overview 
of the comments we received. Many of the comments we received focused 
on opioids broadly, some comments addressed future policy implementing 
section 4135 of the Consolidated Appropriations Act of 2023, and others 
addressed the policy authorized under the Substance Use-Disorder 
Prevention that Promotes Opioid Recovery and Treatment for Patients and 
Communities Act (SUPPORT) Act (Pub. L. 115-271) as described in the 
previous section.
    Response: We thank the numerous commenters for their significant 
interest on the topic of non-opioid pain management and CMS's role in 
addressing the opioid epidemic. We will not be responding directly to 
all of these comments because, as we stated in the proposed rule (88 FR 
49767), we plan to include our proposals to implement the section 4135 
amendments in the CY 2025 OPPS/ASC proposed rule. These comments will 
be taken into account when crafting that proposed policy and discussed 
in the CY 2025 OPPS/ASC proposed rule.
    Comment: We received a number of comments urging CMS to expedite 
the implementation timeline for the section 4135 amendments from CY 
2025 to CY 2024. One commenter suggested that CMS use all measures at 
its disposal, including certain waivers available under the ongoing 
opioid public health emergency, in order to accomplish this request. 
Commenters generally spoke of the severity of the opioid epidemic and 
its harmful effects. A couple commenters specifically requested an 
additional comment period for CMS to gather thorough input from all 
interested stakeholders. One commenter expressed concern that the 
proposed rule did not more aggressively seize the opportunity to 
prevent opioid addiction by increasing access to non-opioid pain 
management approaches across outpatient surgical settings. Another 
commenter stated that the existing separate payment policies for non-
opioid pain management approaches did not adequately incentivize 
facilities to use these alternative methods for pain management.
    Response: We thank the commenters for expressing their concerns on 
this important issue. Section 4135 of the CAA, 2023 requires separate 
payments to begin on January 1, 2025, and we will undertake notice and 
comment rulemaking to implement it. As such, we will include our 
implementation proposal in the CY 2025 OPPS/ASC proposed rule. We note 
that we agree with commenters on the importance of this issue.

[[Page 81954]]

    It is a top priority of CMS to address the opioid misuse epidemic 
and its impact on communities. CMS is committed to a comprehensive and 
multi-pronged strategy to combat this public health emergency. Please 
see our Roadmap Strategy to Fight the Opioid Crisis.\214\
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    \214\ https://www.cms.gov/about-cms/agency-information/emergency/downloads/opioid-epidemic-roadmap.pdf.
---------------------------------------------------------------------------

    Although not a component of the OPPS/ASC payment policies, we note 
that through the CMS Behavioral Health Strategy,\215\ CMS seeks to 
remove barriers to care and services, and to adopt a data-informed 
approach to evaluate our behavioral health programs and policies. CMS 
is working to improve access to substance use disorder (SUD) 
prevention, treatment and recovery services. As of January 1, 2020, CMS 
makes bundled payments for opioid use disorder treatment services 
provided by Opioid Treatment Programs under with Medicare Part B.\216\ 
Additionally, CMS covers a monthly bundle service for the treatment of 
OUD and other SUDs in office-based settings,\217\ as well as screenings 
for OUD.
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    \215\ https://www.cms.gov/cms-behavioral-health-strategy.
    \216\ https://www.cms.gov/medicare/payment/opioid-treatment-program.
    \217\ https://www.cms.gov/medicare/payment/fee-schedules/physician/opioid-use-disorder-screening-treatment.
---------------------------------------------------------------------------

    We thank commenters again for their insightful comments that will 
assist us in crafting well informed future policy.
    Comment: We received several comments supporting the existing 
efforts CMS has taken to reduce the financial incentives that may exist 
as a result of OPPS packaging policies to use opioids over non-opioid 
alternatives for pain relief in surgical settings. Several commenters 
expressed appreciation that CMS is engaging stakeholders in advance of 
the implementation of this statutory provision. One commenter stated 
that unbundling and stand-alone payment for these alternative 
medications and treatment plans will ensure a change in pain management 
practices, prescription patterns, and ultimately improve patient care.
    Response: We thank commenters for their support.
    Comment: We received very broad support for extending our current 
policy under Sec.  416.174(a) to encompass payment in the HOPD setting, 
and to include payment for expanded drugs, biologicals, devices, and 
procedures. Specifically, we received a significant number of comments 
that suggested drugs, biologicals, medical devices, and other 
modalities that could be utilized as non-opioid alternatives for pain 
management as well as the criteria CMS should employ to evaluate these 
requests, including evidence requirements for medical devices. The non-
opioid alternatives that were suggested in the comment solicitation 
include, but are not limited to the following: enhanced recovery after 
surgery protocols; ultrasound equipment when it is used to guide the 
injection of non-opioid treatments for pain relief; certain PNS systems 
such as Sprint; oral drugs; IV acetaminophen; IV NSAIDS such as 
Caldolor; massage therapy; acupuncture; chiropractic services; 
osteopathic manipulation; cognitive behavioral therapy; physical 
therapy; neurological devices such as pain pumps; spinal cord 
stimulators; cold therapy devices; cryoablation; local anesthetics via 
pump; ON-Q pump; interspinous spacers; Polar ice devices; NerveCap; THC 
oil; acupuncture; and more drugs, biologicals, items, services, and 
devices.
    We received a couple of comments that supported continuing to make 
separate payments for Exparel, Omidria, Xaracoll, and Dextenza as non-
opioid management drugs. These are the 4 drugs that will be paid 
separately in the ASC setting in CY 2024 under the policy described at 
Sec.  416.174(a).
    We also received a comment requesting that CMS designate the 
Addinex System as a non-opioid pain management drug technology. We also 
received a comment asking for the ioversa system, a medical device with 
510(k) pre-market clearance, to receive separate payment. One commenter 
requested separate payment be made for Zynrelef under the non-opioid 
pain management payment policy for CY 2025, effective once its pass-
through status expires in CY 2025.
    For many of the suggested items listed above, commenters provided 
current HCPCS codes, suggested possible new HCPCS coding, or suggested 
that CMS create appropriate new coding for the new items paid under 
this policy.
    Another commenter suggested that CMS examine and alleviate barriers 
to appropriate treatment options that can reduce the duration or impact 
of acute pain experienced with some diseases such as sickle cell 
anemia. Similarly, one commenter recommended that we provide education 
and outreach to ensure providers and patients are aware of and can 
access non-opioid therapies to manage acute and chronic pain in these 
settings. Another commenter suggested that CMS create separate billing 
codes for non-opioid anesthesia services and treatments for pain.
    Finally, we received several comments regarding the criteria used 
to determine if a drug, device, or treatment modality qualifies as a 
non-opioid pain management alternative. One comment supported 
maintaining the existing criteria that CMS has outlined for determining 
FDA-approved non-opioid pain management drugs for separate payment in 
the ASC setting and further recommended extending these determinations 
on a longer-term basis.
    Response: We appreciate all of the comments received suggesting 
additional therapeutic modalities for which CMS should consider paying 
under this policy for CY 2025. We will take these suggestions into 
consideration as we develop our proposal for CY 2025.
    Comment: A few commenters discussed their views on evidence 
requirements for medical devices that CMS should impose. Many 
commenters believed that CMS should follow the clinical evidence 
requirement set out in the statute when evaluating eligibility for 
medical devices as non-opioid treatments. They believed that CMS should 
implement this requirement of the statute to include only those devices 
that replace or reduce the use of opioids, as demonstrated through a 
clinical trial or data published in a peer review journal. Many of 
these commenters did not believe CMS should set additional specific 
trial design or outcomes criteria not found in the Act. Another 
commenter suggested that CMS create a transparent process for 
evaluating the clinical evidence that indicate certain technologies 
reduce opioid use. The commenter specifically stated that CMS should 
utilize a p-value of 0.10 for statistical significance when device 
safety has been established and provide payment for these devices using 
CMS existing pass-through policies.
    Alternatively, some commenters recommend a more stringent 
evaluation process. One commenter stated that CMS should focus on 
outcomes, not surrogate endpoints. The commenter stated specifically 
that CMS should assess whether the medical device (1) reduced the 
percentage of patients using opioids or (2) reduced morphine milligram 
equivalents (MMEs). The reduction in opioid use should be of a duration 
that is clinically appropriate for the patient's condition.
    Response: We appreciate all of the comments received on evidence 
requirements for medical devices that CMS should impose. We will take 
these into consideration as we develop our proposal for CY 2025.
    Comment: Regarding payment, commenters generally felt that the CMS

[[Page 81955]]

methodology outlined in the comment solicitation was appropriate for 
determining the payment limitation, particularly the payment limitation 
based on the top five services by volume with known claims data and 
payment limit without claims data. Other commenters suggested 
alternative methodologies such as developing a non-claims data-based 
approach for payment of non-opioid alternatives, which relied on 
available clinical data. Some commenters felt the ASP approach for 
setting the payment amount is appropriate, given how CMS reimburses for 
other separately paid drugs and biologicals. Many commenters requested 
that CMS be consistent with the transitional pass-through status 
payment methodology for drugs and devices. One commenter was concerned 
that reducing the payment amount by some portion of the associated 
procedure APC may lead to improper and inconsistent payment for non-
opioid treatments. One commenter urged CMS to provide additional 
clarification and work to ensure that there is transparency on the 
potential methodology to be used to calculate the specific payments for 
qualifying non-opioid treatments, particularly in the case of 
treatments with multiple applicable procedures and, thus, potentially 
varying payments as well as how CMS intends to define clinical dose as 
discussed in the proposed rule.
    Response: We appreciate all of the comments received on the topic 
of payment. We will take these into consideration as we develop our 
proposal for CY 2025.
    Comment: One commenter requested CMS amend its non-opioid pain 
management drug policies to permit temporary ``grandfathering'' of 
certain drugs approved before CY 2022 that have relevant and 
documentable clinical support for their pain management attributes but 
do not have current FDA label indication for pain management or 
analgesia.
    Response: We thank the commenter for their comment. We are 
currently unaware of any authority that would allow us to implement 
this recommendation, but we will consider that point for future 
rulemaking.
    Comment: Other commenters continued to express more general 
concerns with opioid use and access to non-opioid alternatives. For 
example, one commenter stated that beneficiaries in rural regions lack 
access to adequate healthcare, reliable transportation to health 
programs, and insurance coverage.
    Response: While we recognize some of the concerns presented by 
commenters fall outside of the scope of our OPPS and ASC Medicare 
payment policies, we appreciate these comments and learning more about 
how we can structure policies to address this multifaceted issue.
    We sincerely thank commenters for their responses on this important 
issue. We encourage further engagement from interested parties on this 
issue. As previously mentioned, we will take all of these comments into 
consideration in order to create an informed policy proposal to 
implement the section 4135 of the CAA, 2023, in the CY 2025 OPPS/ASC 
proposed rule.

G. 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/payment/prospective-payment-systems/ambulatory-surgical-center-asc/new-technology-intraocular-lenses-ntiols.
     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).
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.
    The comments and our responses to the comments are set forth below:
    Comment: Some commenters requested we re-evaluate our payment 
adjustment for a new NTIOL class. Commenters noted that our $50 payment 
adjustment has not been adjusted since CY 1999, the payment has lagged 
behind the overall economic inflation rate, and that the stagnant 
payment adjustment has been a barrier to intraocular lens innovation. 
Commenters recommended that we set the $50 payment adjustment at $91.04 
and update this payment annually.
    Response: At the inception of the ASC benefit on September 7, 1982, 
Medicare paid 90 percent of the reasonable charge for intraocular 
lenses (IOLs) inserted concurrent with or following cataract surgery 
performed in an ASC. The Omnibus Budget Reconciliation Act of 1987 
(Pub. L. 100-203) mandated that we include payment for an IOL furnished 
by an ASC for insertion during or following cataract surgery as part of 
the facility fee. Section 141(b)(1) of the Social Security Amendments 
of 1994 required us to develop and implement a process under which 
interested parties may request a review

[[Page 81956]]

of the appropriateness of the payment amount for an IOL to ensure that 
the facility fee for the procedure is reasonable and related to the 
cost of acquiring a lens that belongs to a class of NTIOLs. In 
response, in June 1999, CMS established the payment adjustment for 
NTIOLs at $50 per lens (with the beneficiary responsible for a 20 
percent coinsurance). In light of the commenters' recommendation but in 
the absence of cost and volume data for potential forthcoming NTIOLs, 
we performed an analysis to determine if the cost of IOLs has 
significantly changed and if the $50 payment adjustment is no longer 
reasonable and appropriate as the commenters suggest.
    For our analysis, we looked at the change in the median cost, mean 
cost, and geometric mean cost of the most commonly-billed intraocular 
lens HCPCS code--HCPCS code V2632 (Posterior chamber intraocular lens) 
from CY 2010 (the furthest year back we could readily retrieve hospital 
outpatient claims data) to CY 2022 (the most recently available full 
year of claims data). In CY 2010, over 162,000 units of HCPCS code 
V2632 were reported on hospital outpatient claims at a median cost of 
$204.34, mean cost of $259.32, and geometric mean cost of $199.84. For 
CY 2022, over 220,000 units of HCPCS code V2632 were reported on 
hospital outpatient claims at a median cost $189.26, mean cost of 
$230.18, and a geometric mean cost of $184.10. Interestingly, we did 
not observe a strong increase, or any increase at all, in the cost of 
IOLs since CY 2010 but a noticeable decline (between 8 and 12 percent 
depending on the cost metric) in the cost of an IOL. Therefore, given 
the decline in the cost of IOLs we observed from CY 2010 to CY 2022, we 
do not accept the commenters' suggestion that the $50 payment 
adjustment has been a barrier to intraocular lens innovation, and we 
continue to believe the $50 per lens payment adjustment is a reasonable 
and appropriate payment adjustment for NTIOLs.
4. Announcement of CY 2024 Deadline for Submitting Requests for CMS 
Review of Applications for a New Class of NTIOLs
    In accordance with 42 CFR 416.185(a) of our regulations, CMS 
announces that in order to be considered for payment effective 
beginning in CY 2025, requests for review of applications for a new 
class of new technology IOLs must be received by 5:00 p.m. EST, on 
March 1, 2024. Send requests via email to outpatientpps@ cms.hhs.gov or 
by mail to ASC/NTIOL, Division of Outpatient Care, Mailstop C4-05-17, 
Centers for Medicare and Medicaid Services, 7500 Security Boulevard, 
Baltimore, MD 21244-1850. To be considered, requests for NTIOL reviews 
must include the information requested on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/
NTIOLs.

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

1. Background
    In the August 2, 2007, ASC final rule (72 FR 42493), we established 
our policy to base ASC relative payment weights and payment rates under 
the revised ASC payment system on APC groups and the OPPS relative 
payment weights. Consistent with that policy and the requirement at 
section 1833(i)(2)(D)(ii) of the Act that the revised payment system be 
implemented so that it would be budget neutral, the initial ASC 
conversion factor (CY 2008) was calculated so that estimated total 
Medicare payments under the revised ASC payment system in the first 
year would be budget neutral to estimated total Medicare payments under 
the prior (CY 2007) ASC payment system (the ASC conversion factor is 
multiplied by the relative payment weights calculated for many ASC 
services in order to establish payment rates). That is, application of 
the ASC conversion factor was designed to result in aggregate Medicare 
expenditures under the revised ASC payment system in CY 2008 being 
equal to aggregate Medicare expenditures that would have occurred in CY 
2008 in the absence of the revised system, taking into consideration 
the cap on ASC payments in CY 2007, as required under section 
1833(i)(2)(E) of the Act (72 FR 42522). We adopted a policy to make the 
system budget neutral in subsequent calendar years (72 FR 42532 and 
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 and 
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 and 
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

[[Page 81957]]

to hospitals. We believe that using the most recently available pre-
floor and pre-reclassified IPPS hospital wage indexes result 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/wp-content/uploads/legacy_drupal_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.bls.gov/bls/omb-bulletin-15-01-revised-delineations-of-metropolitan-statistical-areas.pdf.)
    On August 15, 2017, OMB issued OMB Bulletin No. 17-01, which 
provided updates to and superseded OMB Bulletin No. 15-01 that was 
issued on July 15, 2015. We refer readers to the CY 2019 OPPS/ASC final 
rule with comment period (83 FR 58864 through 58865) for a discussion 
of these changes and our implementation of these revisions. (A copy of 
this bulletin may be obtained at https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_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/wp-content/uploads/2018/09/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 final 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 and 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 final rule, we are using 
the CY 2022 claims data to be consistent with the OPPS claims data for 
this rule. Consistent with our established policy, we proposed 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 proposed to compare 
the estimated total payment using the CY 2023 ASC

[[Page 81958]]

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 final 
rule. For estimated CY 2024 total payments, we proposed to incorporate 
the estimated total spending and estimated utilization related to our 
proposed CY 2024 ASC complexity adjustment codes. In this final rule 
with comment period, we estimate the additional CY 2024 spending 
related to our proposed ASC complexity adjustment codes will be 
approximately $5 million.
    We proposed 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 was 
0.8649. Consistent with historical practice, we proposed 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 proposed 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 services. The ASC payment weights for those services 
without predetermined national payment amounts (that is, those services 
with national payment amounts that would be based on OPPS relative 
payment weights) would be scaled to eliminate any difference in the 
total payment between the current year and the update year.
    For any given year's ratesetting, we typically use the most recent 
full calendar year of claims data to model budget neutrality 
adjustments. We proposed to use the CY 2022 claims data to model our 
budget neutrality adjustment for CY 2024.
    Comment: Many commenters reiterated their past recommendation that 
we discontinue applying the ASC weight scalar to achieve budget 
neutrality and greater parity between the OPPS and ASC. Commenters were 
concerned that the ASC weight scalar has decreased overall since the 
implementation of the revised ASC payment system for CY 2008 and stated 
that relative weights have already been scaled for budget neutrality 
and do not require secondary rescaling to achieve budget neutrality 
under the ASC payment system. Commenters proposed that CMS combine the 
OPPS and ASC utilization and mixes of services to establish a single 
weight scalar, applying a single budget neutrality calculation to the 
OPPS and ASC payment systems, which commenters felt would align the 
payment systems and more accurately scale for outpatient volume across 
both sites of service.
    Response: We disagree with commenters' assessment and are not 
accepting the recommendation to discontinue applying the ASC weight 
scalar. As we have stated in past rulemaking (82 FR 59421), applying 
the ASC weight scalar, which is 0.8881 for this final rule with comment 
period and an increase from the CY 2023 ASC weight scalar of 0.8594, 
ensures that the ASC payment system remains budget neutral. This annual 
budget neutrality adjustment is performed similarly to updates for the 
IPPS, OPPS, PFS, and other Medicare payment systems. We apply the ASC 
weight scalar to scaled OPPS relative weights to ensure that current 
Medicare payments under the ASC payment system do not increase as a 
result of newer data used to determine the cost relativity between 
surgical procedures. The scaled prospective OPPS relative weights that 
are used to determine scaled prospective ASC relative weights have not, 
as commenters suggest, been adjusted to achieve budget neutrality 
within the ASC payment system prior to the application of the ASC 
weight scalar. We also note that no stakeholder presented empirical 
evidence that the budget neutrality adjustment under the ASC payment 
system has impacted beneficiary access to surgical procedures in the 
ASC setting.
    After consideration of the public comments we received, we are 
finalizing our proposal to use the ratio of CY 2023 to CY 2024 total 
payments (the weight scalar) to scale the ASC relative payment weights 
for CY 2024. The final CY 2024 ASC weight scalar is 0.8881. Consistent 
with historical practice, we are finalizing our proposal to scale the 
ASC relative payment weights of covered surgical procedures, covered 
ancillary radiology services, and certain diagnostic tests within the 
medicine range of CPT codes, which are covered ancillary services for 
which the ASC payment rates are based on OPPS relative payment weights. 
Additionally, CY 2024 total payments will include additional spending 
and utilization related to these ASC complexity adjustment C codes, 
which we estimate to be approximately $5 million 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

[[Page 81959]]

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 
productivity-adjusted 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 the CY 2024 OPPS/ASC proposed rule, we 
proposed 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 productivity-adjusted 
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 proposed 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 
proposed 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) and (vi) and (a)(2)(viii)(B), we proposed 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 proposed 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 productivity-adjusted hospital market 
basket update factor for ASCs that fail to meet the ASCQR Program 
requirements. We refer readers to section XIV.E of the CY 2019 OPPS/ASC 
final rule with comment period (83 FR 59138 and 59139) and section 
XIV.E of this final rule for a detailed discussion of our policies 
regarding payment reduction for ASCs that fail to meet ASCQR Program 
requirements. We proposed to utilize the 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 proposed 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 
proposed 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 proposed 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 proposed 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.
    Comment: Most commenters supported our proposed increase to the CY 
2024 ASC payment rates. These commenters supported the continued use of 
the hospital market basket update for the ASC payment system, due to 
better alignment with the OPPS, and were supportive of extending the 
five-

[[Page 81960]]

year interim period for an additional two years. Several of these 
commenters suggested the use of the hospital market basket update 
should become a permanent update for ASCs.
    However, a subset of commenters, including MedPAC, were against the 
extension proposal. MedPAC was opposed to extending the interim period, 
citing evidence that the hospital market basket index does not 
accurately reflect ASC costs and that surgical procedure migration was 
occurring before this update factor was used in ASCs. MedPAC did not 
support CMS collecting additional data on the effects of using the 
hospital market basket update on ASC volume. (As discussed in section 
XII.C., MedPAC has suggested that neither the hospital market basket 
update nor CPI-U likely reflect an ASC's cost structure and recommended 
collecting cost data to establish an appropriate price index for ASCs.) 
Several other commenters also recommended that CMS allow the proposal 
to expire after CY 2023, as hospitals and ASC have different costs and 
patient populations. They suggested CMS work with ASCs to develop and 
implement a minimally burdensome way to collect ASC costs that could be 
used to finalize an appropriate update mechanism in the future, if 
necessary.
    Response: We appreciate the feedback from commenters. As we stated 
above, the profound impact of the COVID-19 PHE on health care 
utilization, particularly for elective surgeries, makes it difficult to 
clarify whether the higher update factor for the ASC payment system 
caused increased migration to the ASC setting. We believe using the 
additional two years of data, CY2024 and CY 2025, will enable us to 
more accurately analyze the impact of the hospital market basket update 
on the ASC payment system; and we do not believe we should make any 
determination regarding the most appropriate update mechanism until we 
perform such analysis.
    After consideration of the public comments we received, for CY 
2024, we are finalizing temporarily extending a CY 2019 ASC payment 
system policy that implemented a five-year interim period using the 
productivity-adjusted hospital market basket, instead of the CPI-U to 
update ASC payment rates.
    For CY 2024, we are also finalizing the hospital market basket 
update of 3.3 percent reduced by the productivity adjustment of 0.2 
percentage point, resulting in a productivity-adjusted hospital market 
basket update factor of 3.1 percent for ASCs meeting the quality 
reporting requirements. Therefore, we apply a 3.1 percent productivity-
adjusted hospital market basket update to the CY 2023 ASC conversion 
factor for ASCs meeting the quality reporting requirements to determine 
the CY 2024 ASC payments. We are finalizing the hospital market basket 
update of 3.3 percent reduced by 2.0 percentage points for ASCs that do 
not meet the quality reporting requirements and an additional reduction 
of 0.2 percentage point for the productivity adjustment. Therefore, we 
apply a 1.1 percent productivity-adjusted hospital market basket update 
to the CY 2023 ASC conversion factor for ASCs not meeting the quality 
reporting requirements.
    For CY 2024, we are adjusting the CY 2023 ASC conversion factor 
($51.854) by a wage index budget neutrality factor of 1.0010 in 
addition to the productivity-adjusted hospital market basket update of 
3.1 percent, discussed above, which results in a final CY 2024 ASC 
conversion factor of $53.514 for ASCs meeting the quality reporting 
requirements. For ASCs not meeting the quality reporting requirements, 
we are adjusting the CY 2023 ASC conversion factor ($51.854) by the 
wage index budget neutrality factor of 1.0010 in addition to the 
reduced productivity-adjusted hospital market 1.1 percent, discussed 
above, which results in a final CY 2024 ASC conversion factor of 
$52.476 for ASCs not meeting the quality reporting requirements.
3. Display of the Final CY 2024 ASC Payment Rates
    Addenda AA and BB to this final 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 final payment rates included in Addenda AA and BB to 
this final rule reflect the full ASC payment update and not the reduced 
payment update used to calculate payment rates for ASCs not meeting the 
quality reporting requirements under the ASCQR Program.
    These Addenda contain several types of information related to the 
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 and 66830), 
most covered surgical procedures are subject to a 50 percent reduction 
in the ASC payment for the lower-paying procedure when more than one 
procedure is performed in a single operative session.
    For CY 2021, we finalized adding a new column to ASC Addendum BB 
titled ``Drug Pass-Through Expiration during Calendar Year'' where we 
flag through the use of an asterisk each drug for which pass-through 
payment is expiring during the calendar year (that is, on a date other 
than December 31st).
    The values displayed in the column titled ``Final CY 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 final CY 2024 payment rate displayed in the ``Final 
CY 2024 Payment Rate'' column, each ASC payment weight in the ``Final 
CY 2024 Payment Weight'' column was multiplied by the final 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 final CY 2024 ASC 
conversion factor uses the CY 2024 productivity-adjusted hospital 
market basket update factor of 3.1 percent (which is equal to the 
inpatient hospital market basket percentage increase of 3.3 percent 
reduced by the productivity adjustment of 0.2 percentage point).
    In Addendum BB, there are no relative payment weights displayed in 
the ``Final CY 2024 Payment Weight'' column for items and services with 
predetermined national payment amounts, such as separately payable 
drugs and biologicals. The ``Final CY 2024 Payment'' column displays 
the final CY 2024 national unadjusted ASC payment rates for all items 
and services. The final 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.

[[Page 81961]]

    Addendum EE to this final 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 final rule displays the OPPS payment rate 
(based on the standard ratesetting methodology), the device offset 
percentage for determining device-intensive status (based on the 
standard ratesetting methodology), and the device portion of the ASC 
payment rate for CY 2024 for covered surgical procedures.

XIV. Requirements for the Hospital Outpatient Quality Reporting (OQR) 
Program

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 and 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 419.46. We refer readers to section XIV.F of this 
final rule with comment period for a detailed discussion of the payment 
reduction for hospitals that fail to meet Hospital OQR Program 
requirements.

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.
    In the CY 2024 OPPS/ASC proposed rule (88 FR 49774), we proposed 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 invited public comment on the proposal.
    We received no comments on the proposal. We are finalizing our 
proposal as proposed.
a. 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 
and 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 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, as we described 
in the CY 2024 OPPS/ASC proposed rule (88 FR 49774), 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; \218\ 
and (3) unintended effects on LWBS rates caused by other policies, 
programs, and initiatives may lead to skewed measure 
performance.219 220 221
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    \218\ 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.
    \219\ 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.
    \220\ 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.
    \221\ 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 recognized 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 stated that we did not believe the LWBS 
measure provides enough specificity to give value because it does not 
provide granularity for actionable meaningful data toward quality 
improvement. Based on these findings during the development of the CY 
2024 OPPS/ASC proposed rule, we identified measure removal factor 2 as 
applicable (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. In the CY 2024 OPPS/ASC proposed rule, we 
discussed the Median Time from ED Arrival to ED Departure for 
Discharged ED Patients measure (Median Time for Discharged ED Patients 
measure) as a better measure for measuring ED performance and care. In 
our discussion, we stated that 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, we stated that 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, in the CY 2024 OPPS/
ASC proposed rule (88 FR 49774), we stated our belief that the LWBS 
measure does

[[Page 81962]]

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 proposed to remove the LWBS measure from the 
program beginning with the CY 2024 reporting period/CY 2026 payment 
determination.
    We invited public comment on our proposal.
    Comment: Many commenters supported CMS's proposal to remove the 
LWBS measure beginning with the CY 2024 reporting period/CY 2026 
payment determination. Several of these commenters noted that high LWBS 
rates may reflect factors beyond the control of HOPDs rather than 
intrinsic systemic issues within the ED. A few of these commenters 
further stated that there are more meaningful measures, such as Median 
Time for Discharged ED Patients, in the Hospital OQR Program that are 
better for measuring ED performance and care. A few of these commenters 
concurred with the rationale in the CY 2024 OPPS/ASC proposed rule to 
remove the LWBS measure based on measure removal factor 2. These 
commenters specifically stated that they supported CMS's proposal to 
remove the LWBS measure because the LWBS measure does not provide 
actionable data toward quality improvement and lacks sufficient 
evidence that the measure promotes quality of care and improved patient 
outcomes.
    Response: We thank commenters for their feedback. After 
consideration of public comments and assessment of the latest 
monitoring and evaluation data, we are not finalizing our proposal to 
remove the LWBS measure at this time. While our routine monitoring and 
evaluation of this measure initially indicated lack of variation among 
hospital performance as well as limited evidence linking the measure to 
improved patient outcomes, since publication of the CY 2024 OPPS/ASC 
proposed rule we have received new data indicating an increase 
(worsening) in LWBS rates that we believe warrants further 
investigation before potentially removing the LWBS measure under 
measure removal factor 2--performance or improvement on a measure does 
not result in better patient outcomes.
    Comment: Some commenters disagreed that the measure had met the 
criteria to qualify for measure removal factor 2. One of these 
commenters cited evidence from Gravel, Smalley, and Mataloni indicating 
that people who leave without being seen are at higher risk of poor 
outcomes, higher readmission rates, and increased mortality, and 
recommended retaining the LWBS measure.222 223 224 According 
to this commenter, leaving the ED without receiving a medical opinion 
from the visit is sub-optimal care that should be accounted for. 
Another commenter provided evidence \225\ to support its belief that 
patients might leave the ED because they are too sick to stay, not 
because they were not sick enough, and that CMS cannot presume that the 
only reason patients left without being seen was because they did not 
need to be in the ED to begin with.
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    \222\ Gravel J, Gouin S, Carri[egrave]re B, et al. (2013). 
Unfavourable outcome for children leaving the emergency department 
without being seen by a physician. CJEM 15(5), 289-299. https://doi.org/10.2310/8000.2013.130939.
    \223\ Smalley CM, Meldon SW, Simon EL, et al. (2021). Emergency 
Department patients who leave before treatment is complete. WestJEM 
22(2), 148-155. https://doi.org/10.5811/westjem.2020.11.48427.
    \224\ Mataloni F, Colais P, Galassi C, et al. (2018). Patients 
who leave Emergency Department without being seen or during 
treatment in the Lasio Regio (Central Italy): Determinants and short 
term outcomes. PloS ONE 13(12), 0208914. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6291150/.
    \225\ Baker DW, Stevens CD, Brook RH. Patients who leave a 
public hospital emergency department without being seen by a 
physician. Causes and consequences. JAMA. 1991;266:1085-90. https://jamanetwork.com/journals/jama/article-abstract/391369.
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    Response: We appreciate the commenters' feedback regarding the LWBS 
measure and note that we are not finalizing our proposal to remove the 
LWBS measure. More recent data in the evaluation of this measure have 
indicated an increase in LWBS rates that we believe warrants further 
investigation before potentially removing the LWBS measure under 
measure removal factor 2--performance or improvement on a measure does 
not result in better patient outcomes.
    Comment: Some commenters opposed the removal of the measure as they 
believe it helps capture ``ED boarding,'' which one commenter defined 
as a concept where patients are held in the ED awaiting admission to an 
inpatient bed or transfer elsewhere.\226\ These commenters believe that 
ED wait times and boarding reflect the overall issue of ED 
overcrowding, and that CMS should retain this measure to keep tracking 
and reporting these important data. One commenter stated that 
information from this measure could help incentivize investments in 
more targeted solutions to the issue of ED overcrowding. Another 
commenter stated that removing this measure would signal that CMS does 
not recognize or acknowledge the seriousness of the negative effects of 
ED wait times, overcrowding, and boarding.
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    \226\ American College of Emergency Physicians. (n.d.). 
Emergency Department Boarding and Crowding. Available at: https://www.acep.org/boarding.
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    Response: We acknowledge the commenters' concerns regarding the 
lack of ED measures in the Hospital OQR Program and emphasize that ED 
performance and care, including overcrowding and boarding, continue to 
be important topic areas of the Hospital OQR Program. After 
consideration of public comments and assessment of recent LWBS rates, 
which indicate a worsening in LWBS rates, we believe that the LWBS 
measure may provide meaningful information about patient patterns in 
EDs and that, prior to potentially removing this measure from the 
Hospital OQR Program, additional examination of the measure's utility 
is warranted. We are also committed to conducting a broader re-
examination of how to improve measurement of quality of care in the ED 
setting that could help address gaps not directly measured by the 
Median Time for Discharged ED Patients and LWBS measures.
    Comment: A few commenters suggested that CMS explore an alternative 
measure for access to care to ensure patients have access to timely 
emergency care. One commenter additionally suggested that CMS adopt the 
Median Admit Decision Time to ED Departure Time for Admitted Patients 
eCQM and noted that, while the Hospital Inpatient Quality Reporting 
(IQR) Program is removing this eCQM in 2024, several state quality 
reporting programs wish to continue to report the measure. This 
commenter further stated that adoption of the Median Admit Decision 
Time to ED Departure Time for Admitted Patients eCQM in the Hospital 
OQR Program would allow hospitals already familiar with the measure to 
continue to report this measure and reduce reporting burden while also 
monitoring ED wait times until admission.
    Response: We thank the commenters for their recommendations. We 
agree that we should continue to prioritize ED measures in the Hospital 
OQR Program and will continue to assess and develop relevant measures 
for future rulemaking. We note that proposal and adoption of the Median 
Admit Decision Time to ED Departure Time for Admitted Patients eCQM 
would address the National Quality Strategy goal of 
``Interoperability'' under the priority area ``Interoperability and 
Scientific Advancement.'' We will take this recommendation into 
consideration.

[[Page 81963]]

    We believe that it is important to evaluate a measure's 
effectiveness based on its capacity to deliver better patient outcomes 
and remove measures that show limited evidence in improving patient 
outcomes. As stated above, our routine monitoring and evaluation of 
this measure has indicated a recent increase in LWBS rates that we 
believe warrants further investigation before potentially removing the 
LWBS measure under measure removal factor 2--performance or improvement 
on a measure does not result in better patient outcomes. Several 
commenters emphasized the importance of quality measurement for the ED 
care setting, particularly to address persistent problems of ED 
overcrowding and boarding. We agree with commenters who noted the 
benefits of retaining the LWBS measure in order to identify and inform 
quality improvement efforts or beneficiary care decision-making and 
using that information to identify a more granular measure that could 
potentially replace the LWBS measure. Therefore, after considering the 
concerns raised by commenters, we are not finalizing our proposal to 
remove the LWBS measure beginning with the CY 2024 reporting period/CY 
2026 payment determination.
2. Modifications to Previously Adopted Measures
    In the CY 2024 OPPS/ASC proposed rule (88 FR 49774), we proposed 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; and (3) Appropriate Follow-Up 
Interval for Normal Colonoscopy in Average Risk Patients measure. We 
discuss each of these measures, along with the public comments that we 
received on them, in subsequent sections.
a. 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).\227\ 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).\228\ The Secretary renewed the PHE on April 21, 
2020, and then every 3 months thereafter, with the final renewal on 
February 9, 2023.\229\ The PHE expired on May 11, 2023; however, the 
public health response to COVID-19, which includes vaccination efforts, 
remains a public health priority.\230\ As we noted in the CY 2024 OPPS/
ASC proposed rule (88 FR 49776), there had been more than 102.7 million 
COVID-19 cases and 1.1 million COVID-19 deaths in the United States as 
of February 13, 2023; in reviewing these numbers for this final rule, 
as of September 15, 2023 there have been more than 103.4 million COVID-
19 cases and 1.1 million COVID-19 deaths in the United 
States.231 232
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    \227\ 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.
    \228\ The Ambulatory Surgical Center Quality Reporting (ASCQR) 
Program (86 FR 63875 through 63883), the Hospital Inpatient Quality 
Reporting (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).
    \229\ 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.
    \230\ 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.
    \231\ World Health Organization. United States of America. 
Accessed September 15, 2023. Available at: https://covid19.who.int/region/amro/country/us.
    \232\ Centers for Disease Control and Prevention. COVID Data 
Tracker. Accessed February 13, 2023. Available at: https://covid.cdc.gov/covid-data-tracker/#datatracker-home.
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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-19.233 234 235 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.\236\ 
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-
19.237 238 239 240 Overall, data

[[Page 81964]]

demonstrate that COVID-19 vaccines are effective and prevent severe 
disease, hospitalization, and death from COVID-19 infection.\241\
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    \233\ Centers for Medicare & Medicaid Services (October 26, 
2022). Revised Guidance for Staff Vaccination Requirements. 
Available at: https://www.cms.gov/files/document/qs0-23-02-all.pdf.
    \234\ 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 w.
    \235\ Centers for Medicare & Medicaid Services. (October 26, 
2022). Revised Guidance for Staff Vaccination Requirements. 
Available at: https://www.cms.gov/files/document/qs0-23-02-all.pdf.
    \236\ 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.
    \237\ 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.
    \238\ 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.
    \239\ Centers for Medicare & Medicaid Services (October 26, 
2022). Revised Guidance for Staff Vaccination Requirements. 
Available at: https://www.cms.gov/files/document/qs0-23-02-all.pdf.
    \240\ 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.
    \241\ 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.
---------------------------------------------------------------------------

    When we adopted the COVID-19 Vaccination Coverage Among HCP measure 
in the CY 2022 OPPS/ASC final rule (86 FR 63824 through 63833), we 
acknowledged that the measure did not address booster shots for COVID-
19 vaccination (86 FR 63829) 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 63829). 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 
63829).
    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.\242\ 
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.\243\ 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 six months removed from receipt of their 
primary series.\244\ Updated COVID-19 vaccine 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.245 246 247 In the CY 2024 
OPPS/ASC proposed rule (88 FR 49774 through 49776), we stated that data 
from the existing COVID-19 Vaccination Coverage Among HCP measure 
demonstrate clinically significant variation in booster dose 
vaccination rates across HOPDs, but are clarifying here that literature 
has indicated disparities in COVID-19 booster vaccine uptakes across 
healthcare personnel irrespective of specific care setting.\248\
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    \242\ Centers for Disease Control and Prevention (2021). 
Variants of the Virus. Available at: https://www.cdc.gov/coronavirus/2019-ncov/variants/index.html.
    \243\ Food and Drug Administration (November 2022). COVID-19 
Bivalent Vaccine Boosters. Available at https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-authorizes-moderna-pfizer-biontech-bivalent-covid-19-vaccines-use. 
(In the CY 2024 OPPS/ASC proposed rule, we cited this information 
to: https://www.fda.gov/emergency-preparedness-and-response/coronavirus-disease-2019-covid-19/covid-19-bivalent-vaccines. 
However, after review, the information appears to have moved. Thus, 
we have updated the citation.)
    \244\ 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.
    \245\ 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.
    \246\ 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.
    \247\ Ibid.
    \248\ Wigdan F. et al. (April 2023). Who is getting boosted? 
Disparities in COVID-19 vaccine booster uptake among health care 
workers. Available at: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9918311/pdf/main.pdf.
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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, and Biologics License Application approvals issued by the 
FDA for updated 2023-2024 formulations of the vaccine bivalent 
boosters, continued presence of SARS-CoV-2 in the United States, and 
variance among rates of updated vaccinations, we believe it is 
important to modify the COVID-19 Vaccination Coverage Among HCP measure 
for HCP to receive primary series and updated 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, 
including the most recent September 2023 Omicron variant that came to 
light after the publication of the CY 2024 OPPS/ASC proposed 
rule.249 250
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    \249\ Link-Gelles et al. (February 2023). Early Estimates of 
Bivalent mRNA Booster Dose Vaccine Effectiveness in Preventing 
Symptomatic SARs-CoV-2 Infection Attributable to Omicron BA.5- and 
XBB/XBB.1.5-Relating Sublineages Among Immunocompetent Adults--
Increasing Community Access to Testing Program, United States, 
December 2022-January 2023. Morbidity and Mortality Weekly Report 
(MMWR). February 3;72(5);119-124. Available online at: https://www.cdc.gov/mmwr/volumes/72/wr/mm7205e1.htm#suggestedcitation.
    \250\ Food and Drug Administration (June 2023). FDA Briefing 
Document: Vaccines and Related Biological Products Advisory 
Committee Meeting. Food and Drug Administration. Available Online: 
https://www.fda.gov/media/169378/download.
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    In the CY 2024 OPPS/ASC proposed rule (88 FR 49774 through 49776), 
we proposed to modify the COVID-19 Vaccination Coverage Among HCP 
measure to utilize the term ``up to date'' in the HCP vaccination 
definition. We also proposed to update the numerator to specify the 
timeframes within which an HCP is considered up to date with CDC 
recommended COVID-19 vaccines, including updated vaccine doses, 
beginning with CY 2024 reporting period/CY 2026 payment determination 
for the Hospital OQR Program.
(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 and is 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 and 63828) for more 
information on the initial review of the measure by the Measure 
Applications Partnership (MAP).\251\
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    \251\ 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. 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. 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

[[Page 81965]]

appreciated that the re-specified measure's target population is 
broader and simplified from seven categories of HCP to four.\252\ 
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.\253\ 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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    \252\ 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.
    \253\ Ibid.
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    The developer noted that the model used for this measure is based 
on the Influenza Vaccination Coverage Among HCP measure (CBE 
0431).\254\ We refer readers to sections XXIV.B and XXVI of 
this final rule with comment period for additional detail on the burden 
and impact of this measure modification.
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    \254\ 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 CBE. The MAP noted that 
the previous version of the measure received endorsement from the CBE 
(CBE 3636) \255\ and that the measure steward (CDC) intends to 
submit the updated measure for endorsement.\256\
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    \255\ Centers for Medicare & Medicaid Services. Measures 
Inventory Tool. Available at: https://cmit.cms.gov/cmit/#/MeasureView? variantId=11670& sectionNumber=1.
    \256\ 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 & 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 one week of data. The measure 
includes at least one week of data collection a month for each of the 
three months in a quarter. The denominator is calculated as the 
aggregated number of HCP eligible to work in the hospital for at least 
one day during the week of data collection, excluding denominator-
eligible individuals with contraindications as defined by the CDC for 
all three months in a quarter.\257\ Facilities report the following 
four categories of HCP to the NHSN:
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    \257\ 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 (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 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.\258\
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    \258\ 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.
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    As stated in the CY 2024 OPPS/ASC proposed rule (88 FR 49777), we 
did not propose 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.
    As proposed in the CY 2024 OPPS/ASC proposed rule (88 FR 49777), 
public reporting of the modified version of the COVID-19 Vaccination 
Coverage Among HCP measure 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.\259\ The 
measure steward (CDC) is pursuing endorsement for the modified version 
of this measure.
---------------------------------------------------------------------------

    \259\ 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 63828 
through 63833) for information on data submission and reporting of this 
measure. We did not propose any changes to the data submission or 
reporting process in the CY 2024 OPPS/ASC proposed rule (88 FR 49777). 
However, we did 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, 
which would remain unchanged under these proposals, hospitals 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

[[Page 81966]]

OQR Program requirements. If a hospital submits more than one week of 
data in a month, the most recent week's data are used to calculate the 
measure. For example, if both the first- and third- week of data for a 
facility are submitted, the third week data will be used for measure 
calculation and public reporting. Each quarter, the CDC calculates a 
single quarterly COVID-19 HCP vaccination coverage rate for each 
hospital, which is then calculated by taking the average of the data 
from the three weekly rates submitted by the hospital for that quarter. 
CMS publicly reports each quarterly COVID-19 HCP vaccination coverage 
rate as calculated by the CDC (86 FR 63878).
    We refer readers to section XV.B.4.a of this final rule with 
comment period for the same proposal for the Ambulatory Surgical Center 
Quality Reporting (ASCQR) Program.
    We invited public comment on the proposal.
    Comment: Some commenters supported the proposed modification to the 
COVID-19 Vaccination Coverage Among HCP measure and noted the 
importance of maintaining alignment across programs and with current 
CDC guidelines. A few commenters highlighted the significance of 
vaccination in preventing greater spread of COVID-19 and the potential 
for continued vaccination to prevent future large-scale outbreaks. One 
commenter expressed the importance of ``up to date'' guidelines to 
ensure patients have accurate information to support their choice of 
provider.
    Response: We thank commenters for their support. We agree that 
maintaining alignment across programs and current CDC guidelines is 
important, as is the new definition of ``up to date'' due to the 
changing nature of the virus's transmission and community spread. We 
agree that vaccination plays a critical part of the HHS's strategy to 
effectively counter the spread of COVID-19 and will continue to support 
it as the most effective means to prevent the worst consequences of 
COVID-19, including severe illness, hospitalization, and death. 
Additionally, we continue to believe it is important to incentivize and 
track HCP vaccination through quality measurement across care settings, 
including the outpatient and ASC settings. We believe that HCP 
vaccinations will protect healthcare workers, patients, and caregivers 
and help sustain the ability of HCP in each of these care settings to 
continue serving their communities.
    Comment: Many commenters did not support modifying the COVID-19 
Vaccination Coverage Among HCP measure due to concerns that the 
frequent changes to the CDC's definition of ``up to date'' combined 
with uncertainty around future vaccination schedules creates 
unnecessary burden for facilities. Many commenters expressed concern 
that changing definitions and guidance exacerbates staffing and 
resource challenges and requires updates to facility or system-level 
vaccination policies, adding burden and confusion. One commenter 
recommended that CMS educate stakeholders on the evolving COVID-19 
vaccination requirements.
    Response: We acknowledge commenters' concerns around data 
collection, burden, and staffing and resource challenges for reporting 
the COVID-19 Vaccination Coverage Among HCP measure. As evidenced by 
the increased cases and hospitalizations in September 2023 due to new 
variants, we believe that COVID-19 remains a relevant and evolving 
situation requiring monitoring of vaccination rates to ensure the 
safety of patients, caregivers, and providers, and that the burden of 
reporting is outweighed by the benefits of collecting and regularly 
publishing this data to inform care decision-making. Additionally, the 
data submission and reporting requirements provide flexibility for 
hospitals with staffing and resource challenges as this measure only 
requires hospitals to collect data for one self-selected week during 
each month of the reporting quarter at minimum.
    When we finalized the adoption of the COVID-19 Vaccination Coverage 
Among HCP measure in the CY 2022 OPPS/ASC final rule with comment 
period (86 FR 63875), we received several comments encouraging us to 
update the measure as new evidence on COVID-19 is identified. While we 
acknowledge that the definition of ``up to date'' may change in the 
future, our intention is to continue to work with partners, including 
the FDA and CDC, to consider and align any updates to the measure 
specifications in future rulemaking as appropriate to ensure the safety 
of patients, providers, and caregivers in facilities of care.
    Comment: Many commenters recommended that CMS reduce the required 
reporting frequency from quarterly to annually to reduce reporting 
burden for facilities. Many of these commenters observed that annual 
reporting would mirror the reporting schedule for the Influenza 
Vaccination Coverage Among HCP measure, which has been adopted into 
some quality reporting programs. Several commenters recommended that 
the COVID-19 Vaccination Coverage Among HCP measure be voluntary and 
not publicly reported. Other commenters recommended clear communication 
in what the publicly reported data for the measure reflects. A few 
commenters recommended changes to the data collection methods for the 
measure; one commenter recommended that the chosen week for data 
reporting be determined by individuals unaffiliated with the HOPD to 
avoid bias, while another commenter recommended using fewer specific 
criteria for the numerator and denominator to provide flexibility for 
hospitals.
    Response: We thank commenters for their recommendations on data 
collection, reporting frequency, and measure criteria for the COVID-19 
Vaccination Coverage Among HCP measure. As stated in the CY 2024 OPPS/
ASC proposed rule (88 FR 49806), the measure developer based this 
measure on the Influenza Vaccination Coverage Among HCP measure (CBE 
0431), which is reported annually. The measure developer (the 
CDC) intends to adopt a similar approach to the modified COVID-19 
Vaccination Coverage Among HCP measure if vaccination strategy becomes 
seasonal. While monitoring and surveillance are ongoing, we do not 
currently have data demonstrating seasonal trends in the circulation of 
SARS-CoV-2. Additionally, these are different public health initiatives 
and vaccines, and therefore, the measure specifications are not in 
complete alignment (86 FR 45379). In addition, we do not believe that 
hospital-selection of the week for reporting on this measure introduces 
significant bias as the sampling is taken from within the same facility 
over time.
    With regard to public reporting, the intent of the measure is to 
capture the vaccination rate within hospitals so that patients have 
information available on HCP vaccination to inform their health care 
decisions. We continue to believe that it is appropriate and important 
to collect and report these data and to make the data publicly 
available.
    Comment: Several commenters did not support the measure due to 
concern of a time lag between data collection and public reporting. 
Commenters observed that publicly reporting these data may not be 
meaningful to consumers due to the changing definitions of vaccine 
guidance.
    Response: We thank the commenters for their concern. Since the 
adoption of the current version of the measure, the public health 
response to COVID-19 has adapted to respond to the changing nature of 
the virus's transmission and community spread. When we finalized the 
adoption of the COVID-19

[[Page 81967]]

Vaccination Coverage Among HCP measure in the CY 2022 OPPS/ASC final 
rule with comment period (86 FR 63824), we received several comments 
encouraging us to update the measure as we learn more about COVID-19. 
Our intention is to continue to work with partners, including the FDA 
and CDC, to consider and align any updates to the measure 
specifications in future rulemaking as appropriate to ensure the safety 
of patients, providers, and caregivers in facilities of care.
    While we understand that there is a delay between data collection 
and public reporting for this measure, we note that such a delay exists 
for all measures in the Hospital OQR Program. As with other measures, 
we believe that the data will provide meaningful information to 
consumers in making healthcare decisions because the data will be able 
to reflect differences between facilities in COVID-19 vaccination 
coverage among HCP within a relatively short timeframe.
    Comment: A few commenters did not support updating the 
specifications for the COVID-19 Vaccination Coverage Among HCP measure 
because the PHE has expired and the Conditions of Participation (CoPs) 
for hospitals have been revised to no longer require reporting of this 
data. One commenter recommended removal of the measure for this reason. 
One commenter recommended that in addition to CoP alignment, the 
measure should capture individuals who decline vaccination. One 
commenter recommended removing non-clinical staff from the measure.
    Response: We note that CoPs are a set of health and safety 
standards that health care organizations must meet to begin or continue 
participation in Medicare and Medicaid programs. As we acknowledged in 
the CY 2024 OPPS/ASC proposed rule (88 FR 49775), the PHE expired on 
May 11, 2023. While some state and Federal reporting requirements have 
since changed, the expiration of the PHE for COVID-19 has no bearing on 
the use of this measure for quality reporting because vaccination 
continues to be an essential tool in preventing COVID-19 transmission 
and that monitoring and surveillance of vaccination rates through 
measure performance is important as it provides patients, 
beneficiaries, and their caregivers with information to support 
informed decision-making.
    While CMS requirements for Medicare and Medicaid-certified 
providers and suppliers to ensure that their staff were fully 
vaccinated for COVID-19 have ended with the expiration of the PHE, 
hospitals will continue to report on a reduced number of COVID-19 data 
elements through April 30, 2024 (FY 2023 IPPS/LTCH PPS final rule; 87 
FR 48787).
    We believe this measure continues to align with our goals to 
promote wellness and disease prevention, especially in light of new 
variants and an increase in COVID-19 infection and hospitalizations as 
of September 2023. Under CMS' Meaningful Measures Framework 2.0, the 
COVID-19 Vaccination Coverage Among HCP measure addresses the quality 
priorities of ``Immunizations'' and ``Public Health'' through the 
Meaningful Measures Area of ``Wellness and Prevention.'' Under the 
National Quality Strategy, the measure addresses the goal of Safety 
under the priority area Safety and Resiliency. As part of the 
Administration's continued response to COVID-19, and in light of the 
presence of new variants that have resulted in higher rates of 
infection and hospitalizations as of September 2023, we will continue 
to work to protect individuals and communities from the virus and its 
worst impacts.\260\
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    \260\ Centers for Disease Control and Prevention (August 23, 
2023). Risk Assessment Summary for SARS CoV-2 Sublineage BA.2.86 
Available at: https://www.cdc.gov/respiratory-viruses/whats-new/covid-19-variant.html.
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    Comment: A few commenters expressed concern that the COVID-19 
Vaccination Coverage Among HCP measure has not been endorsed by the CBE 
and recommended endorsement. One commenter recommended the continual 
monitoring of the measure for unintended consequences since it has not 
undergone full validity and reliability testing.
    Response: The current version of the measure received CBE 
endorsement (CBE 3636, ``Quarterly Reporting of COVID-19 
Vaccination Coverage among Healthcare Personnel'') on July 26, 2022. As 
stated when we first adopted CBE 3636 in the CY 2022 OPPS/ASC 
final rule (86 FR 63828), we prefer to adopt measures that have been 
endorsed by the entity with a contract under section 1890(a) of the 
Act; however, the requirement that measures reflect consensus among 
affected parties can be achieved in other ways, including through the 
measure development process, through broad acceptance, use of the 
measure(s), and through public comment. Although the COVID-19 
Vaccination Coverage Among HCP measure was not CBE-endorsed, the 
measure steward, CDC, submitted the measure for consideration in the 
Fall 2021 measure cycle. Additionally, we considered whether there are 
other available measures that assessed COVID-19 vaccination rates among 
HCP and found no other feasible and practical measures on the topic of 
COVID-19 vaccination among HCP. The CDC intends to submit the modified 
measure for endorsement as the current version of the measure has 
already received endorsement.
    Comment: A few commenters recommended that HOPDs stratify the 
measure data to identify sub-populations of HCP that have lower vaccine 
uptake.
    Response: We thank the commenters for their recommendation; 
however, as we stated in the CY 2024 OPPS/ASC proposed rule, the 
measure cannot be stratified since the data are submitted at an 
aggregate rather than an individual level (88 FR 49776).
    Comment: One commenter did not support inclusion of the measure in 
the Hospital OQR Program measure set due to conflict between state and 
local mandates and Federal quality reporting requirements. Another 
commenter recommended that the measure specifications have proper 
exclusion criteria in alignment with Federal and state vaccination 
exemption policies. Another commenter requested clarification on how 
the elimination of the vaccine mandate will impact the adoption or use 
of the measure.
    Response: We reiterate that the Hospital OQR Program is a CMS 
quality reporting program separate from state, local, and Federal 
policies, including policies surrounding vaccination exemption. We note 
that neither the proposed modified measure nor the current version of 
the measure mandates vaccines, and the elimination of the Federal 
vaccine mandate is immaterial to the adoption and use of the measure.
    Comment: One commenter expressed concern on how the measure may 
result in unintended consequences of exacerbating workforce shortages.
    Response: We note that neither the proposed modified measure nor 
the current version of the measure mandates vaccines, nor do they 
reward or penalize HOPDs for the rate of HCP who have received a COVID-
19 vaccine. Therefore, we believe it is unlikely that the measure will 
have any bearing on existing or future workforce shortages. For 
successful program participation, the COVID-19 Vaccination Coverage 
Among HCP measure only requires HOPDs to collect and report COVID-19 
vaccination data that would support public health surveillance and 
provide beneficiaries and their caregivers information to support 
informed decision-making.
    Comment: One commenter did not support the measure because it did 
not

[[Page 81968]]

consider those who opted out of receiving the vaccine due to religious 
or medical reasons. A few commenters recommended that CMS include an 
exclusion for sincerely held religious beliefs to adhere to HHS Office 
for Civil Rights Guidance. Some of these commenters also requested the 
measure be updated to track the number of HCP who decline vaccination. 
A few commenters observed that there are many factors beyond a 
facility's control that may affect performance on this measure.
    Response: We recognize that there are many reasons, including 
religious objections and health concerns which may lead individual HCP 
to decline vaccination. The CDC's NHSN tool allows facilities to report 
on the number of HCP who were offered a vaccination but declined for 
religious or philosophical objections. We emphasize that neither the 
proposed modified measure nor the current version of the measure 
mandate vaccines, and that the COVID-19 Vaccination Coverage Among HCP 
measure only requires reporting of vaccination rates for successful 
program participation. We understand the commenters' concern that there 
are many factors outside of a facility's control that could affect 
vaccination coverage; however, we believe that all facilities face such 
concerns, and that public reporting of these data can help patients and 
their caregivers identify which HOPDs have better vaccination coverage 
among their HCP.
    Comment: A commenter requested clarification on whether NHSN data 
submission for the measure meets all requirements for the measure under 
the Hospital OQR Program.
    Response: The data for this measure can only be reported through 
NHSN, and no separate reporting to CMS is required. We refer readers to 
the Successful Reporting in the Hospital OQR Program guide for more 
information on how to register and submit data using NHSN, available 
at: https://www.qualityreportingcenter.com/globalassets/2023/02/oqr/py-2024-hospital-oqr-successful-reporting-guide-final508.pdf.
    After consideration of the public comments we received, we are 
finalizing our proposed modification to the COVID-19 Vaccination 
Coverage Among HCP Measure in the Hospital OQR Program as proposed.
b. 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 with comment period (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 is being used.\261\ For purposes of this 
modification to the Cataracts Visual Function measure, the survey 
instruments we considered and proposed 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. 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 Hospital OQR Program Specifications Manual for 
additional detail, which is available at: https://qualitynet.cms.gov/outpatient/specifications-manuals.
---------------------------------------------------------------------------

    \261\ 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 with comment period (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.\262\ While all 16 
survey instruments demonstrate usefulness for detecting clinically 
important changes in cataract patients, some survey instruments' 
detection sensitivity scored higher than others.\263\
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    \262\ 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.
    \263\ 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. 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. Thus, in 
the CY 2024 OPPS/ASC proposed rule (88 FR 49777 through 49779), we 
proposed 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. We proposed 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:

 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 considered 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 stated 
our belief that the three survey instruments listed above would allow 
HOPDs to select the length of the survey to be administered while 
ensuring

[[Page 81969]]

adequate validity and reliability.264 265 266 All three of 
the 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 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 eight questions for the VF-8R. Even 
with fewer numbers of questions, all three of the survey instruments 
have been validated as providing results comparable to the NEI VFQ-51. 
In addition, all three of the survey instruments are readily available 
for hospitals to access and use.
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    \264\ 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.
    \265\ 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.
    \266\ 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.
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    In the CY 2024 OPPS/ASC proposed rule (88 FR 49778) we proposed 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).\267\
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    \267\ 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.\268\ 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.\269\ 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.\270\
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    \268\ 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.
    \269\ Ibid.
    \270\ 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.\271\ 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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    \271\ Mangione CM, Phillips RS, Seddon JM, 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, the inclusion of this survey instrument in this measure's 
specifications would allow 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.\272\ Further, 
if a hospital finds the NEI VFQ-25 particularly burdensome to 
administer, the hospital may choose from the other two survey 
instruments proposed for inclusion in this measure's specifications, as 
both of these have even fewer survey questions to administer.
---------------------------------------------------------------------------

    \272\ 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 proposed 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.273 274 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. 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.
---------------------------------------------------------------------------

    \273\ Ibid.
    \274\ 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 proposed 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.\275\ 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.\276\ Studies using this survey instrument generally 
report significant and clinically important improvement following 
cataract surgery.\277\ The VF-14 additionally has achieved adequate 
reliability and validity, proving it to be a dependable survey 
instrument for cataract outcomes.278 279
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    \275\ 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.
    \276\ Ibid.
    \277\ Ibid.
    \278\ Ibid.
    \279\ 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.
---------------------------------------------------------------------------

    In the CY 2024 OPPS/ASC proposed rule (88 FR 49809), we also 
proposed the VF-8R as it is the most concise of the three survey 
instruments while still achieving adequate validity and 
reliability.\280\ The VF-8R consists of questions related to reading, 
fine handwork, writing, playing board games, and watching 
television.\281\ Given its conciseness compared to the majority of 
currently available survey instruments and its adequate psychometric 
properties, we stated our belief that the VF-8R would be beneficial for 
measuring cataract surgery outcomes without prompting further patient 
survey fatigue.\282\
---------------------------------------------------------------------------

    \280\ Ibid.
    \281\ Pre-Cataract Surgery--Visual Functioning Index (VF-8R) 
Available at: https://www.aao.org/practice-management/coding/updates-resources. (In the CY 2024 OPPS/ASC proposed rule, we cited 
this information to: https://eyecaresite.com/wp-content/uploads/2020/02/Visual-Functioning-Index-Pre-Cat-SX.pdf. However, after 
review, the information appears to have moved. Thus, we have updated 
the citation in this final rule.)
    \282\ Ibid.

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[[Page 81970]]

    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 proposed 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 will 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 and 
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.283 284 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.285 286 These findings support the 
inclusion of varying survey instrument-collection methods for patient 
and provider convenience.
---------------------------------------------------------------------------

    \283\ Bhandari NR, 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.
    \284\ 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.
    \285\ 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.
    \286\ Meyer VM, Benjamens S, Moumni ME, 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 invited public comment on the proposal.
    Comment: Many commenters supported our proposal to modify the 
survey instruments allowable for the Cataracts Visual Function measure 
beginning with the voluntary CY 2024 reporting period. Several 
commenters concurred with CMS that this modification would standardize 
data collection and ensure comparability of the measure across HOPDs. 
Several commenters also expressed support for the modification because 
the three survey instruments demonstrate adequate reliability and 
validity.
    Response: We thank commenters for their support. We agree that 
limiting the allowable survey instruments used to report on the 
Cataracts Visual Function measure to three survey instruments of 
different lengths will allow for a more standardized approach to data 
collection and improve measure reliability. We emphasize that all three 
surveys demonstrate adequate reliability and validity, which 
demonstrates that they are dependable survey instruments for measuring 
cataract outcomes. Further, by adopting this modification for this 
measure, we will be promoting alignment with the ASCQR Program.
    Comment: Several commenters did not support modification of the 
survey instruments allowable for the Cataracts Visual Function measure 
and recommended that the measure be removed altogether from the 
Hospital OQR Program measure set, stating that the modification does 
little to address reporting burden, which they believe outweighs the 
measure's utility in improving care for patients undergoing cataract 
procedures.
    Response: We acknowledge the commenters' concerns regarding burden 
but respectfully disagree that this measure should be removed from the 
Hospital OQR Program as we believe the benefits of the measure outweigh 
the reporting burden. Cataract surgery is one of the most commonly 
performed procedures in HOPDs, and there are currently no other 
measures assessing the quality of care provided for this procedure for 
the Hospital OQR Program. As a patient reported outcome measure, this 
measure aligns with the CMS National Quality Strategy (NQS) ``Foster 
Engagement'' goal, which seeks to increase engagement between 
individuals and their care teams to improve quality, establish trusting 
relationships, and bring the voices of people and caregivers to the 
forefront. The Meaningful Measures 2.0 goals also prioritize patient-
reported measures and promoting better collection and integration of 
patient voices across CMS' quality programs.
    We believe that the value of the information the measure provides 
to consumers about quality of care justifies the potential 
administrative burden for facilities reporting on it. As some HOPDs 
have been voluntarily reporting this measure successfully, we believe 
this indicates the measure is not overly burdensome, and that 
standardizing the allowable survey instruments will further improve its 
usability and reliability in this setting. We wish to reiterate that 
when selecting allowable surveys, we considered a variety of factors, 
including accessibility and prevalence, and that we proposed to limit 
the allowable surveys to the NEI-VFQ-25, VF-14, and VF-8R as they are 
commonly adopted survey instruments that are readily available online 
for entities to access and use. We also note that, in accordance with 
CMS standards,\287\ hospitals failing to reach established thresholds 
will not be publicly reported but can still receive data through their 
Preview Reports which can drive quality improvement efforts.
---------------------------------------------------------------------------

    \287\ 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.
---------------------------------------------------------------------------

    Comment: A few commenters did not support this measure because it 
was unclear to them if the revisions have been tested to ensure 
performance scores are reliable and valid. One commenter recommended 
further reliability and validity testing, as well as CBE endorsement, 
before adoption into the Hospital OQR Program.
    Response: We stated in the CY 2024 OPPS/ASC proposed rule (88 FR 
49778)

[[Page 81971]]

our belief that the three proposed survey instruments (NEI VFQ-25, VF-
14, and VF-8R) will allow HOPDs to select the length of the survey to 
be administered while ensuring adequate validity and reliability, and 
cited literature to support this belief.288 289 290 We also 
emphasize that all three surveys demonstrate adequate reliability and 
validity, which demonstrates that they are dependable survey 
instruments for measuring cataract outcomes. Additionally, we wish to 
reiterate that scientific literature demonstrates that self-
administered surveys can produce statistically reliable 
results.291 292 Regarding CBE endorsement, the current 
version of the measure in the Hospital OQR Program received CBE 
endorsement (CBE 3636) on July 26, 2022. The measure steward 
(CDC) is pursuing endorsement for the modified version of this measure.
---------------------------------------------------------------------------

    \288\ 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.
    \289\ 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.
    \290\ 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.
    \291\ 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.
    \292\ 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.
---------------------------------------------------------------------------

    Comment: Many commenters provided recommendations regarding 
reporting requirements of the Cataracts Visual Function measure. Some 
of these commenters believed that the measure should remain voluntary 
in the Hospital OQR Program. One commenter recommended that the measure 
remain voluntary until a digital version is developed, in order to 
support the transition away from chart-abstracted measures. A couple of 
commenters conversely requested to make this measure mandatory to boost 
reporting, citing concerns that only a handful of facilities are 
voluntarily collecting these data and publicly reporting their 
performance.
    Response: We appreciate commenters' input regarding maintaining 
this measure as voluntary. We are committed to having a cataract 
surgery, patient-reported outcome measure for the Hospital OQR Program, 
and our intent is to maintain this measure as voluntary while we 
consider mandatory reporting in future rulemaking. We will continue to 
evaluate the status of this measure moving forward. We also acknowledge 
that this measure requires cross-setting coordination among clinicians 
of different specialties (surgeons and ophthalmologists), increasing 
burden. If we determine that the value of mandatory reporting justifies 
increased burden on HOPDs, we will propose to transition the measure to 
mandatory reporting through rulemaking. Regarding the commenter's 
request to maintain the measure as voluntary until a digital version is 
available, we agree that moving from chart-abstracted measures to 
digital measures is an important step in working toward 
interoperability as well as reducing reporting burden, goals we 
outlined in the FY 2022 IPPS/LTCH PPS final rule (86 FR 45342 and 
45343) and the FY 2023 IPPS/LTCH PPS final rule (87 FR 49181), and 
intend to take into consideration when making measure decisions in the 
future.
    Comment: One commenter recommended removing the Cataracts Visual 
Function measure and adopting the Toxic Anterior Segment Syndrome 
(TASS) measure instead. Another commenter recommended the addition of 
Catquest 9 Short Form (Catquest-9SF) as an acceptable alternative to 
the proposed NEI VFQ-25, the VF-14, and VF-8R. One commenter 
recommended that CMS publicly report trends on HOPDs' choices of survey 
instruments. One commenter recommended CMS provide additional best 
practices as more facilities adopt the use of these three surveys 
during the voluntary measurement period.
    Response: Although we are not currently considering the adoption of 
the TASS measure, we will continue to monitor the effects of the 
Cataracts Visual Function measure and will consider the adoption of new 
measures in future rulemaking. We note that the TASS measure is used to 
assess the number of ophthalmic anterior segment surgery patients 
diagnosed with TASS within 2 days of surgery. The Cataracts Visual 
Function measure assesses the percentage of patients aged 18 years and 
older who had cataract surgery and had improvement in visual function 
achieved within 90 days following the cataract surgery. Therefore, the 
TASS measure could not seamlessly replace the Cataracts Visual Function 
measure, as they measure two different outcomes. Similarly, we will 
monitor the impact of the three survey options (NEI VFQ-25, the VF-14, 
and VF-8R) and consider adjusting the chosen standardized surveys as 
needed in future rulemaking. We will also consider the value of 
reporting HOPD's choices of survey instruments in future rulemaking, as 
well as developing best practices based on facility use of these 
surveys during the voluntary measurement period.
    Comment: One commenter, while supportive of limiting the survey 
instruments and allowing flexible administration to simplify data 
collection, expressed concerns about the complexity and burden of 
cross-setting coordination among clinicians of different specialties.
    Response: We believe hospitals, facilities, ophthalmologists, and 
other clinicians should actively and routinely engage in exchanging 
information to better communicate and coordinate patient care to ensure 
and improve quality of care. We note that while it is recommended that 
the HOPD obtain the survey results from the appropriate physician or 
optometrist, in an effort to reduce administrative burden, the surveys 
can be administered by the HOPD via phone, mail, email, or during 
clinician follow-up. Patients can also self-administer the surveys and 
submit them directly to the HOPD via mail or email. Due to commenter 
concerns on complexity and burden of cross-setting coordination among 
clinicians of different specialties, we maintain this measure as 
voluntary.
    Comment: A few commenters recommended exploring whether this 
measure is best captured under the Quality Payment Program, because 
patients likely receive ongoing care following the procedure from an 
ophthalmologist and not the hospital outpatient department or 
ambulatory surgical center. Commenters further recommended exploring 
adoption of this measure as part of its development of specialist-
focused Merit-based Incentive Payment System (MIPS) Value Pathways 
(MVPs) around ophthalmology care. One commenter noted that this measure 
was not originally developed for use at the HOPD level.
    Response: This measure is already included in the Quality Payment 
Program's Merit-based Incentive Payment System (MIPS) (Measure 
303) for MIPS eligible clinicians (as defined in 42 CFR 
414.1305) to report. Even though individual clinicians may report this 
measure in MIPS, we continue to view this measure as appropriate for 
assessing hospital-level of care as the procedures are provided in a 
hospital.
    We appreciate the commenter's suggestion to include this measure in 
a

[[Page 81972]]

potential future ophthalmology care MVP. We will consider this 
suggestion in future rulemaking.
    Furthermore, we continue to view this measure as appropriate for 
assessing hospital-level of care as the procedures are provided in 
HOPDs. We emphasize the importance of measuring cataract outcomes in 
all procedural settings.
    After consideration of the public comments we received, we are 
finalizing our proposal to modify the Cataracts Visual Function measure 
as proposed. We also refer readers to the discussion of a similar 
proposal for the same measure as used in the ASCQR Program in section 
XV.B.4.b of this final rule with comment period.
c. 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.\293\ 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.\294\ 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.'' \295\
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    \293\ Centers for Disease Control and Prevention (2022). 
Colorectal Cancer Statistics. Available at: https://gis.cdc.gov/Cancer/USCS/#/AtAGlance/.
    \294\ 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.
    \295\ 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.
---------------------------------------------------------------------------

    In May 2021, the United States Preventive Services Task Force 
(USPSTF) issued a revised Final Recommendation Statement on CRC 
Screening.\296\ 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.\297\ 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 45.298 299 300 Based on the recent changes in clinical 
guidelines to begin CRC screening at age 45 instead of age 50, in the 
CY 2024 OPPS/ASC proposed rule (88 FR 49779 and 49780), we proposed 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.
---------------------------------------------------------------------------

    \296\ US Preventive Services Task Force (2021). Screening for 
Colorectal Cancer. JAMA, 325(19), 1965-1977. https://doi.org/10.1001/jama.2021.6238.
    \297\ Ibid.
    \298\ 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.
    \299\ 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.
    \300\ 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.
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(2) Overview of Measure
    We refer readers to the CMS Measures Inventory Tool (CMIT) 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.301 302 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.'' 
\303\ In the CY 2024 OPPS/ASC proposed rule (88 FR 49780), we proposed 
to amend the measure's denominator language by replacing the phrase 
``aged 50 years'' with the phrase ``aged 45 years.'' Under the 
proposal, 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.'' \304\ 
We did not propose any changes to the measure numerator, other measure 
specifications, exclusions, or data collection for the Colonoscopy 
Follow-Up Interval measure.
---------------------------------------------------------------------------

    \301\ Centers for Medicare & Medicaid Services. (2023). Measures 
Inventory Tool. Available at: https://cmit.cms.gov/cmit/#/MeasureView?variantId=793&sectionNumber=1.
    \302\ Centers for Medicare & Medicaid Services. Qualitynet Home. 
Available at: https://qualitynet.cms.gov/outpatient/specifications-manuals.
    \303\ Centers for Medicare & Medicaid Services (2023). Measures 
Inventory Tool. Available at: https://cmit.cms.gov/cmit/#/MeasureView?variantId=793&sectionNumber=1.
    \304\ 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 proposed 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, 
in the CY 2024 OPPS/ASC proposed rule (88 FR 49779 and 49780), we 
proposed to modify the Colonoscopy Follow-Up Interval measure 
denominator to ``all patients aged 45 to 75 years'' for the Hospital 
OQR Program. We proposed the modification of the Colonoscopy Follow-Up 
Interval measure beginning with the CY 2024 reporting period/CY 2026 
payment determination.
    We invited public comment on the proposal.
    Comment: Many commenters supported the modification of the 
Colonoscopy Follow-Up Interval measure beginning with the CY 2024 
reporting period/CY 2026 payment determination. Many commenters stated 
that the modification to the denominator aligns with clinical 
guidelines. Some of these commenters noted the modification to the 
denominator provides alignment across quality programs. Other 
commenters supported the proposal because commenters believe that the 
measure will ensure appropriate patient access to recommended cancer 
screening and prevention services. Another

[[Page 81973]]

commenter expressed that the measure modification will enable CMS to 
measure appropriate care more meaningfully and to better differentiate 
facilities with successful preventive care efforts. Another commenter 
supported the proposal because the commenter believes the measure 
modification could be key to mitigating disparities in CRC screening 
and early detection among different sociodemographic groups and, 
therefore, is supportive of CMS' health equity goals. Another commenter 
supported the proposal because the commenter believes the measure 
modification will promote timely and connected patient care.
    Response: We thank commenters for supporting our proposal to modify 
the Colonoscopy Follow-Up Interval measure denominator to ``all 
patients aged 45 to 75 years'' for the Hospital OQR Program. We agree 
that it is important to align requirements across quality reporting 
programs and clinical guidelines when relevant. We believe that 
consistent policy across programs in terms of minimum age limits for 
CRC screening tests is critical to the public's understanding of 
evolving CRC screening recommendations. We also agree that CRC 
screening plays a key role in the prevention and early detection of 
cancer.
    Comment: One commenter suggested that CMS remove the measure from 
the Hospital OQR Program because the commenter believes the measure 
should not be tracked by hospitals, but instead should be tracked by 
the patient's primary care physician.
    Response: We support the inclusion of the Colonoscopy Follow-up 
Interval measure in the Hospital OQR Program and reiterate that, while 
this measure is suitable for clinician office settings, we continue to 
believe that the measure is also suitable for settings, such as HOPDs, 
that provide the same types of services to the same target populations 
for the measure. The intent of the measure is to improve the 
coordination of services, reduce fragmented care, encourage redesigned 
care processes for high quality and efficient service delivery, and 
incentivize higher value care. Additionally, we continue to believe 
this measure aligns with our goals to promote wellness and disease 
prevention. Under CMS' Meaningful Measures Framework 2.0, the 
Colonoscopy Follow-up Interval measure addresses the Meaningful 
Measures Area of ``Wellness and Prevention.'' Under the National 
Quality Strategy, the measure addresses the goals of Outcomes and 
Alignment under the priority area Outcomes and Alignment.
    Comment: A few commenters noted that the modification to this 
measure would increase the patient population that is eligible for the 
measure and recommended that CMS maintain the same sample size to 
prevent increased administrative burden.
    Response: The only change proposed to this measure was a change in 
the measure denominator to ``all patients aged 45 to 75 years.'' We 
understand that the measure would increase the patient population that 
is eligible for the measure, however, we did not propose any other 
changes to the measure specifications or sampling methodology for the 
measure, including any changes to minimum sampling size requirements. 
Therefore, we do not believe that the modification to the denominator 
increases the burden on hospitals. We refer readers to the Population 
and Sampling Specifications section of the Hospital OQR Program 
Specifications Manual for additional detail, which is available at 
https://qualitynet.cms.gov/outpatient/specifications-manuals.
    After consideration of the public comments we received, we are 
finalizing our proposal to modify the Colonoscopy Follow-Up Interval 
measure as proposed. We also refer readers to the discussion of a 
similar proposal for the same measure as used in the ASCQR Program in 
section XV.B.4.c of this final rule with comment period.
3. 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 proposed for adoption in the CY 2024 OPPS/ASC proposed 
rule (88 FR 49780 and 49790) for the Hospital OQR Program. 
Specifically, we proposed to: (1) re-adopt the 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. We discuss each of these measures, along with 
the public comments that we received on them, in subsequent sections.
a. Proposed Re-Adoption of the Hospital Outpatient Department Volume 
Data on Selected Outpatient Surgical Procedures 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
(1) Background
    Hospital care has been gradually shifting from inpatient to 
outpatient settings.\305\ 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

[[Page 81974]]

2029.\306\ 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 teamwork and increased surgical 
experience, discussed in more detail below.\307\ Given the association 
between volume and outcomes, this information could provide valuable 
insight to patients when choosing a HOPD.
---------------------------------------------------------------------------

    \305\ 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.
    \306\ 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/.
    \307\ 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.\308\ 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.309 310 311 Specifically, larger facility surgical 
procedure volume may be associated with better outcomes due to having 
characteristics that improve care.\312\ 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.\313\ 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.
---------------------------------------------------------------------------

    \308\ Ibid.
    \309\ Ibid.
    \310\ 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.
    \311\ 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.
    \312\ 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.
    \313\ 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. In the CY 2012 OPPS/ASC final 
rule (76 FR 74466 through 74468), 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 \314\ of procedures 
frequently performed in the hospital outpatient setting: 
Cardiovascular, Eye, Gastrointestinal, Genitourinary, Musculoskeletal, 
Nervous System, Respiratory, Skin, and Other.\315\ 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).316 317 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).
---------------------------------------------------------------------------

    \314\ 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 following 
eight categories: Cardiovascular, Eye, Gastrointestinal, 
Genitourinary, Musculoskeletal, Nervous System, Respiratory, and 
Skin. The category ``other'' was added following this measure's 
adoption. This measure collected data ranging from eight to nine 
procedural categories while incorporated in the OQR Program.
    \315\ Centers for Medicare & Medicaid Services (2016). Hospital 
Outpatient Specifications Manuals version 9.1. Available at: https://qualitynet.cms.gov/outpatient/specifications-manuals#tab9.
    \316\ 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.
    \317\ 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 
and 59430), we removed the HOPD Procedure Volume measure, citing 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 did not 
offer insight into the facilities' overall performance or quality 
improvement regarding 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.\318\ 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.\319\ 
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.
---------------------------------------------------------------------------

    \318\ 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.
    \319\ 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

[[Page 81975]]

measure outweighs its value (87 FR 72104 and 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.\320\
---------------------------------------------------------------------------

    \320\ 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.
---------------------------------------------------------------------------

    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 and 72105). However, many studies in recent 
years have shown that volume does serve as an indicator of quality of 
care.321 322 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.323 324 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.325 326
---------------------------------------------------------------------------

    \321\ 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.
    \322\ 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.
    \323\ 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.
    \324\ 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.
    \325\ 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.
    \326\ 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 HOPD Procedure Volume measure, if re-adopted with the 
modifications discussed below, would collect data regarding the 
aggregate count of selected surgical procedures. The most frequent 
outpatient procedures fall into one of eight categories: 
Cardiovascular, Eye, Gastrointestinal, Genitourinary, Musculoskeletal, 
Nervous System, Respiratory, and Skin.\327\ Under the 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.\328\
---------------------------------------------------------------------------

    \327\ Centers for Medicare & Medicaid Services (2016). Hospital 
Outpatient Specifications Manuals version 9.1. Available at: https://qualitynet.cms.gov/outpatient/specifications-manuals.
    \328\ Data source: Part A and B claims for Outpatient Hospitals 
for services January 1, 2022-December 31, 2022.
---------------------------------------------------------------------------

    We also proposed 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.
    In the CY 2024 OPPS/ASC proposed rule (88 FR 49782), we proposed 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 with comment period, (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/#/.
    In the CY 2024 OPPS/ASC proposed rule (88 FR 49782), we also 
proposed 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 final rule with 
comment period 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.\329\ 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

[[Page 81976]]

volume of procedures would relate to the program's goals of improving 
the safety and quality of outpatient procedures in HOPDs.\330\ 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.\331\
---------------------------------------------------------------------------

    \329\ 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.
    \330\ Ibid.
    \331\ 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.\332\ 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 volume-outcome 
relationship across eight studies.\333\
---------------------------------------------------------------------------

    \332\ 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.
    \333\ 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.\334\ 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.\335\ 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.336 337
---------------------------------------------------------------------------

    \334\ 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/.
    \335\ 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.
    \336\ 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.
    \337\ 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 proposed 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.\338\
---------------------------------------------------------------------------

    \338\ 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 this final rule with 
comment period, 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 CBE 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 CBE, including the measure development process, broad 
acceptance of the measure(s), use of the measure(s), and public 
comment.
    We proposed to re-adopt the measure because we did not find any 
other measures of procedure volume. Additionally, this measure was 
previously in the Hospital OQR 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, in the CY 2024 OPPS/ASC proposed rule (88 FR 
49780 through 49783), we proposed the re-adoption of this measure in 
the Hospital OQR Program pending endorsement by a national CBE.
    We invited public comment on the proposal.
    Comment: Several commenters expressed support for our proposal to 
re-adopt with modification the HOPD Procedure Volume measure beginning 
with the voluntary CY 2025 reporting period followed by mandatory 
reporting beginning with the CY 2026 reporting period/CY 2028 payment 
determination. Some of these commenters expressed that this measure 
provides valuable insights about quality of care and supports consumer 
decision-making. These commenters also expressed support for the 
measure's more granular reporting at the procedure level for the five 
most frequently occurring procedures in each of the clinical 
categories. One commenter expressed their support of this measure's 
likelihood to reduce administrative burden.
    Response: We thank the commenters for their support. Although we 
are not re-adopting the HOPD Procedure Volume measure at this time, we 
agree that this measure provides valuable insights into care quality 
and is supportive of consumer decision-making.
    Comment: Many commenters did not support our proposal to re-adopt 
with modification the HOPD Procedure Volume measure. Some of these 
commenters believe there is a lack of evidence that surgical volume is 
an indicator of quality, specifically in the outpatient setting, and a 
few commenters stated that the measure does not align with CMS' 
Meaningful Measures 2.0 framework for this reason. Furthermore, a few 
commenters believe that CMS has not provided evidence for a threshold 
to determine at what particular volume patient outcomes improve for 
specific procedures. A few commenters expressed concern that procedural 
volume is impacted by factors outside of the hospital's control. 
Additionally, a few commenters cited evidence which indicates higher 
volume for transcatheter aortic valve replacement (TAVR) procedures is 
not an indicator of superior care quality.339 340
---------------------------------------------------------------------------

    \339\ Nelson AJ, Wegermann ZK, Gallup D, et al. Modeling the 
Association of Volume vs Composite Outcome Thresholds With Outcomes 
and Access to Transcatheter Aortic Valve Implantation in the US. 
JAMA Cardiol. 2023;8(5):492-502. https://doi.org/10.1001/jamacardio.2023.0477.
    \340\ Russo MJ, McCabe JM, Thourani VH, et al. Case Volume and 
Outcomes After TAVR With Balloon-Expandable Prostheses: Insights 
From TVT Registry. J Am Coll Cardiol. 2019;73(4):427-440. Available 
at: https://doi.org/10.1016/j.jacc.2018.11.031.
---------------------------------------------------------------------------

    Response: We disagree with commenters that volume cannot serve as 
an indicator of care quality along with other quality information. We 
reiterate

[[Page 81977]]

that recently published scientific literature supports the position 
that volume metrics can serve as an indicator of quality, denoting 
which facilities have experience with certain outpatient procedures and 
assist consumers in making informed decisions about where they receive 
care. Furthermore, a study found that congestive heart failure (CHF) 
patients who stayed in hospitals with more experience in managing CHF 
received higher quality care and experienced better outcomes.\341\ 
Referencing commenter concern of a lack of evidence that surgical 
volume is an indicator of quality, specifically in the outpatient 
setting, in the CY 2024 OPPS/ASC proposed rule (88 FR 49782), we cited 
one study which found that patients who had total hip arthroplasties 
performed at high-volume hospitals had lower rates of surgical site 
infections, complications, and mortality compared to patients at low-
volume hospitals.\342\ Although we are not re-adopting the HOPD 
Procedure Volume measure at this time for the reasons discussed below, 
we will continue to assess the evidence linking volume to quality of 
care to ensure alignment with the Meaningful Measures 2.0 Framework 
goal to use ``only high-quality measures impacting key quality 
domains.''
---------------------------------------------------------------------------

    \341\ Joynt, K.E., Orav, E.J., & Jha, A.K. (2011). The 
association between hospital volume and processes, outcomes, and 
costs of care for congestive heart failure. Annals of internal 
medicine, 154(2), 94-102. https://doi.org/10.7326/0003-4819-154-2-201101180-00008.
    \342\ Mufarrih, S.H., Ghani, M.O.A., Martins, R.S. et al. Effect 
of hospital volume on outcomes of total hip arthroplasty: a 
systematic review and metaanalysis. J Orthop Surg Res 14, 468 
(2019). Available at: https://doi.org/10.1186/s13018-019-1531-0.
---------------------------------------------------------------------------

    With respect to the determination of volume thresholds indicating 
improved outcomes, while the scientific literature points to an 
association between volume and outcomes, we do not intend to designate 
volume thresholds indicating proven desired outcomes. We believe it is 
important for patients to have the ability to access information that 
can inform their decision-making when choosing a hospital. Furthermore, 
we acknowledge that procedural volume can be impacted by factors 
outside of the hospital's control. We want to provide transparency to 
patients and consumers with respect to volume, in the case that it 
helps inform patient decision-making.
    We acknowledge the publication of recent research indicating that 
when patients were treated in high-volume hospitals versus those with 
best historical outcomes, there was no significant reduction in 
observed versus modeled adverse events.343 344 We believe 
these recent studies indicate that hospital variation in care metrics 
is important, but that it does not discount the conclusions of the 
studies mentioned above or address instances where facility volume is 
low. Given the potential association between volume and outcomes, we 
believe volume information can be useful to patients and consumers. 
Although we are not re-adopting the HOPD Procedure Volume measure at 
this time, given that there is a potential association between volume 
and outcome, we believe this measure provides transparency, including 
information about volume that may be informative to patients.
---------------------------------------------------------------------------

    \343\ Nelson AJ, Wegermann ZK, Gallup D, et al. Modeling the 
Association of Volume vs Composite Outcome Thresholds With Outcomes 
and Access to Transcatheter Aortic Valve Implantation in the US. 
JAMA Cardiol. 2023;8(5):492-502. https://doi.org/10.1001/jamacardio.2023.0477.
    \344\ Russo MJ, McCabe JM, Thourani VH, et al. Case Volume and 
Outcomes After TAVR With Balloon-Expandable Prostheses: Insights 
From TVT Registry. J Am Coll Cardiol. 2019;73(4):427-440. Available 
at: https://doi.org/10.1016/j.jacc.2018.11.031.
---------------------------------------------------------------------------

    Comment: Some commenters did not support our proposal because the 
HOPD Procedure Volume measure was previously removed from the Hospital 
OQR Program measure set due to CMS' stated belief at that time that 
there is a lack of evidence to support this measure's link to improved 
clinical quality.
    Response: When we removed the HOPD Procedure Volume measure from 
the Hospital OQR Program measure set in the CY 2018 OPPS/ASC final rule 
with comment period, we stated our belief at the time that performance 
or improvement on this measure did not result in better patient 
outcomes (82 FR 59429). This belief was due to the lack of evidence 
supporting the measure's link to improved clinical quality at the time 
the CY 2018 OPPS/ASC final rule (82 FR 59429) with comment period was 
published. As discussed in the CY 2024 OPPS/ASC proposed rule (88 FR 
49781), since the measure removal, scientific literature shows that 
volume metrics can serve as an indicator of which facilities are 
experienced with certain outpatient procedures and can assist consumers 
in making informed decisions. More recent literature supports the use 
of volume as a quality-of-care indicator and we continue to believe 
that this information can be of benefit to Medicare beneficiaries and 
other consumers, especially when case volume is low. Therefore, 
although we are not re-adopting the HOPD Procedure Volume measure at 
this time, we recognize the increasing importance of volume in the HOPD 
setting.
    Comment: Many commenters did not support our proposal because they 
stated that they believe the potential administrative burden of the 
HOPD Procedure Volume measure outweighs its potential value.
    Response: The MAP noted 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. Furthermore, our estimates of burden indicate 
that each participating hospital would spend 10 minutes per year to 
submit the data for this measure to CMS, as noted in section XXIV.B.7 
of this final rule with comment period. Although we are not re-adopting 
the HOPD Procedure Volume measure at this time, we believe these 
collection efforts would not impose undue burden on hospitals.
    In addition, this measure would further advance CMS' goal of 
transitioning to a fully digital quality measurement landscape and 
promoting interoperability while helping to decrease reporting burden 
in the long-term. We therefore believe that the value of the measure 
would outweigh potential reporting burden.
    Comment: A few commenters did not support our proposal because they 
believe adoption of the HOPD Procedure Volume measure would drive 
business away from high-risk public hospitals or rural care.
    Response: Although we are not re-adopting the HOPD Procedure Volume 
measure at this time, we do not agree with the commenters' concern that 
public reporting of procedure volume would affect providers' business. 
We have not found, to date, that public reporting associated with this 
measure affects hospitals' service lines in any significant way. For 
this measure, only aggregate data is reported. We do not intend to 
include any qualifiers with publicly displayed data. We believe this 
measure provides transparency to patients, including information about 
volume that may be informative to patients.
    Comment: Several commenters did not support our proposal because 
they believe the HOPD Procedure Volume measure would lead to potential 
misuse through ``perverse incentives'' for providers to perform non-
indicated procedures to increase procedural volume.
    Response: We disagree that the volume measure creates an incentive 
for providers to perform non-indicated procedures. The HOPD Procedure

[[Page 81978]]

Volume measure tracks the top five procedures performed in the 
outpatient setting using CPT codes. The procedures posted by volume 
change yearly; thus, the volume measure could not lead to potential 
misuse through ``perverse incentives'' for providers to perform non-
indicated procedures to increase procedural volume. Furthermore, we did 
not identify significant changes in reported volume information that 
would indicate this measure engendered ``perverse incentives'' for 
providers to perform non-indicated procedures simply to increase 
reported numbers of procedures.
    Comment: Several commenters did not support our proposal to adopt 
with modification the HOPD Procedure Volume measure because they 
believe volume data will be confusing to Medicare patients. Commenters 
explained their belief that such data are limited in value due to lack 
of context related to the clinical appropriateness of the procedure for 
each specific patient as well as the risk profile for the volume of 
patients. Commenters added that the measure does not provide context 
related to overall procedural outcomes.
    Response: We disagree with the commenter's assertion that volume 
data will be confusing to Medicare patients. As we explained in the CY 
2024 OPPS/ASC proposed rule (88 FR 49782), if the proposal was adopted 
in future rulemaking, we intended to publish the measure's results on 
the Care Compare website, which is designed to be a consumer-friendly 
portal for quality information on Medicare providers. We interpret 
commenters' concern about the clinical appropriateness of the procedure 
for each specific patient to indicate concern that the volume measure's 
calculation may appear to be inflated by medically unnecessary 
procedures. We disagree with this concern. We believe the HOPD 
Procedure Volume measure provides fundamental information to patients 
about the frequency with which a procedure is performed in a given 
HOPD. We do not believe that this information is harmful for patients, 
and we believe strongly that equipping patients with as much meaningful 
information as possible about their care builds a stronger health care 
system. We also do not agree that the measure lacks risk profile 
context. As we stated in the CY 2024 OPPS/ASC proposed rule (88 FR 
49781), volume metrics serve as an indicator of which facilities have 
experience with certain outpatient procedures, likely leading to higher 
quality outcomes, and assist consumers in making informed decisions 
about where they receive care. We do agree that other dimensions of 
quality are also important to patients' outcomes in the hospital 
outpatient department, but we believe that the information provided 
through the HOPD Procedure Volume measure results provides transparency 
into volume as a dimension of quality, which may be informative to 
patients. The HOPD Procedure Volume measure is intended to be one of 
many metrics for determining care.
    Although we are not re-adopting the HOPD Procedure Volume measure 
at this time, we continue to believe there is significant evidence 
linking volume to quality of care, and that volume metrics serve as an 
indicator of which facilities have experience with certain outpatient 
procedures and can assist consumers in making informed decisions about 
where they receive care. Based on comments received, we intend to 
reassess the measure's methodology and reconsider how the data may be 
publicly displayed in the most meaningful manner for consumers.
    Comment: A few commenters did not support our proposal to adopt the 
HOPD Procedure Volume measure over challenges related to reporting 
volume by procedure type. One commenter raised concern over a lack of 
consistency in data obtained, as the measure assesses the top five most 
frequently performed surgical procedures, which will change from year 
to year. One commenter raised concern over many services and diagnoses 
distributed over large groups of procedures or diagnostic codes, so 
even if a facility regularly performs a service, a volume measure may 
incorrectly identify it as having little to no experience if no single 
code exceeds a minimum threshold. One commenter expressed concern, 
stating CMS only has access to Medicare/Medicaid claims populations, 
which will likely result in skewed data for surgical procedure volumes 
and outcomes. One commenter expressed that it is unclear how the 
measure provides meaningful information for all patients when the 
categories, as well as the top five procedures per category, are based 
upon Medicare FFS frequency and not frequency across all patients and 
payers. This commenter added that when utilizing claims data, reporting 
is delayed, making it challenging for hospitals to identify gaps and 
improve performance. Another commenter expressed that CMS already has 
access to this data through claims.
    Response: To address commenter concerns over a lack of consistency 
in procedural data obtained year to year, we reiterate that the top 
five procedures in each category would be assessed and updated annually 
to ensure accurate data collection of the most frequently performed 
procedures. Instead of tracking a fixed list of a greater number of 
procedures, we intended to choose the methodology of tracking the top 
five procedures in each category to decrease reporting burden while 
maximizing the usefulness of the reported data. Responding to 
commenter's concerns over the distribution of services over large 
groups of procedural codes, our method is applied consistently across 
all medical providers. As such, all medical providers are equally 
likely to have procedural volume distributed over a large number of 
procedural codes. For this reason, this measure groups some procedural 
codes together within specific procedure categories.\345\ We reiterate 
that the proposal is not being finalized for CY 2024. We will further 
consider this concern in future rulemaking.
---------------------------------------------------------------------------

    \345\ 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.
---------------------------------------------------------------------------

    We acknowledge that relying solely on the use of Medicare FFS 
claims data to simplify reporting would limit the measure to only this 
payer, which may bias the data, misrepresenting the volume of 
procedures performed at a given HOPD. As we note in section 
XIV.B.3.a(1) of this final rule with comment period, the specifications 
for the HOPD Procedure Volume measure include reporting data for non-
Medicare patients. We would like to clarify that hospital procedural 
volume submitted to the CMS web-based tool would be determined by CPT 
codes rather than Medicare and Medicaid claims. The chosen categories 
and top five procedures within each category are intended to be 
informed by recent Medicare claims because we believe they likely 
mirror procedural trends in non-Medicare populations. We would like to 
further investigate procedural frequency trends which may mirror that 
of non-Medicare populations by including both FFS and Medicare 
Advantage data when evaluating categories and most frequently performed 
procedures. We are concerned that not including Medicare Advantage data 
in our sampling estimates could potentially imperil their accuracy, 
particularly as these measures are meant to show procedure volume for 
all patients. We intend to address this measurement subject in the 
future after determining the best way to accurately predict which 
reporting categories would be most useful to hospitals, as

[[Page 81979]]

well as the top five most frequently performed procedures in each 
category.
    Comment: A few commenters did not support our proposal to re-adopt 
with modification the HOPD Procedure Volume measure because it is not 
CBE endorsed. These commenters raised concern over the measure's lack 
of validity and reliability testing.
    Response: As we noted in the CY 2011 OPPS/ASC final rule with 
comment period (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. While the HOPD Procedure Volume 
measure is not CBE-endorsed, we believe this measure reflects consensus 
among affected parties, because the CBE, which represents interested 
parties, reviews and conditionally supported the measure for use in the 
Hospital OQR Program.
    Comment: A few commenters expressed concern that if this measure is 
adopted into the Hospital OQR Program, it could be used in the 
calculation of Star Rating performance. One commenter noted the 
importance of lower-volume sites in providing services to underserved 
populations, such as Black, Hispanic, and rural patients. Another 
commenter raised concern that the cardiovascular procedure studies 
cited by CMS are outdated or inapplicable to their patient population.
    Response: We acknowledge the commenter's concern over the HOPD 
Procedure Volume measure being used in the calculation of Star Rating 
performance. We reiterate that we are not finalizing our proposal to 
adopt this measure currently and there are currently no plans to 
include this measure in Star Rating calculations. Furthermore, we agree 
with the importance of lower-volume sites in providing services to 
patients, including historically underserved populations and will keep 
this in consideration if we re-propose this measure in the future.
    We respectfully disagree that the studies cited in the CY 2024 
OPPS/ASC proposed rule are outdated or inapplicable. One cardiovascular 
study (Saito et al. 2022) was published within the past two years and 
adequately shows that volume at hospitals for this procedure was 
inversely associated with in[hyphen]hospital mortality. We would like 
to reiterate our belief, given the potential association between volume 
and outcome, that it is our duty to provide transparency to patients, 
rather than withhold information that may be informative.
    Comment: Many commenters provided recommendations in response to 
our proposal to re-adopt with modification the HOPD Procedure Volume 
measure. A few commenters recommended that CMS work with interested 
parties to identify additional measures that would be useful or 
complementary in evaluating the shift in procedures from inpatient to 
outpatient setting that would be an appropriate indicator of quality of 
care. A few commenters recommended adoption of a quality metric that 
addresses equity, low-value procedures, or prevention of ambulatory 
care sensitive conditions that are known to result in inpatient 
utilization instead of the HOPD Procedure Volume measure. Furthermore, 
a few commenters recommended reporting all procedures in a specific 
category, rather than the top five performed annually. Another 
commenter recommended a phased-in approach, where we gradually 
introduce new procedure reporting categories each year. One commenter 
recommended only confidential-level feedback than publicly reporting 
this data and tying it to payment. One commenter recommended delaying 
re-adoption of the Volume Indicator measure in favor of more targeted 
quality metrics that do not discourage patients from seeking new and 
innovative procedures.
    Response: We thank commenters for these recommendations. We agree 
that collaboration with interested parties, attention to advancing 
health equity, and refining measure specifications are important when 
identifying useful measures for evaluating the shift in procedures from 
the inpatient to outpatient setting, and will consider these 
recommendations in future rulemaking. We would like to clarify that the 
OQR Program is a pay-for-reporting program and not a value-based 
payment program.
    After consideration of the public comments we received, we are not 
finalizing our proposal to re-adopt with modification 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. We will not finalize 
this measure at this time, as we would like to investigate procedural 
frequency trends which may mirror that of non-Medicare populations by 
conducting analysis that includes FFS and Medicare Advantage data when 
evaluating categories and the most frequently performed procedures. 
Based on comments received, we are reassessing the measure's 
methodology and reconsidering how the data may be publicly displayed. 
We continue to believe there is significant evidence linking volume to 
quality of care, and that volume serves as an indicator of which 
facilities have experience with certain outpatient procedures and can 
assist consumers in making informed decisions about where they receive 
care. We also refer readers to the discussion of a similar proposal for 
the same measure as used in the ASCQR Program in section XV.B.5.a of 
this final rule with comment period.
b. 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 reporting periods in 
CY 2025 and 2026,\346\ followed by mandatory reporting for eligible 
elective procedures occurring July 1, 2024, through June 30, 2025, for 
the FY 2028 payment determination. In the CY 2024 OPPS/ASC proposed 
rule (88 FR 49783 through 49787), we proposed 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.
---------------------------------------------------------------------------

    \346\ In the CY 2024 OPPS/ASC proposed rule (88 FR 49813 and 
49814), we stated these reporting periods as FY. The IQR voluntary 
reporting periods for the THA/TKA PRO-PM are October 23, 2022, 
through June 30, 2023, for 2025 voluntary reporting and April 2, 
2023, through June 30, 2024, for 2026 voluntary reporting.
---------------------------------------------------------------------------

    Approximately 6 million adults aged 65 or older suffer from 
osteoarthritis in the United States.\347\ In 2013, there were 
approximately 568,000 hospitalizations

[[Page 81980]]

billed to Medicare for osteoarthritis.\348\ Hip and knee osteoarthritis 
is one of the leading causes of disability among non-institutionalized 
adults,349 350 and roughly 80 percent of patients with 
osteoarthritis have some limitation in mobility.351 352 
Elective THA and TKA are most commonly performed for degenerative joint 
disease or osteoarthritis, which affects more than 30 million 
Americans.\353\ 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.354 355 356 However, not all patients 
experience benefit from these procedures.\357\ Many patients note that 
their pre-operative expectations for functional improvement have not 
been met.358 359 360 361 In addition, clinical practice 
variation has been well documented in the United 
States,362 363 364 365 366 readmission and complication 
rates vary across hospitals,\367\ and international experience 
documents wide hospital-level variation in patient-reported outcome 
measure results following THA and TKA.\368\
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    \347\ 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.
    \348\ 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/.
    \349\ 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.
    \350\ 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.
    \351\ 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.
    \352\ 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.
    \353\ Centers for Disease Control and Prevention (CDC). 
Osteoarthritis (OA). Accessed March 8, 2019. Available at: https://www.cdc.gov/arthritis/basics/osteoarthritis.htm.
    \354\ 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)80123-8.
    \355\ 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.
    \356\ 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.
    \357\ 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/.
    \358\ 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.
    \359\ 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.
    \360\ 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.
    \361\ 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.
    \362\ 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.
    \363\ 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.
    \364\ 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.
    \365\ 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.
    \366\ 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.
    \367\ 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/.
    \368\ 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.\369\ 
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,370 371 are influenced by a range 
of improvements in care,\372\ and demonstrate hospital-level variation 
even after patient case mix adjustment.373 374 Further, THA/
TKA procedures are specifically intended to improve function and reduce 
pain, making PROs a meaningful outcome metric to assess.\375\
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    \369\ Centers for Medicare & Medicaid Services. Comprehensive 
Care for Joint Replacement Model. Available at: https://innovation.cms.gov/innovation-models/cjr.
    \370\ 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.
    \371\ 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/.
    \372\ 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.
    \373\ 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.
    \374\ 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.
    \375\ 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.
---------------------------------------------------------------------------

    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).\376\ As 
a result, the volume of THA and TKA procedures for Medicare 
beneficiaries aged 65 years and older have been increasing in 
outpatient settings.
---------------------------------------------------------------------------

    \376\ 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 
127).

[[Page 81981]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.195

[GRAPHIC] [TIFF OMITTED] TR22NO23.196

    In CY 2022 OPPS/ASC proposed rule (86 FR 42251 and 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 63851 through 63854) 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. In response, 
we stated that while we recognize that PRO-PMs 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 did 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 with comment period (86 
FR 63851 through 63854) for a complete summary of feedback.
    In the CY 2024 OPPS/ASC proposed rule (88 FR 49785), we proposed to 
adopt the THA/TKA PRO-PM into the

[[Page 81982]]

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 the proposed measure required collection of 
data during the 3-month pre-operative period and the greater than 1-
year post-operative period, there would be 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 proposed 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 
final rule with comment period 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).\377\
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    \377\ 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, if adopted into the 
Hospital OQR Program as proposed, would account 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 (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 XIV.B.3.b(1) of this final rule with comment period, 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 this final rule with comment 
period.\378\ The measure includes PRO data collected with the PRO 
instruments described in this section of this final rule with comment 
period, including 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: (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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    \378\ 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.
---------------------------------------------------------------------------

    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 final rule with comment period for further details regarding 
the variables required for data collection and submission.
(ii) Measure Calculation
    The HOPD facility-level THA/TKA PRO-PM result would be calculated 
by

[[Page 81983]]

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 proposed rule (86 FR 25588 through 25592) (as summarized 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 and 42252), and as discussed 
in the Hospital IQR Program in the FY 2023 IPPS/LTCH PPS final rule (87 
FR 49246 through 49257), we proposed to adopt the THA/TKA PRO-PM in the 
Hospital OQR Program utilizing flexible data submission approaches.
    Under the proposal, 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.379 380)
---------------------------------------------------------------------------

    \379\ Fairbank JC & Pynsent PB (2000). The Oswestry Disability 
Index. Spine. 25(22), 2940-52. https://doi.org/10.1097/00007632-200011150-00017.
    \380\ The Oswestry Disability Index is in the public domain and 
available for all hospitals to use.
---------------------------------------------------------------------------

    Under the proposal, HOPDs would also 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, and there would be no 
opportunity to correct the data following the submission deadline.
    In the CY 2024 OPPS/ASC proposed rule (88 FR 49787), following the 
two voluntary reporting periods, we proposed mandatory reporting of the 
THA/TKA PRO-PM beginning with the CY 2027 reporting period/CY 2030 
payment determination. Under the proposal, 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).\381\ The MAP Coordinating Committee supported the measure, as 
referenced in the 2022-2023 Final Recommendations report to HHS and 
CMS.\382\
---------------------------------------------------------------------------

    \381\ Centers for Medicare & Medicaid Services. 2022 Measures 
Under Consideration List. Available at: https://mmshub.cms.gov/sites/default/files/2022-MUC-List.xlsx.
    \382\ 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 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.\383\
---------------------------------------------------------------------------

    \383\ 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.\384\
---------------------------------------------------------------------------

    \384\ Ibid.
---------------------------------------------------------------------------

(c) Measure Endorsement
    The CBE endorsed the hospital-level version of the THA/TKA PRO-PM 
(CBE 3559) in November 2020.\385\ 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 measure endorsement 
cycle.
---------------------------------------------------------------------------

    \385\ 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. In the CY 2024 OPPS/ASC proposed rule (88 
FR 49787), we proposed 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 final rule with 
comment period for a discussion on the THA/TKA PRO-PM form, manner, and 
timing submission requirements.
    We invited public comment on the proposal.

[[Page 81984]]

    Comment: Several commenters supported the use of the THA/TKA PRO-PM 
in the Hospital OQR Program, as well as general support for PRO-PMs in 
CMS quality programs that are valid, reliable, and capable of informing 
performance improvement.
    Response: We thank commenters for their support of the THA/TKA PRO-
PM for the Hospital OQR Program.
    Comment: Many commenters expressed support for this measure, but 
recommended changes to the proposed voluntary and mandatory reporting 
timelines for the THA/TKA PRO-PM adoption into the Hospital OQR 
Program. A few commenters suggested that CMS extend the voluntary 
reporting timelines to support hospitals' learning and their 
incorporation of this PRO-PM into their workflows, and to support 
patients in making informed care decisions based on quality. One 
commenter suggested a partial year reporting before an entire year 
reporting requirement is instituted and suggested four years of 
voluntary reporting. One commenter suggested a delay of reporting 
timelines by a year. One commenter supported the proposed voluntary and 
mandatory reporting timelines but urged CMS to consider adjusting the 
HOPD reporting and submission deadlines to align with inpatient 
requirements adopted in the FY 2023 IPPS/LTCH PPS final rule (87 FR 
49246 through 49257) for the Hospital IQR Program. The commenter noted 
that when implementing the PRO surveys, hospitals will not make a 
distinction between inpatient or outpatient services because tracking 
one set of patients on a fiscal year timeline (for the Hospital IQR 
Program) and another set of patients on a calendar year timeline (for 
the Hospital OQR Program) will be an administrative burden. Several 
commenters supported only the voluntary reporting timeline without 
mandatory reporting, citing undue burden for hospitals participating in 
both the Hospital IQR and Hospital OQR Programs to collect data and 
respond to differing measurement and reporting periods. These 
commenters urged CMS to not mandate THA/TKA PRO-PM measure reporting in 
the Hospital OQR Program until testing and consensus-based endorsement 
in the HOPD setting has been completed or until CMS has sufficient 
information from the use of this measure in the Hospital IQR Program, 
to ensure this measure operates as intended and is useful for providers 
and patients. Commenters suggested this would allow CMS to assess 
feasibility, validity, and response rates, particularly in light of 
certain patient-level characteristics that may influence response rates 
of this measure.
    Response: We thank commenters for their support of adopting the 
THA/TKA PRO-PM in the Hospital OQR Program. In response to interested 
party feedback to revise the measure reporting timelines, we are 
finalizing the measure with modification by delaying implementation of 
mandatory reporting by one year, such that voluntary reporting would 
begin with the CY 2025 reporting period and continue through the CY 
2027 reporting period, and mandatory reporting would begin with the CY 
2028 reporting period for CY 2031 payment determination.
    In response to commenters' recommendations to align performance and 
reporting timelines of the Hospital OQR Program with the Hospital IQR 
Program, we will explore the feasibility of this approach within the 
HQR system, but do not want to delay the start of voluntary reporting 
with the CY 2025 reporting period so that HOPDs and their vendors can 
gain experience with the measure. Any further changes to the reporting 
requirements would be proposed through future rulemaking.
    Regarding commenters' recommendation to delay mandatory reporting 
until CBE endorsement, given the increasing volume of THA and TKA 
procedures occurring in the outpatient setting, we believe it is 
important to adopt this PRO-PM in Hospital OQR Program as soon as 
possible and intend to submit the outpatient version of this measure 
for CBE endorsement in a future measure cycle. We refer readers to 
section XIV.E.7.a of this final rule with comment period where we 
discuss in more detail the form, manner, and timing of reporting the 
THA/TKA PRO-PM.
    Comment: One commenter supported the adoption of this measure into 
the Hospital OQR Program but recommended that CMS analyze hip and knee 
arthroplasty procedures separately. Specifically, this commenter noted 
that THA procedures have a high success rate as measured by improvement 
in Quality Adjusted Life Years (QALYs), while TKA does not always reach 
the same levels of patient satisfaction.
    Response: While we acknowledge that THA and TKA procedures can have 
varying recovery times and may differ somewhat in anticipated patient 
outcomes, we developed this measure to include both THA and TKA 
procedures for several reasons: (1) to align with other claims-based 
measures that combine THA/TKA procedures; (2) to increase the number of 
hospitals performing enough procedures and obtaining enough completed 
pre- and post-operative patient-reported outcome measures (PROMs) to be 
included in the measure; and (3) because surgeons and their hospital 
care teams often provide care for patients receiving both types of 
procedures.
    Comment: Many commenters expressed concern that the inclusion of 
the THA/TKA PRO-PM in the Hospital OQR Program could create financial 
burden at the hospital level and require additional staff resources, 
and impact clinical workflows at the provider level. Several commenters 
expressed concern that the post-operative data collection timeframe of 
300 to 425 days would be costly, time consuming, and difficult to 
implement because many patients miss follow-up appointments or do not 
require follow-up care this long after their procedure. One commenter 
noted concern for possible bias that may arise from events outside of 
the provider's control during the long post-operative assessment 
window. Another commenter noted that many clinicians participating in 
The Joint Commission Advanced Total Hip and Knee Replacement 
Certification, which calls for 90 day pre- and post-operative (+/- 2 
months) PROMs reporting, have expressed challenges with a 1-year data 
capture. A few commenters expressed concern that EHRs are not 
integrated with patient portals that would allow hospitals to collect 
patient-reported information. Additionally, commenters noted that many 
small, rural, and medically underserved hospitals exist in areas where 
patient portal use is unreliable, requiring infrastructure investments 
and adding manual burden to extrapolate data. One commenter suggested 
CMS institute technical support and incentives like the facility bonus 
used in the Quality Payment Program for smaller health systems and for 
those with limited infrastructure and resources and encouraged CMS to 
consider reimbursing hospitals for data collection.
    Response: We acknowledge that collecting PROMs data may involve 
more burden and initial implementation resources compared to some other 
types of quality measures, and that small hospitals, particularly in 
rural areas, may lack the necessary infrastructure to collect data on 
this measure. However, we believe the benefit of collecting direct 
functional improvement information from the patients outweighs the 
burden. We believe that measuring patient-reported outcomes is an 
important aspect of patient-centered healthcare and continue to 
emphasize, as highlighted in our Meaningful Measures 2.0 Framework, 
that the

[[Page 81985]]

patient voice should be prioritized across healthcare systems and 
providers. While PRO-PMs require providers to integrate data collection 
into clinical workflows, this integration provides an important 
opportunity for patient-reported outcomes to inform clinical decision-
making and benefits patients by engaging them in discussions about 
potential outcomes. To allow more time for initial implementation, we 
are extending the voluntary reporting period by an additional year and 
delaying implementation of mandatory reporting by one year. We believe 
that the additional year of voluntary reporting and delaying mandatory 
reporting will allow time for HOPDs to integrate data collection into 
their clinical workflows, as well as for CMS to monitor implementation 
progress with regards to data collection burden, and time for 
rulemaking should any improvements for mandatory reporting need to be 
made. Additionally, to provide more flexibility, we are not requiring 
HOPDs to collect data in a standardized way. HOPDs may use a variety of 
data collection, storage, and submission approaches, and we encourage 
HOPDs to use processes best suited to them. We will monitor data 
collection burden during the voluntary reporting period and carefully 
consider public comments to advance patient-centered measurement with 
as little burden as possible to both providers and patients.
    We also acknowledge commenters' concerns about the long post-
operative data collection timeline of 300 to 425 days, and the concern 
about potential bias that could occur due to events following the 
procedure to the post-operative data collection window. In developing 
the THA/TKA PRO-PM, the measure developer reviewed registry data 
capture to inform the post-operative assessment window (initially 270 
to 365 days) for capture of full recovery from both THA and TKA, and to 
align the post-operative assessment with the typically scheduled one-
year post-surgery appointments so that the collection of the post-
operative data collection would not require an additional appointment. 
Following several years of PRO data collection through the CJR Model, 
clinical experts expressed concern that the initial 365-day upper limit 
missed patients who were scheduled or rescheduled for this one-year 
follow-up beyond 365 days, and they strongly advocated for shifting the 
post-operative data collection window to better align with clinical 
practice and increase PRO data collection. For additional details we 
refer readers to the Patient-Reported Outcomes (PROs) Following 
Elective Primary Total Hip and/or Total Knee Arthroplasty: Hospital-
Level Performance Measure--Measure Methodology Report, available in Hip 
and Knee Arthroplasty Patient-Reported Outcomes folder at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.
    Regarding the commenter's concern that the long-term results of 
care may be connected to factors outside the facility's control, it is 
our belief that quality procedures, efficient processes, and best 
practices (such as discharge education), and care coordination are 
critical aspects of care directly in purview of the facility.
    Regarding commenters' recommendations concerning reimbursement and 
incentives for reporting the THA/TKA PRO-PM data, we are not able to 
provide incentive payments or reimburse hospitals for data collection 
under the Hospital OQR Program. We note that the Hospital OQR Program 
is a pay-for-reporting program, and hospitals will receive credit for 
reporting their measure data regardless of their performance on a 
measure.
    Comment: A few commenters expressed concern that data is not 
collected in a standardized way and suggested that CMS consider 
reducing the number of risk variables required. These commenters also 
suggested that CMS shorten the pre- and post-operative data collection 
window and propose an alternative timeframe. A commenter urged CMS to 
consider reducing the Hospital OQR Program measure reporting 
requirement of 50 percent for completed PRO data for the first two 
years of collection to reduce financial penalties associated with 
incomplete data collection. A few commenters noted that the extensive 
data collection required by the measure would rarely be used to guide 
patient care decisions and incomplete reporting penalties would require 
diversion of staff effort away from direct patient care toward PRO 
collection. One commenter urged CMS to also monitor and evaluate 
patient willingness to respond to requests for patient-reported 
information and to assist providers in best practices to improve and 
maintain patient responsiveness to these data collection requests.
    Response: We emphasize that allowing hospitals to use a variety of 
data collection, storage, and submission approaches ensures flexibility 
and reduces burden, and we encourage hospitals to use processes best 
suited to their care setting and patient populations. We note that 
while we are not requiring hospitals to collect data in a standardized 
way, we are standardizing the specific data elements that need to be 
collected and reported to us. Further, we believe that clinicians, 
providers, and hospitals should determine practices that avoid 
duplication across care settings. We will evaluate data collection 
burden associated with the THA/TKA PRO-PM to inform future changes to 
measure specifications or reporting process improvements.
    In regards to reporting thresholds requirements, we selected the 50 
percent reporting threshold after considering numerous factors and the 
experience of the Comprehensive Care for Joint Replacement (CJR) Model 
participants. The proposed reporting threshold for adoption of the 
measure into the Hospital OQR Program is based on average response 
rates for both pre-operative and post-operative surveys collected by 
participating hospitals in the CJR Model. We note that the proposed 
reporting threshold for adoption of the measure into the Hospital OQR 
Program is lower than that currently used in the CJR Model (50 percent 
versus 85 percent) since hospitals participating in the CJR Model had 
difficulty meeting the threshold requirement. Additionally, hospitals 
are not held to reporting thresholds until mandatory reporting; 
therefore, we believe hospitals will have time to develop their data 
collection and reporting processes. We reiterate that hospitals in the 
Hospital IQR Program will already have the necessary infrastructure and 
several years of experience collecting measure data to meet this 
threshold. Lastly, we are providing three years of voluntary reporting 
for hospitals to integrate data collection into their workflows. We 
will continue to consider the appropriate pre- and post-operative 
matched survey response rate and reporting thresholds, evaluate our 
proposed approach during voluntary reporting, and consider adjustments 
based on feedback prior to mandatory reporting.
    We also acknowledge commenters' concerns with evaluating patient 
willingness to respond to the PRO surveys. We anticipate data 
collection for this measure to present a low burden to patients thereby 
fostering receptiveness to survey participation. We will evaluate data 
collection burden and response rates associated with the THA/TKA PRO-PM 
and will also consider this information in future measure reevaluation.

[[Page 81986]]

    Comment: A few commenters requested CMS explore data collection 
through providers because surgeons' offices or other settings commonly 
administer PRO surveys and suggested adoption of the measure into the 
Quality Payment Program as part of its specialty care-focused Merit-
based Incentive Payment System (MIPS) Value Pathways (MVPs) Program, 
given that patient follow-up is more likely to occur through the 
orthopedic/surgeon practice. One commenter supported the adoption of 
the measure into the Hospital OQR Program if the measure is removed 
from the Hospital IQR Program, citing that duplicative processes would 
create burden. One commenter recommended streamlining or eliminating 
duplicative existing measures as the number of overall measures in the 
Hospital OQR Program increases.
    Response: We agree that there is value in measurement at the 
clinician level; however, the hospital outpatient measure helps capture 
the quality of care provided in the HOPD setting and provides the 
opportunity for more entities to have sufficient case volume to be 
included in the measure. We highlight that THA/TKA procedures performed 
in the hospital inpatient or outpatient departments would be counted 
only either in the Hospital IQR Program or the Hospital OQR Program. 
Additionally, implementation of this measure in the HOPD setting has 
been recommended by interested parties as summarized in the FY 2023 
IPPS/LTCH PPS final rule (87 FR 49254) and supported by interested 
parties as summarized in the CY 2022 OPPS/ASC final rule with comment 
period (86 FR 63851 and 63852).
    After considering the comments received, we are finalizing adoption 
of the THA/TKA PRO-PM into the Hospital OQR Program with modification. 
In response to interested party feedback, we are delaying 
implementation of mandatory reporting by one year, such that voluntary 
reporting would begin with the CY 2025 reporting period and continue 
through the CY 2027 reporting period, and mandatory reporting would 
begin with the CY 2028 reporting period for CY 2031 payment 
determination. The additional year of voluntary reporting would allow 
time to monitor implementation progress with regards to data collection 
burden and response rates, as well as time for rulemaking should any 
improvements for mandatory reporting need to be made.
c. 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 U.S.\386\ Most CT scans 
are performed as outpatient procedures.\387\ CT scans expose patients 
to low-dose ionizing radiation which is known to contribute to the 
development of cancer.\388\ 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).\389\ 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.\390\ In comparison, a conventional chest x-ray delivers 
about 0.1 mSv of radiation.\391\
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    \386\ Harvard Health Publishing (2021). Radiation Risk from 
Medical Imaging. Available at: https://www.health.harvard.edu/cancer/radiation-risk-from-medical-imaging.
    \387\ Food and Drug Administration. Computed Tomography. 
Available at: https://www.fda.gov/radiation-emitting-products/medical-x-ray-imaging/computed-tomography-ct.
    \388\ Harvard Health Publishing (2021). Radiation Risk from 
Medical Imaging. Available at: https://www.health.harvard.edu/cancer/radiation-risk-from-medical-imaging.
    \389\ 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.
    \390\ Ibid.
    \391\ 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.392 393 394 395 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.\396\ 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.\397\ Cancer risk 
increased for patients who underwent multiple CT scans, ranging from 
2.7 to 12 percent.\398\ 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 2 percent.\399\
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    \392\ 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.
    \393\ 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.
    \394\ 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.
    \395\ 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.
    \396\ Ibid.
    \397\ Harvard Health Publishing (2021). Radiation Risk from 
Medical Imaging. Available at: https://www.health.harvard.edu/cancer/radiation-risk-from-medical-imaging.
    \398\ Ibid.
    \399\ 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.

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[[Page 81987]]

    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.400 401 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.402 403 404 405 406 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. Therefore, in the CY 2024 OPPS/ASC proposed 
rule, (88 FR 49789), we proposed 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.
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    \400\ 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.
    \401\ 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.
    \402\ 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.
    \403\ 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.
    \404\ 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.
    \405\ 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.
    \406\ 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.\407\ 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 
provides 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.\408\ Additionally, the Excessive Radiation eCQM supports the 
National Quality Strategy goal of promoting safety because it works to 
reduce preventable harm to patients.\409\ 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 American Association of Physicists in 
Medicine.410 411 412 413 414
---------------------------------------------------------------------------

    \407\ 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.
    \408\ Centers for Medicare & Medicaid Services. Meaningful 
Measures Framework. Available at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/CMS-Quality-Strategy.
    \409\ 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.
    \410\ American College of Radiology (2015). Development and 
Revision Handbook. Available at: https://www.acr.org/-/media/ACR/Files/Practice-Parameters/DevelopmentHandbook.pdf.
    \411\ 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.
    \412\ Image Wisely 2020. Available at: https://www.imagewisely.org/Imaging-Modalities/Computed-Tomography/Diagnostic-Reference-Levels.
    \413\ American Association of Physicists in Medicine. The 
Alliance For Quality Computed Tomography. Available at: https://www.aapm.org/pubs/CTProtocols/.
---------------------------------------------------------------------------

    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.\415\ 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

[[Page 81988]]

addresses the ``Safety'' Meaningful Measures 2.0 Healthcare Priority 
and would encourage shared decision-making between providers and 
patients.\416\ The MAP's Final Report on February 1, 2023, supported 
the Excessive Radiation eCQM for rulemaking in the Hospital OQR 
Program.\417\
---------------------------------------------------------------------------

    \415\ 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.
    \416\ Ibid.
    \417\ 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,\418\ 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.\419\ 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 also provides 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 will 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.
---------------------------------------------------------------------------

    \418\ Alara Imaging. Available at: https://www.alaracare.com/.
    \419\ 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.\420\
---------------------------------------------------------------------------

    \420\ 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.
---------------------------------------------------------------------------

    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.\421\
---------------------------------------------------------------------------

    \421\ 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
    In the CY 2024 OPPS/ASC proposed rule, we proposed 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 stated that 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 final rule with comment period for a discussion of 
the Excessive Radiation eCQM reporting and data submission 
requirements. We refer readers to section XIV.E.6 of this final rule 
with comment period for a discussion of our previously finalized eCQM 
reporting and submission policies.
    We invited public comment on the proposal.
    Comment: Many commenters supported our proposal to adopt the 
Excessive Radiation eCQM, believing that the measure will increase 
patient safety by reducing unnecessary exposure to harmful radiation. 
Several commenters expressed their belief that the measure will 
mitigate risks of cancer within patients who rely on CT to monitor 
health conditions. Several of these commenters noted that the measure 
was designed with stakeholder feedback from a diverse Technical Expert 
Panel, was tested in diverse settings, and was endorsed by the CBE on 
both scientific merit and feasibility. Several of these commenters 
highlighted the lack of standardization in CT application that leads to 
using a higher radiation dose than necessary. Commenters noted that the 
Excessive Radiation eCQM provides a guide for acceptable dose limits.
    Response: We thank commenters for their support. We agree that this 
measure will increase patient safety by reducing unnecessary exposure 
to harmful radiation.
    Comment: A few commenters supported the adoption of the Excessive 
Radiation eCQM because they believed it aligns with the priority CMS 
identified in the Meaningful Measures 2.0 initiative to transition to 
digital quality measures. One commenter supported our proposal, citing 
alignment with other CMS quality programs. The commenter noted that 
implementing this measure will encourage synergy across entities and 
advance quality improvement efforts.
    Response: We thank commenters for their support. We agree that 
adoption of the Excessive Radiation eCQM aligns with our Meaningful 
Measures 2.0 initiative to transition to digital quality measures. We 
further note the Excessive Radiation eCQM addresses the goal of 
Alignment under the priority area Outcomes and Alignment in CMS's 
National Quality Strategy.
    Comment: A few commenters supported adoption of the Excessive 
Radiation eCQM and recommended CMS implement mandatory reporting 
beginning with the CY 2024 reporting period/CY 2026 payment 
determination.
    Response: We thank commenters for their support and recommendation. 
When proposing this measure for adoption, we sought to balance quickly 
addressing the patient safety concerns presented by exposure to 
excessive radiation while still providing hospitals

[[Page 81989]]

with enough time to implement the measure. To ensure this balance 
remains, we are not accelerating the adoption timeline.
    Comment: A few commenters stated that they were implementation 
testing centers and supported adoption of the Excessive Radiation eCQM. 
Commenters noted that the measure was highly feasible for reporting and 
was able to appropriately identify CT exams that were significantly 
above diagnostic reference level doses. One commenter indicated that 
the measure would significantly reduce the use of excessive radiation 
doses as well as inadequate, suboptimal low doses by identifying 
outliers and thereby increasing the awareness and importance of CT 
protocol optimization. Another commenter noted the successful 
implementation of the measure within their institution and stated that 
they had received, from Alara Imaging, information on their measure 
performance that brought to their attention some areas of opportunity 
to decrease radiation dose. Several commenters noted that the measure 
removed burden from their institutions in terms of identifying areas of 
improvement to reduce CT radiation dose, including the detection of 
outliers.
    Response: We thank commenters for their support.
    Comment: One commenter supported the adoption of the Excessive 
Radiation eCQM because the commenter believed that the measure will 
disincentivize use of technical parameters that are inappropriate based 
on a given patient's condition. Another commenter supported the 
adoption of the Excessive Radiation eCQM because the commenter believed 
that the Alara Imaging software bridges the gap between data stored 
outside of the EHR and eCQMs and aligns with the CMS's goals of digital 
quality measurement. The commenter noted that the software uses 
widespread standards including DICOM, HL7 v2.x and/or FHIR to minimize 
reporting burden. The commenter further noted that HOPDs can choose 
between Alara Imaging's measure calculation product or import the 
intermediate variables into an existing EHR for eCQM calculation. 
Another commenter supported the adoption of the Excessive Radiation 
eCQM because the commenter stated that the image noise algorithm for 
this measure is statistically robust and appropriately specified. 
Commenters noted that testing of the data in diverse settings resulted 
in accessible data elements that contained very little missing data.
    Response: We thank commenters for their support.
    Comment: Many commenters opposed the proposal's mandatory reporting 
requirement, stating that the software integration, maintenance, and 
management would impose a significant burden on HOPDs (specifically, 
implementation challenges with integration of the Alara Imaging 
software into facility EHR or EMR systems, the additional processes 
needed to aggregate data components, and the financial and 
administrative burden as a result of the implementation challenges and 
aggregation of data components). Another commenter noted that 
implementing this measure in rural hospitals and those treating 
underserved communities may prove insurmountable due to implementation 
challenges. Many of these commenters supported voluntary reporting of 
the measure.
    Several commenters suggested that CMS delay implementation of 
mandatory reporting to give HOPDs additional time to integrate, 
appropriately test, and gain experience from the software. One 
commenter stated that the eCQM, once cybersecurity due diligence 
surrounding integration of software is completed, will take up to 18 
months to build and test. Another commenter recommended that voluntary 
reporting be implemented sooner than 2024.
    Response: We acknowledge the concerns regarding the potential 
issues with measure implementation. As discussed further below, we are 
delaying implementation of mandatory reporting as a logical outgrowth 
of public comments on this subject. We will continue to monitor 
implementation of the measure during the voluntary period and make any 
future adjustments to the requirement as needed in future rulemaking.
    Regarding commenters' concerns about the burdens associated with 
the measure and software; while this measure in its current form 
requires the reporting of data that eCQMs cannot process directly 
through the software of their choice, the Alara Imaging software 
provided by the measure developer would address this gap. As stated in 
the CY 2024 OPPS/ASC proposed rule, the Alara Imaging software meets 
CMS compliance and security standards. Educational materials will also 
be made available to provide step-by-step instructions for creating 
secure accounts and linking hospital EHRs and PACS data to the 
translation software (88 FR 49789). We will take the commenters' 
concerns into account during the voluntary reporting period as we 
continue to evaluate the measure and its accompanying translation 
software for policy consideration in future rulemaking.
    We also reiterate that the Hospital OQR Program introduced the ST-
Segment Elevation Myocardial Infraction (STEMI) eCQM previously, such 
that HOPDs already have the capability and the knowledge to submit eCQM 
data. To help alleviate potential burden, this measure has been 
proposed in a phased approach after a period of voluntary reporting. 
During this time, we will continue to monitor and evaluate measure 
implementation and adjust as necessary in future rulemaking.
    Comment: Several commenters expressed concern about the set 
thresholds for both ``Calculated CT Global Noise'' and ``Calculated CT 
Size-Adjusted Dose.'' One commenter stated their belief that Calculated 
CT Global Noise is not a meaningful indicator of quality, is not 
defined by any international or national standards organizations, and 
greatly oversimplifies the nature of image noise in clinical 
examinations. The commenter notes that the International 
Electrotechnical Commission has clearly defined measures for noise and 
dose in CT imaging, of which ``Calculated CT Global Noise'' and 
``Calculated CT Size-Adjusted Dose'' are not among the definitions. The 
commenter further states that noise levels may vary substantially 
depending upon the parameters of the CT procedure. Another commenter 
notes that ``Calculated CT Size-Adjusted Dose'' and ``Calculated CT 
Global Noise'' are not widely accepted image quality measurements and 
have not been widely tested and validated. One commenter noted that the 
proposed measure does not seem to have referred to appropriate peer 
reviewed literature on CT dose in an earnest effort to address patient 
imaging concerns.
    Response: We respectfully disagree that the thresholds have not 
been adequately tested. The data elements are scientifically and 
practically valid. The measure's thresholds for noise and radiation 
dose were developed with close input from an experienced and diverse 
Technical Expert Panel (TEP), which included representation from 
radiologists and physicists in medicine and were informed by an image 
quality study.\422\ The measure also relies on evidence and consensus-
based clinical guidelines for optimizing CT radiation doses. These 
include guidelines

[[Page 81990]]

developed by the American College of Radiology,\423\ The Society of 
Interventional Radiology,\424\ The Society of Cardiovascular CT,\425\ 
cardiovascular imaging societies,\426\ Image Wisely 2020,\427\ and the 
FDA.\428\ Measure testing by the measure developer across 16 inpatient 
and outpatient hospitals showed 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 testing sites reported that the assessment of their 
radiation doses as specified in the measure was helpful for identifying 
areas for quality improvement, and the measure received support from 
radiologists and medical physicists who serve as leaders of the testing 
sites (88 FR 49789). We also reiterate that this measure was submitted 
to the CBE by the measure developer for endorsement review (CBE 
3663e) and was endorsed on August 2, 2022. The Excessive 
Radiation eCQM (MUC 2022-018) was submitted to the CBE-convened MAP for 
the 2022-2023 pre-rulemaking cycle and received support for rulemaking 
(88 FR 49789).
---------------------------------------------------------------------------

    \422\ Smith-Bindman R, Yu S, Wang Y, et al. (2022). An Image 
Quality-informed Framework for CT Characterization. Radiology, 
302(2), 380-389. https://doi.org/10.1148/radiol.2021210591.
    \423\ American College of Radiology (2015). Development and 
Revision Handbook. https://www.acr.org/-/media/ACR/Files/Practice-Parameters/DevelopmentHandbook.pdf.
    \424\ Stecker MS, Balter S, Towbin RB, et al. (2009). Guidelines 
for Patient Radiation Dose Management. Journal of Vascular and 
Interventional Radiology. 20(7): S263-S273. https://doi.org/10.1016/j.jvir.2009.04.037.
    \425\ Halliburton SS, Abbara S, Chen MY, et al. (2011). Society 
of Cardiovascular Computed Tomography. SCCT guidelines on radiation 
dose and dose-optimization strategies in cardiovascular CT. J 
Cardiovasc Comput Tomogr. 5(4): 198-224. https://doi.org/10.1016/j.jcct.2011.06.001.
    \426\ 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. 92: E35-E97. 
https://doi.org/10.1002/ccd.27659.
    \427\ Image Wisely 2020. Available at: https://www.imagewisely.org/.
    \428\ FDA (2019). Computed Tomography (CT). https://www.fda.gov/radiation-emitting-products/medical-x-ray-imaging/computed-tomography-ct#6.
---------------------------------------------------------------------------

    Comment: Another commenter asked how good image quality will be 
determined, and that CMS identify the threshold values for image 
quality and provide additional information about how they were derived. 
One commenter asked if the one-year measurement period is a cumulative 
dose for all patients, or individual patients, and if it is 
standardized over a year. One commenter noted their opposition to 
finalizing the measure until further testing in oncology settings can 
be conducted since the measure does not consider cumulative radiation 
exposure over a lifespan, as well as prior or anticipated radiation 
exposure history, including therapeutic irradiation for malignancies.
    Response: Regarding the commenter's question about how good image 
quality would be determined, we wish to clarify that the image quality 
component, as measured by noise, was included to ensure that CT image 
quality does not decrease as an unintended consequence of lowering 
radiation doses. Noise was selected as the metric for measuring image 
quality because it is the most widely used measure of image quality for 
CT. Because the image quality component is not meant to be a 
comprehensive measure of image quality that can assess nuanced 
differences in quality across all CT scans, it does not take into 
account variables beyond noise.
    Regarding the measure's threshold values and approach for deriving 
them, this information can be found in the materials that the measure 
developer submitted to the National Quality Forum (NQF) for endorsement 
review.\429\ The thresholds were derived in part using data from the 
ACR Dose Index Registry and University of California San Francisco 
(UCSF) International CT Dose Registry.
---------------------------------------------------------------------------

    \429\ Measure 3663e Information Form. Available at: https://www.qualityforum.org/ProjectMeasures.aspx?projectID=86057&cycleNo=2&cycleYear=2021.
---------------------------------------------------------------------------

    With regard to the commenter's question about what the one-year 
measurement period is measuring, each CT scan in the one-year period is 
evaluated against size-adjusted dose and permissible image noise 
thresholds set for each CT category. There is no assessment that 
combines dose across time and there are no cumulative dose 
calculations.
    We refer commenters to the measure specifications listed in measure 
submission materials on the NQF \430\ and the eCQI Resource Center at 
https://ecqi.healthit.gov/ecqm/eh/pre-rulemaking/2024/cms1074v1 for 
additional information on the measure's technical specifications. The 
framework for classifying CT scans into CT categories was published in 
``An Image Quality-informed Framework for CT Characterization''.\431\
---------------------------------------------------------------------------

    \430\ Measure 3663e Information Form. Available at: https://www.qualityforum.org/ProjectMeasures.aspx?projectID=86057&cycleNo=2&cycleYear=2021.
    \431\ Smith-Bindman, R., Yu, S., Wang, Y., Kohli, M. D., Chu, 
P., Chung, R., Luong, J., Bos, D., Stewart, C., Bista, B., 
Alejandrez Cisneros, A., Delman, B., Einstein, A. J., Flynn, M., 
Romano, P., Seibert, J. A., Westphalen, A. C., & Bindman, A. (2022). 
An Image Quality-informed Framework for CT Characterization. 
Radiology, 302(2), 380-389. https://doi.org/10.1148/radiol.2021210591.
---------------------------------------------------------------------------

    Comment: A few commenters expressed various concerns about the 
measure software vendor and pilot. Commenters expressed concerns about 
the ability of a single vendor to handle multiple organizations 
onboarding this measure and challenges associated with quality 
reporting. One commenter expressed concern about other services or 
features the vendor may provide outside of the free software and asked 
if there are any other vendors who offer software specific to the needs 
of this measure. One commenter expressed a belief that CMS lacks 
authority to require users to purchase software from a single supplier 
to meet Federal quality requirements associated with reimbursement. 
Another had questions about the survey conducted by the vendor about 
the pilot, including whether it was a conflict of interest for the 
vendor to conduct a survey about their own pilot. A few commenters 
expressed concern that the software has not been released for public 
review.
    Response: In regard to the ability of a single vendor to handle 
multiple organizations onboarding, we acknowledge that onboarding of 
the measure may take time for both hospitals and vendors. In response 
to commenters' concerns about implementing the measure, we are delaying 
mandatory reporting of the measure by extending voluntary reporting by 
an additional year. Additionally, we are using a phased approach to 
mandatory reporting. This will allow the hospitals and vendors time to 
successfully implement the measure.
    In regard to the use of Alara Imaging software and other vendor 
software, hospitals are not required to use the Alara Imaging software 
for CMS Measure Compliance. They may choose to use any software(s) that 
performs the necessary functions to generate the same standardized data 
elements necessary to calculate the measure consistent with the 
measure's specifications. The Alara Imaging software for CMS Measure 
Compliance was created under a CMS-funded grant. At this time, the 
Alara Imaging software is the only vendor to offer translation software 
that specifically performs all the necessary functions, in one software 
package, to generate the data elements necessary for the measure 
specifications. Because the software is not required and the software 
is free of charge, we disagree that the Federal quality requirements 
associated with reimbursement are relevant in this situation.

[[Page 81991]]

    Regarding commenter's concerns about a conflict of interest, we do 
not believe that a vendor conducting a survey on their own pilot poses 
a conflict of interest. Further, the pilot conducted was reviewed 
during the MAP selection process by a TEP. The TEP found that the pilot 
conducted met the CBE evaluation criteria for testing (reliability 
testing and validity testing) standards. For more information on the 
Excessive Radiation eCQM pilot, we refer readers to the measure 
submission materials on the NQF \432\ and the eCQI Resource Center at 
https://ecqi.healthit.gov/ecqm/eh/pre-rulemaking/2024/cms1074v1.
---------------------------------------------------------------------------

    \432\ Measure 3663e Information Form. Available at: https://www.qualityforum.org/ProjectMeasures.aspx?projectID=86057&cycleNo=2&cycleYear=2021.
---------------------------------------------------------------------------

    Regarding commenters' concerns that the software has not been 
released for public review, we acknowledge that the Alara Imaging 
software for CMS Measure Compliance is proprietary. However, it will be 
available to all reporting entities free of charge and accessible by 
creating a secure account through the Alara Imaging website. 
Additionally, by delaying mandatory reporting of this measure, we are 
providing more opportunity for the Alara Imaging software to be 
publicly released and available for reporting entities prior to 
mandatory reporting.
    Comment: Several commenters expressed concerns about software 
technical issues. A few commenters expressed concerns about how the 
measure is reported and what EHR formats are accepted. One commenter 
asked CMS to identify the specific requirements, if any, for 
maintaining the data over time, including where the information should 
be stored over the years. A few commenters expressed concern about data 
breaches and security protocols. One commenter asked if hospitals would 
sign into Alara Imaging and be protected by the Alara Imaging firewall 
thus requiring a business agreement, or if the hospital would run Alara 
Imaging software on their own hospital systems.
    Response: The Alara Imaging software accepts a wide range of FHIR, 
HL7 formats for EHR data, and DICOM CT radiation dose and image data to 
decrease burden. Similar to other eCQMs, the measure has also been 
developed using proven formats: Quality Data Model (QDM) for immediate 
implementation and FHIR when adopted in the future, in accordance with 
our aim of encouraging interoperability based on the FHIR Application 
Programming Interface (API).
    While the Alara Imaging software for CMS Measure Compliance is 
proprietary, it will be available to all reporting entities free of 
charge and accessible by creating a secure account through the Alara 
Imaging website. To clarify the reporting process, we note that a 
hospital can log in through the measure developer's secure portal and 
run the Alara Imaging software for CMS Measure Compliance inside the 
firewall. The software runs automatically to create the three 
intermediate data elements needed for the measure: CT Dose and Image 
Quality Category, Calculated CT Size-Adjusted Dose, and Calculated CT 
Global Noise. Once the software finishes creating these intermediate 
variables, hospitals can send the data to its EHR for measure 
calculation and reporting. The software allows additional options such 
as the ability to send the data to other business associates of the 
hospital if needed. No manual data entry is required.
    We anticipate that some EHR vendors may develop solutions to ingest 
these calculated variables and calculate the eCQM, as they have done 
for other eCQMs. This burden to EHR developers should be similar to any 
other new eCQM adopted into the Hospital OQR Program.
    The Alara Imaging software for CMS Measure Compliance has security 
protocols to safeguard sensitive patient information. It is installed 
and computes the measure within a hospital's firewall to be used for 
measure-related activities, including calculation, and reporting. The 
measure steward's security aligns with industry standards, including 
HIPAA and Systems and Organization Controls (SOC) 2 certification 
verified via ongoing third-party audits. As noted previously, while the 
Alara Imaging software for CMS Measure Compliance is proprietary, it 
will be available to all reporting entities free of charge and 
accessible by creating a secure account through the Alara Imaging 
website.
    Additionally, regarding the question about requirements for data 
maintenance, the Excessive Radiation eCQM uses data from radiology 
electronic clinical data systems, including the Radiology Information 
System (RIS) and the Picture Archiving and Communication System (PACS), 
and medical imaging information such as Radiation Dose Structured 
Reports and image pixel data are stored according to the universally 
adopted DICOM standard, as described in the proposed rule (88 FR 
27084). These data will need to be available at the time the hospital 
and/or its vendor calculates the eCQM for quality improvement and 
monitoring purposes as well reporting to CMS.
    Further, we will post information about the software's 
specifications as it becomes available through routine communication 
channels to hospitals, vendors, and other interested parties, including 
but not limited to issuing memos, emails, and notices on QualityNet and 
the eCQI Resource Center websites.
    Comment: One commenter suggested that the measure should be 
classified as a hybrid measure, not an eCQM.
    Response: This measure is suitable for eCQM reporting. As set forth 
in the CMS' eCQI Resource Center at https://ecqi.healthit.gov/glossary, we define an eCQM as a measure specified in a standard 
electronic format that uses data electronically extracted from EHRs 
and/or health IT systems to measure the quality of health care 
provided. By using patients' radiology data that exist in a structured 
and standard electronic format that can be electronically extracted 
from radiology IT data systems, this measure meets the definition of an 
eCQM. And while radiology data are stored in health IT systems, we 
understand that for many hospitals the radiology data system may not be 
fully integrated or interoperable with the EHRs. To address this gap, 
the measure developer created the Alara Imaging software for CMS 
Measure Compliance. This software links primary data elements, assesses 
CT scans for eligibility for inclusion in the measure, and generates 
three data elements mapped to a clinical terminology for eCQM 
consumption: CT Dose and Image Quality Category, Calculated CT Size-
Adjusted Dose, and Calculated CT Global Noise (88 FR 27084).
    Comment: Several commenters expressed concern that the measure does 
not take the individual patient's needs into consideration, such as the 
type and reason for the scan, the size of the patient, etc. One 
commenter suggested this will require the operator to turn down the 
dose to an unacceptable level for high-BMI patients who often also 
suffer most from negative Social Determinants of Health and other 
challenges. A few commenters recommended that CMS reconsider the 
proposed measure and instead work with the medical imaging community to 
adopt a reference value approach--based on distributions of patients--
and not a per-patient limit-based approach. One commenter commented on 
the lifespan accumulation of radiation exposure on the individual and

[[Page 81992]]

suggested that this also be taken into consideration before finalizing 
the measure. One commenter noted that patient-centered care should 
encompass appropriate imaging--the right test for the right patient, 
and thus at times a higher radiation dose will provide greater test 
accuracy. This commenter expressed concern that this measure may result 
in unintended consequences and that those be monitored over time, such 
as the inappropriate shifting of care or coding/billing practices, or 
increased patient morbidity and mortality.
    Response: We disagree that the measure does not take the individual 
patient's needs into consideration. The measure assesses radiation 
doses by clinical indication, thereby allowing consideration for the 
reason of imaging. Similarly, it assesses radiation dose according to 
thresholds determined by the underlying clinical indication for 
imaging. The denominator for this measure is all diagnostic CT exams 
performed on adults during the measurement period of one year that have 
an assigned CT category, a size-adjusted radiation dose value, and a 
global noise value. Thus, the measure considers the clinicians choice 
of imaging protocol (for example, whether to assign a patient to a 
single or multi-phase abdomen exam).
    We wish to clarify that the purpose of the Excessive Radiation eCQM 
is to ensure that radiation dose and image quality fall within 
thresholds that are safe and appropriate, and it is not intended to 
oversimplify the relationship between noise and radiation. The image 
quality component is included in the measure as a balancing component 
to the radiation dose thresholds, to ensure that CT image quality does 
not decrease as an unintended consequence of the measure. We reiterate 
that the thresholds for radiation doses are size-adjusted to 
accommodate patients of all sizes. We would like to further emphasize 
that hospitals should use the measure as a guideline for conducting CT 
scans while also adjusting noise and radiation doses when necessary to 
provide quality patient care in special circumstances. The measure 
seeks to reduce harm from excessive radiation for most patients and 
should not replace appropriate clinical judgement if adjustments need 
to be made in select circumstances.
    Comment: Several commenters recommended that CMS integrate 
reporting requirements of this measure between the Hospital OQR Program 
and the Hospital IQR Program, including considering a single hospital-
wide rate rather than distinct inpatient and outpatient measures. A few 
commenters had concerns about the burden associated with reporting this 
eCQM as part of the Hospital OQR Program, as HOPDs do not participate 
individually in the Promoting Interoperability Program and thus do not 
have options of measures to report. Commenters noted that integrating 
reporting requirements between programs would reduce burden.
    Response: We thank commenters for their recommendations. One of the 
Meaningful Measures 2.0 goals is to address measurement gaps, reduce 
burden, and increase efficiency by aligning measures across value-based 
programs and across partners, including CMS, Federal, and private 
entities. We note that the Act established the Hospital OQR Program as 
distinct from the Hospital IQR Program. While measure alignment and 
coordination between programs remains a priority, the Hospital OQR 
Program, consistent with specific statutory requirements, measures 
outpatient department services separate from other hospital services. 
We will continue to assess our measures to promote alignment between 
programs.
    As we stated previously, the Hospital OQR Program already 
introduced the STEMI eCQM, and as such, HOPDs already have the 
capability and the knowledge to submit eCQM data. To help alleviate 
potential burden, this measure has been proposed in a phased approach 
after a period of voluntary reporting. During this time, we will 
continue to monitor and evaluate measure implementation and adjust as 
necessary in future rulemaking.
    Comment: One commenter stated that CMS did not adequately consider 
references that express concern with the measure's benchmarking 
approach such as ``Benchmarking CT Radiation Doses Based on Clinical 
Indications: Is Subjective Image Quality Enough?'' by Mahadevappa 
Mahesh in Radiology.
    Response: We note that this publication is an editorial and not a 
peer-reviewed source. Additionally, we note that the measure developer, 
while developing the Excessive Radiation eCQM, reviewed and considered 
interested party feedback. The measure developer then rigorously tested 
the measure across 16 inpatient and outpatient hospitals and a large 
system of outpatient radiology practices (88 FR 27084).
    Comment: Two commenters expressed concern with the terminology used 
in the measure name and believe ``excessive radiation dose'' may raise 
undue alarm. One commenter recommended renaming the measure to avoid 
potential misinformation.
    Response: We are not planning to change the measure's name. Keeping 
the measure's name as proposed will allow facilities and consumers to 
find information about the measure throughout the measure's life, such 
as the initial proposal to the MUC list.
    Comment: A few commenters expressed their belief that the proposal 
should not be finalized because it is unnecessary due to other 
regulations and accreditation programs that exist to monitor radiation 
dose and optimize scanning protocols, including the ACR accreditation, 
the Joint Commission QC program, and state health department monitoring 
programs.
    Response: We respectfully disagree that the measure is unnecessary. 
Other regulations and accreditation programs that exist are not 
standard among outpatient facilities. For example, facilities elect to 
become accredited by the ACR or Joint Commission QC program, etc. while 
each state has varying standards. Further, this measure provides 
additional information not contained in regulations and programs that 
exist to monitor radiation dose and optimize scanning protocols. First, 
the measure would allow consumers to compare hospital performance 
nationwide because the information would be available on the Care 
Compare website. Second, the Excessive Radiation eCQM, through the 
Alara Imaging software, is designed to not only monitor performance but 
also provide feedback to achieve a meaningful reduction in radiation 
doses.
    After considering commenter's recommendations regarding voluntary 
and mandatory reporting timelines, we are finalizing our proposal to 
adopt the Excessive Radiation eCQM with modification to extend the 
Excessive Radiation voluntary reporting period by an additional year 
such that voluntary reporting would begin with the CY 2025 reporting 
period, as proposed, and mandatory reporting would begin one year later 
than proposed with the CY 2027 reporting period/CY 2029 payment 
determination. The additional year of voluntary reporting would allow 
time to monitor implementation progress with regards to data collection 
burden and response rates.

4. Previously Finalized and Newly Finalized Hospital OQR Program 
Measure Sets

[[Page 81993]]

a. Summary of Finalized 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 128 
summarizes the finalized Hospital OQR Program measures for the CY 2026 
payment determination:
BILLING CODE 4150-28-P
[GRAPHIC] [TIFF OMITTED] TR22NO23.197


[[Page 81994]]


b. Summary of Finalized Hospital OQR Program Measure Set for the CY 
2027 Payment Determination and Subsequent Years
    Table 129 summarizes the previously finalized and newly finalized 
Hospital OQR Program measures beginning with the CY 2027 payment 
determination and subsequent years:
[GRAPHIC] [TIFF OMITTED] TR22NO23.198


[[Page 81995]]


BILLING CODE 4150-28-C
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 did not propose any changes to these policies in the CY 2024 
OPPS/ASC 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 did not propose any changes to these policies in the CY 2024 
OPPS/ASC proposed rule.
a. Public Reporting of 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: (1) Median Time for Discharged ED 
Patients-Reported Measure, which excludes psychiatric/mental health and 
transferred patients; (2) Median Time for Discharged ED Patients-
Psychiatric/Mental Health Patients, which includes information only for 
psychiatric/mental health patients; and (3) Median Time for Discharged 
ED Patients-Transfer Patients, which includes information only for 
patients transferred from the ED; and (4) 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 with comment period (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 with comment period 
(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.
    In the CY 2024 OPPS/ASC proposed rule (88 FR 49792), we proposed 
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.
    Under the proposal, beginning with the CY 2024 reporting period, we 
would make data publicly available on our Care Compare website and in 
downloadable data files found at 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 invited public comment on the proposal.
    Comment: One commenter supported public reporting of Median Time 
for Discharged ED Patients-Transfer Patients and Median Time for 
Discharged ED Patients-Overall Rate stating that the 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. The commenter further stated that 
facilities have begun to see more mental health and substance use 
disorder patients in relation to overall volume of patients and 
publicly reporting the measure gives visibility to issues in the ED.
    Response: We thank the commenter for their support. We agree that 
public reporting of the Median Discharge Time for Patients-Transfer 
Patients and Median Time for Discharged ED Patients-Overall Rate will 
bring to light any existing performance gaps for this patient 
population. We believe displaying all strata will highlight and 
prioritize various issues in the health care system.
    Comment: Several commenters did not support Public Reporting of 
Median Time for Discharged ED Patients-Transfer Patients and Median 
Time for Discharged ED Patients-Overall Rate. A few of these commenters 
stated that the measure could be affected by many factors (such as ED 
boarding) which are outside the control of ED, and therefore Median 
Time for Discharged ED Patients-Transfer Patients and the Median Time 
for Discharged ED Patients-Overall Rate should not be publicly 
reported. One commenter stated that CMS should not finalize the 
proposal to publicly report Median Time for Discharged ED Patients-
Transfer Patients and Median Time for Discharged ED Patients-Overall 
Rate because essential hospitals may lack the reporting infrastructure 
and staff needed to track and submit the measure accurately and 
therefore these hospitals need more time to properly develop systems to 
collect and verify these data points before publicly reporting them on 
Care Compare.
    Response: We thank commenters for their concern. We disagree that 
Median Time for Discharged ED Patients-Transfer Patients and Median 
Time for Discharged ED Patients-Overall Rate should not be publicly 
displayed on the Care Compare website and in the downloadable files. 
For one, HOPDs are already collecting and reporting this data. Prior to 
our proposal to publicly report all strata in this measure, HOPDs

[[Page 81996]]

had not presented CMS with this issue of lacking reporting 
infrastructure and staff needed to track and submit the measure 
accurately. Furthermore, we believe that displaying all strata will 
highlight and prioritize various issues in the health care system. We 
believe patients should have access to this data when making decisions 
about their care.
    Comment: A few commenters suggested that CMS remove the Median Time 
for Discharged ED Patients measure. Commenters stated that Median Time 
for Discharged ED Patients should be removed due to the influence of 
factors beyond the control of HOPDs.
    Response: One of the Meaningful Measures 2.0 goals is to address 
measurement gaps, reduce burden, and increase efficiency by using only 
high-value quality measures impacting key quality domains. As we stated 
in the CY 2024 OPPS/ASC proposed rule, ED performance and care 
continues to be a key quality domain of the Hospital OQR Program. 
Removal of the Median Time for Discharged ED Patients measure would 
result in an incomplete measure set because there would be no measures 
that review ED throughput. We continue to believe that the Median Time 
for Discharged ED Patients measure supports our Meaningful Measures 2.0 
goals.
    Comment: One commenter suggests that CMS provide context with 
public reporting of Median Time for Discharged ED Patients about ED 
discharge delays due to persistent lack of care options, growing 
workforce shortages, an inability to pay for post-discharge care and 
administrative delays.
    Response: We thank the commenter for their recommendations and will 
take them into consideration.
    After consideration of the public comments we received, we are 
finalizing our proposal as proposed.
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 did not propose any changes to these policies in the CY 2024 
OPPS/ASC proposed rule.

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

1. Summary
    In the CY 2024 OPPS/ASC proposed rule (88 FR 49792), we sought 
public comment on potential measurement topic areas for the Hospital 
OQR Program. The request for comment (RFC) sought 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 encouraged the public to review and 
provide comment.
2. Background
    In the CY 2024 OPPS/ASC proposed rule (88 FR 49792), we sought 
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 sought comment on quality measurement topics for 
the Hospital OQR Program that include:
     Promoting Safety (Patient and Workforce);
     Behavioral Health; and
     Telehealth.
    We sought input on the specific questions posed in this RFC.
3. Summary 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.\433\ 
Improving safety 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 the CY 2024 OPPS/ASC proposed rule, we sought 
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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    \433\ 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.434 435 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.\436\ 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.\437\ Therefore, 
preventing, diagnosing, and treating sepsis effectively has been a 
focus of patient safety in recent years.438 439
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    \434\ 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.
    \435\ 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.
    \436\ National Institute of General Medical Sciences (2021). 
Sepsis. Available at: https://nigms.nih.gov/education/fact-sheets/Pages/sepsis.aspx.
    \437\ Centers for Disease Control and Prevention (2022). What is 
Sepsis? Available at: https://www.cdc.gov/sepsis/what-is-sepsis.html.
    \438\ 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.
    \439\ 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.\440\ 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.441 442 443 In

[[Page 81997]]

addition, using an interdisciplinary sepsis-response team to coordinate 
care in the ED shows potential in improving sepsis care management and 
enhancing patient outcomes.\444\ 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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    \440\ 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.
    \441\ 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.
    \442\ 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.
    \443\ 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.
    \444\ 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) \445\ (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, readmission rates, and mortality.446 447
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    \445\ 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.
    \446\ 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.
    \447\ 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.
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    In the CY 2024 OPPS/ASC proposed rule (88 FR 49793), we requested 
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.\448\
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    \448\ 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.\449\
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    \449\ 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 requested 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 requested 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 
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.\450\ At the same time, technology could also be leveraged 
to mitigate AI risks, improve safety, or facilitate quality 
measurement.
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    \450\ 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?
    We received comments on this topic.
    Comment: Many commenters provided feedback and recommendations to 
measure and assess the quality of sepsis care in the hospital 
outpatient setting that could potentially support the foundation of 
patient safety established in the Hospital OQR Program. While these 
commenters did not specifically reference implementation of the Severe 
Sepsis and Septic Shock: Management Bundle measure (CBE 0500) 
in the Hospital OQR Program, commenters generally supported the intent 
of this measure and believed increased focus on sepsis care will help 
patient safety in the outpatient program.

[[Page 81998]]

    Several commenters expressed concerns regarding the administrative 
burden related to chart abstraction. A few commenters stated their 
belief that the Sepsis measure contributes to antibiotic overuse. Other 
commenters noted that certain elements of the Sepsis measure are not 
appropriate for the outpatient setting. One commenter specifically 
noted that the denominator population would be too small. Another 
commenter opposed the measure, expressing their belief that hospitals 
participating in the Hospital Value-Based Purchasing program may 
deliberately designate some inpatient sepsis cases as outpatient to 
avoid incurring monetary penalties. Another commenter noted that the 
measure requires adherence to a standardized protocol and may not 
provide flexibility for individually tailored care. One commenter 
questioned how stays would be characterized or attributed to a setting 
for quality reporting purposes if hospitals were required to report on 
the Sepsis measure for both their inpatient and outpatient care.
    A few commenters shared recommendations of alternative sepsis care 
measures. These recommendations included measures targeted at 
prevention of sepsis onset, as well as early and accurate sepsis 
identification. One commenter recommended that CMS more broadly measure 
healthcare associated infections and encouraged analysis to identify 
the infections most pertinent to the HOPD setting, noting that given 
the high volume of surgical procedures in this setting, surgical site 
infections may be a suitable candidate topic for a quality metric.
    A few commenters shared general considerations when assessing the 
quality of sepsis care in the hospital outpatient setting. One 
commenter encouraged CMS to gather sufficient evidence from use of the 
Sepsis measure under the Hospital IQR Program prior to adopting the 
measure in the outpatient setting. Another commenter requested that CMS 
pay particular attention to racial disparities in regard to sepsis 
care. One commenter urged CMS to consider other targeted solutions that 
better addresses current patient safety challenges, including those 
exposed during the recent Public Health Emergency.
    Response: We thank commenters for their input and acknowledge their 
concerns and recommendations. We will take commenters' feedback into 
consideration in future rulemaking related to quality measurement of 
sepsis care, including the importance of addressing health equity in 
the Hospital OQR Program.
    Comment: Many commenters supported efforts to address patient and 
workforce harms through data-driven and actionable quality measurement. 
Commenters shared their highest priorities in developing measures 
targeted at patient harm in the outpatient setting, including harms 
associated with ED boarding, radiation exposure, and preventing low-
value care. Highlighted outcomes for workforce safety included work-
related illness, injury, and workplace violence. A few commenters 
recommended that CMS support research to better understand the 
implications of the COVID-19 pandemic on safety in the healthcare 
system overall.
    Commenters also shared recommendations for potential measures to 
advance patient safety. A few commenters recommended measures that 
assess avoidable readmissions, repeat visits, and use of inappropriate 
services. One commenter recommended adoption of Hospital Visits after 
Orthopedic ASC Procedures (CBE 3470) and Hospital Visits after 
Urology ASC Procedures (CBE 3366). Another commenter 
recommended measures of DVT prophylaxis, medical errors, and in-
facility accidents, such as patient falls.
    In addition, commenters provided recommendations for methodological 
approaches to identifying patient harm in the outpatient setting. A few 
commenters recommended that CMS leverage the CDC's National Healthcare 
Safety Network (NHSN) to accurately measure hospital-acquired infection 
at the HOPD level. A few commenters also encouraged CMS to utilize all-
payer data for more accurate measurement of patient harms. One 
commenter suggested capturing harm via a claims-based measure, while 
another commenter advocated for additional PRO-PMs. As a means of 
examining disparities in patient safety, one recommended stratifying 
patient safety measures by social risk factors.
    Several commenters acknowledged harms resulting from the 
proliferation of AI in the healthcare space. A few commenters 
highlighted the potential risk of AI bias, which commenters believed 
can lead to improper diagnosis or inappropriate care delivery in 
underserved populations, further exacerbating disparities in patient 
outcomes. One commenter suggested that CMS dedicate more resources to 
understanding these disparities. In addition, several commenters 
suggested increased stakeholder engagement efforts, such as multi-
disciplinary panels to fully consider the potential harms and benefits 
associated with high impact technologies. Other commenters acknowledged 
the role AI technology can play in improving safety and creating a more 
equitable system. One commenter noted that AI has been demonstrated to 
reduce time to care. A few comments highlighted AI's potential to offer 
accuracy that may reduce repeat and inappropriate care.
    A few commenters urged that, when possible, CMS align its work with 
other proponents of patient safety and collaborate with Federal 
partners on safety-focused measures. A few commenters recommended that 
CMS explore measurement approaches in line with the Joint Commission's 
National Patient Safety Goals. Other commenters encouraged CMS to 
coordinate with the Centers for Disease Control and Prevention (CDC) 
and the Occupational Safety and Health Administration (OSHA) to align 
quality measurement efforts and advance the well-being of the 
healthcare workforce.
    Several commenters highlighted barriers to developing and 
implementing quality measurement of workforce safety, including the 
potential administrative burden to report and track workforce safety 
metrics, the dearth of workplace violence data, the potential interplay 
of measures with Federal policies, and factors outside of the 
hospital's control that may contribute to workplace violence.
    Response: We thank the commenters for their input and 
recommendations. We believe efforts to mitigate patient and workforce 
harms are critical to achieving our vision of shaping a high-value 
health care system that delivers high-quality, safe,andequitable care 
for all. We acknowledge the critical but complicated nature of AI 
technology and appreciate all input on this topic. We will consider all 
comments in any future rulemaking related to safety quality measurement 
in the Hospital OQR Program.
4. Summary 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

[[Page 81999]]

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.451 452 453 
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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    \451\ 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_ 
trackEvent%E2%80%99, %E2%80%99Download%E2%80%99, 
%E2%80%99PDF%E2%80%99,this.href] );%E2%80%9DUsing. No ``Measurement 
to Promote Joint Accountability and Whole-Person Care''.
    \452\ 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.
    \453\ Centers for Medicare & 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.\454\ In 2020, 
about 46,000 Americans died as a result of suicide and 12.2 million 
adults experienced suicidal ideation.\455\ 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.\456\ Many factors contribute to suicide risk, including 
Major Depressive Disorder (MDD) diagnosis.457 458 MDD is a 
significant risk factor for suicide, indicating that patients with MDD 
are a critical population for intervention efforts.\459\
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    \454\ Centers for Disease Control and Prevention (2022). Facts 
About Suicide. Available at: http://www.cdc.gov/suicide/facts/index.html.
    \455\ Centers for Disease Control and Prevention (2022). Suicide 
Prevention. Available at: http://www.cdc.gov/suicide/index.html.
    \456\ 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.
    \457\ Ibid.
    \458\ 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.
    \459\ 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.
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    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.\460\ 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 1 month.\461\ 
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.\462\
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    \460\ 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.
    \461\ 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.
    \462\ 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 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. In the CY 
2024 OPPS/ASC proposed rule (88 FR 49795), we requested 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.\463\ Universal suicide screening may 
improve identification of individuals who may not otherwise have been 
identified as at risk.\464\
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    \463\ 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.
    \464\ 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.
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    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.\465\ 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.466 467 We sought comment on 
whether screening for substance use disorders would be an appropriate 
measure topic for the Hospital OQR Program.
---------------------------------------------------------------------------

    \465\ 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.
    \466\ Substance Abuse and Mental Health Services Administration 
(2022). Screening, Brief Intervention, and Referral to Treatment 
(SBIRT). Available at: https://www.samhsa.gov/sbirt.
    \467\ 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 sought 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 
requested 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

[[Page 82000]]

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?
    We received comments on this topic.
    Comment: Many commenters supported efforts to expand screening and 
treatment of behavioral health in the outpatient setting. Priority 
areas included suicide screening and prevention, access to medication 
assisted treatment for substance use disorder patients, referrals to 
appropriate follow-up care, crisis care, and patient-centered, 
interdisciplinary management of patients with psychiatric disorders. A 
few commenters underscored barriers to behavioral healthcare, such as 
cost, insurance coverage, and mental health provider shortages. To 
address these barriers to patient care, commenters recommended that CMS 
partner with policymakers for broader intervention.
    Commenters also shared recommendations for potential measures that 
assess behavioral health quality. One commenter suggested that CMS 
monitor whether patients are referred to appropriate follow-up care. A 
few commenters recommended measures of patient experience and suggested 
that CMS convene stakeholders from all domains to inform measure 
development. One commenter urged CMS to focus its development on 
outcomes measures, including patient-reported outcome measures, rather 
than patient experience measures.
    Commenters generally supported efforts to expand suicide screening. 
A few commenters believed universal suicide screening to be clinically 
appropriate and logistically feasible for the HOPD setting. One 
commenter noted their belief that the ED is often the main avenue of 
care for patients without primary care providers, thus a universal 
screening measure could improve identification and treatment of 
behavioral health conditions within this patient population. Another 
commenter recommended two suicide assessment tools believed to be 
clinically effective and low burden: the Safety Planning Intervention 
(SPI) and the Post-Discharge Telephonic Follow-up Contacts Intervention 
(FCI).
    A few commenters recommended that CMS examine existing reporting 
requirements related to behavioral health to avoid duplication and 
advance alignment across programs. Suggestions for alignment included 
the National Committee for Quality Assurance's (NCQA) Healthcare 
Effectiveness Data and Information Set (HEDIS) and the Core Quality 
Measures Collaborative (CQMC). One commenter suggested research to 
understand how behavioral healthcare delivery has changed, so as to 
better tailor development of measures. The commenter recommended only 
adopting measures that are CBE-approved.
    Regarding substance use disorder screening and counseling for the 
outpatient setting, one commenter expressed their belief that these 
measure topics are more appropriate in inpatient and primary care 
settings. The commenter also noted that if CMS is to further explore a 
disorder-related screening measure, they suggested using the Alcohol 
Use Disorders Identification Test (AUDIT) or AUDIT-C tool and the Drug 
Abuse Screening Test (DAST).
    A few commenters did not believe a universal suicide screening 
measure to be appropriate for the HOPD setting due to commenters' 
desires for a more patient-specific screening approach, claims of 
limited evidence pointing to the measure's success, and concerns that 
universal screening would heighten strains in the ED. One commenter 
recommended that CMS narrow its detection and prevention efforts to 
patients for whom the Joint Commission requires such screening.
    A few commenters did not believe the MDD: Suicide Risk Assessment 
measure to be appropriate for the HOPD setting, due to concerns of the 
measure's lack of CBE endorsement and beliefs that the measure is more 
appropriate for the ASC setting.
    Response: We thank the commenters for their meaningful input and 
commitment to addressing quality gaps in the area of hospital 
outpatient behavioral health. We believe these approaches to 
continually improve behavioral health in outpatient settings will drive 
improvements in behavioral health outcomes. We will consider these 
comments in any future rulemaking related to outpatient behavioral 
health quality measurement in the Hospital OQR Program.
5. Summary 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.\468\ 
Telemedicine has the potential to improve patient experience, outcomes, 
and access to healthcare.\469\ Telemedicine is also associated with 
cost-savings for both patients and healthcare 
systems.470 471 Telehealth utilization expanded greatly in 
the outpatient setting during the early months of the SARS-CoV-2 
pandemic.\472\ The number of outpatient visits conducted via telehealth 
has since declined but remains higher than pre-pandemic levels.\473\
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    \468\ 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.
    \469\ 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.
    \470\ American Health Association (2016). Telehealth: Helping 
Hospitals Deliver Cost-Effective Care. Available at: https://www.aha.org/system/files/content/16/16telehealthissuebrief.pdf.
    \471\ 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.
    \472\ 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/.
    \473\ Ibid.
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    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.474 475 
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.476 477
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    \474\ 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.
    \475\ 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.
    \476\ Ibid.
    \477\ 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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[[Page 82001]]

    For the Hospital OQR Program, we are considering a measure focused 
on telehealth quality based on a framework developed by the CBE.\478\ 
This framework was chosen because it offers a comprehensive guide for 
developing telehealth measures under four domains: access, 
effectiveness, experience, and equity. In the CY 2024 OPPS/ASC proposed 
rule (88 FR 49795), we sought 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 utilization, of 
telehealth-related care for outpatient settings and services; and (4) 
understanding patient experience with outpatient telehealth services. 
Specifically, we requested comment from interested parties on the 
following questions:
---------------------------------------------------------------------------

    \478\ 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?
    We received comments on this topic.
    Comment: Many commenters supported further development of measures 
that assess telehealth care quality in the Hospital OQR Program. 
Commenters believed advancing and evaluating healthcare outcomes and 
effectiveness of telehealth quality of care will inform broader 
adoption of telehealth to meet its potential to transform the health 
care delivery system and access to care. Priority areas highlighted by 
commenters included check-ins following surgery, follow-up appointments 
that do not require physical ``laying of hands'' via an in-person 
visit, remote patient monitoring, management of chronic conditions, and 
virtual behavioral health and substance use treatment.
    Commenters also provided many recommendations for focus areas for a 
potential measure that assesses telehealth care quality in the Hospital 
OQR Program. These included recommendations regarding understanding 
patient experience with telehealth, including measurement of patient-
centeredness of care, ease of use, timeliness, and shared decision-
making. One commenter recommended that, since patient experience 
evaluation of telehealth should be treated the same as other care 
settings, the same questions on patients' experience should be asked. 
Additional recommendations focused on technical delivery aspects such 
as quality measurement of platforms used and connection issues.
    Commenters additionally provided recommendations for stratifying 
outpatient quality measures by telehealth as mode of delivery. These 
included outpatient quality measures for required follow-up 
appointments, antibiotic prescription rates, and screening tools such 
as Patient Health Questionnaire-9 (PHQ9) and Generalized Anxiety 
Disorder-7 (GAD-7). A few commenters recommended focusing evaluation 
efforts on the influence of telehealth on ED visits and readmissions, 
wait times, time spent with providers, intermediate patient outcomes, 
such as rates of complications, and concordance with treatment plans.
    Many commenters highlighted priority concerns regarding disparities 
in access, use, or outcomes related to telehealth in the outpatient 
setting. These focused on areas to close gaps in care using telehealth 
and included prioritizing access to quality maternal health during the 
perinatal period to decrease the number of maternal deaths among all 
women, addressing the variance in accessibility (internet, appropriate 
devices) and telehealth treatment options, focusing on rural and rural 
emergency settings, and addressing low digital health literacy, 
particularly among older adults. Other commenters encouraged focusing 
on utilizing frameworks and guidance available from the Americans with 
Disabilities Act (ADA) and the HHS Office for Civil Rights to ensure 
equitable care for those in need of interpretive services and ADA 
compliance services.
    Commenters provided recommendations to address quality gaps in 
outpatient telehealth-related care, including across HOPD settings and 
services. Gaps in care highlighted included expanding access to 
continuous glucose monitors to patients and the supportive elements 
that ensure interoperability between patient devices and EHRs, as well 
as development of a payment structure that provides a bridge for young 
adults to obtain telehealth services for mental health and substance 
use disorders. A few commenters highlighted the ways in which 
telehealth closes gaps in care for their outpatient systems such as 
tele-stroke services, as well as how it allows facilities to scale 
across geography. Commenters also noted that virtual care supports 
rural and smaller facilities that do not have the volume or budget to 
support many specialty services.
    Response: We thank the commenters for their input and appreciate 
the many thoughtful responses on practices being utilized in facilities 
across our nation and the commitment to delivering high quality care 
using telehealth in outpatient settings. We believe these efforts to 
continually improve access to the highest quality of care through all 
modes of care delivery will help inform improvements to achieve our 
vision of being a high-value American health care system that delivers 
high-quality, safe, and equitable care for all. We will consider these 
comments in any future rulemaking related to telehealth quality 
measurement in the Hospital OQR Program.

D. Administrative Requirements

1. 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. In the CY 2024 OPPS/ASC 
proposed rule (88 FR 49796), we proposed 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 invited public comment on the proposal.
    We received no comments on the proposal. We are finalizing our 
proposal as proposed.

[[Page 82002]]

2. Modified 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. In the CY 
2024 OPPS/ASC proposed rule (88 FR 49796), we proposed 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 invited public comment on the proposal.
    We received no comments on the proposal. We are finalizing our 
proposal as proposed.

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).\479\ An updated PRA package reflecting the updated 
information collection requirements related to the finalized proposals 
set forth in this final rule will be submitted for approval under the 
same OMB control number.
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    \479\ Office of Management and Budget. Office of Information and 
Regulatory Affairs. Available at: https://www.reginfo.gov/public/do/PRAOMBHistory?ombControlNumber=0938-1109.
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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 130 and 131 (87 FR 44734).
[GRAPHIC] [TIFF OMITTED] TR22NO23.199

[GRAPHIC] [TIFF OMITTED] TR22NO23.200

    In the CY 2024 OPPS/ASC proposed rule (88 FR 49797), we proposed 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 invited public comment on the proposal.
    We received no comments on the proposal. We are finalizing our 
proposal as proposed.
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

[[Page 82003]]

the requirements for chart-abstracted measure data submitted via the 
HQR System (formerly referred to as the QualityNet Secure Portal) for 
the CY 2014 payment determination and subsequent years.
    We did not propose any changes to these policies in the CY 2024 
OPPS/ASC proposed rule.
3. Claims-Based Measure Data Requirements
    We refer readers to the CY 2019 OPPS/ASC final rule with comment 
period (83 FR 59106 and 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 with 
comment period (86 FR 63863) where we finalized a 3-year reporting 
period for the Breast Cancer Screening Recall Rates measure.
    We did not propose any changes to these policies in the CY 2024 
OPPS/ASC 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 with comment period (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 did not propose any changes to these policies in the CY 2024 
OPPS/ASC 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 with comment 
period (78 FR 75112 through 75115), the CY 2016 OPPS/ASC final rule 
with comment period (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).\480\ 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.
---------------------------------------------------------------------------

    \480\ Ibid.
---------------------------------------------------------------------------

    We did not propose any changes to these policies in the CY 2024 
OPPS/ASC proposed rule.
b. HOPD Procedure Volume Measure Reporting and Data Submission 
Requirements
    In section XIV.B.3.a of this final rule with comment period, we did 
not finalize our proposal 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 proposed that 
hospitals would 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.\481\ 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 proposed 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.
---------------------------------------------------------------------------

    \481\ Centers for Medicare & Medicaid Services (2016). Hospital 
Outpatient Specifications Manuals version 9.1. Available at: https://qualitynet.cms.gov/outpatient/specifications-manuals#tab9.
---------------------------------------------------------------------------

    We invited public comment on the proposal.
    We refer readers to section XIV.B.3.a of this final rule with 
comment period received on the Re-adoption with Modification of the 
Hospital Outpatient Department Volume Data on Selected Outpatient 
Surgical Procedures measure. Based on comments received, we are 
reassessing the measure's methodology and reconsidering how the data is 
publicly displayed. Furthermore, we plan to update and refine 
procedural categories to ensure data collection of the most accurate 
and frequently performed procedures.
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 final rule with comment period, we 
finalized our proposal to modify the Cataracts Visual Function measure 
survey instrument use, beginning with the voluntary CY 2024 reporting 
period. The modified measure will refine data collection by 
standardizing survey instruments that HOPDs can use, which will 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)

    Hospitals will submit data from the above three survey instrument 
options 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 finalized our proposal 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 invited public comment on the proposal.
    We refer readers to section XIV.B.2.b of this final rule with 
comment period regarding our discussion of the Cataracts Visual 
Function measure, including summaries of the comments we received on 
our proposal and our responses

[[Page 82004]]

thereto. We did not receive public comments on the form, manner, and 
timing for the Cataracts Visual Function measure; as such, we are 
finalizing our proposal to begin collection of the modified Cataracts 
Visual Function measure beginning with the voluntary CY 2024 reporting 
period and subsequent years.
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 with comment 
period (78 FR 75097 through 75100) for a discussion of the previously 
finalized requirements for measure data submitted via the CDC NHSN 
website. In addition, we refer readers to the CY 2022 OPPS/ASC final 
rule (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 final rule with comment period, we discuss the 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 will remain as 
previously finalized.
    We did not propose any changes to these policies in the CY 2024 
OPPS/ASC proposed rule.
6. eCQM Reporting and Submission Requirements
a. Background
    We refer readers to the CY 2014 OPPS/ASC final rule with comment 
period (78 FR 75106 and 75107), the CY 2015 OPPS/ASC final rule with 
comment period (79 FR 66956 through 66961), the CY 2016 OPPS/ASC final 
rule (80 FR 70516 through 70518), the CY 2017 OPPS/ASC final rule with 
comment period (81 FR 79785 through 79790), the CY 2018 OPPS/ASC final 
rule with comment period (82 FR 59435 through 59438), the CY 2022 OPPS/
ASC final rule with comment period (86 FR 63867 through 63870), and the 
CY 2023 OPPS/ASC final rule with comment period (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 with comment 
period (86 FR 63867 and 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 STEMI eCQM data.
    We did not propose any changes to these policies in the CY 2024 
OPPS/ASC proposed rule.
b. 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 the CY 2024 OPPS/ASC proposed rule (88 FR 
49787 through 49790), we discuss the 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 the CY 2024 OPPS/ASC proposed 
rule (88 FR 49798), we proposed a progressive increase in the number of 
quarters for which hospitals report Excessive Radiation eCQM data. We 
proposed that hospitals that submit Excessive Radiation eCQM data 
during the CY 2025 voluntary period may submit up to all four 
quarter(s) of data.
    Under our proposal, beginning with the CY 2026 mandatory reporting 
period/CY 2028 payment determination, we proposed 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 proposed 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.
    We also refer readers to Table 132 for a summary of the proposed 
quarterly data increase in eCQM reporting beginning with the CY 2025 
reporting period.
[GRAPHIC] [TIFF OMITTED] TR22NO23.201


[[Page 82005]]


    We also proposed 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 will 
follow our policies on submission deadlines for eCQM data defined in 
section XIV.E.6.e of this final rule with comment period.
    We invited public comment on our proposals.
    We refer readers to section XIV.B.3.c of this final rule with 
comment period for the discussion of public comments received regarding 
the reporting and submission requirements for the Excessive Radiation 
eCQM. After consideration of public comments, we are finalizing our 
proposal to begin voluntary reporting of the Excessive Radiation eCQM 
beginning with the CY 2025 reporting period. We are finalizing our 
proposal with modification to begin mandatory reporting of the 
Excessive Radiation eCQM beginning with the CY 2027 reporting period/CY 
2029 payment determination.
    Under our finalized proposal, beginning with the CY 2027 mandatory 
reporting period/CY 2029 payment determination, hospitals will report 
two self-selected calendar quarters of data for the Excessive Radiation 
eCQM. Beginning with the CY 2028 reporting period/CY 2030 payment 
determination, hospitals will be required to report all four calendar 
quarters (one calendar year) of data for the Excessive Radiation eCQM.
    Data submission for the Excessive Radiation eCQM is required by May 
15 in the year prior to the affected payment determination year. For 
example, for the CY 2027 reporting period/CY 2029 payment 
determination, hospitals must report two self-selected quarters of data 
and would be required to submit eCQM data by May 15, 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. The data submission deadline will follow our 
policies on submission deadlines for eCQM data defined in section 
XIV.E.6.e of this final rule with comment period.
    We also refer readers to Table 133 for a summary of the finalized 
quarterly data increase in eCQM reporting beginning with the CY 2025 
reporting period.
[GRAPHIC] [TIFF OMITTED] TR22NO23.202

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 with comment 
period (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 did not propose any changes to these policies in the CY 2024 
OPPS/ASC proposed rule.
d. File Format for eCQM Data, Zero Denominator Declarations, and Case 
Threshold Exemptions
(1) File Format for eCQM Data
    We refer readers to the CY 2022 OPPS/ASC final rule with comment 
period (86 FR 42262) for our policies regarding the file format for 
eCQM data.
    We did not propose any changes to these policies in the proposed 
rule.
(2) Zero Denominator Declarations
    We refer readers to the CY 2022 OPPS/ASC final rule with comment 
period (86 FR 63869) for our policies regarding zero denominator 
declarations.
    We did not propose any changes to these policies in the CY 2024 
OPPS/ASC proposed rule.
(3) Case Threshold Exemptions
    We refer readers to the CY 2022 OPPS/ASC final rule with comment 
period (86 FR 63869) for our policies regarding case threshold 
exemptions.
    We did not propose any changes to these policies in the CY 2024 
OPPS/ASC proposed rule.
e. Submission Deadlines for eCQM Data
    We refer readers to the CY 2022 OPPS/ASC final rule with comment 
period (86 FR 63870) for our policies regarding submission deadlines 
for eCQM data.
    We did not propose any changes to these policies in the CY 2024 
OPPS/ASC proposed rule.

[[Page 82006]]

7. Data Submission and Reporting Requirements for Patient-Reported 
Outcome-Based Performance Measures (PRO-PMs)
    In section XIV.B.3.b of this final rule with comment period, we 
finalized our proposal to adopt the hospital-level THA/TKA PRO-PM into 
the Hospital OQR Program measure set. In this section of this final 
rule with comment period, we are finalizing our proposal of 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 the CY 2024 OPPS/ASC proposed rule (88 FR 
49799 through 49801), we proposed to adopt the THA/TKA PRO-PM into 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 proposed 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
    In the CY 2024 OPPS/ASC proposed rule (88 FR 49800), for hospitals 
participating in voluntary reporting for the THA/TKA PRO-PM, we 
proposed that hospitals submit preoperative 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 proposed 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 proposed 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 did not propose to publicly report the data we receive 
during the voluntary reporting periods for the THA/TKA PRO-PM facility-
level RSIR, we proposed 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 134 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 82007]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.203

(b) Mandatory Reporting
    Following the voluntary reporting periods, we proposed 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 will 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 proposed 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 135 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.

[[Page 82008]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.204

    We invited comment on these proposals.
    We refer readers to section XIV.B.3.b of this final rule with 
comment period received on the 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) regarding the 
reporting and submission requirements for the THA/TKA PRO-PM. After 
considering commenter's recommendation regarding voluntary and 
mandatory reporting timelines received in section XIV.B.3.b of this 
final rule with comment period, we note that we have extended the 
voluntary reporting period for the THA/TKA PRO-PM by an additional 
year. We are finalizing our proposal to begin voluntary reporting 
beginning with CY 2025 as proposed. We are finalizing with delayed 
implementation mandatory reporting beginning with the CY 2028 reporting 
period/CY 2031 payment determination.
    We refer readers to Table 136 for an overview of the finalized 
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] TR22NO23.205


[[Page 82009]]


    Following the voluntary reporting periods, we are finalizing that 
mandatory reporting of the THA/TKA PRO-PM would begin with reporting 
PRO data for eligible elective THA/TKA procedures from January 1, 2028, 
through December 31, 2028 (the CY 2028 performance period), impacting 
the CY 2031 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, 
2027, through December 31, 2028 (for eligible elective primary THA/TKA 
procedures from January 1, 2028, through December 31, 2028) and post-
operative PRO data collection from October 27, 2028 to March 1, 2030. 
Pre-operative data submission would occur by May 15, 2029, and post-
operative data submission would occur by May 15, 2030.
    We refer readers to Table 137 for an overview of the finalized 
performance period, pre- and post-operative data collection timeframes, 
and data submission deadlines during the mandatory reporting periods 
for THA/TKA PRO-PM.
[GRAPHIC] [TIFF OMITTED] TR22NO23.206

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 with comment 
period (75 FR 72100 through 72103) and the CY 2012 OPPS/ASC final rule 
with comment period (76 FR 74482 and 74483) for our policies regarding 
population and sampling data requirements.
    We did not propose any changes to these policies in the CY 2024 
OPPS/ASC 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 with comment 
period (79 FR 66964 and 67014) for our policies regarding a review and 
corrections period for chart-abstracted- measures in the Hospital OQR 
Program.
    We did not propose any changes to these policies in the CY 2024 
OPPS/ASC proposed rule.
b. Web-Based Measures
    We refer readers to the CY 2021 OPPS/ASC final rule with comment 
period (85 FR 86184) for our policies regarding a review and 
corrections period for web-based measures in the Hospital OQR Program.
    We did not propose any changes to these policies in the CY 2024 
OPPS/ASC proposed rule.
c. Electronic Clinical Quality Measures (eCQMs)
    We refer readers to the CY 2022 OPPS/ASC final rule with comment 
period (86 FR 63870) 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 did not propose any changes to these policies in the CY 2024 
OPPS/ASC proposed rule.
d. OAS CAHPS Measures
    We refer readers to the CY 2022 OPPS/ASC final rule with comment 
period (86 FR 63870) and the CY 2017 OPPS/ASC final rule with comment 
period (81 FR 79793) for our policies regarding a review and 
corrections period for OAS CAHPS measures in the Hospital OQR Program.
    We did not propose any changes to these policies in the CY 2024 
OPPS/ASC proposed rule.
10. Hospital OQR Program Validation Requirements
a. Background
    We refer readers to the CY 2011 OPPS/ASC final rule with comment 
period (75 FR 72105 and 72106), the CY 2013 OPPS/ASC final rule with 
comment period (77 FR 68484 through 68487), the CY 2015 OPPS/ASC final 
rule with comment period (79 FR 66964 and 66965), the CY 2016 OPPS/ASC 
final rule with comment period (80 FR 70524), the CY 2018 OPPS/ASC 
final rule with comment period (82 FR 59441 through 59443), the CY 2022 
OPPS/ASC final rule with comment period (86 FR 63870 through 63873), 
the CY 2023

[[Page 82010]]

OPPS/ASC final rule with comment period (87 FR 72115 and 72116), and 
Sec.  419.46(f) for our policies regarding validation.
    We did not propose any changes to these policies in the CY 2024 
OPPS/ASC 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 with comment 
period (86 FR 63870) for additional information on the use of 
electronic file submissions for chart-abstracted measure medical 
records requests.
    We did not propose any changes to these policies in the CY 2024 
OPPS/ASC proposed rule.
c. Time Period for Chart-Abstracted Measure Data Validation
    We refer readers to the chart-abstracted validation requirements 
and methods we adopted in the CY 2014 OPPS/ASC final rule (78 FR 75117 
and 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 did not propose any changes to these policies in the CY 2024 
OPPS/ASC proposed rule.
d. Targeting Criteria
    We refer readers to the CY 2012 OPPS/ASC final rule with comment 
period (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 with 
comment period (82 FR 59441), where we clarified that an ``outlier 
value'' for purposes of the targeting criterion; the CY 2022 OPPS/ASC 
final rule with comment period (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 with comment period (87 FR 72115 and 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 did not propose any changes to these policies in the CY 2024 
OPPS/ASC 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 did not propose any changes to these policies in the CY 2024 
OPPS/ASC 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. In the CY 2024 OPPS/ASC proposed rule (88 FR 49802), we 
proposed 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 invited public comment on the proposal.
    We received no comments on the proposal. We are finalizing our 
proposal as proposed.
12. Hospital OQR Program Reconsideration and Appeals Procedures
    We refer readers to Sec.  419.46(g) for our policies regarding 
reconsideration and appeals procedures. In the CY 2024 OPPS/ASC 
proposed rule (88 FR 49802), we proposed 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 invited public comment on the proposal.
    We received no comments on the proposal. We are finalizing our 
proposal as proposed.

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 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

[[Page 82011]]

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 and 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/ASC final rule with comment period, 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 
and 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 and 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 the CY 2024 OPPS/ASC proposed rule, the proposed reporting ratio 
was 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 proposed to continue 
to apply the reporting ratio to all services calculated using the OPPS 
conversion factor. We proposed to continue to apply the reporting 
ratio, when applicable, to all HCPCS codes to which we have proposed 
status indicator assignments of ``J1,'' ``J2,'' ``P,'' ``Q1,'' ``Q2,'' 
``Q3,'' ``R,'' ``S,'' ``T,'' ``V,'' and ``U'' (other than New 
Technology APCs to which we have proposed status indicator assignments 
of ``S'' and ``T''). We proposed to continue to exclude services paid 
under New Technology APCs. We proposed to continue to apply the 
reporting ratio to the national unadjusted payment rates and the 
minimum unadjusted and national unadjusted copayment rates of all 
applicable services for those hospitals that fail to meet the Hospital 
OQR Program reporting requirements. We also proposed to continue to 
apply all other applicable standard adjustments to the OPPS national 
unadjusted payment rates for hospitals that fail to meet the 
requirements of the Hospital OQR Program. Similarly, we proposed to 
continue to calculate OPPS outlier eligibility and outlier payment 
based on the reduced payment rates for those hospitals that fail to 
meet the reporting requirements. In addition to our proposal to 
implement the policy through the use of a reporting ratio, we also 
proposed to calculate the reporting ratio to four decimals (rather than 
the previously used three decimals) to more

[[Page 82012]]

precisely calculate the reduced adjusted payment and copayment rates.
    For CY 2024, the proposed reporting ratio was 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.
    We did not receive any public comments on our proposal. For this 
final rule with comment period, the final reporting ratio is 0.9806, 
which, when multiplied by the final full conversion factor of $87.382, 
equals a final conversion factor for hospitals that fail to meet the 
requirements of the Hospital OQR Program (that is, the reduced 
conversion factor) of $85.687. We are finalizing our proposal to 
continue to calculate OPPS outlier eligibility and outlier payment 
based on the reduced payment rates for those hospitals that fail to 
meet the reporting requirements. We are also finalizing our proposals 
to implement the policy through the use of a reporting ratio, and to 
calculate the reporting ratio to four decimals (rather than the 
previously used three decimals) to more precisely calculate the reduced 
adjusted payment and copayment rates for hospitals that fail to meet 
the Hospital OQR Program requirements for CY 2024 payment.

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

A. Background

1. Overview
    We seek to promote higher quality, more efficient, and equitable 
healthcare for Medicare beneficiaries. Consistent with these goals, we 
have implemented quality reporting programs for multiple care settings, 
including the 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 with comment 
period (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. Sec.  416.300 through 416.330). We refer 
readers to section XV.E of this final rule with comment period 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 with comment 
period (77 FR 68493 and 68494) for a detailed discussion of the 
priorities we consider for quality measure selection for the ASCQR 
Program.
    We did not propose any changes to these policies in the CY 2024 
OPPS/ASC 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 did not propose any changes to this policy in the CY 2024 OPPS/
ASC proposed rule.
3. Removal, Replacement, or Suspension of Quality Measures
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. In the CY 2024 OPPS/ASC proposed rule (88 FR 49804), 
we proposed 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 invited public comment on the proposal.
    We received no comments on the proposal. We are finalizing our 
proposal as proposed.
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).

[[Page 82013]]

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 did not propose any changes to these policies in the CY 2024 
OPPS/ASC proposed rule.
4. Modifications to Previously Adopted Measures
    In the CY 2024 OPPS/ASC proposed rule (88 FR 49804 through 49810), 
we proposed 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 Normal 
Colonoscopy in Average Risk Patients measure. We discuss each of these 
measures, along with the public comments that we received on them, in 
subsequent sections.
a. 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).\482\ 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 63883).\483\ The Secretary renewed the PHE on April 21, 2020 
and then every 3 months thereafter, with the final renewal on February 
9, 2023.\484\ The PHE ended on May 11, 2023; however, the public health 
response to COVID-19, which includes vaccination efforts, remains a 
public health priority.\485\ As we noted in the CY 2024 OPPS/ASC 
proposed rule (88 FR 49805), there had been more than 102.7 million 
COVID-19 cases and 1.1 million COVID-19 deaths in the United States as 
of February 13, 2023; in reviewing these numbers for this final rule, 
as of September 15, 2023 there have been more than 103.4 million COVID-
19 cases and 1.1 million COVID-19 deaths in the United 
States.486 487
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    \482\ 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.
    \483\ 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).
    \484\ 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.
    \485\ 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.
    \486\ World Health Organization. United States of America. 
Accessed September 15, 2023. Available at: https://covid19.who.int/region/amro/country/us.
    \487\ Centers for Disease Control and Prevention. COVID Data 
Tracker. Accessed February 13, 2023. Available at: https://covid.cdc.gov/covid-data-tracker/#datatracker-home.
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    As stated in the CY 2022 OPPS/ASC final rule with comment period 
(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-19.488 489 490 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.\491\ 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-19.492 493 494 495 
Overall, data demonstrate that COVID-19 vaccines are effective and 
prevent severe disease, hospitalization, and death from the COVID-19 
infection.\496\
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    \488\ 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.
    \489\ 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 w.
    \490\ 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.
    \491\ 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.
    \492\ 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.
    \493\ 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.
    \494\ 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.
    \495\ 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.
    \496\ 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 with comment period (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

[[Page 82014]]

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.\497\ 
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.\498\ 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.\499\ Updated COVID-19 vaccines 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.500 501 In the CY 2024 OPPS/ASC proposed rule (88 FR 
49774 through 49776), we stated that data from the existing COVID-19 
Vaccination Coverage Among HCP measure demonstrate clinically 
significant variation in booster dose vaccination rates across ASCs, 
but are clarifying here that literature has indicated disparities in 
COVID-19 booster vaccine uptakes across healthcare personnel 
irrespective of specific care setting.\502\
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    \497\ Centers for Disease Control and Prevention (August 2021). 
Variants of the Virus. Available at: https://www.cdc.gov/coronavirus/2019-ncov/variants/index.html.
    \498\ Food and Drug Administration (November 2022). COVID-19 
Bivalent Vaccine Boosters. Available at: https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-authorizes-moderna-pfizer-biontech-bivalent-covid-19-vaccines-use. 
(In the CY 2024 OPPS/ASC proposed rule, we cited this information 
to: https://www.fda.gov/emergency-preparedness-and-response/coronavirus-disease-2019-covid-19/covid-19-bivalent-vaccines. 
However, after review, the information appears to have moved. Thus, 
we have updated the citation.)
    \499\ 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.
    \500\ 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/.
    \501\ 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/.
    \502\ Wigdan F. et al (April 2023). Who is getting boosted? 
Disparities in COVID-19 vaccine booster uptake among health care 
workers. Available at: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9918311/pdf/main.pdf.
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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, and Biologics License Application approvals issued by the 
FDA for updated 2023-2024 formulations of the vaccine, the continued 
presence of SARS-CoV-2 in the United States, and variance among rates 
of updated vaccinations, we believe it is important to modify the 
COVID-19 Vaccination Coverage Among HCP measure for HCP to receive 
primary series and updated 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, including 
the most recent September 2023 Omicron variant that came to light after 
the publication of the CY 2024 OPPS/ASC proposed 
rule.503 504
---------------------------------------------------------------------------

    \503\ Link-Gelles et al. (February 2023). Early Estimates of 
Bivalent mRNA Booster Dose Vaccine Effectiveness in Preventing 
Symptomatic SARs-CoV-2 Infection Attributable to Omicron BA.5- and 
XBB/XBB.1.5-Relating Sublineages Among Immunocompetent Adults--
Increasing Community Access to Testing Program, United States, 
December 2022-January 2023. Morbidity and Mortality Weekly Report 
(MMWR). February 3;72(5);119-124. Available online at: https://www.cdc.gov/mmwr/volumes/72/wr/mm7205e1.htm#suggestedcitation.
    \504\ Food and Drug Administration (June 2023). FDA Briefing 
Document: Vaccines and Related Biological Products Advisory 
Committee Meeting. Food and Drug Administration. Available Online: 
https://www.fda.gov/media/169378/download.
---------------------------------------------------------------------------

    In the CY 2024 OPPS/ASC proposed rule (88 FR 49805 through 49807), 
we proposed to modify the COVID-19 Vaccination Coverage Among HCP 
measure to utilize the term ``up to date'' in the HCP vaccination 
definition. We also proposed to update the numerator to specify the 
timeframes within which an HCP is considered up to date with CDC 
recommended COVID-19 vaccines, including updated vaccine doses, 
beginning with the CY 2024 reporting period/CY 2026 payment 
determination for the ASCQR Program.
    As noted in the CY 2022 OPPS/ASC final rule with comment period (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 adopted the same modification to versions of the measure 
that we have adopted for other quality reporting programs.\505\
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    \505\ 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 with comment period 
(86 FR 63877 through 63878) for more information on the initial review 
of the measure by the Measure Applications Partnership (MAP).\506\
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    \506\ 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.
---------------------------------------------------------------------------

    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 the CY 2024 OPPS/ASC proposed rule (88 FR 
49806), we noted 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.
    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

[[Page 82015]]

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.\507\ 
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.\508\ 
In the CY 2024 OPPS/ASC proposed rule (88 FR 49806), we noted 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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    \507\ 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.
    \508\ Ibid.
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    The developer also noted that the model used for this measure is 
based on the Influenza Vaccination Coverage Among HCP measure (CBE 
0431).\509\ We refer readers to sections XXIV.C and XXVI of 
this final rule with comment period for additional detail on the burden 
and impact of this finalized proposal.
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    \509\ 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 consensus-based entity 
(CBE). The MAP noted that the previous version of the measure received 
endorsement from the CBE (CBE 3636) \510\ and that the measure 
steward (CDC) intends to submit the updated measure for 
endorsement.\511\
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    \510\ Centers for Medicare and Medicaid Services Measures 
Inventory Tool. (n.d.). Available at: https://cmit.cms.gov/cmit/#/MeasureView?variantId=11670&sectionNumber=1.
    \511\ 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 one week of data collection a month for each of the 
three months in a quarter. The 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 three 
months in a quarter.\512\ Facilities report vaccination information for 
the following four, separate categories of HCP to NHSN:
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    \512\ 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 (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.\513\ 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.\514\
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    \513\ 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.
    \514\ Ibid.
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    As stated in the CY 2024 OPPS/ASC proposed rule (88 FR 49807), we 
did not propose 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.
    As proposed in the CY 2024 OPPS/ASC proposed rule (88 FR 49807), 
public reporting of the modified version of the COVID-19 Vaccination 
Coverage Among HCP measure 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 the ASCQR Program received 
CBE endorsement (CBE 3636) on July 26, 2022.\515\ The measure 
steward (CDC) intends to pursue CBE endorsement for the modified 
version of this measure.
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    \515\ 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 with comment 
period (86 FR 63879 through 63883) for information on data submission 
and reporting of this measure. We did not propose any changes to the 
data submission or reporting process in the CY 2024 OPPS/ASC proposed 
rule (88 FR 49807). However, we did 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, which would remain unchanged under these proposals, 
ASCs collect the numerator and denominator for the COVID-19 Vaccination 
Coverage

[[Page 82016]]

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 are used to calculate the 
measure. For example, if both the first- and third- weeks of data for 
an ASC are submitted, the third week data will be used for measure 
calculation and public reporting. Each quarter, the CDC calculates a 
single quarterly COVID-19 HCP vaccination coverage rate for each ASC, 
which is then calculated by taking the average of the data from the 
three weekly rates submitted by the ASC for that quarter. We 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 final rule with 
comment period for the same proposal for the Hospital OQR Program.
    We invited public comment on the proposal.
    Comment: Some commenters supported the proposed modification to the 
COVID-19 Vaccination Coverage Among HCP measure and noted the 
importance of maintaining alignment across programs and with current 
CDC guidelines. A few commenters highlighted the significance of 
vaccination in preventing greater spread of COVID-19 and the potential 
for continued vaccination to prevent future large-scale outbreaks. One 
commenter expressed the importance of ``up to date'' guidelines to 
ensure patients have accurate information to support their choice of 
provider.
    Response: We thank commenters for their support. We agree that 
maintaining alignment across programs and the current CDC guideline is 
important, as is the new definition of ``up to date'' due to the 
changing nature of the virus's transmission and community spread. We 
agree that vaccination plays a critical part of HHS's strategy to 
effectively counter the spread of COVID-19 and will continue to support 
it as the most effective means to prevent the worst consequences of 
COVID-19, including severe illness, hospitalization, and death. 
Additionally, we continue to believe it is important to incentivize and 
track HCP vaccination through quality measurement across care settings, 
including the outpatient and ASC settings. We believe that HCP 
vaccinations will protect healthcare workers, patients, and caregivers 
and help sustain the ability of HCP in each of these care settings to 
continue serving their communities.
    Comment: Many commenters did not support modifying the COVID-19 
Vaccination Coverage Among HCP measure due to concerns that the 
frequent changes to the CDC's definition of ``up to date'' combined 
with uncertainty around future vaccination schedules creates 
unnecessary burden for facilities. Many commenters expressed concern 
that changing definitions and guidance exacerbates staffing and 
resource challenges and requires updates to facility or system-level 
vaccination policies, adding burden and confusion.
    Response: We acknowledge commenters' concerns around data 
collection, burden, and staffing and resource challenges for reporting 
the COVID-19 Vaccination Coverage Among HCP measure. As evidenced by 
the increased cases and hospitalizations in August 2023 due to new 
variants, we believe that COVID-19 remains a relevant and evolving 
situation requiring monitoring of vaccination rates to ensure the 
safety of patients, caregivers and providers, and that the burden of 
reporting is outweighed by the benefits of collecting and regularly 
publishing these data to inform care decision-making. Additionally, the 
data submission and reporting requirements provide flexibility for 
facilities with staffing and resource challenges as this measure only 
requires facilities to collect data for one self-selected week during 
each month of the reporting quarter at minimum.
    When we finalized the adoption of the COVID-19 Vaccination Coverage 
Among HCP measure in the CY 2022 OPPS/ASC final rule with comment 
period (86 FR 63875), we received several comments encouraging us to 
update the measure as new evidence on COVID-19 is identified. While we 
acknowledge that the definition of ``up to date'' may change in the 
future, our intention is to continue to work with partners, including 
the FDA and CDC, to consider and align any updates to the measure 
specifications in future rulemaking as appropriate to ensure the safety 
of patients, providers, and caregivers in facilities of care.
    Comment: Many commenters recommended that CMS reduce the required 
reporting frequency from quarterly to annually to reduce reporting 
burden for facilities. Some of these commenters observed that annual 
reporting would mirror the reporting schedule for the Influenza 
Vaccination Coverage Among HCP measure, which has been adopted into 
some quality reporting programs. One commenter recommended that the 
chosen week for data reporting be determined by individuals 
unaffiliated with the ASC to avoid bias. One commenter recommended that 
CMS educate stakeholders on the evolving COVID-19 vaccination 
requirements.
    Response: We thank commenters for their recommendations on data 
collection reporting frequency, and support for the COVID-19 
Vaccination Coverage Among HCP measure. As stated in the CY 2024 OPPS/
ASC proposed rule (88 FR 49806), the measure developer based this 
measure on the Influenza Vaccination Coverage Among HCP measure (CBE 
0431), which is reported annually. The measure developer (the 
CDC) intends to adopt a similar approach to the modified COVID-19 
Vaccination Coverage Among HCP measure if vaccination strategy becomes 
seasonal. While monitoring and surveillance are ongoing, we do not 
currently have data demonstrating seasonal trends in the circulation of 
SARS-CoV-2. In addition, we do not believe that ASC-selection of the 
week for reporting on this measure introduces significant bias as the 
sampling is taken from within the same facility over time.
    Comment: Several commenters did not support updating the 
specifications for the COVID-19 Vaccination Coverage Among HCP measure 
because the PHE has expired. Several commenters expressed their opinion 
that the end of Federal vaccination requirements does not justify the 
continued data collection for this measure. Several of these commenters 
recommended the removal of the measure for these reasons.
    Response: As we acknowledged in the CY 2024 OPPS/ASC proposed rule 
(88 FR 49805), the PHE expired on May 11, 2023. While some state and 
Federal reporting requirements have since changed, the expiration of 
the PHE for COVID-19 has no bearing on the use of this measure for 
quality reporting because vaccination continues to be an essential tool 
in preventing COVID-19 transmission. Monitoring and surveillance of 
vaccination rates through measure performance is important as it 
provides patients, beneficiaries, and their caregivers with information 
to support informed decision-making.
    We believe this measure continues to align with our goals to 
promote wellness and disease prevention, especially in light of new 
variants and an increase in COVID-19 infection and hospitalizations as 
of September 2023. Under CMS' Meaningful Measures Framework 2.0, the 
COVID-19 Vaccination Coverage Among HCP

[[Page 82017]]

measure addresses the quality priorities of ``Immunizations'' and 
``Public Health'' through the Meaningful Measures Area of ``Wellness 
and Prevention.'' Under the National Quality Strategy, the measure 
addresses the goal of Safety under the priority area Safety and 
Resiliency. As part of the Administration's continued response to 
COVID-19, and in light of the presence of new variants that have 
resulted in higher rates of infection and hospitalizations as of 
September 2023,\516\ we will continue to work to protect individuals 
and communities from the virus and its worst impacts.
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    \516\ Centers for Disease Control and Prevention (August 23, 
2023). Risk Assessment Summary for SARS CoV-2 Sublineage BA.2.86 
Available at: https://www.cdc.gov/respiratory-viruses/whats-new/covid-19-variant.html.
---------------------------------------------------------------------------

    Comment: A few commenters did not support inclusion of the COVID-19 
Vaccination Coverage Among HCP measure in the ASCQR Program measure set 
due to conflict between state and local mandates and Federal quality 
reporting requirements. One commenter recommended that the measure 
specifications have proper exclusion criteria in alignment with Federal 
and state vaccination exemption policies.
    Response: We recognize commenters' concerns regarding potential 
discrepancies between local, state, and Federal requirements for COVID-
19 vaccination. However, we reiterate that the ASCQR Program is a 
quality reporting program, separate from state and local policies as 
well as other Federal policies, including those related to vaccination 
exemption. We also note that neither the proposed modified measure nor 
the current version of the measure mandates vaccination, and the 
elimination of the Federal vaccine mandate is immaterial to the 
adoption and use of the measure for quality reporting purposes.
    Comment: One commenter recommended that we continually monitor this 
measure for unintended consequences since it has not undergone full 
validity and reliability testing. Another commenter recommended that 
ASCs stratify the measure data to identify sub-populations of HCP that 
have lower vaccine uptake.
    Response: As part of the MAP review process, all MUC list measures 
were required to submit testing results and be subject to review by 
workgroup and MAP members, as well as be open for public commentary. 
The current version of the measure received CBE endorsement (CBE 
3636, ``Quarterly Reporting of COVID-19 Vaccination Coverage 
among Healthcare Personnel'') on July 26, 2022. While the modified 
measure has not undergone this endorsement process, the measure 
steward, CDC, has signaled intention to submit the modified measure for 
CBE endorsement, which we believe will support the appropriateness of 
this measure for the ASC setting, similar to the current measure. In 
addition, though the modified measure was not explicitly tested in this 
setting, it was considered a reliable and valid measurement for other 
care settings, and the MAP recommended its use for ensuring quality 
care within the ASC setting. We thank the commenters for their 
recommendations regarding monitoring and use of measure information. 
Regarding the recommendation to stratify this measure, as we stated in 
the CY 2024 OPPS/ASC proposed rule, the measure cannot be stratified 
since the data are submitted at an aggregate rather than an individual 
level (86 FR 49806).
    After consideration of the public comments we received, we are 
finalizing our proposed modification to the COVID-19 Vaccination 
Coverage Among HCP Measure in the ASCQR Program as proposed.

b. 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 with comment period (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 is being used.\517\ For purposes of this 
modification to the Cataracts Visual Function measure, the survey 
instruments we considered and proposed 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. 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 section of the ASCQR Program 
Specifications Manual for additional detail, which is available at: 
https://qualitynet.cms.gov/asc/specifications-manuals.
---------------------------------------------------------------------------

    \517\ 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 with comment period (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 valid, detected clinically important changes, 
and provided comparable results.\518\ While all 16 survey instruments 
in this study demonstrate usefulness for detecting clinically important 
change in cataract patients, some survey instruments had detection 
sensitivity scores higher than others.\519\
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    \518\ 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.
    \519\ 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 to standardize acceptable survey instruments, while 
minimizing collecting and reporting burden, and to improve measure 
reliability. Thus, in the CY 2024 OPPS/ASC proposed rule (88 FR 49807 
through 49809), we proposed to clarify which specific survey 
instruments may be used for the assessment of visual function pre- and 
post-cataract surgery

[[Page 82018]]

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. We proposed 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 considered 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 stated 
our belief that the three survey instruments listed above would allow 
ASCs to select the length of the survey instrument to be administered 
while ensuring adequate validity and reliability.520 521 522 
All three of the 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 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 eight questions for the VF-8R. Even 
with fewer questions, all three of the survey instruments have been 
validated as providing results comparable to the NEI VFQ-51. In 
addition, all three of the survey instruments are readily available for 
ASCs to access and use.
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    \520\ 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.
    \521\ 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.
    \522\ 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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    In the CY 2024 OPPS/ASC proposed rule (88 FR 49808), we proposed 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).\523\
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    \523\ 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.\524\ 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.\525\ 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.\526\
---------------------------------------------------------------------------

    \524\ 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.
    \525\ Ibid.
    \526\ Ibid.
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    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.\527\ 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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    \527\ 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.
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    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, the inclusion of this survey instrument in this measure's 
specifications would allow 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.\528\ Further, if 
an ASC finds the NEI VFQ-25 particularly burdensome to administer, the 
ASC may choose from the other two survey instruments proposed for 
inclusion in this measure's specifications for ASCs to use for this 
measure, as both of these have even fewer survey questions to 
administer.
---------------------------------------------------------------------------

    \528\ 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.
---------------------------------------------------------------------------

    In the CY 2024 OPPS/ASC proposed rule (88 FR 49809), we also 
proposed 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.529 530 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. 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.
---------------------------------------------------------------------------

    \529\ Ibid.
    \530\ 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, in the CY 2024 OPPS/ASC proposed rule (88 FR 49809), 
we proposed 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.\531\ 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.\532\ Studies using this survey instrument generally

[[Page 82019]]

report significant and clinically important improvement following 
cataract surgery.\533\ The VF-14 additionally has achieved adequate 
reliability and validity, proving it to be a dependable survey 
instrument for cataract outcomes.534 535
---------------------------------------------------------------------------

    \531\ 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.
    \532\ Ibid.
    \533\ Ibid.
    \534\ Ibid.
    \535\ 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.
---------------------------------------------------------------------------

    In the CY 2024 OPPS/ASC proposed rule (88 FR 49809), we also 
proposed the VF-8R, as it is the most concise of the three survey 
instruments, while still achieving adequate validity and 
reliability.\536\ The VF-8R consists of questions related to reading, 
fine handwork, writing, playing board games, and watching 
television.\537\ Given its conciseness compared to the majority of 
currently available survey instruments and its adequate psychometric 
properties, we stated our belief that the VF-8R would be beneficial for 
measuring cataract surgery outcomes without prompting further patient 
survey fatigue.\538\
---------------------------------------------------------------------------

    \536\ Ibid.
    \537\ Pre-Cataract Surgery--Visual Functioning Index (VF-8R): 
Available at: https://www.aao.org/practice-management/coding/updates-resources. (In the CY 2024 OPPS/ASC proposed rule, we cited 
this information to: https://eyecaresite.com/wp-content/uploads/2020/02/Visual-Functioning-Index-Pre-Cat-SX.pdf. However, after 
review, the information appears to have moved. Thus, we have updated 
the citation in this final rule.)
    \538\ 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, in the CY 2024 OPPS/ASC proposed rule (88 FR 
49807 through 49809), we proposed 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 
will 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 with comment 
period (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.539 540 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.541 542 These findings 
support the inclusion of varying survey instrument-collection methods 
for patient and provider convenience.
---------------------------------------------------------------------------

    \539\ 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.
    \540\ 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.
    \541\ 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.
    \542\ 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 invited public comment on the proposal.
    Comment: Many commenters supported our proposal to modify the 
survey instruments allowable for the Cataracts Visual Function measure 
beginning with the voluntary CY 2024 reporting period. Several 
commenters concurred with CMS that this modification would standardize 
data collection and ensure comparability of the measure across ASCs. 
Several commenters also expressed support for the modification because 
the three survey instruments demonstrate adequate reliability, 
validity, and decrease burden. One commenter believed this modification 
would facilitate better comparability across providers and support care 
decision-making. Another commenter expressed support for CMS' efforts 
to create program alignment.
    Response: We thank commenters for their support. We agree that 
limiting the allowable survey instruments used to report on the 
Cataracts Visual Function measure to three survey instruments of 
different lengths will allow for a less burdensome, and more 
standardized approach to data collection and improve measure 
reliability. We emphasize that all three surveys demonstrate adequate 
reliability and validity, which demonstrates that they are dependable 
survey instruments for measuring functionality following cataract 
surgery. Further, by adopting this modification for this measure, we 
will be promoting alignment with the Hospital OQR Program.
    Comment: Several commenters recommended that the Cataracts Visual 
Function measure either remain voluntary or be removed from the program 
due to the high administrative burden. One commenter believed the 
measure should remain voluntary until a digital version is developed. 
Another commenter recommended that, in addition to removing the 
Cataracts Visual Function measure, CMS instead adopt the Toxic Anterior 
Segment Syndrome (TASS) measure.\543\ One commenter recommended CMS 
provide additional best practices as more facilities adopt the use of 
these three surveys during the voluntary measurement period.
---------------------------------------------------------------------------

    \543\ https://www.ascquality.org/qualitymeasures.
---------------------------------------------------------------------------

    Response: We are retaining this measure as voluntary for the CY 
2024 reporting period/CY 2026 payment determination. We will continue 
to evaluate this measure moving forward. We respectfully disagree that 
this measure should be removed from the ASCQR Program as we believe the 
benefits of the measure outweigh the reporting burden.
    Cataract surgery is one of the most commonly performed procedures 
in

[[Page 82020]]

ASCs and there is currently no other patient-reported outcome measure 
for this procedure for the ASCQR Program. As a patient reported outcome 
measure, this measure aligns with the CMS National Quality Strategy 
(NQS) ``Foster Engagement'' goal, which seeks to increase engagement 
between individuals and their care teams to improve quality, establish 
trusting relationships, and bring the voices of people and caregivers 
to the forefront. The Meaningful Measures 2.0 goals also prioritize 
patient-reported measures and promoting better collection and 
integration of patient voices across CMS' quality programs.
    We believe that the value of the information this measure provides 
to consumers about quality of care justifies the potential 
administrative burden for ASCs that voluntarily report on it. As some 
facilities have been voluntarily reporting this measure successfully 
while it has not been required, we believe this indicates that the 
measure is not overly burdensome, and that standardizing the allowable 
survey instruments will further improve its usability and reliability 
in the ASC setting. We wish to reiterate that when selecting allowable 
surveys, we considered a variety of factors, such as accessibility, 
feasibility, and prevalence. We also reiterate that we proposed to 
limit the allowable surveys to the NEI-VFQ-25, VF-14, and VF-8R as they 
are commonly adopted survey instruments that are readily available 
online for entities to access and use.
    We note that while it is recommended that the facility obtain the 
survey results from the appropriate physician or optometrist, the 
surveys can be administered by the facility via phone, mail, email, or 
during clinician follow-up. Patients can also self-administer the 
surveys and submit them directly to the facility via mail or email.
    Finally, we appreciate the commenter's suggestion to adopt the 
Toxic Anterior Segment Syndrome (TASS) measure. We note that the TASS 
measure is used to assess the number of ophthalmic anterior segment 
surgery patients diagnosed with TASS within 2 days of surgery. The 
Cataracts Visual Function measure assesses the percentage of patients 
aged 18 years and older who had cataract surgery and had improvement in 
visual function achieved within 90 days following the cataract surgery. 
Therefore, the TASS measure could not seamlessly replace the Cataracts 
Visual Function measure, as they measure two different outcomes. We 
will consider the adoption of new measures in future rulemaking.
    Additionally, we will consider developing best practices based on 
facility use of these surveys during the voluntary measurement period.
    Comment: Some commenters suggested that the Cataract Visual 
Function measure be made mandatory.
    Response: We have continued to evaluate and consider community 
feedback on this measure's specifications and implementation since the 
measure was originally adopted in CY 2014. As previously noted, we are 
retaining this measure as voluntary for the CY 2024 reporting period/CY 
2026 payment determination. We acknowledge that this measure requires 
cross-setting coordination among clinicians of different specialties 
(that is, surgeons and ophthalmologists), increasing burden. If we 
determine that the value of mandatory reporting justifies increased 
burden on ASCs, we will propose to transition the measure to mandatory 
reporting through rulemaking.
    Comment: One commenter recommended that the Cataracts Visual 
Function measure be included instead under the Quality Payment Program, 
as patients are likely to receive ongoing care following the procedure 
outside of the facility where the surgery was performed.
    Response: This measure is already included under the Quality 
Payment Program's Merit-based Incentive Payment System (MIPS) (Measure 
303) for MIPS eligible clinicians (as defined in 42 CFR 
414.1305) to report. Even though individual clinicians may report this 
measure in MIPS, we continue to view this measure as appropriate for 
assessing facility-level of care as the procedures are provided in a 
facility.
    After consideration of the public comments we received, we are 
finalizing our proposal to modify the Cataracts Visual Function measure 
as proposed. We also refer readers to the discussion of a similar 
proposal for the same measure as used in the Hospital OQR Program in 
section XIV.B.2.b of this final rule with comment period.
c. 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.\544\ 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.\545\ 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.'' \546\
---------------------------------------------------------------------------

    \544\ Centers for Disease Control (2022). Colorectal Cancer 
Statistics. Available at: https://gis.cdc.gov/Cancer/USCS/#/AtAGlance/.
    \545\ 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.
    \546\ 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.\547\ 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.\548\ 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 45.549 550 551 Based on

[[Page 82021]]

the recent changes in clinical guidelines to begin CRC screening at age 
45 instead of age 50, in the CY 2024 OPPS/ASC proposed rule (88 FR 
49809 and 49810), we proposed 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.
---------------------------------------------------------------------------

    \547\ US Preventive Services Task Force (2021). Screening for 
Colorectal Cancer. JAMA, 325(19), 1965-1977. https://doi.org/10.1001/jama.2021.6238.
    \548\ Ibid.
    \549\ 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.
    \550\ 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.
    \551\ 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.
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(2) Overview of Measure
    We refer readers to the CMS Measures Inventory Tool (CMIT) 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.552 553 
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.'' \554\ In the CY 
2024 OPPS/ASC proposed rule (88 FR 49810), we proposed to amend the 
measure's denominator language by replacing the phrase ``aged 50 
years'' with the phrase ``aged 45 years.'' Under the proposal, 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.'' \555\ We did not 
propose any changes to the measure numerator, other measure 
specifications, exclusions, or data collection for the Colonoscopy 
Follow-Up Interval measure.
---------------------------------------------------------------------------

    \552\ Centers for Medicare & Medicaid Services (2023). Measures 
Inventory Tool. Available at: https://cmit.cms.gov/cmit/#/MeasureView?variantId=793&sectionNumber=1.
    \553\ Qualitynet Home. (n.d.). Retrieved March 21, 2023, from 
https://qualitynet.cms.gov/asc/specifications-manuals#tab6.
    \554\ Centers for Medicare & Medicaid Services (2023). Measures 
Inventory Tool. Available at: https://cmit.cms.gov/cmit/#/MeasureView?variantId=793&sectionNumber=1.
    \555\ Ibid.
---------------------------------------------------------------------------

    In the CY 2023 Physician Fee Schedule final rule with comment 
period (87 FR 69760 through 69767), we adopted the modified Colonoscopy 
Follow-Up Interval measure, which we proposed 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, in the CY 2024 OPPS/ASC proposed rule (88 FR 49810), 
we proposed to modify the Colonoscopy Follow-Up Interval measure 
denominator to ``all patients aged 45 to 75 years'' for the ASCQR 
Program. We proposed the modification of the Colonoscopy Follow-Up 
Interval measure beginning with the CY 2024 reporting period/CY 2026 
payment determination.
    We invited public comment on the proposal.
    Comment: Many commenters supported CMS's proposal to modify the 
Colonoscopy Follow-Up Interval measure beginning with the CY 2024 
reporting period/CY 2026 payment determination. Some commenters 
supported the proposal because the modification to the denominator 
aligns with clinical guidelines. Some of these commenters supported the 
proposal because the modification to the denominator provides alignment 
across quality programs. One commenter supported the proposal, noting 
that rates of CRC have been increasing in people under 50 years of age 
and stating a belief that the denominator change will promote 
appropriate and important preventative services. Another commenter 
supported the proposal stating a belief that the change in denominator 
will have far-reaching impacts on improving access to CRC screening and 
reduce CRC mortality.
    Response: We thank commenters for supporting our proposal to modify 
the Colonoscopy Follow-Up Interval measure denominator to ``all 
patients aged 45 to 75 years'' for the ASCQR Program. We agree that it 
is important to align requirements across quality reporting programs 
and clinical guidelines when relevant. We believe that establishing 
consistent policy across our programs in terms of minimum age limits 
for CRC screening tests is critical to the public's understanding of 
evolving CRC screening recommendations.
    Comment: One commenter noted that the modification to this measure 
would increase the patient population that is eligible for the measure 
and recommended that CMS maintain the same sample size to prevent 
increased administrative burden.
    Response: We clarify that the only change proposed to this measure 
was a change in the measure denominator to ``all patients aged 45 to 75 
years.'' We understand that the measure would increase the patient 
population that is eligible for the measure, however, we did not 
propose any other changes to the measure specifications or sampling 
methodology for the measure, including any changes to minimum sampling 
size requirements. Therefore, we do not believe that the modification 
to the denominator increases the burden on ASCs. We refer readers to 
the Sampling Specifications section of the ASCQR Program Specifications 
Manual for additional detail, which is available at: https://qualitynet.cms.gov/asc/specifications-manuals.
    After consideration of the public comments we received, we are 
finalizing our proposal to modify the Colonoscopy Follow-Up Interval 
measure as proposed. We also refer readers to the discussion of a 
similar proposal for the same measure as used in the Hospital OQR 
Program in section XIV.B.2.c of this final rule with comment period.
5. 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

[[Page 82022]]

(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 the 
measures we proposed for adoption in the CY 2024 OPPS/ASC proposed rule 
for the ASCQR Program as detailed therein (88 FR 49810 through 49818) 
and under this section of this final rule with comment period.
    Specifically, in the CY 2024 OPPS/ASC proposed rule (88 FR 49810 
through 49818), we proposed to: (1) re-adopt with modification the ASC 
Facility Volume Data on Selected ASC Surgical 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 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.
    We discuss each of these measures, along with the public comments 
that we received on them, in subsequent sections.
a. Proposed ASC Facility Volume Data on Selected ASC Surgical 
Procedures 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
(1) Background
    Hospital care has been gradually shifting from inpatient to 
outpatient settings.\556\ 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.\557\ 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.\558\ 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.
---------------------------------------------------------------------------

    \556\ 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.
    \557\ 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/.
    \558\ 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.\559\ 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.560 561 562 Specifically, larger facility surgical 
procedure volume may be associated with better outcomes due to having 
characteristics that improve care.\563\ 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.\564\ This association between volume and patient 
outcomes may be attributable to greater experience or surgical skill, 
greater comfort with and, hence, higher likelihood of application of 
standardized best practices, and increased experience in monitoring and 
management of surgical patients for the particular procedure.
---------------------------------------------------------------------------

    \559\ Ibid.
    \560\ Ibid.
    \561\ 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.
    \562\ 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.
    \563\ 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.
    \564\ Ibid.
---------------------------------------------------------------------------

    The ASCQR Program does not currently include a quality measure for 
facility-level volume data, including surgical procedure volume data, 
but did so previously. In the CY 2012 OPPS/ASC final rule with comment 
period (76 FR 74507 through 74509), 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 \565\ of procedures frequently performed in the ASC 
setting: Gastrointestinal, Eye, Nervous System, Musculoskeletal, Skin, 
Respiratory, and Genitourinary.\566\ 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).567 568 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).
---------------------------------------------------------------------------

    \565\ 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 seventh category ``Respiratory'' was added 
following this measure's adoption. This measure collected data 
ranging from six to eight procedural categories while incorporated 
in the ASCQR Program.
    \566\ ASC Specifications Manual version 5.1. Available at: 
https://qualitynet.cms.gov/asc/specifications-manuals#tab6.
    \567\ 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.
    \568\ 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 59449 
and 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)(2)(vi)) (82 FR 59449).

[[Page 82023]]

    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 and 59450).
    In the CY 2023 OPPS/ASC final rule with comment period (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 serves 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.\569\ 
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.\570\ 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.
---------------------------------------------------------------------------

    \569\ 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.
    \570\ 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 and 
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.\571\
---------------------------------------------------------------------------

    \571\ 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 supporting the 
correlation between volume and quality as meaningful (87 FR 72129 and 
72130). However, many studies in recent years have shown that volume 
does serve as an indicator of quality of care.572 573 For 
example, studies published since the CY 2018 OPPS/ASC final rule with 
comment period 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.574 575 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.576 577
---------------------------------------------------------------------------

    \572\ 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 00001985.
    \573\ 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.
    \574\ 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 meta-analysis. J Orthop Surg Res 14, 468. 
https://doi.org/10.1186/s13018-019-1531-0.
    \575\ 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.
    \576\ 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 00001985.
    \577\ 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
    In the CY 2024 OPPS/ASC proposed rule (88 FR 49812), we noted that 
the ASC Procedure Volume measure, if re-adopted with the modifications 
discussed below, would collect 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.\578\ Under the 
proposed measure, data surrounding the top five most frequently 
performed procedures among ASCs 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.\579\
---------------------------------------------------------------------------

    \578\ ASC Specifications Manual version 1.0b. Available at: 
https://qualitynet.cms.gov/asc/specifications-manuals#tab6.
    \579\ Data source: Clinical Data Warehouse; CMS ASC Part B 
claims for encounters January 1, 2022-December 31, 2022.
---------------------------------------------------------------------------

    We also proposed 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 data.cms.gov website or 
another CMS website. We refer readers to Sec.  416.315 for our codified 
policies regarding public

[[Page 82024]]

reporting of data under the ASCQR Program.
    In the CY 2024 OPPS/ASC proposed rule (88 FR 49812), we proposed 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 with comment period 
(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 proposed 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 differentiation among these broad-based categories 
(76 FR 74508), the second modification to this measure that we proposed 
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. We refer readers 
to the Center for Medicare and Medicaid Services Inventory Tool for 
more information on this measure: https://cmit.cms.gov/cmit/#/MeasureView? variantId=11740& sectionNumber=1.
    In the CY 2024 OPPS/ASC proposed rule (88 FR 49813), we also 
proposed 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 final rule with 
comment period 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.\580\ 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.
---------------------------------------------------------------------------

    \580\ 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.
---------------------------------------------------------------------------

    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.\581\
---------------------------------------------------------------------------

    \581\ 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.\582\ The 
MAP noted a similar review focused on outpatient surgeries that 
similarly found a significant volume-outcome relationship across eight 
studies.\583\
---------------------------------------------------------------------------

    \582\ 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.
    \583\ 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 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.\584\ 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.\585\ 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.586 587
---------------------------------------------------------------------------

    \584\ 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/.
    \585\ 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.
    \586\ 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.
    \587\ 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.\588\ The MAP 
highlighted that the specifications of the volume measure proposed for 
the Hospital OQR Program are aligned with the volume measure we 
proposed 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.
---------------------------------------------------------------------------

    \588\ 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.
---------------------------------------------------------------------------

(c) Measure Endorsement
    As discussed in the previous subsection of this final rule with 
comment period, 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 CBE as the measure 
was not submitted for endorsement. We have noted in previous rulemaking 
(76 FR

[[Page 82025]]

74494) the requirement that measures reflect consensus among affected 
parties can be achieved in other ways aside from endorsement by a 
national CBE, 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 proposed to re-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, in the CY 2024 OPPS/ASC 
proposed rule (88 FR 49811 through 49813), we proposed the re-adoption 
of this measure, with modification, in the ASCQR Program pending 
endorsement from a national CBE.
    We invited public comment on the proposal.
    Comment: Several commenters expressed support for our proposal to 
re-adopt with modification the ASC Procedure Volume measure beginning 
with the voluntary CY 2025 reporting period followed by mandatory 
reporting beginning with the CY 2026 reporting period/CY 2028 payment 
determination. Some of these commenters expressed that this measure 
provides valuable insights about quality of care and supports consumer 
decision-making. Some commenters expressed support for the measure's 
more granular reporting at the procedure level for the five most 
frequently occurring procedures in each of the clinical categories.
    Response: We thank the commenters for their support. Although we 
are not re-adopting the ASC Procedure Volume measure at this time, we 
agree that this measure provides valuable insights into care quality 
and is supportive of consumer decision-making.
    Comment: Many commenters did not support our proposal to re-adopt 
with modification the ASC Procedure Volume measure. Some of these 
commenters stated that there is a lack of evidence that surgical volume 
is an indicator of quality, specifically in the outpatient setting, and 
a few commenters stated that the measure does not align with CMS' 
Meaningful Measures 2.0 Framework for this reason. A few commenters 
cited evidence to support these beliefs, which indicates higher volume 
for transcatheter aortic valve replacement (TAVR) procedures is not an 
indicator of superior care quality.589 590
---------------------------------------------------------------------------

    \589\ Nelson AJ, Wegermann ZK, Gallup D. Modeling the 
association of volume vs composite outcome thresholds with outcomes 
and access to transcatheter aortic valve implantation in the US. 
JAMA Cardiol 2023; 8(5): 492-502. Available at: https://doi.org/10.1001/jamacardio.2023.0477.
    \590\ Russo MJ, McCabe JM, Thourani VH, et al. Case Volume and 
Outcomes After TAVR With Balloon-Expandable Prostheses: Insights 
From TVT Registry. J Am Coll Cardiol. 2019;73(4):427-440. https://doi.org/10.1016/j.jacc.2018.11.031.
---------------------------------------------------------------------------

    Response: We disagree with these comments regarding whether volume 
can serve as an indicator of quality along with other quality 
information. We reiterate that recently published scientific literature 
supports the position that volume metrics can serve as an indicator of 
quality, denoting which facilities have experience with certain 
outpatient procedures, and can assist consumers in making informed 
decisions about where they receive care. Furthermore, a study found 
that congestive heart failure (CHF) patients who stayed in hospitals 
with more experience in managing CHF received higher quality care and 
experienced better outcomes.\591\ Referencing commenter concern of a 
lack of evidence that surgical volume is an indicator of quality, 
specifically in the outpatient setting, in the CY 2024 OPPS/ASC 
proposed rule (88 FR 49812), we cited a study, which found that 
patients who had total hip arthroplasties performed at high-volume 
hospitals had lower rates of surgical site infections, complications, 
and mortality compared to patients at low-volume hospitals.\592\ 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, leading to a shift in THA procedures in ASCs. We believe these 
studies, linking volume to quality of care, aligns with the Meaningful 
Measures 2.0 Framework goal to use ``only high-quality measures 
impacting key quality domains.'' Although we are not re-adopting the 
ASC Procedure Volume measure at this time for the reasons discussed 
below, we will continue to assess such evidence to ensure alignment 
with our goals set forth in the Meaningful Measures 2.0 Framework.
---------------------------------------------------------------------------

    \591\ Joynt, K.E., Orav, E.J., & Jha, A.K. (2011). The 
association between hospital volume and processes, outcomes, and 
costs of care for congestive heart failure. Annals of internal 
medicine, 154(2), 94- 102. https://doi.org/10.7326/0003-4819-154-2-201101180-00008.
    \592\ Mufarrih, S.H., Ghani, M.O.A., Martins, R.S. et al. Effect 
of hospital volume on outcomes of total hip arthroplasty: a 
systematic review and metaanalysis. J Orthop Surg Res 14, 468 
(2019). https://doi.org/10.1186/s13018-019-1531-0.
---------------------------------------------------------------------------

    We acknowledge the publication of recent research indicating that 
when patients were treated in high-volume hospitals versus those with 
best historical outcomes, there was no significant reduction in 
observed versus modeled adverse events.593 594 We believe 
these recent studies indicate that hospital variation in care metrics 
is important, but that it does not discount the conclusions of the 
studies mentioned above or address instances where facility volume is 
low. Given the potential association between volume and outcomes, we 
believe that volume information can be useful to patients and 
consumers. Although we are not re-adopting the ASC Procedure Volume 
measure at this time, given that there is a potential association 
between volume and outcome, we believe this measure provides 
transparency, including information about volume that may be 
informative to patients.
---------------------------------------------------------------------------

    \593\ Nelson AJ, Wegermann ZK, Gallup D, et al. Modeling the 
Association of Volume vs Composite Outcome Thresholds With Outcomes 
and Access to Transcatheter Aortic Valve Implantation in the US. 
JAMA Cardiol. 2023;8(5):492-502. Available at: https://doi.org/10.1001/jamacardio.2023.0477.
    \594\ Russo MJ, McCabe JM, Thourani VH, et al. Case Volume and 
Outcomes After TAVR With Balloon-Expandable Prostheses: Insights 
From TVT Registry. J Am Coll Cardiol. 2019;73(4):427-440. https://doi.org/10.1016/j.jacc.2018.11.031.
---------------------------------------------------------------------------

    Comment: Some commenters did not support our proposal to re-adopt 
with modification the ASC Procedure Volume measure stating that there 
is a lack of evidence to support volume as a measure of quality in low-
risk procedures. This commenter stated that volume literature focuses 
on high-risk surgical procedures, which are often not performed at 
ASCs.
    Response: We acknowledge that much of the literature addresses the 
relationship of volume to outcomes in high-risk surgeries, which are 
less likely to be performed in ASCs. However, a recent meta-analysis 
showed that low volume hospitals were associated with higher surgical 
site infection rates, longer length of stay, higher 90-day complication 
rates, and higher 1-year mortality rates compared with high volume 
hospitals following Total Hip Arthroplasty (THA) procedures.\595\ THA 
is considered a lower risk procedure and is often performed in ASCs. We 
note that while this study takes place in the hospital setting, the 
volume of THA and Total Knee Arthroplasty (TKA) procedures for Medicare 
beneficiaries aged 65 years and older have been increasing in ASCs. In 
the CY 2021 OPPS/ASC final rule with comment period (85 FR 86146), we 
announced

[[Page 82026]]

that THA and TKA procedures were removed from the Inpatient Only 
Procedures (IPO) list and added to the ASC covered procedures list 
(CPL), leading to a shift in THA procedures in both hospitals and ASCs.
---------------------------------------------------------------------------

    \595\ 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 meta-analysis. J Orthop Surg Res 14, 468. 
https://doi.org/10.1186/s13018-019-1531-0.
---------------------------------------------------------------------------

    Comment: Some commenters did not support our policy to re-adopt the 
ASC Procedure Volume measure due to the previous rationale for removing 
this measure: 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)(2)(vi)) (82 FR 59449).
    Response: We acknowledge that, in the CY 2018 OPPS/ASC final rule 
with comment period (82 FR 59449 and 59450), we stated our belief, 
based on the then-available literature, that measures on specific 
procedure types would provide patients with more valuable ASC quality 
of care information as these types of measures are more strongly 
associated with desired patient outcomes. Thus, we removed the ASC 
Facility Volume measure under our second criterion for removal from the 
program; specifically, that there are other measures available that are 
more strongly associated with desired patient outcomes for the 
particular topic (82 FR 59449 and 59450). However, as we noted in the 
CY 2024 OPPS/ASC proposed rule (88 FR 49811 through 49813) and section 
XV.B.5.a(1) of this final rule with comment period, more recent studies 
support the use of volume as a quality-of-care indicator and we 
continue to believe that this information can be of benefit to Medicare 
beneficiaries and other consumers, especially when case volume is low.
    Also, as we noted in the CY 2024 OPPS/ASC proposed rule (88 FR 
49811 through 49813) and section XV.B.5.a(1) of this final rule with 
comment period, the migration of procedures from the inpatient to the 
outpatient setting has since placed greater importance on tracking the 
volume of outpatient procedures. As we noted in the CY 2023 OPPS/ASC 
final rule, forty-five percent of percutaneous coronary intervention 
(PCI) procedures shifted from the inpatient to outpatient setting from 
2004 to 2014, and more than 70 percent of patients who undergo 
thoracoscopic surgery can be discharged on the day of surgery itself 
due to the use of innovative techniques and technologies available in 
the outpatient setting (87 FR 72128). Given the relatively small number 
of HCPCS codes utilized by most ASCs, we believe that patients may 
benefit from the public reporting of facility-level volume measure data 
that illuminates which procedures are performed across ASCs, provides 
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. We believe that the 
increasing importance of volume metrics in the outpatient setting 
supports our proposal to re-adopt this measure with modification. 
Although we are not re-adopting the ASC Procedure Volume measure at 
this time, we recognize the increasing importance of volume in the ASC 
setting.
    Comment: Many commenters did not support our proposal because they 
stated that they believe the potential administrative burden of the ASC 
Procedure Volume measure outweighs its potential value.
    Response: 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. Furthermore, our estimates of burden indicated that each 
participating ASC would spend 10 minutes per year to submit the data 
for this measure to CMS, as noted in the CY 2024 OPPS/ASC proposed rule 
(88 FR 49875). We believe these collection efforts would not impose 
undue burden on ASCs.
    In addition, this measure would further advance CMS' goal of 
transitioning to a fully digital quality measurement landscape and 
promoting interoperability while helping to decrease reporting burden 
in the long-term. We believe that the value of the measure would 
outweigh potential reporting burden. Although we are not re-adopting 
the ASC Procedure Volume measure at this time, we believe these 
collection efforts would not impose undue burden on ASCs.
    Comment: Several commenters did not support our proposal because 
they believe the ASC Procedure Volume measure would lead to potential 
misuse through ``perverse incentives'' for providers to perform non-
indicated procedures to increase procedural volume.
    Response: We disagree that the ASC Procedure Volume measure creates 
an incentive for providers to perform non-indicated procedures. The ASC 
Procedure Volume measure tracks the top five procedures performed in 
the outpatient setting using CPT codes. The procedures posted by volume 
change yearly; thus, we do not believe the volume measure would lead to 
potential misuse through ``perverse incentives'' for providers to 
perform non-indicated procedures to increase procedural volume. 
Furthermore, when this measure was previously included in the ASCQR 
Program measure set, we did not identify significant changes in 
reported volume information that would indicate this measure engendered 
``perverse incentives'' for facilities to perform non-indicated 
procedures simply to increase reported numbers of procedures.
    Comment: One commenter did not support our proposal to re-adopt 
with modification the ASC Procedure Volume measure because they stated 
that volume data would be confusing to Medicare patients. Commenters 
noted that such data are limited in value due to lack of context 
related to clinical appropriateness of the procedure for each specific 
patient and the risk profile for the volume of patients. Commenters 
added that the measure does not provide context related to overall 
procedural outcomes.
    Response: We disagree with the commenter's assertion that volume 
data would be confusing to Medicare patients. As we explained in the CY 
2024 OPPS/ASC proposed rule (88 FR 49812), we intended to publish the 
measure's results to the data.cms.gov website, or other CMS website, 
which is designed to be a consumer-friendly portal for quality 
information on Medicare providers, if the proposal was adopted in 
future rulemaking. We interpret commenters' concern about the clinical 
appropriateness of the procedure for each specific patient to indicate 
concern that the ASC Procedure Volume measure's calculation may appear 
to be inflated by medically unnecessary procedures. We disagree with 
this opinion. We believe the ASC Procedure Volume measure provides 
fundamental information to patients about the frequency with which 
procedure is performed in a given facility. We do not believe that this 
information is harmful for patients, and we believe strongly that 
equipping patients with as much meaningful information as possible 
about their care builds a stronger health care system. We also do not 
agree that the measure lacks risk profile context for ASCs as ASCs 
typically do not perform procedures in higher risk patients. As we 
stated in the CY 2024 OPPS/ASC proposed rule (88 FR 49811), volume 
metrics serve as an indicator of which facilities have experience with 
certain outpatient procedures, likely leading to higher quality 
outcomes, and assist consumers in making informed decisions about where 
they receive care. We do agree that other dimensions of quality are 
also important to patients' outcomes in the

[[Page 82027]]

hospital outpatient department, but we believe that data submitted for 
the ASC Procedure Volume measure provide transparency into volume as a 
dimension of quality, which may be informative to patients. The ASC 
Procedure Volume measure is intended to be one of many metrics for 
determining care. Although we are not re-adopting the ASC Procedure 
Volume measure at this time, we continue to believe there is 
significant evidence linking volume to quality of care, and that volume 
metrics serve as an indicator of which facilities have experience with 
certain outpatient procedures and can assist consumers in making 
informed decisions about where they receive care. Based on comments 
received, we intend to reassess the measure's methodology and 
reconsider how the data may be publicly displayed in the most 
meaningful manner for consumers.
    Comment: One commenter raised concern over many services and 
diagnoses distributed over large groups of procedure or diagnostic 
codes, so even if a facility regularly performs a service, a volume 
measure may incorrectly identify it as having little to no experience 
if no single code exceeds a minimum threshold. Another commenter also 
stated that CMS already has access to these data through claims.
    Response: Responding to commenter concerns over the distribution of 
services over large groups of procedural codes, our method does group 
some procedural codes within specific procedure categories to account 
for services being distributed over groups of procedures.\596\ We 
reiterate that the proposal is not being finalized for CY 2024. We will 
further consider this concern in future rulemaking.
---------------------------------------------------------------------------

    \596\ ASC Specifications Manual version 1.0b. Available at: 
https://qualitynet.cms.gov/asc/specifications-manuals#tab6.
---------------------------------------------------------------------------

    We acknowledge that we can determine facility volumes for 
procedures performed using Medicare FFS claims. However, as we note in 
section XV.B.5.a(1) of this final rule with comment period, the 
specifications for the ASC Procedure Volume measure include reporting 
data for non-Medicare patients. Relying solely on the use of Medicare 
FFS claims data to simplify reporting would limit the measure to only 
this payer, which will not fully account for the volume of procedures 
performed at a given ASC.
    Comment: One commenter expressed confusion related to the number of 
procedure categories, as they have varied since the measure's initial 
implementation.
    Response: The categories chosen for the proposed ASC Facility 
Volume measure were informed and updated through CY 2022 ASC Claims 
with Surgical CPT codes. Since this measure's initial adoption, the 
number of categories varied annually depending on updated code data. 
This measure collected data ranging from six to eight procedural 
categories while incorporated in the ASCQR Program. During this 
measure's initial adoption in the ASCQR Program in CY 2012, there were 
six finalized categories (76 FR 74509). During the measure's time in 
the ASCQR Program, there were predominately seven or eight categories 
annually. To collect the most meaningful data for this measure, we 
proposed to collect the top five procedures within each chosen 
category. We reiterate that these top five procedures would be assessed 
and updated annually as needed to ensure data collection of most 
accurate and frequently performed procedures. We will continue to 
examine these data on an ongoing basis and will consider adjusting the 
measure specifications as needed.
    Comment: One commenter noted the importance of lower-volume sites 
in providing services to underserved populations, such as Black, 
Hispanic, and rural patients. One commenter noted that, because ASCs 
are specialized facilities, there would be a lot of ``0'' data entries 
for procedure categories that are not applicable.
    Response: We recognize that lower-volume sites provide services to 
patients, including historically underserved populations. We will 
consider the importance of lower volume sites for historically 
underserved populations if we re-propose this measure in the future.
    We acknowledge commenter's concerns over the data completeness of 
the ASC Procedure Volume measure. The categories and the top five 
procedures in each category would be assessed and updated annually as 
needed to ensure data collection of the most frequently performed 
procedures. We will continue to examine these data on an ongoing basis 
and adjust the measure specifications as needed.
    Comment: Many commenters provided recommendations in response to 
our proposal to re-adopt with modification the ASC Procedure Volume 
measure. A few commenters recommended adopting this measure as 
voluntary. One commenter recommended that CMS develop a volume measure 
focusing on procedures transitioning from the inpatient to the 
outpatient setting to replace this measure. Another commenter 
recommended the development of complementary measures of patient 
outcomes to pair with the ASC Procedure Volume measure to provide a 
complete picture of quality in the care setting. One commenter 
recommended not limiting the reporting to the 5 most frequently 
occurring procedures per clinical category. One commenter recommended 
only confidential-level feedback rather than publicly reporting these 
data and tying it to payment. Another commenter recommended that the 
top 5 frequently performed procedure categories are specific to each 
ASC, rather than national trends, to provide a more accurate picture of 
the specific facility's procedure volume. Additionally, another 
commenter suggested that CMS instead focus on outcome measures.
    Response: We thank commenters for providing these recommendations 
for this measure. We agree that refining measure specifications to 
benefit both patients and providers is important. We will consider 
these recommendations in future rulemaking. We would like to clarify 
that the ASCQR Program is a pay-for-reporting program and not a value-
based payment program.
    Comment: One commenter requested clarification on whether the top 5 
most frequently performed procedures are based on national data or if 
they are specific to each ASC.
    Response: The top five most frequently performed procedures are 
based on national data. We will continue to refine the best approach 
for determining most frequently performed procedures.
    After consideration of the public comments we received, we are not 
finalizing our proposal to re-adopt with modification the ASC Procedure 
Volume measure beginning with the voluntary CY 2025 reporting period 
followed by mandatory reporting beginning with the CY 2026 reporting 
period/CY 2028 payment determination. We are not finalizing this 
measure at this time, as we would like to conduct analysis that 
includes FFS and Medicare Advantage data when evaluating categories and 
most frequently performed procedures. Based on comments received, we 
intend to reassess the measure's methodology and reconsider how the 
data may be publicly displayed.

[[Page 82028]]

We continue to believe there is significant evidence linking volume to 
quality of care, and 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. We also refer readers to the discussion of a similar proposal for 
the same measure as used in the Hospital OQR Program in section 
XIV.B.3.a of this final rule with comment period.
b. 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 with comment period (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 CYs 2025 and 2026,\597\ followed by mandatory 
reporting for eligible elective procedures occurring July 1, 2024, 
through June 30, 2025, for the FY 2028 payment determination. In the CY 
2024 OPPS/ASC proposed rule (88 FR 49813 through 49818), we proposed 
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.
---------------------------------------------------------------------------

    \597\ In the CY 2024 OPPS/ASC proposed rule (88 FR 49813 and 
49814), we stated these reporting periods as FY. The IQR voluntary 
reporting periods for the THA/TKA PRO-PM are October 23, 2022, 
through June 30, 2023, for 2025 voluntary reporting and April 2, 
2023, through June 30, 2024, for 2026 voluntary reporting.
---------------------------------------------------------------------------

    Approximately six million adults aged 65 or older suffer from 
osteoarthritis in the United States.\598\ In 2013, there were 
approximately 568,000 hospitalizations billed to Medicare for 
osteoarthritis.\599\ Hip and knee osteoarthritis is one of the leading 
causes of disability among non-institutionalized 
adults,600 601 and roughly 80 percent of patients with 
osteoarthritis have some limitation in mobility.602 603 
Elective THA and TKA are most commonly performed for degenerative joint 
disease or osteoarthritis, which affects more than 30 million 
Americans.\604\ 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.605 606 607 However, not all patients 
experience benefit from these procedures.\608\ Many patients note that 
their pre-operative expectations for functional improvement have not 
been met.609 610 611 612 In addition, clinical practice 
variation has been well documented in the United 
States,613 614 615 616 617 readmission and complication 
rates vary across hospitals,618 619 and international 
experience documents wide hospital-level variation in patient-reported 
outcome measure results following THA and TKA.\620\
---------------------------------------------------------------------------

    \598\ 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.
    \599\ 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/.
    \600\ 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.
    \601\ 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.
    \602\ 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.
    \603\ 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.
    \604\ Centers for Disease Control and Prevention. Osteoarthritis 
(OA). Accessed March 8, 2019. Available at: https://www.cdc.gov/arthritis/basics/osteoarthritis.htm.
    \605\ 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.
    \606\ 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.
    \607\ 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.
    \608\ 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.
    \609\ 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.
    \610\ 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.
    \611\ 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.
    \612\ 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.
    \613\ 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.
    \614\ 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.
    \615\ 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.
    \616\ 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.
    \617\ 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.
    \618\ 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/.
    \619\ 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/.
    \620\ 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,

[[Page 82029]]

voluntary PRO data collection opportunity within the Comprehensive Care 
for Joint Replacement (CJR) model to support measure development.\621\ 
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,622 623 are influenced by a range 
of improvements in care,\624\ and demonstrate hospital-level variation 
even after patient case mix adjustment.625 626 Further, THA/
TKA procedures are specifically intended to improve function and reduce 
pain, making PROs a meaningful outcome metric to assess.\627\
---------------------------------------------------------------------------

    \621\ Centers for Medicare & Medicaid Services. Comprehensive 
Care for Joint Replacement Model. Available at: https://innovation.cms.gov/innovation-models/cjr.
    \622\ 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.
    \623\ 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/.
    \624\ 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.
    \625\ 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.
    \626\ 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.
    \627\ 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.
---------------------------------------------------------------------------

    In the CY 2021 OPPS/ASC final rule with comment period (85 FR 
86146), we announced that THA and TKA procedures were removed from the 
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 138). 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

[[Page 82030]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.207

BILLING CODE 4120-01-C
    In the CY 2022 OPPS/ASC proposed rule (86 FR 42276 and 42277), 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 rule with comment period (86 FR 63896 through 63898) for a 
complete summary of feedback from interested parties.
    Many commenters supported inclusion of the THA/TKA PRO-PM in 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. In response, we 
stated that while we recognize that PRO-PMs require providers to 
integrate data collection into clinical workflows, this integration 
provides opportunity for PROs to inform clinical decision-making and 
benefits

[[Page 82031]]

patients by engaging them in discussions about potential outcomes. 
Furthermore, we did 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. (88 FR 
49816) 628 629
---------------------------------------------------------------------------

    \628\ 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.
    \629\ 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.
---------------------------------------------------------------------------

    In the CY 2024 OPPS/ASC proposed rule (88 FR 49816), we proposed 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 the proposed measure required collection of data during the 3-
month pre-operative period and the greater than 1-year post-operative 
period, there would be 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 
proposed 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 final rule with comment period 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).\630\
---------------------------------------------------------------------------

    \630\ 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.
---------------------------------------------------------------------------

    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, if adopted into the ASCQR 
Program as proposed, would account 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 with 
comment period (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 final rule with comment period, 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 final rule.\631\ The measure 
includes PRO data collected with the two joint-specific PRO instruments 
described in this section of the final 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: (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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    \631\ 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. 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 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

[[Page 82032]]

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 final rule with comment period for further 
details regarding the variables required for data collection and 
submission.
(ii) Measure Calculation
    The ASC facility-level THA/TKA PRO-PM result would be 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 proposed rule (86 FR 25591 through 25592) (as summarized in the FY 
2022 IPPS/LTCH PPS final rule with comment period (86 FR 45408 through 
45414)) and the CY 2022 OPPS/ASC proposed rule (86 FR 42251 and 42252), 
and as discussed in the Hospital IQR Program in the FY 2023 IPPS/LTCH 
PPS final rule with comment period (87 FR 49246 through 49257), we 
proposed in the CY 2024 OPPS/ASC proposed rule (88 FR 49817) to adopt 
the THA/TKA PRO-PM in the ASCQR Program utilizing flexible data 
submission approaches.
    In the CY 2024 OPPS/ASC proposed rule (88 FR 49817), we proposed 
that 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 question. 
632 633)
---------------------------------------------------------------------------

    \632\ 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.
    \633\ The Oswestry Disability Index is in the public domain and 
available for all hospitals to use.
---------------------------------------------------------------------------

    Under the proposal, ASCs would also 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, and there would be no 
opportunity to correct the data following the submission deadline.
    In the CY 2024 OPPS/ASC proposed rule (88 FR 49817), following the 
two voluntary reporting periods, we proposed that mandatory reporting 
of the THA/TKA PRO-PM would begin with the CY 2027 reporting period/CY 
2030 payment determination. Under the proposal, 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).\634\ The MAP Coordinating Committee supported the 
measure, as referenced in the MAP's 2022-2023 Final Recommendations 
report to HHS and CMS.\635\
---------------------------------------------------------------------------

    \634\ 2022 Measures Under Consideration List. Available at 
https://mmshub.cms.gov/sites/default/files/2022-MUC-List.xlsx.
    \635\ 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 agreed 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.\636\
---------------------------------------------------------------------------

    \636\ 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 engagement, communication, and care coordination for the 
ASCQR Program.\637\
---------------------------------------------------------------------------

    \637\ Ibid.
---------------------------------------------------------------------------

(c) Measure Endorsement
    The CBE endorsed the hospital-level version of the THA/TKA PRO-PM 
(CBE 3559) in November 2020.\638\ 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 measure endorsement 
cycle.
---------------------------------------------------------------------------

    \638\ 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. In the CY 2024 OPPS/ASC proposed rule (88 
FR 49818), we proposed this measure without CBE-endorsement based upon 
strong MAP and public support

[[Page 82033]]

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 final rule with 
comment period for a discussion on the THA/TKA PRO-PM form, manner, and 
timing submission requirements.
    We invited public comment on the proposal.
    Comment: Some commenters supported the adoption of the THA/TKA PRO-
PM in the ASCQR Program, noting that the measure will support patients 
in their choice of a provider and allow comparisons of the quality of 
care among ASCs.
    Response: We thank commenters for their support of the THA/TKA PRO-
PM for the ASCQR Program.
    Comment: One commenter strongly supported the adoption of the THA/
TKA PRO-PM in the ASCQR Program; however, the commenter recommended a 
shorter timeframe to track patient-reported outcomes following THA/TKA 
procedures to better identify patients recovering faster, provide a 
more meaningful guide of the procedure's success, and help to 
differentiate performance among various implant systems and rehab 
protocols. The commenter also recommended posting post-operative 
functional improvements on Medicare's website once sufficient data has 
been collected so that patients can act as informed consumers of care. 
The commenter encouraged development of other THA/TKA claims-based 
outcome measures with a shorter-term post-operative time frame such as 
one-year mortality and revision rates.
    Response: We thank the commenter for their support and 
recommendations and agree with the importance of measuring patient-
reported outcomes for elective primary THA and TKA procedures, 
particularly to measure functional improvement following the applicable 
surgical procedure.
    We appreciate the commenter's recommendation for a shorter 
timeframe to track patient-reported outcomes following THA/TKA 
procedures; however, a longer timeframe has been adopted for capture of 
full recovery from both THA and TKA and alignment with the typically 
scheduled one-year post-surgery appointments so that the collection of 
the post-operative data would not require an additional appointment. 
Clinical experts strongly advocated for the 300-425-day post-operative 
data collection window to better align with clinical practice and 
increase PRO data collection.
    We also appreciate the commenter's suggestions to develop other 
claims-based joint arthroplasty measures and publicly post post-
operative functional improvements.
    Comment: Several commenters expressed concern about the burden for 
ASCs associated with the THA/TKA PRO-PM if it is finalized for adoption 
into the ASCQR Program. Commenters stated that the financial, resource, 
and labor costs required to collect, track, and submit data for this 
measure would burden facilities and lead to reporting penalties, which 
small, rural, and medically underserved facilities cannot afford. One 
commenter noted that EHRs are not integrated with patient portals in a 
manner that allow facilities to collect patient-reported information 
and that many facilities exist in areas where patient portal use is 
unreliable, requiring infrastructure investments and adding manual 
burden to extrapolate data. This commenter urged CMS to move the 
measure from facilities to providers or consider making it optional. 
One commenter noted that burden to ASCs could detract from the ability 
to dedicate necessary resources to patient care and safety.
    Response: We acknowledge that collecting patient-reported outcome 
measures (PROM) data may involve more burden and initial implementation 
resources compared to some other types of quality measures, and that 
some facilities may lack the necessary infrastructure to collect data 
on this measure. However, we believe the benefit of collecting direct 
functional improvement information from the patients outweighs the 
burden. We believe that measuring patient-reported outcomes is an 
important aspect of patient-centered healthcare and continue to 
emphasize, as highlighted in our Meaningful Measures 2.0 Framework, 
that the patient voice should be prioritized across healthcare systems 
and providers.\639\ While PRO-PMs require providers to integrate data 
collection into clinical workflows, this integration provides an 
important opportunity for patient-reported outcomes to inform clinical 
decision-making and benefit patients by engaging them in discussions 
about potential outcomes. To allow more time for initial 
implementation, we are extending the voluntary reporting period by an 
additional year and delaying implementation of mandatory reporting by 
one year. We believe that the additional year of voluntary reporting 
and delaying mandatory reporting will allow more time for ASCs to 
integrate data collection into their clinical workflows, allow time for 
CMS to monitor implementation progress with regards to data collection 
burden, as well as time for rulemaking should any improvements for 
mandatory reporting need to be made. Additionally, to provide more 
flexibility, we are not requiring ASCs to collect data in a 
standardized way. ASCs may use a variety of data collection, storage, 
and submission approaches, and we encourage ASCs to use processes best 
suited to them. We will monitor data collection burden during the 
voluntary reporting period and carefully consider public comments to 
advance patient-centered measurement with as little burden as possible 
to both providers and patients.
---------------------------------------------------------------------------

    \639\ Centers for Medicare & Medicaid Services. Meaningful 
Measures Framework. Available at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/CMS-Quality-Strategy.
---------------------------------------------------------------------------

    Additionally, implementation of this measure in the ASC setting has 
been recommended by interested parties, as summarized in the FY 2023 
IPPS/LTCH PPS final rule with comment period (87 FR 49254), and 
supported by interested parties, as summarized in the CY 2022 OPPS/ASC 
final rule with comment period (86 FR 63897).
    We thank commenters for their feedback on moving this measure to 
other programs and settings. We also agree that there is value in 
measurement at the clinician-level; however, this measure is designed 
as a facility-level measure and helps to capture the quality of care 
provided during a patient's stay in the ASC setting. Any proposal to 
implement the measure in other CMS programs would be announced through 
future rulemaking.
    Comment: We received mixed comments with respect to the proposed 
mandatory reporting timelines. One commenter suggested CMS reconsider 
the proposed timeline for the THA/TKA PRO-PM measure, possibly delaying 
the timeline by an additional year, and reconsidering the number of 
risk variables required for the proposed measure. However, another 
commenter recommended to move up mandatory reporting, to begin sooner 
than we proposed. A few commenters noted that the proposal to begin 
voluntary reporting in CY 2025 does not consider the beginning of 
mandatory reporting for the Outpatient and Ambulatory Surgery Consumer 
Assessment of Healthcare Providers and Systems (OAS

[[Page 82034]]

CAHPS) survey and therefore, requested delaying the voluntary reporting 
for the ASCQR Program's THA/TKA PRO-PM to allow the preparatory work 
required for reporting of the THA/TKA PRO-PM measure. One commenter 
noted that the extensive data collection required by the measure would 
rarely be used to guide patient care decisions and suggested that CMS 
consider an incremental approach to the number of data elements used 
for the proposed measure or reconsider the number of risk variables 
required to allow ASCs to implement the survey instruments, required 
for data collection, in a way that would distribute the burden over a 
longer period of time.
    Response: We have considered the commenters' recommendation 
regarding voluntary and mandatory reporting timelines for this measure 
and, as discussed below, we are finalizing the THA/TKA PRO-PM for the 
ASCQR Program with modification to extend the voluntary reporting 
period by an additional year, for a total of three years, and, in turn, 
delay implementation of the mandatory reporting period by one year. We 
are finalizing the phased implementation approach for adoption and 
implementation of this measure into the ASCQR Program, with voluntary 
reporting periods in CY 2025, CY 2026, and CY 2027 followed by 
mandatory reporting beginning with the CY 2028 reporting period for the 
CY 2031 payment determination. We believe this implementation approach 
balances the need to allow ASCs sufficient time to make the necessary 
enhancements to their clinical workflow to successfully report this 
measure with the need to make this information public for patient use. 
We will carefully consider feedback received during voluntary reporting 
to inform improvements that may be made for mandatory reporting. We 
also refer readers to section IX.X.10.k. of this final rule with 
comment period, where we discuss in more detail the form, manner, and 
timing of reporting the THA/TKA PRO-PM.
    Comment: One commenter did not support the proposed adoption of the 
THA/TKA PRO-PM into the ASCQR Program and expressed concerns regarding 
the measure specifications, supporting materials guidelines, and volume 
of data collection. The commenter noted that the supporting guidelines 
do not make it clear that patients undergoing THA and TKA procedures 
must be enrolled in Medicare Parts A and B for at least 12 months prior 
to the procedures and on the day of the procedure in order to be 
included in the measure calculation. The commenter also noted that the 
post-operative PRO collection timeframe does not align with that of the 
American Joint Replacement Registry which is 270-425 days and that one 
of the measure exclusions criteria includes patients who die within 300 
days of their procedure, which does not align with the postoperative 
data collection period of 300 to 425 days. In addition, the commenter 
stated that the Veterans Rand (VR)-12 questionnaire is not readily 
available and suggests CMS provide the questionnaire if this is an 
option for patient mental health data collection. The commenter also 
suggested clearer guidelines on how data elements are defined, 
specifically noting that the Use of Chronic Narcotics data element is 
not sufficiently defined leaving it open to interpretation. In 
addition, the commenter suggested that the Total Painful Joint Count 
data element is not a total painful joint count, but rather an 
assessment of whether the patient has pain in the non-operative hip or 
knee and requires rewording to avoid confusion and to reflect the data 
to be collected. A few commenters expressed concern over the volume of 
data ASCs would be required to collect and submit to report this 
measure. A commenter noted the limited availability of PRO data 
collection modalities, and stated that, under Federal regulation, ASCs 
may only act as the site for outpatient surgery and may not provide 
pre-operative services or post-operative follow-up care after patient 
discharge, thus limiting the options for PRO data collection or 
requiring significant additional resources to get patient data from 
other providers and/or their contractors. The commenter further noted 
that, given the lack of alignment between the proposed ASC THA/TKA PRO-
PM and other THA/TKA related quality measures clinicians can report on, 
reliance on other providers for PRO data collection may not be 
appropriate.
    Response: We acknowledge the commenter's concerns with the ASC THA/
TKA PRO-PM measure specifications and supporting materials guidelines. 
We note that the Data Collection, Submission, Reporting and Measure 
Specifications section in this rule and in the methodology report, 
available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology, 
clearly state that the THA/TKA PRO-PM 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 B during the procedure.
    In developing the THA/TKA PRO-PM, the measure developer reviewed 
registry data capture to inform the post-operative assessment window 
(initially 270 to 365 days) for capture of full recovery from both THA 
and TKA and alignment with the typically scheduled one-year post-
surgery appointments, so that the collection of the post-operative data 
collection would not require an additional appointment. Following 
several years of PRO data collection through the CJR Model, clinical 
experts expressed concern that the initial 365-day upper limit missed 
patients who were scheduled or rescheduled for this one-year follow-up 
beyond 365 days, and they strongly advocated for shifting the post-
operative data collection window to better align with clinical practice 
and increase PRO data collection. For additional details we refer 
readers to the Patient-Reported Outcomes (PROs) Following Elective 
Primary Total Hip and/or Total Knee Arthroplasty: Hospital-Level 
Performance Measure--Measure Methodology Report, available in Hip and 
Knee Arthroplasty Patient-Reported Outcomes folder at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.
    The PRO instruments and PROMs such as the Veterans Rand 12-Item 
Health Survey (VR-12) PROM and the Patient-Reported Outcomes 
Measurement Information Systems (PROMIS)-Global were carefully 
considered, with extensive interested party input, including 
clinicians, to be low burden. ASCs can use either of the two PROMs (VR-
12 or PROMIS-Global) to assess general aspects of health and well-being 
following elective primary THA/TKA. PROMs are available in both free 
and cost versions.
    We thank the commenter on the feedback to provide clearer 
guidelines regarding reporting the ``Use of Chronic Narcotics'' and 
labelling of ``Total Painful Joint Count'' data elements. We will 
conduct further review of the guidance materials.
    While we acknowledge the large volume of data required to calculate 
and risk-adjust measure scores for the proposed ASC THA/TKA PRO-PM, we 
highlight that the measure as proposed notes registries as an 
acceptable form of data collection for the measure (88 FR 49813 through 
49818) ASCs can utilize registries to reduce data collection

[[Page 82035]]

burden. In addition, this measure allows ASCs to use a variety of data 
collection, storage, and submission approaches to ensure flexibility 
and reduce burden, and we encourage ASCs to use processes best suited 
to their care setting and patient populations. We note that while we 
are not requiring ASCs to collect data in a standardized way, we are 
standardizing the specific data elements that need to be collected and 
reported. Further, we believe that clinicians, providers, and 
facilities should determine practices that avoid duplication across 
care settings. We will evaluate data collection burden associated with 
the THA/TKA PRO-PM to inform future changes to measure specifications 
or reporting processes improvements.
    With respect to the concern raised about ASCs' limited PRO data 
collection opportunities and modalities, we highlight that collecting 
outcome data after the procedure does not amount to providing post-
operative services or care. ASCs will be obtaining data that reflect 
patients' outcomes after a service that was provided by the ASC. The 
longer post-operative window for this measure reflects the time course 
of recovery and benefits the ASCs by providing sufficient recovery time 
to be reflected in the PRO responses.
    Comment: A few commenters expressed concerns about the data 
submission requirements and reporting thresholds. One commenter did not 
support the proposed adoption of the THA/TKA PRO-PM into the ASCQR 
Program because, for data submissions occurring after May 15, 2026, 
ASCs would be required to submit both pre-operative data for THA/TKAs 
performed the prior year and post-operative data for THA/TKAs performed 
two years prior. The commenter suggested that having a single data 
submission deadline for pre-operative and post-operative measure data 
for THA/TKA procedures performed in a single calendar year would be 
less burdensome and more efficient. A few commenters expressed concern 
regarding the requirement to submit complete and matching pre-operative 
and post-operative PRO data for at least 45 percent of their eligible 
elective primary THA/TKA procedures. The commenter noted that while the 
45 percent threshold proposed for this measure in the ASCQR Program is 
slightly less than the 50 percent threshold set for the Hospital IQR 
and proposed in the Hospital OQR Programs, it is still too high. The 
commenter cited difficulty with meeting the reporting threshold and 
also noted that ASCs are currently not collecting on all the PRO 
measures and would need additional time to prepare to meet this 
requirement. One commenter noted that data completeness requirement 
should not fall solely on the ASCs, and neither should the facility be 
financially penalized for it. The commenter noted that, because ASCs do 
not know in advance which patients would respond completely or would 
respond at all, ASCs will have to collect pre-operative data on all 
their THA/TKA patients. The commenter suggested that CMS select a more 
reasonable data completeness standard supported by results from the 
2019 OAS CAHPS mode experiment \640\ and redefine the reporting 
threshold to include both complete and incomplete responses, since it 
reflects the facility's attempt to meet requirements for the measure.
---------------------------------------------------------------------------

    \640\ https://oascahps.org/General-Information/Mode-Experiment.
---------------------------------------------------------------------------

    Response: We acknowledge commenters' concerns regarding submission 
of both pre-operative data for the second voluntary reporting period 
and post-operative data for the first voluntary period by the same data 
submission. We decided to stagger data submission to reduce burden for 
ASCs holding onto their pre-operative data for two years, ensure 
alignment between the pre-operative and post-operative data, and 
potentially reduce gaming. We will monitor and evaluate the proposed 
approach during the voluntary reporting period.
    Given that THA and TKA procedures were removed from the Inpatient 
Only Procedures (IPO) list and added to the ASC covered procedures list 
(CPL), we expect that the volume of THA and TKA procedures will 
continue to increase in ASCs, and that significant numbers of Medicare 
beneficiaries will potentially undergo these procedures in the 
outpatient setting in future years, including ASCs. We selected the 45 
percent reporting threshold after considering numerous factors and the 
experience of CJR Model participants. The proposed reporting threshold 
for adoption of the measure into the ASCQR Program is based on average 
response rates for both pre-operative and post-operative surveys 
collected by participating hospitals in the CJR Model. We note that the 
proposed reporting threshold for the THA/TKA PRO-PM is lower than that 
currently used in the CJR Model (45 percent versus 85 percent). 
Additionally, ASCs are not held to reporting thresholds until mandatory 
reporting; therefore, we believe ASCs will have time to develop their 
data collection and reporting processes.\641\
---------------------------------------------------------------------------

    \641\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9485540/.
---------------------------------------------------------------------------

    Regarding data completeness requirements, we acknowledge that ASCs 
would not know in advance which patients would respond completely or 
would respond at all; however, the original measure in the Hospital IQR 
Program, and specified for the ASCQR Program, was developed with 
extensive input from patients, who indicated strong support for a PRO-
PM following elective primary THA and TKA. However, we will continue to 
consider the appropriate pre-operative and post-operative matched 
survey response rate, data completeness, and reporting thresholds. We 
will carefully consider feedback received during voluntary reporting to 
inform improvements that may be made for mandatory reporting.
    Comment: One commenter did not support the proposed adoption of the 
THA/TKA PRO-PM into the ASCQR Program because ASCs will be required to 
collect and submit incomplete or no patient PRO data to adjust for 
nonresponse bias in the measure methodology. The commenter noted that 
since the measure methodology report stated that nonresponse bias 
weighting did not have a significant impact on the measure outcome, 
ASCs should not be required to devote resources to submit these PRO 
responses. A few commenters expressed concern that CMS has 
underestimated the cost burden to collect PRO data given that ASCs may 
not have access to an Electronic Health Record (EHR) system, and those 
that do use EHR technology will spend more than 20 minutes a year to 
collect PRO data.
    Response: We thank the commenter for their concerns about 
incomplete and missing PRO data. While encouraged, we do not require 
ASCs to submit incomplete data as that is left to the ASCs discretion. 
Submitting data (complete or not) during voluntary reporting offers 
several advantages. These include gaining familiarity with the data 
submission process, receiving feedback on the cases that were 
submitted, and potential inclusion in the measure through non-response 
weights. While we acknowledge the challenge of colleting PRO data, we 
note that submitting incomplete data should not add additional burden 
to the ASC. Furthermore, although we agree that during measure 
development, inverse probability weighting (IPW) for nonresponse bias 
did not have a substantial impact, we anticipate that

[[Page 82036]]

this may be a concern as more ASCs participate in reporting. Therefore, 
we retained this widely accepted statistical approach in the final 
measure methodology. The adjustment itself will be done during measure 
calculation and adds no additional computational burden to the 
ASC.\642\
---------------------------------------------------------------------------

    \642\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4257477/pdf/nihms578341.pdf.
---------------------------------------------------------------------------

    We also acknowledge commenters' concerns with the burden to collect 
PRO data given that some ASCs may have limited or no access to EHR 
systems. We acknowledge that the Title XIII of the American Recovery 
and Reinvestment Act of 2009 (ARRA) (Pub. L. 111-5, February 17, 2009), 
which sets forth the Health Information Technology for Economic and 
Clinical Health (HITECH) Act, did not offer ASCs financial incentives 
for EHR adoption like it did for hospitals, thus did not facilitate the 
proliferation of adoption and utilization of EHRs in ASCs. However, we 
clarify that this measure, as proposed, provides flexibility for the 
manner in which ASCs collect, store, and submit data. 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. We encourage ASCs 
to use processes best suited to them. We also note that qualified data 
collection registries are an acceptable form of data collection for the 
measure and can be utilized to reduce data collection burden for ASCs. 
This data submission approach is consistent with interested party input 
received by the measure developer during measure development and 
comments as summarized in the FY 2022 IPPS/LTCH PPS final rule with 
comment period (86 FR 45411 through 45414), which recommended that CMS 
provide multiple options for data submission mechanisms to ensure 
flexibility.
    Comment: Many commenters expressed concern over the technological, 
operational, resource and financial burden to obtain post-operative 
data 300 to 425 days. A few commenters expressed concern that ASCs 
would not have the benefit of collecting post-operative PRO data during 
a follow-up visit, which would be expected to negatively impact data 
completeness and overall response rates.
    Response: We acknowledge that while PROMs and PRO-PMs may involve 
more burden and initial implementation resources compared to some other 
types of quality measures, we believe the benefit of collecting direct 
functional improvement information from the patients outweighs the 
burden. We are carefully considering public comments and are seeking to 
advance patient-centered measurement with as little burden as possible 
to both providers and patients.
    We will review these recommendations to inform ongoing measure 
evaluation.
    After considering the comments received, we are finalizing adoption 
of the THA/TKA PRO-PM into the ASCQR Program. However, in response to 
concerns raised by commenters, we are extending the voluntary reporting 
period by an additional year and delaying implementation of mandatory 
reporting by one year, such that voluntary reporting would begin with 
the CY 2025 reporting period and continue through the CY 2027 reporting 
period followed by mandatory reporting beginning with the CY 2028 
reporting period for CY 2031 payment determination. We believe that the 
additional year of voluntary reporting would allow time for CMS to 
monitor implementation progress with regards to data collection burden 
and response rates, as well as time for rulemaking should any 
improvements for mandatory reporting need to be made.
6. ASCQR Program Quality Measure Set
a. Summary of Finalized 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 with comment 
period (87 FR 72120 and 72121) for the previously finalized ASCQR 
Program measure set for the CY 2024 reporting period/CY 2026 payment 
determination.
    Table 139 below summarizes the finalized ASCQR Program measures for 
the CY 2024 reporting period/CY 2026 payment determination.

[[Page 82037]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.208

b. Summary of Finalized ASCQR Program Quality Measure Set for the CY 
2025 Reporting Period/CY 2027 Payment Determination and Subsequent 
Years
    Table 140 summarizes the finalized ASCQR Program measures for the 
CY 2025 reporting period/CY 2027 payment determination.

[[Page 82038]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.209

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).\643\ Our policy on maintenance of technical specifications 
for the ASCQR Program are codified in our regulations at Sec.  416.325. 
In the CY 2024 OPPS/ASC proposed rule (88 FR 49819), we proposed 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 conforming technical edits, to 
accommodate recent and future systems requirements and mitigate 
confusion for program participants.
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    \643\ Qualitynet Home. (n.d.). Retrieved March 21, 2023, from 
https://qualitynet.cms.gov/asc/specifications-manuals.
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    We invited public comment on the proposal.
    We received no comments on the proposal. We are finalizing our 
proposal as proposed.

[[Page 82039]]

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 and 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 did not propose any changes to these policies in the CY 2024 
OPPS/ASC 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. In 
the CY 2024 OPPS/ASC proposed rule (88 FR 49820), we proposed 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 invited public comment on the proposal.
    We received no comments on the proposal. We are finalizing our 
proposal as proposed.
2. Requirements Regarding Program Participation
    We refer readers to the CY 2014 OPPS/ASC final rule with comment 
period (78 FR 75133 through 75135) for a complete discussion of the 
participation status requirements beginning with the CY 2014 payment 
determination. In the CY 2016 OPPS/ASC final rule with comment period 
(80 FR 70533 and 70534), we codified these requirements regarding 
participation status for the ASCQR Program in our regulations at Sec.  
416.305. In the CY 2024 OPPS/ASC proposed rule (88 FR 49820), we 
proposed 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 invited public comment on the proposal.
    We received no comments on the proposal. We are finalizing our 
proposal as proposed.

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 final rule with comment period 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 with comment 
period (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 with comment period (80 FR 70534), we 
codified the requirements regarding data processing and collection 
periods for claims-based measures using QDCs for the ASCQR Program 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 did not propose any changes to these policies in the CY 2024 
OPPS/ASC proposed rule.
(2) Minimum Threshold, Minimum Case Volume, and Data Completeness for 
Claims-Based Measures Using QDCs
    We refer readers to the CY 2018 OPPS/ASC final rule with comment 
period (82 FR 59472) (and the previous rulemakings cited therein), as 
well as 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 with 
comment period (86 FR 63904 and 63905), where we finalized that our 
policies for minimum threshold, minimum case volume, and data 
completeness requirements apply to any future claims-based-measures 
using QDCs adopted in the ASCQR Program.
    We did not propose any changes to these policies in the CY 2024 
OPPS/ASC proposed rule.
(3) Requirements Regarding Data Processing and Collection Periods for 
Non-QDC Based, Claims-Based Measure Data
    We refer readers to the CY 2019 OPPS/ASC final rule with comment 
period (83 FR 59136 through 59138) for a complete summary of the data 
processing and collection requirements for the non-QDC based, claims-
based measures. We codified the requirements regarding data processing 
and collection periods for non-QDC, claims-based measures for the ASCQR 
Program in our regulations at Sec.  416.310(b). We note that these 
requirements for non-QDC, 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 did not propose any changes to these policies in the CY 2024 
OPPS/ASC proposed rule.
c. Requirements for Data Submitted Via an Online Data Submission Tool
(1) Requirements for Data Submitted Via a CMS Online Data Submission 
Tool
    We refer readers to the CY 2018 OPPS/ASC final rule with comment 
period (82 FR 59473) (and the previous rulemakings cited therein) and 
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) \644\ to host our CMS online data submission tool, available by 
securely logging in at: https://hqr.cms.gov/hqrng/login. We note that, 
in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59473), 
we finalized expanded submission via the CMS online tool to also allow 
for batch data submission and made

[[Page 82040]]

corresponding changes at Sec.  416.310(c)(1)(i).
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    \644\ The HQR System was previously referred to as the 
QualityNet Secure Portal.
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    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: 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 with comment period (86 FR 63883 
through 63885), we finalized our proposal to require and resume data 
collection beginning with the CY 2023 reporting period/CY 2025 payment 
determination for the following four measures:
 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 sections XV.C.1 and XV.D.1.h., respectively, of this final 
rule with comment period, we did not propose any changes to these 
policies.
(a) Data Submission and Reporting Requirements for the ASC Procedure 
Volume Measure
    As discussed in section XV.B.5.a of this final rule with comment 
period, we are not finalizing our proposal 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 proposed that ASCs would 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 requirement, we proposed that we would 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.\645\ We 
proposed that we would assess and update the top five procedures in 
each category annually as needed. 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 data.cms.gov website, or other CMS website, following our 30-day 
preview period of submitted data.
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    \645\ Ambulatory Surgical Center Specifications Manuals. 
Available at: https://qualitynet.cms.gov/asc/specifications-manuals#tab6.
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    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 invited public comment on the proposal.
    We did not receive public comments on the form, manner, and timing 
for the ASC Procedure Volume measure. However, as previously discussed, 
we are not finalizing our proposal to re-adopt with modification the 
ASC Facility Volume Data on Selected ASC Surgical measure beginning 
with the voluntary CY 2025 reporting period followed by mandatory 
reporting beginning with the CY 2026 reporting period/CY 2028 payment 
determination.
(b) Data Submission and Reporting Requirements for the Cataracts Visual 
Function Measure
    In section XV.B.4.b of this final rule with comment period, we 
finalized our proposal to modify the Cataracts Visual Function measure 
by standardizing acceptable survey instruments, beginning with the CY 
2024 reporting period, which will 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)

    ASCs will 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, ASCs will 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 invited public comment on the proposal.
    We refer readers to section XV.B.4.b of this final rule with 
comment period regarding our discussion of the Cataracts Visual 
Function measure, including summaries of the comments we received on 
our proposal and our responses thereto. We did not receive public 
comments on the form, manner, and timing for the Cataracts Visual 
Function measure; as such, we are finalizing our proposal to begin 
collection of the modified Cataracts Visual Function measure beginning 
with the voluntary CY 2024 reporting period and subsequent years.
(2) Requirements for Data Submitted Via a Non-CMS Online Data 
Submission Tool
    We refer readers to the CY 2014 OPPS/ASC final rule with comment 
period (78 FR 75139 and 75140) and the CY 2015 OPPS/ASC final rule with 
comment period (79 FR 66985 and 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 with comment period (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 final rule with comment period, we 
discuss the 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 did not propose any changes to these policies in the CY 2024 
OPPS/ASC proposed rule.

[[Page 82041]]

d. Data Submission and Reporting Requirements for Patient-Reported 
Outcome-Based Performance Measures (PRO-PMs)
    In section XV.B.5.b of this final rule with comment period, we 
finalized our proposal to adopt the THA/TKA PRO-PM into the ASCQR 
Program measure set. In this section of the final rule, we are 
finalizing our proposal of 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 with comment period (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 the CY 2024 OPPS/ASC proposed rule (88 FR 
49813 through 49818), we proposed to adopt the THA/TKA PRO-PM into the 
ASCQR Program beginning with voluntary CYs 2025 and 2026 reporting 
periods and mandatory reporting period beginning with the CY 2027/CY 
2030 payment determination. We proposed that both ASCs and vendors 
would 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 invited public comment on the proposals.
    We did not receive any comments on the proposal and therefore, are 
finalizing the proposal as proposed.
    We also refer readers to section XV.B.5.b of this final rule with 
comment period regarding our discussion of the 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), 
including summaries of the comments we received on our proposal and our 
responses thereto. After considering commenters' recommendations 
regarding voluntary and mandatory reporting timelines received in 
section XV.B.5.b of this final rule with comment period, we are 
extending the voluntary reporting period by an additional year and 
delaying implementation of mandatory reporting by one year. We believe 
that the additional year of voluntary reporting would allow time for 
CMS to monitor implementation progress with regards to data collection 
burden and response rates, as well as time for rulemaking should any 
improvements for mandatory reporting need to be made. We are finalizing 
our proposal to begin voluntary reporting with the CY 2025 reporting 
period and continue through the CY 2027 reporting period followed by 
mandatory reporting beginning with the CY 2028 reporting period for CY 
2031 payment determination.
(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
    In the CY 2024 OPPS/ASC proposed rule (88 FR 49821), for ASCs 
participating in voluntary reporting for the THA/TKA PRO-PM, we 
proposed 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 proposed 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 proposed 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 did not propose to publicly report the data we receive 
during the voluntary reporting periods for the THA/TKA PRO-PM facility-
level RSIR, we proposed 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

[[Page 82042]]

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 141 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] TR22NO23.210

    We refer readers to section XV.B.5.b of this final rule with 
comment period regarding our discussion of the 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), 
including summaries of the comments we received on our proposal and our 
responses thereto. After considering commenters' recommendations 
regarding voluntary and mandatory reporting timelines received in 
section XV.B.5.b of this final rule with comment period, we are 
extending the voluntary reporting period by an additional year and 
delaying implementation of mandatory reporting by one year. We believe 
that the additional year of voluntary reporting would allow time for 
CMS to monitor implementation progress with regards to data collection 
burden and response rates, as well as time for rulemaking should any 
improvements for mandatory reporting need to be made.
    We are finalizing our proposal to begin voluntary reporting with 
the CY 2025 reporting period and continue through the CY 2027 reporting 
period followed by mandatory reporting beginning with the CY 2028 
reporting period for CY 2031 payment determination and refer readers to 
Table 142 for an overview of the finalized performance period, pre- and 
post-operative data collection timeframes, and data submission 
deadlines during the voluntary reporting periods for THA/TKA PRO-PM.

[[Page 82043]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.211

(c) Mandatory Reporting
    Following the two voluntary reporting periods, we proposed 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.
    In the CY 2024 OPPS/ASC proposed rule, we noted that 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 ASC annual 
fee schedule update in the CY 2030 payment determination. 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 143 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 82044]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.212

    We refer readers to section XV.B.5.b of this final rule with 
comment period regarding our discussion of the 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), 
including summaries of the comments we received on our proposal and our 
responses thereto.
    We invited comment on these proposals.
    After considering commenter's recommendation regarding voluntary 
and mandatory reporting timelines received in section XV.B.5.b of this 
final rule with comment period, we are extending the voluntary 
reporting period by an additional year and delaying implementation of 
mandatory reporting by one year. We believe that the additional year of 
voluntary reporting would allow time for CMS to monitor implementation 
progress with regards to data collection burden and response rates, as 
well as time for rulemaking should any improvements for mandatory 
reporting need to be made. We are finalizing our proposal to begin 
voluntary reporting with the CY 2025 reporting period and continue 
through the CY 2027 reporting period followed by mandatory reporting 
beginning with the CY 2028 reporting period for CY 2031 payment 
determination.
    Following the voluntary reporting periods, we are finalizing that 
mandatory reporting of the THA/TKA PRO-PM would begin with reporting 
PRO data for eligible elective THA/TKA procedures from January 1, 2028, 
through December 31, 2028 (the CY 2028 performance period), impacting 
the CY 2031 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, 
2027, through December 31, 2028 (for eligible elective primary THA/TKA 
procedures from January 1, 2028, through December 31, 2028) and post-
operative PRO data collection from October 27, 2028, to March 1, 2030. 
Pre-operative data submission would occur by May 15, 2029, and post-
operative data submission would occur by May 15, 2030.
    We refer readers to Table 144 for an overview of the finalized 
performance period, pre- and post-operative data collection timeframes, 
and data submission deadlines during the mandatory reporting periods 
for THA/TKA PRO-PM.

[[Page 82045]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.213

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 did not propose any changes to this policy in the CY 2024 OPPS/
ASC 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 
and 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 did not propose any changes to this policy in the CY 2024 OPPS/
ASC 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 did not propose any changes to this policy in the CY 2024 OPPS/
ASC 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. In the CY 2024 OPPS/ASC proposed rule 
(88 FR 49824), we proposed 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 invited public comment on the proposal.
    We received no comments on the proposal. We are finalizing our 
proposal as proposed.

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 and 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 2024, 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 
and 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

[[Page 82046]]

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 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 and 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 
proposed the continuation of these policies for the CY 2024 reporting 
period.
    We did not receive any public comments on our proposal. We are 
finalizing the continuation of these policies for CY 2024.

XVI. 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 hospitals 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, 2021 added section 
1861(kkk) to the Social Security Act (the Act). This section defines an 
REH as a facility that 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,\646\ or (ii) a subsection (d) hospital 
with not more than 50 beds that was treated as being in a rural 
area.647 648 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).649 650 At the election of the REH, it can also 
provide certain services furnished on an outpatient basis.\651\
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    \646\ As defined in section 1886(d)(2)(D) of the Act.
    \647\ Pursuant to section 1886(d)(8)(E) of the Act.
    \648\ As set out under section 1861(kkk)(3) of the Act.
    \649\ 42 CFR part 485, subpart E (Sec. Sec.  485.500 through 
485.546).
    \650\ Qualification requirements for REHs are set out under 
section 1861(kkk)(2) of the Act.
    \651\ See section 1861(kkk)(1)(A)(ii) of the Act.

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[[Page 82047]]

3. Codification of the Statutory Authority of the REHQR Program
    In the CY 2024 OPPS/ASC proposed rule (88 FR 49825 and 49826), we 
proposed 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 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 invited public comment on the proposal. We did not receive any 
comments on the proposal and are finalizing our proposal to codify the 
statutory authority of the REHQR Program at Sec.  419.95(a).

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) \652\ review for the hospital outpatient 
department (HOPD) setting that reflect important areas of service for 
REHs while adhering to the CMS National Quality Strategy goals,\653\ 
Strategic Plan,\654\ Meaningful Measures 2.0 initiatives,\655\ and the 
Department of Health and Human Services' (HHS) Strategic Plan.\656\ 
When identifying potential measures for the REHQR Program, we focused 
on the considerations of service and patient volume, care 
accountability and quality, rurality and care setting relevance, and 
health equity.
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    \652\ 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.
    \653\ 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.
    \654\ CMS (2023). CMS Strategic Plan. Available at: https://www.cms.gov/cms-strategic-plan. Last accessed March 10, 2023.
    \655\ 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.
    \656\ 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. 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. More specifically, 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 the CY 2024 OPPS/ASC proposed rule (88 FR 49826), we proposed to 
adopt four measures for the REHQR Program measure set--(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--which are measures 
currently adopted 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.\657\ As discussed in the CY 2024 OPPS/ASC proposed rule, 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 REHQR Program measures within the context of the Hospital 
OQR Program with sufficient volume to meet CMS case number thresholds 
for data to be publicly reported, though we note that CAHs report data 
voluntarily. More specifically, we considered reporting rates and 
measure performance for CAHs and 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 145 includes the results of this analysis.
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    \657\ 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 that meet the requirements for disclosure per 
CMS privacy policy \658\ for the measures we proposed for the REHQR 
Program. 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 to 
REHs. 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 
colonoscopies than expected, which provides potentially valuable 
information when discerning individual hospital performance.
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    \658\ 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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    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 REHQR 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.\659\
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    \659\ 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 82052]]

b. Adoption and Codification of a Measure Retention Policy for the 
REHQR Program
    In the CY 2024 OPPS/ASC proposed rule (88 FR 49831), we proposed 
that, once adopted into the REHQR Program measure set, each measure 
would be retained for use, except when they are removed, suspended, or 
replaced under our policies for measure removal, suspension, or 
replacement, discussed below in sections XVI.B.3.a and XVI.B.3.b of 
this final rule with comment period. We also proposed to codify this 
policy at Sec.  419.95 by adding paragraph (e), ``Retention and removal 
of quality measures under the REHQR Program.'' In paragraph (e)(1), we 
proposed that quality measures would be adopted into the REHQR Program 
measure set until such time that such measures are removed, suspended, 
or replaced, as set forth at paragraphs (e)(2) and (3) of the section.
    We invited public comment on these proposals.
    Comment: One commenter expressed broad support of CMS' proposals to 
support REHQRs' efforts to collect data, report quality measures, and 
improve performance, including CMS' proposal to adopt a measure 
retention policy for the REHQR Program, in alignment with the Hospital 
OQR and ASCQR Programs.
    Response: We thank the commenter for their support.
    After consideration of the public comments we received, we are 
finalizing adoption of the measure retention policy as proposed for the 
REHQR Program and to codify this policy at Sec.  419.95(e)(1).
3. Removal of Quality Measures From the REHQR Program Measure Set
a. Adoption and Codification of 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, in the CY 2024 OPPS/ASC proposed rule (88 FR 
49831), we proposed 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 a CMS website (such as QualityNet). We also proposed 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 proposed to codify this policy at Sec.  419.95 by adding 
paragraph (e)(2), ``Immediate measure removal.'' In paragraph (e)(2), 
we proposed 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 invited public comment on these proposals.
    Comment: One commenter did not support our proposal to adopt a 
policy to immediately remove a measure in cases where CMS believes that 
the continued use of the measure as specified raises patient safety 
concerns. The commenter stated that this policy would enable CMS to 
remove REHQR Program measures without going through the rulemaking 
process, which the commenter believed would thus strip consumers of 
their voice in this decision-making, diminish transparency, and send 
the wrong message about the importance of quality and safety at REHs. 
The commenter also felt that the circumstances triggering immediate 
removal of a measure under the proposed measure removal policy (``the 
continued collection of a measure as currently specified raises 
potential patient safety concerns'') should be held to public scrutiny 
through rulemaking.
    Response: We believe that we should take immediate action to 
discontinue the use of quality measures when clinical evidence suggests 
that continued collection of the data may result in harm to patients. 
Under such circumstances, we may not be able to wait until the annual 
rulemaking cycle or until we have had the opportunity to obtain input 
from the public to remove the measure because of the necessity to not 
encourage potentially harmful practices which may result from the 
continued collection of the measure. However, we agree with the 
commenter that seeking public input on the removal of the measure 
increases the public's voice in decision-making and increases 
transparency. Therefore, we are finalizing a policy in which we would 
suspend the measure's use until the removal can be accomplished through 
the standard rulemaking process.
    After consideration of the public comment we received regarding 
reducing consumer voice in decision-making and diminishing 
transparency, we are finalizing a modified version of the proposed 
immediate measure removal policy. When the collection of the measure as 
currently specified raises potential patient safety concerns, instead 
of immediately removing the measure, we will suspend the measure's use 
until the removal can be proposed and finalized through rulemaking. We 
will notify REHs and the public of the decision to suspend the measure 
through standard hospital communication channels, including, but not 
limited to, REHQR Program-specific listservs and REHQR Program guidance 
currently housed on a CMS website (such as QualityNet). We will then 
address any such suspension and propose any permanent action regarding 
such suspended measure in the next appropriate rulemaking cycle. We are 
codifying this policy at Sec.  419.95(e)(2).
b. Adoption and Codification of 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, in the CY 2024 OPPS/ASC 
proposed rule (88 FR 49831), we proposed to adopt a similar set of 
removal factors for the REHQR Program.
    Specifically, we proposed 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.

[[Page 82053]]

     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 Measure Removal Factor 1, we proposed 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 proposed to codify these policies at Sec.  419.95 by adding 
paragraph (e)(3), ``Measure removal, suspension, or replacement through 
the rulemaking process.'' In paragraph (e)(3), we proposed that unless 
a measure raises specific safety concerns as set forth in paragraph 
(e)(2) of the section, we would use rulemaking to remove, suspend, or 
replace quality measures in the REHQR Program. We also proposed to 
adopt the eight removal factors discussed previously by codifying them 
at paragraph (e)(3)(i), in alignment with other quality reporting 
programs (74 FR 60634 and 60635, 77 FR 68472, and 83 FR 59082). 
Additionally, we proposed to adopt the criteria to determine topped-out 
measures discussed previously at paragraph (e)(3)(ii). Similar to the 
Hospital OQR Program (79 FR 66941 and 66942), we proposed to assess the 
benefits of removing a measure from the REHQR Program on a case-by-case 
basis at paragraph (e)(3)(iii). An REHQR Program measure would not be 
removed solely based on meeting any specific factor.
    We invited public comment on these proposals.
    Comment: One commenter did not support CMS' proposal to adopt 
measure removal factors to consider when determining whether to remove 
REHQR Program measures. The commenter specifically did not agree with 
the ``topped-out criteria'' under Measure Removal Factor 1 because some 
measures included in CMS quality reporting programs quantify ``never 
events.'' The commenter stated that comparing performance between the 
75th and 90th percentiles does not adequately consider variation 
between higher and lower performing hospitals in these cases. The 
commenter further stated that many of CMS' quality measures only 
include patients covered by Medicare FFS and exclude the large 
population of Medicare Advantage beneficiaries, which makes the 
determination of whether a measure is topped out incomplete and 
inaccurate.
    Response: We thank the commenter for this feedback. We acknowledge 
that our topped-out policy does not lend itself well to measures of 
rare adverse events also known as ``never events.'' We do consider 
these types of measures important, especially with regard to patient 
safety measures. As discussed in the CY 2024 OPPS/ASC proposed rule (88 
FR 49831), the benefits of removing a measure from the REHQR Program 
would be assessed on a case-by-case basis. Under this case-by-case 
approach, a measure would not be removed solely on the basis of meeting 
any specific factor (88 FR 49831).
    We also agree that across our quality programs, many measures 
currently are specified for only Medicare FFS beneficiary information. 
As recommended by the commenter, we seek to include Medicare Advantage 
as well as other payer information in our measures.
    However, we believe that for many measures, when performance is so 
high and unvarying that meaningful distinctions and improvements in 
performance can no longer be made, the measures would not provide 
useful information to Medicare beneficiaries or the public about the 
quality of care. For this reason, we believe that topped-out status is 
an important consideration when assessing whether to remove a measure 
from the REHQR Program.
    Comment: One commenter recommended that CMS consider an additional 
measure removal factor based on whether a substantial number of REHs 
have reported aggregated measure data in sufficient numbers to permit 
public reporting. The commenter stated that if most REHs do not have a 
sufficient number of cases for a specific measure, such a measure 
should be removed from the REHQR Program because it would not be 
providing meaningful insight regarding REH quality performance. Another 
commenter requested that CMS adopt a new Factor 1 that explicitly 
states that CMS' measure removal policy is centered on the best 
interests of Medicare beneficiaries and the public. This commenter also 
requested that CMS provide more details on the costs and benefits of a 
measure that we would consider under Factor 8, noting that there is a 
cost to beneficiaries of not having access to insights as a result of a 
measure removal.
    Response: We thank the commenters for their recommendations and 
appreciate the articulation of these important considerations in 
relation to measure removal under the REHQR Program. We believe that 
the concerns raised by the commenters are addressed by other REHQR 
Program policies and other measure removal factors. For example, with 
regard to the concern regarding low volume, as discussed in the CY 2024 
OPPS/ASC proposed rule (88 FR 49830), CMS does not report measures 
publicly unless it achieves sufficient case volumes to allow for public 
reporting of the collected data. We further note that, as discussed in 
the CY 2024 OPPS/ASC proposed rule (88 FR 49827 through 49830), many 
CAHs and small, rural subsection (d) hospitals--hospitals which are 
eligible to convert to REH status--had sufficient measure data to be 
publicly reported on the Care Compare website for the four measures we 
are finalizing in section XVI.D of this final rule with comment period.
    We also do not believe that an additional measure removal factor 
explicitly stating that CMS' measure removal policy is centered on the 
best interests of beneficiaries and the public is necessary because we 
do consider the benefits of retaining a measure to patients, 
beneficiaries, and the public as part of our consideration under Factor 
8: The costs associated with a measure outweigh the benefit of its 
continued use in the program. We agree with the commenter that access 
to information regarding the quality of care provided at a specific REH 
is a benefit to retaining a measure and that loss of this information 
is a cost. When we determine that a measure's costs outweigh the 
benefits of retaining that measure, we provide additional details on 
the costs and benefits that we have considered in our proposal to 
remove that measure through rulemaking. Moreover, as discussed in the 
CY 2024 OPPS/ASC proposed rule (88 FR 49831), similarly to the Hospital 
OQR Program, our assessment would be made on a case-by-case basis, and 
a measure would not be removed solely on the basis of meeting any 
single factor.
    After consideration of the public comments we received, we are 
finalizing our proposal to adopt the measure removal factors and 
related policies as proposed and to codify these policies at Sec.  
419.95(e)(3).

[[Page 82054]]

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 as timely a manner as 
possible.
b. Adoption and Codification of a Sub-Regulatory Measure Modification 
Policy
    In the CY 2024 OPPS/ASC proposed rule (88 FR 49831 and 49832), we 
proposed 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 proposed 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. We 
stated that we would 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 
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 CMS website (such as the QualityNet website). We noted that this 
policy for the REHQR Program aligns with the policies under the 
Hospital OQR Program (73 FR 68766 and 68767) and ASCQR Program (Sec.  
416.325) that allow measures to be refined through a sub-regulatory 
process.
    We proposed to codify this policy at Sec.  419.95(d), ``Technical 
specifications and measure maintenance under the REHQR Program.'' In 
paragraph (d)(2), we proposed that REHQR Program specifications would 
be updated based on whether the change is considered substantive or 
non-substantive, as determined by CMS. In paragraph (d)(2)(ii), we 
proposed 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 
previously.
    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 paragraph (d)(2)(i), we proposed that we would use 
rulemaking to adopt substantive updates to measures previously adopted 
under the REHQR Program. We believe that this 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 invited public comment on these proposals.
    Comment: One commenter expressed broad support of CMS' proposals to 
support REHQR Program efforts to collect data, report quality measures, 
and improve performance, including CMS' proposals to adopt policies 
related to modification of previously adopted measures under the REHQR 
Program, in alignment with the Hospital OQR and ASCQR Programs.
    Response: We thank the commenter for their support.
    Comment: One commenter expressed concern with the use of a sub-
regulatory process in certain circumstances, including within the 
context of a new program where transparency and the opportunity to 
comment on proposals is so essential.
    Response: We appreciate the commenter's feedback and agree that 
transparency and opportunity to comment on proposals is essential, 
particularly within the context of a new program. We note that as 
discussed in the CY 2024 OPPS/ASC proposed rule (88 FR 49831 and 
49832), we would use the sub-regulatory process to make non-substantive 
updates to measures previously adopted into the REHQR Program. We also 
noted that non-substantive changes to measures might include updated 
diagnoses or procedure codes. In contrast, 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, and we proposed that we 
would utilize rulemaking to adopt substantive updates to measures 
previously adopted by the REHQR Program. We also note that we use the 
sub-regulatory process to address urgent issues, such as patient 
safety, as discussed later in section XVI.B.3.a, as well as in other 
quality reporting programs (for example, Sec. Sec.  412.140(g)(2), 
412.164(c)(3)(iii), 412.24(d)(3)(iii), 416.320(b), and 419.46(i)(2), 84 
FR 42382 fn. 318, and 84 FR 42404 fn. 328). We believe this policy 
adequately balances the need to incorporate updates to 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.
    After consideration of the public comments we received, we are 
finalizing our proposals related to a sub-regulatory measure 
modification policy and to codify this policy at Sec.  419.95(d)(2).
c. Development and Maintenance of Technical Specifications for Quality 
Measures
    We intend to maintain technical specifications for adopted REHQR 
Program measures. We note that the measures proposed for the REHQR 
Program have been previously adopted by the Hospital OQR Program. To 
simplify and streamline participation in the REHQR Program, in the CY 
2024 OPPS/ASC proposed rule (88 FR 49832), we proposed 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 and 59105).
    We proposed 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 paragraph 
(d)(1) of Sec.  419.95, we proposed to update the specifications manual 
for REHQR Program measures at least every 12 months beginning with CY 
2024.
    We invited public comment on the proposal.
    We did not receive any comments specific to the proposal and 
therefore are finalizing our proposal related to the development and 
maintenance of technical specifications for quality measures and to 
codify this policy at Sec.  419.95(d)(1) as proposed. We also refer 
readers to section XVI.B.2 of this final rule with comment period where 
we summarize the broad support we received for our proposals related to 
modifications to previously adopted measures.

[[Page 82055]]

5. New Measures for the REHQR Program Measure Set
    In the CY 2024 OPPS/ASC proposed rule (88 FR 49832 through 49839), 
we proposed 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. We noted that 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.
    We received comments about the initial measure set for the REHQR 
Program and CMS' future approach to developing the REHQR Program 
measure set.
    Comment: Several commenters supported the initial REHQR Program 
measure set. One commenter expressed support for analyzing measures 
that REH-eligible facilities have reported on to ensure that REHs will 
be able to successfully participate in this program. Another commenter 
stated that these measures adequately balance quality reporting burden 
with ensuring safety and quality of care.
    Response: We thank commenters for their support. We agree that it 
is important to analyze measures that REH-eligible facilities have 
reported on to ensure successful participation. As demonstrated in 
Table 146, most of the 16 hospitals that have successfully converted to 
REH status thus far reported data for the four REHQR Program measures 
in sufficient case volumes for these data to be public reported and 
some hospitals reported data for each of the measures being finalized 
in this rulemaking.\660\ We also agree with the need to balance 
reporting burden with quality of care and safety. Three of the four 
measures in the initial set for the REHQR Program are based fully on 
claims, thus not requiring additional data collection burden while 
representing patient safety and adverse outcome measures. The fourth 
measure is chart-abstracted, but it is a measure that hospitals that 
are eligible to convert to REH status are likely to have experience 
with as it is a long-standing measure under the Hospital OQR Program.
---------------------------------------------------------------------------

    \660\ The data provided in Table 146, discussed in section 
XVI.B.5 below are from the Medicare Provider Enrollment, Chain, and 
Ownership System (PECOS) as of October 13, 2023.
---------------------------------------------------------------------------

    Comment: Several commenters recommended adding measures to the 
REHQR Program measure set slowly to account for the newness of the 
program and the lack of certainty regarding what services REHs will 
provide.
    Response: We agree that measures should be added slowly to the 
REHQR Program measure set to account for newness of the program and 
uncertainty regarding what services REHs will provide. However, we 
believe that the measures selected for the initial measure set reflect 
services that REHs will continue to provide at levels that will enable 
at least some REHs to publicly report data. We will take commenters' 
feedback into consideration when deciding how and when to introduce 
additional measures into the REHQR Program.
    Comment: One commenter expressed concern that the REHQR Program 
measure set as outlined in this rule does not provide the public with 
sufficient information on the quality of care provided in REHs. The 
commenter also recommended identifying measure gaps to expand the 
measure set. The commenter stated that CMS could readily fill two 
measurement gaps they had identified by implementing two existing 
measures related to avoidable morbidity and mortality as well four ED 
measures used in the Hospital OQR Program. These measures are: (1) 
Severe Sepsis and Septic Shock: Management Bundle measure (SEP-1); (2) 
Door to Diagnostic Evaluation by a Qualified Medical Professional (OP-
20); (3) Fibrinolytic Therapy Received Within 30 Minutes of ED arrival 
(OP-2); (4) Median Time to Transfer to Another Facility for Acute 
Coronary Intervention-Reporting Rate (OP-3); (5) Median Time from ED 
Arrival to ED Departure for Discharged ED Patients (OP-18); and (6) 
Left Without Being Seen (OP-22).
    Response: Regarding the commenter's concern regarding measurement 
gaps, we acknowledge that the initial REHQR Program with the four 
measures outlined in this rule serves as a starter set for initial 
program implementation, while also being sensitive to provider burden. 
We also believe that the selected measures reflect a core area of REH 
services (ED services) plus selected outpatient services (imaging and 
surgical) that sufficiently account for small case volume, and note 
that the set allows most hospitals that have converted to REH status 
thus far to have had some data publicly reported. Although the number 
of facilities converting to REH status is in flux and the services 
provided may shift, Table R-B2 depicts performance data for REHs that 
publicly reported data for the four measures we are finalizing in this 
rule, among the 16 hospitals that have converted to REH status based on 
data from the Medicare Provider Enrollment, Chain, and Ownership System 
(PECOS) as of October 13, 2023. As further discussed in section 
XVI.B.5, these four measures are: (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.

[[Page 82056]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.221

    We also appreciate the commenter's suggested measures for the REHQR 
Program measure set and will take this feedback into consideration. We 
note that one of the ED measures suggested by the commenter, the Median 
Time from ED Arrival to ED Departure for Discharged ED Patients 
measure, was proposed for the REHQR Program in the CY 2024 OPPS/ASC 
proposed rule (88 FR 49834 and 49835) and is being finalized for 
adoption for the REHQR Program measure set in this final rule, as 
discussed in section XVI.B.5.b of this final rule with comment period.
    Comment: One commenter stated that REHs are likely to be small 
facilities with limited staff and recommended limiting the use of 
chart-abstracted measures and creating accommodations to minimize the 
burden of reporting these measures.
    Response: As discussed below in section XVI. B.5.b of this final 
rule with comment period, we are finalizing one chart-abstracted 
measure, the Median Time for Discharged ED Patients measure. While we 
understand that reporting this measure is associated with some burden, 
as discussed in section XXIV.D of this final rule with comment period, 
we believe that hospitals that convert to REH status

[[Page 82057]]

from being a subsection (d) hospital or CAH will have experience with 
this measure and likely have existing processes in place to collect and 
submit data for this measure. In addition, as ED services are 
statutorily mandated to be provided by REHs, we believe this measure is 
especially suited for the program. We will, however, take the 
commenter's feedback into consideration as we continue to evaluate all 
elements of the REHQR Program.
a. Adoption of the Abdomen Computed Tomography (CT)--Use of Contrast 
Material Measure Beginning With the CY 2024 Reporting Period
(1) Background
    A CT study performed with and without contrast increases the 
radiation dose to patients,\661\ exposing them to the potential harmful 
side effects of the contrast material itself \662\ and it is often 
unnecessary.\663\ In the past, reports showed deviations from 
clinically appropriate American College of Radiology contrast practices 
for abdominal/pelvic CTs nationally.\664\ 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 (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.\665\ However, the same 2020 study found 
that duplicate abdomen CTs continue to occur.
---------------------------------------------------------------------------

    \661\ 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.
    \662\ 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.
    \663\ 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.
    \664\ 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.
    \665\ 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.
---------------------------------------------------------------------------

    As discussed in the CY 2024 OPPS/ASC proposed rule (88 FR 49832 
through 49834), 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 among hospitals both large 
and small, and in both rural and urban settings, rural hospitals during 
the study period accounted for nearly half of those cases.\666\ 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)).
---------------------------------------------------------------------------

    \666\ Ibid.
---------------------------------------------------------------------------

(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).
    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,\667\ 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.\668\ 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.\669\ 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 receiving CBE 
endorsement.\670\
---------------------------------------------------------------------------

    \667\ 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.
    \668\ 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.
    \669\ 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.
    \670\ 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,\671\ favorable comments 
received by the Health Equity Advisory Group,\672\ and lack of 
objection by the Rural Health Advisory Group.\673\
---------------------------------------------------------------------------

    \671\ CMS, 2022 Measures Under Consideration Spreadsheet.
    \672\ CMS, 2022-2023 MAP Final Recommendations.
    \673\ Ibid.
---------------------------------------------------------------------------

    We proposed 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

[[Page 82058]]

the care journey, as well as the goal of promoting safety,\674\ 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.\675\
---------------------------------------------------------------------------

    \674\ 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.
    \675\ 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.
---------------------------------------------------------------------------

(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, in the case of 
REHs, 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 the 
bladder, malignant neoplasm of the pancreas, diseases of the urinary 
system, pancreatic disorders, non-traumatic aortic disease, and 
unspecified disorders of the kidney or ureter).\676\
---------------------------------------------------------------------------

    \676\ 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.
---------------------------------------------------------------------------

(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 hospital reports a 
value nearer to zero, whereas facilities that may be performing too 
many combined CT abdomen studies score closer to 100 percent.\677\
---------------------------------------------------------------------------

    \677\ 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 excluded from the measure.\678\ Thus, this measure does 
not include beneficiaries with the following conditions: adrenal mass, 
hematuria, infections of the kidney, jaundice, liver lesion (mass or 
neoplasm), malignant neoplasm of the bladder, malignant neoplasm of the 
pancreas, diseases of the urinary system, pancreatic disorders, non-
traumatic aortic disease, and unspecified disorders of the kidney or 
ureter.\679\
---------------------------------------------------------------------------

    \678\ American College of Radiology. ACR Appropriateness 
Criteria. Available at: https://www.acr.org/Clinical-Resources/ACR-Appropriateness-Criteria. Last accessed April 4, 2023.
    \679\ 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.
---------------------------------------------------------------------------

    We invited public comment on the proposal.
    Comment: Several commenters supported adoption of the Abdomen CT--
Use of Contrast Material measure.
    Response: We thank commenters for their support.
    Comment: Some commenters expressed concern regarding measure 
specifications for the Abdomen CT measure, including that it uses 
denominator exclusions as opposed to risk-adjustment and that it does 
not account for clinical reasons that providers may perform duplicate 
abdomen CTs.
    Response: We recognize that using risk-adjustment as opposed to 
denominator exclusions would also account for the possibility that 
patients with some conditions are more likely to receive clinically 
appropriate duplicate abdominal CT scans. However, we believe that 
reporting the measure with the same specifications as adopted in the 
Hospital OQR Program, which underwent an extensive development process 
prior to implementation in the Hospital OQR Program, including 
soliciting broad interested party input and which many REH-eligible 
hospitals have historically reported on, will ensure alignment and 
comparability across programs, and preserve provider and consumer 
measure familiarity.
    Comment: Several commenters expressed concern that this measure has 
not been endorsed by the CBE for this setting and that it is 
insufficiently tested to show that there is a performance gap and that 
the measure is valid and reliable. One of these commenters, however, 
also observed that rural hospitals do appear to be outliers on the 
Abdomen CT measure and therefore the measure may be appropriate for the 
REHQR Program if adequately tested.
    Response: Under section 1861(kkk)(7)(C)(i) of the Act, a measure 
selected for use in the REHQR Program must have been endorsed or 
adopted by the entity with a contract under section 1890(a) of the Act, 
also known as the CBE. However, section 1861(kkk)(7)(C)(ii) 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 CBE, 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. Further, while we prefer to adopt CBE-endorsed measures, 
it may not be feasible or practicable, such as when a CBE-endorsed 
measure does not exist. We reviewed measures endorsed by consensus 
organizations and were unable to identify any other measures on this 
topic endorsed or adopted by a consensus organization, and therefore, 
we believe the exception in section 1861(kkk)(7)(C)(ii) of the Act 
applies.
    As we noted in the CY 2024 OPPS/ASC proposed rule (88 FR 49833), 
this measure has been used in Hospital OQR Program for many years 
involving many

[[Page 82059]]

participating facilities, some of which are eligible to convert to 
REHs. Through both the MAP and rulemaking processes regarding this 
measure, we believe it has received sufficient support from consensus 
organizations. We also believe that, because facilities eligible to 
convert to REH status have been reporting this measure under the 
Hospital OQR Program, these facilities are meaningfully similar to 
HOPDs and therefore the testing that was completed for the HOPD setting 
is applicable to this setting.
    In addition, we note that this measure underwent an extensive 
development process prior to adoption in the Hospital OQR Program which 
included a development process involving testing for reliability and 
validity. We believe that, because facilities eligible to convert to 
REH status have been reporting this measure under the Hospital OQR 
Program, these facilities are meaningfully similar to HOPDs and 
therefore the testing is applicable to this setting.
    In response to commenters' concerns regarding demonstrating a 
performance gap, we refer readers to the CY 2024 OPPS/ASC proposed rule 
(88 FR 49832) where we noted that a 2020 study using CMS Care Compare 
data found that duplicate abdomen CTs continue to occur. Although the 
study found that 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.\680\
---------------------------------------------------------------------------

    \680\ 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 October 17, 2023.
---------------------------------------------------------------------------

    Comment: One commenter expressed concern that duplicate abdominal 
CT with and without contrast is already performed at a very low 
frequency and therefore this measure would not provide useful data.
    Response: While we acknowledge that identifiable adverse events 
related to conducting CT with and without contrast are rare, we believe 
this measure is important, impactful, and clinically relevant, and can 
help compare between care settings. Conducting duplicate CT scans both 
with and without contrast increases the radiation dose to patients, and 
the potential harmful side effects associated with increased exposure 
to radiation are well-documented and understood. We also note that 
duplicative procedures represent deviations from clinically appropriate 
American College of Radiology contrast practices for abdominal/pelvic 
CTs.
    In addition, as depicted in Table R-B1 in section XVI.B.1 of this 
final rule with comment period, a significant majority of CAHs (77.9 
percent) and rural subsection (d) hospitals with 50 or fewer beds (75.5 
percent) reported on this measure in sufficient numbers to be publicly 
reported. Furthermore, the use of this measure in the Hospital OQR 
Program has been correlated with reductions in the frequency of 
duplicate abdominal CTs (that is, the use of this measure encourages 
providers to reduce the frequency of performing CTs twice, once with 
and once without contrast), indicating that the use of this measure has 
been effective in improving the safety of clinical and diagnostic 
medicine.\681\ Moreover, as we noted in the CY 2024 OPPS/ASC proposed 
rule (88 FR 49832), studies have found that facilities with outlier 
values on this measure (that is, facilities that perform an unusually 
large number of duplicate abdominal CT scans) are overrepresented in 
rural settings.\682\
---------------------------------------------------------------------------

    \681\ 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 Sept. 3, 2023.
    \682\ Ibid.
---------------------------------------------------------------------------

    Comment: One commenter recommended that CMS evaluate how to 
appropriately publicly report this measure so that the public 
understands the measure results.
    Response: We agree that providing information to help the public 
understand a measure's importance is necessary when publicly reporting 
a measure. We note that in publicly reporting this measure for the 
Hospital OQR Program, we include information stating that lower 
percentages are better and have information on Care Compare explaining 
the risks of ``double scans.'' We believe that this public reporting of 
information enables public understanding of the measure results. We 
intend to provide such explanatory information when publicly reporting 
this measure for the REHQR Program, consistent with our current 
approach in the Hospital OQR Program.
    After consideration of the public comments we received, we are 
finalizing our proposal to adopt the Abdomen Computed Tomography (CT)--
Use of Contrast Material Measure, beginning with the CY 2024 reporting 
period as proposed.
b. Adoption of the Median Time From Emergency Department (ED) Arrival 
to ED Departure for Discharged ED Patients Measure Beginning With the 
CY 2024 Reporting Period
(1) Background
    Care provided in the ED will be a focus of REH services and we seek 
measures that assess the quality of care in this setting. Improving ED 
throughput times is important for alleviating overcrowding and reducing 
wait times.\683\ 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.\684\
---------------------------------------------------------------------------

    \683\ 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.
    \684\ 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.
---------------------------------------------------------------------------

    As discussed in the CY 2024 OPPS/ASC proposed rule (88 FR 49834), 
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),685 686 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.
---------------------------------------------------------------------------

    \685\ A Measure Information Form provides detail on the 
rationale for a measure as well as the relevant numerator 
statements, denominator statements and measure calculations.
    \686\ 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

[[Page 82060]]

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.\687\ 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.\688\
---------------------------------------------------------------------------

    \687\ 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.
    \688\ 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 we stated in the CY 2024 OPPS/ASC proposed rule (88 FR 49834), 
we recognize the concerns expressed in the MAP Final Recommendation. 
However, we believe that ED throughput times have significant impact on 
patients. Prolonged waiting times, especially the door-to-doctor time 
component, are associated with worse patient experience in patients 
discharged from the ED.\689\ Studies demonstrate that higher patient 
satisfaction is associated with patient outcomes, including decreased 
mortality \690\ and lower readmission rates.\691\
---------------------------------------------------------------------------

    \689\ 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.
    \690\ 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.
    \691\ 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 41to48.
---------------------------------------------------------------------------

    We acknowledge that transfer times may be delayed due to weather 
and transport safety issues that are out of a hospitals control. 
However, we believe that some factors such as building transfer 
relationships and process improvements can be addressed by hospitals to 
improve ED throughput 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. If we implement 
this measure, we are supporting CMS National Quality Strategy goals, 
including embedding quality into the care journey (for example, by 
addressing quality throughout, subsequently addressing the patient 
experience); promoting safety (for example, by minimizing associated 
negative patient outcomes, such as delayed administration of 
treatment); and increasing alignment (given that this measure is used 
in other quality programs).\692\ Alignment of measures across CMS 
Federal programs is also an objective of the Meaningful Measures 2.0 
initiative.\693\
---------------------------------------------------------------------------

    \692\ 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.
    \693\ 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.
---------------------------------------------------------------------------

    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 R-B1 in section XVI.B.1 of this 
final rule with comment period). Care Compare data current to January 
2023 show that many 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. Discussion of publicly reporting these data can be found in 
section XVI.B.8.c of this final rule with comment period. Thus, in the 
CY 2024 OPPS/ASC proposed rule (88 FR 49834 and 49835), we proposed 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 discharged patients. Reducing the 
time patients remain in the ED can improve access to treatment and 
increase quality of care.694 695 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.\696\ However, the measure is 
stratified by certain subgroups of patients, as described in the next 
section.
---------------------------------------------------------------------------

    \694\ 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.
    \695\ 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.
    \696\ 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.
---------------------------------------------------------------------------

(5) Cohort
    The Median Time for Discharged ED Patients measure is calculated in 
stratified subsections for certain types of patients: (1) All Patients 
Excluding Psychiatric/Mental Health and

[[Page 82061]]

Transferred Patients; (2) Psychiatric/Mental Health Patients; (3) 
Transfer Patients; and (4) All Patients. All strata of the measure 
exclude patients who expired in the ED, left against medical advice, or 
whose discharge was not documented or unable to be determined.\697\
---------------------------------------------------------------------------

    \697\ QualityNet. Hospital Outpatient Specifications Manuals. 
Available at: https://qualitynet.cms.gov/outpatient/specifications-manuals. Last accessed April 5, 2023.
---------------------------------------------------------------------------

    We invited public comment on the proposal.
    Comment: Several commenters supported adoption of the ED throughput 
measure. One of these commenters stated that measuring ED throughput 
would improve patient outcomes. Another commenter stated that this 
measure will track whether REHs have the capacity and staff to treat 
their patients appropriately.
    Response: We thank commenters for their support.
    Comment: Several commenters did not support the ED throughput 
measure because this measure does not account for factors beyond the 
REH's control.
    Response: We understand the commenters' concern that there are many 
factors outside of an REH's control that could affect ED throughput; 
however, we believe that many hospitals face such concerns and that 
that timely care is a critical aspect of quality of care, directly 
impacting patient outcomes, particularly for an ED episode of care. 
Therefore, the public reporting of these data can help patients and 
their caregivers identify which facilities are performing better than 
others despite potential challenges, and drive quality improvement 
efforts. Additionally, we believe that having a consistent ED 
throughput measure across REHs and HOPDs will allow consumers to 
compare across programs, especially for vulnerable populations in need 
of transfer to more appropriate care settings.
    Comment: Some commenters did not support this measure because of 
concerns that REHs will have low patient volumes and that including 
four strata within the measure may lead to statistically unreliable 
rates.
    Response: We note the commenters' concern applies to all measures 
and providers, and that CMS does not report measures publicly unless it 
achieves sufficient case volumes to allow for public reporting of the 
collected data. We further note that, as discussed in the CY 2024 OPPS/
ASC proposed rule (88 FR 49827 through 49829), many CAHs and small, 
rural subsection (d) hospitals--hospitals which are eligible to convert 
to REH status--had sufficient measure data to be publicly reported for 
this measure, including by strata. We acknowledge that having four 
strata will create lower volumes within each stratum but reiterate that 
we will only publicly report measure results with sufficient case 
volumes, both to protect patient privacy and to ensure that data are 
statistically reliable. As shown in Table 146 in section XVI.B.5, many 
of the 16 hospitals that have converted to REH status as of October 13, 
2023, had data in sufficient volumes to be publishable for all four 
strata.\698\
---------------------------------------------------------------------------

    \698\ The data provided in Table 146, discussed in section 
XVI.B.5 are from the Medicare Provider Enrollment, Chain, and 
Ownership System (PECOS) as of October 13, 2023.
---------------------------------------------------------------------------

    Comment: Several commenters expressed the belief that this measure 
does not represent the quality of care provided by REHs. Some of these 
commenters observed that measure results are not directly tied to 
patient outcomes. One commenter stated that the measure does not have 
appropriate risk-adjustment to reflect quality of care. Another 
commenter stated that while this measure is appropriate in crowded 
urban EDs, it is not clinically appropriate in rural EDs.
    Response: We appreciate commenters' feedback. Regarding commenters' 
concerns regarding the significance of this measure within the setting 
of REHs, we note that per section 1861(kkk)(1), ED services are 
required REH services and are thus a focus of care provided at REHs. 
Furthermore, as discussed in the CY 2024 OPPS/ASC proposed rule (88 FR 
49834), 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 ED.\699\ Studies demonstrate 
that higher patient satisfaction is associated with improved patient 
outcomes, including decreased mortality \700\ and lower readmission 
rates.\701\ Regarding urban versus rural difference, we note that small 
rural hospitals including the subset that have converted to REH status 
tend to have times on par or lower (better performance) than large 
urban hospitals. We therefore believe ED measures are of paramount 
importance to the REHQR Program measure set.
---------------------------------------------------------------------------

    \699\ 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.
    \700\ 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.
    \701\ 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 41to48.
---------------------------------------------------------------------------

    We recognize that using risk-adjustment would account for 
potentially higher ED throughput times for patients who require more 
extensive ED services. However, as specified, the measure provides 
metrics for the case mix each hospital experiences, thus providing 
Medicare beneficiaries and other interested parties valuable 
information on hospital performance. In addition, the measure is 
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. This stratification accounts for significant 
variables affecting ED throughput time.
    Comment: One commenter did not support this measure due to the high 
reporting burden. Another commenter stated that because reporting this 
measure under the Hospital OQR Program is currently voluntary, only 
hospitals with sufficient resources report this measure and under-
resourced hospitals will be disadvantaged if reporting is required.
    Response: We thank the commenter for their feedback. Regarding the 
comment about the voluntary nature of reporting this measure under the 
Hospital OQR Program, we wish to clarify that under the Hospital OQR 
Program, reporting of this measure by subsection (d) hospitals, 
including small, rural subsection (d) hospitals, is mandatory in order 
to avoid a payment penalty, whereas data submission and public 
reporting of this measure are voluntary for CAHs. We also wish to 
clarify that under the REHQR Program, data submission and public 
reporting of this measure, as with all REHQR Program measures, would be 
mandatory. We further note that many subsection (d) hospitals and CAHs 
established on or before December 27, 2020, that are eligible for REH 
conversion are currently reporting outpatient quality data under the 
Hospital OQR Program and have publicly available data (87 FR 72137).
    While we understand that reporting this measure is associated with 
some burden, as discussed in section XXIV.D of this final rule with 
comment period,

[[Page 82062]]

we believe the benefits outweigh the burden, as ED services are 
statutorily mandated to be provided by REHs; as a focus of care 
provided at REHs, we believe ED measures are of paramount importance to 
the REHQR Program measure set. In addition, as depicted in Table R-B1 
in section XVI.B.1 of this final rule with comment period, a 
significant majority of CAHs (82.6 percent) and rural subsection (d) 
hospitals with 50 or fewer beds (81.5 percent) reported on the reported 
measure stratum of this measure in sufficient numbers to be publicly 
reported, indicating the measure is not overly burdensome.
    Comment: One commenter did not support this measure because of 
concerns that this measure may have unintentional consequences such as 
leading to premature ED discharge for the most vulnerable patients.
    Response: We appreciate the commenter's concern; however, we 
respectfully disagree with the commenter that reporting this measure 
would incentivize REHs to prematurely discharge patients, particularly 
their most vulnerable patients, from the ED. Rather, we remain 
confident that REHs will continue to provide quality care and submit 
data as part of their commitment to the patient experience and ongoing 
quality improvement efforts, as evidenced by the fact that many 
hospitals which are eligible to convert to REH status have been 
reporting on this measure through the Hospital OQR Program for many 
years.
    Comment: One commenter stated that this measure is unnecessary 
because REHs cannot exceed an annual average length of stay of 24 hours 
per patient, which incentivizes reducing ED wait times.
    Response: Given the variation in wait times between zero to 24 
hours, we believe patients will be interested in knowing the ED 
throughput times, even if they average less than 24 hours. Moreover, we 
believe quality reporting is an important for transparency as well as 
for driving improvement in care separate from any statutory requirement 
related to an annual mean patient length of stay.
    Comment: Several commenters recommended alternative measures that 
they believe would better reflect the quality of care provided by REHs. 
One commenter suggested measuring time from ED arrival to being seen by 
a clinician instead of time from ED arrival to ED departure for 
discharged patients stratified by patients seen during standard working 
hours versus nights or weekends. Another commenter recommended the 
Medicare Beneficiary Quality Improvement Project (MBQIP) Emergency 
Department Transfer Communication measure. Finally, one commenter noted 
that CMS cited studies linking patient satisfaction to improved patient 
outcomes and stated that the ED CAHPS measure \702\ would be a better 
indicator of patient satisfaction.
---------------------------------------------------------------------------

    \702\ The Emergency Department Consumer Assessment of Healthcare 
Providers and Systems (ED CAHPS) is a survey designed to measure 
patients' opinions of the care they receive in the ED.
---------------------------------------------------------------------------

    Response: We thank commenters for their feedback and will take 
these recommendations into future consideration as we continue to 
evaluate all elements of the REHQR Program to ensure a relevant and 
meaningful measure set.
    After consideration of the public comments we received, we are 
finalizing our proposal to adopt the Median Time from ED Arrival to ED 
Departure for Discharged ED Patients measure, beginning with the CY 
2024 reporting period as proposed.
c. Adoption of the Facility 7-Day Risk-Standardized Hospital Visit Rate 
After Outpatient Colonoscopy Measure Beginning With the CY 2024 
Reporting Period
(1) Background
    Colonoscopies are one of the most frequently performed procedures 
in the outpatient setting in the United States,\703\ with more than 16 
million procedures performed each year.\704\ 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.\705\ 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,\706\ and may be complicated by patient comorbidities and 
high risk factors.\707\
---------------------------------------------------------------------------

    \703\ 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,procedures %20at%20ASCs%20by%20volume. Last 
accessed March 12, 2023.
    \704\ 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.
    \705\ 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.
    \706\ 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.
    \707\ Ibid.
---------------------------------------------------------------------------

    As noted in Table R-B1 with Hospital OQR Program data current to 
January 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, 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 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.\708\ In its February 1, 2023 Final 
Recommendations, the MAP considered and supported it for

[[Page 82063]]

rulemaking for the REHQR Program given that a previous version of this 
measure specified for colonoscopies performed in ambulatory surgical 
centers (ASCs) and 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.\709\
---------------------------------------------------------------------------

    \708\ 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.
    \709\ 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 R-B1, many 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 website. 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 would 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.\710\ Inclusion would 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.\711\ Therefore, in the CY 2024 OPPS/ASC proposed rule (88 FR 
49835 through 49837), we proposed to include the 7-Day Hospital Visit 
Rate After Outpatient Colonoscopy measure in the REHQR Program 
beginning with the CY 2024 reporting period.
---------------------------------------------------------------------------

    \710\ 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.
    \711\ 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.\712\ 
In alignment with the reporting period for this measure as used in the 
Hospital OQR Program, we proposed the initial reporting period to be a 
three-year period beginning with patient encounters from January 1, 
2024 through December 31, 2026 with annual updates on a rolling 
basis.\713\
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    \712\ 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.
    \713\ 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.\714\ For this measure, a hospital visit includes any ED 
visit, observation stay, or unplanned inpatient admission to any short-
term, acute care facility.715 716 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.\717\ 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.''
---------------------------------------------------------------------------

    \714\ 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.
    \715\ Ibid.
    \716\ CMS, Frequently Asked Questions. Available at: https://qualitynet.cms.gov/outpatient/measures/colonoscopy/resources. Last 
accessed May 2, 2023.
    \717\ ``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 FFS 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 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

[[Page 82064]]

development are available at: https://qualitynet.cms.gov/outpatient/measures/surgery/methodology.
    We invited public comment on the proposal.
    Comment: Several commenters supported adoption of the Facility 7-
Day Risk-Standardized Hospital Visit Rate After Outpatient Colonoscopy 
measure. One of these commenters stated that assessing hospital visits 
within seven days would ensure the visitation rate is proximal to the 
procedure while promoting a robust enough volume to support valid 
measurement. Another commenter stated that this measure will help 
ensure REHs provide services of comparable quality to other settings.
    Response: We thank commenters for their support.
    Comment: Some commenters stated that if REHs perform a sufficient 
number of colonoscopies to generate adequate volume to calculate 
performance, the measure would be appropriate for use in the REHQR 
Program, and they would not oppose its adoption; however, other 
commenters did not support adoption of the measure due to their 
uncertainty as to whether the measure would yield enough volume to be 
statistically valid or relevant. One commenter stated that CAHs in 
their state averaged less than 50 colonoscopies on an annual basis 
during FY 2022. The commenter further stated that the tiered framework 
approach to measure reporting based on the scope of services provided 
by an REH, as discussed in section XVI.B.7.c. of this final rule with 
comment period, would be particularly relevant for this measure.
    Response: We note that minimum case numbers for statistical 
reliability purposes apply for calculation of the measure for public 
reporting purposes. In addition, as we state in section XVI.B.1 of this 
final rule with comment period, 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 REHQR 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, including the Facility 7-day Risk-Standardized 
Hospital Visit Rate after Outpatient Colonoscopy measure, some with 
case volumes sufficient to meet thresholds to allow public reporting of 
the collected data. This is evidenced by data publicly reported by the 
initial 16 hospitals that have converted to REH status as of October 
13, 2023.\718\ We reiterate that we will only publicly report measure 
results with sufficient case volumes, both to protect patient privacy 
and to ensure that data are statistically reliable.
---------------------------------------------------------------------------

    \718\ The data provided in Table 146, discussed in section 
XVI.B.5 are from the Medicare Provider Enrollment, Chain, and 
Ownership System (PECOS) as of October 13, 2023.
---------------------------------------------------------------------------

    After consideration of the public comments we received, we are 
finalizing our proposal to adopt the Facility 7-day Risk-Standardized 
Hospital Visit Rate after Outpatient Colonoscopy measure, beginning 
with the CY 2024 reporting period, as proposed.
d. Adoption of the Risk-Standardized Hospital Visits Within 7 Days 
After Hospital Outpatient Surgery Measure Beginning With the CY 2024 
Reporting Period
(1) Background
    Most surgical procedures in the United States are performed in 
outpatient settings; there are approximately 23 million such procedures 
performed annually.\719\ Same-day surgery offers significant patient 
benefits as compared with inpatient surgery, including shorter waiting 
times, avoidance of hospitalizations, and rapid return home.\720\ 
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.\721\ 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.\722\ Similarly, direct admissions 
after surgery that are primarily caused by non-clinical 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.\723\ 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,'' \724\ 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.\725\ 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.
---------------------------------------------------------------------------

    \719\ 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.
    \720\ Banner Health. Outpatient Experience & Benefits. Available 
at: https://www.bannerhealth.com/services/outpatient-surgery/experience-benefits. Last accessed April 4, 2023.
    \721\ 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.
    \722\ 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.
    \723\ Ibid.
    \724\ Ibid.
    \725\ 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 Hospital 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 hospitals and providers. 
This measure meets the National Quality Strategy goals of embedding 
quality into the care journey

[[Page 82065]]

and promoting safety.\726\ We expect that the measure would promote 
improvement in patient care over time.
---------------------------------------------------------------------------

    \726\ 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.
---------------------------------------------------------------------------

    The 7-Day Hospital Visit Rate After Outpatient Surgery measure was 
on the 2022 MUC list.\727\ The Rural Health Advisory Group members did 
not have any rural health concerns about the measure. We believe that 
the 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 MAP recommended the measure for rulemaking.\728\
---------------------------------------------------------------------------

    \727\ 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.
    \728\ 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, in the CY 2024 OPPS/ASC proposed rule (88 FR 
49837 through 49839), we proposed 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 7-Day Hospital Visit Rate After Outpatient Surgery measure is 
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),\729\ and we proposed the first reporting period in the 
REHQR Program would begin with the CY 2024 reporting period. We also 
considered increasing the data collection time-period, to account for 
low volume, to two or three years.
---------------------------------------------------------------------------

    \729\ 2022 Measure Updates and Specifications Report (2022), 
available at https://qualitynet.cms.gov/outpatient/measures/surgery/methodology. Last accessed February 28, 2023.
---------------------------------------------------------------------------

(4) Measure Calculation
    The measure outcome would include 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,\730\ 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 three 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 three 
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 non-
diagnostic services that are furnished to the beneficiary during the 3-
day payment window.\731\ 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.\732\
---------------------------------------------------------------------------

    \730\ https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/Three_Day_Payment_Window Window. Accessed May 
4, 2023.
    \731\ 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 Window. Last accessed on 
March 28, 2023.
    \732\ 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).\733\ 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.
---------------------------------------------------------------------------

    \733\ 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 CMS 
and includes a transparent public comment submission and review process 
for

[[Page 82066]]

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.
    As noted previously, 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 seven days following cataract surgery \734\ and another study 
showing a 1.77 percent of patients with ED visits within 30 days 
following cataract surgery.\735\ 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.
---------------------------------------------------------------------------

    \734\ 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.
    \735\ 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, 2022 DOI: https://doi.org/10.1016/j.ajo.2022.08.017.
---------------------------------------------------------------------------

(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 seven days following outpatient 
surgery.\736\ The measure risk-adjusts for surgical procedure 
complexity using two variables. First, it adjusts for surgical 
procedure complexity using the Work Relative Value Units (RVUs).\737\ 
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),\738\ to account for organ-
specific differences in risk and complications, which are not 
adequately captured by the Work RVU alone.
---------------------------------------------------------------------------

    \736\ 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.
    \737\ 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 nhpf. Last accessed February 28, 2023.
    \738\ 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 invited public comment on the proposal.
    Comment: Several commenters supported the Risk-Standardized 
Hospital Visits Within 7 Days After Hospital Outpatient Surgery 
measure. One commenter stated that this measure will ensure REHs 
provide quality services and provide information for consumers to use 
when selecting a provider.
    Response: We thank commenters for their support
    Comment: Several commenters expressed concern that REHs will not 
have sufficient surgical volumes to allow reporting of the Risk-
Standardized Hospital Visits Within 7 Days After Hospital Outpatient 
Surgery measure. One of these commenters stated that the tiered 
framework approach to measure reporting based on the scope of services 
provided by an REH, as discussed in section XVI.B.7.c. of this final 
rule with comment period, would be particularly relevant for this 
measure.
    Response: We note that the commenters' concern regarding low 
volumes applies to all measures and providers, and that CMS does not 
report measures publicly unless it achieves sufficient case volumes to 
allow for public reporting of the collected data. In addition, as we 
state in section XVI.B.1 of this final rule with comment period, 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 REHQR 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. We reiterate that we will only publicly report measure 
results with sufficient case volumes, both to protect patient privacy 
and to ensure that data are statistically reliable. We agree that the 
tiered framework approach to measure reporting based on the scope of 
services provided by an REH could be particularly relevant for this 
measure and refer readers to section XVI.B.7.c. of this final rule with 
comment period for further discussion.
    After consideration of the public comments we received, we are 
finalizing our proposal to adopt the Risk-Standardized Hospital Visits 
Within 7 Days After Hospital Outpatient Surgery measure, beginning with 
the CY 2024 reporting period as proposed.
6. Summary of Finalized REHQR Program Measure Set Beginning With the CY 
2024 Reporting Period
    Table 147 summarizes the finalized REHQR Program measure set 
beginning with the CY 2024 reporting period:

[[Page 82067]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.222

7. REHQR Program Measures and Topics for Future Consideration
a. Electronic Clinical Quality Measures (eCQMs) for Reporting Quality 
Data Under the REHQR Program
    In the CY 2024 OPPS/ASC proposed rule (88 FR 49840 and 49841), we 
requested comment on the use of 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.\739\
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    \739\ CMS. Meaningful Measures Initiative. https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/CMS-Quality-Strategy. Last accessed April 
3, 2023.
---------------------------------------------------------------------------

    We acknowledged in the request for comment that technological, 
monetary, and staffing barriers may present challenges to eCQM adoption 
and use in some REHs. Although some REH staff may have had experience 
reporting eCQMs in the Hospital Inpatient Quality Reporting (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 148 and 
149 compare urban and rural hospital eCQM reporting, as defined by 
census area, with respect to the Medicare PI Program for the CY 2021 
reporting period. 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.
BILLING CODE 4150-28-P

[[Page 82068]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.223


[[Page 82069]]


[GRAPHIC] [TIFF OMITTED] TR22NO23.224

BILLING CODE 4150-28-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 image quality, relative to 
evidence-based thresholds based on the clinical indication for the 
exam.\740\ 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 are finalizing adoption of the Excessive 
Radiation eCQM for the Hospital OQR Program in this final rule. We 
refer readers to section XIV.B.3.c of this final rule with comment 
period for a discussion of this measure in the Hospital OQR Program.
---------------------------------------------------------------------------

    \740\ 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 invited 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.
    Comment: Several commenters agreed that eCQMs could reduce 
reporting burden by eliminating the need to manually abstract data from 
medical charts and multiple other sources but did not support 
implementation of eCQMs in the REHQR Program based on concerns with 
operational feasibility. Many commenters expressed concerns with 
implementing eCQMs because small, rural hospitals often lack the 
resources to implement expensive EHR systems, including the human 
resources to operate and support them. One commenter noted that REHs 
may also be located in areas with limited broadband internet access. 
Another commenter stated that CAHs in their state reported

[[Page 82070]]

significant costs and vendor-related delays to modify their current 
systems in order to allow for reporting of eCQMs, including every time 
a new eCQM is added to a CMS program.
    Some commenters who did not support implementation of eCQMs in the 
REHQR Program noted existing challenges with data collection and 
interoperability. A few commenters reported that several eCQMs that 
have been reviewed by a CBE or already proposed for use in CMS programs 
often use fields that do not always appear universally across all EHRs 
and may require time-consuming workarounds that negate the automation 
inherent to eCQMs. One commenter noted that not all measure definitions 
lend themselves to an eCQM data collection. The commenter also 
expressed concern with evolving technology standards, such as the 
variation in FHIR versions.
    Another commenter who opposed the potential future use of eCQMs in 
the REHQR Program stated their belief that their introduction would be 
shortsighted, burdensome, and fail to recognize the increasing drive 
towards digital quality measures (dQMs). The commenter stated their 
belief that through efforts to improve health information exchange and 
extra data for quality measurement, eCQMs will continue to require 
significant resources to build. The commenter recommended that CMS 
should instead invest its efforts towards the future development of 
dQMs.
    One commenter expressed support for the potential future use of 
eCQMs in the REHQR Program. This commenter also provided 
recommendations for CMS' identification and development of eCQMs, 
including aligning measures for a given concept (for example, patient 
safety) across applicable settings (for example, REHs and HOPDs) and 
focusing on outcome and patient-reported measures. The commenter also 
suggested that CMS use the recommendations of a recent Office of 
Inspector General (OIG) report as a guide in the identification and 
development of eCQMs around medication errors.\741\
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    \741\ Department of Health and Human Services, Office of the 
Inspector General (2022). Adverse events in hospitals: A quarter of 
Medicare patients experienced harm in October 2018. Available at: 
https://oig.hhs.gov/oei/reports/OEI-06-18-00400.pdf.
---------------------------------------------------------------------------

    A few commenters suggested that prior to adopting eCQMs for the 
REHQR Program, CMS should explore their feasibility with participating 
providers, with one commenter recommending program incentives for REHs 
to partner with vendors in pilot programs and models.
    A few commenters recommended that CMS should consider adding eCQMs 
as optional measures initially. One of these commenters further 
suggested a stair-step approach to implementation, first incentivizing 
milestones along the way and, at an appropriate point in the timeline, 
introducing a negative incentive to promote long-term adherence.
    To help REHs and all hospitals with successful eCQM reporting, the 
same commenter also recommended slowing down the implementation of and 
updates to new standards in health care interoperability to allow all 
parties, including CMS' technology, to catch up and align as an 
industry. The commenter also suggested that CMS standardize reporting 
requirements across all quality reporting programs, which would enable 
utilization of software and quality measures across all care settings, 
allow for better continuity of care, and minimize the chances for some 
providers and/or care settings to be left behind.
    Response: We thank commenters for their feedback and will take it 
into consideration as we continue to evaluate all elements of the REHQR 
Program.
b. Care Coordination Measures
    In the CY 2024 OPPS/ASC proposed rule (88 FR 49841), we requested 
comment on 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 health care 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.\742\ 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.\743\ 
However, REHs are required to have in effect a transfer agreement with 
a level I or level II trauma center,\744\ 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.
---------------------------------------------------------------------------

    \742\ Healthcare Access in Rural Communities. Rural Health 
Information Hub. Available at: https://www.ruralhealthinfo.org/topics/healthcare-access. Last accessed March 13, 2023.
    \743\ Ibid.
    \744\ 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 and 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.\745\ 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.\746\ 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.\747\
---------------------------------------------------------------------------

    \745\ 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.
    \746\ Ibid.
    \747\ 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.
---------------------------------------------------------------------------

    We invited public comment on the use of care coordination measures 
in the REHQR Program, including telehealth measures, 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.
    Comment: Several commenters expressed support for care coordination 
measures for the REHQR Program. Some of these commenters recommended a

[[Page 82071]]

cautious approach to measure adoption because REHs are small and some 
measures are burdensome to report.
    Several commenters recommended adoption of measures that assess 
appropriate use of telehealth and other remote monitoring services for 
the REH setting. One of these commenters stated that such a measure 
would be appropriate in the future, but that it is currently premature 
because telehealth services are not required for REHs. One of these 
commenters stated that anesthesiology telehealth supervision services 
increase costs without improving quality, and also urged CMS not to 
create unintended barriers to the use of Certified Registered Nurse 
Anesthetists (CRNAs) in rural and rural emergency settings through the 
use of telehealth services. Another commenter recommended that CMS' 
strategy for REHs should address the need for using advanced 
technology, such as telehealth, remote patient monitoring (RPM), and 
other communications-based technology services, as well as Software as 
a Medical Device (SaMD), in improving rural maternal and infant care.
    Several commenters recommended specific care coordination measures 
for future adoption in the REHQR Program. These measures are Medication 
Reconciliation Post Discharge (CBE 0097) and the Medicare 
Beneficiary Quality Improvement Project (MBQIP) Emergency Department 
Transfer Communication (EDTC) measure. Some commenters recommended 
types of measures that should be considered. These commenters 
specifically recommended a focus on patient safety measures, patient 
reported outcome measures, and patient experience measures.
    Response: We thank commenters for their feedback and will take it 
into consideration as we continue to evaluate all elements of the REHQR 
Program.
c. Tiered Approach Framework
    In the CY 2024 OPPS/ASC proposed rule (88 FR 49841 and 49842), we 
requested comment on a tiered approach to quality measure reporting. We 
referred 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) and received comments from more than 50 commenters in 
response, including one suggestion to implement a multi-tiered approach 
for quality measures and reporting requirements to incentivize REH 
reporting.
    In the CY 2024 OPPS/ASC proposed rule (88 FR 49841 and 49842), we 
explained that 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.
    In this final rule with comment period, we are adopting the 
following measures into the REHQR Program measure set: (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 
measures are related to services that REHs must provide to participate 
in the Medicare program. The other two measures are related to services 
that could be furnished on an outpatient basis at the election of the 
REH.\748\ 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.
---------------------------------------------------------------------------

    \748\ See section 1861(kkk)(1) of the Act.
---------------------------------------------------------------------------

    The aforementioned tiered measures were only examples for the 
purposes of the 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 additional services would begin to submit Tier 2 data at a 
designated time after such services begin under the new REH status.
    We invited 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.
    Comment: Several commenters expressed support for a tiered or menu-
like approach to measures because the scope of REH services is still 
uncertain, and this approach would thus allow REHs to focus on 
reporting measures applicable to the services they offer. One commenter 
anticipated that the scope of services will likely vary based on 
location and seasonality. One commenter recommended adopting this 
approach cautiously because the REH designation is still new.
    One commenter did not support a tiered measurement strategy because 
this could signal to patients that they do not deserve information 
related to the quality of care provided by REHs in their area.
    Response: We thank commenters for their feedback and will take it 
into consideration as we continue to evaluate all elements of the REHQR 
Program.
8. Display of Quality Measure Data Publicly
a. Public Reporting of Quality Data Generally
    Pursuant to the CAA, 2021, the Secretary shall establish procedures 
to make quality measure data submitted by REHs available to the public 
on a CMS website.\749\ 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.\750\ In the CY 2024 OPPS/ASC proposed rule (88 FR 49842), we 
proposed 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).
---------------------------------------------------------------------------

    \749\ CAA, 2021, at section 125(a)(1)(B) of Division CC, adding 
section 1861(kkk)(7)(D) of the Act.
    \750\ CAA, 2021, at section 125(a)(1)(B) of Division CC, adding 
section 1861(kkk)(7)(D) of the Act.
---------------------------------------------------------------------------

    We proposed to make publicly reported data under the REHQR Program 
available to the public both on our Care Compare website and in 
downloadable data files found at https:// data.cms.gov. We discussed 
our intent 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 would use the same information systems, 
business processes, and other infrastructure that we use to display 
data for the Hospital OQR and Hospital IQR Programs. We described our 
belief

[[Page 82072]]

that alignment of public reporting processes and policies with other 
quality reporting programs would ease the understanding of such 
processes and policies for REHs.
    Specifically, we proposed 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). Similar 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-designated 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-designated websites. This preview process would 
align with that of the Hospital OQR Program (81 FR 79791).
    We proposed to codify this policy at Sec.  419.95 by adding 
paragraph (f), ``Public reporting of data under the REHQR Program.'' In 
paragraph (f), we proposed 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 invited public comment on the proposal.
    Comment: One commenter supported our proposals related to public 
reporting of quality data generally under the REHQR Program. The 
commenter also expressed particular support for our proposal to provide 
a 30-day preview process in alignment with the Hospital OQR and ASCQR 
Programs.
    Response: We thank the commenter for their support.
    Comment: One commenter did not support publicly reporting 
performance in the REHQR Program consistent with reporting in the 
Hospital OQR and ASCQR Programs because of the perception that data are 
difficult for the public to interpret. As an example, the commenter 
stated that whether higher values are better or worse is not specified 
for each measure. Additionally, the commenter did not support reporting 
by CCN because the commenter believes that this obscures the individual 
performance of a given facility delivering the care, which the 
commenter believes is misleading and unhelpful to patients. The 
commenter encouraged CMS to work with the Office of the National 
Coordinator for Health Information Technology's (ONC) to utilize ONC's 
HTI-1 version 4 (v4), which the commenter stated could provide 
consistent identification of healthcare facilities by physical 
locations and facilitate public reporting of quality data at the 
facility level.
    Response: We appreciate the commenter's concern regarding reporting 
the data in a way that is meaningful for patients. We note that we 
provide educational materials on the Care Compare website and in the 
program's Specifications Manual, both of which include information 
about why a measure is important and provide information about whether 
higher or lower percentages are better for most measures, including 
those being adopted for the REHQR Program. We continually evaluate our 
patient education materials to improve the clarity and usefulness of 
the data we provide and believe that publicly reporting these data 
helps patients to make informed decisions about their care.
    Regarding the commenter's preference for reporting data at the 
facility level as opposed to at the CCN level, we believe that 
consistent reporting across quality reporting facilitates meaningful 
comparison; however, we will consider taking into consideration 
alternative data reporting levels based on program needs and evidence 
of validity and reliability of such a change.
    We clarify that ONC, on behalf of the Secretary and under the 
authority provided in section 3004 of the Public Health Service Act, 
proposed the adoption of United States Core Data for Interoperability 
(USCDI) version 3 (v3) in the ``Health Data, Technology, and 
Interoperability: Certification Program Updates, Algorithm 
Transparency, and Information Sharing'' proposed rule (HTI-1 proposed 
rule).\751\ USCDI v4 was recently published in July 2023 and re-
published with errata in October 2023.\752\ USCDI v4, includes facility 
information, including facility identifier, type, and name, however, 
USCDI v4 has not yet been proposed for adoption through rulemaking nor 
is it in widespread use. We will continue to coordinate with ONC as to 
when adoption and implementation of USCDI v4 may occur and its 
suitability for use for the public reporting of quality data.
---------------------------------------------------------------------------

    \751\ 88 FR 23750 (April 18, 2023); https://www.federalregister.gov/d/2023-07229/p-164.
    \752\ https://www.healthit.gov/isa/sites/isa/files/2023-10/USCDI-Version-4-October-2023-Errata-Final.pdf.
---------------------------------------------------------------------------

    Comment: A few commenters encouraged CMS to delay public reporting 
by at least one or 2 years to allow time for the data to be reviewed 
for accuracy and assure that the measures appropriately reflect REH 
quality.
    Response: We note that the four measures being adopted by the REHQR 
Program have been incorporated in the Hospital OQR Program and all 
hospitals eligible to convert to REH status, except for CAHs, have been 
required to participate in the Hospital OQR Program. Furthermore, many 
CAHs have voluntarily reported these measures in the Hospital OQR 
Program (88 FR 49827 through 49830). Therefore, we believe most 
hospitals participating in the REHQR Program will have already had data 
on these measures publicly reported. We believe immediate reporting 
under the REHQR Program will allow continuity of data and provide 
patients with meaningful information to make informed decisions about 
care. We note that there is some delay due to data collection time 
periods for the measures in the initial REHQR Program measure set, 
which will allow some time for REHs to settle into their new provider 
role. Each of these initial measures will also be calculated once the 
completion of the relevant data collection period is met. The three 
claims-based measures are collected on a rolling annual basis 
thereafter; the chart-abstracted measure will be collected quarterly.
b. Public Reporting of REHQR Program Claims-Based Measures
    In the CY 2024 OPPS/ASC proposed rule (88 FR 49842), we proposed to 
make measure scores for the 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 
previously in section XVI.B.5 of this final rule with comment period, 
we are finalizing the adoption of 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.
    As explained in the CY 2024 OPPS/ASC proposed rule (88 FR 49842), 
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

[[Page 82073]]

volumes are achieved.753 754 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.
---------------------------------------------------------------------------

    \753\ CMS does not report measures publicly unless measures are 
the result of an analysis of more than 10 cases.
    \754\ 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.
---------------------------------------------------------------------------

    As we described in the CY 2024 OPPS/ASC proposed rule (88 FR 49842) 
and in section XVI.B.8.a. of this final rule with comment period, we 
proposed that 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 found 
at https:// data.cms.gov. Data associated with these three claims-based 
measures would be updated annually.
    We invited public comment on the proposal.
    Comment: One commenter expressed broad support of CMS' proposals to 
support REHs' efforts to collect data, report quality measures, and 
improve performance, including CMS' proposal to publicly report claims-
based measures under the REHQR Program.
    Response: We thank the commenter for their support.
c. Public Reporting of the 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 website and in the downloadable data found at https:// 
data.cms.gov for the Hospital OQR Program. In addition, measure data 
for the Median Time for Discharged ED Patients--Psychiatric/Mental 
Health Patients is publicly displayed in downloadable data files, in 
order to address a behavioral health gap in the publicly reported 
Hospital OQR Program measure set.\755\
---------------------------------------------------------------------------

    \755\ 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).
---------------------------------------------------------------------------

    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 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 that have a 
discharge code, 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 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 the Median Time for 
Discharged ED Patients measure for the REHQR Program measure set, 
please refer to section XVI.B.5.b of this final rule with comment 
period.
    In the CY 2024 OPPS/ASC proposed rule (88 FR 49842 and 49843), we 
proposed to make publicly available data received from REHs to 
calculate the following measure strata for the Median Time for 
Discharged ED Patients measure: (1) Overall Rate; (2) Reported Measure; 
(3) Psychiatric/Mental Health Patients; and (4) 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 these data through CMS websites or 
communications, and in future rulemaking. As discussed previously, 
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 invited public comment on these proposals.
    Comment: Several commenters did not support public reporting of the 
transfer patients stratum because the Hospital OQR program does not 
report this stratum.
    Response: We appreciate the commenters' recommendation to align 
public reporting between the Hospital OQR Program and the REHQR 
Program. We note that in section XIV.B.6 of this final rule with 
comment period, we are finalizing public reporting of the transfer 
patients stratum in the Hospital OQR Program. Therefore, if CMS 
finalizes public reporting of this stratum in the REHQR Program as 
proposed, this policy will align across these two programs.
    Comment: One commenter did not support publicly reporting these 
data because of concerns that low volumes will lead to unreliable data. 
This commenter observed that stratifying the data into four strata will 
lead to smaller volumes and therefore less reliable data.
    Response: We thank the commenters for their feedback but note that 
this concern applies to all measures, and that CMS does not report 
measures publicly unless sufficient case volumes to allow for public 
reporting of the collected data are achieved. This measure has clinical 
importance, and even if case rates are too small for public reporting, 
the collection of this measure can drive hospital improvement efforts 
and improve timely access to care. In addition, as we state in section 
XVI.B.1 of this final rule with comment period, 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 REHQR 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. We reiterate that we will only publicly report measure 
results with sufficient case volumes, both to protect patient privacy 
and to ensure that data are statistically reliable. We believe that 
reporting all four strata provides meaningful information regarding the 
care provided by addressing the various outcomes of seeking ED care 
which a patient may experience.
    Comment: Several commenters did not support reporting these data 
because the measure could be affected by factors outside of the REH's 
control. These commenters expressed that reporting these data could 
affect perceptions of

[[Page 82074]]

REHs and patient willingness to seek care at REHs with high throughput 
times.
    Response: We understand the commenters' concern regarding factors 
outside of an REH's control that could affect ED throughput and thus 
the perception of the hospital; however, we believe that many hospitals 
face such concerns and that timeliness of care is critical aspect of 
quality of care, directly impacting patient outcomes, particularly for 
an ED episode of care. While we understand concerns that transport 
times may be delayed due to circumstances beyond a facility's control, 
such as weather, local facility transport modalities, and distance, we 
also note that transfer time for trauma patients is especially 
important, that these circumstances are not unknown or new challenges, 
and that REHs are statutorily required to have in effect a transfer 
agreement with a higher level trauma center, such that patients that 
present with needs for longer-term inpatient care may receive that 
care, particularly in a timely manner. Further, an examination of Care 
Compare data for hospitals that have converted to REH status shows 
transfer times that are more timely or on par with larger or urban 
hospitals. Therefore, the public reporting of these data can help 
patients and their caregivers identify which facilities are performing 
better than others despite potential challenges, and drive quality 
improvement efforts. Additionally, we believe that having a consistent 
ED throughput measure across REHs and HOPDs will allow consumers to 
compare across programs, especially for vulnerable populations in need 
of transfer to more appropriate care settings.

C. Administrative Requirements

1. Codification of 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, 72149, and 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. In the CY 2024 OPPS/ASC proposed rule (88 FR 49843), we proposed 
to codify the participation requirements in the REHQR Program at Sec.  
419.95(b), ``Participation in the REHQR Program.''
    We noted in the CY 2024 OPPS/ASC proposed rule that we intend to 
propose additional administrative requirements as appropriate for the 
REHQR Program in subsequent rulemaking.
    We invited public comment on these proposals. We did not receive 
any comments on the proposal and are finalizing our proposal to codify 
the participation requirements in the REHQR Program at Sec.  419.95(b) 
with one correction to fix a typographical error, in which ``paragraph 
(c)'' was inadvertently referred to as ``paragraph (d).''

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

1. Alignment and Codification of Submission of REHQR Program Data
    We refer readers to the CYs 2014, 2016, and 2018 OPPS/ASC final 
rules (78 FR 75110 and 75111; 80 FR 70519 and 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). In the CY 2024 OPPS/ASC proposed rule 
(88 FR 49843), we proposed to align the policies regarding submission 
of program data for the REHQR Program with those from the Hospital OQR 
Program.
    We also proposed to codify this policy at Sec.  419.95 by adding 
paragraph (c), ``Submission of REHQR Program data.'' In 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 CCN must combine data 
collection and submission across their multiple campuses for all 
clinical measures for public reporting purposes. In paragraph (c)(2), 
we proposed that submission deadlines by measure and by data type be 
posted on a CMS website. We proposed that all deadlines occurring on a 
Saturday, Sunday, or legal holiday, or on any other day all or part of 
which is declared to be a non-workday 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 invited public comments on these proposals.
    Comment: One commenter expressed broad support of CMS' proposals to 
support REHQRs' efforts to collect data, report quality measures, and 
improve performance, including CMS' proposals related to the form, 
manner and timing of data submission, to include: (1) our proposal to 
align the policies regarding submission of REHQR Program data with 
those of the Hospital OQR Program and to codify such policies at Sec.  
419.95(c); (2) our proposed data submission requirements for chart-
abstracted measures beginning with the CY 2024 reporting period; (3) 
our proposed claims-based measure data requirements beginning with the 
CY 2024 reporting period; (4) our proposal to adopt a review and 
corrections period for measure data submitted to the REHQR Program and 
to codify this policy at Sec.  419.95(c)(3); and (5) our proposal to 
adopt an Extraordinary Circumstances Exceptions (ECE) process for the 
REHQR Program and to codify this policy at Sec.  419.95(g).
    Response: We thank the commenter for their support.
    After consideration of the public comments we received, we are 
finalizing our proposal to align the policies regarding submission of 
REHQR Program data with those of the Hospital OQR Program and to codify 
such policies at Sec.  419.95(c).
2. Requirements for Chart-Abstracted Measures Where Patient-Level Data 
Are Submitted Directly to CMS Beginning With the CY 2024 Reporting 
Period
    As discussed in section XVI.B.5.b of this final rule with comment 
period, we are finalizing our proposal 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 the CY 2024 OPPS/ASC proposed rule 
(88 FR 49843), we explained that in developing proposed data submission 
requirements for this measure, 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 noted that REHs

[[Page 82075]]

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 
proposed the same data submission frequency (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 through 72112).
    Beginning with the CY 2024 reporting period, the applicable patient 
encounter quarters for chart-abstracted data and their corresponding 
data submission deadlines would be as follows in Table 150.
[GRAPHIC] [TIFF OMITTED] TR22NO23.225

    We proposed to adopt these dates as quarterly deadlines for 
submitting chart-abstracted measure data for the REHQR Program.
    We invited public comment on the proposal.
    Response: We refer readers to previous section XVI.D.1 where we 
summarize the broad support we received for CMS' proposals related to 
the form, manner and timing of data submission.
    After consideration of the public comments we received, we are 
finalizing our proposed data submission requirements for chart-
abstracted measures beginning with the CY 2024 reporting period.
3. Claims-Based Measure Data Requirements Beginning With the CY 2024 
Reporting Period
    As discussed in section XVI.B.5 of this final rule with comment 
period, we are finalizing our proposal to adopt three initial claims-
based measures for the CY 2024 reporting period and for subsequent 
years: (1) Abdomen CT; (2) 7-Day Hospital Visit Rate After Outpatient 
Colonoscopy; and (3) 7-Day Hospital Visit Rate After Outpatient 
Surgery. In the CY 2024 OPPS/ASC proposed rule (88 FR 49844), for 
calculating these and future claims-based measures, we proposed to use 
Medicare claims data for services with encounter dates on or after 
January 1, 2024.
    We invited public comment on the proposal.
    Response: We refer readers to previous section XVI.D.1 where we 
summarize the broad support we received for CMS' proposals related to 
the form, manner and timing of data submission.
    After consideration of the public comments we received, we are 
finalizing our proposed claims-based measure data requirements 
beginning with the CY 2024 reporting period.
4. Adoption and Codification of 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 we are 
finalizing in section XVI.B.5.b of this final rule with comment period, 
and later discovers or suspects the data provided were not accurate, it 
may need to submit corrected data. To address this need, in the CY 2024 
OPPS/ASC proposed rule (88 FR 49844), we proposed 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 the submission 
deadline.
    We proposed 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 proposed to codify this policy at Sec.  419.95 by adding 
paragraph (c)(3), ``Review and corrections period.'' In paragraph 
(c)(3), we proposed 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 proposed that after the submission deadline, these data cannot be 
changed.
    We invited public comment on these proposals.
    Response: We refer readers to previous section XVI.D.1 where we 
summarize the broad support we received for CMS' proposals related to 
the form, manner and timing of data submission.
    After consideration of the public comments we received, we are

[[Page 82076]]

finalizing our proposal to adopt a review and corrections period for 
measure data submitted to the REHQR Program and to codify this policy 
at Sec.  419.95(c)(3).
5. Adoption of an Extraordinary Circumstances Exceptions (ECE) Process
    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. In the CY 
2024 OPPS/ASC proposed rule (88 FR 49844 and 49845), we proposed 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 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 proposed 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 proposed 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 chief executive officer (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 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.
    We proposed the request form must be signed by the REH's designated 
contact, whether or not that individual is the CEO. A request form 
would be 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. We 
proposed 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 proposed to codify these policies at Sec.  419.95 by adding 
paragraph (g), ``Exception.'' In paragraphs (g)(1) and (2), we proposed 
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 invited public comment on these proposals.
    Response: We refer readers to previous section XVI.D.1 where we 
summarize the broad support we received for CMS' proposals related to 
the form, manner and timing of data submission.
    After consideration of the public comments we received, we are 
finalizing our proposal to adopt an Extraordinary Circumstances 
Exceptions (ECE) process for the REHQR Program and to codify this 
policy at Sec.  419.95(g).

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

A. Background and Statutory Authority

    The Consolidated Appropriations Act (CAA), 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 
program (IOP) services in 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 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 partial hospitalization 
program (PHP) services. The statutory definitions provide distinctions 
between the two programs for Medicare purposes.
    In order to implement division FF, section 4124 of the CAA, 2023, 
we proposed to modify the requirements for CMHC participation in 
Medicare to include standards for IOP services throughout the CoPs. 
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.
    Division FF, section 4121 of the CAA, 2023, establishes a new 
Medicare benefit category for marriage and family therapist (MFT) 
services and mental health counselor (MHC) services. Thus, we also 
proposed to add personnel qualifications for MFTs and update the 
existing personnel qualifications for MHCs in the CMHC CoPs.

B. Summary of the CMHC Proposed Provisions, Public Comments and 
Responses to Comments

    On July 31, 2023, the CY 2024 OPPS/ASC proposed rule (88 FR 49552) 
was published in the Federal Register. This section of this final rule 
with comment period sets out changes to the CMHC CoPs as required in 
section 4124 of Division FF of the CAA 2023. In response to the 
proposed CMHC CoP policies, we received 23 public comments. Commenters 
included health associations and residential and outpatient substance 
use disorder treatment facilities. In this section, we provide a 
summary of our proposed provisions, a summary of the public comments 
received, our responses to the public comments, and the policies we are 
finalizing for CMHCs.
1. General Comments
    Comment: We received one comment that supported the various 
technical changes to codify the coverage of IOP services in CMHCs. 
However, this commenter noted that CMHCs do not provide screening or 
treatment for eating disorders.
    Response: We appreciate the feedback from the commenter. While the 
CoPs do not explicitly address every mental

[[Page 82077]]

health service provided by CMHCs, we note that practitioners working in 
CMHCs may provide these services for the screening and treatment of 
eating disorders as part of individual counseling under part B if they 
so choose.
2. Section 485.900 Basis and Scope
    We proposed to revise the basis and scope of part 485, subpart J, 
at Sec.  485.900 to add the definition of IOP services to the standard 
in which the current definition of ``partial hospitalization services'' 
is located. In this standard, we also proposed to reference the 
statutory provision at section 1861(ff) enacted by Congress in division 
FF, section 4124 of the CAA, 2023. Section 1832(a)(2)(J) of the Act 
specifies payment of benefits covered under Medicare for CMHCs and 
section 1866(e)(2) of the Act specifies the provider agreement 
requirements for CMHCs with respect to providing PHP and IOP services. 
The addition of IOP services to the list of Medicare services covered 
when provided by a CMHC would assist in ensuring the continuum of 
coverage of outpatient behavioral health services under the Medicare 
program. Medicare coverage of IOP services in CMHCs may help address 
barriers to access to behavioral health care, which may also address 
inequities in behavioral health care and services. In order to 
implement division FF, section 4124 of the CAA, 2023, we proposed to 
modify the CMHC CoPs at Sec.  485.900(a)(1) through (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.
    Comment: We received several comments in support of the proposals 
at Sec.  485.900. Commenters expressed support for the inclusion of IOP 
services as it aligns with the broader health care industry's shift 
towards recognizing and treating mental health with the same importance 
as physical health. Commenters also supported IOP services furnished by 
CMHCs as it increases access to behavioral health care.
    Response: We thank and appreciate the commenters support of these 
proposals.
    After consideration of public comments on these provisions, we are 
finalizing them as proposed at Sec.  485.900. The inclusion of IOP 
services in a CMHC would assist in ensuring the continuum of coverage 
of outpatient behavioral health services under the Medicare program and 
may help address barriers to access to behavioral health care. We 
believe that this action strengthens our response to the need for 
increased access to behavioral health services.
3. Section 485.904 Personnel Qualifications
    Section 1861(ff)(2) of the Act lists the items and services partial 
hospitalization programs must be able to provide to meet the needs of 
clients and the staff needed to provide such items and services. For 
example, section 1861(ff)(2)(A) of the Act states a physician, 
psychologist, or other mental health professional to the extent 
authorized under State law may furnish individual and group therapy. 
The programs providing PHP services must be able to meet the needs of 
each client under their care.
    As stated above, section 4121 of division FF of the CAA, 2023, 
established a new Medicare benefit category for MFT and MHC services in 
section 1861(lll) of the Act, including a definition for MFTs and MHCs 
in sections 1861(lll)(2) and 1861(lll)(4) of the Act, respectively. To 
support the health and safety of CMHC clients and to promote 
consistency and clarity of CMHC personnel qualifications we proposed at 
Sec.  485.904(b), ``Standard: Personnel qualifications for certain 
disciplines,'' to align the personnel qualifications for MFTs and MHCs 
with the requirements set out in the CAA, 2023. We proposed to 
implement the statutory definitions for MFTs and MHCs in the CY 2024 
Physician Fee Schedule proposed payment rule (88 FR 52262); the final 
rule implementing these definitions published in the Federal Register 
of November 16, 2023 (FR Doc. 2023-24184). We proposed to add a new 
requirement at Sec.  485.904(b)(12), cross-referencing the definition 
of an MFT at Sec.  410.53 and we proposed to modify the MHC personnel 
requirement at Sec.  485.904(b)(5) by cross-referencing the definition 
of an MHC at Sec.  410.54.
    Comment: Several commenters shared their support for the inclusion 
of MFTs and MHCs in the personnel requirements and believe these 
practitioners will provide vital clinical resources to support PHP and 
IOP services. One commenter stated that adding MFTs and MHCs to the 
personnel requirements could help address the workforce shortages in 
underserved communities, and potentially increase the availability of 
mental health services at CMHCs. Another commenter expressed their 
support for the proposed provision stating that many MFTs and MHCs 
already work in a variety of community mental health settings.
    Response: We thank these commenters for their support of these new 
proposals.
    After consideration of public comments on this provision, we are 
finalizing these provisions at Sec.  485.904(b) as proposed. The 
inclusion of the definition of MFT and modification of the definition 
of MHC to promote consistency and clarity of the CMHC personnel 
qualification of these providers.
4. Section 485.914 Admission, Initial Evaluation, Comprehensive 
Assessment, and Discharge or Transfer of the Client
    We proposed to add ``intensive outpatient services'' to existing 
references for ``partial hospitalization services'' at Sec.  485.914, 
which establish CMHC 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)(2), we proposed to revise the paragraph by 
referencing IOP requirements the CMHC must meet at proposed Sec.  
485.918(g). This standard for IOP is discussed later in section 
XVII.A.5 of this final rule with comment period. At Sec.  485.914(d), 
we proposed to add a reference to IOP services. This standard 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.
    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. The CMHC interdisciplinary treatment 
team uses assessment information to guide necessary reviews and/or 
changes to the client's active treatment plan.\756\
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    Comment: Several commenters suggested that the IOP comprehensive 
assessment be updated no less frequently than every 60 days. The 
commenter noted the comprehensive

[[Page 82078]]

assessment for IOP should be updated less frequently than for PHP, 
which would be consistent with the recertification requirements for IOP 
at 60 days and PHP at 30 days.
    Response: We appreciate the commenters suggestions to coordinate 
the time frames for the update of the comprehensive assessment and the 
recertification of IOP to both occur at 60 days. We note that we did 
not propose any modifications to the comprehensive assessment time 
frame. We believe that for both PHP and IOP, a 60-day time frame 
between assessments would not support the most current changes in the 
client's behavioral health needs and could potentially put the client's 
health and safety at risk. We note that clients with ongoing behavioral 
health needs may be subject to frequent and/or rapid changes in status, 
thereby affecting the type and frequency of services that are updated 
in the client's active treatment plan and furnished by the CMHC.
    After consideration of public comments on this provision, we are 
finalizing the provisions at Sec.  485.914(d) as proposed. The 
inclusion of IOP in the ``update of the comprehensive assessment'' 
standard will support our responsibility to protect clients' health and 
safety by ensuring all CMHC clients receive care based on their most 
current assessed needs.
5. Section 485.916 Treatment Team, Person-Centered Active Treatment 
Plan, and Coordination of Services
    We proposed to modify language at Sec.  485.916(d) to incorporate 
IOP programs into requirements for active treatment plans in CMHCs and 
proposed to include a specific cross-reference to the proposed 
requirement for payment of IOP services at Sec.  424.24(d), which is 
discussed in section VIII.B.3 of this final rule with comment period. 
The proposal reflected existing requirements in Sec.  485.916(d) that 
CMHCs meet partial hospitalization program requirements specified under 
Sec.  424.24(e). Review and update of the CMHC client's person-centered 
active treatment plan plays an integral role in guaranteeing the 
provision of care and services offered by the CMHC.
    The active treatment plan must 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 but no less frequently than every 30 calendar days. 
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. As noted above, the CMHC must 
meet PHP requirements specified under Sec.  424.24(e). As such, we 
proposed to include IOP service requirements the CMHC must meet as 
specified under Sec.  424.24(d), as applicable, if such services are 
included in the active treatment plan.
    Comment: We received several comments requesting we revise the CoPs 
at Sec.  485.916(a)(1) and (3). Specifically, at Sec.  485.916(a)(1) 
commenters asked that MFTs and MHCs be added to the members that can 
lead the interdisciplinary team. In addition, commenters asked that 
MFTs and MHCs be identified as interdisciplinary team members at Sec.  
485.916(a)(3). Commenters stated that including MFTs and MHCs will 
clarify that these practitioners may lead and be members of the CMHC 
interdisciplinary teams.
    Response: We appreciate the commenter's suggestions to add MFTs and 
MHCs to the list of practitioners who may lead and be a member of the 
interdisciplinary team. We agree with the commenter's suggestion to add 
MFTs and MHCs to the list of practitioners who may lead an 
interdisciplinary team and have modified the language at Sec.  
485.916(a)(1). We believe making this revision can increase flexibility 
for the CMHC and allow diversity in team leadership. However, we do not 
agree with the suggestion to add MFTs or MHCs under Sec.  
485.916(a)(3), the standard describing who may be included in the 
interdisciplinary team. The items and services set out in paragraph 
(a)(3) follow the clinical providers set forth in 1861(ff)(2) of the 
Act, and MFTs and MHCs are not specifically listed. We believe that 
MFTs and MHCs fall under paragraph (a)(3)(vi) (other licensed mental 
health professionals, as necessary). The current language in this 
requirement allows CMHCs the flexibility to utilize appropriate 
counselors, including MFTs and MHCs, who may serve on the client's 
interdisciplinary team.
    Final action: After consideration of public comments on this 
provision, we are finalizing the provisions at Sec.  485.916(d) as 
proposed. Additionally, we are finalizing language at Sec.  
485.916(a)(1) to include MFTs or MHCs as professionals who can lead the 
CMHC interdisciplinary team.
6. Section 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. We proposed 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.''
    At Sec.  485.918(b), ``Standard: Provision of services,'' specifies 
a comprehensive list of services that a CMHC would be required to 
provide; this provision would implement section 1861(ff)(3) of the Act. 
We proposed to add IOP services to the requirement at Sec.  
485.918(b)(1)(iii) for the provision of services. These proposed 
changes would recognize IOP services, 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 proposed to redesignate the current requirements at Sec.  
485.918(g) to Sec.  485.918(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. Sec.  410.2, 410.44, 410.111, and 
424.24(d). See sections VIII.B.2 and VIII.C.2 of this final rule with 
comment period for a discussion of these additional requirements.
    Comment: One commenter suggested that the coverage of IOP services 
by Medicare be extended beyond CMHCs to include any licensed Medicare 
provider. They also stated that Medicare coverage should extend the 
full continuum of care for mental health and substance use disorder 
treatment across all services.
    Response: We recognize that access to behavioral health services is 
an important need for Medicare beneficiaries. Starting January 1, 2024, 
Medicare will cover IOP services furnished in hospitals, CMHCs, RHCs, 
and FQHCs. In addition, CMS is finalizing coverage of IOP services 
furnished at Opioid Treatment Programs (OTPs) for the treatment of 
Opioid Use Disorder using the existing statutory authority at section 
1861(jjj)(1)(F) and 1834(w) of the Act. The statute sets forth covered 
services for all provider types, and at this time only these providers 
may furnish IOP services.

[[Page 82079]]

    Comment: We received several comments requesting that we revise the 
CoPs at Sec.  485.918(b)(1)(vi) to specifically list MFTs similarly to 
the other practitioners who may lawfully provide psychotherapy services 
in a CMHC.
    Response: Section 485.918(b)(1) requires CMHCs to provide a set of 
services. These services align with the requirements in section 
1861(ff)(2)(A) of the Act. Additionally, Sec.  485.918(b)(1)(vi) 
requires a CMHC to provide individual and group psychotherapy utilizing 
a psychiatrist, psychologist, or other licensed mental health 
counselor, to the extent authorized under State law. This requirement 
aligns with the items and services outlined in the statute, and MFTs or 
MHCs are not specifically listed. However, we note that MFTs and MHCs 
would be included in this provision under ``other licensed mental 
health counselor, to the extent authorized under State law.''
    After consideration of public comments on this provision, we are 
finalizing the changes to Sec.  485.918 as proposed. The inclusion of 
IOP throughout this provision promotes consistency and clarity of IOP 
services in a CMHC.
6. Request for Information Regarding the Impact of the Proposed IOP 
Requirements on CMHC Populations and Meeting the 40 Percent Requirement
    In the CY 2024 OPPS/ASC proposed rule (88 FR 49847), we stated our 
interest in better understanding the impact of providing IOP services 
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) 
\757\ and section 1861(ff)(3)(B)(iii) of the Act. 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, noting the 
CMHC's compliance with this requirement. Medicare enrollment will be 
denied or revoked in instances in which the CMHC fails to provide the 
certification statement as required. We solicited 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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    Comment: Many commenters requested clarification on the CMS 
interpretive guidance (IG) addressing the 40 percent requirement. 
Specifically, commenters asked CMS to clarify that the percentage of 
services furnished to non-Medicare-eligible persons is determined based 
on all clients who received care at CMHCs, not based solely on the 
provision of services coinciding with the PHP and IOP services that 
Medicare-certified CMHCs may provide.
    Response: Thank you for the suggestion to update the CMHC 
Interpretive Guidance. The Medicare State Operations Manual (SOM), 
Appendix F (CMHC Interpretive Guidance) is identical to our regulations 
at Sec.  485.918(b)(1)(v) without change, and states that the 40 
percent is measured by the total number of CMHC clients treated by the 
CMHC for whom services are not paid for by Medicare, divided by the 
total number of clients treated by the CMHC for each 12-month period of 
enrollment.\758\ This computation is done with respect to the whole 
behavioral health service array furnished by the Medicare-certified 
CMHC and not only those who receive PHP/IOP or similar services covered 
by another payor. We acknowledge that the interpretive guidance mirrors 
the regulation text and does not expand on the regulation. However, at 
this time we do not believe the interpretive guidance for this 
requirement must be updated.
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    Comment: Several commenters requested that CMS monitor concerns 
relating to the provision of services by Medicare-enrolled CMHCs to 
dual-eligible beneficiaries. Specifically, commenters encouraged CMS to 
monitor and require state Medicaid agencies to monitor the challenges 
faced by CMHCs obtaining secondary payment from state Medicaid agencies 
for PHP and IOP services.
    Response: We appreciate the commenters concerns and suggestions 
regarding CMS monitoring for issues related to obtaining secondary 
payment from State Medicaid Agencies. However, note that this is 
outside the scope of this final rule with comment period. We agree this 
is an important issue and will share this information with the 
appropriate CMS component for their review.
    Comment: We received many comments regarding the impact of the 
standard at Sec.  485.918(b)(1)(v), requiring CMHCs provide at least 40 
percent of its items and services to individuals who are not eligible 
for benefits under title XVIII of the Act. The commenters believe that 
because Medicare will cover a wider range of outpatient behavioral 
health services via PHP and IOP, it may encourage more community 
behavioral health providers to enroll as Medicare-certified CMHCs. The 
commenters also stated that the inclusion of IOP services and the 
potential growth in the number of Medicare-certified CMHCs providing 
care would help make these services more broadly available to the 
Medicare population. One commenter believes that the total number of 
clients served would only slightly increase when Medicare covers IOP 
services in CMHCs. The commenter also stated that for those community 
behavioral health entities enrolling as a CMHCs Medicare provider, 
furnishing IOP services would be an opportunity to provide more 
intensive services to Medicare clients who require them and a step 
towards aligning the benefits covered under State Medicaid programs. 
One commenter stated that many clients will likely be directly admitted 
into the IOP program, as their IOP program already admits clients from 
other insurance companies. This commenter also stated that generally, 
half of their PHP clients step down to the IOP level of care, and that 
they currently admit clients to the IOP level of care who are receiving 
office-based therapy. This commenter does not expect the 40 percent 
requirement to be an issue when adding the Medicare IOP service level 
to their services.
    Response: We appreciate the feedback we received regarding the 40 
percent rule. We will continue to consider this further.

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

A. Introduction and Overview
1. Statutory Basis and Background
    Section 1001 of the Patient Protection and Affordable Care Act 
(Pub. L. 111-148), as amended by section 10101 of the Health Care and 
Education Reconciliation Act of 2010 (Pub. L. 111-152), amended Title 
XXVII of the Public Health Service Act (the PHS Act), in part, by 
adding a new section 2718(e). Section 2718 of the PHS Act, titled 
``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).

[[Page 82080]]

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); \759\ and (2) in a consumer-
friendly format. We codified these requirements at 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 of healthcare 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 healthcare 
consumers searching for hospital-specific charge information. 
Additionally, we believe such data can be used specifically by 
employers, researchers, and policy officials, and other members of the 
public to drive competition and help bring more value to healthcare.
---------------------------------------------------------------------------

    \759\ 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 are finalizing 
the proposal 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, 
specifically including 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 are a necessary 
and important first step in ensuring transparency in prices of 
healthcare services 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. Competition in the healthcare 
industry benefits consumers because it helps contain costs, improve 
quality, expand choice, and encourage innovation.\760\
---------------------------------------------------------------------------

    \760\ https:// www.justice.gov/atr/health-care#:~:text= 
Competition%20in%20the%20 healthcare%20industry,and%20 
to%20prevent%20anticompetitive%20 conduct.
---------------------------------------------------------------------------

2. General Comments
    Comment: All commenters, including, for example, hospitals and 
hospital associations, IT developers, researchers, employers, payers, 
healthcare consumers, and consumer advocates, expressed general support 
for transparency in healthcare pricing. Many expressed appreciation 
that CMS has made healthcare price transparency a priority, including 
CMS' commitment to continual refinement of the regulatory requirements 
across all its price transparency initiatives, including Hospital Price 
Transparency (HPT), Transparency in Coverage (TIC), and the No 
Surprises Act (NSA). Commenters explained that patients, plan sponsors, 
and employers need easily understandable cost and quality information 
to encourage the use of high-value care options, citing the financial 
stress caused by medical bills and the need to effectively manage 
healthcare expenses. Many commenters expressed the view that price 
transparency efforts are integral in supporting a transition to value-
based care. One commenter stated their belief that the societal benefit 
of pricing disclosure would be substantial as transparency enables 
comparison shopping and competitive dynamics to contain prices and 
noted that, as hospitals and insurers continue to invest resources and 
effort to build the technology and administrative infrastructure for 
pricing disclosure the incremental burden of compliance would steadily 
diminish.
    Response: We appreciate the overwhelming support for CMS price 
transparency initiatives, which include HPT, TIC, and the NSA. We agree 
with commenters who believe that price transparency can stimulate 
provider competition, empower healthcare consumers, and result in lower 
healthcare costs. We agree that transparency in healthcare pricing is 
integral to supporting a transition to value-based care. We further 
agree that transparency in healthcare pricing is a societal benefit 
that can facilitate competition and comparison shopping to lower 
healthcare costs, and that the burden on providers and payers should 
decrease over time.
    Comment: Many commenters were generally supportive of the statutory 
requirement for hospitals to disclose their standard charges, noting 
that such transparency stimulates provider competition to lower health 
care costs and can also benefit healthcare consumers by providing them 
with more accurate information and choice in their care. One commenter 
specifically recognized HPT data disclosure as a necessary first step 
in achieving these goals and encouraged CMS to take bolder steps to 
lower costs and make healthcare more affordable by increasing 
transparency of healthcare information with employers, researchers, and 
policymakers as the primary audience. Other commenters continue to 
express opposition to the requirement for disclosing hospital standard 
charges, stating that more regulation is not the answer and that 
payers, not providers, should be responsible for disclosing pricing 
information to the public. One commenter characterized hospital 
standard charge information as `extraneous' and expressed concern that 
their disclosure may cause patients to delay care as they seek to 
understand the information.
    Response: We agree that disclosure of hospital standard charges 
represents a critical first step for stimulating provider competition 
and facilitating consumer shopping to lower health care costs. We 
continue to disagree that making standard charges public would deter 
patients from seeking necessary care. Rather, as we explained in the CY 
2020 HPT final rule, we believe that disclosure of this information, 
once presented in a consumer-friendly manner, allows consumers to 
include price considerations in their treatment plan for elective 
procedures, which may result in their selecting the most appropriate 
setting for their care and increased patient satisfaction (84 FR 
65541).
    Comment: One commenter expressed the belief that CMS does not have 
authority and discretion to require price transparency disclosure, 
including negotiated rates. Hospitals and patient advocates alike 
indicated that hospital standard charges fail to provide patients with 
individualized cost of care information, such as an individual's out-
of-pocket costs or `guaranteed, real

[[Page 82081]]

prices in dollars.' One commenter requested that CMS require hospitals 
to make public their standard charges ``in dollars and cents'' and 
asserted that anything less would ``violate the intent of the 
regulation.'' Hospital commenters expressed concern that display of 
hospital standard charges serves only to lead to scrutiny of hospital 
operations and have generated ``unfounded ire'' and been used as ``a 
sounding board for special interest groups'' and allowed third-party 
payers to ``lowball payment proposals,'' thereby harming competition. 
One hospital commenter observed that, instead of providing directly 
actionable information to patients, the current requirements are more 
useful for academic studies, health care finance professionals and 
insurance companies, which use the data to compare rates among peers.
    Response: The HPT regulation implements sections 2718(b)(3) and (e) 
of the PHS Act and represents a significant first step toward 
increasing competition through transparency of hospital standard 
charges. As we stated in the CY 2020 HPT final rule, we believe there 
is a direct connection between transparency in hospital standard charge 
information and having more affordable healthcare and lower healthcare 
coverage costs. We believe healthcare markets could work more 
efficiently and provide consumers with higher-value healthcare if we 
promote policies that encourage choice and competition. As we have 
stated on numerous occasions, we believe that transparency in 
healthcare pricing is critical to enabling patients to become active 
consumers so that they can lead the drive towards value. (84 FR 65526) 
As we stated in the CY 2020 HPT final rule, we continue to encourage 
hospitals to provide consumers with cost information in a consumer-
friendly manner.
    To be clear, as upheld by the courts, we have authority to require 
hospitals to disclose payer-specific negotiated charges. We continue to 
believe that disclosure of hospital standard charges, including payer-
specific negotiated charges, is critical for driving competition and 
are pleased that the intended users of this information, including 
payers, \761\ researchers,\762\ providers, 
employers,763 764 765 policy officials, innovators,\766\ 
industry experts,\767\ and other members of the public are actively 
using the information to develop consumer-friendly displays, compare 
rates, drive efficiencies and lower costs.
---------------------------------------------------------------------------

    \761\ 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/.
    \762\ 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/.
    \763\ 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.
    \764\ 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.
    \765\ 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.
    \766\ Turquoise Health. Patients- Shop Healthcare Like You Shop 
Anything Else. Available at: https://turquoise.health/patients.
    \767\ 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.
---------------------------------------------------------------------------

    As we explained in the CY 2020 HPT final rule, each of the standard 
charges were chosen specifically because they are relevant to a 
specific group of consumers, including the rate negotiated between a 
hospital and third-party payer which is a critical component for 
determining an individual's out-of-pocket obligations. Thus, we 
finalized a requirement for hospitals to disclose the rate they have 
negotiated with third party payers (a standard charge called the 
`payer-specific negotiated charge' defined at 45 CFR 180.20). As 
explained in more detail in XVIII.B.3.b of this final rule with comment 
period, hospitals establish their payer-specific negotiated charges in 
various ways which may result in the display of a payer-specific 
negotiated charge in dollars or as an algorithm, depending on what 
payer-specific negotiated charge meets the definition of a `standard 
charge'. In the CY 2020 HPT final rule, we concluded that ``requiring 
hospitals to post on the internet a machine-readable file containing a 
list of all standard charges for all items and services would be a good 
first step for driving transparency in healthcare pricing because the 
access to such data would allow integration into price transparency 
tools or into EHR systems for use at the point of care or otherwise 
where and when the information is necessary to help inform patients.'' 
Thus, while the data contained in a MRF is critical for driving 
competition and directly beneficial for patients, the MRF format is 
designed to be used by machines for further processing of the data and 
is not tailored for direct use by individual patients. In short, MRF 
formats are not consumer friendly.
    In recognition of this, we finalized a requirement in the CY 2020 
HPT final rule for hospitals to make public a subset of standard 
charges for some frequently provided hospital services in a form and 
manner that we believed would be more directly available to individual 
patients and consumer friendly. Specifically, we finalized a 
requirement for hospitals to make public some standard charges for 
common services for which healthcare consumers may have the opportunity 
to shop, in a consumer-friendly manner, or, alternatively, offer an 
online price estimator tool that ``[a]llows healthcare consumers to, at 
the time they use the tool, obtain an estimate of the amount they will 
be obligated to pay the hospital for the shoppable service.'' (45 CFR 
180.60) 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 TIC rule (85 FR 72158, 
finalized in 2020) and the NSA (enacted as part of the Consolidation 
Appropriations Act of 2021) have been promulgated or enacted. 
Information about these additional Federal price transparency 
authorities can be found in the Request for Information in the CY 2024 
OPPS/ASC PPS proposed rule (88 FR 49552).
    We acknowledge and agree with commenters that, although critical 
for determining an individual's out-of-pocket obligation, hospital 
standard charges do not represent either an individual's out-of-pocket 
obligation or a ``real, guaranteed price.'' However, we note that 
individualized estimates in dollars may be obtained directly, in many 
circumstances, from providers and payers through other Federal price 
transparency efforts such as those implementing the NSA and TIC 
requirements. As such, we strongly encourage individual consumers to 
avail themselves of hospital and payer price estimator and comparison 
tools, and to seek out `good faith estimates' from hospitals which, in 
order to comply with separate requirements implementing the NSA, may 
provide up-front pricing that can be used to dispute final charges that 
are substantially in excess of the up-front

[[Page 82082]]

amounts.\768\ Additionally, as we stated in the CY 2020 HPT final rule, 
we continue to encourage hospitals to provide consumers with cost 
information in a consumer-friendly manner.
---------------------------------------------------------------------------

    \768\ https://www.cms.gov/files/document/nosurpriseactfactsheet-whats-good-faith-estimate508c.pdf.
---------------------------------------------------------------------------

    Furthermore, we understand the desire for individual patients to 
access hospital prices in dollars and cents. We believe that the 
policies we are finalizing in this final rule with comment period are 
consistent with our authority under section 2718(e) of the PHS Act and 
will greatly improve the transparency of payer-negotiated rates, 
including whether the standard charges should be interpreted by the 
user as a dollar amount, or if the standard charges are based on a 
percentage or algorithm. We discuss in XVIII.B.3.b.(2) of this final 
rule with comment period a new requirement to include an estimated 
allowed amount (referred to as the `consumer-friendly expected allowed 
amount' in the CY 2024 OPPS/ASC proposed rule) which is designed to 
provide contextual information to the payer-specific negotiated charge 
when it can only be expressed as a percentage or algorithm.
    Additionally, we welcome the scrutiny and discussion related to 
healthcare financing, which we believe are important for driving needed 
cost efficiencies in the healthcare marketplace, putting patients 
first, and ultimately empowering patients and their clinicians to make 
value-based decisions. We will continue to educate interested parties 
about CMS price transparency initiatives in general and the intent and 
limitations of the hospital price transparency regulations for 
consumers in particular.
    In summary, we continue to affirm that the HPT regulations 
requiring hospitals to make public standard charges are a necessary and 
important first step for driving competition and in ensuring 
transparency in healthcare prices for the public, but that, while 
foundational, the release of hospital standard charge information is 
not sufficient by itself to achieve our ultimate goals for price 
transparency for driving competition in the marketplace or for consumer 
shopping. Additional barriers must be overcome to promote healthcare 
market efficiencies and for individual patients 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. We believe authorities granted to CMS through, for example, 
TIC and the NSA are specifically designed to address some of the 
additional barriers for individual patients. As such, we strongly 
encourage individual consumers to avail themselves of hospital and 
payer price estimator and comparison tools, and to seek out `good faith 
estimates' from hospitals which, in order to comply with separate 
requirements implementing the NSA, may provide up-front pricing that 
can be used to dispute final charges that are substantially in excess 
of the up-front amounts.\769\
---------------------------------------------------------------------------

    \769\ https://www.cms.gov/files/document/nosurpriseactfactsheet-whats-good-faith-estimate508c.pdf.
---------------------------------------------------------------------------

    Comment: Several commenters made comments related to the overall 
direction of the proposed policies as a whole. Many commenters, for 
example, generally supported the proposals, stating they agreed the 
proposals would strengthen price transparency through data 
standardization and additional enforcement tools, although one 
commenter stated their belief that some proposals would ``substantially 
weaken and rollback existing law'' without specifying a particular law.
    Several commenters expressed concern related to the additional 
burden imposed on hospitals by the proposed requirements, and the short 
timeline for implementation. At least one commenter requested that CMS 
hold off on any new HPT requirements until such time as other price 
transparency initiatives, such as the NSA, are fully implemented. 
Additionally, the commenter noted that Congress is currently 
considering multiple pieces of legislation that would, if implemented, 
affect price transparency activities, and that CMS should await the 
outcome of all current legislative proposals before either proposing or 
finalizing any additional changes to HPT regulations.
    Response: We appreciate the support we received from many 
commenters for the proposals, which we believe will strengthen HPT 
through standardization of hospital MRFs and expansion of enforcement 
tools. Additionally, we believe the benefits of these proposals to the 
public outweigh the burden on hospitals. However, after consideration 
of the comments, we are finalizing a phased implementation timeline (as 
described in XVIII.B.3.c of this final rule with comment period) for 
hospitals to implement the changes that we are finalizing in this final 
rule with comment period. We do not believe we should pause our efforts 
to improve the HPT regulations while we await implementation of 
companion price transparency initiatives, such as the NSA, because we 
believe the HPT requirements we proposed to modify are complementary to 
those efforts. We did, however, seek comment on alignment related to 
the consumer-friendly display requirements at Sec.  180.60 that we may 
consider in future rulemaking. Although we are aware of various 
legislative efforts that may, at some point in the future, affect 
hospital price transparency, we do not view that potential possibility 
as a reason to put on hold our efforts to strengthen the current HPT 
regulations.
3. Summary of Final Policies
    In this final rule with comment period, we are finalizing our 
proposals to revise 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 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 are finalizing: (1) definitions of 
several terms; (2) a requirement that hospitals make a good faith 
effort to ensure standard charge information is true, accurate, and 
complete, and to include a statement affirming this in the MRF; (3) new 
data elements that hospitals must include in their MRFs, as well a 
requirement that hospitals encode standard charge information in a CMS 
template layout; (4) a phased implementation timeline applicable to the 
new requirements we are finalizing in this final rule with comment 
period; (5) a requirement that 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 (6) improvements to 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

[[Page 82083]]

activities related to individual hospital compliance.
    Specifically, and as discussed in more detail below, we are 
finalizing that the effective date of the changes to the hospital price 
transparency regulations at 45 CFR part 180 will be January 1, 2024. 
However, the regulation text will specify later dates by which 
hospitals must be in compliance with some of these new requirements, 
and we will begin enforcing those requirements on those specified 
dates.

B. New Requirements for Making Public Hospital Standard Charges Under 
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 access to the list, as well as 
the frequency by which they must update the list.
    In this section, for the reasons discussed below, we proposed 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 proposed 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 automated access to the machine-
readable file.
1. New Definitions
    We proposed to add the following definitions to Sec.  180.20:
     ``CMS template'' is 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'' is the 
average dollar amount that the hospital estimates it will be paid by a 
third party payer for an item or service.
     ``Encode'' is entering data items into the fields of the 
CMS template.
     ``Machine-readable file'' is a single digital file that is 
in a machine-readable format.
    We also proposed several technical and conforming revisions to 
ensure consistency of the use of these terms across the HPT 
regulations. Specifically, we proposed 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.'' We also proposed 
to make revisions to references to the ``file'' in the introductory 
text of Sec.  180.50(c) and at Sec.  180.50(e), which we addressed in 
the CY 2024 OPPS/ASC proposed rule as a part of other proposed changes.
    We received a few comments on our proposed definitions.
    Comment: One commenter recommended that the term ``consumer-
friendly expected allowed amount'' be modified to reflect an emphasis 
on using patient claims to calculate an average dollar amount, and to 
permit grouping at the service package level. One commenter objected to 
defining a `consumer-friendly expected allowed amount' as an `average,' 
stating that a `consumer-friendly expected allowed amount' should 
instead be the expected dollar amount to be charged to the healthcare 
consumer. A few commenters suggested alternative names, indicating 
that, as proposed, the term is cumbersome, using extra verbiage that is 
unnecessary, and could be misleading to consumers. These commenters 
suggested renaming the term ``estimated average price'' or ``average 
historical allowed amount'', or a revision to the definition to 
indicate that the amount is the average amount received by the hospital 
in the past, rather than suggesting it is the amount the hospital 
expects to receive in the future.
    Response: We thank the commenters for their detailed comments on 
the proposed definition. Because the comments related to the definition 
itself are inextricably intertwined with the proposal to add the 
consumer-friendly ``expected allowed amount'' as a new data element and 
the method of its calculation, we will address them in more detail in 
XVIII.B.3.b.(2) of this final rule with comment period. For reasons 
described there, we decline to revise the definition to be more 
prescriptive regarding the underlying data hospitals use to establish 
this data element or to revise it to indicate that it is representative 
of the dollar amount a hospital would charge to an individual patient. 
We note that the definition of ``items and services'' is inclusive of 
service packages, thus we do not believe the definition requires the 
suggested modification for that reason. We agree that the term 
``consumer-friendly expected allowed amount'' is cumbersome and could 
generate confusion for individuals about the limitations of this 
allowed amount as an estimate, rather than a cost guarantee. We are 
therefore revising the definition to reflect that the amount is based 
on the average amount the hospital has historically received from the 
payer, rather than an average amount the hospital expects to receive 
from the payer. Additionally, we will revise the term to ``estimated 
allowed amount'' in response to comments indicating that this data 
point, while necessary to contextualize the standard charges 
established by the hospital, is not particularly consumer-friendly.
    Comment: One commenter stated that the definition of ``encode'' is 
technically imprecise. The commenter indicated that rather than meaning 
`to enter' information into a template, the term means taking 
information and converting it to a particular form or specification.
    Response: We thank the commenter for raising this concern and agree 
that the definition of ``encode'' could be more precise. According to 
the Oxford Advanced American Dictionary, to ``encode something'' in a 
computing context means ``to change information into a form that can be 
processed by a computer.'' \770\ This definition captures the policy 
goal underlying the standardization requirements we are finalizing in 
this final rule with comment period, which is that the MRF display 
standard charge information that the hospital has converted into the 
form and manner we specify in Sec.  180.50(c). We will therefore 
finalize that the term ``encode'' means ``to convert hospital standard 
charge information into a machine-readable format that complies with 
Sec.  180.50(c)(2).''
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    \770\ https:// www.oxfordlearnersdictionaries.com/us/definition/
american_ english/encode#:~:text= encode%20something%20 
(computing)%20to%20change,be%20 processed%20by%20a%20computer.
---------------------------------------------------------------------------

    Comment: We received one comment on each of our proposed 
definitions of ``machine-readable file'' and ``CMS template.'' One 
commenter indicated that the term ``machine-readable file'' is circular 
because ``machine-readable'' appears in both the term and its 
definition. Another commenter suggested improving the definition of 
``CMS template'' to indicate that existing hospital files would need to 
transition from already established CSV files into a new mandated 
format.
    Response: We appreciate the opportunity to clarify the definitions 
of ``machine-readable file'' and ``CMS template.'' We do not believe 
the definition of ``machine-readable file'' is circular because it 
refers to the defined term ``machine-readable format'' which

[[Page 82084]]

also appears in 45 CFR 180.20. Regarding the definition of ``CMS 
template,'' we clarify that in order to comply with Sec.  180.40(a), 
CMS is finalizing a requirement at Sec.  180.50(c)(2) that would 
require hospitals to conform to the CMS template layout, data 
specifications, and data dictionary for purposes of making public their 
standard charge information. A detailed discussion of this requirement 
is found in XVIII.B.3.c of this final rule with comment period in which 
we discuss the CSV formats and JSON schema from which hospitals may 
choose. We believe the regulatory expectation for hospitals to conform 
to a CMS template layout is clear and therefore decline to revise the 
definition of ``CMS template.''
    Comment: One commenter suggested we revise the definition of 
``negotiated rate'' to refer to both simple fee schedule dollar amounts 
as well as the proposed consumer-friendly ``expected allowed amount.''
    Response: We believe the commenter was referring to the defined 
term ``payer-specific negotiated charge'' because the regulations at 45 
CFR 180.20 do not include a definition for ``negotiated rate'' and we 
did not propose to add a definition of this term in the CY 2024 OPPS/
ASC proposed rule. The term ``payer-specific negotiated charge'' is 
defined at 45 CFR 180.20 as ``the charge that a hospital has negotiated 
with a third party payer for an item or service'' and it is also 
referenced in the definition of ``standard charge'' as being one type 
of standard charge. As explained both in this section and in more 
detail in section XVIII.B.3.b.(2)(b) of this final rule with comment 
period, we are finalizing the definition of ``estimated allowed 
amount'' as the average dollar amount that the hospital has 
historically received from a third party payer for an item or service. 
The estimated allowed amount would not meet the definition of a 
standard charge because estimates and averages do not meet the 
definition of a `payer-specific negotiated charge,'
    Final action: After consideration of comments, we are finalizing 
the following definitions at Sec.  180.20:
     ``CMS template'' is a CSV format or JSON schema that CMS 
makes available for purposes of compliance with the requirements of 
Sec.  180.40(a).
     ``Encode'' is converting hospital standard charge 
information into a machine-readable format that complies with Sec.  
180.50(c)(2).
     ``Estimated allowed amount'' is the average dollar amount 
that the hospital has historically received from a third party payer 
for an item or service.
     ``Machine-readable file'' is a single digital file that is 
in a machine-readable format.
    Additionally, we are finalizing as proposed several technical and 
conforming revisions to ensure consistency of the use of these terms 
across the regulation. Specifically, we are finalizing our proposal to 
replace references to ``the file'' and ``the digital file'' in Sec.  
180.50(d)(4) through (5) with the newly defined term ``machine-readable 
file.''
2. Requirement That Hospitals Affirm the Accuracy and Completeness of 
Their Standard Charge Information Displayed in the MRF
    We stated in the CY 2024 OPPS/ASC proposed rule that 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. Although section 2718(e) 
of the PHS Act requires hospitals to make public each standard charge 
the hospital has established, 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 (with 
respect to this element) be in compliance with our regulations, a user 
of the MRF count not be certain whether the hospital had not 
established such charges, or, instead, had 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 indicated in the CY 2024 OPPS/ASC proposed rule that we believe 
that requiring the hospital to affirm the accuracy and completeness of 
its MRF would lessen the potential for public confusion as to whether 
the MRF is accurate and complete by clarifying that blank cells left in 
some formats (such as CSV which can be opened in a human-readable 
format) are intentional. Specifically, an affirmation would streamline 
our assessments of hospital compliance by removing ambiguity 
surrounding blank cells and the overall accuracy and completeness of a 
hospital's MRF. We therefore proposed to require that each hospital 
affirm directly in its MRF (using a CMS template, which we proposed in 
more detail at XVIII.B.2 of the CY 2024 OPPS/ASC proposed rule) that it 
has included all applicable standard charge information in its MRF as 
of the date in the MRF. We indicated our belief 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 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 proposed to add new paragraph (a)(3) at Sec.  180.50 
to require that, in its MRF, each hospital add a statement affirming, 
to the best of its knowledge and belief, that 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 sought comment on the proposal.
    Comment: Several commenters supported or strongly supported the 
proposal to require hospitals to include an affirmation of the accuracy 
and completeness of standard charge information in the MRF because the 
statement in the MRF would provide assurance to users of the files that 
the data contained within them are accurate and complete to the best of 
the hospital's knowledge and belief. These commenters further agreed 
that including this statement in the MRF is better than requiring an 
affirmation to reside at a location separate from the file. One 
commenter requested clarification as to whether the affirmation would 
be made by the hospital at the organizational level, as opposed to 
being made personally by an individual hospital official, while another 
recommended that CMS require a senior hospital official to make the 
affirmation.
    One commenter indicated their belief that it would be impossible 
for hospitals to make such an attestation when CMS has the sole 
authority to determine hospital compliance and argued that ``CMS does 
not mandate attestation for other CMS requirements, apart from equity, 
which has recently been introduced.''

[[Page 82085]]

    Response: We appreciate the support for our proposal. We clarify 
that we are only requiring the hospital as an organization to make the 
affirmation.
    Although we acknowledge that HPT enforcement is CMS' role, the law 
puts the responsibility on hospitals to establish and make public 
complete and accurate standard charge information. Additionally, there 
are many instances in which CMS requires regulated entities to make 
statements of accuracy and completeness, for example: Qualifying 
Medicare Advantage Organizations are required to attest that they are 
meaningful EHR users (42 CFR 495.210) and are required by CMS to 
certify as to the accuracy and completeness of its requests for payment 
from CMS (42 CFR 422.504(l)); Accountable Care Organizations in the 
Medicare Shared Savings Program must attest that certain information 
submitted to Medicare is true, accurate, and complete (42 CFR 425.302); 
Merit-based Incentive Payment System (MIPS) eligible clinicians must 
certify that the data and information they submit to CMS for the 
purposes of MIPS is true, accurate, and complete (42 CFR 414.1390); and 
Entities that contract with the State under a separate child health 
program must certify the accuracy, completeness, and truthfulness of 
information in contracts and proposals, including information on 
subcontractors, and other related documents, as specified by the State 
(42 CFR 457.945), finally, a hospital CFO or Administrator must certify 
that the information submitted to CMS in its annual cost report is 
true, correct, and complete, to the best of their knowledge and 
belief.\771\
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    \771\ https://www.cms.gov/files/document/medicare-cost-reporting-e-filing-system-user-manual.pdf.
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    Comment: A few commenters questioned why such an affirmation would 
be necessary because they indicated they are already putting forth good 
faith efforts to ensure MRF data are accurate and complete by virtue of 
posting the information. Others welcomed this additional requirement 
stating they viewed it as an opportunity to communicate to the public 
their good faith effort to comply.
    A few interested parties commented on the intent or purpose of the 
affirmation, stating the affirmation should be used as an additional 
layer for enforcement and oversight, rather than using it to streamline 
enforcement, or that it be paired with continued strong enforcement. 
Other commenters viewed the proposed affirmation the hospital would 
make as part of the MRF as duplicative of the proposal to require a 
certification of completeness and accuracy by a hospital executive as 
part of the enforcement process (as discussed in XVIII.C.1 of this 
final rule with comment period).
    Response: As we stated in the CY 2024 OPPS/ASC proposed rule, we 
believe an affirmation in the hospital's MRF will lessen public 
confusion related to the completeness of the data in the file and also 
improve CMS' ability to assess both the completeness and accuracy of 
the MRF, and that by improving assessment of compliance, CMS will 
improve its enforcement capabilities. We believe that a requirement 
that the hospital affirm the completeness and accuracy of the MRF is 
not duplicative of a requirement that an authorized hospital official 
certify the accuracy and completeness of the MRF if asked by CMS as 
part of the enforcement process (as discussed in XVIII.C.1 of this 
final rule with comment period) because the two requirements serve 
different purposes. The general affirmation statement within the MRF 
will provide some assurance to the public and to CMS that the hospital 
has made a good faith effort to ensure the data displayed is true, 
accurate, and complete, while a certification would be signed by an 
authorized hospital executive as part of a specific enforcement effort 
by CMS. Thus, we do not believe that requiring this policy would in any 
way erode our strong enforcement to which we are committed. If there is 
evidence to suggest a hospital has not made a good faith effort to make 
public its standard charge information accurately and completely, the 
public is invited to submit a complaint to CMS through its website so 
that CMS can conduct a comprehensive compliance review.
    Comment: Several commenters requested that CMS delay the 
affirmation requirement, if we elected to finalize it, until hospitals 
have had adequate time to familiarize themselves with the new format 
and adapt their data accordingly. One commenter recommended that CMS 
add sample language to the CMS template.
    A few commenters suggested additions or alternatives that were not 
proposed, including that CMS should: concurrently increase penalties or 
that CMS should require the statement to apply to both the machine-
readable file and the consumer-friendly disclosures of the 300 
shoppable services.
    Response: We appreciate the suggestion for sample language and will 
finalize a modification to the proposal such that the hospital would be 
required in its MRF to affirm, rather than to include an affirmation 
statement, 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 machine-readable file. Specifically, we will include affirmation 
language in the MRF template which will read: ``To the best of its 
knowledge and belief, this hospital has included all applicable 
standard charge information in accordance with the requirements of 45 
CFR 180.50, and the information encoded in this machine-readable file 
is true, accurate, and complete as of the date indicated in this 
file.'' To reduce hospital burden and maximize machine readability, we 
will require the hospital to encode either ``true'' or ``false'' as a 
valid value, where a value of ``false'' will generate a deficiency. 
Because, as described in XVIII.B.3.c of this final rule with comment 
period, hospitals will be required to adopt a CMS template format 
beginning July 1, 2024, this requirement to affirm the accuracy and 
completeness of the data would also be required beginning July 1, 2024. 
However, nothing in this final rule with comment period would preclude 
hospitals from voluntarily adding an affirmation statement to their 
existing MRFs immediately, and we encourage hospitals to do so.
    Finally, we appreciate the additional suggestions offered by 
commenters, such as concurrently increasing penalties for noncompliance 
and extending the requirement for an affirmation apply to the 
hospital's consumer-friendly display. Because these policies were not 
proposed, we decline at this time to finalize them. However, we will 
evaluate the need for such changes in the future as we continue to 
evaluate hospital compliance and consider alignment with the consumer-
friendly requirements under the TIC regulations and the NSA.
    Comment: Several commenters opposed the proposal to require 
hospitals to affirm the completeness and accuracy of the standard 
charge information in the MRF because they believed that doing so would 
be ``operationally unfeasible'' because the complexity of the data 
would render it nearly impossible to validate or validate without 
mistakes. These commenters explained their belief that the inclusion of 
such an affirmation in the MRF would shift focus away from 
acknowledging good faith compliance efforts and instead mandate 
perfection, which could have legal implications.

[[Page 82086]]

These commenters recommended that CMS provide a ``safe harbor policy'' 
for hospitals that make a good faith effort, which they believed would 
ensure reasonable accuracy without imposing undue burdens on hospitals 
or penalizing them for unintentional and minor data inconsistencies.
    By contrast, some supporters of the proposal recommended that such 
an affirmation be used as an additional layer for enforcement rather 
than to just streamline the enforcement process. These commenters 
indicated their belief that the proposal should be strengthened by 
removing the statement ``to the best of the hospital's knowledge and 
belief'' and deeming such affirmations as ``material to payment,'' 
thereby incorporating potential liability under the False Claims Act 
(FCA) for hospitals that knowingly violate the rule and falsely attest 
to the accuracy and completeness of the file.
    Response: We appreciate the public's need for assurance that the 
standard charge information contained in the MRFs are true, accurate, 
and complete, which is why we proposed that hospitals include an 
affirmation statement in the MRF. We believe inclusion of an 
affirmation statement by the hospital would serve to reassure the 
public, including CMS, that the hospital has made a good faith effort 
to present its standard charge information accurately and completely. 
As such, we disagree that it is operationally `unfeasible' for a 
hospital to be accountable for the information they display publicly 
and to provide such an assurance to the public.
    However, we also disagree with commenters that an affirmation would 
(or should) serve to establish a guarantee of perfection, because even 
with a good faith effort, mistakes may be made as hospitals encode 
potentially hundreds of thousands of data points, many of which, at 
least initially, may need to be encoded manually. Moreover, the 
standard charge information contained in the hospital MRF is not 
updated in real time, rather, in accordance with statute and 45 CFR 
180.50(e), hospitals must update their files not less than annually. 
The FCA is outside the scope of this final rule with comment period.
    We decline the commenters' recommendation to establish a ``safe 
harbor'' and finalize the requirement that hospitals include an 
affirmation of completeness and accuracy in the MRF, but we also 
finalize a requirement at Sec.  180.50(a)(3)(i) that, effective January 
1, 2024, hospitals make a `good faith effort' to ensure the standard 
charge information displayed in the MRF is true, accurate, and 
complete. This additional language will emphasize our expectation of a 
good faith effort on the part of the hospital, and we disagree that 
such an expectation, and the ability to streamline CMS' assessment of 
hospital MRFs as a result, would diminish CMS' ability to enforce 
hospital standard charge information display requirements. To the 
contrary, we believe that requiring a hospital affirmation will impress 
upon hospitals their obligation to ensure the data they display is 
true, accurate, and complete, to the best of their knowledge and 
belief. Such an affirmation will not preclude CMS from taking 
enforcement action against a hospital that posts verifiably inaccurate 
or incomplete information, nor will it prevent CMS from requesting a 
certification from an authorized hospital executive as part of the 
enforcement process (addressed in more detail at XVIII.C.1 of this 
final rule with comment period).
    Comment: A few commenters objected specifically to affirming the 
`completeness' of the file, stating that this could be a challenge if 
the hospital cannot obtain reimbursement information from the insurance 
company. Others suggested that an affirmative indicator encoded in the 
file would go further in signaling the file's `completeness.'
    Response: We believe hospitals should have access to the documents 
and contracts that they signed with third party payers when they 
established their payer-specific negotiated charges, as well as records 
of the reimbursement received, and therefore these data should be 
available to them for encoding into the MRF. We decline to require 
indicators of non-applicability to be included in MRFs because we 
believe that would create additional burden for hospitals, and because 
they would be unnecessary by virtue of the affirmation statement.
    Final action: After considering public comments, we are finalizing 
the proposal with modification. We finalize as proposed a requirement 
at Sec.  180.50(a)(3)(ii) that, beginning July 1, 2024, the hospital 
must affirm in its MRF 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 encoded is true, accurate, and complete as of the date 
indicated in the MRF. We also are finalizing a new general requirement 
at new Sec.  180.50(a)(3)(i) that, beginning January 1, 2024, each 
hospital must make a good faith effort to ensure that the standard 
charge information encoded in the MRF is true, accurate, and complete 
as of the date indicated in the MRF.
3. Improving the Standardization of Hospital Machine-Readable File 
(MRF) Formats and Data Elements
    In this section, we proposed to revise several requirements at 
Sec.  180.50(b) and (c). We also proposed 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 charge 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:
     A 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

[[Page 82087]]

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 of and access to 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.772 773 774 775 776 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 charge 
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 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 that 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.
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    \772\ https://www.healthsystemtracker.org/brief/ongoing-challenges-with-hospital-price-transparency/.
    \773\ https://energycommerce.house.gov/events/improving-drug-pricing-transparency-and-lowering-prices-for-american-consumers.
    \774\ https://familiesusa.org/wp-content/uploads/2023/04/Power-of-Price-Transparency-final-4.19.23.pdf
    \775\ https://blog.turquoise.health/hospital-compliance-assessments/.
    \776\ https://static1.squarespace.com/static/60065b8fc8cd610112ab89a7/t/60de0380cc0972060d0354eb/1625162631437/PRA+OPPS+Recommendations+June+2021%5B3%5D.pdf.
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    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 patient 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 that the HHS Health Federally Funded Research and 
Development Center (FFRDC) \777\ more fully explore the feasibility of 
these commenters' recommendations and 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 FFRDC 
convened a technical expert panel (TEP) and used the TEP members' 
advice to make informed recommendations to CMS in the summer of 
2022.\778\ 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 IT 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 number of required data elements may 
improve the public's ability to make price comparisons across 
hospitals. TEP members indicated their

[[Page 82088]]

belief that public display of hospital standard charge information is 
an important step toward price transparency 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.
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    \777\ 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.
    \778\ 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.
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    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 the ideal formats would be those that 
are non-proprietary, as they are widely and freely available to the MRF 
developers (the hospitals) and users (for example, IT developers and 
researchers). The TEP members then considered different types of non-
proprietary formats, and 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. 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, the FFRDC, 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: 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, 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,\779\ 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, the FFRDC 
did not recommend that CMS adopt them.
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    \779\ 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) 
identifier779 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-networ).
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    The FFRDC 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

[[Page 82089]]

website,\780\ 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 encouraged commenters to 
review the sample templates and data dictionary to inform their 
comments on these proposals. Additionally, we hosted a webinar \781\ to 
educate interested parties about the voluntary sample formats. In the 
webinar, we highlighted differences between the voluntary sample 
formats and the CMS templates as proposed and encouraged interested 
parties to adopt one of the sample formats and submit comments on the 
proposals through the Federal Register by the indicated due date.
---------------------------------------------------------------------------

    \780\ https://www.cms.gov/hospital-price-transparency/resources.
    \781\ The sample format webinar slides and recording can be 
found on the CMS website: https://www.cms.gov/hospital-price-transparency/resources.
---------------------------------------------------------------------------

    Comment: Many commenters supported improving standardization of the 
hospital's MRFs, stating that such standardization is crucial for 
researchers and policymakers to access and analyze the data, and for 
the development of consumer facing tools used to display prices. 
Commenters agreed that such standardization would also serve to support 
CMS' enforcement efforts.
    A few commenters expressed strong opposition to the proposals for 
standardization, stating their belief that the proposals are `extreme' 
and would make hospital standard charge information `unusable' for 
patients and too complex and burdensome for hospitals to complete.
    Response: We appreciate the support for improving standardization 
of the hospital's MRF and agree that greater standardization will 
benefit public use of hospital standard charge information, including 
for promoting competition and developing consumer-facing healthcare 
pricing tools. We also agree that standardization will further 
strengthen and support CMS assessment and enforcement efforts by 
streamlining its processes through, for example, automation. We 
disagree that the proposals related to standardization are `extreme' or 
would be too complex and burdensome for hospitals to complete. To the 
contrary, efforts were undertaken by the FFRDC to develop 
recommendations for standardization that reflected feedback from small 
and large hospitals with a goal of balancing the need to improve the 
clarity and context of hospital standard charges with the burden of the 
data collection effort. We therefore believe the proposals for 
improving standardization represent a balanced approach and that 
hospitals will be able to achieve compliance. We do not agree with the 
premise that hospital standard charge information must be directly 
usable for patients, and we continue to believe that the hospital's 
standard charges are a necessary and important first step in ensuring 
transparency in healthcare prices. As explained in the CY2024 OPPS/ASC 
proposed rule, we believe that standardization in display, as finalized 
in this rule, will help provide both hospitals and the public with some 
assurance of hospital compliance with 45 CFR 180.50 and facilitate more 
meaningful use of these data by the public. We continue to believe this 
is the case because we believe standardization will promote a common 
understanding of the data displayed in the file, thus mitigating 
misunderstandings of both hospitals and the public about hospital 
standard charges that are required for display under this regulation.
b. Requirement That Hospitals Encode All Data Items for Additional Data 
Elements in Their MRF
(1) Encoding, 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 
proposed 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.
    That 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 have proposed 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 indicated that we believe that adopting more precise terminology 
will make the display requirements easier to understand.
    In making the proposal, we indicated our belief that this revision 
was 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, we stated that the term ``as applicable'' would 
no longer refer to data elements and instead would qualify the standard 
charge information that the hospital encodes in the MRF. Hospitals 
would thus be required to encode their MRF with all applicable standard 
charge information that corresponds to each of the required data 
elements. We noted 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.
    Final action: We did not receive any specific comments related to 
the proposal. We are finalizing a technical revision to redesignate the 
policies finalized in this final rule with comment period related to 
required data elements under new Sec.  180.50(b)(2). We are therefore 
finalizing a revision to the introductory text at Sec.  180.50(b)(2) 
for clarity to indicate that unless otherwise specified in Sec.  
180.50(b)(2), beginning July 1, 2024, each hospital must encode, as 
applicable, all standard charge information corresponding to each 
required data element in its MRF. Additionally, as discussed in 
XVIII.B.2 of this final rule with comment period, we are finalizing a 
related requirement that each hospital make a good faith effort to 
ensure that the standard charge information encoded in the MRF is true, 
accurate, and complete as of the date indicated in the MRF.
(2) Revising and Expanding the Required Data Elements
    At new Sec.  180.50(b)(1) through (4), we proposed to revise and 
expand the required data elements which describe the categories of 
information the hospital must encode in its MRF. We proposed to include 
most of the data elements suggested by the TEP and recommended by the 
FFRDC in its

[[Page 82090]]

report to CMS,\782\ and noted that many of the proposed data elements 
are incorporated in the CMS `sample formats' currently available for 
voluntary use by hospitals on CMS' HPT website.\783\
---------------------------------------------------------------------------

    \782\ 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.
    \783\ https://www.cms.gov/hospital-price-transparency/resources.
---------------------------------------------------------------------------

    We proposed to require hospitals to encode all applicable standard 
charge information for an expanded set of data elements in their MRF, 
noting our belief that they would improve the public's ability to 
better understand, and, therefore, more meaningfully use hospital 
standard charges. We stated that we believed this expanded set of data 
elements will make hospital standard charges more understandable and 
comparable across hospitals. We 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 indicated that we agree with the feedback we have received from 
various interested parties, the FFRDC recommendations, 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 stated that 
we believed 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.
    Comment: Several commenters expressed general support for revising 
and expanding data elements indicating that inclusion of some of the 
additional data elements will help with the identification and 
utilization of the standard charge information. One commenter objected 
to including any data element that was not also recommended by the 
FFRDC. Another suggested that any new data elements should be gradually 
incorporated into the file over time, enabling hospitals to create and 
encode the information accurately.
    By contrast, several commenters objected to including any new data 
element, including recasting existing required information as separate 
data elements (such as whether an item or service is provided in the 
inpatient or outpatient setting), stating that CMS should require 
hospitals to adopt a standardized format for only the existing required 
data elements as they are currently described. Several commenters 
indicated their belief that including additional data could render the 
files inaccessible to most of the public due to size and present a 
burden for hospitals because they would have to manually collect and 
encode the data.
    A few commenters renewed their concerns that no data element, let 
alone additional data elements, would achieve the aims of hospital 
price transparency and provide information to individual patients 
related to out-of-pocket costs, nor would they be able to fit every 
hospital's contracting approaches, including contracting approaches 
related to value-based purchasing contracts.
    Response: We appreciate the support for the proposal and agree with 
commenters that including some additional data elements will help with 
the identification and utilization of the hospital's standard charge 
information. For example, (as discussed in section XVIII.B.3.(2) of 
this final rule with comment) we are finalizing a policy for hospitals 
to include an estimated allowed amount in order to bring context to a 
payer-specific negotiated charge when such a charge can only be 
expressed as a percentage or algorithm, rather than a standard dollar 
amount. In the CY 2020 HPT final rule, and for the reasons we discussed 
there, we defined and finalized payer-specific negotiated rates as a 
type of standard charge that, in accordance with the law, a hospital 
must make public, and continue to affirm that such standard charges are 
fundamental for determining an individual's out-of-pocket costs. For 
reasons discussed in the CY 2024 OPPS/ASC proposed rule, we believe 
that expanding the data elements will provide needed context to 
hospital standard charges. Although these requirements may increase the 
file size, we believe these changes will ultimately make the data in 
the MRF more readily available to the public because it will be easier 
to be machine read and interpreted/summarized in order to facilitate 
consumer-friendly displays. We appreciate the additional burden on 
hospitals. Responses to these comments can be found in the economic 
analysis at section XXVI of this final rule with comment period. 
Additionally, we are modifying the timeline for implementation (in 
section XVIII.B.3.c of this final rule with comment period) to provide 
hospitals more time to fully comply.
    We agree with commenters who pointed out that hospital contracting 
approaches are varied and challenging for the public to understand, 
including for individual patients. Because of this, as indicated in the 
CY 2024 OPPS/ASC proposed rule, we believe the expansion of data 
elements is necessary and will add clarity to the contracting 
approaches the hospital has employed in the process of establishing its 
standard charges, and, in particular, its payer-specific negotiated 
charges. We further agree that not all payment arrangements negotiated 
by hospitals and third party payers, such as value-based payments, will 
necessarily result in the establishment of a standard charge for a 
specific item or service provided by a hospital or be easily encoded in 
a MRF. For example, a hospital may have agreed to receive a `per member 
per month' payment from the payer for each member of the payer's plan 
which remains the same amount, regardless of the number or types of 
hospital items and services provided during a month. Although we 
believe such negotiated charges can play a role in driving competition, 
they can be difficult for a hospital to encode in its MRF and even more 
difficult to those who seek to use hospital pricing data to assess or 
estimate individual costs or to compare across hospitals for particular 
items or services. We therefore reiterate that the intended use of the 
data in the MRFs is to drive competition because competition in the 
healthcare industry benefits consumers by helping to contain costs, 
improve quality, expand choice, and encourage innovation,\784\ 
including innovations for using hospital standard charges to facilitate 
consumer shopping. Further, in order to assist hospitals and improve 
standardization, we will keep these various contracting methodologies 
in mind as we develop technical guidance and examples for including 
them in the MRF.
---------------------------------------------------------------------------

    \784\ https:// www.justice.gov/atr/health-
care#:~:text=Competition %20in%20the%20healthcare 
%20industry,and%20to%20prevent %20anticompetitive%20conduct.
---------------------------------------------------------------------------

    Comment: A few commenters supported requiring data elements that 
are currently included in the voluntary sample templates as a result of 
the recommendations made by the FFRDC TEP, but that we did not propose 
to require. For example, a few commenters recommended requiring 
hospitals to include their financial aid policy in the MRF, indicating 
that doing so would be helpful for researchers studying prices, medical 
debt, and predatory billing practices, and enable patients to access

[[Page 82091]]

hospital financial aid policies as they examine the MRF's pricing data. 
One commenter suggested that CMS should go further and require 
hospitals to display their financial aid or charity care policy on a 
hospital website.
    Several other commenters expressed disappointment that CMS did not 
propose to include ``billing class'' as a required data element. 
Commenters explained that knowing the ``billing class'' is necessary to 
distinguish between facility and professional standard charges because 
there are many instances where hospitals display the same item or 
service (with the same description and billing code) but have different 
standard charges. These commenters noted that the current hospital 
price transparency regulation requires hospitals to disclose their 
standard charges for all items and services, including those provided 
by employed physicians and nonphysician practitioners.
    Response: We appreciate the additional suggestions for data 
elements. Although we decline at this time to require hospitals to 
encode these additional data elements because we did not propose them, 
we will not prohibit hospitals from including them in the CMS template. 
To aid standardization of the ``billing class'' and ``financial aid 
policy'' should hospitals wish to voluntarily include these data, CMS 
will include recommended technical instructions in the CMS templates 
and data dictionary located in a CMS GitHub repository. We will 
continue to consider whether these additional data elements would 
improve the meaningfulness of hospital standard charge information and 
may revisit them for inclusion in future rulemaking.
(a) Requirement To Encode General Data Elements
    We proposed in new Sec.  180.50(b)(1) that hospitals would be 
required 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 the 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 stated our belief that this change is necessary 
because we have found that a single public website may host several 
hospitals' files 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 in the CY 
2020 HPT final rule. We stated we believed that requiring hospitals to 
encode standard charge information for these data elements directly in 
the MRF would 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, we noted that 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. We explained that 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.
    We proposed 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. We further noted 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. We noted that such 
flexibility would be eliminated with the proposal because, if 
finalized, we would require the date of last update to be indicated in 
the file itself. We therefore proposed 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 the most recent update 
within the MRF, we stated that file users would be assured that the 
file they are using is the most recently available. Finally, we 
indicated that nothing in the 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.
    Comment: Most commenters expressed broad support for requiring 
hospitals to encode general information including the 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, as well 
as the file version and most recent date of update. These commenters 
indicated that the additional hospital information would ensure that 
users of the file can match MRFs found on hospital websites to specific 
hospital locations where items and services are provided for the 
standard charges indicated in the file. Additionally, commenters 
expressed appreciation for including the file version and date of last 
update as necessary to code to the correct schema and ensure the use of 
the most recent data posted by the hospital.
    By contrast, a few commenters specifically objected to the proposed 
requirement to include hospital address(es) as a new data element. 
These commenters indicated their belief that the proposal would impose 
burdensome requirements to list every address at which the hospital 
furnishes items or services, including each hospital outpatient 
department that uses the same standard charges. One commenter went on 
to explain that they interpreted the CY 2024 OPPS/ASC proposed rule's 
intent to move current hospital location information under paragraph 
(d)(2) into the data encoded in the machine-readable file but not to 
require the addition of new name and address information for every 
hospital

[[Page 82092]]

outpatient department, which could represent hundreds of locations.
    Response: We appreciate the broad support expressed by commenters 
for hospitals to include general information about the hospital and 
file. We agree this information is necessary to ensure hospital 
compliance with requirements at Sec.  180.50(a)(2), (d)(2), and (e) and 
improve the data's clarity and use for the public. Under Sec.  
180.50(a)(2), 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. Under Sec.  180.50(d), hospitals must ensure that the 
standard charge information in the MRF is ``clearly identified with the 
hospital location with which the standard charge information is 
associated.'' As we explained in the CY 2020 HPT final rule, we 
believed it would be sufficient for a hospital to post a single file of 
standard charges for a single campus location, if the file includes 
charges for all items and services offered at the single campus 
location. In cases where such off-campus and affiliated sites operate 
under the same license (or approval) as a main location but have 
different standard charges or offer different items and services, these 
locations would separately make public the standard charges for such 
locations (84 FR 65564). Therefore, hospitals will be required to 
include both the geographic location of the hospital (for example, 
``123 Main Street, Baltimore, MD'') as well as the location name of the 
campus (for example, Smithville Campus), in addition to the hospital 
license under which the location operates. As we indicated in the CY 
2024 OPPS/ASC proposed rule, we believe that requiring hospitals to 
encode standard charge information for ``these data elements'' 
(referring to the hospital name(s), license number, and location 
name(s) and address(es)) directly in the MRF would 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, we believe that including location information (including 
the address(es)) in the MRF will ensure hospital compliance with the 
requirements of Sec.  180.50(a)(2). However, we agree with commenters 
that if the hospital has established a single set of standard charges 
for all inpatient and outpatient departments across many different 
locations, it could be cumbersome to list all their location names and 
addresses in a single MRF. To reduce burden, we will therefore finalize 
a modification to the requirement. Specifically, we will require that 
hospitals encode the name(s) and address(es) of each hospital inpatient 
location and each standalone emergency department in the MRF. While 
strongly encouraged, it will not be required to encode all outpatient 
locations. We note, however, that even though we are making this 
practical accommodation, hospitals must still include all standard 
charge information in the MRF, including standard charge information 
for outpatient locations not encoded for this data element. In other 
words, this accommodation should not be interpreted to mean that 
hospitals need not include the standard charges that apply to 
outpatient locations that operate under the single hospital license but 
whose location names and addresses are not required to be encoded. We 
believe this change will reduce burden and make the requirement 
technically feasible for even very large health systems that have a 
single set of standard charges across many inpatient and outpatient 
locations.
    Comment: A few commenters made suggestions for additional general 
data elements. One commenter recommended requiring hospitals to encode 
their CMS Certification Number (CCN) in the MRF, stating their belief 
that most hospitals have CCNs and they are more universal than state 
license numbers. One commenter requested guidance for how a state-owned 
hospital, for which some states may not issue a license number, should 
encode licensure information in the MRF.
    Response: At this time, we decline to require hospitals to include 
their CCN in the MRF because this data point is unrelated to the 
requirements of Sec.  180.50. As discussed above, as finalized, 
hospitals would be required to encode standard charge information for 
all data elements, as applicable. Therefore, if a hospital does not 
have a hospital license number, the field would be left blank because 
there would be no applicable information to encode.
    Final action: After considering public comments, we are making a 
technical revision to finalize required data elements under new Sec.  
180.50(b)(2), and finalizing as proposed new Sec.  180.50(b)(2)(i) that 
will 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. Location name(s) and address(es) must include, 
at minimum, all inpatient facilities and stand-alone emergency 
departments.
     The version number of the CMS template and the date of the 
most recent update to the standard charge information in the machine-
readable file.
    We believe these data elements will improve CMS' assessment of 
hospital compliance with the requirements of Sec.  180.50 and will 
improve the public's ability to effectively use the data by encoding to 
the correct format and correlating the standard charge information 
displayed in the file with the correct hospital and its location(s).
(b) Required Data Elements Related to Types of Standard Charges
    First, we proposed, at proposed new Sec.  180.50(b)(2), to 
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 
were currently listed as required data elements at Sec.  180.50(b)(2) 
through (6). We noted 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). We stated that 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).
    Comment: One commenter indicated that proposing consolidation of 
the types of standard charges into a single data element would be 
`redundant' because hospitals are already required to make them public. 
Another expressed concern about consolidating the five types of 
standard charges into a ``single'' data element.
    Response: We agree that hospitals are already required to make 
public in their MRFs the five types of standard charges identified as 
separate data elements at Sec.  180.50(b)(2) through (6). Consolidating 
these data elements into a single data element and referring to the 
defined term ``standard charges'' reorganizes the regulatory text but 
does not change the requirements. In other words, we will continue to 
require hospitals to make public their standard charges for each of the 
five types of standard charges separately. We are therefore finalizing 
this as proposed.

[[Page 82093]]

    Comment: One commenter specifically objected to separating out the 
``setting'' as a separate data element due to burden.
    Response: This comment is addressed in detail in section 
XVIII.B.3.b.(2)(c) of this final rule with comment period. For reasons 
discussed there, we are finalizing ``setting'' as a separate data 
element.
    Final action: We are making a technical revision to finalize 
required data elements under new Sec.  180.50(b)(2). We are thus 
finalizing as proposed the consolidation of existing Sec.  180.50(b)(2) 
through (6) into a single requirement at new Sec.  180.50(b)(2)(ii). We 
are also finalizing, as proposed, to establish ``setting'' as a 
separate data element; specifically, whether the item or service is 
provided in connection with an inpatient admission or an outpatient 
department visit.
    Second, we noted that, under the proposal, 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, as a 
result of our acquiring a better understanding of hospital and 
commercial payer contracting, we proposed 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 stated that this modification was 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 indicated that we believed this 
modification was necessary to ensure hospitals are not penalized for 
displaying information that is consistent with their contracting 
practices. Moreover, we stated that this practice could improve access 
to the MRF by avoiding repetition of standard charge information that 
would unnecessarily increase file size. Additionally, because we 
proposed 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 
proposed 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 
sought comment on a publicly available data source(s) that we could 
consider as we develop the technical instructions.
    Comment: Several commenters expressed support and appreciation for 
allowing hospitals to 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, noting that this is 
a reasonable accommodation. A few commenters noted that they had a 
single contract with a payer that may tie to multiple plans, but that 
the hospital did not know the plan names assigned by the payer for all 
of the multiple plans. The commenters indicated that payers don't seem 
to have these data readily available for providers upon request. 
Overall, commenters agreed the proposed policy was practical and 
aligned with the realities of commercial contracting. Commenters agreed 
it would create efficiencies and reduce file size. One commenter 
indicated that contracts with payers will oftentimes indicate a line of 
coverage (such as ``Medicare Advantage'' or ``Commercial'' or ``Work 
Comp'') instead of a plan category (such as PPO, HMO, etc) and sought 
clarification on whether this situation would also be covered under the 
proposed exception. One commenter requested that CMS consider allowing 
hospitals to aggregate this information into groups of payors with 
similar contracting terms (that is, 102 percent of Medicare rates). 
This commenter explained that under the proposal, specific payors could 
be specified in a ``notes'' field of the template and stated this 
practice could further improve access to the MRF by avoiding repetition 
of standard charge information that would unnecessarily increase the 
file size of the MRF.
    A few commenters appeared to misunderstand that we were not 
proposing to change the existing requirement that hospitals must 
clearly associate the payer-specific negotiated charges with the payer 
and plan. These commenters expressed concern that a requirement to list 
standard charges by payer and plan would be burdensome and make MRFs 
unwieldy, recommending that CMS take steps to protect hospital and 
payer names to prevent discernment of individual contracts. One 
commenter expressed concern that in the absence of specific plan names, 
users of the file may have some difficulty discovering exactly what 
plan or plans are included in contracting categories. Another commenter 
stated that the rationale discussed in the CY 2024 OPPS/ASC proposed 
rule for removing the phrase ``clearly associated'' was confusing 
because, under the proposal to allow general plan categories to be 
indicated, specific plan names may not always be associated with the 
standard charges going forward.
    Response: We appreciate the support for the proposal and agree that 
providing hospitals with a method to address situations in which they 
do not know the specific plan names will serve to align this policy 
with contracting practicalities, support efficiencies, and avoid access 
challenges due to file size. We clarify that this policy would extend 
to plans included in a `line of coverage' so long as the established 
payer-specific negotiated charges are applicable to each plan in the 
indicated category. We further clarify that this policy would be 
consistent with current CMS guidance.
    We emphasize that we did not propose to revise the existing 
requirement that hospitals clearly associate the payer-specific 
negotiated charges with the payer and plan. Instead, we proposed to 
carve out an exception such that, in instances where the hospital, 
within the contract with the third-party payer, has negotiated the same 
payer-specific charges for a category of plans, the hospital may 
indicate the category of plans rather than the specific name(s) of the 
plans.
    Comment: A few commenters supported specifications that would 
standardize the name of payers and plans in the MRF. Some commenters 
recommended that CMS require hospitals to encode, in a standardized 
way, the names of payers and plans. Although a few commenters stated 
their belief that standard payer and plan names exist, others supported 
our belief that there is no nationally recognized

[[Page 82094]]

source of such information. One commenter suggested that CMS revive the 
National Plan Identifier.
    A few commenters supported the development of specifications for 
categories of plans. One commenter suggested that CMS allow hospitals 
to define their own categories but also require them to provide a key 
that lists out each of the plans included in the groups. Another 
commenter suggested CMS create a separate data element for plan 
category and include this in the CMS template. One commenter suggested 
using the Unified Rate Review Public Use Files to describe types of 
plans as a starting point.
    Response: We appreciate the suggestion for standardizing valid 
values for plan categories and we will take this into consideration as 
the data dictionary specifications are developed, although we note that 
the current data dictionary specifications for plan name are not 
prescriptive. We appreciate the suggestion to require, if hospitals use 
a plan category, that they must also provide a companion key with plan 
names. However, as explained in the CY 2024 OPPS/ASC proposed rule and 
by commenters, we understand that some hospital contracts are 
nonspecific and hospitals may not have the information with which to 
populate a key. We also appreciate the suggestion for an additional 
data element and may consider this in future rulemaking. We further 
appreciate the response to our request for comment related to a 
national standard. We are also unaware of a national standard for plan 
names, with the exception of the National Plan Identifier, which 
rulemaking HHS rescinded (see Administrative Simplification: Rescinding 
the Adoption of the Standard Unique Health Plan Identifier and Other 
Entity Identifier (84 FR 57621)).\785\
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    \785\ www.govinfo.gov/content/pkg/FR-2019-10-28/pdf/2019-23507.pdf.
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    Final action: We are making a technical revision to finalize 
required data elements under new Sec.  180.50(b)(2). After taking 
comments into consideration, we are finalizing a requirement at Sec.  
180.50(b)(2)(ii)(A) that, for payer-specific negotiated charges, the 
payer and plan would be required as separate data elements. Further, we 
are finalizing as proposed that 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. We believe this exception is necessary to ensure that 
hospitals are not penalized for displaying information that is 
consistent with their contracting practices. Moreover, we believe that 
this practice could improve access to MRF data by avoiding repetition 
of standard charge information that would unnecessarily increase file 
size.
    Third, we proposed 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.\786\ 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 
sought comment on contracting types that we should consider as allowed 
values in the CMS template, should this data element be finalized.
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    \786\ For additional discussion, please see the CY 2020 HPT 
final rule, 84 FR 65534.
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    Comment: Several commenters, including some hospitals and consumer 
advocates, expressed strong support for including the contract method 
used to establish the payer-specific negotiated charge. These 
commenters indicated that including this data element would aid in the 
public's understanding of the payer-specific negotiated charge 
established by the hospital. Several commenters provided suggestions 
and recommendations for valid values in response to our request on 
contracting types that should be considered. One commenter indicated 
they expected to encounter unique technical questions related to their 
contracting methodologies and expressed a desire to work with CMS on 
guidance. One commenter suggested that CMS should routinely revisit the 
list of contracting arrangements and modify it as needed based on 
feedback from hospitals.
    Response: We appreciate the support for the proposal and the 
additional suggestions for valid values. We welcome the opportunity to 
work with hospitals to establish technical specifications for unique 
methods hospitals use to establish their standard charges. We agree 
with commenters that including this data element will bring needed 
context to the payer-specific negotiated charges the hospital has 
established. As we continue to gain experience with hospital use of the 
CMS Template, we will periodically review and update the technical 
instructions to ensure suitability of the valid values for hospitals to 
encode applicable standard charge information.
    Comment: Several commenters opposed the proposal, citing the burden 
this data element would impose on hospitals that don't already have 
this information encoded in existing systems, stating that this would 
require manual effort to encode the data into the file on a line-by-
line basis. One commenter recommended allowing hospitals to provide 
high level information instead; for example, a given field could read: 
``percent of charge with the exception of radiology and laboratory 
services carve outs paid at fee schedules'' as opposed to individual 
charge lines for each payor. Another commenter expressed concern that 
the technical specifications may not be broad enough to accommodate all 
types of contracting methodologies and recommended CMS allow hospitals 
to encode ``other.''
    A few commenters raised concerns that divulging the contracting 
method could hamper future negotiations with payers. For example, one 
hospital stated that a simple description of general contracting 
methodologies would fail to account for factors that drive some 
hospital costs higher than others. One commenter indicated that 
insights into the method(s) used by hospitals to establish their 
negotiated rates could potentially undermine a hospital's negotiation 
strategy, as competitors might gain insights into a specific hospital's 
tactics.
    Response: We agree that new data elements may increase burden for 
some hospitals and have taken this into consideration as we developed 
the economic analysis at section XXVI of this final rule with comment 
period. We continue to believe that the benefits of these data and the 
standardization of them outweigh the burden on hospitals. Additionally, 
after consideration of the comments, we are finalizing a phased 
implementation timeline (as described in XVIII.B.3.c of this final rule 
with comment period) for hospitals to implement the changes that we are 
finalizing in this final rule with comment period. We appreciate the 
implementation suggestions for streamlining the requirement and will 
take them into consideration as we develop the technical instructions. 
We note that the currently available sample formats and corresponding 
data dictionary include an ``other'' option. A primary goal of price 
transparency is to increase competition, and we do not

[[Page 82095]]

believe that this data element will hamper hospital negotiations. As 
proposed, this data element will provide contextual information related 
to the hospital's payer-specific negotiated charges. However, we will 
finalize a clarifying revision to the name of this data element and 
refer to it as ``standard charge methodology.'' If a hospital believes 
its standard charges are not reflective of other important aspects of 
the methods used by the hospital to establish them, nothing in this 
final rule with comment period would preclude the hospital from 
offering additional context and information to the public in its MRF, 
so long as the MRF conforms to the formatting requirements required at 
Sec.  180.50(c)(2).
    Comment: One commenter sought clarification on whether CMS' 
intention was to add ``standard charge or negotiated rate 
information,'' stating their view that adding more fields to the MRF 
that align with a contracted payment methodology and not the 
chargemaster will create more confusion among end users of the data. 
This commenter further cautioned that negotiated rate information is 
``meaningless'' for consumers. Another asserted that contracting 
information does not reside in hospital chargemasters and could 
therefore not be displayed as one-to-one matches for individual items 
and services as listed in chargemasters. Others questioned the value of 
the information to users of the file, stated that it would create 
confusion for patients, or that the data would only be useful to app 
developers. A few commenters expressed concern that, although knowing 
the method used to establish the payer-specific negotiated charge may 
increase its context, it would not completely resolve the public's 
ability to make meaningful comparisons across hospitals.
    Response: We are uncertain of the clarification sought by the 
commenter. In the CY 2020 HPT final rule, we finalized five types of 
standard charges, including the gross charge (as found in a hospital's 
chargemaster) and payer-specific negotiated charge, which is defined 
Sec.  180.20 as the charge that a hospital has negotiated with a third 
party payer for an item or service. Moreover, as explained in the CY 
2020 HPT final rule, such payer-specific negotiated charges often do 
not reside in the hospital's chargemaster. We also do not agree that 
negotiated rate information is ``meaningless'' for consumers. We 
believe that competition in the healthcare industry benefits consumers 
because it helps contain costs, improve quality, expand choice, and 
encourage innovation \787\ and refer the commenters to a fulsome 
discussion of the utility of such rates for consumers in the CY 2020 
HPT final rule at 84 FR 65537. We agree with commenters that including 
an indication of the method used by the hospital to establish its 
standard charges will increase context for payer-specific negotiated 
charges, but it will not resolve every barrier for price comparisons 
for every type of contracting methodology.
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    \787\ https://www.justice.gov/atr/health-care.
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    Final action: We are making a technical revision to finalize 
required data elements under new Sec.  180.50(b)(2). After taking 
comments into consideration, we are finalizing the establishment of a 
new data element at Sec.  180.50(b)(2)(ii)(B). Specifically, for payer-
specific negotiated charges, hospital will be required to encode the 
type of method it used to establish the standard charge. Going forward, 
we will refer to this data element as ``standard charge methodology.''
    Fourth, we proposed 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. We indicated our belief that 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. Further, we stated that 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, we 
indicated that CMS would provide technical instructions for hospitals 
to display standard charges expressed in dollars, percentages, and 
algorithms in order to ensure consistency and machine-readability.
    Comment: Several commenters supported the proposal to require 
hospitals to indicate the standard algorithm that a hospital has 
established, stating that such information is necessary for the public 
to understand how a charge would be determined for an individual's 
care, including for use by third parties such as employers, 
researchers, and pricing tool developers to develop more accurate 
individualized out-of-pocket pricing estimates. These commenters 
expressed optimism about the positive effects of the proposal for 
encouraging competition and enhancing the ability to create accurate 
out-of-pocket estimates in consumer-friendly pricing tools. For 
example, one commenter theorized that display of hospital payer-
specific negotiated charges as either a standard dollar amount or as an 
algorithm would afford consumers the opportunity to make a choice 
regarding whether they want to go to a hospital that has established 
its standard charges in dollars, even if the price might be higher at 
that hospital, over a hospital that establishes its standard charges 
based on an algorithm, even if its estimated allowed amount in dollars 
might be lower. This commenter went on to suggest that the policy 
``pushes the industry even further towards simplification, 
standardization, and overall predictability among business and consumer 
healthcare transactions'' and expressed hope that, in the future, 
``cost certainty will win out over ambiguous algorithms.'' By contrast, 
another commenter expressed concern that requiring disclosure of 
algorithms would become ``more commonplace as hospitals seek to avoid 
providing guaranteed up-front pricing to consumers'', presumably, as a 
result of hospitals choosing to more frequently establish their 
standard charges as algorithms. Another commenter noted that requiring 
``hospitals and health plans to only disclose how they do business and 
not forcing them to change how they do business'' appropriately 
balances the ``need to provide pricing information to patients without 
undermining the development of new payment models.'' Other commenters 
expressed concern that such information would only be useful to 
competitors or to insurers who would seek to drive down hospital 
reimbursement.
    Response: We appreciate commenters' support of the proposal. We 
agree with commenters that greater transparency in hospital standard 
charges, and payer-specific negotiated charges in particular, is 
necessary to minimize confusion about the data hospitals are currently 
displaying in MRFs. Further, we agree with commenters that knowledge of 
the algorithms used by hospitals for establishing payer-specific 
negotiated charges is necessary for consumer-friendly tools to estimate 
(in dollars) an individual's payer-specific negotiated charge and 
subsequent out-of-pocket cost obligations. We also agree with 
commenters who are optimistic about the potential for positive effects 
of

[[Page 82096]]

understanding whether the payer-specific negotiated charge has been 
established by the hospital as a dollar amount, percentage, or 
algorithm, specifically, that it may drive a desire for contracting 
simplicity and patient-centric healthcare financing. We believe that 
such simplicity would benefit both consumers and hospitals by promoting 
consumer shopping and reducing hospital administrative costs. Finally, 
we agree with commenters that this regulation is designed to tell 
hospitals how to make public their standard charges and does not tell 
hospitals how to establish their standard charges. The goal of the 
disclosure is to increase price transparency to drive competition and 
reduce healthcare costs. As we stated in the CY 2020 HPT final rule, we 
continue to encourage hospitals to provide consumers with cost 
information in a consumer-friendly manner.
    Comment: One commenter noted that all payer-specific negotiated 
charges are established via algorithm such that none could be displayed 
as a standard dollar amount. By contrast, another commenter insisted 
that ``hospitals know the prices in dollars'' because ``that's how they 
charge'' and that formulas, percentages or referenced prices, or 
algorithms are used by hospitals to make prices harder to access. Yet 
another indicated hospital standard charges can be a hybrid or 
combination of both standard dollar amount and algorithm, noting, for 
example, that some algorithms allow for the identification of a 
standard ``base rate'' in dollars, which are then modified further, 
depending on additional terms and conditions, such as ``outlier'' 
payments or stop loss protections, within the hospital's contract with 
the payer. The commenter concluded there is no need for hospitals to 
display their payer-specific negotiated charges as a percentage or 
algorithm and instead urged CMS to require hospitals to display their 
payer-specific negotiated charge in ``dollars and cents.'' A few 
commenters requested that CMS clarify that the hospital would continue 
to be required to express standard charges in dollars to the extent it 
is possible and only indicate the algorithm or estimated allowed amount 
(discussed in more detail below) at the point at which the rate becomes 
truly individualized. Commenters indicated that the file specifications 
should ensure clarity about whether the standard charge is presented as 
a standard dollar amount, percentage, or algorithm.
    Response: Based on our experience, we understand that hospitals 
establish payer-specific negotiated charges in many ways, ranging from 
basic fee schedules (in which dollar amounts for specific items and 
services are known) to grouper methodologies (in which a base rate in 
dollars has been established but may then be modified depending on 
other factors like transfers or outliers), to ``percent of billed 
charges'' schemes (in which the dollar amount varies from person to 
person). We therefore disagree that all hospital payer-specific 
negotiated charges can only be expressed as an algorithm. For the same 
reason, we disagree that all hospitals can produce a payer-specific 
negotiated charge in dollars that meets the definition of a `standard 
charge.' Finally, we believe that section 2718(e) of the PHS Act 
directs the Secretary to tell hospitals how to display their standard 
charges, not how to establish them or that they must establish them.
    We clarify that allowing hospitals to display a payer-specific 
negotiated charge as a standard algorithm is appropriate to the extent 
a standard algorithm is the manner in which hospitals establish their 
standard charges with third party payers. Hospitals are required to 
display the standard charges as they are established, such that, if the 
hospital established a standard charge as a dollar amount, the hospital 
would display the standard charge as a dollar amount. If the hospital 
has established a standard charge as a percentage or algorithm such 
that a standard dollar amount is not available, then the hospital would 
display the standard charge as a percentage or algorithm. Using the 
examples discussed earlier, we anticipate that most if not all payer-
specific negotiated charges will fall into one of three categories, 
depending on how a hospital has established them: (1) standard dollar 
amount, (2) standard algorithm or percentage, or (3) hybrid where a 
standard dollar amount can be identified but the final allowed amount 
is dependent on additional variables. An example of where we would 
expect to see a standard charge in dollars would be standard charges 
established under a fee schedule or where an identifiable dollar amount 
has been established for an item or service (for example, a per diem 
rate, a gross charge for an itemized item or service, or a cash 
discounted price for a service package). An example of a where we would 
expect to see a standard charge expressed as an algorithm would be when 
a hospital has negotiated a reimbursement for defined service packages 
(for example, hip replacement or colonoscopy) that are based on 
differential percentages of total billed (gross) charges (for example, 
50 percent of total billed charges for hip replacement and 75 percent 
of total billed charges for colonoscopy). A hybrid would be a situation 
in which the hospital has established both a standard charge in dollars 
and there are additional variables that would modify the negotiated 
rate for a particular item or service. For example, a hospital may have 
established a payer-specific negotiated charge under the MS-DRG 
methodology where an adjusted base rate in dollars has been established 
for each DRG code, but the adjusted base rate may be further modified 
due to certain variable factors (such as outlier cases or transfers). 
In general, we recommend that each hospital, as a starting point, 
inspect their contracts with each third-party payer to identify all 
standard charges established as dollar amounts. Next, the hospital 
should populate, by payer and plan, the MRF with those standard charges 
in dollars and describe the item or service associated with each of the 
standard charges (along with any relevant billing or accounting codes). 
After that has been done, the hospital should identify whether the 
standard charge (in dollars) is subject to modification and what 
factors or variables (for example, algorithm) might cause the standard 
charge to change, and indicate those as instructed by the data 
dictionary for the particular format selected. If the hospital's payer-
specific negotiated charge is based on an algorithm within which no 
standard dollar amount can be determined, then the hospital should 
specify what percentage or algorithm determines the dollar amount for 
the item or service. As discussed in more detail in the next section, 
we are finalizing, a requirement for hospitals to display an estimated 
allowed amount which would provide needed context, in dollars, for 
instances in which the hospital's standard charge can only be expressed 
as a percentage or algorithm for a specified payer's plan. The CMS data 
dictionary will provide examples and technical instructions for 
displaying this information in a standardized manner.
    Comment: A few commenters opposed the proposal, stating that 
algorithms are not consumer friendly and could make price comparisons 
among hospitals challenging for individual patients. A few commenters 
noted that algorithms are complex, burdensome for hospitals to produce, 
and potentially the source of new access issues to the files due to 
their expanded size. Additionally, these commenters indicated that 
algorithms do not provide

[[Page 82097]]

consumers the out-of-pocket dollar amounts they want and would be 
challenging for users of the file to understand without a third party 
to interpret.
    A few commenters provided additional implementation suggestions. At 
least one commenter supported posting actual algorithms and formulas 
used to establish the payer-specific negotiated charge. One commenter 
suggested requiring the hospital to produce a separate formula sheet 
with the algorithms it uses to establish payer-specific negotiated 
charges in order to limit the file size. Another commenter recommended 
that instead of trying to insert a complex algorithm into an MRF field, 
CMS should permit hospitals to insert a high-level description of the 
algorithm and the reasons a modification could be made to the amount 
indicated, or factors that are accounted for when calculating the 
charge that would apply to the individual. Yet another commenter 
suggested that instead of inserting detailed algorithms into the MRF, 
hospitals should be allowed to insert a footnote to indicate that the 
estimated allowed amount presented in the file is built from an 
algorithm.
    Response: We agree with commenters that having to display a 
detailed algorithm within an MRF would be unwieldy and burdensome. 
Although we believe that a detailed algorithm would provide more 
precision and understanding of the individual's payer-specific 
negotiated charge, at this time, in the interest of reducing burden and 
complexity of files, we will allow hospitals provide a description of 
the algorithm that includes any conditions that may alter the total 
reimbursement, rather than attempting to insert the detailed algorithm 
itself in the MRF. For example, if a payer-specific standard charge is 
negotiated using a common ``hybrid'' algorithm, such as the MS-DRG, 
then a hospital would indicate the adjusted base rate (in dollars) plus 
either a high-level description (``MS-DRG'') or a link to the formula 
used to determine the payer-specific negotiated charge for an 
individual rather than inserting the algorithm formula itself (see 
Figure A). Alternatively, since the corresponding code type would 
already indicate that the standard charge was established under the MS-
DRG system, the hospital could indicate that the adjusted base rate 
indicated (in dollars) may be further adjusted for transfers and 
outliers.
    We appreciate the practical implementation suggestions offered by 
commenters. In order to assist hospitals in meeting the requirement, we 
will provide a CMS template and specifications for encoding hospital 
standard charges as a dollar amount, percentage, or algorithm in a way 
that will allow file users to readily distinguish between them. 
Additionally, although we agree that a detailed algorithm would provide 
more precision and understanding of what the individual's payer-
specific negotiated charge might be, at this time, in the interest of 
reducing burden and complexity of files, we will allow hospitals 
provide a description of the algorithm, rather than attempting to 
insert the specific algorithm itself in the MRF. We are therefore 
finalizing that if the standard charge is based on a percentage or 
algorithm, the MRF must also describe (instead of specify) what 
percentage or algorithm determines the dollar amount for the item or 
service. By describing, rather than specifying, what percentage or 
algorithm determines the dollar amount for the item or service, we 
believe this will balance the need for exact information versus MRF 
complexity, hospital burden, and the limitations of data processing. 
However, given how critical the allowed amount is for estimating an 
allowed amount (and therefore individual out-of-pocket costs), we 
believe that more precision in understanding how the dollar amount is 
determined by the hospital and payer is better. We will therefore 
continue to consider this issue and may revisit it in future 
rulemaking.\788\
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    \788\ https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/html/images/OP.jpg.

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[[Page 82098]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.226

    Final action: We are making a technical revision to finalize 
required data elements under new Sec.  180.50(b)(2). After reviewing 
comments, we are finalizing a new requirement at Sec.  
180.50(b)(2)(ii)(C) whereby, with respect to payer-specific negotiated 
charges, the hospital will be required to indicate in its MRF 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. Additionally, if the standard charge is based on a 
percentage or algorithm, the MRF must also describe the percentage or 
algorithm that determines the dollar amount for the item or service. 
Descriptions for algorithms could include, for example, a link to the 
algorithm used, a descriptor of a commonly understood algorithm, or a 
list of factors that would be used to determining the individualized or 
variable allowed amount in dollars.
    Fifth, we proposed 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 in 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.'' 
\789\ 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

[[Page 82099]]

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).
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    \789\ https://www.cms.gov/files/document/nosurpriseactfactsheet-health-insurance-terms-you-should-know508c.pdf.
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    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. The hospital submits a 
claim to the payer for the total gross charges associated with itemized 
items and services provided to each patient. The payer analyzes the 
claims and assigns 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 $1500, 
while Patient Y's gross charges for each itemized item and service 
provided by the hospital total $2000. 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 $1000. 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 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 individualized 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,\790\ 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 have allowed 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.
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    \790\ 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 proposed 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. We expressed 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 did not expect that the 
inclusion of such data in the MRF would represent a large burden. We 
indicated that the consumer-friendly `expected allowed amount' was 
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, we said that it was an 
estimate of the average amount that the hospital expects to receive for 
the item or service across all group members but not the final exact 
amount in dollars that would actually apply to each group member. Even 
so, we stated we believed 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 proposed to add this consumer-friendly `expected 
allowed

[[Page 82100]]

amount' to the list of required data elements at Sec.  180.50(b)(2).
    Comment: Several commenters expressed strong support for a data 
element that would provide an estimated dollar amount when the hospital 
can only express their standard charge as an algorithm. These 
commenters asserted that this information must be paired with knowledge 
of the algorithm itself in order to facilitate comparisons between 
hospitals and would be useful to consumers. By contrast, other 
commenters objected to the inclusion of an estimated amount in dollars 
on the basis that such a dollar amount would not be consumer-friendly 
and would not be useful for comparing across hospitals. As a result, 
these commenters indicated that it would be a burdensome `waste of time 
and money' to require hospitals to calculate and display estimated 
dollar amounts and that such amounts may generate consumer confusion 
and generate additional controversy over hospital charges. A few 
commenters noted that estimates are not `guaranteed' prices.
    A few commenters recommended that should we finalize the proposal, 
then we should not also require hospitals to have to display 
algorithms. A few commenters indicated that hospitals have `allowed 
amounts' in their systems while others said they did not, or that they 
did but it was different than what was proposed for display.
    Response: We appreciate the support for expressing an estimated 
dollar amount when the hospital has established a payer-specific 
negotiated charge for an item or service that can only be expressed as 
a percentage or algorithm. We agree that this information, when paired 
with the algorithm, will promote greater transparency of hospital 
standard charges that can be useful to users of the MRF data; however, 
they are averages and therefore would not represent `guaranteed' prices 
because they would not apply to an individual, nor would they 
necessarily represent the amount an individual would pay for an item or 
service. We note, however, that under the NSA, individual patients may 
obtain a good faith estimate from a hospital, which can be used by the 
patient to dispute final charges that are substantially in excess of 
the up-front amounts.\791\ Additionally, in accordance with 45 CFR 
180.60 a hospital may elect to offer a price estimator tool in order to 
meet requirements for a consumer-friendly display. In accordance with 
45 CFR 180.60(a)(2)(ii), the price estimator tool must allow 
``healthcare consumers to, at the time they use the tool, obtain an 
estimate of the amount they will be obligated to pay the hospital for 
the shoppable service.'' As we stated in the CY 2020 HPT final rule, we 
continue to encourage hospitals to provide consumers with cost 
information in a consumer-friendly manner.
---------------------------------------------------------------------------

    \791\ https://www.cms.gov/files/document/nosurpriseactfactsheet-whats-good-faith-estimate508c.pdf.
---------------------------------------------------------------------------

    Comment: A few commenters expressed misunderstandings or requested 
clarifications about the proposal. For example, one commenter appeared 
to believe that the hospital would be required to create an estimate 
across all standard charges for a defined set of services or service 
packages such that it would take into account average billed amounts 
(for example, gross charges), discounted cash prices, and all 
negotiated rates. Other commenters indicated that such an amount could 
not be calculated on the basis of an ``individual line item within the 
chargemaster.'' A few commenters sought clarification on whether this 
average amount was intended to be prospective or whether it would 
represent a retrospective calculation based on the amount received by 
the hospital for past services (for example, an historical allowed 
amount).
    Response: We clarify that, as proposed, a hospital would only be 
required to calculate an estimated allowed amount, in dollars, when the 
hospital has established a payer-specific negotiated charge that can 
only be expressed as a percentage or an algorithm. This algorithm or 
percentage is based on the contract the hospital has with a particular 
payer for a particular plan, and the estimated allowed amount would be 
the average reimbursement in dollars that it has received from the 
payer in the past, that is, what some might call an `historical allowed 
amount.' This estimated allowed amount is therefore not prospective and 
is also not based on the hospital's chargemaster or claims submitted to 
the payer which, as we understand it, contains only gross charges for 
itemized items and services. Because the ``expected allowed amount'' 
data element is meant to provide an estimate of what the algorithm 
produces in dollars, across the group of people covered by a particular 
payer's plan, we clarify that such an amount should reflect the amount 
the hospital expects to be reimbursed for the item or service (or 
service package), on average. To avoid confusion, we will modify the 
definition to refer to the average amount `historically received' 
(rather than `expects to be paid', and also rename the data element 
``estimated allowed amount.''
    Comment: We received few comments on the proposed definition of 
``consumer-friendly expected allowed amount.'' One commenter agreed 
with the additional definitions and recommended that the definition of 
``consumer-friendly expected allowed amount'' be modified to read ``the 
average dollar amount that the hospital estimates it will be paid by a 
third-party payer for patient claims that include items, services or 
service packages,'' arguing this would emphasize using patient claims 
due to their belief that patient claims data are the only ``level'' 
where hospitals would calculate or store such data. This commenter 
further indicated their belief that it would be important to emphasize 
the term ``service package'' in order to provide consistency with the 
definition of ``standard charge'' and permit appropriate disclosure of 
claim-driven values which would be grouped at the service package 
level. By contrast, another commenter objected to defining a `consumer-
friendly expected allowed amount' as an `average,' stating that a 
`consumer-friendly expected allowed amount' should instead be the 
expected maximum dollar amount to be charged to the consumer, and that 
hospitals be prohibited from charging a patient more than that amount. 
Several commenters requested more detailed information on the 
methodology and data source a hospital should use to calculate the 
estimated average allowed amount in dollars. A few commenters suggested 
that using 835 remittance files would be the simplest method. One 
commenter suggested that hospital claims data should be used 
exclusively.
    Response: For the reasons discussed in more detail above, we are 
finalizing a new data element, the consumer-friendly ``estimated 
allowed amount'' to reflect an estimated dollar value when a standard 
charge (such as a payer-specific negotiated charge) can only be 
expressed as an algorithm. As we understand it, hospitals submit claims 
to payers that include gross charges for the items and services 
furnished to an individual, along with various additional information 
(such as a diagnosis code) that may be necessary for the hospital to 
receive the negotiated rate (or ``allowed amount'') from the payer. 
Sometimes the allowed amount (for example, the dollar amount reimbursed 
to the hospital) is static (a payer-specific negotiated charge 
represented as a dollar amount) and sometimes the allowed amount is 
variable (a payer-specific negotiated represented as an algorithm). 
Because

[[Page 82101]]

the estimated allowed amount data element is meant to provide an 
estimate of what the algorithm produces in dollars, across the group of 
people covered by a particular payer's plan, we clarify that such an 
amount should reflect the amount the hospital has historically received 
from the payer for the item or service (or service package). Thus, we 
decline to revise the definition in such a way that it might suggest 
that hospitals should calculate and display the average total gross 
charges on the claims submitted to the payer, rather than calculating 
and displaying the average negotiated or allowed amount that is 
received by the hospital, because the total gross charges are not 
representative of the rate negotiated between the hospital and payer. 
However, nothing in the hospital price transparency regulation would 
preclude a hospital from voluntarily including such information in the 
MRF in addition to including the ``estimated allowed amount.'' 
Moreover, we believe hospitals should retain flexibility, in the 
interest of reducing burden, to determine the best data source for 
calculating the estimated allowed amount. We therefore decline at this 
time to be prescriptive. However, we agree that using information from 
the EDI 835 electronic remittance advice (ERA) transaction, the 
electronic transaction that provides claim payment information, 
including any adjustments made to the claim, such as denials, 
reductions, or increases in payment, would appear to meet this 
requirement as the data in the 835 form is used by hospitals to track 
and analyze their claims and reimbursement patterns.
    We agree that display of a maximum allowed amount could provide 
some clarity of the maximum amount that a consumer might be obligated 
to pay (once the consumer calculates their own potential out-of-pocket 
obligation based on the displayed maximum allowed amount). For example, 
if the maximum allowed amount for an item or service (including a 
service package) was displayed as $1500 and a person covered under that 
particular payer/plan has a 20 percent coinsurance and has not yet met 
their deductible (if applicable to their insurance plan) then the 
individual would have a very high probability of not being obligated to 
pay more than $300 for the indicated item or service. However, because 
a calculated maximum derived from past remittances or other data 
sources may include other costs, such as costs incurred for outlier 
cases, we believe the display of the maximum amount could be skewed to 
the point where it would not present as much useful information to the 
public as an average estimated allowed amount. Additionally, because 
the estimated allowed amount may be established based on past 
remittances, any calculated maximum for an algorithm that does not have 
an upward bound would be, by definition, not guaranteed. Moreover, we 
do not believe we have authority to prohibit hospitals from charging a 
patient more than the estimated amount. We note, however, that under 
the NSA, patients may obtain a good faith estimate from a hospital, 
which can be used by the patient to dispute final charges that are 
substantially in excess of the up-front amounts.\792\
---------------------------------------------------------------------------

    \792\ https://www.cms.gov/files/document/nosurpriseactfactsheet-whats-good-faith-estimate508c.pdf.
---------------------------------------------------------------------------

    Final action: We are making a technical revision to finalize 
required data elements under new Sec.  180.50(b)(2). We are finalizing 
the requirement at Sec.  180.50(b)(2)(ii)(C) that, beginning January 1, 
2025, if the standard charge is based on a percentage or algorithm, the 
MRF must also specify the estimated allowed amount for that item or 
service.
(c) Required Data Elements Related to Hospital Items and Services
    At new Sec.  180.50(b)(3), we proposed that hospitals be required 
to provide standard charge information for additional data elements. We 
indicated that 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 
proposed that the hospital would be required to indicate the drug unit 
and type of measurement as separate data elements. We stated that 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. 
We noted that under the 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.\793\ 
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 a 
drug described as `aspirin 81mg chewable tablet.'
---------------------------------------------------------------------------

    \793\ 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 stated that 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 proposed 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 did not believe it was 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

[[Page 82102]]

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 agreed 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 agreed with the TEP members that the 
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 stated we believed the burden on hospitals was outweighed by the 
need for improvements in data machine-readability, and therefore 
proposed to require hospitals to report this information as separate 
data elements. We noted that nothing would preclude the hospital from 
also including the information in its description of the drug. We 
sought comment on the proposal and the alternative we considered but we 
did not propose.
    Comment: We received a few comments on our proposed revision to 
retain the ``description'' and ``setting'' information but requiring 
them to be encoded as two separate data elements. A few commenters 
expressed support for the separation of these data elements, stating 
they are necessary to provide context and improve the machine-
readability of the MRF. A few other commenters objected to the 
separation, stating that this information is not currently encoded in 
hospital systems and would be a burden to encode manually for each item 
or service. One commenter suggested that CMS technical instructions 
allow hospitals to designate a standard charge as being applicable to 
the inpatient setting, outpatient setting, or both settings.
    Response: We appreciate the support for the proposal. We agree that 
separation of a data element that distinguishes between the inpatient 
versus the outpatient setting is necessary to improve the 
meaningfulness of the standard charge. Although we recognize that 
encoding the ``setting'' data element, at least initially, may increase 
the burden for some hospitals, we believe that this data element is 
necessary to contextualize the standard charge established by the 
hospital and will improve the meaningfulness and usability of the data. 
Thus, we believe the benefit of including this data element will 
outweigh the initial burden for hospitals to collect and encode it. 
However, in light of comments, as discussed at section XVIII.B.3.c of 
this final rule with comment period, we are implementing a phased 
implementation timeline with respect to the requirements we are 
finalizing in this final rule with comment period, which will provide 
hospitals additional time to collect and encode the data completely and 
accurately. The valid values currently indicated by the data dictionary 
for the voluntary sample formats include ``inpatient'', ``outpatient'' 
and ``both'' and we do not intend to change these technical 
instructions in the data dictionary for the required CMS templates.
    Comment: We received many comments about the proposal to require 
drug unit and type of measurement as separate data elements, and to 
separate them from the description of the item or service. Several 
commenters supported the addition of the drug unit and drug type of 
measurement as separate data elements. One commenter indicated that the 
addition of drug prices in the MRF would be crucial to give patients a 
comprehensive understanding of their cost of care, given that dosage 
and quantity factor heavily into pricing. Moreover, commenters believe 
that drug reporting poses a number of unique challenges compared to 
other types of charges (for example, room and board, operating room 
time), given dosage and quantity factor heavily into pricing. One 
commenter sought clarification as to whether the unit and measurement 
of a drug is the equivalent of a `dose'.
    By contrast, several hospitals expressed opposition, citing 
concerns related to administrative burden. For example, a few 
commenters indicated that standard charges for drugs can change 
frequently which would then require the hospital to frequently update 
the MRF. Others indicated that some hospitals maintain separate drug 
files and that merging payer data with drug and supply data would be 
burdensome, or that the information is already included in the 
description and separating the information in the MRF would take time. 
These commenters suggested that the user of the file should be 
responsible for parsing out the information. Others indicated, without 
further explanation, that they believed these data elements would be 
confusing for end users. Regarding the timing of implementation, one 
commenter specifically noted that CMS postponed the requirement for 
payers to including drug information in the TIC files. Several 
commenters recommended that, given such data is often not already in 
hospital systems in a format conducive to automatic inclusion in an 
MRF, CMS either make this data element optional or delay implementation 
of the data element.
    Response: We appreciate commenters' support for the proposal. We 
agree 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 will 
facilitate machine-readability and ensure clarity for the users of 
these files. The drug unit and type of measurement are intended to 
bring context to the standard charge a hospital has established for the 
drug, which typically (but may not always be) expressed as a dose, 
leveraging HCPCS or NDC dosing descriptions. We recognize that hospital 
charges for drugs may vary throughout the course of a year, however, 
hospitals are only required to update MRFs at least once annually. 
Although we recognize these data elements may increase burden for some 
hospitals, in this case we believe the burden on hospitals is 
outweighed by the need for improvements in data machine-readability, 
and in bringing clarity and context for the standard charges hospitals 
have established for drugs and therefore we are finalizing this 
requirement. These data are not the same as the data required under the 
TIC regulation, which CMS postponed pending further rulemaking.\794\ 
However, we are swayed by those who indicate that these data elements 
may require additional time to encode. Therefore, as discussed at 
section XVIII.B.3.c of this final rule with comment period, we are 
implementing a phased implementation timeline with respect to the 
requirements we are finalizing in this final rule with

[[Page 82103]]

comment period, which will provide hospitals with additional time to 
encode the standard charge information accurately and completely.
---------------------------------------------------------------------------

    \794\ https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/FAQs-Part-49.pdf.
---------------------------------------------------------------------------

    Comment: A few commenters made recommendations related to technical 
instructions, for example, a commenter suggested that the valid values 
specified in the data dictionary align with those that are considered 
`industry standard', and one requested CMS allow valid values for units 
of measures beyond the four (GR (gram), ME (milligram), ML 
(milliliter), and UN (unit)) that are currently found in the data 
dictionary for the voluntary sample formats. One commenter requested 
that CMS provide an example for how to encode standard charge 
information for drugs when the charges are based on an algorithm (such 
as the average wholesale price or actual acquisition cost of the drug) 
rather than a ``hardcoded'' amount. The commenter suggested that such 
charges could be represented as an average dollar amount or as a 
``null'' value.
    Response: We appreciate the suggestions related to technical 
instructions and will consider them as we develop the data dictionary 
and other technical guidance. The current valid values reflect industry 
standards, specifically, we are adopting both the NDC standards (which 
include UN (unit), ML (milliliter), GR (gram), F2 (International Unit), 
ME (milligram)) and the NCPDP standards (which include ``EA'' (each), 
``ML'' (milliliter), and ``GM'' (gram)), however if there are 
additional industry standards that are not reflected or that are needed 
to ensure each hospital is able to maximally contextualize the standard 
charge information for drugs, then we would consider adding them for 
inclusion. Such an inclusion would serve to expand hospital 
flexibility. We note that, in accordance with the discussion related to 
display of hospital standard charges that can only be expressed as an 
algorithm (in section XVIII.B.3.b.(2)(a) in this final rule with 
comment), if a hospital has established a standard charge that can only 
be expressed as a percentage or algorithm, then the hospital must 
describe the algorithm and calculate and display an estimated allowed 
amount in dollars.
    Final action: We are making a technical revision to finalize 
required data elements under new Sec.  180.50(b)(2). After considering 
comments, we are finalizing as proposed new Sec.  180.50(b)(2)(iii) 
that, in its MRF, a hospital must encode a description of the item or 
service that corresponds to the standard charge established by the 
hospital, including:
     general description of the item or service (at new Sec.  
180.50(b)(2)(iii)(A));
     whether the item or service is provided in connection with 
an inpatient admission or an outpatient department visit (at new Sec.  
180.50(b)(2)(iii)(B)); and
     beginning January 1, 2025, for drugs, the drug unit and 
type of measurement (at new Sec.  180.50(b)(2)(iii)(C)).
    We note that we are making a technical correction to insert the 
word ``the'' which was inadvertently dropped from the phrase ``standard 
charge established by [the] hospital, including:'' As discussed at 
section XVIII.B.3.c of this final rule with comment period, we are 
implementing a phased implementation timeline with respect to the 
requirements we are finalizing in this final rule with comment period, 
which will provide hospitals with additional time to collect and 
accurately encode the standard charge information.
(d) Required Data Elements Related to Item or Service Billing
    At new Sec.  180.50(b)(2)(iv), we proposed to specify data elements 
related to item or service billing. We indicated that we believed data 
elements related to item or service billing were necessary because the 
standard charges that a hospital establishes are often dependent on the 
way an item or service is billed. As such, we stated we believed that 
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 noted 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 proposed 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. We stated that separating the code itself (for example, the 
numbers of the code) from the code type (for example, ``HCPCS'') would 
directly improve machine-readability.
    Comment: Most commenters recognized that billing codes can be 
critical for contextualizing the standard charges a hospital has 
established. Several commenters indicated that, more often than not, 
combinations of billing codes and modifiers (including place of 
service) are necessary to describe the possible standard charge 
amounts. A few commenters requested that CMS require hospitals to use 
only nationally recognized code types so that users of the standard 
charge information can more readily compare `apples to apples', for 
example, they requested that CMS mandate hospitals solely use CPT or 
HCPCS codes to contextualize the standard charges the hospital has 
established. One commenter requested clarification on whether the 
intent of including billing codes was to limit codes to only those that 
are included in a hospital chargemaster, or whether it was to try to 
describe every scenario that might result in a different negotiated 
rate under a third party payer contract, noting that managed care 
contracts can differentiate rates based on age, ICD-10 codes, birth 
weight, what day of the week a service was performed on, what other CPT 
codes are billed with it, and other factors.
    Response: We agree that billing codes bring necessary context to 
the standard charges established by hospitals. We additionally agree 
that more than one code may be necessary to establish that context (for 
example, a HCPCS code plus a revenue center code may be needed for 
describing a gross charge). For this reason, the current data 
dictionary used for the voluntary sample formats allows hospitals to 
repeat code and code type data elements as many times as is necessary 
to define an established standard charge. We would retain this 
instruction in the data dictionary for the CMS templates. Although we 
agree with commenters that comparing prices across hospitals would be 
easier for users of MRFs if all hospitals were to establish their 
standard charges against a nationally recognized set of billing codes, 
not all

[[Page 82104]]

hospitals do so. We therefore do not believe it would be in the 
public's best interest to limit the types of codes hospitals can use to 
describe the standard charges they establish because it may increase 
the ``N/As''. Additionally, we agree that gross charges that are 
established by the hospital for itemized items and services are often 
associated with CPT and HCPCS codes in the hospital's chargemaster, 
whereas it may be more appropriate to contextualize the payer-specific 
negotiated charges that hospitals have established with third party 
payers with DRGs, APCs, or other types of payer codes. We further 
recognize that payer-specific negotiated charges may depend on a 
variety of factors, which may make it challenging to display as a 
single dollar amount. In such cases (as discussed in more detail in 
section XVIII.B.3.b.(2)(b) of this final rule with comment), a hospital 
may have established payer-specific negotiated charges that can only be 
expressed as an algorithm. When this occurs, as finalized in this final 
rule with comment period, the hospital will be required to describe the 
algorithm that applies and calculate and encode an estimated allowed 
amount.
    Comment: A few commenters expressed strong concern related to the 
removal of the examples of types of codes a hospital might use to 
describe an item or service for which the hospital has established a 
standard charge. These commenters characterized the change as ``a step 
backwards'' and a ``serious weakening'' of the current rule, explaining 
that the omission of the language might be mistaken by some hospitals 
to mean that they need only include ``any'' single code. Additionally, 
commenters indicated their belief that removing the examples of code 
types would permit hospitals to use only proprietary codes, preventing 
consumers from making comparisons across files. One commenter stated 
that hospitals must be required to provide all codes, including 
nationally recognized codes such as CPT, HCPCS, DRG, or NDC, to ensure 
the public's ability to compare across hospital files. Another 
commenter expressed concern that some organizations bundle complex 
treatment plans under unique ``house codes'' and unbundling these 
treatments would be difficult and time-consuming.
    Response: We disagree that removing examples of codes that 
hospitals may use to describe items and services for which the hospital 
has established a standard charge weakens the requirement. That 
requirement, which we did not propose to change, requires that 
hospitals include in their MRFs ``[a]ny code used by the hospital for 
purposes of accounting or billing for the item or service'' which 
included, and would continue to include, local or proprietary codes. 
However, in light of concerns raised by commenters, we will not 
finalize our proposal to remove from current Sec.  180.50(b)(7) the 
examples of codes hospitals may use to describe the standard charge 
established by the hospital. We will, however, revise the text so that 
it requires the hospital to encode ``[a]ny code(s) used by the 
hospital'', which will emphasize that more than one code may be 
necessary to contextualize the standard charge established by the 
hospital and provide the technical ability for hospitals to associate 
more than one code and code type with a standard charge. We clarify 
that the retention of the examples has no effect on the requirement 
that, to the extent a hospital uses one or more codes to bill/account 
for items and services for which the hospital has established a 
standard charge, the hospital must indicate these in its MRF. Common 
types of codes used by hospitals include such nationally recognized 
codes as CPT, DRG, HCPCS, NDC, and other code types such as revenue 
center codes, place of service codes, modifiers, or ``local'' codes. 
The data dictionary specifications will ensure these and other code 
types are included in the list of valid values (similar to the data 
dictionary currently available for the voluntary sample formats). We 
note that there may be times that a hospital has established a standard 
charge for an item or service for which there is no nationally 
recognized code type, for example, as one commenter pointed out, for 
complex treatment plans. In such cases, the hospital's only option may 
be to indicate the internal or local code established by the hospital 
or payer to describe the item or service. By allowing for these types 
of circumstances, we believe this will avoid situations in which there 
is no code or code type associated with a standard charge, which could 
have the unintended consequence of increasing the number of blanks and 
raising public concern or confusion. However, if a standard charge 
established by the hospital can be contextualized using either a common 
billing code or a local code, then the hospital must either display 
both codes or must preferentially display a common billing code in 
order to maximize the meaningfulness and comparability of the MRF data 
for the public.
    Comment: Several commenters expressed support for the inclusion of 
modifiers whenever they are applicable, even though they may increase 
the size of MRFs. These commenters indicated that modifiers are 
critical to accurately specify standard charges and necessary to help 
compare prices across hospital files, and that the benefit to the 
public outweighs the larger file size. Commenters explained their 
belief that lack of modifiers in some cases had resulted in many 
different standard charges being posted for one procedure type, with no 
explanation of what accounts for the differences.
    By contrast, a few commenters opposed the proposal to add modifiers 
as a separate data element, indicating that the file size would 
increase dramatically due to the ``endless number of permutations'' of 
coding combinations. One commenter indicated that because modifiers are 
typically added manually at the time of billing, they would not be 
known in advance and are unnecessary because they are patient-specific 
and non-standard. Another noted that modifiers are often not included 
in a hospital's chargemaster. Others stated that modifiers are not 
consumer friendly and that including modifiers in the MRF would confuse 
consumers even more than CPT and DRG codes already do, and that 
individual patients should seek out personalized estimates from payers 
or from price estimator tools. Others objected to the proposal on the 
basis of burden and stated that if CMS were to require modifiers as a 
separate data element, then hospitals would need significant lead time 
to adopt the changes.
    Response: We appreciate commenters' support for the proposal to 
continue to require hospitals to include coding information, including 
modifiers as necessary, in the MRF. We agree that including modifiers 
and revenue center codes are useful for making distinctions between 
different hospital standard charges that have the same item/service 
description. Thus, we believe that requirement to include any 
applicable code(s) that include modifiers and revenue center codes will 
help distinguish cases where multiple standard charges have been 
established for the same items or services. A revenue center code may 
contextualize a standard charge for a procedure when the standard 
charge amount varies depending on where in the hospital the procedure 
was provided. For example, the gross charge for a certain procedure may 
be different when that procedure is performed in a general inpatient 
setting compared to when the procedure is performed in the ICU. 
Similarly, a modifier may contextualize a standard charge for a 
procedure, but when the

[[Page 82105]]

standard charge amount varies based on factors specific to the 
procedure. For example, a hospital may have established a payer-
specific negotiated charge ($X) with a third party payer for a 
procedure and a higher payer-specific negotiated charge (150 percent x 
$X) when the procedure is performed bilaterally. We agree that 
hospitals may have to collect modifier information from sources other 
than the hospital's chargemaster in order to contextualize their 
standard charges (particularly payer-specific negotiated charges). To 
the extent that a hospital has established a payer-specific negotiated 
charge that is dependent on a modifier (or revenue center code, or any 
other code), we are finalizing that the hospital must include it in the 
MRF. Although including modifiers increases MRF complexity, the data 
are essential for consumers to understand costs of care prior to 
receiving a hospital item or service through, for example, the data's 
use in building consumer-friendly displays tools such as online price 
estimators. As such, we continue to encourage individual patients to 
seek out personalized estimates from providers (including hospitals) 
and payers through other Federal price transparency efforts such as TIC 
and the NSA. We also will continue to require hospitals to provide 
consumers with pricing information in a consumer-friendly manner, in 
accordance with hospital price transparency's consumer-friendly 
requirements at 45 CFR 180.60.
    Comment: A few commenters requested clarification of the proposal 
to require hospitals to encode modifiers as a separate data element and 
wondered if the agency was intending for hospitals to list modifiers 
for billing purposes that affect reimbursement. These commenters 
recommended that CMS specify that hospitals only need to include 
combinations of procedures and modifiers that represent a distinct 
service and result in a separate reimbursement rate. Others noted that 
many modifiers do not change the payer-specific negotiated charge 
established between the hospital and third party payer and sought 
clarification as to whether CMS would require such modifiers to be 
included in the MRFs. Another commenter suggested that modifiers would 
be `out of scope' because they are appended to patient claims at the 
end of a hospital visit and are not known in advance.
    Response: As proposed, hospitals would be required to include 
modifiers only when they are necessary to provide the additional 
context needed for the standard charges the hospital has established. 
We agree it is unnecessary to include modifiers that do not impact or 
change the standard charges established by the hospital. Given that 
modifiers are often necessary for hospitals to make public the standard 
charges established by the hospital, we disagree that modifiers are 
`out of scope'.
    However, in order to reduce burden, we are finalizing modifiers as 
a separate data element. We clarify that in doing so, a hospital would 
not be required to encode all combinations of codes, including 
modifiers, for each standard charge established. Instead, the hospital 
would be required to separately encode the modifiers and indicate what 
effect the modifier would have on the standard charge established by 
the hospital when used in combination with a procedure or service. For 
example, a hospital's contract with a third party payer may indicate 
that when the service(s) provided by the hospital are greater than that 
usually required for the listed procedure, the hospital may identify 
this by adding modifier `22' to the usual procedure number and the 
payer will increase the allowed amount for the procedure by 125 percent 
of the 5-digit procedure code `allowable'.\795\ To reduce burden, the 
hospital would encode the standard charge associated with each 5-digit 
code, as they have been established, and then separately encode each 
modifier that may change the standard charge by including a description 
of the modifier and the way it modifies the standard charge.
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    \795\ One example of how American Medical Association (AMA) 
modifiers can effect hospital payer-specific negotiated charges can 
be found here: https://www.aapc.com/codes/webroot/upload/general_pages_docs/document/09-14_10_Modifiers.pdf.
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    Final action: We are making a technical revision to finalize 
required data elements under new Sec.  180.50(b)(2). As a result of 
comments, we are finalizing a requirement at Sec.  180.50(b)(2)(iv) 
coding information as a required data element, including: Any code(s) 
used by the hospital for purposes of accounting or billing for the item 
or service at new Sec.  180.50(b)(2)(iv)(A); and corresponding code 
type(s) at new Sec.  180.50(b)(2)(iv)(B). Such code types may include, 
but are not limited to, the Current Procedural Terminology (CPT) code, 
the Healthcare Common Procedure Coding System (HCPCS) code, the 
Diagnosis Related Group (DRG), the National Drug Code (NDC), Revenue 
Center Codes (RCC), or other common payer identifier. Additionally, at 
new Sec.  180.50(b)(2)(iv)(C), beginning January 1, 2025, the hospital 
must encode any modifier(s) that may change the standard charge that 
corresponds to a hospital item or service, including a description of 
the modifier and how it would change the standard charge.
(e) Response To Request for Comment and Summary of Finalized Required 
Data Elements
    We sought comment on these proposed revisions to Sec.  180.50(b). 
Specifically, we sought comment on whether we should consider 
additional data elements to ensure the public's understanding and 
ability to meaningfully use the standard charge information as 
displayed in hospital MRFs. In particular, we sought comment from 
hospitals related to display of payer-specific negotiated charges and 
solicited 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.
    Comment: We received several suggestions for additional data 
elements such as ``type'' of gross charge that would indicate ``any 
specialty pricing schedules'' maintained by the hospital, for example, 
special lab, imaging, or clinic prices, ``Average Standard Gross 
Charge'' found on claims, the ``realization rate'' from payers which 
would take into consideration claim/benefit denials from payers, and 
others. We also received a few specific examples of complex contracting 
methodologies.
    Response: We thank the commenters for the additional data element 
suggestions that we may consider in future rulemaking. We note that 
nothing would preclude a hospital from voluntarily including additional 
data elements in its MRF, and we may develop recommended specifications 
for optional data elements in the data dictionary. We also thank 
commenters for providing examples of complex contracting methodologies, 
which will be helpful for developing specific recommendations and 
technical instructions on the display of standard charges resulting 
from them.
    Final action: We are finalizing as proposed the modifications to 
Sec.  180.50(b), which we believe are necessary to improve hospitals' 
ability to display their standard charges in a more specific, clear, 
and standardized way. We believe the final policies will 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 final

[[Page 82106]]

policies will improve and streamline CMS' ability to enforce the HPT 
requirements. In so doing, we are making a technical revision to 
existing Sec.  180.50(b), specifically, redesignating the introductory 
paragraph as (b)(1) and renumbering paragraphs (b)(1) through (7) as 
paragraphs (b)(1)(i) through (vii). Additionally, the existing 
introductory paragraph is revised to apply to dates prior to July 1, 
2024. The policies finalized in this final rule with comment period for 
newly required data elements are added under new Sec.  180.50(b)(2). 
Table 151A summarizes the implementation timeline for encoding required 
data elements in a CMS template.
c. Formatting Requirements for Display of Standard Charge Information 
Using a CMS Template and Implementation Timeline
    We proposed 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 made these proposals in order to 
improve automated aggregation of the standard charge information in the 
hospital's MRFs. Additionally, we stated that we believed these 
proposals would streamline our enforcement capabilities.
    While most hospitals are ensuring that the data they display 
appears in a machine-readable format (such as JSON 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 to facilitate 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 the 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 stated that 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 proposed 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).
    We proposed 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. We 
indicated that 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 in its MRF.
    For purposes of this requirement, we proposed to make available a 
CMS template in CSV and JSON formats. Additionally, we proposed to make 
available three different layouts. We indicated that the three layouts 
would be similar to the three `sample formats' that are currently 
available on the HPT website.\796\ 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 sought comment on this issue, and on whether we 
should instead require use of a single format (such as JSON).
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    \796\ https://www.cms.gov/hospital-price-transparency/resources.
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    Further, we noted that 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,' 
\797\ but would be updated to include any new policies that we finalize 
in this final rule with comment period. We indicated our belief that 
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 stated that we believed that providing 
such direction via separate technical instructions was 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.
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    \797\ https://www.cms.gov/hospital-price-transparency/resources.
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    We stated that hospitals that did 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 considered whether we should develop an MRF 
validator tool, similar to the validator tool provided by TIC on the 
CMS GitHub website.\798\ 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

[[Page 82107]]

technical instruction and assurance that the formatting requirements 
have been met prior to posting the MRF online. We sought comment on 
whether hospitals would find a validator tool helpful and, if so, what 
technical specifications such a validator ought to assess.
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    \798\ https://github.com/CMSgov/price-transparency-guide-validator.
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    Additionally, we continued to encourage hospitals to provide any 
additional information they deem necessary to further explain or 
contextualize their standard charges, and indicated that 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 proposed to remove the examples of specific types of 
machine-readable formats from the definition of ``machine-readable 
format'' at Sec.  180.20. Similarly, we proposed 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].''
    We stated that if the proposals related to these formatting 
requirements were finalized, CMS would 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 the CY 
2024 OPPS/ASC proposed rule, we proposed 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 
continued 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 
reiterated that the 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 cautioned 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 prior guidance). To help mitigate ongoing 
misunderstandings by users of hospital MRF data, we noted that 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 the CY 2024 
OPPS/ASC proposed rule, we proposed that hospitals include an 
affirmation of accuracy and completeness within the CMS template (see 
proposal in section XVIII.B.2.b of the CY 2024 OPPS/ASC proposed rule), 
which we believed 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. We stated that such an affirmation may 
also mitigate the need for a hospital to insert any indicator of non-
applicability into its MRF. We therefore did not propose to require 
insertion of such an indicator, however, we sought comment on this 
issue. We sought comment on whether an indicator of non-applicability 
is necessary, whether such an indicator should be required or just be 
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.
    Comment: Many commenters, including hospitals, IT developers, and 
consumer advocates expressed broad support and appreciation for the 
proposals for requiring hospitals to conform to a standard CMS template 
layout and encode their data in a standardized way. Commenters 
indicated that such standardization is both critical and urgent and 
would support both macroeconomics (business-to-business competition) as 
well as microeconomic (consumer) applications. Others indicated their 
belief that such standardization benefits both users (the public) and 
producers (hospitals) of the files. Others agreed that the proposal has 
the potential to facilitate standardization and add clarity for 
hospitals in meeting requirements and would remove administrative 
burden from hospitals, particularly for urban or well-resourced 
hospitals.
    Some commenters expressed understanding and appreciation of CMS' 
willingness to address issues raised by hospitals related to the 
current format but had concerns with the proposed formatting 
requirements. Specifically, a few hospitals expressed concern related 
to additional burden the new requirements would place on hospital staff 
to adopt a CMS template layout and the short timeline for 
implementation. One commenter urged CMS to consider retaining 
flexibility to accommodate diverse hospital contracting methodologies 
to mitigate implementation challenges and burden while enhancing 
transparency and standardization. One commenter indicated their belief 
that rural hospitals would likely see little benefit from using a CMS 
template because they would still need staff and resources to 
understand how to meet the new requirements.
    Response: We appreciate the general support for requiring hospitals 
to conform to a standard CMS template layout and encode its data in a 
standardized way. We believe this policy will improve hospital standard 
charge information use and ease hospital administrative burden for 
complying with the requirements. Additionally, we believe that use of a 
standardized format will improve the public's understanding of the 
standard charges hospitals have established. We recognize that 
hospitals have diverse contracting methodologies and believe the CMS 
template layouts and technical specifications retain sufficient 
flexibility.
    Comment: Several commenters offered specific support for the 
proposal to allow hospitals to choose between a JSON schema and two CSV 
templates, stating that this policy would allow hospitals some 
flexibility to choose a method appropriate for them and align with 
varying levels of expertise. A few, however, disagreed with permitting 
hospitals to use JSON indicating that this format is more difficult for

[[Page 82108]]

consumers, researchers, and employers to use, and urged CMS to require 
hospitals to use only a CSV format to ensure the hospital's standard 
charge information would be easily accessed by both machines and humans 
alike. These commenters suggested that hospitals might use JSON to 
circumvent the regulatory requirements. A few commenters expressed 
support for requiring hospitals to make their standard charge 
information public in a spreadsheet format (such as Microsoft Excel). 
These commenters explained that requiring hospitals to encode their 
standard charge information in a human-readable spreadsheet format 
would make the information more accessible to consumers of the data. 
One commenter indicated their belief that the voluntary sample JSON 
schema currently available is `flat' and inefficient and provides no 
advantage over the CSV formats.
    Other commenters indicated that different organizations have taken 
different approaches for making public their standard charge 
information, and that switching formats now would be very costly. 
Another requested that CMS provide more description and specific 
examples of both formats in the final rule and/or as later guidance. 
One commenter expressed interest in using a validator tool, indicating 
their belief it would increase compliance with formatting requirements.
    Response: We appreciate the comments related to specific formats 
and CMS templates. We agree that hospitals should have some choice, 
given varying levels of expertise and formats that are widely used by 
hospitals to date. The JSON schema was developed for those hospitals 
that wish to take advantage of a format that is more efficient in 
disclosing the structured data elements and allows for hospitals to 
represent their data in a hierarchical structure which can reduce the 
file sizes significantly. Additionally, the JSON schema is intended to 
reduce burden for hospitals that have already expressed a preference 
for making public their standard charge information in a JSON schema. 
Further, there are free, open source JSON viewers available online for 
noncommercial use. By contrast, the CSV template was developed for 
those hospitals that are already using this format or who may not be 
comfortable encoding data in a JSON schema. CSV is a nonproprietary and 
common flat-file format that uses commas as a delimiter between values 
and is easily downloadable into a variety of spreadsheet software 
packages and applications, including Excel, Access, R, Python, Tableau, 
and others. The flexibility of this format to be opened by many 
different applications provides an advantage over requiring hospitals 
to adopt a single application that may be proprietary or not accessible 
to all members of the public. This practice is consistent with the 
Federal Government's general open source principles for data access 
which provides that: data should be made available in convenient, 
modifiable, and open formats that can be retrieved, downloaded, 
indexed, and searched; formats should be machine-readable (that is, 
data are reasonably structured to allow automated processing); open 
data structures do not discriminate against any person or group of 
persons and should be made available to the widest range of users for 
the widest range of purposes, often by providing the data in multiple 
formats for consumption; and, to the extent permitted by law, formats 
should be non-proprietary, publicly available, and no restrictions 
should be placed upon their use.\799\
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    \799\ https://resources.data.gov/PoD/principles/.
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    For these reasons, we decline to limit options to a single format 
at this time, or to require hospitals to make public their standard 
charge information in a human-readable format, however, we will 
continue to monitor and may revisit this policy in the future.
    We also appreciate comments from consumers and consumer advocates 
and will consider them in the future rulemaking that addresses the 
consumer-friendly display requirements at Sec.  180.60. We note that we 
provided detailed examples of both the CSV formats and JSON schema, as 
well as the technical directions found in the data dictionary. These 
are currently offered to hospitals on a voluntary basis and can be 
viewed on the HPT website. We intend to timely update these resources 
to align with the policies finalized in this final rule with comment 
period. Finally, we appreciate the input on the value a validator may 
bring for hospitals that are developing their MRFs and will consider 
making one available.
    Comment: A few commenters commented on the use of an indicator when 
there is no applicable standard charge information to encode. One 
commenter suggested specific technical specifications and suggested 
that the process of manually adding indicators would aid in the 
hospital validation of the file. One stated that requiring hospitals to 
insert indicators, rather than leaving blanks, would complicate 
hospital validation efforts and add to the administrative burden. A few 
commenters questioned the need for such identifiers and suggested there 
should be no situations in which there is no applicable data.
    Response: We appreciate the input on use of indicators. As 
described in the CY 2024 OPPS/ASC proposed rule, we believe that there 
are situations in which there is no applicable standard charge 
information to encode. We also indicated our belief that if we require 
a hospital to include a statement affirming the accuracy and 
completeness of the data it has encoded in the file, then the hospital 
would not have to fill in `blanks' because the affirmation would signal 
the blanks are intentional and not missing data. In order to reduce 
hospital burden, we will not require encoding of an indicator at this 
time. We may revisit this policy in future rulemaking.
    Finally, we proposed 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, we stated that the grace period would apply solely with respect 
to enforcement actions based on the new 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 45 CFR part 180 as they are 
currently being implemented. Additionally, we stated that the grace 
period would not apply to other proposals which would become effective 
and enforced on January 1, 2024. We stated we understood that some 
hospitals may have already adopted the sample format that CMS made 
available in November 2022, however, we proposed to implement an 
enforcement grace period to accommodate hospitals that have adopted 
formats that vary significantly from the sample format. We sought 
comment on the proposal. In particular, we sought comment on whether 
and why an enforcement grace period should or should not be applied.
    Comment: We received many comments related to the effective date of 
the proposed requirements. Nearly all of those who commented on the 
effective date indicated their belief that the proposed timeline is 
aggressive and it would be unreasonable to require hospitals to adopt 
the proposed CMS template and encode new data elements into it by the 
March 1, 2024 enforcement date, although one commenter applauded CMS 
for its dedication to urgency.
    The primary reason for requests in a delay was the need to collect 
and encode data for newly proposed data

[[Page 82109]]

elements, as well as the need to ensure the data presented are accurate 
and complete. One commenter noted that when TIC was finalized, CMS 
provided payers an extended timeline for implementation and expressed 
their belief that it would be unfair if CMS failed to do so for 
providers. Another indicated that the proposed timeline would be 
especially challenging for smaller hospitals. A few commenters 
indicated that their vendors would not begin making any changes to 
accommodate the new formats and data requirements until CMS finalizes 
the rules. Others expressed concern related to the timing of planned 
annual updates and indicated it would be burdensome for a hospital to 
have to produce two files in a single 12-month period.
    Commenters recommended alternative dates for enforcement that they 
considered to be more reasonable. These alternative dates ranged from 
as early as April 1, 2024, to 18 or 24 months after any finalized 
changes. Some commenters suggested CMS permit hospitals to adopt the 
new format on a rolling basis to align with the hospital's planned 
annual update, while others suggested a phased-in approach, noting that 
some new data elements may take additional time to collect and encode 
accurately and completely, at least initially. Commenters noted that 
the delay would not be harmful to patients because individuals seeking 
estimates for healthcare services could continue to use already 
established price estimator tools, patient portals, and existing 
machine-readable files.
    Additionally, commenters requested that CMS use the time between 
finalization and enforcement to provide assistance to providers as they 
seek to comply, for example, hosting nationwide calls with provider 
technical teams to work through their formatting issues.
    Response: We believe that hospitals should adopt a CMS template 
layout and encode the required data elements as soon as possible to 
improve public use of hospital standard charge information. However, in 
light of the comments and as explained below, we are finalizing a 
phased implementation schedule for the new requirements that we are 
finalizing in this final rule with comment period. We believe that this 
step-wise approach will provide hospitals sufficient time to implement 
all of the new requirements accurately and completely, which we believe 
will enhance transparency overall. We do not believe it is necessary to 
mirror the timeline for implementation with the timeline CMS provided 
to payers under TIC because the requirements are different and at this 
time, hospitals are already collecting and displaying many of the 
required data elements in a machine-readable format.
    Finally, we thank commenters for their suggestions regarding 
education and outreach activities and will consider how best to engage 
hospitals as they seek to meet the requirements established in this 
final rule with comment period.
    Final action: We are finalizing as proposed the revision to the 
formatting requirements at Sec.  180.50(c). In so doing, we are making 
a technical revision to existing Sec.  180.50(c), specifically, 
redesignating the introductory paragraph as paragraph (c)(1) and 
revising the paragraph to apply to dates prior to July 1, 2024. At new 
Sec.  180.50(c)(2), we will require that, beginning July 1, 2024, the 
hospital's machine-readable file must conform to a CMS template layout, 
data specifications, and data dictionary for purposes of making public 
the standard charge information required under paragraph (b)(2) of this 
section. CMS will update the existing sample formats (CSV ``tall'', CSV 
``wide'', and JSON schema) and data dictionary found on the CMS website 
to align with the new regulatory requirements.
    In response to comments regarding our proposed 60-day enforcement 
grace period with respect to adoption of a CMS template format and 
encoding new data elements, we are not finalizing that proposal. We 
agree with commenters that the encoding already required data elements 
in a standardized format is an adjustment and that the new data 
elements we are finalizing may initially take hospitals some time to 
collect and encode in a CMS template layout completely and accurately. 
We believe that complete and accurately encoding standard charge 
information in a CMS template will improve CMS' ability to assess 
hospital compliance and take necessary enforcement action for hospitals 
that are determined to be out of compliance. We are therefore 
finalizing a phased implementation timeline with respect to the changes 
we are finalizing in this final rule with comment period. Specifically, 
we are finalizing that the effective date of all of the changes to the 
hospital price transparency regulations at 45 CFR part 180 will be 
January 1, 2024. However, the regulation text will specify later dates 
by which hospitals must be in compliance with some of these new 
requirements, and we will begin enforcing hospital compliance with 
those new requirements on the applicable later compliance date. The 
date by which hospitals must comply with each of the new requirements 
in section XVIII.B of this final rule with comment period are described 
in Tables 151A and 151B.
    Table 151A describes the implementation timeline for adoption of a 
CMS template layout and encoding of the required data elements. The 
implementation date for all other requirements referenced in section 
XVIII.B of this final rule with comment period are indicated in Table 
151B.
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4. Requirements to Improve the Access to 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 charge 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 MRFs 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 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 
therefore indicated our belief that 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 proposed 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 proposed, 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. We stated that 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 the 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

[[Page 82112]]

the MRF to establish and maintain automated access.
    Second, we proposed, 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 proposed 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 sought comment on the proposed approach to improving 
accessibility of MRFs to automated searches. We particularly sought 
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 sought comment on whether the proposals to require 
use of a footer and .txt file 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 
sought 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.
    Comment: Several commenters expressed general support for the 
proposals to improve automated accessibility of hospital MRFs, noting 
these proposals will aid in the automation of MRF data retrieval, 
enhance transparency, make the MRFs more visible to individual 
consumers, and reduce the effort of aggregating the data. One 
commenter, while supportive of these proposals, requested that CMS 
delay enforcement to July 1, 2024, to give hospitals sufficient time to 
operationalize the changes, while another commenter did not see 
substantial technical difficulty with implementing either the .txt file 
or including a link in the footer. One commenter indicated that they 
did not believe the naming convention would be useful for identifying 
the location of the MRF, but that the .txt file would help. One 
commenter suggested adding the file date of the naming convention. 
Another commenter agreed with CMS that the data should be accessible 
but believed the proposed requirement for a link in the footer should 
be optional.
    Response: We appreciate the support for this policy and agree that 
including both a .txt file in the root folder and a link in the footer 
with a standardized label that links directly to the web page that 
hosts the link to the MRF will aid in the automated accessibility of 
MRFs and ultimately enhance transparency. We disagree with the 
commenter who believes the proposal for a link in the footer should be 
optional. 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. 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. Further, we agree with the 
commenter who stated that implementation of these proposals would not 
pose substantial technical difficulty. 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. Therefore, we believe it is important for hospitals to include the 
.txt file and link in the footer as soon as possible.
    Comment: Several commenters opposed the proposals to improve 
automated accessibility of hospital MRFs, stating they did not believe 
the proposed changes would improve consumer friendliness or 
accessibility, expressing concern over not having flexibility in 
placement of the footer link and saying it would detract from other 
pertinent hospital information, and finding the proposals to be 
unnecessarily technical and excessive. A few commenters found the .txt 
file to be duplicative, stating the proposed MRF template fields would 
contain hospital location information. One commenter stated that 
websites do not have root folders, but instead have URLs, and that this 
would be an issue with the .txt file. One commenter appeared to object 
to the .txt file requirement stating that anyone using a .txt file 
could also find the file through the footer link. One commenter noted 
that the proposal to include a link in the footer would not satisfy at 
least one State requirement to have the link be immediately visible on 
the homepage without scrolling. One commenter found the proposal to 
include a link in the footer to be burdensome, citing a situation where 
the hospital website hosts an MRF for more than one hospital location 
and the link bringing the user to a page with multiple links to the 
various MRFs. By contrast, one commenter recommended the .txt file and 
footer link be extended to support multiple MRFs and transparency web 
pages on a website.
    A few commenters recommended various alternative approaches, 
including placing the link to the MRF directly on the hospital's 
homepage, having CMS maintain a repository of MRF links, and having CMS 
ingest, host, and directly make available the data required under the 
regulations. One commenter sought clarification on whether CMS intends 
for the footer link to appear on every single web page on the 
hospital's website. One commenter suggested limiting the text of the 
footer label to ``Price Transparency'' instead of ``Hospital Price 
Transparency.''
    Response: We appreciate the commenters' concerns and 
recommendations. We disagree that the proposed changes would not 
improve consumer friendliness or accessibility. We believe that 
standardizing website location information could provide

[[Page 82113]]

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 remain committed to ensuring 
that the MRFs and their data contents are easily 1467cessible, and do 
not believe that offering flexibility on placement of the proposed 
footer link anywhere on a hospitals' homepage would achieve a 
predictable navigation path to internal web pages because link 
placement could vary from one hospital website to another. 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. We further 
note that nothing would preclude a hospital from additionally providing 
such a link elsewhere on its homepage if the hospital believes it would 
be necessary for other reasons.
    Despite the requirement for the MRF and the standard charge 
information contained in that file to be digitally searchable and use 
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.
    We appreciate the concern of not detracting from other pertinent 
information on a hospital's website. Due to the website footer being a 
common place for hospitals to link to other information, we believe 
this requirement would be simple for hospitals to understand and 
implement without taking away from other information on a hospital's 
website.
    We do not agree that the .txt file is duplicative because it's a 
separate file with different information that serves the purpose of 
helping machines automatically locate the hospital's MRF. We appreciate 
the comment noting websites have URLs. We use `root folder' here to 
refer to the base URL of the website. We also appreciate the comment 
noting that the MRF can be found via the footer link and recommending 
the .txt file requirement be deleted. We believe the .txt file is 
necessary to help streamline the automation of MRF data retrieval. 
Having the .txt file would achieve having a predictable URL that could 
be used to successfully aggregate the files.
    We understand the concern regarding potential inconsistency with 
recently enacted state legislation. While developing this rule, we 
attempted to balance the States' interests in regulating hospitals with 
the need to ensure access to uniform hospital pricing data. We further 
note that nothing would preclude a hospital from additionally providing 
such a link elsewhere on its homepage if the hospital believes it would 
be necessary for other reasons.
    We appreciate one commenter's concern that the proposal to include 
a link in the footer would be burdensome. We believe having a footer 
link to a page with multiple links to the various MRFs would help 
consolidate and aggregate the information, provide consumers with a 
standard pathway to find the information, provide some uniformity, and 
ensure that the MRFs and their data contents are easily accessible. In 
other words, we believe the burden of providing a link in the footer is 
outweighed by the benefits to the public. Further, we agree with the 
commenter who stated that the .txt file and footer link be extended to 
support multiple MRFs and transparency web pages on a website. The .txt 
file can have the ability to support multiple MRFs and a footer link 
can go to a page that contains links to multiple MRFs.
    We appreciate the various alternative approaches commenters 
recommended and may take them into consideration in future rulemaking. 
We appreciate the commenter seeking clarification on the footer link 
placement. At minimum, the link in the footer must by on the homepage. 
We agree with the commenter who suggested limiting the text of the 
footer label to ``Price Transparency'' instead of ``Hospital Price 
Transparency.''
    Final action: At new Sec.  180.50(d)(6)(i), we are finalizing as 
proposed the requirement 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. At new 
Sec.  180.50(d)(6)(ii), we are finalizing the requirement that the 
hospital ensure the public website includes a link includen the footer 
on its website, including but not limited to the homepage, that is 
labeled ``Price Transparency'' (instead of ``Hospital Price 
Transparency'') and links directly to the publicly available web page 
that hosts the link to the MRF.

C. Requirements 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 part 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).
     Request a corrective action plan (CAP) 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 CAP 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.\800\ Of the remainder of the 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

[[Page 82114]]

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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    \800\ https://www.healthaffairs.org/content/forefront/hospital-price-transparency-progress-and-commitment-achieving-its-potential.
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    Recently, we announced updates to our enforcement process \801\ 
that are intended to increase the rates of HPT compliance. In this 
section, we made proposals that would further improve the efficiency, 
timeliness, and transparency of the compliance process.
---------------------------------------------------------------------------

    \801\ https://www.cms.gov/newsroom/fact-sheets/hospital-price-transparency-enforcement-updates.
---------------------------------------------------------------------------

    Comment: We received several comments related to CMS' general 
approach to enforcement and the proposals to improve monitoring, 
assessing, and enforcing the requirements of Sec. Sec.  180.40, 180.50, 
and 180.60.
    Some commenters expressed appreciation for the general enforcement 
approach taken by CMS, including CMS' previous work to advance hospital 
price transparency by increasing the penalties for noncompliance with 
the transparency requirements and using its enforcement power to work 
with hospitals and, when necessary, issue warnings, require CAPs, and 
impose civil monetary penalties on noncompliant hospitals.
    One commenter expressed concern related to external reports of high 
noncompliance rates while a few commenters believed that CMS should 
refute third-party assessment of HPT compliance. These commenters 
agreed that only a formal CMS assessment can determine a hospital's 
compliance with the HPT requirements, and thanked CMS for performing 
and publishing its own assessment of hospital compliance.
    Some commenters expressed support for the proposals to improve CMS 
enforcement capabilities, and urged CMS to go further by, for example, 
increasing and promptly assessing penalties.
    Response: We thank commenters for their support. We are committed 
to the monitoring and assessment of hospitals' compliance with the HPT 
requirements and enforcement of those requirements. We believe that our 
current compliance actions, culminating in a CMP for those hospitals 
which CMS determines are out of compliance and that either fail to 
respond to CMS' request to submit a CAP or comply with the requirements 
of a CAP, are the appropriate way to address hospital noncompliance 
with the HPT regulations because the process ensures hospitals have an 
opportunity to come into compliance before CMS assesses a CMP. We agree 
that only CMS can make a determination as to a hospital's compliance 
with the HPT requirements.
    Comment: A few commenters were generally opposed to the proposed 
regulatory changes. One commenter stated the changes would cause 
hospitals to effectively redo their compliance approach, and instead 
encouraged CMS to offer incentives to hospitals should the agency aim 
to promote standardization. One commenter recommended that CMS 
recognize hospitals making a good faith effort to be in compliance with 
regulations.
    Response: We appreciate the commenters' concerns and 
recommendations. We remain committed to enforcing the HPT regulations, 
and do not believe that offering incentives would achieve the goal of 
compliance. We expect hospitals to fully comply with the HPT 
regulations.
1. Requirements 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 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 charge 
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 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 indicated our expectation that 
many of these issues would be resolved by finalizing the proposed 
improvements to standardizing display of hospital standard charges (as 
discussed in section XVIII.B.3 of this final rule with comment period). 
However, we noted that there could still be times when CMS would need 
additional information from the hospital to assess compliance.
    We therefore proposed to amend Sec.  180.70(a)(2) to add activities 
that CMS may use to monitor and assess for compliance. Specifically, we 
proposed:
     To revise Sec.  180.70(a)(2)(iii) to indicate that CMS may 
conduct a comprehensive compliance review of a hospital's standard 
charge information posted on a publicly available website. We stated 
that we believed the proposal was 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 charge information posted in the MRF at 
any stage of the monitoring, assessment, or compliance phase. We also 
proposed, at new Sec.  180.50(a)(3), that the hospital affirm within 
the MRF the accuracy and completeness of the standard charge 
information. However, we indicated that we believed that this 
additional authority to require a formal certification by an authorized 
official

[[Page 82115]]

would be 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 was 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 stated that we believed 
that the proposal was necessary to enable CMS to adequately evaluate 
the hospital's publicly posted information to be able to assess 
compliance.
    Further, we proposed two technical revisions. First, we proposed a 
technical revision to the heading at Sec.  180.70(a) so that it would 
read ``Monitoring and assessment.'' Second, we proposed 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.''
    Comment: Several commenters supported CMS' overall efforts to 
enhance assessment of noncompliance and its focus on improving 
enforcement.
    Response: We thank commenters for their support.
    Comment: Several commenters encouraged CMS to focus and commit to 
``enforcement, not simply assessment.'' Similarly, a few commenters 
asserted that ``real enforcement'' is necessary, not just assessment, 
and that stringent enforcement is necessary to encourage hospital 
compliance with the law. A few commenters asked CMS to clarify that the 
proposed assessment and enforcement measures would supplement, not 
replace, the enforcement mechanisms currently in place, with one 
commenter encouraging CMS to say the proposals would supplement 
enforcement measures by strengthening CMS' capacity to assess 
compliance and respond to verified cases of noncompliance with 
enforcement actions. This commenter added that the need for 
clarification arises from the addition of ``assessment'' in Sec.  
180.70(a), and failure to use the word ``enforcement'' throughout this 
section in the CY 2024 OPPS/ASC proposed rule and recommended revised 
regulation text. A few commenters stated that any enhanced assessment 
capability must be paired with corresponding robust enforcement 
authority to engender compliance.
    A few commenters disagreed with the proposed technical revision to 
the regulatory text change to ``monitoring and assessment,'' and 
strongly encouraged CMS to use consistent and strong language 
throughout the regulation and recommended CMS use the word 
``enforcement'' to send a strong message to hospitals about the 
seriousness of enforcement activities.
    Response: We appreciate the commenters' concerns and 
recommendations. CMS is committed to strong enforcement of the HPT 
regulation. We clarify that the proposed assessment and enforcement 
measures would not replace, but instead would supplement and enhance, 
existing enforcement mechanisms. Of note, we did not propose to remove 
the word ``Enforcement'' from Sec.  180.70, but instead proposed to add 
the word ``Assessment'' in addition to ``Monitoring'' to Sec.  
180.70(a). Monitoring and assessment are activities that must occur 
prior to an enforcement action. Once CMS has determined (by way of its 
monitoring and assessment activities) that a hospital is out of 
compliance, the enforcement procedures continue to be addressed in 
Sec.  180.70(b) under the actions to address hospital noncompliance.
    Therefore, we will finalize the use of the word ``assessment'' and 
decline to replace this word with ``enforcement,'' given that 
``enforcement'' is still included within the regulation text and that 
in order to complete enforcement activities, we must first complete 
assessment activities.
    Comment: We received some comments related to the proposal to 
revise Sec.  180.70(a)(2)(iii) to indicate that CMS may conduct a 
comprehensive compliance review of a hospita''s standard charge 
information posted on a publicly available website.
    A few commenters provided general support for the proposal. One 
commenter supported additional monitoring and assessment capabilities 
for CMS in overseeing compliance.
    One commenter questioned the scope and timing of a ``comprehensive 
compliance review'' and suggested that the criteria for a comprehensive 
compliance review be established and included in the CY 2024 OPPS/ASC 
proposed rule language before finalized so hospitals can have an 
opportunity to understand and provide appropriate comment. One 
commenter requested that CMS regularly release information about how 
compliance is monitored and assessed, such as the factors examined when 
compliance reviews are pursued.
    Response: We appreciate the commenters' support, concerns, and 
recommendations. We remain committed to enforcement of the HPT 
regulation, and we take compliance with the regulation seriously. We 
believe revising Sec.  180.70(a)(2)(iii) to indicate that CMS may 
conduct a comprehensive compliance review of a hospita''s standard 
charge information posted on a publicly available website (in addition 
to CMS audit which is included at Sec.  180.70(a)(2)(iii) and would be 
retained) is necessary to clarify and align with the process we have 
established to determine a hospital's compliance with HPT requirements. 
This change does not alter our enforcement process, but instead merely 
clarifies the terminology we use in our current processes, and 
therefore does not diminish our enforcement capabilities. We will 
continue to evaluate complaints made by individuals or entities, review 
individuals' or entities' analysis of noncompliance, and audit 
hospitals' websites. We clarify that we will continue to 
comprehensively review hospitals' compliance with all the criteria 
required in 45 CFR 180.40, 180.50, and 180.60 in order to assess 
noncompliance and enforce those requirements, including any new 
criteria added as a result of this final rule with comment period. 
Additionally, in accordance with the regulation, once we make a 
determination of noncompliance we will continue to follow our 
established enforcement process, by which we may take one or more 
enforcement actions indicated in 45 CFR 180.70(b) such as providing a 
written warning notice to the hospital of the specific violation(s), 
requesting a CAP from the hospital if its noncompliance constitutes a 
material violation of one or more requirements, and imposing a CMP on 
the hospital if it remains noncompliant.
    Comment: We received many comments related to our proposal to add 
Sec.  180.70(a)(2)(iv) requiring submission of certification by an 
authorized hospital official as to the accuracy and

[[Page 82116]]

completeness of the data in the machine-readable file. Several 
commenters supported a hospital executive attesting to the accuracy of 
a hospital's data. One commenter requested that a ``top hospital 
executive'' sign an attestation assuring that the prices are complete 
and accurate, stating that this is the case for Medicare reimbursement 
reports. One commenter provided suggested regulation text to implement 
its suggestions. One commenter supported the proposal because 
certification of the accuracy and completeness of the standard charges 
will encourage hospitals to keep this information as up to date as 
possible, which will benefit the consumer.
    A few commenters suggested that CMS require senior officers from 
the hospital to make such attestations and encouraged CMS to deem such 
attestations as material to payment from the Federal Government to 
incorporate potential liability under the False Claims Act (``FCA'') 
for hospitals that knowingly violate the rule and falsely attest to the 
accuracy and completeness of their files. Similarly, one commenter 
recommended that CMS take actionable steps allowing for applicable 
individuals to be held accountable for the pricing information 
provided.
    Response: We thank commenters for their support. We indicated in 
the CY 2024 OPPS/ASC proposed rule that additional authority to require 
a formal certification by an authorized official would be necessary 
because we 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. This 
authority, and the authority requiring submission of additional 
documentation as may be necessary to assess hospital compliance, 
bolsters our ability to conduct a full compliance review and is in 
addition to the hospital's affirmation of the completeness and accuracy 
of the data. We do not agree that formal certification by an authorized 
official is required in every case.
    We thank commenters for their suggestion to pursue noncompliance 
with the HPT regulations under the FCA; however, the FCA is outside the 
scope of this rule, and we believe that our current compliance regimen, 
as bolstered by the proposals that we finalize here, is the appropriate 
way to address hospital noncompliance with the HPT regulations. In the 
CY 2022 OPPS/ASC final rule with comment period (86 FR 63941, 63945), 
we increased the amount of civil monetary penalty to which a hospital 
could be subject to a minimum total penalty of $109,500 and a maximum 
total penalty of $2,007,500, per year. Additionally, we note that in 
addition to the compliance updates we are finalizing in this final rule 
with comment period, we are engaged in continued efforts to ensure that 
every hospital complies with the hospital price transparency 
requirements such as: requiring CAP completion deadlines; imposing CMPs 
earlier and automatically; and streamlining the compliance process.
    Comment: Several commenters disagreed with the proposal to require 
an authorized hospital official to submit to CMS a certification to the 
accuracy and completeness of the standard charge information posted in 
the MRF. One commenter believed, given the complexity of the file 
development, no single person could certify all the contents of the 
MRF, and that the proposal could introduce personal liability. This 
commenter believes that the request for a primary point of contact for 
questions contained in the acknowledgement of warning notices language 
is reasonable and should address this issue. Another commenter stated 
that it would be unreasonable to require a single hospital official to 
certify the accuracy and completeness of the file with the magnitude of 
data it contains, and that any certifications should be limited to a 
targeted and narrow subset of data that can reasonably be reviewed by 
the hospital official.
    Several commenters felt the proposal was duplicative of the 
requirements to affirm the accuracy of the MRF within the file itself. 
A few commenters expressed concern that the requirement would impose 
excessive burden on providers or create difficulty for hospitals that 
are part of a health system where MRFs are developed at the system 
level. One commenter believed that there is not much value in CMS 
receiving this submission, and that, instead, CMS should consider 
providers setting forth a good faith effort to be in compliance. One 
commenter questioned whether the formal certification is necessary 
because the expectation is that all information posted by a given 
hospital is in fact accurate and expressed concern about whether a 
hospital could actually certify completeness if a blank cell is 
required.
    Response: We appreciate the commenters' concerns and 
recommendations. However, we note that a certification by an authorized 
official is standard practice in various CMS processes, for example, in 
such areas as Medicare provider-based attestation and the submission of 
Medicare cost reports. We also believe it is not unreasonable to expect 
that an authorized official could certify the contents of the MRF, as 
the standard charge information displayed is expected to be true, 
accurate, and complete as of the date indicated in the file. As 
previously stated, formal certification would provide assurance that 
the information within the MRF has been verified by the authorized 
official and is valid. The designation of a primary point of contact 
does not in itself assure accuracy or completeness of an MRF, and 
therefore does not address the need for a formal certification.
    Further, we do not believe the affirmation statement in the MRF and 
a formal certification by an authorized official of the hospital are 
duplicative. The primary purpose of the affirmation statement in the 
MRF is to alert the public that the hospital has made a good faith 
effort to ensure the data included in the MRF is true, accurate, and 
complete, to the best of the hospital's knowledge and belief, as of the 
date indicated in the file. There may, however, be a need to resolve 
specific questions related to the standard charges displayed, which 
might not be answered by the proposed affirmation statement. For 
example, a formal certification may be necessary to validate 
information that has no independent source of verification.
    By contrast to the affirmation statement that would be included in 
a hospital's MRF, the intent of the certification is use by CMS during 
the enforcement process, for example, to aid in assessing whether a 
hospital has corrected the deficiencies noted in a warning notice or in 
a request for a CAP. As such, a certification as part of CMS' 
enforcement process, signed by an authorized official of the hospital, 
serves a different purpose than the affirmation the hospital will be 
required to include in the MRF, as discussed in section XVIII.B.2. of 
this final rule with comment period.
    We also anticipate that although this formal certification, signed 
by an authorized official of the hospital, may be requested at any 
stage of the monitoring, assessment, or compliance phases, it will not 
be required in all cases. Instead, it will be a method to monitor and 
assess hospital compliance as part of the enforcement process and will 
be submitted only upon CMS' request. The formal certification is not 
required to be posted publicly by the hospital. Therefore, we will 
finalize this provision as proposed.
    Comment: Several commenters disagreed with the proposal to require

[[Page 82117]]

submission of additional documentation as may be necessary to make a 
determination of hospital compliance. One commenter cited hospital 
burden to comply and offered a detailed alternative process to validate 
transparency files using ``exploratory conversations.'' A few 
commenters believed that ``courts have long held that certain 
contracting information--especially negotiated rate data--is 
commercially sensitive information that is shielded from disclosure by 
numerous legal protections'' and cited court cases in support of this 
assertion. One commenter believed that the proposal would create a far 
more burdensome audit and review process and would shift monitoring and 
assessment to data validation. One commenter urged that if the proposal 
is finalized, that the contracts are designated as confidential 
commercial information that is exempt from disclosure under the Freedom 
of Information Act (FOIA).
    A few commenters believed that requiring hospitals to share a broad 
array of additional information would be burdensome. A few commenters 
suggested that since CMS has already established transparency standards 
for payers, these could serve as a validation mechanism by cross-
referencing the data. One commenter stated that because CMS is 
requiring a hospital to attest to the accuracy and completeness of its 
MRF, such additional contracting documentation is unnecessary. One 
commenter believed that there is not much value in the additional 
documentation requirement and that, instead, CMS should consider 
providers setting forth a good faith effort to be in compliance.
    A few commenters requested clarification on this requirement. 
Specifically, one commenter requested CMS to clarify that the 
requirement is based on a request from CMS during monitoring and 
enforcement activities, and additional documents are not required to be 
included in the MRF, while the other commenter expressed concern that 
the language is overly broad and asked for greater specificity and 
clarity.
    Response: We appreciate the commenters' concerns and 
recommendations. We believe that the ability to require hospitals to 
submit supporting source documents may be necessary, as part of the CMS 
enforcement process, to ensure compliance in some, but not all, cases. 
We clarify that we anticipate requiring submission of documentation to 
validate the standard charge information the hospital has included in 
its MRF, on a case by case basis, thus reducing burden. The documents 
themselves are not required to be included in the MRF. For example, if 
there is concern about the completeness and accuracy of payer-specific 
negotiated charges included in a hospital's MRF, CMS may use externally 
available information, such as the MRFs displayed by payers as a result 
of the TIC requirements, to monitor for hospital compliance; however, 
these data are not source data and may also contain errors. 
Accordingly, to make a determination of compliance, source data, such 
as data specified in a contract between a hospital and a third party 
payer, may be necessary to validate payer-specific negotiated charge 
information posted in the hospital's MRF. In this example, if CMS needs 
to make a determination regarding the accuracy or completeness of a 
hospital's data, this provision would require the hospital to submit 
documentation to demonstrate that the data encoded in the MRF is in 
fact accurate and complete. The hospital would determine the type of 
source data that would provide sufficient evidence needed for us to 
determine compliance, which may be the contract between the hospital 
and payer. Thus, we clarify that we are not explicitly requiring 
hospitals to submit any or all of their contracts to CMS for review. 
However, in response to an enforcement action, a hospital would need to 
supply sufficient source documentation so as to satisfy CMS that the 
hospital has met the regulatory requirements. As such, depending on the 
specific type of standard charge information that needs verification, 
the hospital might determine a contract is the appropriate source 
documentation. Further, a contract is only one type of source 
documentation that a hospital might choose to submit in response to a 
request from CMS in; it is not the only type of source documentation 
that the hospital may submit.
    Additionally, we are not aware of any protections specific to 
hospital contracts being shielded from disclosure to a government 
agency for the purposes of determining compliance with regulatory 
requirements, and the case law cited by commenters did not go to that 
premise. We also note that hospitals are already required to display 
and disclose the payer-specific data. See American Hospital Association 
v. Azar, 468 F. Supp. 3d. (D.D.C. 2020), aff'd by American Hospital 
Association v. Azar, 983 F.3d 528 (D.C. Cir. 2020). We note that any 
documentation that is submitted by the hospital to CMS would be 
evaluated in accordance with the regulations at 45 CFR part 5, which 
addresses the FOIA provisions, prior to release in the event of a FOIA 
request.
    We anticipate that any additional documentation requested will be 
limited to addressing specific evidence of noncompliance with one or 
more HPT requirements. For these reasons, we will finalize this 
provision as proposed.
    Final action: After considering public comments, we are finalizing 
as proposed a revision to Sec.  180.70(a)(2) to add activities that CMS 
may use to monitor and assess for compliance. Specifically, we will 
revise Sec.  180.70(a)(2)(iii) to indicate that CMS may conduct a 
comprehensive compliance review of a hospital's standard charge 
information posted on a publicly available website, in addition to the 
use of audits which will be retained. We believe the 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), we 
will require, upon our request, an authorized hospital official to 
submit to CMS a certification to the accuracy and completeness of the 
standard charge information posted in the MRF. At new Sec.  
180.70(a)(2)(v), we will require submission to us, upon our request, 
additional documentation as may be necessary to make a determination of 
hospital compliance.
    We are also finalizing as proposed a technical revision to the 
heading at Sec.  180.70(a) so that it would read ``Monitoring and 
assessment.'' We are finalizing as proposed 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. Requiring Hospital Acknowledgement of Receipt of Warning Notice
    Since the HPT regulations first became effective in January 2021 
through September 2023, we have issued approximately 989 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 a warning notice will confirm 
receipt to CMS and hopefully prompt hospital personnel to appropriately 
route the warning notice and initiate prompt action to resolve the

[[Page 82118]]

deficiencies specified in the warning notice.
    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 proposed 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.
    Comment: Several commenters supported the proposal. A few 
commenters suggested that the primary contact on the CMS-855A be copied 
as they are already an intermediary between CMS and the hospital and 
could help ensure the communication reached the appropriate individuals 
in a timely manner. One commenter recommended that CMS require that the 
acknowledgement include contact information for a primary compliance 
officer at the hospital to streamline further communication. One 
commenter requested that the form, manner, and deadline for 
acknowledgement of receipt should be set as part of this rule. One 
commenter requested that CMS be detailed and explicit in its 
communication as to what the notice of deficiency is specifically for. 
One commenter requested that CMS allow hospitals to designate, or 
confirm, the appropriate hospital point of contact to receive 
communications from CMS.
    CMS received no comments opposed to the proposal.
    Response: We thank commenters for their support and suggestions. We 
intend to delineate the form, manner, and deadline for acknowledgement 
of receipt within the notice of violation issued to the hospital. We 
note that currently the hospital CEO may appoint a designee if he/she 
will not be the official representative communicating with CMS 
regarding the HPT program. We will continue to allow hospitals to 
designate the appropriate hospital point of contact.
    Final action: After considering public comments, we are finalizing 
as proposed 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.
3. Updated 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 the CY 2024 OPPS/ASC 
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 indicated that we believed 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 proposed 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.\802\
---------------------------------------------------------------------------

    \802\ 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 stated that we believed 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 stated we believed 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 sought comment on the proposal, including on whether there are 
additional data sources that CMS could access for purposes of 
identifying health system affiliation and leadership contact 
information.
    Comment: Several commenters supported the proposal to address 
noncompliance within hospital systems. Several commenters showed their 
support for CMS' efforts to streamline hospital compliance and 
enforcement processes and indicated their belief that the proposal may 
seamlessly address noncompliance, improve delivery of communications, 
reduce administrative burden, and provide potential educational 
engagement and collaboration opportunities. One commenter supported the 
collaborative nature of the proposal but noted that it may be difficult 
for a health system to promptly implement a hospital-level corrective 
action plan with a system-wide change.
    One commenter supported the proposal but suggested that CMS work

[[Page 82119]]

with individual hospitals to determine the correct personnel at each 
location. Further, they requested that CMS offer hospitals an 
opportunity to regularly update contact information in order to address 
any notices of noncompliance timely.
    One commenter indicated they supported the proposal but would not 
support using the CMS-855A form that CMS currently uses to gather 
contact information, instead advocating for less administratively 
burdensome methods. By contrast, a few commenters recommended that all 
official communications be sent to PECOS authorized officials and 
delegated officials, or the hospital contact listed on the provider's 
CMS-855A form. Another commenter requested the ability to designate 
official contacts ahead of any compliance activities.
    Response: We thank commenters for their support in alerting 
hospital system leadership when CMS has determined that one or more of 
the hospitals within the system is noncompliant. As explained in the CY 
2024 OPPS/ASC proposed rule, once CMS determines that a hospital is out 
of compliance with the regulation, it takes a compliance action against 
an individual hospital. However, we have found that many hospitals are 
part of a larger health system. We believe the ability notify hospitals 
within a system and work with these health system officials may allow 
for consistent and efficient compliance across all hospitals in the 
health system. We also believe this could reduce instances of 
noncompliance among hospitals within a health system as they may be 
positioned to implement more informed system-wide changes. With that, 
we appreciate the commenter expressing it may be difficult for a health 
system to promptly implement a hospital-level corrective action plan 
with a system-wide change. However, we note that the proposal does not 
require hospitals to implement system-wide changes.
    We agree with the commenters that addressing compliance with health 
systems may streamline hospital compliance and enforcement, improve 
delivery of communications, reduce administrative burden, and provide 
potential educational engagement and collaboration opportunities. 
Additionally, we appreciate the commenters who provided feedback on 
data sources that CMS may access for purposes of identifying health 
system affiliation and leadership contact information.
    Final action: After consideration of the public comments we 
received, we are finalizing as proposed 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 health system leadership of the 
action and may work with health system leadership to address similar 
deficiencies for hospitals across the health system.
    We believe these policies will aid in advancing hospital compliance 
and our enforcement process.
4. Publicizing 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 determination 
of a hospital's noncompliance with the requirements to make public 
standard charges.
    As of September 2023, CMS had issued approximately 989 warning 
notices and 631 requests for CAPs since the initial regulation went 
into effect in January 2021. Approximately 346 hospitals were 
determined by CMS after a comprehensive compliance review to not 
require any compliance action and approximately 738 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. At the time of the publication of the 
CY 2024 OPPS/ASC proposed rule, we had imposed CMPs on four hospitals 
and publicized those CMP impositions on our website.\803\
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    \803\ https://www.cms.gov/hospital-price-transparency/enforcement-actions.
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    We explained that 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,\804\ CMS' Part C and D results 
related to the Medicare Advantage and Prescription Drug Plan program 
audits \805\ and compliance actions,\806\ and the FDA which provides 
the public access to an online, searchable dashboard of compliance 
actions, including warning letters.\807\
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    \804\ https://www.hrsa.gov/opa/program-integrity/fy-22-audit-results.
    \805\ https://www.cms.gov/medicare/compliance-and-audits/part-c-and-part-d-compliance-and-audits/programaudits.
    \806\ https://www.cms.gov/Medicare/Compliance-and-Audits/Part-C-and-Part-D-Compliance-and-Audits/PartCandPartDComplianceActions.
    \807\ https://datadashboard.fda.gov/ora/cd/complianceactions.htm.
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    We indicated our belief 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. We further stated that 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 proposed 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

[[Page 82120]]

action(s), and the outcome of such compliance action(s). Additionally, 
we proposed 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 the CY 2024 
OPPS/ASC proposed rule were finalized. We indicated that should CMS 
decide to publicize this information on its website, it would apply 
uniformly to all hospitals. We further noted 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.
    Comment: A few commenters supported the proposal to publicize 
information related to CMS' assessment of a hospital's compliance, 
compliance actions taken against a hospital, and the status and outcome 
of such compliance actions. A few commenters also supported CMS' 
proposal to create and publicize compliance information to help refute 
inaccurately reported third-party information. Taking it further, one 
commenter provided strong support for the proposal and shared their 
belief that CMS publicize when assessments of compliance are started, 
in progress, and completed. Another commenter requested that CMS 
provide a proactive notification of compliance in situations where CMS 
conducted a compliance assessment and confirmed no instances of 
noncompliance.
    One commenter supported the proposal and recommended that CMS set 
up a regular cadence under which they assess hospital compliance and 
publicize the information associated with the status and outcome of 
such compliance actions. One commenter suggested that CMS consider 
delaying its enforcement for the first effective year of the CY 2024 
OPPS/ASC proposed rule so hospitals and CMS can collaborate without a 
publication of noncompliance. Another commenter supported the proposal 
but requested CMS' commitment to note when an entity fixes its issues 
and moves into compliance in a timely manner to avoid public scrutiny.
    Response: We appreciate the comments regarding the proposal to 
allow CMS the ability to 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 actions, and 
the outcomes of such compliance actions. We believe that publishing 
these actions may be an effective tool to raise public awareness and 
encourage hospitals to more quickly remedy any determinations of 
noncompliance to avoid public scrutiny. We also appreciate commenters 
who provided CMS with recommendations for displaying such information 
or suggestions for what we may include in our publication, or when CMS 
may post these actions.
    Comment: One commenter supported CMS' efforts to be more 
transparent about how the agency assesses hospitals for compliance and 
list hospitals that have had compliance actions taken against them, 
while another commenter believed that may be helpful in encouraging 
improved compliance by hospitals, and yet another believed it will 
raise public awareness and encourage timely remediation of hospital 
violations.
    A few commenters noted the proposal has the potential to reduce the 
collaboration between hospitals and CMS in resolving any assessment of 
noncompliance which may be remedied by a hospital conferring with CMS 
prior to a publication of a compliance action taken against them. 
Additionally, a few commenters recommended a process to be used to 
engage hospitals outside of a compliance action when CMS has questions 
about the file.
    Response: We agree with the commenters that the proposal will 
assist in providing more transparency into CMS enforcement activities 
and, in addition to the requirements we are finalizing related to 
standardization in section XVIII.B.3. in this final rule with comment 
period, the criteria used for assessing hospitals for compliance. We 
believe the proposal will minimize frequent and often repetitive 
complaints made to CMS regarding a hospital's ongoing compliance 
status. Moreover, we believe the proposal allows for the public to view 
compliance determinations made by CMS on an ad hoc basis, increasing 
awareness and access to information previously not provided.
    As noted by a commenter, there have been many productive 
conversations between hospitals and CMS during the compliance process 
that have involved education on both sides. CMS intends to continue 
conversations with hospitals, providing clarity and assistance when 
possible. Further, we intend to broaden our scope of engagement by 
working with health systems as proposed in Sec.  180.70(c).
    Comment: Regarding notification to health system leadership, one 
commenter suggested that CMS consider allowing publication of the 
responses of [health system] leadership to a compliance action if 
hospitals wish to have such responses published. Another commenter did 
not support publicly posting collaborative conversations between health 
system leaders and CMS. One commenter suggested publishing when a 
hospital utilized any CMS developed validation tool.
    Response: As discussed in more detail in section XVIII.C.3 of this 
final rule with comment, we believe that the ability to work with 
health system leadership will benefit CMS in ensuring that hospitals 
across large health systems comply with the HPT requirements. As 
finalized, we intend to work with health system leadership on a 
collaborative and voluntary basis. Therefore, at this time, we decline 
to post communications received from health system leadership as they 
are not part of the formal compliance process and posting this 
information could have a chilling effect on the willingness of health 
system leadership to voluntarily work with CMS.
    Similarly, we do not intend to publish details regarding a 
hospital's use of a CMS developed validation tool. The validator tool 
is intended as an aid to be used voluntarily by hospitals as they are 
developing their MRF which may help them format their standard charge 
information in accordance with the required technical specifications 
(finalized at new Sec.  180.50(c)(2)); it is not intended as 
enforcement tool or as a tool to assess overall compliance with the HPT 
requirements at 45 CFR part 180. As such, as we want to encourage 
hospitals to use the validator tool to aid them while they are in the 
process of developing their MRFs, and not create any unintended 
chilling effect by tracking hospital use of the validator tool for 
enforcement purposes.
    Comment: Several commenters did not support publicizing CMS 
assessments, compliance actions, and outcomes because hospitals that 
quickly come into compliance may receive negative public attention, and 
the information publicized could be misleading or misconstrued.
    A few commenters also opposed publicizing CMS assessments, 
compliance actions, and outcomes as it may unfairly stigmatize 
hospitals that make a good-faith effort to comply, but, due to limited 
resources and capabilities, may require additional time to become fully 
compliant.
    A few commenters urged CMS to make it clear that hospitals are not 
deemed noncompliant when under review. Another commenter requested that 
CMS refrain from publishing enforcement actions while hospitals work 
towards complying with the rule's requirements.

[[Page 82121]]

    Comment: Several commenters expressed their belief that publishing 
this information may beget unjustified or negative feedback or unfairly 
stigmatize a hospital that is working to come into compliance.
    Response: In contrast, we believe that publishing this information 
may work to bring hospitals into compliance more quickly to avoid 
public scrutiny. A few commenters concurred with CMS' belief. 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.
    Comment: One commenter voiced concern about a hospital being 
mistakenly listed as noncompliant and requested that CMS publicly 
retract assessments of noncompliance that have been incorrectly 
published. The same commenter suggested a delay of publication until 
CMS has taken steps to correct the contact information needed for the 
letters of noncompliance. One commenter acknowledged CMS' need to 
release this information and suggested data fields be released with 
corresponding disclaimer language. Another commenter believed that CMS 
does not publicize detailed information for any other types of 
enforcement and that HPT should be treated similarly. A few commenters 
suggested that CMS only publicize outcomes of compliance activities 
such as closure notices or CMPs to avoid unintended consequences or 
confusion and cautioned against publicizing information before 
compliance activities have closed. Another commenter requested that 
when a hospital receives a request for a CAP that is posted publicly in 
accordance with the proposal, that CMS removes the hospital as soon as 
they have satisfied the conditions of the CAP. Commenters expressed 
concern about CMS' publishing data preemptively and making 
unsubstantiated determinations of noncompliance, suggesting a warning 
notice is not a true compliance action. A few other commenters 
reiterated that CMS is the arbiter of compliance.
    Response: We note that Sec.  180.70(a) states that CMS may monitor 
and assess hospital compliance with section 2718(e) of the PHS Act and, 
should CMS conclude that a hospital is noncompliant with one or more of 
the requirements to make public standard charges, may take actions 
described at Sec.  180.70(b) that include issuing a written warning 
notice. We believe the proposal may provide a single source of truth 
for hospitals, interested parties, or other inquirers.
    We note that there are other Federal programs that make public 
compliance actions for various programs, including CMS' Part C and D 
results related to the Medicare Advantage and Prescription Drug Plan 
program audits \808\ and compliance actions.\809\
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    \808\ https://www.cms.gov/medicare/compliance-and-audits/part-c-and-part-d-compliance-and-audits/programaudits.
    \809\ https://www.cms.gov/Medicare/Compliance-and-Audits/Part-C-and-Part-D-Compliance-and-Audits/PartCandPartDComplianceActions.
---------------------------------------------------------------------------

    We believe that making public compliance information may reduce 
repetitive complaints to CMS about hospital compliance issues and 
provide a central source of information.
    However, we appreciate the commenters' concerns and 
recommendations, and we will continue to monitor and assess the impact 
of the proposal.
    Final action: After consideration of the public comments we 
received, we are finalizing as proposed at Sec.  180.70(d), that 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.
    We believe that such information will improve the public's 
understanding of CMS' enforcement process by allowing interested 
parties to view compliance actions and determinations made by CMS, 
increasing transparency. We further believe that making public 
compliance information may reduce repetitive complaints to CMS 
regarding a hospital's compliance assessment. Further, making these 
enforcement actions transparent may increase the likelihood that 
hospitals will more quickly come into compliance due to public 
scrutiny.

D. Comments on CMS' Request for Information Related to Consumer-
Friendly Displays and Alignment With Transparency in Coverage and No 
Surprises Act (NSA)

    In the CY 2024 OPPS/ASC proposed rule, we included a Request for 
Information (RFI) related to consumer-friendly displays and alignment 
with TIC and the NSA. We received approximately 71 timely pieces of 
correspondence that were submitted in response to the RFI questions. We 
thank all interested parties for their comments and will take them into 
consideration in the future.

XIX. 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

[[Page 82122]]

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 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 
proposed 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 discussed 
in the CY 2024 OPPS/ASC proposed rule, we stated that 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.
    We stated in the proposed rule that 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 also stated 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. In the CY 
2024 OPPS/ASC proposed rule, we stated that 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 noted 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 invited 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.

[[Page 82123]]

    Comment: A few commenters stated that the opportunity for public 
comment on proposed changes to the MCE has historically been addressed 
through IPPS rulemaking. According to the commenters, there are 
important topics that may warrant additional consideration that 
hospital coding, clinical, and revenue cycle professionals need to 
ensure awareness of ahead of implementation to allow opportunity for 
comment. The commenters strongly recommended that CMS not finalize any 
changes related to the MCE and suggested the agency include the 
proposal in the upcoming FY 2025 IPPS/LTCH PPS proposed rulemaking, to 
help ensure that the appropriate IPPS audience has ample opportunity to 
review and provide comment.
    A commenter specifically urged CMS to maintain discussion of the 
MCE in IPPS rulemaking. The commenter stated that the annual rulemaking 
process provides a more formal and publicly visible opportunity to 
provide comments to CMS on MCE manual changes, including any concerns 
with current edits, including specific edits or language recommended 
for removal or revision, edits that could be combined, or new edits to 
be added, and further stated that discussion of the MCE through 
multiple MACs would be a more de-centralized and fragmented process, 
particularly with multiple MACs involved, each of which may have 
varying processes for interpreting and implementing the MCE manual 
edits. According to the commenter, hospital systems would have to 
provide multiple submissions across various MACs and responses from the 
MACs may be inconsistent, leading to further fragmentation and 
confusion across hospitals and other providers. The commenter stated 
their belief that the more systematic annual regulatory process, with 
opportunity for notice and public comment, will assist in promoting a 
more seamless process for seeking and responding to public comment 
while minimizing confusion about MCE edits.
    Another commenter expressed its appreciation that CMS indicated it 
would continue to welcome input from the public on the current MCE 
edits under the proposed revised approach, however the commenter urged 
CMS to establish a process that allows the public to continue to 
provide input on MCE changes if these changes are no longer going to be 
addressed through IPPS rulemaking. In addition, in response to our 
request for feedback as to whether it would also be helpful to list the 
specific MCE updates in a CR, the commenter recommended specific MCE 
updates be listed in the CR if the revised approach for addressing MCE 
revisions is adopted.
    Response: We appreciate the commenters' feedback. We agree 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. However, we also note that, as 
discussed in the FY 2024 IPPS/LTCH PPS final rule (88 FR 58764), we 
historically have not listed the changes we have made to the MCE as a 
result of the new and modified codes approved after the annual spring 
ICD-10 Coordination and Maintenance Committee meeting, as these changes 
are approved too late in the rulemaking schedule for inclusion in the 
proposed rule. Furthermore, although our MCE policies have been 
described in our proposed and final rules, we have not provided the 
detail of each new or modified diagnosis and procedure code edit in the 
final rule. However, we make available the finalized Definitions of 
Medicare Code Edits (MCE) file and would continue to do so.
    In response to comments recommending that CMS instead include the 
proposal in the upcoming FY 2025 IPPS/LTCH PPS proposed rulemaking to 
help ensure that the appropriate IPPS audience has ample opportunity to 
review and provide comment, we note that in the FY 2024 IPPS/LTCH PPS 
final rule (88 FR 58764 and 58765) we specifically referred readers to 
the discussion of the MCE proposal that was included in the CY 2024 
OPPS/ASC proposed rule (88 FR 49552). We further believe that parties 
interested in Medicare payment for IPPS hospitals would regularly 
review the annual OPPS/ASC proposed rule and note that the proposal was 
specifically identified in the title to the CY 2024 OPPS/ASC proposed 
rule, which included ``Proposed Changes to the Inpatient Prospective 
Payment System Medicare Code Editor'' (88 FR 49552). Accordingly, we 
believe that the public, including the appropriate IPPS audience, had 
ample opportunity to review and provide comment on the proposal.
    In response to the commenter who expressed concern that discussion 
of the MCE through multiple MACs would be a more de-centralized and 
fragmented process, as discussed in the proposed rule and previously in 
this final rule, 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, as we 
currently do. This process would be similar to that currently used for 
changes and updates to the I/OCE that are announced through quarterly 
I/OCE Change Requests (CRs) that are posted to the CMS website for MACs 
and public download. We note that CMS maintains a network of MACs to 
serve as the primary operational contact between the Medicare FFS 
program and the health care providers enrolled in the program. We refer 
the reader to the CMS website at: https://www.cms.gov/medicare/coding-billing/medicare-administrative-contractors-macs/whats-mac for 
additional information on the role of the MACs. We also note that 
currently, there are MACs that provide information on their respective 
websites to inform providers when CRs have been published and to also 
provide additional information that may be helpful for providers with 
respect to the I/OCE and the MCE. For example, Noridian Healthcare 
Solutions, LLC at https://med.noridianmedicare.com/web/jea/topics/claim-submission/ioce-mce#mce and Palmetto GBA at https://www.palmettogba.com/palmetto/jma.nsf/M/SearchSiteAdd?Open&term=Medicare%20Code%20Editor&fz=true. We believe that the definition of 
each edit, as reflected in the Definitions of Medicare Code Edits 
manual, provides sufficient information on the intent of the edit. We 
also note that the Grouper software that is made publicly available via 
the CMS website at https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/ms-drg-classifications-and-software 
in connection with the Definitions of Medicare Code Edits manual, 
reflects updates made to the MCE and that process is not changing.
    In response to the commenter who urged CMS to establish a process 
that allows the public the opportunity to continue to provide input on 
MCE changes, we believe it is important to provide the public with 
opportunities to provide feedback on the MCE edits and, as discussed in 
the proposed rule, would continue to welcome public input. The public 
may submit any questions, comments, concerns, or recommendations 
regarding the MCE to the CMS mailbox at [email protected] for our review and consideration. We will also consider the 
recommendation to list specific MCE updates in a CR.
    In summary, we believe that the proposal will allow for consistency 
in making updates and modifications to

[[Page 82124]]

claims edits under the MCE and other Medicare claims editing systems.
    Final action: For the reasons discussed, and after consideration of 
the public comments we received, we are finalizing the proposal to 
remove discussion of the MCE from the annual IPPS rulemakings, 
beginning with FY 2025 rulemaking, and to generally address future 
changes or updates to the MCE through instruction to the MACs. We will 
also continue to analyze data on the current edits to determine utility 
and whether any edits should be modified or removed from the FFS claims 
processing systems in the future.

XX. 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), 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 
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 a designation and 
certification process for Rural Emergency Hospitals at 42 CFR 485.506. 
In section XVIII.A.2 of the final rule, entitled ``Statutory Authority 
and Establishment of Rural Emergency Hospitals as a Medicare Provider 
Type,'' (87 FR 72160) we noted that 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. (87 FR 72161).
    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 in one paragraph 
of the preamble. We proposed 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) (87 FR 72294).
    We did not receive any public comments on our proposal and 
therefore, we are finalizing our proposal.

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

A. Background on Rural Emergency Hospitals (REHs)

    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 Sec.  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 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. Paying Indian Health Service (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 Sec.  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 or 
tribally operated REHs

[[Page 82125]]

(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 proposed 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 the 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, we proposed 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 proposed that IHS-REHs would receive the REH monthly facility 
payment consistent with how this payment is made to REHs that are not 
tribal or IHS facilities. 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 (Sec.  419.92(b)) 
that would preclude REHs, including tribal or IHS-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 proposed 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 proposed 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. The proposal would 
provide tribal and 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. The 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 the 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 proposed 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 proposed 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 proposed 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 proposed 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).
    Comment: Two commenters requested a technical change to the 
proposed regulation text in Sec.  419.92(e) to state that ``. . . an 
Indian Health Service (IHS) or tribal REH is an REH, as defined in 42 
CFR 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 V of the 
Indian Self-Determination and Education Assistance Act (Pub. L. 93-
638)'' instead of by Title I or III of the Indian Self-Determination 
and Education Assistance Act (Pub. L. 93-638).
    Response: We agree with the commenters that the correct statutory 
reference for the funding authorization described in this context is to 
Titles I and V of the Indian Self-Determination and Education 
Assistance Act (Pub. L. 93-638), and so we will be adopting this 
correction when finalizing Sec.  419.92(f) as part of this final rule 
with comment period. Consistent with the commenters' suggested 
technical change to the proposed regulation text, we are also updating 
the term ``Indian Health Service (IHS) or tribally operated REH'' to 
``Indian Health Service (IHS) or tribal REH'' in the regulation text at 
Sec.  419.92(e) and (f) that we are finalizing as part of this final 
rule with comment period. As previously discussed, CMS proposed to 
allow Indian Health Service (IHS) or tribal facilities that become REHs 
to continue to receive the AIR in order to build on the longstanding 
policy and allow for continuity for eligible IHS and tribal hospitals 
that currently receive the AIR, and who might be interested in 
converting to the REH provider type. Providers that currently receive 
the outpatient AIR in the OPPS context are referred to as ``IHS or 
tribal hospitals,'' and thus for clarity and consistency we are 
finalizing Sec.  419.92(e) and (f) with updated language that refers to 
``Indian Health Service (IHS) or tribal REHs.''
    Comment: One commenter asked that IHS and tribal REHs have the 
option to choose whether they can receive payment for services 
performed by an IHS-REH through either the AIR or the standard REH 
service payment methodology of paying the OPPS rate for a service plus 
an additional 5 percent payment.
    Response: We thank the commenter but respectfully disagree with the 
suggestion to give IHS-REHs the option

[[Page 82126]]

to choose between whether their facility will receive payment for 
services provided through the AIR or the standard REH service payment 
methodology. As stated earlier in this section and in the CY 2024 OPPS/
ASC proposed rule, CMS's proposal that IHS and tribal facilities that 
become REHs be paid for hospital outpatient services via the AIR, 
rather than the standard REH services payment methodology, is based on 
CMS's longstanding policy, in accordance with Sec.  419.20(b)(4), that 
IHS and tribal facilities are excluded from payment under the OPPS and 
instead are paid for hospital outpatient services under the AIR. 
Section 1834(x)(1) of the Act and Sec.  419.92(a)(1) define payment for 
REH services 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, such services, when furnished by IHS or 
tribal REHs do not fall within the scope of REH services. Based on 
this, CMS has proposed that hospital outpatient services furnished by 
IHS or tribal REHs be paid via the AIR consistent with Sec.  419.92(c), 
which provides that ``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.'' However, because paying IHS-
REHs for hospital outpatient services under an alternative payment 
mechanism (the AIR) would be premised on hospital outpatient services 
furnished IHS-REHs not meeting the definition of ``REH services,'' it 
would be contradictory to also allow IHS-REHs the option of being paid 
under the standard payment mechanism for ``REH services'' when 
furnishing those same services.
    Comment: Multiple commenters supported our proposals to allow IHS-
REHs to receive service payments through the AIR instead of through the 
standard REH service payment methodology of the OPPS rate for a service 
plus an additional 5 percent payment.
    Response: We thank the commenters for their support of our 
proposals.
    After consideration of the public comments we received, and for the 
reasons discussed above and in the proposed rule, we are finalizing our 
proposals to allow IHS and tribal hospitals that become REHs to receive 
payment for services using the IHS outpatient hospital AIR with two 
minor modifications. First, we are correcting the statutory reference 
to the Indian Self Determination and Education Act (Pub. L. 93-638) 
which appears in Sec.  419.92(f). Second, we are updating the term 
``Indian Health Service (IHS) or tribally operated REH'' to be ``Indian 
Health Service (IHS) or tribal REH'' in Sec.  419.92(e) and (f).

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 proposed to codify the 
exclusion of REHs from the OPPS by adding new paragraph (b)(5) to Sec.  
419.20.
    Comment: One commenter expressed their support for the corrections 
to the REH statutory references.
    Response: We appreciate the support of the commenter.
    After consideration of the public comments we received, we are 
implementing our proposal without modification.

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 (E.O.) 
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 E.O.s 14005, 
14017, and 14081 (86 FR 7475, 11849, and 25711, respectively). In June 
2021, as tasked in E.O. 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.\810\ In July 2022, as tasked in E.O. 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.\811\
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    \810\ 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.
    \811\ 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.
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    Over the last few years, shortages for critical medical products 
have persisted and continued to increase.\812\ 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.\813\ The frequency 
and severity of these supply disruptions has only been exacerbated over 
the last few years.
---------------------------------------------------------------------------

    \812\ 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.
    \813\ 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, medication 
errors,814 815 816 as well as higher rates of hospital-
acquired infections and in-hospital mortality.817 818 The 
additional time, labor, and resources required to navigate drug 
shortages also increase health care costs.\819\
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    \814\ 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/.
    \815\ JCO Oncology Practice, National Survey on the Effect of 
Oncology Drug Shortages in Clinical Practice, 2022: https://pubmed.ncbi.nlm.nih.gov/35544740/.
    \816\ 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/.
    \817\ 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/.
    \818\ 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/.
    \819\ 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.

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[[Page 82127]]

    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.820 821 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.
---------------------------------------------------------------------------

    \820\ 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.
    \821\ 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.
---------------------------------------------------------------------------

    As discussed below in sections XXII.B, XXII.C, and XXII.D of this 
final rule with comment period, we sought comment on separate payment 
under the IPPS, and potentially the OPPS, for establishing and 
maintaining access to a buffer stock of essential medicines to foster a 
more reliable, resilient supply of these medicines. We provide an 
overview of comments received and next steps in sections XXII.E and 
XXII.F of this final rule with comment period.

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.822 823 
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 
stated in the CY 2024 OPPS/ASC proposed rule we were considering 
separate payment under the IPPS and the OPPS for the costs of 
establishing and maintaining access to a buffer stock of essential 
medicines.
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    \822\ https://www.armiusa.org/wp-content/uploads/2022/07/ARMI_Essential-Medicines_Supply-Chain-Report_508.pdf.
    \823\ https://aspr.hhs.gov/newsroom/Pages/Essential-Medicines-May22.aspx.
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    For the IPPS, we indicated that 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, we indicated that 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, we stated that sustaining sources of domestically 
sourced medical supplies can also help support continued availability 
in the event of public health emergencies and other 
disruptions.824 825 We indicated this concept was 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 
indicated that we expect that domestically manufactured essential 
medicines may be more expensive than those sourced from some other 
countries that may have lower manufacturing costs.\826\ Given these 
additional resource costs, we took into account the increased costs to 
establish and maintain access to a buffer stock of domestically 
manufactured essential medicines when developing the potential payment 
policy discussed in the CY 2024 OPPS/ASC proposed rule.
---------------------------------------------------------------------------

    \824\ 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.
    \825\ 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.
    \826\ 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 indicated that we may 
consider expanding a potential Medicare payment policy in future years 
to include critical medical devices once the HHS 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. We stated that HHS' list was expected to be available by 
the end of 2023.

[[Page 82128]]

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 of the CY 2024 OPPS/ASC proposed rule, 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 we 
discussed in sections XXII.A and XXII.B of the CY 2024 OPPS/ASC 
proposed rule, we stated 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. We indicated 
that 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.
    We noted it is challenging to quantify these additional resource 
costs precisely based on currently available information. As noted in 
section XXII.B of the CY 2024 OPPS/ASC proposed rule, 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, we indicated in the CY 
2024 OPPS/ASC proposed rule that 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. 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, we indicated that Medicare could make a lump-sum payment for 
Medicare's share of these additional inpatient costs at cost report 
settlement.
    In the CY 2024 OPPS/ASC proposed rule, we indicated 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 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. (In the CY 2024 OPPS/ASC proposed 
rule we indicated that CMS would 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 sought comment on 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). We indicated 
that essential medicines for a potential IPPS separate payment would be 
the 86 essential medicines prioritized in the report Essential 
Medicines Supply Chain and Manufacturing Resilience Assessment. We 
indicated that an adjustment under OPPS could be considered for future 
years. We sought comment on all aspects of this potential payment 
policy.
    We indicated that to reflect any such separate payment under the 
IPPS, we were considering amending our regulations at 42 CFR 412.1 by 
revising paragraph (a)(1)(iv) to read as follows: ``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 respirators, and 
for the additional resource costs of establishing and maintaining 
access to a buffer stock of essential medicines.''
    We stated that we were also considering amending our regulations, 
and sought comment on these potential revisions, at 42 CFR 412.2 by 
adding paragraph (f)(11) to read as follows: ``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 stated that we were also considering amending our regulations, 
and sought comment on these potential revisions at Sec.  412.113 by 
adding a paragraph (g) providing that additional resource costs of 
establishing and maintaining access to a buffer stock of essential 
medicines:
     Essential medicines are the 86 medicines prioritized in 
the report Essential Medicines Supply Chain and Manufacturing 
Resilience Assessment

[[Page 82129]]

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;
     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;
     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 Sec.  412.113(g)(4); and
     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 described in section 
XXII.C of the CY 2024 OPPS/ASC proposed rule, we sought comment on 
additional considerations in section XXII.D of the CY 2024 OPPS/ASC 
proposed rule. These additional considerations are summarized below, 
but we refer the public to section XXII. D of the CY 2024 OPPS/ASC 
proposed rule for the complete discussion. We sought comment on the 
following:
     How effective the potential payment policy would be at 
improving the resiliency of the supply chain for essential medicines 
and the care delivery system.
     A number of issues related to establishing and maintaining 
access to a buffer stock of more expensive domestically manufactured 
essential medicines compared to non-domestically manufactured ones.
     The list of essential medicines, including expanding the 
list to include essential medicines used in the treatment of cancer.
     Whether a 3-month supply is the appropriate amount of 
supply for the buffer stock or whether an alternative duration should 
be used.
     The resources involved in establishing and maintaining 
access to a buffer stock of essential medicines.
     Current practices regarding buffer stocks, including the 
use of contractual arrangements.
     The unique circumstances of safety net hospitals or other 
types of hospitals.
     Flexibilities that should exist for implementing buffer 
stock practices.
     The immediate impacts on the supply of essential medicines 
that could be expected upon implementation of the potential policy, 
including 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.
     A separate payment adjustment to more acutely address 
supply issues that emerge specific to a pandemic or other public health 
emergency.
     Essential medicines that are currently in shortage, and 
thus potentially not appropriate for arranging to have buffer stock.
     A number of issues related to critical medical devices.

E. Overview of Comments Received

    All commenters acknowledged the importance of addressing domestic 
drug shortages and medical supply chain disruptions. Many thanked HHS 
for drawing attention to the issue and considering actions aimed at 
reducing the many negative repercussions to hospitals and patients 
caused by drug shortages. However, there was a lack of consensus among 
commenters about a potential Medicare payment policy. As described 
further below, CMS is not finalizing any changes at this time, but 
intends to propose future policy addressing aspects of hospital 
practices with respect to pharmaceutical supply, including in future 
payment rules and through Conditions of Participation.
    Some commenters, including a limited number of pharmaceutical 
manufacturers, some smaller hospital associations, hospital pharmacist 
and other health care provider associations and hospital systems were 
supportive of the potential separate payment. Some of these commenters 
stated that a potential payment could foster a more resilient and 
reliable supply of essential medicines, and would help hospitals 
mitigate negative impacts to drug supply and patient care during 
emergencies. Some of these commenters suggested that CMS clarify 
whether hospitals could--or should--arrange for these buffer stocks to 
be maintained by other parties ``upstream,'' such as manufacturers and 
wholesalers, rather than maintain buffer stocks themselves as 
individual hospitals. Some of these commenters noted the importance of 
implementing a policy in a way that mitigates potential for demand-
driven shortages.
    The majority of commenters, including MedPAC, stated they did not 
support the specific potential payment policy as described and 
discussed in the request for comment. Most hospitals, hospital 
associations, pharmaceutical manufacturers, academic researchers, and 
patient organizations who commented were concerned that design changes 
would be necessary to avoid exacerbating existing drug shortages or 
causing demand-driven shortages. Some commenters were concerned about a 
potential policy inducing hoarding behaviors and fragmenting the 
available stock of the 86 essential medicines. Several commenters 
suggested that CMS phase in (for example, by region or length of time 
covered by the buffer stock) or stagger implementation of any potential 
policy over time to mitigate the risk of demand shocks (including 
impacts to care settings outside of hospitals), remove drugs from the 
essential medicines list if they are currently in shortage, and, to 
help inform policy approaches, first work with hospitals and 
manufacturers to better understand current practices and patterns. 
Commenters stated we should either implement flexibilities for drugs in 
shortage or at risk of shortage or exclude them from eligibility under 
any potential policy.
    Commenters were generally supportive of a 3-month length of time 
for the buffer stock, with some advocating a smaller stock to maximize 
adoption of the policy. Others advocated for a 6-month buffer stock, 
either initially or transitioning to that length, to better improve 
supply chain resiliency. Several commenters stated that no length of 
time was uniformly appropriate for all the 86 essential medicines, 
suggesting that HHS tailor the size of the buffer stock to each drug.
    Some commenters raised equity concerns regarding the impact of this 
policy on small, rural providers and safety net hospitals. They 
indicated that these providers tend to have less surplus funding on 
hand and may not be able to afford the upfront costs of establishing a 
buffer stock of one or more of the 86 essential medicines. Commenters 
stated that if only large, urban hospitals can afford to opt into the 
policy and thereby fragment the existing supply of essential medicines, 
rural and safety net hospitals may experience reduced access to these 
essential medicines. Because the cost of the medicines themselves would 
not be included under the potential payment

[[Page 82130]]

policy as described, commenters suggested that CMS provide incentive 
payments or direct financial support to hospitals unable to opt into 
the policy due to financial obstacles. Several commenters expressed 
concern that such a policy may exclusively benefit large urban 
hospitals, as they claimed only these hospitals could afford the 
upfront costs of establishing a buffer stock. Commenters indicated that 
hospital participation in such policy as described in the comment 
solicitation should be voluntary.
    We received many comments about the appropriate list of essential 
medicines considered for inclusion in a potential policy. Many 
commenters agreed with the use of the 86 essential medicines 
prioritized in the report Essential Medicines Supply Chain and 
Manufacturing Resilience Assessment (also referred to as ``ASPR's 
list'' by commenters). Other commenters proposed other lists, including 
the list FDA was directed to issue under E.O. 13944 (referred to as the 
``FDA list'' by many commenters), the World Health Organization's 
Essential Medicines List, Vizient's Essential Medications For High-
Quality Patient Care, a list of drugs developed by the National 
Association of EMS Physicians, and a Pediatric Drug List. Many 
commenters stated the E.O. 13944 list is more inclusive (including 
blood products) than ASPR's list and some stated that health care 
workers are most familiar with it. Several commenters suggested 
creating a new list organized by disease states, such that any 
medication approved for treating a given disease on the list would be 
approved for inclusion under the policy. Other commenters suggested 
that CMS convene a panel of experts to create a tailored list, stating 
that some critical medicines are missing from the existing ASPR list 
and some medicines on the list are unnecessary to include (for example, 
oral olanzapine). Other commenters proposed the expansion of existing 
lists or creation of new lists of essential medicines for the 
outpatient setting including outpatient cancer care and physicians' 
offices. Commenters stated that an expanded list would enable the 
program to adapt quickly to changes in manufacturing supply and demand 
and address the specific needs of individual hospitals.
    Several commenters expressed interest in a broader policy targeting 
effective quality management practices among pharmaceutical 
manufacturers, which they stated remains the leading driver of supply-
driven drug shortages, and requested that HHS adopt policies to address 
this issue. Some advised instituting payment incentives for, or 
limiting eligibility to, those providers that contracted with 
manufacturers with strong quality management maturity practices when 
establishing their respective buffer stock of one or more of the 86 
essential medicines. Another commenter stated that, to reduce reliance 
on companies likely to have quality failures, drugs from manufacturers 
with a recent history of FDA warning letters should be excluded. Other 
commenters suggested that CMS focus higher payments on the purchase of 
domestically made essential medicines. Some commenters stated that an 
operational definition of domestic would be difficult for the essential 
medicines, and suggested that CMS consider definitions of domestic 
other than the definition noted in the CY 2024 OPPS/ASC proposed rule.
    Many commenters were concerned about the added administrative 
burden associated with tracking and calculating the additional costs 
associated with establishing and maintaining a buffer stock of 
essential medicines, either directly or through contractual 
arrangements with pharmaceutical intermediaries or manufacturers. They 
stated that the administrative burden of collecting and reporting this 
information through a supplemental cost reporting worksheet would be 
sufficiently costly or onerous to prevent hospitals from seeking 
separate payment. Some commenters expressed concern about the 
administrative complexity of directly maintaining a buffer stock of 
essential medicines if they wished to do so rather than maintaining the 
buffer stock through a contract with a pharmaceutical manufacturer or 
distributor. These commenters stated concerns about having adequate 
storage space and inventory management capability for 3 months of 
product. Commenters stated that such hospitals would likely have to 
maintain separate records for buffer stock essential medicines, 
depending on the scope of the policy, as well as potentially for 
domestically versus non-domestically manufactured medicines within 
those buffer stocks. One commenter suggested episodically surveying 
hospitals on their storage costs and making payment based on a national 
average (excluding outliers) so providers are not subject to as many 
reporting requirements.
    Several commenters expressed concern that providers may not receive 
separate payment for the IPPS share of establishing and maintaining a 
buffer stock upon audit. For example, as indicated earlier, 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 the 
additional inpatient costs at cost report settlement. As with other 
separate Medicare payments based on reasonable costs, an audit of the 
cost report submitted by the hospital might determine the costs 
submitted by the hospital not to be reasonable. Some commenters stated 
this may make providers hesitant or unwilling to opt into a potential 
essential medicines policy.

F. Next Steps

    We appreciate the broad consensus regarding the need to curtail 
pharmaceutical shortages of essential medicines and promote resiliency 
in order to safeguard and improve the care hospitals are able to 
provide to beneficiaries. We agree with commenters that a multifaceted 
approach is likely necessary. As part of our initial efforts, we intend 
to propose new Conditions of Participation in forthcoming notice and 
comment rulemaking addressing hospital processes for pharmaceutical 
supply. Although in this final rule with comment period we are not 
adopting a policy regarding payment under the IPPS or OPPS for 
establishing and maintaining access to essential medicines, in response 
to the comments received, we continue to seek feedback from interested 
parties on ways to address the additional costs hospitals face to 
address pharmaceutical shortages and prepare for future emergencies. We 
will consider this feedback in future payment policy. We look forward 
to continuing to engage with the public on this critical issue in 
future rulemaking.

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

[[Page 82131]]

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 proposed 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 proposed 
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 proposed 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 proposed to 
add another column for notes. We proposed 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.
    For CY 2024, we did not receive any public comments and are 
finalizing our proposal to update the addenda format by deleting the 
column titled ``Copayment Capped at the Inpatient Deductible'' and 
instead to add two new columns for ``Adjusted Beneficiary Copayment'' 
and ``Note.''
    In addition, for CY 2024, we are updating the format of the OPPS 
Addenda A, B, and C by adding another column for ``IRA Coinsurance 
Percentage'' to identify the percentage for 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). To view the Addenda to this final rule 
pertaining to CY 2024 payments under the OPPS, we refer readers to the 
CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices; select ``CMS-
1786-FC'' from the list of regulations. All OPPS Addenda to this final 
rule with comment period are contained in the zipped folder titled 
``2024 NFRM OPPS Addenda'' in the related links section at the bottom 
of the page. To view the Addenda to this CY 2024 OPPS/ASC final rule 
with comment period pertaining to CY 2024 payments under the ASC 
payment system, we refer readers to the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/ambulatory-surgical-center-asc/asc-regulations-and-notices; select ``CMS-1786-FC'' 
from the list of regulations. The ASC Addenda to the CY 2024 OPPS/ASC 
proposed rule are contained in a zipped folder titled ``2024 NFRM 
Addendum AA, BB, DD1, DD2, EE, and FF''.

XXIV. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995, we are required to 
provide 30-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 solicited 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 the CY 2024 OPPS/ASC proposed rule (88 FR 49702), 
we proposed to codify the content of certification and plan of 
treatment requirements for intensive outpatient services at Sec.  
424.24(d). Specifically, we proposed 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).
    We stated that the proposed ICRs at Sec.  424.24(d) are subject to 
the Act. However, we stated that 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 stated that we believe the record keeping requirements 
described in section VIII.B.3 of the CY2024 OPPS/ASC 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.
    We did not receive any comments on the burden estimate in the CY 
2024 OPP/ASC proposed rule.

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 and 79863; 82 FR 59476 
through 59479; 83 FR 59155 and 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

[[Page 82132]]

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 final 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 with comment period (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 with comment period, 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,'' \827\ 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.
---------------------------------------------------------------------------

    \827\ 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 final rule with comment period, we 
finalized our proposals 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 finalized with 
modification, our proposals to adopt two 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, with voluntary 
reporting beginning with the CY 2025 reporting period followed by 
mandatory reporting beginning one year later than proposed with the CY 
2028 reporting period/CY 2031 payment determination; and (2) the 
Excessive Radiation Dose or Inadequate Image Quality for Diagnostic 
Computed Tomography (CT) in Adults (Hospital Level--Outpatient) 
electronic clinical quality measure (eCQM), with voluntary reporting 
beginning with the CY 2025 reporting period followed by mandatory 
reporting beginning one year later than proposed with the CY 2027 
reporting period/CY 2029 payment determination.
    We did not finalize our proposals to: (1) remove the Left Without 
Being Seen measure; or (2) re-adopt the Hospital Outpatient Volume on 
Selected Outpatient Surgical Procedures measure with modification.
2. Information Collection Burden 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 with comment period, 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 final rule with 
comment period, we finalized our proposal 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 
with comment period (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 did not finalize 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 policy. The 
modified COVID-19 Vaccination Coverage Among HCP measure will 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 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 75102 
through 75104), we 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 final rule with 
comment period, we finalized our proposal 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 finalized 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 did not propose any changes in burden per response 
associated with this policy to finalize. 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

[[Page 82133]]

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.\828\ We did not propose an increase in the required 
sample size for chart abstraction; therefore we do not believe there is 
any increase in burden associated with this policy.
---------------------------------------------------------------------------

    \828\ https://qualitynet.cms.gov/files/63c8361058e56000179b310e?filename=OQR_v16.0a_SpecsManual_011723.pdf.
---------------------------------------------------------------------------

4. Information Collection Burden 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 with comment period, we 
finalized the Appropriate Follow-Up Interval for Normal Colonoscopy in 
Average Risk Patients measure (78 FR 75101 and 75102). In section 
XIV.B.2.c of this final rule with comment period, we finalized our 
proposal 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 did not propose an increase in 
the required sample size for chart abstraction; therefore, we do not 
believe there is any increase in burden associated with this policy.
5. Information Collection Burden 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 With Voluntary Reporting 
Beginning With the CY 2025 Reporting Period Followed by Mandatory 
Reporting Beginning With the CY 2028 Reporting Period/CY 2031 Payment 
Determination
    In section XIV.B.3.b of this final rule with comment period, we 
finalized our proposal to adopt the THA/TKA PRO-PM with voluntary 
reporting beginning with the CY 2025 reporting period, followed by 
mandatory reporting beginning one year later than proposed with the CY 
2028 reporting period/CY 2031 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 and 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 did not propose 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 can 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 can 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 can 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 three voluntary periods. The first voluntary reporting period 
would begin in CY 2025 for eligible procedures occurring between 
January 1, 2025, through December 31, 2025; the second voluntary 
reporting period would begin in CY 2026 for eligible procedures 
occurring between January 1, 2026, through December 31, 2026; and the 
third voluntary reporting period would begin in CY 2027 for eligible 
procedures occurring between January 1, 2027, through December 31, 
2027. Voluntary reporting would be followed by mandatory reporting 
beginning with the CY 2028 reporting period for eligible elective 
procedures occurring between January 1, 2028, and December 31, 2028, 
impacting the CY 2031 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 and 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 finalized 
the requirement that hospitals 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 finalized measure, we refer to the ``Valuing Time in U.S. 
Department of 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.\829\ 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

[[Page 82134]]

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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    \829\ https://aspe.hhs.gov/reports/valuing-time-us-department-health-human-services-regulatory-impact-analyses-conceptual-framework.
---------------------------------------------------------------------------

    For burden estimating purposes for this 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 the CYs 2025, 2026, and 
2027 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 2028 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 
finalized 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 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 CYs 2027 and 2028 reporting 
periods, 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 CY 2029 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 CY 2030 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 final rule with comment period.
6. Information Collection Burden To Adopt the Excessive Radiation Dose 
or Inadequate Image Quality for Diagnostic Computed Tomography (CT) in 
Adults (Hospital Level--Outpatient) eCQM, With Voluntary Reporting 
Beginning With the CY 2025 Reporting Period, Followed by Mandatory 
Reporting Beginning With the CY 2027 Reporting Period/CY 2029 Payment 
Determination
    In section XIV.B.3.c of this final rule with comment period, we 
finalized our proposal to adopt the Excessive Radiation Dose or 
Inadequate Image Quality for Diagnostic CT in Adults (Hospital Level--
Outpatient) eCQM, with voluntary reporting beginning with the CY 2025 
reporting period, followed by mandatory reporting beginning one year 
later than proposed with the CY 2027 reporting period/CY 2029 payment 
determination. For the CYs 2025 and 2026 voluntary reporting periods, 
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 final rule with comment period, we finalized 
our proposal 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 2027 reporting period/CY 2029 payment 
determination, and all four quarters for the CY 2028 reporting period/
CY 2030 payment determination.
    For the voluntary reporting periods in CYs 2025 and 2026, we 
estimate 20 percent of hospitals would voluntarily report one quarter 
of data for the measure with 100 percent of hospitals reporting the 
measure as finalized 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 with comment period 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 CYs 2025 and 2026 
voluntary reporting periods, 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 2027 reporting period/CY 2029 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 2028 reporting period/CY 
2030 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).
    For the Excessive Radiation eCQM, hospitals would also be required 
to log in through the measure developer's secure portal and run the 
Alara Imaging Software for CMS Measure Compliance inside the firewall. 
The software runs automatically to create the three intermediate data 
elements needed for the measure. Once the software finishes creating 
these intermediate variables, hospitals can either: (1) send the data 
to a hospital's EHR for reporting; (2) send the data to another vendor 
for reporting; or (3) have the measure developer submit the data on 
behalf of and at the behest of hospitals to CMS. No manual data entry 
is required. Similar to our assumptions for the Hospital IQR Program in 
the FY 2024 IPPS/LTCH PPS final rule (88 FR 59313), we estimate that 
each hospital would spend approximately 15 minutes (0.25 hours) 
annually to conduct these activities prior to data submission. For the 
CYs 2025 and 2026 voluntary reporting periods, we estimate a per 
reporting period burden of 167.5 hours (0.25 hours x 670 hospitals) at 
a cost of $8,730 (167.5 hours x $52.12/hour). Beginning with the CY 
2027 mandatory reporting period, we estimate a total annual burden of 
837.5 hours (0.25 hours x 3,350 hospitals) at a cost of $43,651 (837.5 
hours x $52.12/hour).
7. 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 finalized proposals in this 
final rule

[[Page 82135]]

with comment period will result in an increase of 67,842 hours at a 
cost of $1,536,526 for 3,350 OPPS hospitals across a 6-year period from 
the CY 2025 reporting period/CY 2027 payment determination through the 
CY 2030 reporting period/CY 2032 payment determination. The following 
Tables 152 through 157 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 2032 
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 with comment 
period (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 with 
comment period (77 FR 68532 and 68533; 78 FR 75172 through 75174; 79 FR 
67015 and 67016; 80 FR 70582 through 70584; 81 FR 79863 through 79865; 
82 FR 59479 through 59481; 83 FR 59156 and 59157; 84 FR 61469; 85 FR 
86267; 86 FR 63968 through 63971; and 87 FR 72252 and 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.
    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,'' \830\ 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 and 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.
---------------------------------------------------------------------------

    \830\ 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 the most recent analysis of the CY 2023 payment 
determination data, we found that, of the 5,375 ambulatory surgical 
centers (ASCs) that were actively billing Medicare, 3,733 were required 
to participate in the ASCQR Program and met all reporting requirements, 
whereas 194 did not. Of the 1,448 ASCs not required to participate in 
the program, 687 ASCs

[[Page 82141]]

did so. In addition, 195 Hospitals Without Walls have returned to 
active ASC billing and will be eligible to participate toward CY 2024 
payment determinations. On this basis, we estimate that 4,809 ASCs 
(3,733 + 194 + 687 + 195) will submit data for the ASCQR Program for 
the CY 2026 payment determination unless otherwise noted. We note that 
this estimate is a decrease of 248 ASCs from our estimate of 5,057 
provided in the CY 2024 OPPS/ASC proposed rule (88 FR 49881) due to 
results from more recent data analysis regarding numbers of eligible 
ASCs. In section XV.B.4 of this final rule with comment period, we 
finalized our proposals 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 finalized with modification, our 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, with 
voluntary reporting beginning with the CY 2025 reporting period, 
followed by mandatory reporting beginning 1 year later than proposed 
with the CY 2028 reporting period/CY 2031 payment determination.
    We are not finalizing our proposal to re-adopt with modification 
the ASC Facility Volume on Selected ASC Surgical Procedures measure.
2. Information Collection Burden 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 with comment period, 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 final rule with comment 
period, we finalized our proposal 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 with comment period (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 did not propose 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 policy. 
Furthermore, the modified COVID-19 Vaccination Coverage Among HCP 
measure will 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).\831\
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    \831\ Public Law 99-660.
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3. Information Collection Burden 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 
and 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 final rule with comment period, we finalized our 
proposal 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 finalized are currently 
allowable for administering this measure, we do not believe limiting 
use to these three surveys will result in a change in burden. As a 
result, we did not propose any changes in burden per response 
associated with this policy. 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.\832\ We 
did not propose an increase in the required sample size for chart 
abstraction; therefore we do not believe there is any increase in 
burden associated with this policy.
---------------------------------------------------------------------------

    \832\ https://qualitynet.cms.gov/files/62900933404aa300169072f1?filename=12.0_ASC_Full_Specs_Mnl.pdf.
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4. Information Collection Burden 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 with comment period, 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 final rule comment 
period, we finalized our proposal 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 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 did not propose an increase in the required sample 
size for chart abstraction; therefore, we do not believe there is any 
increase in burden associated with this policy.
5. Information Collection Burden 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, With Voluntary Reporting 
Beginning With the CY 2025 Reporting Period Followed by Mandatory 
Reporting Beginning With the CY 2028 Reporting Period/CY 2031 Payment 
Determination
    In section XV.B.5.b of this final rule with comment period, we 
finalized our proposal to adopt the THA/TKA PRO-PM, with voluntary 
reporting beginning with the CY 2025 reporting period,

[[Page 82142]]

followed by mandatory reporting beginning one year later than proposed 
with the CY 2028 reporting period/CY 2031 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 will 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 did not propose to 
require how ASCs collect PRO data for this measure, ASCs collecting PRO 
data will have multiple options for when and how they will collect 
these PRO data so they can 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 ASC. The modes of PRO data collection can 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 can 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 will maximize response 
rates as it allows for different patient preferences. For the THA/TKA 
PRO-PM data, ASCs will be able to submit data during three voluntary 
periods. The first voluntary reporting period will begin in CY 2025 for 
eligible procedures occurring between January 1, 2025, through December 
31, 2025; the second voluntary reporting period will begin with CY 2026 
for eligible procedures occurring between January 1, 2026, through 
December 31, 2026; and the third voluntary reporting period will begin 
with CY 2027 for eligible procedures occurring between January 1, 2027, 
through December 31, 2027. Voluntary reporting will be followed by 
mandatory reporting beginning with the CY 2028 reporting period for 
eligible elective procedures occurring between January 1, 2028, and 
December 31, 2028, impacting the CY 2031 payment determination.
    Whether participating in the voluntary reporting periods or during 
subsequent mandatory reporting, ASCs will need to submit data twice 
(pre-operative data and post-operative data). For the purposes of 
calculating burden. Specifically, we estimate that, during the 
voluntary periods, 50 percent of ASCs that perform at least one THA/TKA 
procedure will submit data and will do so for 50 percent of THA/TKA 
patients. For purposes of calculating burden for the mandatory period, 
we estimate that ASCs will submit for 100 percent of patients. While we 
finalized 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 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.\833\ 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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    \833\ https://aspe.hhs.gov/reports/valuing-time-us-department-health-human-services-regulatory-impact-analyses-conceptual-framework.
---------------------------------------------------------------------------

    To estimate the burden of information collection for patients 
completing surveys for this measure, we assume that most ASCs will 
likely undertake PRO data collection through a screening tool 
incorporated into their electronic health record (EHR) or other patient 
intake process. We utilized recently analyzed Medicare claims 
information, which was unavailable for the CY 2024 OPPS/ASC proposed 
rule, to estimate the number of ASCs performing these procedures. We 
believe this data is more appropriate as ASCs specialize and these 
procedures are recently added to the ASC covered procedures list. We 
found that there were 2,381 THA/TKA ASC claims in CY 2022 with an 
average of 58 Medicare claims per ASC for 41 ASCs. Thus, we estimate 
that approximately 58 THA/TKA procedures will occur in each 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 will complete the post-operative questionnaire. For the 
voluntary CYs 2025, 2026, and 2027 reporting periods, we assume 609 
patients will complete the survey (58 patients x 0.50 x 21 ASCs) for a 
total of 74 hours annually (609 respondents x 0.120833 hours) at a cost 
of $1,524 (74 hours x $20.71) across all ASCs that perform these 
procedures. Beginning with mandatory reporting in the CY 2028 reporting 
period/CY 2031 payment determination, we estimate a total of 288 hours 
(2,381 patients x 0.120833 hours) at a cost of $5,958 (288 hours x 
$20.71) across all ASCs performing these procedures.
    Regarding ASCs' burden related to submitting data for this measure, 
which will be reported via the HQR System, we estimate a burden of 10 
minutes per response. ASCs will submit data associated with pre-
operative surveys by March 31 of the CY following the CY in which the 
eligible procedures took place and will submit data associated with

[[Page 82143]]

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 will occur in the first quarter of the 
CY 2026 reporting period and post-operative survey data submission will 
occur in the first quarter of the CY 2027 reporting period. For each of 
the three voluntary reporting periods, we estimate that each ASC will 
spend 20 minutes (0.33 hours) annually (10 minutes x 2 surveys) to 
collect and submit the data. For the CY 2026 reporting period, we 
estimate a burden for all participating ASCs of 4 hours (0.167 hours x 
21 ASCs) at a cost of $182 (4 hours x $52.12). For the CYs 2027 and 
2028 reporting periods, we estimate a burden for all participating ASCs 
of 7 hours (0.33 hours x 21 ASCs) at a cost of $365 (7 hours x $52.12). 
For the CY 2029 reporting period, we estimate a burden for all 
participating ASCs of 10 hours [(0.167 hours x 21 ASCs) + (0.167 hours 
x 41 ASCs)] at a cost of $539 (10 hours x $52.12). For the CY 2030 
reporting period and subsequent years, we estimate a total of 14 hours 
(0.33 hours x 41 ASCs) at a cost of $712 (14 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 final rule with comment period.
6. 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 finalized proposals in this 
final rule with comment period will result in an increase of 302 hours 
at a cost of $6,670 for 4,089 ASCs across a 6-year period from the CY 
2025 reporting period/CY 2027 payment determination through the CY 2030 
reporting period/CY 2032 payment determination. The following Tables 
158 through 163 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.\834\
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    \834\ 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 final rule with comment period, we discuss the 
requirements for the Rural Emergency Hospital Quality Reporting (REHQR) 
Program. In this final rule with comment period, we finalized the 
adoption of 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 Facility7-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 final rule with comment period, 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 BLS 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.'' \835\ 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 are finalizing 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 with comment period 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 and 
allows for a conservative estimate of hourly costs.
---------------------------------------------------------------------------

    \835\ 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 could transition to REH status 
assuming that all eligible hospitals in states which have passed or 
amended necessary legislation enabling transition to occur as of March 
2023 choose to do so. We will revise this estimate in future rules when 
updated data are available.
2. Information Collection Burden 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 final rule 
with comment period, we finalized the adoption of 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

[[Page 82149]]

reported to the Medicare program for payment purposes, adopting these 
measures does not result in additional burden for REHs in the REHQR 
Program.
3. Information Collection Burden 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 final rule with comment period, we 
finalized the adoption of 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 will 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 will similarly abstract and submit 
data from 63 cases per quarter, for a total of 252 cases per year.\836\ 
We therefore estimate that it will 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).
---------------------------------------------------------------------------

    \836\ https://qualitynet.cms.gov/files/63c8361058e56000179b310e?filename=OQR_v16.0a_SpecsManual_011723.pdf.
---------------------------------------------------------------------------

4. Summary of Information Collection Burden Estimates for the REHQR 
Program
    In summary, we estimate that the finalized policies in this final 
rule will 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 164. 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 of this final rule with comment 
period.
[GRAPHIC] [TIFF OMITTED] TR22NO23.241

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 proposed 
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 did not seek PRA approval for any information collection 
or recordkeeping activities that may be

[[Page 82150]]

conducted in connection with the proposed revisions to Sec.  
485.914(a)(2).
    We also proposed 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 proposed to add ``and IOP services,'' 
which requires 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 did not seek 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). We did not receive any public comments on our proposal 
and therefore, we are finalizing our proposal to add IOP services to 
the requirement at Sec.  485.914.

F. ICRs Related to Conditions of Participation (CoPs): Treatment Team, 
Person-Centered Active Treatment Plan, and Coordination of Services 
(Sec.  485.916)

    We proposed 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 the CY 2024 
OPPS/ASC proposed rule. We proposed 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 did not propose to seek PRA 
approval for any information collection or recordkeeping activities 
that may be conducted in connection with the proposed revisions to 
Sec.  485.916(d).
    Comment: We received several comments requesting we revise the CoPs 
at Sec.  485.916(a)(1) and (3) to specifically identify MFTs and MHCs 
as potential members of the CMHC interdisciplinary team. Comments 
stated that including MFTs and MHCs will clarify that these 
practitioners may lawfully take their place on the CMHC 
interdisciplinary teams.
    Response: We agree with the commenters suggestions and have 
modified the language at Sec.  485.916(a)(1) to include the MFT or MHC 
as providers who can lead the CMHC interdisciplinary team. We believe 
that the burden associated with adding MFT and MHC to the list of 
practitioners who can lead the CMHC interdisciplinary team 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).
    After consideration of the public comments we received, we have 
modified the language at Sec.  485.916(a)(1) to include the MFT or MHC 
as practitioners who can lead the CMHC interdisciplinary team. This 
requirement allows CMHCs the flexibility to utilize appropriate 
counselors that may serve on the client's interdisciplinary team.

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 proposed 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 proposed 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 
proposed 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 
did not 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 proposed 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 parts 410 and 424. We also 
believe adding the IOP services requirement in the new requirement at 
Sec.  485.918(g) is a usual and customary business practice under 5 CFR 
1320.3(b)(2). Therefore, we did not seek PRA approval for any 
information collection or recordkeeping activities that may be 
conducted in connection with the proposed revisions to Sec.  
485.918(g).
    We did not receive any public comments on our proposal, therefore, 
we are finalizing our proposal to add IOP services to the requirements 
at Sec.  485.918.

H. ICRs Related to Hospital Price Transparency

    In a final rule published in 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 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 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

[[Page 82151]]

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 the CY 2024 OPPS/ASC proposed rule (88 FR 49890 
through 49892), we proposed to revise regulations at 45 CFR 180.50 
related to making public hospital standard charges in an MRF. First, we 
proposed 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 proposed 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 
believed these proposed revisions would result in an increased 
collection burden to hospitals, both an initial one-time burden and an 
on-going annual cost.
    Additionally, as explained in the CY2024 OPPS/ASC proposed rule, we 
increased the number of hospitals we believe to be subject to these 
requirements from 6,002 to 7,098, which, in turn, increased the 
estimated national burden. The reason for this increase is because in 
the CY 2020 HPT final rule (84 FR 65591), we relied on data from the 
American Hospital Association (AHA).\837\ For the collection of 
information estimate in the CY2024 OPPS/ASC proposed rule we used 
updated hospital numbers based on the publicly available dataset from 
the Homeland Infrastructure Foundation-Level Data (HIFLD) \838\ 
hospital dataset. 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 stated our belief that the HIFLD dataset is more 
comprehensive than the AHA Directory. To estimate the number of 
hospitals subject to these requirements in the CY 2024 OPPS/ASC 
proposed rule, 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 estimated that 
the CY 2024 OPPS/ASC proposed rule would apply to 7,098 hospitals 
operating within the U.S that meet the HPT regulation's definition of 
``hospital'' at 45 CFR 180.20. Finally, we estimated 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).\839\ We included labor categories for General and Operations 
Managers, Business Operations Specialists, and Network and Computer 
Systems Administrators. We did not include a Lawyer labor category in 
the CY 2024 OPPS/ASC proposed rule.
---------------------------------------------------------------------------

    \837\ 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 US. To arrive at 6,002 hospitals, we subtracted the 208 
federally owned or operated hospitals.
    \838\ Homeland Infrastructure Foundation-Level Data hospital 
dataset accessed on May 3, 2023, located at https://hifld-geoplatform.opendata.arcgis.com/datasets/hospitals/data.
    \839\ 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.
---------------------------------------------------------------------------

    We indicated in the CY 2024 OPPS/ASC proposed rule that we believed 
hospitals would incur an initial 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 estimated 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 estimated 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 estimated 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 the proposed rule. Therefore, we proposed the 
total 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 initial one-time national burden 
was calculated to be $19,784,539.32 dollars ($2,787.34 per hospital x 
7,098 hospitals).
    In addition to the initial one-time cost to implement the 
proposals, we proposed to increase the ongoing annual burden estimate 
to take into account the increase in data elements the hospital must 
collect and encode in the MRF. Specifically, we estimated 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 acknowledged 
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 expected a 
subset of hospitals would continue to spend time annually to gather and 
manually encode their standard charge information. Therefore, we 
proposed an estimated ongoing annual national burden of 383,292 hours 
(54 hours x 7,098 hospitals) and an ongoing annual national cost of 
$32,370,571 dollars ($4,560.52 per respondent x 7,098 hospitals), which 
represents a $10,698,069 ($32,370,571 - $21,672,502) increase over our 
previous estimated national annual burden for subsequent years.
    We received the following comments related to our burden estimates, 
which we have summarized below.
    Comment: Several commenters expressed concern that CMS 
underestimated the cost to comply with HPT requirements and noted that 
price transparency activities are complex, expensive, and burdensome 
for hospitals, although a few noted that standardization of the data 
would help hospitals comply with the regulation. Commenters noted that 
hospitals have already dedicated significant resources toward complying 
with the machine-readable file requirements, with hospitals reporting 
that they are spending thousands of dollars and significant labor 
resources to implement

[[Page 82152]]

these requirements, asserting their belief that these costs were not 
benefitting patients.
    A few commenters provided more detailed information on costs 
incurred by hospitals for implementation. One commenter believed that 
our estimates do not fully account for attorney time, financial 
specialists, and meetings between contracting, billing, finance, legal, 
and technical teams. Another commenter noted they invest several 
thousand hours of staff full time equivalents (FTEs) annually in its 
40-hospital system. Several commenters noted that member hospitals 
reported spending $15,000-25,000 per hospital on vendors to build the 
initial machine-readable files, and $10,000-20,000 to maintain the 
files and update them annually. These commenters noted that a hospital 
system producing its own file, without vendor help, reported spending 
1,600 hours annually, across 23 individuals, to produce their machine-
readable files. Another commenter stated that converting to a new CMS 
template with payer-specific notes would require seven full-time 
employees with the appropriate level of payer contracting expertise.
    Finally, commenters noted that requiring a rapid change in format 
may increase their expenses when the hospital uses a third-party vendor 
to make their data public, noting that vendors would not likely begin 
work until the policies are finalized. Commenters stated that detailed 
guidance would be required to properly ensure that the new standard 
format is implemented consistently across hospitals and to avoid 
excessive updates to the guidance in the future.
    Response: We appreciate commenters' concerns and that hospitals 
have different operational and administrative systems that impact 
projected burden for implementation of the CMS standard template and 
encoding of new data elements. To address this variability, CMS is 
allowing hospitals to choose which CMS template format they will use, 
providing hospitals some flexibility to select the least burdensome 
format and layout to incorporate into their current MRF development 
process. CMS expects that, nearly 3 years after the implementation of 
the initial rule, most hospitals have well developed automated 
processes in place that they leverage to minimize the burden associated 
with making hospital standard charge information public in their 
current MRFs.
    We agree with commenters that standardization may help streamline 
hospital efforts. As noted in section XVIII.B.3 of this final rule with 
comment period we relied on recommendations from the FFRDC that 
convened a TEP 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. 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 and recommended the use of a standard 
template. Additionally, as discussed in more detail in the economic 
analysis (section XXVI of this final rule with comment period), we 
continue to believe that increased competition benefits consumers, and 
that this benefit outweighs the burden imposed by these requirements.
    Moreover, in order to reduce burden, we are finalizing a phased 
implementation timeline applicable to the new requirements we are 
finalizing in this final rule. Specifically, and as discussed in more 
detail in section XVIII.B.3.c of this final rule with comment, we are 
finalizing that the effective date of the changes to the hospital price 
transparency regulations at 45 CFR part 180 will be January 1, 2024. 
However, the regulation text will specify later dates by which 
hospitals must be in compliance with some of these new requirements, 
and we will begin enforcing those requirements on those specified 
dates. In response to comments, we will increase the initial one-time 
burden to take into account an additional labor category (lawyer) and 
increase increasing number of total hours.
    Finally, we are developing detailed technical specifications and 
guidance, in the form of a data dictionary and other resources, that 
will be available to assist hospitals in correctly formatting the 
standard charge information into a standardized CMS template layout. 
The policies CMS is finalizing closely approximate the voluntary sample 
formats and technical guidance found on our HPT website which CMS has 
made available in November 2022. Thus, we estimate that hospitals that 
have already voluntarily adopted this format and collected and encoded 
the additional data elements would incur little additional burden.
    To summarize, we are swayed by commenters that the proposal to 
increase the number of data elements will result in an increased 
initial one-time expense for hospitals to collect and encode in the CMS 
template. We are therefore increasing the initial one-time burden 
estimate to more closely approximate commenter's estimates, to the 
extent they were expressed as a `per hospital' amount and not a `per 
health system' amount. We are also finalizing our estimate of ongoing 
annual costs as proposed, which approximates the per hospital amount 
provided by commenters.
    After consideration of the comments, and based on the policies we 
are finalizing in this final rule, we now estimate it will take, on 
average, 5 hours (at a cost of $157.48 per hour) for a Lawyer (BLS 23-
1011) to review the rule. We estimate it will take, on average, 5 hours 
(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, 80 hours (at a cost of $80.08 per hour) to develop 
and update the necessary processes and procedures and develop the 
requirements to implement a CMS template layout. 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, 30 hours (at a cost of $93.42 per hour), to make 
updates to existing systems to conform to a CMS template layout and 
post it to the internet, including developing and posting the .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 final rule with comment period. Occupation 
titles and wage rates included in the final estimate are in Table 165.

[[Page 82153]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.242

    The total initial one-time burden estimate for the first year is 
now estimated to be 120 hours (5 hours + 5 hours + 80 hours + 30 hours) 
per hospital with a cost of $10,587.10 ($787.40 + $590.70 + $6,406.40 + 
$2,802.60) per hospital. The initial one-time national burden is 
calculated to be $75,147,235.80 dollars ($10,587.10 per hospital x 
7,098 hospitals) (See Table 166.)
[GRAPHIC] [TIFF OMITTED] TR22NO23.243

    Additionally, we are finalizing an estimated ongoing 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), which represents a $10,698,069 ($32,370,571-
$21,672,502) increase over our previous estimated ongoing national 
annual burden for subsequent years (See Table 167.)
[GRAPHIC] [TIFF OMITTED] TR22NO23.244

    The new information collection requirements, as well as the initial 
one-time cost estimates and updated ongoing annual burden estimates 
discussed in this section will be submitted for OMB review and approval 
for OMB control number is 0938-1369.

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 final rule with comment period 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

[[Page 82154]]

annually the OPPS conversion factor used to determine the payment rates 
for APCs. We also are required under section 1833(t)(9)(A) of the Act 
to review, not less often than annually, and revise the groups, the 
relative payment weights, and the wage and other adjustments described 
in section 1833(t)(2) of the Act. We must review the clinical integrity 
of payment groups and relative payment weights at least annually. We 
are revising the APC relative payment weights using claims data for 
services furnished on and after January 1, 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 
final rule with comment period.
    This final rule with comment period 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 
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 final rule with comment 
period, we are finalizing a policy to extend the 5-year interim period 
by 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 final policy can be found in section XIII.G.2.b of 
this final rule with comment period.

B. Overall Impact of Provisions of This Final Rule With Comment Period

    We have examined the impacts of this 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) and the 
Congressional Review Act (5 U.S.C. 804(2)).
    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). 
Executive Order 14094, titled ``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 the Office of Information and 
Regulatory Affairs (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, and 
hence also a major rule under Subtitle E of the Small Business 
Regulatory Enforcement Fairness Act of 1996 (also known as the 
Congressional Review Act). Accordingly, we have prepared a Regulatory 
Impact Analysis that to the best of our ability presents the costs and 
benefits of the rulemaking. Therefore, OMB has reviewed this final rule 
with comment period, and the Departments have provided the following 
assessment of their impact.
    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 final rule with comment period, will be 
approximately $2.2 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 $88.9 billion, which is approximately $6.0 
billion higher than estimated OPPS expenditures in CY 2023. Table 168 
of this final rule with comment period 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 final CY 2024 policy, drugs and biologicals 
are generally paid at ASP plus 6 percent, WAC plus 6 percent, or 95 
percent of AWP, as applicable. The impacts on hospital rates as a 
result of this final policy are reflected in the discussion of the 
estimated effects of this final rule with comment period.
    We estimate that the final update to the conversion factor and 
other budget neutrality adjustments will increase total OPPS payments 
by 3.1 percent in CY 2024. The final changes to the APC relative 
payment weights, the final changes to the wage indexes, the final 
continuation of a payment adjustment for rural SCHs, including EACHs, 
and the final 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 will increase total estimated 
OPPS payments by 3.2 percent.
    We estimate the total increase (from changes to the ASC provisions 
in this final rule with comment period, as well

[[Page 82155]]

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 
$207 million. Tables 169 and 170 of this final rule with comment period 
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 Final Rule
a. Limitations of Our Analysis
    The distributional impacts presented here are the projected effects 
of the final 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 final rule with 
comment period. To view the hospital-specific estimates, we refer 
readers to the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient. On the website, select 
``Regulations and Notices'' from the left side of the page and then 
select ``CMS-1786-FC'' from the list of regulations and notices. The 
hospital-specific file layout and the hospital-specific file are listed 
with the other supporting documentation for this final rule with 
comment period. We show hospital-specific data only for hospitals whose 
claims were used for modeling the impacts shown in Table 168 of this 
final rule with comment period. We do not show hospital-specific 
impacts for hospitals whose claims we were unable to use. We refer 
readers to section II.A of this final rule with comment period for a 
discussion of the hospitals whose claims we do not use for ratesetting 
or impact purposes.
    We estimate the effects of the individual policy changes by 
estimating payments per service, while holding all other payment 
policies constant. We use the best data available but do not attempt to 
predict behavioral responses to our policy changes in order to isolate 
the effects associated with specific policies or updates, but any 
policy that changes payment could have a behavioral response. In 
addition, we have not made 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 168 shows the estimated impact of this final 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 168, 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 are finalizing paying 
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 are finalizing 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 final 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 final 
IPPS market basket percentage increase applicable to the OPD fee 
schedule for CY 2024 is 3.3 percent. Section 1833(t)(3)(F)(i) of the 
Act reduces that 3.3 percent by the productivity adjustment described 
in section 1886(b)(3)(B)(xi)(II) of the Act, which is 0.2 percentage 
point for CY 2024 (which is also the productivity adjustment for FY 
2024 in the FY 2024 IPPS/LTCH PPS final rule (88 FR 59035)), resulting 
in the final CY 2024 OPD fee schedule increase factor of 3.1 percent. 
We are using the OPD fee schedule increase factor of 3.1 percent in the 
calculation of the final 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 168 of this final rule with 
comment period.
    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 168 
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 3.1 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 proposed to maintain the current 
adjustment percentage for CY 2024. Because the final 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 final rule would redistribute 
money during implementation also will depend on changes in volume, 
practice

[[Page 82156]]

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 final rates for CY 2024 will increase 
Medicare OPPS payments by an estimated 3.2 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 3.3 percent increase in 
Medicare payments to all other hospitals. These estimated payments will 
not significantly impact other providers.
Column 1: Total Number of Hospitals
    The first line in Column 1 in Table 168 shows the total number of 
facilities (3,611), 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 in greater detail in section II.A of this 
final rule with comment period. At this time, we are unable to 
calculate a DSH variable for hospitals that are not also paid under the 
IPPS because DSH payments are only made to hospitals paid under the 
IPPS. Hospitals for which we do not have a DSH variable are grouped 
separately and generally include freestanding psychiatric hospitals, 
rehabilitation hospitals, and long-term care hospitals. We show the 
total number of OPPS hospitals (3,511), 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 32 CMHCs at the 
bottom of the impact table (Table 168) 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 0.3 overall. Major teaching 
hospitals will experience an estimated decrease of 0.5 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 final CY 2024 
changes in wage index policy, discussed in section II.C of this final 
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 final rule. We modeled a budget neutrality 
adjustment for the final cancer hospital payment adjustment because the 
final 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 are 
finalizing in section II.F of this final 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 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 the final changes 
previously described and the update to the conversion factor of 3.1 
percent. Overall, these changes will increase payments to urban 
hospitals by 3.2 percent and to rural hospitals by 4.6 percent. Rural 
sole community hospitals will receive an estimated increase of 4.8 
percent while other rural hospitals would receive an estimated increase 
of 4.3 percent.
Column 5: All Changes for CY 2024
    Column 5 depicts the full impact of the final 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 final 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 final rule with comment 
period); and other final 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 56 
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 3.2 
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 final relative payment weights for CY 2024. We used the final 
conversion factor for CY 2023 of $85.585 and the final CY 2024 
conversion factor of $87.382 discussed in section II.B of this final 
rule with comment period.

[[Page 82157]]

    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 
final 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 
2024, using a multiple threshold of 1.75 and a fixed-dollar threshold 
of $7,750, would be approximately 0.83 percent of total payments. The 
estimated current outlier payments of 0.83 percent are incorporated in 
the comparison in Column 5. We used the same set of claims and a charge 
inflation factor of 11.9 percent (1.11904) and the CCRs in the July 
2023 OPSF, with an adjustment of 0.990843 (88 FR 59353), to reflect 
relative changes in cost and charge inflation between CY 2022 and CY 
2024, to model the final CY 2024 outliers at 1.0 percent of estimated 
total payments using a multiple threshold of 1.75 and a fixed dollar 
threshold of $7,750. The charge inflation and CCR inflation factors are 
discussed in detail in the FY 2024 IPPS/LTCH PPS final rule (88 FR 
59348 through 59354).
    Overall, we estimate that facilities will experience an increase of 
3.2 percent under this final rule with comment period in CY 2024 
relative to total spending in CY 2023. This projected increase (shown 
in Column 5) of Table 168 of this final rule with comment period 
reflects the final 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 0.11 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 will 
increase payments to urban hospitals by 3.2 percent. Overall, we 
estimate that rural hospitals will experience a 4.2 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 will include an 
increase of 2.4 percent for major teaching hospitals and an increase of 
3.9 percent for nonteaching hospitals. Minor teaching hospitals will 
experience an estimated increase of 3.5 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 3.2 percent, proprietary hospitals will 
experience an increase of 4.6 percent, and governmental hospitals will 
experience an increase of 2.8 percent.
c. Estimated Effects of OPPS Changes on CMHCs
    The last line of Table 168 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 CY 2024 
OPPS/ASC final rule, we are finalizing the proposal 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 final rule. We did not 
exclude days with one or two services from our modeling for CY 2024, 
because our final policy will pay the per diem rate for APC 5853 for 
such days beginning in CY 2024. As a result of the final PHP APC 
changes for CMHCs, we estimate that CMHCs will experience a 9.2 percent 
increase in CY 2024 payments relative to their CY 2023 payments (shown 
in Column 5). For a detailed discussion of our final PHP policies, 
please see section VIII of this final rule with comment period.
    Column 3 shows the estimated impact of adopting the final FY 2024 
wage index values, which result in an estimated change of 0 percent to 
CMHCs. Column 4 shows that combining the OPD fee schedule increase 
factor, along with the final changes in APC policy for CY 2024 and the 
final FY 2024 wage index updates, will result in an estimated increase 
of 10 percent.
    Lastly, we note that as discussed in section VIII of this final 
rule with comment period, we are finalizing the proposal 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 168 but are 
discussed in section XXI.C.1.i of this final rule with comment period.
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BILLING CODE 4150-28-C
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 
final 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 final CY 2024 
comprehensive APC payment policy discussed in section II.A.2.b of this 
final rule. We note that the individual payments, and therefore 
copayments, associated with services may differ based on the setting in 
which they are furnished. However, at the aggregate system level, 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 final rule. Hospitals, CMHCs, and ASCs would be affected by the 
changes in this final rule. Additionally, as discussed in section VIII 
of this final rule with comment period, we are establishing 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 final payment amount for OPPS APC 5861 will 
affect payments to these providers. We discuss estimated effects of 
final IOP policies in section XXI.C.1.i of this final rule with comment 
period.
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 $2.1 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 final rule with comment period will increase these 
Medicaid beneficiary payments by approximately $135 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 
$135 million Medicaid increase, approximately $75 million would be from 
the Federal government and $60 million will be from State governments.

[[Page 82161]]

g. Alternative OPPS Policies Considered
    Alternatives to the OPPS changes we proposed and the reasons for 
our selected alternatives are discussed throughout this final rule with 
comment period.
     Alternatives Considered for the Claims Data used in OPPS 
and ASC Ratesetting due to the PHE.
    We refer readers to section X.F of this final rule with comment 
period for a discussion of our final policy of returning to the 
standard update process of using updated cost report data for OPPS 
ratesetting. In that section, we discussed 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 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 final 
rule, as discussed in section X.F. of this final rule with comment 
period, we are finalizing our 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.\840\ 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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    \840\ Available at: https://www.cms.gov/files/document/2022-cms-strategic-framework.pdf.
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    We sought 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 stated that we were 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 welcomed 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 sought 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.
    Comment: Commenters were supportive of CMS efforts to incorporate 
health equity elements into future impact analyses and provided other 
recommendations for policies to promote health equity using the OPPS. 
Suggestions included: engaging with interested parties or beneficiaries 
to identify instances where payment policy negatively impacts 
beneficiary care and to determine which health equity elements should 
be included in impact analyses; adding elements that address policy 
impacts on social drivers of health, racial and ethnically minoritized 
groups, the LGBTQIA+ community, those living with disabilities, and 
other underserved populations; using of health equity accreditation 
programs or the NCQA health equity framework to examine whether payment 
adjustments worsen health disparities or produce unintended results; 
conducting research to better understand how beneficiaries are made 
aware of outpatient services and whether this leads to disparities in 
accessing outpatient services; assessing whether utilization by 
geographic areas is skewed by socioeconomic circumstances or inequities 
that pose barriers to beneficiaries accessing and utilizing services; 
outlining specific health equity goals for providers; adopting the ONC 
HIT certification requirements as a model for embedding health equity 
in all components of data measurement; adopting payment policies that 
recognize the unique role of essential hospitals in promoting health 
equity; considering hospital performance and the proportion of 
vulnerable populations served by the hospitals in any health equity 
framework; and continuing efforts to advance interoperable data systems 
that collect health equity data.
    Response: We appreciate the input from commenters. We will take 
these suggestions into consideration for future rulemaking.
i. Effects of IOP Policies on Hospitals, CMHCs, FQHCs, RHCs, and OTPs
    As discussed in section VIII of this CY 2024 OPPS/ASC final rule 
with comment period, we are establishing payment for intensive 
outpatient services furnished by hospitals, CMHCs, FQHCs, and RHCs 
under a new IOP benefit. We are also finalizing our proposal 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 168 of this final rule 
with comment period, 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 98 of this final rule with comment 
period and at least one service from the list of primary services shown 
in Table 99 of this final rule with comment period.
    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 
168. 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 or more service days 
in the hospital setting and compared this to the number of PHP 3-
service and 4 or more 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 final rule with comment 
period, IOP and PHP days will 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 52,608 
IOP days with

[[Page 82162]]

three services and approximately 18,034 IOP days with four or more 
services. These projections correspond to an estimated $9.4 million 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 
solicited comment on our assumptions and the methodology used to derive 
this estimate.
    In section VIII.F.4 of this final rule with comment period, 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 are finalizing 
that the IOP payment rate will be 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, the 
payment amount will be based on the lesser of a FQHC's actual charges 
or the rate determined for APC 5861. Additionally, we are finalizing 
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 payment 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 final rule with comment 
period, for CY 2024 and subsequent years, we are finalizing 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 methodology for other add-on adjustments to the bundled payment for 
OUD treatment services, we are finalizing 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. We are finalizing to allow OTPs 
to bill a new HCPCS code (G0137) for IOP services based on a minimum of 
at least nine IOP services furnished to eligible patients per week, 
which results in a payment rate of $778.20.
    We estimate that these finalized policies to allow OTPs to bill for 
IOP services beginning in CY 2024 will result in a negligible cost 
increase, that is, the overall estimated impact of this final policy is 
increased spending of less than $5 million. 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.\841\ 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 $40,466, 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.
---------------------------------------------------------------------------

    \841\ 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 final rule with comment period, we are 
setting the CY 2024 ASC relative payment weights by scaling the final 
CY 2024 OPPS relative payment weights by the final CY 2024 ASC scalar 
of 0.8881. The estimated effects of the updated relative payment 
weights on payment rates are varied and are reflected in the estimated 
payments displayed in Tables 169 and 170.
    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 will be based on the application of a 2.0 percentage 
point reduction to the annual update factor, which is the hospital 
market basket update for CY 2024. We calculated the final CY 2024 ASC 
conversion factor by adjusting the CY 2023 ASC conversion factor by 
1.0010 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 
3.1 percent (which is equal to the final inpatient hospital market 
basket percentage increase of 3.3 percent reduced by a productivity 
adjustment of 0.2 percentage point). The final CY 2024 ASC conversion 
factor is $53.514 for

[[Page 82163]]

ASCs that successfully meet the quality reporting requirements.
a. Limitations of Our Analysis
    Presented here are the projected effects of the final changes for 
CY 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 final 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 final 
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 final 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 169 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 170 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 169, 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 169.
     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 final updates to ASC payment rates for CY 
2024 compared to CY 2023.
    As shown in Table 169, 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 2024 will result in a 8 percent 
increase in aggregate payment amounts for eye and ocular adnexa 
procedures, an 11 percent decrease in aggregate payment amounts for 
nervous system procedures, 1 percent increase in aggregate payment 
amounts for musculoskeletal system procedures, a 9 percent increase in 
aggregate payment amounts for digestive system procedures, a 4 percent 
increase in aggregate payment amounts for cardiovascular system 
procedures, and a 8 percent increase in aggregate payment amounts for 
genitourinary system procedures. We note that these changes can be a 
result of different factors, including updated data, payment weight 
changes, and changes in policy. In general, spending in each of these 
categories of services is increasing due to the 3.1 percent payment 
rate update. After the payment rate update is accounted for, aggregate 
payment increases or decreases for a category of services can be higher 
or lower than a 3.1 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 8 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 
an offsetting increase in the ASC weight scalar to account for an 
expected decrease in ASC expenditures from other surgical specialties. 
These changes are further increased by the 3.1 percent ASC rate update 
for these procedures. Conversely, we estimate an 11 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 63685) to a new, 
lower-cost neurostimulator procedure (CPT code 64596) for CY 2024. For 
estimated changes for selected procedures, we refer readers to Table 
169 provided later in this section.

[[Page 82164]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.248

    Table 170 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 final update.
BILLING CODE 4150-28-P

[[Page 82165]]

[GRAPHIC] [TIFF OMITTED] TR22NO23.249

BILLING CODE 4150-28-C
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 those additional procedures 
that we finalized to designate as office-based in CY 2024, the 
beneficiary coinsurance amount under the ASC payment system

[[Page 82166]]

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 final rule with comment period. The first 
accounting statement, Table 171, 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 172, illustrates the 
classification of expenditures associated with the 3.1 percent CY 2024 
update to the ASC payment system, based on the provisions of this final 
rule with comment period and the baseline spending estimates for ASCs. 
Both tables classify most estimated impacts as transfers. Table 173 
displays the annual estimated impact of hospital price transparency.
[GRAPHIC] [TIFF OMITTED] TR22NO23.250

[GRAPHIC] [TIFF OMITTED] TR22NO23.251

[GRAPHIC] [TIFF OMITTED] TR22NO23.252

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 with comment 
period (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 Final Rule Policies
    We do not anticipate that the Hospital OQR Program policies will 
significantly impact the number of hospitals that will receive payment 
reductions. In this final rule with comment period, we are finalizing 
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 Follow-Up Interval for Normal Colonoscopy in 
Average Risk Patients measure, beginning with the CY 2024 reporting 
period/CY 2026 payment determination.
    We are finalizing with modification our proposal to adopt the Risk-
Standardized Patient-Reported Outcome-Based Performance Measure (PRO-
PM) Following Elective Primary Total Hip Arthroplasty (THA) and/or

[[Page 82167]]

Total Knee Arthroplasty (TKA) in the HOPD Setting (THA/TKA PRO-PM) with 
voluntary reporting beginning with the CY 2025 reporting period and 
mandatory reporting beginning one year later than proposed with the CY 
2028 reporting period/CY 2031 payment determination.
    We are finalizing with modification our proposal to adopt the 
Excessive Radiation Dose or Inadequate Image Quality for Diagnostic 
Computed Tomography (CT) in Adults (Hospital Level--Outpatient) 
electronic clinical quality measure (eCQM) with voluntary reporting 
beginning with the CY 2025 voluntary reporting period and mandatory 
reporting beginning 1 year later than proposed with the CY 2027 
reporting period/CY 2029 payment determination.
    We are not finalizing our proposals to: (1) re-adopt with 
modification the Hospital Outpatient Volume Data on Selected Outpatient 
Surgical Procedures measure; and (2) remove the Left Without Being Seen 
measure.
    We refer readers to section XXIV.B of this final rule with comment 
period entitled ``Collection of Information'' 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 157 where we estimate a total information 
collection burden increase for 3,350 OPPS hospitals of 67,842 hours at 
a cost of $1,536,526 annually associated with our finalized policies 
for the CYs 2030 reporting period/CY 2032 payment determination and 
subsequent years, compared to our currently approved information 
collection burden estimates.
    In section XIV.B.2.a of this final rule with comment period, we 
finalized our proposal 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 with comment period for the Hospital 
OQR Program (86 FR 63984).
    In section XIV.B.2.b of this final rule with comment period, we 
finalized our proposal 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 final rule with comment period, we 
finalized with modification our proposal to adopt 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).\842\
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    \842\ 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.
---------------------------------------------------------------------------

    In section XIV.B.3.c of this final rule with comment period, we 
finalized with modification our proposal to adopt 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 with comment period (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). For the Excessive Radiation eCQM, 
hospitals will be required to create a secure account through the 
measure developer's website and link their EHR and PACS data to the 
Alara Imaging Software for CMS Measure Compliance. Similar to our 
assumptions for the Hospital IQR Program in the FY 2024 IPPS/lTCH PPS 
final rule (88 FR 59431), we estimate this one-time activity will 
require no more than 1 hour to complete and therefore estimate a total 
of 3,350 hours (1 hour x 3,350 hospitals) at a cost of $174,602 (3,350 
hours x $52.12) for all OPPS hospitals.
    Regarding the remaining finalized proposals, we do not believe any 
of these policies would result in any additional economic impact beyond 
those discussed in section XXIV ``Collection of Information'' of this 
final rule with comment period.
4. Effects of Requirements for the Ambulatory Surgical Center Quality 
Reporting (ASCQR) Program
a. Background
    In section XV of this final rule with comment period, we discuss 
our finalized policies affecting the ASCQR Program. Based on the most 
recent

[[Page 82168]]

analysis of the CY 2023 payment determination data, we found that, of 
the 5,375 ambulatory surgical centers (ASCs) that were actively billing 
Medicare, 3,733 were required to participate in the ASCQR Program and 
met all reporting requirements, whereas 194 did not. Of the 1,448 ASCs 
not required to participate in the program, 687 ASCs did so. In 
addition, 195 Hospitals Without Walls have returned to active ASC 
billing and will be eligible to participate toward CY 2024 payment 
determinations. On this basis, we estimate that 4,809 ASCs (3,733 + 194 
+ 687 + 195) will submit data for the ASCQR Program for the CY 2026 
payment determination unless otherwise noted. We note that this 
estimate is a decrease of 248 ASCs from our estimate of 5,057 provided 
in the CY 2024 OPPS/ASC proposed rule (88 FR 49881) due to results from 
more recent data analysis regarding numbers of eligible ASCs.
b. Impact of CY 2024 OPPS/ASC Finalized Policies
    In this final rule with comment period, we are finalizing our 
proposals 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; and (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.
    We are finalizing with modification our 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 (THA/TKAPRO-PM) with 
voluntary reporting beginning with the CY 2025 reporting period through 
the CY 2027 reporting period followed by mandatory reporting beginning 
one year later than proposed with the CY 2028 reporting period/CY 2031 
payment determination.
    We are not finalizing our proposal to re-adopt with modification 
the ASC Facility Volume Data on Selected ASC Surgical Procedures 
measure.
    We refer readers to section XXIV.C of this final rule with comment 
period (addressing 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 163 where we estimate a total information collection burden 
increase for 4,089 ACSs of 302 hours at a cost of $6,670 annually 
associated with our finalized policies and updated burden estimates for 
the CY 2030 reporting period/CY 2032 payment determination and 
subsequent years, compared to our currently approved information 
collection burden estimates. We note that our burden estimate has been 
updated from the CY 2024 OPPS/ASC proposed rule (88 FR 49906) due to 
the previously discussed decrease in our estimate of ASCs submitting 
data for the CY 2026 payment determination as well as the decision not 
to finalize our proposal to re-adopt with modification the ASC Facility 
Volume on Selected ASC Surgical Procedures measure.
    In section XV.B.4.a of this final rule with comment period, we 
finalized our proposal 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 
will not require additional information to be collected and, therefore, 
the financial impact of any required updates will be minimal. Finally, 
we do not estimate any changes to the effects previously discussed in 
the CY 2022 OPPS/ASC final rule with comment period for the ASCQR 
Program (86 FR 63985).
    In section XV.B.4.b of this final rule with comment period, we 
finalized our proposal 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 will no longer be 
allowable for collecting data for this measure, however, we believe any 
costs associated with modifying clinical practices will 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 final rule with comment period, we 
finalized with modification the adoption of the THA/TKA PRO-PM. We 
assume the effects on ASCs will 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 
will 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 will 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).\843\
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    \843\ 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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    Regarding the remaining proposals finalized, we do not believe any 
of these finalized proposals would result in any additional economic 
impact beyond those discussed in section XXIV of this final rule with 
comment period, if adopted.
5. Effects of Requirements for the Rural Emergency Hospital Quality 
Reporting (REHQR) Program
a. Background
    In section XVI of this final rule with comment period, we discuss 
our

[[Page 82169]]

finalized policies affecting the Rural Emergency Hospital Quality 
Reporting (REHQR) Program. We are finalizing the adoption of 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 of this final rule with comment 
period for a detailed discussion of the calculations estimating the 
changes to the information collection burden for submitting data to the 
REHQR Program and Table 164 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 finalized policies for the CY 2024 
reporting period and subsequent years. Regarding the remaining policies 
we are finalizing, we do not believe any of these policies will result 
in any additional economic impact beyond those discussed in section 
XXIV of this final rule with comment period.
b. Impact of CY 2024 OPPS/ASC Finalized 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 become an REH in the nation based on current available data. 
Based on our analysis of CAHs and subsection (d) hospitals 
participating in the Hospital OQR Program with 50 beds or less, we have 
estimated 746 hospitals could transition to REH status assuming that 
all eligible hospitals in states which have passed or amended necessary 
legislation enabling transition to occur as of March 2023 choose to do 
so. We use this number of REHs for our impact analyses knowing that 
more jurisdictions will pass or amend necessary legislation enabling 
transitions, acknowledging that the number of conversions could be less 
than or significantly greater than this estimate with time noting that 
as of October 13, 2023, 16 hospitals had converted to REH status.
    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 policies will 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 proposed 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 proposed 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)
    We received several comments requesting that we revise the CoPs at 
Sec.  485.916(a)(1) and (3) to specifically identify MFTs and MHCs as 
potential members of the CMHC interdisciplinary team. We have modified 
the language at Sec.  485.916(a)(1) to include the MFT or MHC as 
providers who can lead the CMHC interdisciplinary team. The standard at 
Sec.  485.916(d) 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 proposed to add IOP into this requirement and 
to reference the specific IOP program requirements being proposed (at 
Sec.  424.24(d)) in section VIII.B.2 of this final rule with comment 
period. We do not expect any increase in burden for these 
modifications, 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 proposed to modify the title at Sec.  
485.918, by adding intensive outpatient services after partial 
hospitalization services. In addition, we proposed to add IOP to the 
requirement at Sec.  485.918(b)(1)(iii) for the provision of services. 
This 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 proposed to add a new standard for IOP services at Sec.  
485.918(g). This requirement specifies the additional requirements a 
CMHC providing IOP services must meet under proposed requirements at 
Sec. Sec.  410.2, 410.44, 410.111, and 424.24(d). 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 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 Requirements Relating to Hospital Price Transparency
a. Background
    Since the hospital price transparency regulation's (at 45 CFR part 
180) effective date on January 1, 2021, hospitals have been required to 
make their standard charges available to the public.
    As discussed in section XVIII of the CY 2024 OPPS/ASC proposed rule 
(88 FR 49847 through 49864), we proposed a number of changes to the 
hospital price transparency regulations at 45 CFR part 180 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.

[[Page 82170]]

Specifically, we are finalizing: (1) definitions of several terms; (2) 
a requirement that hospitals make a good faith effort to ensure 
standard charge information is true, accurate, and complete, and to 
include a statement affirming this in the MRF; (3) new data elements 
that hospitals must include in their MRFs, as well a requirement that 
hospitals encode standard charge information in a CMS template layout; 
(4) a phased implementation timeline applicable to the new requirements 
we are finalizing in this final rule with comment period; (5) a 
requirement that 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 (6) improvements to 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.
b. Overall Estimated Burden on Hospitals Due to Hospital Price 
Transparency Requirements
    The hospital price transparency policies are estimated to increase 
burden on hospitals (as defined at 45 CFR 180.20), as detailed in 
section XXIV, including a one-time cost and a modest increase in 
recurring costs. We believe that the benefits to the public, some of 
which are noted above, justify this regulatory action.
    To analyze the costs of this 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 with comment period and 
codified at 45 CFR part 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 
inform our baseline scenario of no further regulatory action.
    As detailed in section XXIV of this final rule with comment period, 
commenters generally expressed concern that the cost to comply with new 
HPT requirements was underestimated in the proposed rule. Accordingly, 
we have revised our burden estimates in the section XXIV of this final 
rule with comment period, as well as the assumptions used in this RIA 
to establish a range of quantifiable effects that accounts for 
uncertainty. We now estimate a one-time cost for this requirement of 
approximately $10,587.10 per hospital, or $75,147,236 ($10,587.10 x 
7,098) for all hospitals combined. This is an increase of $7,800.10 per 
hospital, or $55,362,696.80 for all hospitals combined compared to the 
cost estimates in the CY 2024 OPPS/ASC proposed rule. To estimate upper 
and lower bounds 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 nearly all of the proposed requirements. 
Moreover, some hospitals may have robust information systems in which 
the information we are finalizing is readily available. As a result, a 
subset of these hospitals may only need to review this regulation to 
ensure that all finalized requirements are being met, which represents 
our low estimate. A second group of hospitals may have adopted 
automated processes to allow for automated processing of the data that 
is currently required for display, but would have to collect and encode 
the newly finalized data elements for the first time; for these 
hospitals we assume the full collection and implementation cost 
estimated above. A third subset of hospitals are assumed not to have 
adopted an automated process to collect and display the currently 
required data elements and would not do so for the data elements 
finalized in this final rule. As such, these hospitals would be making 
more time-consuming manual updates each year to comply with the new HPT 
requirements. The marginal annual burden on these hospitals would be 
limited to the difference in burden under this regulation compared to 
the existing requirements; we assume the marginal annual burden to be 
20 percent of the initial implementation cost. For the low estimate we 
assume hospitals are distributed 10, 70, and 20 percent across the 
three subsets described above, respectively, and for the high estimate 
we assume hospitals are distributed 0, 50, and 50 percent across the 
three subsets. Finally, to account for uncertainty inherent in these 
types of estimates of administrative costs, we further adjusted our 
high estimate upward by 50 percent, and our low estimate downward by 50 
percent. These cost range estimates are displayed in Table 174.
[GRAPHIC] [TIFF OMITTED] TR22NO23.253

    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 (in 2019 dollars). We estimated in the CY 2024 OPPS/ASC 
proposed rule that the requirements would increase hospital annual 
burden by 8 hours per year (88 FR 49892). This would result in 
increasing 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

[[Page 82171]]

per respondent x 7,098 hospitals). This represents a $10,698,069 
($32,370,571 - $21,672,502) increase over our previously estimated 
national annual burden for subsequent years.
c. Benefits of Final Policies
    Although we cannot quantify the benefits of including additional 
data elements and encoding such data in a CMS template layout, we 
believe standardization requirements will help streamline the 
hospital's development and public's 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 a standardized CMS template will assist 
hospitals with implementing the hospital price transparency regulation, 
create administrative efficiencies, and improve compliance rates, 
thereby supporting the overarching goal of increasing healthcare 
pricing competition and lowering costs. As discussed in section XXIV of 
this final rule with comment period, 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.\844\ 
As we noted in section XXIV ``Collection of Information'' of this final 
rule with comment period, in response to the CY 2022 OPPS/ASC proposed 
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.845 846 847 848 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.\849\
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    \844\ 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 care.
    \845\ The State of Hospital Pricing Transparency in Texas. Texas 
2036. Available at: http://pricetransparency.texas2036.org/.
    \846\ 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.
    \847\ 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/ assessments/.
    \848\ 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 email.
    \849\ ``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 is 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, 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.\850\ Employers have used the data to 
reconsider their employee healthcare plans and renegotiate hospital 
contracts.851 852 853 Innovators have identified and 
aggregated the data allowing consumers of healthcare to more easily 
make meaningful comparisons.\854\ Insurers have evaluated data, 
identified hospitals that are cost outliers, and successfully 
renegotiated their contracts.\855\ Researchers \856\ and industry 
experts \857\ continue to expose potential savings by publishing on the 
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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    \850\ R&R Insurance. How I Saved Over 1K. Available at: https://rrins.wistia.com/medias/rkefb7g3aq.
    \851\ 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.
    \852\ 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.
    \853\ 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.
    \854\ Turquoise Health. Patients--Shop Healthcare Like You Shop 
Anything Else. Available at: https://turquoise.health/patients.
    \855\ 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/.
    \856\ 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/.
    \857\ 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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    Numerous peer-reviewed academic studies have used the MRF data to 
conduct price analyses.858 859 860 861 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

[[Page 82172]]

knee replacements among hospitals within specific 
regions.862 863 However, lack of standardization has 
hampered these efforts; 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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    \858\ 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.
    \859\ 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.
    \860\ 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.
    \861\ 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 term=021323.
    \862\ 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/.
    \863\ 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/.
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    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, including an increase in data 
elements that provide context for the standard charges established by 
hospitals, 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.864 865 As discussed by industry experts, 
standardization will require all hospitals to provide this ``much-
needed'' context in their machine-readable files, thereby enhancing 
innovators' ability to develop tools to help consumers of healthcare 
effectively compare prices.\866\ Patient advocates echo the need for 
standardization.\867\ Beyond providing additional context, a required 
template and data elements improves 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.868 869 In the CY 2020 OPPS/ASC final 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.\870\
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    \864\ https://www.healthsystemtracker.org/brief/ongoing-challenges-with-hospital-price-transparency/.
    \865\ https://familiesusa.org/wp-content/uploads/2023/04/Power-of-Price-Transparency-final-4.19.23.pdf.
    \866\ Turquoise Health. CMS Releases Required Schemas for 
Hospital MRFs. July 13, 2023. Available at: https://blog.turquoise.health/cms-releases-required-schemas-for-hospital-mrfs/.
    \867\ https://static1.squarespace.com/static/60065b8fc8cd610112ab89a7/t/60de0380cc0972060d0354eb/1625162631437/PRA+OPPS+Recommendations+June+2021%5B3%5D.pdf.
    \868\ 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 20Hospitals.
    \869\ 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/.
    \870\ 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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d. Consideration of Increased Burden to Hospitals Due to Hospital Price 
Transparency Requirements
(1) MRF Standardization and Accessibility of Hospital MRFs
    Many hospitals have expressed concern over two major hurdles in 
implementing the HPT rule requirements: administrative burden \871\ and 
cost,872 873 and we acknowledge that requiring additional 
data elements and use of a CMS template would impose an additional one-
time burden on hospitals. However, for the reasons discussed in this 
rule and the CY 2024 OPPS proposed rule (88 FR 49847 through 49864), 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.
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    \871\ 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.
    \872\ 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.
    \873\ 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 7vzkg.
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    In the CY 2020 HPT final rule, we finalized requirements for MRF 
location and accessibility (45 CFR 180.50(d)). We prioritized 
accessibility because we want to be sure hospital standard charge 
information can be available for automated 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.874 875 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

[[Page 82173]]

websites.876 877 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 are finalizing the requirement for hospitals to 
post a .txt file to the root folder of the public website. To reduce 
burden on hospitals, CMS intends to provide both plain language 
instruction and develop a .txt generator to support the proposed 
requirement.
---------------------------------------------------------------------------

    \874\ Kona, M. CMS Proposes Updates To The Hospital Price 
Transparency Rule. Health Affairs. August 3, 2023. Available at: 
https://www.healthaffairs.org/content/forefront/cms-proposes-updates-hospital-price-transparency-rule.
    \875\ Rhee, B. and Kalliainen, L. Ongoing Challenges With Prices 
Transparency in Hospital Charges for Hand Procedures. In Press. 
Available at: https://www.sciencedirect.com/science/article/abs/pii/S0363502323004112 04112.
    \876\ 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/ files/.
    \877\ 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 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. Feedback 
received during public comment confirmed the burden on hospitals to 
post a .txt file to the root folder of a public website is minimal.
    Comment: Several commenters expressed concern about the financial 
and administrative burden for hospitals to comply with adopting the new 
required hospital price transparency template and encoding additional 
data elements. These commenters indicated that the addition of new data 
elements would not be feasible within the proposed timeframe. Moreover, 
these commenters indicated that encoding new data, at least initially, 
would be a manual process for hospitals that don't already have such 
data formatted as separate data elements in their systems. Others noted 
that the desired data is not simply available from a single data source 
or always maintained by the chargemaster or billing vendor, often 
requiring a manual review and calculations for services and procedures, 
requiring extensive reprogramming and file manipulation to populate 
this information. Several commenters noted that while some hospitals 
may already be using the current optional CMS provided template for 
their MRFs, many are not, and all facilities will have to make at least 
some operational changes to encode the new data elements. While several 
commenters noted appreciation for CMS's willingness to address issues 
with the current format raised by hospitals and other stakeholders, 
they also noted the tremendous increase in cost and workforce burden. 
Several commenters indicated that the burden from the CY 2024 OPPS/ASC 
proposed rule will far outweigh the utility of this information for 
patients.
    Response: We believe the benefits of standardization to innovators, 
researchers and other entities utilizing the MRFs to promote 
competition (through, for example, creating consumer-friendly price 
comparison tools) and reduce healthcare costs outweigh the operational 
challenges faced by hospitals. We believe standardization helps 
streamline the development and consumption of the MRF data, making it 
more actionable for employers, third party tool developers, and 
researchers. Researchers and experts suggest that a clear standard 
format would better support hospital compliance with the 
regulation.878 879 880 881 Additional studies have also 
suggested that standardization would improve the accuracy of price 
comparisons, the quality and usefulness of MRF data, and perhaps reduce 
wide variations in hospital prices.882 883 In response to 
commenters' concerns about additional burden we are finalizing an 
approach to phase in the implementation of the new requirements we are 
finalizing in this final rule with comment period. Specifically, we are 
finalizing that the effective date of all of the changes to the 
hospital price transparency regulations at 45 CFR part 180 will be 
January 1, 2024. However, the regulation text will specify later dates 
by which hospitals must be in compliance with some of these new 
requirements, and we will begin enforcing hospital compliance with 
those new requirements on the applicable later compliance date. The 
date by which hospitals must comply with each of the new requirements 
is described in Table 151A and 151B in section XVIII.B.3.c of this 
final rule with comment period. Finally, in response to comments, we 
are also increasing the estimate as discussed above.
---------------------------------------------------------------------------

    \878\ The State of Hospital Pricing Transparency in Texas. Texas 
2036. Available at: http://pricetransparency.texas2036.org/.
    \879\ 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.
    \880\ 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/.
    \881\ 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 email.
    \882\ Lo, J, et al. Ongoing Challenges with Hospital Price 
Transparency. Peterson-KFF Health System Tracker. February 10, 2023. 
Available at: https://www.healthsystemtracker.org/brief/ongoing-challenges-with-hospital-price-transparency/#Select%20data%20for%20University%20of%20Chicago%20Hospitals.
    \883\ 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/.
---------------------------------------------------------------------------

    Comment: A few commenters noted that the HPT regulations have 
prompted an entirely new industry of vendors and consultants eager to 
help hospitals comply at great expense creating financial hardship. A 
few commenters also noted that rural and CAH facilities will suffer 
further burden since they already struggle with dedicating staff and 
resources to complying with existing HPT regulations.
    Response: As indicated in section XXIV.H of this final rule with 
comment period, we note that hospitals have different operational and 
administrative systems that impact projected burden for implementation 
of the CMS standard template and encoding of new data elements. To 
address this variability, CMS is allowing hospitals a choice of CMS 
template format and layout they will use, providing hospitals some 
flexibility to select the least burdensome format and layout to 
incorporate into their current MRF development process. CMS expects 
that most hospitals have automated processes in place to minimize the 
burden associated with developing their current MRFs. Furthermore, as 
indicated in sections XVIII.B.3.c. and XXIV.H. of this final rule with 
comment period (above), we have taken the burden associated with 
adopting the CMS standard template and encoding the new data elements 
into account, and we are finalizing additional time for hospitals to 
implement the changes to their MRFs and have revised our burden 
estimates.
(2) Improvements in CMS Enforcement of Hospital Price Transparency
    We received several comments regarding the potential burden 
associated with the proposals to improve and enhance enforcement. We

[[Page 82174]]

have summarized those comments and responded to them in section XVIII.C 
of this final rule with comment period. We do not believe that our 
compliance activities represent a burden to hospitals because we expect 
hospitals to comply with the requirements of 45 CFR part 180. We 
therefore have not included any costs estimates related to CMS 
enforcement activities.
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. We also note 
that several other price transparency initiatives have been 
implemented, or are in the process of being implemented, that may make 
a definitive and specific 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 taken an approach that assesses the 
potential directional impact of these new 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
    We considered a number of alternative approaches including reducing 
or increasing the number of data elements or limiting the CMS template 
to a single format (for example, JSON).
    The requirement of additional data elements is necessary to provide 
context to hospital standard charges and represents nearly the entire 
cost in our burden estimate. Thus, reducing the number of data elements 
would reduce hospital burden and the cost associated with gathering the 
data necessary to display while increasing the number of proposed data 
elements would increase hospital burden and the cost associated with 
gathering data for display. The additional required data elements are 
based on the FFRDC 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 we considered was to limit hospital choice of 
format for the MRF to JSON, which we concluded would be expected to 
increase hospital burden for hospitals that lack technical expertise, 
as discussed in XVIII of this final rule with comment period.
    We therefore have not finalized any alternatives because 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 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 this year's proposed rule will be the number of reviewers 
of this final rule with comment period. We acknowledge that this 
assumption may understate or overstate the costs of reviewing this 
final rule with comment period. It is possible that not all commenters 
reviewed this 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 welcomed any public comments on the approach in estimating the 
number of entities that would review the proposed rule. We did not 
receive any public comments specific to our solicitation. We also 
recognize that different types of entities are in many cases affected 
by mutually exclusive sections of the proposed rule, and therefore for 
the purposes of our estimate we assume that each reviewer reads 
approximately 50 percent of the rule. We sought public comments on this 
assumption. We did not receive any public comments specific to our 
solicitation.
    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 final rule with comment period. 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 $3,715,428 ($984.48 x 3,774).

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 $47.0 
million or less in any single year or by the hospital's not-for-profit 
status. Most ASCs (NAICS code 621493 with a $19 million threshold) and 
most CMHCs (NAICS code 621498 with a $25.5 million threshold) 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 https://www.sba.gov/document/support-table-size-standards.
    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 final rule with comment period. 
Therefore, the Secretary has certified that this final rule with 
comment period will have a significant economic impact on a substantial 
number of small entities.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis if a rule may have a significant impact on 
the operations of a substantial number of small rural hospitals. This 
analysis must conform to the provisions of section 604 of the RFA. For 
purposes of section 1102(b) of the Act, we define a small rural 
hospital as a hospital that is located outside of

[[Page 82175]]

a metropolitan statistical area and has 100 or fewer beds. We estimate 
that this final rule with comment period will increase payments to 
small rural hospitals by approximately 5 percent; therefore, it should 
have a negligible impact on approximately 554 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 
threshold is approximately $177 million. This final rule with comment 
period will 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 final rule with comment period in accordance with Executive Order 
13132, Federalism, and have determined that they will not have a 
substantial direct effect on State, local, or Tribal governments, 
preempt State law, or otherwise have a federalism implication. As 
reflected in Table 168 of this final rule with comment period, we 
estimate that OPPS payments to governmental hospitals (including State 
and local governmental hospitals) would increase by 2.8 percent under 
this final rule with comment period. While we do not know the number of 
ASCs or CMHCs with government ownership, we anticipate that it is 
small. The analyses we have provided in this section of this final rule 
with comment period, in conjunction with the remainder of this 
document, demonstrate that this final rule with comment period is 
consistent with the regulatory philosophy and principles identified in 
Executive Order 12866, the RFA, and section 1102(b) of the Act.
    This final rule with comment period will affect payments to a 
substantial number of small rural hospitals and a small number of rural 
ASCs, as well as other classes of hospitals, CMHCs, and ASCs, and some 
effects may be significant. However, as noted in section XXIII of this 
final rule with comment period, this rule should not have a significant 
effect on small rural hospitals.

H. Conclusion

    The changes we are finalizing in this final rule with comment 
period will affect all classes of hospitals paid under the OPPS as well 
as both CMHCs and ASCs. We estimate that most classes of hospitals paid 
under the OPPS will experience a modest increase or a minimal decrease 
in payment for services furnished under the OPPS in CY 2024. Table 168 
demonstrates the estimated distributional impact of the OPPS budget 
neutrality requirements that will result in a 3.2 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 ASC's 
patients who are Medicare beneficiaries, the degree to which the 
payments for the procedures offered by the ASC are changed under the 
ASC payment system, and the extent to which the ASC provides a 
different set of procedures in the coming year than in previous years. 
Table 169 demonstrates the estimated distributional impact among ASC 
surgical specialties of the productivity-adjusted hospital market 
basket update factor of 3.1 percent for CY 2024.

I. Congressional Review

    This final rule with comment period is subject to the Congressional 
Review Act provisions of the Small Business Regulatory Enforcement 
Fairness Act of 1996 (5 U.S.C. 801 et seq.) and has been transmitted to 
the Congress and the Comptroller General for review.
    Chiquita Brooks-LaSure, Administrator of the Centers for Medicare & 
Medicaid Services, approved this document on October 27, 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, 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, Reporting and recordkeeping 
requirements.

45 CFR Part 180

    Hospitals, Reporting and recordkeeping requirements.

42 CFR Chapter IV

    For the reasons set forth in the preamble, the Centers for Medicare 
and Medicaid Services amends 42 CFR chapter IV as set forth below:

[[Page 82176]]

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 is amended in paragraph (b) 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). (1) For RHCs, a coinsurance amount that does not exceed 20 
percent of the payment determined under Sec.  405.2462(j)(1); 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. Section 405.2446 is amended 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) Payment amount for intensive outpatient services. 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 that 
grandfathered tribal FQHCs are paid pursuant to paragraph (j)(4)(ii) 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 (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:
0
a. Revising paragraphs (a)(1) and (2);
0
b. Adding paragraph (a)(3);
0
c. Removing the period at the end of paragraph (b)(3) and adding ``; 
or'' in its place; and
0
d. Adding paragraph (b)(4).
    The revisions and additions 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.
* * * * *

[[Page 82177]]

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, 1395rr, and 1395ddd.


0
13. Section 410.2 is amended by--
0
a. In the definition of ``Community mental health center (CMHC)'', 
revising 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) * * *
    (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, critical access hospital (CAH), 
skilled nursing facility (SNF), home health agencies (HHA), 
comprehensive outpatient rehabilitation facility (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, 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), HHAs, 
CORFs, and partial hospitalization services and intensive outpatient 
services provided by 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), (e) introductory text, and (g) 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--
* * * * *
    (g) For purposes of this section, nonphysician practitioner means a 
clinical psychologist, licensed clinical social worker, marriage and 
family therapist, mental health counselor, physician assistant, nurse 
practitioner, clinical nurse specialist, or certified nurse-midwife.


0
17. Section 410.28 is amended by revising paragraph (e)(2)(iii) to read 
as follows:


Sec.  410.28  Hospital or CAH diagnostic services furnished to 
outpatients: Conditions.

* * * * *
    (e) * * *
    (2) * * *
    (iii) Through December 31, 2024, the presence of the physician or 
nonphysician practitioner under paragraphs (e)(2)(i) and (ii) of this 
section includes virtual presence through audio/video real-time 
communications technology (excluding audio-only).
* * * * *

0
18. Section 410.43 is amended by revising paragraphs (a)(4)(i) and 
(iii) and (c)(5) to read as follows:


Sec.  410.43  Partial hospitalization services: Conditions and 
exclusions.

    (a) * * *
    (4) * * *
    (i) Individual and group therapy with physicians or psychologists 
or other mental health professionals (including substance use disorder 
professionals) to the extent authorized under State law.
* * * * *
    (iii) Services of social workers, trained psychiatric nurses, and 
other staff trained to work with psychiatric patients (including 
patients with substance use disorder).
* * * * *
    (c) * * *
    (5) Have a mental health or substance use disorder diagnosis;
* * * * *

0
19. 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;

[[Page 82178]]

    (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 (including substance use disorder 
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 (including 
patients with substance use disorder).
    (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 or substance use disorder 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
20. Section 410.67 is amended by--
0
a. In paragraph (b), in the definition of ``Opioid use disorder 
treatment service,'' 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) * * *
    Opioid use disorder treatment service * * *
    (ix) Opioid treatment program (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 
(OUD) 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 accordance with a physician or non-physician practitioner 
(as defined in section 1842(b)(18)(C) of the Act) certification and 
plan of care, as permitted by State law and scope of practice 
requirements, in which a physician or non-physician practitioner 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 or 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 and any reference to a physician requirement in Sec.  
424.24(d)(1) through (3) may also be performed by a non-physician 
practitioner (as defined in section 1842(b)(18)(C) of the Act, as 
permitted by state law and scope of practice requirements.
    (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 (ix) of the definition of opioid use disorder treatment 
service in paragraph (b) 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 Sec.  
410.44(c) and multiplied by a factor of three for a weekly payment 
adjustment.
    (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 chapter. 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 chapter.
* * * * *

[[Page 82179]]


0
21. 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
22. 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 chapter; and
    (c) Furnished under a plan of treatment that meets the requirements 
of Sec.  424.24(d)(2) of this chapter.


0
23. 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
24. 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
25. 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
26. The authority citation for part 416 continues to read as follows:

    Authority:  42 U.S.C. 1302 and 1395hh.


0
27. 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 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
28. 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) and 
489.30(b)(6) of this chapter.
* * * * *

0
29. 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
30. 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 
ASCQR 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
31. 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

[[Page 82180]]

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
32. 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
33. The authority citation for part 419 continues to read as follows:

    Authority:  42 U.S.C. 1302, 1395l(t), and 1395hh.


0
34. 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
35. 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
36. Section 419.22 is amended by adding paragraphs (w) and (x) to read 
as follows:


Sec.  419.22  Hospital services excluded from payment under the 
hospital outpatient prospective payment system.

* * * * *
    (w) Services of marriage and family therapists, as defined in 
section 1861(lll)(1) of the Act.
    (x) Services of mental health counselors, as defined in section 
1861(lll)(3) of the Act.

0
37. Section 419.41 is amended by adding paragraphs (d) through (g) to 
read as follows:


Sec.  419.41  Calculation of national beneficiary copayment amounts and 
national Medicare program payment amounts.

* * * * *
    (d) Notwithstanding paragraphs (a) through (c) of this section, for 
a drug or biological for which payment is not packaged into a payment 
for a covered outpatient department (OPD) service (or group of 
services) and is not a rebatable drug (as defined in section 
1847A(i)(2)(A) of the Act), 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 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 outpatient prospective payment 
system (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 chapter) that is furnished during the 
applicable five-year period (as defined in Sec.  414.902 of this 
chapter) 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 chapter.
    (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 chapter) during the initial period is the amount determined in 
Sec.  414.904(e)(4)(ii) of this chapter.

0
38. 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

[[Page 82181]]

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
39. Section 419.92 is amended by adding paragraphs (e) and (f) to read 
as follows:


Sec.  419.92  Payment to rural emergency hospitals.

* * * * *
    (e) Payment for Indian Health Service (IHS) or tribal REHs. An IHS 
or tribal REH, as defined in paragraph (f) of this section will be paid 
under the outpatient hospital All-Inclusive Rate that is established 
and published annually by the IHS rather than the rates for REH 
services described in paragraph (a)(1) of this section.
    (f) IHS or tribal REHs. An IHS or tribal 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 V of 
the Indian Self-Determination and Education Assistance Act (Pub. L. 93-
638).

0
40. 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(e).
* * * * *

0
41. 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 (c) of this section.
    (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

[[Page 82182]]

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 (3) of this section.
    (2) Immediate measure suspension from reporting. In cases where CMS 
believes that the collection and reporting activities related to a 
quality measure as specified raises patient safety concerns, CMS will 
immediately suspend the measure from the REHQR Program and will 
promptly notify REHs and the public of the suspension of the measure. 
CMS will address the suspension and propose any permanent action 
regarding the measure in the next appropriate rulemaking cycle.
    (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
42. The authority citation for part 424 continues to read as follows:

    Authority:  42 U.S.C. 1302 and 1395hh.


0
43. 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 furnished by providers (and not exempted under paragraph (a) 
of this section) only if a physician certifies the content specified in 
paragraph (c)(1) or (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.
* * * * *

[[Page 82183]]

PART 485--CONDITIONS OF PARTICIPATION: SPECIALIZED PROVIDERS

0
44. The authority citation for part 485 continues to read as follows:

    Authority: 42 U.S.C. 1302 and 1395(hh).


0
45. 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
46. Section 485.900 is amended by revising paragraphs (a)(1) through 
(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
47. 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
48. 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.  485.918(f) 
and (g), as applicable.
* * * * *
    (d) * * *
    (2) For clients that receive partial hospitalization program (PHP) 
or intensive outpatient (IOP) services, the assessment must be updated 
no less frequently than every 30 days.
* * * * *

0
49. Section 485.916 is amended by revising paragraphs (a)(1) and (d) to 
read as follows:


Sec.  485.916  Condition of participation: Treatment team, person-
centered active treatment plan, and coordination of services.

* * * * *
    (a) * * *
    (1) An interdisciplinary treatment team, led by a physician, nurse 
practitioner (NP), physician assistant (PA), clinical nurse specialist 
(CNS), clinical psychologist, clinical social worker, marriage and 
family therapist (MFT), or mental health counselor (MHC), must provide 
the care and services offered by the CMHC.
* * * * *
    (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 are included in the active treatment plan.
* * * * *

0
50. Section 485.918 is amended by:
0
a. Revising the section heading and paragraph (b)(1)(iii);
0
b. Redesignating paragraph (g) as paragraph (h); and
0
c. Adding new 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
51. The authority citation for part 488 continues to read as follows:

    Authority: 42 U.S.C. 1302 and 1395hh.


0
52. Section 488.2 is amended by revising the entry in table 1 for 
``1832(a)(2)(J)'' to read as follows:


Sec.  488.2  Statutory basis.

* * * * *

[[Page 82184]]



                         Table 1 to Sec.   488.2
------------------------------------------------------------------------
              Section                              Subject
------------------------------------------------------------------------
 
                              * * * * * * *
1832(a)(2)(J).....................  Requirements for partial
                                     hospitalization services and
                                     intensive outpatient services
                                     provided by CMHCs.
 
                              * * * * * * *
------------------------------------------------------------------------

PART 489--PROVIDER AGREEMENTS AND SUPPLIER APPROVAL

0
53. 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 1395hh.


0
54. 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.
* * * * *

45 CFR Subtitle A

    For the reasons set forth in the preamble, the Department of Health 
and Human Services amends 45 CFR part 180 as set forth below:

PART 180--HOSPITAL PRICE TRANSPARENCY

0
55. The authority citation for part 180 continues to read as follows:

    Authority: 42 U.S.C. 300gg-18, 42 U.S.C. 1302.


0
56. Section 180.20 is amended by--
0
a. Adding definitions for ``CMS template'', ``Encode'', ``Estimated 
allowed amount'', and ``Machine-readable file'' in alphabetical order.
0
b. In the definition of ``Machine-readable format'', removing the 
second sentence.
    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 Sec.  180.40(a).
* * * * *
    Encode means to convert hospital standard charge information into a 
machine-readable format that complies with Sec.  180.50(c)(2).
    Estimated allowed amount means the average dollar amount that the 
hospital has historically received from a third party payer for an item 
or service.
* * * * *
    Machine-readable file means a single digital file that is in a 
machine-readable format.
* * * * *

0
57. Section 180.50 is amended by--
0
a. Adding paragraph (a)(3);
0
b. Revising paragraphs (b) and (c);
0
c. In paragraph (d)(4), 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. In paragraph (d)(5):
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); and
0
f. In paragraph (e), removing the second sentence.
    The revisions and additions read as follows:


Sec.  180.50  Requirements for making public hospital standard charges 
for all items and services.

    (a) * * *
    (3) Each hospital must:
    (i) Beginning January 1, 2024, make a good faith effort to ensure 
that the standard charge information encoded in the machine-readable 
file is true, accurate, and complete as of the date indicated in the 
machine-readable file; and
    (ii) Beginning July 1, 2024, affirm in its machine-readable file 
that, to the best of its knowledge and belief, the hospital has 
included all applicable standard charge information in accordance with 
the requirements of this section, and that the information encoded is 
true, accurate, and complete as of the date indicated in the machine-
readable file.
    (b) Required data elements. (1) Prior to July 1, 2024, a hospital 
must include all of the following corresponding data elements in its 
list of standard charges, as applicable:
    (i) Description of each item or service provided by the hospital.
    (ii) Gross charge that applies to each individual item or service 
when provided in, as applicable, the hospital inpatient setting and 
outpatient department setting.
    (iii) 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.
    (iv) 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.
    (v) 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.
    (vi) Discounted cash price that applies to each item or service 
when provided in, as applicable, the hospital inpatient setting and 
outpatient department setting.
    (vii) Any code used by the hospital for purposes of accounting or 
billing for the item or service, including, but not limited to, the 
Current Procedural Terminology (CPT) code, the Healthcare Common 
Procedure Coding System (HCPCS) code, the Diagnosis Related Group 
(DRG), the National Drug Code (NDC), or other common payer identifier.
    (2) Unless otherwise specified in this paragraph (b)(2), beginning 
July 1, 2024, each hospital must encode in its machine-readable file 
all standard charge information, as applicable, for each of the 
following required data elements:
    (i) General data elements, including:
    (A) Hospital name, license number, and location name(s) and 
address(es) under the single hospital license to which the list of 
standard charges applies. Location name(s) and address(es) must 
include, at minimum, all inpatient facilities and stand-alone emergency 
departments; and
    (B) The version number of the CMS template and the date of most 
recent update to the standard charge

[[Page 82185]]

information in the machine-readable file.
    (ii) Each type of standard charge as defined at Sec.  180.20 (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:
    (A) 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;
    (B) Method used to establish the standard charge; and
    (C) 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 machine-readable file (MRF) must also 
describe the percentage or algorithm that determines the dollar amount 
for the item or service, and, beginning January 1, 2025, calculate and 
encode an estimated allowed amount in dollars for that item or service.
    (iii) A description of the item or service that corresponds to the 
standard charge established by the hospital, including:
    (A) A general description of the item or service;
    (B) Whether the item or service is provided in connection with an 
inpatient admission or an outpatient department visit; and
    (C) Beginning January 1, 2025, for drugs, the drug unit and type of 
measurement.
    (iv) Coding information, including:
    (A) Any code(s) used by the hospital for purposes of accounting or 
billing for the item or service;
    (B) Corresponding code type(s). Such code types may include, but 
are not limited to, the CPT code, the HCPCS code, the DRG, the NDC, 
Revenue Center Codes (RCC), or other common payer identifier; and
    (C) Beginning January 1, 2025, any modifier(s) that may change the 
standard charge that corresponds to a hospital item or service, 
including a description of the modifier and how it changes the standard 
charge.
    (c) Format. (1) Prior to July 1, 2024, the information described in 
paragraph (b)(1) of this section must be published in a single digital 
file that is in a machine-readable format.
    (2) Beginning July 1, 2024, the hospital's machine-readable file 
must conform to a CMS template layout, data specifications, and data 
dictionary for purposes of making public the standard charge 
information required under paragraph (b)(2) of this section.
    (d) * * *
    (6) Beginning January 1, 2024, 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 ``Price Transparency'' and links 
directly to the publicly available web page that hosts the link to the 
machine-readable file.
* * * * *

0
58. Section 180.70 is amended by:
0
a. Revising paragraphs (a) heading and (a)(2)(iii).
0
b. Adding paragraphs (a)(2)(iv) and (v).
0
c. Revising paragraph (b)(1).
0
d. Adding paragraphs (c) and (d).
    The additions and revisions read as follows:


Sec.  180.70  Monitoring and enforcement.

    (a) Monitoring and assessment. * * *
    (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 standard 
charge information 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
59. Section 180.90 is amend in 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''.

Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2023-24293 Filed 11-2-23; 5:05 pm]
BILLING CODE 4150-28-P