[Federal Register Volume 86, Number 218 (Tuesday, November 16, 2021)]
[Rules and Regulations]
[Pages 63458-63998]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-24011]
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Vol. 86
Tuesday,
No. 218
November 16, 2021
Part II
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 412, 416, 419, et al.
45 CFR Part 180
Medicare Program: Hospital Outpatient Prospective Payment and
Ambulatory Surgical Center Payment Systems and Quality Reporting
Programs; Price Transparency of Hospital Standard Charges; Radiation
Oncology Model; Final Rule
Federal Register / Vol. 86, No. 218 / Tuesday, November 16, 2021 /
Rules and Regulations
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 412, 416, 419, and 512
Office of the Secretary
45 CFR Part 180
[CMS-1753-FC]
RIN 0938-AU43
Medicare Program: Hospital Outpatient Prospective Payment and
Ambulatory Surgical Center Payment Systems and Quality Reporting
Programs; Price Transparency of Hospital Standard Charges; Radiation
Oncology Model
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 (CY)
2022 based on our continuing experience with these systems. In this
final rule with comment period, 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 with comment period updates and refines the
requirements for the Hospital Outpatient Quality Reporting (OQR)
Program and the ASC Quality Reporting (ASCQR) Program, updates Hospital
Price Transparency requirements, and updates and refines the design of
the Radiation Oncology Model.
DATES:
Effective date: The provisions of the final rule with comment are
effective January 1, 2022.
Comment period: To be assured consideration, comments on the
payment classifications assigned to the interim APC assignments and/or
status indicators of new or replacement Level II HCPCS codes in this
final rule with comment period (CMS-1753-FC) must be received at one of
the addresses provided in the ADDRESSES section no later than 5 p.m.
EST on December 2, 2021.
ADDRESSES: In commenting, please refer to file code CMS-1753-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 http://www.regulations.gov. Follow the ``Submit a
comment'' instructions.
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-1753-FC, P.O. Box 8010,
Baltimore, MD 21244-1810.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments to
the following address ONLY: Centers for Medicare & Medicaid Services,
Department of Health and Human Services, Attention: CMS-1753-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: [email protected] or at 410-
786-4617.
Advisory Panel on Hospital Outpatient Payment (HOP Panel), contact
the HOP Panel mailbox at [email protected].
Ambulatory Surgical Center (ASC) Payment System, contact Scott
Talaga via email at [email protected] or Mitali Dayal via email
at [email protected].
Ambulatory Surgical Center Quality Reporting (ASCQR) Program
Administration, Validation, and Reconsideration Issues, contact Anita
Bhatia via email at [email protected].
Ambulatory Surgical Center Quality Reporting (ASCQR) Program
Measures, contact Cyra Duncan via email [email protected].
Blood and Blood Products, contact Josh McFeeters via email at
[email protected].
Cancer Hospital Payments, contact Scott Talaga via email at
[email protected].
CMS Web Posting of the OPPS and ASC Payment Files, contact Chuck
Braver via email at [email protected].
Comment Solicitation on Temporary Policies for the PHE for COVID-
19, contact Emily Yoder via email at [email protected] or Abigail
Cesnik via email at [email protected].
Composite APCs (Low Dose Brachytherapy and Multiple Imaging),
contact Au'Sha Washington via email at [email protected].
Comprehensive APCs (C-APCs), contact Mitali Dayal via email at
[email protected].
Hospital Inpatient Quality Reporting Program--Administration
Issues, contact Julia Venanzi, [email protected].
Hospital Outpatient Quality Reporting (OQR) Program Administration,
Validation, and Reconsideration Issues, contact Shaili Patel via email
[email protected].
Hospital Outpatient Quality Reporting (OQR) Program Measures,
contact Janis Grady via email [email protected].
Hospital Outpatient Visits (Emergency Department Visits and
Critical Care Visits), contact Allison Bramlett via email at
[email protected], or Emily Yoder via email at
[email protected].
Hospital Price Transparency, contact the Hospital Price
Transparency email box at [email protected].
Inpatient Only (IPO) Procedures List, contact Au'Sha Washington via
email at [email protected], or Allison Bramlett at
[email protected], or Abigail Cesnik at
[email protected].
Medical Review of Certain Inpatient Hospital Admissions under
Medicare Part A for CY 2022 and Subsequent Years (2-Midnight Rule),
contact Abigail Cesnik via email at [email protected].
New Technology Intraocular Lenses (NTIOLs), contact Scott Talaga
via email at [email protected].
No Cost/Full Credit and Partial Credit Devices, contact Scott
Talaga via email at [email protected].
OPPS Brachytherapy, contact Scott Talaga via email at
[email protected].
OPPS Data (APC Weights, Conversion Factor, Copayments, Cost-to-
Charge Ratios (CCRs), Data Claims, Geometric Mean Calculation, Outlier
Payments, and Wage Index), contact Erick Chuang via email at
[email protected], or Scott Talaga via email at
[email protected], or Josh McFeeters via email at
[email protected].
OPPS Drugs, Radiopharmaceuticals, Biologicals, and Biosimilar
Products, contact Josh McFeeters via email at
[email protected], or Gil Ngan via email at
[email protected], or Cory Duke via email at [email protected],
or Au'Sha Washington via email at [email protected].
OPPS New Technology Procedures/Services, contact the New Technology
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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) and Community Mental Health
Center (CMHC) Issues, contact the PHP Payment Policy Mailbox at
[email protected].
RO Model, contact [email protected] or at 844-711-2664,
Option 5.
Skin Substitutes, contact Josh McFeeters via email at
[email protected].
Supervision of Outpatient Therapeutic Services in Hospitals and
CAHs, 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: http://www.regulations.gov. Follow the search instructions on that website to
view public comments. CMS will not post on Regulations.gov public
comments that make threats to individuals or institutions or suggest
that the individual will take actions to harm the individual. CMS
continues to encourage individuals not to submit duplicative comments.
We will post acceptable comments from multiple unique commenters even
if the content is identical or nearly identical to other comments.
Addenda Available Only Through the Internet on the CMS Website
In the past, a majority of the Addenda referred to in our OPPS/ASC
proposed and final rules were published in the Federal Register as part
of the annual rulemakings. However, beginning with the CY 2012 OPPS/ASC
proposed rule, all of the Addenda no longer appear in the Federal
Register as part of the annual OPPS/ASC proposed and final rules to
decrease administrative burden and reduce costs associated with
publishing lengthy tables. Instead, these Addenda are published and
available only on the CMS website. The Addenda relating to the OPPS are
available at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.
The Addenda relating to the ASC payment system are available at:
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/ASC-Regulations-and-Notices.
Current Procedural Terminology (CPT) Copyright Notice
Throughout this 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.
All Rights Reserved. CPT is a registered trademark of the American
Medical Association (AMA). Applicable Federal Acquisition Regulations
(FAR and Defense Federal Acquisition Regulations (DFAR) apply.
Table of Contents
I. Summary and Background
A. Executive Summary of This Document
B. Legislative and Regulatory Authority for the Hospital OPPS
C. Excluded OPPS Services and Hospitals
D. Prior Rulemaking
E. Advisory Panel on Hospital Outpatient Payment (the HOP Panel
or the Panel)
F. Public Comments Received in Response to the CY 2022 OPPS/ASC
Proposed Rule
G. Public Comments Received on the CY 2021 OPPS/ASC Final Rule
With Comment Period
II. Updates Affecting OPPS Payments
A. Recalibration of APC Relative Payment Weights
B. Conversion Factor Update
C. Wage Index Changes
D. 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 2022
F. Payment Adjustment for Certain Cancer Hospitals for CY 2022
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. OPPS APC-Specific Policies
IV. OPPS Payment for Devices
A. Pass-Through Payments for Devices
B. Device-Intensive Procedures
V. OPPS Payment Changes 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
VI. Estimate of OPPS Transitional Pass-Through Spending for Drugs,
Biologicals, Radiopharmaceuticals, and Devices
A. Background
B. Estimate of Pass-Through Spending
VII. OPPS Payment for Hospital Outpatient Visits and Critical Care
Services
VIII. Payment for Partial Hospitalization Services
A. Background
B. PHP APC Update for CY 2022
C. Outlier Policy for CMHCs
IX. Services That Would Be Paid Only as Inpatient Services
A. Background
B. Changes to the Inpatient Only (IPO) List
C. Summary of Final Policy and Changes to the IPO List for CY
2022
X. Nonrecurring Policy Changes
A. Medical Review of Certain Inpatient Hospital Admissions Under
Medicare Part A for CY 2022 and Subsequent Years
B. Changes to Beneficiary Coinsurance for Additional Procedures
Furnished During the Same Clinical Encounter as Certain Colorectal
Cancer Screening Tests
C. Low Volume Policy for Clinical and Brachytherapy APCs
D. Comment Solicitation on Temporary Policies To Address the
COVID-19 PHE
E. Use of CY 2019 Claims Data for CY 2022 OPPS and ASC Payment
System Ratesetting Due to the PHE
F. Separate Payment in CY 2022 for the Device Category, Drugs,
and Biologicals With Transitional Pass-Through Payment Status
Expiring Between December 31, 2021 and September 30, 2022
XI. CY 2022 OPPS Payment Status and Comment Indicators
A. CY 2022 OPPS Payment Status Indicator Definitions
B. CY 2022 Comment Indicator Definitions
XII. MedPAC Recommendations
A. OPPS Payment Rates Update
B. ASC Conversion Factor Update
C. ASC Cost Data
XIII. Updates to the Ambulatory Surgical Center (ASC) Payment System
A. Background
B. ASC Treatment of New and Revised Codes
C. Update to the List of ASC Covered Surgical Procedures and
Covered Ancillary Services
D. Update and Payment for ASC Covered Surgical Procedures and
Covered Ancillary Services
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E. New Technology Intraocular Lenses (NTIOLs)
F. ASC Payment and Comment Indicators
G. Calculation of the ASC Payment Rates and the ASC Conversion
Factor
XIV. Advancing to Digital Quality Measurement and the Use of Fast
Healthcare Interoperability Resources (FHIR) in Outpatient Quality
Programs--Request for Information
A. Background
B. Definition of Digital Quality Measures
C. Use of FHIR for Current eCQMs
D. Changes Under Consideration to Advance Digital Quality
Measurement: Potential Actions in Four Areas to Transition to
Digital Quality Measures by 2025
E. Solicitation of Comments
XV. Requirements for the Hospital Outpatient Quality Reporting (OQR)
Program
A. Background
B. Hospital OQR Program Quality Measures
C. Administrative Requirements
D. Form, Manner, and Timing of Data Submitted for the Hospital
OQR Program
E. Payment Reduction for Hospitals That Fail To Meet the
Hospital OQR Program Requirements for the CY 2022 Payment
Determination
XVI. Requirements for the Ambulatory Surgical Center Quality
Reporting (ASCQR) Program
A. Background
B. ASCQR Program Quality Measures
C. Administrative Requirements
D. Form, Manner, and Timing of Data Submitted for the ASCQR
Program
E. Payment Reduction for ASCs That Fail To Meet the ASCQR
Program Requirements
XVII. Radiation Oncology Model
A. Introduction
B. Background
C. RO Model Regulations
XVIII. Updates to Requirements for Hospitals To Make Public a List
of Their Standard Charges
A. Introduction and Overview
B. Increasing the Civil Monetary Penalty (CMP) Amounts Using a
Scaling Factor
C. Deeming of Certain State Forensic Hospitals as Having Met
Requirements
D. Improving Access to the Machine-Readable File
E. Clarification and Requests for Comment
XIX. Additional Hospital Inpatient Quality Reporting (IQR) Program
Policies
XX. Additional Medicare Promoting Interoperability Program Policies
XXI. Files Available to the Public via the Internet
XXII. Collection of Information Requirements
A. Statutory Requirement for Solicitation of Comments
B. ICRs for the Hospital OQR Program
C. ICRs for the ASCQR Program
XXIII. Response to Comments
XXIV. Economic Analyses
A. Statement of Need
B. Overall Impact for the Provisions of This Final Rule With
Comment Period
C. Detailed Economic Analyses
D. Regulatory Review Costs
E. Regulatory Flexibility Act (RFA) Analysis
F. Unfunded Mandates Reform Act Analysis
G. Conclusion
H. Federalism Analysis
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, 2022. 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 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 practices,
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, Hospital Price
Transparency requirements, and the design of the Radiation Oncology
Model.
2. Summary of the Major Provisions
OPPS Update: For 2022, we are increasing the payment rates
under the OPPS by an Outpatient Department (OPD) fee schedule increase
factor of 2.0 percent. This increase factor is based on the proposed
hospital inpatient market basket percentage increase of 2.7 percent for
inpatient services paid under the hospital inpatient prospective
payment system (IPPS) reduced by a proposed productivity adjustment of
0.7 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) 2022 would be approximately $82.078 billion, an
increase of approximately $5.913 billion compared to estimated CY 2022
OPPS payments.
We are continuing to implement the statutory 2.0 percentage point
reduction in payments for hospitals that fail to meet the hospital
outpatient quality reporting requirements by applying a reporting
factor of 0.9804 to the OPPS payments and copayments for all applicable
services.
Data used in CY 2022 OPPS/ASC Ratesetting: To set CY 2022
OPPS and ASC payment rates, we would normally use the most updated
claims and cost report data available. However, because the CY 2020
claims data include services furnished during the COVID-19 PHE, which
significantly affected outpatient service utilization, we have
determined that CY 2019 data would better approximate expected CY 2022
outpatient service utilization than CY 2020 data. As a result, we are
utilizing CY 2019 data to set CY 2022 OPPS and ASC payment rates.
Partial Hospitalization Update: For CY 2022, we are using
the CMHC and hospital-based PHP (HB PHP) geometric mean per diem costs,
consistent with existing methodology, but with a cost floor that will
maintain the per diem costs finalized in CY 2021. We are also using the
CY 2019 claims and cost report data for each provider type, consistent
with the use of claims and cost report data prior to the PHE within the
broader CY 2022 OPPS ratesetting.
Changes to the Inpatient Only (IPO) List: For 2022, we are
finalizing our proposal with modification to pause the elimination of
the IPO list and add back to the IPO list the services removed in 2021,
except for CPT code 22630 (Arthrodesis, posterior interbody technique,
including laminectomy and/or discectomy to prepare interspace (other
than for decompression), single interspace; lumbar); CPT code 23472
(Arthroplasty, glenohumeral joint; total shoulder (glenoid and proximal
humeral replacement (for example, total shoulder))); CPT code 27702
(Arthroplasty, ankle; with implant (total ankle)) and their
corresponding anesthesia codes: CPT code 00630 (Anesthesia for
procedures in lumbar region; not otherwise specified), CPT code 00670
(Anesthesia for extensive spine and spinal cord procedures (e.g.,
spinal instrumentation or vascular procedures)); CPT code 01638
(Anesthesia for open or surgical arthroscopic procedures on humeral
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head and neck, sternoclavicular joint, acromioclavicular joint, and
shoulder joint; total shoulder replacement); and CPT 01486 (Anesthesia
for open procedures on bones of lower leg, ankle, and foot; total ankle
replacement). We are also classifying CPT code 0643T (Transcatheter
left ventricular restoration device implantation including right and
left heart catheterization and left ventriculography when performed,
arterial approach) as an inpatient only procedure. We are finalizing
our proposal to amend the regulation at Sec. 419.22(n) to remove the
reference to the elimination of the list of services and procedures
designated as requiring inpatient care through a 3-year transition and
to codify our five longstanding criteria for determining whether a
service or procedure should be removed from the IPO list in the
regulation in a new Sec. 419.23.
Medical Review of Certain Inpatient Hospital Admissions
under Medicare Part A for CY 2021 and Subsequent Years (2-Midnight
Rule): For CY 2022, we are finalizing a policy to exempt procedures
that are removed from the inpatient only (IPO) list under the OPPS
beginning on or after January 1, 2022, from site-of-service claim
denials, Beneficiary and Family-Centered Care Quality Improvement
Organization (BFCC-QIO) referrals to Recovery Audit Contractor (RAC)
for persistent noncompliance with the 2-midnight rule, and RAC reviews
for ``patient status'' (that is, site-of-service) for a time period of
2 years.
340B-Acquired Drugs: For CY 2022, we are continuing our
current policy of paying an adjusted amount of ASP minus 22.5 percent
for drugs and biologicals acquired under the 340B program. We are
continuing to exempt Rural SCHs, PPS-exempt cancer hospitals and
children's hospitals from our 340B payment policy.
Device Pass-Through Payment Applications: For CY 2022, we
received eight applications for device pass-through payments. One of
these applications received preliminary approval for pass-through
payment status through our quarterly review process. We solicited
public comment on all eight of these applications and are making final
determinations on these applications in this CY 2022 OPPS/ASC final
rule with comment period.
Equitable Adjustment for Device Category, Drugs, and
Biologicals with Expiring Pass-through Status: As a result of our
proposal to use CY 2019 claims data, rather than CY 2020 claims data,
to inform CY 2022 ratesetting, we are using our equitable adjustment
authority under 1833(t)(2)(E) to provide up to four quarters of
separate payment for 27 drugs and biologicals and one device category
whose pass-through payment status will expire between December 31, 2021
and September 30, 2022.
Cancer Hospital Payment Adjustment: For CY 2022, we are
continuing to provide additional payments to cancer hospitals so that a
cancer hospital's payment-to-cost ratio (PCR) after the additional
payments is equal to the weighted average PCR for the other OPPS
hospitals using the most recently submitted or settled cost report
data. However, section 16002(b) of the 21st Century Cures Act requires
that this weighted average PCR be reduced by 1.0 percentage point.
Based on the data and the required 1.0 percentage point reduction, we
are using a target PCR of 0.89 to determine the CY 2022 cancer hospital
payment adjustment to be paid at cost report settlement. That is, the
payment adjustments will be the additional payments needed to result in
a PCR equal to 0.89 for each cancer hospital.
ASC Payment Update: For CYs 2019 through 2023, we adopted
a policy to update the ASC payment system using the hospital market
basket update. Using the hospital market basket methodology, for CY
2022, we are increasing payment rates under the ASC payment system by
2.0 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 2.7 percent reduced by a productivity adjustment
of 0.7 percentage point. Based on this update, we estimate that total
payments to ASCs (including beneficiary cost-sharing and estimated
changes in enrollment, utilization, and case-mix) for CY 2022 would be
approximately 5.41 billion, an increase of approximately 40 million
compared to estimated CY 2021 Medicare payments.
ASC Payment Policy for Non-Opioid Pain Management Drugs
and Biologicals under Section 6082 of the SUPPORT Act (Section
1833(t)(22) of the Social Security Act): Under section 1833(t)(22)(A)
of the Act, the Secretary was required to conduct a review (part of
which may include a request for information) of payments 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. Section
1833(t)(22)(A)(ii) provides that the Secretary may, as the Secretary
determines appropriate, conduct subsequent reviews of such payments.
In accordance with our review and comments from stakeholders, for
CY 2022, we are finalizing our proposal to modify the current non-
opioid pain management payment policy and regulatory text to require
that evidence-based non-opioid alternatives for pain management must be
approved under a new drug application under section 505(c) of the
Federal Food, Drug, and Cosmetic Act, under an abbreviated new drug
application under section 505(j), or, in the case of a biological
product, be licensed under section 351 of the Public Health Service
Act. We further proposed that the drug or biological must also have an
FDA-approved indication for pain management or analgesia and have a
per-day cost in excess of the OPPS drug packaging threshold, which is
finalized at $130 for CY 2022 and described in section V.B.1.a. of this
final rule with comment period, to qualify for separate payment in the
ASC setting. We appreciate the comments received on our multiple
comment solicitations. We are not finalizing any policy modifications
or additional criteria as a result of these comments but will take this
information into consideration for future notice and comment
rulemaking.
For CY 2022, in accordance with our finalized criteria, CMS review,
and stakeholder comments, we will pay separately in the ASC setting for
four drugs that are non-opioid pain management drugs that function as
surgical supplies.
Changes to the List of ASC Covered Surgical Procedures:
For CY 2022, we are reinstating the ASC Covered Procedures List (CPL)
criteria that were in effect in CY 2020 and removing several of the
procedures that were added to the ASC CPL in CY 2021. We requested
comments on whether any of the procedures that we proposed to remove
from the ASC CPL in CY 2021 met the CY 2020 criteria that we proposed
to reinstate. After reviewing these recommendations, we determined that
a total of six procedures should either remain on or be added to the
CPL We are also finalizing our proposal to adopt a nomination process,
under which stakeholders may nominate procedures they believe meet the
requirements to be added to the ASC CPL. CMS will provide subregulatory
guidance on the nomination process in early 2022, with procedure
nominations due in March 2022, and the formal nomination process
beginning in CY 2023.
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Hospital Outpatient Quality Reporting (OQR) Program: For
the Hospital OQR Program, we proposed changes for the CY 2023, CY 2024,
CY 2025, and CY 2026 payment determinations and subsequent years in the
CY 2022 OPPS/ASC proposed rule (86 FR 42018). In this final rule, we
are finalizing our proposals to: (1) Remove the OP-02: Fibrinolytic
Therapy Received Within 30 Minutes of ED Arrival measure beginning with
the CY 2025 payment determination; (2) remove the OP-3: Median Time to
Transfer to Another Facility for Acute Coronary Intervention measure
beginning with the CY 2025 payment determination; (3) adopt OP-38:
COVID-19 Vaccination Coverage Among Health Care Personnel (HCP) measure
beginning with the CY 2024 payment determination; (4) adopt OP-39: The
Breast Screening Recall Rates measure beginning with the CY 2023
payment determination; (5) adopt OP-40: The ST-Segment Elevation
Myocardial Infarction (STEMI) electronic clinical quality measure
(eCQM) beginning with voluntary reporting for the CY 2023 reporting
period and mandatory reporting beginning with the CY 2024 reporting
period/CY 2026 payment determination; and (6) restart reporting of the
OP-37a-e: Outpatient and Ambulatory Surgery Consumer Assessment of
Healthcare Providers and Systems (OAS CAHPS) Survey-based measures
beginning with voluntary reporting during the CY 2023 reporting period
and mandatory reporting beginning with the CY 2024 reporting period/CY
2026 payment determination. We are finalizing as proposed the data
submission requirements for the OAS CAHPS Survey-based measures and the
COVID-19 Vaccination Coverage Among HCP measure (OP-38). Similarly, we
are finalizing as proposed the data submission and certification
requirements for eCQMs and expanding our Extraordinary Circumstances
Exemption (ECE) policy to these measures.
Beginning with the CY 2024 payment determination, we are finalizing
as proposed three updates to our validation requirements to: (1) Use
electronic file submissions for chart-abstracted measure medical record
requests; (2) change the chart validation requirements and methods; and
(3) update the targeting criteria. In the CY 2022 OPPS/ASC proposed
rule (86 FR 42018) we requested comment from stakeholders on: (1) The
potential future development and inclusion of a patient-reported
outcomes measure following elective total hip and/or total knee
arthroplasty (THA/TKA); (2) the possibility of expanding our current
disparities methods to include reporting by race and ethnicity; and (3)
the possibility of hospital collection of standardized demographic
information for quality reporting and measure stratification. We also
requested feedback across programs on potential actions and priority
areas that would enable the continued transformation of our quality
measurement toward greater digital capture of data and use of the FHIR
standard.
We are finalizing with modification, our proposal to make mandatory
the reporting of the OP-31: Cataracts: Improvement in Patient's Visual
Function within 90 Days Following Cataract Surgery measure. We are
finalizing to make reporting of this measure mandatory beginning with
the CY 2027 payment determination, instead of the CY 2025 payment
determination.
Ambulatory Surgical Center Quality Reporting (ASCQR)
Program: For the ASCQR Program, we proposed changes for the CY 2024, CY
2025, and CY 2026 payment determinations and subsequent years in the CY
2022 OPPS/ASC proposed rule (86 FR 42018). For the ASCQR Program
measure set, we are finalizing our proposals to: (1) Adopt ASC-20:
COVID-19 Vaccination Coverage Among HCP measure beginning with the CY
2024 payment determination; and (2) resume data collection for four
measures beginning with the CY 2025 payment determination: (a) ASC-1:
Patient Burn; (b) ASC-2: Patient Fall; (c) ASC-3: Wrong Site, Wrong
Side, Wrong Patient, Wrong Procedure, Wrong Implant; and (d) ASC-4:
All-Cause Hospital Transfer/Admission. We are also finalizing as
proposed the data submission requirements for the OAS CAHPS Survey-
based measures and the COVID-19 Vaccination Coverage Among HCP measure
(ASC-20).
We are finalizing, with modification, the proposal to require the
ASC-15a-e: OAS CAHPS Survey-based measures with voluntary reporting
beginning with the CY 2024 reporting period and mandatory reporting
beginning with the CY 2025 reporting period/CY 2027 payment
determination.
We are also finalizing with modification the proposal to require
the ASC-11: Cataracts: Improvement in Patient's Visual Function within
90 Days Following Cataract Surgery measure. We are finalizing mandatory
reporting of this measure beginning with the CY 2027 payment
determination, instead of the CY 2025 payment determination.
In the CY 2022 OPPS/ASC proposed rule (86 FR 42018) we requested
stakeholder comment on: (1) The potential future development and
inclusion of a patient-reported outcomes measure following elective
THA/TKA; (2) potential measurement approaches or social risk factors
that influence health disparities in the ASC setting; and (3) the
future inclusion of a measure to assess pain management surgical
procedures performed in ASCs. We also requested feedback across
programs on potential actions and priority areas that would enable the
continued transformation of our quality measurement toward greater
digital capture of data and use of the FHIR standard.
Hospital Inpatient Quality Reporting (IQR) Program Update:
In the CY 2022 OPPS/ASC proposed rule (86 FR 25549 through 25628) we
requested information from stakeholders on potential measure updates on
reporting and submission requirements for the Safe Use of Opioids--
Concurrent Prescribing eCQM.
Updates to Requirements for Hospitals to Make Public a
List of Their Standard Charges: We are amending several hospital price
transparency policies codified at 45 CFR part 180 in order to encourage
compliance. We are: (1) Increasing the amount of the penalties for
noncompliance through the use of a scaling factor based on hospital bed
count; (2) deeming state forensic hospitals that meet certain
requirements to be in compliance with the requirements of 45 CFR part
180; and (3) finalizing a requirement that the machine-readable file be
accessible to automated searches and direct downloads. In addition, we
clarify the expected output of hospital online price estimator tools
when hospitals choose to use an online price estimator tool in lieu of
posting its standard charges for the required shoppable services in a
consumer-friendly format.
Radiation Oncology Model (RO Model): Section 133 of the
Consolidated Appropriations Act (CAA), 2021 (Pub. L. 116-260), enacted
on December 27, 2020, includes a provision that prohibits the RO Model
from beginning before January 1, 2022. This law supersedes the RO Model
delayed start date established in the CY 2021 OPPS/ASC final rule with
comment period. We are finalizing proposed provisions related to the
additional delayed implementation of the RO Model due to the CAA, 2021,
as well as modifications to certain RO Model policies not related to
the delay.
[[Page 63463]]
Comment Solicitation on Temporary Policies for the PHE for
COVID-19: In response to the COVID-19 pandemic, CMS undertook emergency
rulemaking to implement a number of flexibilities to address the
pandemic, such as preventing spread of the infection and supporting
diagnosis of COVID-19. While many of these flexibilities will expire at
the conclusion of the PHE, we sought comment on whether there are
certain policies that should be made permanent. Specifically, we sought
comment on services furnished by hospital staff to beneficiaries in
their homes through use of communication technology, direct supervision
when the supervising practitioner is available through two-way, audio/
video communication technology, and a code and payment for COVID-19
specimen collection. We will consider comments received for future
rulemaking.
Changes to Beneficiary Coinsurance for Colorectal Cancer
Screening Test: Section 122 of the Consolidated Appropriations Act
(CAA) of 2021 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 are finalizing our proposal
that all surgical services furnished on the same date as a planned
screening colonoscopy or planned flexible sigmoidoscopy could be viewed
as being furnished in connection with, as a result of, and in the same
clinical encounter as the screening test for purposes of determining
the coinsurance required of Medicare beneficiaries for planned
colorectal cancer screening tests that result in additional procedures
furnished in the same clinical encounter.
3. Summary of Costs and Benefits
In sections XXIV. and XXV. of this final rule with comment period,
we set forth a detailed analysis of the regulatory and federalism
impacts that the changes would have on affected entities and
beneficiaries. Key estimated impacts are described below.
a. Impacts of All OPPS Changes
Table 84 in section XXIV.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 2022 compared to all estimated
OPPS payments in CY 2021. We estimate that the policies in this final
rule with comment period will result in a 1.6 percent overall increase
in OPPS payments to providers. We estimate that total OPPS payments for
CY 2022, including beneficiary cost-sharing, to the approximately 3,659
facilities paid under the OPPS (including general acute care hospitals,
children's hospitals, cancer hospitals, and CMHCs) will increase by
approximately $1.3 billion compared to CY 2021 payments, excluding our
estimated changes in enrollment, utilization, and case-mix.
We estimated the isolated impact of our OPPS policies on CMHCs
because CMHCs are only paid for partial hospitalization services under
the OPPS. Continuing the provider-specific structure we adopted
beginning in CY 2011, and basing payment fully on the type of provider
furnishing the service, we estimate a 1.1 percent increase in CY 2022
payments to CMHCs relative to their CY 2021 payments.
b. Impacts of the Updated Wage Indexes
We estimate that our update of the wage indexes based on the FY
2022 IPPS final rule wage indexes will result in no change for urban
hospitals under the OPPS and no change for rural hospitals. These wage
indexes include the continued implementation of the OMB labor market
area delineations based on 2010 Decennial Census data, with updates, as
discussed in section II.C. of this final rule with comment period.
c. Impacts of the Rural Adjustment and the Cancer Hospital Payment
Adjustment
There are no significant impacts of our CY 2022 payment policies
for hospitals that are eligible for the rural adjustment or for the
cancer hospital payment adjustment. We are not making any change in
policies for determining the rural hospital payment adjustments. While
we are implementing the reduction to the cancer hospital payment
adjustment for CY 2022 required by section 1833(t)(18)(C) of the Act,
as added by section 16002(b) of the 21st Century Cures Act, the target
payment-to-cost ratio (PCR) for CY 2021 is 0.89, equivalent to the 0.89
target PCR for CY 2021, and therefore has no budget neutrality
adjustment.
d. Impacts of the OPD Fee Schedule Increase Factor
For the CY 2022 OPPS/ASC, we are establishing an OPD fee schedule
increase factor of 2.0 percent and applying that increase factor to the
conversion factor for CY 2022. 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 2.1 percent and that rural hospitals will experience an
increase in payments of 2.3 percent. Classifying hospitals by teaching
status, we estimate nonteaching hospitals will experience an increase
in payments of 2.2 percent, minor teaching hospitals will experience an
increase in payments of 2.2 percent, and major teaching hospitals will
experience an increase in payments of 1.8 percent. We also classified
hospitals by the type of ownership. We estimate that hospitals with
voluntary ownership will experience an increase of 2.2 percent in
payments, while hospitals with government ownership would experience an
increase of 1.7 percent in payments. We estimate that hospitals with
proprietary ownership will experience an increase of 2.3 percent in
payments.
e. Impacts of the 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 2022 payment
rates, compared to estimated CY 2021 payment rates, generally ranges
between an increase of 2 and 4 percent, depending on the service, with
some exceptions. We estimate the impact of applying the hospital market
basket update to ASC payment rates will increase payments by $80
million under the ASC payment system in CY 2022.
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.
[[Page 63464]]
The Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of
1999 (BBRA) (Pub. L. 106-113) made major changes in the hospital OPPS.
The following Acts made additional changes to the OPPS: The Medicare,
Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000
(BIPA) (Pub. L. 106-554); the Medicare Prescription Drug, Improvement,
and Modernization Act of 2003 (MMA) (Pub. L. 108-173); the Deficit
Reduction Act of 2005 (DRA) (Pub. L. 109-171), enacted on February 8,
2006; the Medicare Improvements and Extension Act under Division B of
Title I of the Tax Relief and Health Care Act of 2006 (MIEA-TRHCA)
(Pub. L. 109-432), enacted on December 20, 2006; the Medicare,
Medicaid, and SCHIP Extension Act of 2007 (MMSEA) (Pub. L. 110-173),
enacted on December 29, 2007; the Medicare Improvements for Patients
and Providers Act of 2008 (MIPPA) (Pub. L. 110-275), enacted on July
15, 2008; the Patient Protection and Affordable Care Act (Pub. L. 111-
148), enacted on March 23, 2010, as amended by the Health Care and
Education Reconciliation Act of 2010 (Pub. L. 111-152), enacted on
March 30, 2010 (these two public laws are collectively known as the
Affordable Care Act); the Medicare and Medicaid Extenders Act of 2010
(MMEA, Pub. L. 111-309); the Temporary Payroll Tax Cut Continuation Act
of 2011 (TPTCCA, Pub. L. 112-78), enacted on December 23, 2011; the
Middle Class Tax Relief and Job Creation Act of 2012 (MCTRJCA, Pub. L.
112-96), enacted on February 22, 2012; the American Taxpayer Relief Act
of 2012 (Pub. L. 112-240), enacted January 2, 2013; the Pathway for SGR
Reform Act of 2013 (Pub. L. 113-67) enacted on December 26, 2013; the
Protecting Access to Medicare Act of 2014 (PAMA, Pub. L. 113-93),
enacted on March 27, 2014; the Medicare Access and CHIP Reauthorization
Act (MACRA) of 2015 (Pub. L. 114-10), enacted April 16, 2015; the
Bipartisan Budget Act of 2015 (Pub. L. 114-74), enacted November 2,
2015; the Consolidated Appropriations Act, 2016 (Pub. L. 114-113),
enacted on December 18, 2015, the 21st Century Cures Act (Pub. L. 114-
255), enacted on December 13, 2016; the Consolidated Appropriations
Act, 2018 (Pub. L. 115-141), enacted on March 23, 2018; the Substance
Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for
Patients and Communities Act (Pub. L. 115-271), enacted on October 24,
2018; the Further Consolidated Appropriations Act, 2020 (Pub. L. 116-
94), enacted on December 20, 2019; the Coronavirus Aid, Relief, and
Economic Security Act (Pub. L. 116-136), enacted on March 27, 2020; and
the Consolidated Appropriations Act, 2021 (Pub. L. 116-260), enacted on
December 27, 2020.
Under the OPPS, we generally pay for hospital Part B services on a
rate-per-service basis that varies according to the APC group to which
the service is assigned. We use the Healthcare Common Procedure Coding
System (HCPCS) (which includes certain Current Procedural Terminology
(CPT) codes) to identify and group the services within each APC. The
OPPS includes payment for most hospital outpatient services, except
those identified in section I.C. of this 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.
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
[[Page 63465]]
excluded from payment under the OPPS. These excluded hospitals are:
Critical access hospitals (CAHs);
Hospitals located in Maryland and paid under Maryland's
All-Payer or Total Cost of Care Model;
Hospitals located outside of the 50 States, the District
of Columbia, and Puerto Rico; and
Indian Health Service (IHS) hospitals.
D. Prior Rulemaking
On April 7, 2000, we published in the Federal Register a final rule
with comment period (65 FR 18434) to implement a prospective payment
system for hospital outpatient services. The hospital OPPS was first
implemented for services furnished on or after August 1, 2000. Section
1833(t)(9)(A) of the Act requires the Secretary to review certain
components of the OPPS, not less often than annually, and to revise the
groups, the relative payment weights, and the wage and other
adjustments to take into account changes in medical practices, changes
in technology, the addition of new services, new cost data, and other
relevant information and factors.
Since initially implementing the OPPS, we have published final
rules in the Federal Register annually to implement statutory
requirements and changes arising from our continuing experience with
this system. These rules can be viewed on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html.
E. Advisory Panel on Hospital Outpatient Payment (the HOP Panel or the
Panel)
1. Authority of the Panel
Section 1833(t)(9)(A) of the Act, as amended by section 201(h) of
Public Law 106-113, and redesignated by section 202(a)(2) of Public Law
106-113, requires that we consult with an expert outside advisory panel
composed of an appropriate selection of representatives of providers to
annually review (and advise the Secretary concerning) the clinical
integrity of the payment groups and their weights under the OPPS. In CY
2000, based on section 1833(t)(9)(A) of the Act, the Secretary
established the Advisory Panel on Ambulatory Payment Classification
Groups (APC Panel) to fulfill this requirement. In CY 2011, based on
section 222 of the Public Health Service Act (the PHS Act), which gives
discretionary authority to the Secretary to convene advisory councils
and committees, the Secretary expanded the panel's scope to include the
supervision of hospital outpatient therapeutic services in addition to
the APC groups and weights. To reflect this new role of the panel, the
Secretary changed the panel's name to the Advisory Panel on Hospital
Outpatient Payment (the HOP Panel or the Panel). The HOP Panel is not
restricted to using data compiled by CMS, and in conducting its review,
it may use data collected or developed by organizations outside the
Department.
2. Establishment of the Panel
On November 21, 2000, the Secretary signed the initial charter
establishing the Panel, and, at that time, named the APC Panel. This
expert panel is composed of appropriate representatives of providers
(currently employed full-time, not as consultants, in their respective
areas of expertise) who review clinical data and advise CMS about the
clinical integrity of the APC groups and their payment weights. Since
CY 2012, the Panel also is charged with advising the Secretary on the
appropriate level of supervision for individual hospital outpatient
therapeutic services. The Panel is technical in nature, and it is
governed by the provisions of the Federal Advisory Committee Act
(FACA). The current charter specifies, among other requirements, that
the Panel--
May advise on the clinical integrity of Ambulatory Payment
Classification (APC) groups and their associated weights;
May advise on the appropriate supervision level for
hospital outpatient services;
May advise on OPPS APC rates for ASC covered surgical
procedures;
Continues to be technical in nature;
Is governed by the provisions of the FACA;
Has a Designated Federal Official (DFO); and
Is chaired by a Federal Official designated by the
Secretary.
The Panel's charter was amended on November 15, 2011, renaming the
Panel and expanding the Panel's authority to include supervision of
hospital outpatient therapeutic services and to add critical access
hospital (CAH) representation to its membership. The Panel's charter
was also amended on November 6, 2014 (80 FR 23009), and the number of
members was revised from up to 19 to up to 15 members. The Panel's
current charter was approved on November 20, 2020, for a 2-year period.
The current Panel membership and other information pertaining to
the Panel, including its charter, Federal Register notices, membership,
meeting dates, agenda topics, and meeting reports, can be viewed on the
CMS website at: https://www.cms.gov/Regulations-and-Guidance/Guidance/FACA/AdvisoryPanelonAmbulatoryPaymentClassificationGroups.html.
3. Panel Meetings and Organizational Structure
The Panel has held many meetings, with the last meeting taking
place on August 31, 2020. 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). As published in this notice,
CMS is accepting nominations on a continuous basis.
In addition, the Panel has established an administrative structure
that, in part, currently includes the use of three subcommittee
workgroups to provide preparatory meeting and subject support to the
larger panel. The three current subcommittees include the following:
APC Groups and Status Indicator Assignments Subcommittee,
which advises and provides recommendations to the Panel on the
appropriate status indicators to be assigned to HCPCS codes, including
but not limited to whether a HCPCS code or a category of codes should
be packaged or separately paid, as well as the appropriate APC
assignment of HCPCS codes regarding services for which separate payment
is made;
Data Subcommittee, which is responsible for studying the
data issues confronting the Panel and for recommending options for
resolving them; and
Visits and Observation Subcommittee, which reviews and
makes recommendations to the Panel on all technical issues pertaining
to observation services and hospital outpatient visits paid under the
OPPS.
Each of these workgroup subcommittees was established by a majority
vote from the full Panel during a scheduled Panel meeting, and the
Panel recommended at the August 23, 2021, meeting that the
subcommittees continue. We accepted this recommendation.
For discussions of earlier Panel meetings and recommendations, we
refer readers to previously published OPPS/ASC proposed and final
rules, the CMS website mentioned earlier in this
[[Page 63466]]
section, and the FACA database at http://facadatabase.gov.
F. Public Comments Received in Response to the CY 2022 OPPS/ASC
Proposed Rule
We received approximately 18,864 timely pieces of correspondence on
the CY 2022 OPPS/ASC proposed rule that appeared in the Federal
Register on August 4, 2021 (86 FR 42018). We note that we received some
public comments that were outside the scope of the CY 2022 OPPS/ASC
proposed rule. Out-of-scope-public comments are not addressed in this
CY 2022 OPPS/ASC final rule with comment period. Summaries of those
public comments that are within the scope of the proposed rule and our
responses are set forth in the various sections of this final rule with
comment period under the appropriate headings.
G. Public Comments Received on the CY 2021 OPPS/ASC Final Rule With
Comment Period
We received approximately 32 timely pieces of correspondence on the
CY 2021 OPPS/ASC final rule with comment period that appeared in the
Federal Register on December 2, 2020 (85 FR 85866), most of which were
outside of the scope of the final rule. In-scope comments related to
the interim APC assignments and/or status indicators of new or
replacement Level II HCPCS codes (identified with comment indicator
``NI'' in OPPS Addendum B, ASC Addendum AA, and ASC Addendum BB to that
final rule).
II. Updates Affecting OPPS Payments
A. Recalibration of APC Relative Payment Weights
1. Database Construction
a. Use of CY 2019 Data in the CY 2022 OPPS Ratesetting
We primarily use two data sources in OPPS ratesetting: Claims data
and cost report data. Our goal is always to use the best available data
overall for ratesetting. Ordinarily, the best available full year of
claims data would be the data from the year two years prior to the
calendar year that is the subject of the rulemaking. As discussed in
further detail in Section X.E. of the CY 2022 OPPS/ASC proposed rule
(86 FR 42188 through 42190), given our concerns with CY2020 data as a
result of the COVID-19 PHE we proposed to generally use CY 2019 claims
data and the data components related to it in establishing the CY 2022
OPPS. As discussed in further detail in Section X.E. of this final rule
with comment period, we are finalizing our proposal to generally use CY
2019 claims data and the data components related to it in establishing
the CY 2022 OPPS.
b. Database Source and Methodology
Section 1833(t)(9)(A) of the Act requires that the Secretary review
not less often than annually and revise the relative payment weights
for APCs. In the April 7, 2000 OPPS final rule with comment period (65
FR 18482), we explained in detail how we calculated the relative
payment weights that were implemented on August 1, 2000 for each APC
group.
For the CY 2022 OPPS, we proposed to recalibrate the APC relative
payment weights for services furnished on or after January 1, 2022, and
before January 1, 2023 (CY 2022), using the same basic methodology that
we described in the CY 2021 OPPS/ASC final rule with comment period (85
FR 85873), using CY 2019 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 2022, 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, 2019, and before January 1, 2020, 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 2022 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
2022 OPPS/ASC proposed rule on the CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
Addendum N to the CY 2022 OPPS/ASC proposed rule (which is
available via the internet on the CMS website at: http://www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html) includes the proposed
list of bypass codes for CY 2022. The proposed list of bypass codes
contains codes that are reported on claims for services in CY 2019 and,
therefore, includes codes that were in effect in CY 2019 and used for
billing. We proposed to retain deleted bypass codes on the proposed CY
2022 bypass list because these codes existed in CY 2019 and were
covered OPD services in that period, and CY 2019 claims data were used
to calculate proposed CY 2022 payment rates. Keeping these deleted
bypass codes on the bypass list potentially allows us to create more
``pseudo'' single procedure claims for ratesetting purposes. ``Overlap
bypass codes'' that are members of the proposed multiple imaging
composite APCs are identified by asterisks (*) in the third column of
Addendum N to the proposed rule. HCPCS codes that we proposed to add
for CY 2022 are identified by asterisks (*) in the fourth column of
Addendum N.
We did not receive any public comments on our general proposal to
recalibrate the relative payment weights for each APC based on claims
and cost report data for HOPD services or on our proposed bypass code
process. We are adopting as final the proposed ``pseudo'' single claims
process and the final CY 2022 bypass list of 173 HCPCS 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 2022, we used approximately 93 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, 2019, and before January 1, 2020. 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: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
c. Calculation and Use of Cost-to-Charge Ratios (CCRs)
For 2022, in the CY 2022 OPPS/ASC proposed rule (86 FR 42046) 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 CY 2022 APC payment
rates are based, we calculated hospital-specific overall ancillary CCRs
and hospital-specific departmental CCRs for each hospital for which we
had CY 2019 claims data by comparing these claims data to hospital
[[Page 63467]]
cost reports available for the CY 2021 OPPS/ASC final rule with comment
period ratesetting, which, in most cases, are from CY 2019. For the
proposed CY 2022 OPPS payment rates, we used the set of CY 2019 claims
processed through June 30, 2020. 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 2019 (the year
of claims data we used to calculate the proposed CY 2022 OPPS payment
rates) and updates to the National Uniform Billing Committee (NUBC)
2020 Data Specifications Manual. That crosswalk is available for review
and continuous comment on the CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
In accordance with our longstanding policy, we calculate CCRs for
the standard and nonstandard cost centers accepted by the electronic
cost report database. In general, the most detailed level at which we
calculate CCRs is the hospital-specific departmental level. For a
discussion of the hospital-specific overall ancillary CCR calculation,
we refer readers to the CY 2007 OPPS/ASC final rule with comment period
(71 FR 67983 through 67985). The calculation of blood costs is a
longstanding exception (since the CY 2005 OPPS) to this general
methodology for calculation of CCRs used for converting charges to
costs on each claim. This exception is discussed in detail in the CY
2007 OPPS/ASC final rule with comment period and discussed further in
section II.A.2.a.(1) of the CY 2022 OPPS/ASC proposed rule.
In the CY 2014 OPPS/ASC final rule with comment period (78 FR 74840
through 74847), we finalized our policy of creating new cost centers
and distinct CCRs for implantable devices, magnetic resonance imaging
(MRIs), computed tomography (CT) scans, and cardiac catheterization.
However, in response to comments we received from our CY 2014 OPPS/ASC
proposed rule, we finalized a policy in the CY 2014 OPPS/ASC final rule
with comment period (78 FR 74847) to remove claims from providers that
use a cost allocation method of ``square feet'' to calculate CCRs used
to estimate costs associated with the APCs for CT and MRI. As finalized
in the CY 2020 OPPS/ASC final rule with comment period (84 FR 61152),
beginning in CY 2021, we use all claims with valid CT and MRI cost
center CCRs, including those that use a ``square feet'' cost allocation
method, to estimate costs for the CT and MRI APCs.
Comment: One commenter stated that coronary CT angiography (CCTA)
requires considerably more resources than the procedures that are
currently assigned to the CT cost center. The commenter suggests that
this has resulted in over a decade of inadequate reimbursement for CCTA
below the actual cost of performing the test. The commenter recommends
that CMS provide specific instructions that allow hospitals to submit
charges for cardiac CT using revenue codes that provide more accurate
cost estimates. The commenter stated that hospitals do not have the
ability to directly report costs for cardiac CT services and that CMS
regulations mandate that cardiac CT be lumped into generic diagnostic
CT revenue codes.
Response: Hospital outpatient facilities make the final
determination 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 Manual, 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, providers should report their charges
under the revenue code that will result in the charge being assigned to
the same cost center to which the cost of those services are assigned
in the cost report.'' Therefore, HOPDs must determine the most
appropriate cost center and revenue code for the cardiac CT exams.
After consideration of the public comment we received on the
general CCR process, we are finalizing for CY 2022 using the hospital-
specific overall ancillary and departmental CCRs to convert charges to
estimated costs through application of a revenue code-to-cost center
crosswalk and the established methodology.
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 2022. The
Hospital OPPS page on the CMS website on which the CY 2022 OPPS/ASC
final rule with comment period is posted (http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html)
provides an accounting of claims used in the development of the
proposed payment rates. That accounting provides additional detail
regarding the number of claims derived at each stage of the process. In
addition, later in this section we discuss the file of claims that
comprises the data set that is available upon payment of an
administrative fee under a CMS data use agreement. The CMS website,
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html, includes information about obtaining
the ``OPPS Limited Data Set,'' which now includes the additional
variables previously available only in the OPPS Identifiable Data Set,
including ICD-10-CM diagnosis codes and revenue code payment amounts.
This file is derived from the CY 2019 claims that were used to
calculate the final payment rates for the CY 2022 OPPS/ASC 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 did not receive any public comments on our proposed process and
are finalizing our proposed methodology to continue to use geometric
mean costs to calculate the relative weights on which the final CY 2022
OPPS payment rates are based.
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 2022 shown in Addenda A and B
to the CY 2022 OPPS/ASC final rule with comment period (which are
available via the internet on the CMS website at: http://www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html). We refer readers to
section II.A.4. of this final rule with comment period for a discussion
of the
[[Page 63468]]
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 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 2022 OPPS, we will continue
to remove claim lines with modifier ``PN'' from the ratesetting
process.
For details of the claims accounting process used in the CY 2022
OPPS/ASC final rule with comment period, we refer readers to the claims
accounting narrative under supporting documentation for the CY 2022
OPPS/ASC final rule with comment period on the CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
a. Calculation of Single Procedure APC Criteria-Based Costs
(1) Blood and Blood Products
Since the implementation of the OPPS in August 2000, we have made
separate payments for blood and blood products through APCs rather than
packaging payment for them into payments for the procedures with which
they are administered. Hospital payments for the costs of blood and
blood products, as well as for the costs of collecting, processing, and
storing blood and blood products, are made through the OPPS payments
for specific blood product APCs.
We proposed to continue to establish payment rates for blood and
blood products using our blood-specific CCR methodology, which utilizes
actual or simulated CCRs from the most recently available hospital cost
reports to convert hospital charges for blood and blood products to
costs. This methodology has been our standard ratesetting methodology
for blood and blood products since CY 2005. It was developed in
response to data analysis indicating that there was a significant
difference in CCRs for those hospitals with and without blood-specific
cost centers, and past public comments indicating that the former OPPS
policy of defaulting to the overall hospital CCR for hospitals not
reporting a blood-specific cost center often resulted in an
underestimation of the true hospital costs for blood and blood
products. Specifically, to address the differences in CCRs and to
better reflect hospitals' costs, we proposed to continue to simulate
blood CCRs for each hospital that does not report a blood cost center
by calculating the ratio of the blood-specific CCRs to hospitals'
overall CCRs for those hospitals that do report costs and charges for
blood cost centers. We also proposed to apply this mean ratio to the
overall CCRs of hospitals not reporting costs and charges for blood
cost centers on their cost reports to simulate blood-specific CCRs for
those hospitals. We proposed to calculate the costs upon which the
proposed CY 2022 payment rates for blood and blood products are based
using the actual blood-specific CCR for hospitals that reported costs
and charges for a blood cost center and a hospital-specific, simulated
blood-specific CCR for hospitals that did not report costs and charges
for a blood cost center.
We continue to believe that the hospital-specific, simulated blood-
specific, CCR methodology better responds to the absence of a blood-
specific CCR for a hospital than alternative methodologies, such as
defaulting to the overall hospital CCR or applying an average blood-
specific CCR across hospitals. Because this methodology takes into
account the unique charging and cost accounting structure of each
hospital, we believe that it yields more accurate estimated costs for
these products. We continue to believe that using this methodology in
CY 2022 would result in costs for blood and blood products that
appropriately reflect the relative estimated costs of these products
for hospitals without blood cost centers and, therefore, for these
blood products in general.
We note that we defined a comprehensive APC (C-APC) as a
classification for the provision of a primary service and all
adjunctive services provided to support the delivery of the primary
service. Under this policy, we include the costs of blood and blood
products when calculating the overall costs of these C-APCs. We
proposed to continue to apply the blood-specific CCR methodology
described in this section when calculating the costs of the blood and
blood products that appear on claims with services assigned to the C-
APCs. Because the costs of blood and blood products would be reflected
in the overall costs of the C-APCs (and, as a result, in the proposed
payment rates of the C-APCs), we proposed not to make separate payments
for blood and blood products when they appear on the same claims as
services assigned to the C-APCs (we refer readers to the CY 2015 OPPS/
ASC final rule with comment period (79 FR 66795 through 66796) for more
information about our policy not to make separate payments for blood
and blood products when they appear on the same claims as services
assigned to a C-APC).
We refer readers to Addendum B to the CY 2022 OPPS/ASC proposed
rule (which is available via the internet on the CMS website) for the
proposed CY 2022 payment rates for blood and blood products (which are
generally identified with status indicator ``R''). For a more detailed
discussion of the blood-specific CCR methodology, we refer readers to
the CY 2005 OPPS proposed rule (69 FR 50524 through 50525). For a full
history of OPPS payment for blood and blood products, we refer readers
to the CY 2008 OPPS/ASC final rule with comment period (72 FR 66807
through 66810).
For CY 2022, we proposed to continue to establish payment rates for
blood and blood products using our blood-specific CCR methodology. We
did not receive any comments on our proposal to establish payment rates
for blood and blood products using our blood-specific CCR methodology
and we are finalizing this policy as proposed. Please refer to Addendum
B to the CY 2022 OPPS/ASC final rule with comment period (which is
available via the internet on the CMS website) for the final CY 2022
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 consisting of a seed or seeds (or radioactive source)
(``brachytherapy sources'') separately from other services or groups of
services. The statute provides certain criteria for the additional
groups. For the history of OPPS payment for brachytherapy sources, we
refer readers to prior OPPS final rules, such as the CY 2012 OPPS/ASC
final rule with comment period (77 FR 68240 through 68241). As we have
stated in prior OPPS updates, we believe that adopting the general OPPS
prospective payment methodology for brachytherapy sources is
appropriate for a number of reasons (77 FR 68240). The general OPPS
methodology uses costs based on claims data to set the relative payment
weights for hospital outpatient services. This payment methodology
results in more consistent, predictable, and equitable payment amounts
per
[[Page 63469]]
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 2022, except where otherwise indicated, we proposed to use
the costs derived from CY 2019 claims data to set the proposed CY 2022
payment rates for brachytherapy sources because CY 2019 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 2022 OPPS.
With the exception of the proposed payment rate for brachytherapy
source C2645 (Brachytherapy planar source, palladium-103, per square
millimeter) and brachytherapy source C2636 (Brachytherapy linear
source, non-stranded, palladium-103, per 1 mm), 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 2022 OPPS/ASC proposed rule. We also proposed
to continue the other payment policies for brachytherapy sources that
we finalized and first implemented in the CY 2010 OPPS/ASC final rule
with comment period (74 FR 60537). We proposed to pay for the stranded
and nonstranded not otherwise specified (NOS) codes, HCPCS codes C2698
(Brachytherapy source, stranded, not otherwise specified, per source)
and C2699 (Brachytherapy source, non-stranded, not otherwise specified,
per source), at a rate equal to the lowest stranded or nonstranded
prospective payment rate for such sources, respectively, on a per-
source basis (as opposed to, for example, a per mCi), which is based on
the policy we established in the CY 2008 OPPS/ASC final rule with
comment period (72 FR 66785). We also 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 2022 payment rates
for brachytherapy sources are included in Addendum B to the CY 2022
OPPS/ASC proposed rule (which is available via the internet on the CMS
website) and identified with status indicator ``U''.
For CY 2018, we assigned status indicator ``U'' (Brachytherapy
Sources, Paid under OPPS; separate APC payment) to HCPCS code C2645
(Brachytherapy planar source, palladium-103, per square millimeter) in
the absence of claims data and established a payment rate using
external data (invoice price) at $4.69 per mm\2\. For CY 2019, in the
absence of sufficient claims data, we continued to establish a payment
rate for C2645 at $4.69 per mm\2\. Our CY 2018 claims data available
for the CY 2020 OPPS/ASC final rule with comment period included two
claims with a geometric mean cost for HCPCS code C2645 of $1.02 per
mm\2\. In response to comments from stakeholders, we agreed with
commenters 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 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
to maintain the CY 2019 payment rate of $4.69 per mm\2\ for HCPCS code
C2645 for CY 2021.
As discussed in Section X.E. of the CY 2022 OPPS/ASC proposed rule,
given our concerns with CY 2020 data as a result of the COVID-19 PHE,
in general we proposed to use CY 2019 claims data and the data
components related to it in establishing the CY 2022 OPPS. Therefore,
we proposed to use our equitable adjustment authority under section
1833(t)(2)(E) of the Act to maintain the CY 2019 payment rate of $4.69
per mm\2\ for HCPCS code C2645 for CY 2022.
We received no public comments and are finalizing our proposal,
without modification, to use our equitable adjustment authority under
section 1833(t)(2)(E) of the Act to maintain the CY 2019 payment rate
of $4.69 per mm\2\ for HCPCS code C2645 for CY 2022.
Additionally, for CY 2022 and subsequent calendar years, as
discussed in Section X.C. of the CY 2022 OPPS/ASC proposed rule, we
proposed to establish a Low Volume APC policy for New Technology APCs,
clinical APCs, and brachytherapy APCs. For these APCs with fewer than
100 single claims that can be used for ratesetting purposes in the
existing claims year, we proposed to use up to four years of claims
data to establish a payment rate for each item or service as we
currently do for low volume services assigned to New Technology APCs.
Further, we proposed to calculate the cost for Low Volume APCs based on
the greatest of the arithmetic mean cost, median cost, or geometric
mean cost. We proposed to designate 5 brachytherapy APCs as Low Volume
APCs for CY 2022 as these APCs met our proposed criteria to be
designated as a Low Volume APC. In Section X.C. of this final rule with
comment period, we are finalizing our proposal to designate 5
brachytherapy APCs as Low Volume APCs for CY 2022. For more information
on the brachytherapy APCs we are designating as Low Volume APCs, see
Section X.C. of this final rule with comment period.
We continue to invite stakeholders to submit recommendations for
new codes to describe new brachytherapy sources. Such recommendations
should be directed via email to [email protected] or by mail to
the Division of Outpatient Care, Mail Stop C4-01-26, Centers for
Medicare and Medicaid Services, 7500 Security Boulevard, Baltimore, MD
21244. We will continue to add new brachytherapy source codes and
descriptors to our systems for payment on a quarterly basis.
b. Comprehensive APCs (C-APCs) for CY 2022
(1) Background
In the CY 2014 OPPS/ASC final rule with comment period (78 FR 74861
[[Page 63470]]
through 74910), we finalized a comprehensive payment policy that
packages payment for adjunctive and secondary items, services, and
procedures into the most costly primary procedure under the OPPS at the
claim level. The policy was finalized in CY 2014 but the effective date
was delayed until January 1, 2015, to allow additional time for further
analysis, opportunity for public comment, and systems preparation. The
comprehensive APC (C-APC) policy was implemented effective January 1,
2015, with modifications and clarifications in response to public
comments received regarding specific provisions of the C-APC policy (79
FR 66798 through 66810).
A C-APC is defined as a classification for the provision of a
primary service and all adjunctive services provided to support the
delivery of the primary service. We established C-APCs as a category
broadly for OPPS payment and implemented 25 C-APCs beginning in CY 2015
(79 FR 66809 through 66810). In the CY 2016 OPPS/ASC final rule with
comment period (80 FR 70332), we finalized 10 additional C-APCs to be
paid under the existing C-APC payment policy and added one additional
level to both the Orthopedic Surgery and Vascular Procedures clinical
families, which increased the total number of C-APCs to 37 for CY 2016.
In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79584
through 79585), we finalized another 25 C-APCs for a total of 62 C-
APCs. In the CY 2018 OPPS/ASC final rule with comment period, we did
not change the total number of C-APCs from 62. In the CY 2019 OPPS/ASC
final rule with comment period, we created three new C-APCs, increasing
the total number to 65 (83 FR 58844 through 58846). In the CY 2020
OPPS/ASC final rule with comment period, we created two new C-APCs,
increasing the total number to 67 C-APCs (84 FR 61158 through 61166).
Most recently, in the CY 2021 OPPS/ASC final rule, we created two new
C-APCs, increasing the total number to 69 C-APCs (85 FR 85885).
Under our C-APC policy, we designate a service described by a HCPCS
code assigned to a C-APC as the primary service when the service is
identified by OPPS status indicator ``J1''. When such a primary service
is reported on a hospital outpatient claim, taking into consideration
the few exceptions that are discussed below, we make payment for all
other items and services reported on the hospital outpatient claim as
being integral, ancillary, supportive, dependent, and adjunctive to the
primary service (hereinafter collectively referred to as ``adjunctive
services'') and representing components of a complete comprehensive
service (78 FR 74865 and 79 FR 66799). Payments for adjunctive services
are packaged into the payments for the primary services. This results
in a single prospective payment for each of the primary, comprehensive
services based on the costs of all reported services at the claim
level.
Services excluded from the C-APC policy under the OPPS include
services that are not covered OPD services, services that cannot by
statute be paid for under the OPPS, and services that are required by
statute to be separately paid. This includes certain mammography and
ambulance services that are not covered OPD services in accordance with
section 1833(t)(1)(B)(iv) of the Act; brachytherapy seeds, which also
are required by statute to receive separate payment under section
1833(t)(2)(H) of the Act; pass-through payment drugs and devices, which
also require separate payment under section 1833(t)(6) of the Act;
self-administered drugs (SADs) that are not otherwise packaged as
supplies because they are not covered under Medicare Part B under
section 1861(s)(2)(B) of the Act; and certain preventive services (78
FR 74865 and 79 FR 66800 through 66801). A list of services excluded
from the C-APC policy is included in Addendum J to the CY 2022 OPPS/ASC
final rule (which is available via the internet on the CMS website at
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices).
In the interim final rule with request for comments (IFC) titled,
``Additional Policy and Regulatory Revisions in Response to the COVID-
19 Public Health Emergency'', published on November 6, 2020, we stated
that, effective for services furnished on or after the effective date
of the IFC and until the end of the PHE for COVID-19, there is an
exception to the OPPS C-APC policy to ensure separate payment for new
COVID-19 treatments that meet certain criteria (85 FR 71158 through
71160). Under this exception, any new COVID-19 treatment that meets the
following two criteria will, for the remainder of the PHE for COVID-19,
always be separately paid and will not be packaged into a C-APC when it
is provided on the same claim as the primary C-APC service. First, the
treatment must be a drug or biological product (which could include a
blood product) authorized to treat COVID-19, as indicated in section
``I. Criteria for Issuance of Authorization'' of the FDA letter of
authorization for the emergency use of the drug or biological product,
or the drug or biological product must be approved by FDA for treating
COVID-19. Second, the emergency use authorization (EUA) for the drug or
biological product (which could include a blood product) must authorize
the use of the product in the outpatient setting or not limit its use
to the inpatient setting, or the product must be approved by FDA to
treat COVID-19 disease and not limit its use to the inpatient setting.
For further information regarding the exception to the C-APC policy for
COVID-19 treatments, please refer to the November 6, 2020 IFC (85 FR
71158 through 71160).
The C-APC policy payment methodology set forth in the CY 2014 OPPS/
ASC final rule with comment period for the C-APCs and modified and
implemented beginning in CY 2015 is summarized as follows (78 FR 74887
and 79 FR 66800):
Basic Methodology. As stated in the CY 2015 OPPS/ASC final rule
with comment period, we define the C-APC payment policy as including
all covered OPD services on a hospital outpatient claim reporting a
primary service that is assigned to status indicator ``J1'', excluding
services that are not covered OPD services or that cannot by statute be
paid for under the OPPS. Services and procedures described by HCPCS
codes assigned to status indicator ``J1'' are assigned to C-APCs based
on our usual APC assignment methodology by evaluating the geometric
mean costs of the primary service claims to establish resource
similarity and the clinical characteristics of each procedure to
establish clinical similarity within each APC.
In the CY 2016 OPPS/ASC final rule with comment period, we expanded
the C-APC payment methodology to qualifying extended assessment and
management encounters through the ``Comprehensive Observation
Services'' C-APC (C-APC 8011). Services within this APC are assigned
status indicator ``J2''. Specifically, we make a payment through C-APC
8011 for a claim that:
Does not contain a procedure described by a HCPCS code to
which we have assigned status indicator ``T'';
Contains 8 or more units of services described by HCPCS
code G0378 (Hospital observation services, per hour);
Contains services provided on the same date of service or
one day before the date of service for HCPCS code G0378 that are
described by one of the following codes: HCPCS code G0379
[[Page 63471]]
(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 and delivered either by therapists
or nontherapists is included as part of the payment for the packaged
complete comprehensive service. These services that are provided during
the perioperative period are adjunctive services and are deemed not to
be therapy services as described in section 1834(k) of the Act,
regardless of whether the services are delivered by therapists or other
nontherapist health care workers. We have previously noted that therapy
services are those provided by therapists under a plan of care in
accordance with section 1835(a)(2)(C) and section 1835(a)(2)(D) of the
Act and are paid for under section 1834(k) of the Act, subject to
annual therapy caps as applicable (78 FR 74867 and 79 FR 66800).
However, certain other services similar to therapy services are
considered and paid for as hospital outpatient department services.
Payment for these nontherapy outpatient department services that are
reported with therapy codes and provided with a comprehensive service
is included in the payment for the packaged complete comprehensive
service. We note that these services, even though they are reported
with therapy codes, are hospital outpatient department services and not
therapy services. We refer readers to the July 2016 OPPS Change Request
9658 (Transmittal 3523) for further instructions on reporting these
services in the context of a C-APC service.
Items included in the packaged payment provided in conjunction with
the primary service also include all drugs, biologicals, and
radiopharmaceuticals, regardless of cost, except those drugs with pass-
through payment status and SADs, unless they function as packaged
supplies (78 FR 74868 through 74869 and 74909 and 79 FR 66800). We
refer readers to Section 50.2M, Chapter 15, of the Medicare Benefit
Policy Manual for a description of our policy on SADs treated as
hospital outpatient supplies, including lists of SADs that function as
supplies and those that do not function as supplies.
We define each hospital outpatient claim reporting a single unit of
a single primary service assigned to status indicator ``J1'' as a
single ``J1'' unit procedure claim (78 FR 74871 and 79 FR 66801). Line
item charges for services included on the C-APC claim are converted to
line item costs, which are then summed to develop the estimated APC
costs. These claims are then assigned one unit of the service with
status indicator ``J1'' and later used to develop the geometric mean
costs for the C-APC relative payment weights. (We note that we use the
term ``comprehensive'' to describe the geometric mean cost of a claim
reporting ``J1'' service(s) or the geometric mean cost of a C-APC,
inclusive of all of the items and services included in the C-APC
service payment bundle.) Charges for services that would otherwise be
separately payable are added to the charges for the primary service.
This process differs from our traditional cost accounting methodology
only in that all such services on the claim are packaged (except
certain services as described above). We apply our standard data trims,
which exclude claims with extremely high primary units or extreme
costs.
The comprehensive geometric mean costs are used to establish
resource similarity and, along with clinical similarity, dictate the
assignment of the primary services to the C-APCs. We establish a
ranking of each primary service (single unit only) to be assigned to
status indicator ``J1'' according to its comprehensive geometric mean
costs. For the minority of claims reporting more than one primary
service assigned to status indicator ``J1'' or units thereof, we
identify one ``J1'' service as the primary service for the claim based
on our cost-based ranking of primary services. We then assign these
multiple ``J1'' procedure claims to the C-APC to which the service
designated as the primary service is assigned. If the reported ``J1''
services on a claim map to different C-APCs, we designate the ``J1''
service assigned to the C-APC with the highest comprehensive geometric
mean cost as the primary service for that claim. If the reported
multiple ``J1'' services on a claim map to the same C-APC, we designate
the most costly service (at the HCPCS code level) as the primary
service for that claim. This process results in initial assignments of
claims for the primary services assigned to status indicator ``J1'' to
the most appropriate C-APCs based on both single and multiple procedure
claims reporting these services and clinical and resource homogeneity.
Complexity Adjustments. We use complexity adjustments to provide
increased payment for certain comprehensive services. We apply a
complexity adjustment by promoting qualifying paired ``J1'' service
code combinations or paired code combinations of ``J1'' services and
certain add-on codes (as described further below) from the originating
C-
[[Page 63472]]
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 2022, we proposed to apply the frequency and cost
criteria thresholds discussed above, testing claims reporting one unit
of a single primary service assigned to status indicator ``J1'' and any
number of units of a single add-on code for the primary ``J1'' service.
If the frequency and cost criteria thresholds for a complexity
adjustment are met and reassignment to the next higher cost APC in the
clinical family is appropriate (based on meeting the criteria outlined
above), we make a complexity adjustment for the code combination; that
is, we reassign the primary service code reported in conjunction with
the add-on code to the next higher cost C-APC within the same clinical
family of C-APCs. As previously stated, we package payment for add-on
codes into the C-APC payment rate. If any add-on code reported in
conjunction with the ``J1'' primary service code does not qualify for a
complexity adjustment, payment for the add-on service continues to be
packaged into the payment for the primary service and is not reassigned
to the next higher cost C-APC. We list the complexity adjustments for
``J1'' and add-on code combinations for CY 2022, along with all of the
other final complexity adjustments, in Addendum J to the CY 2022 OPPS/
ASC final rule (which is available via the internet on the CMS website
at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices).
Addendum J to the CY 2022 OPPS/ASC final rule includes the cost
statistics for each code combination that would qualify for a
complexity adjustment (including primary code and add-on code
combinations). Addendum J to the CY 2022 OPPS/ASC final rule also
contains summary cost statistics for each of the paired code
combinations that describe a complex code combination that would
qualify for a complexity adjustment and are finalized to be reassigned
to the next higher cost C-APC within the clinical family. The combined
statistics for all proposed reassigned complex code combinations are
represented by an alphanumeric code with the first four digits of the
designated primary service followed by a letter. For example, the
proposed geometric mean cost listed in Addendum J for the code
combination described by complexity adjustment assignment 3320R, which
is assigned to C-APC 5224 (Level 4 Pacemaker and Similar Procedures),
includes all paired code combinations that are proposed to be
reassigned to C-APC 5224 when CPT code 33208 is the primary code.
Providing the information contained in Addendum J to the CY 2022 OPPS/
ASC proposed rule allows stakeholders the opportunity to better assess
the impact associated with the proposed assignment of claims with each
of the paired code combinations eligible for a complexity adjustment.
Comment: One commenter expressed support of CMS' proposal to
maintain existing complexity adjustment code pairs that were in effect
for 2021 and to create new complexity adjustments for certain code
pairs for CY 2022.
Response: We thank the commenter for their support.
Comment: Several commenters requested that CMS modify or eliminate
the established C-APC complexity adjustment eligibility criteria of 25
or more claims reporting the code combination (frequency) and a
violation of the 2 times rule in the originating C-APC (cost) to allow
additional code combinations to qualify for complexity adjustments.
These commenters expressed concern that CMS' methodology for
determining complexity adjustments is unnecessarily restrictive,
specifically the 25-claim threshold. One commenter also requested that
CMS apply the complexity adjustment to all blue light cystoscopy
procedures performed with Cysview [supreg]in the HOPD. The specific C-
APC complexity adjustments requested by the commenters are listed in
Table 1 below.
Several commenters reiterated their request to allow clusters of
procedures, consisting of a ``J1'' code-pair and multiple other
associated add-on codes used in combination with that ``J1''
[[Page 63473]]
code-pair to qualify for complexity adjustments, stating that this may
allow for more accurate reflection of medical practice when multiple
procedures are performed together or there are certain complex
procedures that include numerous add-on codes. Commenters also
requested that CMS continue to monitor and report on the impact of
applying complexity criteria on APC assignments for code combinations
within C-APCs.
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Response: We appreciate these comments. We note that we did not
propose that claims with the code combinations suggested by commenters
would receive complexity adjustments because they failed to meet either
the cost or frequency criteria. We also note that, 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. If a code combination meets these criteria, the
combination receives payment at the next higher cost C-APC. Code
combinations that do not meet these
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criteria receive the C-APC payment rate associated with the primary
``J1'' service. 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 stated in the CY 2019 OPPS/ASC final rule with comment period
(83 FR 58843), we do not believe that it is necessary to adjust the
complexity adjustment criteria to allow claims that include more than
two ``J1'' procedures or procedures that are not assigned to C-APCs to
qualify for a complexity adjustment. As previously mentioned, we
believe the current criteria are adequate to determine if a combination
of procedures represents a complex, costly subset of the primary
service. We will continue to monitor the application of the complexity
adjustment criteria.
After consideration of the public comments we received on the
proposed complexity adjustment policy, we are finalizing the C-APC
complexity adjustment policy for CY 2022 as proposed. We are also
finalizing the complexity adjustments proposed without modification.
(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 the procedures. 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 two years if sufficient data are available.
It also allows us to retain a service in a New Technology APC for more
than two years if sufficient data upon which to base a decision for
reassignment have not been collected (82 FR 59277).
The C-APC payment policy packages payment for adjunctive and
secondary items, services, and procedures into the most costly primary
procedure under the OPPS at the claim level. Prior to CY 2019, when a
procedure assigned to a New Technology APC was included on the claim
with a primary procedure, identified by OPPS status indicator ``J1'',
payment for the new technology service was typically packaged into the
payment for the primary procedure. Because the new technology service
was not separately paid in this scenario, the overall number of single
claims available to determine an appropriate clinical APC for the new
service was reduced. This was contrary to the objective of the New
Technology APC payment policy, which is to gather sufficient claims
data to enable us to assign the service to an appropriate clinical APC.
To address this issue and ensure that there are sufficient claims
data for services assigned to New Technology APCs, in the CY 2019 OPPS/
ASC final rule with comment period (83 FR 58847), we finalized
excluding payment for any procedure that is assigned to a New
Technology APC (APCs 1491 through 1599 and APCs 1901 through 1908) from
being packaged when included on a claim with a ``J1'' service assigned
to a C-APC. In the CY 2020 OPPS/ASC final rule with comment period, we
finalized that 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 starting in CY
2020 (84 FR 61167). We proposed to continue to exclude payment for any
procedure that is assigned to a New Technology APC (APCs 1491 through
1599 and APCs 1901 through 1908) from being packaged when included on a
claim with a ``J1'' or ``J2'' service assigned to a C-APC.
We did not receive any comments on this policy. We are finalizing
as proposed without modification to continue this exclusion policy.
(3) Additional C-APCs for CY 2022
In the CY 2022 proposed rule, 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 2022, thus we proposed that
the number of C-APCs for CY 2022 would be the same as the number for CY
2021, which is 69 C-APCs.
Comment: One commenter requested that CMS designate APC 5372 (Level
2 Urology and Related Services) as a Comprehensive APC, noting that all
other Urology and Related Services APCs are C-APCs and multiple
procedures within this APC would qualify for complexity adjustments.
Response: We appreciate the commenter's suggestion and will
consider it for future rulemaking.
Comment: Several commenters requested that CMS discontinue the C-
APC payment policy for all surgical insertion codes required for
brachytherapy treatment. The commenters were concerned that the C-APC
methodology lacks the charge capture mechanisms to accurately reflect
the cost of radiation oncology services, particularly the delivery of
brachytherapy for the treatment of cervical cancer. They also stated
that they oppose C-APC payment for cancer care given the complexity of
coding, use of serial billing, and the potential for different sites of
service for the initial surgical device insertion and subsequent
treatment delivery or other supportive services. These commenters
suggested that CMS assign brachytherapy procedures to traditional APCs,
move brachytherapy procedures to higher paying C-APC, or pay separately
for preparation and planning services to fully account for the costs
associated with these procedures.
Response: We appreciate the comments. The calculations provided by
commenters as to the cost of these services do not match how we
calculate C-APC costs. We believe that the current C-APC methodology is
appropriately applied to these surgical procedures and is accurately
capturing costs. 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 C-APC policy and the proposed C-APCs as proposed for CY
2022. Table 2 below lists the final C-APCs for CY 2022, all of which
were established in past rules. All C-APCs are displayed in Addendum J
to this CY 2022 OPPS/ASC final rule with comment period (which is
available via the internet at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices). Addendum J to this final rule with comment
period also contains all of the data related to the C-APC payment
policy methodology, including the list of complexity adjustments and
other information for CY 2022.
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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 note that, in the CY 2018 OPPS/ASC final rule with
comment period, we finalized a policy to delete the composite APC 8001
(LDR Prostate Brachytherapy Composite) for CY 2018 and subsequent
years.) We refer readers to the CY 2008 OPPS/ASC final rule with
comment period (72 FR 66611 through 66614 and 66650 through 66652) for
a full discussion of the development of the composite APC methodology,
and the CY 2012 OPPS/ASC final rule with comment period (76 FR 74163)
and the CY 2018 OPPS/ASC final rule with comment period (82 FR 59241
through 59242 and 59246 through 52950) for more recent background.
(1) Mental Health Services Composite APC
We proposed to continue our longstanding policy of limiting the
aggregate payment for specified less resource-intensive mental health
services furnished on the same date to the payment for a day of partial
hospitalization services provided by a hospital, which we consider to
be the most resource-intensive of all outpatient mental health
services. We refer readers to the April 7, 2000 OPPS final rule with
comment period (65 FR 18452 through 18455) for the initial discussion
of this longstanding policy and the CY 2012 OPPS/ASC final rule with
comment period (76 FR 74168) for more recent background.
In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79588
through 79589), we finalized a policy to combine the existing Level 1
and Level 2 hospital-based PHP APCs into a single hospital-based PHP
APC, and thereby discontinue APCs 5861 (Level 1--Partial
Hospitalization (3 services) for Hospital-Based PHPs) and 5862 (Level
2--Partial Hospitalization (4 or more services) for Hospital-Based
PHPs) and replace them with APC 5863 (Partial Hospitalization (3 or
more services per day)).
In the CY 2018 OPPS/ASC proposed rule and final rule with comment
period (82 FR 33580 through 33581 and 59246 through 59247,
respectively), we proposed and finalized the policy for CY 2018 and
subsequent years that, when the aggregate payment for specified mental
health services provided by one hospital to a single beneficiary on a
single date of service, based on the payment rates associated with the
APCs for the individual services, exceeds the maximum per diem payment
rate for partial hospitalization services provided by a hospital, those
specified mental health services will be paid through composite APC
8010 (Mental Health Services Composite). In addition, we set the
payment rate for composite APC 8010 for CY 2018 at the same payment
rate that will be paid for APC 5863, which is the maximum partial
hospitalization per diem payment rate for a hospital, and finalized a
policy that the hospital will continue to be paid the payment rate for
composite APC 8010. Under this policy, the I/OCE will continue to
determine whether to pay for these specified mental health services
individually, or to make a single payment at the same payment rate
established for APC 5863 for all of the specified mental health
services furnished by the hospital on that single date of service. We
continue to believe that the costs associated with administering a
partial hospitalization program at a hospital represent the most
resource intensive of all outpatient mental health services. Therefore,
we do not believe that we should pay more for mental health services
under the OPPS than the highest partial hospitalization per diem
payment rate for hospitals.
We proposed that when the aggregate payment for specified mental
health services provided by one hospital to a single beneficiary on a
single date of service, based on the payment rates associated with the
APCs for the individual services, exceeds the maximum per diem payment
rate for partial hospitalization services provided by a hospital, those
specified mental health services would be paid through composite APC
8010 for CY 2022. In addition, we proposed to set the payment rate for
composite APC 8010 at the same payment rate that we proposed for APC
5863, which is the maximum partial hospitalization per diem payment
rate for a hospital, and that the hospital continue to be paid the
proposed payment rate for composite APC 8010.
We did not receive any public comment on these proposals and are
finalizing them as proposed. In particular, 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 2022. In addition, we are
finalizing our proposal to set the payment rate for composite APC 8010
for CY 2022 at the same payment rate that we set for APC 5863, which is
the maximum partial hospitalization per diem payment rate for a
hospital.
(2) Multiple Imaging Composite APCs (APCs 8004, 8005, 8006, 8007, and
8008)
Effective January 1, 2009, we provide a single payment each time a
hospital submits a claim for more than one imaging procedure within an
imaging family on the same date of service, to reflect and promote the
efficiencies hospitals can achieve when performing multiple imaging
procedures during a single session (73 FR 41448 through 41450). We
utilize three imaging families based on imaging modality for purposes
of this methodology: (1) Ultrasound; (2) computed tomography (CT) and
computed tomographic angiography (CTA); and (3) magnetic resonance
imaging (MRI) and magnetic resonance angiography (MRA). The HCPCS codes
subject to the multiple imaging composite policy and their respective
families are listed in Table 3 below.
While there are three imaging families, there are five multiple
imaging 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
[[Page 63478]]
provided either with or without contrast. The five multiple imaging
composite APCs established in CY 2009 are:
APC 8004 (Ultrasound Composite);
APC 8005 (CT and CTA without Contrast Composite);
APC 8006 (CT and CTA with Contrast Composite);
APC 8007 (MRI and MRA without Contrast Composite); and
APC 8008 (MRI and MRA with Contrast Composite).
We define the single imaging session for the ``with contrast''
composite APCs as having at least one or more imaging procedures from
the same family performed with contrast on the same date of service.
For example, if the hospital performs an MRI without contrast during
the same session as at least one other MRI with contrast, the hospital
will receive payment based on the payment rate for APC 8008, the ``with
contrast'' composite APC.
We make a single payment for those imaging procedures that qualify
for payment based on the composite APC payment rate, which includes any
packaged services furnished on the same date of service. The standard
(noncomposite) APC assignments continue to apply for single imaging
procedures and multiple imaging procedures performed across families.
For a full discussion of the development of the multiple imaging
composite APC methodology, we refer readers to the CY 2009 OPPS/ASC
final rule with comment period (73 FR 68559 through 68569).
For CY 2022, 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 2022, except where otherwise indicated, we proposed to use
the costs derived from CY 2019 claims data to set the proposed CY 2022
payment rates. Therefore, for CY 2022, the payment rates for the five
multiple imaging composite APCs (APCs 8004, 8005, 8006, 8007, and 8008)
are based on proposed geometric mean costs calculated from CY 2019
claims available for the CY 2022 OPPS/ASC proposed rule that qualified
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 have 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), are identified by asterisks in
Addendum N to the CY 2022 OPPS/ASC proposed rule (which is available
via the internet on the CMS website\1\) and are discussed in more
detail in section II.A.1.b. of the CY 2022 OPPS/ASC proposed rule (86
FR 42034 through 42040).
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\1\ CY 2022 Medicare Hospital Outpatient Prospective Payment
System and Ambulatory Surgical Center Payment System Proposed Rule
(CMS-1753-P); Notice of Proposed Rulemaking. Available at: https://www.cms.gov/medicaremedicare-fee-service-paymenthospitaloutpatientppshospital-outpatient-regulations-and-notices/cms-1753-p.
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For the CY 2022 OPPS/ASC proposed rule, we were able to identify
approximately 1.04 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
47 percent of all eligible claims, to calculate the proposed CY 2022
geometric mean costs for the multiple imaging composite APCs. Table 2
of the CY 2022 OPPS/ASC proposed rule lists the proposed HCPCS codes
that would be subject to the multiple imaging composite APC policy and
their respective families and approximate composite APC proposed
geometric mean costs for CY 2022 (86 FR 42037 through 42040).
We did not receive any public comments on these proposals. 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 2022.
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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
time. Finally, packaging may reduce the importance of refining service-
specific payment because packaged payments include costs associated
with higher cost cases requiring many ancillary items and services and
lower cost cases requiring fewer ancillary items and services. Because
packaging encourages efficiency and is an essential component of a
prospective payment system, packaging payments for items and services
that are typically integral, ancillary, supportive, dependent, or
adjunctive to a primary service has been a fundamental part of the OPPS
since its implementation in August 2000. For an extensive discussion of
the history and background of the OPPS packaging policy, we refer
readers to the CY 2000 OPPS final rule with comment period (65 FR
18434), the CY 2008 OPPS/ASC final rule with comment period (72 FR
66580), the CY 2014 OPPS/ASC final rule with comment period (78 FR
74925), the CY 2015 OPPS/ASC final rule with comment period (79 FR
66817), the CY 2016 OPPS/ASC final rule with comment period (80 FR
70343), the CY 2017 OPPS/ASC final rule with comment period (81 FR
79592), the CY 2018 OPPS/ASC final rule with comment period (82 FR
59250), the CY 2019 OPPS/ASC final rule with comment period (83 FR
58854), the CY 2020 OPPS/ASC final rule with comment period (84 FR
61173), and the CY 2021 OPPS/ASC final rule with comment period (85 FR
85894). As we continue to develop larger payment groups that more
broadly reflect services provided in an encounter or episode of care,
we have expanded the OPPS packaging policies. Most, but not necessarily
all, categories of items and services currently packaged in the OPPS
are listed in 42 CFR 419.2(b). Our overarching goal is to make payments
for all services under the OPPS more consistent with those of a
prospective payment system and less like those of a per-service fee
schedule, which pays separately for each coded item. As a part of this
effort, we have continued to examine the payment for items and services
provided under the OPPS to determine which OPPS services can be
packaged to further achieve the objective of advancing the OPPS toward
a more prospective payment system.
For CY 2022, 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 2022, we proposed no changes to the overall packaging policy
previously discussed. We proposed to continue to conditionally package
the costs of selected newly identified ancillary services into payment
for a primary service where we believe that the packaged item or
service is integral, ancillary, supportive, dependent, or adjunctive to
the provision of care that was reported by the primary service HCPCS
code. Below we discuss a proposed change to an ASC payment system
packaging policy for CY 2022 and solicit comment on potential
additional changes to that policy and application of that policy to the
OPPS.
We did not receive any public comments on the overall OPPS
packaging policy and are finalizing our packaging policy as proposed.
Specific packaging concerns are discussed in detail in their respective
sections throughout this final rule with comment period.
b. ASC Payment System Policy for Non-Opioid Pain Management Drugs and
Biologicals That Function as Surgical Supplies
(1) Background on OPPS/ASC Non-Opioid Pain Management Packaging
Policies
In the CY 2018 OPPS/ASC proposed rule (82 FR 33588), within the
framework of existing packaging categories, such as drugs that function
as supplies in a surgical procedure or diagnostic test or procedure, we
requested stakeholder feedback on common clinical scenarios involving
currently packaged items and services described by HCPCS codes that
stakeholders believe should not be packaged under the OPPS. We also
expressed interest in stakeholder feedback on common clinical scenarios
[[Page 63484]]
involving separately payable HCPCS codes for which payment would be
most appropriately packaged under the OPPS. Commenters who responded to
the CY 2018 OPPS/ASC proposed rule expressed a variety of views on
packaging under the OPPS. While several commenters supported
maintaining packaging policies, most of the public comments ranged from
requests to unpackage most items and services that are unconditionally
packaged under the OPPS, including drugs and devices, to specific
requests for separate payment for a particular drug or device.
In the CY 2018 OPPS/ASC final rule with comment period (82 FR
52485), we reiterated our position with regard to payment for
Exparel[supreg], a non-opioid analgesic that functions as a surgical
supply, stating that we believed that payment for this drug is
appropriately packaged with the primary surgical procedure. We also
stated in the CY 2018 OPPS/ASC final rule with comment period that we
would continue to explore and evaluate packaging policies under the
OPPS and consider these policies in future rulemaking.
In the CY 2019 OPPS/ASC final rule with comment period (83 FR
58855), we explained that, in addition to stakeholder feedback
regarding OPPS packaging policies, the President's Commission on
Combating Drug Addiction and the Opioid Crisis (the Commission) \2\ had
recently recommended that CMS examine payment policies for certain
drugs that function as a supply, specifically non-opioid pain
management treatments. The Commission was established in 2017 to study
the scope and effectiveness of the Federal response to drug addiction
and the opioid crisis and to make recommendations to the President for
improving the Federal response to the crisis. The Commission's report
included a recommendation for CMS to `` . . . review and modify
ratesetting policies that discourage the use of non-opioid treatments
for pain, such as certain bundled payments that make alternative
treatment options cost prohibitive for hospitals and doctors,
particularly those options for treating immediate postsurgical pain. .
. .'' We explained that, as discussed in the CY 2019 OPPS/ASC proposed
rule (83 FR 37068 through 37071), in response to stakeholder comments
on the CY 2018 OPPS/ASC proposed rule and in light of the
recommendations regarding payment policies for certain drugs, we had
recently evaluated the impact of our packaging policy for drugs that
function as a supply when used in a surgical procedure on the
utilization of these drugs in both the hospital outpatient department
and the ASC setting. We stated that, although we found increases in
utilization of Exparel when it was paid under the OPPS, we noticed
decreased utilization of Exparel under the ASC payment system.
Accordingly, in the CY 2019 OPPS/ASC final rule with comment period (83
FR 58855 through 58860), we finalized a policy to unpackage and pay
separately at ASP+6 percent for non-opioid pain management drugs that
function as surgical supplies when they are furnished in the ASC
setting for CY 2019, due to decreased utilization in the ASC setting.
Historically, we 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).
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\2\ https://www.federalregister.gov/documents/2017/04/03/2017-06716/establishing-the-presidents-commission-on-combating-drug-addiction-and-the-opioid-crisis.
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On October 24, 2018, the Substance Use-Disorder Prevention that
Promotes Opioid Recovery and Treatment for Patients and Communities Act
(SUPPORT) Act (Pub. L. 115-271) was enacted. Section 1833(t)(22)(A)(i)
of the Act, as added by section 6082(a) of the SUPPORT Act, states that
the Secretary must review payments under the OPPS for opioids and
evidence-based non-opioid alternatives for pain management (including
drugs and devices, nerve blocks, surgical injections, and
neuromodulation) with a goal of ensuring that there are not financial
incentives to use opioids instead of non-opioid alternatives. As part
of this review, under section 1833(t)(22)(A)(iii) of the Act, the
Secretary must consider the extent to which revisions to such payments
(such as the creation of additional groups of covered outpatient
department (OPD) services to separately classify those procedures that
utilize opioids and non-opioid alternatives for pain management) would
reduce the payment incentives for using opioids instead of non-opioid
alternatives for pain management. In conducting this review and
considering any revisions, the Secretary must focus on covered OPD
services (or groups of services) assigned to C-APCs, APCs that include
surgical services, or services determined by the Secretary that
generally involve treatment for pain management. If the Secretary
identifies revisions to payments pursuant to section
1833(t)(22)(A)(iii) of the Act, section 1833(t)(22)(C) of the Act
requires the Secretary to, as determined appropriate, begin making
revisions for services furnished on or after January 1, 2020. Revisions
under this paragraph are required to be treated as adjustments for
purposes of paragraph (9)(B) of the Act, which requires any adjustments
to be made in a budget neutral manner. Section 1833(i)(8) of the Act,
as added by section 6082(b) of the SUPPORT Act, requires the Secretary
to conduct a similar type of review as required for the OPPS and to
make revisions to the ASC payment system in an appropriate manner, as
determined by the Secretary.
For 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. We used currently available data to analyze
the payment and utilization patterns associated with specific non-
opioid alternatives, including drugs that function as a supply, nerve
blocks, and neuromodulation products, to determine whether our
packaging policies may have reduced the use 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+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
for CY 2020. 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+6 percent
for non-opioid pain management drugs that function as surgical supplies
when furnished in the ASC setting for CY 2020. Under this
[[Page 63485]]
policy, for CY 2020, the only drug that qualified for separate payment
in the ASC setting as a non-opioid pain management drug that functions
as a surgical supply was Exparel.
In the CY 2021 OPPS/ASC final rule with comment period (85 FR 85896
to 85899), we continued the policy to pay separately at ASP+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
for CY 2021. For CY 2021, only two drug products met the criteria as
non-opioid pain management drugs that function as surgical supplies in
the ASC setting, and thus receive separate payment under the ASC
payment system. These drugs are Exparel and Omidria.
(2) CY 2022 Evaluation of Payments for Opioids and Non-Opioid
Alternatives for Pain Management and Comment Solicitation on Extending
the Policy to the OPPS
As noted in the background above, over the past several years we
have reviewed non-opioid alternatives and evaluated the impact of our
packaging policies on access to these products. In our previous
evaluations, we used currently available data to analyze the payment
and utilization patterns associated with specific non-opioid
alternatives, including drugs that function as a supply, nerve blocks,
and neuromodulation products, to determine whether our packaging
policies may have reduced the use of non-opioid alternatives. In the CY
2021 OPPS/ASC final rule with comment period (85 FR 85896 through
85899), we stated that we would continue to analyze the issue of access
to non-opioid pain management alternatives in the HOPD and the ASC
settings as part of any reviews we conduct under section
1833(t)(22)(A)(ii) of the Act, with a specific focus on whether there
is evidence that our current payment policies are creating access
barriers for other non-opioid pain management alternatives for which
there is evidence-based support that these products help to deter or
avoid prescription opioid use and opioid use disorder.
For CY 2022, we conducted a subsequent review of payments for
opioids and non-opioid alternatives as authorized by section
1833(t)(22)(A)(ii) of the Act. We analyzed utilization patterns in both
the HOPD and ASC settings for multiple non-opioid pain management
drugs, including the two drugs that are receiving separate payment when
furnished in the ASC setting under our current policy for CY 2021:
Exparel and Omidria. The results of our CY 2022 review were similar to
the results of our reviews in previous years. Generally, utilization of
non-opioid pain management drugs continued to increase year after year
in the HOPD setting, where payment for these non-opioid alternatives is
packaged with the payment for the associated surgical procedure. In the
ASC setting, where Exparel and Omidria are separately paid, we also saw
utilization increases for these two drugs. However, in the ASC setting,
the rate of increase in utilization is much more substantial than in
the HOPD setting. In particular, in the HOPD setting where payment for
Exparel is packaged, utilization of Exparel increased from 19.7 million
units in 2019 to 21.8 million units in 2020, whereas utilization of
Exparel increased from 1.5 million units in 2019 to 3.3 million units
in 2020 in the ASC setting, where Exparel is separately paid. We note
that a number of reasons could explain this discrepancy other than our
policy to pay separately for Exparel under the ASC payment system,
including evolving clinical practice in the ASC setting, which could
increase the number of surgeries performed in ASCs for which Exparel is
an appropriate pain management drug.
We have consistently explained, including as recently as in the CY
2021 OPPS/ASC final rule with comment period (85 FR 85894), that 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. We have
not found conclusive evidence to support the notion that the OPPS
packaging policy, under which non-opioid drugs and biologicals are
packaged when they function as a supply in a surgical procedure, has
created financial incentives to use opioids instead of evidence-based
non-opioid alternatives for pain management. For example, we have not
observed decreased utilization of non-opioid alternatives for pain
management in the HOPD setting. Therefore, for CY 2022, we proposed 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.
As explained earlier in this section, while packaging encourages
efficiency and is a fundamental component of a prospective payment
system, where there is an overriding policy objective to reduce
disincentives for use of non-opioid products to the extent possible, we
believe it may be appropriate to establish payment that reduces
disincentives for use of non-opioid drugs and biologicals for pain
management when there is evidence that use of those products reduces
unnecessary opioid use. For these reasons, we solicited comment as to
whether we should expand our current policy that only applies in the
ASC setting--to pay separately at ASP+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--to
the HOPD setting.
In the CY 2022 OPPS/ASC proposed rule, we stated we were interested
in learning from stakeholders whether similar disincentives for the use
of non-opioid pain management drugs and biologicals identified in the
ASC setting exist in the HOPD setting. Previously, in the CY 2019 OPPS/
ASC final rule with comment period (83 FR 59067), we identified several
disincentives that were unique to the ASC setting compared to the HOPD
setting, including the fact that ASCs tend to provide specialized care
and a more limited range of services in comparison to hospital
outpatient departments. Also, ASCs are paid, in aggregate,
approximately 55 percent of the OPPS rate. Therefore, fluctuations in
payment rates for specific services may affect these providers more
acutely than hospital outpatient departments; and ASCs may be less
likely to choose to furnish non-opioid postsurgical pain management
treatments, which are typically more expensive than opioids, as a
result. Additionally, we sought comment on what evidence supports the
expansion of this policy to the HOPD setting, including the clinical
benefit that Medicare beneficiaries may receive from the availability
of separate or modified payment for these products in the HOPD setting.
Finally, in the proposed rule we sought comment on if we should
treat
[[Page 63486]]
products the same depending on the setting, ASC or HOPD. For example,
we sought comment on whether products should have the same eligibility
requirements to qualify for revised payment in the ASC and the HOPD
settings. We also sought comment on how the additional comment
solicitations described below, which refer to the ASC setting, could
also be applied to the HOPD setting.
Comment: MedPAC commented that while it appreciated CMS's interest
in addressing the issue of opioid overuse it continued to support a
policy that maintains the packaging of drugs that function as supplies
in surgical procedures. MedPAC stated that this policy is contrary to
CMS's efforts to increase the size of payment bundles in the OPPS to
increase incentives for efficient delivery of care.
Response: We appreciate this feedback. We agree that packaging
policies are a fundamental component of the OPPS and ASC payment
systems. We strive to balance the importance of our packaging policies
with the importance of addressing the opioid epidemic. In this specific
scenario, we believe separate payment in the ASC setting for non-opioid
pain management drugs and biologicals that function as surgical
supplies is appropriate given the financial disincentives we have
observed for these products in the ASC setting. As previously
discussed, we identified several disincentives that were unique to the
ASC setting compared to the HOPD setting, including the fact that ASCs
tend to provide specialized care and a more limited range of services
in comparison to hospital outpatient departments.
Comment: Most commenters were in favor of expanding the policy to
provide separate payment under the ASC payment system for certain non-
opioid pain management drugs that function as surgical supplies to the
HOPD setting. Many providers commented that non-opioid pain management
therapies are often superior to opioid-based ones in reducing pain, and
indicated that they generally would prefer to use non-opioid therapies.
However, many stated that payment dictated whether they could use a
specific therapy. As such, commenters stated that the pain management
therapies available in the ASC setting are not used to the same degree
as in the HOPD setting. Commenters stated that although there has not
been a drastic decrease in HOPD utilization of non-opioid pain
management drugs, the utilization of opioid alternatives could be much
higher if separate payment for these products was provided. Similarly,
several commenters acknowledged that the disincentives to provide non-
opioid pain management drugs in the HOPD setting were not as
substantial as the ASC setting; however, according to these
stakeholders, there are still financial disincentives to use opioids
instead of opioid alternatives in the HOPD setting. A drug manufacturer
discussed its view on the disparities in utilization and access to non-
opioid pain management therapies in the HOPD setting compared to the
ASC setting. Based on this commenter's geo-sociodemographic analysis,
they believe that ASC access to their drug outpaced access in the HOPD
setting due to CMS payment policies. A few drug manufacturers provided
specific data on utilization of their individual products. Omeros, the
manufacturer of the drug Omidria, cited that the drug's utilization
had, in their view, decreased in the HOPD setting as a result of CMS
packaging polices. Many commenters suggested that opioids were more
cost effective for their HOPD facilities to use compared to non-opioid
pain management drugs due to CMS payment policies. Some commenters
suggested that a greater number of surgeries, particularly those with
higher acuity and complexity that require pain management drugs, occur
in the HOPD setting, compared to the ASC setting. The commenters
contended that separate payment for non-opioid pain management drugs in
this setting could potentially increase access to these treatments.
Therefore, the commenters encouraged CMS to expand this policy to the
HOPD setting.
The commenters generally encouraged payment parity across the ASC
and HOPD settings in order to enhance site neutrality and prevent a
diversion of patients to the ASC setting based solely on the
availability of separate payment for non-opioid pain management drugs.
MedPAC had concerns that our proposed policy would further distort
payment differences between two care settings that are the sites of
many of the same services, creating financial incentives for providers
to direct patients to one setting of care. Many commenters and
providers pointed to the clinical benefit of non-opioid treatments, and
encouraged CMS to pay separately, incentivize, or otherwise recognize
the value of these drugs in the HOPD setting, regardless of utilization
patterns. Commenters provided literature supporting the benefits of
non-opioid pain management approaches, including how certain non-opioid
pain management products were effective for pain and reduced opioid
consumption.
Response: We appreciate the many detailed comments we received from
a wide variety of stakeholders in response to our comment solicitation
on expanding our non-opioid pain management payment policy to the HOPD
setting as well as those regarding the clinical benefit of non-opioid
pain management treatments used in their clinical practice.
As discussed in the CY 2022 OPPS/ASC proposed rule, we did not make
a proposal to expand this policy to the HOPD setting based on many
factors, including our continued claims analysis that demonstrates
increasing utilization year after year of these products in the HOPD
setting. In the proposed rule, we described our claims analysis for
Exparel, a drug for which we have more than five years of reliable
claims data. As stated in the proposed rule, even while Exparel was
packaged in the HOPD setting, claims data shows that utilization
continued to steadily increase year over year. For other drugs
described by stakeholders, we found similar increases over years of
claims data. We will continue to track the utilization in the HOPD and
ASC settings for all of these drugs. However, as Exparel is the only
drug that has been not recently been on pass-through and has been
packaged in the HOPD setting over the last three years, we believe that
Exparel's utilization is a good indicator of whether our payment
policies are causing disincentives for non-opioids in the HOPD setting.
We have explained in several prior rulemakings, including in the CY
2021 OPPS/ASC final rule with comment period (85 FR 85894), that 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. As previously discussed, we strive to
balance the importance of our packaging policies with the importance of
addressing the opioid epidemic. In this specific scenario, we believe
separate payment in the ASC setting for non-opioid pain management
drugs and biologicals that function as surgical supplies is
appropriate, given the financial disincentives we have observed for
these products in the ASC setting. We identified several disincentives
that were unique to the ASC setting compared to the HOPD setting,
including the fact that ASCs tend to provide specialized care and a
more limited range of services in comparison to hospital outpatient
departments. Also, ASCs are paid, in aggregate, approximately 55
percent of the OPPS
[[Page 63487]]
rate. Therefore, fluctuations in payment rates for specific services
may affect these providers more acutely than hospital outpatient
departments; and ASCs may be less likely to choose to furnish non-
opioid postsurgical pain management treatments, which are typically
more expensive than opioids, as a result. We have not observed the same
financial disincentives in the HOPD setting. We have also not observed
conclusive trends that our packaging policies for non-opioid pain
management are shifting patients from the HOPD setting to the ASC
setting.
After reviewing the public comments received, as described
previously, we have not found conclusive evidence to support the notion
that the OPPS packaging policy, under which non-opioid drugs and
biologicals are packaged when they function as a supply in a surgical
procedure, has created financial incentives to use opioids instead of
evidence-based non-opioid alternatives for pain management. Our goal is
to eliminate the disincentive to use non-opioid pain management drugs,
rather than to incentivize products in the HOPD setting as some
commenters have suggested. At this time, we have not observed any clear
and conclusive financial disincentive to use non-opioid pain management
drugs over opioids in the HOPD setting. However, based on the comments
we received, we will continue to carefully analyze utilization data and
engage with stakeholders.
Therefore, for CY 2022, we are finalizing as proposed our proposal
to continue to package payment under the OPPS for non-opioid pain
management drugs that function as surgical supplies in the performance
of surgical procedures in the HOPD setting.
(3) Criteria for Eligibility for Separate Payment Under the ASC Payment
System for Non-Opioid Pain Management Drugs and Biologicals That
Function as Surgical Supplies
As described in section 1833(t)(22)(A)(i) of the Act, the Secretary
shall conduct a review of payments for opioids and evidence-based non-
opioid alternatives for pain management with a goal of ensuring that
there are not financial incentives to use opioids instead of non-opioid
alternatives. In any future reviews the Secretary may determine
appropriate to conduct under section 1833(t)(22)(A)(ii) of the Act, we
believe it is important to establish the evidence base for non-opioid
alternatives for pain management when evaluating whether current
payment policies result in an incentive for providers to use opioids
instead of such evidence-based non-opioid alternatives for pain
management.
Accordingly, for CY 2022 and subsequent years, we proposed two
criteria that non-opioid pain management drugs and biologicals would be
required to meet to be eligible for a payment revision under the ASC
payment system in accordance with section 1833(t)(22)(C). The proposed
criteria were intended to identify non-opioid pain management drugs and
biologicals that function as supplies in surgical procedures for which
revised payment under the ASC payment system would be appropriate.
Comment: Most commenters supported continuing our policy of
separate payment for non-opioid pain management drugs that function as
surgical supplies in the ASC setting. Commenters believe continuing
separate payment in the ASC setting is essential given the continued
overall low utilization of these drugs in the ASC setting and the
positive clinical benefit the drugs provide.
Response: We thank commenters for their support for our proposal.
In the following sections we discuss in greater detail the specific
aspects of the policy that commenters addressed.
Comment: MedPAC expressed reservations regarding our policy to pay
ASCs separately for non-opioid pain management drugs that function as
supplies. It stated this policy is contrary to CMS's policy efforts to
increase the size of payment bundles in order to increase incentives
for efficient delivery of care. Additionally, it stated paying
separately in the ASC would distort payment differences between the ASC
and HOPD settings. Generally, MedPAC supported a policy that maintains
the packaging of drugs that function as supplies in surgical
procedures, especially in the absence of evidence in peer-reviewed
publications indicating that the drug in question reduces the use of
opioids.
Response: We appreciate this comment and agree with the importance
of maintaining our overarching packaging policies in the OPPS and ASC
payment systems. However, given the seriousness of the opioid epidemic,
we continue to believe this policy plays an important role in
maintaining beneficiary access and enhancing patient care in the ASC
setting by eliminating the financial disincentive to use non-opioid
pain management drugs that function as surgical supplies over opioids.
Based on public comments received, for CY 2022, we are finalizing
our proposal as proposed to continue our current policy to pay
separately for non-opioid pain management drugs that function as
surgical supplies in the performance of surgical procedures in the ASC
setting. We are also finalizing the new additional eligibility criteria
we proposed for this policy, as discussed in the following section.
Specifically, for CY 2022, we proposed the following criteria that
non-opioid pain management drugs and biologicals that function as
surgical supplies would be required to meet to be eligible for separate
payment under the ASC payment system in accordance with section
1833(t)(22)(C) of the Act.
Criterion One: FDA Approval and FDA-Approved Indication for Pain
Management or Analgesia
We proposed that the drug or biological product must be safe and
effective, as determined by FDA. We proposed that the drug must be
approved under a new drug application under section 505(c) of the
Federal Food, Drug, and Cosmetic Act (FDCA), under an abbreviated new
drug application under section 505(j), or, in the case of a biological
product, be licensed under section 351 of the Public Health Service Act
(the PHS Act). We further proposed that the drug or biological must
also have an FDA-approved indication for pain management or analgesia.
We believe FDA approval is an appropriate requirement for a drug or
biological to be eligible for this policy because FDA reviews new drugs
and biologicals for safety and effectiveness, which would allow us to
identify safe and effective non-opioid products to which this separate
payment policy would apply. Given that FDA has an existing and detailed
review process already in place, we believe it would be appropriate and
administratively efficient to utilize FDA approval as a requirement to
ensure that the new drugs and biologicals approved under this policy
are safe and effective for their intended use. We believe the vast
majority of drugs and biologicals on the market have undergone FDA
review and approval, and we do not anticipate this criterion would
prevent otherwise eligible drugs or biologicals from qualifying. In
addition, section 1833(t)(22)(A) of the Act, our current policy, and
our proposed policy all focus on pain management products.
Specifically, section 1833(t)(22)(A) of the Act refers to reviews of
opioid and evidence-based non-opioid products for pain management.
Therefore, we proposed to require an FDA-approved indication for pain
management or analgesia for a drug or biological to qualify as a pain
management product.
[[Page 63488]]
The FDA approval process would also allow us to confirm that a drug or
biological is, in fact, a non-opioid. Drugs and biologicals that are
characterized as opioids or opioid agonists in the labeling for the
FDA-approved product would not be eligible for separate payment under
this policy.
Comment: Many commenters recommended CMS finalize its proposal to
require an FDA-approved indication for pain management or analgesia for
a drug or biological to qualify as a pain management product. Numerous
commenters believe that this criterion is objective and would provide a
transparent requirement for this policy moving forward. Commenters
stated that FDA has a thorough and comprehensive process for evaluating
drugs for approval and for specific FDA-approved indications. Other
commenters did not express outright support for this criterion, but
rather said they were not opposed to it. Generally, commenters were in
favor of establishing an FDA approval requirement.
Response: We thank commenters for their support. As described in
our proposal, we agree with the importance of utilizing FDA approval
and an indication for pain management as a criterion for separate
payment for eligible non-opioids.
Comment: Some commenters did not support requiring a specific FDA-
approved indication for pain management or analgesia because the
commenters believed this requirement may limit the number of products
to which the policy would apply. One commenter asked us to clarify
whether an FDA-approved indication for the treatment of pain would be
considered appropriate and satisfy this criterion. One drug
manufacturer more generally asked for flexibility in the exact FDA-
approved indication. This commenter stated CMS should allow flexibility
for a variety of indication statements that demonstrate that a drug
mitigates or otherwise alleviates pain. Additionally, this commenter
asked CMS to clarify if providing a drug during the pre-operative,
post-operative, or intraoperative period could potentially qualify
under the proposed policy. Some commenters asked CMS to expand this
FDA-approved indication criterion to include anesthesia drugs, drugs
used to treat inflammation, or more generally, any drugs that may have
pain management properties. An additional commenter suggested limiting
eligibility to drugs or biologicals with more restrictive FDA-approved
indications, such as those drugs with opioid-sparing pain management
indications.
Response: Regarding comments on a specific FDA-approved indication,
we believe an FDA-approved indication for pain management or analgesia
is appropriate for this policy. Section 1833(t)(22) of the Act required
us to assess incentives to use opioids rather than non-opioid products
used for pain management. We believe using the FDA-approved indications
as a method to determine which drug products are safe and effective for
pain management is appropriate. Therefore, we do not believe drugs or
biologicals that do not have an FDA--approved indication for pain
management or as an analgesic, such as certain anesthesia drugs
mentioned by stakeholders, would be appropriate under this policy. We
do believe ``treatment of pain'' as described by one commenter, would
be an appropriate indication to satisfy this criterion. In response to
the recommendation that we include drugs used to treat inflammation, or
more generally, any drugs that may have pain management properties, we
are not modifying our proposal to include these types of drugs in the
definition of an FDA-approved indication for pain management or
analgesia.
Additionally, we remind commenters 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 (83 FR 58855).
Additionally, a drug product must meet all other requirements for
payment and coverage under Medicare Part B in order to be paid and
covered under this policy. We believe including those drugs with FDA-
approved indications for pain management or analgesia will capture the
appropriate drug products intended for this policy without being so
broad as to include drugs that may not be used for pain management or
so restrictive as to exclude potentially useful non-opioid pain
management products.
Based on our review of public comments, we are finalizing criterion
one as proposed, under which the drug or biological product must be
safe and effective, as determined by FDA, and that the drug must be
approved under a new drug application under section 505(c) of FDCA,
under an abbreviated new drug application under section 505(j), or, in
the case of a biological product, be licensed under section 351 of the
PHS Act. We are also finalizing for CY 2022 as part of criterion one
the requirement that the drug or biological also have an FDA-approved
indication for pain management or analgesia.
Criterion Two: Cost of the Product
Currently under the OPPS, drugs that are not policy-packaged are
subject to the drug 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 at $50 per administration
during CYs 2005 and 2006. We set the packaging threshold for
establishing separate APCs for drugs and biologicals through annual
notice and comment rulemaking. The proposed per-day drug packaging
threshold for CY 2022 was $130, and the finalized per-day drug
packaging threshold for CY 2022 is $130, as described in V.B.1.a of
this final rule with comment period.
As our second criterion, we proposed that a drug or biological
would only be eligible for a payment revision under the ASC payment
system in accordance with section 1833(t)(22)(C) of the Act if its per-
day cost exceeds the drug packaging threshold described in section
V.B.1.a. of this final rule with comment period. We believe this is an
appropriate requirement because we believe that not all non-opioid
alternative treatments are equally disincentivized by our packaging
policies. In particular, when the cost of non-opioid drugs and
biologicals falls below the packaging threshold of $130 per-day, we
believe the drug does not generally have a significant impact on the
overall procedure costs; therefore, we believe use of these drugs and
biologicals is less likely to be disincentivized by CMS packaging
policies. However, when the per-day cost of the drug is above the drug
packaging threshold, we believe the cost of these drugs or biologicals
is more likely to have a significant impact on the overall procedure
costs. Section 1833(t)(22)(A)(i) of the Act discusses financial
incentives to use opioids instead of non-opioid alternative treatments.
As such, we do not believe non-opioid pain management drugs that are
lower in cost are generally disincentivized by our packaging policies,
as their cost is more easily absorbed into the payment for the primary
procedure in which they are used when compared to drugs and biologicals
with costs above the threshold. We proposed to use the existing OPPS
drug packaging threshold as it is familiar to stakeholders and its
application to drugs and biologicals under this policy creates
uniformity across the OPPS and ASC payment systems. Therefore, CMS
proposed that drugs and biologicals would be required to have a per-day
cost that exceeds the drug packaging threshold that CMS sets
[[Page 63489]]
annually through notice and comment rulemaking.
We also believe the use of this threshold as an eligibility
criterion for drugs under consideration for separate payment under this
policy is appropriate, as it conforms with the broader goals of the
OPPS and ASC payment systems. 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, including the drug packaging threshold, support our strategic
goal of using larger payment bundles to maximize hospitals' incentives
to provide care in the most efficient manner. Packaging payments into
larger payment bundles promotes the predictability and accuracy of
payment for services over time. For the reasons mentioned above, we
believe it is appropriate to continue to package drugs that would
otherwise qualify for separate payment under this policy where their
per-day cost is below the OPPS drug packaging threshold.
Comment: Most commenters supported this criterion. Some commenters
stated that they agreed with CMS's rationale that use of drugs and
biologicals with per-day costs below the packaging threshold is not
generally disincentivized by CMS packaging policies. Commenters
generally thought this was a clear, transparent, and objective
criterion. Other commenters did not express outright support for this
criterion but stated that they were not opposed to it.
Response: We thank commenters for their support of this proposed
criterion.
Comment: A few commenters stated that non-opioid pain management
drugs that fall below the drug packaging threshold are still expensive
relative to opioids, and therefore, the commenters believed CMS should
not finalize a cost threshold for this policy. Specifically, the
manufacturer of Anjeso (HCPCS code J1738; Injection, meloxicam, 1 mg),
Baudax Bio, supported CMS adopting policies that encourage use of non-
opioid pain alternatives. However, they recognized that the per-day
cost of their product fell below the drug packaging threshold and
disagreed with CMS's proposed criterion two regarding per-day cost,
because they indicated that the relative cost of opioids is still less
than most non-opioid pain management products. Other commenters
recommended that CMS pay for drugs and biologicals with per-day costs
that fall below the drug packaging threshold, such as intravenous (IV)
acetaminophen.
Response: We thank the commenters for their feedback on this
proposed criterion. At this time, we continue to believe that drugs and
biologicals with per-day costs below the OPPS drug packaging threshold
are not generally disincentivized by CMS packaging policies, as the
drug cost is less likely to represent a substantial portion of the
payment rate of the primary procedure in which the product is used.
This criterion aligns with our policy objective of eliminating
financial disincentives to use of non-opioid pain management products.
Based on our rationale described above and feedback from
stakeholders, we believe it is appropriate to finalize the second
criterion as proposed. For CY 2022, we are finalizing our proposal that
a non-opioid pain management drug or biological that functions as a
supply in a surgical procedure would only be eligible for separate
payment under the ASC payment system if its per-day cost exceeds the
drug packaging threshold described in section V.B.1.a. of this final
rule with comment period.
In addition, we proposed that non-opioid drugs and biologicals
currently receiving transitional drug pass-through status in the OPPS
would not be candidates for this policy as they are already paid
separately under the OPPS and ASC payment system. We proposed that once
transitional drug pass-through status expires, the non-opioid drug or
biological may qualify for separate payment under the ASC payment
system if it meets the proposed eligibility requirements.
Comment: Commenters requested that CMS determine the payment status
of non-opioid drugs and biologicals after pass-through status expires
as soon as possible through rulemaking.
Response: We thank commenters for their feedback. We will make
payment determinations for applicable drugs in the appropriate calendar
year rule. For example, those drugs that may be eligible for separate
payment under this policy for the first time in CY 2023 will be
discussed during the CY 2023 rulemaking cycle and evaluated against the
appropriate eligibility criteria for that year.
Based on stakeholder feedback, we are finalizing as proposed that
non-opioid pain management drugs and biologicals that function as
supplies in surgical procedures that are already paid separately, or
have transitional drug pass-through status under the OPPS, would not be
candidates for this policy as they are already paid separately under
the OPPS and ASC payment system. We also note that if a product has not
received transitional pass-through status in the OPPS and ASC settings,
separate payment in the ASC setting through this policy for non-opioid
pain management drugs that function as surgical supplies does not
preclude the manufacturer from applying for and receiving transitional
pass-through status for their drug or biological if the drug or
biological meets the criteria for transitional drug pass-through
status. Please see section V.A., OPPS Transitional Pass-Through Payment
for Additional Costs of Drugs, Biologicals, and Radiopharmaceuticals,
of this CY 2022 OPPS/ASC final rule for additional details on
transitional pass-through payments.
(4) Regulation Text Changes
We proposed to codify our proposed criteria for separate payment
for qualifying non-opioid pain management drugs and biologicals that
function as surgical supplies in the regulation text for the ASC
payment system in a new Sec. 416.174. In particular, we proposed to
provide in a new Sec. 416.174(a)(1) that non-opioid pain management
drugs or biologicals that function as a supply in a surgical procedure
are eligible for separate payment if they are approved under a new drug
application under section 505(c) of FDCA, under an abbreviated new drug
application under section 505(j) of FDCA, or, in the case of a
biological product, are licensed under section 351 of the PHS Act.
Section 416.174(a)(1) would also provide that the drug or biological
must have an FDA-approved indication for pain management or analgesia.
New Sec. 416.174(a)(2) would require that the per-day cost of the drug
or biological must exceed the OPPS drug packaging threshold set
annually through notice and comment rulemaking.
We also proposed to amend Sec. 416.164(b)(6) to provide that 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 are ancillary items that are integral to a covered surgical
procedure and for which separate payment is allowed. We also proposed
to amend Sec. 416.171(b)(1) to provide that the payment rate for 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 are
[[Page 63490]]
not paid an amount derived from the payment rate for the equivalent
item or service under the OPPS.
We received no comments on the specific regulation text changes. As
we are finalizing the two criteria as proposed, we are also finalizing
the corresponding regulation text changes as proposed.
(5) Eligibility for Separate Payment in CY 2022 for Exparel, Omidria,
and Other Non-Opioid Drugs or Biologicals for Pain Management
As discussed in the CY 2021 OPPS/ASC final rule with comment
period, there are two products receiving separate payment in the ASC
setting in CY 2021 under our current policy to pay separately for non-
opioid pain management treatments that function as surgical supplies
when furnished in the ASC setting (85 FR 86171). These two products are
Exparel (HCPCS Code C9290, Injection, bupivacaine liposome, 1 mg) and
Omidria (HCPCS Code J1097, phenylephrine 10.16 mg/ml and ketorolac 2.88
mg/ml ophthalmic irrigation solution, 1 ml). Based on the current
information available to us, as we explain below, we proposed that both
products would be eligible for separate payment in CY 2022 under our
proposed policy. We sought comment on whether there are any other non-
opioid drug or biological products that would meet the proposed
criteria if finalized. We have included our evaluations of these
products based on stakeholder comments in the follow sections.
(a) Eligibility for Separate Payment in CY 2022 for Exparel
We proposed that Exparel (C9290; Injection, bupivacaine liposome, 1
mg) would continue to receive separate payment in the ASC setting as a
non-opioid pain management drug that functions as a surgical supply for
CY 2022. As we stated in the CY 2022 OPPS/ASC proposed rule, based on
CMS's internal review, we believed Exparel met criterion one. Exparel
was approved by FDA with a New Drug Application (NDA #022496) on 10/28/
2011.\3\ Exparel's FDA-approved indication is ``in patients 6 years of
age and older for single-dose infiltration to produce postsurgical
local analgesia (1). In adults as an interscalene brachial plexus nerve
block to produce postsurgical regional analgesia''.\4\ No component of
Exparel is opioid-based. Accordingly, we proposed that Exparel meets
criterion one.
---------------------------------------------------------------------------
\3\ Exparel. FDA Letter. 28 October 2011. https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2011/022496s000ltr.pdf.
\4\ Exparel. FDA Package Insert. 22 March 2021. https://www.accessdata.fda.gov/drugsatfda_docs/label/2021/022496s035lbl.pdf.
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As discussed in section (3) above, for criterion two we proposed
that a drug or biological would only be eligible for separate payment
under this policy if its per-day cost exceeds the drug packaging
threshold described in section V.B.1.a. of this final rule with comment
period. The finalized per-day cost threshold for CY 2022 is $130. Using
the methodology described at V.B.1.a. of this final rule with comment
period, the per-day cost of Exparel exceeds the $130 per-day cost
threshold. Therefore, we proposed that Exparel meets criterion two.
Based on the above discussion, we proposed that Exparel meets
criteria 1 and 2, and should receive separate payment under the ASC
payment system for CY 2022.
Comment: The manufacturer of Exparel, Pacira BioSciences, supported
finalizing both criteria as proposed and urged CMS to finalize the
proposal to pay separately for Exparel in the ASC setting. The
manufacturer also noted that numerous peer-reviewed studies demonstrate
that Exparel can reduce or even replace use of postsurgical opioid pain
medication and lead to improved patient outcomes. Several commenters,
including a hospital association and surgery associations, also
supported CMS's proposal to continue to unpackage and pay separately
for Exparel in the ASC setting.
Response: We appreciate the commenters' input. After reviewing the
information provided during the public comment period, and as described
in our proposal above, we have determined that Exparel meets criterion
one for FDA approval and an FDA-approved pain management indication and
that the per-day cost of Exparel exceeds the finalized $130 per-day
cost threshold, meeting criterion two. Additionally, no component of
Exparel is opioid-based.
After consideration of the public comments we received and
consistent with the eligibility criteria we are adopting, we are
finalizing our proposal that Exparel will continue to receive separate
payment under the ASC payment system in CY 2022 as a non-opioid pain
management drug that functions as a surgical supply.
(b) Eligibility for Separate Payment for Omidria in CY 2022
We proposed that Omidria (J1097; Phenylephrine 10.16 mg/ml and
ketorolac 2.88 mg/ml ophthalmic irrigation solution, 1 ml) would
continue to receive separate payment in the ASC setting as a non-opioid
pain management drug that functions as a surgical supply for CY 2022.
Based on our internal review during the proposed rule, we stated that
we believed Omidria would meet criterion one. Omidria was approved by
FDA with a New Drug Application (NDA #205388) on May 30, 2014.\5\
Additionally, 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''.\6\ No component of Omidria is
opioid-based. Therefore, we proposed that Omidria would meet proposed
criterion one.
---------------------------------------------------------------------------
\5\ Omidria. FDA Letter. 30 May 2014. https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2014/205388Orig1s000ltr.pdf.
\6\ Omidria. FDA Package Insert. 08 December 2017. https://www.accessdata.fda.gov/drugsatfda_docs/label/2017/205388s006lbl.pdf.
---------------------------------------------------------------------------
Using the methodology described at V.B.1.a. of this final rule with
comment period, the per-day cost of Omidria exceeds the $130 per-day
cost threshold. Therefore, we proposed that Omidria meets criterion
two.
Because we proposed that Omidria meets criteria one and two, we
proposed that it should receive separate payment under the ASC payment
system for CY 2022.
Comment: The manufacturer of Omidria, Omeros, agreed with CMS's
proposal that Omidria would satisfy the proposed criteria for CY 2022
and noted their support for Omidria continuing to receive separate
payment in ASC setting. The manufacturer noted that Omidria decreases
the need for the opioid fentanyl during surgery and reduces opioids
prescribed post operatively, but did not submit literature to support
these assertions. One commenter, a hospital association, also supported
CMS's proposal to continue to unpackage Omidria in the ASC setting.
However, another individual commenter stated their opposition to this
proposal, noting that Omidria should be treated as an incidental part
of an ophthalmic surgery and not paid for separately, as, in this
commenter's view, Omidria does not meaningfully ameliorate the opioid
crisis, is not indicated or useful for the treatment of an opioid use
disorder, and that separate payment does not provide a clinical benefit
for Medicare beneficiaries. Additionally, this commenter noted that
ophthalmic surgeons rarely prescribe opioids.
Response: We appreciate the public comments on our proposal. We
note that we have not proposed or adopted a requirement that a product
must meaningfully ameliorate the opioid crisis or have a clinically
significant
[[Page 63491]]
impact on opioid usage. As such, after reviewing the information
provided during the public comment period, and as described in our
proposal above, we have determined that Omidria meets finalized
criterion one because it is FDA approved and has an FDA-approved pain
management indication and meets finalized criterion two because it has
a per-day cost that exceeds the $130 per-day cost threshold.
After consideration of the public comments we received and our
review of the criteria, we are finalizing the proposal for Omidria to
continue to receive separate payment under the ASC payment system as a
non-opioid pain management drug that functions as a surgical supply for
CY 2022.
(c) Eligibility for Separate Payment in CY 2022 for Other Non-Opioid
for Pain Management Drugs and Biologicals
We received comments on the CY 2022 OPPS/ASC proposed rule on
additional non-opioid pain management drugs and biologicals that
commenters believe would be eligible for separate payment in CY 2022
under our proposed policy. We have included a summary of these comments
below as well as our analysis of whether these products meet the final
eligibility criteria.
Comment: The manufacturer of Dextenza (J1096; Dexamethasone,
lacrimal ophthalmic insert, 0.1 mg), Ocular Therapeutix, commented that
separate payment for Dextenza is necessary in the ASC setting for
beneficiary access, as it is frequently used in that setting. The
manufacturer requested continued separate payment after Dextenza's
pass-through status expires.
Response: Based on CMS's internal review, we believe Dextenza meets
criterion one. Dextenza was approved by FDA with a New Drug Application
(NDA #208742) on November 30, 2018.\7\ Dextenza's FDA-approved
indication is as ``a corticosteroid indicated for the treatment of
ocular pain following ophthalmic surgery''.\8\ No component of Dextenza
is opioid-based. Accordingly, we believe that Dextenza meets criterion
one.
---------------------------------------------------------------------------
\7\ Dextenza. FDA Letter. 30 November 2018. https://www.accessdata.fda.gov/drugsatfda_docs/nda/2018/208742Orig1s000Approv.pdf.
\8\ Dextenza. FDA Labeling. 30 November 2018. https://www.accessdata.fda.gov/drugsatfda_docs/nda/2018/208742Orig1s000Lbl.pdf.
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As discussed in section (3) above, for criterion two we proposed
that a drug or biological would only be eligible for separate payment
under this policy if its per-day cost exceeds the drug packaging
threshold described in section V.B.1.a. of this final rule with comment
period. Using that methodology, the per-day cost of Dextenza exceeds
the $130 per-day cost threshold. Therefore, we believe that Dextenza
meets criterion two.
We agree that Dextenza meets criteria one and two, and would be
eligible to receive separate payment under the ASC payment system as a
non-opioid pain management drug that functions as a surgical supply for
CY 2022 if it was not already receiving separate payment-in CY 2022 as
a pass-through drug. Please see section V.A. ``OPPS Transitional Pass-
Through Payment for Additional Costs of Drugs, Biologicals, and
Radiopharmaceuticals'' of this final rule with comment period for
additional details on transitional pass-through payments for drugs and
biologicals, as well as section X. F. of this final rule with comment
period, ``Separate Payment in CY 2022 for the Device Category, Drugs,
and Biologicals with Transitional Pass-Through Payment Status Expiring
between December 31, 2021, and September 30, 2022.''
Comment: The manufacturer of Dexycu (J1095; Injection,
dexamethasone 9 percent, intraocular, 1 microgram), EyePoint
Pharmaceuticals, commented that Dexycu should be eligible for separate
payment in the ASC setting as a non-opioid pain management drug that
functions as a surgical supply. An individual commenter, an
ophthalmologist, noted that Dexycu is indicated for the treatment of
inflammation following ocular surgery and provided summaries of several
studies that discussed Dexycu's utility in controlling pain. Other
commenters more broadly suggested that CMS provide separate payment for
products that prevent inflammation.
Response: Based on CMS's internal review, we do not believe Dexycu
meets criterion one. Dexycu was approved by FDA with a New Drug
Application (NDA #208912) on February 9, 2018.\9\ Dexycu's FDA-approved
indication is as ``a corticosteroid indicated for the treatment of
postoperative inflammation''.\10\ No component of Dexycu is opioid-
based. However, Dexycu does not have an FDA-approved indication for
pain management or analgesia. Accordingly, we do not believe Dexycu
meets criterion one.
---------------------------------------------------------------------------
\9\ Dexycu. FDA Letter. 09 February 2018. https://www.accessdata.fda.gov/drugsatfda_docs/nda/2018/208912Orig1s000Approv.pdf.
\10\ Dexycu. FDA Labeling. 09 February 2018. https://www.accessdata.fda.gov/drugsatfda_docs/nda/2018/208912Orig1s000Lbl.pdf.
---------------------------------------------------------------------------
As discussed in section II.A.3. of this final rule with comment
period, for criterion two we proposed that a drug or biological would
only be eligible for separate payment under this policy if its per-day
cost exceeds the drug packaging threshold described in section V.B.1.a.
of this final rule with comment period. Using that methodology, the
per-day cost of Dexycu does exceed the $130 per-day cost threshold.
Therefore, we believe Dexycu meets criterion two.
After consideration of the public comments we received and our
review of the criteria, we have determined that Dexycu does not meet
criteria one and, therefore, would not eligible to receive separate
payment under the ASC payment system as a non-opioid pain management
drug that functions as a surgical supply for CY 2022. Additionally, we
note that Dexycu is already receiving separate payment through CY 2022.
Please see section V.A. ``OPPS Transitional Pass-Through Payment for
Additional Costs of Drugs, Biologicals, and Radiopharmaceuticals'' of
this final rule with comment period for additional details on
transitional pass-through payments for drugs and biologicals as well as
section X. F. ``Separate Payment in CY 2022 for the Device Category,
Drugs, and Biologicals with Transitional Pass-Through Payment Status
Expiring between December 31, 2021, and September 30, 2022.''
Comment: The manufacturer of Xaracoll, Innocoll Pharmaceuticals,
commented that Xaracoll meets the two proposed CMS criteria and
qualifies for separate payment as a non-opioid pain management drug
that functions as a surgical supply in the ASC setting. The
manufacturer also provided additional details regarding the clinical
benefit of their product, including discussion of studies in which
Xaracoll demonstrated significant pain relief and opioid reduction in
open inguinal hernia repair.
Response: We appreciate the commenter's input. Based on CMS's
internal review, we believe Xaracoll meets criterion one. Xaracoll was
approved by FDA with a New Drug Application (NDA #209511) on August 28,
2020.\11\ Regarding the specific FDA-approved indication requirement,
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''.\12\ No component of Xaracoll is
[[Page 63492]]
opioid-based. Accordingly, we believe that Xaracoll meets criterion
one.
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\11\ Xaracoll. FDA Letter. 30 November 2018. https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2020/209511Orig1s000ltr.pdf.
\12\ Xaracoll. FDA Labeling. 30 November 2018. https://www.accessdata.fda.gov/drugsatfda_docs/label/2020/209511s000lbl.pdf.
---------------------------------------------------------------------------
As discussed in section II.A.3. of this final rule with comment
period, for criterion two we proposed that a drug or biological would
only be eligible for separate payment under this policy if its per-day
cost exceeds the drug packaging threshold described in section V.B.1.a.
of this final rule with comment period. Using that methodology, the
per-day cost of Xaracoll exceeds the $130 per-day cost threshold.
Therefore, we believe that Xaracoll meets criterion two.
After consideration of the public comments we received and our
review of the finalized criteria, we have determined that Xaracoll
meets criteria one and two, and are approving Xaracoll (C9089;
Bupivacaine, collagen-matrix implant, 1 mg) to receive separate payment
under the ASC payment system as a non-opioid pain management drug that
functions as a surgical supply for CY 2022.
Comment: The manufacturer of Zynrelef, Heron Therapeutics, stated
how Zynrelef meets CMS's proposed criteria for separate payment in the
ASC setting and should be receive separate payment in that setting. The
manufacturer also provided additional details regarding the clinical
benefit of their product, including studies where Zynrelef demonstrated
reduced opioid use.
Response: We appreciate the commenter's input. Based on CMS's
internal review, we believe Zynrelef meets criterion one. Zynrelef was
approved by FDA with a New Drug Application (NDA #211988) on May 12,
2021.\13\ Regarding the specific FDA-approved indication requirement,
Zynrelef is ``indicated in adults for soft tissue or periarticular
instillation to produce postsurgical analgesia for up to 72 hours after
bunionectomy, open inguinal herniorrhaphy and total knee
arthroplasty''.\14\ No component of Zynrelef is opioid-based.
Accordingly, we believe that Zynrelef meets criterion one.
---------------------------------------------------------------------------
\13\ Zynrelef. FDA Letter. 05 May 2021. https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2021/211988Orig1s000ltr.pdf.
\14\ Zynrelef. FDA Labeling. 05 May 2021. https://www.accessdata.fda.gov/drugsatfda_docs/label/2021/211988s000lbl.pdf.
---------------------------------------------------------------------------
As discussed in section (3) above, for criterion two we proposed
that a drug or biological would only be eligible for separate payment
under this policy if its per-day cost exceeds the drug packaging
threshold described in section V.B.1.a. of this final rule with comment
period. Using that methodology, the per-day cost of Zynrelef exceeds
the $130 per-day cost threshold. Therefore, we believe that Zynrelef
meets criterion two.
After consideration of the public comments we received and our
review of the finalized criteria, we have determined that Zynrelef
meets criteria one and two, and are approving Zynrelef (C9088;
Instillation, bupivacaine and meloxicam, 1 mg/0.03 mg) to receive
separate payment under the ASC payment system as a non-opioid pain
management drug that functions as a surgical supply for CY 2022.
Comment: The manufacturer of Anjeso (HCPCS code J1738; Injection,
meloxicam, 1 mg), Baudax Bio, expressed support for policies that
encourage the use of non-opioid pain alternatives. In their comment,
Baudax Bio discussed the clinical benefits of their product.
Response: We appreciate the commenter's input. Based on CMS's
internal review, we believe Anjeso meets criterion one. Anjeso was
approved by FDA with a New Drug Application (NDA #210583) on February
20, 2020.\15\ Anjeso's FDA-approved indication is ``indicated for use
in adults for the management of moderate-to-severe pain, alone or in
combination with non-NSAID analgesics''.\16\ No component of Anjeso is
opioid-based. Accordingly, we believe that Anjeso meets criterion one.
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\15\ Anjeso. FDA Letter. 02 February 2020. https://www.accessdata.fda.gov/drugsatfda_docs/nda/2020/210583Orig1s000Approv.pdf.
\16\ Anjeso. FDA Labeling. 02 February 2020. https://www.accessdata.fda.gov/drugsatfda_docs/nda/2020/210583Orig1s000lbl.pdf.
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As discussed in section II.A.3. of this final rule with comment
period, for criterion two we proposed that a drug or biological would
only be eligible for separate payment under this policy if its per-day
cost exceeds the drug packaging threshold described in section V.B.1.a.
of this final rule with comment period. Using that methodology, the
per-day cost of Anjeso does not exceed the $130 per-day cost threshold.
Therefore, we do not believe that Anjeso meets criterion two.
After consideration of the public comments we received and our
review of the finalized criteria, we have determined that Anjeso meets
criteria one but not criterion two, and would not be eligible to
receive separate payment under the ASC payment system as a non-opioid
pain management drug that functions as a surgical supply for CY 2022.
However, Anjeso remains on transitional pass-through status throughout
CY 2022 and accordingly, is already receiving separate payment in the
HOPD and ASC settings for CY 2022. Please see section V.A., OPPS
Transitional Pass-Through Payment for Additional Costs of Drugs,
Biologicals, and Radiopharmaceuticals, of this final rule with comment
period for additional details on transitional pass-through payments for
drugs and biologicals.
Comment: Several commenters, including hospital and professional
associations, recommended separate payment for Ofirmev, IV
acetaminophen, stating they believed it decreased use of post-operative
opioids.
Response: We appreciate the commenters' input. Based on CMS's
internal review, we believe Ofirmev meets criterion one. Ofirmev was
approved by FDA with a New Drug Application (NDA #022450) on October 2,
2010.\17\ Ofirmev's FDA-approved indication is ``management of mild to
moderate pain, management of moderate to severe pain with adjunctive
opioid analgesics, and reduction of fever''.\18\ No component of
Ofirmev is opioid-based. Accordingly, we believe that Ofirmev meets
criterion one.
---------------------------------------------------------------------------
\17\ Ofirmev. FDA Letter. 02 November 2010. https://www.accessdata.fda.gov/drugsatfda_docs/nda/2010/022450Orig1s000Approv.pdf.
\18\ Ofirmev. FDA Labeling. 02 November 2010. https://www.accessdata.fda.gov/drugsatfda_docs/nda/2010/022450Orig1s000Lbl.pdf.
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As discussed in section (3) above, under criterion two a drug or
biological is only eligible for separate payment if its per-day cost
exceeds the drug packaging threshold described in section V.B.1.a. of
this final rule with comment period. Using the methodology described at
V.B.1.a. of this final rule with comment period, the per-day cost of
Ofirmev does not exceed the $130 per-day cost threshold. Therefore, we
do not believe Ofirmev meets criterion two.
After consideration of the public comments we received and our
review of the criteria, we have determined that Ofirmev meets criteria
one but not criterion two and is not eligible to receive separate
payment under the ASC payment system as a non-opioid pain management
drug that functions as a surgical supply for CY 2022.
Comment: Several commenters, including professional and hospital
associations, commented that classes of drugs, such as NSAIDS,
including IV ibuprofen and IV ketorolac, may reduce opioid usage if CMS
paid separately for them. However, they did not request that CMS
consider a specific non-opioid product for separate payment in the ASC
setting.
Response: We thank commenters for their comments. For both of these
[[Page 63493]]
products, we did not receive recommendations for a specific product,
for a specific FDA approval, or from a specific manufacturer. We note
that based on our review of these products, we do believe IV ibuprofen
and IV ketorolac products, which have FDA approval and an FDA-approved
indication for pain management or as an analgesic, would satisfy
criterion one. However, based on our review of these products, using
the methodology described at V.B.1.a. of this final rule with comment
period, the per-day costs of HCPCS code 1741 (Injection, ibuprofen, 100
mg) and HCPCS code J1885 (Injection, ketorolac tromethamine, per 15 mg)
do not exceed the packaging threshold for criterion two.
Comment: Commenters requested CMS consider the clinical value of
Prialt (HCPCS Code J2278; Injection, ziconotide, 1 microgram) and
Dsuvia, a sufentanil sublingual tablet, for separate payment in the ASC
setting
Response: Prialt is not eligible for separate payment under our
final policy because it is not a drug that functions as a supply in a
surgical procedure and is already receiving separate payment. Dsuvia is
not eligible for separate payment under our final policy because it
contains an opioid and therefore is not a non-opioid drug. We are not
revising our policy to provide separate payment for opioid pain
management products for CY 2022.
As previously explained above, we are not modifying the eligibility
criteria for our policy to include such products. However, we
appreciate these comments and suggestions from stakeholders and will
take them into consideration for future rulemaking.
(6) Comment Solicitation on Policy Modifications and Potential
Additional Criteria for Revised Payment for Non-Opioid Pain Management
Treatments
In addition to the proposed eligibility criteria above, we also
sought comment on potential policy modifications and additional
criteria that may help further align this policy with the intent of
section 1833(t)(22) of the Act. Below we discuss potential additional
criteria. We noted in the CY 2022 OPPS/ASC proposed rule that,
depending on the public comments we received and our continued
consideration of these potential criteria, we may adopt these criteria
as part of our final policy and include them in the final regulation
text; accordingly, we provided substantial details, explanations, and
considerations about these potential criteria. We welcomed input from
stakeholders on these and any additional policy modifications or
criteria they believe would enhance our proposed policy. We also sought
comment on other barriers to access to non-opioid pain management
products that may exist, and to what extent our policies under the OPPS
or ASC payment system could be modified to address these barriers.
Comment: A few comments from providers and drug manufacturers
discussed additional barriers they faced in providing non-opioid pain
management products. One commenter recommended CMS provide education to
providers on non-opioid pain medications and to encourage patients to
ask their providers about which medications they are being prescribed.
One commenter noted that not allowing separate payment for non-opioid
products in the HOPD setting limits the expansion of patient access to
non-opioid therapies in new geographic areas. Another commenter noted
that rural and underserved areas have been disproportionately harmed by
opioid addiction and that geography, lack of provider education and
training, and payment and coverage for these services may be barriers
to treatment in these communities.
Response: We are committed to implementing measures to combat the
opioid epidemic. We appreciate stakeholders' comments in response to
this solicitation. We will take these comments into consideration for
future rulemaking.
Comment: Many commenters appreciated CMS soliciting comment on
potential additional criteria in the proposed rule. A few commenters
recommended that CMS not finalize additional criteria based on
responses to the comment solicitations. Rather, they suggested CMS
finalize the two proposed criteria and assess the policy in the future
to assess whether additional criteria are warranted.
Response: We thank commenters for their input. We are not
finalizing additional criteria or policy modifications based on the
comments were received in response to the comment solicitations in the
CY 2022 OPPS/ASC proposed rule. Please see the following sections for a
summary of the comments received.
(a) Utilization of the Product
We have historically used utilization as a metric to determine
whether a change in our payment policy was necessary to determine
whether our policies create a disincentive to use non-opioid
alternatives. For example, as previously discussed, Exparel's
decreasing utilization in the ASC setting caused us to propose to pay
separately for non-opioid pain management drugs that function as
surgical supplies in the ASC setting. We have used currently available
claims data in prior years to analyze the payment and utilization
patterns associated with specific non-opioid alternatives to determine
whether our packaging policies may have reduced the use of non-opioid
alternatives. We believe that higher utilization may be a potential
indicator that the packaged payment is not causing an access to care
issue and that the payment rate for the primary procedure adequately
reflects the cost of the drug or biological. We also believe decreased
utilization could potentially indicate that our packaging policy is
discouraging use of a drug or biological and that providers are
choosing less expensive treatments. We note that it is difficult to
attribute product-specific changes in utilization to our packaging
policies alone. Nonetheless, while we acknowledge certain limitations
of utilization data, we believe analyzing utilization either on a
product-specific basis or on a broader basis could be an important
criterion in determining whether separate payment is warranted for a
non-opioid pain management alternative.
Therefore, we solicited comment on whether specific evidence of
reduced utilization should be part of our evaluation and determination
as to whether a non-opioid pain management product should qualify for
modified payment. This data may help to demonstrate that our packaging
policies are causing an access issue for these products. Additionally,
we realize that new products to the market may not have utilization
data available, or reliable utilization data may be difficult to obtain
for some products; therefore, we also requested comment on whether
utilization data requirements should vary based on the newness of a
product or its FDA marketing approval date.
Comment: Generally, commenters did not support adding a utilization
requirement criterion. Several commenters stated that utilization data
was useful in the original analysis to establish the original policy in
the ASC setting, but they believe would be inappropriate to require new
products to prove they are disincentivized by CMS packaging policies.
These commenters noted it would take significant time for this data to
be available after a new drug was introduced to the market.
Additionally, several comments stated that utilization data is
imperfect, as CMS described in the CY 2022 OPPS/ASC proposed rule.
[[Page 63494]]
Response: We thank commenters for their feedback on a potential
utilization requirement. However, we are not finalizing any policy
modifications, including adopting a utilization requirement, for CY
2022. We will take these comments into consideration for future
rulemaking.
(b) FDA-Approved Indication for Pain Management or Analgesia for the
Drug or Biological Product
As previously discussed, section 1833(t)(22)(A) of the Act
specifically refers to reviews of opioid and evidence-based non-opioid
products for pain management. We believe the majority of drugs and
biologicals that would meet the requirements of our proposed policy
would already have FDA approval as a pain management drug or as an
analgesic. However, we acknowledge there may be other non-opioid
products that would benefit from inclusion under this policy, but do
not have a specific FDA-approved indication for pain management or
analgesia, and would not satisfy criterion one. Therefore, we solicited
comment on whether we should allow certain FDA-approved drugs and
biologicals to be eligible for separate payment under this policy
without a specific FDA-approved indication for pain management or as an
analgesic drug. In lieu of an FDA-approved indication for pain
management or analgesia, we sought comment on whether it would be
appropriate to approve a product for inclusion under this policy if the
pain-management or analgesia attributes of the drug or biological are
recognized by a medical compendium. Similarly, we sought comment as to
whether we should consider specialty society or national organization
(such as a national surgery organization) recommendations of non-opioid
pain management products that function as surgical supplies and reduce
opioid use in the ASC setting, as evidence that a product meets
criterion one, when a drug or biological does not have an FDA-approved
indication for pain management or analgesia.
Comment: Some commenters were supportive of CMS taking into
consideration other factors, such as specialty society endorsements,
medical compendia, or inclusion in clinical practice guidelines, as
part of the qualifying criteria if an FDA-approved indication for pain
management or analgesia was not present. Commenters stated a specific
FDA-approved indication may be too restrictive as some products may be
used off-label for pain management. A few commenters suggested CMS take
an individualized and holistic approach to each drug it evaluates, and
therefore, consider association recommendations outside of FDA-approved
indications. Commenters thought this would support increased access to
drugs for off-label uses.
Response: We appreciate the comments received as a part of this
specific comment solicitation; however, for CY 2022, we are not making
any policy modifications based on the public comments we received in
response to this comment solicitation.
(c) Peer-Reviewed Literature Requirement Comment Solicitation
We note that section 1833(t)(22)(B) of the Act requires the
Secretary to focus on covered OPD services (or groups of services)
assigned to a comprehensive ambulatory payment classification,
ambulatory payment classifications that primarily include surgical
services, and other services determined by the Secretary that generally
involve treatment for pain management. Therefore, we solicited comment
as to whether we should only adopt a payment revision for drugs and
biologicals that function as surgical supplies in the ASC setting when
those products have evidence in peer-reviewed literature supporting
that the product actually decreases opioid usage associated with the
surgical procedure. We believe this may be appropriate to ensure
Medicare payment policies would not financially incentivize use of
opioids rather than evidence-based non-opioid alternative treatments,
as required by section 1833(t)(22)(A)(iii) of the Act. Specifically, we
sought comment as to whether the drug or biological's use in a surgical
procedure as a non-opioid pain management product should be supported
by peer-reviewed literature demonstrating a clinically significant
decrease in opioid usage compared to the standard of care, and we
sought comment on whether such decreases in opioid usage should be
sustained decreases that continue into the post-operative period.
Additionally, we sought input from commenters as to what they
believe the requirements for peer-reviewed literature should be. For
example, we solicited stakeholder feedback as to whether peer-reviewed
literature should demonstrate that use of the drug or biological
results in at least one, or several, of the following: decreased post-
operative opioid use following surgery, decreased opioid misuse
following surgery, or decreased opioid use disorder and dependency
following surgery.
Additionally, we asked stakeholders if specific thresholds are
necessary to determine whether these decreases are statistically and
clinically significant and whether the decreases should simply be
measured against placebo or the standard of care. We also requested
information on how stakeholders would define the standard of care in
these circumstances. In the proposed rule we stated, when evaluating
literature, we would expect to examine the study methods, sample size,
limitations, possible conflicts of interest, patient populations
studied, and how the evidence supports the conclusion that the product
can serve as a non-opioid pain management product and provide a
clinically significant reduction in opioid use that continues into the
post-operative period. However, we welcomed input from stakeholders
about additional aspects of these studies that they believe CMS should
focus on for this potential criterion. Additionally, we stated we would
expect to use our discretion to assess whether the submitted studies
meet these criteria, as well as for clinical applicability, literature
integrity, and potential biases in consultation with our clinical
advisors.
In order to provide stakeholders with some examples of what
supporting evidence CMS may consider for this potential criterion, we
stated in the proposed rule that we believed it would be helpful for
CMS to receive literature demonstrating that use of a non-opioid drug
or biological results in a statistically and clinically significant
decreased day supply of outpatient opioids prescribed after surgery
discharge compared to the generally accepted standard of care, or a
statistically and clinically significant decreased morphine milligram
equivalents (MME) per opioid dose prescribed after surgery discharge
compared to the generally accepted standard of care. We would consider
the generally accepted standard of care to include pain management
therapy a patient would receive in the absence of the non-opioid
alternative, such as the use of localized analgesia and/or an opioid.
As previously discussed, we would then expect the use of a non-opioid
pain management drug or biological to result in a decline in opioids
used compared to the pain management therapy a patient would receive in
the absence of the non-opioid alternative. We would expect this decline
in opioids to include a decreased number of opioids received by a
patient intraoperatively, post-operatively, and most significantly at
discharge. We solicited comment on additional examples or measures that
[[Page 63495]]
would be beneficial for CMS to take into consideration. Additionally,
we sought comment on whether we should require a specific objective
measure for this criterion. We also sought input on how to assess
whether changes are statistically and clinically significant. We
requested comment on whether stakeholders believe evidence of
statistical significance should be sufficient, or whether stakeholders
believe the literature should also demonstrate clinically significant
differences between treatment groups as well.
Comment: Many commenters did not support CMS finalizing any
additional criteria, including a peer-reviewed literature requirement.
A few commenters disagreed that a peer-reviewed literature requirement
was necessary as they believed an FDA-approved indication for pain
management or analgesia would be sufficient. Several commenters
suggested CMS collect, review, and consider peer-reviewed literature,
but not explicitly require it.
Response: We appreciate the comments received as a part of this
specific comment solicitation; however, for CY 2022, we are not making
any policy modifications based on the public comments we received in
response to this comment solicitation. We will take these comments into
consideration for future rulemaking.
Comment: A few commenters supported CMS requiring peer-reviewed
literature that demonstrates that the drug in question reduces opioid
use in the post-operative period. One commenter specified which type of
literature endpoints would be important to incorporate into our review
process. Specifically, one drug manufacturer recommended that CMS
require that use of a drug demonstrate a significant reduction in the
need for opioids and increase the number of patients who are opioid
free in a randomized, well-controlled, head-to-head clinical trial
versus an active comparator. A number of commenters requested that CMS
provide separate payment for evidence-based, non-opioid pain management
drugs. Specifically, in regards to peer-reviewed literature, MedPAC
asserted that separately payable status should only be granted when
evidence in peer-reviewed publications indicates that the drug in
question reduces the use of opioids. Other commenters supported a
criterion that requires a product to demonstrate the ability to
replace, reduce, or avoid opioid use or the quantity of opioids
prescribed.
Response: We thank commenters for their detailed comments. We agree
it is important that a non-opioid pain management product serve as an
alternative to an opioid, and therefore replace, reduce, or avoid
opioid use.
We once again thank commenters for their detailed insights on this
comment solicitation; however, for CY 2022, we are not making any
policy modifications based on the public comments we received in
response to this comment solicitation. We will take these comments into
consideration for future rulemaking.
(d) Alternative Payment Mechanisms for Non-Opioid Drugs and Biologicals
As previously discussed, for CY 2022, we proposed to pay separately
at ASP+6 percent for non-opioid pain management drugs and biologicals
that function as surgical supplies in the performance of surgical
procedures when they are furnished in the ASC setting and meet our
other proposed criteria. Section 1833(t)(22)(A)(iii) of the Act
requires the Secretary to consider the extent to which revisions to
payments (such as the creation of additional groups of covered OPD
services to classify separately those procedures that utilize opioids
and non-opioid alternatives for pain management) would reduce payment
incentives to use opioids instead of non-opioid alternatives for pain
management. Accordingly, separate payment is not the only possible
revision that may be appropriate. We sought comment on additional
payment mechanisms that may be appropriate aside from separate payment.
For instance, we requested feedback from stakeholders as to whether a
single, flat add-on payment, or separate APC assignment, for products
or procedures that use a product that meets eligibility criteria would
be preferable to separate payment. We note that any revisions the
Secretary determines appropriate under section 1833(t)(22)(C) of the
Act must be applied in a budget neutral manner under section
1833(t)(9)(B) of the Act. We also sought input from stakeholders on any
other innovative payment mechanisms for eligible non-opioid drugs and
biologicals for pain management.
Comment: Most commenters opposed any other payment methodologies
aside from paying separately for non-opioid pain management drugs or
biologicals at ASP+6 percent. Several commenters contended that an add-
on payment would not be appropriate because this would create
differentials in payment across care settings, such as physician
offices, and emphasized that stakeholders are more familiar with the
ASP payment methodology. Some commenters also emphasized that drugs and
biologicals are generally paid at ASP+6 percent when furnished in the
physician office setting and encouraged CMS to pay ASP+6 percent under
this policy to ensure payment parity across the different treatment
settings.
One commenter asked that CMS apply its final payment policy for
340B-acquired drugs, to pay for non-opioid drug products at ASP minus
22.5 percent instead of ASP+ 6 percent. Additionally, one commenter
asked that CMS create new CPT codes in order to account for the work
associated with opioid-sparing therapies furnished by surgeons.
Response: We appreciate the comments received as a part of this
specific comment solicitation; however, for CY 2022, we are not making
any policy modifications based on the public comments we received in
response to this comment solicitation. We will take these comments into
consideration for future rulemaking.
(e) Non-Drug Products
In the CY 2022 OPPS/ASC proposed rule, we stated we were also
interested in information on any non-opioid non-drug products that
function as surgical supplies that commenters believe should be
eligible for separate payment under this policy. Although we have not
currently identified any non-opioid pain management non-drug products
that are disincentivized by CMS packaging policies based on utilization
data, we believe it is reasonable to assume that if disincentives exist
for the use of non-opioid pain management drugs and biological products
under the ASC payment system, they may also exist for non-opioid, non-
drug products under the ASC payment system. If this is the case, we
would like to address these disincentives given the severity and
importance of combatting the opioid epidemic, regardless of whether the
non-opioid product is a drug, biological, or non-drug product. We
remain interested in whether there are any non-opioid non-drug products
that may meet the proposed eligibility criteria and should qualify for
separate or modified payment as discussed in section (d) above, in the
ASC setting. Similarly, we also sought comment on whether there are
unique qualities of non-drug products that would make revised payment
in the HOPD setting appropriate instead of, or in addition to, the ASC
setting.
We sought comment on whether it is appropriate to require non-drug
products to meet the same criteria being proposed for drugs and
biologicals. Additionally, we sought comment from
[[Page 63496]]
stakeholders on whether they believe it would be appropriate to create
a broad category for non-drug products, or if a more limited category,
such as for devices, would be appropriate. Specifically, we sought
comment on whether there is information in the FDA approval for devices
that would be an appropriate criterion to determine eligibility for
separate payment, similar to how we proposed to require FDA approval
with an FDA-approved indication for pain management or analgesia for
drugs and biologicals. We sought comment on whether, if the non-drug
product is a ``device'' as defined in section 201(h) of FDCA, the
device should have received FDA premarket approval (PMA), grant of a de
novo request, 510(k) clearance or meet an exemption from premarket
review. Finally, we solicited comment on all aspects of an extension of
our current policy to include appropriate products that are not drugs
or biologicals.
We also sought comment on how peer-reviewed literature and
utilization claims data could be used as potential criteria for a
policy that would apply to non-drug products. Additionally, should a
payment revision be determined necessary, we solicited comment on
appropriate payment mechanisms for non-opioid, non-drug products,
including assigning the non-drug product to its own APC to ensure that
the product is paid separately or establishing an add-on adjustment for
the cost of the non-drug product in addition to the payment for the APC
to which the non-drug product is assigned. Additionally, we sought
comment on whether it would be appropriate to subject non-drug products
to a cost threshold similar to the one we proposed to apply to drugs
and biologicals.
Comment: A few commenters supported CMS exploring a payment
adjustment for non-opioid, non-drug items, including items such as
devices. Some commenters discussed the benefit of spinal cord
stimulators, and one commenter recommended an add-on payment for a
narrowly constructed payment category, such as spinal cord stimulators.
Commenters also cited the CMS prior authorization policy on spinal cord
stimulators as inappropriately creating barriers to access to these
devices, as beneficiaries could be prescribed opioids for longer
periods of time while waiting for prior authorization to be approved.
Commenters recommended CMS provide separate payment for nerve blocks,
pain blocks (represented by CPT codes 64415, 64416, 64417, 64445,
64446, 64447, 64448, 64450), joint injections, and neuromodulation.
Some commenters stated that barriers for non-drug items are often
more severe in the ASC setting. Commenters also suggested CMS consider
payment methodologies for various other non-drug items, including for
multi-modal pain management ERAS protocols, physical therapy,
acupuncture, massage therapy, ON-Q pain relief system, devices that use
ice water, dry needling, THC oil applied topically, and polar ice
devices.
Commenters pointed to the opioid-sparing abilities of some of these
products. For example, commenters noted that spinal cord stimulators
are useful in reducing opioid usage for chronic pain patients.
Commenters urged CMS to change payment polices to make spinal cord
stimulators a front-line option in combating chronic pain.
Response: We appreciate the responses from commenters on this
topic. As discussed in prior rulemaking (85 FR 85899), we have not
found compelling evidence for non-drug, non-opioid pain management
alternatives that commenters described to warrant separate payment
under the OPPS or ASC payment system. For CY 2022, we are not
finalizing any policy modifications in response to the comments we
received on this comment solicitation. We will take these comments into
consideration for future rulemaking.
Comment: Some commenters recommended that criteria similar to those
proposed for drug items also apply to non-drug items, including a
potential requirement for peer-reviewed literature demonstrating that
the product significantly limits or eliminates prescription opioids.
Response: We thank commenters for their feedback regarding
potential criteria for non-drug items and how we may incorporate non-
drug products into our non-opioid pain management packaging policy in
the future. We will take these comments into consideration for future
rulemaking.
(f) Coinsurance Waiver Request
Comment: Multiple commenters, including providers and the
manufacturer of Prialt, an intrathecal drug, requested CMS waive the 20
percent coinsurance requirement for non-opioid pain management drugs.
Specifically, these commenters discussed that waiving coinsurance for
non-opioid drugs that are indicated for severe chronic pain in patients
requiring intrathecal therapy could bolster patient access
Response: The services described here, including intrathecal
therapy, do not meet the statutory requirements process for
``additional preventive services'' in section 1861(ddd)(1) of the Act
that would be subject to coinsurance waiver under 1833(a)(1)(W).
Providers may waive coinsurance amounts only if they comply with
applicable law, including the Federal Anti-Kickback Statute and the
civil monetary penalty provision prohibiting inducements to
beneficiaries. We note that the drugs these commenters describe are
already paid separately. Additionally, the intrathecal drug, Prialt,
frequently described by commenters, does not function as a supply to a
surgical procedure. As such, it would not qualify under our current
policy to pay separately in the ASC setting for non-opioid pain
management drugs and biologicals that function as surgical supplies.
However, we appreciate the commenters' input about the potential value
of these drugs.
Summary of Finalized Policy
As discussed in the preceding sections, after consideration of the
public comments we received, we are finalizing the proposed policy for
CY 2022 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 for CY 2022.
As noted above, we are finalizing the proposed regulation text changes
at Sec. 416.164(a)(4) and (b)(6), Sec. 416.171(b)(1), and Sec.
416.174 as proposed. We determined that four products are eligible for
separate payment in the ASC setting under our final policy for CY 2022.
Future products, or products not discussed in this rulemaking that may
be eligible for separate payment under this policy will be evaluated in
future notice and comment rulemaking. We will continue to analyze the
issue of access to non-opioid pain management alternatives in the OPPS
and the ASC settings as part of any subsequent reviews we conduct under
section 1833(t)(22)(A)(ii) of the Act, which would be discussed in
future notice and comment rulemaking. We will also continue to evaluate
whether there are other non-opioid pain management alternatives for
which our payment policy should be revised to allow separate payment in
future rulemaking. Table 4 below lists the four
[[Page 63497]]
drugs that meet our finalized criteria and will receive separate
payment under the ASC payment system when furnished in the ASC setting
for CY 2022.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TR16NO21.010
BILLING CODE 4120-01-C
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 2021 OPPS/
ASC final rule with comment period (85 FR 85902 through 85903), we
applied this policy and calculated the relative payment weights for
each APC for CY 2021 that were shown in Addenda A and B of the CY 2021
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 2021 OPPS/ASC final rule with
comment period. For CY 2022, as we did for CY 2021, we proposed to
continue to apply the policy established in CY 2013 and calculate
relative payment weights for each APC for CY 2022 using geometric mean-
based APC costs.
For CY 2012 and CY 2013, outpatient clinic visits were assigned to
one of five levels of clinic visit APCs, with APC 0606 representing a
mid-level clinic visit. In the CY 2014 OPPS/ASC final rule with comment
period (78 FR 75036 through 75043), we finalized a policy that created
alphanumeric HCPCS code G0463 (Hospital outpatient clinic visit for
assessment and management of a patient), representing any and all
clinic visits under the OPPS. HCPCS code G0463 was assigned to APC 0634
(Hospital Clinic Visits). We also finalized a policy to use CY 2012
claims data to develop the CY 2014 OPPS payment rates for HCPCS code
G0463 based on the total geometric mean cost of the levels one through
five CPT E/M codes for clinic visits previously recognized under the
OPPS (CPT codes 99201 through 99205 and 99211 through 99215). In
addition, we finalized a policy to no longer recognize a distinction
between new and established patient clinic visits.
For CY 2016, we deleted APC 0634 and reassigned the outpatient
clinic visit HCPCS code G0463 to APC 5012 (Level 2 Examinations and
Related Services) (80 FR 70372). For CY 2022, as we did for CY 2021, we
proposed to continue to standardize all of the relative payment weights
to APC 5012. We believe that standardizing relative payment weights to
the geometric mean of the APC to which HCPCS code G0463 is assigned
maintains consistency in calculating unscaled weights that represent
the cost of some of the most frequently provided OPPS services. For CY
2022, as we did for CY 2021, we proposed to assign APC 5012 a relative
payment weight of 1.00 and to divide the geometric mean cost of each
APC by the geometric mean cost for APC 5012 to derive the unscaled
relative payment weight for each APC. The choice of the APC on which to
standardize the relative payment weights does not affect payments made
under the OPPS because we scale the weights for budget neutrality.
We note that in the CY 2019 OPPS/ASC final rule with comment period
(83 FR 59004 through 59015) and the CY 2020 OPPS/ASC final rule with
comment period (84 FR 61365 through 61369), we discuss our policy,
implemented on January 1, 2019, to control for unnecessary increases in
the volume of covered outpatient department services by paying for
clinic visits furnished at excepted off-campus provider-based
department (PBD) at a reduced rate. While the volume associated with
these visits is included in the impact model, and thus used in
calculating the weight scalar, the policy has a negligible effect on
the scalar. Specifically, under this policy, there is no change to the
relativity of the OPPS
[[Page 63498]]
payment weights because the adjustment is made at the payment level
rather than in the cost modeling. Further, under this policy, the
savings that result from the change in payments for these clinic visits
are not budget neutral. Therefore, the impact of this policy will
generally not be reflected in the budget neutrality adjustments,
whether the adjustment is to the OPPS relative weights or to the OPPS
conversion factor. For a full discussion of this policy, we refer
readers to the CY 2020 OPPS/ASC final rule with comment period (84 FR
61142).
Section 1833(t)(9)(B) of the Act requires that APC reclassification
and recalibration changes, wage index changes, and other adjustments be
made in a budget neutral manner. Budget neutrality ensures that the
estimated aggregate weight under the OPPS for CY 2022 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 2021 scaled relative payment
weights to the estimated aggregate weight using the proposed CY 2022
unscaled relative payment weights.
For CY 2021, we multiplied the CY 2021 scaled APC relative payment
weight applicable to a service paid under the OPPS by the volume of
that service from CY 2019 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 2022, we
proposed to apply the same process using the estimated CY 2022 unscaled
relative payment weights rather than scaled relative payment weights.
We proposed to calculate the weight scalar by dividing the CY 2021
estimated aggregate weight by the unscaled CY 2022 estimated aggregate
weight.
For a detailed discussion of the weight scalar calculation, we
refer readers to the OPPS claims accounting document available on the
CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html. Click on the link labeled
``CY 2022 OPPS/ASC Notice of Proposed Rulemaking'', which can be found
under the heading ``Hospital Outpatient Prospective Payment System
Rulemaking'' and open the claims accounting document link at the bottom
of the page, which is labeled ``2022 NPRM OPPS Claims Accounting
(PDF)''.
We proposed to compare the estimated unscaled relative payment
weights in CY 2022 to the estimated total relative payment weights in
CY 2021 using CY 2019 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 2022 unscaled
relative payment weights for purposes of budget neutrality. We proposed
to adjust the estimated CY 2022 unscaled relative payment weights by
multiplying them by a proposed weight scalar of 1.4436 to ensure that
the proposed CY 2022 relative payment weights are scaled to be budget
neutral. The proposed CY 2022 relative payment weights listed in
Addenda A and B to the CY 2022 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 2022 OPPS/ASC proposed rule (86 FR 42026).
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 2022 OPPS/ASC proposed rule (86 FR
42131 through 42133) is included in the budget neutrality calculations
for the CY 2022 OPPS.
We did not receive any public comments on the proposed weight
scalar calculation. Therefore, we are finalizing our proposal to use
the calculation process described in the proposed rule, without
modification, for CY 2022. Using updated final rule claims data, we are
updating the estimated CY 2022 unscaled relative payment weights by
multiplying them by a weight scalar of 1.4416 to ensure that the final
CY 2022 relative payment weights are scaled to be budget neutral. The
final CY 2022 relative payments weights listed in Addenda A and B of
this final rule with comment period (which are available via the
internet on the CMS website) were scaled and incorporate the
recalibration adjustments discussed in sections II.A.1 and II.A.2 of
this final rule with comment period.
B. Conversion Factor Update
Section 1833(t)(3)(C)(ii) of the Act requires the Secretary to
update the conversion factor used to determine the payment rates under
the OPPS on an annual basis by applying the OPD 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 2022 IPPS/LTCH PPS
proposed rule (86 FR 25435), consistent with current law, based on IHS
Global, Inc.'s fourth quarter 2020 forecast of the FY 2022 market
basket increase, the proposed FY 2022 IPPS market basket update was 2.5
percent.
Specifically, section 1833(t)(3)(F)(i) of the Act requires that,
for 2012 and subsequent years, the OPD fee schedule increase factor
under subparagraph (C)(iv) be reduced by the productivity adjustment
described in section 1886(b)(3)(B)(xi)(II) of the Act. Section
1886(b)(3)(B)(xi)(II) of the Act defines the productivity adjustment as
equal to the 10-year moving average of changes in annual economy-wide,
private nonfarm business multifactor productivity (MFP) (as projected
by the Secretary for the 10-year period ending with the applicable
fiscal year, year, cost reporting period, or other annual period) (the
``MFP adjustment''). In the FY 2012 IPPS/LTCH PPS final rule (76 FR
51689 through 51692), we finalized our methodology for calculating and
applying the MFP adjustment, and then revised this methodology, as
discussed in the FY 2016 IPPS/LTCH PPS final rule (80 FR 49509). In the
FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25435), the proposed MFP
adjustment for FY 2022 was 0.2 percentage point.
Therefore, we proposed that the MFP adjustment for the CY 2022 OPPS
is 0.2 percentage point. We also proposed that if more recent data
become subsequently available after the publication of the CY 2022
OPPS/ASC proposed rule (for example, a more recent estimate of the
market basket increase and/or the MFP adjustment), we will use such
updated data, if appropriate, to determine the CY 2022 market basket
update and the MFP adjustment, which are components in calculating the
OPD fee schedule increase factor under sections 1833(t)(3)(C)(iv) and
1833(t)(3)(F) of the Act, in the CY 2022 OPPS/ASC final rule.
[[Page 63499]]
We note that section 1833(t)(3)(F) of the Act provides that
application of this subparagraph may result in the OPD fee schedule
increase factor under section 1833(t)(3)(C)(iv) of the Act being less
than 0.0 percent for a year, and may result in OPPS payment rates being
less than rates for the preceding year. As described in further detail
below, we proposed for CY 2022 an OPD fee schedule increase factor of
2.3 percent for the CY 2022 OPPS (which is the proposed estimate of the
hospital inpatient market basket percentage increase of 2.5 percent,
less the proposed 0.2 percentage point MFP adjustment).
We proposed that hospitals that fail to meet the Hospital OQR
Program reporting requirements would be subject to an additional
reduction of 2.0 percentage points from the OPD fee schedule increase
factor adjustment to the conversion factor that would be used to
calculate the OPPS payment rates for their services, as required by
section 1833(t)(17) of the Act. For further discussion of the Hospital
OQR Program, we refer readers to section XIV. of the proposed rule.
To set the OPPS conversion factor for 2022, we proposed to increase
the CY 2021 conversion factor of $82.797 by 2.3 percent. In accordance
with section 1833(t)(9)(B) of the Act, we proposed further to adjust
the conversion factor for CY 2022 to ensure that any revisions made to
the wage index and rural adjustment are made on a budget neutral basis.
We proposed to calculate an overall budget neutrality factor of 1.0012
for wage index changes by comparing proposed total estimated payments
from our simulation model using the proposed FY 2022 IPPS wage indexes
to those payments using the FY 2021 IPPS wage indexes, as adopted on a
calendar year basis for the OPPS.
For the CY 2022 OPPS, we proposed to maintain the current rural
adjustment policy, as discussed in section II.E. of the CY 2022 OPPS/
ASC proposed rule. Therefore, the proposed budget neutrality factor for
the rural adjustment is 1.0000.
We proposed to continue previously established policies for
implementing the cancer hospital payment adjustment described in
section 1833(t)(18) of the Act, as discussed in section II.F. of the CY
2022 OPPS/ASC proposed rule. We proposed to calculate a CY 2022 budget
neutrality adjustment factor for the cancer hospital payment adjustment
by comparing estimated total CY 2022 payments under section 1833(t) of
the Act, including the proposed CY 2022 cancer hospital payment
adjustment, to estimated CY 2022 total payments using the CY 2021 final
cancer hospital payment adjustment, as required under section
1833(t)(18)(B) of the Act. The proposed CY 2022 estimated payments
applying the proposed CY 2022 cancer hospital payment adjustment were
the same as estimated payments applying the CY 2021 final cancer
hospital payment adjustment. Therefore, we proposed to apply a budget
neutrality adjustment factor of 1.0000 to the conversion factor for the
cancer hospital payment adjustment. In accordance with section
1833(t)(18)(C), as added by section 16002(b) of the 21st Century Cures
Act (Pub. L. 114-255), we are applying a budget neutrality factor
calculated as if the proposed cancer hospital adjustment target
payment-to-cost ratio was 0.90, not the 0.89 target payment-to-cost
ratio we applied as stated in section II.F. of the proposed rule.
For the CY 2022 OPPS/ASC proposed rule, we estimated that proposed
pass-through spending for drugs, biologicals, and devices for CY 2022
would equal approximately $1.03 billion, which represented 1.24 percent
of total projected CY 2022 OPPS spending. Therefore, the proposed
conversion factor would be adjusted by the difference between the 0.92
percent estimate of pass-through spending for CY 2021 and the 1.24
percent estimate of proposed pass-through spending for CY 2022,
resulting in a proposed decrease to the conversion factor for CY 2022
of 0.32 percent.
Proposed estimated payments for outliers would remain at 1.0
percent of total OPPS payments for CY 2022. We estimated for the
proposed rule that outlier payments would be 1.06 percent of total OPPS
payments in CY 2021; the 1.00 percent for proposed outlier payments in
CY 2022 would constitute a 0.06 percent decrease in payment in CY 2022
relative to CY 2021.
For the CY 2022 OPPS/ASC proposed rule, 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 0.3 percent (that is,
the proposed OPD fee schedule increase factor of 2.3 percent further
reduced by 2.0 percentage points). This would result in a proposed
reduced conversion factor for CY 2022 of $82.810 for hospitals that
fail to meet the Hospital OQR Program requirements (a difference of -
1.647 in the conversion factor relative to hospitals that met the
requirements).
In summary, for 2022, we proposed to use a reduced conversion
factor of $82.810 in the calculation of payments for hospitals that
fail to meet the Hospital OQR Program requirements (a difference of -
1.647 in the conversion factor relative to hospitals that met the
requirements).
For 2022, we proposed to use a conversion factor of $84.457 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
2.3 percent for CY 2022, the required proposed wage index budget
neutrality adjustment of approximately 1.0012, the proposed cancer
hospital payment adjustment of 1.0000, and the proposed adjustment of
0.32 percentage point of projected OPPS spending for the difference in
pass-through spending that resulted in a proposed conversion factor for
CY 2022 of $84.457.
Comment: Two commenters request that the OPD fee schedule update
factor be larger than the proposed 2.3 percent increase. One commenter
cited a MedPAC study \19\ that reported for 2019 that the aggregate
Medicare margin for inpatient hospital providers was -8.7 percent among
all inpatient hospital providers, and that the median Medicare margin
was -1 percent for relatively efficient providers. This commenter
appeared to request the OPD fee schedule update factor be increased
sufficiently to substantially reduce the aggregate margin for hospital
providers. The commenter also mentioned that the annual Consumer Price
Index was 5.4 percent which was over 3 percentage points higher than
the proposed 2.3 percent OPD fee schedule increase. The second
commenter, a state hospital association, claimed that unspecified
recent payment cuts for outpatient hospital services have hurt the
financial position of hospitals in their state. The commenter asks us
to identify additional ways to increase hospital payment more than the
proposed 2.3 percent OPD fee schedule increase.
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\19\ Medicare Payment Advisory Commission, Report to the
Congress: Medicare Payment Policy, v, 499 (Mar. 2021), http://medpac.gov/docs/default-source/reports/mar21_medpac_report_to_the_congress_sec.pdf.
---------------------------------------------------------------------------
Response: The OPD fee schedule update factor is designed to
maintain a consistent level of payment for outpatient hospital services
in Medicare year over year after taking into account changes in medical
inflation and business productivity. In addition, the
[[Page 63500]]
OPPS conversion factor is not designed to redress payment reductions
made in a non-budget neutral manner. The MedPAC study cited by one of
the commenters reported, in addition to the aggregate Medicare margin
for inpatient hospital providers, that the median margin for Medicare
spending for relatively efficient hospitals was around -1 percent for
2019. The same MedPAC study also recommended a 2.0 percent increase in
outpatient hospital spending for 2022, which is actually lower than our
proposed conversion factor update of 2.3 percent.
The same commenter also suggested that the Consumer Price Index may
be a better measure of medical inflation than the hospital market
basket index used by CMS. The percentage change in the hospital market
basket reflects the average change in the price of goods and services
purchased by hospitals in order to provide medical care. A general
measure of health care inflation (such as the Consumer Price Index for
Medical Care Services) would not be appropriate as it is not specific
to hospital medical services and is not reflective of the input price
changes experienced by hospitals but rather the inflation experienced
by the consumer for their medical expenses.
Comment: Two commenters supported our proposed CY 2022 OPD fee
schedule increase factor percentage increase of 2.3 percent.
Response: We appreciate the support of the commenters.
After reviewing the public comments that we received, we are
finalizing these proposals with modification. For CY 2022, we proposed
to continue previously established policies for implementing the cancer
hospital payment adjustment described in section 1833(t)(18) of the Act
(discussed in section II.F. of this final rule with comment period).
Based on the final rule updated data used in calculating the cancer
hospital payment adjustment in section II.F. of this final rule with
comment period, the target payment-to-cost ratio for the cancer
hospital payment adjustment, which was 0.90 for CY 2021, is also 0.90
for CY 2022. As a result, we are applying a budget neutrality
adjustment factor of 1.0000 to the conversion factor for the cancer
hospital payment adjustment.
For this CY 2022 OPPS/ASC final rule with comment period, as
published in the FY 2022 IPPS/LTCH PPS final rule (86 FR 45214), based
on IGI's 2021 second quarter forecast with historical data through the
first quarter of 2021, the hospital market basket update for CY 2022 is
2.7 percent and the estimate of the 10-year moving average growth of
MFP for FY 2022 is 0.7 percent.
We note that as a result of the modifications in final policy for
the CY 2022 wage index we are also including a change to the wage index
budget neutrality adjustment so that the final overall budget
neutrality factor of 1.0000 would apply for wage index changes. This
adjustment is comprised of a 1.0001 budget neutrality adjustment, using
our standard calculation of comparing proposed total estimated payments
from our simulation model using the final FY 2022 IPPS wage indexes to
those payments using the FY 2022 IPPS wage indexes, as adopted on a
calendar year basis for the OPPS as well as a 0.9999 budget neutrality
adjustment for the final CY 2022 5 percent cap on wage index decreases,
requiring application of the 5 percent cap on CY 2021 wages, to ensure
that this transition wage index is implemented in a budget neutral
manner, consistent with the proposed FY 2022 IPPS wage index policy (86
FR 45552).
As a result of these finalized policies, the OPD fee schedule
increase factor for the CY 2022 OPPS is 2.0 percent (which reflects the
2.7 percent final estimate of the hospital inpatient market basket
percentage increase with a 0.7 percentage point MFP adjustment). For CY
2022, we are using a conversion factor of $84.177 in the calculation of
the national unadjusted payment rates for those items and services for
which payment rates are calculated using geometric mean costs; that is,
the OPD fee schedule increase factor of 2.0 percent for CY 2022, the
required wage index budget neutrality adjustment of 1.0000, and the
adjustment of-0.32 percentage point of projected OPPS spending for the
difference in pass-through spending that results in a conversion factor
for CY 2022 of $84.177.
C. Wage Index Changes
Section 1833(t)(2)(D) of the Act requires the Secretary to
determine a wage adjustment factor to adjust the portion of payment and
coinsurance attributable to labor-related costs for relative
differences in labor and labor-related costs across geographic regions
in a budget neutral manner (codified at 42 CFR 419.43(a)). This portion
of the OPPS payment rate is called the OPPS labor-related share. Budget
neutrality is discussed in section II.B. of the CY 2022 OPPS/ASC
proposed rule (86 FR 42048 through 42049).
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 2022 OPPS. We referred readers to section II.H. of the CY 2022
OPPS/ASC proposed rule (86 FR 42056 through 42058) 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 this proposal. Accordingly, for the reasons discussed above
and in the CY 2022 OPPS/ASC proposed rule, we are finalizing our
proposal, without modification, to continue this policy for the CY 2022
OPPS.
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), for estimating APC
costs, we are standardizing 60 percent of estimated claims costs for
geographic area wage variation using the same FY 2022 pre-reclassified
wage index that we use under the IPPS to standardize costs. This
standardization process removes the effects of differences in area wage
levels from the determination of a national unadjusted OPPS payment
rate and copayment amount.
Under 42 CFR 419.41(c)(1) and 419.43(c) (published in the OPPS
April 7, 2000 final rule with comment period (65 FR 18495 and 18545)),
the OPPS adopted the final fiscal year IPPS post-reclassified wage
index as the calendar year wage index for adjusting the OPPS standard
payment amounts for labor market differences. Therefore, the wage index
that applies to a particular acute care, short-stay hospital under the
IPPS also applies to that hospital under the OPPS. As initially
explained in the September 8, 1998 OPPS proposed rule (63 FR 47576), we
believe that using the IPPS wage index as the source of an adjustment
factor for the OPPS is reasonable and logical, given the inseparable,
subordinate status of the HOPD within the hospital overall. In
accordance with section 1886(d)(3)(E) of the Act, the IPPS wage index
is updated annually.
The Affordable Care Act contained several provisions affecting the
wage index. These provisions were discussed in the CY 2012 OPPS/ASC
final rule
[[Page 63501]]
with comment period (76 FR 74191). Section 10324 of the Affordable Care
Act added section 1886(d)(3)(E)(iii)(II) to the Act, which defines a
frontier State and amended section 1833(t) of the Act to add paragraph
(19), which requires a frontier State wage index floor of 1.00 in
certain cases, and states that the frontier State floor shall not be
applied in a budget neutral manner. We codified these requirements at
Sec. 419.43(c)(2) and (3) of our regulations. For 2022, we proposed to
implement this provision in the same manner as we have since CY 2011.
Under this policy, the frontier State hospitals would receive a wage
index of 1.00 if the otherwise applicable wage index (including
reclassification, the rural floor, and rural floor budget neutrality)
is less than 1.00. Because the HOPD receives a wage index based on the
geographic location of the specific inpatient hospital with which it is
associated, the frontier State wage index adjustment applicable for the
inpatient hospital also would apply for any associated HOPD. We
referred readers to the FY 2011 through FY 2021 IPPS/LTCH PPS final
rules for discussions regarding this provision, including our
methodology for identifying which areas meet the definition of
``frontier States'' as provided for in section 1886(d)(3)(E)(iii)(II)
of the Act: for FY 2011, 75 FR 50160 through 50161; for FY 2012, 76 FR
51793, 51795, and 51825; for FY 2013, 77 FR 53369 through 53370; for FY
2014, 78 FR 50590 through 50591; for FY 2015, 79 FR 49971; for FY 2016,
80 FR 49498; for FY 2017, 81 FR 56922; for FY 2018, 82 FR 38142; for FY
2019, 83 FR 41380; for FY 2020, 84 FR 42312; and for FY 2021, 85 FR
58765. We did not receive any public comments on this proposal.
Accordingly, for the reasons discussed above and in the CY 2022 OPPS/
ASC proposed rule, we are finalizing our proposal, without
modification, to continue to implement the frontier State floor under
the OPPS in the same manner as we have since CY 2011.
In addition to the changes required by the Affordable Care Act, we
noted in the CY 2022 OPPS/ASC proposed rule (86 FR 42050) that the
proposed FY 2022 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, an adjustment for occupational mix, an adjustment to
the wage index based on commuting patterns of employees (the out-
migration adjustment), and an adjustment to the wage index for certain
low wage index hospitals to help address wage index disparities between
low and high wage index hospitals. In addition, we noted that in the FY
2022 IPPS/LTCH PPS proposed rule (86 FR 25405 through 25407), we
proposed to implement section 9831 of the American Rescue Plan Act of
2021 (Pub. L. 117-2) which reinstates the imputed floor wage index
adjustment under the IPPS for hospitals in all-urban states effective
for discharges on or after October 1, 2021 (FY 2022) using the
methodology described in Sec. 412.64(h)(4)(vi) as in effect for FY
2018. Specifically, section 1886(d)(3)(E)(iv)(I) and (II) of the Act,
as added by section 9831 of the American Rescue Plan Act, provides that
for discharges occurring on or after October 1, 2021, the area wage
index applicable under the IPPS to any hospital in an all-urban State
may not be less than the minimum area wage index for the fiscal year
for hospitals in that State established using the methodology described
in Sec. 412.64(h)(4)(vi) as in effect for FY 2018. We further noted in
the FY 2022 IPPS/LTCH PPS proposed rule that, given the recent
enactment of section 9831 of Public Law 117-2 on March 11, 2021, there
was not sufficient time available to incorporate the changes required
by this statutory provision (the reinstatement of the imputed floor
wage index) into the calculation of the IPPS provider wage index for
the FY 2022 IPPS/LTCH PPS proposed rule, and we stated that we would
include the imputed floor wage index adjustment in the calculation of
the IPPS provider wage index in the FY 2022 IPPS/LTCH PPS final rule.
We noted that CMS posted, concurrent with the issuance of the FY 2022
IPPS/LTCH proposed rule, estimated imputed floor values by state in a
separate data file on the FY 2022 IPPS Proposed Rule web page on the
CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index. In addition, we stated in the FY 2022
IPPS/LTCH PPS proposed rule that, based on data available for the FY
2022 IPPS/LTCH PPS proposed rule, the following States would be all-
urban States as defined in section 1886(d)(3)(E)(iv)(IV) of the Act,
and thus hospitals in such States would be eligible to receive an
increase in their wage index due to application of the imputed floor
for FY 2022: New Jersey, Rhode Island, Delaware, Connecticut, and
Washington, DC. We referred readers to the FY 2022 IPPS/LTCH PPS
proposed rule (86 FR 25396 through 25417) for a detailed discussion of
all proposed changes to the FY 2022 IPPS wage indexes.
A summary of the comments we received regarding the rural floor and
the imputed floor for all-urban states and our responses to those
comments appear below:
Comment: Some commenters expressed their support for the
application of the rural floor policy which included support for the
continued exclusion of the wage data of hospitals that have
reclassified as rural under Sec. 412.103 when calculating the wage
index for the rural floor.
Response: We appreciate the commenters' support for the application
of the rural floor policy.
Comment: Some commenters opposed the continued application of a
nationwide rural floor budget neutrality adjustment, noting that the
policy does nothing more than benefit a few hospitals and exacerbate a
downward spiral of the wage index for low wage index hospitals.
Response: We appreciate the commenters' concerns about application
of the nationwide rural floor budget neutrality policy. However, as
stated in the FY 2017 IPPS/LTCH PPS final rule (81 FR 56920), for
discharges occurring on or after October 1, 2010, for purposes of
applying the rural floor, section 3141 of the Affordable Care Act
replaced the statewide budget neutrality adjustment policy with the
national budget neutrality adjustment policy that was in place during
FY 2008. That is, section 3141 required that budget neutrality for the
rural floor be applied ``through a uniform, national adjustment to the
area wage index'' instead of within each State beginning in FY 2011 (75
FR 50160).
We continue to believe it is reasonable and appropriate to continue
the current policy of applying budget neutrality for the rural floor
under the OPPS on a national basis, consistent with the IPPS. We
believe that hospital inpatient and outpatient departments are subject
to the same labor cost environment, and therefore, the wage index and
any applicable wage index adjustments (including the rural floor and
rural floor budget neutrality) should be applied in the same manner
under the IPPS and OPPS. Furthermore, we believe that applying the
rural floor and rural floor budget neutrality in the same manner under
the IPPS and OPPS is reasonable and logical, given the inseparable,
subordinate status of the HOPD within the hospital overall. In
addition, we believe the application of different wage indexes and wage
index adjustments under the IPPS and OPPS would add a level of
administrative complexity that is overly burdensome and unnecessary.
Therefore, we are
[[Page 63502]]
continuing the current policy of applying budget neutrality for the
rural floor under the OPPS on a national basis, consistent with the
IPPS.
Comment: Some commenters supported the proposed implementation of
the imputed floor wage index policy. However, one commenter opposed the
reinstatement of the imputed floor, stating that it exacerbates wage
index disparities, but acknowledged that the proposal was in accordance
with legislation enacted by Congress. This commenter requested CMS
include details by state of the effects of the imputed floor.
Commenters both in support and in opposition of the imputed floor
policy applauded its implementation without the application of budget
neutrality, per section 9831 of the American Rescue Plan Act of 2021. A
commenter specifically concurred with CMS' interpretation that the
definition of an all-urban state according to section 9831 of the
American Rescue Plan Act of 2021 is one in which no hospital receives
the rural area wage index.
Response: We appreciate the commenters' support of the proposed
implementation of the imputed floor policy, which we note has been
finalized in the FY 2022 IPPS/LTCH PPS final rule (86 FR 45176 through
45178). Responding to the commenter opposed to this policy, we
underscore that, as the commenter itself pointed out, the imputed floor
has been reinstated by statute in section 9831 of the American Rescue
Plan Act of 2021. We believe that it is appropriate to apply the
imputed floor policy in the OPPS in the same manner as under the IPPS,
given the inseparable, subordinate status of the HOPD within the
hospital overall.
In response to the commenter's request for details by state of the
effects of the imputed floor, we direct the commenter to the data file
that CMS posted concurrent with the FY 2022 IPPS/LTCH PPS proposed rule
with estimated imputed floor value by state at https://www.cms.gov/files/zip/fy2022-ipps-nprm-imputed-state-floors.zip. Finally, we note
that section 9831 of the American Rescue Plan Act of 2021 excluded the
imputed floor from the budget neutrality requirement under the IPPS
(section 1886(d)(3)(E)(i) of the Act) but did not specify that the same
budget neutral treatment also would apply under the OPPS. As a result,
the changes related to the reinstatement of the imputed floor would be
budget neutralized through the standard OPPS wage index budget
neutrality adjustment, as discussed in section II.B. of this final rule
with comment period.
For more information about the imputed floor required by section
1886(d)(3)(E)(iv) of the Act, we refer readers to the regulations at
Sec. 412.64(e)(1) and (4) and (h)(4) and (5), and the discussion in
the FY 2022 IPPS/LTCH PPS final rule (86 FR 45176 through 45178).
In the CY 2022 OPPS/ASC proposed rule (86 FR 42050), we noted that
as discussed in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49951
through 49963) and in each subsequent IPPS/LTCH PPS final rule,
including the FY 2021 IPPS/LTCH PPS final rule (85 FR 58743 through
58755), the Office of Management and Budget (OMB) issued revisions to
the labor market area delineations on February 28, 2013 (based on 2010
Decennial Census data) that included a number of significant changes,
such as new Core Based Statistical Areas (CBSAs), urban counties that
became rural, rural counties that became urban, and existing CBSAs that
were split apart (OMB Bulletin 13-01). This bulletin can be found at:
https://obamawhitehouse.archives.gov/sites/default/files/omb/bulletins/2013/b13-01.pdf. In the FY 2015 IPPS/LTCH PPS final rule (79 FR 49950
through 49985), for purposes of the IPPS, we adopted the use of the OMB
statistical area delineations contained in OMB Bulletin No. 13-01,
effective October 1, 2014. For purposes of the OPPS, in the CY 2015
OPPS/ASC final rule with comment period (79 FR 66826 through 66828), we
adopted the use of the OMB statistical area delineations contained in
OMB Bulletin No. 13-01, effective January 1, 2015, beginning with the
CY 2015 OPPS wage indexes. In the FY 2017 IPPS/LTCH PPS final rule (81
FR 56913), we adopted revisions to statistical areas contained in OMB
Bulletin No. 15-01, issued on July 15, 2015, which provided updates to
and superseded OMB Bulletin No. 13-01 that was issued on February 28,
2013. For purposes of the OPPS, in the CY 2017 OPPS/ASC final rule with
comment period (81 FR 79598), we adopted the revisions to the OMB
statistical area delineations contained in OMB Bulletin No. 15-01,
effective January 1, 2017, beginning with the CY 2017 OPPS wage
indexes.
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. The attachments to OMB Bulletin No. 17-01
provided detailed information on the update to the statistical areas
since July 15, 2015, and were based on the application of the 2010
Standards for Delineating Metropolitan and Micropolitan Statistical
Areas to Census Bureau population estimates for July 1, 2014 and July
1, 2015. For purposes of the OPPS, in the CY 2019 OPPS/ASC final rule
with comment period (83 FR 58863 through 58865), we adopted the updates
set forth in OMB Bulletin No. 17-01, effective January 1, 2019,
beginning with the CY 2019 wage index.
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 No. 18-04 which superseded the April 10,
2018 OMB Bulletin No. 18-03. Typically, interim OMB bulletins (those
issued between decennial censuses) have only contained minor
modifications to labor market delineations. However, the April 10, 2018
OMB Bulletin No. 18-03 and the September 14, 2018 OMB Bulletin No. 18-
04 included more modifications to the labor market areas than are
typical for OMB bulletins issued between decennial censuses, including
some new CBSAs, urban counties that became rural, rural counties that
became urban, and some existing CBSAs that were split apart. In
addition, some of these modifications had a number of downstream
effects, such as reclassification changes. These bulletins established
revised delineations for Metropolitan Statistical Areas, Micropolitan
Statistical Areas, and Combined Statistical Areas, and provided
guidance on the use of the delineations of these statistical areas. For
purposes of the OPPS, in the CY 2021 OPPS/ASC final rule with comment
period (85 FR 85907 through 85908), we adopted the updates set forth in
OMB Bulletin No. 18-04 effective January 1, 2021, beginning with the CY
2021 wage index. For a complete discussion of the adoption of the
updates set forth in OMB Bulletin No. 18-04, we refer readers to the CY
2021 OPPS/ASC final rule with comment period.
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. The attachments to OMB Bulletin No. 20-01 provided
detailed information on the updates to statistical areas since
September 14, 2018, and were based on the application of the 2010
Standards for Delineating Metropolitan and Micropolitan Statistical
Areas to Census Bureau population estimates for July 1, 2017 and July
1, 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.) In
[[Page 63503]]
OMB Bulletin No. 20-01, OMB announced one new Micropolitan Statistical
Area, one new component of an existing Combined Statistical Area and
changes to New England City and Town Area (NECTA) delineations. As we
stated in the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25397), after
reviewing OMB Bulletin No. 20-01, we determined that the changes in
Bulletin 20-01 encompassed delineation changes that would not affect
the Medicare IPPS wage index for FY 2022. Specifically, the updates
consisted of changes to NECTA delineations and the creation of a new
Micropolitan Statistical Area, which was then added as a new component
to an existing Micropolitan Statistical Area. The Medicare wage index
does not utilize NECTA definitions, and, as most recently discussed in
FY 2021 IPPS/LTCH PPS final rule (85 FR 58746), we include hospitals
located in Micropolitan Statistical areas in each State's rural wage
index. Therefore, consistent with our discussion in the FY 2022 IPPS/
LTCH PPS final rule (86 FR 45164), while we are adopting the updates
set forth in OMB Bulletin No. 20-01 consistent with our general policy
of adopting OMB delineation updates, we note that specific OPPS wage
index updates would not be necessary for CY 2022 as a result of
adopting these OMB updates. In other words, these OMB updates would not
affect any hospital's geographic area for purposes of the OPPS wage
index calculation for CY 2022.
For CY 2022, we are continuing to use the OMB delineations that
were adopted beginning with FY 2015 (based on the revised delineations
issued in OMB Bulletin No. 13-01) to calculate the area wage indexes,
with updates as reflected in OMB Bulletin Nos. 15-01, 17-01, 18-04, and
20-01, although as noted above the latter Bulletin did not require any
wage area updates.
We noted in the CY 2022 OPPS/ASC proposed rule (86 FR 42051) that,
in connection with our adoption in FY 2021 of the updates in OMB
Bulletin 18-04, we adopted a policy to place a 5 percent cap, for FY
2021, on any decrease in a hospital's wage index from the hospital's
final wage index in FY 2020 so that a hospital's final wage index for
FY 2021 would not be less than 95 percent of its final wage index for
FY 2020. We referred the reader to the FY 2021 IPPS/LTCH PPS final rule
(85 FR 58753 through 58755) for a complete discussion of this
transition. As finalized in the FY 2021 IPPS/LTCH PPS final rule, this
transition was set to expire at the end of FY 2021. However, as
discussed in the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25397),
given the unprecedented nature of the ongoing COVID-19 PHE, we sought
comment in the FY 2022 IPPS/LTCH PPS proposed rule on whether it would
be appropriate to continue to apply a transition for the FY 2022 IPPS
wage index for hospitals negatively impacted by our adoption of the
updates in OMB Bulletin 18-04. For example, we stated that such an
extended transition could potentially take the form of holding the FY
2022 IPPS wage index for those hospitals harmless from any reduction
relative to their FY 2021 wage index. We further stated that if we were
to apply a transition to the FY 2022 IPPS wage index for hospitals
negatively impacted by our adoption of the updates in OMB Bulletin 18-
04, we also sought comment on making this transition budget neutral
under the IPPS, as is our usual practice, in the same manner that the
FY 2021 IPPS wage index transition was made budget neutral as discussed
in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58755).
A summary of the comments we received regarding a wage index
transition policy for 2022 as described above, and our responses to
those comments, appear below:
Comment: We received multiple comments strongly recommending CMS
extend a transition policy similar to that implemented in FY 2020 and
FY 2021 in the IPPS. Multiple commenters, citing the severity and
continuing impact of changes related to the OMB updates, the low wage
index policy, and the lingering financial burden caused by the COVID-19
PHE, urged CMS to add an additional year of transition for both
inpatient hospital and outpatient hospital providers, applied in a
budget neutral manner. These commenters stated that given the wide-
ranging factors impacting wage index values, it would not be equitable
to limit the transition adjustment only to the effects of the revised
labor market delineations. The commenters requested the transition be
implemented more broadly to all hospitals experiencing large declines
in wage index values. Many of these commenters recommended CMS consider
making a permanent 5 percent maximum reduction policy to protect
hospitals from large year-to-year variations in wage index values as a
means to reduce overall volatility.
Multiple commenters requested that CMS extend a hold harmless
policy for all hospitals negatively affected by CMS' adoption of
revised delineations until OMB releases further revisions predicated on
the results of the 2020 decennial census. A commenter recommended a
hold-harmless transition be applied specifically to hospitals in CBSAs
that were negatively affected by the FY 2021 adoption of revised CBSAs,
citing specific CBSAs they believed warranted an additional transition
adjustment.
Multiple commenters, while supporting some form of transition
adjustment for negatively affected hospitals, requested any such
adjustment be made in a non-budget neutral manner. These commenters
expressed their preference that any such adjustment should not come at
the expense of the providers themselves. Some commenters stated that
such a budget neutrality adjustment would disadvantage providers who
have increased their wage index values due to a variety of factors.
Response: We refer readers to the FY 2022 IPPS/LTCH PPS final rule
(86 FR 45164 through 45165) for a detailed discussion of the wage index
transition policy finalized for the FY 2022 IPPS wage index and for
responses to these and other comments relating to the wage index
transition policy.
As we noted, in the FY 2022 IPPS/LTCH PPS final rule (86 FR 45164
through 45165), we finalized a wage index transition policy for the FY
2022 IPPS wage index. Specifically, for hospitals that received the
transition in FY 2021, we are continuing a wage index transition for FY
2022 under which we will apply a 5 percent cap on any decrease in the
hospital's wage index compared to its wage index for FY 2021 to
mitigate significant negative impacts of, and provide additional time
for hospitals to adapt to, the CMS decision to adopt the revised OMB
delineations (86 FR 45164). We stated that, as discussed in the FY 2021
IPPS/LTCH final rule, we believe applying a 5-percent cap on any
decrease in a hospital's wage index from the hospital's final wage
index from the prior fiscal year is an appropriate transition as it
provides predictability in payment levels from FY 2021 to the upcoming
FY 2022 as well as effectively mitigating any significant decreases in
the wage index for FY 2022 (86 FR 45164). We considered and responded
to comments requesting that we apply the transition adjustment in FY
2022 to all hospitals with significant reductions in wage index values
(not just those that received the transition adjustment in FY 2021), as
well as comments recommending a 5-percent cap become a permanent policy
for future fiscal years (86 FR 45164 through 45165). In addition, we
considered and responded to comments recommending we not apply the
transition in a budget neutral manner (86 FR 45165). We stated that
[[Page 63504]]
for FY 2022, similar to FY 2021, we are applying a budget neutrality
adjustment to the standardized amount so that our transition, as
previously described, is implemented in a budget neutral manner under
our authority in section 1886(d)(5)(I) of the Act (86 FR 45165).
In the CY 2022 OPPS/ASC proposed rule (86 FR 42051 through 42052),
we proposed to use the FY 2022 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 2022. Therefore, as we stated in the CY 2022 OPPS/ASC proposed
rule (86 FR 42052), any adjustments for the FY 2022 IPPS post-
reclassified wage index, including without limitation any wage index
transition policy that may be applied, would be reflected in the final
CY 2022 OPPS wage index beginning on January 1, 2022. 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. For this reason, as discussed later in this section, we are
finalizing our proposal to use the FY 2022 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 2022, which will include the wage index
transition policy discussed previously.
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 2022, under the OPPS, we are continuing to use
only the FIPS county codes for purposes of crosswalking counties to
CBSAs.
We proposed to use the FY 2022 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 2022. Therefore, we stated that any adjustments for the FY
2022 IPPS post-reclassified wage index, including, but not limited to,
the imputed floor adjustment and any transition that may be applied (as
discussed previously), would be reflected in the final CY 2022 OPPS
wage index beginning on January 1, 2022. (We referred readers to the FY
2022 IPPS/LTCH PPS proposed rule (86 FR 25396 through 25417) and the
proposed FY 2022 hospital wage index files posted on the CMS website.)
With regard to budget neutrality for the CY 2022 OPPS wage index, we
referred readers to section II.B. of the CY 2022 OPPS/ASC proposed rule
(86 FR 42048 through 42049). We stated that we continue to believe that
using the IPPS post-reclassified wage index as the source of an
adjustment factor for the OPPS is reasonable and logical, given the
inseparable, subordinate status of the HOPD within the hospital
overall.
We refer readers to the discussion of comments on the wage index
transition policy for 2022, and our responses to those comments,
earlier in this section. We did not receive any additional comments on
this proposal and are finalizing it without modification.
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 adjustments. In the CY 2022 OPPS/ASC proposed
rule, we proposed to continue this policy for CY 2022, and included a
brief summary of the major proposed FY 2022 IPPS wage index policies
and adjustments that we proposed to apply to these hospitals under the
OPPS for CY 2022. which we have summarized below. We referred readers
to the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25396 through 25417)
for a detailed discussion of the proposed changes to the FY 2022 IPPS
wage indexes.
It has been our longstanding policy to allow non-IPPS hospitals
paid under the OPPS to qualify for the out-migration adjustment if they
are located in a section 505 out-migration county (section 505 of the
Medicare Prescription Drug, Improvement, and Modernization Act of 2003
(MMA)). Applying this adjustment is consistent with our policy of
adopting IPPS wage index policies for hospitals paid under the OPPS. We
note that, because non-IPPS hospitals cannot reclassify, they are
eligible for the out-migration wage index adjustment if they are
located in a section 505 out-migration county. This is the same out-
migration adjustment policy that would apply if the hospital were paid
under the IPPS. For CY 2022, we proposed to continue our policy of
allowing non-IPPS hospitals paid under the OPPS to qualify for the
outmigration adjustment if they are located in a section 505 out-
migration county (section 505 of the MMA). Furthermore, we proposed
that the wage index that would apply for CY 2022 to non-IPPS hospitals
paid under the OPPS would continue to include the rural floor
adjustment and any adjustments applied to the IPPS wage index to
address wage index disparities. In addition, the wage index that would
apply to non-IPPS hospitals paid under the OPPS would include any
transition we may finalize for the FY 2022 IPPS wage index as discussed
previously.
We did not receive any comments on these proposals and are
finalizing them without modification.
For CMHCs, for CY 2022, we proposed to continue to calculate the
wage index by using the post-reclassification IPPS wage index based on
the CBSA where the CMHC is located. Furthermore, we proposed that the
wage index that would apply to CMHCs for CY 2022 would continue to
include the rural floor adjustment and any adjustments applied to the
IPPS wage index to address wage index disparities. In addition, the
wage index that would apply to CMHCs would include any transition we
may finalize for the FY 2022 IPPS wage index as discussed above. Also,
we proposed that the wage index that would apply to CMHCs would not
include the outmigration adjustment because that
[[Page 63505]]
adjustment only applies to hospitals. We did not receive any comments
on these proposals and are finalizing them without modification.
Table 4A associated with the FY 2022 IPPS/LTCH PPS final rule
(available via the internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index)
identifies counties eligible for the out-migration adjustment. Table 2
associated with the FY 2022 IPPS/LTCH PPS final rule (available for
download via the website above) identifies IPPS hospitals that receive
the out-migration adjustment for FY 2022. We are including the
outmigration adjustment information from Table 2 associated with the FY
2022 IPPS/LTCH PPS final rule as Addendum L to the CY 2022 OPPS/ASC
final rule with the addition of non-IPPS hospitals that will receive
the section 505 outmigration adjustment under the CY 2022 OPPS/ASC
final rule. Addendum L is available via the internet on the CMS
website. We refer readers to the CMS website for the OPPS at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index. At this link, readers will find a link to
the final FY 2022 IPPS wage index tables and Addendum L.
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 to determine outlier payments,
payments for pass-through devices, and monthly interim transitional
corridor payments under the OPPS during the PPS year. For certain
hospitals, under the regulations at 42 CFR 419.43(d)(5)(iii), we use
the statewide average default CCRs to determine the payments mentioned
earlier if it is not possible to determine an accurate CCR for a
hospital in certain circumstances. This includes hospitals that are
new, hospitals that have not accepted assignment of an existing
hospital's provider agreement, and hospitals that have not yet
submitted a cost report. We also use the statewide average default CCRs
to determine payments for hospitals whose CCR falls outside the
predetermined ceiling threshold for a valid CCR or for hospitals in
which the most recent cost report reflects an all-inclusive rate status
(Medicare Claims Processing Manual (Pub. 100-04), Chapter 4, Section
10.11).
We discussed our policy for using default CCRs, including setting
the ceiling threshold for a valid CCR, in the CY 2009 OPPS/ASC final
rule with comment period (73 FR 68594 through 68599) in the context of
our adoption of an outlier reconciliation policy for cost reports
beginning on or after January 1, 2009. For details on our process for
calculating the statewide average CCRs, we refer readers to the CY 2022
OPPS final rule Claims Accounting Narrative that is posted on our
website. We proposed to calculate the default ratios for CY 2022 using
cost report data from the same set of cost reports we originally used
in the CY 2021 OPPS ratesetting, consistent with the broader proposal
regarding 2022 OPPS ratesetting discussed in section X.E. of the CY
2022 OPPS/ASC proposed rule (86 FR 42188 through 42190).
We did not receive any public comments on our proposal and are
finalizing our proposal, without modification, to calculate the default
ratios for CY 2022 using cost report data from the same set of cost
reports we originally used in the CY 2021 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 2022
In the CY 2006 OPPS final rule with comment period (70 FR 68556),
we finalized a payment increase for rural sole community hospitals
(SCHs) of 7.1 percent for all services and procedures paid under the
OPPS, excluding drugs, biologicals, brachytherapy sources, and devices
paid under the pass-through payment policy, in accordance with section
1833(t)(13)(B) of the Act, as added by section 411 of the Medicare
Prescription Drug, Improvement, and Modernization Act of 2003 (MMA)
(Pub. L. 108-173). Section 1833(t)(13) of the Act provided the
Secretary the authority to make an adjustment to OPPS payments for
rural hospitals, effective January 1, 2006, if justified by a study of
the difference in costs by APC between hospitals in rural areas and
hospitals in urban areas. Our analysis showed a difference in costs for
rural SCHs. Therefore, for the CY 2006 OPPS, we finalized a payment
adjustment for rural SCHs of 7.1 percent for all services and
procedures paid under the OPPS, excluding separately payable drugs and
biologicals, brachytherapy sources, items paid at charges reduced to
costs, and devices paid under the pass-through payment policy, in
accordance with section 1833(t)(13)(B) of the Act.
In the CY 2007 OPPS/ASC final rule with comment period (71 FR 68010
and 68227), for purposes of receiving this rural adjustment, we revised
our regulations at Sec. 419.43(g) to clarify that essential access
community hospitals (EACHs) are also eligible to receive the rural SCH
adjustment, assuming these entities otherwise meet the rural adjustment
criteria. Currently, two hospitals are classified as EACHs, and as of
CY 1998, under section 4201(c) of Public Law 105-33, a hospital can no
longer become newly classified as an EACH.
This adjustment for rural SCHs is budget neutral and applied before
calculating outlier payments and copayments. We stated in the CY 2006
OPPS final rule with comment period (70 FR 68560) that we would not
reestablish the adjustment amount on an annual basis, but we may review
the adjustment in the future and, if appropriate, would revise the
adjustment. We provided the same 7.1 percent adjustment to rural SCHs,
including EACHs, again in CYs 2008 through 2021. Further, in the CY
2009 OPPS/ASC final rule with comment period (73 FR 68590), we updated
the regulations at Sec. 419.43(g)(4) to specify, in general terms,
that items paid at charges adjusted to costs by application of a
hospital-specific CCR are excluded from the 7.1 percent payment
adjustment.
For CY 2022, we proposed to continue the current policy of a 7.1
percent payment adjustment that is done in a budget neutral manner 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.
Comment: One commenter requested that CMS make the 7.1 percent
rural adjustment permanent. The commenter appreciated the policy that
CMS
[[Page 63506]]
adopted in CY 2019 and reaffirmed in CY 2020 where we stated that the
7.1 percent rural adjustment would continue to be in place until our
data support establishing a different rural adjustment percentage.
However, the commenter believes that this policy still does not provide
enough certainty for rural SCHs and EACHs to know whether they should
take into account the rural SCH adjustment when attempting to calculate
expected revenues for their hospital budgets.
Response: We thank the commenter for their input. We believe that
our current policy, which states that the 7.1 percent payment
adjustment for rural SCHs and EACHs will remain in effect until our
data show that a different percentage for the rural payment adjustment
is necessary, provides sufficient budget predictability for rural SCHs
and EACHs. Providers would receive notice in a proposed rule and have
the opportunity to provide comments before any changes to the rural
adjustment percentage would be implemented.
After consideration of the public comment we received, we are
finalizing our proposal, without modification, to continue the current
policy of a 7.1 percent payment adjustment that is done in a budget
neutral manner for rural SCHs, including EACHs, for all services and
procedures paid under the OPPS, excluding separately payable drugs and
biologicals, devices paid under the passthrough payment policy, and
items paid at charges reduced to costs.
F. Payment Adjustment for Certain Cancer Hospitals for CY 2022
1. Background
Since the inception of the OPPS, which was authorized by the
Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33), Medicare has paid
the 11 hospitals that meet the criteria for cancer hospitals identified
in section 1886(d)(1)(B)(v) of the Act under the OPPS for covered
outpatient hospital services. These cancer hospitals are exempted from
payment under the IPPS. With the Medicare, Medicaid and SCHIP Balanced
Budget Refinement Act of 1999 (Pub. L. 106-113), the Congress added
section 1833(t)(7), ``Transitional Adjustment to Limit Decline in
Payment,'' to the Act, which requires the Secretary to determine OPPS
payments to cancer and children's hospitals based on their pre-BBA
payment amount (these hospitals are often referred to under this policy
as ``held harmless'' and their payments are often referred to as ``hold
harmless'' payments).
As required under section 1833(t)(7)(D)(ii) of the Act, a cancer
hospital receives the full amount of the difference between payments
for covered outpatient services under the OPPS and a ``pre-BBA
amount.'' That is, cancer hospitals are permanently held harmless to
their ``pre-BBA amount,'' and they receive transitional outpatient
payments (TOPs) or hold harmless payments to ensure that they do not
receive a payment that is lower in amount under the OPPS than the
payment amount they would have received before implementation of the
OPPS, as set forth in section 1833(t)(7)(F) of the Act. The ``pre-BBA
amount'' is the product of the hospital's reasonable costs for covered
outpatient services occurring in the current year and the base payment-
to-cost ratio (PCR) for the hospital defined in section
1833(t)(7)(F)(ii) of the Act. The ``pre-BBA amount'' and the
determination of the base PCR are defined at Sec. 419.70(f). TOPs are
calculated on Worksheet E, Part B, of the Hospital Cost Report or the
Hospital Health Care Complex Cost Report (Form CMS-2552-96 or Form CMS-
2552-10, respectively), as applicable each year. Section 1833(t)(7)(I)
of the Act exempts TOPs from budget neutrality calculations.
Section 3138 of the Affordable Care Act amended section 1833(t) of
the Act by adding a new paragraph (18), which instructs the Secretary
to conduct a study to determine if, under the OPPS, outpatient costs
incurred by cancer hospitals described in section 1886(d)(1)(B)(v) of
the Act with respect to APC groups exceed outpatient costs incurred by
other hospitals furnishing services under section 1833(t) of the Act,
as determined appropriate by the Secretary. Section 1833(t)(18)(A) of
the Act requires the Secretary to take into consideration the cost of
drugs and biologicals incurred by cancer hospitals and other hospitals.
Section 1833(t)(18)(B) of the Act provides that, if the Secretary
determines that cancer hospitals' costs are higher than those of other
hospitals, the Secretary shall provide an appropriate adjustment under
section 1833(t)(2)(E) of the Act to reflect these higher costs. In
2011, after conducting the study required by section 1833(t)(18)(A) of
the Act, we determined that outpatient costs incurred by the 11
specified cancer hospitals were greater than the costs incurred by
other OPPS hospitals. For a complete discussion regarding the cancer
hospital cost study, we refer readers to the CY 2012 OPPS/ASC final
rule with comment period (76 FR 74200 through 74201).
Based on these findings, we finalized a policy to provide a payment
adjustment to the 11 specified cancer hospitals that reflects their
higher outpatient costs, as discussed in the CY 2012 OPPS/ASC final
rule with comment period (76 FR 74202 through 74206). Specifically, we
adopted a policy to provide additional payments to the cancer hospitals
so that each cancer hospital's final PCR for services provided in a
given calendar year is equal to the weighted average PCR (which we
refer to as the ``target PCR'') for other hospitals paid under the
OPPS. The target PCR is set in advance of the 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 2021.
[[Page 63507]]
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2. Policy for CY 2022
Section 16002(b) of the 21st Century Cures Act (Pub. L. 114-255)
amended section 1833(t)(18) of the Act by adding subparagraph (C),
which requires that in applying Sec. 419.43(i) (that is, the payment
adjustment for certain cancer hospitals) for services furnished on or
after January 1, 2018, the target PCR adjustment be reduced by 1.0
percentage point less than what would otherwise apply. Section 16002(b)
also provides that, in addition to the percentage reduction, the
Secretary may consider making an additional percentage point reduction
to the target PCR that takes into account payment rates for applicable
items and services described under section 1833(t)(21)(C) of the Act
for hospitals that are not cancer hospitals described under section
1886(d)(1)(B)(v) of the Act. Further, in making any budget neutrality
adjustment under section 1833(t) of the Act, the Secretary shall not
take into account the reduced expenditures that result from application
of section 1833(t)(18)(C) of the Act.
We proposed to provide additional payments to the 11 specified
cancer hospitals so that each cancer hospital's final PCR is equal to
the weighted average PCR (or ``target PCR'') for the other OPPS
hospitals, using the most recent submitted or settled cost report data
that were available at the time of the development of the proposed
rule, reduced by 1.0 percentage point, to comply with section 16002(b)
of the 21st Century Cures Act. We did not propose an additional
reduction beyond the 1.0 percentage point reduction required by section
16002(b) of the 21st Century Cures Act for CY 2022.
Under our established policy, to calculate the proposed CY 2022
target PCR, we would use the same extract of cost report data from
HCRIS used to estimate costs for the CY 2022 OPPS which would be the
most recently available hospital cost reports which, in most cases,
would be from CY 2020. However, as discussed in section II.A.1.a of the
CY 2022 OPPS/ASC proposed rule, given our concerns with CY 2020 claims
data as a result of the PHE, we believe a target PCR based on CY 2020
claims and the most recently available cost reports may provide a less
accurate estimation of cancer hospital PCRs and non-cancer hospital
PCRs than the data used for the CY 2021 rulemaking cycle. Therefore,
for CY 2022, we proposed to continue to use the CY 2021 target PCR of
0.89. This proposed CY 2022 target PCR of 0.89 includes the 1.0-
percentage point reduction required by section 16002(b) of the 21st
Century Cures Act for CY 2022. For a description of the CY 2021 target
PCR calculation, we refer readers to the CY 2021 OPPS/ASC final rule
with comment period (84 FR 85912 through 85914).
We did not receive any public comments on our proposal and we are
finalizing our proposal to continue to use the CY 2021 target PCR of
0.89 for the 11 specified cancer hospitals for CY 2022 without
modification.
Table 6 shows the estimated percentage increase in OPPS payments to
each cancer hospital for CY 2022, due to the cancer hospital payment
adjustment policy. The actual amount of the CY 2022 cancer hospital
payment adjustment for each cancer hospital will be determined at cost
report settlement and will depend on each hospital's CY 2022 payments
and costs. We note that the requirements contained in section
1833(t)(18) of the Act do not affect the existing statutory provisions
that provide for TOPs for cancer hospitals. The TOPs will be assessed,
as usual, after all payments, including the cancer hospital payment
adjustment, have been made for a cost reporting period.
BILLING CODE 4120-01-P
[[Page 63508]]
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BILLING CODE 4120-01-C
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 amount of dollars). In CY 2021, the outlier
threshold was met when the hospital's cost of furnishing a service
exceeded 1.75 times (the multiplier threshold) the APC payment amount
and exceeded the APC payment amount plus $5,300 (the fixed-dollar
amount threshold) (85 FR 85914 through 85916). If the cost of 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 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. Using CY 2019 claims available for this final rule with
comment period, we estimate that we paid approximately 0.89 percent of
the total aggregated OPPS payments in outliers for CY 2019. Therefore,
for CY 2019, we estimate that we paid 0.11 percentage points below the
CY 2019 outlier target of 1.0 percent of total aggregated OPPS
payments.
For this final rule with comment period, using CY 2019 claims data
and CY 2021 payment rates, we estimate that the aggregate outlier
payments for CY 2021 would be approximately 1.07 percent of the total
CY 2021 OPPS payments. We provide estimated CY 2021 outlier payments
for hospitals and CMHCs with claims included in the claims data that we
used to model impacts in the Hospital-Specific Impacts--Provider-
Specific Data file on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
2. Outlier Calculation for CY 2022
For CY 2022, we proposed to continue our policy of estimating
outlier payments to be 1.0 percent of the estimated aggregate total
payments under the OPPS. We proposed that a portion of that 1.0
percent, an amount equal to less than 0.01 percent of outlier payments
(or 0.0001 percent of total OPPS payments), would be allocated to CMHCs
for PHP outlier payments. This is the amount of estimated outlier
payments that would result from the proposed CMHC outlier threshold as
a proportion of total estimated OPPS outlier payments. We proposed to
continue our longstanding policy that if a CMHC's cost for partial
hospitalization services, paid under APC 5853 (Partial Hospitalization
for CMHCs), exceeds 3.40 times the payment rate for
[[Page 63509]]
proposed APC 5853, the outlier payment would be calculated as 50
percent of the amount by which the cost exceeds 3.40 times the proposed
APC 5853 payment rate.
For further discussion of CMHC outlier payments, we refer readers
to section VIII.C. of the CY 2022 OPPS/ASC proposed rule.
To ensure that the estimated CY 2022 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 $6,100.
We calculated the proposed fixed-dollar threshold of $6,100 using
the standard methodology most recently used for CY 2021 (85 FR 85914
through 85916). For purposes of estimating outlier payments for the CY
2022 OPPS/ASC proposed rule, we used the hospital-specific overall
ancillary CCRs available in the April 2020 update to the Outpatient
Provider-Specific File (OPSF). The OPSF contains provider-specific
data, such as the most current CCRs, which are maintained by the MACs
and used by the OPPS Pricer to pay claims. The claims that we generally
use to model each OPPS update lag by 2 years. However, as discussed in
section X.E. of the CY 2022 OPPS/ASC proposed rule, we proposed to use
CY 2019 claims in establishing the CY 2022 OPPS.
In order to estimate the CY 2022 hospital outlier payments for the
proposed rule, we inflated the charges on the CY 2019 claims using the
same inflation factor of 1.20469 that we used to estimate the IPPS
fixed-loss cost threshold for the FY 2022 IPPS/LTCH PPS proposed rule
(86 FR 25718). We used an inflation factor of 1.13218 to estimate CY
2021 charges from the CY 2019 charges reported on CY 2019 claims,
applying the charge inflation factor for two years, to estimate CY 2021
hospital outlier payments. The methodology for determining this charge
inflation factor is discussed in the FY 2021 IPPS/LTCH PPS final rule
(85 FR 59037 through 59040). As we stated in the CY 2005 OPPS final
rule with comment period (69 FR 65844 through 65846), we believe that
the use of these 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
inflation adjustment factor that we proposed to apply for the FY 2022
IPPS outlier calculation to the CCRs used to simulate the proposed CY
2022 OPPS outlier payments to determine the fixed-dollar threshold.
Specifically, for CY 2022, we proposed to apply an adjustment factor of
0.94964 (or 0.974495 * 0.974495) to the CCRs that were in the April
2020 OPSF to trend them forward from CY 2020 to CY 2022. We note that
we proposed to use the April 2020 OPSF to address concerns regarding
the impact of the PHE on data used in OPPS ratesetting, as discussed in
section X.E. of the CY 2022 OPPS/ASC proposed rule. The methodology for
calculating the proposed adjustment is discussed in the FY 2022 IPPS/
LTCH PPS proposed rule (86 FR 25717 through 25719).
To model hospital outlier payments for the CY 2022 OPPS/ASC
proposed rule, we applied the overall CCRs from the April 2020 OPSF
after adjustment (using the proposed CCR inflation adjustment factor of
0.94964 to approximate CY 2022 CCRs) to charges on CY 2019 claims that
were adjusted (using the proposed charge inflation factor of 1.20469 to
approximate CY 2022 charges). We note that the additional year in the
charge inflation factor and CCR inflation factors is a result of the
use of claims and OPSF data from a year earlier than the year that we
would typically use in a standard ratesetting cycle. We simulated
aggregated CY 2021 hospital outlier payments using these costs for
several different fixed-dollar thresholds, holding the 1.75 multiplier
threshold constant and assuming that outlier payments would continue to
be made at 50 percent of the amount by which the cost of furnishing the
service would exceed 1.75 times the APC payment amount, until the total
outlier payments equaled 1.0 percent of aggregated estimated total CY
2021 OPPS payments. We estimated that a proposed fixed-dollar threshold
of $6,100, 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 services, paid under APC
5853, exceeds 3.40 times the payment rate for APC 5853, the outlier
payment would be calculated as 50 percent of the amount by which the
cost exceeds 3.40 times the APC 5853 payment rate.
Section 1833(t)(17)(A) of the Act, which applies to hospitals, as
defined under section 1886(d)(1)(B) of the Act, requires that hospitals
that fail to report data required for the quality measures selected by
the Secretary, in the form and manner required by the Secretary under
section 1833(t)(17)(B) of the Act, incur a 2.0 percentage point
reduction to their OPD fee schedule increase factor; that is, the
annual payment update factor. The application of a reduced OPD fee
schedule increase factor results in reduced national unadjusted payment
rates that will apply to certain outpatient items and services
furnished by hospitals that are required to report outpatient quality
data and that fail to meet the Hospital OQR Program requirements. For
hospitals that fail to meet the Hospital OQR Program requirements, we
proposed to continue the policy that we implemented in CY 2010 that the
hospitals' costs will 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
2022 OPPS/ASC proposed rule.
Comment: One commenter recommended that, in light of the PHE, CMS
should not update the OPPS outlier fixed-dollar threshold at a time
when hospitals are struggling financially.
Response: We maintain the target outlier percentage of 1.0 percent
of estimated aggregate total payments 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. We continue to believe that the 1.0 percent OPPS
outlier spending target appropriately mitigates the financial risk
associated with exceptionally costly or complex cases. In addition, in
a budget neutral system any spending for OPPS outliers would require a
corresponding reduction to all other OPPS payments, which would have a
universal impact on hospitals because every OPPS payment would be
reduced. The fixed-dollar outlier threshold is specifically developed
in order to best estimate aggregate outlier payments of 1.0 percent of
the OPPS and ensure that outlier payments are directed towards the high
cost and complex procedures associated with potential financial risk.
Failing to update this outlier threshold would systemically
underestimate the
[[Page 63510]]
amount of OPPS outlier payments and result in OPPS outlier payments in
excess of 1.0 percent of aggregate OPPS payments.
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
2022.
3. Final Outlier Calculation
Historically, we have used updated data for the outlier fixed-
dollar threshold calculation for the final rule. However, as discussed
in section X.E. of the CY 2022 OPPS/ASC proposed rule (86 FR 42188
through 42190) claims and other data that we would typically have used
as part of our ratesetting process would have been affected by the PHE.
As a result, we proposed to use CY 2019 OPPS claims as part of the CY
2022 OPPS ratesetting process. For purposes of estimating the outlier
threshold, we are finalizing our proposal to apply the same CCR
inflation adjustment factor that we finalized to apply for the FY 2022
IPPS outlier calculation to the CCRs used to simulate the final CY 2022
OPPS outlier payments to determine the fixed-dollar threshold. As
discussed in the FY 2022 IPPS/LTCH PPS final rule with comment period
(86 FR 45537 through 45543), there are some changes to the typical
charge and CCR inflation factors we would use for outlier estimating
purposes as a result of the proposed and final policy to use data prior
to the PHE. Ordinarily, we would use updated CCRs of the OPSF and apply
an adjustment factor to adjust the CCRs from the most recent update of
OPSF. However, as discussed previously, we believe the most recent CCRs
in the OPSF may be significantly impacted by the PHE. As a result, and
similar to the proposed use of CY 2019 claims in CY 2022 OPPS
ratesetting more broadly, we proposed to use OPSF CCRs from the April
2020 OPSF for CY 2022 outlier estimation purposes. The claims and OPSF
data are not the most updated data available and therefore to properly
update them for the prospective year--CY 2022--we needed to apply an
additional year of CCRs and charge inflation. For CY 2022, we are
applying the overall CCRs from the April 2020 OPSF file (using the CCR
inflation adjustment factor of 0.94964 to approximate CY 2021 CCRs) to
charges on CY 2019 claims that were adjusted using a charge inflation
factor of 1.20469 to approximate CY 2022 charges. These are the same
CCR adjustment and charge inflation factors that were used to set the
IPPS fixed-loss cost threshold for the FY 2022 IPPS/LTCH PPS final rule
(86 FR 45537 through 45543). We simulate aggregate CY 2022 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 total outlier payments equal 1.0
percent of aggregated estimated total CY 2022 OPPS payments. We
estimate that a fixed-dollar amount threshold of $6,175 combined with
the multiplier threshold of 1.75 times the APC payment rate, will
allocate the 1.0 percent of aggregated total OPPS payments to outlier
payments. For CY 2022, we are finalizing a multiplier threshold of 1.75
times the APC payment rate and a fixed-dollar amount threshold of
$6,175.
For CMHCs, if a CMHC's cost for partial hospitalization services,
paid under APC 5853, exceeds 3.40 times the payment rate the outlier
payment will be calculated as 50 percent of the amount by which the
cost exceeds 3.40 times APC 5853.
H. Calculation of an Adjusted Medicare Payment From the National
Unadjusted Medicare Payment
The 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 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 determined under section
II.A. of this final rule with comment period. Therefore, the national
unadjusted payment rate for most APCs contained in Addendum A to this
final rule with comment period (which is available via the internet on
the CMS website) and for most HCPCS codes to which separate payment
under the OPPS has been assigned in Addendum B to this final rule with
comment period (which is available via the internet on the CMS website)
was calculated by multiplying the final CY 2022 scaled weight for the
APC by the CY 2022 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 (formerly referred to as the
Hospital Outpatient Quality Data Reporting Program (HOP QDRP))
requirements. For further discussion of the payment reduction for
hospitals that fail to meet the requirements of the Hospital OQR
Program, we refer readers to section XIV. of this final rule with
comment period.
We 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 the proposed rule, which is available via the
internet on the CMS website), in a circumstance in which the multiple
procedure discount does not apply, the procedure is not bilateral, and
conditionally packaged services (status indicator of ``Q1'' and ``Q2'')
qualify for separate payment. We note that, although blood and blood
products with status indicator ``R'' and brachytherapy sources with
status indicator ``U'' are not subject to wage adjustment, they are
subject to reduced payments when a hospital fails to meet the Hospital
OQR Program requirements.
Individual providers interested in calculating the payment amount
that they will receive for a specific service from the national
unadjusted payment rates presented in Addenda A and B to the proposed
rule (which are available via the internet on the CMS website) should
follow the formulas presented in the following steps. For purposes of
the payment calculations below, we refer to the national unadjusted
payment rate for hospitals that meet the requirements of the Hospital
OQR Program as the ``full'' national unadjusted payment rate. We refer
to the national unadjusted payment rate for hospitals that fail to meet
the requirements of the Hospital OQR Program as the ``reduced''
national unadjusted payment rate. The reduced
[[Page 63511]]
national unadjusted payment rate is calculated by multiplying the
reporting ratio of 0.9804 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 2022 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 final rule with comment period (65 FR 18496
through 18497) for a detailed discussion of how we derived this
percentage. During our regression analysis for the payment adjustment
for rural hospitals in the CY 2006 OPPS final rule with comment period
(70 FR 68553), we confirmed that this labor-related share for hospital
outpatient services is appropriate.
The formula below is a mathematical representation of Step 1 and
identifies the labor-related portion of a specific payment rate for a
specific service.
X is the labor-related portion of the national unadjusted payment rate.
X = .60 * (national unadjusted payment rate).
Step 2. Determine the wage index area in which the hospital is
located and identify the wage index level that applies to the specific
hospital. The wage index values assigned to each area would reflect the
geographic statistical areas (which are based upon OMB standards) to
which hospitals are assigned for FY 2022 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 2022 OPPS wage index any adjustments for the FY 2022
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 2022 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 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 2022 IPPS wage index, which are listed in Table 2 associated with
the FY 2022 IPPS/LTCH PPS final rule and available via the internet on
the CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. (Click on the link on the
left side of the screen titled ``FY 2022 IPPS Final Rule Home Page''
and select ``FY 2022 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 = .60 * (national unadjusted payment rate) * applicable wage index.
Step 5. Calculate 40 percent (the nonlabor-related portion) of the
national unadjusted payment rate and add that amount to the resulting
product of Step 4. The result is the wage index adjusted payment rate
for the relevant wage index area.
The formula below is a mathematical representation of Step 5 and
calculates the remaining portion of the national payment rate, the
amount not attributable to labor, and the adjusted payment for the
specific service.
Y is the nonlabor-related portion of the national unadjusted payment
rate.
Y = .40 * (national unadjusted payment rate).
Adjusted Medicare Payment = Y + Xa.
Step 6. If a provider is an SCH, as set forth in the regulations at
Sec. 412.92, or an EACH, which is considered to be an SCH under
section 1886(d)(5)(D)(iii)(III) of the Act, and located in a rural
area, as defined in Sec. 412.64(b), or is treated as being located in
a rural area under Sec. 412.103, multiply the wage index adjusted
payment rate by 1.071 to calculate the total payment.
The formula below is a mathematical representation of Step 6 and
applies the rural adjustment for rural SCHs.
Adjusted Medicare Payment (SCH or EACH) = Adjusted Medicare Payment *
1.071.
We are providing examples below of the calculation of both the full
and reduced national unadjusted payment rates that will apply to
certain outpatient items and services performed by hospitals that meet
and that fail to meet the Hospital OQR Program requirements, using the
steps outlined previously. For purposes of this example, we are using a
provider that is located in Brooklyn, New York that is assigned to CBSA
35614. This provider bills one service that is assigned to APC 5071
(Level 1 Excision/Biopsy/Incision and Drainage). The CY 2022 full
national unadjusted payment rate for APC 5071 is $635.54. The proposed
reduced national unadjusted payment rate for APC 5071 for a hospital
that fails to meet the Hospital OQR Program requirements is $623.08.
This proposed reduced rate is calculated by multiplying the reporting
ratio of 0.9804 by the full unadjusted payment rate for APC 5071.
The FY 2022 wage index for a provider located in CBSA 35614 in New
York, which includes the proposed adoption of IPPS 2022 wage index
policies, is 1.3427. The labor-related portion of the proposed full
national unadjusted payment is approximately $512.00 (.60 * $635.54 *
1.3427). The labor-related portion of the proposed reduced national
unadjusted payment is approximately $501.97 (.60 * $623.08 * 1.3427).
The nonlabor-related portion of the proposed full national unadjusted
payment is approximately $254.22 (.40 * $635.54). The nonlabor-related
portion of the proposed reduced national unadjusted payment is
approximately $249.23 (.40 * $623.08). The sum of the labor-related and
nonlabor-related portions of the proposed full national adjusted
payment is approximately $766.22 ($512.00 + $254.22). The sum of the
portions of the proposed reduced national adjusted payment is
approximately $751.20 ($501.97 + $249.23).
We did not receive any public comments on these steps under the
methodology that we included in the proposed rule to determine the APC
payments for CY 2022. Therefore, we are using the steps in the
methodology specified above, as we proposed, to demonstrate the
calculation of the final
[[Page 63512]]
CY 2021 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).
2. OPPS Copayment Policy
For CY 2022, we proposed to determine copayment amounts for new and
revised APCs using the same methodology that we implemented beginning
in CY 2004. (We refer readers to the November 7, 2003 OPPS final rule
with comment period (68 FR 63458).) In addition, we proposed to use the
same standard rounding principles that we have historically used in
instances where the application of our standard copayment methodology
would result in a copayment amount that is less than 20 percent and
cannot be rounded, under standard rounding principles, to 20 percent.
(We refer readers to the CY 2008 OPPS/ASC final rule with comment
period (72 FR 66687) in which we discuss our rationale for applying
these rounding principles.) The proposed national unadjusted copayment
amounts for services payable under the OPPS that would be effective
January 1, 2022 are included in Addenda A and B to the proposed rule
(which are available via the internet on the CMS website).
As discussed in section XIV.E. of the CY 2022 OPPS/ASC proposed
rule and this final rule with comment period, for CY 2022, the Medicare
beneficiary's minimum unadjusted copayment and national unadjusted
copayment for a service to which a reduced national unadjusted payment
rate applies will equal the product of the reporting ratio and the
national unadjusted copayment, or the product of the reporting ratio
and the minimum unadjusted copayment, respectively, for the service.
We note that OPPS copayments may increase or decrease each year
based on changes in the calculated APC payment rates, due to updated
cost report and claims data, and any changes to the OPPS cost modeling
process. However, as described in the CY 2004 OPPS final rule with
comment period, the development of the copayment methodology generally
moves beneficiary copayments closer to 20 percent of OPPS APC payments
(68 FR 63458 through 63459).
In the CY 2004 OPPS final rule with comment period (68 FR 63459),
we adopted a new methodology to calculate unadjusted copayment amounts
in situations including reorganizing APCs, and we finalized the
following rules to determine copayment amounts in CY 2004 and
subsequent years.
When an APC group consists solely of HCPCS codes that were
not paid under the OPPS the prior year because they were packaged or
excluded or are new codes, the unadjusted copayment amount would be 20
percent of the APC payment rate.
If a new APC that did not exist during the prior year is
created and consists of HCPCS codes previously assigned to other APCs,
the copayment amount is calculated as the product of the APC payment
rate and the lowest coinsurance percentage of the codes comprising the
new APC.
If no codes are added to or removed from an APC and, after
recalibration of its relative payment weight, the new payment rate is
equal to or greater than the prior year's rate, the copayment amount
remains constant (unless the resulting coinsurance percentage is less
than 20 percent).
If no codes are added to or removed from an APC and, after
recalibration of its relative payment weight, the new payment rate is
less than the prior year's rate, the copayment amount is calculated as
the product of the new payment rate and the prior year's coinsurance
percentage.
If HCPCS codes are added to or deleted from an APC and,
after recalibrating its relative payment weight, holding its unadjusted
copayment amount constant results in a decrease in the coinsurance
percentage for the reconfigured APC, the copayment amount would not
change (unless retaining the copayment amount would result in a
coinsurance rate less than 20 percent).
If HCPCS codes are added to an APC and, after
recalibrating its relative payment weight, holding its unadjusted
copayment amount constant results in an increase in the coinsurance
percentage for the reconfigured APC, the copayment amount would be
calculated as the product of the payment rate of the reconfigured APC
and the lowest coinsurance percentage of the codes being added to the
reconfigured APC.
We noted in the CY 2004 OPPS final rule with comment period that we
would seek to lower the copayment percentage for a service in an APC
from the prior year if the copayment percentage was greater than 20
percent. We noted that this principle was consistent with section
1833(t)(8)(C)(ii) of the Act, which accelerates the reduction in the
national unadjusted coinsurance rate so that beneficiary liability will
eventually equal 20 percent of the OPPS payment rate for all OPPS
services to which a copayment applies, and with section 1833(t)(3)(B)
of the Act, which achieves a 20-percent copayment percentage when fully
phased in and gives the Secretary the authority to set rules for
determining copayment amounts for new services. We further noted that
the use of this methodology would, in general, reduce the beneficiary
coinsurance rate and copayment amount for APCs for which the payment
rate changes as the result of the reconfiguration of APCs and/or
recalibration of relative payment weights (68 FR 63459).
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
[[Page 63513]]
1833(a) of the Act to offer a special coinsurance rule for screening
flexible sigmoidoscopies and screening colonoscopies, regardless of the
code that is billed for the establishment of a diagnosis as a result of
the test, or for the removal of tissue or other matter or other
procedure, that is furnished in connection with, as a result of, and in
the same clinical encounter as the colorectal cancer screening test. We
refer readers to section X.B., ``Changes to Beneficiary Coinsurance for
Certain Colorectal Cancer Screening Tests'' of this final rule with
comment period for the full discussion of this policy.
Comment: One commenter requested that CMS waive the patient
coinsurance and deductible for Biomechanical Computed Tomography (BCT)
analysis, CPT 0554T to 0558T under the Medicare preventive services
benefit 42 CFR 410.152(l)(6). The commenter stated that these codes are
considered preventive services for diagnostic screening of osteoporosis
and that Change Request (CR) 11392 directed contractors to apply the
same rules applied to CPT code 77078 (Computed tomography, bone mineral
density study, 1 or more sites, axial skeleton (for example, hips,
pelvis, spine)) to these BCT codes.
Response: We disagree with the commenter that the BCT codes are not
subject to coinsurance and the Part B deductible at this time. The
service described by CPT code 77078 meets the National Coverage
Determination (NCD) process for preventive services coverage and
subject to its coinsurance and deductible waiver. However, the USPSTF
has not changed its current recommendation for bone measurement testing
(available here: https://www.uspreventiveservicestaskforce.org/uspstf/recommendation/osteoporosis-screening#fullrecommendationstart) since
2018. These new BCT codes became effective July 1, 2019, and the
services described by these codes are not specifically included in the
USPSTF grade B recommendation. Therefore, they do not meet requirements
to have beneficiary coinsurance and deductible waived. We note that CMS
may add preventive services coverage through the National Coverage
Determination (NCD) process if the service meets all of the following
criteria: Reasonable and necessary for prevention or early detection of
illness or disability, USPSTF recommended with grade A or B, and
appropriate for individuals entitled to benefits under Part A or
enrolled under Medicare Part B. In the event that the USPSTF updates
its recommendation for bone measurement testing to specifically include
these services described by the new BCT codes, CMS would reevaluate
whether to apply the coinsurance and deductible waiver.
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, $127.11 is approximately 20 percent of the
full national unadjusted payment rate of $635.54. For APCs with only a
minimum unadjusted copayment in Addenda A and B to the CY 2022 OPPS/ASC
proposed rule (which are available via the internet on the CMS
website), the beneficiary payment percentage is 20 percent.
The formula below is a mathematical representation of Step 1 and
calculates the national copayment as a percentage of national payment
for a given service.
B is the beneficiary payment percentage.
B = National unadjusted copayment for APC/national unadjusted payment
rate for APC.
Step 2. Calculate the appropriate wage-adjusted payment rate for
the APC for the provider in question, as indicated in Steps 2 through 4
under section II.H. of the CY 2022 OPPS/ASC proposed rule. Calculate
the rural adjustment for eligible providers, as indicated in Step 6
under section II.H. of the CY 2022 OPPS/ASC proposed rule.
Step 3. Multiply the percentage calculated in Step 1 by the payment
rate calculated in Step 2. The result is the wage-adjusted copayment
amount for the APC.
The formula below is a mathematical representation of Step 3 and
applies the beneficiary payment percentage to the adjusted payment rate
for a service calculated under section II.H. of this final rule with
comment period, with and without the rural adjustment, to calculate the
adjusted beneficiary copayment for a given service.
Wage-adjusted copayment amount for the APC = Adjusted Medicare Payment
* B.
Wage-adjusted copayment amount for the APC (SCH or EACH) = (Adjusted
Medicare Payment * 1.071) * B.
Step 4. For a hospital that failed to meet its Hospital OQR Program
requirements, multiply the copayment calculated in Step 3 by the
reporting ratio of 0.9804.
The unadjusted copayments for services payable under the OPPS that
will be effective January 1, 2022 are shown in Addenda A and B to this
final rule with comment period (which are available via the internet on
the CMS website). We note that the national unadjusted payment rates
and copayment rates shown in Addenda A and B to this final rule with
comment period reflect the CY 2022 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. The HCPCS is divided into two principal
subsystems, referred to as Level I and Level II of the HCPCS. Level I
is comprised of CPT (Current Procedural Terminology) codes, a numeric
and alphanumeric coding system maintained by the American Medical
Association (AMA), and consists of Category I, II, and III CPT codes.
Level II, 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. HCPCS codes are used to report surgical
procedures, medical services, items, and supplies under the hospital
OPPS. Specifically, CMS recognizes 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; and
Level II HCPCS codes (also known as alphanumeric codes),
which are used primarily to identify drugs, devices, ambulance
services, durable medical equipment, orthotics, prosthetics, supplies,
temporary surgical
[[Page 63514]]
procedures, and medical services not described by CPT codes.
CPT codes are established by the AMA and the Level II HCPCS codes
are established by the CMS HCPCS Workgroup. These 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 and makes the codes effective (that is, the codes can be reported
on Medicare claims) 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. Those 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 2022 OPPS 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 status indicators and their definitions in
Addendum D1 to this final rule with comment period.
1. HCPCS Codes That Were Effective April 1, 2021 for Which We Solicited
Public Comments in the CY 2022 OPPS/ASC Proposed Rule
For the April 2021 update, 26 new HCPCS codes were established and
made effective on April 1, 2021. These codes and their long descriptors
were included in Table 5 of the proposed rule and are now listed in
Table 7 of this final rule with comment period. Through the April 2021
OPPS quarterly update CR (Transmittal 10666, Change Request 12175,
dated March 8, 2021), we recognized several new HCPCS codes for
separate payment under the OPPS. In the CY 2022 OPPS/ASC proposed rule,
we solicited public comments on the proposed APC and status indicator
assignments for the codes which were listed in Table 5 of this CY 2022
OPPS/ASC proposed rule with comment period.
We did not receive any public comments on the proposed OPPS APC and
SI assignments for the new Level II HCPCS codes implemented in April
2021. Therefore, we are finalizing the proposed APC and SI assignments
for these codes, as indicated in Table 7.
The status indicator, APC assignment, and payment rate for each
HCPCS code can be found in Addendum B to this final rule with comment
period. In addition, the complete list of status indicators and
corresponding definitions used under the OPPS can be found in Addendum
D1 to this final rule with comment period. These new codes that were
effective April 1, 2021 were assigned to comment indicator ``NP'' in
Addendum B to the CY 2022 OPPS/ASC 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. Also, the complete
list of comment indicators and definitions used under the OPPS can be
found in Addendum D2 to this final rule with comment period. We note
that OPPS Addendum B, Addendum D1, and Addendum D2 are available via
the internet on the CMS website.
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2. HCPCS Codes That Were Effective July 1, 2021 for Which We Solicited
Public Comments in the CY 2022 OPPS/ASC Proposed Rule
For the July 2021 update, 55 new codes were established and made
effective July 1, 2021. The codes and long descriptors were listed in
Table 6 of the proposed rule and are now also listed in Table 8 of this
final rule with comment period. Through the July 2021 OPPS quarterly
update CR (Transmittal 10825, Change Request 12316, dated June 11,
2021), we recognized several new codes for separate payment and
assigned them to appropriate interim OPPS status indicators and APCs.
In the CY 2022 OPPS/ASC proposed rule, we solicited public comments on
the proposed APC and status indicator assignments for the codes
implemented on July 1, 2021, all of which are listed in Table 8.
We did not receive any public comments on the proposed OPPS APC and
SI assignments for the new Level II HCPCS codes implemented in July
2021 and we are finalizing the proposed APC and SI assignments for
these codes, as indicated in Table 8. We note that several of the HCPCS
C-codes have been replaced with HCPCS J-codes, effective October 1,
2021. Their replacement codes are listed in Table 8. The final payment
rates for these codes can be found in Addendum B to this final rule
with comment period.
The status indicator, APC assignment, and payment rate for each
HCPCS code can be found in Addendum B to this final rule with comment
period. The complete list of status indicators and corresponding
definitions used under the OPPS can be found in Addendum D1 to this
final rule with comment period. These new codes that were effective
July 1, 2021 were assigned to comment indicator ``NP'' in Addendum B to
the CY 2022 OPPS/ASC 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. Also, the complete list of
comment indicators and definitions used under the OPPS can be found in
Addendum D2 to this final rule with comment period. We note that OPPS
Addendum B, Addendum D1, and Addendum D2 are available via the internet
on the CMS website.
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3. October 2021 HCPCS Codes for Which We Are Soliciting Public Comments
in the CY 2022 OPPS/ASC Final Rule With Comment Period
As has been our practice in the past, we incorporate those new
HCPCS codes that are effective October 1 in the final rule with comment
period, thereby updating the OPPS for the following calendar year, as
displayed in Table 7 of the CY 2022 OPPS/ASC proposed rule with comment
period and reprinted as Table 9 of this final rule with comment period.
These codes are released to the public through the October OPPS
quarterly update CRs and via the CMS HCPCS website (for Level II HCPCS
codes). For CY 2022, these codes are flagged with comment indicator
``NI'' in Addendum B to this OPPS/ASC final rule with comment period to
indicate that we are assigning them an interim payment status which is
subject to public comment. Specifically, the interim SI and APC
assignments for codes flagged with comment indicator ``NI'' are open to
public comment in this final rule with comment period, and we will
respond to these public comments in the OPPS/ASC final rule with
comment period for the next year's OPPS/ASC update.
In the CY 2022 OPPS/ASC proposed rule (86 FR 42068), we proposed to
continue this process for CY 2022. Specifically, for CY 2022, we
proposed to include in Addendum B to the CY 2022 OPPS/ASC final rule
with comment period the new HCPCS codes effective October 1, 2021 that
would be incorporated in the October 2021 OPPS quarterly update CR.
Also, as stated above, the October 1, 2021 codes are flagged with
comment indicator ``NI'' in Addendum B to this CY 2022 OPPS/
[[Page 63523]]
ASC final rule with comment period to indicate that we have assigned
the codes an interim OPPS payment status for CY 2022. We are inviting
public comments on the interim SI and APC assignments for these codes,
if applicable, that will be finalized in the CY 2023 OPPS/ASC final
rule with comment period.
4. January 2022 HCPCS Codes
a. New Level II HCPCS Codes for Which We Are Soliciting Public Comments
in This CY 2022 OPPS/ASC Final Rule With Comment Period
Consistent with past practice, we are soliciting comments on the
new Level II HCPCS codes that will be effective January 1, 2022 of this
final rule with comment period, thereby allowing us to finalize the
status indicators and APC assignments for the codes in the CY 2023
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 G-codes listed in Addendum O of the CY 2022 OPPS/ASC
proposed rule, most Level II HCPCS codes are not released until
sometime around November to be effective January 1. Because these codes
are not available until November, we are unable to include them in the
OPPS/ASC proposed rules. Consequently, for CY 2022, we proposed to
include in Addendum B to this final rule with comment period the new
Level II HCPCS codes effective January 1, 2022 that would be
incorporated in the January 2022 OPPS quarterly update CR. These codes
will be released to the public through the January OPPS quarterly
update CRs and via the CMS HCPCS website (for Level II HCPCS codes).
For CY 2022, the Level II HCPCS codes effective January 1, 2022 are
flagged with comment indicator ``NI'' in Addendum B to this final rule
with comment period to indicate that we have assigned the codes an
interim OPPS payment status for CY 2022. We are inviting public
comments on the interim SI and APC assignments for these codes, if
applicable, that will be finalized in the CY 2023 OPPS/ASC final rule
with comment period.
b. CPT Codes for Which We Solicited Public Comments in the CY 2022
OPPS/ASC Proposed Rule
In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66841
through 66844), we finalized a revised process of assigning APC and
status indicators for new and revised Category I and III CPT codes that
would be effective January 1. Specifically, for the new/revised CPT
codes that we receive in a timely manner from the AMA's CPT Editorial
Panel, we finalized our proposal to include the codes that would be
effective January 1 in the OPPS/ASC proposed rules, along with proposed
APC and status indicator assignments for them, and to finalize the APC
and status indicator assignments in the OPPS/ASC final rules beginning
with the CY 2016 OPPS update. For those new/revised CPT codes that were
received too late for inclusion in the OPPS/ASC proposed rule, we
finalized our proposal to establish and use HCPCS G-codes that mirror
the predecessor CPT codes and retain the current APC and status
indicator assignments for a year until we can propose APC and status
indicator assignments in the following year's rulemaking cycle. We note
that even if we find that we need to create HCPCS G-codes in place of
certain CPT codes for the PFS proposed rule, we do not anticipate that
these HCPCS G-codes will always be necessary for OPPS purposes. We will
make every effort to include proposed APC and status indicator
assignments for all new and revised CPT codes that the AMA makes
publicly available in time for us to include them in the proposed rule,
and to avoid resorting to use of HCPCS G-codes and the resulting delay
in utilization of the most current CPT codes. Also, we finalized our
proposal to make interim APC and status indicator assignments for CPT
codes that are not available in time for the proposed rule and that
describe wholly new services (such as new technologies or new surgical
procedures), to solicit public comments in the final rule, and to
finalize the specific APC and status indicator assignments for those
codes in the following year's final rule.
For the CY 2022 OPPS update, we received the CPT codes that will be
effective January 1, 2022 from the AMA in time to be included in the CY
2022 OPPS/ASC proposed rule. The new, revised, and deleted CPT codes
can be found in Addendum B to the CY 2022 OPPS/ASC proposed rule (which
is available via the internet on the CMS website). We note that the new
and revised CPT codes are assigned to comment indicator ``NP'' in
Addendum B of the CY 2022 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 APC
assignment, and that comments will be accepted on the proposed APC
assignment and status indicator.
Further, we note that the CPT code descriptors that appear in
Addendum B are short descriptors and do not accurately describe the
complete procedure, service, or item described by the CPT code.
Therefore, we included the 5-digit placeholder codes and the long
descriptors for the new and revised CY 2022 CPT codes in Addendum O to
the CY 2022 OPPS/ASC proposed rule (which is available via the internet
on the CMS website) so that the public can adequately comment on our
proposed APCs and status indicator assignments. The 5-digit placeholder
codes can be found in Addendum O, specifically under the column labeled
``CY 2022 OPPS/ASC Proposed Rule 5-Digit AMA Placeholder Code''. The
final CPT code numbers would be included in this 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 CPT codes, we
requested public comments on only those codes that are assigned comment
indicator ``NP''.
In summary, in the CY 2022 OPPS/ASC proposed rule, we solicited
public comments on the proposed CY 2022 status indicators and APC
assignments for the new and revised CPT codes that will be effective
January 1, 2022. Because the CPT codes listed in Addendum B appear with
short descriptors only, we listed them again in Addendum O to the CY
2022 OPPS/ASC proposed rule with long descriptors. In addition, we
proposed to finalize the status indicator and APC assignments for these
codes (with their final CPT code numbers) in this final rule with
comment period. The proposed status indicator and APC assignment for
these codes can be found in Addendum B to the CY 2022 OPPS/ASC proposed
rule (which is available via the internet on the CMS website).
Commenters addressed several of the new CPT codes that were
assigned to comment indicator ``NP'' in Addendum B of the 2022 OPPS/ASC
Proposed Rule. We have responded to those public comments in sections
III.D. ``OPPS APC-Specific Policies'' of this final rule with comment
period.
Finally, in Table 9, which is a reprint of Table 7 from the CY 2022
OPPS/ASC proposed rule, we summarize our current process for updating
codes through our OPPS quarterly update CRs, seeking public comments,
and finalizing the treatment of these codes under the OPPS.
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B. 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. For CY 2022, we proposed that each APC relative payment
weight represents the hospital cost of the services included in that
APC, relative to the hospital cost of the services included in APC 5012
(Clinic Visits and Related Services). The APC relative payment weights
are scaled to APC 5012 because it is the hospital clinic visit APC and
clinic visits are among the most frequently furnished services in the
hospital outpatient setting.
2. Application of the 2 Times Rule
Section 1833(t)(9)(A) of the Act requires the Secretary to review,
not less often than annually, and revise the APC groups, the relative
payment weights, and the wage and other adjustments described in
paragraph (2) to take into account changes in medical practice, changes
in technology, the addition of new services, new cost data, and other
relevant information and factors. Section 1833(t)(9)(A) of the Act also
requires the Secretary to consult with an expert outside advisory panel
composed of an appropriate selection of representatives of providers to
review (and advise the Secretary concerning)
[[Page 63525]]
the clinical integrity of the APC groups and the relative payment
weights. We note that the HOP Panel recommendations for specific
services for the CY 2022 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 (FDCA)). In determining the
APCs with a 2 times rule violation, we consider only those HCPCS codes
that are significant based on the number of claims. We note that, for
purposes of identifying significant procedure codes for examination
under the 2 times rule, we consider procedure codes that have more than
1,000 single major claims or procedure codes that both have more than
99 single major claims and contribute at least 2 percent of the single
major claims used to establish the APC cost to be significant (75 FR
71832). This longstanding definition of when a procedure code is
significant for purposes of the 2 times rule was selected because we
believe that a subset of 1,000 or fewer claims is negligible within the
set of approximately 100 million single procedure or single session
claims we use for establishing costs. Similarly, a procedure code for
which there are fewer than 99 single claims and that comprises less
than 2 percent of the single major claims within an APC will have a
negligible impact on the APC cost (75 FR 71832). In this section of the
CY 2022 OPPS/ASC proposed rule, for CY 2022, 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 2022 OPPS update, in the CY 2022 OPPS/ASC proposed rule,
we identified the APCs with violations of the 2 times rule. Therefore,
we proposed changes to the procedure codes assigned to these APCs in
Addendum B to the CY 2022 OPPS/ASC proposed rule. We noted that
Addendum B does not appear in the printed version of the Federal
Register as part of the CY 2022 OPPS/ASC proposed rule. Rather, it is
published and made available via the internet on the CMS website at:
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html. To eliminate a violation of the 2
times rule and improve clinical and resource homogeneity, 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 2022 included
in the CY 2022 OPPS/ASC proposed rule are related to changes in costs
of services that were observed in the CY 2019 claims data available for
CY 2022 ratesetting. Addendum B to the CY 2021 OPPS/ASC proposed rule
identified 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, 2021 OPPS Addendum
B Update (available via the internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Addendum-A-and-Addendum-B-Updates.html).
3. APC Exceptions to the 2 Times Rule
Taking into account the APC changes that we proposed to make for CY
2022, we reviewed all of the APCs to determine which APCs would not
meet the requirements of the 2 times rule. 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.
Based on the CY 2019 claims data available for the CY 2022 proposed
rule, we found 23 APCs with violations of the 2 times rule. We applied
the criteria as described above to identify the APCs for which we
proposed to make exceptions under the 2 times rule for CY 2022, and
found that all of the 23 APCs we identified meet the criteria for an
exception to the 2 times rule based on the CY 2019 claims data
available for the CY 2022 OPPS/ASC proposed rule. 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 only identified those
APCs, including those with criteria-based costs, such as device-
dependent CPT/HCPCS codes, with violations of the 2 times rule.
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 may
accept the HOP Panel's recommendation because those recommendations are
based on explicit consideration (that is, a review of the latest OPPS
claims data and group discussion of the issue) of resource use,
clinical homogeneity, site of service, and the quality of the claims
data used to determine the APC payment rates.
Table 8 of the CY 2022 OPPS/ASC proposed rule listed the 23 APCs
for which we proposed to make an exception under the 2 times rule for
CY 2021 based on the criteria cited above and claims data submitted
between January 1, 2019 and December 31, 2019, and processed on or
before June 30, 2020, and updated 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 CY 2022
OPPS/ASC proposed rule can be found on the CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html.
Based on the updated final rule CY 2019 claims data used for this
final rule with comment period, we identified the same 23 APCs that
appeared in Table 8 of the CY 2022 OPPS/ASC proposed rule.
Comment: We received two comments that agreed with the proposed
exceptions identified in Table 8 of the CY 2021 OPPS proposed rule.
Response: We appreciate the commenters' support.
Comment: One commenter requested that CMS adjust the definition of
a significant procedure code for cost significance purposes in
evaluating the 2 times rule to only require 500 single claims rather
than the current requirement of 1,000 single claims.
Response: As stated earlier, in determining whether a 2 times rule
violation exists in an APC, we consider only those HCPCS codes that are
significant based on the number of claims for the codes. For purposes
of identifying significant HCPCS codes to examine for 2 times rule
violations, we consider codes that have more than 1,000 single major
claims or codes that have both greater than 99 single major
[[Page 63526]]
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 HCPCS code is significant for
purposes of the 2 times rule was selected because we believe that a
subset of 1,000 claims is negligible within the set of approximately
100 million single procedure or single session claims we use for
establishing costs. Similarly, a HCPCS code for which there are fewer
than 99 single claims and which comprises less than 2 percent of the
single major claims within an APC will have a negligible impact on the
APC cost. We continue to believe that these definitions remain
appropriate and are therefore making no changes in this final rule with
comment period.
Comment: One commenter opposed the allowance of a 2 times rule
exception for APC 5161 (Level 1 ENT Procedures) in Table 8 of the CY
2021 OPPS proposed rule, based on the current construct of codes
included in the APC.
Response: We have reviewed the CY 2019 claims data available for CY
2022 OPPS ratesetting for APC 5161 and believe that this APC remains
appropriate as currently structured because it optimizes clinical and
resource cost homogeneity. In addition, we note that the 2 times rule
violation is based on the cost range of approximately $155.55 for CPT
code 31500 (Insert emergency airway) and $315.60 for CPT code 69100
(Biopsy of external ear) between the geometric mean costs for the
lowest and highest cost significant codes in the APC. The difference
between the geometric mean costs for CPT codes 31500 and 69100 violates
the 2 times rule by a minimal amount and does not suggest there is a
broader issue with the APC. However, we will continue to monitor the
claims data for APC 5161 as they become available.
After considering the public comments we received on proposed APC
assignments and our analysis of the CY 2019 costs from hospital claims
and cost report data available for this final rule with comment period,
we are finalizing our proposals, with some modifications. Specifically,
we are finalizing our proposal to except the 23 proposed APCs from the
2 times rule for CY 2022.
Table 10 below lists the 23 APCs that we are excepting from the 2
times rule for CY 2022 based on the criteria described earlier and a
review of claims data for dates of service between January 1, 2019, and
December 31, 2019, that were processed on or before June 30, 2020. We
note that, for cases in which a recommendation by the HOP Panel appears
to result in or allow a violation of the 2 times rule, we generally
accept the HOP Panel's recommendation because those recommendations are
based on explicit consideration of resource use, clinical homogeneity,
site of service, and the quality of the claims data used to determine
the APC payment rates. The geometric mean costs for hospital outpatient
services for these and all other APCs that were used in the development
of this final rule with comment period can be found on the CMS website
at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.
BILLING CODE 4120-01-P
[[Page 63527]]
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BILLING CODE 4120-01-C
C. New Technology APCs
1. Background
In the CY 2002 OPPS final rule (66 FR 59903), we finalized changes
to the time period in which a service can be eligible for payment under
a New Technology APC. Beginning in CY 2002, we retain services within
New Technology APC groups until we gather sufficient claims data to
enable us to assign the service to an appropriate clinical APC. This
policy allows us to move a service from a New Technology APC in less
than 2 years if sufficient data are available. It also allows us to
retain a service in a New Technology APC for more than 2 years if
sufficient data upon which to base a decision for reassignment have not
been collected.
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 2021, there were 52 New Technology APC levels, ranging from
the lowest cost band assigned to APC 1491 (New Technology--Level 1A
($0-$10)) to the highest cost band assigned to APC 1908 (New
Technology--Level 52 ($145,001-$160,000)). We note that the cost bands
for the New Technology APCs, specifically, APCs 1491 through 1599 and
1901 through 1908, vary with increments ranging from $10 to $14,999.
These cost bands identify the APCs to which new technology procedures
and services with estimated service costs that fall within those cost
bands are assigned under the OPPS. Payment for each APC is made at the
mid-point of the APC's assigned cost band. For example, payment for New
Technology APC 1507 (New Technology--Level 7 ($501-$600)) is made at
$550.50.
Under the OPPS, one of our goals is to make payments that are
appropriate for the services that are necessary for the treatment of
Medicare beneficiaries. The OPPS, like other Medicare payment systems,
is budget neutral and increases are limited to the annual hospital
market basket increase reduced by the productivity adjustment. We
believe that our payment rates reflect the costs that are associated
with providing care to Medicare beneficiaries and are adequate to
ensure access to services (80 FR 70374).
For many emerging technologies, there is a transitional period
during which utilization may be low, often because providers are first
learning about the technologies and their clinical utility. Quite
often, parties request that Medicare make higher payments under the New
Technology APCs for new procedures in that transitional phase.
[[Page 63528]]
These requests, and their accompanying estimates for expected total
patient utilization, often reflect very low rates of patient use of
expensive equipment, resulting in high per-use costs for which
requesters believe Medicare should make full payment. Medicare does
not, and we believe should not, assume responsibility for more than its
share of the costs of procedures based on projected utilization for
Medicare beneficiaries and does not set its payment rates based on
initial projections of low utilization for services that require
expensive capital equipment. For the OPPS, we rely on hospitals to make
informed business decisions regarding the acquisition of high-cost
capital equipment, taking into consideration their knowledge about
their entire patient base (Medicare beneficiaries included) and an
understanding of Medicare's and other payers' payment policies. We
refer readers to the CY 2013 OPPS/ASC final rule with comment period
(77 FR 68314) for further discussion regarding this payment policy.
We note that, in a budget-neutral system, payments may not fully
cover hospitals' costs in a particular circumstance, including those
for the purchase and maintenance of capital equipment. We rely on
hospitals to make their decisions regarding the acquisition of high-
cost equipment with the understanding that the Medicare program must be
careful to establish its initial payment rates, including those made
through New Technology APCs, for new services that lack hospital claims
data based on realistic utilization projections for all such services
delivered in cost-efficient hospital outpatient settings. As the OPPS
acquires claims data regarding hospital costs associated with new
procedures, we regularly examine the claims data and any available new
information regarding the clinical aspects of new procedures to confirm
that our OPPS payments remain appropriate for procedures as they
transition into mainstream medical practice (77 FR 68314). For CY 2022,
we included the proposed payment rates for New Technology APCs 1491 to
1599 and 1901 through 1908 in Addendum A to the CY 2022 OPPS/ASC
proposed rule (which is available via the internet on the CMS website).
2. Establishing Payment Rates for Low-Volume New Technology Services
Services that are assigned to New Technology APCs are typically new
services that do not have sufficient claims history to establish an
accurate payment for the services. One of the objectives of
establishing New Technology APCs is to generate sufficient claims data
for a new service so that it can be assigned to an appropriate clinical
APC. Some services that are assigned to New Technology APCs have very
low annual volume, which we consider to be fewer than 100 claims. We
consider services with fewer than 100 claims annually to be low-volume
services because there is a higher probability that the payment data
for a service may not have a normal statistical distribution, which
could affect the quality of our standard cost methodology that is used
to assign services to an APC. In addition, services with fewer than 100
claims per year are not generally considered to be a significant
contributor to the APC ratesetting calculations and, therefore, are not
included in the assessment of the 2 times rule. As we explained in the
CY 2019 OPPS/ASC final rule with comment period (83 FR 58890), we were
concerned that the methodology we use to estimate the cost of a service
under the OPPS by calculating the geometric mean for all separately
paid claims for a HCPCS service code from the most recent available
year of claims data may not generate an accurate estimate of the actual
cost of the service for these low-volume services.
In accordance with section 1833(t)(2)(B) of the Act, services
classified within each APC must be comparable clinically and with
respect to the use of resources. As described earlier, assigning a
service to a New Technology APC allows us to gather claims data to
price the service and assign it to the APC with services that use
similar resources and are clinically comparable. However, where
utilization of services assigned to a New Technology APC is low, it can
lead to wide variation in payment rates from year to year, resulting in
even lower utilization and potential barriers to access to new
technologies, which ultimately limits our ability to assign the service
to the appropriate clinical APC. To mitigate these issues, we
determined in the CY 2019 OPPS/ASC final rule with comment period that
it was appropriate to utilize our equitable adjustment authority at
section 1833(t)(2)(E) of the Act to adjust how we determined the costs
for low-volume services assigned to New Technology APCs (83 FR 58892
through 58893). We have utilized our equitable adjustment authority at
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 estimate an
appropriate payment amount for low-volume new technology services in
the past (82 FR 59281). Although we have used this adjustment authority
on a case-by-case basis in the past, we stated in the CY 2019 OPPS/ASC
final rule with comment period that we believed it was appropriate to
adopt an adjustment for low-volume services assigned to New Technology
APCs 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.
For purposes of this adjustment, we stated that we believed that it
was appropriate to use up to 4 years of claims data in calculating the
applicable payment rate for the prospective year, rather than using
solely the most recent available year of claims data, when a service
assigned to a New Technology APC has a low annual volume of claims,
which, for purposes of this adjustment, we defined as fewer than 100
claims annually. We adopted a policy to consider services with fewer
than 100 claims annually as low-volume services because there is a
higher probability that the payment data for a service may not have a
normal statistical distribution, which could affect the quality of our
standard cost methodology that is used to assign services to an APC. We
explained that we were concerned that the methodology we use to
estimate the cost of a service under the OPPS by calculating the
geometric mean for all separately paid claims for a HCPCS procedure
code from the most recent available year of claims data may not
generate an accurate estimate of the actual cost of the low-volume
service. Using multiple years of claims data will potentially allow for
more than 100 claims to be used to set the payment rate, which would,
in turn, create a more statistically reliable payment rate.
In addition, to better approximate the cost of a low-volume service
within a New Technology APC, we stated that we believed using the
median or arithmetic mean rather than the geometric mean (which
``trims'' the costs of certain claims out) could be more appropriate in
some circumstances, given the extremely low volume of claims. Low claim
volumes increase the impact of ``outlier'' claims; that is, claims with
either a very low or very high payment rate as compared to the average
claim, which would have a substantial impact on any statistical
methodology used to estimate the most appropriate payment rate for a
service. We also explained that we believed having the flexibility to
utilize an alternative statistical
[[Page 63529]]
methodology to calculate the payment rate in the case of low-volume new
technology services would help to create a more stable payment rate.
Therefore, 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 should be
used for each low-volume service assigned to a New Technology APC. In
the preamble of each annual rulemaking, we stated that we would present
the result of each statistical methodology and solicit public comment
on which methodology should be used to establish the payment rate for a
low-volume new technology service. In addition, we explained that we
would use our assessment of the resources used to perform a service and
guidance from the developer or manufacturer of the service, as well as
other stakeholders, to determine the most appropriate payment rate.
Once we identified the most appropriate payment rate for a service, we
would assign the service to the New Technology APC with the cost band
that includes its payment rate.
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. However, we proposed to utilize our equitable
adjustment authority through our proposed universal low volume APC
policy described in section X.C. of the CY 2022 OPPS/ASC proposed rule.
Our proposed universal low volume APC policy is similar to our current
New Technology APC low volume policy with the difference between the
two policies being that the universal low volume APC policy would apply
to clinical APCs and brachytherapy APCs, in addition to procedures
assigned to New Technology APCs, and would use 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. For New Technology
APCs with fewer than 100 single claims at the procedure level that can
be used for ratesetting, we would apply our proposed methodology for
determining a low volume APC's cost, choosing the ``greatest of'' the
median, arithmetic mean, or geometric mean at the procedure level, to
apply to the individual services assigned to New Technology APCs and
provide the final New Technology APC assignment for each procedure. We
proposed to end our separate New Technology APC low volume policy if we
adopt the proposed universal low volume APC policy, as it also applies
to New Technology APCs as well as clinical and brachytherapy APCs.
We did not receive any comments on our proposal to end our separate
New Technology APC low volume policy if we adopt the proposed universal
low volume APC policy and we have decided to implement our universal
low volume APC policy as described in section X.C. of this final rule
with comment period. Therefore, we are implementing our proposal
without modification and applying our universal low volume APC policy
to procedures assigned to New Technology APCs as well as clinical and
brachytherapy APCs.
3. Procedures Assigned to New Technology APC Groups for CY 2022
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 2022, 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 not obtained sufficient claims data. It also allows
us to retain a service in a New Technology APC for more than 2 years if
we have not obtained sufficient claims data upon which to base a
reassignment decision (66 FR 59902).
a. Retinal Prosthesis Implant Procedure (APC 1908)
CPT code 0100T (Placement of a subconjunctival retinal prosthesis
receiver and pulse generator, and implantation of intra-ocular retinal
electrode array, with vitrectomy) describes the implantation of a
retinal prosthesis, specifically, a procedure involving the use of the
Argus[supreg] II Retinal Prosthesis System. This first retinal
prosthesis was approved by FDA in 2013 for adult patients diagnosed
with severe to profound retinitis pigmentosa. For information on the
utilization and payment history of the Argus[supreg] II procedure and
the Argus[supreg] II device prior to CY 2020, please refer to the CY
2021 OPPS final rule (85 FR 85937 through 85938).
For CY 2020, we identified 35 claims reporting the procedure
described by CPT code 0100T for the 4-year period of CY 2015 through CY
2018. We found the geometric mean cost for the procedure described by
CPT code 0100T to be approximately $146,059, the arithmetic mean cost
to be approximately $152,123, and the median cost to be approximately
$151,267. All of the resulting estimates from using the three
statistical methodologies fell within the same New Technology APC cost
band ($145,001-$160,000), where the Argus[supreg] II procedure was
assigned for CY 2019. Consistent with our policy stated in section
III.C.2 of this final rule with comment period, we presented the result
of each statistical methodology in the CY 2022 OPPS/ASC proposed rule,
and we sought public comments on which method should be used to assign
procedures described by CPT code 0100T to a New Technology APC. All
three potential statistical methodologies used to estimate the cost of
the Argus[supreg] II procedure fell within the cost band for New
Technology APC 1908, with the estimated cost being between $145,001 and
$160,000. Accordingly, we assigned CPT code 0100T in APC 1908 (New
Technology--Level 52 ($145,001-$160,000)), with a payment rate of
$152,500.50 for CY 2020.
For CY 2021, the number of reported claims for the Argus[supreg] II
procedure continued to be very low with a substantial fluctuation in
cost from year to year. The high annual variability of the cost of the
Argus[supreg] II procedure continued to make it difficult to establish
a consistent and stable payment rate for the procedure. As previously
mentioned, in accordance with section 1833(t)(2)(B) of the Act, we are
required to establish that services classified within each APC are
[[Page 63530]]
comparable clinically and with respect to the use of resources. We
identified 35 claims reporting the procedure described by CPT code
0100T for the 4-year period of CY 2016 through CY 2019. We found the
geometric mean cost for the procedure described by CPT code 0100T to be
approximately $148,148, the arithmetic mean cost to be approximately
$153,682, and the median cost to be approximately $151,974. All three
potential statistical methodologies used to estimate the cost of the
Argus[supreg] II procedure fell within the cost band for New Technology
APC 1908, with the estimated cost being between $145,001 and $160,000,
and accordingly, we assigned the Argus II procedure to New Technology
APC 1908 for CY 2021.
For 2022, we proposed to utilize our equitable adjustment authority
under section 1833(t)(2)(E) of the Act to establish the universal low
volume APC policy described in section X.C. of the CY 2022 OPPS/ASC
proposed rule. Consistent with this proposed policy, we calculated the
geometric mean, arithmetic mean, and median costs using multiple years
of claims data to select the appropriate payment rate for purposes of
assigning the Argus[supreg] II procedure (CPT code 0100T) to a New
Technology APC. We proposed to use claims data from CY 2016 through CY
2019, which are the last 4 years of available OPPS claims data that we
believe are appropriate for ratesetting, to determine the proposed
payment rate for the Argus[supreg] II procedure for CY 2022. The claims
data are the same 35 claims that were used to determine the payment
rate for CPT code 0100T in CY 2021, and the estimates of the geometric
mean ($148,148), the arithmetic mean ($153,682), and the median
($151,974) are the same as the estimates for CY 2021. All three
potential statistical methodologies used to estimate the cost of the
Argus[supreg] II procedure are within the cost band for New Technology
APC 1908, with the proposed payment rate being between $145,001 and
$160,000. Accordingly, we proposed to continue to assign the
Argus[supreg] II procedure to New Technology APC 1908 for CY 2022.
For our analysis for this final rule with comment period, we
identified 35 claims reporting the procedure described by CPT code
0100T for the 4-year period of CY 2016 through CY 2019, which were the
same claims analyzed for the CY 2022 OPPS/ASC proposed rule. We found
the geometric mean cost for the procedure described by CPT code 0100T
to be approximately $148,148, the arithmetic mean cost to be
approximately $153,682, and the median cost to be approximately
$151,974, which are the same results that we calculated for the
proposed rule. All three potential statistical methodologies used to
estimate the cost of the Argus[supreg] II procedure fall within the
cost band for New Technology APC 1908, with the estimated cost being
between $145,001 and $160,000.
We received no public comments on our proposal. Therefore, we are
finalizing our proposal without modification. We will maintain the
assignment of the procedure described by CPT code 0100T in APC 1908
(New Technology--Level 52 ($145,001- $160,000)), with a payment rate of
$152,500.50 for CY 2021. We note that the final payment rate includes
both the surgical procedure (CPT code 0100T) and the use of the
Argus[supreg] II device (HCPCS code C1841). Please see Table 11 below
for the final OPPS APC and status indicator for the Argus[supreg] II
procedure (CPT code 0100T) for CY 2022.
[GRAPHIC] [TIFF OMITTED] TR16NO21.023
[[Page 63531]]
b. Administration of Subretinal Therapies Requiring Vitrectomy (APC
1561)
Effective January 1, 2021, CMS established HCPCS code C9770
(Vitrectomy, mechanical, pars plana approach, with subretinal injection
of pharmacologic/biologic agent) and assigned it to a New Technology
APC based on the geometric mean cost of HCPCS code 67036. For CY 2021,
HCPCS code C9770 was assigned to APC 1561 (New Technology--Level 24
($3001-$3500)). This procedure may be used to describe the
administration of CPT code J3398 (Injection, voretigene neparvovec-
rzyl, 1 billion vector genomes). This procedure was previously
discussed in the CY 2021 OPPS/ASC final rule with comment period (85 FR
85939 through 85940).
CPT code J3398 (Injection, voretigene neparvovec-rzyl, 1 billion
vector genomes) is a gene therapy for a rare mutation-associated
retinal dystrophy. Voretigene neparvovec-rzyl (Luxturna[supreg]), was
approved by FDA in December of 2017, and is indicated as an adeno-
associated virus vector-based gene therapy indicated for the treatment
of patients with confirmed biallelic RPE65 mutation-associated retinal
dystrophy.\20\ This therapy is administered through a subretinal
injection, which stakeholders 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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\20\ Luxturna. FDA Package Insert. Available: https://www.fda.gov/media/109906/download.
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Stakeholders, including the manufacturer of Luxturna[supreg],
recommended HCPCS code 67036 (Vitrectomy, mechanical, pars plana
approach) for the administration of the gene therapy.\21\ However, the
manufacturer previously contended the administration was not accurately
described by any existing codes as HCPCS code 67036 (Vitrectomy,
mechanical, pars plana approach) does not account for the
administration itself.
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\21\ LUXTURNA REIMBURSEMENT GUIDE FOR TREATMENT CENTERS. https://mysparkgeneration.com/pdf/Reimbursement_Guide_for_Treatment_Centers_Interactive_010418_FINAL.pdf.
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CMS recognized the need to accurately describe the unique
administration procedure that is required to administer the therapy
described by HCPCS code J3398. Therefore, in the CY 2021 OPPS/ASC
proposed rule (85 FR 48832), we proposed to establish a new HCPCS code,
C97X1 (Vitrectomy, mechanical, pars plana approach, with subretinal
injection of pharmacologic/biologic agent) to describe this process. We
stated that we believed that this new HCPCS code accurately described
the unique service associated with intraocular administration of HCPCS
code J3398. We recognized that HCPCS code 67036 represents a clinically
similar procedure and process that approximates similar resource
utilization that is associated with C97X1. However, we also recognized
that it is not prudent for the code that describes the administration
of this unique gene therapy, C97X1, to be assigned to the same C-APC to
which HCPCS code 67036 is assigned, as this would package the primary
therapy, HCPCS code J3398, into the code that represents the process to
administer the gene therapy.
Therefore, for CY 2021, we proposed to assign the services
described by C97X1 to a New Technology APC with a cost band that
contains the geometric mean cost for HCPCS code 67036. The placeholder
code C97X1 was replaced by C9770 in this final rule with comment
period. For CY 2021, we finalized our proposal to create C9770
(Vitrectomy, mechanical, pars plana approach, with subretinal injection
of pharmacologic/biologic agent), and we assigned this code to APC 1561
(New Technology--Level 24 ($3,001-$3,500)) using the geometric mean
cost of HCPCS code 67036. See Table 12 for the final descriptor and APC
assignment of HCPCS code C9770 for CY 2021.
For CY 2022, we proposed to continue our policy from CY 2021 to
assign the services described by HCPCS code C9770 to a New Technology
APC with a cost band that contains the geometric mean cost for HCPCS
code 67036. We proposed to continue to assign the services described by
C9770 to a New Technology APC with a payment band based on the
geometric mean cost for HCPCS code 67036 based on its geometric mean
cost using CY 2019 claims data for CY 2022. Based on this data, the
geometric mean cost of HCPCS code 67036 is $3,434.91. Therefore, we
proposed to assign C9770 to the corresponding New Technology APC
payment band, APC 1561 New Technology--Level 24 ($3,001-$3,500), with a
payment rate of $3,250.50. Refer to Table 12 below for the proposed
OPPS APC and status indicator for HCPCS code C9770 for CY 2022.
[GRAPHIC] [TIFF OMITTED] TR16NO21.024
[[Page 63532]]
We received no comment on this proposal. Therefore, we are
finalizing our proposal as proposed to continue our policy from CY 2021
to assign the services described by HCPCS code C9770 to a New
Technology APC with a cost band that contains the geometric mean cost
for HCPCS code 67036. As we proposed to continue to assign the services
described by C9770 to a New Technology APC with a payment band based on
the geometric mean cost for HCPCS code 67036 based on its geometric
mean cost using CY 2019 claims data for CY 2022, we are finalizing this
proposal. Based on CY 2019 claims data, the geometric mean cost of
HCPCS code 67036 is $3,435.25 Therefore, we will assign C9770 to the
corresponding New Technology APC payment band, APC 1561 New
Technology--Level 24 ($3,001-$3,500), with a payment rate of $3,250.50.
Please see Table 13 below for the final and proposed OPPS APC and
status indicator for HCPCS code C9770 for CY 2022.
[GRAPHIC] [TIFF OMITTED] TR16NO21.025
c. Bronchoscopy With Transbronchial Ablation of Lesion(s) by Microwave
Energy (APC 1562)
Effective January 1, 2019, CMS established HCPCS code C9751
(Bronchoscopy, rigid or flexible, transbronchial ablation of lesion(s)
by microwave energy, including fluoroscopic guidance, when performed,
with computed tomography acquisition(s) and 3-D rendering, computer-
assisted, image-guided navigation, and endobronchial ultrasound (EBUS)
guided transtracheal and/or transbronchial sampling (for example,
aspiration[s]/biopsy[ies]) and all mediastinal and/or hilar lymph node
stations or structures and therapeutic intervention(s)). This microwave
ablation procedure utilizes a flexible catheter to access the lung
tumor via a working channel and may be used as an alternative procedure
to a percutaneous microwave approach. Based on our review of the New
Technology APC application for this service and the service's clinical
similarity to existing services paid under the OPPS, we estimated the
likely cost of the procedure would be between $8,001 and $8,500.
In claims data available for CY 2019 for the CY 2021 OPPS/ASC final
rule with comment period, there were four claims reported for
bronchoscopy with transbronchial ablation of lesions by microwave
energy. Given the low volume of claims for the service, we proposed for
CY 2021 to apply the policy we adopted in CY 2019, under which we
utilize our equitable adjustment authority under section 1833(t)(2)(E)
of the Act to calculate the geometric mean, arithmetic mean, and median
costs to calculate an appropriate payment rate for purposes of
assigning bronchoscopy with transbronchial ablation of lesions by
microwave energy to a New Technology APC. We found the geometric mean
cost for the service to be approximately $2,693, the arithmetic mean
cost to be approximately $3,086, and the median cost to be
approximately $3,708. The median was the statistical methodology that
estimated the highest cost for the service and provided a reasonable
estimate of the midpoint cost of the three claims that have been paid
for this service. The payment rate calculated using this methodology
fell within the cost band for New Technology APC 1562 (New Technology--
Level 25 ($3,501-$4,000)). Therefore, we assigned HCPCS code C9751 to
APC 1562 for CY 2021.
For CY 2022, the only available claims for HCPCS code C9751 are
from CY 2019. Therefore, we proposed given the low number of claims for
this procedure to utilize our equitable adjustment authority under
section 1833(t)(2)(E) of the Act to calculate the geometric mean,
arithmetic mean, and median costs to calculate an appropriate payment
rate for purposes of assigning bronchoscopy with transbronchial
ablation of lesions by microwave energy to a New Technology APC,
consistent with our proposed universal low volume APC policy. Because
we proposed to use the same claims as we did for CY 2021, we found the
same values for the geometric mean cost, arithmetic mean cost, and the
median cost for CY 2022. Once again, the median was the statistical
methodology that estimated the highest cost for the service and
provided a reasonable estimate of the midpoint cost of the three claims
that have been paid for this service. The payment rate calculated using
this methodology falls again within the cost band for New Technology
APC 1562 (New Technology--Level 25 ($3,501-$4,000)). Therefore, we
proposed to continue to assign HCPCS code C9751 to APC 1562 (New
Technology--Level 25 ($3,501-$4,000)), with a proposed payment rate of
$3,750.50 for CY 2022.
For our analysis for this final rule with comment period, we again
used CY 2019 data, and we identified the same four claims reported for
bronchoscopy with transbronchial ablation of lesions by microwave
energy that were analyzed for the proposed rule and in CY 2021. Since
the same claims were analyzed we received the same values for the
geometric mean cost ($2,693), arithmetic mean cost ($3,086), and the
median cost ($3,708) as we did for the proposed rule. As before, the
median was the statistical methodology that estimated the highest cost
for the service and provides a reasonable estimate of the midpoint cost
of the three claims that have been paid for this service. The payment
rate calculated using this methodology falls again within the cost band
for New Technology APC 1562 (New Technology--Level 25 ($3,501-$4,000)).
We did not receive any public comments regarding our proposal. We
[[Page 63533]]
are finalizing our proposal without modification to continue to assign
HCPCS code C9751 to APC 1562 (New Technology--Level 25 ($3,501-
$4,000)), with a final payment rate of $3,750.50 for CY 2022. Details
regarding HCPCS code C9751 are included in Table 14.
[GRAPHIC] [TIFF OMITTED] TR16NO21.026
d. Fractional Flow Reserve Derived From Computed Tomography (FFRCT)
(APC 1511)
Fractional Flow Reserve Derived from Computed Tomography (FFRCT),
also known by the trade name HeartFlow, is a noninvasive diagnostic
service that allows physicians to measure coronary artery disease in a
patient through the use of coronary CT scans. The HeartFlow procedure
is intended for clinically stable symptomatic patients with coronary
artery disease, and, in many cases, may avoid the need for an invasive
coronary angiogram procedure. HeartFlow uses a proprietary data
analysis process performed at a central facility to develop a three-
dimensional image of a patient's coronary arteries, which allows
physicians to identify the fractional flow reserve to assess whether or
not patients should undergo further invasive testing (that is, a
coronary angiogram).
For many services paid under the OPPS, payment for analytics that
are performed after the main diagnostic/image procedure are packaged
into the payment for the primary service. However, in CY 2018, we
determined that HeartFlow should receive a separate payment because the
service is performed by a separate entity (that is, a HeartFlow
technician who conducts computer analysis offsite) rather than the
provider performing the CT scan. We assigned CPT code 0503T, which
describes the analytics performed, to New Technology APC 1516 (New
Technology--Level 16 ($1,401-$1,500)), with a payment rate of $1,450.50
based on pricing information provided by the developer of the procedure
that indicated the price of the procedure was approximately $1,500. We
did not have Medicare claims data in CY 2019 for CPT code 0503T, and we
continued to assign the service to New Technology APC 1516 (New
Technology--Level 16 ($1,401-$1,500)), with a payment rate of
$1,450.50.
CY 2020 was the first year for which we had Medicare claims data to
calculate the cost of HCPCS code 0503T. For the CY 2020 OPPS/ASC final
rule with comment period, there were 957 claims with CPT code 0503T of
which 101 of the claims were single frequency claims that were used to
calculate the geometric mean of the procedure. We planned to use the
geometric mean to report the cost of HeartFlow. However, the number of
single claims for CPT code 0503T was below the low-volume payment
policy threshold for the proposed rule, and this number of single
claims was only two claims above the threshold for the New Technology
APC low-volume policy for the final rule. Therefore, we decided to use
our equitable adjustment authority under section 1833(t)(2)(E) of the
Act to calculate the geometric mean, arithmetic mean, and median using
the CY 2018 claims data to determine an appropriate payment rate for
HeartFlow using our New Technology APC low-volume payment policy. While
the number of single frequency claims was just above our threshold to
use the low-volume payment policy, we still had concerns about the
normal cost distribution of the claims used to calculate the payment
rate for HeartFlow, and we decided the low-volume payment policy would
be the best approach to address those concerns.
Our analysis found that the geometric mean cost for CPT code 0503T
was $768.26, the arithmetic mean cost for CPT code 0503T was $960.12,
and the median cost for CPT code 0503T was $900.28. Of the three cost
methods, the highest amount was for the arithmetic mean. The arithmetic
mean fell within the cost band for New Technology APC 1511 (New
Technology--Level 11 ($901-$1,000)) with a payment rate of $950.50. The
arithmetic mean helped to account for some of the higher costs of CPT
code 0503T identified by the developer and other stakeholders that may
not have been reflected by either the median or the geometric mean.
For CY 2021, we observed a significant increase in the number of
claims billed with CPT code 0503T. Specifically, using CY 2019 data, we
identified 3,188 claims billed with CPT code 0503T including 465 single
frequency claims. These totals are well above the threshold of 100
claims for a procedure to be evaluated using the New Technology APC
low-volume policy. Therefore, we used our standard methodology rather
than the low-volume methodology we previously
[[Page 63534]]
used to determine the cost of CPT code 0503T. Our analysis found that
the geometric mean for CPT code 0503T was $804.35, and the geometric
mean cost for the service fell within the cost band for New Technology
APC 1510 (New Technology--Level 10 ($801-$900)). However, providers and
other stakeholders have noted that the FFRCT service costs $1,100 and
that there are additional staff costs related to the submission of
coronary CT image data for processing by HeartFlow.
We noted that HeartFlow is one of the first procedures utilizing
artificial intelligence to be separately payable in the OPPS, and
providers are still learning how to accurately report their charges to
Medicare when billing for artificial intelligence services (85 FR
85943). This is especially the case for allocating the cost of staff
resources between the HeartFlow procedure and the coronary CT imaging
services. Therefore, we decided it would be appropriate to use our
equitable adjustment authority under section 1833(t)(2)(E) of the Act
to assign CPT code 0503T to the same New Technology APC in CY 2021 as
in CY 2020 in order to provide payment stability and equitable payment
for providers as they continue to become more familiar with the proper
cost reporting for HeartFlow and other artificial intelligence
services. Accordingly, we assigned CPT code 0503T to New Technology APC
1511 (New Technology--Level 11 ($901-$1,000)) with a payment rate of
$950.50 for CY 2020, and we continued to assign CPT code 0503T to New
Technology APC 1511 for CY 2021.
For CY 2022, we proposed to use claims data from CY 2019 to
estimate the cost of the HeartFlow service. Because we are using the
same claims data as in CY 2021, these data continue to reflect that
providers were learning how to accurately report their charges to
Medicare when billing for artificial intelligence services. Therefore,
we proposed to continue to use our equitable adjustment authority under
section 1833(t)(2)(E) of the Act to assign CPT code 0503T to the same
New Technology APC in CY 2022 as in CY 2020 and CY 2021: New Technology
APC 1511 (New Technology--Level 11 ($901-$1000)), with a payment rate
of $950.50 for CY 2022, which is the same payment rate for the service
as in CY 2020 and CY 2021.
Comment: The developer of HeartFlow and multiple other commenters
stated that CPT code 0503T should not be assigned to New Technology APC
1510. Instead, they suggested that the HeartFlow procedure be assigned
to APC 5593 (Level 3 Nuclear Medicine and Related Services) with a
payment rate of around $1,270. The developer asserted that even though
the payment for APC 5593 is substantially higher than the estimated
cost of CPT code 0503T, the cost of the service fits reasonably well
with the cost of other procedures assigned to APC 5593. The developer
and other commenters also assert that the HeartFlow procedure has
enough clinical similarity to other procedures currently assigned to
the Nuclear Medicine and Related Services APCs. According to the
developer and the other commenters, HeartFlow is comparable to other
nuclear medicine procedures that are image analysis tests
characterizing organ-specific function. The developer and the other
commenters also note that cardiac CT procedures, which are used to
identify coronary artery disease, are assigned to the nuclear medicine
APC family. Finally, the developer cited two examples of procedures in
the OPPS that are assigned to APCs where the procedure in question does
not have clinical similarity to the other procedures in the APC.
Response: We disagree with the suggestion that CPT code 0503T
should be assigned to APC 5593. As we stated in the CY 2021 OPPS/ASC
final rule with comment period (85 FR 85942), the Nuclear Medicine and
Related Procedures APCs describe diagnostic and therapeutic procedures,
many of them involving imaging, where radiopharmaceuticals and other
nuclear materials are critical supplies for the performance of the
procedure. In comparison, HeartFlow is a computer algorithm that does
not directly take images nor is it used on its own to generate a
diagnosis for a patient. Instead, HeartFlow analyzes diagnostic images
obtained through other medical procedures and assists with the
interpretation of those diagnostic images to determine if a patient has
coronary artery disease. We appreciate that there may be a limited
number of examples where a procedure may have only a little clinical
similarity to other procedures in the same APC, but we attempt to make
those situations an exception rather than our regular practice. There
is little clinical similarity between the HeartFlow procedure and the
procedures currently assigned to the Nuclear Medicine and Related
Procedures APCs and we are therefore not assigning CPT code 0503T to
APC 5593.
Comment: One commenter, the developer, suggested that, if we
decided not to assign CPT code 0503T to a Nuclear Medicine and Related
Services APC, that we assign the service to APC 5724 (Level 4--Level 4
Diagnostic Tests and Related Services) with a payment rate of $896.09.
The commenter states Heartflow generates critical diagnostic
information for the treating physician and an anatomical mapping of FFR
values that assists the physician in determining whether an invasive
procedure is needed for a patient. Because HeartFlow generates
diagnostic information, the commenter believes it can be described as a
diagnostic service or a service related to a diagnostic service and can
be assigned to APC 5724. The commenter gives examples of software-based
services that are already assigned to APC 5724 and notes that the
geometric mean cost of CPT code 0503T places the service in the
midrange of cost for separately paid services assigned to APC 5724.
Response: We appreciate the commenter's suggestion. However, one of
the key reasons we assigned CPT code 0503T to a New Technology APC for
CY 2021 and proposed assigning the service again to a New Technology
APC for CY 2022, is that we are continuing to seek more cost data for
the service before assigning it to a clinical APC. As mentioned
earlier, we want to get a better understanding of the cost of HeartFlow
as providers become more familiar with reporting and billing for
artificial intelligence services. More broadly, we believe we need at
least one more year of cost data before assigning HeartFlow to a
clinical APC. Our concerns that the CY 2020 claims data and may not
represent the outpatient hospital experience in CY 2022 make it
challenging to refine or update our payment quality for HeartFlow given
the need for additional claims data.
Comment: Several commenters asserted the proposed payment rate for
CPT code 0503T is too low and does not reflect their individual
hospital's cost to use HeartFlow. Commenters mentioned cost issues,
including the $1,100 list price for each individual HeartFlow service
and the staff resources involved to transmit data to the HeartFlow
analysis facility and review the results of the analyses performed by
HeartFlow. Commenters suggested a range of potential payments for a
HeartFlow procedure from $1,151 up to $2,100, and they encouraged CMS
to use our equitable adjustment authority at section 1833(t)(2)(E) of
the Act to establish an OPPS payment rate that would more closely
reflect the costs the commenters believe they are incurring to perform
the HeartFlow procedure.
Response: For this final rule with comment period, we identified
3,188
[[Page 63535]]
claims billed with CPT code 0503T including 465 single frequency claims
for CPT code 0503T using claims from CY 2019. Our analysis has found
that the geometric mean for CPT code 0503T is $807.58, and the
geometric mean cost is lower than the cost band for New Technology APC
1511 New Technology--Level 11 ($901-$1000) where CPT code 0503T is
assigned. This result is similar to our results for the proposed rule
and the CY 2021 OPPS/ASC final rule, which all used CY 2019 claims
data. However, multiple commenters have noted that the FFRCT service
costs $1,100 and that there are additional staff costs related to the
submission of coronary CT image data for processing by HeartFlow.
HeartFlow is one of the first procedures utilizing artificial
intelligence to be separately payable in the OPPS, and providers are
still learning how to accurately report their charges to Medicare when
billing for artificial intelligence services. This is especially the
case for allocating the cost of staff resources between the HeartFlow
procedure and the coronary CT imaging services. Also, the COVID-19 PHE
potentially has affected the quality of the claims and cost data from
CY 2020, and we have decided not to use that data to determine the
payment rate for CPT code 0503T. That means it is difficult to
determine whether the additional costs for HeartFlow that commenters
state that their practices are incurring are reflected in the cost data
for the service.
Therefore, we believe it is appropriate to continue to use our
equitable adjustment authority under section 1833(t)(2)(E) of the Act
to assign CPT code 0503T to the same New Technology APC in CY 2022 as
in CY 2020 and CY 2021 in order to provide payment stability and
equitable payment for providers as they continue to become more
familiar with the proper cost reporting for HeartFlow and other
artificial intelligence services until we can review more recent
reliable claims data. As mentioned earlier in this section, CPT code
0503T was assigned to New Technology APC 1511 (New Technology--Level 11
($901-$1000)) with a payment rate of $950.50 for CY 2020, and we will
continue to assign CPT code 0503T to New Technology APC 1511 for CY
2022.
After reviewing all of the public comments, we are finalizing our
proposal without modification to use our equitable adjustment authority
under section 1833(t)(2)(E) of the Act to continue to assign CPT code
0503T to New Technology APC 1511 (New Technology--Level 11 ($901-
$1000)) for CY 2022. Refer to Table 15 below for the final OPPS APC and
status indicator for CPT code 0503T for CY 2022.
[GRAPHIC] [TIFF OMITTED] TR16NO21.027
e. Cardiac Positron Emission Tomography (PET)/Computed Tomography (CT)
Studies (APCs 1522 and 1523)
Effective January 1, 2020, we assigned three CPT codes (78431,
78432, and 78433) that describe the services associated with cardiac
PET/CT studies to New Technology APCs. Table 16 lists the code
descriptors, status indicators, and APC assignments for these CPT
codes. 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 CY 2021. 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. Likewise, CPT codes 78432 and 78433
continued to be assigned to APC 1523 (New Technology--Level 23 ($2501-
$3000)) with a payment rate of $2,750.50.
For CY 2022, we proposed to use CY 2019 claims data to determine
the payment rates for CPT codes 78431, 78432, and 78433. Because these
codes did not become active until CY 2020, there are no claims for
these three services. Accordingly, we proposed to continue to assign
CPT code 78431 to APC 1522 (New Technology--Level 22 ($2001-$2500))
with a payment rate of $2,250.50. Likewise, we proposed that CPT codes
78432 and 78433 would continue to be assigned to APC 1523 (New
Technology--Level 23 ($2501-$3000)) with a payment rate of $2,750.50.
Comment: Multiple commenters supported our proposal to assign CPT
code 78431 to APC 1522 (New Technology--Level 22 ($2001-$2500)) with a
payment rate of $2,250.50, and to assign CPT codes 78432 and 78433 to
APC 1523 (New Technology--Level 23
[[Page 63536]]
($2501-$3000)) with a payment rate of $2,750.50. Commenters noted that
there were no available claims data for these services as we are using
CY 2019 claims data for CY 2022 ratesetting, and these codes did not
become active until January 2020.
Response: We appreciate the support of the commenters for our
policy. After our review of the public comments, we have decided to
implement our proposal without modification. Table 16 lists code
descriptors, status indicators, and APC assignments for these CPT
codes.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TR16NO21.028
BILLING CODE 4120-01-C
f. 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 have received the interatrial shunt because
an additional procedure code, CPT code 93799 (Unlisted cardiovascular
service or procedure), would be included on the claims for participants
receiving the interatrial shunt. Therefore, for CY 2020, we created a
temporary HCPCS code to describe the V-wave interatrial shunt procedure
for both the experimental group and the control group in the study.
Specifically, we established HCPCS code C9758 (Blinded procedure for
NYHA class III/IV heart failure; transcatheter implantation of
interatrial shunt or placebo control, including right heart
catheterization, trans-esophageal echocardiography (TEE)/intracardiac
echocardiography
[[Page 63537]]
(ICE), and all imaging with or without guidance (for example,
ultrasound, fluoroscopy), performed in an approved investigational
device exemption (IDE) study) to describe the service, and we assigned
the service to New Technology APC 1589 (New Technology--Level 38
($10,001-$15,000)).
We stated in the CY 2021 OPPS/ASC final rule with comment period
that we believe that similar resources and device costs are involved
with the V-Wave interatrial shunt procedure and the Corvia Medical
interatrial shunt procedure (85 FR 85946). Therefore, the difference in
the payment for HCPCS codes C9758 and C9760 is 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.
Accordingly, for CY 2021, we reassigned HCPCS code C9758 to New
Technology APC 1590, which reflects the cost of having surgery every
time and receiving the interatrial shunt one-half of the time when the
procedure is performed.
For CY 2022, we are using the same claims data that we did for CY
2021. Because there are no claims reporting HCPCS code C9758, we
proposed to continue to assign HCPCS code C9758 to New Technology APC
1590 with a payment rate of $17,500.50 for CY 2022.
Comment: Multiple commenters including the manufacturer supported
our proposal to continue to assign HCPCS code C9758 to New Technology
APC 1590 with a payment rate of $17,500.50 for CY 2022.
Response: We appreciate the support of the commenters for our
proposal. After reviewing the public comments, we are finalizing our
proposal without modification. Details about the HCPCS code and its APC
assignment are shown in Table 17. The final CY 2022 payment rate for
C9758 can be found in Addendum B to this final rule with comment
period.
[GRAPHIC] [TIFF OMITTED] TR16NO21.029
g. Corvia Medical Interatrial Shunt Procedure (APC 1592)
Corvia Medical is currently conducting its pivotal trial for their
interatrial shunt procedure. The trial started in Quarter 1 of CY 2017
and is scheduled to continue through CY 2021.\22\ On July 1, 2020, we
established HCPCS code C9760 (Non-randomized, non-blinded procedure for
nyha class ii, iii, iv heart failure; transcatheter implantation of
interatrial shunt or placebo control, including right and left heart
catheterization, transeptal puncture, trans-esophageal echocardiography
(tee)/intracardiac echocardiography (ice), and all imaging with or
without guidance (for example, ultrasound, fluoroscopy), performed in
an approved investigational device exemption (ide) study) to facilitate
the implantation of the Corvia Medical interatrial shunt.
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\22\ https://clinicaltrials.gov/ct2/show/NCT03088033?term=NCT03088033&rank=1.
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As we stated in the CY 2021 OPPS final rule with comment period, we
believe that similar resources and device costs are involved with the
Corvia Medical interatrial shunt procedure and the V-Wave interatrial
shunt procedure (85 FR 85947). Therefore, the difference in the payment
for HCPCS codes C9760 and C9758 is based on how often the interatrial
shunt is implanted when each code is billed. The Corvia Medical
interatrial shunt is implanted every time 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.
For CY 2022, we proposed to use the same claims data as in CY 2021 to
establish payment rates for services. Therefore, there are no claims
for HCPCS code C9760, and we proposed to continue to assign HCPCS code
C9760 to New Technology APC 1592.
Comment: Multiple commenters, including the manufacturer, supported
our proposal to continue to assign HCPCS code C9760 to New Technology
APC 1592.
Response: We appreciate the support of the commenters of our
proposal.
Comment: One commenter, the manufacturer, requested that CPT code
0613T (Percutaneous transcatheter implantation of interatrial septal
shunt device, including right and left heart catheterization,
intracardiac echocardiography, and imaging guidance by the
proceduralist, when performed) be assigned to comprehensive APC 5194
(Level 4
[[Page 63538]]
Endovascular Procedures) for CY 2022 and assigned a status indicator of
``J1''. CPT code 0613T is the CPT code that will be used to report the
Corvia Medical interatrial shunt procedure once the Corvia Medical
interatrial shunt device associated with the procedure receives
approval from the FDA, which the manufacturer believes will occur in CY
2022. Currently, CPT code 0613T is a non-payable service code and is
assigned a status indicator of ``E1''.
Response: We will assign CPT code 0613T to a payable status
indicator and assign the service to a clinically-appropriate APC when
the Corvia Medical interatrial shunt device associated with the
procedure has received approval from the FDA. OPPS payment policies are
updated quarterly through a sub-regulatory process. If the Corvia
Medical interatrial shunt device receives FDA approval, we will work to
ensure a timely transition for the overall procedure to be reported
with CPT code 0613T and end reporting of the service with HCPCS code
C9760. We will also work to assign CPT code 0613T to an APC that
reflects clinical and resource similarity to CPT code 0613T.
Details about the HCPCS code and its APC assignment are shown in
Table 18. The final CY 2022 payment rate for C9760 can be found in
Addendum B to this final rule with comment period.
[GRAPHIC] [TIFF OMITTED] TR16NO21.030
h. Supervised Visits for Esketamine Self-Administration (APCs 1508 and
1511)
On March 5, 2019, FDA approved Spravato\TM\ (esketamine) nasal
spray, used in conjunction with an oral antidepressant, for treatment
of depression in adults who have tried other antidepressant medicines
but have not benefited from them (treatment-resistant depression
(TRD)). Because of the risk of serious adverse outcomes resulting from
sedation and dissociation caused by Spravato administration, and the
potential for abuse and misuse of the product, it is only available
through a restricted distribution system under a Risk Evaluation and
Mitigation Strategy (REMS). A REMS is a drug safety program that FDA
can require for certain medications with serious safety concerns to
help ensure the benefits of the medication outweigh its risks.
A treatment session of esketamine consists of instructed nasal
self-administration by the patient, followed by a period of post-
administration observation of the patient under direct supervision of a
health care professional. Esketamine is a noncompetitive N-methyl D-
aspartate (NMDA) receptor antagonist. It is a nasal spray supplied as
an aqueous solution of esketamine hydrochloride in a vial with a nasal
spray device. This is the first FDA approval of esketamine for any use.
Each device delivers two sprays containing a total of 28 mg of
esketamine. Patients would require either two (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 Spravato administration, and the
potential for abuse and misuse of the product, Spravato is only
available through a restricted distribution system under a REMS;
patients must be monitored by a health care provider for at least 2
hours after receiving their Spravato dose; the prescriber and patient
must both sign a Patient Enrollment Form; and the product will only be
administered in a certified medical office where the health care
provider can monitor the patient. Please refer to the CY 2020 PFS final
rule and interim final rule for more information about supervised
visits for esketamine self-administration (84 FR 63102 through 63105).
To facilitate prompt beneficiary access to the new, potentially
life-saving treatment for TRD using esketamine, we created two new
HCPCS G codes, G2082 and G2083, effective January 1, 2020. 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 2 hours
post-administration observation. HCPCS code G2082 was assigned to New
Technology APC 1508 (New Technology--Level 8 ($601--$700)) with a
payment rate of $650.50. HCPCS code G2083 describes a similar
[[Page 63539]]
service to HCPCS code G2082, but involves the administration of more
than 56 mg of esketamine. HCPCS code G2083 was assigned to New
Technology APC 1511 (New Technology--Level 11 ($901-$1000)) with a
payment rate of $950.50.
For CY 2022, we are using CY 2019 claims data to determine the
payment rates for HCPCS codes G2082 and G2083. Since these codes did
not become active until CY 2020, there are no claims for these two
services. Therefore, for CY 2022, we proposed to continue to assign
HCPCS code G2082 to New Technology APC 1508 (New Technology--Level 8
($601-$700)) and to assign HCPCS code G2083 to New Technology APC 1511
(New Technology--Level 11 ($901-$1000)).
Comment: One commenter, the manufacturer, while understanding the
rationale for our proposal to use CY 2019 claims data for CY 2022
ratesetting, asked us to take into consideration CY 2020 claims data to
finalize payment rates for HCPCS codes G2082 and G2083. The commenter
noted that HCPCS codes G2082 and G2083 were not payable in CY 2019, and
therefore there is no cost information in the CY 2019 claims data for
these two procedures. The commenter also believes that CY 2020 data may
show that the cost of G2082 and G2083 is substantially higher than the
current New Technology APC assignments for the two services.
Response: We reviewed the available CY 2020 OPPS claims data in
response to the request by the commenter for HCPCS codes G2082 and
G2083, but we decided that there were not enough data available to
determine whether to change the APC assignments for HCPCS codes G2082
and G2083. We would like to review another year of claims data for
HCPCS codes G2082 and G2083 to assess the reliability of the cost
information for CY 2020 and CY 2021 before using claims data to base
our APC assignments for these services. Therefore, we will continue to
use the same APC assignments for HCPCS codes G2082 and G2083 for CY
2022 as for CY 2021.
After reviewing the public comments for this proposal, we have
decided to implement our proposal without modification to assign HCPCS
code G2082 to New Technology APC 1508 and to assign HCPCS code G2083 to
New Technology APC 1511. Details about the HCPCS codes and their APC
assignments are shown in Table 19. The final CY 2022 payment rate for
esketamine self-administration can be found in Addendum B to this final
rule with comment period.
[GRAPHIC] [TIFF OMITTED] TR16NO21.031
i. DARI Motion Procedure (APC 1505)
CPT code 0693T (Comprehensive full body computer-based markerless
3D kinematic and kinetic motion analysis and report) will be effective
January 1, 2022. The technology consists of eight cameras that surround
a patient. The cameras send live video to a computer workstation that
analyzes the video to create a 3D reconstruction of the patient without
the need for special clothing, markers or devices attached to the
patient's clothing or skin. The technology is intended to guide health
care providers on pre and post-operative surgical intervention and on
the best course of physical therapy and rehabilitation for patients.
As displayed in Addendum B to the CY 2022 OPPS/ASC proposed rule,
we
[[Page 63540]]
proposed to assign CPT code 0693T to APC 5721 (Level 1 Diagnostics and
Related Services) with a proposed payment rate of $143.21. We note that
CPT code 0693T was listed as placeholder code 0X60T in OPPS Addendum B
of the CY 2021 OPPS/ASC proposed rule.
Comment: One commenter, the manufacturer of the DARI Motion
procedure, requested that CMS assign CPT code 0693T to APC 5723 (Level
3 Diagnostics and Related Services) with a payment rate of $498.53. The
commenter believed that the payment rate for APC 5721 is inadequate and
will create a barrier to patient access.
Response: We appreciate the concerns of the commenter and, for the
reasons set forth below, agree that the proposed payment rate for CPT
code 0693T may be too low and the procedure should be reassigned to a
different APC.
The AMA releases Category III codes in January, for implementation
beginning the following July, and in July, for implementation beginning
the following January. DARI Motion received a Category III code
scheduled for implementation January 1, 2022. Some Category III CPT
codes describe services that we have determined are not compatible with
an existing clinical APC, yet are appropriately provided in the
hospital outpatient setting. In these cases, we may assign the Category
III CPT code to what we estimate is an appropriately priced New
Technology APC (71 FR 68015). In addition, it should be noted that,
with all new codes, CMS's policy has been to assign the service to an
APC based on input from a variety of sources, including but not limited
to review of the clinical similarity of the service to existing
procedures, input from CMS medical advisors, information from
interested specialty societies, 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. Based on information
from the manufacturer, resources involved for the procedure described
by CPT code 0693T appear to be higher than the payment rate for APC
5721 (Level 1 Diagnostics and Related Services). CPT code 0693T is new
for CY 2022 and, therefore, we had no claims data available for OPPS
ratesetting. Further, based on input from our medical advisors and our
understanding of the service, we believe that it is more appropriate to
assign the DARI Motion procedure to APC 1505 (New Technology--Level 5
($301-$400)), for CY 2022. We believe that assigning CPT code 0693T to
New Technology APC 1505 will allow CMS to collect claims data before
assigning CPT code 0693T to a clinical APC.
Comment: A commenter argued the assignment of CPT code 0693T to APC
5721 would create a 2 times rule violation within the APC based on
geometric mean costs. The commenter calculated the 2-times threshold by
multiplying the lowest cost significant procedure by 2 and arrived at a
2-times threshold. According to the commenter, the 2-times threshold
they calculated for APC 5721 is a lower payment rate than the
technology described by CPT code 0693T. The commenter asserted that
assigning CPT code 0693T to APC 5721 is a violation of the 2 times
rule.
Response: We thank the commenter for their feedback. To clarify, we
determine APC 2 times rule violations by considering 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). CPT code 0693T is new for CY 2022 and, therefore, we had no
claims data available for purposes of determining whether a 2 times
rule violation occurs based on the code.
In summary, after consideration of the public comments, we are
finalizing our proposal with modification, and assigning CPT code 0693T
to New Technology APC 1505 (New Technology--Level 5 ($301-$400)), for
CY 2022. The final APC assignment and status indicator for CPT code
0693T are found in Table 20. We refer readers to Addendum B of this
final rule with comment period or the final payment rates for all codes
reportable under the OPPS. Addendum B is available via the internet on
the CMS website.
As we do for all codes, we will reevaluate the APC assignments for
CPT code 0693T once we have claims data. We remind hospitals that we
review, on an annual basis, the APC assignments for all services and
items paid under the OPPS based on the latest claims data.
[GRAPHIC] [TIFF OMITTED] TR16NO21.032
[[Page 63541]]
j. Histotripsy Service (APC 1575)
Histotripsy is a non-invasive, non-thermal, mechanical process that
uses a focused beam of sonic energy to destroy targeted cancerous liver
tumors. The AMA's CPT Editorial Panel established a new code to
describe the service associated with histotripsy, specifically,
Category III CPT code, 0686T (Histotripsy (that is, non-thermal
ablation via acoustic energy delivery) of malignant hepatocellular
tissue, including image guidance), effective July 1, 2021.
As displayed in Addendum B of the CY 2022 OPPS/ASC proposed rule
with comment period, for CY 2022, we proposed to assign the new code to
APC 5311 (Level 1 Lower GI Procedures) with a payment rate of $814.44
effective January 1, 2022.
Comment: One commenter, the manufacturer of histotripsy, stated
that histotripsy is a new technology that delivers short pulses of
ultrasound energy, resulting in acoustic cavitation that mechanically
destroys the targeted cancerous liver tumors while avoiding damage to
intervening or surrounding healthy tissues. The commenter stated that
the proposed assignment of CPT code 0686T to APC 5311 (Level 1 Lower GI
Procedures) was not clinically or resource cohesive to histotripsy. The
commenter reported a list of HCPCS codes currently assigned to APC 5311
and argued that the codes are not clinically or resource similar to
histotripsy. The commenter referenced histotripsy's IDE clinical study
(G200253-NCT04573881) and provided a description of the histotripsy
procedure and a breakdown of the associated resource components. The
commenter also provided a cost estimate of each resource, such as the
device cost, the associated imaging cost, and total room time. The
commenter stated that the total cost for the procedure is $22,782.51
and requested assignment to a New Technology APC 1577 for the
histotripsy service.
Response: We appreciate the commenter's input on this new
technology. As stated in the CY 2002 OPPS final rule, CMS staff will
obtain information on cost from other appropriate sources before making
a final determination on the cost of the procedure or service to
hospital outpatient facilities (66 FR 59900). We note that for Category
A IDE studies, Medicare may not furnish payment for costs associated
with the histotripsy device since Category A devices are statutorily
excluded from Medicare coverage. Based on our evaluation, for CY 2022,
we estimated the cost of histotripsy, after removing the device cost,
is within the cost band between $10,001 and $15,000. Accordingly, we
believe reassigning CPT code 0686T to APC 1575 (New Technology--Level
38 ($10,001-$15,000)), with a payment rate of $12,500.50, more
appropriately reflects the costs for which Medicare may provide
payment. We note that we retain services within New Technology APC
groups until we obtain sufficient claims data to justify reassignment
of the service to a clinically appropriate APC.
In summary, after consideration of the public comments, we are
finalizing our proposal with modifications. Specifically, we are
assigning CPT code 0686T to APC 1575 for CY 2022. The final CY 2022
OPPS payment rates for this code can be found in Addendum B to this
final rule with comment period. In addition, we refer readers to
Addendum D1 of this final rule with comment period for the SI meanings
for all codes reported under the OPPS. Both Addenda B and D1 are
available via the internet on the CMS website.
k. Liver Multiscan Service (APC 1511)
Liver MultiScan is a Software as a medical Service (SaaS) that is
intended to aid the diagnosis and management of chronic liver disease,
the most prevalent of which is Non-Alcoholic Fatty Liver Disease
(NAFLD). It provides standardized, quantitative imaging biomarkers for
the characterization and assessment of inflammation, hepatocyte
ballooning, and fibrosis, as well as steatosis, and iron accumulation.
The SaaS receives MR images acquired from patients' providers and
analyzes the images using their proprietary Artificial Intelligence
(AI) algorithms. The SaaS then send the providers a quantitative metric
report of the patient's liver fibrosis and inflammation. The AMA CPT
Editorial Panel established two new codes, specifically, Category III
CPT codes 0648T and 0649T for LiverMultiScan effective July 1, 2021,
and CMS assigned the Category III CPT code 0648T to APC 5523 (Level 3
Imaging without Contrast) with a status indicator of ``S'' effective
July 1, 2021. We note that CPT code 0649T is packaged per our packaging
policy for add-on code procedures. For the complete code descriptors
for both codes, refer to Table 21.
For CY 2022, we proposed to assign CPT code 0648T to APC 5523
(Level 3 Imaging without Contrast) with a payment rate of $236.14
effective January 1, 2022, and assign the add-on code, CPT code 0649T,
to OPPS status indicator ``N'' (packaged) to indicate that payment for
the add-on service is included in the primary service.
[[Page 63542]]
[GRAPHIC] [TIFF OMITTED] TR16NO21.033
Comment: Several commenters stated that LiverMultiScan is a new
technology that represents a breakthrough for the diagnosis and
monitoring of chronic parenchymal liver disease that will reduce the
number of invasive procedures. The commenters stated that
LiverMultiScan is an MRI measure of hepatic steatosis with performance
equivalent to liver biopsy and superior to liver fat measures using
ultrasound. Some commenters cited that biopsy is the gold standard for
diagnosis, but it is not commonly used because of cost, patient
discomfort, risk of complications, and possible sampling error. Another
commenter stated that LiverMultiScan has excellent diagnostic accuracy
for at-risk Nonalcoholic steotohepatitis (NASH), detects changes in
response to investigational treatments within a very short timeframe,
and predicts clinical outcomes in patients with liver disease as well
as liver biopsy. The commenters believe LiverMultiScan improves the
management of NAFLD by helping patients connect with their liver
health, which encourages these patients to their recommended course of
treatment. The commenters stated the assignment of CPT code 0648T to
APC 5523 (Level 3 Imaging without Contrast) does not adequately cover
the cost of delivering this service and discourages adoption of
advanced liver care. The commenters stated that their hospital
outpatient cost for the service is between $1,300 to $1,500 (versus
approximately $7,000 for a liver biopsy), and they requested assignment
of LiverMultiScan to a New Technology APC. One commenter referenced
CMS's decision on Heartflow, which was initially packaged and then
later recognized as a distinct service. The commenter requested CMS
recognize LiverMultiScan as a distinct service.
Response: We appreciate the commenters' feedback on this new
technology. We note that before we assign a new service to a New
Technology APC, we first perform our own cost analysis and cost
estimate. As we stated in the CY 2002 OPPS final rule (66 FR 59900), we
do not limit our determination of the cost of the procedure to
information suggested by the commenters (or information submitted by
the applicant for New Technology applications). To appropriately assign
a service to a New Technology APC, our staff will obtain information on
cost from other appropriate sources, including acquiring input from our
medical advisors on the appropriateness of the service in the hospital
outpatient setting, before making a final determination on the cost of
the procedure or service. Based on the information provided, we
recognize that LiverMultiScan is a new technology that will aid in the
management of beneficiaries with NAFLD, which may avoid liver biopsies.
We note that liver biopsy remains the current gold standard for
diagnosing NASH, determining grade disease severity, and accurately
staging fibrosis. Based on our evaluation of the service, we agree with
the commenter's suggested reference to Heartflow. That is, we believe
that LiverMultiScan and Heartflow share similar characteristics based
on the nature of how the service is provided in the hospital outpatient
setting. Both LiverMultiScan and Heartflow require the acquisition of
radiological images as well as analysis of the images using proprietary
AI algorithms to assist clinicians in appropriately diagnosing a
patient's medical condition. In addition, our analysis of the estimated
cost associated for this service is between $901 and $1,000. Therefore,
after further evaluation of the service and the resources required to
perform the LiverMultiScan analysis, we believe it is appropriate to
assign this service to a New Technology APC, specifically, APC 1511
(New Technology--Level 11 ($901-$1000)), which is the same APC
assignment for Heartflow. Accordingly, we are assigning CPT code 0648T
to New Technology APC 1511). We note that we retain services within New
Technology APC groups until we obtain sufficient claims data to justify
reassignment of the service to a clinically appropriate APC. For CPT
code 0649T, an add-on code, we believe that our assignment of the
status indicator of ``N'' is appropriate under 42 CFR 419.2(b). We note
that CMS does not create the Category III CPT codes or their
descriptors, but we follow an established set of payment policies
consistent with our OPPS packaging policy. As stated in section III.A.
``OPPS Treatment of New and Revised HCPCS Codes'' of this final rule
with comment period, CPT codes are established and maintained by the
American Medical Association (AMA), and changes to CPT codes should be
referred to the AMA.
In summary, after consideration of the public comment, we are
finalizing our proposal with modification, to assign CPT code 0648T to
New Technology APC 1511 ((New Technology--Level 11 ($901-$1000), for CY
2022. Also, we are finalizing our proposal, without
[[Page 63543]]
modification, for CPT code 0649T and assigning the code to OPPS status
indicator ``N'' for CY 2022. The final APC assignment and status
indicators for CPT codes 0648T and 0649T can be found in OPPS Addendum
B. We refer readers to Addendum B of the final rule for the final
payment rates for all codes reportable under the OPPS. In addition, we
refer readers to Addendum D1 of this final rule with comment period for
the SI meanings for all codes reported under the OPPS. Both Addendum B
and Addendum D1 are available via the internet on the CMS website.
l. Minimally Invasive Glaucoma Surgery (MIGS) (APCs 5491 and 5492)
Prior to CY 2022, extracapsular cataract removal with insertion of
intraocular lens was reported using CPT codes describing cataract
removal alongside a CPT code for device insertion. Specifically, the
procedure was described using CPT codes 66982 (Extracapsular cataract
removal with insertion of intraocular lens prosthesis (1-stage
procedure), manual or mechanical technique (for example, irrigation and
aspiration or phacoemulsification), complex, requiring devices or
techniques not generally used in routine cataract surgery (for example,
iris expansion device, suture support for intraocular lens, or primary
posterior capsulorrhexis) or performed on patients in the amblyogenic
developmental stage; without endoscopic cyclophotocoagulation) or 66984
(Extracapsular cataract removal with insertion of intraocular lens
prosthesis (1-stage procedure), manual or mechanical technique (for
example, irrigation and aspiration or phacoemulsification); without
endoscopic cyclophotocoagulation) and 0191T (Insertion of anterior
segment aqueous drainage device, without extraocular reservoir,
internal approach, into the trabecular meshwork; initial insertion).
For CY 2022, the AMA's CPT Editorial Panel created two new Category I
CPT codes describing extracapsular cataract removal with insertion of
intraocular lens prosthesis, specifically, CPT codes 66989 and 6691,
deleted a Category III CPT code, specifically, CPT code 0191T,
describing insertion of anterior segment aqueous drainage device, and
created a new Category III CPT code, specifically, CPT code 0671T,
describing interior segment aqueous drainage device without concomitant
cataract removal. We proposed the following APC assignment:
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) to APC 5492 (Level 2 Intraocular Procedures) with a proposed
status indicator (SI) of ``J1'' and proposed payment rate of $4,018.82.
We note this code was listed as placeholder code 669X1 in the OPPS
Addendum B of the CY 2022 OPPS/ASC proposed rule.
CPT code 66991 (Extracapsular cataract removal with
insertion of intraocular lens prosthesis (1 stage procedure), manual or
mechanical technique (for example, irrigation and aspiration or
phacoemulsification); with insertion of intraocular (for example,
trabecular meshwork, supraciliary, suprachoroidal) anterior segment
aqueous drainage device, without extraocular reservoir, internal
approach, one or more) to APC 5492. We note this code was listed as
placeholder code 669X2 in the OPPS Addendum B of the CY 2022 OPPS/ASC
proposed rule.
CPT code 0671T (Insertion of anterior segment aqueous
drainage device into the trabecular meshwork, without external
reservoir, and without concomitant cataract removal, one or more) to
APC 5491 (Level 1 Intraocular Procedures) with a proposed SI of ``J1''
and a proposed payment rate of $2,131.25. We note this code was listed
as placeholder code 0X12T in the OPPS Addendum B of the CY 2022 OPPS/
ASC proposed rule.
At the August 23, 2021 HOP Panel Meeting, a presenter requested
that we reassign CPT codes 66989 and 66991 to APC 5493 (Level 3
Intraocular Procedures) with a proposed payment rate of $7,529.00, and
reassign 0671T to APC 5492, citing concerns over a decrease in payment
for MIGS between how it is currently coded and how it will be coded
beginning January 1, 2022. Based on the discussion during the meeting,
the HOP Panel recommended that CMS reassign CPT codes 66989 and 66991
to APC 5493 and reassign 0671T to APC 5492.
Comment: Most commenters opposed the proposed APC assignment for
these services and recommended that CMS implement the APC assignments
recommended by the HOP Panel. They stated that the proposed APC
assignments do not accurately account for the costs associated with
MIGS and would result in an overall decrease in payment for MIGS from
the current payment rates and that this decrease would negatively
impact access to this service. Commenters stated placement in APC 5493
and APC 5492 would better account for the resources associated with
performing CPT codes 66989 and 66991, and CPT code 0671T, respectively.
Commenters also suggested that CMS could consider assignment of these
services to a New Technology APC or create an incremental intraocular
APC between APC 5492 and 5493.
Response: We do not believe that the costs associated with
performing MIGS are accurately reflected by APC 5493. We note that
while APC 5491 (Level 1 Intraocular Procedures) and APC 5492 have 40 or
greater separately payable services assigned to them, only one service
is assigned to the APCs 5493, 5494, and 5495 (Level 3-5 Intraocular
Procedures, respectively). In instances where a single procedure is
assigned to an APC, the geometric mean cost and the resulting payment
rate is largely based on the geometric mean of the individual service
assigned to the APC. However, we note that while only one service is
assigned to APC 5493, there are certain complexity adjustments that
move certain services assigned to the APC 5492 to APC 5493 when billed
concurrently. These changes are also reflected in the claims data we
use to develop geometric mean costs and the resulting payment rates. We
note that the proposed payment rate for APC 5493 is almost double the
payment rate for APC 5492. We also believe 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 do not believe we have the necessary information on
the costs associated with CPT codes 66989 and 66991 to assign them to a
clinical APC at this time. We agree with commenters that reassignment
to a New Technology APC will maintain payment accuracy for these
services while we collect cost data to support reassignment to the
relevant clinical APC. We believe that APC 1526 (New Technology--Level
26 ($4001-$4500)), with a payment rate of $4,250.50, most accurately
accounts for the resources associated with furnishing MIGS.
We regard to CPT code 0671T, we note that this code describes
insertion of
[[Page 63544]]
intraocular lens without concurrent cataract removal and would not be
billed alongside CPT codes 66989 or 66991. Based on our review of the
clinical characteristics of the procedure and input from our medical
advisors, we continue to believe that this service is more similar to
the other services in APC 5491.
In summary, after consideration of the public comments, we are
finalizing the reassignment of CPT codes 66989 and 66991 to APC 1526
and assignment of CPT code 0671T to APC 5491. The final CY 2022 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
to this final rule with comment period for the status indicator (SI)
meanings for all codes reported under the OPPS. Both Addendum B and D1
are available via the internet on the CMS website.
m. Scalp Cooling (APC 1520)
For July 1, 2021, the CPT Editorial Panel created CPT code 0662T to
describe initial measurement and calibration of a scalp cooling device
for use during chemotherapy administration to prevent hair loss. For CY
2022, we proposed to assign CPT code 0662T (Scalp cooling, mechanical;
initial measurement and calibration of cap) to APC 5732 (Level 2 Minor
Procedures) with a proposed payment rate of $34.72.
At the August 23, 2021 HOP Panel Meeting, a presenter requested
that we reassign CPT code 0662T to one of the following APCs:
APC 5054 (Level 4 Skin Procedures) with a proposed payment
rate of $1,759.21,
APC 5055 (Level 5 Skin Procedures) with a proposed payment
rate of $3,613.14,
APC 1519 (New Technology--Level 19 ($1,701-$1,800)) with a
proposed payment rate of $1,750.50, or
APC 1520 (New Technology--Level 20 ($1,801-$1,900)) with a
proposed payment rate of $1,850.50
Based on the information presented, the HOP Panel recommended that
CMS assign CPT code 0662T to a New Technology APC.
Comment: Commenters encouraged CMS to accept the HOP Panel's
recommendation and assign CPT code 0662T to APC 1519 or 1520 or
reassign CPT code 0662T to either APC 5054 or 5055. Commenters stated
that the cost of the scalp cooling cap itself was around $600 and that
the rest of the costs associated with performing the measurement and
calibration were around $2,500-$3,000.
Response: Based on the information presented at the HOP Panel
meeting, as well as input from our clinical advisors, and analysis of
the information provided by the commenters, we believe that the
procedure described by CPT code 0662T should be assigned to a New
Technology APC. We note that 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, stakeholders have indicated
that there are substantial resource costs associated with calibration
and fitting of the cap. Based on the estimate of costs provided by the
commenter, without taking into account the costs of the cap, the
overall cost associated with CPT code 0662T is between $1,900-$2,400,
supporting reassignment to New Technology APC 1520. CPT guidance states
that CPT code 0662T should be billed once per chemotherapy session,
which we interpret to mean once per course of chemotherapy. Therefore,
if a course of chemotherapy involves 6 or 18 sessions, HOPDs should
report CPT 0662T only once for that 6 or 18 therapy sessions. We note
that we review, on an annual basis, the APC assignments for all items
and services paid under the OPPS.
In summary, after consideration of the public comments, we are
finalizing our proposal with modification. Specifically, we are
finalizing assignment of CPT code 0662T to APC New Technology 1520. The
final CY 2022 OPPS payment rate for this code can be found in Addendum
B to this final rule with comment period. In addition, we refer readers
to Addendum D1 of this final rule with comment period for the status
indicator (SI) meanings for all codes reported under the OPPS. Both
Addendum B and D1 are available via the internet on the CMS website.
D. OPPS APC-Specific Policies
1. AccuCinch Ventricular Restoration Procedure
For the July 2021 update, the AMA's CPT Editorial Panel established
CPT code 0643T (Transcatheter left ventricular restoration device
implantation including right and left heart catheterization and left
ventriculography when performed, arterial approach) to describe the
AccuCinch device implantation procedure. For CY 2022, we proposed to
assign the code to OPPS status indicator ``E1'' (Items, codes, and
services not covered by any Medicare outpatient benefit category;
statutorily excluded; not reasonable and necessary) to indicate that
the service is not covered by Medicare.
Comment: A commenter requested the reassignment in the status
indicator to OPPS status indicator ``C'' (inpatient-only) since this is
the more appropriate assignment for the ventricular restoration therapy
based on the complex patient population enrolled in the US clinical
trial. The commenter explained that the investigational device, the
AccuCinch[supreg] Ventricular Restoration System, is currently under
evaluation in the CORCINCH-HF pivotal trial (NCT04331769).
Response: Based on our review of the clinical study, input from our
medical advisors, as well review of Medicare's coverage policy for this
clinical trial, we agree with the commenter. Review of the clinical
study indicates that the CORCINCH-HF study (https://clinicaltrials.gov/ct2/show/NCT04331769) is a prospective, randomized, control multicenter
clinical study that evaluates the safety and efficacy of the AccuCinch
Ventricular Restoration System in patients with heart failure and
reduced ejection fraction (HFrEF). Based on the interventional
structural heart (SH) technique involved in the procedure, use of an
experimental device, and close monitoring of the patient that is
required during the intra- and post-op period consistent with the
resources available in the hospital inpatient setting, we believe the
AccuCinch procedure should be designated as an inpatient-only
procedure. We note that the CORCINCH-HF pivotal trial (NCT04331769) was
approved by Medicare and meet's CMS' standards for coverage as an
Investigation Device Exemption (IDE) study effective November 11, 2020.
In summary, after consideration of the public comment, we are
modifying our proposal and revising the status indicator for CPT code
0643T from ``E1'' to ``C'' (inpatient-only) for CY 2022. 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.
2. Administration of Lacrimal Ophthalmic Insert Into Lacrimal
Canaliculus (APC 5694)
HCPCS code J1096 (Dexamethasone, lacrimal ophthalmic insert, 0.1
mg) is a drug indicated ``for the treatment of ocular inflammation and
pain following
[[Page 63545]]
ophthalmic surgery.'' \23\ Stakeholders assert that this drug is
administered through CPT code 0356T (Insertion of drug-eluting implant
(including punctal dilation and implant removal when performed) into
lacrimal canaliculus, each). Stakeholders also state the drug is
inserted in a natural opening in the eyelid (called the punctum) and
that the drug is designed to deliver a tapered dose of dexamethasone to
the ocular surface for up to 30 days. HCPCS code J1096 is currently on
pass-through status and assigned to APC 9308 (Dexametha opth insert 0.1
mg) with status indicator ``G''. Please see section V.A.5. of this
final rule with comment period for further information regarding the
pass-through status of J1096. CPT code 0356T is currently assigned to
status indicator ``Q1'', indicating conditionally packaged payment
under the OPPS. Packaged payment applies if a code assigned status
indicator ``Q1'' is billed on the same claim as a HCPCS code assigned
status indicator ``S'', ``T'', or ``V''. Accordingly, based on the OPPS
assigned status indicator, CPT code 0356T is assigned to payment
indicator ``N1'' in the ASC setting, meaning a packaged service/item.
We refer readers to Addendum D1 of this final rule with comment period
for a list of OPPS status indicators and their definitions, available
via the internet on the CMS website. We also refer readers to Addendum
AA for ASC payment indicator assignments and to Addendum DD1 for
payment indicator definitions, available via the internet on the CMS
website. For CY 2021, CPT code 0356T is assigned to APC 5692 (Level 2
Drug Administration). Effective January 1, 2022, CPT code 0356T will be
deleted. CPT code 68841, represented by placeholder code 68XXX in the
proposed rule, will become effective on January 1, 2022.
---------------------------------------------------------------------------
\23\ Dextenza FDA Package Insert: https://www.accessdata.fda.gov/drugsatfda_docs/label/2019/208742s001lbl.pdf.
---------------------------------------------------------------------------
Due to the similarity between CPT code 0356T and CPT code 68841, we
proposed to assign CPT code 68841 to the same APC, status indicator,
and payment indicator assignments as CPT code 0356T.
Additionally, we note that the manufacturer of the product that is
usually administered through 0356T and placeholder code 68XXX, brought
the issue of payment of this code to the Advisory Panel on Hospital
Outpatient Payment (also known as HOP Panel) in 2021 for CY 2022
rulemaking and requested a new APC placement. The HOP Panel did not
make a recommendation to reassign placeholder code 68XXX to a different
APC, OPPS status indicator, or ASC payment indicator as suggested by
the presenters.
Comment: Commenters asserted that the proposed placeholder code
68XXX is used to describe the administration of Dextenza and the drug
insertion procedure is typically performed after the completion of an
ophthalmic procedure, such as a cataract, glaucoma, or retina
procedure. Commenters state this procedure is typically done in the ASC
setting 80 percent of the time, and is performed in the HOPD setting 20
percent of the time.
Several commenters had concerns with continuing the same APC
placement of APC 5692 for CPT code 68XXX for CY 2022. Commenters
generally advocated for increased payment for this CPT code in the HOPD
and ASC settings. Some commenters did not make a specific suggestion as
to what the final APC assignment should be, rather they argued the
proposed payment was inadequate. However, some commenters made specific
recommendations to change the APC assignment to APC 5503 (Level 3
Extraocular, Repair and Plastic Eye Procedures). Commenters felt this
would be a more appropriate and fair APC placement due to its resource
similarity to procedures in this APC. Commenters frequently cited CPT
66030 (Injection, anterior chamber of eye (separate procedure);
medication) and CPT 0X78T (Injection, posterior chamber of eye;
medication), which were proposed to be assigned to APC 5491 (Level 1
Intraocular Procedures), as similar procedures to which 68XXX should be
compared. However, commenters did recognize that 68XXX represents an
extraocular procedure; therefore, they felt APC 5503 (Level 3
Extraocular, Repair, and Plastic Eye Procedures) would be an
appropriate alternative APC assignment.
A minority of commenters discussed the proposed status indicator
assignment and payment indicator assignment for 68XXX. Some said a
``Q1'' status indicator was inappropriate, but did not provide an
alternative suggestion. One commenter provided an alternate crosswalk
for 68XXX and stated that, in their view, 68XXX was clinically similar
to CPT Code 68761 (Closure of the lacrimal punctum; by plug, each),
which is assigned to APC 5501 (Level 1 Extraocular, Repair and Plastic
Eye Procedures), and is assigned to status indicator ``T''.
Additionally, a commenter mentioned using available 2020 claims
data for 0356T, instead of the zero claims data available using 2019
claims as proposed, which would suggest a higher APC placement.
Several stakeholders commented that the clinical importance of
providing HCPCS code J1096 to patients is that it reduces ocular pain,
inflammation, and reduces the burden of topical eyedrop application.
Additionally, providers stated that they usually perform the procedure
to administer Dextenza after the conclusion of ophthalmic surgeries.
Commenters believe the procedure is a distinct surgical procedure that
requires additional operating room time and resources. Commenters were
concerned that the lack of increased or separate payment may reduce
access to Dextenza, particularly in the ASC setting.
Response: We thank commenters for their feedback. We note that
placeholder code 68XXX will be replaced by CPT code 68841, and we will
refer to this code from here on. Based on input from stakeholders, we
believe an APC reassignment is appropriate for CY 2022. After careful
consideration of the statements from commenters, we analyzed available
claims data and similar procedures that approximate the clinical
resources associated with CPT code 68841. We agree with a commenter
that CPT code 68761 (Closure of the lacrimal punctum; by plug, each)
may more appropriately approximate the resources associated with CPT
code 68841. We also believe that CPT code 68801 (Dilation of lacrimal
punctum, with or without irrigation) represents a clinically similar
procedure and would also be an appropriate procedure with which to
compare CPT code 68841. Additionally, based on our review of comments,
we do not find it appropriate to use the three single frequency claims
that are associated with the CY 2020 claims data for CPT code 0356T as
a basis for CPT code 68841, as they seem anomalous compared to the
1,543 total frequency claims available in the CY 2020 claims data
dataset. Additionally, we do not find it appropriate to use CY 2019
claims data for 0356T as there are zero single frequency claims, 53
total frequency claims, and a zero-dollar geometric mean. Rather, we
believe estimating the clinical resources needed for CPT code 68841
through comparison to clinically similar codes is more appropriate for
CY 2022.
Based on the CY 2019 claims data available for CY 2022 OPPS
ratesetting, the geometric mean cost associated with CPT code 68761 is
$211.17 and the geometric mean cost associated with CPT code 68801 is
$300.27. Based on these geometric mean costs, we believe assignment of
CPT code 68841 to APC 5694 (Level 4 Drug Administration) is
[[Page 63546]]
appropriate. Additionally, we continue to believe that assignment of
CPT code 68841 to an OPPS status indicator ``Q1'' and an associated ASC
payment indicator of ``N1'', is appropriate. Commenters have stated
that CPT code 68841 is performed during ophthalmic surgeries, such as
cataract surgeries. A status indicator ``Q1'', 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 stakeholder comment
regarding clinical patterns as to how the drug is used, we do not
agree. We find it appropriate to conditionally package CPT code 68841
based on its clinical use patterns as described by commenters. This is
consistent with 42 CFR 419.2(b). The conditional packaging of this code
supports our overarching goal to make payments for all services paid
under the OPPS and ASC payment system more consistent with those of a
prospective payment system and less like those of a per-service fee
schedule. We believe that packaging encourages efficiency and is an
essential component of a prospective payment system, and that packaging
payments for items and services that are typically integral, ancillary,
supportive, dependent, or adjunctive to a primary service is a
fundamental part of the OPPS. We therefore believe packaging of CPT
code 68841 is appropriate.
After consideration of the public comments, we are finalizing our
proposal to assign CPT code 68841 to APC 5694 (Level 4 Drug
Administration) with OPPS status indicator ``Q1'' for CY 2022. In
addition, based on the OPPS assignments, we are finalizing an ASC
payment indicator of ``N1'' for CPT code 68841 for CY 2022. Please see
Table 22 for the code descriptor, APC assignment, status indicator
assignment, and payment indicator assignment for CPT code 68841 for CY
2022.
[GRAPHIC] [TIFF OMITTED] TR16NO21.034
3. Allergy Testing (APC 5724)
For CY 2022, we proposed to continue to assign CPT code 95004
(Percutaneous tests (scratch, puncture, prick) with allergenic
extracts, immediate type reaction, including test interpretation and
report, specify number of tests) and CPT code 95044 to APC 5724 (Level
4 Diagnostic Tests and Related Services) with a proposed payment rate
of $943.96.
Comment: One commenter expressed concerns with the overall
reimbursement for allergy testing, stating that reimbursement has
increased dramatically over time for what the commenter asserted was a
relatively routine procedure. The commenter recommended that CMS review
the payment rates for these services to ensure that they are being
accurately reimbursed.
Response: We thank the commenter for their insight and will
consider it for future rulemaking.
In summary, after consideration of the public comment, we are
finalizing our proposal without modification. Specifically, we are
finalizing assignment of CPT codes 95004 and 95044 to APC 5724. The
final CY 2022 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 (SI) meanings for all codes reported under the
OPPS. Both Addendum B and D1 are available via the internet on the CMS
website.
4. Blood Not Otherwise Classified (NOC) (APC 9537)
Providers and stakeholders in the blood products field have
reported that product development for new blood products has
accelerated. There may be several additional new blood products
entering the market by the end of by CY 2022, compared to only one or
two new products entering the market over the previous 15 to 20 years.
To encourage providers to use these new products, providers and
stakeholders requested that we establish a new HCPCS code to allow for
payment for unclassified blood products prior to these products
receiving their own HCPCS code. Under the OPPS, unclassified procedures
are generally assigned to the lowest APC payment level of an APC
family. However, since blood products are each assigned to their own
unique APC, the concept of a lowest APC payment level does not apply in
this context.
Starting January 1, 2020, we established a new HCPCS code, P9099
(Blood component or product not otherwise classified) which allows
providers to report unclassified blood products. We assigned HCPCS code
P9099 to status indicator ``E2'' (Not payable by Medicare when
submitted on an outpatient claim) for CY 2020. We took this action
because HCPCS code P9099 potentially could be reported for multiple
products with different costs during the same period of time.
Therefore, we could not identify an individual blood product HCPCS code
that would have a similar cost to HCPCS code P9099, and were not able
to crosswalk a payment rate from an
[[Page 63547]]
established blood product HCPCS code to HCPCS code P9099. Some
stakeholders expressed concerns that assigning HCPCS code P9099 to a
non-payable status in the OPPS meant that hospitals would receive no
payment when they used unclassified blood products. Also, claim lines
billed with P9099 are rejected by Medicare, which prevents providers
from tracking the utilization of unclassified blood products.
Because of the challenges of determining an appropriate payment
rate for unclassified blood products, we stated in the CY 2021 OPPS/ASC
proposed rule that we were considering packaging the cost of
unclassified blood products into their affiliated primary medical
procedure. Although we typically do not package blood products under
the OPPS, for unclassified blood products, we stated that we do not
believe it is possible to accurately determine an appropriate rate that
would apply for all of the products (potentially several, with varying
costs) that may be reported using HCPCS code P9099. Packaging the cost
of unclassified blood products into the payment for the primary medical
service by assigning HCPCS code P9099 a status indicator of ``N'' would
allow providers to report the cost of unclassified blood products to
Medicare. Over time, the costs of unspecified blood products would be
reflected in the payment rate for the primary medical service if the
blood product remains unclassified. However, we stated that we expect
that most blood products would seek and be granted more specific coding
such that the unclassified HCPCS code P9099 would no longer be
applicable. We also explained that we believe that packaging the costs
of unclassified blood products would be an improvement over the current
non-payable status for HCPCS code P9099 as it would allow for tracking
of the costs and utilization of unclassified blood products. We had
concerns about this approach because providers would not receive
separate payment for the blood products reported with HCPCS code P9099,
and providers would have had to wait at least two years for the primary
service billed with HCPCS code P9099 to potentially reflect some of the
cost of the unclassified product. After considering the other payment
options for HCPCS code P9099 and comments from providers and
stakeholders, we decided against packaging HCPCS code P9099 for CY
2021.
The CMS HOP Panel and multiple stakeholders suggested another
payment alternative to have unclassified blood products paid separately
by using a weighted average of the payment rates of all separately
payable blood products in the OPPS. The average payment rate would be
weighted by the number of units billed for each service in the OPPS.
Stakeholders believed a weighted average would be consistent with OPPS
policy to provide separate payment for all blood products and would
encourage the use of HCPCS code P9099 to track the utilization of
unclassified blood products until the new products could receive
individual HCPCS codes. Other stakeholders suggested that unclassified
blood products be paid either at charges reduced to cost or at
reasonable cost to appropriately compensate providers billing
unclassified blood products.
We decided against paying for HCPCS code P9099 through either a
weighted average payment, charges reduced to cost, or reasonable cost
for CY 2021. We had concerns that these payment methods could provide
incentives to discourage manufacturers of new blood products from
seeking individual HCPCS codes for their products. A weighted average
payment would encourage manufacturers of relatively inexpensive
unclassified blood products not to seek a HCPCS code for their products
because the payment using HCPCS code P9099 for the products would be
substantially higher than payment the products would receive once an
individual code is established for the blood products. In addition, the
level of payment from a weighted average payment may reduce the urgency
of manufacturers to seek an individual HCPCS code even for higher-cost
products, which would delay our ability to track payment for individual
blood products.
After considering our options, we decided for CY 2021 to pay for
HCPCS code P9099 by making the blood not otherwise classified code
separately payable, assigning it a status indicator of ``R'', and
paying the code at a rate equal to the lowest paid separately payable
blood product in the OPPS, which is P9043 (Infusion, plasma protein
fraction (human), 5 percent, 50 ml) with a payment rate of $7.79 per
unit. This policy aligns with our overall OPPS policy to pay NOC codes
at the lowest available APC rate for a service category, while
providing a payment for unclassified blood products when a service is
reported on the claim. Our policy also provides incentives for
manufacturers to seek individual HCPCS codes for new blood products,
which helps us to track the utilization of these new blood products and
establish a payment rate for these new products that better reflects
their cost. For CY 2022, we proposed to continue our policy that was
established in CY 2021 without modification.
Comment: The HOP Panel and multiple commenters have requested that
unclassified blood products assigned to HCPCS code P9099 be paid based
on reasonable cost and that HCPCS code P9099 be assigned a status
indicator of ``F'' (paid at reasonable cost). Unclassified blood
products paid on the basis of reasonable cost would receive payment
based on individual invoices submitted by the provider that detail the
actual cost of the unclassified blood products for the provider. The
commenters believe our current policy severely underpays for most
unclassified blood products, which limits the ability of providers to
use these new products, and discourages innovation in the blood
products field. Commenters assert that the universe of blood products
is very heterogeneous with each product having its own APC and payment
rate, and our policy that assigns unclassified clinical services HCPCS
codes to the lowest-paying APC in a clinical series is not appropriate
for the payment of blood products.
Commenters also believe the administrative burdens of submitting
claims to receive payment through reasonable cost would encourage blood
product manufacturers to classify their unclassified products.
Relatedly, two other commenters urged us to reduce administrative
burden for providers if we decide to implement reasonable cost payment
for HCPCS code P9099.
Response: We have concerns about paying unclassified blood products
using reasonable cost and assigning HCPCS code P9099 a status indicator
of ``F''. Although reasonable cost would likely provide a more granular
reflection of the cost of unclassified blood products to providers,
there would be no incentive for providers to manage their costs when
using unclassified blood products, and no incentives for the
manufacturers to seek individual HCPCS codes for the unclassified blood
products. We agree with the commenters that the administrative burdens
of seeking payment through reasonable cost methodology may provide some
incentive to classify currently unclassified blood products. However,
we believe that providers will prefer to receive full cost
reimbursement for an unclassified blood product rather than risk
receiving a prospective payment that could be less than full cost of
the blood product if the blood product is classified and assigned a
HCPCS code. Finally, we do not support reasonable cost payment for
HCPCS code P9099 because the OPPS is a prospective payment system, and
we
[[Page 63548]]
want to limit rather than expand the types of services within the OPPS
that do not receive prospective payment.
After reviewing the public comments we received, we have decided to
implement our proposal without modification to keep HCPCS code P9099
separately payable with a status indicator of ``R'', and pay the code
at a rate equal to the lowest paid separately payable blood product in
the OPPS, which is P9043 (Infusion, plasma protein fraction (human), 5
percent, 50 ml) with a payment rate of $7.79 per unit. Therefore, we
are finalizing our proposal to continue to assign HCPCS code P9099 to
APC 9537 (Blood component/product noc) for CY 2022. We appreciate that
establishing a fair and equitable payment methodology for HCPCS code
P9099 continues to be a challenge, and we plan to explore other
possible ideas for the payment of HCPCS code P9099 in future
rulemaking.
5. Bone Substitute Material Injection (APC 5113)
For January 1, 2022, the AMA's CPT Editorial Panel established new
CPT code 0707T (Injection(s), bone substitute material (for example,
calcium phosphate) into subchondral bone defect (that is, bone marrow
lesion, bone bruise, stress injury, microtrabecular fracture),
including imaging guidance and arthroscopic assistance for joint
visualization). We note that CPT code 0707T was listed as placeholder
code 0X79T in OPPS Addendum B of the CY 2022 OPPS/ASC proposed rule.
For CY 2022, we proposed to assign CPT code 0707T to APC 5111 (Level 1
Musculoskeletal Procedures) with a proposed payment rate of $211.47.
Comment: Commenters did not agree with our proposed APC assignment.
Instead, commenters stated that CPT code 0707T should be assigned to
APC 5114 (Level 4 Musculoskeletal Procedure) with a proposed payment
rate of $6,428.51 based on its clinical and resource homogeneity to the
procedures and services in the APC. Commenters stated that 0707T is
most clinically similar to Zimmer Biomet's AccuFill BSM procedure,
which is the service described by CPT code 29855 (Arthroscopically
aided treatment of tibial fracture, proximal (plateau); unicondylar,
includes internal fixation, when performed (includes arthroscopy)), and
assigned to APC 5114. Commenters stated that the injection of a bone
substitute material into a subchondral bone defect is mainly accounted
for by two products, Zimmer Biomet's AccuFill BSM and Anika, which
range in price from $2,600-$2,800.
Response: We do not agree that CPT code 0707T is comparable to CPT
code 29855; however, based on our review of the clinical
characteristics of the procedure and input from our medical advisors,
we believe CPT code 0707T is more similar to the procedures assigned to
APC 5113 (Level 3 Musculoskeletal Procedures) with a proposed payment
rate of $2,906.75, and this payment rate better accounts for the cost
of the procedure as well as the bone substitute material.
In summary, after consideration of the public comments, we are
assigning CPT code 0707T to APC 5113 for CY 2022 based on its resource
and clinical similarity to the procedures in APC 5113. The final CY
2022 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 to this final rule with comment period for the SI meanings
for all codes reported under the OPPS. Both Addendum B and D1 are
available via the internet on the CMS website.
As we do every year, we will reevaluate the APC assignment for CPT
code 0707T for the next rulemaking cycle. We note that we review, on an
annual basis, the APC assignments for all services and items paid under
the OPPS.
6. Calculus Aspiration With Lithotripsy Procedure (APC 5376)
For CY 2022, we proposed to assign HCPCS code C9761
(Cystourethroscopy, with ureteroscopy and/or pyeloscopy, with
lithotripsy (ureteral catheterization is included) and vacuum
aspiration of the kidney, collecting system and urethra if applicable)
to APC 5375 (Level 5 Urology and Related Services) with a proposed
payment of $4,527.23. HCPCS code C9761 describes the procedure that
uses a sterile, single-use aspiration-irrigation catheter that is
designed to assist in the removal of stone fragments during standard
ureteroscopy. Based on our analysis of the latest CY 2020 claims data
for this CY 2022 OPPS/ASC final rule with comment period, our data
reveals two single claims for HCPCS code C9761 with a geometric mean
cost of $9,342.
Comment: Several commenters expressed concerns that a significant
difference between cost and payment prevented hospitals from providing
this procedure to their patients. The commenters urged CMS to change
the APC assignment of HCPCS code C9761 to APC 5376 (Level 6 Urology and
Related Services). The commenters asked that CMS assign HCPCS code
C9761 to APC 5376 for two reasons: (1) The current and proposed
reimbursement rates for services in APC 5375 are inadequate to pay
hospitals appropriately for the costs of furnishing the Steerable
Ureteroscopic Renal Evacuation (SURE) procedure; and (2) the clinical
characteristics and resources associated with HCPCS code C9761 are
similar to codes in APC 5376 than services in APC 5375.
Response: We thank the commenters for their feedback. Based on
information from the manufacturer, resources involved for the procedure
described by HCPCS code C9761 appear to be higher than for those
procedures assigned to APC 5375. At this time, only two CY 2020 claims
are available to assist in identifying costs associated with the
procedure. The geometric mean cost of $9,342 for the two claims
indicate that the cost of HCPCS code C9761 is substantially higher than
the proposed payment rate of $4,527.23. However, two claims is not a
significant data set; and we have concerns that the costs reported from
the two claims for the procedure described by HCPCS code C9761 may not
accurately reflect the geometric mean costs of the procedure. We also
note that, in the manufacturer's 2020 New Technology APC application,
they indicated that an appropriate payment for the procedure described
by HCPCS code C9761 would be approximately $5,627.39 and that
assignment to New Technology APC 1566 (New Technology--Level 29
($5,501-$6,000)) would be appropriate. Based on the claims data along
with the reported costs associated with the procedure presented to us
by the manufacturer, we believe that it is appropriate to assign the
procedure described by HCPCS code C9761 to APC 5376 (Level 6 Urology
and Related Services), for CY 2022. As we do every year we will
reevaluate the APC assignment for CPT code 9761 in the next rulemaking
cycle. We remind hospitals that we review, on an annual basis, the APC
assignments for all services and items paid under the OPPS based on the
latest claims data available to us.
In summary, after consideration of the public comments we received,
we are modifying our proposal for the APC assignment of HCPCS code
C9761. Instead of assigning this code to APC 5375 (Level 5 Urology and
Related Services), for CY 2022, we are reassigning HCPCS code C9761 to
APC 5376 (Level 6 Urology and Related Services). Table 23 below lists
the final CY 2022 status indicator and APC assignments for the calculus
aspiration
[[Page 63549]]
with lithotripsy procedure. We refer readers to Addendum B to this
final rule with comment period for the final payment rates for all
codes reportable under the OPPS. Addendum B is available via the
internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TR16NO21.035
7. Cardiac Computed Tomography (CT) (APC 5571)
For CY 2022, we proposed to continue to assign the following
cardiac CT exam codes to APC 5571 (Level 1 Imaging with Contrast) with
a proposed payment rate of $183.30:
75572 (Computed tomography, heart, with contrast material,
for evaluation of cardiac structure and morphology (including 3d image
postprocessing, assessment of cardiac function, and evaluation of
venous structures, if performed));
75573 (Computed tomography, heart, with contrast material,
for evaluation of cardiac structure and morphology in the setting of
congenital heart disease (including 3d image postprocessing, assessment
of lv cardiac function, rv structure and function and evaluation of
venous structures, if performed)); and
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)).
Comment: Many commenters opposed the assignment of CPT codes 75572,
75573, and 75574 to APC 5571. They stated that the proposed CY 2022
OPPS payment rate for APC 5571 is inadequate to cover the total cost of
providing the service.
Commenters stated that they also believe that the resource costs
required to perform cardiac CT scans are similar to the tests that are
assigned to APC 5573 rather than APC 5571. They noted that the low
payment for the test limits patient access, and requested that CMS take
action to increase reimbursement to levels in line with the actual
testing costs. The commenters requested an APC reassignment for all
three codes. Specifically, the commenters suggested reassigning CPT
codes 75572 and 75573 to APC 5572 (Level 2 Imaging with Contrast) and
CPT code 75574 to APC 5573 (Level 3 Imaging with Contrast). Most of the
commenters reported that cardiac CT scans are more resource intensive
than other CT and x-ray scans in APC 5571 and expressed concerns that
APC-misallocation would suppress utilization for these services.
Response: As we stated in the CY 2021 OPPS final rule with comment
period (85 FR 85956), payments under the OPPS are based on our analysis
of the latest available claims and cost report data submitted to
Medicare. We have many years of claims data for CPT codes 75572, 75573,
and 75574. Based on the geometric mean costs for these codes, we do not
believe that CPT codes 75572, 75573, and 75574 utilize similar
resources as the exams assigned to APC 5572 or APC 5573. We refer
readers to the CY 2021 OPPS final rule with comment period for a more
detailed discussion of the pricing methodology for CPT codes 75572,
75573, and 75574 (85 FR 85956 through 85959).
In summary, after consideration of the public comments, we are
finalizing our proposal, without modification, to assign the cardiac CT
exam codes, specifically, CPT codes 75572, 75573, and 75574 to APC
5571. The final CY 2022 OPPS payment rates for these codes can be found
in Addendum B to this final rule with comment period. In addition, we
refer readers to Addendum D1 of this final rule with comment period for
the SI meanings for all codes reported under the OPPS. Both Addendum B
and D1 are available via the internet on the CMS website.
8. Cardiac Magnetic Resonance (CMR) Imaging (APC 5523, 5524, 5572, and
5573)
For CY 2022, we proposed to continue to assign the following
cardiac magnetic resonance imaging (MRI) CPT codes to APC 5523, 5524,
5572, and 5573, respectively:
CPT code 75557 (Cardiac magnetic resonance imaging for
morphology and function without contrast material) to APC 5523 (Level 3
Imaging without Contrast) with a proposed payment of $236.14;
CPT code 75559 (Cardiac magnetic resonance imaging for
morphology and function without contrast material; with stress imaging)
to APC 5524 (Level 3 Imaging without Contrast) with a proposed payment
of $495.76;
CPT code 75561 (Cardiac magnetic resonance imaging for
morphology and function without contrast material(s), followed by
contrast material(s) and further sequences) to APC 5572 (Level 2
Imaging with Contrast) with a proposed payment of $377.80; and
CPT code 75563 (Cardiac magnetic resonance imaging for
morphology and function without contrast material(s), followed by
contrast material(s) and further sequences; with stress imaging) to APC
5573 (Level 3 Imaging with Contrast) with a proposed payment of
$733.76.
Comment: A few commenters expressed concern with the lack of
payment stability for cardiac MRI services, specifically, those
described by CPT codes 75557, 75559, 75561, and 75563. They indicated
that the payments for these codes have decreased in the last several
years, and prior to CY 2017, the codes were placed in appropriate APCs.
Of significant concern are the payment rates for CPT codes 75561 and
75563, which, according to the commenters, are grouped with services
that are not
[[Page 63550]]
clinically similar. The commenters stated that CPT code 75561 is unlike
CT of the abdomen or pelvis or MRI of the neck and spine in APC 5572,
and instead, the code should be placed in APC 5573 with comparable
services. The commenters further added that CPT code 75563 is labor-
intensive and should be assigned to APC 5593 (Level 3 Nuclear Medicine
and Related Services).
Response: As stated in the CY 2021 OPPS final rule with comment
period, payments under the OPPS are based on our analysis of the latest
available claims and cost report data submitted to Medicare. We have
many years of claims data for CPT codes 75561 and 75563. Based on the
geometric mean costs for these codes, we do not believe that CPT codes
75561 and 75563 utilize similar resources as the exams assigned to APC
5573 or APC 5593. We refer readers to the CY 2021 OPPS final rule with
comment period for a more detailed discussion of the pricing
methodology for CPT codes 75561 and 75563 (85 FR 85959 through 85960).
In summary, after consideration of the public comments, we are
finalizing our proposal, without modification, to assign the cardiac
MRI codes, specifically, CPT codes 75561 and 75563 to APCs 5572 and
5573. The final CY 2022 OPPS payment rates for these codes can be found
in Addendum B to this final rule with comment period. In addition, we
refer readers to Addendum D1 of this final rule with comment period for
the SI meanings for all codes reported under the OPPS. Both Addendum B
and D1 are available via the internet on the CMS website.
9. Chimeric Antigen Receptor Therapy (CAR-T) (APCs 5694, 9035, 9194,
9391, 9413, and 9422)
Chimeric Antigen Receptor T-Cell (CAR T-cell) therapy is a cell-
based gene therapy in which T-cells are collected and genetically
engineered to express a chimeric antigen receptor that will bind to a
certain protein on a patient's cancerous cells. The CAR T-cells are
then administered to the patient to attack certain cancerous cells and
the individual is observed for potential serious side effects that
would require medical intervention. We refer readers to previous
discussions in the OPPS/ASC final rules with comment period for
background regarding the specific CAR T-cell products, in both the CY
2020 OPPS/ASC final rule with comment period (84 FR 61231 through
61234) and the CY 2019 OPPS/ASC final rule with comment period (83 FR
58904 through 58908). In addition, for discussion about CY 2022 OPPS
payment policies for separately paid drugs with pass-through status
expiring or continuing in CY 2022, please see sections V.A.4. and
V.A.5. of this final rule with comment period. The AMA created four
Category III CPT codes that are related to CAR T-cell therapy,
effective January 1, 2019. As discussed in the CY 2019 OPPS/ASC final
rule with comment period (83 FR 58904 through 58908), the CY 2020 OPPS/
ASC final rule with comment period (84 FR 61231 through 61234), and the
CY 2021 OPPS/ASC final rule with comment period (85 FR 85949 through
85951) we finalized our proposal to assign procedures described by CPT
codes 0537T, 0538T, and 0539T to status indicator ``B'' (Codes that are
not recognized by OPPS when submitted on an outpatient hospital Part B
bill type (12x and 13x)) to indicate that the services are not paid
under the OPPS. The procedures described by CPT codes 0537T, 0538T, and
0539T describe the various steps required to collect and prepare the
genetically modified T-cells, and Medicare does not generally pay
separately for each step used to manufacture a drug or biological. We
also finalized that the procedures described by CPT code 0540T would be
assigned status indicator ``S'' (Procedure or Service, Not Discounted
when Multiple) and APC 5694 (Level 4 Drug Administration) for CY 2019,
CY 2020, and CY 2021 and made no proposal to change the assignment for
CY 2022. Additionally, the National Uniform Billing Committee (NUBC)
established CAR T-cell-related revenue codes and a value code to be
reportable on Hospital Outpatient Department (HOPD) claims effective
for claims received on or after April 1, 2019. We made no specific
proposal related to the CAR T-cell preparation codes, as described by
CPT codes 0537T, 0538T, 0539T. As listed in Addendum B of the CY 2022
OPPS/ASC proposed rule, we proposed to continue to assign procedures
described by these CPT codes, 0537T, 0538T, and 0539T, to status
indicator ``B'' (Codes that are not recognized by OPPS when submitted
on an outpatient hospital Part B bill type (12x and 13x)) to indicate
that the services are not paid under the OPPS. We proposed to continue
to assign CPT code 0540T to status indicator ``S'' (Procedure or
Service, Not Discounted when Multiple) and APC 5694 (Level IV Drug
Administration).
Comment: Two commenters opposed our proposal to continue to assign
status indicator ``B'' to CPT codes 0537T, 0538T, and 0539T for CY
2022. One commenter did not have a specific recommendation, but rather
suggested CMS take into consideration the complex process and
separately recognize the efforts associated with leukapheresis, cell
handling, and processing. This commenter additionally mentioned the
administrative burden associated with CAR T-cell therapy
administration, among other resources that are specific to the process
in which CAR-T is processed, manufactured, and then administered.
The other commenter discussed a wide variety of topics related to
CAR T-cell therapy and stated that a change in status indicator would
be appropriate, with a preference for assigning CPT codes 0537T, 0538T,
and 0539T to status indicator ``Q1''. This commenter believed that the
procedures these CPT codes describe did not represent the steps
required to manufacture the CAR T-cell product, as CMS has stated.
Generally, this commenter advocated for a change in status indicator as
they believed this change is necessary to allow services furnished to
the patient to be eligible for payment and for hospitals to be paid
appropriately for the services they provide during each step of the CAR
T-cell process. This commenter pointed out that a number of patients
may receive the preparation procedures, but then fail to receive the
final CAR-T product. Accordingly, this commenter asked CMS to release
new cost centers and to revise the instructions in MLN Matters Article
SE19009 in order to no longer allow hospitals to put outpatient cell
collection and process charges occurring more than three days prior to
an inpatient stay on inpatient claims or to report cell collection and
cell processing charges as part of the product charge.
Response: We thank the commenters for their feedback. CMS does not
believe that separate or packaged payment under the OPPS is necessary
for the procedures described by CPT codes 0537T, 0538T, and 0539T for
CY 2022. The procedures described by CPT codes 0537T, 0538T, and 0539T
describe the various steps required to collect and prepare the
genetically modified T-cells; and Medicare does not generally pay
separately for each step used to manufacture a drug or biological
product. Additionally, we note that CAR T-cell therapy is a unique
therapy approved as a biologic, with unique preparation procedures,
that cannot be directly compared to other therapies or existing CPT
codes. We note that the current HCPCS coding for the currently approved
CAR T-cell therapies include leukapheresis and dose preparation
procedures, as these services are included in the manufacturing of
these
[[Page 63551]]
biologicals. Therefore, payment for these services is incorporated into
the drug codes. Please see Table 24 for HCPCS coding for CAR T-cell
therapies.
[GRAPHIC] [TIFF OMITTED] TR16NO21.036
We note that although there is no payment associated with CPT codes
0537T, 0538T, and 0539T for reasons stated previously, these codes can
still be reported to CMS for tracking purposes. We thank commenters for
their feedback related to our guidance contained in MLN Matters Article
SE19009. We are not revising this document at this time as we believe
these instructions are consistent with our longstanding policies, but
we appreciate the feedback from stakeholders. We believe that the
comments in reference to payment for services in settings not payable
under the OPPS are outside the scope of the CY 2022 OPPS/ASC proposed
rule. Accordingly, we are not revising the existing codes for CAR T-
cell therapies to remove leukapheresis and dose preparation procedures,
and we are not accepting the recommendations at this time to revise the
status indicators for procedures described by CPT codes 0537T, 0538T,
and 0539T. We will continue to evaluate and monitor payment for CAR T-
cell therapies.
In summary, after consideration of the public comments we received,
we are finalizing our proposal to assign status indicator ``B'' to CPT
codes 0537T, 0538T, and 0539T for CY 2022. Additionally, we are
continuing our policy from CY 2019 to assign status indicator ``S'' to
CPT code 0540T for CY 2022. Table 25 below shows the final SI and APC
assignments for HCPCS codes 0537T, 0538T, 0539T, and 0540T for CY 2022.
For more information on CY 2022 OPPS final status indicators, APC
assignments, and payment rates for HCPCS codes, including the CAR T-
cell drug codes, we refer readers to Addendum B to this final rule with
comment period. In addition, the status indicator definitions can be
found in Addendum D1 (OPPS Payment Status Indicators for CY 2022) to
this final rule with comment period. Both Addendum B and D1 are
available via the internet on the CMS website.
[[Page 63552]]
[GRAPHIC] [TIFF OMITTED] TR16NO21.037
10. ClariFix Procedure (APC 5164)
For CY 2022, we proposed to continue to assign HCPCS code C9771
(Nasal/sinus endoscopy, cryoablation nasal tissue(s) and/or nerve(s),
unilateral or bilateral)) to APC 5164 Level 4 ENT Procedures. We
created HCPCS code C9771 to describe the technology associated with
nasal endoscopy with cryoablation of nasal tissues and/or nerves, based
on our review of a New Technology APC application submitted by the
manufacturer of the technology. HCPCS code C9771 was effective on
January 1, 2021.
Comment: We received one comment from the manufacturer requesting
that HCPCS code C9771 be reassigned to APC 5165 Level 5 ENT Procedures,
which had a proposed CY 2022 OPPS payment rate of $5,218.17. The
commenter believed that assigning HCPCS code C9771 to APC 5165 would be
more appropriate due to the resource and clinical similarity to the
procedures in that APC.
Response: We thank the commenter for their recommendation. After
reviewing the comment, and after further evaluation of the procedure,
as well as input from our medical advisors, we continue to believe that
the current APC assignment for HCPCS code C9771 is appropriate, based
on its resource and clinical similarity to the procedures in APC 5164.
Therefore, we are not accepting the commenter's recommendation. We
remind hospitals that every year we review the APC assignments for all
services and items paid under the OPPS. We will reassess the APC
assignment for the procedure described by HCPCS C9771 once we have
claims data for the code. We note that the first year that claims data
will be available for HCPCS code C9771 will be during the CY 2023
rulemaking cycle.
In summary, after consideration of the public comment, we are
finalizing our proposal without modification. The final CY 2022 OPPS
payment rate for this code can be found in Addendum B to this final
rule with comment period. In addition, we refer readers to Addendum D1
of this final rule with comment period for the status indicator (SI)
meanings for all codes reported under the OPPS. Both Addendum B and D1
are available via the internet on the CMS website.
11. Dilapan-S Cervical Dilation Procedure (APC 5412)
For CY 2022, we proposed to continue to assign CPT code 59200
(Insertion of cervical dilator (for example, laminaria, prostaglandin)
(separate procedure)) to APC 5412 (Level 2 Gynecologic Procedures) with
a proposed payment rate of $289.30.
Comment: A few commenters requested that CMS reassign CPT code
59200 to APC 5413 (Level 3 Gynecologic Procedures) with a proposed
payment rate of $650.81. These commenters state that the cost of
Dilapan-S, a cervical softening and dilation device, is not reflected
in the payment rate for APC 5412.
Response: For CY 2022, OPPS payments are based on claims submitted
between January 1, 2019, through December 31, 2019, that were processed
on or before June 30, 2020. Based on our evaluation of the claims data
for this final rule with comment period, the geometric mean cost for
CPT code 59200 is $456.73, which, while it does fall outside the range
of geometric mean costs for APC 5412 ($206.24-$402.55) it does not fall
within the range of geometric mean costs for APC 5413 ($516.27-
$874.50.) Given that the Dilapan-S device and CPT code 59200 have both
existed for a significant period of time, the fact that payment for CPT
code 59200 does not reflect the costs of Dilapan-S suggests that this
device is not routinely used to furnish CPT code 59200. Furthermore,
based on our review of the clinical characteristics of the procedure
and input from our medical advisors, we continue to believe that CPT
code 59200 is more clinically similar to the other services in APC
5412.
In summary, after consideration of the public comments, we are
finalizing our proposal to continue to assign CPT code 59200 to APC
5412. The final CY 2022 OPPS payment rates for these codes can be found
in Addendum B to this final rule with comment period. In addition, we
refer readers to Addendum D1 of this final rule with comment period for
the SI meanings for all codes reported under the OPPS. Both Addendum B
and D1 are available via the internet on the CMS website.
[[Page 63553]]
12. Ellipsys System Hemodialysis Arteriovenous Fistula (AVF) Procedure
(APC 5194)
For CY 2022, we proposed to continue to assign HCPCS code G2170 to
APC 5194 (Level 4 Endovascular Procedures) with a proposed payment rate
of $16,484.41.
Comment: Commenters supported this proposal.
Response: We appreciate commenters' support.
In summary, after consideration of the public comments, we are
finalizing our proposal without modification. Specifically, we are
finalizing our APC proposal to continue to assign HCPCS code G2170 to
APC 5194.
The final CY 2022 OPPS payment rate for this code can be found in
Addendum B to this final rule with comment period. In addition, we
refer readers to Addendum D1 of this final rule with comment period for
the status indicator (SI) meanings for all codes reported under the
OPPS. Both Addendum B and D1 are available via the internet on the CMS
website.
13. Esophagogastroduodenoscopy (APC 5331)
For CY 2022, we proposed to continue to assign CPT code 43240
(Esophagogastroduodenoscopy, flexible, transoral; with transmural
drainage of pseudocyst (includes placement of transmural drainage
catheter[s]/stent[s], when performed, and endoscopic ultrasound, when
performed)) to APC 5303 (Level 3 Upper GI Procedures) with a proposed
payment rate of $3,160.76.
Comment: One commenter requested the reassignment of CPT code 43240
to APC 5331 (Complex GI Procedures) with a proposed payment rate of
$5,159.81. The commenter stated that the geometric mean cost of CPT
code 43240 ($5827.94) exceeds the 2 times threshold for APC 5303 and is
within the range of the geometric mean costs for APC 5331 ($4,706.48-
$6,277.12). Furthermore, the commenter stated that CPT code 43240 is
more clinically similar to the services in APC 5331, which includes all
other gastroenterology stent placement codes.
Response: Based on our review of the cost data and input from our
clinical advisors, we agree that CPT code 43240 would be more
appropriately placed in APC 5331 based on its clinical and resource
homogeneity to the procedures in the APC. Therefore, we are reassigning
CPT code 43240 to APC 5331.
In summary, after consideration of the public comments, we are
finalizing the reassignment of CPT code 43240 to APC 5331. The final CY
2022 OPPS payment rate for this code can be found in Addendum B to this
final rule with comment period. In addition, we refer readers to
Addendum D1 of this final rule with comment period for the SI meanings
for all codes reported under the OPPS. Both Addendum B and D1 are
available via the internet on the CMS website.
14. External Electrocardiogram (ECG) (APCs 5733 and 5734)
For CY 2022, we proposed to continue to assign CPT code 93242
(External ECG recording for more than 48 hours up to 7 days by
continuous rhythm recording) to APC 5732 (Level 2 Minor Procedures)
with a proposed payment rate of $34.72 and CPT code 93243 (External ECG
recording for more than 48 hours up to 7 days scanning analysis with
report) to APC 5733 (Level 3 Minor Procedures) with a proposed payment
rate of $57.12.
Comment: A few commenters suggested that, based on clinical
similarity to CPT codes 93225 (External electrocardiographic recording
up to 48 hours by continuous rhythm recording and storage; recording
(includes connection, recording, and disconnection)) and 93226
(External electrocardiographic recording up to 48 hours by continuous
rhythm recording and storage; scanning analysis with report), which
include payment for a holter monitor, CMS should reassign CPT codes
93242 and 93243 to APC 5734 (Level 4 Minor Procedures) with a proposed
payment rate of $115.71. Commenters further stated that placement in
APC 5734 would be consistent with the placement of the predecessor
codes, CPT codes 0296T (External electrocardiographic recording for
more than 48 hours up to 21 days by continuous rhythm recording and
storage; recording (includes connection and initial recording)) and
0296T (External electrocardiographic recording for more than 48 hours
up to 21 days by continuous rhythm recording and storage; scanning
analysis with report).
Response: Based on our review of the clinical characteristics of
the procedure and input from our medical advisors, we agree with
commenters that resources associated with furnishing CPT codes 93242
and 93243 may not be accurately reflected in their current APC
assignment. We do not agree with commenters that both codes should be
reassigned to APC 5734. We note that the predecessor codes, CPT codes
0296T and 0297T, described 21 days of continuous monitoring, while the
current codes, CPT codes 93242 and 93243, describe 7 days of
monitoring. We believe that CPT code 93242 shares greater clinical and
cost similarities to the services in APC 5733 (Level 3 Minor
Procedures), which has a proposed payment rate of $57.12. We agree with
commenters, however, the CPT code 93243 does share clinical and cost
similarities with the other services in APC 5734.
In summary, after consideration of the public comments, we are
finalizing our proposal with modification. Specifically, we are
assigning CPT code 93242 to APC 5733 and CPT code 93243 to APC 5734.
The final CY 2022 OPPS payment rates for these codes can be found in
Addendum B to this final rule with comment period. In addition, we
refer readers to Addendum D1 of this final rule with comment period for
the SI meanings for all codes reported under the OPPS. Both Addendum B
and D1 are available via the internet on the CMS website.
15. Eye-Movement Analysis Without Spatial Calibration (CPT Code 0615T)
The CPT Editorial Panel established a new CPT code 0615T, 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.
We included this new code in the July quarterly OPPS update CR
(Transmittal 10224, Change Request 11814, dated July 15, 2020).
Effective July 1, 2020, we assigned CPT code 0615T to APC 5734 (Level 4
Minor Procedures) with status indicator ``Q1'' (conditionally
packaged).
As displayed in the Addendum B to the CY 2022 ASC/OPPS proposed
rule, we proposed to continue to assign 0615T to APC 5734 with status
indicator ``Q1'' and a proposed OPPS payment rate of $115.71 for CY
2022.
Comment: The manufacturer of the EyeBOX resubmitted their comment
again this year because they are still concerned that the lack of
adequate, separate reimbursement will strongly discourage hospitals
from providing this important technology to their patients.
[[Page 63554]]
The commenter urged CMS to: (1) Change the APC assignment of CPT code
0615T to APC 5722 (Level 2 Diagnostic Tests and Related Services); and
(2) change the status indicator for the service to ``S'' to allow for
separate payment under the OPPS. The commenter continues to claim that
the proposed reimbursement rate for services in APC 5734 is inadequate
to pay hospitals appropriately for the costs of furnishing the EyeBOX
test. They assert the EyeBOX test costs hospitals at least $200.00 to
provide and the clinical characteristics and resources associated with
0615T are more similar to codes in APC 5722 than services in APC 5734.
Response: We note that OPPS payment rates for the CY 2022 final
rule are based on claims submitted between January 1, 2019, through
December 31, 2019, that were processed on or before June 30, 2020.
Because HCPCS code 0615T was established on July 1, 2020, we did not
have claims data available for CY 2022 OPPS ratesetting.
As far as the resource similarity of CPT code 0615T to other eye-
related diagnostic tests that are assigned to APC 5722, such as CPT
code 92240 (Indocyanine-green angiography (includes multiframe imaging)
with interpretation and report, unilateral or bilateral) and CPT code
92242 (Fluorescein angiography and indocyanine-green angiography
(includes multiframe imaging) performed at the same patient encounter
with interpretation and report, unilateral or bilateral), the EyeBOX
test does not involve an injection. Therefore, we continue to believe
that the resource costs for CPT code 0615T are not comparable to other
eye-related diagnostic tests in APC 5722. Updated CY 2019 claims data
for this final rule with comment period indicate that the geometric
mean cost of APC 5722 is 257.89, while the geometric mean cost of APC
5734 is $109.88. Based on the lack of claims data, we believe that
maintaining assignment of APC 5734 for CPT code 0615T for CY 2022
continues to be appropriate.
Depending on the procedures submitted on the claim, and whether the
procedure described by CPT code 0615T is performed with any other
services on the same day, the procedure described by CPT code 0615T may
be paid separately through an APC (in this case APC 5734) or receive
packaged payment when accompanying a more significant procedure that is
reported on the claim. Based on the nature of this procedure, which may
be performed by itself or with other procedures on the same claim, we
believe that the continued assignment of status indicator ``Q1'' is
appropriate for the procedure described by CPT code 0615T.
As we do every year, we will reevaluate the APC assignment for CPT
code 0615T for the next rulemaking cycle. We note that we review, on an
annual basis, the APC assignments for all services and items paid under
the OPPS.
We are finalizing our proposal, without modification, to continue
to assign CPT code 0615T to status indicator ``Q1'' and APC 5734 for CY
2022. The final CY 2022 payment rate for the CPT code can be found in
Addendum B to this final rule with comment period (which is available
via the internet on the CMS website).
16. FemSelect Enplace Procedure (APC 5415)
For CY 2022, we proposed to continue to assign HCPCS code C9778
(Colpopexy, vaginal; minimally invasive extra-peritoneal approach
(sacrospinous)) to APC 5414 Level 4 Gynecologic Procedures. We created
HCPCS code C9778 to describe the technology associated with vaginal
colpopexy by sacrospinous ligament fixation, based on our review of a
New Technology APC application submitted by the manufacturer of the
technology. HCPCS code C9778 was effective on July 1, 2021.
Comment: We received many comments from providers and the
manufacturer requesting that HCPCS code C9778 be reassigned to APC 5415
Level 5 Gynecologic Procedures, which had a proposed CY 2022 OPPS
payment rate of $4,525.49. Commenters stated that the resource cost
exceeded the payment provided by APC 5414, and that APC 5415 would be a
more appropriate APC assignment.
Response: We thank the commenters for their recommendations. Based
on input from our medical advisors, further evaluation of the resources
to perform the surgery, and its similarity to existing procedures, we
believe that HCPCS code C9778 should be reassigned to APC 5415. Based
on our assessment, we believe that the service described by HCPCS code
C9778 shares similar resource and clinical characteristics to the
procedures included in APC 5415.
In summary, after consideration of the public comments, we are
reassigning HCPCS code C9778 to APC 5415 Level 5 Gynecologic Procedures
for CY 2022, as shown in Table 26 below. The final CY 2022 OPPS payment
rates for this code can be found in Addendum B to this final rule with
comment period. In addition, we refer readers to Addendum D1 of this
final rule with comment period for the SI meanings for all codes
reported under the OPPS. Both Addendum B and D1 are available via the
internet on the CMS website.
As we do every year, we will reevaluate the APC assignment for
HCPCS code C9778 for the next rulemaking cycle. We note that we review,
on an annual basis, the APC assignments for all services and items paid
under the OPPS. The first year that claims data will be available for
HCPCS code C9778 will be during the CY 2023 rulemaking cycle.
[GRAPHIC] [TIFF OMITTED] TR16NO21.038
[[Page 63555]]
17. Hypoglossal Nerve Neurostimulator (HGNS) Procedure (APC 5465)
Effective January 1, 2022, the AMA's CPT Editorial Panel created a
new code to describe open implantation of hypoglossal nerve
neurostimulator array. For CY 2022, we proposed to assign CPT code
64582 to APC 5465 (Level 5 Neurostimulator and Related Procedures) with
a proposed payment rate of $30,208.51. We note that CPT code 64582 was
listed as placeholder code 645X1 in OPPS Addendum B of the CY 2022
OPPS/ASC proposed rule.
Comment: One commenter expressed support for the proposed APC
assignment.
Response: We thank the commenter for their support.
In summary, after consideration of the public comments, we are
finalizing our proposal without modification. Specifically, we are
finalizing our APC proposal to assign CPT code 64582 to APC 5465. The
final CY 2022 OPPS payment rate for this code can be found in Addendum
B to this final rule with comment period. In addition, we refer readers
to Addendum D1 of this final rule with comment period for the SI
meanings for all codes reported under the OPPS. Both Addendum B and D1
are available via the internet on the CMS website.
18. IDx-DR: Artificial Intelligence System To Detect Diabetic
Retinopathy (APC 5733)
For CY 2022, we proposed to continue to assign CPT code 92229
(Imaging of retina for detection or monitoring of disease; with point-
of care automated analysis with diagnostic report; unilateral or
bilateral) to APC 5733 (Level 3 Minor Procedures) with a proposed
payment rate of $57.12.
Comment: Some commenters disagreed with the proposed payment amount
and requested a revision in the assignment from APC 5733 to APC 5734
(Level 4 Minor Procedures) with a proposed payment rate of $115.71. The
commenters reported that the service described by CPT code 92229 is
similar to the technical components described by existing CPT code
92250 (Fundus photography with interpretation and report), which was
proposed for assignment to APC 5734. They stated that providers
previously billed for this service on an interim basis under CPT code
92250. The commenters indicated that APC 5734, which is the APC
assigned to the predecessor CPT code 92250, is the more appropriate
assignment for CPT code 92229 until sufficient Medicare claims data can
be collected by CMS to either retain that assignment or reassign to
another APC.
One commenter expressed support for our proposal to continue APC
assignment of CPT code 92229 to APC 5733.
Response: As discussed in the CY 2021 OPPS final rule with comment
period (85 FR 85962), we do not believe that CPT code 92250, which the
commenters reported to be the predecessor code, is similar to the IDx-
DR test; otherwise, the placement of the new IDx-DR code would have
been close to CPT code 92250. As the commenter did not provide any
additional clinical information or cost data, we continue to believe
that CPT code 92229 should be assigned to APC 5733.
In summary, after consideration of the public comments, we are
finalizing our proposal without modification. Specifically, we are
continuing to assign CPT code 92229 to APC 5733. The final CY 2022
payment rate for this code can be found in Addendum B to this final
rule with comment period. In addition, we refer readers to Addendum D1
of this final rule with comment period for the status indicator (SI)
meanings for all codes reported under the OPPS. Both Addendum B and D1
are available via the internet on the CMS website.
19. Intravascular Lithotripsy (IVL) Procedure (APCs 5193 and 5194)
As explained in the CY 2021 OPPS/ASC final rule with comment
period, we finalized our proposal to assign HCPCS codes C9764
(Revascularization, endovascular, open or percutaneous, lower extremity
artery(ies), except tibial/peroneal; with intravascular lithotripsy,
includes angioplasty within the same vessel(s), when performed) and
C9765 (Revascularization, endovascular, open or percutaneous, lower
extremity artery(ies), except tibial/peroneal; with intravascular
lithotripsy, and transluminal stent placement(s), includes angioplasty
within the same vessel(s), when performed) to APC 5192 and C9766
(Revascularization, endovascular, open or percutaneous, lower extremity
artery(ies), except tibial/peroneal; with intravascular lithotripsy and
atherectomy, includes angioplasty within the same vessel(s), when
performed) to APC 5193 (85 FR 85975 through 85976). For a detailed
discussion on the APC assignments for HCPCS code(s) describing the IVL
procedures, we refer readers to the CY 2021 OPPS/ASC final rule with
comment period (85 FR 85975 through 85976).
At the August 23, 2021 meeting, the HOP Panel recommended that CMS
reassign HCPCS code C9764 to APC 5193 and HCPCS codes C9765 and C9766
to APC 5194, as long as the cost of the IVL device is within 10 percent
of other devices currently available.
Comment: Several commenters, including the manufacturer, disagreed
with CMS's proposed CY 2022 APC assignments for the IVL service
described by HCPCS codes C9764, C9765, and C9766. They argued that, for
new procedures that did not have claims in the CY 2019 claims data,
current claims data should be used when reviewing for APC placement.
The commenter also noted the CY 2020 claims data provided evidence to
support their argument that the service described by HCPCS code C9764
is not adequately reimbursed under APC 5192, and recommended
reassignment to APC 5193 (Level 3 Endovascular Procedures). Similarly,
the commenters indicated that assignment of HCPCS codes C9765 and C9766
to APC 5193 does not provide adequate payment for the service based on
2020 claims data and that those codes should instead be placed in APC
5194 (Level 4 Endovascular Procedures).
Response: In the CY 2022 OPPS/ASC proposed rule, we proposed to use
2019 claims data in the OPPS due to the effects of the PHE on the CY
2020 claims data. As the commenter noted, claims data are not available
for HCPCS codes C9764 through C9766 in the CY 2019 claims data, only in
CY 2020. As discussed in more detail in section X.E. of this final rule
with comment period, we are not using CY 2020 claims data for
ratesetting because of data integrity concerns with respect to the
broader OPPS; however, based on stakeholder request, we are reviewing
the CY 2020 claims data for determining potential APC assignments in
cases where CY 2019 claims data did not include any information on new
procedures.
Under what would otherwise be the standard ratesetting process, we
would typically use CY 2020 claims data submitted for services
furnished in CY 2020, that were processed on or before June 30, 2021.
Our analysis of that CY 2020 claims data supports reassigning CPT code
C9764 to APC 5193 and CPT codes C9765 and C9766 to APC 5194, based on
their estimated geometric mean costs. Specifically, our claims data
show a geometric mean cost of approximately $11,442.47 for HCPCS code
C9764 based on 253 single claims, which is comparable to the geometric
mean cost of about $10,258.49 for APC 5193, rather than the geometric
mean cost of approximately $5,061.89 for APC 5192. The geometric mean
cost of approximately $17,372.02 for HCPCS code C9765 and the geometric
mean
[[Page 63556]]
cost of approximately $19,285.11 for HCPCS code C9766 is also
consistent with the costs for significant services in APC 5194, which
range between about $10,670.16 (for HCPCS code C9754) to $24,311.10
(for HCPCS code C9767). Based on our analysis of the latest available
CY 2020 claims data, we believe that HCPCS codes C9765 and C9766 are
more appropriately assigned to APC 5194.
In summary, after consideration of the public comments, we are
assigning HCPCS code C9764 to APC 5193 and HCPCS codes C9765 and C9766
to APC 5194. Table 27 below lists the three HCPCS codes for the IVL
procedure and their APC and SI assignments for CY 2022. The final CY
2022 OPPS payment rates for the codes can be found in Addendum B of
this final rule with comment period. Addendum B is available via the
internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TR16NO21.039
20. 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: Two commenters, including the manufacturer of Lixelle
apheresis column, requested payment for the procedure under the OPPS.
One commenter stated that Lixelle is the only device available for the
treatment DRA and that all DRA patients are Medicare beneficiaries. The
commenter stated that they have been unable to complete the FDA-
required post-approval study as a condition of the HDE, due to
difficulty in securing patient enrollment because of lack of CMS
payment for the Lixelle apheresis procedure. The commenter stated that
CMS should rely upon the HUD program requirements and post-approval
clinical studies mandated and approved by FDA for coverage and payment
of Lixelle apheresis in the OPPS. The commenter acknowledged that
Medicare payment under the ESRD PPS is not possible at this time but
stated that payment under the OPPS may be more clinically appropriate.
The commenter requested that CMS provide payment under the OPPS because
the Lixelle apheresis is not eligible for Medicare payment when
furnished in the dialysis facility at this time, and therefore, these
treatments (even though technically not ``scheduled'' or ``non-
routine'') should be eligible for payment when furnished in the
hospital outpatient department under the OPPS. Specifically, the
commenter requested that CMS provide payment under the OPPS using the
following pathways: (1) By paying 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 reinfusion), proposed to be assigned to APC 5243
(Level 3 Blood Product Exchange and Related Services) for CY 2022, and
requiring 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); (2) by allowing payment for
[[Page 63557]]
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
2022, and requiring the use of a modifier or add-on code to provide
additional payment beyond that provided for APC 5401; or (3) by
creating a HCPCS C code or G code for the Lixelle apheresis procedure
and assigning the code to APC 5242 (Level 2 Blood Product Exchange and
Related Services).
Response: We appreciate the commenters' input on the Lixelle device
and will consider their recommendations for future rulemaking.
21. Low Dose Computed Tomography (LDCT) (APC 5522)
For CY 2022, we proposed to continue to assign CPT code 71271
(Computed tomography, thorax, low dose for lung cancer screening,
without contrast material(s)) to APC 5521 (Level 1 Imaging without
Contrast) with a proposed payment rate of $83.01.
Comment: Several commenters stated that CPT code 71271 should be
reassigned to APC 5523 (Level 3 Imaging without Contrast) with a
proposed payment rate of $236.14. These commenters stated that CPT code
71271 should not be in a lower APC than CPT code 71270 (Computed
tomography, thorax; without contrast material, followed by contrast
material(s) and further sections) given that CPT code 71271 has
additional resource costs, such as greater clinical staff time. The
commenter noted that we proposed to assign CPT code 71270 to APC 5571
(Level 1 Imaging With Contrast) with a payment rate of $183.30.
Response: The predecessor code to CPT code 71271 was HCPCS code
G0297 (Low dose ct (ldct) scan for lung cancer screening) which was
assigned to APC 5521. However, in the CY 2021 Physician Fee Schedule
final rule, we stated that it was a longstanding CMS policy that the
payment for HCPCS code G0297 match the payment rate for CPT code 71250,
which we proposed to assign to APC 5522 (Level 2 Imaging without
Contrast) with a payment rate of $111.73, as the services are almost
identical in terms of clinical similarity and resource costs (85 FR
84621 through 84622). In the interests of preserving the relationship
between the predecessor code and CPT code 71250, and based on our
review of the clinical characteristics of the procedure and input from
our medical advisors, we believe that CPT code 71271 should be
reassigned to APC 5522 (Level 2 Imaging without Contrast). We believe
that assignment to APC 5522 for both CPT codes 71250 and 71271
accurately reflects the resources associated with performing this
service.
In summary, after consideration of the public comments, we are
finalizing our proposal, with modification. Specifically, we are
reassigning CPT code 71271 to APC 5522. The final CY 2022 payment rate
for this code can be found in Addendum B to this final rule with
comment period. In addition, we refer readers to Addendum D1 to this
final rule with comment period for the SI meanings for all codes
reported under the OPPS. Both Addendum B and D1 are available via the
internet on the CMS website.
22. Magnetic Resonance-Guided Focused Ultrasound Surgery (MRgFUS) (APC
5463)
CPT code 0398T (Magnetic resonance image guided high intensity
focused ultrasound (mrgfus), stereotactic ablation lesion, intracranial
for movement disorder including stereotactic navigation and frame
placement when performed) describes MRgFUS procedures for the treatment
of essential tremor. We have identified 175 paid claims for CY 2019
with a geometric mean of $12,334.67. CPT code 0398T had been assigned
to a New Technology APC for several years. Then, in CY 2021, we
reorganized the Neurostimulator and Related Procedures APCs to add a
new Level 3 category (APC 5463) that had a geometric mean of
approximately $10,950. While the payment rate for APC 5463 was somewhat
lower than the geometric mean of CPT code 0398T, it was a reasonable
estimate of the cost of MRgFUS for the treatment of essential tremor in
a prospective payment system where some services receive more payment
than their geometric mean cost, while other services receive less
payment than their geometric mean cost. For CY 2022, we proposed
continuing to assign CPT code 0398T to APC 5463 with a payment rate of
approximately $10,956.33.
Comment: One commenter, the manufacturer, requests a higher paying
APC for CPT code 0398T because the current payment rate for APC 5463
(Level 3 Neurostimulator and Related Procedures) of approximately
$10,956.33 is substantially lower than the geometric mean cost of the
service. According to the commenter, the geometric mean of CPT code
0398T has steadily increased from $10,136 in CY 2018 to $13,907 in CY
2020.
Response: We appreciate the commenter's concerns about the level of
payment for CPT code 0398T. However, the OPPS is a prospective payment
system and it is expected that any individual service may be paid more
or less than the geometric mean cost of the service. The current
payment difference between the geometric mean cost of CPT code 0398T
and the payment rate for APC 5463 is $1,153.66 ($12,109.99 minus
$10,956.33) with the payment rate of APC 5463 equal to $10,956.33. That
means there is no violation of the two-times rule to assign CPT code
0398T to APC 5463, and the service is assigned to an APC that covers
around 90 percent of the geometric mean cost of the service. Also, CPT
code 0398T is grouped with other neurostimulator and related procedures
that have clinical and resource similarity to the MRgFUS.
After our review of the public comments, we have decided to
implement our proposal without modification to continue to assign CPT
code 0398T to APC 5463 (Level 3 Neurostimulator and Related
Procedures). The final CY 2022 payment rate for CPT code 0398T can be
found in Addendum B to this final rule with comment period, which is
available via the internet on the CMS website.
23. Medical Physics Dose (APC 5612)
For CY 2022, we proposed to continue to assign CPT code 76145
(Medical physics dose evaluation for radiation exposure that exceeds
institutional review threshold, including report (medical physicist/
dosimetrist)) in APC 5611 (Level 1 Therapeutic Radiation Treatment
Preparation) with a proposed payment rate of $130.19.
Comment: Several commenters disagreed with the assignment to APC
5611 and requested a reassignment to APC 5724 (Level 4 Diagnostic Tests
and Related Services) with a proposed payment rate of $943.96. The
commenters stated that the services assigned to APC 5724 require
similar resource use as CPT code 76145. Commenters also stated that APC
5724 contains a range of services that are clinically similar to CPT
76145.
Response: Given that we have no claims data for this service, and
that APC 5724 does not contain any radiation oncology services, we do
not believe that APC 5724 is an appropriate assignment on the basis of
clinical similarity or similar costs. However, based on our review of
the service associated with CPT code 76145 and input from our medical
advisors, we believe that APC code 5612, with a proposed payment rate
of $347.44, may be a more appropriate assignment for
[[Page 63558]]
the code. APC 5612 contains CPT code 77307 (Teletherapy isodose plan;
complex (multiple treatment areas, tangential ports, the use of wedges,
blocking, rotational beam, or special beam considerations), includes
basic dosimetry calculation(s)), which is clinically similar to CPT
code 76145 in that CPT code 77307 describes the work of a medical
physicist and dosimetrist. Once we have claims data, we will review the
APC assignment and determine whether a change is necessary. We note
that we review, on an annual basis, the APC assignments for all items
and services paid under the OPPS.
In summary, after consideration of the public comments, we are
reassigning CPT code 76145 to APC 5612. The final CY 2022 payment rate
for this code can be found in Addendum B to this final rule with
comment period. In addition, we refer readers to Addendum D1 to this
final rule with comment period for the SI meanings for all codes
reported under the OPPS. Both Addendum B and D1 are available via the
internet on the CMS website.
24. MiVu Mucosal Integrity Testing System (APC 5303)
For CY 2022, we proposed to continue to assign HCPCS code C9777
(Esophageal mucosal integrity testing by electrical impedance,
transoral (list separately in addition to code for primary procedure))
to OPPS status indicator ``N,'' to indicate that the payment for HCPCS
code C9777 is packaged into the payment for the primary procedure. We
created HCPCS code C9777 to describe mucosal integrity testing by
electrical impedance, based on our review of a New Technology APC
application submitted by the manufacturer of the technology. HCPCS code
C9777 was effective on April 1, 2021. Based on the application
submitted to CMS and our initial review of the procedure, we believed
the MiVu test to be performed with another primary procedure on the
same day. Because the MiVu test is always performed as an add-on test
to either an esophagoscopy or esophagogastroduodenoscopy, we
established a C-code to appropriately describe the add-on component.
Under the regulation at 42 CFR 419.2, payment for add-on codes is
packaged or conditionally packaged into the payment for the related
procedures or services under the OPPS.
Comment: We received several comments from providers and the
manufacturer requesting that HCPCS code C9777 be separately reimbursed
and reassigned to APC 5303 Level 3 Upper GI Procedures, which had a
proposed CY 2022 OPPS payment rate of $3,160.76. Commenters argued that
MiVu\TM\ should be considered the primary procedure, not the
esophagoscopy or esophagogastroduodenoscopy and that based on the cost
of the device and procedure, the appropriate APC assignment is APC
5303.
Response: We thank the commenters for their recommendations. After
further evaluation of procedures performed in conjunction with the MiVu
test on the same day, review of the comments, and input from our
medical advisors, we believe that modifying the descriptor for the C-
code is appropriate. We believe that revising the long descriptor to
describe the service of performing both the MiVu test with either an
esophagoscopy or esophagogastroduodenoscopy on the same day would
ensure accurate tracking and reporting of the service and minimize
inappropriate reporting of the services. Consequently, effective
January 1, 2022, we are revising the descriptor for HCPCS code C9777 to
read ``Esophageal mucosal integrity testing by electrical impedance,
transoral, includes esophagoscopy or esophagogastroduodenoscopy,'' to
accurately reflect how the procedure is currently performed in the
hospital outpatient setting. With the change in the descriptor for
HCPCS code C9777, we are assigning HCPCS code C9777 to APC 5303 based
on its resource and clinical homogeneity to the other procedures in the
APC. We remind hospitals that because HCPCS code C9777 describes both
the MiVu test performed with either an esophagoscopy or
esophagogastroduodenoscopy on the same day, HOPDs should not report
separate HCPCS codes for the esophagoscopy or
esophagogastroduodenoscopy.
In summary, after consideration of the public comments, we are
modifying the long descriptor for HCPCS code C9777, as shown in Table
28 below, and reassigning HCPCS code C9777 to APC 5303 (Level 3 Upper
GI Procedures) for CY 2022. The final CY 2022 OPPS payment rates for
this code can be found in Addendum B to this final rule with comment
period. In addition, we refer readers to Addendum D1 of this final rule
with comment period for the SI meanings for all codes reported under
the OPPS. Both Addendum B and D1 are available via the internet on the
CMS website.
As we do every year, we will reevaluate the APC assignment for
HCPCS code C9777 for the next rulemaking cycle. We note that we review,
on an annual basis, the APC assignments for all services and items paid
under the OPPS.
[GRAPHIC] [TIFF OMITTED] TR16NO21.040
[[Page 63559]]
25. Musculoskeletal Procedures (APCs 5111 Through 5116)
Prior to the CY 2016 OPPS, payment for musculoskeletal procedures
was primarily divided according to anatomy and the type of
musculoskeletal procedure. As part of the CY 2016 reorganization to
better structure the OPPS payments to utilize prospective payment
packages, we consolidated these individual APCs so that they became a
general Musculoskeletal APC series (80 FR 70397 through 70398).
In the CY 2018 OPPS/ASC final rule with comment period (82 FR
59300), we continued to apply a six-level structure for the
Musculoskeletal APCs because doing so provided an appropriate
distinction for resource costs at each level and provided clinical
homogeneity. However, we indicated that we would continue to review the
structure of these APCs to determine whether additional granularity
would be necessary.
In the CY 2019 OPPS proposed rule (83 FR 37096), we recognized that
commenters had previously expressed concerns regarding the granularity
of the current APC levels and, therefore, requested comment on the
establishment of additional levels. Specifically, we solicited comments
on the creation of a new APC level between the current Level 5 and
Level 6 within the Musculoskeletal APC series. While some commenters
suggested APC reconfigurations and requests for change to APC
assignments, many commenters requested that we maintain the current
six-level structure and continue to monitor the claims data as they
become available. Therefore, in the CY 2019 OPPS/ASC final rule with
comment period, we maintained the six-level APC structure for the
Musculoskeletal Procedures APCs (83 FR 58920 through 58921).
Based on the claims data available for the CY 2022 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 the it for the CY 2022 OPPS update.
Comment: One commenter requested that we assign CPT code 28297
(Correction, hallux valgus (bunionectomy), with sesamoidectomy, when
performed; with first metatarsal and medial cuneiform joint
arthrodesis, any method) and CPT code 28740 (Arthrodesis, midtarsal or
tarsometatarsal, single joint) from APC 5114 to APC 5115. They noted
that if these codes were considered cost significant for purposes of
the 2 times rule, then these codes would cause 2 times rule violations
in APC 5114.
Response: We appreciate the commenter's recommendation regarding
the APC assignment of CPT 28297 and 28740. CPT codes 28297 and 28740
are currently assigned to APC 5114 (Level 4 Musculoskeletal
Procedures). We note that APC 5114 does not currently have a 2 times
rule violation, under the requirements for cost significance as
described in section III.B.2. of this final rule with comment period.
In addition, we have reviewed the codes' geometric mean cost in both
the CY 2019 and CY 2020 claims data available as well as their clinical
similarity to other codes within APC 5114 and believe that their
current APC assignment continues to be appropriate.
Comment: One commenter supported the proposed assignment of HCPCS
code 0627T (Percutaneous injection of allogeneic cellular and/or
tissue-based product, intervertebral disc, unilateral or bilateral
injection, with fluoroscopic guidance, lumbar; first level) and HCPCS
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 APC 5115. Another
commenter supported the proposed assignment of HCPCS code 0627T
(Percutaneous injection of allogeneic cellular and/or tissue-based
product, intervertebral disc, unilateral or bilateral injection, with
fluoroscopic guidance, lumbar; first level) and 0630T (Percutaneous
injection of allogeneic cellular and/or tissue-based product,
intervertebral disc, unilateral or bilateral injection, with ct
guidance, lumbar; each additional level (list separately in addition to
code for primary procedure)) to APC 5115.
Response: We appreciate the commenters' support. We note that that
the availability of these codes does not mean that the product(s) are
legally marketed under the Federal Food, Drug and Cosmetic Act and/or
the Public Health Service Act.
Comment: A commenter requested that we allow an exception from the
broader proposed OPPS ratesetting process to use the CY 2020 claims
data for ratesetting for the musculoskeletal APC series (5111 through
5116). Two commenters also requested that we allow an exception for the
use of CY 2020 claims data for CPT code 27130 (Arthroplasty, acetabular
and proximal femoral prosthetic replacement (total hip arthroplasty),
with or without autograft or allograft), which was removed from the IPO
list beginning in CY 2020.
Response: We appreciate the commenters' concerns regarding
available data and its use in OPPS ratesetting. However, we note that
widespread use of claims data from two different years to set rates for
a items and services in a single year could distort the OPPS relative
payment weights, which we believe would be inappropriate and
unnecessary when claims data from a single year--in this case, 2019--
are largely available for ratesetting and using these data generally to
set CY 2022 rates allows us to avoid this sort of distortion. As a
result, we are establishing a final policy of using CY 2019 claims for
establishing the OPPS relative weights but allowing limited use of CY
2020 claims for informational purposes where CY 2019 claims are not
otherwise available. For additional detail regarding the use of CY 2019
claims in CY 2022 OPPS ratesetting, please see section X.E. of this
final rule with comment period.
After consideration of the comments, we are finalizing the proposed
assignment of CPT codes 28297 and 28740 to APC 5114, and the proposed
assignment of CPT codes 0627T, 0629T and 0630T to APC 5115 for the CY
2022 OPPS.
26. Non-Highly Enriched Uranium (Non-HEU) Sources (APC 1442)
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, is produced in
legacy reactors outside of the United States using highly enriched
uranium (HEU).
The United States would like to eliminate domestic reliance on
these reactors, and is promoting the conversion of all medical
radioisotope production to non-HEU sources. Alternative methods for
producing Tc99m without HEU are technologically and economically
viable, and conversion to such production has begun. We expect that
this change in the supply source for the radioisotope used for modern
medical imaging will introduce new costs into the payment system that
are 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
[[Page 63560]]
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
68321).
Comment: Multiple commenters requested that we increase the payment
rate for HCPCS add-on code Q9969 from $10 and to make the add-on code
permanent. The commenters noted that we have not increased the payment
rate for Q9969 since the code was established in CY 2013, and one of
the commenters believes that we have made only token efforts to promote
the use of non-HEU produced Mo-99, the parent nuclide to Tc-99m.
One of the commenters supported a rate increase to Q9969 to fully
reflect the additional cost to providers to obtain non-HEU medical
isotopes. The same commenter suggested that if such a cost-analysis
could not be done for CY 2022, we should increase the payment for Q9969
by the annual market basket increase for CY 2022 along with a one-time
increase to reflect prior increases to the market basket between CY
2013 and CY 2021. Alternatively, the commenter suggested the payment
rate could be increased by the change in the drug cost threshold
packaging amount between CY 2013 and CY 2022.
Response: We appreciate the information we received from the
commenters supporting an increase to the payment rate of $10 for HCPCS
code Q9969, especially since the conversion to non-HEU sources for
medical isotopes has not been completed by all producers. As discussed
in the CY 2013 OPPS/ASC final rule with comment period, we did not
finalize a policy to use the usual OPPS methodologies to update the
non-HEU add-on payment (77 FR 68317). The purpose of the additional
payment is limited to mitigating any adverse impact of transitioning to
non-HEU sources, and we believe the add-on is appropriate at this time.
Comment: Multiple commenters supported the current payment amount
for HCPCS code Q9969, and they requested that we finalize our proposed
payment rate for the add-on.
Response: We appreciate the support of the commenters for the
proposed payment rate for HCPCS code Q9969.
After consideration of the public comments we received, we are
finalizing our proposal, without modification, to continue the policy
of providing an additional $10 payment for radioisotopes produced by
non-HEU sources for CY 2022 as represented by HCPCS code Q9969.
27. Nuclear Medicine Services: Single-Photon Emission Computed
Tomography (SPECT) Studies (APC 5593)
For CY 2022, we proposed to continue to assign CPT code 78803
(Radiopharmaceutical localization of tumor, inflammatory process or
distribution of radiopharmaceutical agent(s) (includes vascular flow
and blood pool imaging, when performed); tomographic (spect), single
area (eg, head, neck, chest, pelvis), single day imaging)) to APC 5593
(Level 3 Nuclear Medicine and Related Services) with a proposed payment
rate of $1,340.84.
Comment: One commenter expressed support for the proposed APC
assignment.
Response: We thank the commenter for their support. We note that,
based on our analysis of the claims data for this CY 2022 OPPS/ASC
final rule with comment period, our data reveals a geometric mean cost
of about $529.69 based on 4157 single claims (out of 9451 total
claims), which is in line with the geometric mean cost of $1,273.36 for
APC 5593.
In summary, after consideration of the public comments, we are
finalizing our proposal without modification to assign CPT code 78803
to APC 5593. The final CY 2022 OPPS payment rate for this code can be
found in Addendum B to this final rule with comment period. In
addition, we refer readers to Addendum D1 of this final rule with
comment period for the SI meanings for all codes reported under the
OPPS. Both Addendum B and D1 are available via the internet on the CMS
website.
28. Pathogen Test(s) for Platelets (APC 5733)
For the July 2017 update, the HCPCS Workgroup established HCPCS
code Q9987 (Pathogen(s) test for platelets) effective July 1, 2017.
This new code and the OPPS APC assignment was announced in the July
2017 OPPS quarterly update CR (Transmittal 3783, Change Request 10122,
dated May 26, 2017). Subsequently, HCPCS code Q9987 was deleted on
December 31, 2017, and replaced with permanent HCPCS code P9100
(Pathogen(s) test for platelets) effective January 1, 2018. Each of the
HCPCS codes were assigned to New Technology APCs for the period of July
2017 through December 2020 with payment rates for the service ranging
between $25.50 and $35.50. Starting in January 2021, we decided to
assign P9100 to APC 5732 (Level 2 Minor Procedures) with a payment rate
of approximately $33.
From July 2017 until 2021, only one type of pathogen test for
platelets, rapid bacterial testing, was described by HCPCS code P9100.
The estimated cost for a rapid bacterial test was around $30, which has
been confirmed through claims data. Starting in 2021, a new type of
pathogen test for platelets, culture-based bacterial testing, using
large volume delayed sampling (LVDS), was introduced. This culture-
based method is used to test for bacterial contamination of leukocyte-
reduced apheresis platelets and leukocyte-reduced whole blood platelet
concentrates. We do not have claims data describing the cost of the
LVDS test. For CY 2022, we proposed to assign HCPCS code P9100 to APC
5732 (Level 2 Minor Procedures with a payment rate of approximately
$33, which is the same APC assignment for HCPCS code P9100 as in CY
2021.
Comment: Two commenters requested we increase the payment rate for
HCPCS code P9100 by moving the service from APC 5732 (Level 2 Minor
Procedures) with payment rate of $32.98 to APC 5733 (Level 3 Minor
Procedures) with a payment rate of $54.24. The commenters claim that
the cost of the LVDS test is either $75 or $83, depending on which
manufacturer's test is used, which is substantially higher than the
approximately $30 cost of the rapid bacterial test for platelets. The
commenters believe that the proposed payment rate of $32.98 for APC
5732 is too low to adequately compensate hospitals for the share of
pathogen tests for platelets using the more expensive culture-based
test, using LVDS. Commenters believed assigning HCPCS code P9100 to APC
5733 with a payment rate of $54.24 would better reflect the mixture of
costs between culture-based platelet tests using LVDS and rapid
bacterial tests.
Response: We agree with the commenters that the payment rate for
HCPCS code P9100 should better reflect the resource cost of the
anticipated mixture of rapid bacterial platelet tests and culture-based
platelet tests, using LVDS, that will be used in CY 2022 to test for
bacterial contamination in platelets. Therefore, we support the
suggestion of the commenters to reassign HCPCS code P9100 to APC 5733
(Level 3 Minor Procedures) with a payment rate of $54.24.
After reviewing the public comments, we have decided to modify our
proposal and reassign HCPCS code P9100 from APC 5732 (Level 2 Minor
Procedures) to APC 5733 (Level 3 Minor Procedures) for CY 2022. The
final CY 2022 payment rate for HCPCS code P9100 can be found in
Addendum B to this CY 2022 OPPS/ASC final rule with comment period
[[Page 63561]]
which is available via the internet on the CMS website.
29. Pulmonary Rehabilitation (APC 5733)
For CY 2022, the AMA's CPT Editorial Panel created two new codes
describing pulmonary rehabilitation services and requested that CMS
delete HCPCS code G0424 (Pulmonary rehabilitation, including exercise
(includes monitoring), one hour, per session, up to two sessions per
day). We proposed to assign CPT code 94625 (Physician or other
qualified health care professional services for outpatient pulmonary
rehabilitation; without continuous oximetry monitoring (per session))
and CPT code 94626 (Physician or other qualified health care
professional services for outpatient pulmonary rehabilitation; with
continuous oximetry monitoring (per session)) to APC 5733 (Level 3
Minor Procedures) with a proposed payment rate of $57.12. We note that
CPT codes 94625 and 94626 were listed as placeholder codes 946X1 and
946X2, respectively, in OPPS Addendum B of the CY 2022 OPPS/ASC
proposed rule.
Comment: Several commenters disagreed with the proposed APC
assignment and requested that CMS reassign CPT codes 94625 and 94626 to
either APC 5721 (Level 1 Diagnostic Tests and Related Services) with a
proposed payment rate of $143.21 or to APC 5771 (Cardiac
Rehabilitation) with a proposed payment rate of $119.09. These
commenters stated that these APCs better reflected the clinical
similarity and costs associated with furnishing these services.
Response: CPT codes 94625 and 94626 do not describe diagnostic
tests and so are not clinically similar to the other services in APC
5721. While clinically similar to cardiac rehabilitation services,
predecessor HCPCS code G0424 has a geometric mean cost of $45.63 based
on 198,132 single claims (out of 199,356 total claims), which is
significantly lower than the geometric mean cost of $113.12 for the
services in APC 5771. Based on our analysis, we believe that assignment
of CPT codes 94625 and 94626 to APC 5733 is appropriate because their
costs are consistent with the cost data of the predecessor code. We
note that we review, on an annual basis, the APC assignments for all
items and services paid under the OPPS. We will consider whether the
current APC structure adequately reflects the clinical similarities and
costs associated with pulmonary rehabilitation services in future
rulemaking.
In summary, after consideration of the public comments, we are
finalizing our proposal without modification to assign CPT codes 94625
and 94626 to APC 5733. The final CY 2022 OPPS payment rates for the
codes can be found in Addendum B to this final rule with comment
period. In addition, we refer readers to Addendum D1 of this final rule
with comment period for the SI meanings for all codes reported under
the OPPS. Both Addendum B and D1 are available via the internet on the
CMS website.
30. Sclerotherapy (APC 5054)
For CY 2022, we proposed to continue assignment of both CPT codes
36465 (Injection of non-compounded foam sclerosant with ultrasound
compression maneuvers to guide dispersion of the injectate, inclusive
of all imaging guidance and monitoring; single incompetent extremity
truncal vein (for example, great saphenous vein, accessory saphenous
vein)) and CPT code 36466 (Injection of non-compounded foam sclerosant
with ultrasound compression maneuvers to guide dispersion of the
injectate, inclusive of all imaging guidance and monitoring; multiple
incompetent truncal veins (for example, great saphenous vein, accessory
saphenous vein), same leg) to APC 5054 (Level 4 Skin Procedures) with a
proposed payment rate of $1,759.21.
Comment: One commenter disagreed with the proposed assignment of
the procedures described by CPT codes 36465 and 36466 to APC 5054 and
requested a reassignment to APC 5183 (Level 3 Vascular Procedures),
which had a proposed payment rate of $2,937.76. The commenter stated
that the per-procedure cost for the Varithena foam sclerosant used in
the procedure is $1,054. The commenter stated that APC 5183 is more
clinically appropriate and reflects the resources required to perform
the procedure. Specifically, the commenter indicated that the
procedures described by CPT codes 36465 and 36466 share similar
clinical and resource characteristics to the following surgical
procedures that are assigned to APC 5183:
CPT code 36473 (Endovenous ablation therapy of incompetent
vein, extremity, inclusive of all imaging guidance and monitoring,
percutaneous, mechanochemical; first vein treated);
CPT code 36475 (Endovenous ablation therapy of incompetent
vein, extremity, inclusive of all imaging guidance and monitoring,
percutaneous, radiofrequency; first vein treated); and
CPT code 36478 (Endovenous ablation therapy of incompetent
vein, extremity, inclusive of all imaging guidance and monitoring,
percutaneous, laser; first vein treated).
The commenter also stated that the proposed geometric mean cost of
$1,567.45 for 36465 would not be the lowest cost procedure if placed in
APC 5183 and that the geometric mean costs of CPT code 36466 would be
better aligned with APC 5183.
Response: Based on input from our clinical advisors, we believe
that the procedures described by CPT codes 36465 and 36466 are
clinically similar to the procedures assigned to APC 5054. We do not
believe that the resources used for the procedures described by CPT
codes 36465 and 36466 are comparable to the procedures described by CPT
codes 36473, 36475, and 36478, which are assigned to APC 5183. We also
note that the proposed geometric mean cost of $2,314.25 for CPT code
36466 is greater than the other codes with significant volume in APC
5183 and above the highest geometric mean cost of codes with
significant volume in the next lower APC 5182 (Level 2 Vascular
Procedures). Consequently, we believe that APC 5054 appropriately
reflects the resources and clinical characteristics associated with the
procedures described by CPT codes 36465 and 36466. We note that the
geometric mean cost for APC 5054 is approximately $1,668.97, which
exceeds the cost of the Varithena foam sclerosant ($1,054, as reported
by the commenter) used in the procedure. We also note that the
geometric mean costs for CPT codes 36465 and 36466 are well within the
range of significant costs associated with APC 5054 ($1,402.75-
$2,752.68).
Therefore, after consideration of the public comment received, we
are finalizing our proposal without modification for assignment of the
procedures described by CPT codes 36465 and 36466 to APC 5054. The
final CY 2022 OPPS payment rates for the codes can be found in Addendum
B to this final rule with comment period. In addition, we refer readers
to Addendum D1 of this final rule with comment period for the SI
meanings for all codes reported under the OPPS. Both Addendum B and D1
are available via the internet on the CMS website.
31. Stromal Vascular Fraction (SVF) Therapy
For CY 2022, we proposed to continue assignment of CPT codes 0565T
(Autologous cellular implant derived from adipose tissue for the
treatment of osteoarthritis of the knees; tissue harvesting and
cellular implant creation) and 0566T (Autologous
[[Page 63562]]
cellular implant derived from adipose tissue for the treatment of
osteoarthritis of the knees; injection of cellular implant into knee
joint including ultrasound guidance, unilateral) to status indicator
``E1'', indicating that these services are not paid by Medicare when
submitted on outpatient claims.
Comment: One commenter supported this proposal and indicated that
adipose-derived stromal vascular fraction (SVF) therapy for
osteoarthritis is an unproven treatment. The commenter stated that FDA
has issued several warnings about unproven cellular therapies and
regenerative medicines since they offer no proven clinical benefits and
may harm patients. The commenter further reported there is no
indication for which SVF has been proven to be safe and effective in
well-controlled clinical trials. To eliminate abuse by businesses
seeking to profit from unproven treatments, the commenter suggested not
paying for SVF therapy since unproven therapies create economic burdens
on health systems and patients.
Response: We thank the commenter for their support.
In summary, after consideration of the public comment, we are
finalizing our proposal without modification to continue assignment of
CPT codes 0565T and 0566T to status indicator ``E1''. 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.
32. Synthetic Resorbable Skin Substitute
The CY 2014 OPPS/ASC final rule with comment period describes skin
substitute products as ``. . . a category of products that are most
commonly used in outpatient settings for the treatment of diabetic foot
ulcers and venous leg ulcers . . . [T]hese products do not actually
function like human skin that is grafted onto a wound; they are not a
substitute for a skin graft. Instead, these products are applied to
wounds to aid wound healing and through various mechanisms of action
that stimulate the host to regenerate lost tissue.'' (78 FR 74930
through 74931). The CY 2014 OPPS/ASC final rule with comment period
also described skin substitutes as ``. . . a class of products that we
treat as biologicals . . .'' and mentioned that prior to CY 2014, skin
substitutes were separately paid in the OPPS as if they were
biologicals according to the ASP methodology (78 FR 74930 through
74931).
The CY 2014 OPPS final rule with comment period did not
specifically mention whether synthetic products could be considered to
be skin substitute products in the same manner as biological products,
because there were no synthetic products at that time that were
identified as skin substitute products. Then in 2018, a manufacturer
made a request that an entirely synthetic product that it claimed is
used in the same manner as biological skin substitutes, receive a HCPCS
code that would allow the product to be billed with graft skin
substitute procedure codes, including CPT codes 15271 through 15278 and
C5271 through C5278, starting in 2019. Initially, the synthetic product
was not described as a graft skin substitute product. However, we now
believe that both biological and synthetic products could be considered
to be skin substitutes for Medicare payment purposes.
This view is supported by a paper referenced in a report we cited
in the CY 2014 OPPS/ASC final rule with comment period titled ``Skin
Substitutes for Treating Chronic Wounds Technology Assessment Report at
ES- 2'', which is available on the AHRQ website at: https://www.ahrq.gov/sites/default/files/wysiwyg/research/findings/ta/skinsubs/HCPR0610_skinsubst-final.pdf.
That paper, titled ``Regenerative medicine in dermatology:
biomaterials, tissue engineering, stem cells, gene transfer and
beyond'' by Dieckmann et al., states that skin substitutes should be
divided into two broad categories: Biomaterial and cellular. The paper
explains that ``. . . biomaterial skin substitutes do not contain cells
(acellular) and are derived from natural or synthetic sources . . .''
The paper continues by describing biomaterial skin substitutes further:
``Synthetic sources include various degradable polymers such as
polylactide and polyglycolide. Whether natural or synthetic, the
biomaterial provides an extracellular matrix that allows for
infiltration of surrounding cells.'' The paper by Dieckmann et al.
indicates that skin substitute products may be synthetic products as
well as biological products.
For CY 2021, we established a policy to include synthetic products
in addition to biological products in our description of skin
substitutes. Our new description defines skin substitutes as a category
of biological and synthetic products that are most commonly used in
outpatient settings for the treatment of diabetic foot ulcers and
venous leg ulcers. We also retained the additional description of skin
substitute products from the CY 2014 OPPS final rule which states ``. .
. that skin substitute products do not actually function like human
skin that is grafted onto a wound; they are not a substitute for a skin
graft. Instead, these products are applied to wounds to aid wound
healing and through various mechanisms of action they stimulate the
host to regenerate lost tissue . . .'' (78 FR 74930 through 74931).
Finally, our definition of skin substitutes does not include bandages
or standard dressings and these items cannot be assigned to either the
high cost or low cost skin substitute groups or be reported with either
CPT codes 15271 through 15278 or HCPCS codes C5271 through C5278. For
CY 2022, we proposed to continue to report synthetic graft skin
substitute products using HCPCS code C1849 in the same manner as in CY
2021.
Comment: As previously requested for CY 2021, several commenters
requested that we establish product-specific HCPCS codes for synthetic
graft skin substitute products and requested that we delete HCPCS code
C1849 because the code is not product-specific. The primary reason
commenters want product-specific codes for synthetic graft skin
substitute is they feel that synthetic products should be assigned to
either the high cost or low cost skin substitute group based on the
cost of each individual product in a similar manner to biological skin
substitute products. Commenters feel that because multiple synthetic
graft skin substitute products can be assigned to HCPCS code C1849,
there may be some synthetic products that should be in the low cost
skin substitute group that will receive payment in the high cost skin
substitute group if HCPCS code C1849 is assigned to the high cost
group. Commenters also expressed concern about the opposite situation,
in which high cost synthetic products would potentially be underpaid if
HCPCS code C1849 is assigned to the low cost skin substitute group.
Commenters believed the only resolution to these issues with HCPCS code
C1849 is to delete the code and replace it with product-specific HCPCS
codes for each graft synthetic product so there are not cases of
synthetic products being either overpaid or underpaid.
Response: HCPCS code C1849 was established in response to the need
to pay for graft skin substitute application services performed with
synthetic graft skin substitute products in the OPPS in a manner
comparable to how we pay for graft skin substitute application services
performed with biological graft skin substitute products. As mentioned
earlier in this section, when we established our policy in the CY 2014
OPPS/ASC final rule with comment period to package graft skin
substitute
[[Page 63563]]
products into their associated application procedures (78 FR 74930
through 74931), we did not specifically mention whether synthetic
products could be considered skin substitute products in the same
manner as biological products. The reason for this was that there were
no synthetic products at that time that were identified as skin
substitute products.
We note that unless a graft skin substitute product has pass-
through status, graft skin substitute products are not paid separately
under unique HCPCS or CPT codes in OPPS. However, in CY 2018, a
manufacturer requested that CMS develop methodologies to allow
synthetic graft skin substitute products to receive payment in the
outpatient hospital setting and in the physician office setting. After
extensive review, we made the determination to assign the synthetic
product in CY 2019 to HCPCS codes A6460 and A6461, which were newly
created HCPCS codes to report synthetic, resorbable wound dressings.
HCPCS codes A6460 and A6461 are packaged under the OPPS and cannot be
assigned to either the high cost or low cost skin substitute group.
This meant that graft skin substitute products could not be billed with
CPT codes 15271 through 15278 or HCPCS codes C5271 through C5278, even
though synthetic graft skin substitute products and biological graft
skin substitute products perform the same function and have similar
efficacy. We quickly realized that using HCPCS codes A6460 and A6461
would not work to appropriately describe the application of synthetic
graft products when used in similar manner to biological graft skin
substitute products. Therefore, we needed to consider other approaches
to this issue.
Because all skin substitutes, except those with pass-through
status, are packaged under the OPPS, we explored solutions that would
permit synthetic skin substitute products to be billed with either CPT
codes 15271 through 15278 or HCPCS codes C5271 though C5278. We decided
to create HCPCS code C1849 to describe any synthetic graft skin
substitute product, and we revised the payment logic for the graft skin
substitute application procedure codes to allow HCPCS code C1849 to be
billed with those procedures. Multiple synthetic graft skin substitute
products have now been identified as being described by HCPCS code
C1849. We will average the pricing data from the various products to
determine an amount for the products described by HCPCS code C1849 to
compare against the MUC threshold. This comparison will determine if
HCPCS code C1849 should be assigned to the high cost or low cost skin
substitute category.
We appreciate the concerns expressed by commenters that one service
code for synthetic products could lead to low cost synthetic graft
products receiving excess payment if HCPCS code C1849 is assigned to
the high cost group, or lead to high cost synthetic graft products
being underpaid if HCPCS code C1849 is assigned to the low cost group.
We will take these concerns into consideration in future rulemaking.
Comment: One commenter suggested that, if we do not establish
product-specific HCPCS codes for each synthetic graft skin substitute
product, we delete C1849 and establish two new HCPCS codes in its
place. Specifically, the commenter recommended that one HCPCS code
would be for high cost synthetic graft skin substitute products and the
other HCPCS code would be for low cost synthetic graft skin substitute
products. These two payment codes would ensure that all synthetic graft
skin substitute products are assigned to the cost group that reflects
whether the mean unit cost of any given synthetic graft skin substitute
product is above or below the mean unit cost threshold for determining
assignment to the high cost or low cost skin substitute group.
Response: We appreciate the suggestion from the commenter. We note
that our policy is to allow all synthetic skin substitutes described by
C1849 to bill the skin graft application CPT codes for high cost skin
substitute products (CPT codes 15271 through 15278). We appreciate the
commenters suggestion, which we will consider for future rulemaking.
Comment: One commenter provided suggestions on how we could revise
our definition of synthetic graft skin substitute products to reduce
the possibility that synthetic dressings or non-resorbable polymeric
sheets could be considered synthetic skin substitute products and be
reported using HCPCS code C1849.
Response: We thank the commenter for their suggestions. Currently,
we do not believe that there is an issue with the definition of
synthetic skin substitute products that we established for the CY 2021
OPPS/ASC final rule (85 FR 86064 through 86067). If during future
rulemaking we find that synthetic graft products that do not function
as skin substitutes are being reported using HCPCS code C1849, we may
refer to the commenter's suggestions to help us revise our definition
of synthetic graft skin substitute products.
33. Therapeutic Ultrafiltration (APC 5241)
As displayed in Addendum B to the CY 2022 OPPS/ASC proposed rule,
we proposed to assign placeholder CPT code 0692T (Therapeutic
Ultrafiltration) to SI ``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, is statutorily
excluded from Medicare payment, or is not reasonable and necessary. We
note that CPT code 0692T was listed as placeholder code 057XT in OPPS
Addendum B of the CY 2022 OPPS/ASC proposed rule.
Comment: Some commenters reported that the device associated with
the CPT code 0692T describing therapeutic ultrafiltration received FDA
approval by the U.S. Food and Drug Administration (FDA) in 2020 and
requested separate payment for the code. They specifically requested
assignment to APC 5242 (Level 2 Blood Product Exchange and Related
Services) and SI ``S'' (Paid under OPPS; separate APC payment). They
stated that CPT codes 36511 (Therapeutic apheresis; for white blood
cells), and 36514 (Therapeutic apheresis; for plasma pheresis), which
are assigned to APC 5242 and SI ``S,'' can be considered similar to
therapeutic ultrafiltration in clinical and resource coherence.
Response: For CY 2022, OPPS payments are based on claims submitted
between January 1, 2019, through December 31, 2019, and processed
through June 30, 2020. Because CPT code 0692T is a new code that will
be effective January 1, 2022, we have no claims data available for
ratesetting. However, after further review of the service, we believe
that CPT code 0692T shares similar clinical characteristics and
resource costs as CPT code 36513 (Therapeutic apheresis; for
platelets), which is currently assigned to APC 5241 (Level 1 Blood
Product Exchange and Related Services). Therefore, we are assigning CPT
code 0692T to APC 5241 and SI ``S'' for CY 2022. The final payment rate
for the code can be found in Addendum B to this final rule with comment
period. In addition, the SI definitions can be found in Addendum D1 to
this final rule with comment period. Both Addendum B and Addendum D1
are available via the internet on the CMS website.
We note that we review, on an annual basis, the APC assignments for
all services and items paid under the OPPS. As a result, we will
reevaluate the APC
[[Page 63564]]
placement for CPT code 0692T for the next rulemaking cycle.
34. Transcatheter Implantation of Coronary Sinus Reduction Device
The Neovasc Reducer System is a novel device implanted into the
coronary sinus vein using minimally invasive techniques. The Reducer is
implanted by transvenous percutaneous approach from the right or left
jugular vein into the coronary sinus. After positioning the balloon
catheter at the implantation site, the Reducer is deployed by inflating
the balloon catheter until apposition of the vessel wall is achieved.
The balloon catheter is then deflated and removed from the coronary
sinus, leaving the Reducer permanently inflated. After 6 to 8 weeks the
hourglass shaped wire mesh is covered with endothelium and narrowing
becomes effective by redistributing blood flow to ischemic areas of the
heart.
In 2021, Neovasc received FDA approval for the Investigational
Device Exemption (IDE) regarding the COSIRA-II Clinical Trial. COSIRA-
II is a randomized, sham-controlled trial investigating the safety and
effectiveness of the Reducer for patients suffering from refractory
angina. Neovasc has been classified as a Category B device by FDA.
In addition, the AMA's Editorial Panel established a new code,
specifically, CPT code 0645T (Transcatheter implantation of coronary
sinus reduction device including vascular access and closure, right
heart catheterization, venous angiography, coronary sinus angiography,
imaging guidance, and supervision and interpretation, when performed),
to describe the implantation of a coronary sinus reduction device that
is associated with the Neovasc Reducer System. This code was effective
July 1, 2021.
For CY 2022, we proposed to assign CPT code 0645T to SI ``E1'' to
indicate that the code is not paid by Medicare when submitted on
outpatient claims (any outpatient bill type).
Comment: One commenter, specifically, the manufacturer of the
Neovasc Reducer System, requested assignment to either New Technology
APC 1576 (New Technology--Level 39 ($15,001-$20,000) with the payment
rate of $17,500.50, or New Technology APC 1577 (New Technology--Level
40 ($20,001-$25,000) with the payment rate of $22,500.50, in
anticipation of its approval by Medicare for its Category B IDE study.
The company stated there are no other surgical procedures that are
similar in terms of resource costs and clinical homogeneity that would
allow for the Neovasc Reducer System to be assigned to an appropriate
clinical APC.
Response: Based on the information presented by the commenter, and
our review of the IDE study, we do not believe that it is appropriate
to assign a payable status indicator under the OPPS to CPT code 0645T
prior to the approval of the Category B IDE study. In addition, the
clinical study has not yet met CMS' standards for coverage, nor does it
appear on the CMS Approved IDE List, which can be found at this CMS
website: https://www.cms.gov/Medicare/Coverage/IDE/Approved-IDE-Studies.html. Because the Neovasc Reducer System has not been approved
for Medicare coverage as a Category B IDE, we believe that we should
continue to assign CPT code 0645T to status indicator ``E1''. If this
technology later meets CMS's standards for coverage, we will assess the
APC assignment for the code in a future quarterly update and/or
rulemaking cycle.
Therefore, after consideration of the public comment, we are
finalizing our proposal, without modification, to assign CPT code 0645T
to SI ``E1''. We refer readers to Addendum D1 to this final rule with
comment period for the complete list of the OPPS payment status
indicators and their definitions for CY 2022. Addendum D1 is available
via the internet on the CMS website.
35. Tympanostomy Using an Automated Tube Delivery System (APC 5163)
For CY 2022, we proposed to continue to assign CPT code 0583T to
APC 5163 (Level 3 ENT Procedures) with a proposed payment rate of
$1,387.72.
Comment: A few commenters disagreed with our proposed APC
assignment. These commenters stated that CPT code 0583T should be
reassigned to APC 5164 (Level 4 ENT Procedures) or APC 1523 (New
Technology--Level 23 ($2,501-$3,000)) with proposed payment rates of
$2,806.94 and $2,750.50, respectively. Commenters stated that CPT code
0583T is clinically similar to CPT code 69421 (Myringotomy including
aspiration and/or eustachian tube inflation requiring general
anesthesia), which is assigned to APC 5164. Commenters further stated
that APC 5164 also includes many other middle ear procedures that
involve an incision, revision, repair, and removal of tubes.
Response: We disagree with commenters on the clinical similarity
between CPT code 0583T and the other services in APC 5164. For the
reasons discussed in the CY 2021 OPPS final rule with comment period
(85 FR 85983), based on our review of the procedure and input from our
medical advisors, we continue to believe that the surgical procedure
described by CPT code 0583T is most similar, in terms of clinical
homogeneity and resource cost, to CPT code 69436 (Tympanostomy
(requiring insertion of ventilating tube), local or topical
anesthesia), which is assigned to APC 5163. Both procedures (as
described by CPT codes 0583T and 69436) require ventilating tubes that
require anesthesia.
In summary, after consideration of the public comments, we are
finalizing our proposal without modification to continue assignment of
CPT code 0583T to APC 5163. The final CY 2022 OPPS payment rates for
these codes can be found in Addendum B to this final rule with comment
period. In addition, we refer readers to Addendum D1 of this final rule
with comment period for the SI meanings for all codes reported under
the OPPS. Both Addendum B and D1 are available via the internet on the
CMS website.
36. Urology and Related Services (APCs 5371 Through 5378)
For CY 2016, we established the APC reorganization and developed a
urology specific series of APCs 5371-5377. Since that time, we have
maintained that structure and added an additional level 8, APC 5378
(Level 8 Urology and Related Services). Based on our analysis of the CY
2019 claims available for ratesetting, we proposed to continue the 8
level structure of Urology APCs in the CY 2022 OPPS. We received
comments on the CY 2022 OPPS/ASC proposed rule suggesting we revise the
APC assignments for the services assigned to the Urology & Related
Services APCs. A commenter specifically noted that a reorganization for
APCs 5375 through 5376 would be appropriate, but added that there were
other adjustments across services within the Urology APCs that could
improve the structure of these APCs.
We received several comments on APC reassignments. Below are the
comments and our responses.
a. High-Intensity Focused Ultrasound of the Prostate (HIFU) Procedure
(APC 5375)
In 2017, CMS received a new technology application for the prostate
HIFU procedure and established a new code, specifically, HCPCS code
C9747 (Ablation of prostate, transrectal, high intensity focused
ultrasound (hifu), including imaging guidance). Based on the estimated
cost provided in the new technology application, we assigned the new
code to APC 5376 (Level 6 Urology and Related Services) with a payment
rate of $7,452.66 effective July 1, 2017.
[[Page 63565]]
We announced the SI and APC assignment in the July 2017 OPPS quarterly
update CR (Transmittal 3783, Change Request 10122, dated May 26, 2017).
For the CY 2018 update, we maintained the assignment of HCPCS code
C9747 to APC 5376 with a payment rate of $7,596.26. We note that the
payment rates for the CY 2018 OPPS update were based on claims
submitted between January 1, 2016 through December 30, 2016, that were
processed on or before June 30, 2017. Since HCPCS code C9747 was
established on July 1, 2017, we had no claims data for the procedure
for use in ratesetting for CY 2018.
However, for the CY 2019 update, based on the latest claims data
for the final rule, we revised the APC assignment for HCPCS code C9747
from APC 5376 to APC 5375 with a payment rate of $4,020.54. We note
that the payment rates for CY 2019 were based on claims submitted
between January 1, 2017 through December 30, 2017, that were processed
on or before June 30, 2018. Our claims data showed a geometric mean
cost of approximately $5,000 for HCPCS code C9747 based on 64 single
claims (out of 64 total claims), which was significantly lower than the
geometric mean cost of about $7,717 for APC 5376. We believed that the
geometric mean cost for HCPCS code C9747 was more comparable to the
geometric mean cost of approximately $4,055 for APC 5375. Consequently,
we reassigned the code from APC 5376 to APC 5375 (Level 5 Urology and
Related Services) for CY 2019 and C9747 remained in APC 5375 for CY
2020.
For the CY 2021 update, we replaced HCPCS code C9747 with CPT code
55880 (Ablation of malignant prostate tissue, transrectal, with high
intensity-focused ultrasound (hifu), including ultrasound guidance) on
January 1, 2019. We maintained the assignment of HCPCS code C9747 to
APC 5375 with a payment rate of $4,413.90. We note that the payment
rates for the CY 2021 OPPS update were based on claims submitted
between January 1, 2019 through December 30, 2019, that were processed
on or before June 30, 2020. Our claims data showed a geometric mean
cost of approximately $5,744,43 for HCPCS code C9747 (CPT code 55880)
based on 279 single claims (out of 284 total claims), which was
assigned to APC 5375 with a geometric mean cost of about $4,299.81.
For CY 2022, we proposed to continue to assign HCPCS code C9747 to
APC 5375 with a proposed payment rate $4,527.23.
Comment: Several commenters requested CPT code 55880 be reassigned
to APC 5376 from APC 5375. The commenters argued that the average cost
of the HIFU procedure is closer to the APC 5376 proposed payment rate
of $8,468.32. Several commenters recommended we assign this procedure
to APC 5376 because they believe the service is clinically similar and
comparable in terms of resources to cryoablation of the prostate, which
is described by CPT code 55873 (Cryosurgical ablation of the prostate
(includes ultrasonic guidance and monitoring) and assigned to APC 5376
(Level 6 Urology and Related Services), with a proposed payment rate of
$8,468.32. They also stated that the new CPT code 55880 descriptor
treats malignant prostate tissue, which requires additional resources
relative to its predecessor code descriptor that treated BPH. Some
commenters stated that the CY 2019 OPPS reassignment of HCPCS code
C9747 to APC 5375 from APC 5376 was due to inaccurate and incomplete
claims that did not include the substantial cost of the disposable
device required for the procedure and stated that HIFU is a device-
intensive procedure. They alleged the underpayment for HIFU discourages
hospitals from providing this procedure for Medicare patients because
the APC 5375 payment rate does not cover the hospital facility cost for
this procedure. They alleged that maintaining the assignment in APC
5375 will deter HOPD facilities from offering the HIFU treatment to
Medicare beneficiaries because the payment is insufficient to cover the
cost of the procedure. Several commenters argued that the current HIFU
payment is a health equity issue because Americans in a lower socio-
economic class will have less access to high-quality healthcare.
Furthermore, the commenters stated that prostate cancer affects more
men of color whose rate of death is almost twice that of non-Hispanic
white men.
Response: We review, on an annual basis, the APC assignments for
all services and items (including devices) paid under the OPPS based on
our analysis of the latest claims data. For CY 2021, based on
predecessor HCPCS code C9747, our claims data supported maintaining CPT
code 55880 in APC 5375. For CY 2022, based on our analysis of the
claims for this CY 2022 OPPS/ASC final rule with comment period, our
data shows a geometric mean cost of approximately $5,708 for HCPCS code
C9747 based on 279 single claims, which is more comparable to the
geometric mean cost of about $4,299 for APC 5375, rather than the
geometric mean cost of approximately $8,042 for APC 5376. Although we
are not applying the CY 2020 claims data for the CY 2022 ratesetting
due to the PHE, we noted that the geometric mean cost associated with
HCPCS code C9747 is about $6,654, which is between the geometric means
of APC 5375 and APC 5376. Our clinical advisors also acknowledge the
clinical and resource similarity between CPT code 55880 and CPT code
55873, both of which are treatment options for prostate cancer. We
performed several APC modeling studies on the impact of reassigning a
set of codes to better balance the procedures within APC 5375 and 5376,
and we found that the reassignment of these codes would impact the
payment level of both APC 5375 and 5376.
In summary, after careful consideration of the public comments, and
after our analysis of the claims data for this final rule with comment
period, we are maintaining the APC assignment for CPT code 55880 in APC
5375, but will consider its reassignment in future rulemaking. The
final CY 2022 payment rate for CPT code 55880 can be found in Addendum
B to this final rule with comment period. In addition, we refer readers
to Addendum D1 to this final rule with comment period for the SI
meanings for all codes reported under the OPPS. Both Addendum B and D1
are available via the internet on the CMS website.
b. Rez[umacr]m Procedure--Water Vapor Thermotherapy (APC 5373)
In 2018, CMS established a new code, specifically, HCPCS code C9748
(Transurethral destruction of prostate tissue; by radiofrequency water
vapor (steam) thermal therapy). Based on its estimated cost, we
assigned the new code to APC 5373 (Level 3 Urology and Related
Services) with a payment rate of $1,695.68 effective January 1, 2018.
We announced the SI and APC assignment in the January 2018 OPPS
quarterly update CR (Transmittal 3941, Change Request 10417, dated
December 22, 2017).
For the CY 2019 update, we replaced HCPCS code C9748 with CPT 53854
(Transurethral destruction of prostate tissue; by radiofrequency
generated water vapor thermotherapy) on January 1, 2019. We maintained
the assignment of CPT 53854 (HCPCS code C9748) to APC 5373 with a
payment rate of $1,695.57. We note that the payment rates for the CY
2018 OPPS update were based on claims submitted between January 1, 2017
through December 30, 2017, that were processed on or before June 30,
2018. Since HCPCS code C9748
[[Page 63566]]
was established on January 1, 2018, we had no claims data for the
procedure for use in ratesetting for CY 2019.
For the CY 2020 update, we maintained the assignment of HCPCS code
53854 to APC 5373 with a payment rate of $1,771.35. We note that the
payment rates for the CY 2020 OPPS update were based on claims
submitted between January 1, 2018 through December 30, 2018, that were
processed on or before June 30, 2019. Our claims data showed a
geometric mean cost of approximately $1,899.18 for HCPCS code C9748
based on 191 single claims (out of 192 total claims), which was
assigned to APC 5373 with a geometric mean of about $1,733.35.
For the CY 2021 update, we maintained the assignment of HCPCS code
53854 to APC 5373 with a payment rate of $1,792.99. We note that the
payment rates for the CY 2020 OPPS update were based on claims
submitted between January 1, 2019, through December 30, 2019, that were
processed on or before June 30, 2020. Our claims data showed a
geometric mean cost of approximately $2,414.69 for HCPCS code 53854
based on 751 single claims (out of 752 total claims), which was
assigned to APC 5373 with a geometric mean cost of about $1,746.64.
For CY 2022, we proposed to continue to assign HCPCS code 53854 to
APC 5373 with a proposed payment rate $1,839.83.
Comment: A commenter requested the reassignment of CPT code 53854
to APC 5374 (Level 4 Urology and Related Services) from APC 5373 (Level
3 Urology and Related Services). The commenter stated the geometric
mean costs associated with CPT Code 53854 are significantly higher than
either all significant or almost all significant other procedures in
APC 5373. The commenter further stated that based on the CY 2019 claims
data, CPT code 53854 yields a geometric mean cost of about $2,410 with
751 single frequency claims and suggested the geometric mean cost of
CPT code 53854 is much closer to the geometric mean cost of APC 5374,
which is approximately $2,996. The commenter cited the year over year
increase in geometric cost of 18 percent or $423 from 2019 to 2020. In
addition, the commenter stated CPT 53854 is a transurethral procedure
for the treatment of benign prostatic hyperplasia (BPH) and is more
clinically similar to the two transurethral BPH procedure codes CPT
53850 (Transurethral destruction of prostate tissue; by microwave
thermotherapy) and CPT 53852 (Transurethral destruction of prostate
tissue; by radiofrequency thermotherapy) assigned to APC 5374.
Response: We appreciate the commenter's input on this subject.
Based on our evaluation of the latest claims data for this final rule
with comment period, we noted the geometric mean cost associated with
CPT code 53854 (HCPCS C9748) increased from $1,899.18 (from the CY 2018
claims data) to $2,412.55 (from the CY 2019 claims data), which
represented an approximately 27 percent increase year-over-year. Based
on our review, our medical advisors agreed with the commenter that CPT
code 53854 is similar to CPT code 53850 and CPT code 53852 in terms of
clinical characteristics and resource. We noted that CPT codes 53850
and 53852 represent treatment options for BPH which are assigned to APC
5374 (Level 4 Urology and Related Services) while there are no BPH
treatment procedures assigned to APC 5373 with the exception of CPT
code 53854.
In summary, after consideration of the public comments, we are
finalizing our proposal with modification and reassigning CPT code
53854 to APC 5374 from APC 5373 for CY 2022. The final CY 2022 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
to this final rule with comment period for the SI meanings for all
codes reported under the OPPS. Both Addendum B and D1 are available via
the internet on the CMS website.
37. VisONE Synchronized Diaphragmatic Stimulation (SDS) System
For CY 2022, the CPT Editorial Panel created CPT codes 0674T
through 0685T, which are listed in Table 29, to describe the
VisONE[supreg] Synchronized Diaphragmatic StimulationTM
(SDS[supreg]) System. For CY 2022, we proposed to assign these codes to
OPPS SI ``E1'', indicating that these services are not paid by Medicare
when submitted on outpatient claims. We note these codes were listed as
placeholder codes 050XT through 055XT in OPPS Addendum B of the CY 2022
OPPS/ASC proposed rule.
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Comment: A commenter reported that the device associated with these
codes has been approved for Breakthrough Device Designation by the FDA.
The commenter added that they are currently in the process of applying
for Medicare national coverage for the clinical trial as a Category B
IDE study. The commenter requested that we crosswalk the new codes to
the SIs and APC assignments of comparable procedures involving other
stimulation technologies so that appropriate hospital outpatient
payment may be made in the event the Category B IDE study is approved
for Medicare coverage. The commenter listed the comparable codes with
the SI and APCs assignments. See Table 30 for SI and APC assignments
requested by commenter.
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Response: The clinical trial associated with CPT codes 0674T
through 0685T does not appear on the CMS Approved IDE List, which can
be found at this CMS website: https://www.cms.gov/Medicare/Coverage/IDE/Approved-IDE-Studies.html. While we recognize the commenter's
assertion that is was accepted for FDA's Breakthrough Device
Designation and that it intends to apply for Medicare coverage as a
Category B IDE clinical trial, since the clinical trial associated with
these codes has not been approved for Medicare coverage, we believe we
should continue to assign CPT codes 0674T through 0685T to SI ``E1''
for CY 2022. If Medicare approves the clinical trial as a Category B
IDE study, we will reassess the SI and APC assignments for the codes.
In summary, after consideration of the public comments, we are
finalizing our proposal without modification. Specifically, we are
finalizing our continued assignment of CPT code=0674T through 0685T to
OPPS SI ``E1.''
IV. OPPS Payment for Devices
A. Pass-Through Payment for Devices
1. Beginning Eligibility Date for Device Pass-Through Status and
Quarterly Expiration of Device Pass-Through Payments
a. Background
The intent of transitional device pass-through payment, as
implemented at Sec. 419.66, is to facilitate access for beneficiaries
to the advantages of new and truly innovative devices by allowing for
adequate payment for these new devices while the necessary cost data is
collected to incorporate the costs for these devices into the procedure
APC rate (66 FR 55861). Under section 1833(t)(6)(B)(iii) of the Act,
the period for which a device category eligible for transitional pass-
through payments under the OPPS can be in effect is at least 2 years
but not more than 3 years. Prior to CY 2017, our regulation at Sec.
419.66(g) provided that this pass-through payment eligibility period
began on the date CMS established a particular transitional pass-
through category of devices, and we based the pass-through status
expiration date for a device category on the date on which pass-through
payment was effective for the category. In the CY 2017 OPPS/ASC final
rule with comment period (81 FR 79654), in accordance with section
1833(t)(6)(B)(iii)(II) of the Act, we amended Sec. 419.66(g) to
provide that the pass-through eligibility period for a device category
begins on the first date on which pass-through payment is made under
the OPPS for any medical device described by such category.
In addition, prior to CY 2017, our policy was to propose and
finalize the
[[Page 63570]]
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.
b. Expiration of Transitional Pass-Through Payments for Certain Devices
As stated earlier, section 1833(t)(6)(B)(iii) of the Act requires
that, under the OPPS, a category of devices be eligible for
transitional pass-through payments for at least 2 years, but not more
than 3 years. Currently, there are 11 device categories eligible for
pass-through payment. These devices are listed in Table 31. Below, we
detail the expiration dates of pass-through payment status for each of
the 11 devices currently receiving device pass-through payment.
The pass-through payment status of the device category for HCPCS
code C1823 is scheduled to expire on December 31, 2021. Typically, we
would propose to package the costs of the device described by C1823
into the costs related to the procedure with which the device is
reported in the hospital claims data for CY 2022. The data for the CY
2022 OPPS proposed rule ratesetting for the procedure reported with
C1823 would have been set using CY 2020 outpatient claims data
processed through December 31, 2020, however, as described in section
X.E. of the CY 2022 OPPS/ASC proposed rule (86 FR 42188), due to the
effects of the COVID-19 PHE, we proposed to use CY 2019 claims data
instead of CY 2020 claims data in establishing the CY 2022 OPPS rates
and to use cost report data from the same set of cost reports
originally used in final rule 2021 OPPS ratesetting. Therefore, we
proposed to use our equitable adjustment authority under section
1833(t)(2)(E) of the Act to provide separate payment for C1823 for four
quarters of CY 2022 to end on December 31, 2022. This would allow for
CY 2021 claims data to inform CY 2023 rate setting for the procedure
reported with C1823. This is the only device whose costs would
typically be packaged into the related procedure in CY 2022 using CY
2020 claims data for ratesetting and is the only device to which this
proposed policy would apply. A full discussion of this finalized policy
is included in section X.F. of this CY 2022 OPPS/ASC final rule.
The pass-through payment status of the device category for HCPCS
code C1823 will end on December 31, 2021. The pass-through payment
status of the device categories for HCPCS codes C1824, C1982, C1839,
C1734, and C2596 is set to expire on December 31, 2022. The pass-
through payment status of the device category for HCPCS code C1748 is
set to expire on June 30, 2023. The pass-through payment status of the
device category for HCPCS codes C1052, C1062, and C1825 is set to
expire on December 31, 2023 and the pass-through payment status of the
device category for HCPCS code C1761 is set to expire on June 30, 2024.
Table 31 shows the expiration dates of transitional pass-through
payments for these devices.
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2. New Device Pass-Through Applications for CY 2022
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). We note that, as discussed in section IV.A.2. of the CY 2022
OPPS/ASC proposed rule (86 FR 42085), we created an alternative pathway
in the CY 2020 OPPS/ASC final rule that granted fast-track device pass-
through payment under the OPPS for devices approved under the FDA
Breakthrough Device Program for OPPS device pass-through payment
applications received on or after January 1, 2020. We refer readers to
section IV.A.4. of the CY 2022 OPPS/ASC proposed rule for a complete
discussion of this pathway.
As specified in regulations at Sec. 419.66(b)(1) through (3), to
be eligible for transitional pass-through payment under the OPPS, a
device must meet the following criteria:
If required by FDA, the device must have received FDA
marketing authorization (except for a device that has received an FDA
investigational device exemption (IDE) and has been classified as a
Category B device by FDA), or meet another appropriate FDA exemption;
and the pass-through payment application must be submitted within 3
years from the date of the initial FDA marketing authorization, if
required, unless there is a documented, verifiable delay in U.S. market
availability after FDA marketing
[[Page 63572]]
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.
Beginning in CY 2016, we changed our device pass-through evaluation
and determination process. Device pass-through applications are still
submitted to CMS through the quarterly subregulatory process, but the
applications will be subject to notice and- comment- rulemaking in the
next applicable OPPS annual rulemaking cycle. Under this process, all
applications that are preliminarily approved upon quarterly review will
automatically be included in the next applicable OPPS annual rulemaking
cycle, while submitters of applications that are not approved upon
quarterly review will have the option of being included in the next
applicable OPPS annual rulemaking cycle or withdrawing their
application from consideration. Under this notice-and-comment process,
applicants may submit new evidence, such as clinical trial results
published in a peer-reviewed journal or other materials for
consideration during the public comment process for the proposed rule.
This process allows those applications that we are able to determine
meet all of the criteria for device pass-through payment under the
quarterly review process to receive timely pass-through payment status,
while still allowing for a transparent, public review process for all
applications (80 FR 70417 through 70418).
In the CY 2020 annual rulemaking process, we finalized an
alternative pathway for devices that are granted a Breakthrough Device
designation (84 FR 61295) and receive FDA marketing authorization.
Under this alternative pathway, devices that are granted an FDA
Breakthrough Device designation are not evaluated in terms of the
current substantial clinical improvement criterion at Sec.
419.66(c)(2) for the purposes of determining device pass-through
payment status, but do need to meet the other requirements for pass-
through payment status in our regulation at Sec. 419.66. Devices that
are part of the Breakthrough Devices Program, have received FDA
marketing authorization, and meet the other criteria in the regulation
can be approved through the quarterly process and announced through
that process (81 FR 79655). Proposals regarding these devices and
whether pass-through payment status should continue to apply are
included in the next applicable OPPS rulemaking cycle. This process
promotes timely pass-through payment status for innovative devices,
while also recognizing that such devices may not have a sufficient
evidence base to demonstrate substantial clinical improvement at the
time of FDA marketing authorization.
More details on the requirements for device pass-through payment
applications are included on the CMS website in the application form
itself at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/passthrough_payment.html, in the
``Downloads'' section. In addition, CMS is amenable to meeting with
applicants or potential applicants to discuss research trial design in
advance of any device pass-through application or to discuss
application criteria, including the substantial clinical improvement
criterion.
Comment: One commenter recommended that, for devices with FDA
Breakthrough Device designation, CMS remove the requirement that the
device prove they are not described by an existing transitional pass-
through category. The commenter asserted that FDA Breakthrough Device
designation implies that a device is a first of kind in addressing the
condition for which it is indicated.
Response: We appreciate the commenter's input but note that we did
not propose to eliminate the device category requirement in the CY 2022
OPPS/ASC proposed rule. Moreover, section 1833(t)(6)(B)(ii) requires
the Secretary to establish categories of medical devices in a manner
such that no medical device is described by more than one category and
to promptly establish a new category of medical devices for any new
medical devices for which none of the categories in effect or
previously in effect is appropriate.
Comment: One commenter asked that CMS provide additional guidance
to medical technology innovators to help clarify requirements for
demonstrating ``substantial clinical improvement'' for purposes of
transitional pass-through payment eligibility. The commenter stated
that greater clarity should be provided in particular with regard to
the evidence types and study designs that may be considered in
evaluating substantial clinical improvement, including methods beyond
randomized clinical trials (RCTs) that would produce evidence
sufficient to demonstrate substantial clinical
[[Page 63573]]
improvement in a shorter period of time and at reduced cost.
Response: We appreciate the commenter's input, but note that this
comment is outside the scope of this rulemaking. We refer the commenter
to the Device Pass-through application located on the CMS website
(https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Downloads/catapp.pdf) for further information
regarding what evidence is considered in evaluating substantial
clinical improvement of devices.
Comment: One commenter offered their general support for our
proposal to approve all eight applications for device pass-through
status included in the CY 2022 OPPS/ASC proposed rule. The commenter
added that CMS needs to ensure that pass-through payment amounts
adequately cover the cost of the device to ensure that Medicare
beneficiaries have access to innovative services and reduce facilities'
economic burdens. The commenter also believed CMS should refrain from
factoring a procedure off-set amount into the calculation of payment
for these transitional pass though approved services.
Response: We appreciate the general support for our proposals to
approve the applications discussed in the CY 2022 OPPS/ASC proposed
rule and the recommendations provided by the commenter. Our
determinations on each application are described in detail in the next
section. As we have 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.
b. Applications Received for Device Pass-Through Payment for CY 2022
We received eight complete applications by the March 1, 2021
quarterly deadline, which was the last quarterly deadline for
applications to be received in time to be included in the CY 2022 OPPS/
ASC proposed rule. We received three of the applications in the third
quarter of 2020, two of the applications in the fourth quarter of 2020,
and three of the applications in the first quarter of 2021. One of the
applications was approved for device pass-through payment during the
quarterly review process: the Shockwave C\2\ Coronary Intravascular
Lithotripsy (IVL) catheter, which received fast-track approval under
the alternative pathway effective July 1, 2021. As previously stated,
all applications that are preliminarily approved upon quarterly review
will automatically be included in the next applicable OPPS annual
rulemaking cycle. Therefore, the Shockwave C\2\ Coronary Intravascular
Lithotripsy (IVL) catheter is discussed in section IV.2.b.1. of this
final rule with comment period.
Applications received for the later deadlines for the remaining
2021 quarters (June 1, September 1, and December 1), if any, will be
discussed in the CY 2023 OPPS/ASC proposed rule. We note that the
quarterly application process and requirements have not changed in
light 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, 2021
deadline are included below.
1. Alternative Pathway Device Pass-through Applications
We received two device pass-through applications by the March 2021
quarterly application deadline for devices that have received
Breakthrough Device designation from FDA and FDA marketing
authorization, and therefore are eligible to apply under the
alternative pathway. As stated above in section IV.2.a of the CY2022
OPPS/ASC proposed rule, under this alternative pathway, devices that
are granted an FDA Breakthrough Device designation are not evaluated in
terms of the substantial clinical improvement criterion at Sec.
419.66(c)(2)(i) for purposes of determining device pass-through payment
status, but need to meet the other requirements for pass-through
payment status in our regulation at Sec. 419.66.
(1) RECELL[supreg] System
AVITA Medical submitted an application for a new device category
for transitional pass-through payment status for the RECELL[supreg]
System (RECELL[supreg]) for CY 2022. According to the applicant,
RECELL[supreg] is used to process autologous donor tissue into a cell
suspension autograft that is then immediately applied to the surgically
prepared acute thermal burn wound.
The applicant stated RECELL[supreg] is a stand-alone, single-use,
battery-powered device used to process and apply an autologous skin
cell suspension. According to the applicant, RECELL[supreg] is a Class
III medical device indicated for the treatment of acute partial-
thickness and full-thickness/mixed depth thermal burn wounds and is not
categorized as a skin substitute.
According to the applicant, the autograft procedure utilizing the
RECELL[supreg] system involves harvesting a small graft from the
patient's healthy skin and placing it into the RECELL[supreg] System
for immediate processing into an autologous skin cell suspension. The
applicant asserts that a significantly smaller autograft harvest is
needed for procedures involving RECELL[supreg] when compared to
procedures involving a split-thickness skin graft (STSG) without
RECELL[supreg]; where typical STSG expansion ranges from 2:1 to 6:1,
RECELL[supreg] may expand skin by up to 80:1. The applicant adds the
entire procedure takes place in the operating room, including
surgically preparing the acute burn wound, harvesting the autograft,
processing the skin cell suspension through a disaggregation process,
and applying the cell suspension autograft to the wound with no
culturing in a laboratory.
The applicant described the RECELL[supreg] procedure in 27 steps:
(1) The autograft site is identified; (2) the patient is anesthetized
and prepared; (3) the nurse opens and transfers the sterile
RECELL[supreg] System to the operative field; (4) a self-test is
performed; (5) the nurse prepares and dispenses the enzyme into the
incubation well; (6) the buffer solution is drawn and dispensed into
the buffering and rinsing well; (7) the RECELL[supreg] processing unit
is activated to heat the enzyme; (8) a thin epidermal autograft is
harvested; (9) the harvested skin graft is placed in the enzyme; (10)
the donor graft incubates for 15-20 minutes; (11) the sample is placed
dermal side down in the mechanical scraping tray; (12) a scalpel is
used to scrape the edges of the skin sample; (13) once ready, the donor
skin is rinsed in the buffer solution; (14) the skin is returned to the
mechanical scraping tray; (15) buffer is applied to the skin sample;
(16) the skin sample is held in place with forceps; (17) the surgeon
scrapes the epidermal cells; (18) the buffer syringe is used to rinse
the disaggregated skin cells; (19) the surgeon draws up the autologous
skin cell suspension from the tray into a syringe; (20) the suspension
is then dispensed through the cell strainer to filter the suspension;
(21) the filtered autologous skin cell suspension is drawn into a new
10 ml syringe; (22) the cell suspension autograft is prepared; (23) the
burn wound is debrided; (24) the primary dressing (non-adherent,
[[Page 63574]]
non-absorbent, small pore) is fixed or held only at the lower aspect of
the burn wound; (25) the cell suspension autograft is applied by either
spraying or dripping over the prepared wound bed; (26) after
application, the primary dressing is immediately secured over the wound
bed; and (27) absorbent and protective dressings are then applied as
needed.
The applicant states the autologous skin cell suspension prepared
using the RECELL[supreg] System contains keratinocytes, fibroblasts and
melanocytes. According to the applicant, keratinocytes are the primary
cells of the epidermis that are responsible for healing; fibroblasts
enable the creation of new extracellular matrix proteins; and
melanocytes produce melanin to allow restoration of normal
pigmentation. The applicant asserts the unique delivery system allows
for broad and even distribution of the cell suspension autograft
directly onto a prepared wound surface or in combination with a meshed
skin graft.
According to the applicant, there is one commercially available
product (Epicel) that is also used to create an autograft from the
patient's skin that is then applied to treat acute thermal burns. The
applicant's claims regarding the differences between the two products
are summarized in the following Table 32:
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TR16NO21.045
[[Page 63575]]
[GRAPHIC] [TIFF OMITTED] TR16NO21.046
BILLING CODE 4120-01-C
---------------------------------------------------------------------------
\24\ Instructions for use--RECELL [reg] Autologous Cell
Harvesting Device. Food and Drug Administration. https://www.fda.gov/media/116382/download.
\25\ Ibid.
\26\ Humanitarian Device Exemption (HDE) Program--Guidance for
Industry and FDA Staff. U.S. Department of Health and Human
Services. Food and Drug Administration. Issued September 6, 2019.
Accessed on March 30, 2021 and available at: https://www.fda.gov/media/74307/download.
\27\ Manufacturer Important Drug Warning: Serious Risk with Use
of Epicel (cultured epidermal autografts): Squamous Cell Carcinoma
(SCC). June 2014. Food and Drug Administration. Accessed on March
30, 2021 and available at: https://www.fda.gov/media/102746/download.
\28\ Directions for Use--Epicel (cultured epidermal
autograpfts). Food and Drug Administration. https://www.fda.gov/vaccines-blood-biologics/approved-blood-products/epicel-cultured-epidermal-autografts.
\29\ Epicel Surgical Guidelines. Epicel website. Accessed on
March 30, 2021 and available at: https://www.epicel.com/pdfs/Epicel%20SurgicalGuide%202018%20DIGITAL.pdf.
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With respect to the newness criterion at Sec. 419.66(b)(1),
RECELL[supreg] is part of the FDA Breakthrough Devices Program. The
applicant stated that RECELL[supreg] received PMA on September 20,
2018. The applicant added that RECELL[supreg] is a Class III medical
device indicated for the treatment of acute thermal burn wounds in
patients 18 years of age and older. We received the application for a
new device category for transitional pass-through payment status for
RECELL[supreg] on August 7, 2020, which is within 3 years of the date
of the initial FDA marketing authorization. We invited public comment
on whether the RECELL[supreg] meets the newness criterion.
Comment: The applicant reiterated that RECELL[supreg] received FDA
PMA on September 20, 2018.
Response: We appreciate the commenter's input. Because we received
the RECELL[supreg] pass-through application on August 7, 2020, which is
within 3 years of September 20, 2018, the date of FDA premarketing
approval, we agree that the RECELL[supreg] meets the newness criterion.
With respect to the eligibility criterion at Sec. 419.66(b)(3),
according to the applicant, RECELL[supreg] is integral to the service
provided, is used for one patient only, comes in contact with human
tissue, and is surgically implanted or inserted (either permanently or
temporarily) or applied in or on a wound or other skin lesion. The
applicant also claimed that RECELL[supreg] meets the device eligibility
requirements of Sec. 419.66(b)(4) because it is not equipment, an
instrument, apparatus, implement, or item for which depreciation and
financing expenses are recovered, and it is not a supply or material
furnished incident to a service. However, given the applicant's
description of RECELL[supreg] as a device that processes tissue into an
autograft, we stated that it appears that the RECELL[supreg] system may
not be surgically implanted or inserted (either permanently or
temporarily) or applied in or on a wound or other skin lesion. We noted
that we believed the product of the RECELL[supreg] system, the
suspension, may be applied on a wound, but we were not certain that
this suspension qualifies as a device. We invited public comments on
whether RECELL[supreg] meets the eligibility criteria at Sec.
419.66(b).
Comment: In response to our concern regarding whether the
suspension, that is applied in or on a wound or other skin lesion is
the device for purposes of the requirement in Sec. 419.66(b) one
commenter stated that FDA approved all components of the RECELL[supreg]
as a device, and that in order to treat a patient, all components of
the RECELL[supreg] device are required to treat the patient. Multiple
commenters stated the process of harvesting, creating and applying the
suspension as one continuous process would not be possible without the
device hardware; the hardware and suspension are tightly integrated and
there is no treatment without the suspension. Another commenter added
that the buffer solution is a component of the RECELL[supreg] device,
which allows the expansion of the donor skin and provides a suspension
mechanism for the skin cells to be applied directly on the patient's
burn wound.
Response: We thank the commenters for their input. We have taken
this information into consideration in our final determination of
whether the device meets the criteria in Sec. 419.66(b)(3) and Sec.
419.66(b)(4), discussed below.
Comment: The applicant asserted that RECELL[supreg] is an integral
part of the service, which cannot be performed without all device
components including the suspension, is used for a single patient only,
comes in contact with human tissue and is applied on a wound, and
therefore, the applicant believes the RECELL[supreg] device meets the
criteria in Sec. 419.66(b)(3).
In response to our concern that the device is not applied in or on
a wound or other skin lesion, the applicant stated that the
RECELL[supreg] device is intended to harvest the cells from the
patient's own donor skin to create a skin cell suspension which is then
applied directly on the debrided and excised burn wound using a syringe
fitted with a spray nozzle. According to the applicant, the RES
Regenerative Epidermal Suspension (``Suspension'') contains autologous
skin cells and buffer solution, a RECELL[supreg] device component,
which is directly applied in or on a wound. The applicant added that
the buffer is a pH neutral solution (sodium lactate) in liquid form
that is used to carry, expand, and deliver the harvested skin cells in
the RES Suspension for direct application to the burn wound. According
to the applicant, RECELL[supreg] could not accomplish its intended use
as described in its FDA label without the buffer, which is a necessary
component of the device. The applicant and another commenter also
contended that the Suspension qualifies as a device under FDA's
definition, and cited provisions of the Federal Food, Drug, and
Cosmetic Act and FDA guidance that they believed supported this
position,
Response: We appreciate the additional information from the
applicant and commenters. The applicant and commenters indicated that
the RECELL[supreg] device consists of several components, one of which
is the buffer, which is combined with harvested skin cells to create
the suspension that is then applied to a wound. Because the buffer, a
component of the device, is part of the
[[Page 63576]]
suspension that is applied in or on a wound, RECELL[supreg] meets the
eligibility criterion specified at Sec. 419.66(b)(3)). We did not
receive any comments in regard to Sec. 419.66(b)(4), whether the
device is equipment, an instrument, apparatus, implement, or item for
which depreciation and financing expenses are recovered, and whether
the device is a supply or material furnished incident to a service.
Because the applicant asserted that the RECELL[supreg] device met the
eligibility requirements at Sec. 419.66(b)(4) and we agree, we
conclude that the RECELL[supreg] device meets this eligibility
criterion.
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. We stated in
the CY 2022 OPPS/ASC proposed rule that we have not yet identified an
existing pass-through payment category that describes RECELL[supreg].
We invited public comment on whether RECELL[supreg] meets the device
category criterion.
Comment: The applicant asserted the RECELL[supreg] meets the first
criterion for establishing a new device category at Sec. 419.66(c)(1)
because there are no existing categories established for device TPT
that describe the RECELL[supreg] device.
Response: We agree there is no existing pass-through payment
category that appropriately describes the RECELL[supreg] because no
current category appropriately describes a device that creates a
suspension from an autograft of the patient's skin that is then applied
to treat acute thermal burns. Based on this information, we have
determined that the RECELL[supreg] meets the first eligibility
criterion at Sec. 419.66(c)(1).
The second criterion for establishing a device category, at Sec.
419.66(c)(2), provides that CMS determines either of the following: (i)
That a device to be included in the category has demonstrated that it
will substantially improve the diagnosis or treatment of an illness or
injury or improve the functioning of a malformed body part compared to
the benefits of a device or devices in a previously established
category or other available treatment; or (ii) for devices for which
pass-through status will begin on or after January 1, 2020, as an
alternative to the substantial clinical improvement criterion, the
device is part of FDA's Breakthrough Devices Program and has received
FDA marketing authorization. As previously discussed in section IV.2.a
above, we finalized the alternative pathway for devices that are
granted a Breakthrough Device designation and receive FDA marketing
authorization in the CY 2020 OPPS/ASC final rule (84 FR 61295). The
RECELL[supreg] System has a Breakthrough Device designation and
marketing authorization from FDA, and therefore, is not evaluated for
substantial clinical improvement. We note that the applicant applied
for new technology add-on payment under the alternative pathway for
Breakthrough devices, as discussed in the FY 2022 IPPS/LTCH PPS final
rule (86 FR 45150 through 45151). While we have determined that the
RECELL[supreg] device meets the newness criterion for OPPS device pass-
through eligibility, in the FY 2022 IPPS/LTCH PPS final rule, we found
that the RECELL[supreg] device was not within the newness period for FY
2022 for eligibility for new technology add-on payments and was
therefore ineligible to receive these payments (86 FR 45151).
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 RECELL[supreg]
would be reported with the HCPCS codes listed in the following Table
33:
[GRAPHIC] [TIFF OMITTED] TR16NO21.047
[[Page 63577]]
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. In the CY 2022 OPPS/ASC proposed rule, we stated that for our
calculations, we used APC 5054--Level 4 Skin Procedures, which had a CY
2020 payment rate of $1,622.74 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 15110 had a device offset amount of $13.47 at the time the
application was received. According to the applicant, the cost of the
RECELL[supreg] is $7,500.
Section 419.66(d)(1), the first cost significance requirement,
provides that the estimated average reasonable cost of devices in the
category must exceed 25 percent of the applicable APC payment amount
for the service related to the category of devices. The estimated
average reasonable cost of $7,500 for RECELL[supreg] is 462 percent of
the applicable APC payment amount for the service related to the
category of devices of $1,622.74 ((7,500/1,622.74) x 100 = 462.2
percent). Therefore, we stated in the CY 2022 OPPS/ASC proposed rule
that we believe RECELL[supreg] meets the first cost significance
requirement.
The second cost significance requirement, at Sec. 419.66(d)(2),
provides that the estimated average reasonable cost of the devices in
the category must exceed the cost of the device-related portion of the
APC payment amount for the related service by at least 25 percent,
which means that the device cost needs to be at least 125 percent of
the offset amount (the device-related portion of the APC found on the
offset list). The estimated average reasonable cost of $7,500 for
RECELL[supreg] is 55,679 percent of the cost of the device-related
portion of the APC payment amount for the related service of $13.47
(($7,500/$13.47) x 100 = 55,679.3 percent). Therefore, we stated in the
CY 2022 OPPS/ASC proposed rule that we believe RECELL[supreg] meets the
second cost significance requirement.
The third cost significance requirement, at Sec. 419.66(d)(3),
provides that the difference between the estimated average reasonable
cost of the devices in the category and the portion of the APC payment
amount for the device must exceed 10 percent of the APC payment amount
for the related service. The difference between the estimated average
reasonable cost of $7,500 for RECELL[supreg] and the portion of the APC
payment amount for the device of $13.47 is 461 percent of the APC
payment amount for the related service of $1,622.74 ((($7,500-$13.47)/
$1,622.74) x 100 = 461.4 percent). Therefore, we stated in the CY 2022
OPPS/ASC proposed rule that we believe RECELL[supreg] meets the third
cost significance requirement.
We invited public comment on whether the RECELL[supreg] meets the
device pass-through payment criteria discussed in this section,
including the cost criterion for device pass-through payment status.
Comment: One commenter asserted that RECELL[supreg] expands the
donor skin by up to 80x compared to 2-4x for most autografts, the
current standard of care. The commenter stated this is an important
treatment option in light of the ongoing COVID-19 pandemic and its
drain on the availability of inpatient bed space. The commenter
respectfully requested that CMS approve the RECELL[supreg] pass-through
payment application to make RECELL[supreg] available in the outpatient
setting. A second commenter offered their general support for approval
of RECELL[supreg] based on what they believe to be substantial
improvements compared to current burn treatments. A third commenter
urged CMS to finalize pass-through status for RECELL[supreg] so that
they could offer the treatment to patients on an outpatient basis.
Response: We thank the commenters for their support and we note
that, as explained further below, we are approving RECELL[supreg] for
device pass-through status beginning in CY 2022.
Comment: The applicant stated that the cost of RECELL[supreg] is
not insignificant and exceeds 25 percent of the applicable APC amount
for the relevant procedures that would be reported with RECELL[supreg].
The applicant further stated that the cost of the RECELL[supreg] device
also exceeds the device-related portion of the applicable APC amount by
more than 25 percent for the relevant procedures that would be reported
with RECELL[supreg].
Response: After consideration of the public comments we received
and our review of the device pass-through application, we have
determined that RECELL[supreg] meets the requirements for device pass-
through payment status described at Sec. 419.66. As stated previously,
devices that are granted an FDA Breakthrough Device designation are not
evaluated in terms of the current substantial clinical improvement
criterion at Sec. 419.66(c)(2)(i) for purposes of determining device
pass-through payment status, but must meet the other criteria for
device pass-through status, and we believe RECELL[supreg] meets those
other criteria.
Therefore, effective beginning January 1, 2022, we are finalizing
approval for device pass-through payment status for RECELL[supreg]
under the alternative pathway for devices that have an FDA Breakthrough
Device designation and have received FDA marketing authorization.
(2) Shockwave C\2\ Coronary Intravascular Lithotripsy (IVL) Catheter
Shockwave Medical submitted an application for a new device
category for transitional pass-through payment status for the Shockwave
C\2\ Coronary Intravascular Lithotripsy (IVL) catheter (Coronary IVL
Catheter) for CY 2022. The applicant asserts the Coronary IVL Catheter
is a proprietary lithotripsy device delivered through the coronary
arterial system of the heart to the site of an otherwise difficult to
treat calcified stenosis, including calcified stenosis that is
anticipated to exhibit resistance to full balloon dilation or
subsequent uniform coronary stent expansion. According to the
applicant, energizing the lithotripsy device generates intermittent
sound waves within the target treatment site, disrupting calcium within
the lesion and allowing subsequent dilation of a coronary artery
stenosis using low balloon pressure. According to the applicant, the
Coronary IVL System is comprised of the following components:
(1) IVL Generator--a portable, rechargeable power source that is
capital equipment and reusable.
(2) IVL Connect Cable--a reusable cable used to connect the IVL
Generator to the IVL Catheter.
(3) Coronary IVL Catheter--a sterile, single-use catheter that
delivers intravascular lithotripsy within the target coronary lesion.
According to the applicant, during a percutaneous coronary
intervention (PCI) procedure, the physician determines that a lesion
has severe calcification. The applicant states the Coronary IVL
Catheter is introduced into the lesion where lithotripsy is delivered
to crack the calcification to facilitate the optimal dilatation of the
vessel and placement of a coronary stent. The applicant adds that the
Coronary IVL Catheter is removed, and the physician then implants a
coronary stent to treat the lesion.
The applicant asserts that the Coronary IVL Catheter is different
from other devices used during PCI procedures as it delivers localized
lithotripsy to crack the calcified lesion prior to the placement of a
coronary stent. According to the applicant there are other devices that
may be utilized to remove calcium within the vessel (that is,
atherectomy), however, these devices utilize some form of cutting or
laser to remove or ablate the calcium and can
[[Page 63578]]
only address the calcium nearest to the vessel lumen. According to the
applicant, the Coronary IVL Catheter addresses the calcium within the
lumen as well as within the vessel walls.
According to the applicant, the Coronary IVL Catheter is used to
treat a subset of patients identified for a PCI procedure to treat
their coronary artery disease where approximately 15 percent of lesions
in patients being eligible for a PCI procedure have severe
calcification. The applicant adds the Coronary IVL Catheter is utilized
during PCI procedures and does not replace any devices currently
utilized to complete the procedure (for example, guidewires,
angioplasty balloons, stent(s), vascular closure, etc.) that are
packaged into the APC payment rate. According to the applicant, based
on the FDA labeling for the Coronary IVL catheter, it is utilized prior
to the placement of a coronary stent.
With respect to the newness criterion at Sec. 419.66(b)(1), the
Coronary IVL Catheter received FDA PMA for the Shockwave Intravascular
Lithotripsy (IVL) System with Shockwave C2 Coronary Intravascular
Lithotripsy (IVL) Catheter on February 12, 2021 and is indicated for
lithotripsy-enabled, low-pressure balloon dilatation of severely
calcified, stenotic de novo coronary arteries prior to stenting. The
Coronary IVL Catheter received FDA Breakthrough Device designation on
August 19, 2019, and is indicated for lithotripsy-enabled, low-pressure
dilatation of calcified, stenotic de novo coronary arteries prior to
stenting. We received the application for a new device category for
transitional pass-through payment status for the Coronary IVL Catheter
on February 26, 2021, which is within 3 years of the date of the
initial FDA marketing authorization. We invited public comment on
whether the Coronary IVL Catheter meets the newness criterion.
Comment: One commenter stated that the Coronary IVL Catheter meets
the newness criteria.
Response: We thank the commenter for the information.
Comment: In their comment the applicant concurred with CMS'
conclusion that Coronary IVL Catheter meets the transitional pass-
through criteria and supported CMS finalizing the transitional-pass
through status for three years.
Response: Because we received the Coronary IVL Catheter pass-
through application on February 26, 2021, which is within 3 years of
February 12, 2021, the date of FDA premarketing approval for the
device, we agree that the Coronary IVL Catheter meets the newness
criterion.
With respect to the eligibility criterion at Sec. 419.66(b)(3),
according to the applicant, the Coronary IVL Catheter is integral to
the service provided, is used for one patient only, comes in contact
with human tissue, and is surgically inserted in a patient until the
procedure is completed. The applicant also claimed that the Coronary
IVL Catheter meets the device eligibility requirements of Sec.
419.66(b)(4) because it is not equipment, an instrument, apparatus,
implement, or item for which depreciation and financing expenses are
recovered, and it is not a supply or material furnished incident to a
service. In the CY 2022 OPPS/ASC proposed rule, we invited public
comments on whether the Coronary IVL Catheter meets the eligibility
criteria at Sec. 419.66(b).
Comment: One commenter stated that the regulation at Sec.
419.66(b)(3) is clear that pass-through is not appropriate for
``equipment, an instrument, apparatus, implement, or item 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).'' \30\ The commenter stated we acknowledged in the CY
2022 OPPS/ASC proposed rule that the Shockwave System Generator, which
is the ``power source'' for the Shockwave System, is ``capital
equipment'' \31\ with the list price referenced for the Coronary IVL
System and not just the Coronary IVL Catheter.\32\ Next the commenter
stated that the proposed rule does not consider if the Generator, an
excluded piece of capital equipment, is the key component of the
Coronary IVL System, and contended that CMS did not consider whether
the Generator, an excluded piece of capital equipment is a ``key
therapeutic component'' of the Shockwave System, and as such, that the
Shockwave System as a whole should not be eligible for device pass-
through status.
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\30\ 42 CFR 419.66(b)(4); Medicare Provider Reimbursement
Manual, Ch. 1, section 104.1.
\31\ 86 FR 42089.
\32\ 86 FR 45153.
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Response: As we stated in the CY 2022 OPPS/ASC proposed rule (86 FR
42089), Shockwave Medical submitted an application for a new device
category for transitional pass-through payment status for the Coronary
IVL Catheter, and not for the remainder of the Coronary IVL System,
which includes the IVL Cable and Generator. Given that the IVL Cable
and Generator are not single-use devices, they are not eligible for
device pass-through status. The only part of this device that is
eligible for device pass-through status is the Coronary IVL Catheter--a
sterile, single-use catheter.
In terms of the commenter's contention that we have not evaluated
which portion of the device is the key therapeutic component, we
emphasize that the Coronary IVL Catheter is the device for which the
applicant submitted an application for device pass-through status. We
also note that we consider which portion of a combination product is
the key therapeutic or diagnostic component solely for purposes of
determining whether implantable biological products should be evaluated
as drugs or devices for pass-through payment purposes (74 FR 60476). We
do not determine which portion of a combination product is the key
therapeutic or diagnostic component for purposes of analyzing a
device's eligibility for pass-through status. Nonetheless, if we were
to consider the Shockwave Coronary IVL System as a whole, we would
conclude that the Coronary IVL Catheter is the key therapeutic
component as it is the component in the Shockwave System that is
introduced into the lesion where lithotripsy is delivered to crack the
calcification to facilitate the optimal dilatation of the vessel and
placement of a coronary stent.
Comment: The applicant concurred with CMS' conclusion that the
Coronary IVL Catheter meets the transitional pass-through criteria,
including the criteria at Sec. 419.66(b), and supported CMS finalizing
the transitional-pass through status for the Coronary IVL Catheter for
3 years.
Response: Based on the information we have received and our review
of the application, we agree with the applicant that the Coronary IVL
Catheter is used for one patient only, comes in contact with human
tissue, and is surgically implanted or inserted, and therefore meets
the requirements in Sec. 419.66(b)(3). We also agree with the
commenter that the Coronary IVL Catheter meets the device eligibility
requirements of Sec. 419.66(b)(4) because it is not equipment, an
instrument, apparatus, implement, or item for which depreciation and
financing expenses are recovered, and it is not a supply or material
furnished incident to a service. Based on this assessment we have
determined that the Coronary IVL Catheter meets the eligibility
criteria at Sec. 419.66(b)(3) and (4).
The criteria for establishing new device categories are specified
at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1),
provides that CMS
[[Page 63579]]
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 identified
five established categories which they believe are not appropriate
representatives of the Coronary IVL Catheter: (1) C1714 and C1724,
which include devices that use mechanical cutting tools; (2) C1725,
which includes balloon angioplasty; (3) C1885, which uses laser, beams
of light to break up vessel obstructions; and (4) C2623, which includes
a drug coated balloon. We stated in the CY 2022 OPPS/ASC proposed rule
that we had not identified an existing pass-through device category
that describes Coronary IVL Catheter and we invited public comment on
this issue.
Comment: In its comment, the applicant concurred with CMS'
conclusion that Coronary IVL Catheter meets the transitional pass-
through device category eligibility criteria at Sec. 419.66(c)(1) and
supported CMS finalizing transitional pass-through status for three
years.
Response: We agree there is no existing pass-through device
category that appropriately describes the Coronary IVL Catheter because
no current category describes a balloon catheter that generates sonic
pressure waves using lithotripsy that can break up calcification in
arterial walls. Based on this information, we have determined that the
Coronary IVL Catheter meets the eligibility criterion at Sec.
419.66(c)(1).
The second criterion for establishing a device category, at Sec.
419.66(c)(2), provides that CMS determines either of the following: (i)
That a device to be included in the category has demonstrated that it
will substantially improve the diagnosis or treatment of an illness or
injury or improve the functioning of a malformed body part compared to
the benefits of a device or devices in a previously established
category or other available treatment; or (ii) for devices for which
pass-through status will begin on or after January 1, 2020, as an
alternative to the substantial clinical improvement criterion, the
device is part of FDA's Breakthrough Devices Program and has received
FDA marketing authorization. As previously discussed in section IV.2.a
above, we finalized the alternative pathway for devices that are
granted a Breakthrough Device designation and receive FDA marketing
authorization in the CY 2020 OPPS/ASC final rule (84 FR 61295). The
Coronary IVL Catheter has a Breakthrough Device designation and
marketing authorization from FDA, and therefore, is not evaluated for
substantial clinical improvement. We note that the applicant applied
for the new technology add-on payment under the alternative pathway for
Breakthrough devices as discussed in the FY 2022 IPPS/LTCH PPS final
rule (86 FR 45151 through 45153). In the FY 2022 IPPS/LTCH PPS final
rule (86 FR 45153), CMS approved the Coronary IVL Catheter for new
technology add-on payments.
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 Coronary
IVL Catheter meeting the cost significance requirements. The applicant
stated that the Coronary IVL Catheter would be reported with the HCPCS
codes listed in the following Table 34:
BILLING CODE 4120-01-P
[[Page 63580]]
[GRAPHIC] [TIFF OMITTED] TR16NO21.048
BILLING CODE 4120-01-C
To meet the cost criterion for establishing a device category, a
device must pass all three cost criteria for at least one APC. For our
calculations for the CY 2022 OPPS/ASC proposed rule, we used APC 5193--
Level 3 Endovascular Procedures, which had a CY 2021 payment rate of
$10,042.94 at the time the application was received.
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 for the Coronary IVL Catheter of $5,640 is 56
percent of the applicable APC payment amount for the service related to
the category of devices of $10,042.94 (($5,640/10,042.94) x 100 = 56
percent). Therefore, we stated in the CY 2022 OPPS/ASC proposed rule
that we believe the Coronary IVL Catheter 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). 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 92928 had a device offset amount of $3,607.42 at the
time the application was received. The estimated average reasonable
cost for the Coronary IVL Catheter of $5,640 is 156 percent of the cost
of the device-related portion of the APC payment amount for the related
service of $3,607.42 (($5,640/$3,607.42) x 100 = 156 percent).
Therefore, we stated in the CY 2022 OPPS/ASC proposed rule that we
believe that the Coronary IVL Catheter 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 $5,640 for the Coronary IVL Catheter and the portion
of the APC payment amount for the device of $3,607.42 is 20 percent of
the APC payment amount for the related service of $10,042.94 (($5,640-
$3,607.42)/$10,042.94) x 100= 20 percent). Therefore, we stated in the
CY 2022 OPPS/ASC proposed rule that we believe that the Coronary IVL
Catheter meets the third cost significance requirement.
We invited public comment on whether the Coronary IVL Catheter
meets the device pass-through payment criteria discussed in this
section,
[[Page 63581]]
including the cost criterion for device pass-through payment status.
Comment: One commenter asserted that CMS' review of the Shockwave
System (Coronary IVL) was based on an incorrect CPT/APC pairing and an
assessment of charges, not actual costs.
The commenter stated that CMS' analysis is contrary to its own
regulation because it did not reference ``the applicable APC.'' \33\
According to the commenter, if APC 5194 (Level 4 Endovascular
Procedures) is used to assess the Shockwave System, and not APC 5193
(Level 3 Endovascular Procedures), it is clear that the Shockwave
System would not meet any of the three cost criteria. The commenter
makes a number of arguments about why it believes APC 5194 is ``the
applicable APC,'' including that that the applicant referenced 92933
(Percutaneous transluminal coronary atherectomy, with intracoronary
stent, with coronary angioplasty when performed; single major coronary
artery or branch) which the commenter explains maps to APC 5194, not
APC 5193.\34\ According to the commenter, the applicant is clearly
targeting this APC, as the applicant references a targeted population
of patients with calcified lesions of approximately 15 percent of
patients; \35\ this population maps to I25.84 (Coronary atherosclerosis
due to calcified coronary lesion) for which a matching percentage of
patients links to 92933 (and APC 5194), not 92928 (Percutaneous
transcatheter placement of intracoronary stent(s), with coronary
angioplasty when performed; single major coronary artery or branch)
(and APC 5193).\36\ The commenter further asserted that in its
development of the Shockwave System, the applicant references coronary
orbital atherectomy (OA), which, in fact, breaks up and removes
calcium, as occurs in atherectomy.\37\ According to the commenter, the
applicant's public comments clearly present the Shockwave System as a
replacement to atherectomy.\38\ The commenter stated that the proposed
rule states that the pass-through criteria can be satisfied if ``any''
APC meets the criteria but refers to the regulation, which states the
pass-through cost criteria can be met if ``the applicable'' APC is
used. The commenter contended that it is clear the applicable APC for
the Shockwave System is 5194 and not 5193. The commenter added that
some stakeholders are under a misconception that, if the Shockwave
System is granted pass-through status based on an analysis of the cost
criterion using a pairing of 92928 and APC 5153, additional pass-
through payments will nevertheless be available when the Shockwave
System is billed under APC 5194. The commenter asked CMS to ensure, if
the agency confirms its quarterly pass-through determination for the
Shockwave System, that appropriate safeguards are in place so that
inappropriate payments are not made in connection with APC 5194.
---------------------------------------------------------------------------
\33\ 42 CFR 419.66(d)(1).
\34\ See CY 2022 OPPS Notice of Proposed Rulemaking Addendum B.
\35\ 86 FR 42018, 42089 (August 4, 2021).
\36\ 2019 Medicare Outpatient Claims data (showing 17.21 percent
of 92933 is associated with I25.84).
\37\ The Shockwave System's PMA was based in part on results
from DISRUPT CAD III, which was designed to enroll the same
population, using the same definitions and endpoints as in ORBIT II,
which was the pivotal trial that paved the way for orbital
atherectomy's approval in 2013. See Shelley Wood, MD, ``FDA Approves
Shockwave Intravascular Lithotripsy for Calcified Coronaries'',
available at https://www.tctmd.com/news/fda-approves-shockwave-intravascular-lithotripsy-calcified-coronaries (Feb. 16, 2021).
\38\ See Shockwave Investor Presentation (August 2021),
available at https://ir.shockwavemedical.com/static-files/84cb0382-3ad6-435e-a6de-1a132160ff68 (stating that the Shockwave System is a
``Solution'' to ``Atherectomy'' and its ``Serious Complications'').
---------------------------------------------------------------------------
The commenter next asserted that the Shockwave System cost
significance test is based on list prices and not costs, is
inadequately supported, and is inconsistent with available cost data.
According to the commenter, the device cost used in assessing the cost
criteria requirement reflects a list price and is contrary to publicly
available information on Shockwave System pricing. The commenter stated
that there are substantially more C9600 (Percutaneous transcatheter
placement of drug eluting intracoronary stent(s), with coronary
angioplasty when performed; single major coronary artery or branch)
claims (i.e., 90,889) with drug-eluting stents than 92928 (i.e., 6,357)
with bare metal stents, where the device-related portion is higher. The
commenter asserted that CMS did not provide any information in the CY
2022 OPPS/ASC proposed rule about why 92928 was used instead of C9600.
The commenter explained that it is not clear to them why CMS chose
92928 instead of C9600 to perform the cost significance calculations
for the cost criterion.
The commenter then asserted that CMS, without providing factual
support, stated that the average reasonable cost for Coronary IVL is
$5,640. According to the commenter, in the IPPS/LTCH final rule (86 FR
44774, 45153) CMS used a value of $5,640 for the Shockwave System, but
did not reference the IPPS/LTCH final rule in the CY 2022 OPPS/ASC
proposed rule. The commenter went on to explain that CMS based this
figure on a cost for the Shockwave System of $4,700 per device x 1.2
devices required per case, and stated that CMS finalized this cost for
the System ``as a whole'' without supporting this calculation except
using preliminary information from the applicant. The commenter
asserted that, under the Administrative Procedures Act, 5 U.S.C.
553(b), an agency is required, in order to provide stakeholders with
reasonable notice and opportunity to comment, to provide the factual
basis that supports its proposal; the commenter added that CMS' failure
to provide any support for its proposal is precisely the kind of defect
in process that courts have repeatedly cautioned against.
According to the commenter, in a published article, citing a
Shockwave earnings call, the Shockwave national list price was stated
to be $4,700.\39\ The commenter asserted that a list price is a charge
and not a reflection of actual cost and does not address any discounts,
rebates, free goods contingent on a purchase, or other price
concessions. The commenter noted that blinded market research revealed
prices to some purchasers as low as $4,200 and possibly lower.
---------------------------------------------------------------------------
\39\ Shelley Wood, tctMD, ``FDA Approves Shockwave Intravascular
Lithotripsy for Calcified Coronaries'', available at https://www.tctmd.com/news/fda-approves-shockwave-intravascular-lithotripsy-calcified-coronaries (February 16, 2021).
---------------------------------------------------------------------------
Additionally, the commenter noted that in the proposed rule the
applicant used a multiplier of 1.2 devices required per case to
calculate the $5,640 used in assessing whether the device meets the
cost criterion. According to the commenter, such a multiplier is not
cited in the proposed rule and was not, therefore, framed appropriately
for comment as part of this rulemaking. The commenter added three
concerns related to the multiplier: (1) Use of a multiplier magnifies
the invalid impact of incorrectly included ``equipment'' (the
Generator) and a reusable item (the Cable) because the Generator and
Cable would not be used in more than one case; (2) neither the CY 2022
OPPS proposed rule nor the FY 2022 IPPS/LTCH final rule included data
or support for the assertion that 1.2 devices are required per case;
and (3) use of a multiplier is not appropriate where, as here, the
pass-through regulation requires a ``reasonable'' estimate of costs and
more than one device would be used in less than twenty percent of all
cases. The commenter contended that CMS should use medians, rather than
[[Page 63582]]
averages, because of what the commenter believed was the inaccurate
nature of averages in circumstances like these.\40\
---------------------------------------------------------------------------
\40\ 42 CFR 419.66(d).
---------------------------------------------------------------------------
Response: We appreciate the additional information provided by the
commenter. We disagree with the commenter's assertion that the proposed
rule references the incorrect HCPCS/APC pairing. Question D.7. of the
device pass-through application states: Using Healthcare Common
Procedure Coding System (HCPCS) Level I and/or Level II code(s), list
all of the specific procedure(s) and/or services with which the
nominated device is used. The applicant for the Coronary IVL Catheter
provided a complete list of HCPCS codes with which their device can be
billed. CMS evaluated the complete list of HCPCS codes to ensure each
code represented a procedure with which the Coronary IVL Catheter could
be used. Consistent with our evaluation of every other device pass-
through application, we identify the applicable APC with which to
evaluate the cost of the device against the cost significance tests at
Sec. 419.66(d). There are numerous APCs to which procedures with which
the Coronary IVL Catheter can be performed are assigned. As we
explained in the CY 2005 OPPS final rule (69 FR 65775), we generally
use the lowest APC payment rate applicable for use with the nominated
device when we assess whether a device meets the cost significance
criterion, thus increasing the probability the device will pass the
cost significance test. Furthermore, we disagree with the commenter's
assertion that CMS should limit pass-through payments to one APC (5193)
versus another (5194). The applicant identified HCPCS codes which CMS
agrees align appropriately to both APC 5193 and 5194. Consistent with
CMS' policy, we are not limited in applying pass-through payments to
only the HCPCS/APC combination that was used in the cost significance
test, but rather the entire list of procedures which appropriately
represent the technology.
We disagree with the commenter's assertions that the CY 2022 OPPS/
ASC proposed rule uses an assessment of charges, as opposed to cost,
and failed to give commenters an opportunity to comment. As we stated
in the proposed rule, according to the applicant the Coronary IVL
System is comprised of the following components: (1) IVL Generator--a
portable, rechargeable power source that is capital equipment and
reusable; (2) IVL Connect Cable--a reusable cable used to connect the
IVL Generator to the IVL Catheter; (3) Coronary IVL Catheter--a
sterile, single-use catheter that delivers intravascular lithotripsy
within the target coronary lesion. Given that parts one and two are not
single-use devices, they are not under consideration for device pass-
through status. The only part of this device which is under
consideration for device pass-through payments is the Coronary IVL
Catheter--a sterile, single-use catheter. According to the applicant,
the expected average sales price of each Shockwave C2 Coronary IVL
single-use catheter is $4,700. We acknowledge that in the CY 2022 OPPS/
ASC proposed rule, we did not state that, per the applicant, the
average number of catheters required per case is 1.2 based on the
applicant's clinical trial experience; the applicant therefore
calculated an expected cost to hospitals on a per-case basis for the
Coronary IVL Catheter of $5,640. Based on our analysis, which includes
a review by CMS clinical professionals, we agree with the applicant
that the average number of catheters required per case is 1.2 and
therefore, that a multiplier of 1.2 is appropriate in this situation.
We appreciate the commenter identifying this information. We note that
regardless of the value used, $4,700 (for one Coronary IVL Catheter per
case) or $5,640 (for 1.2 Coronary IVL Catheters per case), the Coronary
IVL Catheter meets the cost significance tests at Sec. 419.66(d).
Finally, we are clarifying that although the FY 2022 IPPS/LTCH PPS
final rule referred to the Shockwave C2 Intravascular Lithotripsy (IVL)
System when discussing whether the device met the cost criterion for
new technology add-on payments, we considered the cost only of the
Coronary IVL Catheter in that determination.
Comment: This same commenter asserts that the proposed rule failed
to provide stakeholders with a reasonable opportunity to comment on
issues central to the pass-through determination. The commenter
asserted that the quarterly, sub-regulatory determination made for
pass-through status for the Coronary IVL Catheter is invalid following
the Supreme Court's decision in Azar v. Allina Health Services, 139 S.
Ct. 1804 (2019). Based on these assertions, the commenter stated that
the Coronary IVL Catheter should not be approved for pass-through
status and the quarterly determination should be rescinded. The
commenter stated that our process of approving applications for device
pass-through status on a quarterly basis predates the Supreme Court's
decision in Allina and should ``appropriately conform to the rulemaking
obligations set forth in Allina''.\41\ The commenter concludes that the
Shockwave System pass-through determination was invalid and in excess
of CMS' authority and it should, therefore, be rescinded.
---------------------------------------------------------------------------
\41\ CMS Memorandum, Impact of Allina on Medicare Payment Rules,
at 1 (Oct. 31, 2019). See also section 1871(a)(2) of the Act.
---------------------------------------------------------------------------
Response: We disagree with the commenter's assertion that the
quarterly determination process is invalid, and that the quarterly,
sub-regulatory determination to grant pass-through status for the
Coronary IVL Catheter is invalid following Allina. We note that in the
CY 2016 OPPS/ASC final rule (80 FR 70417-70418) CMS finalized through
notice and comment rulemaking its proposal to revise the application
process for device pass-through payments. Specifically, CMS stated that
starting in CY 2016 all device pass-through payment applications
submitted through the quarterly process would be subject to notice-and-
comment rulemaking in the next applicable OPPS annual rulemaking cycle.
Furthermore, under the finalized policy, CMS stated that all
applications that are approved upon quarterly review will automatically
be included in the next applicable OPPS annual rulemaking cycle, and
any information provided by the applicant would be available for
consideration during the public comment process for the proposed rule.
CMS stated that this process would allow those applications that meet
all criteria to receive timely pass-through payment status, while also
allowing for a transparent public review process for all applications
as part of the next available rulemaking. Finally, we note that the
quarterly approval process does not establish or change a substantive
legal standard governing the scope of benefits or the payment for
services, but only applies substantive legal standards adopted through
notice and comment rulemaking to determine whether a particular device
should qualify for pass-through status.
Comment: In their public comment, the applicant stated that there
are two issues associated with CMS' evaluation and implementation of
transitional device pass-through payment status for the Coronary IVL
Catheter that they wanted to bring to CMS' attention. In CMS
Transmittal 10825, dated June 11, 2021, CMS limited HCPCS code C1761 to
being reported with two procedures that describe placement of a
coronary stent (HCPCS codes 92928 and C9600). The applicant noted that
CMS most recently published Transmittal 10997, dated September 16,
2021, which added four additional HCPCS codes--92933,
[[Page 63583]]
92943, C9602, and C9607--that can also be billed in conjunction with
HCPCS code C1761 and be eligible for transitional pass-through
effective July 1, 2021. The applicant noted that CMS included the
device offset associated with these codes when calculating the
incremental transitional pass-through payment when HCPCS code C1761 is
billed. The applicant believes CMS applied the device offset for HCPCS
codes 92933, 92943, C9602, and C9607 as an oversight, and requested
that CMS remove the device offset for these codes when calculating the
incremental transitional pass-through payment when billed in
conjunction with C1761 because, similar to the determination for HCPCS
codes 92928 and C9600, no device offset should be implemented as IVL
costs are completely additive to the procedure and the devices
represented by the device offset in each procedure are still required.
Response: We disagree with the applicant's request to remove the
device offset for HCPCS codes 92933, 92943, C9602 and C9607 when
calculating the incremental transitional pass-through payment when
billed in conjunction with HCPCS code C1761. In the above-identified
procedures, the Coronary IVL Catheter is used in lieu of atherectomy to
achieve a therapeutic outcome. Therefore, we believe a device offset as
identified in Transmittal 10997 dated September 16, 2021 is warranted
when HCPCS code C1761 is used in conjunction with these particular
procedures.
Comment: The applicant stated that while they agree that Coronary
IVL Catheter meets all three cost criteria based on CMS' methodology,
they are concerned that the methodology CMS utilizes is not the most
appropriate for procedures that require the use of multiple devices.
The applicant contends that CMS utilizes the entire device-related
portion (DRP) as reported for the applicable procedure instead of
evaluating the cost of the new technology relative to the specific
devices that it is replacing. The applicant asserted that CMS has
removed the device offset for other technologies that have received
transitional pass-through payment where new technologies are completely
additive to the procedure. The applicant stated that CMS does not
utilize a similar methodology when evaluating the three cost criteria.
The applicant asserted that this may create an artificially high bar
that would make new technology that would otherwise qualify for pass-
through status ineligible, which the applicant believes is the case for
the EluviaTM system. The applicant requested that CMS update
its methodology for current and future transitional pass-through
applications where multiple devices are utilized.
Response: We thank the applicant for their input in regard to the
calculation of the cost significance criterion, which we will take into
consideration for future rulemaking. For a more detailed discussion of
this issue as it relates to the EluviaTM system, please see
section IV(a)(2)(b)(3) of this final rule with comment period.
After consideration of the public comments we received and our
review of the device pass-through application, we have determined that
Coronary IVL Catheter meets the requirements for device pass-through
payment status described at Sec. 419.66. As stated previously, devices
that are granted an FDA Breakthrough Device designation are not
evaluated in terms of the substantial clinical improvement criterion at
Sec. 419.66(c)(2)(i) for purposes of determining device pass-through
payment status, but must meet the other criteria for device pass-
through status, which we believe the Coronary IVL Catheter does.
As specified above, the Coronary IVL Catheter pass-through
application was preliminarily approved for transitional pass-through
payment under the alternative pathway effective July 1, 2021. We note
that in the CY 2022 OPPS/ASC proposed rule we invited public comments
on whether the Coronary IVL Catheter should continue to receive
transitional pass-through payment under the alternative pathway for
devices that are FDA market authorized and that have an FDA
Breakthrough Device designation.
We are finalizing our proposal to continue in 2022 device pass-
through payment status for the Coronary IVL Catheter under the
alternative pathway for devices that have an FDA Breakthrough Device
designation and have FDA marketing authorization.
2. Traditional Device Pass-Through Applications
(1) AngelMed Guardian[supreg] System
Angel Medical Systems submitted an application for a new device
category for transitional pass-through payment status for the AngelMed
Guardian[supreg] System (the Guardian[supreg]) for CY 2022. The
applicant asserted that the Guardian[supreg] is a proactive diagnostic
technology that monitors a patient's heart's electrical activity for
changes that may indicate an Acute Coronary Syndrome (ACS) event (that
is, STEMI, NSTEMI, or unstable angina) related to blockage of a
coronary artery which prevents the heart muscle from receiving
sufficient oxygen. The Guardian[supreg] is a device implanted in the
upper left chest and connects to an active fixation intracardiac lead
attached to the apex of the right ventricle. The applicant asserts the
Guardian[supreg] consists of an implantable medical device (IMD) which
is composed of the header with an antenna for communication and the can
with circuitry, radio, vibratory motor, and battery. According to the
applicant, the Guardian[supreg] system also includes an external device
that communicates with the IMD and provides redundant patient
notification using auditory and visual alarms. Lastly, the applicant
states the Guardian[supreg] system includes a physician programmer, a
capital device, used to program the IMD and download cardiac data
captured by the IMD.
According to the applicant, the Guardian[supreg] system relies upon
the gold standard of changes to the ST-segment of a patient's heartbeat
to diagnose a heart attack. According to the applicant, the
Guardian[supreg] system uses an intracardiac lead to sense cardiac data
and proprietary machine learning algorithms to assess acute changes to
the ST-segment on a continuous, real-time basis. The applicant asserts
these changes are compared to a patient's normal baseline reference
that is computed over the prior twenty-four hours of monitored heart
activity. According to the applicant, if the Guardian[supreg] detects a
statistically abnormal acute change relative to this baseline, it
notifies the patient to the potential ACS event by providing an alarm:
The implanted device will vibrate, and the external device will flash
and beep. According to the applicant, patients are instructed to seek
urgent medical assistance when the system activates, even in the
absence of ACS symptoms.
According to the applicant, the Guardian[supreg] system
implantation will typically be an outpatient procedure and, following
10-14 days, is programmed in the physician office. The applicant
asserts the patient undergoes training on the Guardian[supreg] and has
follow-up visits every six months to review the device data. The
applicant states that the emergency alarm is intended to be used as an
adjunct to symptoms; in the absence of an emergency alarm patients are
instructed not to ignore symptoms of an ACS event. The applicant
asserts that while current technologies detect and provide therapy for
cardiac medical conditions related to abnormal heart rate and rhythm,
the AngelMed Guardian[supreg] system is the only FDA-
[[Page 63584]]
approved technology for providing detection and patient notification of
ACS events so that patients more reliably and urgently seek medical
care.
With respect to the newness criterion at Sec. 419.66(b)(1), the
AngelMed Guardian[supreg] system first received FDA 510(k) clearance on
April 9, 2018 under PMA number P150009. The manufacturers received a
Category B Investigational Device Exemption (IDE) as of January 27,
2020 for the use of the device in their continued access study,
AngelMed for Early Recognition and Treatment of STEMI (ALERTS).
According to the applicant, the device is anticipated for US market
availability in quarter three of 2021. We received the application for
a new device category for transitional pass-through payment status for
the Guardian[supreg] system on February 28, 2021, which is within 3
years of the date of the initial FDA marketing authorization. We
solicited public comment in the CY 2022 OPPS/ASC proposed rule on
whether the Guardian[supreg] system meets the newness criterion.
Comment: The applicant reasserted that the Guardian[supreg] meets
the newness criterion at Sec. 419.66(b)(1) as the application was
submitted within 3 years of FDA approval.
Response: We appreciate the commenter's input and agree that
because we received the application for the Guardian[supreg] on
February 28, 2021, which was within 3 years of the FDA premarketing
approval on April 9, 2018, the Guardian[supreg] meets the newness
criterion.
With respect to the eligibility criterion at Sec. 419.66(b)(3),
according to the applicant, the Guardian[supreg] is integral to the
service provided, is used for one patient only, comes in contact with
human tissue, and is surgically inserted temporarily. The applicant
also claimed that the Guardian[supreg] meets the device eligibility
requirements of Sec. 419.66(b)(4) because it is not an instrument,
apparatus, implement, or item for which depreciation and financing
expenses are recovered, and it is not a supply or material furnished
incident to a service. We invited public comments in the CY 2022 OPPS/
ASC proposed rule on whether the Guardian[supreg] meets the eligibility
criteria at Sec. 419.66(b).
Comment: The applicant stated the Guardian[supreg] meets the
eligibility criteria at Sec. 419.66(b)(3) and 419.66(b)(4) as the
Guardian[supreg] is used for one patient only, comes in contact with
human tissue, and is surgically inserted.
Response: Based on the information we have received and our review
of the application, we agree with the applicant that the device is used
for one patient only, comes in contact with human tissue, and is
surgically implanted or inserted. We also agree with the commenter that
the Guardian[supreg] meets the device eligibility requirements of Sec.
419.66(b)(4) because it is not equipment, an instrument, apparatus,
implement, or item for which depreciation and financing expenses are
recovered, and it is not a supply or material furnished incident to a
service. Based on this assessment we have determined that the
Guardian[supreg] meets the eligibility criterion at Sec. 419.66(b)(3)
and (4).
The criteria for establishing new device categories are specified
at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1),
provides that CMS determines that a device to be included in the
category is not appropriately described by any of the existing
categories or by any category previously in effect, and was not being
paid for as an outpatient service as of December 31, 1996. We stated in
the CY 2022 OPPS/ASC proposed rule that we have not yet identified an
existing pass-through payment category that describes the
Guardian[supreg]. We invited public comment on whether the
Guardian[supreg] meets the device category criterion.
Comment: The applicant asserted the Guardian[supreg] meets the
first criterion for establishing a new device category, at Sec.
419.66(c)(1), as no existing categories or categories previously in
effect appropriately describe the technology.
Response: We agree there is no existing pass-through payment
category that appropriately describes the Guardian[supreg] because no
current or previously in effect category describes a device that
provides detection of ACS events and notification to a patient. Based
on this information, we have determined that the Guardian[supreg] meets
the eligibility criterion at Sec. 419.66(c)(1).
The second criterion for establishing a device category, at Sec.
419.66(c)(2), provides that CMS determines either of the following: (i)
That a device to be included in the category has demonstrated that it
will substantially improve the diagnosis or treatment of an illness or
injury or improve the functioning of a malformed body part compared to
the benefits of a device or devices in a previously established
category or other available treatment; or (ii) for devices for which
pass-through status will begin on or after January 1, 2020, as an
alternative to the substantial clinical improvement criterion, the
device is part of FDA's Breakthrough Devices Program and has received
FDA marketing authorization.
The applicant stated that the Guardian[supreg] represents a
substantial clinical improvement over existing technologies. With
respect to this criterion, the applicant asserted that the
Guardian[supreg] offers the ability to diagnose a medical condition in
a patient population where that medical condition is currently
undetectable or offers the ability to diagnose a medical condition
earlier in a patient population than is currently possible and this
earlier diagnosis results in better outcomes.\42\ In support of this
claim the applicant submitted two published articles, the first by
Gibson et al. and the second by Holmes et al.43 44
---------------------------------------------------------------------------
\42\ 66 FR 55852, November 2, 2001.
\43\ Gibson, C.M., Holmes, D., Mikdadi, G., Presser, D., Wohns,
D., Yee, M.K., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd, Iteld, B.,
& Krucoff, M.W. (2019). Implantable Cardiac Alert System for Early
Recognition of ST-Segment Elevation Myocardial Infarction. Journal
of the American College of Cardiology, 73(15), 1919-1927.
\44\ Holmes, D.R., Jr, Krucoff, M.W., Mullin, C., Mikdadi, G.,
Presser, D., Wohns, D., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd,
Iteld, B., Fischell, D.R., Fischell, T., Keenan, D., John, M.S., &
Gibson, C.M. (2019). Implanted Monitor Alerting to Reduce Treatment
Delay in Patients with Acute Coronary Syndrome Events. JACC, 74(16),
2047-2055.
---------------------------------------------------------------------------
The first study is a randomized control trial with 907 subjects who
were implanted with the Guardian[supreg] system and randomized 1:1 to
either active or deactivated alarms.\45\ According to the authors, all
subjects received education regarding the importance of minimizing
symptom-to-door time in the presence of chest pain or ischemic
equivalents, regardless of alarm status. The authors state that
patients were not blinded to their randomization status. After
randomization patients returned for follow-up visits at 1, 3, 6, and
every six months thereafter. In all patients, the Guardian[supreg]
system captured electrogram data up to 24 hours before and 8 hours
after a triggered alarm for later review. According to the authors, the
primary safety endpoint was the absence of system-related complications
that required a system revision or invasive intervention to resolve in
at least 90 percent of subjects through six months. The primary
efficacy endpoint was a composite of: (1) Cardiac or unexplained death;
(2) new Q-wave MI; and (3) detection-to-presentation time >2 h for a
documented coronary occlusion event. Electrocardiogram (ECG) tracings
were obtained prior to implantation, at randomization, at 1, 3, and 6
months, and at every emergency presentation to evaluate for a Q-wave MI
not present at baseline. An exploratory
[[Page 63585]]
dual baseline ECG analysis was performed, according to the authors,
because Q-waves may be transient between implantation and
randomization. The dual baseline ECG analysis evaluates for the
presence of new Q waves across subsequent ECGs. At the start of the
trial, 456 patients were identified as controls and 451 as treated; at
6 months, 446 controls remained and 437 treated remained. The authors
stated that subject enrollment ceased after 900 subjects were
randomized and therefore an alpha penalty of 0.25 was taken for the
interim look at event rates after 600 subjects.
---------------------------------------------------------------------------
\45\ Gibson, C.M., Holmes, D., Mikdadi, G., Presser, D., Wohns,
D., Yee, M.K., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd, Iteld, B.,
& Krucoff, M.W. (2019). Implantable Cardiac Alert System for Early
Recognition of ST-Segment Elevation Myocardial Infarction. Journal
of the American College of Cardiology, 73(15), 1919-1927.
---------------------------------------------------------------------------
According to the authors, the control and treatment groups were
well matched at baseline.\46\ The primary safety endpoint was met with
96.7 percent freedom (posterior probability >0.999) with a total of 31
system-related complications in 30 (3.3 percent) subjects with
infections being the predominant cause of complications. The authors
stated that ACS events occurrence was low. At 7, 30, 50, 70, and 90
days there were no statistical differences between the control and
treated groups on the primary composite efficacy endpoint. At each time
interval, the treated group had lower rates of the primary endpoint
than the control group. Statistical differences were observed between
treated and control groups in the dual baseline ECG exploratory
analysis particularly at 50, 70, and 90 days after a confirmed
occlusive event favoring the treated group. At the pre-specified 7-day
look back window, the median time from the Guardian[supreg]
notification to arrival at a medical facility was 51 minutes for the
treated subjects as compared to 30.6 hours for control subjects (Pr [pt
< pc] >0.999). Subject arrival within 2 hours of a detected and
confirmed coronary occlusion occurred in 85 percent (29 of 34) of the
treatment group compared with only 5 percent of the control group, with
the majority of patients in the control arm presenting after 7 days.
However, the authors asserted that despite a numerical reduction in new
Q-wave MI using single and dual baseline ECGs at any of the pre-
specified look-back windows, the posterior probability of superiority
did not reach statistical significance. The applicant added that 22
percent (42/193) of the confirmed ACS events were detected due to
Emergency Department (ED) visits prompted by alarms in the absence of
symptoms; that silent MIs typically account for approximately 30
percent of all MIs and are historically associated with increased rates
of morbidity and mortality.\47\
---------------------------------------------------------------------------
\46\ Gibson, C.M., Holmes, D., Mikdadi, G., Presser, D., Wohns,
D., Yee, M.K., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd, Iteld, B.,
& Krucoff, M.W. (2019). Implantable Cardiac Alert System for Early
Recognition of ST-Segment Elevation Myocardial Infarction. Journal
of the American College of Cardiology, 73(15), 1919-1927.
\47\ Gibson, C.M., Holmes, D., Mikdadi, G., Presser, D., Wohns,
D., Yee, M.K., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd, Iteld, B.,
& Krucoff, M.W. (2019). Implantable Cardiac Alert System for Early
Recognition of ST-Segment Elevation Myocardial Infarction. Journal
of the American College of Cardiology, 73(15), 1919-1927.
---------------------------------------------------------------------------
The second article expanded on the previously discussed study with
a post hoc analysis of two coprimary efficacy endpoints: Superiority of
positive predictive value (PPV) and noninferiority of false positive
rate for ED visits prompted by alarms compared to symptoms-only.\48\
According to the authors, these primary endpoints were assessed by
comparing ED visits for an Alarms OFF group (control subjects during
the randomized 6-month period) to those of an Alarms ON group
(including both the treatment subjects during the first 6 months and
all implanted patients beyond 6 months with alarms activated). The
authors stated the expanded analysis adjudicated ED visits into either
true or false-positive ACS events based on independent review of
cardiac test data. The authors stated that the annual rate for Clinical
Events Committee (CEC)-adjudicated ACS events was 0.151 (33 of 218.15)
in the Alarms OFF group and 0.124 (193 of 1,557.64) in the Alarms ON
group. In the Alarms OFF group, of the 181 ED visits, the CEC
adjudicated 33 (18 percent) as ACS events (MI = 22 [67 percent];
unstable angina (UA) \1/4\ 11 [33 percent]), with the remaining visits
adjudicated as due to either stable CAD or indeterminate etiology. The
median symptom-to-door time for Alarms OFF ACS events was 8.0 h (95
percent confidence interval [CI]: 3.2 to 47.5 h). In Alarms ON
subjects, of the 970 ED visits, the CEC adjudicated 193 (20 percent) as
ACS events, with the remainder classified as stable CAD, indeterminate
events, and/or a false-positive alarm. Of the 193 ACS events, 89 events
(46 percent) were prompted by alarms (with or without symptoms; MI \1/
4\ 40 [45 percent]; UA \1/4\ 49 [55 percent]). The remaining 104 visits
(54 percent) were prompted by symptoms only (MI \1/4\ 60 [58 percent];
UA \1/4\ 44 [42 percent]). An overall median arrival time of 1.7 h was
found for the Alarms ON group composite including all 3 prompt types
for ED arrival (alarms only, alarms [thorn] symptoms, or symptoms
only), which was significantly shorter than the 8.0 h delay of the
Alarms OFF group (p < 0.0001). The applicant asserts that the
Guardian[supreg] system allows patients with asymptomatic ACS events to
respond to the ED faster with a median pre-hospital delay of 1.4 hours.
---------------------------------------------------------------------------
\48\ Holmes, D.R., Jr, Krucoff, M.W., Mullin, C., Mikdadi, G.,
Presser, D., Wohns, D., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd,
Iteld, B., Fischell, D.R., Fischell, T., Keenan, D., John, M.S., &
Gibson, C.M. (2019). Implanted Monitor Alerting to Reduce Treatment
Delay in Patients with Acute Coronary Syndrome Events. JACC, 74(16),
2047-2055.
---------------------------------------------------------------------------
The applicant further asserts that the Guardian[supreg] system
offers more rapid beneficial resolution of the disease process treated
because of the use of the device. According to the applicant, the
Guardian[supreg] system increases the likelihood that a patient will
correctly seek medical care for an ACS event in a timely manner that
reduces pre-hospital delay and associated risk of heart damage (for
example, larger infarct size, ejection fraction decrement)
49 50 51 and associated downstream sequelae. More
specifically, the applicant asserts that based on the results of the
second discussed study, the Guardian[supreg] system Alarms ON group
showed reduced pre-hospital delays, with 55 percent (95 percent
confidence interval [CI]: 46 percent to 63 percent) of Emergency
department visits for ACS events <2 hours compared with 10 percent (95
percent CI: 2 percent to 27 percent) in the Alarms OFF group (p <
0.0001).\52\ The applicant adds that results were similar when
restricted to myocardial infarction (MI) events.\53\ The applicant
states the median pre-hospital delay for MI was 12.7 hours for Alarms
OFF compared to 1.6 hours in Alarms ON subjects (p < 0.0089) as
reported in
[[Page 63586]]
Holmes et al. (2019).\54\ The applicant asserts that it is clinically
recognized, due to numerous lines of evidence, that shorter total
ischemia time is associated with better outcomes for ACS
events.55 56 57 58 The applicant asserts that prompt
responsiveness to symptoms and decreased pre-hospital delay is a
universally understood benefit which improves the health outcomes of
ACS events. According to the applicant, the American Heart Association
(Mission Lifeline), American College of Cardiology (Door to Balloon
(D2B) Alliance), Society for Angiographic Intervention (Seconds
CountTM program) and the National Heart, Lung, and Blood
Institute have organized task forces and launched national programs
with the goal of improving patient awareness and response to symptoms
which are indicative of potential ACS events and reducing total
ischemia time (that is, prehospital delay and in-hospital delay) to
improve outcomes.
---------------------------------------------------------------------------
\49\ Weaver WD, Cerqueira M, Hallstrom AP, et al. Prehospital-
Initiated vs Hospital-Initiated Thrombolytic Therapy: The Myocardial
Infarction Triage and Intervention Trial. JAMA. 1993;270(10):1211-
1216.
\50\ Hasche ET, Fernandes C, Freedman SB, Jeremy RW. Relation
between ischemia time, infarct size, and left ventricular function
in humans. Circulation. 1995;92:710-719.
\51\ Liem AL, van `t Hof AW, Hoorntje JC, de Boer MJ,
Suryapranata H, Zijlstra F. Influence of treatment delay on infarct
size and clinical outcome in patients with acute myocardial
infarction treated with primary angioplasty. J Am Coll Cardiol.
1998;32:629-633.
\52\ Holmes, D.R., Jr, Krucoff, M.W., Mullin, C., Mikdadi, G.,
Presser, D., Wohns, D., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd,
Iteld, B., Fischell, D.R., Fischell, T., Keenan, D., John, M.S., &
Gibson, C.M. (2019). Implanted Monitor Alerting to Reduce Treatment
Delay in Patients With Acute Coronary Syndrome Events. Journal of
the American College of Cardiology, 74(16), 2047-2055.
\53\ Holmes, D.R., Jr, Krucoff, M.W., Mullin, C., Mikdadi, G.,
Presser, D., Wohns, D., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd,
Iteld, B., Fischell, D.R., Fischell, T., Keenan, D., John, M.S., &
Gibson, C.M. (2019). Implanted Monitor Alerting to Reduce Treatment
Delay in Patients With Acute Coronary Syndrome Events. Journal of
the American College of Cardiology, 74(16), 2047-2055.
\54\ Holmes, D.R., Jr, Krucoff, M.W., Mullin, C., Mikdadi, G.,
Presser, D., Wohns, D., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd,
Iteld, B., Fischell, D.R., Fischell, T., Keenan, D., John, M.S., &
Gibson, C. M. (2019). Implanted Monitor Alerting to Reduce Treatment
Delay in Patients With Acute Coronary Syndrome Events. Journal of
the American College of Cardiology, 74(16), 2047-2055.
\55\ Guerchicoff A, Brener SJ, Maehara A, et al. Impact of delay
to reperfusion on reperfusion success, infarct size, and clinical
outcomes in patients with ST-segment elevation myocardial
infarction: the INFUSE-AMI Trial (INFUSE-Anterior Myocardial
Infarction). JACC Cardiovasc Interv. 2014;7(7):733-740.
\56\ Flynn A, Moscucci M, Share D, et al. Trends in door-to-
balloon time and mortality in patients with ST elevation myocardial
infarction undergoing primary percutaneous coronary intervention.
Arch Intern Med. 2010;170(20):1842-1849.
\57\ De Luca G, Suryapranata H, Zijlstra F, et al. Symptom-
onset-to-balloon time and mortality in patients with acute
myocardial infarction treated by primary angioplasty. J Am Coll
Cardiol. 2003;42(6):991-997.
\58\ Gersh BJ, Stone GW. Pharmacological facilitation of
coronary intervention in ST-segment elevation myocardial infarction:
Time is of the essence. JACC Cardiovasc Interv. 2010;3(12):1292-
1294.
---------------------------------------------------------------------------
The applicant next asserts the device offers more rapid beneficial
resolution of the disease process because the use of the
Guardian[supreg] system, as compared to the standard of care relying on
symptoms alone, being in the Alarm ON group was associated with a
reduction in the rate of new onset of left ventricular dysfunction.\59\
---------------------------------------------------------------------------
\59\ Holmes, D.R., Jr, Krucoff, M.W., Mullin, C., Mikdadi, G.,
Presser, D., Wohns, D., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd,
Iteld, B., Fischell, D.R., Fischell, T., Keenan, D., John, M.S., &
Gibson, C.M. (2019). Implanted Monitor Alerting to Reduce Treatment
Delay in Patients With Acute Coronary Syndrome Events. Journal of
the American College of Cardiology, 74(16), 2047-2055.
---------------------------------------------------------------------------
Lastly the applicant asserts the use of the Guardian[supreg] system
will decrease the number of future hospitalizations or physician
visits. According to the applicant, the Guardian[supreg] system reduces
the annual false positive rate (FPR) of Emergency Department visits
(that is, spurious ED visits where no ACS is found) by 26 percent.\60\
The applicant states that the FPR for all alarms on emergency visits
was 0.499 per patient-year compared to 0.678 for alarms off (p <
0.001).\61\
---------------------------------------------------------------------------
\60\ Gibson, C.M., Holmes, D., Mikdadi, G., Presser, D., Wohns,
D., Yee, M.K., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd, Iteld, B.,
& Krucoff, M.W. (2019). Implantable Cardiac Alert System for Early
Recognition of ST-Segment Elevation Myocardial Infarction. Journal
of the American College of Cardiology, 73(15), 1919-1927.
\61\ Ibid.
---------------------------------------------------------------------------
Based on the evidence submitted with the application, we have the
following observations. Much of the claims for substantial clinical
improvement are derived from two primary studies identified by the
applicant and discussed above.62 63 We note that the first
study (Gibson et al. 2019) did not demonstrate statistically
significant superiority of the intervention during the pre-determined
study window. The authors noted a lower than expected frequency of
events and the study was terminated early, two factors which may have
affected these results. The results from the second study are based
entirely on a post hoc analysis of data from the first article. We note
that the findings presented are valuable but we sought comment on
whether a post hoc analysis provides sufficient evidence to support the
claim of substantial clinical improvement. Furthermore, we note that
the primary efficacy endpoint was a composite of three outcomes. We are
not certain that this endpoint is an appropriate measure with which to
evaluate substantial clinical improvement among patients experiencing
ACS events. We invited public comments on whether the Guardian[supreg]
system meets the substantial clinical improvement criterion.
---------------------------------------------------------------------------
\62\ Ibid.
\63\ Holmes, D.R., Jr, Krucoff, M.W., Mullin, C., Mikdadi, G.,
Presser, D., Wohns, D., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd,
Iteld, B., Fischell, D.R., Fischell, T., Keenan, D., John, M.S., &
Gibson, C.M. (2019). Implanted Monitor Alerting to Reduce Treatment
Delay in Patients With Acute Coronary Syndrome Events. Journal of
the American College of Cardiology, 74(16), 2047-2055.
---------------------------------------------------------------------------
Comment: Many commenters offered support for the approval of the
Guardian[supreg]. Numerous commenters noted that according to published
studies a reduction in ischemic time is associated with less cardiac
damage and better outcomes for ACS events; these commenters asserted
that the Guardian[supreg] brought patients to the emergency room
earlier and more reliably, which resulted in better outcomes. Some
commenters stated that the two studies submitted by the applicant and
described in the CY 2022 OPPS/ASC proposed rule 64 65
support the finding of a substantial clinical improvement. Some
commenters noted that detection of silent MI enables the diagnosis of a
medical condition that is currently undetectable, which the commenters
believe is a substantial clinical improvement. Many commenters stated
that the use of the Guardian[supreg] will reduce unnecessary medical
utilization, will be beneficial particularly for those who experience
silent myocardial infarction, and will prevent cardiac deaths. Many
commenters offered patient stories that in their opinion showed that
the Guardian[supreg] offers an improvement over existing treatment
options. Multiple commenters noted that the Guardian[supreg] offers
patients positive mental health outcomes given a reduction in
experience anxiety in high-risk ACS patients. Additionally, multiple
commenters stated that the total false positive rate for the ALERTS ON
group was statistically less than that of the ALERTS OFF group.
---------------------------------------------------------------------------
\64\ Holmes, D.R., Jr, Krucoff, M.W., Mullin, C., Mikdadi, G.,
Presser, D., Wohns, D., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd,
Iteld, B., Fischell, D.R., Fischell, T., Keenan, D., John, M.S., &
Gibson, C.M. (2019). Implanted Monitor Alerting to Reduce Treatment
Delay in Patients With Acute Coronary Syndrome Events. Journal of
the American College of Cardiology, 74(16), 2047-2055.
\65\ Gibson, C.M., Holmes, D., Mikdadi, G., Presser, D., Wohns,
D., Yee, M.K., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd, Iteld, B.,
& Krucoff, M.W. (2019). Implantable Cardiac Alert System for Early
Recognition of ST-Segment Elevation Myocardial Infarction. Journal
of the American College of Cardiology, 73(15), 1919-1927.
---------------------------------------------------------------------------
One commenter stated they have been using the Guardian[supreg] for
more than ten years, that the device is a valuable addition to
diagnostic capabilities, and that in many cases it reduces health care
utilization. A second commenter stated this technology represents a
significant improvement to detecting myocardial infarction promptly.
One commenter who described their experience seeing the exam prevent
multiple cardiac catheterizations noted the exam is invaluable to
modern medicine and that a reduction in reimbursement would threaten
its realization in the appropriate context. Another commenter noted
that almost all patients requested replacement of the Guardian[supreg]
when it reached end of battery life, which is indicative of its safety
and effectiveness.
Response: We thank the commenters for additional information to
support their belief that the Guardian[supreg] device is a substantial
clinical improvement over
[[Page 63587]]
devices in existing categories or other available treatments.
Comment: The applicant asserted the Guardian[supreg] meets the
second criterion for establishing a new device category, at Sec.
419.66(c)(2), by providing a substantial clinical improvement over
existing therapies because the Guardian[supreg] ``has demonstrated that
it will substantially improve the diagnosis or treatment of an illness
or injury compared to the benefits of a device or devices in a
previously established category or other available treatment''.
The applicant pointed out that in the CY 2022 OPPS/ASC proposed
rule we stated that the positive predictive value (PPV), false positive
rate (FPR), and Silent myocardial infarction (MI) endpoints were
reported in the ``second study'' (that is, Holmes et al.). The
applicant clarified that Gibson et al. reported on both the original
study analysis and the Expanded analysis, including the PPV, FPR, and
Silent MI endpoints; Holmes et al. reported on pre-hospital delays and
their distribution as a function of both prompt (alarm only, alarm +
symptom, symptom only) and group (Alarms On vs Alarms OFF).
In response to our concerns about the primary endpoints lacking
statistical significance the applicant stated both AngelMed and FDA
have expressed the position that the results of the ALERTS study are
best assessed using the lens that statistical significance of primary
endpoints should be assessed with respect to the totality of the data.
The applicant stated the endpoint analyses requested by FDA for primary
endpoints during its evaluation of the study data (for example, event
based or crossover analysis) reached statistical significance. The
applicant added as an example that an event-based analyses of the
composite primary endpoints of the original study reached statistical
significance when multiple events within patients were counted, rather
than relying upon a patient-based analysis in which each patient could
only be counted once. According to the applicant, since multiple events
may occur in a single patient, they believe that the primary endpoint
data is also valid and more accurately and realistically reflects
Medicare patient experiences. The applicant added that the non-primary
endpoint of sustained left ventricular ejection fraction (LVEF), which
was independent of the primary endpoint measures, was statistically
superior (Gibson et al. 2019, p. 1924).\66\ The applicant added that
the Expanded analysis was explicitly designed to address the event rate
seen in the original study design by leveraging the post-randomization
data to derive a dataset covering an approximately three times larger
study interval, which according to the applicant, greatly increased the
number of events and statistical power. The applicant concluded that
while not all endpoints reached statistical significance, AngelMed
believes that the totality of the data supports substantial clinical
improvement.
---------------------------------------------------------------------------
\66\ Gibson, C.M., Holmes, D., Mikdadi, G., Presser, D., Wohns,
D., Yee, M.K., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd, Iteld, B.,
& Krucoff, M.W. (2019). Implantable Cardiac Alert System for Early
Recognition of ST-Segment Elevation Myocardial Infarction. Journal
of the American College of Cardiology, 73(15), 1919-1927.
---------------------------------------------------------------------------
In response to our concerns about post-hoc validity, the applicant
believes the Expanded analysis supports substantial clinical
improvement for a number of reasons. The applicant acknowledged as
noted by Gibson et al.,\67\ some post-hoc analyses were done in the
original analysis but that the Expanded analysis was not post-hoc. The
applicant asserted the Expanded analysis was a pre-specified analysis
proposed by FDA, and agreed upon by AngelMed, that was completed using
data both from the original randomized period and a large amount of
data from the post-randomization period. While the post-randomization
data was captured with the same rigor and predefined procedures as the
randomization period, the Expanded analysis increased the pool of data
from less than 450 years to 1,500 years. The applicant explained that
this approach was adopted by FDA and AngelMed specifically with the aim
of greatly increasing the number of endpoint events and maximizing the
statistical power of the Expanded analysis for the new endpoints, new
definition of acute coronary syndrome (ACS), etc. The applicant added
that the Expanded analysis used a new analysis protocol which resulted
in data which were analyzed to obtain new, distinct, and meaningful
endpoints that used clearer measurements than the ALERTS design.
---------------------------------------------------------------------------
\67\ Gibson, C.M., Holmes, D., Mikdadi, G., Presser, D., Wohns,
D., Yee, M.K., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd, Iteld, B.,
& Krucoff, M.W. (2019). Implantable Cardiac Alert System for Early
Recognition of ST-Segment Elevation Myocardial Infarction. Journal
of the American College of Cardiology, 73(15), 1919-1927.
---------------------------------------------------------------------------
Lastly, the applicant responded to our concerns regarding
appropriate measure[s] with which to evaluate substantial clinical
improvement. The applicant reasserted that the original analysis used a
composite primary efficacy endpoint of three outcomes that provided an
initial assessment of the technology. The applicant asserted that the
individual components of the primary efficacy endpoint for arrival
times and new Q-waves were consistently in favor of the
Guardian[supreg] with arrival times reaching significance. The
applicant stated, as CMS noted, in the original ALERTS analysis ``at
the pre-specified 7-day look back window, the median time from the
Guardian[supreg] notification to arrival at a medical facility was 51
minutes for the treated subjects as compared to 30.6 hours for control
subjects (Pr [pt < pc] >0.999)'' (86 FR 42092). The applicant added
these results should be combined with the Expanded analysis endpoints,
which used new measures that reflected a better understanding by FDA
and AngelMed for how best to evaluate the real-world impact of the
Guardian System, when assessing substantial clinical improvement. The
applicant asserted that more specifically, the co-primary endpoints
(i.e., PPV and FPR) reflected real-world performance measures that were
suggested by FDA and that more accurately demonstrate, and provide a
complementary view of, the clinical benefit than the composite
endpoints of the original ALERTS design.
The applicant asserted that the main topics of interest for the
Expanded analysis were the alarms in terms of frequency and accuracy,
and how the subjects responded (e.g., distribution of patient pre-
hospital delay for each of the different prompts: Alarm + symptom;
alarms only; or, symptom only). According to the applicant the Expanded
analysis not only assessed device performance but also the behavior of
the individual subjects in the Alarms ON group prompted by the alarms,
symptoms or both. The applicant contended that the combination of the
original study endpoints and Expanded analysis endpoints are the
correct measures since these are able to show substantial clinical
improvement according to multiple device pass-through criteria the
ability to diagnose a medical condition that is currently undetectable,
diagnose a medical condition earlier in a patient population then is
currently available, decrease future hospitalizations, and improve
patient outcomes.
The applicant asserted that all the ALERTS data consistently showed
compelling and statistically significant reduction in pre-hospital
delays in the Alarms ON group compared to the Alarms OFF group.
According to the applicant, reduced total ischemic time is a correct
measure for assessing substantial clinical improvement since
[[Page 63588]]
it is a universal axiom that decreased delay decreases the associated
risk of heart damage (e.g., larger infarct size, ejection fraction
decrement);68 69 70 the applicant asserted that shorter
total ischemic time is associated with better outcomes for ACS
events.71 72 73 74 That is why, according to the applicant,
multiple national agencies, including ACC, SCAI, AMA and NHLBI, have
created programs specifically focused on reducing time to treatment for
ACS events and have used time-based metrics as their sole assessment of
provider quality for ACS care.\75\ For these reasons the applicant
believes that the combination of original and Expanded analysis results
provides clear evidence of substantial clinical improvement for high-
risk ACS patients experiencing ACS events.
---------------------------------------------------------------------------
\68\ Weaver W.D., Cerqueira M., Hallstrom A.P., et al.
Prehospital-Initiated vs. Hospital-Initiated Thrombolytic Therapy:
The Myocardial Infarction Triage and Intervention Trial. JAMA.
1993;270(10):1211-1216.
\69\ Hasche E.T., Fernandes C., Freedman S.B., Jeremy R.W.
Relation between ischemia time, infarct size, and left ventricular
function in humans. Circulation. 1995;92:710-719.
\70\ Liem A.L., van `t Hof A.W., Hoorntje J.C., de Boer M.J.,
Suryapranata H., Zijlstra F. Influence of treatment delay on infarct
size and clinical outcome in patients with acute myocardial
infarction treated with primary angioplasty. J Am Coll Cardiol.
1998;32:629-633.
\71\ Guerchicoff A., Brener S.J., Maehara A., et al. Impact of
delay to reperfusion on reperfusion success, infarct size, and
clinical outcomes in patients with ST-segment elevation myocardial
infarction: The INFUSE-AMI Trial (INFUSE-Anterior Myocardial
Infarction). JACC Cardiovasc Interv. 2014;7(7):733-740.
\72\ Flynn A., Moscucci M., Share D., et al. Trends in door-to-
balloon time and mortality in patients with ST elevation myocardial
infarction undergoing primary percutaneous coronary intervention.
Arch Intern Med. 2010;170(20):1842-1849.
\73\ De Luca G., Suryapranata H., Zijlstra F., et al. Symptom-
onset-to-balloon time and mortality in patients with acute
myocardial infarction treated by primary angioplasty. J Am Coll
Cardiol. 2003;42(6):991-997.
\74\ Gersh B.J., Stone G.W. Pharmacological facilitation of
coronary intervention in ST-segment elevation myocardial infarction:
Time is of the essence. JACC Cardiovasc Interv. 2010;3(12):1292-
1294.
\75\ CMS. Timely & Effective Care. URL: https://data.cms.gov/provider-data/topics/hospitals/timely-effective-care#heart-attack-care.
---------------------------------------------------------------------------
Response: We appreciate the additional information provided by the
commenters. In the proposed rule, we articulated tour concern about the
sufficiency of a post-hoc analysis. In their public comment the
applicant asserted that while some post-hoc analyses were performed,
the expanded analysis was a pre-specified analysis proposed by FDA. We
further appreciate the clarification from the applicant that the
expanded analysis increased the number of endpoint events. Given the
additional endpoints evaluated in the expanded analysis that
specifically show faster visits for real events while not increasing
unnecessary emergency department visits, we agree that the
Guardian[supreg] system meets the substantial clinical improvement
criterion at Sec. 419.66(c)(2).
The third criterion for establishing a device category, at Sec.
419.66(c)(3), requires us to determine that the cost of the device is
not insignificant, as described in Sec. 419.66(d). Section 419.66(d)
includes three cost significance criteria that must each be met. The
applicant provided the following information in support of the cost
significance requirements. The applicant stated that the
Guardian[supreg] would be reported with the HCPCS codes listed in the
following Table 35:
[GRAPHIC] [TIFF OMITTED] TR16NO21.049
To meet the cost criterion for device pass-through payment status,
a device must pass all three tests of the cost criterion for at least
one APC. For our calculations for the CY 2022 OPPS/ASC proposed rule,
we used APC 5222--Level 2 Pacemaker and Similar Procedures, which had a
CY 2021 payment rate of $8,152.58 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 0527T was assigned to APC 5222 and had a device
[[Page 63589]]
offset amount of $1,598.72 at the time the application was received.
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 for the Guardian[supreg] is 126 percent of the
applicable APC payment amount for the service related to the category
of devices of $8,152.58 ((10,250/8,153) * 100 = 125.7 percent).
Therefore, we stated in the CY 2022 OPPS/ASC proposed rule that we
believe the Guardian[supreg] meets the first cost significance
requirement.
The second cost significance requirement, at Sec. 419.66(d)(2),
provides that the estimated average reasonable cost of the devices in
the category must exceed the cost of the device-related portion of the
APC payment amount for the related service by at least 25 percent,
which means that the device cost needs to be at least 125 percent of
the offset amount (the device-related portion of the APC found on the
offset list). We stated in the CY 2022 OPPS/ASC proposed rule that the
estimated average reasonable cost for the Guardian[supreg] is 641
percent of the cost of the device-related portion of the APC payment
amount for the related service of $1,598.72 ((10,250/1,599) * 100 =
641.0 percent). Therefore, we stated that we believe that the
Guardian[supreg] meets the second cost significance requirement.
The third cost significance requirement, at Sec. 419.66(d)(3),
provides that the difference between the estimated average reasonable
cost of the devices in the category and the portion of the APC payment
amount for the device must exceed 10 percent of the APC payment amount
for the related service. We stated in the CY 2022 OPPS/ASC proposed
rule that the difference between the estimated average reasonable cost
for the Guardian[supreg] and the portion of the APC payment amount for
the device of $1,598.72 is 106 percent of the APC payment amount for
the related service of $8,152.58 (((10,250-1,599)/8,153) * 100 = 106.1
percent). Therefore, we explained that we believe that the
Guardian[supreg] meets the third cost significance requirement. In the
CY 2022 OPPS/ASC proposed rule we invited public comment on whether the
Guardian[supreg] meets the device pass-through payment criteria,
including the cost criterion for device pass-through payment status.
Comment: The applicant stated the Guardian[supreg] meets the three
cost criteria at Sec. 419.66(d), consistent with CMS' analysis.
Response: We appreciate the applicant's input and agree that the
Guardian[supreg] meets the cost criterion for device pass-through
payment status.
After considering the public comments we received and our review of
the device pass-through application, we have determined that the
Guardian[supreg] system meets the criteria for device pass-through.
Therefore, we are finalizing approval for device pass-through payment
status for the Guardian[supreg] system effective beginning January 1,
2022.
(2) BONEBRIDGE Bone Conduction Implant System
MED-EL Corporation submitted an application for a new device
category for transitional pass-through payment status for the
BONEBRIDGE Bone Conduction Implant System (hereinafter referred to as
the BONEBRIDGE) by the March 2021 quarterly deadline for CY 2022. The
BONEBRIDGE is a transcutaneous, active auditory osseointegrated device
that replaces the function of the damaged outer or middle ear and can
help people for whom hearing aids are ineffective or not recommended.
According to the applicant, the device consists of a bone conduction
implant and electronics components, and an externally worn audio
processor. The bone conduction implant is called the BONEBRIDGE Bone
Conduction Implant (BCI 602) and the externally worn audio processor is
called the SAMBA 2 Audio Processor. The BCI 602 consists of two main
sections, the coil section and the transducer section. The BCI 602
consists of a magnet surrounded by the receiver coil, the transition,
the Bone Conduction Floating Mass Transducer (BC-FMT), and the
electronics package in a hermetic housing. The SAMBA 2 Audio Processor
is 30.4 mm x 36.4 mm x 10.2 mm and weighs 9.3g, including the battery
and magnet (strength 1). It has an 18-band digital equalizer, 18
independent compression channels, and an audio frequency range of 250
Hz to 8kHz. The audio processor is powered by a non-rechargeable 675
zinc-air button cell with a nominal 1.4-volt supply and 600mA-Hrs of
capacity offering the user up to 133 hours (8 to 10 days) on a single
battery.
The applicant stated that the bone conduction implant is surgically
attached to the skull, is subcutaneous, and is connected to the
external audio processor by transcutaneous magnetic attraction. The
external audio processor picks up sound from the environment and
converts those sounds to a radiofrequency (RF) signal that can be
transmitted across the skin to the implant. The implant converts the
signal to controlled vibrations which are conducted via the skull and
perceived as sound. More specifically, the applicant stated that the
BCI 602 is activated by placing the external audio processor over the
magnet of the BCI 602. The signal and the energy to drive the BC-FMT
are transferred via an inductive link to the internal coil, and then
relayed to the BC-FMT. The BC-FMT transduces the signal into mechanical
vibrations, which are conducted to the skull via the cortical titanium
screws. These vibrations stimulate the auditory system through the bone
conduction pathway to allow the patient to hear.
With respect to the newness criterion at Sec. 419.66(b)(1), FDA
granted a de novo request classifying the BONEBRIDGE as a Class II
device under section 513(f)(2) of the Federal Food, Drug, and Cosmetic
Act on July 20, 2018. The BONEBRIDGE is indicated for use in the
following patients: (1) Patients 12 years of age or older; and (2)
patients who have a conductive or mixed hearing loss and still can
benefit from sound amplification. The pure tone average (PTA) bone
conduction (BC) threshold (measured at 0.5, 1, 2, and 3 kHz) should be
better than or equal to 45 dB HL; (3) Bilateral fitting of the
BONEBRIDGE is intended for patients having a symmetrically conductive
or mixed hearing loss. The difference between the left and right sides'
BC thresholds should be less than 10 dB on average measured at 0.5, 1,
2, and 3 kHz, or less than 15 dB at individual frequencies; (4)
Patients who have profound sensorineural hearing loss in one ear and
normal hearing in the opposite ear (that is, single-sided deafness or
``SSD''). The pure tone average air conduction hearing thresholds of
the hearing ear should be better than or equal to 20 dB HL (measured at
0.5, 1, 2, and 3 kHz); (5) The BONEBRIDGE for SSD is also indicated for
any patient who is indicated for an air conduction contralateral
routing of signals (AC CROS) hearing aid, but who for some reason
cannot or will not use an AC CROS. Prior to receiving the device, it is
recommended that an individual have experience with appropriately fit
air conduction or bone conduction hearing aids. We received the
application for a new device category for transitional pass-through
payment status for the BONEBRIDGE on December 10, 2020, which is within
3 years of the date of the initial FDA marketing authorization. In the
CY 2022 OPPS/ASC proposed rule, we invited public comments on
[[Page 63590]]
whether the BONEBRIDGE meets the newness criterion.
We did not receive any comments in regard to whether the BONEBRIDGE
meets the newness criterion at Sec. 419.66(b)(1). Because we received
the BONEBRIDGE application on December 10, 2020, which is within 3
years of the FDA premarketing approval date of July 20, 2018, which is
within 3 years, we have concluded that the BONEBRIDGE meets the newness
criterion.
With respect to the eligibility criterion at Sec. 419.66(b)(3),
according to the applicant, the BONEBRIDGE is integral to the service
provided, is used for one patient only, comes in contact with human
skin and is surgically implanted or inserted. The applicant also
claimed that the BONEBRIDGE meets the device eligibility requirements
of Sec. 419.66(b)(4) because it is not equipment, an instrument,
apparatus, implement, or item for which depreciation and financing
expenses are recovered, and it is not a supply or material furnished
incident to a service.
Additionally, the BONEBRIDGE is not subject to the hearing aid
exclusion at Sec. 411.15(d)(1). The BONEBRIDGE Bone Conduction Implant
(BCI 602) component is an osseointegrated implant, surgically attached
to the skull that converts a radiofrequency signal from an external
audio processor to controlled vibrations which are conducted via the
skull to the cochlea. Therefore, we explained in the CY 2022 OPPS/ASC
proposed rule that we believe the BONEBRIDGE meets the criterion at
Sec. 411.15(d)(2)(i) and is not subject to the hearing aid exclusion.
In accordance with the Medicare Benefit Policy Manual, Chapter 16
``General Exclusions from Coverage,'' section 100, certain devices that
produce perception of sound by replacing the function of the middle
ear, cochlea or auditory nerve are payable by Medicare as prosthetic
devices. These include osseointegrated implants, that is, devices
implanted in the skull that replace the function of the middle ear and
provide mechanical energy to the cochlea via a mechanical transducer.
We believe the BONEBRIDGE device meets the criteria for this benefit
category. We invited public comments on whether the BONEBRIDGE meets
the eligibility criteria at Sec. 419.66(b) as well as the criterion at
Sec. 411.15(d)(2)(i).
Comment: One commenter agreed with CMS that BONEBRIDGE is not
subject to the hearing aid exclusion at Sec. 411.15(d)(1).
Response: We did not receive any comments on whether the BONEBRIDGE
meets the eligibility criteria at Sec. 419.66(b)(3) or Sec.
419.66(b)(4). We agree with the applicant that the BONEBRIDGE device
meets the criteria of Sec. 419.66(b). We believe discussion concerning
Sec. 411.15(d)(2)(i) is beyond the scope of the discussion here.
The criteria for establishing new device categories are specified
at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1),
provides that CMS determines that a device to be included in the
category is not appropriately described by any of the existing
categories or by any category previously in effect, and was not being
paid for as an outpatient service as of December 31, 1996.
The applicant stated that the previous device category, L8690
(Auditory osseointegrated device, includes all internal and external
components), which was in effect from January 1, 2007 through December
31, 2008 does not appropriately describe the BONEBRIDGE. The applicant
stated that at the time the category was established, BONEBRIDGE did
not exist and the devices described by the category included auditory
osseointegrated implant (AOI) devices or bone-anchored hearing aids
(BAHAs). The applicant claimed that AOI devices and BAHAs are distinct
from the BONEBRIDGE because they are implant systems composed of an
external sound processor connected via a percutaneous abutment to a
titanium implant that is implanted in the skull. In these devices, the
titanium implant protrudes through the skin creating a titanium post,
which directly attaches to an external sound processor. The system
replaces the function of the middle ear by transmitting mechanical
energy from the external transducer/sound processor directly to the
titanium implant to the cochlea thereby resulting in better hearing.
The applicant stated that the titanium abutment used by percutaneous
systems permanently pierce the skin to allow the sound processor to
transmit sound and create vibrations within the skull that stimulate
the nerve fibers of the inner ear. The applicant also stated that in
the percutaneous systems, the external component (sound processor)
receives and processes the sound and generates the vibrations.
The applicant claimed that the BONEBRIDGE is a new technology
compared to the AOI devices and BAHAs and unlike these devices, it does
not use a percutaneous abutment. The applicant described BONEBRIDGE as
an active, transcutaneous device that consists of a completely
implanted transducer and electronics components, and an externally worn
audio processor. The active implant is surgically attached to the
skull, is subcutaneous, and is connected to the external audio
processor by transcutaneous magnetic attraction. The external audio
processor picks up sound from the environment and converts those sounds
to a radiofrequency (RF) signal that can be transmitted across the skin
to the implant. The implant converts the signal to controlled
vibrations, which are conducted via the skull and perceived as sound.
The applicant proposed the device pass-through category descriptor
``Auditory osseointegrated device, transcutaneous, with implanted
transducer and radiofrequency link to external sound processor'' and
suggested that L8690 be revised to read, ``Auditory osseointegrated
device, percutaneous, includes all internal and external components''.
The applicant stated that the Cochlear Osia[supreg]2 System, which also
submitted a device pass-through application for CY 2022, would also be
described by the proposed additional category.
Web stated in the CY 2022 OPPS/ASC proposed rule that we believe
that the BONEBRIDGE is described by L8690 --Auditory osseointegrated
device, includes all internal and external components. The applicant
has noted differences between the BONEBRIDGE and the devices that were
described by L8690, specifically percutaneous, auditory osseointegrated
devices, regarding the connection between the implanted transducer and
the external audio processor (percutaneous abutment vs. transcutaneous
magnetic attraction). However, we believe that there is a similar
mechanism of action for all these devices specifically, vibratory
stimulation of the skull to stimulate the receptors in the cochlea
(inner ear). Further, we believe that the broad descriptor for L8690 of
``Auditory osseointegrated device, includes all internal and external
components'' includes the applicant's device.
In the CY 2022 OPPS/ASC proposed rule, we invited public comment on
whether the BONEBRIDGE meets the device category criterion.
Comment: One commenter stated they do not support CMS' position
that the BONEBRIDGE and Osia[supreg] 2 system should not be granted a
new category, because these devices take much longer to implant
surgically than percutaneous bone conduction implants, they are active
sound processors, and they work differently than percutaneous devices
like the BAHA or Oticon implants.
Another commenter who also disagreed with CMS that the BONEBRIDGE
and Osia[supreg] 2 system are
[[Page 63591]]
adequately described by L8690 stated that the BONEBRIDGE and
Osia[supreg] 2 system are transcutaneous hearing implants, and that CMS
should create a new HCPCS code that describes both the procedure and
the implant for these devices. The commenter expressed their
disappointment in what they described as CMS' continual resistance to
conduct rulemaking specifically on Middle Ear Implants (MEIs) because
they believe CMS should hear the opinions of clinical experts,
physicians, and Medicare beneficiaries regarding the appropriateness of
classifying MEIs as prosthetic implants.
A different commenter supported CMS' conclusion in the proposed
rule that BONEBRIDGE and Cochlear Osia[supreg] are appropriately
described by a pass-through category previously in effect
Two commenters stated that CMS must support the inclusion of middle
ear implants in the prosthetic category. The commenters asserted that
not including these devices denies beneficiaries access to all FDA-
approved hearing prosthetics and discourages in new technology for the
hearing impaired.
Response: We appreciate the input provided by these commenters. We
have taken this information into consideration in our determination of
the eligibility criterion at Sec. 419.66(c)(1), discussed below. We
note some of the comments, those addressing hearing prosthetics, are
outside of the scope of this rule.
Comment: The applicant stated that BONEBRIDGE is not appropriately
described by the previous device category L8690, ``Auditory
osseointegrated device, includes all internal and external
components''. The applicant asserted that even though the mechanism of
action is the same (that is, replacing the function of the middle ear
by transmitting mechanical energy from the external transducer/audio
processor to the cochlea), there are significant differences between
BONEBRIDGE and the devices described by the previous category of L8690,
``Auditory osseointegrated device, includes all internal and external
components'' that enable BONEBRIDGE to furnish a substantial clinical
improvement over existing technology. According to the applicant, L8690
was established in 2007 at a time when the technology to fully implant
a transducer did not exist; the devices for which L8960 was established
were percutaneous passive devices.
According to the applicant, FDA created a new device classification
for active implantable bone conduction hearing systems in response to
BONEBRIDGE's application in 2018 (21 CFR 874.3340) which is
specifically for active systems as opposed to passive systems (21 CFR
874.3300). According to the applicant, FDA's description of active
implantable bone conduction is that the transducer is implanted and the
description of the technical method refers to the transcutaneous nature
of the technology. The applicant stated that while they recognize that
FDA and CMS classify devices differently for different purposes, they
believe that the way FDA classifies bone conduction implants reinforces
why CMS should distinguish active implantable bone conduction devices
from passive, percutaneous systems for purposes of transitional pass-
through payment status.
The applicant asserted that CMS has modified broadly worded device
categories to recognize technological advances within a device class
and to grant transitional pass-through payment status to the newer
technologies. According to the applicant, in the neurostimulator
category, the original descriptor of HCPCS code C1767 was ``Generator,
neurostimulator (implantable).'' The applicant asserted that CMS
modified this descriptor to ``Generator, neurostimulator (implantable),
non-rechargeable'' to create a new device category and grant
transitional pass-through payment status for rechargeable
neurostimulators described by HCPCS codes C1820 (Generator,
neurostimulator (implantable), with rechargeable battery and charging
system) and C1822 (Generator, neurostimulator (implantable), high
frequency, with rechargeable battery and charging system). The
applicant added that CMS previously recognized differences in
transluminal angioplasty catheters to support transitional pass-through
payment status (for example, C2623, C1885, and C1725). The applicant
asserted the new pass-through device category code should specifically
describe active devices, which are those that have a fully implanted
transducer attached transcutaneously to the external audio processor.
The applicant suggested: CXXXX (Active auditory osseointegrated device,
transcutaneous, requires implanted transducer and radiofrequency link
to external sound processor). The applicant further suggested that CMS
could refine L8960 to (Passive auditory osseointegrated device,
percutaneous or transcutaneous, includes all internal and external
components (new language underlined)). The applicant concluded that
effective on January 1, 2022 there will be new and revised CPT codes
that differentiate the surgical procedures for osseointegrated implants
by the type of attachment (for example, 69X50 (Implantation,
osseointegrated implant, skull; with magnetic transcutaneous attachment
to external speech processor), 69X51 (Revision/replacement (including
removal of existing device), osseointegrated implant, skull; with
magnetic transcutaneous attachment to external speech processor)),
69717 (Revision/replacement (including removal of existing device),
osseointegrated implant, skull; with percutaneous attachment to
external speech processor), and 69X51 (Revision/replacement (including
removal of existing device), osseointegrated implant, skull; with
magnetic transcutaneous attachment to external speech processor).
Response: After consideration of the public comments we received,
we agree there is no existing pass-through payment category that
appropriately describes the BONEBRIDGE. The BONEBRIDGE device consists
of an external processor that receives sound pressure energy and
converts this to a radiofrequency signal which communicates with a
surgically implanted subcutaneous transducer/actuator which is
osseointegrated into the skull with screws. The transducer/actuator
converts this signal to mechanical vibrations that are transmitted to
the skull and inner ear. As stated by the applicant, when the existing
pass-through category, Auditory osseointegrated device (L8690), was
issued in 2007, the technology to implant the transducer/actuator did
not exist. Based on this information, we have determined that the
BONEBRIDGE meets the eligibility criterion at Sec. 419.66(c)(1). Due
to the similarity between the devices, we refer the reader to section
IV(A)(2)(b)(4) of this rule for a similar discussion of the
Osia[supreg]2 system.
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
[[Page 63592]]
Devices Program and has received FDA marketing authorization. With
respect to the substantial clinical improvement criterion, the
applicant stated that the BONEBRIDGE represents a substantial clinical
improvement because it provides a reduced rate of device-related
complications and a more rapid beneficial resolution of the disease
process treated because of the use of the device compared to currently
available treatments. The applicant submitted six studies to support
these claims. The applicant also submitted references for four
retrospective case studies of complications with percutaneous devices,
specifically BAHAs, including infections, pain, soft tissue
hypertrophy, loss of osseointegration, and need for further surgery.
These studies did not involve the applicant's device.
In support of the claim that the BONEBRIDGE reduced the rate of
device-related complications compared to currently available
treatments, the applicant submitted a white paper that reviewed the
literature reporting on safety outcomes in bone conduction implants
authored by the manufacturer of the BONEBRIDGE, MED-EL.\76\ The review
included five products used to treat conductive hearing loss, mixed
hearing loss or single side deafness, which were either percutaneous
systems that had an abutment that permanently pierced through the skin
or transcutaneous systems without permanent skin penetration. The
authors further defined the products as either active or passive,
depending on the placement of the vibrating (or active) device
component. According to the authors, active bone conduction systems,
the active device component, is located within the implantable part of
the system. According to the authors, passive bone conduction systems,
the vibrating device component, is located outside of the skull.\77\
---------------------------------------------------------------------------
\76\ MED-EL Medical Electronics. (2019). Safety outcomes of bone
conduction implants: A systematic review [White paper].
\77\ Ibid.
---------------------------------------------------------------------------
The literature review compared the safety outcomes of the BAHA
Connect and the Ponto, (passive, percutaneous systems,) the BONEBRIDGE,
(an active, transcutaneous systems), and the Sophono Alpha and the BAHA
Attract, (passive, transcutaneous systems). In total, 156 studies were
included in the literature review. There were seven studies with 234
patients reported on the Ponto, thirteen studies with 175 patients
reported on the BONEBRIDGE, twelve publications with 143 patients
reported on the Sophono Alpha, seven studies reported on the BAHA
Attract system with 114 patients, and 117 studies reported on the BAHA
Connect system with a total of 6,965 patients. Of all reported adverse
events, 38 percent were major and 62 percent were minor. Major adverse
events reported in the review included revision surgery, explantation,
removal at patient request, implant loss, implant device failure, skin
revision surgery or skin infection. Minor adverse events included skin
infections, soft tissue reactions, and healing difficulties. The
results showed that 9.8 percent of patients using the BONEBRIDGE system
experienced an adverse event (major or minor), compared to 68.4 percent
of BAHA Attract patients, 46.9 percent of Sophono Alpha patients, 44.0
percent of Ponto system patients and 51.7 percent of BAHA Connect
patients. When comparing the percentage of patients who experienced a
major adverse event, 2.9 percent of BONEBRIDGE patients had a major
adverse event compared to 1.8 percent of BAHA Attract patients, 4.2
percent of Sophono Alpha patients, 5.1 percent of Ponto system
patients, and 21.1 percent of BAHA Connect patients.
To support the claim that the BONEBRIDGE reduced the rate of
device-related complications compared to currently available
treatments, the applicant also submitted a systematic review of the
current literature on safety, efficacy and subjective benefit after
implantation with the BONEBRIDGE device.\78\ The systematic review
assessed 39 publications and included randomized controlled trials,
clinical controlled trials and cohort studies, case series and case
reports investigating subjective and objective outcomes. In the 39
publications included in the review, 487 participants were evaluated;
303 participants had conductive hearing loss, 67 participants had mixed
hearing loss, and 53 participants had single-sided deafness. The mean
age of the patients in the included studies was 35.616.9
years. Using the guidelines available from the Cochrane Collaboration,
a search strategy and review protocol was developed using PubMed
(MEDLINE) and Cochrane databases to identify all publications on the
BONEBRIDGE from 2012 to October 31, 2018. The researchers excluded
studies that assessed a device or treatment other than the BONEBRIDGE,
did not include human participants, focused on a type of hearing loss
other than the losses that BONEBRIDGE is indicated for (that is,
conductive hearing loss, mixed hearing loss or single-sided deafness),
did not report on safety or performance/quality of life data, were not
related to hearing loss or treatment thereof, lacked sufficient
information for evaluation, and included overlapping samples.
---------------------------------------------------------------------------
\78\ Magele, A., Schoerg, P, Stanek, B. et al. (2019). Active
transcutaneous bone conduction hearing implants: Systematic review
and meta-analysis. PLoS ONE 14(9); e0221484 https://doi.org/10.1371/journal.pone.0221484.
---------------------------------------------------------------------------
The outcomes extracted from the studies were assessed via meta-
analysis. The safety of the device was assessed by collecting
information on complications during surgery and adverse events in the
postoperative period. Of the 39 identified studies, there were 25
studies that reported on safety during a mean period of 11.7 months
(range 3-36 months). The reported complications were categorized into
minor and major complications, with a major complication described as
requiring surgical attention leading to revision surgery or
explantation. Minor complications included skin edema or erythema, skin
infections, and hematomas. Out of 286 ears implanted with the device,
there were no complications in 259 ears (90.6 percent). Minor
complications occurred in 22 ears (7.7 percent) over a cumulative
period of reported mean follow-up of 12.7 years (mean: 11.7 months
4.5). Major complications occurred in three studies
comprising five ears (1.7 percent).\79\
---------------------------------------------------------------------------
\79\ Ibid.
---------------------------------------------------------------------------
The applicant submitted an additional study by Schmerber, et al. to
support the claim that the BONEBRIDGE reduced the rate of device-
related complications compared to currently available treatments.\80\
The study of 28 participants was a multicenter, prospective study with
intra-subject measurements with the purpose of the study to validate
the safety and efficacy of the BONEBRIDGE 12 months after
implementation. The study included nine university hospitals, seven in
France and two in Belgium. Sixteen participants with conductive or
mixed hearing loss with bone-conduction hearing thresholds under the
upper limit of 45 dB HL for each frequency from 500 to 4000 Hz, and 12
participants with SSD (contralateral hearing within normal range) were
enrolled in the study. Three of the 28 participants (with mixed or
conductive hearing loss) did not complete the study; one requested that
the device be removed (due to ``severe psychological problems'') and
two were lost to follow
[[Page 63593]]
up. The skin safety of the participants was evaluated by the surgeon
who implanted the device up to 12 months post-operatively using an
ordinal scale (``very good'', ``good'', ``acceptable'', ``bad skin
condition'') and a visual analogue scale (between 1 and 10 from ``very
bad'' to ``excellent'') to rate cutaneous tolerance. In the study, no
complications or device failures occurred, no revision surgery was
necessary and no skin injury was reported. The scoring was judged as
`excellent' or `good' for all subjects (n = 25), corresponding to
scores 8 to 10 on the scale. No complication (0 percent) was observed
[95 percent confidence interval = (0 percent-14.9 percent)]. The
authors stated that there was a lower rate of complications for the
BONEBRIDGE device compared to percutaneous systems, like the BAHA,
whose complication rate was up to 24 percent in a large series of 602
ears and a revision surgery rate of 12 percent.81 82
---------------------------------------------------------------------------
\80\ Schmerber, S., Deguine, O., Marx, M. et al. (2017). Safety
and effectiveness of the Bonebridge transcutaneous direct-drive
bone-conduction hearing implant at 1-year device use. Eur Arch
Otorhinolaryngol 274: 1835-1851 doi 10.1007/s00405-016-4228-6.
\81\ Schmerber, S., Deguine, O., Marx, M. et al. (2017). Safety
and effectiveness of the Bonebridge transcutaneous direct-drive
bone-conduction hearing implant at 1-year device use. Eur Arch
Otorhinolaryngol 274: 1835-1851 doi 10.1007/s00405-016-4228-6.
\82\ Hobson, J.C., Roper, A.J., Andrew, R., Rothera, M.P., Hill,
P., Green, K.M. (2010) Complications of bone-anchored hearing aid
implantation. J Laryngol Otol 124(2):132-136. doi:10.1017/
S0022215109991708.
---------------------------------------------------------------------------
The applicant also submitted a study by Siegel et al. as evidence
to support the claim that the BONEBRIDGE reduced the rate of device-
related complications compared to currently available treatments.\83\
The study was a retrospective review that included 37 adult patients
with conductive/mixed hearing loss who met the indications for use and
were implanted with BONEBRIDGE over a 5-year period from April 2013 to
May 2018. Patient charts were reviewed for surgical outcomes and
complications over the 6-year period. The mean time of follow-up was 32
months (range: 9-71 months). There were no events of surgical
complications in the patients included in the study, specifically no
instances of dural injury, cerebrospinal fluid (CSF) leak, or
intracranial bleeding. There were also no skin complications and no
postoperative symptoms of tinnitus/vertigo or dizziness.\84\
---------------------------------------------------------------------------
\83\ Siegel, L.H., You, P., Zimmerman, K. et al. (2020). Active
transcutaneous bone conduction implant: Audiometric outcomes
following a novel middle fossa approach with self-drilling screws.
Otol Neurotol 41(5): 605-613. doi: 10.1097/MAO.0000000000002597.
\84\ Siegel, L.H., You, P., Zimmerman, K. et al. (2020). Active
transcutaneous bone conduction implant: Audiometric outcomes
following a novel middle fossa approach with self-drilling screws.
Otol Neurotol 41(5): 605-613. doi: 10.1097/MAO.0000000000002597.
---------------------------------------------------------------------------
In support of the assertion that the use of BONEBRIDGE resulted in
a more rapid beneficial resolution of the disease process compared to
currently available treatments, the applicant also referenced the
Magele et al., and Siegel et al. studies as well as a study conducted
by Yang et al.85 86 87
---------------------------------------------------------------------------
\85\ Ibid.
\86\ Ibid.
\87\ Ibid.
---------------------------------------------------------------------------
As previously noted, the Magele et al. study assessed 39
publications that included 487 participants; 303 participants had
conductive hearing loss, 67 participants had mixed hearing loss, and 53
participants had single-sided deafness.\88\ Functional gain was
available for analysis from 14 articles and was measured as the
difference between unaided and aided (with the BONEBRIDGE) warble tone
thresholds. On average, functional gain of 32.7 dB 16dB was
observed. Overall, the results showed a 30.89 dB (95 percent CI 27.53
dB-34.24 dB) improvement at speech presentation level; for the 30
conductive hearing loss patients, the improvement was 39.48 dB (95
percent CI 35.25 dB-43.71 dB); for the mixed hearing loss group, the
improvement was 29.08 dB (95 percent CI 26.32 dB--31.83 dB) and the
improvement was 28.94 dB (95 percent CI 16.92 dB--40.96 dB) for the 10
subjects with single-sided deafness.
---------------------------------------------------------------------------
\88\ Ibid.
---------------------------------------------------------------------------
The applicant also noted the study by Siegel et al. to support the
claim that the use of BONEBRIDGE resulted in a more rapid beneficial
resolution of the disease process compared to currently available
treatments.\89\ As previously stated, in this study, 37 adult patients
with conductive/mixed hearing loss who met the indications for use were
implanted with BONEBRIDGE over a 6-year period. The patients' charts
were reviewed for surgical outcomes and complications over the 6-year
period. Preoperative air conduction (AC), preoperative bone conduction
(BC), and 3-month postoperative aided thresholds were recorded. Speech
perception was assessed using two different tests, consonant-nucleus-
consonant (CNC) words and AzBio sentences. Pure-tone averages (PTAs;
measured at 0.5, 1.0, 2.0 and 3.0 kHz), air-bone gap (ABG), and
functional gain (FG) were calculated. The preoperative air-bone gap was
calculated as the difference between AC thresholds and BC thresholds of
the implanted ear. The postoperative ABG was calculated as the
difference between the preoperative BC and postoperative BONEBRIDGE
aided thresholds measured at 3 months postoperatively. Functional gain
was calculated as the difference between preoperative AC thresholds and
BONEBRIDGE aided thresholds measured 3 months postoperatively.
---------------------------------------------------------------------------
\89\ Siegel, L.H., You, P., Zimmerman, K. et al. (2020). Active
transcutaneous bone conduction implant: Audiometric outcomes
following a novel middle fossa approach with self-drilling screws.
Otol Neurotol 41(5): 605-613. doi: 10.1097/MAO.0000000000002597.
---------------------------------------------------------------------------
The results of this study showed audiological improvement in the 37
patients with a functional gain (averaged over 4 frequencies, 500 kHz
to 3000 kHz) of 40.3 dB (19.0 dB) for air conduction 3
months postoperatively. The difference between the average air to bone
conduction gap fell from 44.9 dB preoperative to 4.6 dB three months
after surgery. The postoperative air conduction thresholds for the 21
patients with mixed hearing loss ranged between 30-40 dB and the air
conduction thresholds for the 16 patients with conductive hearing loss
ranged between 20-30 dB. For patients with mixed hearing loss, nearly a
full ABG closure was achieved at all frequencies by 3 months
postoperatively.
In the same study, speech perception testing was available for 21
patients (57 percent). At activation, mean speech perception results
for CNC words (13 patients) and AzBio sentences (14 patients) were 79
and 93 percent, respectively. At six months postoperatively, CNC words
(17 patients) and AzBio sentences (21 patients) were 81 and 93 percent,
respectively. The authors stated that the results of the study were
comparable with what has been accomplished using traditional
percutaneous conduction devices and passive transcutaneous bone
conduction devices.
Lastly, to support the claim that the use of the BONEBRIDGE
resulted in a more rapid beneficial resolution of the disease process,
the applicant submitted a study that compared the use of the BONEBRIDGE
with a non-implantable bone conduction hearing aid (BCHA).\90\ This
single center, prospective study involved 100 patients in Beijing,
China with bilateral congenital microtia-atresia (CMA). The patients
had a mean age of 11.9 6.0 years old at the time the
BONEBRIDGE was implanted. All patients had worn the passive bone
anchored hearing aid for at least a year prior to the implantation of
the BONEBRIDGE and patients were tested
[[Page 63594]]
an average of 25 weeks after surgery. Measured outcomes in the study
included sound field thresholds (SFT), functional gain (FG) [aided
threshold minus the unaided threshold], word recognition, speech
reception thresholds (SRT), preoperative and postoperative bone and air
conduction and patient subjective satisfaction. Bone conduction of pure
tones at any frequency did not change significantly from preoperative
to postoperative testing. The mean bone-conduction pure-tone threshold
(PTA) before implantation was 8.7 6.1 dB HL and after
surgery was 8.9 5.6 dB HL (p > .745, paired t-test).
Furthermore, bone conduction did not significantly change at any
frequency after surgery (p > .05, t-test). The mean SFT of the
BONEBRIDGE (61.6 7.1 dB HL) was significantly higher than
the BCHA (31.3 6.1 dB HL) (paired t-test, p < .001) and
the SFT was significantly better with BONEBRIDGE at 500, 1000, 2000,
and 4000 Hz sound frequencies (paired t-test, p < .002). Further, the
FG of the BONEBRIDGE (31.2 9.5 dB HL) was significantly
better than the FG of the BCHA (26.5 10.3 dB HL) (paired
t-test, p < .001). The FG measured at 250 Hz in the two aided
conditions had less improvement compared to other frequencies (p <
.001). A comparison of BCHA and BONEBRIDGE resulted in a significant
difference in word recognition (68.0 percent for monosyllabic words and
79.0 percent for disyllabic words with the BCHA vs. 78.0 percent for
monosyllabic and 84.0 percent for disyllabic words with the BONEBRIDGE)
in favor of the BONEBRIDGE (p < .001).
---------------------------------------------------------------------------
\90\ Yang, J., Chen, P., Zhao, C. et al. 2020. Audiological and
subjective outcomes of 100 implanted transcutaneous bone conduction
devices and preoperative bone conduction hearing aids in patients
with bilateral microtia-atresia. Acta Oto-Laryngologica 140(6): 667-
673 https://doi.org/10.1080/00016489.2020.1762929.
---------------------------------------------------------------------------
Regarding the applicant's evidence of substantial clinical
improvement, we noted in the CY 2022 OPPS/ASC proposed rule that the
studies submitted did not involve a direct comparison to other
currently available treatments, namely percutaneous or passive,
transcutaneous auditory osseointegrated devices. Therefore, we
explained that it was difficult to determine whether the BONEBRIDGE
provided a substantial clinical improvement over existing devices. We
also indicated that the studies submitted included a small number of
participants which may affect the generalizability of the data provided
in support of the device.
In the white paper by MED-EL, the authors compared the complication
rates associated with various studies that differed by design,
population characteristics and follow-up time. We explained in the CY
2022 OPPS/ASC proposed rule we are not confident that differences seen
or elucidated by the applicant are due to the differences in treatments
or instead due to differences in study characteristics. Additionally,
although the overall, both major and minor, adverse event ratio was
significantly lower for the BONEBRIDGE device (9.8 percent) versus
other bone conduction hearing devices in the study, we noted that when
comparing the percent of patients who experienced a major adverse
event, BONEBRIDGE patients had a major adverse event (2.9 percent) that
was more comparable to other devices included in the paper. With regard
to the Yang et al. study, given the young age of the patients and the
congenital nature of the hearing loss being treated, we stated in the
proposed rule that we are concerned that these results may not be
generalizable to the Medicare population, which tends to be
significantly older in age and potentially less likely to have hearing
loss related to congenital causes. We invited public comments on
whether BONEBRIDGE meets the substantial clinical improvement
criterion.
Comment: The applicant submitted a comment in response to CMS'
concerns regarding the lack of direct comparison to existing
technology; differences in adverse events; and small number of study
participants in the studies submitted to illustrate that BONEBRIDGE
meets the substantial clinical improvement criterion. In response to
CMS' concern about a direct comparison to existing technology, the
applicant stated that direct head-to-head trials are not necessary or
appropriate in this situation. According to the applicant, differences
in the devices make a blinded randomized controlled trial impossible.
The applicant asserted that while a non-blinded randomized trial would
be possible, it is unclear what additional data would be gained from
that approach because the applicant believed the pass-through
application already contained extensive, robust, and definitive data to
support that BONEBRIDGE is a substantial clinical improvement over
existing technologies. The applicant asserted that enrolling patients
in a head-to-head trial in which the primary difference is expected to
be adverse events associated with one treatment arm is extremely
challenging.
The applicant stated that the studies on BONEBRIDGE that were
submitted with the pass-through application are primarily controlled
case series and case reports. The applicant asserted that because the
submitted studies used measures of device performance and adverse
events that are consistent with studies of other devices, they allowed
for direct comparison between different devices which demonstrate that
BONEBRIDGE represents a substantial improvement over other bone
conduction technology by achieving comparable performance in hearing
improvement with fewer adverse events.
In regard to CMS' concerns about differences in adverse events, the
applicant agreed with CMS that the occurrence of both overall and minor
adverse event ratio was significantly lower for BONEBRIDGE than other
devices but disagreed with CMS' characterization of the major adverse
event rate. The applicant stated that major adverse events are far less
common across all devices, including BONEBRIDGE, than minor events.
Next the applicant responded to CMS' concern that the small number
of study participants could affect the generalizability of the data
provided and that, because of the young age of the patients and the
congenital nature of the hearing loss being treated, the study results
may not be generalizable to the Medicare population. The applicant
stated that BONEBRIDGE is indicated for patient who are 12 years or
older, with conductive or mixed hearing loss and still can benefit from
sound amplification, and who have profound sensorineural hearing loss
in one ear and normal hearing in the opposite ear (i.e., single-sided
deafness or ``SSD''). The applicant stated that the study sample sizes
(and overall number of patients in those studies) are consistent with
the anticipated number of implantations. The applicant stated that
while the typical BONEBRIDGE patient is expected to be under age 65,
several studies included patients of Medicare age and the experience of
those patients was consistent with overall experience. The applicant
concluded that the studies are generalizable to the Medicare population
and reflective of expected results in the indicated population
generally. Lastly, the applicant asserted the otologic community has
accepted and adopted active transcutaneous devices as the standard of
care for implanted bone conduction devices.
Response: We appreciate the additional information from commenters'
about the BONEBRIDGE device but note that none of the commenters
provided new empirical evidence that demonstrates that BONEBRIDGE is a
substantial clinical improvement over existing treatment options. Based
on our review of the study evidence, the only purported differences
between BONEBRIDGE and predicate technologies relate to the major and
minor adverse events from the respective technologies. Based on the
information we have, it appears that
[[Page 63595]]
while there is a difference amongst the rates of minor adverse event
incidence favoring BONEBRIDGE, patients had a major adverse event
occurrence (2.9 percent) that was comparable to other devices included
in the provided evidence. While the incidence of minor adverse events
(e.g., skin infections, soft tissue reactions, and healing
difficulties) may benefit BONEBRIDGE, we believe these are less
impactful on patient outcomes as compared to the incidence of major
adverse events (e.g., revision surgery, explantation, removal at
patient request, implant loss, implant device failure, skin revision
surgery or skin infection) which is comparable to previous
technologies. We maintain our concerns listed in the proposed rule,
that the studies submitted included a small number of participants
which may affect the generalizability of the data provided in support
of the device, and the applicant's comparison of outcome data across
multiple studies as opposed to direct comparisons controlling for
confounding variables. Because of these reasons, we do not believe that
BONEBRIDGE represents a substantial clinical improvement relative to
existing therapies currently available. After consideration of the
public comments we received and our review of the device pass-through
application, we are not approving BONEBRIDGE for transitional pass-
through payment status in CY 2022 because the product does not meet the
substantial clinical improvement criterion. Because we have determined
that BONEBRIDGE does not meet the substantial clinical improvement
criterion, we are not evaluating whether the device meets the cost
criterion.
(3) Eluvia\TM\ Drug-Eluting Vascular Stent System
Boston Scientific Corporation submitted an application for device
pass-through status for the Eluvia\TM\ Drug-Eluting Vascular Stent
System (the Eluvia\TM\ system) for CY 2022. According to the applicant,
the Eluvia\TM\ system is a combination product composed of an
implantable endoprosthesis, a non-bonded freely dispersed drug layer (a
formulation of paclitaxel contained in a polymer matrix), and a stent
delivery system indicated for the treatment of symptomatic de novo or
restenotic lesions in the native superficial femoral artery (SFA) and/
or proximal popliteal artery (PPA).
According to the applicant, the Eluvia\TM\ system stent is a laser-
cut self-expanding stent composed of nickel titanium alloy with
radiopaque markers made of tantalum on the proximal and distal ends.
The applicant states that the 6-French delivery system is a triaxial
design with an outer shaft to stabilize the stent delivery system, a
middle shaft to protect and constrain the stent, and an inner shaft to
provide a guidewire lumen. The delivery system is compatible with 0.035
inch (0.89mm) guidewires and is offered in two working lengths (75 and
130 cm).
According to the applicant, peripheral artery disease (PAD) occurs
when fatty or calcified material (plaque) builds up in the walls of the
arteries and makes them narrower, thus restricting blood flow. The
applicant asserts that when this occurs, the muscles in the legs cannot
get enough blood and oxygen, especially during exertion such as
exercise or walking. According to the applicant, the main symptoms of
PAD are pain, burning sensation, or general discomfort in the muscles
of the feet, calves, or thighs. As the disease progresses, plaque
accumulation may significantly reduce blood flow through the arteries,
resulting in claudication and increasing disability, with severe cases
often leading to amputation of the affected limb. The applicant states
that according to the Centers for Disease Control and Prevention
approximately 8.5 million people age 40 and older in the United States
have PAD, including 6-26 percent of individuals older than age 60.\91\
According to the applicant, PAD disproportionately affects African
American and American Indian populations \92\ and nonrevascularized
lower extremity PAD is among the most common causes of lower extremity
amputation.
---------------------------------------------------------------------------
\91\ Centers for Disease Control and Prevention. https://www.cdc.gov/heartdisease/pad.htm.
\92\ Virani SS, et al. AHA Statistical Update: Heart Disease and
Stroke Statistics-2020 Update, A Report from the American Heart
Association. Circulation. 2020;141:e139-e596.
---------------------------------------------------------------------------
According to the applicant, the Eluvia\TM\ system is designed to
restore blood flow in the peripheral arteries above the knee,
specifically the superficial femoral artery and proximal popliteal
artery. The applicant states that the stent features a unique drug-
polymer combination intended to facilitate sustained elution of the
drug paclitaxel that can prevent narrowing (restenosis) of the vessel.
The applicant adds that restenosis is often the cause of pain and
disability for patients diagnosed with PAD.
The applicant asserts that no other endovascular technologies that
are approved for the treatment of PAD provide sustained elution of a
drug over at least 12 months to prevent restenosis. According to the
applicant, two of the most common endovascular treatments for PAD are
angioplasty and stenting. The applicant states that following an
intervention within the SFA or PPA, these arteries elicit a healing
response that leads to restenosis starting with inflammation, followed
by smooth muscle cell proliferation and matrix formation.\93\ According
to the applicant, because of the unique mechanical forces in the SFA
and PPA, the restenotic process can continue well beyond 12 months from
the initial intervention. The applicant asserts the Eluvia\TM\ system
is designed to elute anti-restenotic drug paclitaxel beyond 12 months,
which is longer than the two-month duration of drug applied from drug-
coated balloons and the drug-coated stent Zilver PTX.
---------------------------------------------------------------------------
\93\ Forrester JS, et al. A paradigm for restenosis based on
cell biology: Clues for the development of new preventive therapies.
J Am Coll Cardiol. 1991 Mar 1;17(3):758-69.
---------------------------------------------------------------------------
With respect to the newness criterion at Sec. 419.66(b)(1), the
Eluvia\TM\ system received FDA PMA on September 18, 2018. The
application for a new device category for transitional pass-through
payment status for the Eluvia\TM\ system was received on February 26,
2021, which is within 3 years of the date of the initial FDA approval
or clearance. In the CY 2022 OPPS/ASC proposed rule we invited public
comments on whether the Eluvia\TM\ system meets the newness criterion.
Comment: The applicant stated that the EluviaTM system
application was submitted within three years of regulatory approval and
therefore meets the newness criterion for transitional device pass-
through eligibility.
Response: We appreciate the commenter's input. and agree that the
Eluvia\TM\ system meets the newness criterion because we received its
device pass-through application on February 26, 2021, which is within 3
years of the September 18, 2018, the date of FDA PMA.
With respect to the eligibility criterion at Sec. 419.66(b)(3),
according to the applicant, the Eluvia\TM\ system is integral to the
service provided, is used for one patient only, comes in contact with
human tissue, and is surgically impacted or inserted. The applicant
also claimed that the Eluvia\TM\ system meets the device eligibility
requirements of Sec. 419.66(b)(4) because it is not equipment, an
instrument, apparatus, implement, or items for which depreciation and
financing expenses are recovered, and it is not a supply or material
furnished incident to a service. In the CY 2020 OPPS/ASC final rule
with comment period, we stated that we determined that the Eluvia\TM\
system
[[Page 63596]]
device meets the eligibility criteria at Sec. 419.66(b)(3) and (4) in
response to a pass-through application that the applicant submitted on
November 15, 2018 (84 FR 61286). Because the applicant submitted a new
application for device pass-through status for the Eluvia\TM\ system,
we again invited public comments on whether the Eluvia\TM\ system
continues to meet the eligibility criteria at Sec. 419.66(b(3) and
(4).
Comment: The applicant stated that the EluviaTM system
continues to meet the transitional pass-through eligibility criteria at
Sec. 419.66(b)(3) and (4) as CMS initially concluded in the CY 2020
OPPS/ASC final rule with comment period.
Response: We agree with the applicant and continue to believe that
the EluviaTM system meets the eligibility criteria at Sec.
419.66(b)(3) and (4).
The criteria for establishing new device categories are specified
at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1),
provides that CMS determines that a device to be included in the
category is not appropriately described by any of the existing
categories or by any category previously in effect, and was not being
paid for as an outpatient service as of December 31, 1996. We stated
that we have not identified an existing pass-through payment category
that describes the Eluvia\TM\ system. The applicant proposed a category
descriptor for the Eluvia\TM\ system of ``Stent, non-coronary, polymer
matrix, minimum 12-month sustained drug release, with delivery
system.'' Previously, we invited public comment and subsequently
determined that the Eluvia\TM\ system device meets the device category
eligibility criterion. For a complete discussion of comments received,
please see the CY 2020 OPPS/ASC final rule with comment period (84 FR
61286 through 61287). We invited public comments on whether the
Eluvia\TM\ system continues to meet this criterion.
Comment: One commenter, a manufacturer of a competing product
stated that CMS has reviewed drug-eluting vascular stents in the past
and determined they fell into an already existing pass-through payment
category. The commenter stated that in August of 2002, CMS concluded
that coronary drug-eluting stents were described by existing pass-
through device categories C1874 (Stent, coated/covered, with delivery
system) and C1875 (Stent, coated/covered, without delivery system).\94\
The commenter stated that at the time drug eluting stents were coated
with paclitaxel and the same polymer currently used on the
EluviaTM system. The commenter stated that in 2012, Zilver
PTX DES was denied pass-through payment status and quotes a letter
received from CMS which stated, ``. . . the outpatient clinical review
team believes that the Zilver PTX Stent is appropriately described by
previously active device pass-through category C1874, Stent, coated/
covered, with delivery system. This category describes drug-eluting
stents.'' \95\ According to the commenter, FDA has grouped the
EluviaTM system and Zilver PTX DES into the same product
code:
---------------------------------------------------------------------------
\94\ Federal Register/Vol. 67, No. 154/Proposed Rules/Page
52106.
\95\ Correspondence with Dr. John McInnes, Director, Division of
Outpatient Care.
``NIU: Stent, Superficial Femoral Artery, Drug-Eluting--a metal
scaffold with a drug coating placed via a delivery catheter into the
SFA to maintain the lumen. The drug coating is intended to inhibit
---------------------------------------------------------------------------
restenosis. Class III; Cardiovascular Review Panel.''
The commenter asserted that both devices are self-expanding nitinol
stents coated with the drug paclitaxel.96 97 The commenter
further asserted that the EluviaTM system's underlying stent
platform and delivery system is the same as Boston Scientific's Innova
self-expanding stent (an uncoated stent for treating the superficial
femoral artery); \98\ the drug paclitaxel is the same drug used on the
Zilver PTX DES and earlier generation coronary drug-eluting stents; and
the polymers used in the EluviaTM system coating are the
same polymers as those used in the Xience V and Promus Element coronary
stents.\99\ The commenter stated that this history precludes the
establishment of a new device category for the EluviaTM
system.
---------------------------------------------------------------------------
\96\ https://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfPCD/classification.cfm?id=1076.
\97\ https://www.accessdata.fda.gov/cdrh_docs/pdf18/P180011B.pdf.
\98\ Gray W, et al. A polymer-coated, paclitaxel-eluting stent
(Eluvia) versus a polymer-free, paclitaxel-coated stent (Zilver PTX)
for endovascular femoropopliteal intervention (IMPERIAL): A
randomised, non-inferiority trial. Lancet; Published Online
September 22, 2018; http://dx.doi.org/10.1016/S0140-6736(18)32262-1.
\99\ https://www.accessdata.fda.gov/cdrh_docs/pdf18/P180011B.pdf.
---------------------------------------------------------------------------
Response: We appreciate the information provided by the commenter
and have taken this into consideration in making our determination of
Sec. 419.66(c)(1), discussed below.
Comment: The applicant stated that in the CY 2020 OPPS/ASC proposed
rule CMS stated that no existing device category describes the
EluviaTM system and that since that time no new categories
that would describe the system have been established.
Response: We appreciate the information submitted by the
commenters. Given the additional information provided by commenters CMS
is concerned that the applicant's proposed long descriptor of `Stent,
non-coronary, polymer matrix, minimum 12-month sustained drug release,
with delivery system'' may not suitably differentiate the
EluviaTM system from Zilver PTX. Specifically, given that
CMS has previously determined that coronary drug-eluting stents were
described by existing pass-through device categories C1874 (Stent,
coated/covered, with delivery system) and C1875 (Stent, coated/covered,
without delivery system), that FDA has classified the
EluviaTM system and Zilver PTX into the same product code,
and finally that CMS previously denied pass-through status to Zilver
PTX, stating that it is appropriately described by previously active
device pass-through category C1874 (Stent, coated/covered, with
delivery system), we believe the same pass-through category code C1874
appropriately describes the EluviaTM system. We note that
HCPCS code C1874 is agnostic to the length of time a drug is released
and therefore encapsulates the EluviaTM system's proposed
long descriptor. Further, we do not believe it is appropriate for a
discussion of substantial clinical improvement, i.e., the length of
time a drug release is maintained, to be the primary motivating
determinant in a determination of whether a device meets the device
category criterion in Sec. 419.66(c)(1).
After consideration of the public comments we received, we conclude
there is an existing pass-through payment category or pass-through
category previously in effect that appropriately describes the
EluviaTM system. Based on this information, we have
determined that the EluviaTM system does not 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 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. With respect to this criterion, the applicant
claims the Eluvia\TM\ system provides a substantial clinical
improvement over existing technologies for the following reasons: (1)
The Eluvia\TM\ system achieves superior primary patency; (2) the
Eluvia\TM\
[[Page 63597]]
system achieves reduced lesion revascularization, leading to a reduced
rate of subsequent therapeutic interventions at one year and a
statistically significant reduction of target lesion revascularization
(TLR) at 2 years; (3) the Eluvia\TM\ system decreases the number of
future hospitalizations or physician visits; (4) the Eluvia\TM\ system
reduces hospital readmission rates; (5) the Eluvia\TM\ system reduces
the rate of device-related complications; and (6) the Eluvia\TM\ system
achieves similar functional outcomes and quality of life index values
while associated with half the rate of TLRs.
Many of the assertions made by the applicant are derived from the
IMPERIAL trial which is reported in three citations supplied by the
applicant.100 101 102 We discuss results from the MAJESTIC
study and then these publications from the IMPERIAL study to provide
context for the assertions made by the applicant.
---------------------------------------------------------------------------
\100\ Gray WA et al. A polymer-coated, paclitaxel-eluting stent
(Eluvia) versus a polymer-free, paclitaxel-coated stent (Zilver PTX)
for endovascular femoropopliteal intervention (IMPERIAL): A
randomised, non-inferiority trial. Lancet. 2018;392:1541-51.
\101\ M[uuml]ller-H[uuml]lsbeck S et al. Two-Year Efficacy and
Safety Results from the IMPERIAL Randomized Study of the Eluvia
Polymer-Coated Drug-Eluting Stent and the Zilver PTX Polymer-free
Drug-Coated Stent. Cardiovasc Intervent Radiol. 2021;44:368-375.
\102\ Golzar J et al. Effectiveness and Safety of a Paclitaxel-
Eluting Stent for Superficial Femoral Artery Lesions up to 190 mm:
One-Year Outcomes of the Single-Arm IMPERIAL Long Lesion Substudy of
the Eluvia Drug-Eluting Stent. Journal of Endovascular Therapy.
2020;27(2):296-303.
---------------------------------------------------------------------------
The first article, by M[uuml]ller-H[uuml]lsbeck et al., discusses
the three-year results of the MAJESTIC study, the first-in-human
prospective, single-arm, multicenter, clinical trial involving 57
patients with symptomatic lower limb ischemia and lesions in the
superficial femoral artery or proximal popliteal artery.\103\ Patients
who were treated with the Eluvia\TM\ system were followed for a 3-year
time period during which they took acetylsalicylic acid as an
antiplatelet therapy. At 24 months, patients received a duplex
ultrasound, ankle-brachial index, and Rutherford classification at a
clinical visit. At 36 months patients completed a telephone or clinical
visit which included adverse event and antiplatelet medication
assessments. The authors report that long-term results from the
MAJESTIC study of the Eluvia\TM\ system continue to demonstrate good
technical and clinical outcomes (assessed through 2 years) and a low
reintervention rate (through 3 years).
---------------------------------------------------------------------------
\103\ M[uuml]ller-H[uuml]lsbeck S, Keirse K, Zeller T, Schroe H,
Diaz-Cartelle J. Long-Term Results from the MAJESTIC Trial of the
Eluvia Paclitaxel-Eluting Stent for Femoropopliteal Treatment: 3-
Year Followup. Cardiovasc Interv Ther. 2017;40(12):1832-1838.
---------------------------------------------------------------------------
The second article, by Gray et al., discusses the IMPERIAL trial, a
prospective randomized (2:1) (the Eluvia\TM\ system vs. Zilver PTX),
single-blind, non-inferiority study in 465 patients with symptomatic
lower-limb ischemia manifesting as claudication with atherosclerotic
lesions in the native superficial femoral artery or proximal popliteal
artery across 65 centers and multiple countries.\104\ Of the 465
patients enrolled, 309 were assigned to the Eluvia\TM\ system and 156
were assigned to Zilver PTX. The authors state the overall sample size
in the randomized trial was selected to preserve adequate statistical
power for non-inferiority testing of the primary efficacy and safety
endpoints at a prespecified, one-sided significance level of 5 percent
for each, without adjustment for multiplicity.
---------------------------------------------------------------------------
\104\ Gray WA et al. A polymer-coated, paclitaxel-eluting stent
(Eluvia) versus a polymer-free, paclitaxel-coated stent (Zilver PTX)
for endovascular femoropopliteal intervention (IMPERIAL): A
randomised, non-inferiority trial. Lancet. 2018;392:1541-51.
---------------------------------------------------------------------------
The authors state baseline demographic, clinical, and angiographic
characteristics were similar between the two study groups, indicative
of successful randomization. The primary efficacy endpoint of the trial
was primary vessel patency at 12 months which was a binary endpoint
based on a duplex ultrasound peak systolic velocity ratio of 2.4 or
lower in the absence of clinically driven target lesion
revascularization or bypass of the target lesion. Secondary endpoints
at 12 months were technical success, procedural success, adverse
events, stent integrity, major adverse events, and clinical outcomes.
The authors note that the funder of the study was involved in study
design, data collection, data analysis, data interpretation, and
writing of the report. To identify statistically meaningful results for
the non-inferiority test, the authors used a test such as the
Farrington-Manning method, to estimate the lower bound for the 95
percent CI of the difference between treatment groups.\105\ According
to the authors, if this lower bound was greater than the non-
inferiority margin of -10 percent, the Eluvia\TM\ system would be
considered non-inferior to Zilver PTX in terms of device efficacy. For
all other statistical comparisons, the authors used a p value of less
than 0.05 as indicative of a significant difference.
---------------------------------------------------------------------------
\105\ Gray WA et al. A polymer-coated, paclitaxel-eluting stent
(Eluvia) versus a polymer-free, paclitaxel-coated stent (Zilver PTX)
for endovascular femoropopliteal intervention (IMPERIAL): A
randomised, non-inferiority trial. Lancet. 2018;392:1541-51.
---------------------------------------------------------------------------
According to the authors, the primary non-inferiority analyses were
done when 409 patients (276 in the Eluvia group and 133 in the Zilver
PTX group) had completed 12 months of follow-up or had a primary
efficacy or safety endpoint event.\106\ Primary patency was observed
for 231 (87 percent) of 266 patients in the Eluvia\TM\ system group and
for 106 (82 percent) of 130 patients in the Zilver PTX stent group
(difference 5.3 percent [one-sided lower bound of 95 percent CI -0.66];
p < 0.0001). 259 (95 percent) of 273 patients in the Eluvia group and
121 (91 percent) of 133 patients in the Zilver PTX group had not had a
major adverse event at 12 months (difference 3.9 percent [one-sided
lower bound of 95 percent CI -0.46]; p < .0.0001). According to the
authors, superiority of the Eluvia\TM\ system over Zilver PTX (primary
patency in 86.8 percent vs. 77.5 percent, respectively, p = 0.0144) was
met in the post-hoc analysis of 12 month primary patency data in the
full-analysis cohort. The authors summarize by stating the proportions
of patients with stent thrombosis or clinically driven target lesion
revascularisation in the Eluvia stent group were about half those in
the Zilver PTX group while both groups showed improvements in clinical
symptoms and walking function and the occurrence of stent fracture was
low.\107\
---------------------------------------------------------------------------
\106\ Gray WA et al. A polymer-coated, paclitaxel-eluting stent
(Eluvia) versus a polymer-free, paclitaxel-coated stent (Zilver PTX)
for endovascular femoropopliteal intervention (IMPERIAL): A
randomised, non-inferiority trial. Lancet. 2018;392:1541-51.
\107\ Gray WA et al. A polymer-coated, paclitaxel-eluting stent
(Eluvia) versus a polymer-free, paclitaxel-coated stent (Zilver PTX)
for endovascular femoropopliteal intervention (IMPERIAL): A
randomised, non-inferiority trial. Lancet. 2018;392:1541-51.
---------------------------------------------------------------------------
The third article, by Golzar et al, discusses the one-year follow
up of the single-arm long lesion substudy portion of the IMPERIAL
trial.\108\ Fifty patients were enrolled in the study where 20 patients
had diabetes, 16 were current smokers, 35 had moderately or severely
calcified lesions, and 16 lesions were total occlusions. To be
eligible, patients needed a lesion ranging from 140 mm to 190 mm which
required two overlapping Eluvia stents. At 12 months, no deaths, stent
thrombosis, or target limb amputation had occurred. The primary patency
rate was 87.0
[[Page 63598]]
percent at 12 months which exceeded the 60 percent performance goal.
Forty-three patients (91 percent) had Rutherford category improvement
without the need for TLR. The authors concluded that one year patency
with the Eluvia\TM\ system was independent of lesion length.
---------------------------------------------------------------------------
\108\ Golzar J et al. Effectiveness and Safety of a Paclitaxel-
Eluting Stent for Superficial Femoral Artery Lesions up to 190 mm:
One-Year Outcomes of the Single-Arm IMPERIAL Long Lesion Substudy of
the Eluvia Drug-Eluting Stent. Journal of Endovascular Therapy.
2020;27(2):296-303.
---------------------------------------------------------------------------
The fourth article, by M[uuml]ller-H[uuml]lsbeck et al., discusses
the two-year follow up to the IMPERIAL trial.\109\ The authors found
that through 24 months, the patency rates and Rutherford category
improvements were largely sustained, with a significantly lower
clinically driven TLR rate for Eluvia versus Zilver PTX at 2 years. At
2 years the TLR rate for patients treated with Eluvia was 12.7 percent
as compared to patients treated with Zilver PTX at 20.1 percent (P =
0.0495). As with the previous citation, both study arms show sustained
clinical improvement (that is improvement in Rutherford classification
by one or more categories as compared with baseline and without TLR) of
84.4 percent for patients treated with Eluvia and 78.2 percent for
patients treated with Zilver PTX (p = 0.140). For all-cause mortality,
Eluvia (7.1 percent) and Zilver PTX (8.3 percent) did not statistically
differ (p = 0.6649). The authors conclude that the IMPERIAL trial
provides support for the benefit of drug-eluting treatment in this
population.
---------------------------------------------------------------------------
\109\ M[uuml]ller-H[uuml]lsbeck S et al. Two-Year Efficacy and
Safety Results from the IMPERIAL Randomized Study of the Eluvia
Polymer-Coated Drug-Eluting Stent and the Zilver PTX Polymer-free
Drug-Coated Stent. Cardiovasc Intervent Radiol. 2021;44:368-375.
---------------------------------------------------------------------------
According to the applicant, the Eluvia\TM\ system achieves superior
primary patency compared to Zilver PTX. The applicant states that,
based on the IMPERIAL trial, the Eluvia\TM\ system demonstrated
superior primary patency over Zilver PTX, 86.8 percent vs. 77.5
percent, respectively (p=0.0144), based on pre-specific post-hoc
analysis. The applicant further states that at 12 months, the
Eluvia\TM\ system had greater primary patency than Zilver PTX at 88.5
percent vs. 79.5 percent, respectively (p=0.0119). According to the
applicant, these results are consistent with the 96.4 percent primary
patency rate at 12 months in the MAJESTIC study, the single-arm first-
in-human study of the Eluvia\TM\ system.\110\ Furthermore, in regard to
this point, the applicant asserts among patients 65 and older, the
primary patency rate in the Eluvia\TM\ system was 92.6 percent compared
to 75.0 percent in Zilver PTX (p=0.0386). Lastly, the application
states that among 50 patients with an average lesion length of 162.8 mm
(long lesions), each treated with two Eluvia stents, there was a 12
month primary patency of 87 percent and a TLR of 6.5 percent.\111\
---------------------------------------------------------------------------
\110\ Gray WA et al. A polymer-coated, paclitaxel-eluting stent
(Eluvia) versus a polymer-free, paclitaxel-coated stent (Zilver PTX)
for endovascular femoropopliteal intervention (IMPERIAL): A
randomised, non-inferiority trial. Lancet. 2018;392:1541-51.
\111\ Golzar J et al. Effectiveness and Safety of a Paclitaxel-
Eluting Stent for Superficial Femoral Artery Lesions up to 190 mm:
One-Year Outcomes of the Single-Arm IMPERIAL Long Lesion Substudy of
the Eluvia Drug-Eluting Stent. Journal of Endovascular Therapy.
2020;27(2):296-303.
---------------------------------------------------------------------------
According to the applicant, the Eluvia\TM\ system reduced
subsequent therapeutic interventions at one year and reduced target
lesion revascularization at two years. Based on the IMPERIAL trial, the
applicant asserts the Eluvia\TM\ system achieved a substantial
reduction in re-intervention with a target lesion revascularization
(TLR) of 4.5 percent compared to 9.0 percent (p=0.0672) in the Zilver
PTX group.\112\ The applicant states that at two years the Eluvia\TM\
system had a statistically significantly lower rate of TLRs than Zilver
PTX of 12.7 percent vs. 20.1 percent, respectively (p=0.0495).\113\ The
applicant notes that the published analysis presented in this
application has a slightly different clinically-driven TLR rate at 2
years than internal analysis provided in the Eluvia CY 2020 device
pass-through application (12.7 percent and 20.1 percent (p=0.0495) vs.
12.9 percent and 20.5 percent (p=0.0472), respectively). We note that
the applicant provides a table which compares TLR rates between the
Eluvia\TM\ system and Zilver PTX by all patients 65 and older, U.S.
patients 65 and older, and patients with diabetes.
---------------------------------------------------------------------------
\112\ Gray WA et al. A polymer-coated, paclitaxel-eluting stent
(Eluvia) versus a polymer-free, paclitaxel-coated stent (Zilver PTX)
for endovascular femoropopliteal intervention (IMPERIAL): A
randomised, non-inferiority trial. Lancet. 2018;392:1541-51.
\113\ M[uuml]ller-H[uuml]lsbeck S et al. Two-Year Efficacy and
Safety Results from the IMPERIAL Randomized Study of the Eluvia
Polymer-Coated Drug-Eluting Stent and the Zilver PTX Polymer-free
Drug-Coated Stent. Cardiovasc Intervent Radiol. 2021;44:368-375.
Published online 22 November 2020.
---------------------------------------------------------------------------
The applicant asserts that patients treated with the Eluvia\TM\
system required fewer days of hospital care than in the Zilver PTX
group. According to the applicant, patients treated with the Eluvia\TM\
system had fewer days in the hospital as compared to Zilver PTX for all
adverse events (13.9 vs. 17.7 respectively), TLR (2.8 vs. 7.1
respectively), and procedure and device-related adverse events (2.7 vs.
4.5 respectively). We note that statistical significance was not
assessed.
The applicant asserts that patients treated with the Eluvia\TM\
system had reduced hospital readmission rates compared to those treated
with Zilver PTX at 12 months at 3.9 percent and 7.1 percent
respectively (p=0.1369).\114\
---------------------------------------------------------------------------
\114\ Gray WA et al. A polymer-coated, paclitaxel-eluting stent
(Eluvia) versus a polymer-free, paclitaxel-coated stent (Zilver PTX)
for endovascular femoropopliteal intervention (IMPERIAL): A
randomised, non-inferiority trial. Lancet. 2018;392:1541-51.
---------------------------------------------------------------------------
The applicant asserts that while rates of adverse events were
similar in total between treatment arms in the IMPERIAL trial, device-
related adverse-events were reported in 8 percent of patients treated
with the Eluvia\TM\ system as compared to 14 percent of patients
treated with Zilver PTX.\115\
---------------------------------------------------------------------------
\115\ Gray WA et al. A polymer-coated, paclitaxel-eluting stent
(Eluvia) versus a polymer-free, paclitaxel-coated stent (Zilver PTX)
for endovascular femoropopliteal intervention (IMPERIAL): A
randomised, non-inferiority trial. Lancet. 2018;392:1541-51.
---------------------------------------------------------------------------
Lastly, the applicant asserts that the Eluvia\TM\ system is able to
achieve similar functional outcomes to Zilver PTX while associated with
half the rate of TLRs. The applicant states while functional outcomes
appear similar between the Eluvia Stent System and Zilver PTX groups at
12 months, these improvements for the Zilver PTX group are associated
with twice as many TLRs to achieve similar EQ-5D index values.\116\ The
applicant provides multiple tables which show similar improvements in
walking, distance, speed, stair climbing, and health-related quality of
life (EQ-5D) between the Eluvia\TM\ system and Zilver PTX.
---------------------------------------------------------------------------
\116\ Gray WA et al. A polymer-coated, paclitaxel-eluting stent
(Eluvia) versus a polymer-free, paclitaxel-coated stent (Zilver PTX)
for endovascular femoropopliteal intervention (IMPERIAL): A
randomised, non-inferiority trial. Lancet. 2018;392:1541-51.
---------------------------------------------------------------------------
For a complete discussion of the applicant's previous submission
regarding substantial clinical improvement please see the CY 2020 OPPS/
ASC final rule with comment period (84 FR 61287 through 61292). We note
that we did not approve the Eluvia\TM\ system for CY 2020 transitional
device pass-through payment due to the potential increased long-term
mortality signal that FDA was evaluating at the time. We further note
that in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58657), we
discussed the FDA August 7, 2019 update, which concluded that the
benefits of paclitaxel-coated devices (for example, reduced
reinterventions) should be considered in individual patients along with
potential risks (for example, late mortality) as well as for individual
patients judged to be at particularly high
[[Page 63599]]
risk for restenosis and repeat femoropopliteal interventions,
clinicians may determine that the benefits of using a paclitaxel-coated
device outweigh the risk of late mortality. The applicant asserted that
the Eluvia\TM\ system has demonstrated substantial clinical improvement
over Zilver PTX in the IMPERIAL trial to include no increase in all-
cause mortality. In response to this new information, we no longer have
concerns regarding the increased long-term mortality signal we
described in the CY 2020 OPPS/ASC final rule with comment period.
In the CY 2020 OPPS/ASC final rule with comment period (84 FR
61289) we noted that the IMPERIAL study, which showed significant
differences in primary patency at 12 months, was designed for
noninferiority and not superiority. Therefore, we were concerned that
results showing primary patency at 12 months may not be valid given the
study design. In response, the applicant stated that a non-inferiority
study is consistent with accepted research methodology and is typical
of many head-to-head trials of medical devices. For the complete
discussion of this issue, please see the CY 2020 OPPS/ASC final rule
with comment period (84 FR 61290).
In the CY 2022 OPPS/ASC proposed rule, we invited public comments
on whether the EluviaTM Drug-Eluting Vascular Stent System
meets the substantial clinical improvement criterion.
Comment: One commenter, a manufacturer of a competitor device,
asserted that EluviaTM does not meet the substantial
clinical improvement criterion. The commenter asserted that the
MAJESTIC study is inadequate to demonstrate substantial clinical
improvement as use of a single arm study to support this criterion is
problematic due to the small (n=57) and highly selective patient
population (e.g., lesion length limited to a maximum of 11 cm).\117\
Further, the commenter stated that despite a very high primary patency
rate of 96.4 percent at 12 months the rate drops substantially to 77.9
percent at just 25 months,\118\ which suggests the potential of late
catch-up phenomenon as previously observed with other polymer-coated
peripheral DES.119 120 The commenter added that the target
lesion revascularization (TLR) rate appears to double each year (i.e.,
quadruple from year 1 to year 3), increasing from 3.6 percent at 1 year
to 7.2 percent at 2 years to 14.7 percent at 3 years.\121\
---------------------------------------------------------------------------
\117\ M[uuml]ller-H[uuml]lsbeck S, et al. Twelve-Month Results
From the MAJESTIC Trial of the Eluvia Paclitaxel-Eluting Stent for
Treatment of Obstructive Femoropopliteal Disease. J Endovasc Ther.
2016;23(5):701-7.
\118\ M[uuml]ller-H[uuml]lsbeck S, et al. Long-Term Results from
the MAJESTIC Trial of the Eluvia Paclitaxel-Eluting Stent for
Femoropopliteal Treatment: 3-Year Follow-up. Cardiovasc Intervent
Radiol. 2017;40(12):1832-1838.
\119\ Duda SH, et al. Drug-eluting and Bare Nitinol Stents for
the Treatment of Atherosclerotic Lesions in the Superficial Femoral
Artery: Long-Term Results From the SIROCCO Trial. J Endovasc Ther.
2006;13(6):701-710.
\120\ Lammer J, et al. First Clinical Trial of Nitinol Self-
Expanding Everolimus-Eluting Stent Implantation for Peripheral
Arterial Occlusive Disease. J Vasc Surg. 2011;54(2):394-401.
\121\ M[uuml]ller-H[uuml]lsbeck S, et al. Long-Term Results from
the MAJESTIC Trial of the Eluvia Paclitaxel-Eluting Stent for
Femoropopliteal Treatment: 3-Year Follow-up. Cardiovasc Intervent
Radiol. 2017;40(12):1832-1838.
---------------------------------------------------------------------------
The commenter next asserted that errors in the data analysis have
been reported in scientific meetings\122\ and require a correction of
the 1-year publication and results;\123\ the commenter also asserted
that other publications also require a correction.\124\ The commenter
stated that patency results are inconsistently presented and also
contended that the primary endpoint of the 12-month patency study
(n=409) indicate primary patency of 86.8 percent (231/266) for Eluvia
vs. 81.5 percent (106/130) for Zilver PTX with the subsequent post-hoc
analysis showing a larger difference of 86.8 percent (243/280) for
EluviaTM vs. 77.5 percent (110/142) for Zilver PTX. The
commenter asserted that the post-hoc analysis represents an additional
14 EluviaTM and 12 Zilver PTX patients; the commenter notes
that the results for the final 12 Zilver PTX patients added to the
post-hoc analysis appear to be outliers who had significantly worse
outcomes than the primary patient cohort (patency 77.5 percent [110/
142] in primary cohort vs. 33.3 percent [4/12] in post-hoc cohort,
p=0.002) and raises doubt about the poolability of the data between
these two cohorts.
---------------------------------------------------------------------------
\122\ Gray WA. 2-year Outcomes from the IMPERIAL Randomized Head
to Head Study of Eluvia DES and Zilver PTX. Oral presentation at:
The Leipzig Interventional Course (LINC) Annual Meeting; January
2020; Leipzig, Germany.
\123\ Gray WA, et al. A polymer-coated, paclitaxel-eluting stent
(Eluvia) versus a polymer-free, paclitaxel-coated stent (Zilver PTX)
for endovascular femoropopliteal intervention (IMPERIAL): A
randomised, non-inferiority trial. Lancet. 2018;392(10157):1541-
1551.
\124\ Soga Y, et al. Japanese Patients Treated in the IMPERIAL
Randomized Trial Comparing Eluvia and Zilver PTX Stents. Cardiovasc
Intervent Radiol. 2020;43(2):215-222.
---------------------------------------------------------------------------
The commenter also asserted that in the most recently presented 2-
year results (with data correction),\125\ there is no significant
difference in patency between Eluvia and Zilver PTX at 2 years (83.0
percent vs. 77.1 percent, p=0.10, not significant). The commenter
contended that based on these results a claim of superior primary
patency cannot be maintained. The commenter was concerned by the claim
of ``highest reported'' two-year primary patency, stating: (1) The
modified definition of primary patency is inconsistent across multiple
studies, (example, the Zilver PTX randomized trial and the IMPERIAL
trial) which limits appropriate comparability; (2) the second Zilver
PTX randomized trial, which had a higher 2-year primary patency rate of
83.4 percent compared with 83.0 percent for the EluviaTM
system, was excluded from the comparison; \126\ and (3) the claim of
superiority requires head-to-head comparative studies or at a minimum
an attempt to account for differences between compared studies.
---------------------------------------------------------------------------
\125\ Gray WA. 2-year Outcomes from the IMPERIAL Randomized Head
to Head Study of Eluvia DES and Zilver PTX. Oral presentation at:
The Leipzig Interventional Course (LINC) Annual Meeting; January
2020; Leipzig, Germany.
\126\ Dake MD, et al. Durable Clinical Effectiveness With
Paclitaxel-Eluting Stents in the Femoropopliteal Artery 5-Year
Results of the Zilver PTX Randomized Trial. Circulation.
2016;133(15):1472-1483.
---------------------------------------------------------------------------
The commenter next asserted that the long-term safety of the
EluviaTM system has not been demonstrated due to: (1) A lack
of long-term safety data; (2) multiple reports noting the presence of
aneurysmal degeneration, peri-stent inflammation, or negative late
lumen loss associated with the EluviaTM system,; (3) the
total dose and not just the density must be considered; (4) paclitaxel
is released directly to the target lesion by the Zilver PTX DES and not
by the EluviaTM system; (5) avoiding use of a polymer, if
possible, is a preferred stent design; and (6) long-term paclitaxel
release may not be necessary or desired.
Another commenter stated that the EluviaTM system meets
the substantial clinical improvement criterion because CMS already
concluded the same in the FY 2022 IPPS/LTCH final rule for new
technology add-on payment.
Response: We appreciate the information provided by the commenters
and have taken this into consideration when making our determination of
the substantial clinical improvement criterion, discussed below.
Comment: The applicant submitted a comment in support of the
substantial clinical improvement criterion. The applicant stated that
in the CY 2022 OPPS/ASC proposed rule CMS referenced the FY 2021 IPPS/
LTCH final
[[Page 63600]]
rule (85 FR 58657) and stated that CMS no longer has concerns about the
long-term mortality signal. The applicant further stated that in the FY
2021 IPPS/LTCH final rule, CMS determined that the EluviaTM
system represents a substantial clinical improvement over existing
technologies. The applicant added that despite the assessment in the FY
2021 IPPS/LTCH final rule, in the CY 2022 OPPS/ASC proposed rule, CMS
asked for input regarding whether the EluviaTM system meets
the substantial clinical improvement criterion, even raising concerns
that CMS agreed were not an issue in the discussion of its NTAP
decision. The applicant asserted that the regulations governing the
substantial clinical improvement criterion for NTAP and for
transitional device pass-through status are nearly identical. The
applicant asserted that in its discussion of substantial clinical
improvement for the EluviaTM system under the IPPS NTAP
application, CMS found that the EluviaTM system met the
criterion based on the following endpoints: Superior primary patency;
reduced rate of subsequent therapeutic interventions; decreased future
hospitalizations and physician visits; reduced hospital readmission
rates; reduced rate of device-related complications; and similar
functional outcomes and EQ-5D index values with half the rate of target
lesion revascularizations (TLRs). The applicant added that these
endpoints are clinically meaningful for all patients with PAD and not
just for those in the inpatient setting. The applicant asserted that
there is no evidence-based rationale that would lead CMS to a reach a
different conclusion regarding substantial clinical improvement for the
EluviaTM system for transitional device pass-through status
versus NTAP. The applicant added that there is no difference in the
indicated patient population for the EluviaTM system based
on site of service, which is determined by physicians based on the
totality of a patient's condition.
Response: We appreciate the additional information provided by the
commenters. We note in the FY 2021 IPPS/LTCH final rule (85 FR 58657)
CMS determined that the EluviaTM system met the substantial
clinical improvement criterion after consideration of the comments
received and for the reasons discussed, including the improved outcomes
shown in the IMPERIAL and MAJESTIC trials as well as the updated August
7, 2019 FDA guidance in regard to paclitaxel-coated devices. As we
stated in the FY 2021 IPPS/LTCH final rule, the applicant provided the
following two-year results from the IMPERIAL global randomized
controlled clinical trial, comparing the EluviaTM system to
Zilver[supreg] PTX[supreg]:
The EluviaTM system maintains higher primary
patency than Zilver[supreg] PTX[supreg] at 2 years, 83.0 percent
compared to 77.1 percent. The applicant contended that guidelines
recognize the importance of primary patency in assessing the efficacy
of peripheral endovascular therapies.\127\
---------------------------------------------------------------------------
\127\ Writing Committee Members, Gerhard-Herman MD, Gornik HL et
al. 2016 AHA/ACC Guideline on the Management of Patients with Lower
Extremity Peripheral Artery Disease: Executive Summary. Vasc Med.
2017 Jun; 22(3):NP1-NP43.
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The EluviaTM system's 2-year primary patency is
the highest reported in a superficial femoral artery US pivotal trial
for a drug-eluting stent or drug coated balloon.\128\ Per the
applicant, the 2-year primary patency results are consistent with the
2-year TLR results released earlier in 2019.\129\ According to the
applicant, the EluviaTM system sustained a statistically
significant reduction in TLR at 2 years compared to Zilver PTX, 12.9
percent vs. 20.5 percent (p = 0.0472).\130\
---------------------------------------------------------------------------
\128\ Highest 2-year primary patency based on 24-month Kaplan-
Meier estimates reported for IMPERIAL, IN.PACT SFA, ILLUMENATE,
LEVANT II and Primary Randomization for Zilver PTX RCT.
\129\ BSC Data on File. As-treated ELUVIA and PTxControl data
from IMPERIAL RCT.FDA PTA reference based on FDA Executive Summary
(median of PTA arms).Abbreviations: DES, drug eluting stent; TLR,
target lesion revascularization; PTx, paclitaxel.
\130\ Boston Scientific Presentation to the Circulatory System
Devices Panel of the Medical Devices Advisory Committee Meeting,
June 19, 2019.
---------------------------------------------------------------------------
In a subgroup analysis of patients 65 years and older
(Medicare population), the primary patency rate in the
EluviaTM system stent group is 92.6 percent, compared to
75.0 percent for the Zilver[supreg] PTX[supreg] stent group (p=0.0386).
One commenter identified potential issues with the data used to
evaluate the EluviaTM system for substantial clinical
improvement. In spite of the information presented by the commenter, we
concur with the assessment discussed in the FY 2021 IPPS/LTCH final
rule and the applicant's additional clarification concerning the
specific endpoints for which they believe the EluviaTM
system meets the substantial clinical improvement criterion. We note
one commenter takes issue with two of the above points that CMS relied
upon in the FY 2021 IPPS/LTCH final rule in its determination of
substantial clinical improvement, (e.g. the higher primary patency, the
2-year primary patency being the ``highest reported'', and the target
lesion revascularization rate). However, based upon the data and
comments received we note that the EluviaTM system group
maintained a higher primary patency rate than the Zilver[supreg]
PTX[supreg] stent group (92.6 percent vs. 75.0 percent, p < 0.05) in
the subgroup analysis of patients 65 years and older. Given this
information and the information provided by the applicant and
commenters in their comments, we agree that the EluviaTM
system meets the substantial clinical improvement criterion at Sec.
419.66(c)(2).
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 Eluvia\TM\ system
would be reported with the HCPCS codes in the following Table 36:
[GRAPHIC] [TIFF OMITTED] TR16NO21.050
[[Page 63601]]
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. For our calculations, we used APC 5193--Level 3 Endovascular
Procedures, which had a CY 2021 payment rate of $10,042.94 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 37226 had a device offset amount of
$4,843.71 at the time the application was received.
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 the Eluvia\TM\ system is 56 percent of the
applicable APC payment amount for the service related to the category
of devices of $10,042.94 ((5,645/10,042.94) x 100 = 56.2 percent).
Therefore, we stated in the CY 2022 OPPS/ASC proposed rule that we
believe the Eluvia\TM\ system meets the first cost significance
requirement.
The second cost significance requirement, at Sec. 419.66(d)(2),
provides that the estimated average reasonable cost of the devices in
the category must exceed the cost of the device-related portion of the
APC payment amount for the related service by at least 25 percent,
which means that the device cost needs to be at least 125 percent of
the offset amount (the device-related portion of the APC found on the
offset list). The estimated average reasonable cost for the Eluvia\TM\
system is 117 percent of the cost of the device-related portion of the
APC payment amount for the related service of $4,843.71 ((5,645/
4,843.71) x 100 = 116.5 percent). Therefore, we stated in the CY 2022
OPPS/ASC proposed rule that we do not believe that the Eluvia\TM\
system meets the second cost significance requirement.
The third cost significance requirement, at Sec. 419.66(d)(3),
provides that the difference between the estimated average reasonable
cost of the devices in the category and the portion of the APC payment
amount for the device must exceed 10 percent of the APC payment amount
for the related service. The difference between the estimated average
reasonable cost for the Eluvia\TM\ system and the portion of the APC
payment amount for the device of $4,843.71 is 8 percent of the APC
payment amount for the related service of $10,042.94 (((5,645-
4,843.71)/10,042.94) x 100 = 7.98 percent). Therefore, we stated in the
CY 2022 OPPS/ASC proposed rule that we do not believe that the
Eluvia\TM\ system meets the third cost significance requirement.
We invited public comments on whether the Eluvia\TM\ system meets
the device pass-through payment criteria discussed in this section,
including the cost criterion for device pass-through payment status.
Comment: A manufacturer of a competitor device and a second
commenter agreed that based on calculations included in the CY 2022
OPPS/ASC proposed rule for the second and third cost significance
tests, the EluviaTM system does not meet the cost
significance requirements for device pass-through payment.
A third commenter stated that in response to the CY 2021 OPPS/ASC
proposed rule they noted that a device that meets the newness and
substantial clinical improvement criteria for transitional pass-through
payment may only replace some of the devices included in the device-
related portion (DRP).
Multiple commenters asserted that the EluviaTM system
meets the cost criteria for transitional device pass-through status.
The commenters stated that the current methodology of the cost
significance criterion uses a single number, which includes all devices
utilized in a particular procedure. The commenters explained that since
the DRP contains all devices for respective claims, the DRP is
artificially high as a benchmark for the EluviaTM system
since it only replaces one stent in the procedure. The commenters
concluded that as a result of this issue, the EluviaTM
system does not meet the cost criteria because the average sales price
of the device is not sufficient to account for all the other devices
included in the DRP, and not just the stent it is replacing.
Response: We appreciate the information provided by the commenters
and have taken this into consideration in making our final
determination of the cost significance criterion discussed below.
Comment: The applicant agreed that the EluviaTM system
meets the first cost test. Regarding the second and third cost
significance tests, the applicant stated that CMS overestimated the DRP
used in the cost significance tests. According to the applicant, when
calculating the OPPS payment for a procedure that uses a pass-through
device, CMS has an established policy of only subtracting (as the DRP)
the cost of those devices that are replaced by the transitional pass-
through device. The applicant asserted that the payment policy
methodology for calculating the DRP should also be applied to the
calculating cost significance for the cost criteria.
The applicant asserted of the cost significance tests that the
first question addresses the cost of the transitional pass-through
device relative to total payment, whereas the second two questions
address cases where the transitional pass-through device would replace
device costs currently reflected in the associated procedure payment
amount. The applicant offered three scenarios concerning candidate
devices and the DRP: (1) A candidate device may replace all or nearly
all of the devices that are accounted for in the DRP of the related
procedures (e.g., neurostimulators); (2) a candidate device may replace
only some of the devices included in the DRP (e.g., the
EluviaTM system); and (3) a candidate device may not replace
any of the devices included in the DRP (e.g., a single-use endoscope).
According to the applicant, CMS' calculation of the DRP to include all
the devices used in the related procedure overestimates the DRP in the
latter two scenarios. The applicant asserted that because of this novel
technologies that otherwise meet the transitional pass-through criteria
would fail the cost significance tests since they will be compared to
the cost of all devices used in a procedure and manufacturers may
establish higher device prices to exceed an inflated DRP.
The applicant asserted that CMS' current approach to calculating
the DRP is contrary to the intent of the TPT program, which is to
recognize the costs associated with novel, clinically beneficial
technologies that are not yet incorporated into the procedural cost
calculation with temporary, separate device-related payment until the
new device cost is reflected in rate setting data. The applicant added,
the intent of the DRP in the cost significance test is to compare the
cost of the pass-through candidate device to the costs of the device(s)
that the pass-through candidate device would replace and not to compare
the costs of the candidate device to the total costs of all devices
used in a procedure to include those that are unrelated and not
replaced by the candidate device.
Next the applicant stated that in its discussion of the pass-
through device offset policy for OPPS payment in the CY 2004 Outpatient
Prospective Payment System (OPPS) Final Rule, CMS stated, ``Beginning
with the implementation of the 2002 OPPS update (April 1, 2002), we
deduct from the pass-through payments for the identified devices an
amount that offsets the portion of the APC payment amount that we
determine is associated with the
[[Page 63602]]
device, as required by section 1833(t)(6)(D)(ii) of the Act.''\131\ The
applicant continued, ``We will apply an offset to a new device category
only when we are able to determine that an APC contains costs
associated with the new device. We will also continue our existing
methodology for determining any offset amount if we find that device
costs associated with a new device category are packaged into the APCs.
We will include information about any applicable offset in the
transmittal we issue to announce information regarding the new
category''.\132\
---------------------------------------------------------------------------
\131\ Department of Health and Human Services. Centers for
Medicare & Medicaid Services. 42 CFR parts 410 and 419. [CMS-1471-
FC]. Federal Register. 2003;68(216): 63438-9.
\132\ Department of Health and Human Services. Centers for
Medicare & Medicaid Services. 42 CFR parts 410 and 419. [CMS-1471-
FC]. Federal Register. 2003;68(216): 63439.
---------------------------------------------------------------------------
The applicant stated that on at least two occasions, CMS has
referenced the above-stated policy in decisions not to apply a device
offset when calculating payment for pass-through devices. The applicant
cited two instances where they believe CMS has chosen to not apply a
device offset, first with C2623 (Drug coated angioplasty balloon) \133\
and C1748 (Single use [disposable] endoscope).\134\ According to the
applicant, with these two decisions, CMS has acknowledged that it does
not consider the cost of devices that are not replaced by the pass-
through device when calculating the pass-through payment amount. The
applicant asserted that given these decisions and the associated
payment policy, CMS has not only shown that it has the authority to
define the DRP calculation methodology, but it has also established a
precedent for defining the DRP as only those devices that are replaced
by the pass-through device. The applicant stated that it is therefore
inconsistent for CMS to apply a different DRP methodology in the cost
test for devices seeking transitional pass-through payment.
---------------------------------------------------------------------------
\133\ CMS Transmittal 3280 (R3280CP, June 5, 2015) https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R3280CP.pdf.
\134\ CMS Transmittal 10541 (R10541CP, December 31, 2020)
https://www.cms.gov/files/document/r10541cp.pdf.
---------------------------------------------------------------------------
According to the applicant the prior precedents and this
inconsistency are central to the application of the TPT cost
significance test for the EluviaTM system. The applicant
stated that as requested in their 2018 transitional pass-through
application submission, they again ask CMS to consider only the cost of
those devices replaced by the EluviaTM system when
calculating the DRP for CPT Code 37226 (Revascularization,
endovascular, open or percutaneous, femoral, popliteal artery(s),
unilateral; with transluminal stent placement(s), includes angioplasty
within the same vessel, when performed). According to the applicant the
average femoral, popliteal stent placement procedure (CPT 37226)
includes ancillary (non-stent) device costs of $2,311.26 and average
stent device costs of $3,406.93. The applicant asserts then that a more
appropriate comparison is of the EluviaTM system to the
$3,406.93 in average stent device costs. The applicant contends that
the non-stent devices should not be considered in the DRP utilized in
the 3-part cost significance test because the EluviaTM
system is not replacing these costs associated with the non-stent
devices. The applicant concluded that should the $3,406.93 be used as
the DRP, then the EluviaTM system passes the second and
third cost significance tests at approximately 166 percent and 22
percent, respectively.
Response: As we stated above in section IV.2.a. of this final rule
with comment period, to be eligible for device pass-through payments a
device must 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). Since the CY
2017 OPPS/ASC final rule (81 FR 79648 through 79649), CMS has described
the manner in which it evaluates device pass-through applicants against
the cost significance criterion at Sec. 419.66(d). Per the applicant,
CMS has stated in prior rules that we will deduct from the pass-through
payments for a device an amount that offsets the portion of the APC
payment amount that we determine is associated with the device. Once a
device is approved for pass-through payments CMS appropriately applies
this rationale to determine the payment rate for devices with pass-
through status. However, except in rare circumstances, CMS has
consistently applied the full device offset amount associated with the
applicable APC used to evaluate the cost significance tests at Sec.
419.66(d). In this manner we believe we are identifying devices whose
average cost is not ``insignificant''.
In reference to the prior precedents identified by the applicant
(C2623 and C1748) where CMS determined to not apply an offset we
disagree with the applicant's conclusion that these situations apply to
the EluviaTM system and the request for a partial device
offset. In some cases, CMS determines that none of the costs of a new
device are included in the applicable APC. For example, in the CY 2021
OPPS/ASC final rule (85 FR 85994), CMS determined for the
EXALTTM Model D Single-Use Duodenoscope that the costs
associated with the device were not already reflected in the device
portions of APCs 5303 (Level 3 Upper GI Procedures) or 5331 (Complex GI
Procedures) because there were no single-use duodenoscopes on the
market previously so no operating cost data associated with such
devices could be included in the historical OPPS claims data.
Additionally, none of the costs associated with the device were
reflected in the device portions of the applicable APCs. This is
similarly reflected in the CMS transmittal 10541 dated December 31,
2020 where CMS stated, ``we have determined that the costs associated
with C1748 are not already reflected in APCs 5303 or 5331''.\135\
---------------------------------------------------------------------------
\135\ CMS Transmittal 10541 (R10541CP, December 31, 2020)
https://www.cms.gov/files/document/r10541cp.pdf.
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In its comment to CMS, the applicant asserts that the
EluviaTM system replaces a portion of the previous related
devices and not all of previous related devices. This is further
evidenced by the applicant's request for a partial device-related
portion (that is, device offset) of $3,406.93. CMS has historically
used a full device offset related to the applicable APC in the majority
of cases when assessing the cost criterion; to our knowledge CMS has
never utilized a partial device offset in this manner. If CMS desired
to change the cost criterion evaluation it must do so through notice
and comment rulemaking to provide ample notice and an opportunity for
public comment. Therefore, we do not believe the use of a partial
device offset, as the applicant has requested, would be consistent with
CMS' application of the cost significance criterion specified at Sec.
419.66(d). Because the applicant did not meet the second and third cost
significance tests, we do not believe the EluviaTM system
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 are not approving the
EluviaTM system for transitional pass-through payment status
in CY 2022 because the product does not meet the cost significance
criterion.
(4) CochlearTM Osia[supreg] 2 System
Cochlear Americas submitted an application for a new device
category
[[Page 63603]]
for transitional pass-through payment status for the
CochlearTM Osia[supreg] 2 System (hereinafter referred to as
the Osia[supreg] 2 System) by the December 2020 quarterly deadline for
CY 2022. The Osia[supreg] 2 System is a transcutaneous, active auditory
osseointegrated device that replaces the function of the middle ear by
providing mechanical energy to the cochlea. According to the applicant,
the device consists of four components including: (1) An external sound
processor, the Osia 2 Sound Processor; (2) the Osia OSI200 Implant
Piezo PowerTM transducer; (3) the BI300 osseointegrated
implant for anchoring and single point transmission; and (4) a fixation
screw for attaching the OSI200 implant to the BI300 implant which is
implanted in the skull.
The external sound processor captures environmental sounds and
converts the sound signal into a digital signal transmitted as a
radiofrequency. The external sound processor also contains a magnet and
a battery (rechargeable 675 zinc air button 1.4Volt; 600 mA-hrs
capacity). The magnets couple the external and internal components
across the skin. The transducer (Piezo PowerTM) detects the
radiofrequency signals after they pass through the intact skin and
transforms the signal to vibrations, which are then transmitted to the
bone-implanted fixation screw. The screw vibrates the skull bone
(temporal portion) which stimulates the cochlea (inner ear) to transmit
the information to the brain so that the vibrations are perceived as
sounds. The implanted portion is 7.2 cm x 3 cm x 0.49 cm. The system
has a fitting range of 55 dB sensory neural hearing loss. The applicant
stated that unlike hearing aids, which make sounds louder, an auditory
osseointegrated device, such as the Osia[supreg] 2 System can improve
clarity of hearing and improve hearing at higher frequencies.
With respect to the newness criterion at Sec. 419.66(b)(1), the
Osia[supreg] 2 System received FDA 510(k) clearance on November 15,
2019, based on a determination of substantial equivalence to a legally
marketed predicate device. The Osia[supreg] 2 System is intended for
the following patients and indications: (1) Patients 12 years of age or
older; (2) patients who have a conductive or mixed hearing loss and
still can benefit from sound amplification. The pure tone average (PTA)
bone conduction (BC) threshold (measured at 0.5, 1, 2, and 3 kHz)
should be better than or equal to 55 dBHL; (3) Bilateral fitting of the
Osia[supreg] 2 System is intended for patients having a symmetrically
conductive or mixed hearing loss. The difference between the left and
right sides' BC thresholds should be less than 10 dB on average
measured at 0.5, 1, 2, and 3 kHz, or less than 15 dB at individual
frequencies; (4) patients who have profound sensorineural hearing loss
in one ear and normal hearing in the opposite ear (that is, single-
sided deafness or ``SSD''). The pure tone average air conduction
hearing thresholds of the hearing ear should be better than or equal to
20 dB HL (measured at 0.5, 1, 2, and 3 kHz). The Osia[supreg] 2 System
for SSD is also indicated for any patient who is indicated for an air-
conduction contralateral routing of signals (AC CROS) hearing aid, but
who for some reason cannot or will not use an AC CROS. Prior to
receiving the device, it is recommended that an individual have
experience with appropriately fitted air conduction or bone conduction
hearing aids.
We received the application for a new device category for
transitional pass-through payment status for the Osia[supreg] 2 System
on December 1, 2020, which is within 3 years of the date of the initial
FDA marketing authorization. We invited public comments on whether the
Osia[supreg] 2 System meets the newness criterion.
Comment: The applicant asserted that the Osia[supreg] 2 system is
new because it received FDA clearance on November 15, 2019 and its
predicate device received FDA clearance on July 3, 2019, both of which
are within 3 years of December 1, 2020, the date on which we received
the device pass-through application for the Osia[supreg] 2 System. The
applicant asserted that the predicate to these devices, the BONEBRIDGE
System, received FDA authorization on July 20, 2018 which is also
within the newness period for transitional pass-through status.
Response: We appreciate the applicant's input and agree that the
Osia[supreg] 2 system meets the newness criterion.
With respect to the eligibility criterion at Sec. 419.66(b)(3),
according to the applicant, the Osia[supreg] 2 System is integral to
the service provided, is used for one patient only, comes in contact
with human skin, and is surgically implanted or inserted. The applicant
also claimed that the Osia[supreg] 2 System meets the device
eligibility requirements of Sec. 419.66(b)(4) because it is not
equipment, an instrument, apparatus, implement, or item for which
depreciation and financing expenses are recovered, and it is not a
supply or material furnished incident to a service. We invited public
comments on whether the Osia[supreg] 2 System meets the eligibility
criteria at Sec. 419.66(b).
We did not receive public comments in regard to whether the
Osia[supreg] 2 system meets the eligibility criteria at Sec.
419.66(b)(3) or Sec. 419.66(b)(4), therefore we agree with the
applicant that the Osia[supreg] 2 system meets the criteria of Sec.
419.66(b).
The criteria for establishing new device categories are specified
at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1),
provides that CMS determines that a device to be included in the
category is not appropriately described by any of the existing
categories or by any category previously in effect, and was not being
paid for as an outpatient service as of December 31, 1996.
The applicant stated that the Osia[supreg] 2 System differs
significantly from the devices that were included in the previous
category for auditory osseointegrated devices (L8690--Auditory
osseointegrated device, includes all internal and external components)
which was effective from effective from January 1, 2007 through
December 31, 2008. The applicant claimed that the devices that were
described by this category include a transducer/actuator and sound
processor that is worn externally with the transducer/actuator
connected to the skull by a percutaneous post or abutment that
penetrates the skin. In these devices, the sound processor converts
sound into a digital signal which the transducer/actuator converts to
vibrations that are transmitted to the skull through the abutment. The
vibrations are transmitted directly to the inner ear and are reproduced
as sound.
The applicant stated that the Osia[supreg] 2 System is distinct
from devices with a percutaneous connection between the transducer and
the sound processor because the transducer/actuator for the
Osia[supreg] 2 system is surgically implanted and has a magnetic
transcutaneous attachment to the external sound processor. The
applicant also claimed that the percutaneously coupled osseointegrated
devices included in the previous device pass-through category convert
sound to mechanical vibrations in the external sound processor/
actuator, then transmit the vibrations to the internal components. The
applicant claimed that the Osia[supreg] 2 system instead converts the
sound to mechanical vibrations after it has reached the internal
components. The applicant claimed that the technology to fully implant
the transducer/actuator did not exist when the previous device pass-
through category was established. The applicant proposed the device
pass-
[[Page 63604]]
through category descriptor ``Auditory osseointegrated device,
including implanted transducer/actuator with radiofrequency link to
external sound processor''. The applicant stated that the BONEBRIDGE
Bone Conduction Implant System, which also submitted a device pass-
through application for CY 2022 and is described in this section under
number (2) above, would also be described by the proposed additional
category.
We stated in the CY 2022 OPPS/ASC proposed rule that we believe
that the Osia[supreg] 2 system is described by L8690--Auditory
osseointegrated device, includes all internal and external components.
The applicant has noted differences between the Osia[supreg] 2 system
and the devices that were described by L8690, specifically
percutaneous, auditory osseointegrated devices, regarding the
connection between the implanted transducer and the external audio
processor (percutaneous abutment vs. transcutaneous magnetic
attraction) however, we believe that there is a similar mechanism of
action for all these devices specifically, vibratory stimulation of the
skull to stimulate the receptors in the cochlea (inner ear). Further,
we believe that the broad descriptor for L8690 of ``Auditory
osseointegrated device, includes all internal and external components''
includes the applicant's device. In the CY 2022 OPPS/ASC proposed rule,
we invited public comment on whether the Osia[supreg] 2 system meets
the device category criterion.
Comment: We received multiple comments addressing Sec.
419.66(c)(1) for both BONEBRIDGE and the Osia[supreg] 2 system. One
commenter stated they do not support CMS' position that the BONEBRIDGE
and Osia[supreg] 2 system should not be granted a new category, because
these devices take much longer to implant surgically than percutaneous
bone conduction implants, they are active sound processors, and they
work differently than percutaneous devices like the BAHA or Oticon
implants.
Another commenter who also disagreed with CMS that the BONEBRIDGE
and Osia[supreg] 2 system are adequately described by L8690 stated that
the BONEBRIDGE and Osia[supreg] 2 system are transcutaneous hearing
implants, and that CMS should create a new HCPCS code that describes
both the procedure and the implant because both are new. The commenter
expressed their disappointment in what they described as CMS' continual
resistance to conduct rulemaking specifically on Middle Ear Implants
(MEIs) because they believe CMS should hear the opinions of clinical
experts, physicians, and Medicare beneficiaries regarding the
appropriateness of classifying MEIs as prosthetic implants.
A different commenter stated their support for CMS' conclusion in
the proposed rule that BONEBRIDGE and Cochlear Osia[supreg] are
appropriately described by a pass-through category previously in
effect.
Two commenters stated that CMS must support the inclusion of middle
ear implants in the prosthetic category. The commenters asserted that
not including these devices denies beneficiaries access to all FDA-
approved hearing prosthetics and discourages in new technology for the
hearing impaired.
Response: We appreciate the input provided by these commenters. We
have taken this information into consideration in our determination of
the eligibility criterion at Sec. 419.66(c)(1), discussed below. We
note some of the comments, those addressing hearing prosthetics, are
outside of the scope of this rule. Please refer to the above section
(2) BONEBRIDGE where we summarize these comments in full.
Comment: One commenter stated that the pass-through category
identified by CMS, L8690, does not provide an accurate description of
the Osia[supreg] 2 system as it does not account for several material
differences that exist between Osia (and other active auditory
osseointegrated implant (AOI) systems) and the devices intended to be
described by L8690. The commenter asserted that the mechanism by which
the vibrations are generated and reach the skull are entirely
different, which is reflected by the FDA device classification. The
commenter asserted that L8690, developed in 2007, could not account for
active devices.
Response: We appreciate the information provided by the commenter
and have taken this into account in our determination of the Sec.
419.66(c)(1) eligibility criterion, discussed below.
Comment: The applicant stated that L8690 does not describe active,
transcutaneous systems like Osia[supreg] 2 and BONEBRIDGE. First, the
applicant stated that L8690 did not extend to active, transcutaneous
active osseointegrated implants (AOIs) when it was created in 2007
because the only osseointegrated implant at that time was passive and
percutaneous. Second, the applicant, responding to CMS' statement,
``that there is a similar mechanism of action for all these devices . .
.'' \136\, stated that the mechanism by which the vibrations are
generated and reach the skull are entirely different and can affect
safety, clinical outcomes, and patient quality of life. The applicant
asserted that the active nature of the Osia[supreg] 2 system, which
diminishes skin-related complications associated with percutaneous
devices and at the same time improves audiological outcomes, differs
from passive systems which involve the transmission of mechanical
vibrations from the external components to the internal components. As
opposed to previous technologies, the applicant asserted that active
systems incorporate a new mechanism of action that sends digital
signals from the external sound processor to the internal components,
which then convert a digital signal to a vibration directly at the
point of bone contact, eliminating the need for percutaneous
attachment. The applicant stated that although both active and passive
systems ultimately generate a vibration to stimulate the cochlea, the
way they do so and where the vibration is generated are entirely
different. The applicant added that FDA created a new device
classification for active implantable bone conducting hearing systems
in response to BONEBRIDGE's application in 2018 (21 CFR 874.3340),
which is specifically for active systems as opposed to that for passive
systems (21 CFR 874.3300). The applicant stated that while they
recognize that FDA and CMS classify devices differently for different
purposes, they believe that the way FDA classifies bone conduction
implants reinforces why CMS should distinguish active implantable bone
conduction devices from passive, percutaneous systems for purposes of
transitional device pass-through payment status.
---------------------------------------------------------------------------
\136\ 86 FR at 42104.
---------------------------------------------------------------------------
The applicant next stated that in other situations, CMS has
modified broadly worded device categories to recognize technological
advances within a device class. The applicant noted that the descriptor
for HCPCS code C1767--``Generator, neurostimulator (implantable)''--was
modified to ``Generator, neurostimulator (implantable), non-
rechargeable'' to create a new device pass-through category for HCPCS
codes C1820 (Generator, neurostimulator (implantable), with
rechargeable battery and charging system) and C1822 (Generator,
neurostimulator (implantable), high frequency, with rechargeable
battery and charging system).
Response: After consideration of the public comments we received,
we agree there is no existing pass-through payment category that
appropriately describes the Osia[supreg] 2 system. The Osia[supreg] 2
system device consists of an external
[[Page 63605]]
processor that receives sound pressure energy and converts this to a
radiofrequency signal which communicates with a surgically implanted
subcutaneous transducer/actuator via a stud. The transducer/actuator
converts this signal to mechanical vibrations that are transmitted to
the skull and inner ear. As stated by the applicant, when the existing
pass-through category, Auditory osseointegrated device (L8690), was
issued in 2007, the technology to implant the transducer/actuator did
not exist. Based on this information, we have determined that the
Osia[supreg] 2 system meets the eligibility criterion at Sec.
419.66(c)(1). Due to the similarity between the devices, we refer the
reader to section IV(A)(2)(b)(2) of this rule for a similar discussion
of the BONEBRIDGE.
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. With respect to the substantial clinical
improvement criterion, the applicant stated that the Osia[supreg] 2
system represents a substantial clinical improvement because it
provides a reduced rate of device-related complications compared to
currently available treatments. The applicant submitted five references
to retrospective case series that studied the long-term complications
associated with percutaneous osseointegrated bone conduction hearing
devices, specifically bone-anchored hearing
aids.137 138 139 140 141 The applicant stated that
complications associated with bone-anchored hearing aids include
irritation and/or infection of the skin surrounding the abutment, skin
flap necrosis, wound dehiscence, bleeding or hematoma formation, soft
tissue overgrowth and persistent pain.142 143 144 145 146
Additionally, the applicant also submitted five references to clinical
studies and case series involving the use of transcutaneous
osseointegrated bone conduction hearing devices. Of these five
references, three of these studies involved the use of the BONEBRIDGE
device and have been previously discussed in this section, one study
that involved the use of the BAHA Attract device, and one study that
involved the use of the Osia[supreg] system, an earlier version of the
Osia[supreg] 2 system.
---------------------------------------------------------------------------
\137\ Kraai T, Brown C, Neeff M, Fisher K. Complications of
bone-anchored hearing aids in pediatric patients. Int J Pediatr
Otorhinolaryngol. 2011 Jun;75(6):749-53.
\138\ Badran K, Arya AK, Bunstone D, Mackinnon N. Long-term
complications of bone-anchored hearing aids: a 14-year experience. J
Laryngol Otol. 2009 Feb;123(2):170-6.
\139\ House JW, Kutz JW Jr. Bone-anchored hearing aids:
incidence and management of postoperative complications. Otol
Neurotol. 2007 Feb;28(2):213-7.
\140\ Asma A, Ubaidah MA, Hasan SS, Wan Fazlina WH, Lim BY, Saim
L, Goh BS. Surgical outcome of bone anchored hearing aid (baha)
implant surgery: A 10 years experience. Indian J Otolaryngol Head
Neck Surg. 2013 Jul;65(3):251-4.
\141\ Shirazi MA, Marzo SJ, Leonetti JP. Perioperative
complications with the bone-anchored hearing aid. Otolaryngol Head
Neck Surg. 2006 Feb;134(2):236-9.
\142\ Ibid.
\143\ Ibid.
\144\ Ibid.
\145\ Ibid.
\146\ Ibid.
---------------------------------------------------------------------------
In support of their claim that the Osia[supreg] 2 system reduced
the rate of device-related complications compared to currently
available treatments, the applicant submitted a multicenter prospective
within-subject study conducted at five centers in Europe, Australia,
and USA. This study investigated clinical performance, safety, and
benefit of the Osia[supreg] system and included 51 adult subjects with
mixed and conductive hearing loss (MHL/CHL, n[hairsp]=[hairsp]37) and
single-sided sensorineural deafness (SSD, n[hairsp]=[hairsp]14). In
regard to safety outcomes, patients experienced the following minor
adverse events including pain (n[hairsp]=[hairsp]7), numbness
(n[hairsp]=[hairsp]1), vertigo (n[hairsp]=[hairsp]3), swelling
(n[hairsp]=[hairsp]3), tension implant site (n[hairsp]=[hairsp]1),
warmth at the SP site (n[hairsp]=[hairsp]3), headache
(n[hairsp]=[hairsp]3), hematoma/bleeding (n[hairsp]=[hairsp]2).\147\
One participant developed an implant-site infection three days after
implantation, which subsequently developed into skin necrosis and
dehiscence. The implant had to be removed 55 days after implantation.
---------------------------------------------------------------------------
\147\ Mylanos, E.A.M., Hua, H., Arndt, S. 2020. Multicenter
clinical investigation of a new active osseointegrated steady-state
implant system. Otol Neurotol 41: 1249-1257.
---------------------------------------------------------------------------
In the CY 2022 OPPS/ASC proposed rule, we expressed concern that
the applicant did not submit studies that involved the use of the
Osia[supreg] 2 system to demonstrate substantial clinical improvement
of the device. The applicant submitted one study that investigated the
Osia[supreg] system that utilizes an earlier model of the device. We
explained in the proposed rule that we were concerned that the evidence
of substantial clinical improvement submitted by the applicant did not
directly compare the Osia[supreg] 2 system to other currently available
treatments, namely percutaneous or passive, transcutaneous auditory
osseointegrated devices. Therefore, in the CY 2022 OPPS/ASC proposed
rule we explained that we were concerned that we are unable to
determine a substantial clinical improvement of the Osia 2 system as
compared to existing devices. We stated that we would be interested in
any additional studies that involve the use of the Osia[supreg] 2
system and compare the device to other currently available auditory
osseointegrated devices. We invited public comments in the CY 2022
OPPS/ASC proposed rule on whether the Osia[supreg] 2 system meets the
substantial clinical improvement criterion.
Comment: In response to our concerns about whether the Osia[supreg]
2 system meets the substantial clinical improvement criterion, one
commenter stated that head-to-head comparisons are not a requirement
for transitional pass-through status. The commenter added that because
the Osia[supreg] 2 System and its predecessor system are substantially
similar as determined by FDA, the clinical evidence for the predecessor
system applies equally to the Osia[supreg] 2 System. The commenter
asserted that the clinical evidence submitted by the applicant, as
described by CMS in the CY 2022 OPPS/ASC proposed rule, supports that
the Osia[supreg] 2 System is a substantial clinical improvement
compared to percutaneous systems.
Response: We thank the commenter for the information and have taken
it into consideration in our determination of whether the Osia[supreg]
2 System meets the substantial clinical improvement, discussed below.
Comment: The applicant submitted a comment in support of its
position that the Osia[supreg] 2 System meets the substantial clinical
improvement criterion. The applicant contended, based on the discussion
in the CY 2022 OPPS/ASC proposed rule, that CMS does not appear to be
concerned that there is insufficient evidence to conclude that active/
transcutaneous systems are a substantial clinical improvement over
passive/percutaneous systems. Rather, the applicant believes our
concerns relate to the fact that
[[Page 63606]]
evidence was submitted for Osia[supreg] 1 and not Osia[supreg] 2.\148\
---------------------------------------------------------------------------
\148\ 86 FR at 42,105.
---------------------------------------------------------------------------
In response to CMS' concerns, the applicant stated that first,
head-to-head trials are not a requirement for demonstrating substantial
clinical improvement for purposes of qualifying for transitional pass-
through device--status and would not be appropriate in this situation.
First, the applicant stated that enrolling patients in a head-to-head
trial in which the primary difference is expected to be adverse events
associated with one treatment arm is extremely challenging, and it is
unclear what additional data would be gained, particularly since the
nature and frequency of device-related complications between passive
percutaneous and transcutaneous devices is established and commonly
reported in the literature. Second, the applicant stated that clinical
studies involving the first Osia[supreg] device are applicable to the
Osia[supreg] 2 System because the devices are substantially equivalent
and only minor differences exist between the two versions of the
device. The applicant notes that the FDA 510(k) clearance for the
Osia[supreg] 2 system expressly noted clinical performance data did not
reveal significant differences in hearing performance between either
system and did not raise new issues of safety or effectiveness.
Next the applicant discussed two studies that involve the
Osia[supreg] 2 system. The first study reported the surgical and
audiological experience with the Osia 2 System based on a U.S.
nationwide controlled market release (CMR) conducted between December
9, 2019 and February 14, 2020 involving 23 surgeons who performed 44
operations on 43 recipients.\149\ The applicant noted that no device-
related complications were reported and five complications not
associated with the Osia[supreg] 2 system were reported that were all
successfully resolved. According to the applicant, the authors
concluded that the Osia[supreg] 2 system, ``. . . represents an
important advance in hearing implant technology. Utilizing innovative
digital piezoelectric stimulation, this active auditory osseointegrated
implant (OSI) delivers high-power output and improved high frequency
gain for optimizing speech perception while maintaining safety and
engendering high patient satisfaction.'' \150\
---------------------------------------------------------------------------
\149\ Goldstein MR, Bourn S, Jacob A. Early Osia[supreg] 2 bone
conduction hearing implant experience: Nationwide controlled-market
release data and single-center outcomes.
\150\ Ibid.
---------------------------------------------------------------------------
The second study is a systematic review that, according to the
applicant, provides evidence of substantial clinical improvement for
both the Osia[supreg] and Osia[supreg] 2 systems.\151\ According to the
applicant, the authors reported their findings from reviewing adverse
event reports associated with active transcutaneous bone conduction
implants (atBCls) in the Manufacturer and User Facility Device
Experience (MAUDE) database of FDA. According to the applicant, after
removing irrelevant reports and duplicates, 83 MDRs describing 91
adverse events (patient injuries and device malfunctions) were
analyzed, all of which occurred postoperatively. The applicant asserted
that the five most comment types of events, device malfunctions leading
to a lack of conduction or hearing (n=26, 29 percent), infections
(n=14, 15 percent), device malfunctions of intermittent or reduced
hearing (n=12, 13 percent), and pain and wound formation (n=9 or 10
percent), accounted for 77 percent of all events reported. The
applicant asserted that device malfunctions were predominantly
associated with BONEBRIDGE (93 percent of all device malfunctions
reported), while patient injuries such as infections were more commonly
reported for Osia[supreg] (67 percent of all reported injuries).
According to the applicant, the authors concluded that complications
observed with active transcutaneous BCI use are similar to those with
passive transcutaneous BCIs.\152\
---------------------------------------------------------------------------
\151\ Crowder HR, Bestourous DE, Reilly BK. Adverse events
associated with Bonebridge and Osia bone conduction implant devices.
Am J Otolaryngol. 2021 ;42(4):102968. doi:10.1016/
j.amjoto.2021.102968 PubMed ID: 33676070.
\152\ Ibid.
---------------------------------------------------------------------------
In regard to evidence submitted with their application, the
applicant stated commonly reported adverse events which include ear
inflammations, dizziness, and headache, are clearly not related to the
implantation. Based on reported events in a comparison between the
Osia[supreg] system \153\ and the Baha Connect System \154\ the
applicant asserted that it is clear that the Osia[supreg] System has
significantly lower rates of implantation-related adverse events than
the passive/percutaneous system.
---------------------------------------------------------------------------
\153\ Mylanus EAM et al. in the submission; Clinica/Trials.gov
Identifier: NCT03086135.
\154\ van Hoof M et al. 2020, PubMed JD: 32231633; Clinica/
Trials.gov Identifier: NCT01796236.
---------------------------------------------------------------------------
Response: We thank the applicant for their submission and the
additional information provided. Because of the overlap between
comments for the Osia[supreg] 2 system and BONEBRIDGE, we direct
readers to section (IV)(2)(b)(2)(2) of this final rule with comment
period.
We appreciate the commenters' responses on the Osia[supreg]2 system
application. We disagree with the applicant's comment that commonly
reported adverse events which include ear inflammations, dizziness, and
headache, are clearly not related to the implantation. We note, the
term ``dizziness'' can be used to explain a variety of symptoms that
can include weakness, lightheadedness, unsteadiness and vertigo, and an
argument against causality may be reasonable. ``Headache'', however, is
pain affecting the head or face. To dismiss a possible connection
between the skull implantation procedure and a complaint of post-
procedure headache does not seem reasonable.
While new evidence was submitted by the applicant which attempts to
address substantial clinical improvement for the Osia[supreg] 2 system,
we are unable to conclude that the device meets the substantial
clinical improvement criterion. Specifically, we note that the results
of a meta-analysis are informative, however without controlling for the
differences across studies (for example, study design, sampling
technique, etc.) we are unable to determine if the treatment effects
seen are due to the Osia[supreg] 2 system or due to differences in
study design. In regard to commenter's suggestion that a head-to-head
analysis not being required for an assessment of substantial clinical
improvement, we agree in part. While it may be the case that a direct
head-to-head comparison may not always be feasible or appropriate, we
acknowledge that this is the ideal manner in which to address
comparisons between one technology and another. For example, CMS
utilized meta-analyses and historical controls as evidence of
substantial clinical improvement when robust critical efforts have been
made to account for variations in study design (i.e., confounding) in
the former and comprehensive reviews to establish the validity of the
latter. In regard to the second study \155\ discussed in the
applicant's comment, we note that the small sample size of 43
recipients and 44 procedures may not be generalizable to a larger
Medicare beneficiary population. Therefore, we are unable to determine
a substantial clinical
[[Page 63607]]
improvement of the Osia[supreg] 2 system as compared to existing
devices.
---------------------------------------------------------------------------
\155\ Goldstein MR, Bourn S, Jacob A. Early Osia[supreg] 2 bone
conduction hearing implant experience: Nationwide controlled-market
release data and single-center outcomes.
---------------------------------------------------------------------------
After consideration of the public comments and additional
information we have received, we are not approving the Osia[supreg] 2
system for transitional pass-through payment status in CY 2022 because
the product does not meet the substantial clinical improvement
criterion. Because we have determined that the Osia[supreg] 2 system
does not meet the substantial clinical improvement criterion, we have
not evaluated the cost criterion.
(5) Pure-Vu[supreg] System
Motus GI submitted an application for a new device category for
transitional pass-through payment status for the Pure-Vu[supreg] System
(Pure-Vu[supreg]) for CY 2022. The applicant asserted that the Pure-
Vu[supreg] System helps to avoid aborted and delayed colonoscopy
procedures due to poor visualization of the colon mucosa by creating a
unique High Intensity, Pulsed Vortex Irrigation Jet that consists of a
mixture of air and water to break-up fecal matter, blood clots, and
other debris, and scrub the walls of the colon while simultaneously
removing the debris through two suction channels. The applicant stated
that the suction channels have a sensor to detect the formation of a
clog in the channels, triggering the system to automatically purge and
then revert to suction mode once the channel is clear. According to the
applicant, this combination of the agitation of the fluid in the colon
via the pulsed vortex irrigation and simultaneous removal of the debris
allows the physician to visualize the colon and achieve a successful
colonoscopy or other advanced procedure through the colonoscope even if
the patient is not properly prepped and has debris either blocking the
ability to navigate the colon or covering the colon wall obscuring the
mucosa and any pathology that may be present. The applicant asserted
that the constant volume suction pumps do not cause the colon to
collapse, which allows the physician to continue to navigate the colon
while cleansing and avoids the need to constantly insufflate the colon,
which may be required with other colonoscopy irrigation systems.
The applicant stated that the Pure-Vu[supreg] System is comprised
of a workstation that controls the function of the system, a disposable
oversleeve that is mounted on a colonoscope and inserted into the
patient, and a disposable connector with tubing (umbilical tubing with
main connector) that provides the interface between the workstation,
the oversleeve, and off the shelf waste containers.
The applicant explained that the workstation has two main
functions: Cleansing via irrigation and evacuation, and acting as the
user interface of the system. The applicant explained that the
irrigation into the colon is achieved by an electrical pump that
supplies pressurized gas (air) and a peristaltic pump that supplies the
liquid (water or saline). According to the applicant, the pressurized
gas and liquid flow through the ``main connector'' and are mixed upon
entry into the umbilical tubing that connects to the oversleeve. The
applicant explained that the gas pressure and flow are controlled via
regulators and the flow is adjusted up or down depending on the
cleansing mode selected. The applicant stated that a foot pedal
connected to the user interface activates the main functions of the
system so that the user's hands are free to perform the colonoscope
procedure in a standard fashion.
The applicant stated that the evacuation mode (also referred to as
suction) removes fecal matter and fluids out of the colon. The
applicant noted that the evacuation function is active during cleansing
so that fluid is inserted and removed from the colon simultaneously.
The applicant explained that the evacuation pumps are designed in a
manner that prevents the colon from collapsing when suctioning, which
facilitates the ability to simultaneously irrigate and evacuate the
colon. According to the applicant, during evacuation, the system
continuously monitors the pressure in the evacuation channels of the
oversleeve and if the pressure drops below pre-set limits the pumps
will automatically reverse the flow. The applicant explained that the
clog sensor triggers the system to automatically purge the material out
of the channel and back into the colon where it can be further
emulsified by the Pulsed Vortex Irrigation Jet, and then automatically
reverts back into evacuation mode once the channel is cleared. The
applicant stated that the evacuation (suction) that drains fecal matter
and fluids out of the colon is generated by peristaltic pumps that can
rotate in both directions, either to evacuate fluids and fecal matter
from the colon through the evacuation tubes and into a waste container,
or while in the reverse direction, to purge the evacuation tubes. The
applicant claimed the suction created by this type of pump creates a
constant volume draw of material from the colon and therefore prevents
the colon from collapsing rapidly. According to the applicant, purging
of evacuation tubes may be activated in two ways: The purging cycle is
automatically activated when low pressure is noted by the evacuation-
line sensor (it is also activated for the first 0.5 seconds when
evacuation is activated to make sure the line is clear from the start);
or a manual purge may be activated by the user by pushing the ``manual
purge'' button on the foot pedal. The applicant claimed the pressure-
sensing channel is kept patent by using an air perfusion mechanism
where an electrical pump is used to perfuse air through the main
connector and into the oversleeve, while the sensor located in the
workstation calculates the pressure via sensing of the channel.
The applicant explained the Pure-Vu[supreg] System is loaded over a
colonoscope and that the colonoscope with the Pure-Vu[supreg]
Oversleeve is advanced through the colon in the same manner as a
standard colonoscopy. The applicant stated that the body of the
oversleeve consists of inner and outer sleeves with tubes intended for
providing fluid path for the cleansing irrigation (2X), the evacuation
of fluids (2X), the evacuation sensor (1X) and that the flexible head
is at the distal end of the oversleeve and is designed to align with
the colonoscope's distal end in a consistent orientation. The applicant
explained that the distal cleansing and evacuation head contains the
irrigation ports, evacuation openings, and a sensing port. According to
the applicant, the system gives the physician the control to cleanse
the colon as needed based on visual feedback from the colonoscope to
make sure they have an unobstructed view of the colon mucosa to detect
and treat any pathology. The applicant noted that since the Pure-
Vu[supreg] System does not interfere with the working channel of the
colonoscope, the physician is able to perform all diagnostic or
therapeutic interventions in a standard fashion with an unobstructed
field of view.
With respect to the newness criterion at Sec. 419.66(b)(1), the
Pure-Vu[supreg] System first received FDA 510(k) clearance on September
22, 2016 under 510(k) number K60015. Per the applicant, this initial
device was very cumbersome to set up and required direct support from
the company and therefore was not viable for a small company with
limited resources to market the device. The applicant noted that the
initial device could have been sold starting on January 27, 2017 when
the first device came off the manufacturing line. Per the applicant,
the device was allocated for clinical evaluations but 10 institutions
throughout the country did purchase the device outside of any true
clinical study, mostly based on the fact that
[[Page 63608]]
physicians wanted to try the product prior to committing to a clinical
trial. The applicant further noted that minor modifications were made
to the Pure-Vu[supreg] System in additional 510(k) clearances dated
December 12, 2017 and June 21, 2018. The current marketed Pure-
Vu[supreg] System was then granted 510(k) clearance on June 6, 2019
under 510(k) number K191220. Per the applicant, this clearance changed
the entire set-up of the device, redesigned the user interface, and
reduced the size, among other changes. According to the applicant, this
updated version was commercially available as of September 19, 2019.
Comment: In response to CMS' summary, the applicant stated that the
Pure-Vu[supreg] System Generation 1 (Gen 1) received FDA 510(k)
clearance in September 2016. The applicant added that the Gen 1 version
of the system was used to gather clinical data using disposables sold
at a discounted rate to one institution and five institutions in 2017
and 2018, respectively. According to the applicant, after receiving
feedback from providers concerning the Gen 1 system, the company
decided not to make the Gen 1 product available to the market.
According to the applicant, the Generation 2 (Gen 2) version of the
Pure-Vu[supreg] System obtained FDA 510(k) clearance in June 2019. The
applicant clarified that no application for the Gen 1 device was
submitted for pass-through payment in the outpatient setting and
asserted that since only a few institutions purchased the device, the
cost burden of the Gen 1 system is not factored into the current
marketplace. The applicant stated that the Gen 2 version is the product
for which the applicant is seeking transitional device pass-through
status.
Response: We appreciate the commenter's input and agree that the
Pure-Vu[supreg] System meets the newness criterion because we received
its device pass-through application on September 1, 2020, which is
within 3 years of the June 21, 2018, the date of FDA PMA.
With respect to the eligibility criterion at Sec. 419.66(b)(3),
according to the applicant, Pure-Vu[supreg] is integral to the service
provided, is used for one patient only, comes in contact with human
tissue, and is surgically inserted temporarily. The applicant also
claimed that Pure-Vu[supreg] meets the device eligibility requirements
of Sec. 419.66(b)(4) because it is not an instrument, apparatus,
implement, or item for which depreciation and financing expenses are
recovered, and it is not a supply or material furnished incident to a
service. We invited public comments on whether Pure-Vu[supreg] meets
the eligibility criteria at Sec. 419.66(b).
We did not receive any comments on whether Pure-Vu[supreg] meets
the eligibility criteria at Sec. 419.66(b)(3) or Sec. 419.66(b)(4).
We agree with the applicant that Pure-Vu[supreg] device meets the
criteria of Sec. 419.66(b).
The criteria for establishing new device categories are specified
at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1),
provides that CMS determines that a device to be included in the
category is not appropriately described by any of the existing
categories or by any category previously in effect, and was not being
paid for as an outpatient service as of December 31, 1996. We stated in
the CY 2022 OPPS/ASC proposed rule that we have not identified an
existing pass-through payment category that describes Pure-Vu[supreg].
We invited public comment on whether Pure-Vu[supreg] meets the device
category criterion.
We did not receive any comments on whether Pure-Vu[supreg] meets
the eligibility criteria at Sec. 419.66(c)(1). We continue to believe
that Pure-Vu[supreg] device meets the criteria of Sec. 419.66(c)(1)
because we have not identified an existing pass-through payment
category that describes Pure-Vu[supreg].
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. The applicant stated that Pure-
Vu[supreg] represents a substantial clinical improvement over existing
technologies. With respect to this criterion, the applicant submitted
studies that examined the impact of Pure-Vu[supreg] on endoscopic
hemostasis outcomes, rebleeding occurrence, and mortality. We note that
the applicant has applied for and was denied the New Technology Add-on
Payment in the FY 2022 IPPS/LTCH proposed rule (86 FR 25299 through
25304).
According to the applicant, the Pure-Vu[supreg] System offers the
ability to achieve rapid beneficial resolution of the disease process
treatment by achieving rapid and full visualization of the colon, which
will improve diagnostic yield and the effectiveness of treatment of
diseases of the bowel. The applicant claimed that Pure-Vu[supreg] is
indicated for use in emergent issues such as acute lower
gastrointestinal (GI) bleeding, unknown abdominal pain, foreign body
removal, chronic disease management, and preventive medicine such as
screening and surveillance. The applicant states these procedures are
typically performed using a colonoscope to visualize the colon and
provide a conduit to deliver therapeutic treatments. According to the
applicant, the current standard of care requires the colon to be
cleansed to ensure the success of any procedure. The applicant asserts
that in the case where pre-procedural preparations are not adequate to
achieve proper visualization, current technology provides limited
ability to remove debris from the colon during the procedure to
facilitate the process. The applicant states that regardless of
indication, the bowel preparation remains the constant across patients
who may have a wide range of comorbidities which may limit patient
tolerability. According to the applicant the consumption of a purgative
and the dietary restriction to be on clear liquids for approximately 24
hours can be problematic for the diabetic and elderly populations.\156\
---------------------------------------------------------------------------
\156\ Parra-Blanco A, Ruiz A, Alvarez-Lobos M, Amoros A, Gana
JC, Ibanez P, et al. Achieving the best bowel preparation for
colonoscopy. World J Gastroenterol. 2014;20(47):17709- 26.
---------------------------------------------------------------------------
In support of its application, the applicant submitted three
outpatient clinical studies to demonstrate the Pure-Vu[supreg] System's
capability to convert patients to adequate preparation where
preparation was previously inadequate and the visualization was poor
based on the Boston Bowel Preparation Scale (BBPS). In the first study,
Perez J., et al. conducted an outpatient prospective pilot study using
the Pure-Vu[supreg] System.\157\ The study observed 50 patients with
poorly prepared colons undergoing colonoscopy at two outpatient
clinical sites in Spain and Israel, respectively. The applicant claimed
study patients underwent a reduced bowel preparation consisting of the
following: No dried fruits, seeds, or nuts starting 2 days before the
colonoscopy, a clear liquid diet starting 18 to 24 hours before
colonoscopy, and a split dose of 20mg oral bisacodyl. The study found
the number of patients with
[[Page 63609]]
an adequate cleansing level (BBPS>=2 in each colon segment) increased
significantly from 31 percent (15/49) prior to use of the Pure-Vu
System (baseline) to 98 percent (48/49) after use of the Pure-
Vu[supreg] System (P < 0.001), with no serious adverse events reported.
---------------------------------------------------------------------------
\157\ Perez Jimenez J, Diego Bermudez L, Gralnek IM, Martin
Herrera L, Libes M. An Intraprocedural Endoscopic Cleansing Device
for Achieving Adequate Colon Preparation in Poorly Prepped Patients.
J Clin Gastroenterol. 2019;53(7):530-4.
---------------------------------------------------------------------------
In the second study provided by the applicant, van Keulen, et al.
also conducted a single-arm, prospective study on 47 patients with a
median age of 61 years in the outpatient setting in the Netherlands
using the Pure-Vu[supreg] System.\158\ Within the study, cecal
intubation was achieved in 46/47 patients. This multicenter feasibility
study found that the Pure-Vu[supreg] System significantly improved the
proportion of patients with adequate bowel cleansing from 19.1 percent
prior to the use of the Pure-Vu[supreg] System to 97.9 percent after
its use (P < 0.001) and median BBPS score (from 3.0 [IQR 0.0-5.0] to
9.0 [IQR 8.0-9.0]).
---------------------------------------------------------------------------
\158\ Van Keulen KE, Neumann H, Schattenberg JM, Van Esch AAJ,
Kievit W, Spaander MCW, Siersema PD. A novel device for
intracolonoscopy cleansing of inadequately prepared colonoscopy
patients: A feasibility study. Endoscopy. 2019 Jan;51(1):85-92. doi:
10.1055/a-0632-1927. Epub 2018 Jul 11.
---------------------------------------------------------------------------
In the third study provided by the applicant that directly
evaluated the Pure-Vu[supreg] System in a clinical setting, Bertiger
G., et al. performed a United States-based single center, prospective,
outpatient study investigating regimes of reduced outpatient bowel
preparations, which included low doses of over-the-counter laxatives,
and eliminating the typical 24 hour clear liquid diet restriction,
which was replaced by a low residue diet the day before the
procedure.\159\ In this study, 46 of a possible 49 patients received a
colonoscopy, 8 of which took the over-the-counter laxative (``MiraLAX
arm''), 21 patients ingested two doses of 7.5oz Magnesium Citrate (MgC)
each taken with 19.5oz of clear liquid (``Mag Citrate 15oz arm''), and
18 patients ingested 2 doses of 5oz MgC taken with 16oz of clear liquid
(``Mag Citrate 10oz arm''). Of the 46 subjects, 59 percent were males
and there was a mean age of 619.48 years. The study found
that each of the 3 study arms revealed significant differences in BBPS
score between the baseline preparation and post-cleansing via Pure-
Vu[supreg]. All the preparation regimens resulted in inadequately
prepped colons. Comparing the mean BBPS rating for both pre- and post-
Pure-Vu[supreg] use, the MiraLAX arm was inferior (P < 0.05) to both
Mag Citrate arms. For the MiraLAX arm, the mean BBPS Score improved
from 1.50 to 8.63. For the Mag Citrate 15oz arm, the mean BBPS score
improved from 3.62 to 8.95. For the Mag Citrate 10oz arm, the mean BBPS
Score improved from 4.76 to 9.0.
---------------------------------------------------------------------------
\159\ Bertiger, Gerald MD Optimizing the Preparation Regimen
Prior to Colonoscopy Procedure With the Pure-Vu[supreg] System,
American Journal of Gastroenterology: October 2018--Volume 113--
Issue--p S119-S120.
---------------------------------------------------------------------------
The applicant also provided a self-sponsored, U.S.-based,
multicenter, prospective, single arm study in the inpatient setting,
analyzing 94 patients, 65 of which (68 percent) had a GI bleed.\160\ Of
the 94 patients (41 percent females/59 percent males), the mean age was
62 years. According to the applicant, the study's primary endpoint was
the rate of improved bowel cleansing level from baseline to after use
of the Pure-Vu[supreg] System per colon segment using the BBPS. The
BBPS score was recorded for each colorectal segment (left colon,
transverse colon, and right colon segments) both prior to (baseline)
and after colon cleansing with the Pure-Vu[supreg] System. An adequate
cleansing level was a priori defined as a BBPS >=2 in all evaluated
colon segments. The study found that in 79 of the 94 patients (84
percent), the physician was able to successfully diagnose or rule out a
GI bleed in the colon per the patients' colonoscopy indication using
only the Pure-Vu[supreg] System. The analysis showed statistically
significant visualization improvement in each colon segment after Pure-
Vu[supreg] use with a mean BBPS score in the descending colon, sigmoid,
and rectum of 1.74 pre-Pure-Vu[supreg] use and 2.89 post-Pure-
Vu[supreg] use (P < 0.001); in the transverse colon of 1.74 pre-Pure-
Vu[supreg] use and 2.91 post Pure-Vu[supreg] use (P < 0.001); and the
ascending colon and cecum of 1.50 pre-Pure-Vu[supreg] use and 2.86 post
Pure-Vu[supreg] use (P < 0.001). The study found only 2 percent of
cases where the diagnosis could not be achieved due to inadequate
preparation. Overall, the 84 (89.4 percent) patients that received the
Pure-Vu[supreg] System within the study improved BBPS scores from 38
percent (95 percent CI 28, 49) to 96 percent (95 percent CI 90, 99) in
segments evaluated. The study noted one procedure related perforation
which required surgical repair, and the patient was discharged 48 hours
post operatively and recovered fully.
---------------------------------------------------------------------------
\160\ Helmut Neumann ML, Tim Zimmermann, Gabriel Lang, Jason B.
Samarasena, Seth A. Gross, Bhaumik Brahmbhatt, Haleh Pazwash,
Vladimir Kushnir. Evaluation of bowel cleansing efficacy in
hospitalized patient population using the pure-vu system.
Gastrointestinal Endoscopy. 2019;89(6).
---------------------------------------------------------------------------
In addition to the previously discussed studies, the applicant also
submitted two case studies to highlight the various clinical
presentations of lower gastrointestinal bleed (LGIB) with the use of
the Pure-Vu[supreg] System. In the first case, the applicant described
a patient with a history of scleroderma and chronic constipation who
was referred for a surveillance colonoscopy after a prior endoscopic
mucosal resection due to a large polyp. The applicant states this was
the patient's third colonoscopy in twelve months due to a history of
poor preparation in the prior exams. Despite an aggressive prep regime,
the applicant states the patient still had solid stool and debris
throughout the colon. The applicant states the Pure-Vu[supreg] system
was used extensively and the physician was able to fully cleanse the
colon during which the physician was able to uncover a poorly defined
over 1 cm sessile serrated polyp that could not be appreciated before
cleansing with Pure-Vu[supreg]. The applicant states a successful
polypectomy was performed.
In the second case, the applicant described a patient presenting
with hemorrhagic shock and acute kidney injury six days after a
colonoscopy where nine polyps were removed, including two polyps
greater than 2 cm. The applicant states angiographic control of the
bleeding was not considered because of the patient's acute kidney
injury with a rising creatinine. According to the applicant, the
physician elected to use Pure-Vu[supreg] to immediately exam the
patient without any preparation doing a bedside colonoscopy in the ICU.
The applicant states, the physician was able to cleanse the colon,
locate the source of the bleed and create hemostasis by placing two
clips on the bleed. According to the applicant, the entire colon was
visualized to confirm there were no other sources of bleeding, the
physician was able to downgrade the patient out of the ICU that same
day, and the patient was discharged from the hospital the following
day.
The applicant concludes that based on the provided evidence, Pure-
Vu[supreg] has the ability to improve adenoma detection rates which can
reduce the rate of colorectal cancer (CRC) and diagnose and treat
emergent patients in a more expeditious fashion by removing the need to
have successful pre-procedural preparation that can take time and be
very burdensome to the most needy and fragile patients. According to
the applicant, Pure-Vu[supreg] can minimize the number of aborted and
early repeat colonoscopies that carry inherent risks and add
unnecessary costs to the healthcare system.
Based on the evidence submitted with the application, we explained
in the CY 2022 OPPS/ASC proposed rule that we have the following
observations. While
[[Page 63610]]
the studies provided in support of the Pure-Vu[supreg] System measure
improvement of bowel preparation using the BBPS, the applicant did not
provide data indicating that the improved BBPS directly leads to
improved clinical outcomes (for example, reduction of blood loss in
LGIB or reduction of missed polyps) based on use of the Pure-Vu[supreg]
System. Additionally, we noted that the applicant has not provided any
studies comparing the efficacy of the Pure-Vu[supreg] System to other
existing methods or products for irrigation in support of its claims
that the product is superior at removing debris from the colon while
simultaneously preventing the colon from collapsing, allowing use of
the working channel, or improving outcomes. Furthermore, we noted that
many of the provided studies were based on small sample sizes, which
may affect the quality and reliability of the data provided in support
of the technology.
In addition, we noted in the CY 2022 OPPS/ASC proposed rule that it
is unclear whether this device would have less utility in the
outpatient setting as compared to the inpatient setting, given that
patients will typically have time to adequately prepare for scheduled
outpatient procedures. We further noted that this device may not be
broadly applicable in the outpatient setting and are solicited comment
on situations in which this device would have a substantial clinical
benefit for patients or subpopulations of patients. For instance, in
the outpatient setting, we explained that we are not certain that it
would be appropriate to use this device in the case of a patient with a
poorly prepared bowel as opposed to simply rescheduling the
appointment.
Lastly, we noted that the Helmut et al. study noted one procedure-
related perforation which required surgical repair and we invited
public comments regarding the concern of procedure-related
perforation.\161\ Based upon the evidence presented, we invited public
comments on whether the Pure-Vu[supreg] meets the substantial clinical
improvement criterion.
---------------------------------------------------------------------------
\161\ Helmut Neumann ML, Tim Zimmermann, Gabriel Lang, Jason B.
Samarasena, Seth A. Gross, Bhaumik Brahmbhatt, Haleh Pazwash,
Vladimir Kushnir. EVALUATION OF BOWEL CLEANSING EFFICACY IN
HOSPITALIZED PATIENT POPULATION USING THE PURE-VU SYSTEM.
Gastrointestinal Endoscopy. 2019;89(6).
---------------------------------------------------------------------------
Comment: One commenter stated that Pure-Vu[supreg] is a unique
device with the ability to potentially change a patient's course of
care due to its ability to create high-quality colonoscopies in
patients that are unable to fully prep for an exam. The commenter
stated that they want to make sure that patients who suffer from
functional GI and motility disorders which affect the lower GI tract
can get the surveillance and care that they need and Pure-Vu[supreg]
can directly impact this. The commenter asserted there is a direct
correlation between being able to provide a high-quality colonoscopy
where the more the colon mucosa can be observed and the ability to
better diagnose patients.
Response: We appreciate the information provided by the commenter
and have taken this into consideration in making our final
determination, discussed below.
Comment: In support of the substantial clinical improvement
criterion, the applicant submitted a comment. The applicant responded
to CMS' concerns in the proposed rule related to the Boston Bowel
Preparation Score (BBPS) and stated that this is a measure of the
amount of the colon mucosa that can be visualized and is independent of
a particular technology or method used to clear fecal matter or debris.
The applicant asserted that if significant areas of the colon tissue
cannot be visualized due to retained debris, the endoscopist will miss
any pathology covered. The applicant stated that this is especially
critical as sessile serrated adenomas are pre-cancerous flat lesions
that do not protrude from the colon wall making them impossible to
detect in the presence of debris. According to the applicant, multiple
publications validating the BBPS as a reliable measurement to predict
adenoma and/or polyps have been published, for example: The polyp
detection percentage in inadequate (BBPS 0, 1) and adequate (BBPS 2, 3)
colon prep were 6 percent and 27 percent (p < 0.0001), respectively
and,\162\ the polyp detection rate was 40 percent for patients with a
BBPS score >5 compared to 24 percent for patients with a BBPS score of
<5 (p < 0.02) with an increased percentage of recommendation for repeat
procedures in the later group.\163\ The applicant further described the
Aronchick scale and the Ottawa score which are other validated methods
available to assess colon visualization.\164\ According to the
applicant, these cited studies were based on current standard of care
for performing colonoscopy. The applicant stated that despite use of
the current standard of irrigation and suction through the working
channel of a colonoscope, these patients continued to have inadequate
bowel preparation over 7 percent. The applicant asserted that to the
extent there is a reduction in the number of patients that have an
inadequate/poor preparation, as noted by a low BBPS score, the
endoscopist will improve the overall adenoma detection rate.
---------------------------------------------------------------------------
\162\ Kluge MA, Williams JL, Wu CK, et al. Inadequate Boston
Bowel Preparation Scale scores predict the risk of missed neoplasia
on the next colonoscopy. Gastrointest Endosc. 2018 Mar;87(3):744-
751.
\163\ Lai EJ, Calderwood AH, Doros G, et al. The Boston bowel
preparation scale: a valid and reliable instrument for colonoscopy-
oriented research. Gastrointest Endosc. 2009 Mar;69(3 Pt 2):620-5.
\164\ Hong SN, Sung IK, Kim JH, et al. The Effect of the Bowel
Preparation Status on the Risk of Missing Polyp and Adenoma during
Screening Colonoscopy: A Tandem Colonoscopic Study. Clin Endosc.
2012 Nov;45(4):404-11.
---------------------------------------------------------------------------
According to the applicant, there is a clear relationship between
adenoma detection rates to the risk of receiving a diagnosis of an
interval cancer as evidenced in an evaluation of 314,872 patients.\165\
Citing the article, the applicant states that, ``The risk of interval
cancer decreased approximately linearly with increasing adenoma
detection rates, without evidence of a threshold effect within the
observed range of rates. With adenoma detection rate modeled as a
continuous variable, each 1.0 percent increase in the rate predicted a
3.0 percent decrease in the risk of interval cancer (hazard ration,
0.97;95 percent CI, 0.96 to 0.98).'' \166\ According to the applicant,
this study shows the clinical benefit to the patient population with
low adenoma detection rates due to inadequate preparation, especially
in high risk colorectal cancer patients who present with GI bleeding or
a positive screening test, may be significant.
---------------------------------------------------------------------------
\165\ Corley DA, Jensen CD, Marks AR, et al. Adenoma detection
rate and risk of colorectal cancer and death. N Engl J Med. 2014 Apr
3;370(14):1298-1306.
\166\ Ibid.
---------------------------------------------------------------------------
The applicant next responded to CMS' concerns about the sample
sizes from the studies used in support of Pure-Vu[supreg]. In response,
the applicant performed a meta-analysis of the four studies which were
performed at different centers with different investigators to minimize
the bias of any physician or institution. According to the applicant,
for outpatient studies, the overall rate of adequate colonoscopy
preparation was 99.4 percent compared to 25.3 percent for baseline; and
the overall difference was 74.1 percent (95 percent CI = 60.3 percent,
87.8 percent; p < 0.0001); the inpatient study had a lower overall
success rate in the Pure-Vu[supreg] System (86.2 percent) but the
impact of the Pure-Vu[supreg] was still dramatic with the overall rate
of adequate colonoscopy preparation of 95.0 percent compared to 28.2
percent
[[Page 63611]]
for baseline; and the overall difference was 66.8 percent (95 percent
CI = 55.5 percent, 78.0 percent; p < 0.0001).
Next the applicant responded to CMS' concern that the benefit of
Pure-Vu[supreg] in the outpatient setting may be limited because
patients have more time to prepare for the colonoscopy. According to
the applicant, there are many patients that the physician may pre-
procedurally deem ready for the examination but upon insertion of the
colonoscope the patient is found to be inadequately prepared to receive
a quality examination. The applicant stated that, rather than terminate
the procedure at this point, an endoscopist can remove the colonoscope
and load the Pure-Vu[supreg] and complete the examination. The
applicant added that in the studies used in the meta-analysis, Pure-
Vu[supreg] was able to convert inadequate preparation to adequate even
in patients with a BBPS of 0 in one or more segments of the colon while
the patient was on the table and under sedation, thereby avoiding
another procedure. The applicant asserted that in addition to the risks
associated with a repeat procedure, approximately 54 percent of
patients do not come back for the repeat examination which places these
patients at a higher risk for CRC.\167\ The applicant added that since
history of inadequate preparation is one of the main indicators of poor
preparation along with advanced age, those with motility issues,
patients allergic to the PEG (key ingredient in the purgatives) and
those with comorbidities there is no guarantee the follow-up
colonoscopy will be successful.
---------------------------------------------------------------------------
\167\ Murphy CJ, Jewel Samadder N, Cox K, et al. Outcomes of
Next-Day Versus Non-next-Day Colonoscopy After an Initial Inadequate
Bowel Preparation. Dig Dis Sci. 2016 Jan;61(1):46-52.
---------------------------------------------------------------------------
Next the applicant addressed CMS' concern that there was no data to
support that Pure-Vu[supreg] minimizes the colon collapsing during
suctioning of debris while allowing use of the working channel of the
scope. The applicant asserted that the provision of a pulsed mixture of
air and fluid to break up and facilitate removal of adherent films of
fecal matter from the mucosal lining of the colon, at a much higher
energy level than irrigation through a scope, allows the endoscopist to
simultaneously suction the debris, which is not possible through a
scope with only one working channel. The applicant stated, the
simultaneous action of pumping water and air into the colon while
suctioning out debris inherently reduces the likelihood that the colon
will collapse.
Lastly, in response to CMS' concern related to one procedure-
related perforation, the applicant stated that this study focused on
the inpatient population which is known to be at higher risk for
perforation than the outpatient population.\168\ The applicant stated
that this patient was discharged 48 hours post operatively and fully
recovered with no additional clinical sequelae. The applicant asserted
that inpatient cases undergoing colonoscopy are a high risk for
perforation with a rate of approximately 1 in 500, which is more than
two times higher than the outpatient population.\169\ The applicant
stated that since the Helmut paper they have developed the Gen 2 Pure-
Vu[supreg] and have received no adverse reports in the last 18 months
even with increased utilization across multiple institutions.
---------------------------------------------------------------------------
\168\ Helmut Neumann ML, Tim Zimmermann, Gabriel Lang, Jason B.
Samarasena, Seth A. Gross, Bhaumik Brahmbhatt, Haleh Pazwash,
Vladimir Kushnir. EVALUATION OF BOWEL CLEANSING EFFICACY IN
HOSPITALIZED PATIENT POPULATION USING THE PURE-VU SYSTEM.
Gastrointestinal Endoscopy. 2019;89(6).
\169\ Gatto NM, Frucht H, Sundararajan V, et al. Risk of
perforation after colonoscopy and sigmoidoscopy: a population-based
study. J Natl Cancer Inst. 2003 Feb 5;95(3):230-6.
---------------------------------------------------------------------------
Response: We appreciate the comment in support of the clinical
benefits of the Pure-Vu[supreg] system. As we stated in the FY 2022
IPPS/LTCH final rule (86 FR 45056), we continue to have concerns
regarding the substantial clinical improvement criterion. In response
to commenters' assertion that there is a direct correlation to being
able to provide high-quality colonoscopy where the more the colon
mucosa can be observed and the ability to better diagnose patients, we
agree but are aware that correlation is not causation. While these data
are correlated, without data testing this relationship (for example,
the Pure-Vu[supreg] system and patient outcomes such as adenoma
detection rates), we cannot be certain this relationship is true and
not spurious or mediated by other factors. We note the further input
provided by the applicant concerning the validity of the BBPS and agree
that this is likely a well validated scoring tool. However, we remain
concerned that the studies provided in support of the Pure-Vu[supreg]
System measure improvement of bowel preparation using the BBPS but do
not provide data indicating that the improved BBPS directly leads to
improved clinical outcomes. In addition, the studies did not
demonstrate outcomes in the emergent situations the Pure-Vu[supreg]
System is intended to address. While an additional study provided by
the applicant in their comment indicated a general link between
improved BBPS and advanced adenoma detection rates, we note that the
study occurred in patients undergoing screening colonoscopy, and did
not include the use of the Pure-Vu[supreg] system. We also remain
concerned about the lack of studies comparing the Pure-Vu[supreg]
System to other existing methods or products for irrigation in support
of its claims that the product is superior at removing debris from the
colon while simultaneously preventing the colon from collapsing,
allowing use of the working channel, or improving outcomes.
After consideration of the public comments we received and our
review of the device pass-through application, we are not approving the
Pure-Vu[supreg] system for transitional pass-through payment status in
CY 2022 because the product does not meet the substantial clinical
improvement criterion. Because we have determined that the Pure-
Vu[supreg] system does not meet the substantial clinical improvement
criterion, we are not evaluating whether the device meets the cost
criterion.
(6) XenoscopeTM
Xenocor Inc. submitted an application for a new device category for
transitional pass-through payment status for the Articulating Xenoscope
Laparoscope (hereinafter referred to as the XenoscopeTM) by
the March 2021 quarterly deadline for CY 2022. The applicant described
the XenoscopeTM as a disposable laparoscope which consists
of a high-definition camera chip on the tip of a composite shaft,
paired with led lights with a handle comprised of a clamshell design
and made with molded plastic. The applicant stated that the
XenoscopeTM provides visualization in the abdominal and
thoracic cavities through small, minimally invasive incisions for
diagnostic and therapeutic laparoscopic procedures in a similar fashion
to established, reusable versions of laparoscopes. It is paired with an
image processing unit, the Xenobox, that can plug into any HD monitor
to display anatomy in the abdomen, pelvis or chest. The Xenobox uses
pre-installed firmware that is upgradable.
The applicant claimed that the XenoscopeTM is the first
disposable laparoscope. The applicant also claimed that the use of the
XenoscopeTM reduces the number of cords in the operating
room, eliminates intraoperative fogging and associated image compromise
and eliminates up-front capital expenditures associated with reusable
laparoscopes.
With respect to the newness criterion, the XenoscopeTM
received FDA 510(k) clearance on January 27, 2020, based on
[[Page 63612]]
a determination of substantial equivalence to a legally marketed
predicate device. The XenoscopeTM is indicated for use in
diagnostic and therapeutic procedures for endoscopy and endoscopic
surgery within the thoracic and peritoneal cavities including the
female reproductive organs. We received the application for a new
device category for transitional pass-through payment status for the
XenoscopeTM on August 6, 2020, which is within 3 years of
the date of the initial FDA marketing authorization. We invited public
comments in the CY 2022 OPPS/ASC proposed rule on whether the
XenoscopeTM meets the newness criterion.
We did not receive any comments with respect to the newness
criterion.
We agree with the applicant that the XenoscopeTM meets
the newness criterion because we received its device pass-through
application on August 6, 2020, which is within 3 years of January 27,
2020, the date of FDA 510(k) clearance.
With respect to the eligibility criterion at Sec. 419.66(b)(3),
according to the applicant, the use of the XenoscopeTM is
integral to the service, is used for one patient only, comes in contact
with human skin, and is surgically implanted or inserted into the
patient. Specifically, the applicant explained that the
XenoscopeTM is plugged into the Xenobox image processing
unit (which is connected to an HD monitor and an A/C power source). A
surgeon then makes a small incision and a trocar (tube-like device with
a seal to maintain abdominal pressure) is inserted to gain access to
the body cavity. The XenoscopeTM is then inserted through
the trocar in order to provide a full view of the anatomy for
diagnostic and therapeutic procedures.
The applicant also claimed the XenoscopeTM meets the
device eligibility requirements of Sec. 419.66(b)(4) because it is not
an instrument, apparatus, implement, or item for which depreciation and
financing expenses are recovered, and it is not a supply or material
furnished incident to a service. We invited public comments on whether
the XenoscopeTM meets the eligibility criteria at Sec.
419.66(b).
We did not receive any comments in regard to the eligibility
criteria at Sec. 419.66(b). We agree with the applicant and believe
that the XenoscopeTM meets the eligibility criterion at
Sec. 419.66(b)(3) and (4).
The criteria for establishing new device categories are specified
at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1),
provides that CMS determines that a device to be included in the
category is not appropriately described by any of the existing
categories or by any category previously in effect, and was not being
paid for as an outpatient service as of December 31, 1996. The
applicant described the XenoscopeTM as disposable
laparoscope. The applicant reported that it does not believe that the
XenoscopeTM is described by an existing category and
requested category descriptor ``Single-use laparoscopes.'' The
applicant also stated that the currently existing category, C1748--
Endoscope, single-use (that is, disposable), upper gi, imaging/
illumination device (insertable), did not describe this device because
it is limited to single-use duodenoscopes inserted orally, to reach the
small intestine versus minimally invasive abdominal surgery
(laparoscopy). We stated in the CY 2022 OPPS/ASC proposed rule that we
have not identified an existing pass-through payment category that is
applicable to the XenoscopeTM. We invited public comment on
whether the XenoscopeTM meets the device category criterion.
We did not receive any comments in regard to the eligibility
criteria at Sec. 419.66(c). We continue to believe that the
XenoscopeTM meets the eligibility criterion at Sec.
419.66(c)(1) because we have not identified an existing pass-through
payment category that is applicable to the XenoscopeTM.
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.
With respect to the substantial clinical improvement criterion, the
applicant stated that the XenoscopeTM provides a substantial
clinical improvement over reusable laparoscopes because of its single-
use nature. Specifically, the applicant claimed that because the
XenoscopeTM is a disposable, single-use device, the
XenoscopeTM provides for less risk of scope-related cross-
contamination and infection from improperly handled or reprocessed
scopes compared to traditional laparoscopy.
The applicant also claimed that the XenoscopeTM includes
a fog-free scope and provides a substantial clinical improvement over
currently available laparoscopes which, according to the applicant, fog
often, and can put patients at risk for surgical errors and more time
under anesthesia. Additionally, the applicant claimed that the
XenoscopeTM reaches 104 degrees Fahrenheit at the tip,
eliminating risk of patient burns and drape fires associated with
hotter Xenon bulbs used in currently available laparoscopes.
Lastly, that applicant stated that there can be significant
economic benefits through the use of the XenoscopeTM due to
the processing costs and up-front capital expenditures required for
reusable laparoscopes.
In support of the assertion that the XenoscopeTM reduces
the risk of cross-contamination from improperly cleaned reusable
laparoscopic instruments, the applicant referenced two articles. The
first article was published in 2002 and describes the problem of
surgical site infection (SSI), the Centers for Disease Control (CDC)
guidelines for SSI, and some cases of SSI related to improper cleaning
of reusable laparoscopic instruments. The article also discusses
practices to avoid these infections.\170\ The applicant also submitted
a draft of a manuscript titled ``Novel Laparoscopic System for Quality
Improvement and Increased Efficiency'' that summarizes some of the
evidence that laparoscopy, in general, is superior to open surgical
approaches in terms of pain management and infection risk.\171\
---------------------------------------------------------------------------
\170\ Hewitt, A. (2002, November 1). Laparoscopic Instruments:
Handle with Care. Infection Control Today. https://www.infectioncontroltoday.com/view/laparoscopic-instruments-handle-care.
\171\ Elliott, K.W. & Heilbraun, E. (2020). Novel Laparoscopic
System for Quality Improvement and Increased Efficiency. Manuscript
submitted for publication.
---------------------------------------------------------------------------
In support of the claim that the XenoscopeTM eliminates
the risk of patient burns and drape fires associated with Xenon bulbs
used by currently available laparoscopes, the applicant submitted two
articles. The first was an article published in 2011 that discusses the
problem of laparoscopic related burn injuries and a potential solution
using Active Electrode Monitoring (AEM).\172\ AEM instruments
reportedly use a ``shielded and monitored'' design to prevent the risk
of stray energy burn injury from insulation failure and capacitive
coupling. According to the article, the AEM technology is currently
[[Page 63613]]
licensed by Intuitive Surgical's da Vinci[supreg] Surgical Systems. The
applicant does not compare the XenoscopeTM to AEM technology
in terms of burn injury reduction. The second article examined the
variation and extent of thermal injuries that could be induced by
laparoscopic light sources to porcine tissue. In the study, the maximum
temperature at the tip of the optical cable varied between 119.5
degrees C and 268.6 degrees C. When surgical drapes were exposed to the
tip of the light source, the time to char was 3-6 seconds. The degree
and volume of injury increased with longer exposure times, and
significant injury was recorded with the optical cable 3 mm from the
skin.\173\
---------------------------------------------------------------------------
\172\ Encision Inc. (2011, April 1). Method of Reducing Stray
Energy Burns in Laparoscopic Surgery. Medical Design Briefs. https://www.medicaldesignbriefs.com/component/content/article/mdb/tech-briefs/9500.
\173\ Hindle, A.K., Brody, F., Hopkins, V., Rosales, G.,
Gonzalez, F., & Schwartz, A. (2009). Thermal injury secondary to
laparoscopic fiber-optic cables. Surgical endoscopy, 23(8), 1720-
1723. https://doi.org/10.1007/s00464-008-0219-z.
---------------------------------------------------------------------------
In support of the claim that there could be significant economic
benefits realized through the use the XenoscopeTM compared
to reusable laparoscopes, the applicant also referenced the manuscript
entitled ``Novel Laparoscopic System for Quality Improvement and
Increased Efficiency''.\174\ In this study, a three-page survey was
created to collect data regarding laparoscope-related practices and
costs. The survey was completed by three different institutions,
including an ambulatory surgery center (ASC), a rural hospital and a
suburban hospital. The sites provided the capital equipment cost
required at the time of purchase at their facility which ranged from
$837,184 to $2,786,348. The average cost per use for one surgical
procedure involving a reusable laparoscope was $1,019.24 across the
three institutions.
---------------------------------------------------------------------------
\174\ Ibid.
---------------------------------------------------------------------------
We stated in the CY 2022 OPPS/ASC proposed rule that we are
concerned that the application and the articles submitted as evidence
of substantial clinical improvement discuss potential adverse effects
from laparoscopic procedures, but do not appear to directly show any
clinical improvement that result from the use of the
XenoscopeTM. The applicant has provided evidence which seems
to rely on indirect inferences from other sources of data. The articles
provided did not involve the clinical use of the XenoscopeTM
and did not compare the device to an appropriate comparator, such as a
reusable laparoscope. Therefore, we stated that it is difficult to
determine whether the XenoscopeTM offers substantial
clinical improvement over standard, reusable laparoscopes based on the
information provided. 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 invited public comment on whether the XenoscopeTM
meets the substantial clinical improvement criterion.
Comment: One commenter stated their opposition to the use of HCPCS
code 58570 (Tlh uterus 250 g or less) in conjunction with the
XenoscopeTM. The commenter stated that multiple searches in
PubMed did not produce evidence of use or clinical improvement for
gynecologic laparoscopic procedures, including HCPCS code 58570 (Tlh
uterus 250 g or less). The commenter asserted that Obstetrician-
gynecologists and gynecologic oncologists are the primary billers of
58570 and employ laparoscopy for many other surgeries such as tubal
ligation and hysterectomy, positioning them as potential high-utilizers
of new devices such as the XenoscopeTM. The commenter stated
their concern for the unintended consequences of promoting the payment
of a device for which a substantial clinical improvement in gynecologic
surgery is undetermined.\175\
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\175\ Choosing the route of hysterectomy for benign disease.
Committee Opinion No. 701. American College of Obstetricians and
Gynecologists. Obstet Gynecol 2017:129:e155-9.
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Response: We appreciate the input from the commenter and we have
noted the lack of data demonstrating evidence of use or clinical
improvement for gynecologic laparoscopic procedures. We refer the
commenter to our final response and determination regarding the
substantial clinical improvement criterion below for a discussion of
this concern. However, we note that the indication for use as stated by
the FDA in the 510(k) clearance letter is, ``The Articulating
XenoscopeTM is intended to be used in diagnostic and
therapeutic procedures for endoscopy and endoscopic surgery within the
thoracic and peritoneal cavities including the female reproductive
organs.'' Given the role of the FDA in defining device indications, we
believe the device is appropriately described by HCPCS 58570.
Comment: A commenter representing Xenocor, Inc. stated that the
safety profile for patients could be improved in the following ways:
(1) Cross-contamination for the XenoscopeTM is not possible;
(2) the XenoscopeTM has a top temperature of 129 degrees
Fahrenheit where one of the most frequent causes of operating room
fires and burns are traditional, reusable laparoscopes which often
exceed 350 degrees Fahrenheit; (3) the XenoscopeTM's
composite shaft is non-conductive which avoids risks with traditional
laparoscopes which can arc stray current when using monopolar
electrocautery where the scope acts as an antenna and burns adjacent
structures; and (4) the XenoscopeTM eliminates fog and sees
better through smoke and steam than any currently marketed resuables.
We also received multiple comments stating general support for the
XenoscopeTM. Two of the commenters stated that the
XenoscopeTM reaches a temperature of 129 [deg]F, as opposed
to the 350 [deg]F reached by light cords which can cause burns or
patient injury, is fully shielded and will not cause stray energy burns
or arcing issues that exist with other like products, its single-use
nature ensures complete sterility and consistent image quality due to
the new out of the box feature with each use, and the fog-free picture
helps to ensure a consistent clear visualization of critical anatomy.
One commenter stated the benefits of the XenoscopeTM are
critical to both patient safety and cost control. Another commenter
stated that having a disposable scope would enable surgery to be done
more easily in a wider variety of places while also eliminating many
problems associated with traditional scopes. Another commenter added
that the ability to use XenoscopeTM with any USB enabled
video device obviates the need for expensive auxiliary light sources,
video drivers, etc.
Response: We thank the commenters for their input. We agree that
improved patient safety and a reduction in complications are clinical
outcomes that may represent a substantial clinical improvement.
However, we remain concerned that we did not receive any data to
demonstrate improved outcomes using the XenoscopeTM.
Further, we remain concerned that the applicant did not provide any
comparison to existing technologies such as reusable scopes to
demonstrate an improvement in clinical outcomes. Lastly, we note that
the cost effectiveness of a technology does not substantially improve
the diagnosis or treatment of a disease and therefore is not relevant
to the discussion of substantial clinical improvement.
[[Page 63614]]
After consideration of the public comments we received and our
review of the device pass-through application, we are not approving the
XenoscopeTM for transitional pass-through payment status in
CY 2022 because the product does not meet the substantial clinical
improvement criterion. Because we have determined that the
XenoscopeTM does not meet the substantial clinical
improvement criterion, we are not evaluating whether the device meets
the cost criterion.
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
through 66873) applies to device-intensive APCs and is discussed in
detail in section IV.B. of the CY 2022 OPPS/ASC proposed rule (86 FR
42112 through 42114). 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 the CY 2022 OPPS/ASC proposed rule (86
FR 42114). For further background information on the device-intensive
APC policy, we refer readers to the CY 2016 OPPS/ASC final rule with
comment period (80 FR 70421 through 70426).
a. HCPCS Code-Level Device-Intensive Determination
As stated earlier, prior to CY 2017, under the device-intensive
methodology we assigned device-intensive status to all procedures
requiring the implantation of a device that were assigned to an APC
with a device offset greater than 40 percent and, beginning in CY 2015,
that met the three criteria listed below. Historically, the device-
intensive designation was at the APC level and applied to the
applicable procedures within that APC. In the CY 2017 OPPS/ASC final
rule with comment period (81 FR 79658), we changed our methodology to
assign device-intensive status at the individual HCPCS code level
rather than at the APC level. Under this policy, a procedure could be
assigned device-intensive status regardless of its APC assignment, and
device-intensive APC designations were no longer applied under the OPPS
or the ASC payment system.
We believe that a HCPCS code-level device offset is, in most cases,
a better representation of a procedure's device cost than an APC-wide
average device offset based on the average device offset of all of the
procedures assigned to an APC. Unlike a device offset calculated at the
APC level, which is a weighted average offset for all devices used in
all of the procedures assigned to an APC, a HCPCS code-level device
offset is calculated using only claims for a single HCPCS code. We
believe that this methodological change results in a more accurate
representation of the cost attributable to implantation of a high-cost
device, which ensures consistent device-intensive designation of
procedures with a significant device cost. Further, we believe a HCPCS
code-level device offset removes inappropriate device-intensive status
for procedures without a significant device cost that are granted such
status because of their APC assignment.
Under our existing policy, procedures that meet the criteria listed
in section IV.B.1.b. of the CY 2022 OPPS/ASC proposed rule (86 FR 42112
through 42114) are identified as device-intensive procedures and are
subject to all the policies applicable to procedures assigned device-
intensive status under our established methodology, including our
policies on device edits and no cost/full credit and partial credit
devices discussed in sections IV.B.3. and IV.B.4. of the CY 2022 OPPS/
ASC proposed rule, respectively (86 FR 42114 thorough 42115).
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
stakeholders that the criteria excluded some procedures that
stakeholders believed should qualify as device-intensive procedures.
Specifically, we were persuaded by stakeholder arguments that
procedures requiring expensive surgically inserted or implanted devices
that are not capital equipment should qualify as device-intensive
procedures, regardless of whether the device remains in the patient's
body after the conclusion of the procedure. We agreed that a broader
definition of -device-intensive procedures was warranted, and made two
modifications to the criteria for CY 2019 (83 FR 58948). First, we
allowed procedures that involve surgically inserted or implanted
single-use devices that meet the device offset percentage threshold to
qualify as device-intensive procedures, regardless of whether the
device remains in the patient's body after the conclusion of the
procedure. We established this policy because we no longer believe that
whether a device remains in the patient's body should
[[Page 63615]]
affect a procedure's designation as a device-intensive procedure, as
such devices could, nonetheless, comprise a large portion of the cost
of the applicable procedure. Second, we modified our criteria to lower
the device offset percentage threshold from 40 percent to 30 percent,
to allow a greater number of procedures to qualify as device-intensive.
We stated that we believe allowing these additional procedures to
qualify for -device-intensive status will help ensure these procedures
receive more appropriate payment in the ASC setting, which will help
encourage the provision of these services in the ASC setting. In
addition, we stated that this change would help to ensure that more
procedures containing relatively high-cost devices are subject to the
device edits, which leads to more correctly coded claims and greater
accuracy in our claims data. Specifically, for CY 2019 and subsequent
years, we finalized that--device-intensive procedures will be subject
to the following criteria:
All procedures must involve implantable devices assigned a
CPT or HCPCS code;
The required devices (including single-use devices) must
be surgically inserted or implanted; and
The device offset amount must be significant, which is
defined as exceeding 30 percent of the procedure's mean cost (83 FR
58945).
In addition, to further align the device-intensive policy with the
criteria used for device pass-through payment status, we finalized, for
CY 2019 and subsequent years, that for purposes of satisfying the
device-intensive criteria, a device-intensive procedure must involve a
device that:
Has received FDA marketing authorization, has received an
FDA investigational device exemption (IDE), and has been classified as
a Category B device by FDA in accordance with Sec. Sec. 405.203
through 405.207 and 405.211 through 405.215, or meets another
appropriate FDA exemption from premarket review;
Is an integral part of the service furnished;
Is used for one patient only;
Comes in contact with human tissue;
Is surgically implanted or inserted (either permanently or
temporarily); and
Is not either of the following:
(a) Equipment, an instrument, apparatus, implement, or item of the
type for which depreciation and financing expenses are recovered as
depreciable assets as defined in Chapter 1 of the Medicare Provider
Reimbursement Manual (CMS Pub. 15-1); or
(b) A material or supply furnished incident to a service (for
example, a suture, customized surgical kit, scalpel, or clip, other
than a radiological site marker) (83 FR 58945).
In addition, for new HCPCS codes describing procedures requiring
the implantation of devices that do not yet have associated claims
data, in the CY 2017 OPPS/ASC final rule with comment period (81 FR
79658), we finalized a policy for CY 2017 to apply device-intensive
status with a default device offset set at 41 percent for new HCPCS
codes describing procedures requiring the implantation or insertion of
a device that did not yet have associated claims data until claims data
are available to establish the HCPCS code-level device offset for the
procedures. This default device offset amount of 41 percent was not
calculated from claims data; instead, it was applied as a default until
claims data were available upon which to calculate an actual device
offset for the new code. The purpose of applying the 41-percent default
device offset to new codes that describe procedures that implant or
insert devices was to ensure ASC access for new procedures until claims
data become available.
As discussed in the CY 2019 OPPS/ASC proposed rule and final rule
with comment period (83 FR 37108 through 37109 and 58945 through 58946,
respectively), in accordance with our policy stated previously to lower
the device offset percentage threshold for procedures to qualify as
device-intensive from greater than 40 percent to greater than 30
percent, for CY 2019 and subsequent years, we modified this policy to
apply a 31-percent default device offset to new HCPCS codes describing
procedures requiring the implantation of a device that do not yet have
associated claims data until claims data are available to establish the
HCPCS code-level device offset for the procedures. In conjunction with
the policy to lower the default device offset from 41 percent to 31
percent, we continued our current policy of, in certain rare instances
(for example, in the case of a very expensive implantable device),
temporarily assigning a higher offset percentage if warranted by
additional information such as pricing data from a device manufacturer
(81 FR 79658). Once claims data are available for a new procedure
requiring the implantation or insertion of a device, device-intensive
status is applied to the code if the HCPCS code-level device offset is
greater than 30 percent, according to our policy of determining--
device-intensive status by calculating the HCPCS code-level device
offset.
In addition, in the CY 2019 OPPS/ASC final rule with comment
period, we clarified that since the adoption of our policy in effect as
of CY 2018, the associated claims data used for purposes of determining
whether or not to apply the default device offset are the associated
claims data for either the new HCPCS code or any predecessor code, as
described by CPT coding guidance, for the new HCPCS code. Additionally,
for CY 2019 and subsequent years, in limited instances where a new
HCPCS code does not have a predecessor code as defined by CPT, but
describes a procedure that was previously described by an existing
code, we use clinical discretion to identify HCPCS codes that are
clinically related or similar to the new HCPCS code but are not
officially recognized as a predecessor code by CPT, and to use the
claims data of the clinically related or similar code(s) for purposes
of determining whether or not to apply the default device offset to the
new HCPCS code (83 FR 58946). Clinically related and similar procedures
for purposes of this policy are procedures that have little or no
clinical differences and use the same devices as the new HCPCS code. In
addition, clinically related and similar codes for purposes of this
policy are codes that either currently or previously describe the
procedure described by the new HCPCS code. Under this policy, claims
data from clinically related and similar codes are included as
associated claims data for a new code, and where an existing HCPCS code
is found to be clinically related or similar to a new HCPCS code, we
apply the device offset percentage derived from the existing clinically
related or similar HCPCS code's claims data to the new HCPCS code for
determining the device offset percentage. We stated that we believe
that claims data for HCPCS codes describing procedures that have minor
differences from the procedures described by new HCPCS codes will
provide an accurate depiction of the cost relationship between the
procedure and the device(s) that are used, and will be appropriate to
use to set a new code's device offset percentage, in the same way that
predecessor codes are used. If a new HCPCS code has multiple
predecessor codes, the claims data for the predecessor code that has
the highest individual HCPCS-level device offset percentage is used to
determine whether the new HCPCS code qualifies for device-intensive
status. Similarly, in the event that a new HCPCS code does
[[Page 63616]]
not have a predecessor code but has multiple clinically related or
similar codes, the claims data for the clinically related or similar
code that has the highest individual HCPCS level device offset
percentage is used to determine whether the new HCPCS code qualifies
for device-intensive status.
As we indicated in the CY 2019 OPPS/ASC proposed rule and final
rule with comment period, additional information for our consideration
of an offset percentage higher than the default of 31 percent for new
HCPCS codes describing procedures requiring the implantation (or, in
some cases, the insertion) of a device that do not yet have associated
claims data, such as pricing data or invoices from a device
manufacturer, should be directed to the Division of Outpatient Care,
Mail Stop C4-01-26, Centers for Medicare & Medicaid Services, 7500
Security Boulevard, Baltimore, MD 21244-1850, or electronically at
[email protected]. Additional information can be submitted
prior to issuance of an OPPS/ASC proposed rule or as a public comment
in response to an issued OPPS/ASC proposed rule. Device offset
percentages will be set in each year's final rule.
As discussed in section X.E of the CY 2022 OPPS/ASC proposed rule
(86 FR 42188 through 42190), given our concerns regarding CY 2020 data
as a result of the COVID-PHE, we proposed to use CY 2019 claims data to
establish CY 2022 prospective rates. While we continue to believe CY
2019 represents the best full year of claims data for ratesetting, we
believe our policy of temporarily assigning a higher offset percentage
if warranted by additional information would provide a more accurate
device offset percentage for certain procedures. Specifically, for
procedures that were assigned device-intensive status, but were
assigned a default device offset percentage of 31 percent or a device
offset percentage based on claims from a clinically-similar code in the
absence of CY 2019 claims data, we proposed to assign a device offset
percentage for such procedures based on CY 2020 data if CY 2020 claims
information is available. While we believe that CY 2019 claims data is
a better basis for CY 2022 OPPS rates overall, because we have
specifically noted that we would consider using more recent data than
the data available for ratesetting in a given year to determine device
offset percentages for services that do not have any claims data in the
year used for ratesetting, we believe it would be consistent with this
policy for us to use CY 2020 claims data to determine the device offset
percentage for services that meet the above criteria.
For CY 2022, our proposal would assign device offset percentages
using CY 2020 claims data to the following 11 procedures:
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));
0414T (Removal and replacement of permanent cardiac
contractility modulation system pulse generator only);
0511T (Removal and reinsertion of sinus tarsi implant);
0587T (Percutaneous implantation or replacement 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);
0600T (Ablation, irreversible electroporation; 1 or more
tumors per organ, including imaging guidance, when performed,
percutaneous);
0614T (Removal and replacement of substernal implantable
defibrillator pulse generator);
66987 (Extracapsular cataract removal with insertion of
intraocular lens prosthesis (1-stage procedure), manual or mechanical
technique (for example, irrigation and aspiration or
phacoemulsification), complex, requiring devices or techniques not
generally used in routine cataract surgery (for example, iris ansion
device, suture support for intraocular lens, or primary posterior
capsulorrhexis) or performed on patients in the amblyogenic
developmental stage; with endoscopic cyclophotocoagulation);
66988 (Extracapsular cataract removal with insertion of
intraocular lens prosthesis (1 stage procedure), manual or mechanical
technique (for example, irrigation and aspiration or
phacoemulsification); with endoscopic cyclophotocoagulation);
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);
C9765 (Revascularization, endovascular, open or
percutaneous, lower extremity artery(ies), except tibial/peroneal; with
intravascular lithotripsy, and transluminal stent placement(s),
includes angioplasty within the same vessel(s), when performed); and
C9767 (Revascularization, endovascular, open or
percutaneous, lower extremity artery(ies), except tibial/peroneal; with
intravascular lithotripsy and transluminal stent placement(s), and
atherectomy, includes angioplasty within the same vessel(s), when
performed).
Comment: Many commenters supported our proposal to establish the CY
2022 device offset percentage using CY 2020 claims data for device-
intensive procedures with no claims in the CY 2019 claims data. One
commenter requested that we use CY 2020 claims where CY 2020 claims
volume is greater than CY 2019 claims volume. Another commenter
requested that we apply the greater of the device offset percentage
when comparing CY 2019 claims with CY 2020 claims.
Response: We thank the commenters for their support. We are not
accepting the recommendation to apply data from CY 2020 claims where CY
2020 claims volume is greater than CY 2019 claims volume or to apply
the greater of the device offset percentage when comparing CY 2019
claims with CY 2020 claims. Specifically, as discussed in section X.E
of this final rule with comment period, we continue to believe CY 2019
represents the best full year of claims data for ratesetting.
Therefore, we believe our proposal provides a more accurate device
offset percentage only for certain device-intensive procedures that had
no claims data in CY 2019 and for which the device offset percentage
would otherwise be based on the default percentage or a similar
procedure code's device offset percentage. Comment: Many commenters
requested that we set the device offset percentage for several new
procedures using the predecessor code's device offset percentage based
on CY 2019 claims data. These procedures include:
The predecessor CPT code 0191T in assigning the device
offset percentage for CPT code 66989 (Extracapsular cataract removal
with insertion of intraocular lens prosthesis (1-stage procedure),
manual or mechanical technique (for example, irrigation and aspiration
or phacoemulsification), complex, requiring devices or techniques not
generally used in routine cataract surgery (for example, iris expansion
device, suture support for intraocular lens, or primary posterior
capsulorrhexis) or performed on patients in the amblyogenic
developmental stage; with insertion of intraocular (for example,
trabecular
[[Page 63617]]
meshwork, supraciliary, suprachoroidal) anterior segment aqueous
drainage device, without extraocular reservoir, internal approach, one
or more);
The predecessor CPT code 0191T in assigning the device
offset percentage for CPT code 66991 (Extracapsular cataract removal
with insertion of intraocular lens prosthesis (1 stage procedure),
manual or mechanical technique (for example, irrigation and aspiration
or phacoemulsification); with insertion of intraocular (for example,
trabecular meshwork, supraciliary, suprachoroidal) anterior segment
aqueous drainage device, without extraocular reservoir, internal
approach, one or more);
The predecessor CPT code 0191T in assigning the device
offset percentage for 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);
The predecessor CPT code 0548T in assigning the device
offset percentage for CPT code 53451 (Periurethral transperineal
adjustable balloon continence device; bilateral insertion, including
cystourethroscopy and imaging guidance);
The predecessor CPT code 0549T in assigning the device
offset percentage for CPT code 53452 (Periurethral transperineal
adjustable balloon continence device; unilateral insertion, including
cystourethroscopy and imaging guidance); and
The predecessor HCPCS code C9752 in assigning the device
offset percentage for CPT code 64628 (Thermal destruction of
intraosseous basivertebral nerve, including all imaging guidance; first
2 vertebral bodies, lumbar or sacral).
Additionally, at the August 23, 2021 HOP Panel Meeting, a presenter
requested that we use the predecessor CPT code 64568 in assigning the
device offset percentage for CPT code 64582 (Open implantation of
hypoglossal nerve neurostimulator array, pulse generator, and distal
respiratory sensor electrode or electrode array). Based on the
information presented at the meeting, the HOP Panel recommended we use
CPT code 64568 to assign the device offset percentage for CPT code
64582.
Response: We agree with the commenters and the HOP Panel's
recommendation. We note that we inadvertently did not apply the device
offset percentage to several new HCPCS codes where claims data for a
predecessor code was available. Therefore, we are revising the device
offset percentage for these procedures for this final rule with comment
period using CY 2019 claims data from these procedures' predecessor
codes.
Comment: A number of commenters recommended we assign device-
intensive status to 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 0630T (Percutaneous injection of allogeneic cellular
and/or tissue-based product, intervertebral disc, unilateral or
bilateral injection, with ct guidance, lumbar; each additional level
(list separately in addition to code for primary procedure)).
Response: We appreciate the commenters' recommendation. As we
stated in the CY 2022 OPPS/ASC proposed rule (86 FR 42113), 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.'' The
products involved when reporting CPT code 0627T and 0630T that the
commenter believed should necessitate a device intensive designation do
not meet this requirement. Therefore, we are not accepting the
commenters' recommendations and are not granting device-intensive
status to these codes.
Comment: One commenter requested that we assign HCPCS code C9778
(Colpopexy, vaginal; minimally invasive extra-peritoneal approach
(sacrospinous)) device-intensive status as this procedure meets our
device-intensive criteria.
Response: After further review, we agree with the commenter that
HCPCS code C9778 meets our criteria for device-intensive status. We are
accepting the commenter's recommendation and assigning a default device
offset percentage of 31 percent to HCPCS code C9778 for CY 2022.
Comment: One commenter recommended assigning CPT code 66179
(Aqueous shunt to extraocular equatorial plate reservoir, external
approach; without graft) as device-intensive as the procedure's device
offset percentage is 32.78 percent in Addendum P to the CY 2022 OPPS/
ASC proposed rule, which exceeds our 30-percent threshold for device-
intensive status.
Response: We have reviewed this procedure code with our medical
officers and have determined that this procedure satisfies all of our
device-intensive criteria. In particular, we agree with the commenter
that this procedure involves an implantable single-use device and that
the device meets the requirements for the procedure to receive device-
intensive assignment.
Comment: Commenters requested that we assign device-intensive
status to:
CPT code 0499T (Cystourethroscopy, with mechanical
dilation and urethral therapeutic drug delivery for urethral stricture
or stenosis, including fluoroscopy, when performed);
CPT code 58674 (Laparoscopy, surgical, ablation of uterine
fibroid(s) including intraoperative ultrasound guidance and monitoring,
radiofrequency);
CPT code 50590 (Lithotripsy, extracorporeal shock wave);
CPT code 59200 (Insertion of cervical dilator (e.g.,
laminaria, prostaglandin) (separate procedure));
CPT code 66174 (Transluminal dilation of aqueous outflow
canal; without retention of device or stent);
CPT code 66175 (Transluminal dilation of aqueous outflow
canal; with retention of device or stent);
CPT code 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); and
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).
Response: Based on CY 2019 claims data available for this final
rule with comment period, the procedures requested by commenters do not
have device offset percentages that exceed the 30-percent threshold
required for device-intensive status and, therefore, are not eligible
to be assigned device-intensive status under the OPPS.
Comment: Some commenters submitted invoices and requested a greater
device offset amount and greater device offset percentage to reflect
the invoice price of a particular device.
[[Page 63618]]
Other commenters also recommended utilizing invoice prices to establish
device offset percentages for procedures with low or no claims volume
or to correct situations commenters contend reflect underreported
device costs attributable to hospital confusion when reporting HCPCS
code C1889 (Implantable/insertable device, not otherwise classified).
Response: While we appreciate the recommendations and additional
information submitted by commenters, we are not applying the invoice
prices submitted by commenters to establish the device offset amount
and device offset percentage for these procedures. None of the invoice
prices that were submitted suggest that we should apply our policy of
temporarily applying a higher device offset percentage if warranted by
additional information. As we have stated in previous rulemaking (85 FR
86015), this policy of temporarily assigning a higher device offset
percentage should be applied in rare instances, such as using CY 2020
claims data in light of the COVID-19 PHE or where a device has an
extremely abnormal cost and, in the absence of claims data, may be
significantly underpaid under our policy to apply a default device
offset percentage for the procedure that involves such device.
Additionally, it would be inappropriate to apply a higher device
offset percentage or increase the payment rate in the ASC setting
simply because a device's invoice price is greater than the procedure's
device offset amount. Our packaging policies are intended to promote
the efficient use of resources both in the HOPD as well as ASC setting
and these policies include the packaging of medical devices. While we
provide separate transitional pass-through payments for devices for the
cost of devices approved for transitional pass-through status, as we
stated previously, the intent of transitional pass-through status for
devices is to facilitate access for beneficiaries to the advantages of
truly innovative devices by allowing for adequate payment for these new
devices while the necessary cost data is collected. We believe it would
be inappropriate to provide a similar method of calculating payment
solely based on a device's cost or invoice price for devices that are
not approved for transitional pass-through status.
Lastly, we have heard concerns from stakeholders regarding
hospitals' coding decisions for particular devices. Specifically,
stakeholders have contended that hospitals do not report HCPCS code
C1889 for a particular insertable device as the NUBC billing guidelines
recommend that such HCPCS code crosswalk to revenue code 0278--Other
Implants--and this revenue code would be inappropriate for the costs
attributable to devices that are insertable and not implantable. While
we understand stakeholder concerns regarding accurate device cost
reporting, we expect hospitals to adhere to the guidelines of correct
coding and append the correct device code to the claim when applicable.
However, while we do not believe additional guidance from CMS or
adjustment to the device offset calculation to exclude certain claims
is warranted at this time, we will continue to monitor this issue going
forward.
After reviewing the public comments we received, we are finalizing
our proposal to assign a device offset percentage based on CY 2020 data
if CY 2020 claims information is available, for procedures that were
assigned device-intensive status, but, because CY 2019 claims data is
not available, would otherwise be assigned a default device offset
percentage of 31 percent or a device offset percentage based on claims
from a clinically-similar code. Based on updated data for this CY 2022
OPPS/ASC final rule with comment period, we are applying device offset
percentages from 2020 claims data to 14 procedures. These include the
11 procedures described previously plus three additional procedures
that were assigned default device offset percentages for CY 2021 and
have available device offset percentages from CY 2020 claims data:
CPT code 0519T (Removal and replacement of wireless
cardiac stimulator for left ventricular pacing; pulse generator
component(s) (battery and/or transmitter));
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); and
HCPCS code C9761 (Cystourethroscopy, with ureteroscopy
and/or pyeloscopy, with lithotripsy (ureteral catheterization is
included) and vacuum aspiration of the kidney, collecting system and
urethra if applicable).
Additionally, in this final rule with comment period, we are
correcting the device offset percentages for several new device-
intensive procedures to reflect available claims data from predecessor
codes.
The full listing of the final CY 2022 device-intensive procedures
can be found in Addendum P to the CY 2022 OPPS/ASC final rule with
comment period (which is available via the internet on the CMS
website). Further, our claims accounting narrative contains a
description of our device offset percentage calculation. Our claims
accounting narrative for this final rule with comment period can be
found under supporting documentation for the CY 2022 OPPS/ASC final
rule on our website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
3. Device Edit Policy
In the CY 2015 OPPS/ASC final rule with comment period (79 FR
66795), we finalized a policy and implemented claims processing edits
that require any of the device codes used in the previous device-to-
procedure edits to be present on the claim whenever a procedure code
assigned to any of the APCs listed in Table 5 of the CY 2015 OPPS/ASC
final rule with comment period (the CY 2015 device-dependent APCs) is
reported on the claim. In addition, in the CY 2016 OPPS/ASC final rule
with comment period (80 FR 70422), we modified our previously existing
policy and applied the device coding requirements exclusively to
procedures that require the implantation of a device that are assigned
to a device-intensive APC. In the CY 2016 OPPS/ASC final rule with
comment period, we also finalized our policy that the claims processing
edits are such that any device code, when reported on a claim with a
procedure assigned to a device-intensive APC (listed in Table 42 of the
CY 2016 OPPS/ASC final rule with comment period (80 FR 70422)) will
satisfy the edit.
In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79658
through 79659), we changed our policy for CY 2017 and subsequent years
to apply the CY 2016 device coding requirements to the newly defined
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
[[Page 63619]]
HCPCS code C1889 is ``Implantable/insertable device, not otherwise
classified''.
We did not propose any changes to this policy for CY 2022.
Comment: Some commenters recommended that we reinstate specific
device-to-procedure edits. One commenter recommended we reinstate
specific device-to-procedure edits for arthroplasty procedures and
another commenter recommended we reinstate specific device edits for C-
code device-intensive procedures. One commenter contended that the
removal of specific device-to-procedure edits has contributed to
erosion in accuracy in the data highlighted by certain procedures
having device offset percentages that are nearly 100 percent of the
procedures' costs.
Response: As we stated in the CY 2015 OPPS/ASC final rule with
comment period (79 FR 66794), we continue to believe that the
elimination of device-to-procedure edits and procedure-to-device edits
is appropriate due to the experience hospitals now have in coding and
reporting these claims fully. More specifically, for the most costly
devices, we believe the C-APCs reliably reflect the cost of the device
if charges for the device are included anywhere on the claim. We note
that, 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 also note that, 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.
Additionally, we have not observed any increase in frequency of
procedures with device offset percentages that are nearly 100 percent;
and we do not believe the absence of device-to-procedure edits has
precipitated an erosion in accuracy of our device cost statistics.
Procedures with extremely significant device offset percentages of
greater than 90 percent can be attributed to procedures with little
claims volume as well as extremely significant device costs and not the
absence of device-to-procedure edits. Therefore, we are not accepting
the commenters' recommendations to reinstate device-to-procedure edits.
4. Adjustment to OPPS Payment for No Cost/Full Credit and Partial
Credit Devices
a. Background
To ensure equitable OPPS payment when a hospital receives a device
without cost or with full credit, in CY 2007, we implemented a policy
to reduce the payment for specified device-dependent APCs by the
estimated portion of the APC payment attributable to device costs (that
is, the device offset) when the hospital receives a specified device at
no cost or with full credit (71 FR 68071 through 68077). Hospitals were
instructed to report no cost/full credit device cases on the claim
using the ``FB'' modifier on the line with the procedure code in which
the no cost/full credit device is used. In cases in which the device is
furnished without cost or with full credit, hospitals were instructed
to report a token device charge of less than $1.01. In cases in which
the device being inserted is an upgrade (either of the same type of
device or to a different type of device) with a full credit for the
device being replaced, hospitals were instructed to report as the
device charge the difference between the hospital's usual charge for
the device being implanted and the hospital's usual charge for the
device for which it received full credit. In CY 2008, we expanded this
payment adjustment policy to include cases in which hospitals receive
partial credit of 50 percent or more of the cost of a specified device.
Hospitals were instructed to append the ``FC'' modifier to the
procedure code that reports the service provided to furnish the device
when they receive a partial credit of 50 percent or more of the cost of
the new device. We refer readers to the CY 2008 OPPS/ASC final rule
with comment period for more background information on the ``FB'' and
``FC'' modifiers payment adjustment policies (72 FR 66743 through
66749).
In the CY 2014 OPPS/ASC final rule with comment period (78 FR 75005
through 75007), beginning in CY 2014, we modified our policy of
reducing OPPS payment for specified APCs when a hospital furnishes a
specified device without cost or with a full or partial credit. For CY
2013 and prior years, our policy had been to reduce OPPS payment by 100
percent of the device offset amount when a hospital furnishes a
specified device without cost or with a full credit and by 50 percent
of the device offset amount when the hospital receives partial credit
in the amount of 50 percent or more of the cost for the specified
device. For CY 2014, we reduced OPPS payment, for the applicable APCs,
by the full or partial credit a hospital receives for a replaced
device. Specifically, under this modified policy, hospitals are
required to report on the claim the amount of the credit in the amount
portion for value code ``FD'' (Credit Received from the Manufacturer
for a Replaced Device) when the hospital receives a credit for a
replaced device that is 50 percent or greater than the cost of the
device. For CY 2014, we also limited the OPPS payment deduction for the
applicable APCs to the total amount of the device offset when the
``FD'' value code appears on a claim. For CY 2015, we continued our
policy of reducing OPPS payment for specified APCs when a hospital
furnishes a specified device without cost or with a full or partial
credit and to use the three criteria established in the CY 2007 OPPS/
ASC final rule with comment period (71 FR 68072 through 68077) for
determining the APCs to which our CY 2015 policy will apply (79 FR
66872 through 66873). In the CY 2016 OPPS/ASC final rule with comment
period (80 FR 70424), we finalized our policy to no longer specify a
list of devices to which the OPPS payment adjustment for no cost/full
credit and partial credit devices would apply and instead apply this
APC payment adjustment to all replaced devices furnished in conjunction
with a procedure assigned to a device-intensive APC when the hospital
receives a credit for a replaced specified device that is 50 percent or
greater than the cost of the device.
b. Policy for No Cost/Full Credit and Partial Credit Devices
In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79659
through 79660), for CY 2017 and subsequent years, we finalized a policy
to reduce OPPS payment for device-intensive procedures, by the full or
partial credit a provider receives for a replaced device, when a
hospital furnishes a specified device without cost or with a full or
partial credit. Under our current policy, hospitals continue to be
required to report on the claim the amount of the credit in the amount
portion for value code ``FD'' when the hospital receives a credit for a
replaced device that is 50 percent or greater than the cost of the
device.
In the CY 2014 OPPS/ASC final rule with comment period (78 FR 75005
through 75007), we adopted a policy of reducing OPPS payment for
specified APCs when a hospital furnishes a specified device without
cost or with a full or partial credit by the lesser of the device
offset amount for the APC or the
[[Page 63620]]
amount of the credit. We adopted this change in policy in the preamble
of the CY 2014 OPPS/ASC final rule with comment period and discussed it
in subregulatory guidance, including Chapter 4, Section 61.3.6 of the
Medicare Claims Processing Manual. Further, in the CY 2021 OPPS/ASC
final rule with comment period (85 FR 86017 through 86018, 86302), we
made conforming changes to our regulations at Sec. 419.45(b)(1) and
(2) that codified this policy.
We did not propose any changes and we did not receive any public
comments related to our policies regarding payment for no cost/full
credit and partial credit devices in CY 2022.
5. Payment Policy for Low-Volume Device-Intensive Procedures
In CY 2016, we used our equitable adjustment authority under
section 1833(t)(2)(E) of the Act and used the median cost (instead of
the geometric mean cost per our standard methodology) to calculate the
payment rate for the implantable miniature telescope procedure
described by CPT code 0308T (Insertion of ocular telescope prosthesis
including removal of crystalline lens or intraocular lens prosthesis),
which is the only code assigned to APC 5494 (Level 4 Intraocular
Procedures) (80 FR 70388). We noted that, as stated in the CY 2017
OPPS/ASC proposed rule (81 FR 45656), we proposed to reassign the
procedure described by CPT code 0308T to APC 5495 (Level 5 Intraocular
Procedures) for CY 2017, but it would be the only procedure code
assigned to APC 5495. The payment rates for a procedure described by
CPT code 0308T (including the predecessor HCPCS code C9732) were
$15,551 in CY 2014, $23,084 in CY 2015, and $17,551 in CY 2016. The
procedure described by CPT code 0308T is a high-cost device-intensive
surgical procedure that has a very low volume of claims (in part
because most of the procedures described by CPT code 0308T are
performed in ASCs). We believe that the median cost is a more
appropriate measure of the central tendency for purposes of calculating
the cost and the payment rate for this procedure because the median
cost is impacted to a lesser degree than the geometric mean cost by
more extreme observations. We stated that, in future rulemaking, we
would consider proposing a general policy for the payment rate
calculation for very low-volume device-intensive APCs (80 FR 70389).
For CY 2017, we proposed and finalized a payment policy for low-
volume device-intensive procedures that is similar to the policy
applied to the procedure described by CPT code 0308T in CY 2016. In the
CY 2017 OPPS/ASC final rule with comment period (81 FR 79660 through
79661), we established our current policy that the payment rate for any
device-intensive procedure that is assigned to a clinical APC with
fewer than 100 total claims for all procedures in the APC be calculated
using the median cost instead of the geometric mean cost, for the
reasons described previously for the policy applied to the procedure
described by CPT code 0308T in CY 2016. For CYs 2019 through 2021, we
continued our policy of establishing the payment rate for any device-
intensive procedure that is assigned to a clinical APC with fewer than
100 total claims for all procedures in the APC by using the median cost
instead of the geometric mean (85 FR 86019).
As discussed in further detail in Section X.C of the CY 2022 OPPS/
ASC proposed rule (86 FR 42181 through 42185), we proposed to establish
a universal low volume APC policy for clinical APCs, brachytherapy
APCs, and New Technology APCs with fewer than 100 single claims in the
claims data used for ratesetting (for CY 2022 rates, this is proposed
to be the CY 2019 claim data). For APCs designated as low volume APCs
(those with fewer than 100 single claims in the claims year) under our
proposed policy, we proposed to establish a payment rate using the
highest of the median cost, arithmetic mean cost, or the geometric mean
cost. In conjunction with our new, broader low volume APC proposal for
clinical APCs, brachytherapy APCs, and New Technology APCs, we proposed
to eliminate our payment policy for low-volume device-intensive
procedures for CY 2022 and subsequent calendar years. Currently, CPT
code 0308T is the only code subject to our low-volume device-intensive
policy. Given that our proposed universal low volume APC policy would
utilize a greater number of claims and provide additional cost metric
alternatives for ratesetting than our existing low-volume device-
intensive policy, we believe that the cost and ratesetting issues
previously discussed with respect to CPT code 0308T would be
appropriately addressed under our broader universal low volume APC
proposal.
We did not receive any public comments on our proposal to eliminate
our payment policy for low-volume device-intensive procedures and
address low-volume, device-intensive procedures through our broader
proposal to designate low volume APCs among eligible clinical APCs,
brachytherapy APCs, and New Technology APCs and we are finalizing our
proposal without modification. Public comments related to our proposed
Low Volume APC policy are discussed in section X.C (Low Volume Policy
for Clinical and Brachytherapy APCs) of this final rule with comment
period.
V. OPPS Payment Changes for Drugs, Biologicals, and
Radiopharmaceuticals
A. OPPS Transitional Pass-Through Payment for Additional Costs of
Drugs, Biologicals, and Radiopharmaceuticals
1. Background
Section 1833(t)(6) of the Act provides for temporary additional
payments or ``transitional pass-through payments'' for certain drugs
and biologicals. Throughout the proposed rule, the term ``biological''
is used because this is the term that appears in section 1861(t) of the
Act. A ``biological'' as used in the proposed rule includes (but is not
necessarily limited to) a ``biological product'' or a ``biologic'' as
defined under section 351 of the PHS Act. As enacted by the Medicare,
Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 (BBRA) (Pub.
L. 106-113), this pass-through payment provision requires the Secretary
to make additional payments to hospitals for: current orphan drugs for
rare diseases and conditions, as designated under section 526 of the
Federal Food, Drug, and Cosmetic Act; current drugs and biologicals and
brachytherapy sources used in cancer therapy; and current
radiopharmaceutical drugs and biologicals. ``Current'' refers to those
types of drugs or biologicals mentioned above that are hospital
outpatient services under Medicare Part B for which transitional pass-
through payment was made on the first date the hospital OPPS was
implemented.
Transitional pass-through payments also are provided for certain
``new'' drugs and biologicals that were not being paid for as an HOPD
service as of December 31, 1996, and whose cost is ``not
insignificant'' in relation to the OPPS payments for the procedures or
services associated with the new drug or biological. For pass-through
payment purposes, radiopharmaceuticals are included as ``drugs.'' As
required by statute, transitional pass-through payments for a drug or
biological described in section 1833(t)(6)(C)(i)(II) of the Act can be
made for a period of at least 2 years, but not more than 3 years, after
the payment was first made for the drug as a hospital outpatient
service under Medicare Part B. Proposed CY 2022 pass-through drugs and
[[Page 63621]]
biologicals and their designated APCs are assigned status indicator
``G'' in Addenda A and B to the proposed rule (which are available via
the internet on the CMS website).
Section 1833(t)(6)(D)(i) of the Act specifies that the pass-through
payment amount, in the case of a drug or biological, is the amount by
which the amount determined under section 1842(o) of the Act for the
drug or biological exceeds the portion of the otherwise applicable
Medicare OPD fee schedule that the Secretary determines is associated
with the drug or biological. The methodology for determining the pass-
through payment amount is set forth in regulations at 42 CFR 419.64.
These regulations specify that the pass-through payment equals the
amount determined under section 1842(o) of the Act minus the portion of
the APC payment that CMS determines is associated with the drug or
biological.
Section 1847A of the Act establishes the average sales price (ASP)
methodology, which is used for payment for drugs and biologicals
described in section 1842(o)(1)(C) of the Act furnished on or after
January 1, 2005. The ASP methodology, as applied under the OPPS, uses
several sources of data as a basis for payment, including the ASP, the
wholesale acquisition cost (WAC), and the average wholesale price
(AWP). In the proposed rule, the term ``ASP methodology'' and ``ASP-
based'' are inclusive of all data sources and methodologies described
therein. Additional information on the ASP methodology can be found on
our website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice/index.html.
The pass-through application and review process for drugs and
biologicals is described on our website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/passthrough_payment.html.
2. Transitional Pass-Through Payment Period for Pass-Through Drugs,
Biologicals, and Radiopharmaceuticals and Quarterly Expiration of Pass-
Through Status
As required by statute, transitional pass-through payments for a
drug or biological described in section 1833(t)(6)(C)(i)(II) of the Act
can be made for a period of at least 2 years, but not more than 3
years, after the payment was first made for the drug or biological as a
hospital outpatient service under Medicare Part B. Our current policy
is to accept pass-through applications on a quarterly basis and to
begin pass-through payments for newly 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 newly 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 whose pass-through payment status is ending during the
calendar year will continue to be included in the quarterly OPPS Change
Request transmittals.
Comment: One commenter commended CMS for continuing the policy to
provide for quarterly expiration of pass-through payment status, which
allows a pass-through period that is as close to a full 3 years as
possible.
Response: We thank the commenter for their input and support of
this policy, which was adopted in the CY 2017 OPPS/ASC final rule (81
FR 79654 through 79655).
3. Drugs and Biologicals With Expiring Pass-Through Payment Status in
CY 2021
There are 25 drugs and biologicals whose pass-through payment
status will expire during CY 2021, as listed in Table 37. Most of these
drugs and biologicals will have received OPPS pass-through payment for
3 years during the period of April 1, 2018, through December 31, 2021.
In accordance with the policy finalized in CY 2017 and described
earlier, pass-through payment status for drugs and biologicals newly
approved in CY 2017 and subsequent years will expire on a quarterly
basis, with a pass-through payment period as close to 3 years as
possible. With the exception of those groups of drugs and biologicals
that are always packaged when they do not have pass-through payment
status (specifically, anesthesia drugs; drugs, biologicals, and
radiopharmaceuticals that function as supplies when used in a
diagnostic test or procedure (including diagnostic
radiopharmaceuticals, contrast agents, and stress agents); and drugs
and biologicals that function as supplies when used in a surgical
procedure), our standard methodology for providing payment for drugs
and biologicals with expiring pass-through payment status in an
upcoming calendar year is to determine the product's estimated per day
cost and compare it with the OPPS drug packaging threshold for that
calendar year (which is proposed to be $130 for CY 2022), as discussed
further in section V.B.1. of the CY 2022 OPPS/ASC proposed rule (86 FR
42127 through 42148). We proposed that if the estimated per day cost
for the drug or biological is less than or equal to the applicable OPPS
drug packaging threshold, we would package payment for the drug or
biological into the payment for the associated procedure in the
upcoming calendar year. If the estimated per day cost of the drug or
biological is greater than the OPPS drug packaging threshold, we
proposed to provide separate payment at the applicable ASP-based
payment amount (which is proposed at ASP+6 percent for non-340B drugs
for CY 2022, as discussed further in section V.B.2. of the CY 2022
OPPS/ASC proposed rule (86 FR 42132).
We did not receive any public comments regarding our proposals.
Therefore, we are adopting these proposals as final for CY 2022 without
modification. Refer to Table 37 for the list of drugs and biologicals
for which pass-through payment status will expire between March 31,
2021 and December 31, 2021. The packaged or separately payable status
of each of these drugs or biologicals is listed in Addendum B of the CY
2022 OPPS/ASC final rule (which is available via the internet on the
CMS website).
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4. Drugs, Biologicals, and Radiopharmaceuticals With Pass-Through
Payment Status Expiring in CY 2022
We proposed to end pass-through payment status in CY 2022 for 26
drugs and biologicals. These drugs and biologicals, which were approved
for pass-through payment status between April 1, 2019, and January 1,
2020, are listed in Table 28 of the CY 2022 OPPS/ASC proposed rule (86
FR 42121 through 42122). The APCs and HCPCS codes for these drugs and
biologicals, which have pass-through payment status that will end by
December 31, 2022, are assigned status indicator ``G'' in Addenda A and
B to the CY 2022 OPPS/ASC proposed rule (which are available via the
internet on the CMS website).
Section 1833(t)(6)(D)(i) of the Act sets the amount of pass-through
payment for pass-through drugs and biologicals (the pass-through
payment amount) as the difference between the amount 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 2022, we proposed to continue to pay for pass-
through drugs and biologicals at ASP+6 percent, equivalent to the
payment rate these drugs and biologicals would receive in the
physician's office setting in CY 2022. We proposed that a $0 pass-
through payment amount would be paid for pass-through drugs and
biologicals that are not policy-packaged as described in section
V.B.1.c. (86 FR 42120) under the CY 2022 OPPS because the difference
between the amount authorized under section 1842(o) of the Act, which
is proposed at ASP+6 percent, and the portion of the otherwise
applicable OPD fee schedule that the Secretary determines is
appropriate, which is proposed at ASP+6 percent, is $0.
In the case of policy-packaged drugs (which include the following:
Anesthesia drugs; drugs, biologicals, and radiopharmaceuticals that
function as supplies when used in a diagnostic test or procedure
(including contrast agents, diagnostic radiopharmaceuticals, and stress
agents); and drugs and biologicals that function as supplies when used
in a surgical procedure), we proposed that their pass-through payment
amount would be equal to ASP+6 percent for CY 2022 minus a payment
offset for the portion of the otherwise applicable OPD fee schedule
that the Secretary determines is associated with the drug or biological
as described in section V.A.6. of the CY 2022 OPPS/ASC proposed rule
(86 FR 42126). 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.
We proposed to continue to update pass-through payment rates on a
quarterly basis on the CMS website during CY 2022 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 2022, consistent with our CY 2021 policy for diagnostic and
therapeutic radiopharmaceuticals, we proposed 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 2022, we proposed to follow the standard ASP
methodology to determine the pass-through payment rate that drugs
receive under section 1842(o) of the Act, which is proposed at ASP+6
percent. If ASP data are not available for a radiopharmaceutical, we
proposed to provide pass-through payment at WAC+3 percent (consistent
with our proposed policy in section V.B.2.b. of the CY 2022 OPPS/ASC
proposed rule (86 FR 42132)), the equivalent payment provided to pass-
through drugs and biologicals without ASP information. Additional
detail on the WAC+3 percent payment policy can be found in section
V.B.2.b. of the CY 2022 OPPS/ASC proposed rule. 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. Refer to
Table 38 below for the list of drugs and biologicals with pass-through
payment status expiring during CY 2022.
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5. Drugs, Biologicals, and Radiopharmaceuticals With Pass-Through
Payment Status Continuing in CY 2022
We proposed to continue pass-through payment status in CY 2022 for
46 drugs and biologicals. These drugs and biologicals, which were
approved for pass-through payment status with effective dates beginning
between April 1, 2020, and January 1, 2022, are listed in Table 39. The
APCs and HCPCS codes for these drugs and biologicals, which have pass-
through payment status that will continue after December 31, 2022, are
assigned status indicator ``G'' in Addenda A and B to the CY 2022 OPPS/
ASC proposed rule (which are available via the internet on the CMS
website).
Section 1833(t)(6)(D)(i) of the Act sets the amount of pass-through
payment for pass-through drugs and biologicals (the pass-through
payment amount) as the difference between the amount 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 2023, we proposed to continue to pay for pass-
through drugs and biologicals at ASP+6 percent, equivalent to the
payment rate these drugs and biologicals would receive in the
physician's office setting in CY 2022. We proposed that a $0 pass-
through payment amount would be paid for pass-through drugs and
biologicals that are not policy-packaged as described in section
V.B.1.c. under the CY 2022 OPPS because the difference between the
amount authorized under section 1842(o) of the Act, which is proposed
at ASP+6 percent, and the portion of the otherwise applicable OPD fee
schedule that the Secretary determines is appropriate, which is
proposed at ASP+6 percent, is $0. In the case of policy-packaged drugs
(which include the following: Anesthesia drugs; drugs, biologicals, and
radiopharmaceuticals that function as supplies when used in a
diagnostic test or procedure (including contrast agents, diagnostic
radiopharmaceuticals, and stress agents); and drugs and biologicals
that function as supplies when used in a surgical procedure), we
proposed that their pass-through payment amount would be equal to ASP+6
percent for CY 2022 minus a payment offset for any predecessor drug
products contributing to the pass-through payment as described in
section V.A.6. of the CY 2022 OPPS/ASC proposed rule (86 FR 42126). 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.
We proposed to continue to update pass-through payment rates on a
quarterly basis on our website during CY 2022 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 2022, consistent with our CY 2021 policy for diagnostic and
therapeutic radiopharmaceuticals, we proposed to provide payment for
both diagnostic and therapeutic radiopharmaceuticals that are granted
pass-through payment status based on the ASP methodology. As stated
earlier, for purposes of pass-through payment, we consider
radiopharmaceuticals to be drugs under the OPPS. Therefore, if a
diagnostic or therapeutic radiopharmaceutical receives pass-through
payment status during CY 2023, we proposed to follow the standard ASP
methodology to determine the pass-through payment rate that drugs
receive under section 1842(o) of the Act, which is proposed at ASP+6
percent. If ASP data are not available for a radiopharmaceutical, we
proposed to provide pass-through payment at WAC+3 percent (consistent
with our proposed policy in section V.B.2.b. of the CY 2022 OPPS/ASC
proposed rule (86 FR 42132)), the equivalent payment provided to pass-
through drugs and biologicals without ASP information. Additional
detail on the WAC+3 percent payment policy can be found in section
V.B.2.b. of the CY 2022 OPPS/ASC proposed rule. If WAC information also
is not available, we proposed to provide payment for the pass-through
radiopharmaceutical at 95 percent of its most recent AWP.
The drugs and biologicals that we proposed to have pass-through
payment status expire after December 31, 2022, are shown in Table 39.
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6. Provisions for Reducing Transitional Pass-Through Payments for
Policy-Packaged Drugs, Biologicals, and Radiopharmaceuticals to Offset
Costs Packaged Into APC Groups
Under the regulation at 42 CFR 419.2(b), 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), nonpass-through drugs and biologicals that function
as supplies in a surgical procedure are packaged in the OPPS. This
category includes skin substitutes and other surgical-supply drugs and
biologicals. 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 2022, as we did in CY 2021, we proposed to continue to
apply the same policy-packaged offset policy to payment for pass-
through diagnostic radiopharmaceuticals, pass-through contrast agents,
pass-through stress agents, and pass-through skin substitutes. The
proposed APCs to which a payment offset may be applicable for pass-
through diagnostic radiopharmaceuticals, pass-through contrast agents,
pass-through stress agents, and pass-through skin substitutes are
identified in Table 40.
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We proposed to continue to post annually on our website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Annual-Policy-Files.html a file that contains the
APC offset amounts that will be used for that year for purposes of both
evaluating cost significance for candidate pass-through payment device
categories and drugs and biologicals and establishing any appropriate
APC offset amounts. Specifically, the file will continue to provide the
amounts and percentages of APC payment associated with packaged
implantable devices, policy-packaged drugs, and threshold packaged
drugs and biologicals for every OPPS clinical APC.
Comment: 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 addressing this request in future rulemaking.
B. OPPS Payment for Drugs, Biologicals, and Radiopharmaceuticals
Without Pass-Through Payment Status
1. Criteria for Packaging Payment for Drugs, Biologicals, and
Radiopharmaceuticals
a. Packaging Threshold
In accordance with section 1833(t)(16)(B) of the Act, the threshold
for establishing separate APCs for payment of drugs and biologicals was
set to $50 per administration during CYs 2005 and 2006. In CY 2007, we
used the four quarter moving average Producer Price Index (PPI) levels
for Pharmaceutical Preparations (Prescription) to trend the $50
threshold forward from the third quarter of CY 2005 (when the Pub. L.
108-173 mandated threshold became effective) to the third quarter of CY
2007. We then rounded the resulting dollar amount to the nearest $5
increment in order to determine the CY 2007 threshold amount of $55.
Using the same methodology as that used in CY 2007 (which is discussed
in more detail in the CY 2007 OPPS/ASC final rule with comment period
(71 FR 68085 through 68086)), we set the packaging threshold for
establishing separate APCs for drugs and biologicals at $130 for CY
2021 (84 FR 61312 through 61313).
Following the CY 2007 methodology, for the CY 2022 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 2022 and rounded the
resulting dollar amount ($132.44) to the nearest $5 increment, which
yielded a figure of $130. In performing this calculation, we used the
most recent forecast of the quarterly index levels for the PPI for
Pharmaceuticals for Human Use (Prescription) (Bureau of Labor
Statistics series code WPUSI07003) from CMS's Office of the Actuary.
For the CY 2022 OPPS/ASC proposed rule, based on these calculations
using the CY 2007 OPPS methodology, we proposed a packaging threshold
for CY 2022 of $130.
Comment: Two commenters expressed their support for maintaining the
drug packaging threshold for CY 2022 at $130. One commenter believes,
however, that the drug packaging threshold has been increasing faster
than payment increases under the OPPS. This commenter would like us to
research if the drug packaging threshold should be lowered in future
years.
Response: We appreciate the support of the commenters of the drug
packaging threshold level of $130. We also thank the one commenter for
their suggestion to consider reducing the drug packaging threshold in
future years and will consider it for future rulemaking.
After consideration of the public comments, we repeated our drug
packaging threshold calculations for the final rule with the most
current data available. Once again, we calculated a drug packaging
threshold for CY 2022 of
[[Page 63636]]
$130. Therefore, we are finalizing our proposal without modification to
have a drug packaging threshold for CY 2022 of $130.
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 2022 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 2019 and were paid (via packaged or separate payment)
under the OPPS. We used data from CY 2019 claims processed through June
30, 2020, for this calculation. However, we did not perform this
calculation for those drugs and biologicals with multiple HCPCS codes
that include different dosages, as described in section V.B.1.d. of the
CY 2022 OPPS/ASC proposed rule (86 FR 42129), or for the following
policy-packaged items that we proposed to continue to package in CY
2022: 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 2022, we use the methodology that was described in detail
in the CY 2006 OPPS proposed rule (70 FR 42723 through 42724) and
finalized in the CY 2006 OPPS final rule with comment period (70 FR
68636 through 68638). For each drug and biological HCPCS code, we used
an estimated payment rate of ASP+6 percent (which is the payment rate
we proposed for separately payable drugs and biologicals (other than
340B drugs)) for CY 2022, as discussed in more detail in section
V.B.2.b. of the proposed rule) to calculate the CY 2022 proposed rule
per day costs. We used the manufacturer-submitted ASP data from the
fourth quarter of CY 2020 (data that were used for payment purposes in
the physician's office setting, effective April 1, 2021) to determine
the proposed rule per day cost. While the CY 2020 ASP data were
collected during the PHE, ASP data are not affected by changes in
utilization the way non-drug services are for setting payment rates,
and so we believe CY 2020 ASP data continues to be representative of
the price of drugs in the market. We have continued to use ASP data
from CY 2020 to report quarterly drug rates for CY 2020 and CY 2021.
As is our standard methodology, for 2022, we proposed to use
payment rates based on the ASP data from the fourth quarter of CY 2020
for budget neutrality estimates, packaging determinations, impact
analyses, and completion of Addenda A and B to the 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 proposed rule. These data also were the basis for drug payments in
the physician's office setting, effective April 1, 2021. 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
2019 hospital claims data to determine their per day cost.
We proposed to package items with a per day cost less than or equal
to $130, and identify items with a per day cost greater than $130 as
separately payable unless they are policy-packaged. Consistent with our
past practice, we cross-walked historical OPPS claims data from the CY
2019 HCPCS codes that were reported to the CY 2021 HCPCS codes that we
display in Addendum B to the CY 2022 OPPS/ASC proposed rule (which is
available via the internet on the CMS website) for proposed payment in
CY 2022.
Our policy during previous cycles of the OPPS has been to use
updated ASP and claims data to make final determinations of the
packaging status of HCPCS codes for drugs, biologicals, and therapeutic
radiopharmaceuticals for the OPPS/ASC final rule with comment period.
We note that it is also our policy to make an annual packaging
determination for a HCPCS code only when we develop the OPPS/ASC final
rule with comment period for the update year. Only HCPCS codes that are
identified as separately payable in the final rule with comment period
are subject to quarterly updates. For our calculation of per day costs
of HCPCS codes for drugs and biologicals in the CY 2022 OPPS/ASC
proposed rule, we proposed to use ASP data from the fourth quarter of
CY 2020, 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, 2021, along with updated hospital
claims data from CY 2019. We note that we also proposed to use these
data for budget neutrality estimates and impact analyses for the CY
2022 OPPS/ASC proposed rule.
Payment rates for HCPCS codes for separately payable drugs and
biologicals included in Addenda A and B of the final rule with comment
period will be based on ASP data from the second quarter of CY 2021.
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, 2021. These payment rates would then
be updated in the January 2022 OPPS update, based on the most recent
ASP data to be used for physicians' office and OPPS payment as of
January 1, 2022. For items that do not currently have an ASP-based
payment rate, we proposed to recalculate their mean unit cost from all
of the CY 2019 claims data and update cost report information available
for the CY 2022 final rule with comment period to determine their final
per day cost.
Consequently, the packaging status of some HCPCS codes for drugs,
biologicals, and therapeutic radiopharmaceuticals in the proposed rule
may be different from the same drugs' HCPCS codes' packaging status
determined based on the data used for the final rule with comment
period. Under such circumstances, we 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 2022 OPPS drug packaging
threshold and the drug's payment status (packaged or separately
payable) in CY 2021. 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 2022,
consistent with our historical practice, we proposed to apply the
following policies to these 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 2021 and that are proposed for separate payment in CY
2022, and that then have per day costs equal to or less than the CY
2022 final rule drug packaging threshold, based on the updated ASPs and
hospital claims data used for the CY 2022 final rule, would continue to
receive separate payment in CY 2022.
HCPCS codes for drugs and biologicals that were packaged
in CY 2021 and that are proposed for separate payment in CY 2022, and
that then have
[[Page 63637]]
per day costs equal to or less than the CY 2022 final rule drug
packaging threshold, based on the updated ASPs and hospital claims data
used for the CY 2022 final rule, would remain packaged in CY 2022.
HCPCS codes for drugs and biologicals for which we
proposed packaged payment in CY 2022 but that then have per-day costs
greater than the CY 2022 final rule drug packaging threshold, based on
the updated ASPs and hospital claims data used for the CY 2022 final
rule, would receive separate payment in CY 2022.
We did not receive any public comments on 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 2019 claims data and updated
cost report information available for this CY 2022 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 some HCPCS codes for drugs,
biologicals, and therapeutic radiopharmaceuticals in the proposed rule
may be different from the same drug HCPCS code's packaging status
determined based on the data used for the final rule with comment
period. For CY 2022, we are finalizing these two proposals without
modification. Please refer to Addendum B to this final rule with
comment period, which is available via the internet 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 requested that we develop a policy to
provide separate payment for drugs that are administered at the time of
ophthalmic surgery and have an FDA-approved indication to treat or
prevent postoperative issues.
Response: A surgical procedure episode consists of both pre-
operative and post-operative care in addition to the surgical procedure
itself. If a drug used to address a post-operative concern, such as
pain management, is billed together with a surgical procedure, we
assume that the pain management drug was given as a part of the overall
surgical procedure. Since the pain management drug is ancillary to the
primary ophthalmic surgery procedure, it is considered a surgical
supply. The pain management drug is only administered to the patient
because the patient has received ophthalmic surgery, and the drug would
not have been administered to the patient if the patient did not have
the surgery. In the OPPS, we pay one rate for the entire surgical
procedure, and payment for supplies, such as pain management drugs, is
packaged into the payment rate for the surgical procedure. We note
exceptions to this policy in the ASC setting are discussed in II.A.3.b.
(Payment Policy for Non-Opioid Pain Management Drugs and Biologicals
that Function as Surgical Supplies under the ASC Payment System) of
this final rule with comment period.
Comment: One commenter recommended that CMS continue to apply
radiolabeled product edits to the nuclear medicine procedures to ensure
that all packaged costs are included on nuclear medicine claims in
order to establish appropriate payment rates in the future. The
commenter was concerned that many providers performing nuclear medicine
procedures are not including the cost of diagnostic
radiopharmaceuticals used for the procedures in their claims
submissions. The commenter believes this lack of drug cost reporting
could be causing the cost of nuclear medicine procedures to be
underreported and therefore request that the radiolabeled product edits
be reinstated.
Response: We appreciated the commenter's feedback; however, we are
not reinstating the radiolabeled product edits to nuclear medicine
procedures, which required a diagnostic radiopharmaceutical to be
present on the same claim as a nuclear medicine procedure for payment
to be made under the OPPS. As previously discussed in the CY 2020 OPPS/
ASC final rule with comment period (85 FR 86033 through 86034), the
edits were in place between CY 2008 and CY 2014 (78 FR 75033). We
believe the period of time in which the edits were in place was
sufficient for hospitals to gain experience reporting procedures
involving radiolabeled products and to become accustomed to ensuring
that they code and report charges so that their claims fully and
appropriately reflect the costs of those radiolabeled products. As with
all other items and services recognized under the OPPS, we expect
hospitals to code and report their costs appropriately, regardless of
whether there are claims processing edits in place.
Comment: Several commenters requested that diagnostic
radiopharmaceuticals be paid separately in all cases, not just when the
drugs have pass-through payment status. One commenter suggested payment
based upon ASP, WAC, AWP, or mean unit cost data derived from hospital
claims. Some commenters mentioned that pass-through payment status
helps the diffusion of new diagnostic radiopharmaceuticals into the
market, but is not enough to make up for what the commenters believe is
inadequate payment after pass-through status
[[Page 63638]]
expires. Commenters opposed incorporating the cost of the drug into the
associated APC, and provided evidence showing procedures in which
diagnostic radiopharmaceuticals are considered to be a surgical supply,
which the commenter believed are often paid at a lower rate than the
payment rate for the diagnostic radiopharmaceutical itself when the
drug had pass-through payment status. Additionally, commenters proposed
alternative payment methodologies such as subjecting diagnostic
radiopharmaceuticals to the drug packaging threshold, creating separate
APC payments for diagnostic radiopharmaceuticals that cost more than
$500, or using ASP, WAC, or AWP to account for packaged
radiopharmaceutical costs.
Response: We thank commenters for their suggestions. Commenters
have made many of these suggestions in the past and we addressed them
in previous rules, including the CY 2020 OPPS/ASC final rule (84 FR
61314 through 61315) and the CY 2021 OPPS/ASC final rule (85 FR 86034).
We continue to believe that diagnostic radiopharmaceuticals are an
integral component of many nuclear medicine and imaging procedures and
charges associated with them should be reported on hospital claims to
the extent they are used, and accordingly, the payment for the
radiopharmaceuticals is reflected within the payment for the primary
procedure.
In response to the comment regarding the proposed cost of the
packaged procedure in CY 2022 being substantially lower than the
payment rate of the radiopharmaceutical when it was on pass-through
payment status plus the payment rate of the procedure associated with
the radiopharmaceutical, we note that rates are established in a manner
that uses the geometric mean of reported costs to furnish the procedure
based on data submitted to CMS from all hospitals paid under the OPPS
to set the payment rate for the service. Accordingly, 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 will be based on the
reported costs submitted to Medicare by the hospitals and not the list
price established by the manufacturer. Claims data that include the
radiopharmaceutical packaged with the associated procedure reflect the
combined cost of the procedure and the radiopharmaceutical used in the
procedure. Additionally, we do not believe it is appropriate to create
a new packaging threshold specifically for diagnostic
radiopharmaceuticals as such a threshold would not align with our
overall packaging policy and commenters have submitted only limited
data to support a specific threshold.
With respect to the request that we create a new APC for each
radiopharmaceutical product, we do not believe it is appropriate to
create unique APCs for diagnostic radiopharmaceuticals. Diagnostic
radiopharmaceuticals function as supplies during a diagnostic test or
procedure and following our longstanding packaging policy, these items
are packaged under the OPPS. Packaging supports our goal of making OPPS
payments consistent with those of a prospective payment system, which
packages costs into a single aggregate payment for a service,
encounter, or episode of care. Furthermore, diagnostic
radiopharmaceuticals function as supplies that enable the provision of
an independent service, and are not themselves the primary therapeutic
modality, and therefore, we do not believe they warrant separate
payment through creation of a unique APC at this time. We welcome
ongoing dialogue with stakeholders regarding suggestions for payment
changes for consideration in future rulemaking.
Comment: One commenter expressed their approval of the drugs
proposed to be included in our policy-packaged drug policy.
Response: We appreciate the support of the commenter.
After consideration of the public comments we received, we are
finalizing our proposals without modification to continue our drug
packaging policies, which are included in the regulation text 42 CFR
419.2(b).
d. Packaging Determination for HCPCS Codes That Describe the Same Drug
or Biological but Different Dosages
In the CY 2010 OPPS/ASC final rule with comment period (74 FR 60490
through 60491), we finalized a policy to make a single packaging
determination for a drug, rather than an individual HCPCS code, when a
drug has multiple HCPCS codes describing different dosages because we
believe that adopting the standard HCPCS code-specific packaging
determinations for these codes could lead to inappropriate payment
incentives for hospitals to report certain HCPCS codes instead of
others. We continue to believe that making packaging determinations on
a drug-specific basis eliminates payment incentives for hospitals to
report certain HCPCS codes for drugs and allows hospitals flexibility
in choosing to report all HCPCS codes for different dosages of the same
drug or only the lowest dosage HCPCS code. Therefore, we 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
2022.
For CY 2022, 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 2019 claims data
and our pricing information at ASP+6 percent across all of the HCPCS
codes that describe each distinct drug or biological in order to
determine the mean units per day of the drug or biological in terms of
the HCPCS code with the lowest dosage descriptor. The following drugs
did not have pricing information available for the ASP methodology for
the CY 2022 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 2019 claims data to make the proposed
packaging determinations for these drugs: HCPCS code C9257 (Injection,
bevacizumab, 0.25 mg); HCPCS code J1840 (Injection, kanamycin sulfate,
up to 500 mg); HCPCS code J1850 (Injection, kanamycin sulfate, up to 75
mg); HCPCS code J3472 (Injection, hyaluronidase, ovine, preservative
free, per 1000 usp units); HCPCS code J7100 (Infusion, dextran 40, 500
ml); and HCPCS code J7110 (Infusion, dextran 75, 500 ml).
For all other drugs and biologicals that have HCPCS codes
describing different doses, we then multiplied the proposed weighted
average ASP+6 percent per unit payment amount across all dosage levels
of a specific drug or biological by the estimated units per day for all
HCPCS codes that describe each drug or biological from our claims data
to determine the estimated per day cost of each drug or biological at
less than or equal to the proposed CY 2022 drug packaging threshold of
$130 (so that all HCPCS codes for the same drug or biological would be
packaged) or greater than the proposed CY 2022 drug packaging threshold
of $130 (so that 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 2022
is displayed in Table 41.
[[Page 63639]]
Comment: One commenter supported our proposal to continue our
current policy to make packaging determinations on a drug-specific
basis rather than a HCPCS code basis when multiple HCPCS codes are used
to describe different quantities of a drug or biological.
Response: We appreciate the support of the commenter.
After reviewing the public comments, we are finalizing our
proposal, without modification, 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. The packaging status of each drug
and biological HCPCS code to which this methodology applies in CY 2022
is displayed in Table 41.
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[[Page 63640]]
2. Payment for Drugs and Biologicals Without Pass-Through Status That
Are Not Packaged
a. Payment for Specified Covered Outpatient Drugs (SCODs) and Other
Separately Payable Drugs and Biologicals
Section 1833(t)(14) of the Act defines certain separately payable
radiopharmaceuticals, drugs, and biologicals and mandates specific
payments for these items. Under section 1833(t)(14)(B)(i) of the Act, a
``specified covered outpatient drug'' (known as a SCOD) is defined as a
covered outpatient drug, as defined in section 1927(k)(2) of the Act,
for which a separate APC has been established and that either is a
radiopharmaceutical agent or is a drug or biological for which payment
was made on a pass-through basis on or before December 31, 2002.
Under section 1833(t)(14)(B)(ii) of the Act, certain drugs and
biologicals are designated as exceptions and are not included in the
definition of SCODs. These exceptions are--
A drug or biological for which payment is first made on or
after January 1, 2003, under the transitional pass-through payment
provision in section 1833(t)(6) of the Act.
A drug or biological for which a temporary HCPCS code has
not been assigned.
During CYs 2004 and 2005, an orphan drug (as designated by
the Secretary).
Section 1833(t)(14)(A)(iii) of the Act requires that payment for
SCODs in CY 2006 and subsequent years be equal to the average
acquisition cost for the drug for that year as determined by the
Secretary, subject to any adjustment for overhead costs and taking into
account the hospital acquisition cost survey data collected by the
Government Accountability Office (GAO) in CYs 2004 and 2005, and later
periodic surveys conducted by the Secretary as set forth in the
statute. If hospital acquisition cost data are not available, the law
requires that payment be equal to payment rates established under the
methodology described in section 1842(o), section 1847A, or section
1847B of the Act, as calculated and adjusted by the Secretary as
necessary for purposes of paragraph (14). We refer to this alternative
methodology as the ``statutory default.'' Most physician Part B drugs
are paid at ASP+6 percent in accordance with section 1842(o) and
section 1847A of the Act.
Section 1833(t)(14)(E)(ii) of the Act provides for an adjustment in
OPPS payment rates for SCODs to take into account overhead and related
expenses, such as pharmacy services and handling costs. Section
1833(t)(14)(E)(i) of the Act required MedPAC to study pharmacy overhead
and related expenses and to make recommendations to the Secretary
regarding whether, and if so how, a payment adjustment should be made
to compensate hospitals for overhead and related expenses. Section
1833(t)(14)(E)(ii) of the Act authorizes the Secretary to adjust the
weights for ambulatory procedure classifications for SCODs to take into
account the findings of the MedPAC study.\176\
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\176\ Medicare Payment Advisory Committee. June 2005 Report to
the Congress. Chapter 6: Payment for pharmacy handling costs in
hospital outpatient departments. Available at: http://www.medpac.gov/docs/default-source/reports/June05_ch6.pdf?sfvrsn=0.
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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. In the CY 2022 OPPS/
ASC proposed rule, we proposed to apply section 1833(t)(14)(A)(iii)(II)
of the Act to all separately payable drugs and biologicals, including
SCODs. Although we do not distinguish SCODs in this discussion, we note
that we are required to apply section 1833(t)(14)(A)(iii)(II) of the
Act to SCODs, but we also are applying this provision to other
separately payable drugs and biologicals, consistent with our history
of using the same payment methodology for all separately payable drugs
and biologicals.
For a detailed discussion of our OPPS drug payment policies from CY
2006 to CY 2012, we refer readers to the CY 2013 OPPS/ASC final rule
with comment period (77 FR 68383 through 68385). In the CY 2013 OPPS/
ASC final rule with comment period (77 FR 68386 through 68389), we
first adopted the statutory default policy to pay for separately
payable drugs and biologicals at ASP+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 2021.
b. CY 2022 Payment Policy
For 2022, we proposed to continue our payment policy that has been
in effect since CY 2013 to pay for separately payable drugs and
biologicals, with the exception of 340B-acquired drugs, at ASP+6
percent in accordance with section 1833(t)(14)(A)(iii)(II) of the Act
(the statutory default). We proposed to pay for separately payable
nonpass-through drugs acquired with a 340B discount at a rate of ASP
minus 22.5 percent (as described in section V.B.6). We refer readers to
the CY 2018 OPPS/ASC final rule with comment period (82 FR 59353
through 59371), and the CY 2021 OPPS/ASC final rule with comment period
(85 FR 86042 through 86055) for more information about our current
payment policy for drugs and biologicals acquired with a 340B discount.
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
is not available. Consistent with section 1847A(c)(4) of the Act, in
the CY 2019 PFS final rule (83 FR 59661 to 59666), we finalized a
policy that, effective January 1, 2019, WAC-based payments for Part B
drugs made under section 1847A(c)(4) of the Act will utilize a 3-
percent add-on in place of the 6-percent add-on that was being used
according to our policy in effect as of CY 2018. For the CY 2019 OPPS,
we followed the same policy finalized in the CY 2019 PFS final rule (83
FR 59661 to 59666). For CYs 2020 and 2021, we adopted a policy to
utilize a 3-percent add-on instead of a 6-percent add-on for drugs that
are paid based on WAC under section 1847A(c)(4) of the Act pursuant to
our authority under section 1833(t)(14)(A)(iii)(II) (84 FR 61318 and 85
FR 86039). For 2022, we proposed to continue to utilize a 3-percent
add-on instead of a 6-percent add-on for drugs that are paid based on
WAC pursuant to our authority under section 1833(t)(14)(A)(iii)(II) of
the Act, which
[[Page 63641]]
provides, in part, that the amount of payment for a SCOD is the average
price of the drug in the year established under section 1847A of the
Act. We also proposed to apply this provision to non-SCOD separately
payable drugs. Because we proposed to establish the average price for a
drug paid based on WAC under section 1847A of the Act as WAC+3 percent
instead of WAC+6 percent, we believe it is appropriate to price
separately payable drugs paid based on WAC at the same amount under the
OPPS. We proposed that, if finalized, our proposal to pay for drugs or
biologicals at WAC+3 percent, rather than WAC+6 percent, would apply
whenever WAC-based pricing is used for a drug or biological under
1847A(c)(4). For drugs and biologicals that would otherwise be subject
to a payment reduction because they were acquired under the 340B
Program, the payment amount for these drugs (proposed as a rate of WAC
minus 22.5 percent) would continue to apply. We refer readers to the CY
2019 PFS final rule (83 FR 59661 to 59666) for additional background on
this policy.
We proposed that payments for separately payable drugs and
biologicals would be included in the budget neutrality adjustments,
under the requirements in section 1833(t)(9)(B) of the Act. We also
proposed that the budget neutral weight scalar would not be applied in
determining payments for these separately payable drugs and
biologicals.
We note that separately payable drug and biological payment rates
listed in Addenda A and B to the CY 2022 OPPS/ASC proposed rule
(available via the internet on the CMS website), which illustrate the
proposed CY 2022 payment of ASP+6 percent for separately payable
nonpass-through drugs and biologicals and ASP+6 percent for pass-
through drugs and biologicals, reflect either ASP information that is
the basis for calculating payment rates for drugs and biologicals in
the physician's office setting effective April 1, 2021, or WAC, AWP, or
mean unit cost from CY 2019 claims data and updated cost report
information available for the CY 2022 OPPS/ASC proposed rule. In
general, these published payment rates are not the same as the actual
January 2022 payment rates. This is because payment rates for drugs and
biologicals with ASP information for January 2022 will be determined
through the standard quarterly process where ASP data submitted by
manufacturers for the third quarter of CY 2021 (July 1, 2021, through
September 30, 2021) will be used to set the payment rates that are
released for the quarter beginning in January 2022 in December 2021. In
addition, payment rates for drugs and biologicals in Addenda A and B to
the proposed rule for which there was no ASP information available for
April 2021 are based on mean unit cost in the available CY 2019 claims
data. If ASP information becomes available for payment for the quarter
beginning in January 2022, we will price payment for these drugs and
biologicals based on their newly available ASP information. Finally,
there may be drugs and biologicals that have ASP information available
for the proposed rule (reflecting April 2021 ASP data) that do not have
ASP information available for the quarter beginning in January 2022.
These drugs and biologicals would then be paid based on mean unit cost
data derived from CY 2019 hospital claims. Therefore, the proposed
payment rates listed in Addenda A and B to the proposed rule are not
for January 2022 payment purposes and are only illustrative of the CY
2022 OPPS payment methodology using the most recently available
information at the time of issuance of the proposed rule.
Comment: Multiple commenters expressed their support for paying for
separately payable drugs and biologicals at ASP+6 percent. The
commenters believe this policy is consistent with statute and
Congressional intent, and generates more predictable payment for
providers than previous payment methodologies for drugs and
biologicals. The commenters believe the ASP+6 percent payment policy
ensures equivalent payment for drugs and biologicals between the
outpatient hospital setting and the physician office, which encourages
Medicare beneficiaries to receive care in the most clinically
appropriate setting.
Response: We appreciate the commenters' feedback.
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: Two commenters requested that we exclude both diagnostic
and therapeutic radiopharmaceuticals from our proposed policy that
during an initial sales period in which data on the prices for sales of
the drug or biological are not sufficiently available from the
manufacturer, that 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 (http://www.medpac.gov/docs/default-source/reports/jun17_reporttocongress_sec.pdf, pages 42 through 44) suggested that
greater parity between ASP-based acquisition costs and WAC-based
payments for Part B drugs could be achieved and recommended changing
the 6 percent add-on for WAC-based payments to 3 percent. Given this
evidence that WAC pricing tends to overestimate drug cost, we believe
our current and proposed policy to pay drugs at WAC plus 3 percent for
all drugs, biologicals, and radiopharmaceuticals when ASP is not
available more accurately reflects the cost of new products recently
entering the market than does WAC plus 6 percent.
After considering the public comments we received, we are
finalizing our proposals related to payment for SCODs and other
separately payable drugs and biologicals without modification.
c. Biosimilar Biological Products
For CY 2016 and CY 2017, we finalized a policy to pay for
biosimilar biological products based on the payment allowance of the
product as determined under section 1847A of the
[[Page 63642]]
Act and to subject nonpass-through biosimilar biological products to
our annual threshold-packaged policy (for CY 2016, 80 FR 70445 through
70446; and for CY 2017, 81 FR 79674). In the CY 2018 OPPS/ASC proposed
rule (82 FR 33630), for CY 2018, we proposed to continue this same
payment policy for biosimilar biological products.
In the CY 2018 OPPS/ASC final rule with comment period (82 FR
59351), we noted that, with respect to comments we received regarding
OPPS payment for biosimilar biological products, in the CY 2018 PFS
final rule, CMS finalized a policy to implement separate HCPCS codes
for biosimilar biological products. Therefore, consistent with our
established OPPS drug, biological, and radiopharmaceutical payment
policy, HCPCS coding for biosimilar biological products is based on the
policy established under the CY 2018 PFS final rule.
In the CY 2018 OPPS/ASC final rule with comment period (82 FR
59351), after consideration of the public comments we received, we
finalized our proposed payment policy for biosimilar biological
products, with the following technical correction: All biosimilar
biological products are eligible for pass-through payment and not just
the first biosimilar biological product for a reference product. In the
CY 2019 OPPS/ASC proposed rule (83 FR 37123), for CY 2019, we proposed
to continue the policy in place from CY 2018 to make all biosimilar
biological products eligible for pass-through payment and not just the
first biosimilar biological product for a reference product.
In addition, in CY 2018, we adopted a policy that biosimilars
without pass-through payment status that were acquired under the 340B
Program would be paid the ASP of the biosimilar minus 22.5 percent of
the reference product's ASP (82 FR 59367). We adopted this policy in
the CY 2018 OPPS/ASC final rule with comment period because we believe
that biosimilars without pass-through payment status acquired under the
340B Program should be treated in the same manner as other drugs and
biologicals acquired through the 340B Program. As noted earlier,
biosimilars with pass-through payment status are paid their own ASP+6
percent of the reference product's ASP. Separately payable biosimilars
that do not have pass-through payment status and are not acquired under
the 340B Program are also paid their own ASP plus 6 percent of the
reference product's ASP. If a biosimilar does not have ASP pricing, but
instead has WAC pricing, the WAC pricing add-on of either 3 percent or
6 percent is calculated from the biosimilar's WAC and is not calculated
from the WAC price of the reference product.
As noted in the CY 2019 OPPS/ASC proposed rule (83 FR 37123),
several stakeholders raised concerns to us that the payment policy for
biosimilars acquired under the 340B Program could unfairly lower the
OPPS payment for biosimilars not on pass-through payment status because
the payment reduction would be based on the reference product's ASP,
which would generally be expected to be priced higher than the
biosimilar, thus resulting in a more significant reduction in payment
than if the 22.5 percent was calculated based on the biosimilar's ASP.
We agreed with stakeholders that the current payment policy could
unfairly lower the price of biosimilars without pass-through payment
status that are acquired under the 340B Program. In addition, we noted
that we believed that these changes would better reflect the resources
and production costs that biosimilar manufacturers incur. We also
stated that we believe this approach is more consistent with the
payment methodology for 340B-acquired drugs and biologicals, for which
the 22.5 percent reduction is calculated based on the drug or
biological's ASP, rather than the ASP of another product. In addition,
we explained that we believed that paying for biosimilars acquired
under the 340B Program at ASP minus 22.5 percent of the biosimilar's
ASP, rather than 22.5 percent of the reference product's ASP, will more
closely approximate hospitals' acquisition costs for these products.
Accordingly, in the CY 2019 OPPS/ASC proposed rule (83 FR 37123),
we proposed changes to our Medicare Part B drug payment methodology for
biosimilars acquired under the 340B Program. Specifically, for CY 2019
and subsequent years, in accordance with section
1833(t)(14)(A)(iii)(II) of the Act, we proposed to pay nonpass-through
biosimilars acquired under the 340B Program at ASP minus 22.5 percent
of the biosimilar's ASP instead of the biosimilar's ASP minus 22.5
percent of the reference product's ASP. This proposal was finalized
without modification in the CY 2019 OPPS/ASC final rule with comment
period (83 FR 58977).
For 2022, we proposed to continue our policy to make all biosimilar
biological products eligible for pass-through payment and not just the
first biosimilar biological product for a reference product. We also
proposed to continue our current policy of paying for nonpass-through
biosimilars acquired under the 340B program at the biosimilar's ASP
minus 22.5 percent of the biosimilar's ASP instead of the biosimilar's
ASP minus 22.5 percent of the reference product's ASP, in accordance
with section 1833(t)(14)(A)(iii)(II) of the Act.
Comment: One commenter supported our proposal to continue our
policy from CY 2018 to make biosimilar biological products eligible for
pass-through payment and not just the first biosimilar biological
product for a reference product.
Response: We appreciate the commenter's support of this established
policy.
Comment: Multiple commenters supported our proposal to pay nonpass-
through biosimilars acquired under the 340B Program at ASP minus 22.5
percent of the biosimilar's ASP, rather than the reference product's
ASP.
Response: We appreciate the commenters' support. Please see section
V.B.6. of this final rule with comment period for a discussion of
payment policy for drugs and biologicals acquired under the 340B
program.
Comment: One commenter did not support our proposal to continue our
CY 2018 policy to make all biosimilar biological products eligible for
pass-through payment and not just the first biosimilar biological
product for a reference product. The commenter believes that there
should be a ``level playing field'' between biosimilars and their
reference products in order to increase competition and reduce costs
for beneficiaries. The commenter does not believe it is fair for
biosimilars of a reference product to be receiving passthrough payment
of ASP plus 6 percent of the reference product's ASP. The commenter
pointed out that when the reference product is no longer eligible for
pass-through payment, if it is acquired under the 340B program,
hospitals would be paid for the product at ASP minus 22.5 percent,
while the biosimilar that has pass-through status continues to receive
payment at ASP plus 6 percent of the reference product's ASP. The
commenter believes that this difference in the payment rates for
biosimilars and their reference products could potentially lead to
increased Medicare spending on biosimilars as providers utilize
biosimilars instead of the biosimilars' reference products because of
the higher payment rates for biosimilars in these circumstances.
Response: As discussed in the CY 2019 OPPS/ASC final rule with
comment period (83 FR 58977), we continue to believe that eligibility
for pass-through payment status reflects the unique, complex nature of
biosimilars
[[Page 63643]]
and is important as biosimilars become established in the market, just
as it is for all other new drugs and biologicals. In terms of the
potential increased payment for biosimilars under our policy to allow
biosimilars to be eligible for pass-through status, overall increased
competition due to the presence of more biosimilars on the market as a
result of this policy is expected to drive payments down for both
Medicare and for beneficiaries over time, even if there may be
increased spending on biosimilars in the short term.
After consideration of the public comments we received, we are
finalizing our proposed payment policy for biosimilar products, without
modification, to continue the policy established in CY 2018 to make all
biosimilar biological products eligible for pass-through payment and
not just the first biosimilar biological product for a reference
product. We are also finalizing our proposal to continue to pay
nonpass-through biosimilars acquired under the 340B Program at the
biosimilar's ASP minus 22.5 percent of the biosimilar's, rather than
the reference product's ASP. Our final policy regarding the payment
rate for drugs and biologicals that are acquired under the 340B program
is described in section V.B.6 of this final rule with comment period.
3. Payment Policy for Therapeutic Radiopharmaceuticals
For CY 2022, we proposed to continue the payment policy for
therapeutic radiopharmaceuticals that began in CY 2010. We pay for
separately payable therapeutic radiopharmaceuticals under the ASP
methodology adopted for separately payable drugs and biologicals. If
ASP information is unavailable for a therapeutic radiopharmaceutical,
we base therapeutic radiopharmaceutical payment on mean unit cost data
derived from hospital claims. We believe that the rationale outlined in
the CY 2010 OPPS/ASC final rule with comment period (74 FR 60524
through 60525) for applying the principles of separately payable drug
pricing to therapeutic radiopharmaceuticals continues to be appropriate
for nonpass-through, separately payable therapeutic
radiopharmaceuticals in CY 2022. Therefore, we proposed for CY 2022 to
pay all nonpass-through, separately payable therapeutic
radiopharmaceuticals at ASP+6 percent, based on the statutory default
described in section 1833(t)(14)(A)(iii)(II) of the Act. For a full
discussion of ASP-based payment for therapeutic radiopharmaceuticals,
we refer readers to the CY 2010 OPPS/ASC final rule with comment period
(74 FR 60520 through 60521). We also proposed to rely on CY 2019 mean
unit cost data derived from hospital claims data for payment rates for
therapeutic radiopharmaceuticals for which ASP data are unavailable and
to update the payment rates for separately payable therapeutic
radiopharmaceuticals according to our usual process for updating the
payment rates for separately payable drugs and biologicals on a
quarterly basis if updated ASP information is unavailable. For a
complete history of the OPPS payment policy for therapeutic
radiopharmaceuticals, we refer readers to the CY 2005 OPPS final rule
with comment period (69 FR 65811), the CY 2006 OPPS final rule with
comment period (70 FR 68655), and the CY 2010 OPPS/ASC final rule with
comment period (74 FR 60524). The proposed CY 2022 payment rates for
nonpass-through, separately payable therapeutic radiopharmaceuticals
are included in Addenda A and B to the CY 2022 OPPS/ASC proposed rule
(which are available via the internet on the CMS website).
Comment: One commenter supported the continuation of this policy to
provide a predicable payment methodology and avoid the payment swings
that occurred prior to adoption of the statutory default rate for
therapeutic radiopharmaceuticals.
Response: We thank the commenter for their support.
We did not receive any additional public comments on this proposal
and are finalizing our proposal, without modification, to continue to
pay all nonpass-through, separately payable therapeutic
radiopharmaceuticals at ASP+6 percent. We are also finalizing our
proposal to continue to rely on CY 2019 mean unit cost data derived
from hospital claims data for payment rates for therapeutic
radiopharmaceuticals for which ASP data are unavailable. The CY 2022
final payment rates for nonpass-through separately payable therapeutic
radiopharmaceuticals are included in Addenda A and B to this final rule
with comment period (which are available via the internet on the CMS
website).
4. Payment for Blood Clotting Factors
For CY 2021, 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 (85 FR 86041). That is, for CY 2021, we provided payment
for blood clotting factors under the OPPS at ASP+6 percent, plus an
additional payment for the furnishing fee. We note that when blood
clotting factors are provided in physicians' offices under Medicare
Part B and in other Medicare settings, a furnishing fee is also applied
to the payment. The CY 2021 updated furnishing fee was $0.238 per unit.
For 2022, we proposed to pay for blood clotting factors at ASP+6
percent, consistent with our proposed payment policy for other nonpass-
through, separately payable drugs and biologicals, and to continue our
policy for payment of the furnishing fee using an updated amount. Our
policy to pay a furnishing fee for blood clotting factors under the
OPPS is consistent with the methodology applied in the physician's
office and in the inpatient hospital setting. These methodologies were
first articulated in the CY 2006 OPPS final rule with comment period
(70 FR 68661) and later discussed in the CY 2008 OPPS/ASC final rule
with comment period (72 FR 66765). The proposed furnishing fee update
is based on the percentage increase in the Consumer Price Index (CPI)
for medical care for the 12-month period ending with June of the
previous year. Because the Bureau of Labor Statistics releases the
applicable CPI data after the PFS and OPPS/ASC proposed rules are
published, we are not able to include the actual updated furnishing fee
in the proposed rules. Therefore, in accordance with our policy, as
finalized in the CY 2008 OPPS/ASC final rule with comment period (72 FR
66765), we proposed to announce the actual figure for the percent
change in the applicable CPI and the updated furnishing fee calculated
based on that figure through applicable program instructions and
posting on our website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice/index.html.
We proposed to provide payment for blood clotting factors under the
same methodology as other separately payable drugs and biologicals
under the OPPS and to continue payment of an updated furnishing fee. We
will announce the actual figure of the percent change in the applicable
CPI and the updated furnishing fee calculation based on that figure
through the applicable program instructions and posting on the CMS
website.
Comment: One commenter supports our proposal to continue to pay for
blood clotting factors at ASP+6 percent plus a furnishing fee for the
clotting factor update annually using the CPI. The commenter also
supports our policy to pay the same clotting factor
[[Page 63644]]
furnishing fee in both the hospital outpatient and physician office
settings.
Response: We appreciate the commenter's support for our policies.
After reviewing the public comment that we received, we are
finalizing our proposal, without modification, to provide payment for
blood clotting factors under the same methodology as other separately
payable drugs and biologicals under the OPPS and to continue payment of
an updated furnishing fee. We will announce the actual figure of the
percent change in the applicable CPI and the updated furnishing fee
calculation based on that figure through the applicable program
instructions and posting on the CMS website.
5. Payment for Nonpass-Through Drugs, Biologicals, and
Radiopharmaceuticals With HCPCS Codes But Without OPPS Hospital Claims
Data
For CY 2022, we proposed to continue to use the same payment policy
as in CY 2021 for nonpass-through drugs, biologicals, and
radiopharmaceuticals with HCPCS codes but without OPPS hospital claims
data, which describes how we determine the payment rate for drugs,
biologicals, or radiopharmaceuticals without an ASP. For a detailed
discussion of the payment policy and methodology, we refer readers to
the CY 2016 OPPS/ASC final rule with comment period (80 FR 70442
through 70443). The proposed CY 2022 payment status of each of the
nonpass-through drugs, biologicals, and radiopharmaceuticals with HCPCS
codes but without OPPS hospital claims data is listed in Addendum B to
the CY 2022 OPPS/ASC proposed rule, which is available via the internet
on the CMS website.
We did not receive any comments on our proposal. Therefore, we are
finalizing our CY 2022 proposal without modification, including our
proposal to assign drug or biological products status indicator ``K''
and pay for them separately for the remainder of CY 2022 if pricing
information becomes available. The CY 2022 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 via the
internet on the CMS website.
6. CY 2022 OPPS Payment Methodology for 340B Purchased Drugs
a. Overview
Under the OPPS, payment rates for drugs are generally provided for
in section 1833(t)(14)(A). Under that provision, the payment amount is
more specifically set forth by cross-reference to section 1847A, which
generally sets a default rate of ASP+6 percent for certain drugs;
however, the Secretary has statutory authority to adjust that rate
under the OPPS. As described below, beginning in CY 2018, the Secretary
adjusted the 340B drug payment rate to ASP minus 22.5 percent to
approximate a minimum average discount for 340B drugs, which was based
on findings of the GAO and MedPAC that hospitals were acquiring drugs
at a significant discount under HRSA's 340B Drug Pricing Program. As
described in the following sections, in December 2018, the United
States District Court for the District of Columbia (the district court)
concluded that the Secretary lacks the authority to bring the default
rate in line with average acquisition cost unless the Secretary obtains
survey data from hospitals on their acquisition costs. On July 10,
2019, the district court entered final judgment. The agency appealed to
the United States Court of Appeals for the District of Columbia Circuit
(hereinafter referred to as ``the D.C. Circuit''), and on July 31,
2020, the court entered an opinion reversing the district court's
judgment in this matter. Following the D.C. Circuit's reversal of the
lower court's decision, appellees' petition for panel rehearing and
petition for rehearing en banc were denied on October 16, 2020. For CY
2021, CMS continued its policy of paying for drugs and biologicals
acquired through the 340B Program at ASP minus 22.5 percent.
On January 10, 2021, the appellees filed a petition for a writ of
certiorari in the United States Supreme Court. On July 2, 2021, the
Supreme Court granted their petition for a writ of certiorari and
directed the parties to argue whether the petitioners' suit challenging
HHS's 340B drugs payment adjustment is precluded by section
1833(t)(12).\177\
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\177\ https://www.supremecourt.gov/orders/courtorders/070221zor_4gc5.pdf. Accessed July 8, 2021.
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b. Background
In the CY 2018 OPPS/ASC proposed rule (82 FR 33558 through 33724),
we proposed changes to the OPPS payment methodology for drugs and
biologicals (hereinafter referred to collectively as ``drugs'')
acquired under the 340B Program. We proposed these changes to better,
and more accurately, reflect the resources and acquisition costs that
these hospitals incur. We stated our belief that such changes would
allow Medicare beneficiaries (and the Medicare program) to pay a more
appropriate amount when hospitals participating in the 340B Program
furnish drugs to Medicare beneficiaries that are purchased under the
340B Program. Subsequently, in the CY 2018 OPPS/ASC final rule with
comment period (82 FR 59369 through 59370), we finalized our proposal
and adjusted the payment rate for separately payable drugs and
biologicals (other than drugs with pass-through payment status and
vaccines) acquired under the 340B Program from ASP+6 percent to ASP
minus 22.5 percent. We stated that our goal was to make Medicare
payment for separately payable drugs more aligned with the resources
expended by hospitals to acquire such drugs, while recognizing the
intent of the 340B Program to allow covered entities, including
eligible hospitals, to stretch scarce resources in ways that enable
hospitals to continue providing access to care for Medicare
beneficiaries and other patients. Congress created the 340B Drug
Pricing Program so that the eligible entities--safety net providers
identified in the statute--could stretch scarce Federal resources as
far as possible, reaching more eligible patients and providing more
comprehensive services. By design, the 340B Program increases the
resources available to these safety net providers by providing
discounts on covered outpatient drugs that generate savings that can be
used to support patient care or other services. When the program was
created, there was an understanding that many of the patients seen by
these safety net providers were Medicare and Medicaid beneficiaries.
This rule aims to fulfill the goals of different Federal programs, each
of which helps ensure access to care for vulnerable populations. We
note, however, that the 340B program does not contemplate subsidization
from Medicare in the form of payments far exceeding hospitals'
acquisition costs. We also note that critical access hospitals are not
paid under the OPPS, and therefore are not subject to the OPPS payment
policy for 340B-acquired drugs. We also excepted rural sole community
hospitals, children's hospitals, and PPS-exempt cancer hospitals from
the 340B payment adjustment in CY 2018. In addition, as stated in the
CY 2018 OPPS/ASC final rule with comment period, this policy change
does not apply to drugs with pass-through payment status, which are
required to be paid based on the ASP methodology, or vaccines, which
are excluded from the 340B Program.
In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79699
[[Page 63645]]
through 79706), we implemented section 603 of the Bipartisan Budget Act
of 2015. As a general matter, applicable items and services furnished
in certain off-campus outpatient departments of a provider on or after
January 1, 2017, are not considered covered outpatient services for
purposes of payment under the OPPS and are paid ``under the applicable
payment system,'' which is generally the Physician Fee Schedule (PFS).
However, consistent with our policy to pay separately payable, covered
outpatient drugs and biologicals acquired under the 340B Program at ASP
minus 22.5 percent, rather than ASP+6 percent, when billed by a
hospital paid under the OPPS that is not excepted from the payment
adjustment, in the CY 2019 OPPS/ASC final rule with comment period (83
FR 59015 through 59022), we finalized a policy to pay ASP minus 22.5
percent for 340B-acquired drugs and biologicals furnished in non-
excepted off-campus PBDs paid under the PFS. We adopted this payment
policy effective for CY 2019 and subsequent years.
We clarified in the CY 2019 OPPS/ASC proposed rule (83 FR 37125)
that the 340B payment adjustment applies to drugs that are priced using
either WAC or AWP, and that it has been our policy to subject 340B-
acquired drugs that use these pricing methodologies to the 340B payment
adjustment since the policy was first adopted. The 340B payment
adjustment for WAC-priced drugs is WAC minus 22.5 percent. 340B-
acquired drugs that are priced using AWP are paid an adjusted amount of
69.46 percent of AWP. The 69.46 percent of AWP is calculated by first
reducing the original 95 percent of AWP price by 6 percent to generate
a value that is similar to ASP or WAC with no percentage markup. Then
we apply the 22.5 percent reduction to ASP/WAC-similar AWP value to
obtain the 69.46 percent of AWP, which is similar to either ASP minus
22.5 percent or WAC minus 22.5 percent.
As discussed in the CY 2018 OPPS/ASC final rule with comment period
(82 FR 59369 through 59370), to effectuate the payment adjustment for
340B-acquired drugs, we implemented modifier ``JG'', effective January
1, 2018. Hospitals paid under the OPPS, other than a type of hospital
excluded from the OPPS (such as critical access hospitals), or excepted
from the 340B drug payment policy for CY 2018, were required to report
modifier ``JG'' on the same claim line as the drug HCPCS code to
identify a 340B-acquired drug. For CY 2018, rural sole community
hospitals, children's hospitals and PPS-exempt cancer hospitals were
excepted from the 340B payment adjustment. These hospitals were
required to report informational modifier ``TB'' for 340B-acquired
drugs, and continue to be paid ASP+6 percent. We refer readers to the
CY 2018 OPPS/ASC final rule with comment period (82 FR 59353 through
59370) for a full discussion and rationale for the CY 2018 policies and
use of modifiers ``JG'' and ``TB''.
In the CY 2019 OPPS/ASC final rule with comment period (83 FR
58981), we continued the Medicare 340B payment policies that were
implemented in CY 2018 and adopted a policy to pay for nonpass-through
340B-acquired biosimilars at ASP minus 22.5 percent of the biosimilar's
ASP, rather than of the reference product's ASP. In the CY 2020 OPPS/
ASC final rule with comment period (84 FR 61321), we continued the 340B
policies that were implemented in CY 2018 and CY 2019.
Our CY 2018 and 2019 OPPS payment policies for 340B-acquired drugs
have been the subject of ongoing litigation. On December 27, 2018, in
the case of American Hospital Association, et al. v. Azar, et al., the
district court concluded in the context of reimbursement requests for
CY 2018 that the Secretary exceeded his statutory authority by
adjusting the Medicare payment rates for drugs acquired under the 340B
Program to ASP minus 22.5 percent for that year.\178\ In that same
decision, the district court recognized the ``havoc that piecemeal
review of OPPS payment could bring about' in light of the budget
neutrality requirement,'' and ordered supplemental briefing on the
appropriate remedy.\179\ On May 6, 2019, after briefing on remedy, the
district court issued an opinion that reiterated that the 2018 rate
reduction exceeded the Secretary's authority, and declared that the
rate reduction for 2019 (which had been finalized since the Court's
initial order was entered) also exceeded his authority.\180\ Rather
than ordering HHS to pay plaintiffs their alleged underpayments,
however, the district court recognized that crafting a remedy is ``no
easy task, given Medicare's complexity,'' \181\ and initially remanded
the issue to HHS to devise an appropriate remedy while also retaining
jurisdiction. The district court acknowledged that ``if the Secretary
were to retroactively raise the 2018 and 2019 340B rates, budget
neutrality would require him to retroactively lower the 2018 and 2019
rates for other Medicare Part B products and services.'' \182\ ``And
because HHS has already processed claims under the previous rates, the
Secretary would potentially be required to recoup certain payments made
to providers; an expensive and time-consuming prospect.'' \183\
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\178\ American Hosp. Ass'n, et al. v. Azar, et al., No. 1:18-cv-
2084 (D.D.C. Dec. 27, 2018).
\179\ Id. at 35 (quoting Amgen, Inc. v. Smith, 357 F.3d 103, 112
(D.C. Cir. 2004) (citations omitted)).
\180\ See May 6, 2019 Memorandum Opinion, Granting in Part
Plaintiffs' Motion for a Permanent Injunction; Remanding the 2018
and 2019 OPPS Rules to HHS at 10-12.
\181\ Id. at 13.
\182\ Id. at 19.
\183\ Id. (citing Declaration of Elizabeth Richter).
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We respectfully disagreed with the district court's understanding
of the scope of the Secretary's adjustment authority. On July 10, 2019,
the district court entered final judgment. The agency appealed to the
D.C. Circuit, and on July 31, 2020, the court entered an opinion
reversing the district court's judgment in this matter. Following the
D.C. Circuit's decision, appellees' petition for panel rehearing and
petition for rehearing en banc were denied on October 16, 2020. In
January of 2021, appellees petitioned the United States Supreme Court
for a writ of certiorari. On July 2, 2021, the Court granted the
petition.
Before the D.C. Circuit upheld our authority to pay ASP minus 22.5
percent, we stated in the CY 2020 OPPS/ASC final rule with comment
period that we were taking the steps necessary to craft an appropriate
remedy in the event of an unfavorable decision on appeal. Notably,
after the CY 2020 OPPS/ASC proposed rule was issued, we announced in
the Federal Register (84 FR 51590) our intent to conduct a 340B
hospital survey to collect drug acquisition cost data for certain
quarters in CY 2018 and 2019. We stated that such survey data may be
used in setting the Medicare payment amount for drugs acquired by 340B
hospitals for cost years going forward, and also may be used to devise
a remedy for prior years if the district court's ruling was upheld on
appeal. The district court itself acknowledged that CMS may base the
Medicare payment amount on average acquisition cost when survey data
are available.\184\ No 340B hospital disputed in the rulemakings for CY
2018 and 2019 that the ASP minus 22.5 percent formula was a
conservative adjustment that represented the minimum discount that
hospitals receive for drugs acquired through the 340B program, which is
significant because 340B hospitals have internal data regarding their
own drug acquisition costs. We stated in the CY 2020 OPPS/ASC final
rule with comment period that we thus
[[Page 63646]]
anticipated that survey data collected for CY 2018 and 2019 would
confirm that the ASP minus 22.5 percent rate is a conservative amount
that overcompensates covered entity hospitals for drugs acquired under
the 340B program. We also explained that a remedy that relies on such
survey data could avoid the complexities referenced in the district
court's opinion. For a complete discussion of the Hospital Acquisition
Cost Survey for 340B-Acquired Specified Covered Outpatient Drugs, we
refer readers to the CY 2021 OPPS/ASC proposed rule (85 FR 48882
through 48891) and the CY 2021 OPPS/ASC final rule with comment period
(85 FR 86042 through 86055).
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\184\ See American Hosp. Assoc. v. Azar, 348 F. Supp. 3d 62, 82
(D.D.C. 2018).
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We proposed a payment rate for 340B drugs of ASP minus 28.7 percent
based on survey data, and also proposed in the alternative that the
agency could continue its current policy of paying ASP minus 22.5
percent for CY 2021. We explained that we adopted the OPPS 340B payment
policy based on the average minimum discount for 340B-acquired drugs
being approximately ASP minus 22.5 percent. The estimated discount was
based on a MedPAC analysis identifying 22.5 percent as a conservative
minimum discount that 340B entities receive when they purchase drugs
under the 340B program, which we discussed in the CY 2018 OPPS/ASC
final rule with comment period (82 FR 52496). We emphasized that we
continue to believe that ASP minus 22.5 percent is an appropriate
payment rate for 340B-acquired drugs under the authority of section
1833(t)(14)(A)(iii)(II) for the reasons we stated when we adopted this
policy in CY 2018 (82 FR 59216). We pointed out that on July 31, 2020,
the D.C. Circuit reversed the decision of the district court, holding
that this interpretation of the statute was reasonable. Therefore, we
also proposed in the alternative that the agency could continue the
current Medicare payment policy for CY 2021. If adopted, we stated that
this proposed policy would continue the current Medicare payment policy
for CY 2021.
Based on feedback from stakeholders, we stated that we believed
maintaining the current payment policy of paying ASP minus 22.5 percent
for 340B drugs was appropriate in order to maintain consistent and
reliable payment for these drugs both for the remainder of the PHE, and
after its conclusion, to give hospitals increased certainty as to
payments for these drugs. We explained that continuing our current
policy also gives us more time to conduct further analysis of hospital
survey data for potential future use for 340B drug payment. We also
noted that any changes to the current 340B payment policy would be
adopted through public notice and comment rulemaking.
Finally, we stated that while we believe our methods to conduct the
340B Drug Acquisition Cost Survey, as well as the methodology we used
to calculate the proposed average or typical discount received by 340B
entities on 340B drugs, are valid, we nonetheless recognize the
comments that we received from stakeholders. Utilization of the survey
data is complex, and we emphasized that we wish to continue to evaluate
how to balance and weigh the use of the 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. We stated that we would continue to assess commenters'
feedback as we explore whether survey data should be considered
hospital acquisition cost data for purposes of paying for drugs
acquired under section 1833(t)(14)(A)(iii)(I) of the Act.
c. CY 2022 Proposed 340B Drug Payment Policy
For CY 2022, we proposed to continue our current policy of paying
ASP minus 22.5 percent for 340B-acquired drugs and biologicals,
including when furnished in nonexcepted off-campus PBDs paid under the
PFS. We proposed, in accordance with section 1833(t)(14)(A)(iii)(II) of
the Act, to pay for separately payable Medicare Part B drugs and
biologicals (assigned status indicator ``K''), other than vaccines and
drugs on pass-through status, that are acquired through the 340B
Program at ASP minus 22.5 percent when billed by a hospital paid under
the OPPS that is not excepted from the payment adjustment. We proposed
to continue our current policy for calculating payment for 340B-
acquired biosimilars, which is discussed in section V.B.2.c. of the CY
2019 OPPS/ASC final rule with comment period, and would continue the
policy we finalized in CY 2019 to pay ASP minus 22.5 percent for 340B-
acquired drugs and biologicals furnished in nonexcepted off-campus PBDs
paid under the PFS.
We also proposed to continue the 340B payment adjustment for WAC-
priced drugs, which is WAC minus 22.5 percent. 340B-acquired drugs that
are priced using AWP would continue to be paid an adjusted amount of
69.46 percent of AWP. Additionally, we proposed to continue to exempt
rural sole community hospitals (as described under the regulations at
Sec. 412.92 and designated as rural for Medicare purposes), children's
hospitals, and PPS-exempt cancer hospitals from the 340B payment
adjustment. We stated that these hospitals would continue to report
informational modifier ``TB'' for 340B-acquired drugs, and would
continue to be paid ASP+6 percent. We also explained that we may
revisit our policy to exempt rural SCHs, as well as other hospital
types, from the 340B drug payment reduction in future rulemaking.
We stated that we are also continuing to require hospitals to use
modifiers to identify 340B-acquired drugs. We refer readers to the CY
2018 OPPS/ASC final rule with comment period (82 FR 59353 through
59370) for a full discussion and rationale for the CY 2018 policies and
the requirements for use of modifiers ``JG'' and ``TB''. We explained
that we believe maintaining the current policy of paying ASP minus 22.5
percent for 340B drugs is appropriate given the July 31, 2020 D.C.
Circuit decision, which reversed the district court's decision and held
that the interpretation of the statute was reasonable when the 340B
drug payment policy was implemented in CY 2018. We noted that any
changes to the current 340B payment policy would be adopted through
public notice and comment rulemaking.
While we believe the Secretary has discretion to propose a payment
rate for 340B drugs based on the 2020 survey results, we explained that
we also continue to believe that the current payment rate of ASP minus
22.5 percent represents the minimum discount that 340B covered entities
receive, which more closely aligns the payment rate with the resources
expended by 340B hospitals to acquire such drugs compared to a payment
rate of ASP+6 percent, while also recognizing the intent of the 340B
program to allow covered entities, including eligible hospitals, to
stretch scarce resources in ways that enable hospitals to continue
providing access to care for Medicare beneficiaries and other patients.
Additionally, we stated that we continue to believe it is important to
provide consistency and reliable payment for these drugs both for the
remainder of the PHE, and after its conclusion, to give hospitals
increased certainty as to payments for these drugs.
d. Comments on the Proposed CY 2022 340B Payment Policy
Comment: Several commenters, including a hospital association,
pharmaceutical research and manufacturing companies, and a community
oncology association,
[[Page 63647]]
supported the current OPPS payment policy for 340B-acquired drugs. They
believed that approximating payment based on acquisition costs is
appropriate; however, they also recommended reform to the 340B program
itself. Some of these commenters believed the policy would continue to
address the inappropriate growth of the 340B Program, stem physician
practice consolidation with hospitals, and preserve patient access to
community-based care.
Response: We thank the commenters for their support of our 340B
payment policies. We note that comments related to the reform of the
340B program are outside of the scope of this final rule and we also
note that the 340B program is administered by the Health Resources and
Services Administration, not CMS; however, we thank commenters for
their input.
Comment: A commenter inquired if the 340B drug payment policy
applies to therapeutic radiopharmaceuticals that are paid based on the
mean unit cost data, stating that it would be inappropriate and
inaccurate to apply the 22.5 percent reduction to these payment
amounts. Another commenter opposed the 340B drug payment policy
specifically for therapeutic radiopharmaceuticals, citing the unique
cost structure of radiopharmaceuticals. Another commenter requested a
similar-product specific exemption for Chimeric Antigen Receptor T-cell
(CAR T-cell) therapy when purchased through the 340B program.
Response: The 340B drug payment policy applies to OPPS separately
payable drugs (status indicator ``K'') purchased through the 340B drug
program, which include therapeutic radiopharmaceuticals when these
products are acquired through the 340B drug program. The classes of
drugs exempted from the policy are vaccines (status indicator ``L'' or
``M''), and drugs with transitional pass-through payment status (status
indicator ``G''). We note that the drug cost methodology has no impact
on the application of the 340B discount. As we noted above, our policy
applies to all drugs purchased through the 340B drug program except for
vaccines and drugs with transitional pass-through payment status. While
we acknowledge that radiopharmaceuticals necessitate special handling,
we note that there are other drug classes that also necessitate special
handling under the 340B program. Therefore, we disagree with the
commenter that therapeutic radiopharmaceuticals purchased through the
340B drug program should qualify for an exemption from application of
the payment adjustment. We note that, under the OPPS, the 340B payment
adjustment is ASP minus 22.5 percent, WAC minus 22.5 percent, or 69.46
percent of AWP. We reiterate, these payment rates are based on the
minimum average discount for products purchased through the 340B
program, with the actual acquisition costs likely being much lower.
Comment: Some commenters had concerns that new biosimilars on pass-
through status would have a competitive advantage over their reference
product as a result of the disparity in OPPS payment for these products
when a biosimilar has pass-through status. Commenters believed the
disparity resulting from the combined 340B drug payment and pass-
through policies would advantage biosimilars receiving pass-through
payment if the applicable reference product is acquired under the 340B
program and not receiving pass-through payment. The commenters believe
the disparity would lead to inappropriate prescribing inconsistent with
clinical guidelines and/or standards of care.
Response: We disagree with commenters that the current payment
policy would unfairly place reference products at a competitive
disadvantage relative to their applicable biosimilars. We believe the
continuation of our current biosimilar policy will allow for
appropriate payment and access to these important treatments. As noted
in the CY 2021 OPPS/ASC final rule with comment period (85 FR 86043),
we do not believe that the biosimilars' temporary payments provided by
pass-through status will create the substantial competitive advantage
that commenters described. We note that the advantage of pass-through
payment exists under the current 340B policy that includes both new
drugs and biosimilars. We also note we are continuing the policy from
previous years regarding biosimilars and 340B payment. Please see
section V.B.2.C. of this final rule with comment period for additional
discussion regarding biosimilars and section V.A.1. for additional
discussion on drug pass-through payments. We note that the advantage of
pass-through payment exists under the current 340B policy that includes
both new drugs and biosimilars. We are continuing the policy from
previous years regarding payment for biosimilars acquired under the
340B program.
Comment: Several commenters disagreed that ASP minus 22.5 was a
conservative adjustment that represented the minimum discount that
hospitals receive when they acquire drugs through the 340B program.
They contended that they are losing money when dispensing certain drugs
as the price paid by CMS is significantly lower than the price paid by
the entity.
Response: We thank the commenters for their feedback. The 22.5
percent discount off of ASP is a conservative minimum discount for
products acquired under the 340B program based on a 2015 MedPAC
analysis, which we discussed in the CY 2018 OPPS/ASC final rule with
comment period (82 FR 52496). Our 2020 Hospital Acquisition Cost Survey
for 340B-Acquired SCODs has shown the average discount to be about 34.7
percent. As noted in the 2021 OPPS/ASC final rule with comment period
(85 FR 86045), the 2020 Hospital Acquisition Cost Survey for 340B-
Acquired SCODS incorporated the 340B ceiling prices for hospitals that
did not affirmatively respond to the survey and may have skewed the
average discount determined based on survey results (34.7 percent off
of ASP) towards the minimum average discount (that is, the ceiling
price) that a 340B hospital would receive on a drug. Since the ceiling
price is the maximum amount covered entities may permissibly be
required to pay for a drug under section 340B(a)(1) of the Public
Health Service Act, we would not expect any 340B hospital to have
acquisition costs for any acquired drug that are greater than ASP minus
22.5 percent. Therefore, we disagree that covered entities are, on
average, losing money under the current 340B drug payment policy of ASP
minus 22.5 percent for drugs purchased through the 340B drug program.
Comment: Several commenters requested that we make our 340B
exemptions policy permanent. Additionally, commenters asked CMS to
extend the exemption to urban SCHs, Medicare Dependent Hospitals, Rural
Referral Centers.
Response: We thank commenters for their recommendations. At this
time, we do not believe it is appropriate to revise our 340B exemptions
policy and believe we should maintain our current policy for CY 2022.
Nonetheless, we will take these comments into consideration for future
rulemaking.
Comment: Several commenters stated that CMS has not provided
sufficient analysis for the continuation of the 340B payment policy,
expressing their belief that CMS has not considered changes in
utilization or volume for hospitals that are actively participating in
the 340B program since the implementation of the policy. They further
noted that CMS has not analyzed the impact of the prior year's
reimbursement changes for drugs acquired under the 340B program for the
affected hospitals. They contended
[[Page 63648]]
that CMS has not provided evidence that the payment policy remains
budget neutral by recalculating the policy's impact to make sure the
conversion factor is properly adjusted over time to reflect changes in
inflation or 340B drug utilization.
Response: In the CY 2018 OPPS/ASC final rule with comment period
(82 FR 59369 through 59370), we implemented the 340B drug payment
policy and adjusted the payment rate for separately payable drugs and
biologicals (other than drugs with pass-through payment status and
vaccines) acquired under the 340B Program. This adjustment changed the
payment rate from ASP+6 percent to ASP minus 22.5 percent for drugs
subject to this policy. In that rule, we stated that our goal was to
make Medicare payment for separately payable drugs more aligned with
the resources expended by hospitals to acquire such drugs. We believe
the current 340B drug payment policy reflects the average minimum
discount that 340B participating hospitals receive for drugs acquired
under the 340B Program, and we believe it is inappropriate for Medicare
to subsidize other programs through Medicare payments for separately
payable drugs. We note the data collected in our 2020 Hospital
Acquisition Cost Survey for 340B-acquired SCODs found the average 340B
program drug discount to be 34.7 percent.
With respect to OPPS budget neutrality and the conversion factor,
OPPS budget neutrality is generally developed on a prospective basis by
isolating the effect of any changes in payment policy or data under the
prospective OPPS with all other factors held constant. We note that
since the CY 2018 implementation of the 340B drug payment policy in
which we developed a budget neutrality adjustment for the policy, the
adjusted percentage payment has remained at ASP minus 22.5 percent. As
a result, while some of the claims may change based on drug payment and
billing, as indicated by the ``JG'' modifier, these drugs, including
their utilization and expected payments, would be included as part of
the broader budget neutrality adjustments, but collectively they would
not have a separate budget neutrality adjustment specifically for the
340B drug payment policy. We note that in the rules in which we
proposed to establish or modify the adjustment, we have included in the
impact analysis the estimated effects on different categories of
providers based on the policy. Finally, we note that we monitor the
payment and utilization patterns associated with this adjustment and
for drug spending more broadly, and will continue to do so.
Comment: Several commenters called on CMS to suspend the current
340B drug payment policy and restore the 340B drug and biological
payment rate to the statutory ASP+6 percent until the litigation is
resolved in the U.S. Supreme Court. Other commenters recommended CMS
postpone any changes to the 340B drug payment policy until the court
case has concluded. Others recommended CMS suspend the policy amid the
COVID-19 Public Health Emergency (PHE).
Response: We acknowledge that the issue of the Secretary's
authority to adjust the 340B drug payment rate is subject to litigation
before the U.S. Supreme Court. As explained at prior stages of the
litigation, we believe that the suit now before the Court is precluded
by 1833(t)(12), and, in the alternative, that our 340B drug payment
policy is within the statutory authority under 1833(t)(14)(A), which
was confirmed by the D.C. Circuit. While the litigation involving this
policy is pending, we believe maintaining the current payment policy
for CY 2022 would be appropriate in order to maintain consistent and
reliable payment. Regarding payment during the COVID-19 PHE, we believe
maintaining consistent payment is important; therefore, we are
maintaining our proposed policy. We note that any changes to this
payment policy would be adopted through notice and comment rulemaking.
Comment: Many commenters opposed the CY 2022 proposal to pay for
drugs acquired under the 340B program at the payment rate of ASP minus
22.5 percent. These commenters urged CMS to withdraw its proposed
policy and contended that the policy was an unlawful application of the
CMS's authority.
Many commenters opposed the current 340B policy and argued that it
redistributes resources designated for safety net hospitals to
subsidize non-340B or private hospitals because the payment reduction
is budget neutral. The commenters requested that CMS end its policy of
paying for drugs obtained through the 340B program at ASP minus 22.5
percent and restore the statutory default payment rate of ASP+6
percent.
Many commenters also alleged that private pharmacy benefit managers
and third-party payers are citing Medicare's payment reduction to
justify implementing similar policies that provide lower reimbursement
for 340B drugs compared to non-340B drugs.
Response: We respectfully disagree with the commenters' assertions
that our 340B drug payment policy is illegal or an unlawful application
of the law. We disagree with commenters that the OPPS 340B payment
policy has taken away resources designated for safety net hospitals and
our internal analyses have not demonstrated any issues related to
access of separately payable drugs as a result of the implementation of
this policy. As discussed in this section of the CY 2022 final rule
with comment period, the D.C. Circuit has confirmed that our 340B drug
payment policy is within our authority in section 1833(t)(14) of the
Act.
We note that CMS does not control policies created by private
pharmacy benefit managers and third-party payers regarding payment for
340B drugs compared to non-340B drugs.
After reviewing the public comments for CY 2022, we are finalizing
our proposal, without modification, to pay ASP minus 22.5 percent for
340B-acquired drugs, including when furnished in nonexcepted off-campus
PBDs paid under the PFS. Our finalized proposal continues the 340B
Program policies that were implemented in CY 2018 with the exception of
the way we are calculating payment for 340B-acquired biosimilars, which
is discussed in section V.B.2.c. of the CY 2019 OPPS/ASC final rule
with comment period, and would continue the policy we finalized in CY
2019 to pay ASP minus 22.5 percent for 340B-acquired drugs and
biologicals furnished in nonexcepted off-campus PBDs paid under the
PFS.
We believe that the current payment rate of ASP minus 22.5 percent
represents the minimum discount that 340B covered entities receive,
which more closely aligns the payment rate with the resources expended
by 340B hospitals to acquire such drugs compared to a payment rate of
ASP+6 percent, while also recognizing the intent of the 340B program to
allow covered entities, including eligible hospitals, to stretch scarce
resources in ways that enable hospitals to continue providing access to
care for Medicare beneficiaries and other patients. Additionally, we
continue to believe it is important to provide consistent and reliable
payment for these drugs both for the remainder of the PHE, and after
its conclusion, to give hospitals increased certainty as to payments
for these drugs. We note that any changes to this payment policy would
be adopted through notice and comment rulemaking.
[[Page 63649]]
7. High Cost/Low Cost Threshold for Packaged Skin Substitutes
a. Background
In the CY 2014 OPPS/ASC final rule with comment period (78 FR
74938), we unconditionally packaged skin substitute products into their
associated surgical procedures as part of a broader policy to package
all drugs and biologicals that function as supplies when used in a
surgical procedure. As part of the policy to package skin substitutes,
we also finalized a methodology that divides the skin substitutes into
a high cost group and a low cost group, in order to ensure adequate
resource homogeneity among APC assignments for the skin substitute
application procedures (78 FR 74933).
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 2021, the payment rate for APC
5053 (Level 3 Skin Procedures) was $524.17, the payment rate for APC
5054 (Level 4 Skin Procedures) was $1,715.36, and the payment rate for
APC 5055 (Level 5 Skin Procedures) was $3,522.15. This information also
is available in Addenda A and B of the CY 2021 OPPS/ASC final rule with
comment period, as issued with the final rule correction notice (86 FR
11428) (the correction notice and corrected Addenda A and B are
available via the internet on the CMS website).
We have continued the high cost/low cost categories policy since CY
2014, and we proposed to continue it for CY 2022. Under the current
policy, skin substitutes in the high cost category are reported with
the skin substitute application CPT codes, and skin substitutes in the
low cost category are reported with the analogous skin substitute HCPCS
C-codes. For a discussion of the CY 2014 and CY 2015 methodologies for
assigning skin substitutes to either the high cost group or the low
cost group, we refer readers to the CY 2014 OPPS/ASC final rule with
comment period (78 FR 74932 through 74935) and the CY 2015 OPPS/ASC
final rule with comment period (79 FR 66882 through 66885).
For a discussion of the high cost/low cost methodology that was
adopted in CY 2016 and has been in effect since then, we refer readers
to the CY 2016 OPPS/ASC final rule with comment period (80 FR 70434
through 70435). Beginning in CY 2016 and in subsequent years, we
adopted a policy where we determined the high cost/low cost status for
each skin substitute product based on either a product's geometric mean
unit cost (MUC) exceeding the geometric MUC threshold or the product's
per day cost (PDC) (the total units of a skin substitute multiplied by
the mean unit cost and divided by the total number of days) exceeding
the PDC threshold. We assigned each skin substitute that exceeded
either the MUC threshold or the PDC threshold to the high cost group.
In addition, we assigned any skin substitute with a MUC or a PDC that
does not exceed either the MUC threshold or the PDC threshold to the
low cost group (85 FR 86059).
However, some skin substitute manufacturers have raised concerns
about significant fluctuation in both the MUC threshold and the PDC
threshold from year to year using the methodology developed in CY 2016.
The fluctuation in the thresholds may result in the reassignment of
several skin substitutes from the high cost group to the low cost group
which, under current payment rates, can be a difference of over $1,000
in the payment amount for the same procedure. In addition, these
stakeholders were concerned that the inclusion of cost data from skin
substitutes with pass-through payment status in the MUC and PDC
calculations would artificially inflate the thresholds. Skin substitute
stakeholders requested that CMS consider alternatives to the current
methodology used to calculate the MUC and PDC thresholds and also
requested that CMS consider whether it might be appropriate to
establish a new cost group in between the low cost group and the high
cost group to allow for assignment of moderately priced skin
substitutes to a newly created middle group.
We share the goal of promoting payment stability for skin
substitute products and their related procedures as price stability
allows hospitals using such products to more easily anticipate future
payments associated with these products. We have attempted to limit
year-to-year shifts for skin substitute products between the high cost
and low cost groups through multiple initiatives implemented since CY
2014, including: Establishing separate skin substitute application
procedure codes for low-cost skin substitutes (78 FR 74935); using a
skin substitute's MUC calculated from outpatient hospital claims data
instead of an average of ASP+6 percent as the primary methodology to
assign products to the high cost or low cost group (79 FR 66883); and
establishing the PDC threshold as an alternate methodology to assign a
skin substitute to the high cost group (80 FR 70434 through 70435).
To allow additional time to evaluate concerns and suggestions from
stakeholders about the volatility of the MUC and PDC thresholds, in the
CY 2018 OPPS/ASC proposed rule (82 FR 33627), we proposed that a skin
substitute that was assigned to the high cost group for CY 2017 would
be assigned to the high cost group for CY 2018, even if it did not
exceed the CY 2018 MUC or PDC thresholds. We finalized this policy in
the CY 2018 OPPS/ASC final rule with comment period (82 FR 59347). We
stated in the CY 2018 OPPS/ASC proposed rule that the goal of our
proposal to retain the same skin substitute cost group assignments in
CY 2018 as in CY 2017 was to maintain similar levels of payment for
skin substitute products for CY 2018 while we study our skin substitute
payment methodology to determine whether refinements to the existing
policies are consistent with our policy goal of providing payment
stability for skin substitutes.
We stated in the CY 2018 OPPS/ASC final rule with comment period
(82 FR 59347) that we would continue to study issues related to the
payment of skin substitutes and take these comments into consideration
for future rulemaking. We received many responses to our request for
comments in the CY 2018 OPPS/ASC proposed rule about possible
refinements to the existing payment methodology for skin substitutes
that would be consistent with our policy goal of providing payment
stability for these products. In addition, several stakeholders have
made us aware of additional concerns and recommendations since the
release of the CY 2018 OPPS/ASC final rule with comment period. As
discussed in
[[Page 63650]]
the CY 2019 OPPS/ASC final rule with comment period (83 FR 58967
through 58968), we identified four potential methodologies that have
been raised to us that we encouraged the public to review and provide
comments on. We stated in the CY 2019 OPPS/ASC final rule with comment
period that we were especially interested in any specific feedback on
policy concerns with any of the options presented as they relate to
skin substitutes with differing per day or per episode costs and sizes
and other factors that may differ among the dozens of skin substitutes
currently on the market.
For CY 2020, we sought more extensive comments on the two policy
ideas that generated the most comment from the CY 2019 comment
solicitation. One of the ideas was to establish a payment episode
between 4 to 12 weeks where a lump-sum payment would be made to cover
all of the care services needed to treat the wound. There would be
options for either a complexity adjustment or outlier payments for
wounds that require a large amount of resources to treat. The other
policy idea would be to eliminate the high cost and low cost categories
for skin substitutes and have only one payment category and set of
procedure codes for the application of all graft skin substitute
products. Please refer to the CY 2019 OPPS final rule (83 FR 58967 to
58968) and the CY 2020 OPPS final rule (84 FR 61328 to 61331) for a
detailed summary and discussion of the comments we received in response
to these comment solicitations. We are continuing to consider the
comments we received in response to these comment solicitations from CY
2019 and CY 2020.
Comment: Multiple commenters provided suggestions on changes to the
payment methodology for graft skin substitute payment policy for future
rulemaking.
Response: We appreciate the additional advice regarding possible
changes to the payment methodology for graft skin substitute products,
and we will consider this information as a part of future rulemaking.
b. Packaged Skin Substitutes for CY 2022
For CY 2022, consistent with our policy since CY 2016, we proposed
to continue to determine the high cost/low cost status for each skin
substitute product based on either a product's geometric MUC exceeding
the geometric MUC threshold or the product's PDC (the total units of a
skin substitute multiplied by the MUC and divided by the total number
of days) exceeding the PDC threshold. Consistent with the methodology
as established in the CY 2014 OPPS/ASC through CY 2018 OPPS/ASC final
rules with comment period, we analyzed CY 2019 claims data to calculate
the MUC threshold (a weighted average of all skin substitutes' MUCs)
and the PDC threshold (a weighted average of all skin substitutes'
PDCs). The proposed CY 2022 MUC threshold is $48 per cm\2\ (rounded to
the nearest $1) and the proposed CY 2022 PDC threshold is $949 (rounded
to the nearest $1). We also proposed that our definition of skin
substitutes includes synthetic skin substitute products in addition to
biological skin substitute products as described in section V.B.7. (86
FR 42137 through 42143) of the CY 2022 OPPS/ASC proposed rule. We also
want to clarify that the availability of an HCPCS code for a particular
human cell, tissue, or cellular or tissue-based product (HCT/P) does
not mean that that product is appropriately regulated solely under
section 361 of the PHS Act and the FDA regulations in 21 CFR part 1271.
Manufacturers of HCT/Ps should consult with the FDA Tissue Reference
Group (TRG) or obtain a determination through a Request for Designation
(RFD) on whether their HCT/Ps are appropriately regulated solely under
section 361 of the PHS Act and the regulations in 21 CFR part 1271.
For CY 2022, as we did for CY 2021, we proposed to assign each skin
substitute that exceeds either the MUC threshold or the PDC threshold
to the high cost group. In addition, we proposed to assign any skin
substitute with a MUC or a PDC that does not exceed either the MUC
threshold or the PDC threshold to the low cost group. For CY 2022, we
proposed that any skin substitute product that was assigned to the high
cost group in CY 2021 would be assigned to the high cost group for CY
2022, regardless of whether it exceeds or falls below the CY 2022 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 2022, we proposed to continue to assign skin substitutes
with pass-through payment status to the high cost category. We proposed
to assign skin substitutes with pricing information but without claims
data to calculate a geometric MUC or PDC to either the high cost or low
cost category based on the product's ASP+6 percent payment rate as
compared to the MUC threshold. If ASP is not available, we proposed to
use WAC+3 percent to assign a product to either the high cost or low
cost category. Finally, if neither ASP nor WAC is available, we
proposed to use 95 percent of AWP to assign a skin substitute to either
the high cost or low cost category. We proposed to continue to use
WAC+3 percent instead of WAC+6 percent to conform to our proposed
policy described in section V.B.2.b of the CY 2022 OPPS/ASC proposed
rule (86 FR 42132) to establish a payment rate of WAC+3 percent for
separately payable drugs and biologicals that do not have ASP data
available. New skin substitutes without pricing information would be
assigned to the low cost category until pricing information is
available to compare to the CY 2022 MUC and PDC thresholds. We also
proposed to continue to include synthetic products in addition to
biological products in our description of skin substitutes. For a
discussion of our existing policy under which we assign skin
substitutes without pricing information to the low cost category until
pricing information is available, we refer readers to the CY 2016 OPPS/
ASC final rule with comment period (80 FR 70436). For a discussion of
how we determined that synthetic skin graft sheet products can be
reported with graft skin substitute procedure codes, we refer readers
to the CY 2021 OPPS/ASC final rule (85 FR 86064 to 86067).
Comment: The HOP Panel recommended and several commenters supported
ending the packaging of the graft skin substitute add-on codes (CPT
codes 15272, 15274, 15276, and 15278; HCPCS codes C5272, C5274, C5276,
and C5278). The HOP Panel and the commenters request that these codes
be assigned to APCs that reflect the estimated costs of these service
codes. Commenters claim that packaging the graft skin substitute add-on
codes eliminates the variation of payment for wound care treatment
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 add-on codes disrupts the methodology
of how the American Medical Association (AMA), the organization that
manages CPT service codes, intended graft skin substitute procedures to
be paid.
Response: We do not believe the recommendation of the HOP Panel and
the commenters is appropriate for paying for graft skin substitutes
under the OPPS. The OPPS is a prospective payment system and not a fee-
for-service payment system. That means that we generally attempt to
make one payment for all of the services billed with the primary
medical procedure, including add-on procedures such as
[[Page 63651]]
the ones described by CPT codes 15272, 15274, 15276, and 15278, and
HCPCS codes C5272, C5274, C5276, and C5278.
More specifically, we calculate the OPPS payment rate by first
calculating the geometric mean cost of the procedure. This calculation
includes claims for individual services that used a lower level of
resources and claims for individual services that used a higher level
of resources. The resulting geometric mean cost will reflect the median
service cost for a given medical procedure. Next, we group the medical
procedure with other medical procedures with clinical and resource
similarity in an APC and calculate the geometric mean of these related
procedures to generate a base payment rate for all procedures assigned
to the APC.
A prospective payment system like the OPPS is designed to pay
providers the geometric mean cost of the primary service they provide,
and such a system encourages efficiencies and cost-savings in the
administration of health care. However, a prospective payment system is
not intended to discourage providers from rendering medically-necessary
to patients. For example, it's possible that a provider could
experience a financial loss when they perform a service where a patient
receives 85 cm\2\ of a graft skin substitute product, but that same
provider could see a financial gain when the next patient receives a
skin graft where only 10 cm\2\ of product is used. Paying separately
for add-on codes in a prospective payment system defeats the goals of
such a payment system. If providers are paid at cost or nearly at cost
for each individual service they render, there is no incentive for them
to control costs. Add-on codes should be packaged with the primary
medical service to be able to establish a median payment rate that
gives providers incentives to keep their costs in line with typical
providers throughout the Medicare program. The need for cost
efficiencies in the application of graft skin substitutes to treat
wounds is no different than need for cost efficiencies in other
procedures administered in the outpatient hospital setting. Therefore,
add-on codes, including the add-on codes for the administration of
graft skin substitutes must remain packaged to maintain the integrity
of the OPPS.
Comment: The HOP Panel recommended and several commenters support
ensuring that the payment rate of graft skin substitute procedures be
the same no matter where on the body the graft skin substitute product
is applied to the patient. There are four graft skin substitute
application procedures for high cost skin substitute products (CPT
codes 15271, 15273, 15275, and 15277) and a similar four graft skin
substitute applications for low cost skin substitute products (HCPCS
codes C5272, C5274, C5276, and C5278). The reason there are four
application service codes is that there are different service codes for
applying graft skin substitutes to children and infants as compared to
adults and there are different service codes for applying graft skin
substitutes to the trunk, arms, and legs as compared to the face,
scalp, eyelids, mouth, neck, ears, orbits, genitalia, hands, feet,
fingers, and toes. Commenters claim that the cost to apply graft skin
substitute products does not depend on the location of the wound
because the same amount of product is used on the wound and the same
clinical resources are used to treat the wound independent of the
location of the wound.
Response: We appreciate commenters concerns and note that that
current codes describing the application of high and low cost graft
skin substitutes for adults (CPT codes 15271 and 15275, and HCPCS codes
C5272 and C5276) have been assigned the same APC (5054). Because they
are currently included in the same APC, OPPS payment for them is the
same, and this payment policy is consistent with the recommendation
from the HOP Panel and other commenters. We note that the codes
describing the application of high and low cost products for children
and infants in the trunk, arms, and legs (CPT code 15273 or HCPCS code
C5274) have been assigned to a lower-paying APC (APC 5054) than the APC
assignment for the application of high and low cost graft skin
substitute products for children in the face, scalp, eyelids, mouth,
neck, ears, orbits, genitalia, hand, feet, fingers, and toes--CPT code
15277 or HCPCS code C5277, which are assigned to APC 5055. These APCs
have different payment rates. We note that these services--the
application of skin substitutes for children--are fairly low volume
services in the OPPS because Medicare beneficiaries tend to be older.
In addition, the differences in costs that have determined APC
assignments for these services for children have been supported by
historical cost data. We also note that none of these service codes are
in violation of the 2-times rule. While we do not believe we should
change the APC assignments for these services at this time, we are
interested in additional feedback on this issue, including whether we
should revaluate APC assignments for the application of skin
substitutes for children in the future.
Comment: One commenter did not support our proposal to assign graft
skin substitute products to a high cost or a low cost group based on if
the MUC or PDC of a product exceeds a weighted average of either the
MUC or PDC of all graft skin substitute products. The commenter
believes the current two-tier system provides incentives for providers
to use higher-cost graft skin substitute products instead of lower-cost
products that have similar efficacy to the higher-cost products. The
commenter supports a payment system where the high cost and low cost
groups have been eliminated. The commenter believes geometric mean
payment rate for each graft skin substitute application service code
would be calculated using all of the separately paid claims for a given
code without consideration to the mean unit cost of the graft skin
substitute product used in the service. The commenter believes this
approach would reduce spending on graft skin substitute procedures by
encouraging the use of lower-cost graft skin substitute products and
will reduce administration burden for providers as they only need to
use one set of product application codes.
Response: As we explained in the CY 2014 OPPS/ASC final rule (78 FR
74933), the graft skin substitute procedures described by CPT codes
15271 through 15278 are clinically homogeneous, but there is resource
heterogeneity between different skin substitute products with the cost
per cm\2\ ranging from under $10 per cm\2\ to over $200 per cm\2\. As
we discussed in prior rules, establishing high cost and low cost groups
for skin substitutes makes the payment for these products more
homogeneous and reduces the risk of excessive overpayment or
underpayment to a provider when a skin substitute product is used.
However, we appreciate the commenter's proposal and note that
establishing a payment policy in which with only one set of product
application service codes may have other benefits, such as simplifying
coding and payments for these procedures and products, and we may
explore these concepts in future rulemaking.
Comment: Two commenters supported our proposal to continue to
assign skin substitutes to the low cost or high cost group. Commenters
also supported our proposal that any skin substitute product that was
assigned to the high cost group in CY 2020 would be assigned to the
high cost group for CY 2021, regardless of whether it exceeds or falls
below the CY 2021 MUC or PDC threshold.
[[Page 63652]]
Response: We appreciate the support of the commenters for our
proposals.
Comment: Two commenters supported our inclusion of synthetic
products in our definition of skin substitute products.
Response: We appreciate the support of the commenters.
Comment: One commenter requested that CMS no longer use the term
``skin substitutes'' to describe products that do not function like
human skin that is grafted onto a wound and are not substitutes for
skin grafts, but do aid in wound healing by stimulating the patient to
regenerate lost tissue. Instead, the commenters request that we use the
term ``cellular and/or tissue based products for skin wounds'' that is
abbreviated ``CTPs''.
Response: We appreciate the suggestion by the commenter, but we do
not believe it is appropriate at this time to end our use of the term
``skin substitute.'' Notably, the CPT and HCPCS codes used to report
graft procedures using cellular and tissue based products to heal skin
wounds, CPT codes 15271 through 15278 and HCPCS codes C5271 through
C5278, use the term ``skin substitute'' in the descriptor. We feel that
we should use terminology that reflects the service descriptors that
are reported in the OPPS. Also, we believe the term ``skin substitute''
is well-understood by providers and industry stakeholders.
Comment: Two commenters wanted us to confirm that our proposed rule
language that encourages manufacturers of HCT/Ps to 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 applied only to those HCT/Ps that do not have
either an FDA 510(k) clearance, premarket approval (PMA), or biologic
license application (BLA) approval. These commenters are supportive of
the policy as long as no consultation or determination is required for
HCT/Ps with either a 510(k) clearance, a PMA, or a BLA approval.
Response: We can confirm that our suggestion for manufacturers of
HCT/Ps to 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 does apply only to those
HCT/Ps that do not have either a 510(k) clearance, a PMA, or a BLA
approval from FDA.
Comment: Multiple commenters stated that HCPCS code C1849, which is
used to report synthetic graft skin substitute products, should be
assigned to the low cost skin substitute group by default, similar to
how we pay for HCPCS code Q4100 (Skin substitute, not otherwise
specified), which is used to report multiple biological skin substitute
products that do not have product-specific HCPCS codes. Commenters also
expressed concerns that synthetic graft skin substitute products that
should receive payment through the low cost skin substitute group would
instead receive payment in the high cost skin substitute group and
increase overall graft skin substitute costs for Medicare.
Response: We were aware of one synthetic graft skin substitute
product that was described by HCPCS code C1849 when the code was
established in July 2020. The manufacturer provided pricing data that
showed the cost of the product is above the MUC threshold for graft
skin substitute products and therefore HCPCS code C1849 should be
assigned to the high cost skin substitute group. We note that we used
pricing data to assign HCPCS code C1849 to the high cost group, and the
assignment of HCPCS code C1849 to the high cost skin substitute group
was not automatic. As more synthetic graft skin substitute products are
identified, we will use their pricing data to calculate an average
price for the products described by HCPCS code C1849 and compare that
average price to the overall MUC threshold to determine whether HCPCS
code C1849 should be assigned to the high cost or low cost skin
substitute group.
Comment: One commenter noted that CMS previously assigned HCPCS
code Q4117 (Hyalomatrix, per square centimeter) to a product considered
a synthetic skin substitute which demonstrates that synthetic skin
substitutes can function within the current coding under both the PFS
and OPPS frameworks. The commenter stated that it would be better for
CMS to judiciously assign HCPCS codes to synthetic products that meet
these application requirements.
Response: We will take this suggestion into consideration for
future rulemaking as we continue our work to address payment for all
skin substitutes across settings, taking into account the intersection
between biological, bioengineered, and synthetic components of these
products. We also plan to further evaluate the characteristics of
products with an existing Q-code for future rulemaking.
Comment: One commenter, the manufacturer, has requested that HCPCS
codes Q4122 (Dermacell, per square centimeter) and Q4150 (Allowrap ds
or dry, per square centimeter) continue to be assigned to the high-cost
skin substitute group.
Response: HCPCS codes Q4122 and Q4150 were both assigned to the
high cost group in CY 2021 and also were proposed to be assigned to the
high-cost group for CY 2022. Any skin substitute assigned to the high
cost group in CY 2021 will continue to be assigned to the high cost
group in CY 2022 even if the MUC and PDC for the skin substitute
product is below the overall MUC and PDC thresholds for all skin
substitute products. Accordingly, we are finalizing our proposal to
assign HCPCS codes Q4122 and Q4150 to the high-cost group in CY 2022.
After consideration of the public comments we received, we are
finalizing our proposal to assign a skin substitute with a MUC or a PDC
that does not exceed either the MUC threshold or the PDC threshold to
the low cost group, unless the product was assigned to the high cost
group in CY 2021, in which case we would assign the product to the high
cost group for CY 2022, regardless of whether it exceeds the CY 2022
MUC or PDC threshold. We are also finalizing our proposal to assign to
the high cost group any skin substitute product that exceeds the CY
2022 MUC or PDC thresholds and assign to the low cost group any skin
substitute product that does not exceed the CY 2021 MUC or PDC
thresholds and was not assigned to the high cost group in CY 2021. We
are finalizing our proposal to continue to use payment methodologies,
including ASP+6 percent and 95 percent of AWP, for skin substitute
products that have pricing information but do not have claims data to
determine if their costs exceed the CY 2022 MUC. In addition, we are
finalizing our proposal to continue to use WAC+3 percent instead of
WAC+6 percent for skin substitute products that do not have ASP pricing
information or claims data to determine if those products' costs exceed
the CY 2022 MUC. We also are finalizing our proposal to retain our
established policy to assign new skin substitute products with pricing
information to the low cost group. Table 42 includes the final CY 2022
cost category assignment for each skin substitute product.
BILLING CODE 4120-01-P
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BILLING CODE 4120-01-C
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 2022 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 2022. 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 2021 or beginning in CY
2022. The sum of the proposed CY 2022 pass-through spending estimates
for these two groups of device categories equaled the proposed total CY
2022 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
[[Page 63659]]
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 2022, we also proposed to
include an estimate of any skin substitutes and similar products in our
estimate of pass-through spending for devices.
For drugs and biologicals eligible for pass-through payment,
section 1833(t)(6)(D)(i) of the Act establishes the pass-through
payment amount as the amount by which the amount authorized under
section 1842(o) of the Act (or, if the drug or biological is covered
under a competitive acquisition contract under section 1847B of the
Act, an amount determined by the Secretary equal to the average price
for the drug or biological for all competitive acquisition areas and
year established under such section as calculated and adjusted by the
Secretary) exceeds the portion of the otherwise applicable fee schedule
amount that the Secretary determines is associated with the drug or
biological. Our proposed estimate of drug and biological pass-through
payment for CY 2022 for this group of items was $462.4 million, as
discussed below, because we proposed that most non pass-through
separately payable drugs and biologicals would be paid under the CY
2022 OPPS at ASP+6 percent with the exception of 340B-acquired
separately payable drugs, which we proposed would be paid at ASP minus
22.5 percent, and because we proposed to pay for CY 2022 pass-through
payment drugs and biologicals at ASP+6 percent, as we discuss in
section V.A. of the CY 2022 OPPS/ASC proposed rule (86 FR 42116).
Furthermore, payment for certain drugs, specifically diagnostic
radiopharmaceuticals and contrast agents without pass-through payment
status, is packaged into payment for the associated procedures, and
these products are not be 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 2022 OPPS/ASC proposed rule (86
FR 42129 through 42131). 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
2022, 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 2022
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 2022 OPPS/ASC proposed rule (86 FR 42126 through
42127), we discuss our policy to determine if the costs of certain
policy-packaged drugs or biologicals are already packaged into the
existing APC structure. If we determine that a policy-packaged drug or
biological approved for pass-through payment resembles predecessor
drugs or biologicals already included in the costs of the APCs that are
associated with the drug receiving pass-through payment, we proposed to
offset the amount of pass-through payment for the policy-packaged drug
or biological. For these drugs or biologicals, the APC offset amount is
the portion of the APC payment for the specific procedure performed
with the pass-through drug or biological, which we refer to as the
policy-packaged drug APC offset amount. If we determine that an offset
is appropriate for a specific policy-packaged drug or biological
receiving pass-through payment, we proposed to reduce our estimate of
pass-through payments for these drugs or biologicals by the APC offset
amount.
Similar to pass-through spending estimates for devices, the first
group of drugs and biologicals requiring a pass-through payment
estimate consists of those products that were recently made eligible
for pass-through payment and that will continue to be eligible for
pass-through payment in CY 2022. 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 2021 or beginning in CY 2022.
The sum of the CY 2022 pass-through spending estimates for these two
groups of drugs and biologicals equals the total CY 2022 pass-through
spending estimate for drugs and biologicals with pass-through payment
status.
B. Estimate of Pass-Through Spending for CY 2022
For 2022, we proposed to set the applicable pass-through payment
percentage limit at 2.0 percent of the total projected OPPS payments
for CY 2022, consistent with section 1833(t)(6)(E)(ii)(II) of the Act
and our OPPS policy from CY 2004 through CY 2021 (85 FR 86068). 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 2022, there are 9 active
categories for CY 2022. The active categories are described by HCPCS
codes C2596, C1734, C1982, C1824, C1839, C1748, C1825, C1052, and
C1062. Based on the information from the device manufacturers, we
estimate that HCPCS code C2596 will cost $11.3 million in pass-through
expenditures in CY 2022, HCPCS C1734 will cost $36.9 million in pass-
through expenditures in CY 2022, HCPCS code C1982 will cost $116.3
million in pass-through expenditures in CY 2022, HCPCS code C1824 will
cost $46 million in pass-through expenditures in CY 2022, HCPCS code
C1839 will cost $500,000 in pass-through expenditures in CY 2022, HCPCS
code C1748 will cost $39.1 million in pass-through expenditures in CY
2022, HCPCS code C1825 will cost $3.5 million pass-through expenditures
in CY 2022, HCPCS code C1052 will cost $40 million in pass-through
expenditures in CY 2022, and HCPCS code C1062 will cost $14.3 million
in pass-through expenditures in CY 2022. Therefore, we proposed an
estimate for the first group of devices of $307.9 million.
In estimating our proposed CY 2022 pass-through spending for device
categories in the second group, we included: device categories that we
assumed at the time of the development of the CY 2022 OPPS/ASC proposed
rule will be newly eligible for pass-through payment in CY 2022;
additional device categories that we estimated
[[Page 63660]]
could be approved for pass-through status after the development of the
proposed rule and before January 1, 2022; and contingent projections
for new device categories established in the second through fourth
quarters of CY 2022. For CY 2022, 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. The
proposed estimate of CY 2022 pass-through spending for this second
group of device categories is $244.4 million.
We did not receive any public comments on this proposal. As stated
earlier in this final rule with comment period, we are approving three
devices for pass-through payment status in the CY 2022 rulemaking
cycle: RECELL[supreg] Autologous Cell Harvesting Device, Shockwave C2
Coronary Intravascular Lithotripsy (IVL) catheter, and AngelMed
Guardian[supreg] System. The manufacturers of these systems provided
utilization and cost data that indicate the amount of spending for the
devices would be approximately $18.4 million for RECELL[supreg]
Autologous Cell Harvesting Device, $118.4 million for Shockwave C2
Coronary Intravascular Lithotripsy (IVL) catheter, and $5.1 million for
AngelMed Guardian[supreg] System. Therefore, we are finalizing an
estimate of $141.9 million for this second group of devices for CY
2022.
To estimate proposed CY 2022 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 2022, we proposed to use the CY 2019 Medicare hospital outpatient
claims data regarding their utilization, information provided in the
respective pass-through applications, other historical hospital claims
data, pharmaceutical industry information, and clinical information
regarding these drugs and biologicals to project the CY 2022 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 2022, we estimate the pass-through
payment amount as the difference between ASP+6 percent and the payment
rate for non pass-through drugs and biologicals that will be separately
paid. Separately payable drugs are paid at a rate of ASP+6 percent with
the exception of 340B-acquired drugs, for which we proposed to pay ASP
minus 22.5 percent. Therefore, the proposed payment rate difference
between the pass-through payment amount and the non pass-through
payment amount is $462.4 million for this group of drugs.
Because payment for policy-packaged drugs and biologicals is
packaged if the product is not paid separately due to its pass-through
payment status, we proposed to include in the CY 2022 pass-through
estimate of the difference between payment for the policy-packaged drug
or biological at ASP+6 percent (or WAC+6 percent, or 95 percent of AWP,
if ASP or WAC information is not available) and the policy-packaged
drug APC offset amount, if we determine that the policy-packaged drug
or biological approved for pass-through payment resembles a predecessor
drug or biological already included in the costs of the APCs that are
associated with the drug receiving pass-through payment, which we
estimate for CY 2022 for the first group of policy-packaged drugs to be
$0 since there are currently no policy-packaged drugs for which we have
cost data that will be on pass-through in CY 2022.
We did not receive any public comments on our proposal. Using our
methodology for this final rule with comment period, we calculated a CY
2022 spending estimate for this first group of drugs and biologicals of
approximately $466.7 million based on our decision to maintain our
current policy of paying ASP minus 22.5 percent for 340B-acquired
drugs.
To estimate proposed CY 2022 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 proposed rule were newly
eligible or recently became eligible for pass-through payment in CY
2022, additional drugs and biologicals that we estimated could be
approved for pass-through status subsequent to the development of the
proposed rule and before January 1, 2022, and projections for new drugs
and biologicals that could be initially eligible for pass-through
payment in the second through fourth quarters of CY 2022), 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
2022 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 2022
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 2022 OPPS/ASC proposed rule, we have identified seven
additional policy-packaged drugs in addition to the three policy-
packaged drugs that had pass-through status when the proposed rule was
released. Our original proposed estimate of $10 million of additional
pass-through payments for the second group of drugs and biologicals 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, we are revising our estimate of pass-
through spending for the second group of drugs and biologicals to be
$20 million.
We estimate for this final rule with comment period that the amount
of pass-through spending for the device categories and the drugs and
biologicals that are continuing to receive pass-through payment in CY
2022 and those device categories, drugs, and biologicals that first
become eligible for pass-through payment during CY 2022 would be
approximately $936.5 million (approximately $449.8 million for device
categories and approximately $486.7 million for drugs and biologicals)
which represents 1.14 percent of total projected OPPS payments for CY
2022 (approximately $82 billion). Therefore, we estimate that pass-
through spending in CY 2022 will not amount to 2.0 percent of total
projected OPPS CY 2022 program spending. As discussed in section X.E.
of the CY 2022 OPPS/ASC proposed rule (86 FR 42188 through 42190), due
to the effects of the COVID-19 PHE, we proposed to generally use CY
2019 claims data instead of CY 2020 claims data to establish the CY
2022 OPPS rates and to use cost report data from the same set of cost
reports originally used in CY 2021 final rule OPPS ratesetting. We
stated that if our proposal to use CY 2019 data, rather than CY 2020
data, to inform CY 2022 ratesetting is finalized, we would effectively
remove approximately one year of pass-through data collection time for
ratesetting purposes. Therefore, for CY 2022, in section X.F. of the CY
2022 OPPS/ASC proposed rule (86 FR 42190 through 42193), we proposed to
[[Page 63661]]
use our equitable adjustment authority under 1833(t)(2)(E) to provide
up to four quarters of separate payment for 21 drugs and biologicals
whose pass-through payment status will expire on March 31, 2022, June
30, 2022, or September 30, 2022 and six drugs and biologicals and one
device category whose pass-through payment status will expire on
December 31, 2021. This would ensure that we have a full year of claims
data from CY 2021 to use for CY 2023 ratesetting and would allow us to
avoid using CY 2020 data to set rates for these pass-through drugs,
biologicals, and the device category for CY 2022.
We estimated the spending for the drugs, biologicals, and device
category for which we proposed to provide separate payment for the
remainder of CY 2022 using our equitable adjustment authority. To
estimate proposed CY 2022 spending for the one device pass-through
category with pass-through status expiring on December 31, 2021, we
also used the general methodology described in the CY 2008 OPPS/ASC
final rule with comment period (72 FR 66778). For this device category,
we calculate a proposed spending estimate of $34.5 million. To estimate
proposed CY 2022 spending for the six drugs with pass-through status
expiring on December 21, 2021 and the 18 drugs and three biologicals
with pass-through status expiring on March 30, 2022, June 30, 2022, and
September 30, 2022, we performed an analysis similar to the analysis
for the first group of drugs and biologicals described earlier in this
section where we estimated the pass-through payment amount as the
difference between ASP+6 percent and the payment rate for non pass-
through drugs and biologicals that will be separately paid. For this
group, we calculate a proposed spending estimate for CY 2022 of $44.4
million. We estimate that total spending for these 27 drugs and
biologicals and one device category would be approximately $78.9
million for CY 2022. The drugs, biologicals, and device category for
which we proposed to provide separate payment for one to four quarters
in CY 2022 are listed in Table 43 below. Please refer to section X.F.
of this final rule with comment period regarding our decision to
implement our proposal to utilize our equitable adjustment authority to
pay separately for the remainder of CY 2022 for the device category,
drugs, and biologicals with pass-through status that expires between
December 31, 2021, and September 30, 2022.
BILLING CODE 4120-01-P
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BILLING CODE 4120-01-C
VII. OPPS Payment for Hospital Outpatient Visits and Critical Care
Services
For CY 2022, we proposed to continue with our current clinic and
emergency department (ED) hospital outpatient visits payment policies.
For a description of the current clinic and ED hospital outpatient
visits 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 2022. For a
description of the current payment policy for critical care services,
we refer readers to the CY 2016 OPPS/ASC final rule with comment period
(80 FR 70449), and for the history of the payment policy for critical
care services, we refer readers to the CY 2014 OPPS/ASC final rule with
comment period (78 FR 75043). In the CY 2022 OPPS/ASC proposed rule, we
sought public comments on any changes to these codes that we should
consider for future rulemaking cycles. We continue to encourage
commenters to provide the data and analysis necessary to justify any
suggested changes.
In the CY 2022 OPPS/ASC proposed rule, we stated that we would
continue the clinic visit payment policy for CY 2022 and beyond. More
specifically, we stated that we would continue to utilize a PFS-
equivalent payment rate for the hospital outpatient clinic visit
service described by HCPCS code G0463 when
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it is furnished by excepted off-campus provider-based departments. The
PFS-equivalent rate for CY 2022 is 40 percent of the proposed OPPS
payment (that is, 60 percent less than the proposed OPPS rate). Under
this policy, these departments will be paid approximately 40 percent of
the OPPS rate (100 percent of the OPPS rate minus the 60-percent
payment reduction that is applied in CY 2022) for the clinic visit
service in CY 2022. We stated that we would continue to monitor the
effect of this change in Medicare payment policy, including the volume
of these types of OPD services.
Comment: We received several comments on our payment policy for
hospital outpatient visits. Many commenters expressed concerns that
CMS's policy to pay the PFS-equivalent rate for outpatient clinic
visits furnished in excepted off-campus provider-based departments
would cause financial harm to hospitals. Other commenters suggested
that CMS develop a set of national guidelines for coding ED visits, and
a few of commenters provided specific edits to the descriptor of the
HCPCS code for hospital outpatient clinic visits (G0463).
Response: We appreciate commenters' concerns and will continue to
examine these concerns and determine if any modifications to these
policies are warranted in future rulemaking.
After consideration of the public comments, we are finalizing our
proposal 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 excepted off-campus provider-based departments
as proposed. We are also finalizing our proposal to continue our
current ED outpatient visits and critical care payment policies.
VIII. Payment for Partial Hospitalization Services
A. Background
A partial hospitalization program (PHP) is an intensive outpatient
program of psychiatric services provided as an alternative to inpatient
psychiatric care for individuals who have an acute mental illness,
which includes, but is not limited to, conditions such as depression,
schizophrenia, and substance use disorders. Section 1861(ff)(1) of the
Act defines partial hospitalization services as the items and services
described in paragraph (2) prescribed by a physician and provided under
a program described in paragraph (3) under the supervision of a
physician pursuant to an individualized, written plan of treatment
established and periodically reviewed by a physician (in consultation
with appropriate staff participating in such program), which sets forth
the physician's diagnosis, the type, amount, frequency, and duration of
the items and services provided under the plan, and the goals for
treatment under the plan. Section 1861(ff)(2) of the Act describes the
items and services included in partial hospitalization services.
Section 1861(ff)(3)(A) of the Act specifies that a PHP is a program
furnished by a hospital to its outpatients or by a community mental
health center (CMHC), as a distinct and organized intensive ambulatory
treatment service, offering less than 24-hour-daily care, in a location
other than an individual's home or inpatient or residential setting.
Section 1861(ff)(3)(B) of the Act defines a CMHC for purposes of this
benefit. We refer readers to sections 1833(t)(1)(B)(i), 1833(t)(2)(B),
1833(t)(2)(C), and 1833(t)(9)(A) of the Act and 42 CFR 419.21, for
additional guidance regarding PHP.
In CY 2008, we began efforts to strengthen the PHP benefit through
extensive data analysis, along with policy and payment changes by
implementing two refinements to the methodology for computing the PHP
median. For a detailed discussion on these policies, we refer readers
to the CY 2008 OPPS/ASC final rule with comment period (72 FR 66670
through 66676). In CY 2009, we implemented several regulatory, policy,
and payment changes. For a detailed discussion on these policies, we
refer readers to the CY 2009 OPPS/ASC final rule (73 FR 68688 through
68697). In CY 2010, we retained the two-tier payment approach for
partial hospitalization services and used only hospital-based PHP data
in computing the PHP APC per diem costs, upon which PHP APC per diem
payment rates are based (74 FR 60556 through 60559). In CY 2011 (75 FR
71994), we established four separate PHP APC per diem payment rates:
Two for CMHCs (APC 0172 and APC 0173) and two for hospital-based PHPs
(APC 0175 and APC 0176) and instituted a 2-year transition period for
CMHCs to the CMHC APC per diem payment rates. For a detailed
discussion, we refer readers to section X.B. of the CY 2011 OPPS/ASC
final rule with comment period (75 FR 71991 through 71994). In CY 2012,
we determined the relative payment weights for partial hospitalization
services provided by CMHCs based on data derived solely from CMHCs and
the relative payment weights for partial hospitalization services
provided by hospital-based PHPs based exclusively on hospital data (76
FR 74348 through 74352). In the CY 2013 OPPS/ASC final rule with
comment period, we finalized our proposal to base the relative payment
weights that underpin the OPPS APCs, including the four PHP APCs (APCs
0172, 0173, 0175, and 0176), on geometric mean costs rather than on the
median costs. For a detailed discussion on this policy, we refer
readers to the CY 2013 OPPS/ASC final rule with comment period (77 FR
68406 through 68412).
In the CY 2014 OPPS/ASC proposed rule (78 FR 43621 through 43622)
and CY 2015 OPPS/ASC final rule with comment period (79 FR 66902
through 66908), we continued to apply our established policies to
calculate the four PHP APC per diem payment rates based on geometric
mean per diem costs using the most recent claims data for each provider
type. For a detailed discussion on this policy, we refer readers to the
CY 2014 OPPS/ASC final rule with comment period (78 FR 75047 through
75050). In the CY 2016, we described our extensive analysis of the
claims and cost data and ratesetting methodology, corrected a cost
inversion that occurred in the final rule data with respect to
hospital-based PHP providers and renumbered the PHP APCs. In CY 2017
OPPS/ASC final rule with comment period (81 FR 79687 through 79691), we
continued to apply our established policies to calculate the PHP APC
per diem payment rates based on geometric mean per diem costs and
finalized a policy to combine the Level 1 and Level 2 PHP APCs for
CMHCs and for hospital-based PHPs. We also implemented an eight-percent
outlier cap for CMHCs to mitigate potential outlier billing
vulnerabilities. For a comprehensive description of PHP payment policy,
including a detailed methodology for determining PHP per diem amounts,
we refer readers to the CY 2016 and CY 2017 OPPS/ASC final rules with
comment period (80 FR 70453 through 70455 and 81 FR 79678 through
79680).
In the CYs 2018 and 2019 OPPS/ASC final rules with comment period
(82 FR 59373 through 59381, and 83 FR 58983 through 58998,
respectively), we continued to apply our established policies to
calculate the PHP APC per diem payment rates based on geometric mean
per diem costs, designated a portion of the estimated 1.0 percent
hospital outpatient outlier threshold specifically for CMHCs, and
proposed updates to the PHP allowable HCPCS codes. We finalized these
proposals in the CY 2020 OPPS/ASC final rule with
[[Page 63665]]
comment period (84 FR 61352). We refer readers to section VIII.D. of
the CY 2022 OPPS/ASC proposed rule for a discussion of the proposed
updates and the applicability for CY 2021.
In the CY 2020 OPPS/ASC final rule with comment period (84 FR 61339
through 61350), we finalized our proposal to use the calculated CY 2020
CMHC geometric mean per diem cost and the calculated CY 2020 hospital-
based PHP geometric mean per diem cost, but with a cost floor equal to
the CY 2019 final geometric mean per diem costs as the basis for
developing the CY 2020 PHP APC per diem rates. Also, we continued to
designate a portion of the estimated 1.0 percent hospital outpatient
outlier threshold specifically for CMHCs, consistent with the
percentage of projected payments to CMHCs under the OPPS, excluding
outlier payments.
In the April 30, 2020 interim final rule with comment (85 FR 27562
through 27566), effective as of March 1, 2020 and for the duration of
the COVID-19 Public Health Emergency (PHE), hospital and CMHC staff are
permitted to furnish certain outpatient therapy, counseling, and
educational services (including certain PHP services), incident to a
physician's services, to beneficiaries in temporary expansion
locations, including the beneficiary's home, so long as the location
meets all conditions of participation to the extent not waived. A
hospital or CMHC can furnish such services using telecommunications
technology to a beneficiary in a temporary expansion location if that
beneficiary is registered as an outpatient. These provisions apply only
for the duration of the COVID-19 PHE.
In the CY 2021 final rule (85 FR 86073 through 86080), we finalized
a CMHC geometric mean per diem cost of $136.14 and a final hospital-
based PHP geometric mean per diem cost of $253.76 using the most recent
updated claims and cost data. In the CY 2021 proposed rule (85 FR 48901
through 48905), we had proposed, for CY 2021 and subsequent years, to
use the CY 2021 CMHC geometric mean per diem cost calculated in
accordance with our existing methodology, but with a cost floor equal
to the per diem cost for CMHCs of $121.62 that was calculated for CY
2020 ratesetting (84 FR 61339 through 61344), as the basis for
developing the CY 2021 CMHC APC per diem rate. We had also proposed,
for CY 2021 and subsequent years, to use the CY 2021 hospital-based
geometric mean per diem cost calculated in accordance with our existing
methodology, but with a cost floor equal to the per diem cost for
hospital-based providers of $222.76 that was calculated for CY 2020
ratesetting (84 FR 61344 through 61345). We explained in the CY 2021
final rule that the final calculated geometric mean per diem costs for
both CMHCs and hospital-based PHPs were significantly higher than each
proposed cost floor, therefore 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.
B. PHP APC Update for CY 2022
1. PHP APC Geometric Mean Per Diem Costs
In summary, for CY 2022 only, we proposed to use the CY 2022 CMHC
geometric mean per diem cost calculated in accordance with our existing
methodology, but with a cost floor equal to the per diem cost for CMHCs
of $136.14, which is the final CMHC geometric mean per diem cost
calculated last year for CY 2021 ratesetting (85 FR 86080), as the
basis for developing the CY 2022 CMHC APC per diem rate. We also
proposed, for CY 2022 only, to use the CY 2022 hospital-based geometric
mean per diem cost calculated in accordance with our existing
methodology, but with a cost floor equal to the per diem cost for
hospital-based providers of $253.76 calculated last year for CY 2021
ratesetting (85 FR 86080). Following this methodology, we proposed to
use the cost floor value of $136.14 for CMHCs as the basis for
developing the CY 2022 CMHC APC per diem rate, and to use the cost
floor value of $253.76 as the basis for developing the CY 2021
hospital-based APC per diem rate. We also proposed to use the latest
available CY 2019 claims and cost data from the CY 2021 rulemaking to
determine CY 2022 geometric mean per diem costs in the CY 2022 OPPS/ASC
proposed rule, and we proposed that if the final CY 2022 cost for CMHCs
or hospital-based PHPs was calculated to be above the proposed floor
for that provider type, we would use the final calculated cost instead
of the floor. Lastly, in accordance with our longstanding policy, we
proposed to continue to use CMHC APC 5853 (Partial Hospitalization
(three or More Services Per Day)) and hospital-based PHP APC 5863
(Partial Hospitalization (three or More Services Per Day)).
We are finalizing these proposals in this CY 2022 OPPS/ASC final
rule as proposed, and we discuss our rationale and the public comments
received on these proposals in the following sections.
2. Development of the PHP APC Geometric Mean Per Diem Costs
In preparation for CY 2022, we followed the PHP ratesetting
methodology described in section VIII.B.2. of the CY 2016 OPPS/ASC
final rule with comment period (80 FR 70462 through 70466) to calculate
the PHP APCs' geometric mean per diem costs and payment rates for APCs
5853 and 5863, incorporating the modifications made in the CY 2017
OPPS/ASC final rule with comment period. As discussed in section
VIII.B.1. of the CY 2017 OPPS/ASC final rule with comment period (81 FR
79680 through 79687), the geometric mean per diem cost for hospital-
based PHP APC 5863 is based upon actual hospital-based PHP claims and
costs for PHP service days providing three or more services. Similarly,
the geometric mean per diem cost for CMHC APC 5853 is based upon actual
CMHC claims and costs for CMHC service days providing three or more
services. In addition, for CY 2022, we proposed 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). As discussed in section
VIII.B.2.a of this OPPS/ASC final rule, we are finalizing our proposal
to use HCRIS as the source for CMHC CCRs.
As discussed in section X.E of the OPPS/ASC proposed rule (86 FR
42188 through 42190), we analyzed OPPS cost and claims information from
CY 2019 and CY 2020 to better understand the effects of the COVID-19
PHE on outpatient services, including PHP, and to identify which data
would be the best available for ratesetting. As discussed in that
section of the proposed rule, we observed a number of changes, likely
as a result of the COVID-19 PHE, in the CY 2020 OPPS claims that we
would ordinarily use for ratesetting, and this includes changes in the
claims for partial hospitalization, and we continue to observe those
changes in the data for this OPPS/ASC final rule. For PHP services in
particular, we observe that for hospital-based PHPs, the number of PHP
days in our trimmed CY 2020 claims dataset is approximately 49 percent
less than the number of PHP days in our trimmed CY 2019 claims dataset;
and for CMHCs, the number of PHP days in our trimmed CY 2020 claims
dataset is approximately 51 percent less than the number of PHP days in
our trimmed CY 2019 claims dataset.
For this CY 2022 ratesetting, we proposed to use CY 2019 claims and
the
[[Page 63666]]
cost information from prior to the COVID-19 PHE, that is, the cost
information that was available for the CY 2021 OPPS/ASC rulemaking. We
explained that we believe this is appropriate and necessary for PHP
services, because of the substantial decrease in the number of PHP days
in the CY 2020 claims dataset, which we would normally use for
ratesetting. Furthermore, there was a substantial decrease in the
number of PHP providers in the CY 2020 data that we continue to observe
for this CY 2022 OPPS/ASC final rule. Our trimmed CY 2020 claims
dataset for this final rule contains cost and claim information from 31
fewer hospital-based PHP providers than are in the CY 2019 data. These
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 are not the best overall approximation of expected PHP
services in CY 2022. We stated that we believe the CY 2019 data, as the
most recent complete calendar year of data prior to the COVID-19 PHE,
are a better approximation of expected CY 2022 PHP services. Therefore,
as discussed in section X.E of the OPPS/ASC proposed rule (86 FR 42188
through 42190), and consistent with what CMS proposed to do for other
APCs under the OPPS, we proposed to use CY 2019 claims and the cost
information from prior to the COVID-19 PHE, that is, the cost
information that was available for the CY 2021 OPPS/ASC rulemaking, for
calculating the CY 2022 CMHC and hospital-based PHP APC per diem costs.
Comment: We received 6 comments, which were all in support of our
proposal to use the CY 2019 claims and the cost information from prior
to the COVID-19 PHE, that is, the cost information that was available
for the CY 2021 OPPS/ASC rulemaking, for calculating the CY 2022 CMHC
and hospital-based PHP APC per diem costs. Several commenters stated
their agreement with CMS' assessment that the ongoing COVID-19 PHE has
disrupted the provision PHP services, and acknowledged that the
proposed PHP payment rate methodology outlined in the proposed rule
should help lessen the impact of COVID-19 on providers. One national
organization expressed its belief that ensuring financial stability and
sustainability for these programs is critical to ensuring access to
this level of care for some of Medicare's most vulnerable patients.
Response: We thank commenters for their support. We agree with
commenters that ensuring access to PHP services is critical, especially
within the context of the COVID-19 PHE. As discussed above, we have
analyzed more recent data for this CY 2022 OPPS/ASC final rule, and
continue to observe significant changes from the CY 2019 PHP claims,
which lead us to continue to believe that the CY 2019 data, as the most
recent complete calendar year of data prior to the COVID-19 PHE, are a
better approximation of expected CY 2022 PHP services.
After careful consideration of the comments we received and after
analyzing more recent data, we are finalizing our proposal to use the
CY 2019 claims and the cost information from prior to the COVID-19 PHE,
that is, the cost information that was available for the CY 2021 OPPS/
ASC rulemaking, for calculating the CY 2022 CMHC and hospital-based PHP
APC per diem costs.
The CMHC and hospital-based PHP APC per diem costs are the
provider-type specific costs derived from the latest updated CY 2019
claims and cost data from the CY 2021 rulemaking. The CMHC and
hospital-based PHP APC per diem payment rates are the national
unadjusted payment rates calculated from the CMHC and hospital-based
PHP APC geometric mean per diem costs, respectively, after applying the
OPPS budget neutrality adjustments described in section II.A.4 of this
CY 2022 OPPS/ASC final rule.
a. CMHC Data Preparation: Data Trims, Exclusions, and CCR Adjustments
For this CY 2022 OPPS/ASC final rule, we prepared data consistent
with our policies as described in the CY 2016 OPPS/ASC final rule with
comment period (80 FR 70463 through 70465). However, as discussed
above, we finalized our proposal to use CY 2019 claims data and the
cost information from prior to the COVID-19 PHE, that is, the cost
information that was available for the CY 2021 OPPS/ASC rulemaking, for
calculating the CY 2022 CMHC PHP APC per diem cost.
For CY 2022 and future years, we also proposed to use cost and
charge information from HCRIS as the basis for determining the CMHC
CCRs used to calculate the geometric mean per diem cost for CMHC APC
5853. Following the methodology described in the CY 2016 OPPS/ASC final
rule with comment period (80 FR 70462), we calculated the CCR based on
Medicare costs and charges. However, we noted that CMHCs are now
reporting their costs using the newer cost reporting form, Form CMS
2088-17, which has different lines and columns than the ones described
in the CY 2016 OPPS/ASC final rule for Form CMS 2088-92. Therefore, to
calculate each CMHC's CCR for the CY 2022 OPPS/ASC proposed rulemaking,
we divided costs from Worksheet C, Line 50, Column 5 by charges from
Worksheet C, Line 50, Column 4.
As noted above, prior to this year's proposed rulemaking, our
longstanding methodology for calculating CCRs for CMHCs had been to use
the CCRs from the OPSF. As discussed in the CY 2004 OPPS/ASC final rule
(68 FR 63468), a Program Memorandum was issued on January 17, 2003,
which directed the fiscal intermediaries to recalculate hospital and
CMHC cost-to-charge ratios and to update the cost-to-charge ratios on
an ongoing basis in the OPSF, which was used as the basis for the CCRs
used in calculating the geometric mean per diem costs for CMHCs.
Subsequently, in the CY 2009 OPPS/ASC final rule (73 FR 68690),
commenters addressed the fact that cost report information for CMHCs
was not at that time included in HCRIS, and recommended that CMS base
its calculations only in the cost report information that the agency
can verify directly and not on data provided by the fiscal
intermediary. CMS responded in the same OPPS/ASC final rule that it was
working to include CMHC cost reports in the system, but that the CCRs
from the OPSF continued to be the best available data for ratesetting.
In the CY 2011 OPPS/ASC final rule (75 FR 71993 through 71994),
commenters requested that CMHC cost report information be included in
HCRIS, and CMS explained that CMHC cost reports would begin to be
available in HCRIS starting in early 2011. Since that time, CMHC cost
reports have become available in HCRIS. Because the data is now
available and consistently populated based on the cost reports that
CMHCs submit, we stated that we believe using cost information from
HCRIS would be more consistent with the methodology for calculating
most other OPPS services, including hospital-based PHP services.
Therefore, we proposed for CY 2022 and future years to use HCRIS as the
source for CMHC cost information used for calculating the geometric
mean per diem cost for CMHC APC 5853.
We did not receive any comments on this proposal, and we are
finalizing it as proposed. For CY 2022 and future years, we will use
HCRIS as the source for CMHC cost information used for calculating the
geometric mean per diem cost for CMHC APC 5853. Accordingly, we used
HCRIS as the source for the CMHC cost information for this CY 2022
OPPS/ASC final rule.
[[Page 63667]]
Prior to calculating the final geometric mean per diem cost for
CMHC APC 5853, we prepared the data by first applying trims and data
exclusions, and assessing CCRs as described in the CY 2016 OPPS/ASC
final rule with comment period (80 FR 70463 through 70465), so that
ratesetting is not skewed by providers with extreme data. Before any
trims or exclusions were applied, there were 40 CMHCs in the PHP claims
data file. Under the 2 standard deviation trim policy, we
excluded any data from a CMHC for ratesetting purposes when the CMHC's
geometric mean cost per day was more than 2 standard
deviations from the geometric mean cost per day for all CMHCs. In
applying this trim for CY 2022 ratesetting, one CMHC had geometric mean
costs per day below the trim's lower limit of $32.94, and one had
geometric mean costs per day above the trim's upper limit of $486.92.
Therefore, we are excluding data for ratesetting from these 2 CMHCs.
In accordance with our PHP ratesetting methodology (80 FR 70465),
we also remove service days with no wage index values, because we use
the wage index data to remove the effects of geographic variation in
costs prior to APC geometric mean per diem cost calculation (80 FR
70465). For this CY 2022 final rule ratesetting, no CMHC was missing
wage index data for all of its service days and, therefore, no CMHC was
excluded. We also exclude providers without any days containing 3 or
more units of PHP-allowable services. One provider is excluded from
ratesetting because it had no days containing 3 or more units of PHP-
allowable services. In addition to our trims and data exclusions,
before calculating the PHP APC geometric mean per diem costs, we also
assess CCRs (80 FR 70463). Our longstanding PHP OPPS ratesetting
methodology defaults any CMHC CCR that is not available or any CMHC CCR
greater than one to the statewide hospital CCR associated with the
provider's urban/rural designation and their state location (80 FR
70463). For the CY 2022 OPPS/ASC proposed rule ratesetting and this
OPPS/ACS final rule, there are 3 CMHCs with CCRs greater than one, and
12 CMHCs with missing CCR information. Therefore, we are defaulting the
CCRs for these 15 CMHCs for ratesetting to the applicable statewide
hospital CCR for each CMHC based on its urban/rural designation and its
state location.
In summary, the application of these data preparation steps
resulted in an adjusted CCR during our ratesetting process for 15 CMHCs
having either a CCR greater than one or having no CCR. We are also
excluding one CMHC because it had no days containing 3 or more services
and 2 CMHCs for failing the 2 standard deviation trim,
resulting in the inclusion of 37 CMHCs. There were 564 CMHC claims
removed during data preparation steps due to the 2 standard
deviation trim or because they either had no PHP allowable-codes or had
zero payment days, leaving 10,370 CMHC claims in our CY 2022 final rule
ratesetting modeling. After applying all of the previously listed
trims, exclusions, and adjustments, we followed the methodology
described in the CY 2016 OPPS/ASC final rule with comment period (80 FR
70464 through 70465) and modified in the CY 2017 OPPS/ASC final rule
with comment period (81 FR 79687 through 79688, and 79691), using the
CMHC CCRs calculated based on the cost information from HCRIS as
discussed in this OPPS/ASC final rule, to calculate the CMHC APC
geometric mean per diem cost.\185\ The calculated CY 2022 geometric
mean per diem cost for all CMHCs for providing three or more services
per day (CMHC APC 5853) is $129.93, a decrease from $136.14 calculated
last year for CY 2021 ratesetting (85 FR 86080).
---------------------------------------------------------------------------
\185\ Each revenue code on the CMHC claim must have a HCPCS code
and charge associated with it. We multiply each claim service line's
charges by the CMHC's overall CCR (or statewide CCR, where the
overall CCR was greater than 1 or was missing) to estimate CMHC
costs. Only the claims service lines containing PHP allowable HCPCS
codes and PHP allowable revenue codes from the CMHC claims remaining
after trimming are retained for CMHC cost determination. The costs,
payments, and service units for all service lines occurring on the
same service date, by the same provider, and for the same
beneficiary are summed. CMHC service days must have three or more
services provided to be assigned to CMHC APC 5853. The final
geometric mean per diem cost for CMHC APC 5853 is calculated by
taking the nth root of the product of n numbers, for days where
three or more services were provided. CMHC service days with costs
3 standard deviations from the geometric mean costs
within APC 5853 are deleted and removed from modeling. The remaining
PHP service days are used to calculate the final geometric mean per
diem cost for each PHP APC by taking the nth root of the product of
n numbers for days where three or more services were provided.
---------------------------------------------------------------------------
In the CY 2022 OPPS/ASC proposed rule (86 FR 42151 through 42152),
we proposed a cost floor of $136.14, which is equal to the final CY
2021 geometric mean per diem cost for CMHC APC 5853, in order to
stabilize the geometric mean per diem costs for CY 2022 only. We
recognized the disruption that the ongoing COVID-19 PHE appears to be
having on CMHCs' operations, and stated that we believe it is important
for CMS to continue to support Medicare beneficiaries' access to
critical PHP services during the COVID-19 PHE by helping to maintain
the stability of payments to PHP providers. We stated that we were
concerned that the calculated geometric mean per diem cost of $130.41
for the proposed rule would result in a disruption to CMHC payments at
a time when the need for mental health services has increased.\186\
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\186\ https://www.cdc.gov/mmwr/volumes/70/wr/mm7013e2.htm.
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Because the calculated geometric mean per diem cost for CMHC APC
5853 was below the cost floor, we proposed to calculate the CY 2022
CMHC APC 5853 payment rate based on the cost floor of $136.14. We also
proposed that if the final CY 2022 geometric mean per diem cost is
calculated to be higher than $136.14, then we would use the calculated
geometric mean per diem cost.
Comment: We received 3 comments on our proposed calculation of the
geometric mean per diem cost for CMHC APC 5853. All commenters were
supportive of the proposed cost floor to stabilize the geometric mean
per diem costs finalized in the prior year, CY 2021. Commenters also
encouraged CMS to consider long-term approaches to addressing cost
fluctuations in PHP services and provide more stable payment rates to
ensure access to these important services. Additionally, one commenter
urged CMS to consider making CMHCs financially whole, which should
include payment that will expand their capacity to meet growing need,
particularly in underserved communities.
Response: We appreciate commenters' support for the proposed
policies. We agree with commenters about the importance of maintaining
stable payment rates to ensure access to PHP services. We continue to
recognize that because the CMHC ratesetting dataset is small (n=37),
changes in costs from a small number of providers can influence the
overall geometric mean per diem cost calculation. We are considering
approaches to address cost fluctuations in future years; however, since
we did not propose a methodology for future years, we are not
finalizing any methodology in this CY 2022 OPPS/ASC final rule to
address cost fluctuations in future years.
We also appreciate the commenter's suggestion about the need for
ensuring that CMS supports the capacity of CMHCs to meet the growing
needs of underserved communities. We recognize the critical role that
CMHCs play in the communities they serve. The commenter did not offer
specific information about which growing community needs CMHCs are
facing or
[[Page 63668]]
what mechanism CMS should consider for enabling CMHCs to expand
capacity in order to meet these needs, but we note that section
1866(e)(2) of the Act only authorizes Medicare to make payments to
CMHCs for PHP services.
We agree with the commenter that PHP payment rates should
accurately reflect the financial costs to providers of providing PHP
services to their communities. Sections 1833(t)(2) and 1833(t)(9) of
the Act set forth the requirements for establishing and adjusting OPPS
payment rates, which are based on costs, and which include PHP payment
rates. Because our PHP ratesetting methodology depends heavily on
provider-reported costs, we strongly encourage CMHCs to review cost
reporting instructions to be sure they are reporting their costs
correctly. These instructions are available in chapter 45 of the
Provider Reimbursement Manual (PRM), Part 2, available on the CMS
website at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Paper-Based-Manuals. We want to reiterate that it is a
requirement for CMHCs, unless they are approved as a low-utilization or
no-utilization provider in accordance with PRM-1, chapter 1, section
110 (42 CFR 413.24(g) and (h)), to file full cost reports, which helps
us capture accurate CMHC costs in rate setting. We furthermore
encourage those CMHCs that do not file full cost reports to consider
doing so.
After careful consideration of the comments received, we are
finalizing our proposal to establish a cost floor for CY 2022 equal to
the final CY 2021 geometric mean per diem cost for CMHC APC 5853, which
is $136.14. The calculated CY 2022 geometric mean per diem cost for all
CMHCs for providing three or more services per day (CMHC APC 5853) is
$129.93. Because this amount is below the cost floor, we are finalizing
our proposal to calculate the CY 2022 CMHC APC 5853 payment rate based
on the cost floor of $136.14.
b. Hospital-Based PHP Data Preparation: Data Trims and Exclusions
For this CY 2022 final rule, we prepared data consistent with our
policies as described in the CY 2016 OPPS/ASC final rule with comment
period (80 FR 70463 through 70465) for hospital-based PHP providers,
which is similar to that used for CMHCs. However, as discussed above,
we finalized our proposal to use CY 2019 claims data and the cost
information from prior to the COVID-19 PHE, that is, the cost
information that was available for the CY 2021 OPPS/ASC rulemaking, for
calculating the CY 2022 hospital-based PHP APC per diem cost. The CY
2019 PHP claims included data for 449 hospital-based PHP providers for
our calculations in the CY 2022 OPPS/ASC final rule.
Consistent with our policies, as stated in the CY 2016 OPPS/ASC
final rule with comment period (80 FR 70463 through 70465), we prepared
the data by applying trims and data exclusions. We applied a trim on
hospital service days for hospital-based PHP providers with a CCR
greater than 5 at the cost center level. To be clear, the CCR greater
than 5 trim is a service day-level trim in contrast to the CMHC 2 standard deviation trim, which is a provider-level trim.
Applying the CCR greater than 5 trim removed affected service days from
one hospital-based PHP provider from our proposed ratesetting. However,
100 percent of the service days for this hospital-based PHP provider
had at least one service associated with a CCR greater than 5, so the
trim removed this provider entirely from our proposed ratesetting. In
addition, 68 hospital-based PHPs were removed for having no days with
PHP payment. Two hospital-based PHPs were removed because none of their
days included PHP-allowable HCPCS codes. No hospital-based PHPs were
removed for missing wage index data, and a single hospital-based PHP
was removed by the OPPS 3 standard deviation trim on costs
per day. (We refer readers to the OPPS Claims Accounting Document,
available online at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html).\187\
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\187\ Click on the link labeled ``CY 2022 OPPS/ASC Notice of
Proposed Rulemaking'', which can be found under the heading
``Hospital Outpatient Prospective Payment System Rulemaking'' and
open the claims accounting document link at the bottom of the page,
which is labeled ``2022 NPRM OPPS Claims Accounting (PDF)''.
---------------------------------------------------------------------------
Overall, we removed 72 hospital-based PHP providers (1 with all
service days having a CCR greater than 5) + (68 with no PHP payment) +
(2 with no PHP-allowable HCPCS codes) + (1 provider with geometric mean
costs per day outside the 3 SD limits)], resulting in 377
(449 total-72 excluded) hospital-based PHP providers in the data used
for calculating ratesetting.
After completing these data preparation steps, we calculated the CY
2022 geometric mean per diem cost for hospital-based PHP APC 5863 by
following the methodology described in the CY 2016 OPPS/ASC final rule
with comment period (80 FR 70464 through 70465) and modified in the CY
2017 OPPS/ASC final rule with comment period (81 FR 79687 and
79691).\188\ The calculated CY 2022 hospital-based PHP APC geometric
mean per diem cost for hospital-based PHP providers that provide three
or more services per service day (hospital-based PHP APC 5863) is
$253.02, which is a very slight decrease from $253.76 calculated last
year for CY 2021 ratesetting (85 FR 86080).
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\188\ Each revenue code on the hospital-based PHP claim must
have a HCPCS code and charge associated with it. We multiply each
claim service line's charges by the hospital's department-level CCR;
in CY 2020 and subsequent years, that CCR is determined by using the
PHP-only revenue-code-to-cost-center crosswalk. Only the claims
service lines containing PHP-allowable HCPCS codes and PHP-allowable
revenue codes from the hospital-based PHP claims remaining after
trimming are retained for hospital-based PHP cost determination. The
costs, payments, and service units for all service lines occurring
on the same service date, by the same provider, and for the same
beneficiary are summed. Hospital-based PHP service days must have
three or more services provided to be assigned to hospital-based PHP
APC 5863. The final geometric mean per diem cost for hospital-based
PHP APC 5863 is calculated by taking the nth root of the product of
n numbers, for days where three or more services were provided.
Hospital-based PHP service days with costs 3 standard
deviations from the geometric mean costs within APC 5863 are deleted
and removed from modeling. The remaining hospital-based PHP service
days are used to calculate the final geometric mean per diem cost
for hospital-based PHP APC 5863.
---------------------------------------------------------------------------
In the CY 2022 OPPS/ASC proposed rule (86 FR 42151 through 42152),
we proposed a cost floor of $253.76, which is equal to the final CY
2021 geometric mean per diem cost for CMHC APC 5863, in order to
stabilize the geometric mean per diem costs for CY 2022 only. We noted
that, in general, a decrease of the magnitude calculated for the
proposed rule would not be unexpected due to normal variation in cost
and claims data. However, we recognized the disruption that the ongoing
COVID-19 PHE appears to be having on the operations of hospital-based
PHPs, and stated that we believe it is important for CMS to continue to
support Medicare beneficiaries' access to critical PHP services during
the COVID-19 PHE by helping to maintain the stability of payments to
PHP providers. We stated that while the decrease in the geometric mean
per diem cost for hospital-based PHP APC 5863 would be very slight
based on the CY 2019 claims and cost data used for the CY 2022 OPPS/ASC
proposed rule, we continue to believe, as we have stated before in
recent years, that access is better supported when geometric mean per
diem costs do not fluctuate greatly. We also noted that the proposed
cost floor would protect access to PHP services at hospital-based PHPs
if the final CY 2022 calculated hospital-based PHP APC geometric mean
per diem cost is significantly less,
[[Page 63669]]
which we were concerned would result in a disruption to hospital-based
PHP payments at a time when the need for mental health services has
increased.
Because the calculated geometric mean per diem cost for hospital-
based PHP APC 5863 was below the cost floor, we proposed to calculate
the CY 2022 hospital-based PHP APC 5863 payment rate based on the cost
floor of $253.76. We also proposed that if the final CY 2022 geometric
mean per diem cost is calculated to be higher than $253.76, then we
would use the calculated geometric mean per diem cost.
Comment: We received 5 comments on our proposed calculation of the
geometric mean per diem cost for CMHC APC 5863. All commenters were
supportive of the proposed cost floor to stabilize the geometric mean
per diem costs finalized in the prior year, CY 2021. Commenters also
encouraged CMS to consider long-term approaches to addressing cost
fluctuations in PHP services and provide more stable payment rates to
ensure access to these important services. Three national provider
associations commented that while the PHE has magnified the need for
improved access to behavioral healthcare, there are severe shortages of
behavioral healthcare providers in many parts of the United States,
stating their belief that the proposed ratesetting methodology should
help lessen the impact of COVID-19 on PHP providers.
Response: We appreciate commenters' support for the proposed
policies. We share commenters' concerns about ensuring that Medicare
beneficiaries continue to have access to PHP services, particularly in
light of the impact of the COVID-19 PHE. We also continue to recognize,
as we have noted in past years, that changes in costs from a small
number of providers can influence the overall geometric mean per diem
cost calculation. We are considering approaches to address cost
fluctuations in future years; however, since we did not propose a
methodology for future years, we are not finalizing any methodology in
this CY 2022 OPPS/ASC final rule to address cost fluctuations in future
years.
After careful consideration of the comments received, we are
finalizing our proposal to establish a cost floor for CY 2022 equal to
the final CY 2021 geometric mean per diem cost for CMHC APC 5863, which
is $253.76. The calculated CY 2022 geometric mean per diem cost for all
hospital-based PHPs for providing three or more services per day (CMHC
APC 5863) is $253.02. Because this amount is below the cost floor, we
are finalizing our proposal to calculate the CY 2022 hospital-based PHP
APC 5863 payment rate based on the cost floor of $253.76.The final CY
2022 PHP geometric mean per diem costs are shown in Table 44 and are
used to derive the proposed CY 2022 PHP APC per diem rates for CMHCs
and hospital-based PHPs. The final CY 2022 PHP APC per diem rates are
included in Addendum A to the CY 2022 OPPS/ASC proposed rule (which is
available on our website at:https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html).\189\
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\189\ As discussed in section XX. of the CY 2022 OPPS/ASC
proposed rule, OPPS APC geometric mean per diem costs (including PHP
APC geometric mean per diem costs) are divided by the geometric mean
per diem costs for APC 5012 (Clinic Visits and Related Services) to
calculate each PHP APC's unscaled relative payment weight. An
unscaled relative payment weight is one that is not yet adjusted for
budget neutrality. Budget neutrality is required under section
1833(t)(9)(B) of the Act, and ensures that the estimated aggregate
weight under the OPPS for a calendar year is neither greater than
nor less than the estimated aggregate weight that would have been
made without the changes. To adjust for budget neutrality (that is,
to scale the weights), we compare the estimated aggregated weight
using the scaled relative payment weights from the previous calendar
year at issue. We refer readers to the ratesetting procedures
described in Part 2 of the OPPS Claims Accounting narrative and in
section II. of the CY 2022 OPPS/ASC proposed rule for more
information on scaling the weights, and for details on the final
steps of the process that leads to final PHP APC per diem payment
rates. The OPPS Claims Accounting narrative is available on the CMS
website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html.
[GRAPHIC] [TIFF OMITTED] TR16NO21.073
C. Outlier Policy for CMHCs
For 2022, we proposed to continue to calculate the CMHC outlier
percentage, cutoff point and percentage payment amount, outlier
reconciliation, outlier payment cap, and fixed dollar- threshold
according to previously established policies. These topics are
discussed in more detail. We refer readers to section II.G.1 of this CY
2022 OPPS/ASC final rule for our general policies for hospital
outpatient outlier payments.
We did not receive any public comments on our proposal, and are
finalizing it as proposed.
1. Background
As discussed in the CY 2004 OPPS final rule with comment period (68
FR 63469 through 63470), we noted a significant difference in the
amount of outlier payments made to hospitals and CMHCs for PHP
services. Given the difference in PHP charges between hospitals and
CMHCs, we did not believe it was appropriate to make outlier payments
to CMHCs using the outlier percentage target amount and threshold
established for hospitals. Therefore, beginning in CY 2004, we created
a separate outlier policy specific to the estimated costs and OPPS
payments provided to CMHCs. We designated a portion of the estimated
OPPS outlier threshold specifically for CMHCs, consistent with the
percentage of projected payments to CMHCs under the OPPS each year,
excluding outlier payments, and established a separate outlier
threshold for CMHCs. This
[[Page 63670]]
separate outlier threshold for CMHCs resulted in $1.8 million in
outlier payments to CMHCs in CY 2004 and $0.5 million in outlier
payments to CMHCs in CY 2005 (82 FR 59381). In contrast, in CY 2003,
more than $30 million was paid to CMHCs in outlier payments (82 FR
59381).
2. CMHC Outlier Percentage
In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59267
through 59268), we described the current outlier policy for hospital
outpatient payments and CMHCs. We note that we also discussed our
outlier policy for CMHCs in more detail in section VIII.C. of that same
final rule (82 FR 59381). We set our projected target for all OPPS
aggregate outlier payments at 1.0 percent of the estimated aggregate
total payments under the OPPS (82 FR 59267). This same policy was also
reiterated in the CY 2019 OPPS/ASC final rule with comment period (83
FR 58996), the CY 2020 OPPS/ASC final rule with comment period (84 FR
61350), and the CY 2021 OPPS/ASC final rule with comment period (85 FR
86082).
We estimate CMHC per diem payments and outlier payments by using
the most recent available utilization and charges from CMHC claims,
updated CCRs, and the updated payment rate for APC 5853. For increased
transparency, we are providing a more detailed explanation of the
existing calculation process for determining the CMHC outlier
percentages. To calculate the CMHC outlier percentage, we follow three
steps:
Step 1: We multiply the OPPS outlier threshold, which is
1.0 percent, by the total estimated OPPS Medicare payments (before
outliers) for the prospective year to calculate the estimated total
OPPS outlier payments:
(0.01 x Estimated Total OPPS Payments) = Estimated Total OPPS Outlier
Payments.
Step 2: We estimate CMHC outlier payments by taking each
provider's estimated costs (based on their allowable charges multiplied
by the provider's CCR) minus each provider's estimated CMHC outlier
multiplier threshold (we refer readers to section VIII.C.3. of the CY
2022 OPPS/ASC proposed rule). That threshold is determined by
multiplying the provider's estimated paid days by 3.4 times the CMHC
PHP APC payment rate. If the provider's costs exceed the threshold, we
multiply that excess by 50 percent, as described in section VIII.C.3.
of the CY 2022 OPPS/ASC proposed rule, to determine the estimated
outlier payments for that provider. CMHC outlier payments are capped at
8 percent of the provider's estimated total per diem payments
(including the beneficiary's copayment), as described in section
VIII.C.5. of the CY 2022 OPPS/ASC proposed rule, so any provider's
costs that exceed the CMHC outlier cap will have its payments adjusted
downward. After accounting for the CMHC outlier cap, we sum all of the
estimated outlier payments to determine the estimated total CMHC
outlier payments.
(Each Provider's Estimated Costs - Each Provider's Estimated Multiplier
Threshold) = A. If A is greater than 0, then (A x 0.50) = Estimated
CMHC Outlier Payment (before cap) = B. If B is greater than (0.08 x
Provider's Total Estimated Per Diem Payments), then cap adjusted B =
(0.08 x Provider's Total Estimated Per Diem Payments); otherwise, B =
B. Sum (B or cap-adjusted B) for Each Provider = Total CMHC Outlier
Payments.
Step 3: We determine the percentage of all OPPS outlier
payments that CMHCs represent by dividing the estimated CMHC outlier
payments from Step 2 by the total OPPS outlier payments from Step 1:
(Estimated CMHC Outlier Payments/Total OPPS Outlier Payments).
We proposed to continue to calculate the CMHC outlier percentage
according to previously established policies, and we did not propose
any changes to our current methodology for calculating the CMHC outlier
percentage for CY 2022. Therefore, based on our CY 2022 payment
estimates, CMHCs are projected to receive 0.02 percent of total
hospital outpatient payments in CY 2022, 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 it as proposed.
3. Cutoff Point and Percentage Payment Amount
As described in the CY 2018 OPPS/ASC final rule with comment period
(82 FR 59381), our policy has been to pay CMHCs for outliers if the
estimated cost of the day exceeds a cutoff point. In CY 2006, we set
the cutoff point for outlier payments at 3.4 times the highest CMHC PHP
APC payment rate implemented for that calendar year (70 FR 68551). For
CY 2018, the highest CMHC PHP APC payment rate is the payment rate for
CMHC PHP APC 5853. In addition, in CY 2002, the final OPPS outlier
payment percentage for costs above the multiplier threshold was set at
50 percent (66 FR 59889). In CY 2018, we continued to apply the same 50
percent outlier payment percentage that applies to hospitals to CMHCs
and continued to use the existing cutoff point (82 FR 59381).
Therefore, for CY 2018, we continued to pay for partial hospitalization
services that exceeded 3.4 times the CMHC PHP APC payment rate at 50
percent of the amount of CMHC PHP APC geometric mean per diem costs
over the cutoff point. For example, for CY 2018, if a CMHC's cost for
partial hospitalization services paid under CMHC PHP APC 5853 exceeds
3.4 times the CY 2018 payment rate for CMHC PHP APC 5853, the outlier
payment would be calculated as 50 percent of the amount by which the
cost exceeds 3.4 times the CY 2018 payment rate for CMHC PHP APC 5853
[0.50 x (CMHC Cost-(3.4 x APC 5853 rate))]. This same policy was also
reiterated in the CY 2019 OPPS/ASC final rule with comment period (83
FR 58996 through 58997), CY 2020 OPPS/ASC final rule with comment
period (84 FR 61351) and the CY 2021 OPPS/ASC final rule with comment
period (85 FR 86082 through 86083). For CY 2022, we proposed to
continue to pay for partial hospitalization services that exceed 3.4
times the proposed CMHC PHP APC payment rate at 50 percent of the CMHC
PHP APC geometric mean per diem costs over the cutoff point. That is,
for CY 2022, if a CMHC's cost for partial hospitalization services paid
under CMHC PHP APC 5853 exceeds 3.4 times the payment rate for CMHC APC
5853, the outlier payment will be calculated as [0.50 x (CMHC Cost-(3.4
x APC 5853 rate))].
We did not receive any public comments on our proposal, and are
finalizing it as proposed.
4. Outlier Reconciliation
In the CY 2009 OPPS/ASC final rule with comment period (73 FR 68594
through 68599), we established an outlier reconciliation policy to
address charging aberrations related to OPPS outlier payments. We
addressed vulnerabilities in the OPPS outlier payment system that lead
to differences between billed charges and charges included in the
overall CCR, which are used to estimate cost and would apply to all
hospitals and CMHCs paid under the OPPS. We initiated steps to ensure
that outlier payments appropriately account for the financial risk when
providing an extraordinarily costly and
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complex service, but are only being made for services that legitimately
qualify for the additional payment.
For a comprehensive description of outlier reconciliation, we refer
readers to the CY 2019 OPPS/ASC final rules with comment period (83 FR
58874 through 58875 and 81 FR 79678 through 79680).
We proposed to continue these policies for partial hospitalization
services provided through PHPs for CY 2022. The current outlier
reconciliation policy requires that providers whose outlier payments
meet a specified threshold (currently $500,000 for hospitals and any
outlier payments for CMHCs) and whose overall ancillary CCRs change by
plus or minus 10 percentage points or more, are subject to outlier
reconciliation, pending approval of the CMS Central Office and Regional
Office (73 FR 68596 through 68599). The policy also includes provisions
related to CCRs and to calculating the time value of money for
reconciled outlier payments due to or due from Medicare, as detailed in
the CY 2009 OPPS/ASC final rule with comment period and in the Medicare
Claims Processing Manual (73 FR 68595 through 68599 and Medicare Claims
Processing Internet Only Manual, Chapter 4, Section 10.7.2 and its
subsections, available online at: https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c04.pdf).
We did not receive any public comments on our proposal, and are
finalizing it as proposed.
5. Outlier Payment Cap
In the CY 2017 OPPS/ASC final rule with comment period, we
implemented a CMHC outlier payment cap to be applied at the provider
level, such that in any given year, an individual CMHC will receive no
more than a set percentage of its CMHC total per diem payments in
outlier payments (81 FR 79692 through 79695). We finalized the CMHC
outlier payment cap to be set at 8 percent of the CMHC's total per diem
payments (81 FR 79694 through 79695). This outlier payment cap only
affects CMHCs, it does not affect other provider types (that is,
hospital-based PHPs), and is in addition to and separate from the
current outlier policy and reconciliation policy in effect. In the CY
2020 OPPS/ASC final rule with comment period (84 FR 61351), we
finalized a proposal to continue this policy in CY 2020 and subsequent
years. In the CY 2022 OPPS/ASC proposed rule, we did not propose any
changes to this policy.
6. Fixed-Dollar Threshold
In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59267
through 59268), for the hospital outpatient outlier payment policy, we
set a fixed-dollar threshold in addition to an APC multiplier
threshold. Fixed-dollar thresholds are typically used to drive outlier
payments for very costly items or services, such as cardiac pacemaker
insertions. CMHC PHP APC 5853 is the only APC for which CMHCs may
receive payment under the OPPS, and is for providing a defined set of
services that are relatively low cost when compared to other OPPS
services. Because of the relatively low cost of CMHC services that are
used to comprise the structure of CMHC PHP APC 5853, it is not
necessary to also 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) and the CY 2021 OPPS/ASC final rule with
comment period (85 FR 86083). We proposed to continue this policy for
CY 2022.
We did not receive any public comments on our proposal, and are
finalizing it as proposed.
IX. Services That Will Be Paid Only as Inpatient Services
A. Background
Established in rulemaking as part of the initial implementation of
the OPPS, the inpatient only (IPO) list identifies services for which
Medicare will only make payment when the services are furnished in the
inpatient hospital setting because of the 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, either because of the
invasive nature of the procedures, the need for postoperative care, or
the underlying physical condition of the patient who would require such
surgery, because performing these procedures on an outpatient basis
would not be safe or appropriate, and therefore not reasonable and
necessary under Medicare rules (63 FR 47571). Services included on the
IPO list were those determined to require inpatient care, such as those
that are highly invasive, result in major blood loss or temporary
deficits of organ systems (such as neurological impairment or
respiratory insufficiency), or otherwise require intensive or extensive
postoperative care (65 FR 67826). There are some services designated as
inpatient only that, given their clinical intensity, would not be
expected to be performed in the hospital outpatient setting. For
example, we have traditionally considered certain surgically invasive
procedures on the brain, heart, and abdomen, such as craniotomies,
coronary-artery bypass grafting, and laparotomies, to require inpatient
care (65 FR 18456). Designation of a service as inpatient-only does not
preclude the service from being furnished in a hospital outpatient
setting, but means that Medicare will not make payment for the service
if it is furnished to a Medicare beneficiary in the hospital outpatient
setting (65 FR 18443). Conversely, the absence of a procedure from the
list should not be interpreted as identifying those procedures as
appropriately performed only in the hospital outpatient setting (70 FR
68696).
As part of the annual update process, we have historically worked
with interested stakeholders, 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. Stakeholders were
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).
Prior to CY 2021, we traditionally used five criteria to determine
whether a procedure should be removed from the IPO list (65 FR 18455).
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 or not 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 a
[[Page 63672]]
procedure is not required to meet all of the established criteria to be
removed from the IPO list. The criteria for assessing procedures for
removal from the IPO list prior to CY 2021 are the following:
Most outpatient departments are equipped to provide the
services to the Medicare population.
The simplest procedure described by the code may be
furnished in most outpatient departments.
The procedure is related to codes that we have already
removed from the IPO list.
A determination is made that the procedure is being
furnished in numerous hospitals on an outpatient basis.
A determination is made that the procedure can be
appropriately and safely furnished in an ASC and is on the list of
approved ASC services or has been proposed by us for addition to the
ASC list.
In the past, we have requested that stakeholders submit
corresponding evidence in support of their claims that a code or group
of codes met the longstanding criteria for removal from the IPO list
and was safe to perform on the Medicare population in the hospital
outpatient setting--including, but not limited to case reports,
operative reports of actual cases, peer-reviewed medical literature,
medical professional analysis, clinical criteria sets, and patient
selection protocols. Our clinicians thoroughly reviewed all information
submitted within the context of the established criteria and if,
following this review, we determined that there was sufficient evidence
to confirm that the code could be safely and appropriately performed on
an outpatient basis, we assigned the service to an APC and included it
as a payable procedure under OPPS (67 FR 66740).
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 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). Prior to CY 2021,
changes to the IPO list have been gradual. Further, CMS has at times
had to reclassify codes as inpatient only services with the emergence
of new information.
We refer readers to the CY 2012 OPPS/ASC final rule with comment
period (76 FR 74352 through 74353) for a full discussion of our
historic policies for identifying services that are typically provided
only in an inpatient setting and, therefore, that will not be paid by
Medicare under the OPPS, as well as the criteria we have used to review
the IPO list to determine whether or not any services should be
removed.
In the CY 2021 OPPS/ASC final rule with comment period (85 FR 86084
through 86088), we significantly adjusted our approach to the IPO list.
As we stated in that final rule, we no longer saw the need for CMS to
restrict payment for certain procedures by maintaining the IPO list to
identify services that require inpatient care. In that final rule, we
acknowledged the seriousness of the concerns regarding patient safety
and quality of care that various stakeholders expressed regarding
removing procedures from the IPO list or eliminating the IPO list
altogether. But we stated that we believed that the developments in
surgical technique and technological advances in the practice of
medicine, as well as various safeguards, including, but not limited to,
physician clinical judgment, state and local regulations, accreditation
requirements, medical malpractice laws, hospital conditions of
participation, CMS quality and monitoring initiatives and programs and
other CMS initiatives would continue to ensure that procedures removed
from the IPO list and provided in the hospital outpatient setting could
be performed safely on appropriately selected beneficiaries. We also
stated that given our increasing ability to measure the safety of
procedures performed in the hospital outpatient setting and to monitor
the quality of care, in addition to the other safeguards detailed
above, we believed that quality of care was unlikely to be affected by
the elimination of the IPO list. We noted that we do not require
services that are not included on the IPO list to be performed solely
in the hospital outpatient setting and that services that were
previously identified as inpatient only can continue to be performed in
the inpatient setting. We emphasized that physicians should use their
clinical knowledge and judgment, together with consideration of the
beneficiary's specific needs, to determine whether a procedure can be
performed appropriately in a hospital outpatient setting or whether
inpatient care is required for the beneficiary, subject to the general
coverage rules requiring that any procedure be reasonable and
necessary. We also stated that the elimination of the IPO list would
ensure maximum availability of services to beneficiaries in the
hospital outpatient setting. Finally, we stressed that as medical
practice continues to develop, we believed that the difference between
the need for inpatient care and the appropriateness of outpatient care
has become less distinct for many services.
Accordingly, in the CY 2021 OPPS/ASC final rule with comment period
(85 FR 86084 through 86088), we finalized, with modification, our
proposal to eliminate the IPO list over the course of three years (85
FR 86093). We revised our regulation at Sec. 419.22(n) to state that,
effective on January 1, 2021, the Secretary shall eliminate the list of
services and procedures designated as requiring inpatient care through
a 3-year transition. As part of the first phase of this elimination of
the IPO list, we removed 298 codes, including 266 musculoskeletal-
related services, from the list beginning in CY 2021 and, because we
proposed to eliminate the IPO list entirely, the removed procedures
were not assessed against our longstanding criteria for removal (85 FR
86094).
B. Changes to the Inpatient Only (IPO) List
In the CY 2022 OPPS/ASC proposed rule, for CY 2022, we proposed to
halt the elimination of the IPO list and, after clinical review of the
services removed from the IPO list in CY 2021 as part of the first
phase of eliminating the IPO list, we proposed to add the 298 services
removed from the IPO list in CY 2021 back to the IPO list beginning in
CY 2022. In accordance with this proposal, we proposed to amend the
regulation at Sec. 419.22(n) to remove the reference to the
elimination of the list of services and procedures designated as
requiring inpatient care through a three-year transition. We also
proposed to codify the five longstanding criteria for determining
whether a service or procedure should be removed from the IPO list in
the regulation in a new Sec. 419.23.
1. Proposal To Halt the Elimination of the IPO List
Following the CY 2021 OPPS/ASC final rule with comment period,
stakeholders continued to express concerns regarding the pace at which
the IPO list would be eliminated, the perceived lack of transparency in
determining the order of removal of procedures over the course of the
elimination process, and what stakeholders believed were insufficient
[[Page 63673]]
details concerning rate setting for procedures for which payment would
be made when furnished in the hospital outpatient department (HOPD)
setting, as well as the accuracy of those rates for the HOPD setting.
We have received stakeholder requests to reconsider the elimination of
the IPO list, to reevaluate procedures removed from the IPO list due to
safety and quality concerns, and to, at a minimum, extend the timeframe
for eliminating the list.
In the CY 2022 OPPS/ASC proposed rule, we stated that after further
consideration of the policy we adopted in the CY 2021 OPPS/ASC final
rule with comment period and the concerns stakeholders have raised
since the final rule was issued, we believe that we should halt the
elimination of the IPO list to ensure that any service removed from the
IPO list is evaluated against the previous longstanding criteria for
removal from the IPO list before it is removed. We stated that we
believe assessing whether a procedure or service meets the criteria for
removal would allow for a more gradual removal of services from the IPO
list--which would also allow stakeholders more time to evaluate the
safety of the service in the HOPD and to prepare to safely furnish the
services migrating off of the IPO list, if they so choose. We stated
that after further consideration, we continue to believe that 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 we had therefore reconsidered eliminating the IPO list at
that time. We stated that we believe that there are many surgical
procedures that cannot be safely performed on a typical Medicare
beneficiary in the hospital outpatient setting, and therefore, it would
be inappropriate for us to assign them separately payable status
indicators and establish payment rates in the OPPS (78 FR 75055). 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, we believe that the IPO list
was a necessary safeguard that considers the broader Medicare
population.
In the CY 2021 OPPS/ASC final rule with comment period, we
recognized that stakeholders may need time to adjust to the removal of
procedures from the list, especially given the significant number of
services removed beginning in CY 2021 (85 FR 86085 and 86092). We also
recognized that providers may need time to prepare, update their
billing systems, and gain experience with newly removed procedures
eligible to be paid under either the IPPS or the OPPS (85 FR 86086). We
also acknowledged that it will take time for clinical staff and
providers to gain experience furnishing these services to the
appropriate Medicare beneficiaries in the HOPD, and to develop
comprehensive patient selection criteria and other protocols to
identify whether a beneficiary can safely have these procedures
performed in the hospital outpatient setting (85 FR 86088). In the CY
2021 OPPS/ASC proposed rule, we also reiterated that the removal of a
particular procedure from the IPO list does not require that all
beneficiaries be treated in the hospital outpatient setting, but
explained that we are cognizant that it does require the physician and
clinical care team to exercise complex medical judgment to determine
the appropriate setting of care, in accordance with the 2-midnight
rule.
Separately, we also acknowledged the numerous challenges that
providers are facing due to the COVID-19 PHE (85 FR 86089). After
further experience with the PHE and its impact on provider and
beneficiary behavior, we recognized that the COVID-19 PHE has likely
reduced providers' ability to prepare to furnish these services in the
hospital outpatient setting in the manner they would absent the PHE. We
acknowledged that the COVID-19 PHE may have negatively impacted the
time and resources that providers have to adapt to the removal of these
procedures from the IPO list-- making it more difficult for providers
to prepare, update their billing systems, and gain experience with
newly removed procedures eligible to be paid under either the IPPS or
the OPPS. We also recognized that the COVID-19 PHE has negatively
impacted clinical staff and providers' opportunity to develop the
comprehensive patient selection criteria and other protocols necessary
to identify whether a Medicare beneficiary could safely have these
procedures performed in the hospital outpatient setting while
guaranteeing them appropriate quality of care.
We explained in the CY 2022 OPPS/ASC proposed rule that after
further consideration and review of the additional feedback from
stakeholders, we recognized that the timeframe we finalized in the CY
2021 OPPS/ASC final rule with comment period for eliminating the IPO
list did not, and would not, give us a sufficient opportunity to
carefully assess whether a procedure should be payable in the HOPD
setting, with considerations to beneficiary safety and medical
advancements. We also explained that the unprecedented removal of the
298 codes from the IPO list transpired quickly. Given the significant
policy shift and work required to operationalize the elimination of the
IPO list, we acknowledged that more time is required to separately
evaluate and consider the inpatient only classification of each service
and its potential APC assignment. In addition, we stated that we
believe that we should continue to use the longstanding criteria for
removing services from the IPO list to evaluate each service before
proposing to remove it from the list, and, as noted above, we proposed
to codify these criteria in the regulation in a new Sec. 419.23.
We emphasized in the CY 2022 OPPS/ASC proposed rule that we still
believe that as medical practice continues to develop, the difference
between the need for inpatient care and the appropriateness of
outpatient care has become less distinct for many services. We stated
that 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 considerations to patient safety for all Medicare
beneficiaries. We explained that we must also consider the timing with
which we remove services from the IPO list and the availability of
evidence that may support the removal of those services. We stated that
we believe that with additional time stakeholders can provide
supportive evidence to aid in the evaluation of each individual
procedure's assignment to the IPO list, as well as the appropriate APC
assignment and corresponding payment for any codes, 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.
Furthermore, we explained that an initial review of 2021 billing
data through May 21, 2021 supported our proposal to halt the
elimination of the list, revealing that 131 of the 298 codes removed
from the IPO list in the CY 2021 OPPS/ASC final rule with comment
period appeared on either zero or one OPPS claim and 269 of the 298
[[Page 63674]]
codes appeared on fewer than 100 claims. These data indicated that
fewer than 3 percent of the services removed from the IPO list in 2021
had seen notable volume in the hospital outpatient setting following
their removal from the IPO list. For perspective, we also note that
even before we removed these codes from the IPO list, it was not
uncommon to see at least some volume for these codes in the claims
data. In CY 2020, when these codes were still not payable under the
OPPS, 188 of the codes had at least one outpatient claim and 18 codes
had greater than 100 claims, for reasons undetermined. We stated that,
as a result, it was likely that not all of the reported claims
represent services provided in the hospital outpatient setting due to
these services being removed from the IPO list in CY 2021.
Therefore, we proposed to halt the elimination of the IPO list in
order to allow for greater consideration of the impact removing
services from the list has on beneficiary safety and to allow providers
impacted by the COVID-19 PHE additional time to prepare to furnish
appropriate services safely and efficiently before continuing to remove
large numbers of services from the list.
Comment: Many commenters, including hospital associations, health
systems, medical specialty societies, professional organizations, and
advocacy groups supported our proposal to halt the elimination of the
IPO list. Several commenters thanked CMS for listening to stakeholders'
concerns about beneficiary safety and reconsidering the elimination of
the IPO list. Commenters stated that the IPO list is a necessary tool
and an important programmatic safeguard, and that maintaining the IPO
list is necessary to set a national standard for services that should
be restricted to the inpatient setting.
Specifically, commenters who supported halting the elimination of
the IPO list wanted to maintain the IPO list due to patient safety
concerns. These commenters stated that the high-risk, invasive
procedures that require post-operative monitoring and care coordination
that are included on the IPO list would not be safe to perform on
Medicare beneficiaries in the hospital outpatient setting. Commenters
noted that complications can occur with any surgical procedure,
particularly during the post-operative period and that for many
services on the IPO list, such post-operative complications are best
identified early and treated promptly in the inpatient hospital
setting. Several commenters responded that even with future
advancements in medical practice and technology, they could not
anticipate that such complicated procedures could ever be provided
safely in the hospital outpatient setting, given their clinical nature.
Commenters noted that physicians are in the best position to make
safety determinations for their patients, but CMS must make policies
for the broader, average beneficiary population. The commenters
suggested that a careful review is needed before removing extensive
surgical procedures performed on patients with complications and/or
comorbidities, which are common in the Medicare population.
Supporters of maintaining the IPO list acknowledged operational and
administrative concerns with maintaining the IPO list, largely focused
on the 2-midnight rule and burden of proof required to allow services
removed from the IPO list to be furnished inpatient, but contended that
eliminating the IPO list would create new clinical and operational
challenges for both practitioners and facilities that would require
additional time and resources to adjust to. Several commenters also
expressed concerns that the elimination of the IPO list could
potentially inappropriately shift costs onto patients and subsequently
discourage beneficiaries from seeking necessary care. Most supporters
of maintaining the IPO list also supported CMS retaining its current
process for evaluating and removing procedures from the IPO list
through rulemaking.
Response: We thank the commenters for their support and we refer
readers to sections 1X.B.2. and B.4. of this final rule with comment
period for additional discussion of commenters' feedback on policy
modifications, including whether CMS should maintain the longer-term
objective of eliminating the IPO list or maintain the IPO list but
continue to systematically scale the list back so that inpatient only
designations are consistent with current standards of practice.
Comment: We also received comments from physicians and medical
specialty societies who stated that, while they agreed that physicians
should be the primary arbiters regarding the clinically appropriate
site of service for a procedure for a particular beneficiary, they
support maintaining the IPO list because a physician's medical judgment
is not always the primary factor in determining whether a procedure is
furnished in the inpatient or outpatient hospital setting. These
commenters stated that many of the adverse impacts from removing
procedures from the IPO list arise from hospitals that drive provider
admission decisions. These commenters noted that when procedures are
removed from the IPO list, many hospitals and other payers, including
Medicare Advantage plans, make rules establishing outpatient status as
the assumed baseline site of service for these procedures, regardless
of patient characteristics or the physician's clinical assessment.
Commenters divulged various reasons for this action on the part of
hospitals and payers, including a desire to have the procedure
performed in a lower cost setting, misinterpretation of CMS' rulemaking
guidance, a desire for administrative simplicity, concerns regarding
the application of the 2-midnight benchmark to services that are
removed from the IPO list, the potential for claim denials if this
benchmark is not met and/or excessive administrative burden to support
the case-by-case exception to the 2-midnight rule. According to
commenters, physicians must, at times, convince a hospital or payer
that a particular patient should receive a given procedure in an
inpatient setting due to patient safety concerns.
Commenters requested that CMS provide robust stakeholder education
and issue various forms of guidance as a means of reducing
administrative and operational burden, to support site of service
decisions and to encourage consideration of and deference to the
judgment of the physician, professional societies, and hospital
associations regarding the procedures that are appropriate to be
performed in the HOPD setting. Commenters referenced prior CMS guidance
as a useful tool for providers and hospitals. One commenter noted that
guidance increases the likelihood of hospital awareness of CMS preamble
statements on patient selection. One commenter acknowledged CMS'
historical reticence to define clinical criteria in light of our
deference to physician judgment but reasoned that a CMS-established
baseline protocol would not limit clinical decision-making, as
clinicians would still be able to provide supporting clinical
documentation to justify inpatient stays for patients that may
otherwise be candidates for outpatient surgery. Commenters also
requested that CMS institute a safeguard against inappropriate payer
behavior that requires services to be furnished in the HOPD setting,
despite the clinical judgment of the physician or needs of the patient.
Response: We thank the commenters for their support and we
acknowledge the commenters' concerns regarding the administrative
burden associated with the IPO list and the removal of
[[Page 63675]]
procedures from the list. As we have stated in previous rulemaking (85
FR 86087; 84 FR 61354; 82 FR 59384; 81 FR 79697) when commenters raised
similar concerns, the removal of a service from the IPO list does not
require the service to be performed only on an outpatient basis.
Rather, it allows for payment under the OPPS when the service is
performed on a registered hospital outpatient. We reiterate that
services that are removed from the IPO list can be and are performed on
individuals who are admitted as inpatients (as well as individuals who
are registered hospital outpatients) when the patient's condition
warrants inpatient admission (65 FR 18456). It is a misinterpretation
of CMS payment policy for providers to create policies or guidelines
that establish the hospital outpatient setting as the baseline or
default site of service for a procedure based on its removal from the
IPO list. As stated in previous rulemaking, services that are no longer
included on the IPO list are payable in either the inpatient or
hospital outpatient setting subject to the general coverage rules
requiring that any procedure be reasonable and necessary, and payment
should be made pursuant to the otherwise applicable payment policies
(84 FR 61354; 82 FR 59384; 81 FR 79697).
We also recognize commenters' concerns regarding the need for
additional stakeholder education on considerations that would support
physician decision-making in selecting an appropriate site of service
for procedures furnished to Medicare beneficiaries. We note the balance
between several factors on this important issue, namely, the
prohibition on CMS interfering with the practice of medicine in Section
1801 of the Social Security Act, the need to provide clear information
about CMS billing and payment rules that ensures hospitals, physicians
and other stakeholders can understand and operate within them, and that
the specific decision about the most appropriate care setting for a
given surgical procedure is a complex medical judgment made by the
physician based on the beneficiary's individual clinical needs and
preferences and on the general coverage rules requiring that any
procedure be reasonable and necessary (84 FR 61354). We note that, in
the past when services have come off the IPO list, we have attempted to
provide general educational information regarding our billing and
payment rules. For example, we published Medicare Learning Network
(MLN) Booklet 909065 regarding major hip and knee replacement
procedures, which is available here: https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/Downloads/jointreplacement-ICN909065.pdf.
We also note the Beneficiary and Family-Centered Care Quality
Improvement Organizations (BFCC-QIOs) are contracted by CMS to review a
sample of Medicare fee-for-service (FFS) short-stay inpatient claims
(claims with hospital stays lasting less than 2 midnights after formal
inpatient admission) for compliance with the 2-Midnight Rule. In the CY
2020 OPPS/ASC final rule with comment period (84 FR 61364 through
61365) the BFCC-QIO program adopted a period of exemption from certain
medical review activities for procedures newly removed from the IPO
list where the length of stay after inpatient admission is less than 2
midnights. During the exemption period, BFCC-QIOs may conduct medical
reviews for education purposes but will not deny claims or make
referrals to RACs for noncompliance with the 2-midnight rule for
procedures that are removed from the IPO list within the first 2 years
of their removal. This exemption period was intended to allow providers
time to become more familiar with the application of the 2-midnight
rule to procedures newly removed from the IPO list, and allows the
BFCC-QIOs the opportunity to provide education regarding application of
that payment policy to such procedures. In section X.A of this CY 2022
OPPS/ASC final rule with comment period we are reinstating this 2-year
exemption policy, and believe that this will give providers needed time
to adapt when procedures are newly removed from the IPO list starting
January 1, 2022.
In addition to the 2-year exemption period for certain medical
review activities, in the coming months we plan to use our experience
gained through BFCC-QIO reviews to engage stakeholders to determine if
developing additional materials for services that are newly removed
from the IPO list would be helpful, including materials that are
similar to MLN Booklet 909065 noted above. We reiterate that any such
materials will not supersede physicians' medical judgment about whether
a procedure should be performed in the inpatient or outpatient hospital
setting. With regard to the behavior of commercial payers and site
selection for outpatient services, we believe that these comments are
out of the scope of the proposed rule.
We refer readers to section X. of this final rule with comment
period for additional discussion regarding the 2-midnight rule. We also
refer readers to sections 1X.B.2. and B.4. of this final rule with
comment period for additional discussion of commenters' feedback on
policy modifications, including whether CMS should maintain the longer-
term objective of eliminating the IPO list or maintain the IPO list but
continue to systematically scale the list back so that inpatient only
designations are consistent with current standards of practice.
Comment: Numerous commenters, including some health systems,
individual physicians and certain payers, opposed halting the
elimination of the IPO list. Most of these commenters opposed halting
the elimination of the IPO list due to administrative and operational
issues that they believe stem from the existence of the IPO list,
including site of service claims denials and compliance documentation.
Other commenters contended that eliminating the IPO list would reduce
administrative and operational burden and allow for necessary
flexibility that could help providers serve the diversity of clinical
needs and health statuses among Medicare beneficiaries and would
increase patient choice and access to advances in surgical care that
have made outpatient procedures safe, effective and efficient.
Commenters who supported eliminating the IPO list maintained that the
existence of the IPO list did not impact the quality of care
beneficiaries receive as there is no distinction between inpatient and
outpatient care. Specifically, a few commenters insisted that, for most
hospitals the IPO list has no impact on the quality of care provided:
Procedures are done in the same operating rooms, with the same
infrastructure and the same staff. One commenter asserted that it is an
inaccurate conclusion that the provision of services is less safe when
conducted in an hospital outpatient setting. The commenter argued that
no data has been provided to demonstrate that the removal of services
from the IPO list in 2021 resulted in higher incidences of adverse
events or increased risk to patient safety when performed in the
hospital outpatient setting. Another commenter requested clarification
on why CMS believes the IPO list is in the best interest of patient
safety. The commenter stated that while there may be enhanced safety
for surgeries performed in a hospital versus an ASC or physician
office, it is unclear how patient safety differs between the hospital
inpatient and hospital outpatient settings. They claimed that
utilization of outpatient services
[[Page 63676]]
increased across all plan types with the 2021 elimination of the IPO
list, highlighting the impact across the healthcare system. The
commenter noted high levels of patient satisfaction and no compromise
in quality as measured by unplanned returns to the emergency department
or operating room and no readmissions following services performed in
the hospital outpatient setting. Several commenters acknowledged that
there will be patients for whom an inpatient procedure remains the
safest and most clinically appropriate option but believed that there
should be additional flexibility for Medicare beneficiaries who meet
relevant clinical criteria. In addition, one commenter suggested that
the elimination of the IPO list should occur over 5 to 7 instead of 3.
Response: We appreciate the commenter's feedback. We again
acknowledge commenters' concerns regarding the administrative and
operational challenges associated with the IPO list, including the
application of the 2-midnight benchmark to services that are removed
from the IPO list. In addition to the mechanisms that are already in
place, including the case-by-case exceptions to the 2-midnight
benchmark and the exemption from certain medical review activities
related to the 2-midnight rule for procedures that have been recently
removed from the IPO list, CMS will continue to work with stakeholders
to address these operational concerns in future rulemaking. We again
refer readers to section X. of this final rule with comment period for
additional discussion regarding the 2-midnight rule.
We also acknowledge stakeholders' concerns regarding the lack of
definitive data that shows a difference between services performed in
the inpatient and outpatient settings. In the absence of data
demonstrating that these procedures can be safely furnished to the
typical Medicare beneficiary in the hospital outpatient setting we
continue to believe that it is necessary to prioritize the potential
impact that removing services from the IPO list has on beneficiary
safety and quality of care and develop additional ways to monitor
safety prior to removing such a large number of services from the IPO
list. We note that certain commenters in this rulemaking cycle (and
past OPPS rules) have indicated that hospitals and other payers may use
the circumstance of CMS removing a service from the IPO list to
encourage that service to be performed outpatient, even when not
clinically appropriate for the patient, and we remain concerned about
these potential spillover effects due to changes in our policy. As
described above, we also believe that the policy to eliminate the IPO
list transpired quickly, and we believe it is necessary to halt the
elimination of the IPO list and reinstate a more measured process of
separately evaluating the inpatient only classification of each service
against the five longstanding criteria.
We also note and appreciate commenters concerns about the varying
clinical appropriateness of furnishing a given service in the hospital
outpatient setting based on a beneficiary's clinical status; that is,
we acknowledge that it may be appropriate to furnish certain services
in the hospital outpatient setting for a certain number of
beneficiaries due to their clinical circumstances, while at the same
time it may not be appropriate to furnish those same services in the
hospital outpatient setting for many other beneficiaries. As stated in
the CY 2022 OPPS/ASC proposed rule, we continue to believe that
physicians should use their complex clinical judgment, together with
consideration of the beneficiary's needs, to determine the appropriate
site of service. We continue to strive to balance the goals of
increasing physician and patient choice of setting of care with
consideration of patient safety for all Medicare beneficiaries.
After consideration of the comments, we are finalizing our proposal
without modification to halt the elimination of the IPO list. In
accordance with this proposal, we are finalizing our proposal to amend
the regulation at Sec. 419.22(n) to remove the reference to the
elimination of the list of services and procedures designated as
requiring inpatient care through a 3-year transition.
We refer readers to section IX.B.3 of this final rule with comment
period for a discussion on the services removed in CY 2021 that we
proposed to return to the IPO list in CY 2022.
2. Proposal To Codify Longstanding Criteria
As we stated in the CY 2022 OPPS/ASC proposed rule, we continue to
believe that physicians must use their complex clinical judgment,
together with consideration of the beneficiary's needs, to determine
the appropriate site of service, but we explained that the broad
removal of services from the IPO list in CY 2021 did not allow us to
assess whether procedures proposed for removal met the longstanding
removal criteria that we have historically used in consideration of the
typical Medicare beneficiary. As discussed above and in the proposed
rule, to ensure beneficiary safety, we have historically used
longstanding criteria to determine if a procedure should be removed
from the IPO list, but we noted that the procedures removed from the
IPO list beginning in CY 2021 were not assessed against these criteria
because we adopted a policy to eliminate the IPO list entirely. After
further consideration, we explained that we believe it is important to
continue to assess whether services individually meet any of the
criteria for removal from the IPO list before being removed. In the CY
2022 OPPS/ASC proposed rule, we proposed to codify in the regulation
text in a new Sec. 419.23 our five longstanding criteria, listed
above, for determining whether a service or procedure should be removed
from the IPO list.
Comment: A majority of commenters, including hospital systems,
medical specialty societies, and professional organizations, supported
our proposal to codify the five longstanding criteria to determine if a
procedure should be removed from the IPO list and supported using the
criteria to evaluate the 298 procedures removed from the IPO list in
the CY 2021 OPPS/ASC final rule with comment period. Many commenters
supported the criteria as proposed, stating that the longstanding
criteria appropriately reflect progress and allow us to efficiently
assess if outpatient departments are equipped to provide the services
under consideration for removal.
Response: We thank commenters for their support.
Comment: Some commenters suggested modifications to the five
proposed criteria. One commenter requested that CMS modify the first
two criteria to change ``most outpatient departments'' to ``outpatient
departments conducting surgical procedures,'' due to concerns that the
proposed language is undefined and vague. The commenter also expressed
that our third criterion--that the procedure is related to codes that
we have already removed from the IPO list--was limiting and should be
modified to address codes that do not have related codes being
considered for removal from the IPO list. We also received comments
requesting that we modify the fourth criterion (a determination is made
that the procedure is being furnished in numerous hospitals on an
outpatient basis) to further define ``outpatient basis'' and
``numerous''. We also received a comment citing concerns that many
hospitals do submit claims to Medicare for procedures on the IPO list
when they are performed in the hospital outpatient setting due to lack
of payment. We also received two
[[Page 63677]]
comments requesting that we remove the fifth criterion due to concerns
that CMS is comparing the capabilities and safety of performing a
service in the ASC setting to that of the hospital setting, noting that
hospitals have greater resources and are able to admit patients if
complications arise.
Further, a few commenters believed our longstanding pre-2021 policy
of requiring a service to meet only one criterion to be removed from
the IPO list was too lenient and prevented stakeholders from
anticipating when a procedure would be eligible for removal from the
IPO list. The commenters recommended that we require services to meet
all five criteria in order to be removed from the IPO list.
Response: We appreciate the commenters' recommendations and will
consider them for future rulemaking. Due in part to the overwhelming
support we received from commenters to codify in regulation the current
five criteria as well as our position that the criteria remain
appropriate, we do not believe it is necessary to change them at this
time. However, we plan to continue to engage stakeholders and consider
feedback on modifications to the criteria.
As we stated in previous rulemaking, we created the first three
criteria because we identified services that were often safely
performed in the hospital outpatient setting based on comments we
received. We also identified additional services where the simplest
procedure described by the code may be performed safely in the hospital
outpatient setting or that they were related to codes we removed from
the IPO list (65 FR 18456). We established the fourth and fifth
criteria in later rulemaking after identifying procedures that were on
the IPO list but were also being performed on an outpatient basis or
being safely and appropriately performed in the ASC setting (67 FR
66741). These criteria were created to ensure consistency between the
IPO list and the ASC CPL and to identify services that are included on
the ASC CPL, and therefore should be removed from the IPO list. These
criteria were created to help independently identify procedures that
could be appropriately performed in the hospital outpatient setting and
we reiterate that a service does not need to meet all of the criteria
to be removed from the IPO list, meaning that a service does not need
to have related codes already removed from the IPO list or does not
need to be safely furnished in the ASC setting to be removed from the
IPO list.
Additionally, we do not believe that our policy to only require a
service to meet one criterion to be removed from the IPO list is too
lenient. We believe that not requiring a service to meet multiple
criteria allows for greater flexibility to determine if a service is
appropriate to remove from the IPO list, as some criteria are
irrelevant to certain services. As stated above, 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.
Comment: Commenters also recommended additional criteria as well as
methods of evaluating the five existing criteria. We also received
multiple comments recommending that criteria used to determine if a
service is appropriate to remove from the IPO list should consider
clinical factors and social factors, including patient's age and
comorbidities, support systems, access to care, health literacy, prior
hospitalizations, and functional status. Numerous commenters stressed
that without consideration of clinical and social factors, patients,
surgeons, and hospitals in underserved communities could bear a
disproportionate burden and experience unintended consequences of more
services being payable in the hospital outpatient setting. Commenters
recommended that we also evaluate the out-of-pocket financial impact
that moving a service to the hospital outpatient setting would have on
Medicare beneficiaries.
Commenters suggested that changes to the IPO list should be based
upon scientific evidence on safety, quality, and advancements in
medical technology. They acknowledged that a majority of inpatient
procedures have limited or no evidence on the safety of performing them
in the hospital outpatient setting and that at least some of the
evidence available is based on limited, incomplete, or conflicting data
from other claims.
We also received some comments with recommendations regarding the
data that CMS uses for evaluating services on the IPO list. We received
several comments suggesting that CMS analyze claims data for services
that had a stay less than 2-midnights and use this data to determine if
a service should be eligible to be paid when furnished in the hospital
outpatient setting. One commenter also requested that CMS clarify how
different data, including commercial data, would be considered when
evaluating services for removal using the five criteria as the general
patient population used in the collection of the data may vary from the
Medicare population.
One commenter urged CMS not to use billed and denied outpatient
claims as a source of data to determine if hospitals are equipped to
provide a service in the hospital outpatient setting. The commenter
advised that there would be few outpatient claims for services on the
IPO list because hospitals would avoid billing claims that would be
denied. The commenter suggested that CMS should instead analyze the
geometric mean or median length of stay for IPPS claims reported with
procedures on the IPO list, and crosswalk the ICD-10-PCS codes on the
IPPS claims to the CPT codes on the IPO list, so that CMS could analyze
data where the patient would remain in the hospital post-procedure, but
require less time, less intensive care, or pose less risk than the
typical hospital inpatient. The commenter also suggested that CMS
analyze data on short-stay inpatient hospitalizations from the
Beneficiary Family Centered Care-Quality Improvement Organizations
(BFCC-QIOs), with the QIOs nominating procedures that they commonly see
in their reviews. Finally, we also received comments recommending that
CMS work closely with stakeholders and providers and consider their
feedback when evaluating services on the IPO list against our criteria,
and to allow for the consideration of factors in addition to the five
criteria.
Response: We appreciate the commenters' recommendations. We note
that we take clinical evidence into consideration when evaluating a
service for removal from the IPO list. We also consider all other
available data, including outpatient, inpatient, and professional
claims data. This includes data on length-of-stay, and we have
continuously encouraged stakeholders to bring decreasing length-of-
stays and successful same day discharges to our attention to aid our
review (65 FR 18456). We agree that there are limitations in the
studies and data available to aid our assessment of the appropriateness
of removing procedures from the IPO list, particularly studies that
compare outcomes for services furnished in the inpatient hospital
setting versus the outpatient hospital setting as well as studies that
analyze outcomes for the typical Medicare beneficiary. More
specifically, while studies may demonstrate safety for a given
procedure in the outpatient hospital setting, those studies may not
focus on a Medicare-aged population, or involve patients with certain
comorbid conditions that are common for patients 65 and older. We
continue to explore
[[Page 63678]]
ways to engage stakeholders to effectively address limitations in these
studies, and we look forward to future work on these important issues.
We reiterate that we do not believe it is appropriate at this time to
modify the criteria, which were overwhelmingly supported by commenters,
as we reinstate and codify them in regulation text. However, as
previously stated, we will continue to engage stakeholders and consider
feedback on modifications to the criteria for removal from the IPO
list.
Comment: One commenter opposed codifying the five longstanding
criteria and expressed concern that codifying the criteria would delay
timely updates to the IPO. The commenter was concerned that the process
of submitting a request to add or remove a service and providing
evidence, including peer-reviewed medical literature, physician
comments, and outcome data, is time consuming and may cause unnecessary
delays in hospitals' ability to provide care and be paid under the OPPS
when services are furnished in the hospital outpatient setting for
beneficiaries for whom the services are clinically appropriate.
Response: We appreciate the commenter's response. We believe that
using our five criteria to evaluate services for removal from the IPO
list is necessary to ensure OPPS payment is available for services that
are safe for the typical Medicare beneficiary to receive in the
hospital outpatient setting. We also believe that the comments and
evidence we receive are an important aspect of determining whether it
is appropriate to remove a service from the IPO list. Because we review
requests to add or remove services from the IPO list annually and
address those removals or additions in notice-and-comment rulemaking,
we do not believe that use of criteria to assess whether procedures
should be removed causes unnecessary delays in making payment available
for appropriate procedures under the OPPS.
After reviewing the public comments we received we are finalizing
our proposal without modification to codify our five longstanding
criteria for determining whether a service or procedure should be
removed from the IPO list in the regulation text in a new Sec. 419.23.
3. Returning Procedures Removed in CY 2021 to the IPO List for CY 2022
As discussed earlier in section IX.A. of this final rule with
comment period, we typically evaluate whether a service should be
removed from the IPO list using five criteria and, while a service does
not need to meet all of the criteria to be removed from the IPO list,
it should meet at least one criterion, with the case for removing the
service from the IPO list strengthened with the more criteria the
service meets. For CY 2021, in light of our proposal to eliminate the
IPO list over a three-year transition, we proposed that musculoskeletal
services would be the first group of services removed from the IPO
list. We stated that we proposed to remove this group of services first
for several reasons. In recent years, due to new technologies and
advances in surgical care protocols, expedited rehabilitation
protocols, and significant enhancements in postoperative processes, we
have removed TKA and THA, which are both musculoskeletal services, from
the IPO list. During the process of proposing and finalizing removing
TKA and THA from the IPO list, stakeholders have continuously requested
that CMS remove other musculoskeletal services from the IPO list as
well, citing shortened length of stay times, advancements in
technologies and surgical techniques, and improved postoperative
processes. Additionally, we noted that, more often than not,
stakeholders historically requested that we remove musculoskeletal
services from the IPO list more than other types of services. We also
recognized that there is already a set of comprehensive APCs for
musculoskeletal services for payment under the OPPS, which facilitates
payment for these services and further supported their removal for CY
2021. Specifically, because we had previously removed codes from the
IPO list that are similar clinically and in terms of resource cost and
assigned them to these comprehensive APCs, we explained that these APCs
generally describe appropriate ranges for the musculoskeletal codes
removed in CY 2021, which we believed allowed for appropriate payment.
We also proposed to remove additional related services that were
recommended for removal by stakeholders during the annual HOP panel
meeting. As stated above, because these services were being removed
from the IPO list as the first phase of the elimination of the list, we
did not evaluate each of these services against the longstanding
criteria for removing a service from the IPO list.
During the 2021 rulemaking process, a number of commenters
supported the removal of the 298 services, but the vast majority of
commenters were opposed to removing the services and shared concerns
regarding their inability to properly review the clinical nature of
this large number of procedures and to provide comprehensive feedback
on their removal from the list. Some commenters were able to review the
individual services and requested that specific CPT codes remain
payable in the inpatient setting only, including CPT codes 27280
(Arthrodesis, open, sacroiliac joint, including obtaining bone graft,
including instrumentation, when performed) and 22857 (Total disc
arthroplasty (artificial disc), anterior approach, including discectomy
to prepare interspace (other than for decompression), single
interspace, lumbar) due to concerns about the safety of these
procedures if they are performed in the hospital outpatient setting.
As previously stated in the CY 2021 OPPS/ASC final rule with
comment period (85 FR 86087), an overwhelming number of stakeholders
supported the previously established methodology for identifying
appropriate changes to the IPO list. CMS received numerous requests to
continue to use the established criteria to review and analyze services
proposed for removal as opposed to removing large numbers of services
in groups or categories. Commenters noted that they preferred the
historical process for assessing services for removal from the IPO list
using the five criteria, as they believed this process was more
manageable for patients, providers, and other stakeholders, allowing
them to provide meaningful input on a procedure-by-procedure basis.
We stated in the CY 2022 OPPS/ASC proposed rule that because we
proposed to halt elimination of the IPO list, we also believe it is
appropriate to continue to evaluate services that we proposed for
removal against the longstanding criteria, and include with our
proposals an in-depth analysis of whether most outpatient departments
are equipped to provide the services to the Medicare population;
whether the simplest procedure described by the code may be performed
in most outpatient departments; whether the procedure is related to
codes that we have already removed from the IPO list; whether the
procedure is being performed in numerous hospitals on an outpatient
basis; and whether the procedure can be appropriately and safely
performed in an ASC, is on the list of approved ASC procedures, or has
been proposed by us for addition to the ASC list. Historically, we have
included discussions of the individual codes proposed for removal in
the proposed rule and stakeholders have had the opportunity to comment
with evidence in support of or opposition to the service's assignment
to the IPO list, and we believe it is appropriate to continue to do so.
[[Page 63679]]
Furthermore, we explained in the CY 2022 OPPS/ASC proposed rule
that in light of ongoing stakeholder feedback, we reviewed each of the
procedures removed from the IPO list in CY 2021 to determine whether
they individually meet the longstanding criteria for removal from the
list for CY 2022. Our review considered the clinical intensity and
characteristics of the service, the underlying condition of the
beneficiary who would require the service, peer-reviewed medical
literature, case reports, clinical criteria sets, and utilization data.
This initial review determined that none of the services removed in CY
2021 have sufficient supporting evidence that the service can be safely
performed on the Medicare population in the hospital outpatient
setting, that most outpatient departments are equipped to provide the
services to the Medicare population, or that the services are being
performed safely on an outpatient basis. For a large number of the
removed services, we did not find vignettes, claims or utilization
data, or literature to support their removal under our longstanding
criteria. For the few services that did have some data supporting their
removal from the list, we found the data to be either incomplete or to
be countered by conflicting data. For example, a few services,
including CPT code 21627 (sternal debridement), showed increasing
migration to the hospital outpatient setting, but we could not locate
supportive medical literature case studies or outcomes data to support
that the services are safe for the Medicare population in the hospital
outpatient setting. Some services, such as CPT code 22558 (Lumbar spine
fusion) and CPT code 23472 (reconstruct shoulder joint), show
increasing outpatient claims data, but have high length of stay times
and extensive post-operative care needs that indicate these services
may not be appropriate for the Medicare population in the hospital
outpatient setting. Other services, such as CPT code 22846 (Anterior
instrumentation; 4 to 7 vertebral segments), lack medical literature or
case studies, lack supportive claims data, and have conflicting
stakeholder feedback for the safety of the service in the hospital
outpatient setting. We were unable to find literature and data for
services that included outcomes specific to the Medicare population,
particularly in the hospital outpatient setting.
We stated in the CY 2022 OPPS/ASC proposed rule that given that our
initial review of each of the services removed from the list in CY 2021
using the five criteria mentioned in section IX.A. of this final rule
with comment period did not find sufficient evidence that any of these
services would be safe to perform on the Medicare population in the
hospital outpatient setting, we did not believe it would be appropriate
for Medicare to pay for these services when performed in a hospital
outpatient setting. In particular, we found that the simplest
procedures described by the codes for these services cannot be
furnished safely in most outpatient departments, most outpatient
departments are not equipped to provide these services to the Medicare
population, and the procedures were not being performed in numerous
hospitals on an outpatient basis. We also did not believe the services
could be appropriately and safely furnished in an ASC. As a result of
this review, we proposed to return all of the procedures removed in the
CY 2021 OPPS/ASC final rule with comment period to the IPO list for CY
2022 because we did not believe they met the previously established
criteria for removal from the IPO list. Therefore, after further
clinical review and additional consideration of safety and quality of
care concerns for the group of services removed from the IPO list in
the CY 2021 final rule, for CY 2022 we proposed to return these 298
services to the IPO list, as shown in Table 45 below.
We solicited public comment on whether there are services that were
removed from the IPO list in CY 2021 that stakeholders believe do meet
the longstanding criteria for removing services from the IPO list and
should continue to be payable in the hospital outpatient setting in CY
2022. If so, we requested that commenters submit corresponding
evidence--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--that the service meets the longstanding criteria for removal
from the IPO list and is safe to perform on the typical Medicare
population in the hospital outpatient setting.
As mentioned above, the services that we proposed to add back to
the IPO list reflect those services that we believe may pose increased
safety risk to the typical Medicare beneficiary. However, we recognized
that there may be a subset of Medicare beneficiaries who, on a case-by
case-basis, may nonetheless be appropriate to treat in the hospital
outpatient setting and we sought comment below on whether any services
that were removed in CY 2021, but were proposed to be added back to the
IPO for CY 2022, should in fact, remain off the IPO list. Table 45
below contains the proposed additions to the IPO list for CY 2022.
BILLING CODE 4120-01-P
[[Page 63680]]
[GRAPHIC] [TIFF OMITTED] TR16NO21.074
[[Page 63681]]
[GRAPHIC] [TIFF OMITTED] TR16NO21.075
[[Page 63682]]
[GRAPHIC] [TIFF OMITTED] TR16NO21.076
[[Page 63683]]
[GRAPHIC] [TIFF OMITTED] TR16NO21.077
[[Page 63684]]
[GRAPHIC] [TIFF OMITTED] TR16NO21.078
[[Page 63685]]
[GRAPHIC] [TIFF OMITTED] TR16NO21.079
[[Page 63686]]
[GRAPHIC] [TIFF OMITTED] TR16NO21.080
[[Page 63687]]
[GRAPHIC] [TIFF OMITTED] TR16NO21.081
[[Page 63688]]
[GRAPHIC] [TIFF OMITTED] TR16NO21.082
[[Page 63689]]
[GRAPHIC] [TIFF OMITTED] TR16NO21.083
[[Page 63690]]
[GRAPHIC] [TIFF OMITTED] TR16NO21.084
[[Page 63691]]
[GRAPHIC] [TIFF OMITTED] TR16NO21.085
[[Page 63692]]
[GRAPHIC] [TIFF OMITTED] TR16NO21.086
[[Page 63693]]
[GRAPHIC] [TIFF OMITTED] TR16NO21.087
[[Page 63694]]
[GRAPHIC] [TIFF OMITTED] TR16NO21.088
[[Page 63695]]
[GRAPHIC] [TIFF OMITTED] TR16NO21.089
[[Page 63696]]
[GRAPHIC] [TIFF OMITTED] TR16NO21.090
[[Page 63697]]
[GRAPHIC] [TIFF OMITTED] TR16NO21.091
[[Page 63698]]
[GRAPHIC] [TIFF OMITTED] TR16NO21.092
[[Page 63699]]
[GRAPHIC] [TIFF OMITTED] TR16NO21.093
[[Page 63700]]
[GRAPHIC] [TIFF OMITTED] TR16NO21.094
[[Page 63701]]
[GRAPHIC] [TIFF OMITTED] TR16NO21.095
BILLING CODE 4120-01-C
Comment: Most comments supported returning all 298 services back to
the IPO list for 2022. Of those commenters that supplied a rationale
for their support for returning all 298 services to the IPO list, the
most frequently cited reasons were the commenters' concerns with the
pace that this shift would take place; the lack of data and evidence
available to support furnishing these services in the hospital
outpatient setting for the typical Medicare beneficiary; CMS' inability
to monitor the impact of such a large migration of services from the
inpatient setting to the hospital outpatient setting; CMS' inability to
monitor patient safety outcomes for the services if furnished in the
hospital outpatient setting; and that the PHE has impacted the
commenters' ability to prepare for this shift. Commenters also
expressed concerns regarding how quickly a large number of services
were removed from the IPO list. Emphasizing the financial and clinical
resources needed to prepare clear criteria for surgical site selection;
develop criteria for patient selection; update their billing systems;
and gain experience with furnishing newly removed services, commenters
requested that CMS provide additional time in between removing services
from the IPO list.
Response: We thank commenters for their support for our proposal to
return 298 services to the IPO list, and their detailed feedback
regarding their concerns about patient safety and the timeline for
transitioning services off of the IPO list.
Comment: Some commenters opposed returning all 298 services to the
IPO list and believed that if all 298 services are moved back on the
IPO list in CY 2022, beneficiaries would receive care in an
unnecessarily high-cost inpatient setting and experience higher out-of-
pocket costs for services. In addition, they argued that higher costs
coupled with potential delays in returning home will cause beneficiary
dissatisfaction and increase overall cost to the healthcare system. One
commenter stated that policy changes over the past 2 years have
burdened facilities and clinicians. The commenter noted that many
inpatient procedures are canceled due to the PHE, adding additional
delays and negatively affecting patient experience and health. For
these reasons the commenter suggested CMS reassess returning all 298
procedures to the IPO list.
Some commenters expressed concerns regarding outpatient surgeries
for procedures we are returning to the IPO list that were scheduled
prior to the publication of the final rule and the subsequent impact on
beneficiaries when these surgeries are cancelled or payment is not
available for them under the OPPS. Commenters requested that in the
event the policy is finalized as proposed, CMS allow services scheduled
as outpatient prior to the final rule's implementation date to be
payable as they believe this would decrease provider burden and
minimize impact on patients expecting outpatient care. The commenters
stated that it is difficult for facilities and clinicians to invest in
new equipment and develop protocols to move new procedures to the
outpatient department if they are unsure how long services will remain
payable in the hospital outpatient setting.
Response: We thank commenters for their support and for detailing
their experiences. We recognize that there may be operational changes
(including scheduling and other administrative changes) that may be
necessary to adjust to our final policy to return services to the IPO
list. We also recognize that the PHE has broadly impacted access to
hospital services and note that we have taken several steps to broaden
access to care during the PHE through rulemaking and through waivers
issued using our authority in section 1135 of the Act. For additional
information about the actions taken to expand access to care and
otherwise address the PHE for COVID-19, please visit: https://www.cms.gov/about-cms/emergency-preparedness-response-operations/current-emergencies/coronavirus-waivers. However, we continue to share
concerns expressed by other commenters regarding the speed at which we
implemented this policy change. We believe that we need to reinstate a
more measured process of evaluating individual services for removal
from the IPO list against the five longstanding criteria, and to
prioritize the potential impacts on the quality and safety of care for
services when they are removed from the IPO list.
Comment: Certain commenters (mainly specialists and medical
associations) requested specific services (roughly 120 services in
total, ranging in complexity) not be placed back on the IPO list. Those
services are listed in Table 46 below. These commenters indicated that
they were currently performing some of these procedures on an
outpatient basis in both the HOPD and ASC setting on non-Medicare
patients.
Of those approximately 120 services requested to remain off of the
IPO list, two stakeholders included supportive information for CPT
22630 (Arthrodesis, posterior interbody technique, including
laminectomy and/or discectomy to prepare interspace (other than for
decompression), single interspace; lumbar); CPT 23472 (Arthroplasty,
glenohumeral joint; total shoulder (glenoid and proximal humeral
replacement (for example, total shoulder))); and CPT 27702
(Arthroplasty, ankle; with implant (total ankle). Several commenters,
including medical associations, specialty groups, and surgeons
suggested that shoulder and ankle replacement surgeries performed in
HOPDs and ASCs demonstrated optimal clinical outcomes. Commenters
submitted several peer-reviewed studies
[[Page 63702]]
comparing outcomes for CPT 23472 and CPT 27702 performed in the
inpatient versus the hospital outpatient setting. As a result, they
believed performing CPT 23472 and CPT 27702 in a hospital outpatient
setting is appropriate as determined by the treating health care
provider. Some commenters cited all payer claims data and stated that,
following the removal of services from the IPO list, nearly half of
shoulder replacement surgeries were performed in the hospital
outpatient setting in the first few months of 2021. Commenters that
supported leaving CPT 23472 and CPT 27702 off the IPO list and payable
under the OPPS highlighted that other procedures that were removed from
the IPO list in CY 2021 did not demonstrate similar utilization in the
hospital outpatient setting. The commenters stated that low utilization
of the majority of services removed from the IPO in CY 2021 confirms
physicians are using clinical judgment to determine when the hospital
outpatient setting is clinically appropriate.
In regards to CPT 22630, a commenter noted that CPT codes 22633
(Arthrodesis, combined posterior or posterolateral technique with
posterior interbody technique including laminectomy and/or discectomy
sufficient to prepare interspace (other than for decompression), single
interspace and segment; lumbar) and 22612 (Arthrodesis, posterior or
posterolateral technique, single level; lumbar (with lateral transverse
technique, when performed), which are not on the IPO list, are
performed with CPT code 22630 when a posterior approach 360-degree
spinal fusion is performed. The commenter noted that while CPT code
22633 was removed from the IPO list in 2020 (84 FR 61355 through
61357), the service described by CPT code 22630, if added to the IPO
list, will in effect make the combined procedure, described by CPT
codes 22630 and 22633, unable to be performed in the outpatient
hospital setting because both procedures need to be payable under the
OPPS to be performed there. The commenter recommended keeping CPT code
22630 off the IPO list for CY 2022 so that the individual procedures,
along with the combined procedure, are eligible for Medicare payment
when furnished in the hospital outpatient setting for appropriate
Medicare beneficiaries. A different commenter provided an unpublished
study that they believe demonstrates that safety, efficacy, and patient
satisfaction for lumbar inter-body fusion surgery furnished in the ASC
setting are comparable to or better than in the hospital setting for
Medicare beneficiaries.
The services that commenters believed should remain off the IPO
list in CY 2022 and continue to be paid under the OPPS when furnished
in the hospital outpatient setting are included in Table 46.
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Response: We conducted an additional clinical review and
reevaluation using the five longstanding criteria for removing services
from the IPO list discussed earlier in section IX.A of this final rule
with comment period for the services we proposed to return to the IPO
list to determine whether any of the procedures should remain off of
the list and be paid for under the OPPS when furnished in the HOPD
setting. We considered all the evidence that commenters submitted to
demonstrate that a procedure was performed on an outpatient basis in a
safe and appropriate manner--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, and our medical advisors thoroughly reviewed
all information submitted to determine whether the procedures meet the
evaluation criteria we are reinstating.
We also conducted an additional review of 2021 OPPS claims data
through September 2021. Our review indicated that hospitals have
significantly increased the numbers of services described by CPT codes
22630 (Lumbar spine fusion), 23472 (Reconstruct shoulder joint), and
27702 (Reconstruct ankle joint) furnished in the hospital outpatient
setting in the roughly nine months since the services were removed from
the IPO list. While at this time we cannot determine from the claims
data whether this increase in volume is a result of fundamental changes
to clinical practice; the impact of the PHE on inpatient operating room
availability; or other reasons, the data do indicate that these
services are being furnished frequently in the hospital outpatient
setting, and furnished at a substantial number of different outpatient
departments. Given the studies submitted and the updated analyses of
OPPS claims data, we believe that CPT codes 22630 (Lumbar spine
fusion), 23472 (Reconstruct shoulder joint), and 27702 (Reconstruct
ankle joint) meet several of the longstanding criteria for removing
services from the IPO list: Most outpatient departments are equipped to
provide the services to the Medicare population; the simplest procedure
described by the codes may be furnished in most outpatient departments;
the procedures are being furnished in numerous hospitals on an
outpatient basis; and the procedures are related to codes that we have
already removed from the IPO list. Therefore, at this time we agree
that it is appropriate for CPT codes 22630 (Lumbar spine fusion), 23472
(Reconstruct shoulder joint), and 27702 (Reconstruct ankle joint) and
their corresponding anesthesia codes, CPT code 01638 (Anesthesia for
open or surgical arthroscopic procedures on humeral head and neck,
sternoclavicular joint, acromioclavicular joint, and shoulder joint;
total shoulder replacement), and CPT 01486 (Anesthesia for open
procedures on bones of lower leg, ankle, and foot; total ankle
replacement) to remain off the IPO list and payable under the OPPS when
furnished in the HOPD setting. We will continue to monitor and evaluate
the impact our decision to pay for these services when furnished in the
HOPD setting has on beneficiary outcomes, access to care, and hospital
payments.
As noted above, we also received comments requesting that
approximately 115 other services remain off the IPO list in CY 2022.
Based on our evaluation, we do not believe that there is sufficient
evidence or data to support that these services can be safely furnished
to the typical Medicare beneficiary in the hospital outpatient setting,
and to support stakeholder assertions that these procedures meet one of
the five longstanding criteria. We note that for many services
stakeholders continued to provide conflicting feedback regarding the
ability of providers to safely furnish them in the hospital outpatient
setting. At this time, we do not believe it would be appropriate to
keep these services off of the IPO list and therefore we are
reclassifying these codes as inpatient only procedures for CY 2022. We
acknowledge the unique circumstances for this CY2022 rulemaking cycle:
These approximately 115 services were on the IPO list prior to CY 2021,
they were removed from the IPO list for CY 2021 as part of the first
phase of the elimination of the IPO list, and are now being added back
to the list in CY 2022. It is not our intention to cause any
disruptions or barriers to access care for these services, and we will
prioritize the review of these services for potential removal from the
IPO list in future rulemaking. We emphasize that the assignment of a
service to the IPO list does not prohibit the service from being
offered in the hospital outpatient setting and the assignment in this
final rule should not be considered as a permanent or irrevocable
designation (65 FR 18456). Furthermore, we continue to encourage
stakeholders to provide supportive evidence to aid in the evaluations
of procedures' assignment to the IPO list, and where appropriate the
APC assignment and corresponding payment for any codes as well,
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 for future
rulemaking considerations.
[[Page 63709]]
4. Topics and Questions Posed for Public Comments
In addition to our proposal to halt the elimination of the IPO list
and return services summarily removed from the IPO list in CY 2021 that
our clinicians have determined do not meet the criteria for removal
from the IPO list, we also sought feedback from stakeholders on whether
CMS should maintain the longer-term objective of eliminating the IPO
list or if CMS should maintain the IPO list but continue to
systematically scale the list back to so that inpatient only
designations are consistent with current standards of practice.
Specifically, we requested comments on the following:
Should CMS maintain the longer-term objective of
eliminating the IPO list? If so, what is a reasonable timeline for
eliminating the list? What method do stakeholders suggest CMS use to
approach removing codes from the list?
Should CMS maintain the IPO list but continue to
streamline the list of services included on the list and, if so,
suggestions for ways to systematically scale the list back to allow for
the removal of codes, or groups of codes, that can safely and
effectively be performed on a typical Medicare beneficiary in the
hospital outpatient setting so that inpatient only designations are
consistent with current standards of practice?
What effect do commenters believe the elimination or
scaling back of the IPO list would have on safety and quality of care
for Medicare beneficiaries?
What effect do commenters believe elimination or the
scaling back of the IPO list would have on provider behavior,
incentives, or innovation?
What information or support would be helpful for providers
and physicians in their considerations of site of service selections?
Should CMS' clinical evaluation of the safety of a service
in the hospital outpatient setting consider the safety and quality of
care for the typical Medicare beneficiary or a smaller subset of
Medicare beneficiaries for whom the outpatient provision of a service
may have fewer risk factors?
Are there services that were removed from the IPO list in
CY 2021 that stakeholders believe meet the longstanding criteria for
removal from the IPO list and should continue to be payable in the
hospital outpatient setting in CY 2022? If so, what evidence supports
the conclusion that the service meets the longstanding criteria for
removal from the IPO list and is safe to perform on the Medicare
population in the hospital outpatient setting?
Comment: Numerous commenters responded to CMS' comment solicitation
on whether CMS should continue the longer-term objective of eliminating
the IPO list or if CMS should maintain the IPO list but continue to
systematically scale the list back to ensure that inpatient only
designations are consistent with current standards of practice. The
overwhelming majority of the commenters, including professional
associations, hospital associations, hospitals, and many providers,
supported maintaining the IPO list.
We received many of the same types of comments we received in
response to our CY 2018 OPPS/ASC proposed rule comment solicitation for
removing THA and in subsequent rulemaking. Supporters of maintaining
the IPO list also acknowledged the possibility that in the future
many--but not all--of the services on the IPO could potentially be
safely performed on an outpatient basis. Commenters provided feedback
on improvements to the IPO list maintenance process, as well as the
criteria, evidence and data that should be required to support removing
a procedure from the IPO list. Commenters also suggested alternatives
to the IPO list, including different coding mechanisms and alternative
approaches to APC assignment for services transitioning off of the IPO
list, including changes to the ``CA'' modifier, which identifies a
procedure payable only in the inpatient setting when performed
emergently on an outpatient who expires prior to admission. Commenters
also recommended ways for CMS to monitor patient outcomes and the
impact of services migrating from the IPO list to ensure that there are
not unintended consequences of removing procedures from the IPO list.
Several commenters shared concerns regarding the unintended impact that
large-scale changes to the IPO list may have on hospital finances,
particularly rural hospitals, safety net hospitals, and SNFs.
Response: We thank the commenters for their detailed feedback on
this topic. We will consider all of these comments for future
rulemaking.
Comment: Several commenters recommended that CPT codes 19306
(Mastectomy, radical, including pectoral muscles, axillary and internal
mammary lymph nodes); 32853 (Lung transplant, double (bilateral
sequential or en bloc); without cardiopulmonary bypass); 33523
((Coronary artery bypass, using venous graft(s) and arterial graft(s),
six or more); and 33935 (Heart-lung transplant with recipient
cardiectomy-pneumonectomy), never come off of the IPO list due to their
clinical intensity and nature of the services.
Response: We thank commenters for their recommendations.
Comment: Additionally, CMS received comments recommending the
removal of two services not originally proposed for removal from the
IPO list for CY 2022. The commenters contended that CPT codes 43775
(Laparoscopy, surgical, gastric restrictive procedure; longitudinal
gastrectomy (i.e., sleeve gastrectomy)) and 47550 (Biliary endoscopy,
intraoperative (choledochoscopy) (list separately in addition to code
for primary procedure)) should be removed from the IPO list because the
commenters believed they meet the removal criteria that we are
reinstating beginning CY 2022.
Response: We thank commenters for their feedback regarding these
services. We note CPT codes 43775 and 47550 were not included in the
298 codes that were removed from the IPO list for CY 2021 and then
proposed to be added back to the IPO list in the CY 2022 OPPS/ASC
proposed rule. Rather, these codes were added to the IPO list prior to
2021. As discussed above, we received many comments from stakeholders
regarding the speed at which the 298 services were removed from the IPO
list for CY 2021, and the need for CMS to reinstate a more measured
process that includes additional opportunities for public input and
transparency when evaluating codes for removal. In light of these
comments, we believe it is appropriate to consider the removal of these
services from the IPO list in future rulemaking in order to allow
further discussion and evaluation. We also continue to encourage
stakeholders to provide supportive evidence to aid in the evaluations
of these procedures' assignment to the IPO list, 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 for future rulemaking
considerations.
Comment: One commenter, a medical device company, requested a
reassignment of the OPPS status indicator for CPT code 0643T
(Transcatheter left ventricular restoration device implantation
including right and left heart catheterization and left
ventriculography when performed, arterial approach) from ``E1'' (not
covered by Medicare) to ``C'' (inpatient only) status due to the
complex patient population, the need for intra- and post-
[[Page 63710]]
operative monitoring and their experience with clinical trials.
Response: We thank the commenter for bringing this CPT code to our
attention. CPT code 0643T became effective on July 1, 2021 and for CY
2022, we proposed to assign the code to OPPS status indicator ``E1''
(Items, codes, and services not covered by any Medicare outpatient
benefit category; statutorily excluded; not reasonable and necessary)
to indicate that the service was not covered by Medicare. We note that
the clinical study associated with CPT code 0643T was approved as a
Medicare-approved IDE study \190\ with a Category B designation \191\
for the device effective November 12, 2020. We agree with commenters
that given the invasive nature of the procedures, the clinical
intensity of the services provided, and the underlying physical
condition of the patient who would require surgery, CPT code 0643T
should be classified as an inpatient only procedure.
---------------------------------------------------------------------------
\190\ Clinical evaluation of the ACCUCINCH[supreg] ventricular
restoration system in patients who present with symptomatic heart
failure with reduced ejection fraction (hfref): The corcinch-HF
study--full text view. Full Text View--ClinicalTrials.gov. (n.d.).
Retrieved October 22, 2021, from https://clinicaltrials.gov/ct2/show/NCT04331769.
\191\ G150249-NCT04331769. CMS Approved IDE Studies. (n.d.).
Retrieved October 22, 2021, from https://www.cms.gov/medicarecoverageideapproved-ide-studies/g150249-nct04331769.
---------------------------------------------------------------------------
We refer readers to sections III.D. ``OPPS APC-Specific Policies''
of this final rule with comment period for additional discussion
regarding CY 2022 status indicators and APC assignments.
Comment: Other commenters requested we keep services off the IPO
list that were not included in the proposed CY 2022 IPO list.
Response: We thank commenters for their recommendations. We do
agree that it is appropriate for these services to remain payable in
the OPPS for CY2022. We reiterate that assignment in this final rule
should not be considered as a permanent or irrevocable designation (65
FR 18456). Table 47 lists the CPT codes that were not included in the
proposed CY 2022 IPO list and were affirmed by commenters.
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C. Summary of Final Policy and Changes to the IPO List for CY 2022
As explained above, for CY 2022, we are finalizing our proposal to
halt the elimination of the IPO list; to codify in regulation text in a
new Sec. 419.22 our five longstanding criteria for determining whether
a service or procedure should be removed from the IPO list; and to
pause the elimination of the IPO list and add back to the IPO list the
services removed in CY 2021, except CPT code 22630 (Arthrodesis,
posterior interbody technique, including laminectomy and/or discectomy
to prepare interspace (other than for decompression), single
interspace; lumbar); CPT code 23472 (Arthroplasty, glenohumeral joint;
total shoulder (glenoid and proximal humeral replacement (for example,
total shoulder))); CPT code 27702 (Arthroplasty, ankle; with implant
(total ankle) and their corresponding anesthesia codes: CPT code 01638
(Anesthesia for open or surgical arthroscopic procedures on humeral
head and neck, sternoclavicular joint, acromioclavicular joint, and
shoulder joint; total shoulder replacement), and CPT 01486 (Anesthesia
for open procedures on bones of lower leg, ankle, and foot; total ankle
replacement). We are also classifying CPT code 0643T (Transcatheter
left ventricular restoration device implantation including right and
left heart catheterization and left ventriculography when performed,
arterial approach) as an inpatient only procedure. Finally, we are also
finalizing our proposal to amend the regulation at Sec. 419.22(n) to
remove the reference to the elimination of the list of services and
procedures designated as requiring inpatient care through a 3-year
transition and to codify our five longstanding criteria for determining
whether a service or procedure should be removed from the IPO list in
the regulation in a new Sec. 419.23.
The complete list of codes describing services that are designated
as inpatient only services beginning in CY 2022 is also included as
Addendum E to this final rule with comment period, which is available
via the internet on the CMS website.
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BILLING CODE 4120-01-C
X. Nonrecurring Policy Changes
A. Medical Review of Certain Inpatient Hospital Admissions Under
Medicare Part A for CY 2022 and Subsequent Years
1. Background on the 2-Midnight Rule
In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50913 through
50954), we clarified our policy regarding when an inpatient admission
is considered reasonable and necessary for purposes of Medicare Part A
payment. Under this policy, we established a benchmark providing that
surgical procedures, diagnostic tests, and other treatments would be
generally considered appropriate for inpatient hospital admission and
payment under Medicare Part A when the physician expects the patient to
require a stay that crosses at least 2 midnights and admits the patient
to the hospital based upon that expectation. Conversely, when a
beneficiary enters a hospital for a surgical procedure not designated
as an inpatient-only (IPO) procedure as described in 42 CFR 419.22(n),
a diagnostic test, or any other treatment, and the physician expects to
keep the beneficiary in the hospital for only a limited period of time
that does not cross 2 midnights, the services would be generally
inappropriate for payment under Medicare Part A, regardless of the hour
that the beneficiary came to the hospital or whether the beneficiary
used a bed. With respect to services designated under the OPPS as IPO
list procedures, we explained that because of the intrinsic risks,
recovery impacts, or complexities associated with such services, these
procedures would continue to be appropriate for inpatient hospital
admission and payment under Medicare Part A regardless of the expected
length of stay. We also indicated that there might be further ``rare
and unusual'' exceptions to the application of the benchmark, which
would be detailed in subregulatory guidance.
In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50913 through
50954), we also finalized the 2-Midnight presumption, which is related
to the 2-Midnight benchmark but is a separate medical review policy.
The 2-Midnight benchmark represents guidance to reviewers to identify
when an inpatient admission is generally reasonable and necessary for
purposes of Medicare Part A payment, while the 2-Midnight presumption
relates to instructions to medical reviewers regarding the selection of
claims for medical review. Specifically, under the 2-Midnight
presumption, inpatient hospital claims with lengths of stay greater
than 2 midnights after the formal admission following the order are
presumed to be appropriate for Medicare Part A payment and are not the
focus of medical review efforts, absent evidence of systematic gaming,
abuse, or delays in the provision of care in an attempt to qualify for
the 2-Midnight presumption.
In the CY 2016 OPPS/ASC final rule with comment period (80 FR 70538
through 70549), we revisited the previous rare and unusual exceptions
policy and finalized a proposal to allow for case-by-case exceptions to
the 2-Midnight benchmark, whereby Medicare Part A payment may be made
for inpatient admissions where the admitting physician does not expect
the patient to require hospital care spanning 2 midnights, if the
documentation in the medical record supports the physician's
determination that the patient nonetheless requires inpatient hospital
care.
In the CY 2016 OPPS/ASC final rule with comment period, we
reiterated our position that the 2-Midnight benchmark provides clear
guidance on when a hospital inpatient admission is appropriate for
Medicare Part A payment, while respecting the role of physician
judgment. We stated that the following criteria will be relevant to
determining whether an inpatient admission with an expected length of
stay of less than 2 midnights is nonetheless appropriate for Medicare
Part A payment:
Complex medical factors such as history and comorbidities;
[[Page 63737]]
The severity of signs and symptoms;
Current medical needs; and
The risk of an adverse event.
The exceptions for procedures on the IPO list and for ``rare and
unusual'' circumstances designated by CMS as national exceptions were
unchanged by the CY 2016 OPPS/ASC final rule with comment period.
As we stated in the CY 2016 OPPS/ASC final rule with comment
period, the decision to formally admit a patient to the hospital is
subject to medical review. Specifically, for inpatient admissions not
related to a surgical procedure specified by Medicare as an IPO
procedure under 42 CFR 419.22(n) and for which there is not a national
exception, payment of the claim under Medicare Part A is subject to the
clinical judgment of the medical reviewer to determine whether the
medical record supports a reasonable expectation of the need for
hospital care crossing at least 2 midnights or otherwise supports a
need for inpatient care. The medical reviewer's clinical judgment
involves the synthesis of all submitted medical record information (for
example, progress notes, diagnostic findings, medications, nursing
notes, and other supporting documentation) to make a medical review
determination on whether the clinical requirements in the relevant
policy have been met. In addition, Medicare review contractors must
abide by CMS' policies in conducting payment determinations, but are
permitted to take into account evidence-based guidelines or commercial
utilization tools that may aid such a decision. While Medicare review
contractors may continue to use commercial screening tools to help
evaluate the inpatient admission decision for purposes of payment under
Medicare Part A, such tools are not binding on the hospital, CMS, or
its review contractors. This type of information also may be
appropriately considered by the physician as part of the complex
medical judgment that guides their decision to keep a beneficiary in
the hospital and formulation of the expected length of stay.
2. Current Policy for Medical Review of Inpatient Hospital Admissions
for Procedures Removed From the Inpatient Only List
In the CY 2020 OPPS/ASC final rule with comment period we finalized
a policy to exempt procedures that have been removed from the IPO list
from certain medical review activities to assess compliance with the 2-
Midnight rule within the 2 calendar years following their removal from
the IPO list. We stated that these procedures will not be considered by
the Beneficiary and Family-Centered Care Quality Improvement
Organizations (BFCC-QIOs) in determining whether a provider exhibits
persistent noncompliance with the 2-Midnight rule for purposes of
referral to the RAC nor will these procedures be reviewed by RACs for
``patient status.'' We explained that during this 2-year period, BFCC-
QIOs will have the opportunity to review such claims in order to
provide education for practitioners and providers regarding compliance
with the 2-Midnight rule, but claims identified as noncompliant will
not be denied with respect to the site-of-service under Medicare Part
A.
For CY 2021 we proposed to continue the 2-year exemption from site-
of-service claim denials, BFCC-QIO referrals to RACs, and RAC reviews
for ``patient status'' (that is, site-of-service) for procedures that
are removed from the IPO list under the OPPS beginning on January 1,
2021. However, we finalized our proposal with modifications in the CY
2021 OPPS/ASC final rule with comment period. Instead of the 2-year
exemption, procedures removed from the IPO list after January 1, 2021
were indefinitely exempted from site-of-service claim denials under
Medicare Part A, eligibility for BFCC-QIO referrals to RACs for
noncompliance with the 2-Midnight rule, and RAC reviews for ``patient
status'' (that is, site-of-service). We stated that this exemption
would last until we have Medicare claims data indicating that the
procedure is more commonly performed in the outpatient setting than the
inpatient setting. Thus, for the exemption to end for a specific
procedure, in a single calendar year we would need to have Medicare
claims data indicating that the procedure was performed more than 50
percent of the time in the outpatient setting. We stated that we would
revisit in rulemaking whether an exemption for a procedure should be
ended or whether we may consider additional metrics in the future that
could assist us in determining when the exemption period should end for
a procedure. Even during this exemption period, the BFCC-QIOs retain
the authority to review such claims in order to provide education for
practitioners and providers regarding compliance with the 2-Midnight
rule, but claims identified as noncompliant will not be denied with
respect to the site-of-service under Medicare Part A. Additionally, we
stated that we may still conduct medical review in cases in which we
believe there is potential fraud or abuse occurring. We explained that
the elimination of the IPO list was a large scale change that created
brand new considerations for providers regarding site-of-service
determinations. At the time, we believed a change of this significance
required us to reevaluate our stance on the exemption period for
procedures removed from the IPO list, resulting in our decision to
finalize an indefinite exemption period rather than continuing the
previous 2 year exemption period.
Finally, in the CY 2021 OPPS/ASC final rule with comment period we
amended 42 CFR 412.3 to clarify when a procedure removed from the IPO
is exempt from certain medical review activities. We stated that for
those services and procedures removed between January 1 and December
31, 2020, this exemption will last for 2 years from the date of such
removal. For those services and procedures removed on or after January
1, 2021, this exemption will last until the Secretary determines that
the service or procedure is more commonly performed in the outpatient
setting.
3. Medical Review of Inpatient Hospital Admissions for Procedures
Removed From the Inpatient Only List for CY 2022 and Subsequent Years
As stated earlier in this section, services on the IPO list are not
subject to the 2-Midnight rule for purposes of determining whether
payment is appropriate under Medicare Part A. However, the 2-Midnight
rule is applicable once services have been removed from the IPO list.
Outside of the exemption periods discussed above, services that have
been removed from the IPO list are subject to initial medical reviews
of claims for short-stay inpatient admissions conducted by BFCC-QIOs,
and are subject to denial for non-compliance with the 2-midnight rule.
BFCC-QIOs may also refer providers to the RACs for further medical
review due to exhibiting persistent noncompliance with Medicare payment
policies, including, but not limited to:
Having high denial rates;
Consistently failing to adhere to the 2-Midnight rule; or
Failing to improve their performance after QIO educational
intervention.
As stated in section IX. of the CY 2022 OPPS/ASC proposed rule (86
FR 42155 through 42176), CMS proposed to halt the elimination of the
IPO list. In accordance with this proposal, we proposed to amend 42 CFR
419.22(n) to remove the reference to the elimination
[[Page 63738]]
of the list of services and procedures designated as requiring
inpatient care through a 3-year transition. We also proposed to return
298 procedures removed from the IPO list in CY 2021 to the IPO list for
CY 2022.
Regardless of the status of the IPO list, we believe that the 2-
Midnight benchmark remains an important metric to help guide when Part
A payment for inpatient hospital admissions is appropriate. As
technology advances and more services may be safely performed in the
hospital outpatient setting and paid under the OPPS, it is increasingly
important for physicians to exercise their clinical judgment in
determining the generally appropriate clinical setting for their
patient to receive a procedure, whether that be as an inpatient or on
an outpatient basis. Importantly, removal of a service from the IPO
list has never meant that a beneficiary cannot receive the service as a
hospital inpatient--as always, the physician should use his or her
complex medical judgment to determine the appropriate setting on a case
by case basis.
As stated previously, our current policy regarding IPO list
procedures is that they are appropriate for inpatient hospital
admission and payment under Medicare Part A regardless of the expected
length of stay. Halting the elimination of the IPO list would mean that
this will remain true for all services that are still on the list. As
in previous years, any services that are removed from the list in the
future will be subject to the 2-Midnight benchmark and 2-Midnight
presumption. This means that for services removed from the IPO list,
under the 2-Midnight presumption, inpatient hospital claims with
lengths of stay greater than 2 midnights after admission will be
presumed to be appropriate for Medicare Part A payment and will not be
the focus of medical review efforts, absent evidence of systematic
gaming, abuse, or delays in the provision of care in an attempt to
qualify for the 2-Midnight presumption. Additionally, under the 2-
Midnight benchmark, services formerly on the IPO list will be generally
considered appropriate for inpatient hospital admission and payment
under Medicare Part A when the medical record supports either the
admitting physician's reasonable expectation that the patient will
require a stay that crosses at least 2 midnights, or the physician's
determination that the patient required inpatient hospital care despite
an expectation of a shorter length of stay.
Because we proposed to halt the elimination of the IPO list and add
298 services that were removed back to the IPO list, we believed this
proposed change required us to reexamine the applicable exemption
period. We noted in the CY 2021 OPPS/ASC final rule with comment period
that we may shorten the exemption period for a procedure if necessary.
We heard from many commenters last year that the 2-year exemption was
appropriate when CMS was removing a smaller volume of procedures from
the IPO list. However, commenters believed that the unprecedented
volume of procedures becoming subject to the 2-Midnight rule with the
phased elimination of the IPO list would necessitate a longer exemption
period. While these commenters expressed their support for continuing
the 2-year exemption, they further stated that a longer exemption
period may be more appropriate. Some commenters suggested that anywhere
between 3 to 6 years or indefinitely would be appropriate. Commenters
expressed their belief that increasing the length of the exemption
would be necessary to allow hospitals and practitioners sufficient time
to adjust their billing and clinical systems, as well as processes used
to determine the appropriate setting of care. For a full description of
the comments received please refer to the CY 2021 OPPS/ASC final rule
with comment period (85 FR 86115).
We noted in the CY 2022 OPPS/ASC proposed rule that we believed
that the indefinite exemption was appropriate when the agency was
eliminating the IPO list and removing an unprecedented volume of
procedures from the list in a short period of time. That would have
resulted in a large number of procedures becoming subject to the 2-
Midnight rule in a 3-year span. However, we explained in the CY 2022
OPPS/ASC proposed rule that should we finalize our CY 2022 proposal to
halt the elimination of the IPO list, there would no longer be an
unprecedented volume of procedures removed from the IPO list at once,
and thus the indefinite exemption may no longer be appropriate. As we
explained in the CY 2021 OPPS/ASC final rule with comment period, the
indefinite exemption was necessary given the magnitude of the change
for providers. We explained in the CY 2022 OPPS/ASC proposed rule that
because we were now proposing to move toward a much smaller volume of
procedures becoming subject to the 2-Midnight rule at one time, we
believed that in the event we finalized the proposed halt in the
elimination of the IPO list, an indefinite exemption from medical
review activities related to the 2-Midnight rule would no longer be
warranted.
We also explained in the CY 2022 OPPS/ASC proposed rule that we
continued to believe that, in order to facilitate compliance with our
payment policy for inpatient admissions, some exemption from certain
medical review activities for services removed from the IPO list under
the OPPS is appropriate. Accordingly, we proposed to rescind the
indefinite exemption and instead apply a 2-year exemption from two
midnight medical review activities for services removed from the IPO
list on or after January 1, 2021. As finalized in the CY 2020 OPPS/ASC
final rule with comment period, and unchanged by the CY 2021
rulemaking, services removed from the IPO list between January 1 and
December 30, 2020, are currently subject to a 2-year exemption.
Accordingly, we stated that under our proposal, the same 2-year
exemption would apply to all service removed from the IPO list on or
after January 1, 2020. As we explained in the CY 2020 OPPS/ASC final
rule with comment period, we believe that a 2-year exemption from
certain medical review activities for procedures removed from the IPO
list would allow sufficient time for providers to become more familiar
with how to comply with the 2-Midnight rule and for hospitals and
clinicians to become used to the availability of payment under both the
hospital inpatient and outpatient setting for procedures removed from
the IPO list. As we indicated in the CY 2022 OPPS/ASC proposed rule, if
we finalized our proposal to halt the elimination of the IPO list, we
believed that this rationale would apply equally to the smaller number
of services that may be removed from the list at any one time in the
future, and thus that the same 2-year exemption period is appropriate.
We also noted in the CY 2022 OPPS/ASC proposed rule that, as with
the previous 2-year exemption period for services removed from the IPO
list between January 1 and December 30, 2020, applying a 2-year
exemption period to services removed from the IPO list on or after
January 1, 2021, would allow providers time to gather information on
procedures newly removed from the IPO list to help inform education and
guidance for the broader provider community, develop patient selection
criteria to identify which patients are, and are not, appropriate
candidates for outpatient procedures, and to develop related policy
protocols. We also said that we believed that this exemption period
would aid in compliance with our
[[Page 63739]]
payment policy for inpatient admissions.
It is important to note that whether there is a limited timeframe
or an indefinite exemption from the specified medical review
activities, providers are still expected to comply with the 2-Midnight
rule. It is also important to note that the 2-Midnight rule does not
prohibit procedures from being performed or billed on an inpatient
basis. Whether a procedure has an exemption or not does not change what
site of service is medically necessary or appropriate for an individual
beneficiary. Providers are still expected to use their complex medical
judgment to determine the appropriate site of service for each patient
and to bill in compliance with the 2-Midnight rule. The exemption is
not from the 2-Midnight rule but from certain medical review procedures
and site-of-service claim denials.
Absent the removal of an unprecedented number of services at once
from the IPO list, we explained in the proposed rule that we continue
to believe that a 2-year exemption from BFCC-QIO referral to RACs and
RAC ``patient status'' review of the setting for procedures removed
from the IPO list under the OPPS and performed in the inpatient setting
would be an adequate amount of time to allow providers to gain
experience with application of the 2-Midnight rule to these procedures
and the documentation necessary for Part A payment for those patients
for which the admitting physician determines that the procedures should
be furnished in an inpatient setting. Furthermore, we explained that it
was our belief that the 2-year exemption from referrals to RACs, RAC
patient status review, and claims denials would be sufficient to allow
providers time to update their billing systems and gain experience with
respect to newly removed procedures eligible to be paid under either
the IPPS or the OPPS, while avoiding potential adverse site-of-service
determinations. We solicited public comments regarding the appropriate
period of time for this exemption. Commenters indicated whether and why
they believed the 2-year period is appropriate, or whether they
believed a longer or shorter exemption period would be more
appropriate.
In summary, for CY 2021 and subsequent years, we proposed to return
to the 2-year exemption from site-of-service claim denials, BFCC-QIO
referrals to RACs, and RAC reviews for ``patient status'' (that is,
site-of-service) for procedures that are removed from the IPO list
under the OPPS on January 1, 2021 or later. Under this proposal,
services removed beginning on January 1, 2021 would receive the same 2-
year exemption from 2-Midnight medical review activities as currently
applies to services removed between January 1 and December 30, 2020,
and not the indefinite exemption finalized in the CY 2021 OPPS/ASC
final rule with comment period. We encouraged BFCC-QIOs to review these
cases for medical necessity in order to educate themselves and the
provider community on appropriate documentation for Part A payment when
the admitting physician determines that it is medically reasonable and
necessary to conduct these procedures on an inpatient basis. We noted
that we will monitor changes in site-of-service to determine whether
changes may be necessary to certain CMS Innovation Center models. While
we proposed to halt the elimination of the IPO list, we sought comment
on whether a 2-year time period is appropriate, or if a longer or
shorter period may be more warranted. We also explained in the CY 2022
OPPS/ASC proposed rule, that if we did not finalize our proposal to
halt the elimination of the IPO list we might continue with the
indefinite exemptions. Finally, we proposed to amend 42 CFR 412.3 to
clarify when a procedure removed from the IPO list is exempt from
certain medical review activities. We proposed that for all services
and procedures removed after January 1, 2020, this exemption would last
for 2 years from the date of such removal. This would include those
services and procedures removed on or after January 1, 2021, for which
this exemption would also be for 2 years from the date of such removal.
Comment: Many commenters, including organizations representing
health insurance plans, physician associations, and specialty medical
associations supported an indefinite exemption from site-of-service
claim denials under Medicare Part A, eligibility for BFCC-QIO referrals
to RACs for noncompliance with the 2-Midnight rule, and RAC reviews for
site-of-service for procedures that are removed from the IPO list under
the OPPS beginning on January 1, 2021. Some of these commenters
recommended exemption from site of service reviews until the procedure
is performed in the outpatient setting more than 50 percent of the
time, or until clinical evidence supports the safety of procedures
performed in an outpatient setting. Additional commenters believed CMS
should defer to the physician's judgment on the appropriate site of
care and exempt providers from site-of-service claims denials beyond
the proposed 2-year exemption period. Commenters stated 2 years does
not provide enough time for adequate evidence and research to be
conducted to demonstrate that procedures removed from the IPO list can
be performed safely for Medicare beneficiaries in hospital outpatient
settings. According to the commenters, a longer or indefinite exemption
period would extend additional protection to beneficiaries and
hospitals providing care in outpatient settings.
Other commenters recommended extending site of service review to 3
or 4 years to allow for quality and safety analysis.
Response: We thank the commenters for their recommendations. As we
explained in the CY 2021 OPPS/ASC final rule with comment period, we
believed that the prior 2-year exemption might not be sufficient given
the magnitude of the change for providers due to the elimination of the
IPO list. We agreed at the time that due to the unprecedented number of
services removed from the IPO list as part of the phased elimination of
that list, additional time (beyond 2 years) would be more appropriate
for hospitals and practitioners to adjust their billing and clinical
systems, as well as develop their own internal processes to determine
the appropriate setting of care for their patients, and review for
quality and safety. We acknowledged that providers may not be
experienced with assessing procedures on the IPO list against the 2-
Midnight benchmark and that a longer exemption would allow them ample
time to update their processes to make appropriate decisions about
whether to admit patients for the large numbers of procedures being
removed from the IPO list at the time (85 FR 86116). We also heard from
commenters that the 2-year exemption was appropriate when CMS was
removing a smaller volume of procedures from the IPO list. We agreed
then and still believe now that the 2-year exemption was appropriate
when CMS was removing a smaller, more targeted population of procedures
from the IPO list. Accordingly, because we are finalizing our proposal
to halt the elimination of the IPO list and return most of the removed
services back to the list, we are finalizing our proposal without
modification to resume the 2-year exemption period for procedures
removed from the IPO list for services removed from the IPO list on
January 1, 2020 or later.
Comment: Some commenters supported a two-year exemption from 2-
midnight medical reviews. They
[[Page 63740]]
believed a 2-year exemption will provide sufficient time for physicians
to become more familiar with appropriate coding, billing, and
documentation requirements for procedures removed from the IPO list.
Commenters also noted that the 2-year exemption time period would help
facilitate the transition of services off the IPO list and allow for
the development of patient selection criteria to identify which
patients are appropriate candidates for outpatient procedures. One
commenter in support of the 2-year exemption time period also stressed
the importance of CMS and BFCC-QIOs providing education to providers
when services are removed from the IPO list.
Response: We thank the commenters for their support. The BFCC-QIOs
will continue to review claims even while procedures are exempt from
denial based on site-of-service in order to provide education for
practitioners and providers regarding compliance with the 2-Midnight
rule (85 FR 86119). Additionally, in the future, we may provide
additional educational material regarding considerations for the
selection of site-of-service for a procedure to support physicians'
decision-making. We note that this additional information will be for
informational or educational purposes only and will not be intended to
prohibit payment of procedures that were previously included on the IPO
list in the outpatient setting.
We appreciate the stakeholders' feedback regarding the appropriate
period of time for exemptions from site-of-service claim denials under
Medicare Part A, eligibility for BFCC-QIO referrals to RACs for
noncompliance with the 2-Midnight rule, and RAC reviews for site-of-
service for services removed from the IPO list on January 1, 2021, and
later. Given our decision to halt the elimination of the IPO list, and
the fact that we are accordingly no longer removing an unprecedented
number of procedures from the list at one time, we believe that a 2-
year exemption time period is adequate to let providers gain experience
with the application of the 2-Midnight rule to those procedures that
have been newly removed from the IPO list. We also believe that a 2-
year exemption from the medical review activities discussed above for
procedures removed from the IPO list will be sufficient time for
providers and BFCC-QIOs to understand the documentation necessary to
support Part A payment for those patients for which the admitting
physician determines that the procedures should be furnished in an
inpatient setting. Therefore, we are finalizing our proposed policy
without modifications. We are also finalizing our proposal to amend
Sec. 412.3 of our regulations to clarify when a procedure removed from
the IPO list is exempt from certain medical review activities.
B. Changes to Beneficiary Coinsurance for Additional Procedures
Furnished During the Same Clinical Encounter as Certain Colorectal
Cancer Screening Tests
Section 122 of Division CC 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. The reduced
coinsurance will be phased in beginning January 1, 2022. Currently, the
addition of any procedure beyond a planned colorectal cancer screening
test (for which there is no coinsurance), results in the beneficiary
having to pay coinsurance.
Section 1861(pp) of the Act defines ``colorectal cancer screening
tests'' and, under sections 1861(pp)(1)(B) and (C) of the Act,
identifies ``screening flexible sigmoidoscopy'' and ``screening
colonoscopy'' as two of the recognized procedures. During the course of
either one of these two procedures, removal of tissue or other matter
may become necessary for diagnostic purposes. Among other things,
section 1861(pp)(1)(D) of the Act authorizes the Secretary to include
in the definition, other tests or procedures and modifications to the
tests and procedures described under this subsection, with such
frequency and payment limits as the Secretary determines appropriate,
in consultation with appropriate organizations. Section 1861(s)(2)(R)
of the Act includes colorectal cancer screening tests in the definition
of the medical and other health services that fall within the scope of
Medicare Part B benefits described in section 1832(a)(1) of the Act.
Section 1861(ddd)(3) of the Act includes colorectal cancer screening
tests within the definition of ``preventive services.'' In addition,
section 1833(a)(1)(Y) of the Act provides for payment for a preventive
service under the PFS at 100 percent of the lesser of the actual charge
or the fee schedule amount for these colorectal cancer screening tests,
and under the OPPS at 100 percent of the OPPS payment amount, when the
preventive service is recommended by the United States Preventive
Services Task Force (USPSTF) with a grade of A or B. As such, there is
no beneficiary coinsurance for recommended colorectal cancer screening
tests as defined in section 1861(pp)(1) of the Act.
Under these statutory provisions, we have issued regulations
governing payment for colorectal cancer screening tests at Sec.
410.152(l)(5). We pay 100 percent of the Medicare payment amount
established under the applicable payment methodology for the setting
for providers and suppliers, and beneficiaries are not required to pay
Part B coinsurance for colorectal cancer screening tests (except for
barium enemas, which are not recommended by the USPSTF with a grade of
A or B).
In addition to colorectal cancer screening tests, which typically
are furnished to patients in the absence of signs or symptoms of
illness or injury, Medicare also covers various diagnostic tests (see
Sec. 410.32). In general, diagnostic tests must be ordered by the
physician or practitioner who is treating the beneficiary and who uses
the results of the diagnostic test in the management of the patient's
specific medical condition. Under Part B, Medicare may cover flexible
sigmoidoscopies and colonoscopies as diagnostic tests when those tests
are reasonable and necessary as specified in section 1862(a)(1)(A) of
the Act. When these services are furnished as diagnostic tests rather
than as screening tests, patients are responsible for the Part B
coinsurance (20 or 25 percent depending upon the setting) associated
with these services.
We define colorectal cancer screening tests in our regulation at
Sec. 410.37(a)(1) to include ``flexible screening sigmoidoscopies''
and ``screening colonoscopies, including anesthesia furnished in
conjunction with the service.'' Under our current regulations, we
exclude from the definition of colorectal screening services,
colonoscopies and sigmoidoscopies that begin as screening services, but
where a polyp or other growth is found and removed as part of the
procedure. The exclusion of these services from the definition of
colorectal cancer screening services is based upon longstanding
provisions of the statute under section 1834(d)(2)(D) of the Act
dealing with the detection of lesions or growths during procedures (See
CY 1998 PFS final rule at 62 FR 59048, 59082).
Prior to the enactment of section 122 of the CAA, section
1834(d)(2)(D) of the
[[Page 63741]]
Act provided that if, during the course of a screening flexible
sigmoidoscopy, a lesion or growth is detected which results in a biopsy
or removal of the lesion or growth, payment under Medicare Part B shall
not be made for the screening flexible sigmoidoscopy, but shall be made
for the procedure classified as a flexible sigmoidoscopy with such
biopsy or removal. Similarly, prior to the recent legislative change,
section 1834(d)(3)(D) of the Act provided that if, during the course of
a screening colonoscopy, a lesion or growth is detected that results in
a biopsy or removal of the lesion or growth, payment under Medicare
Part B shall not be made for the screening colonoscopy but shall be
made for the procedure classified as a colonoscopy with such biopsy or
removal. In these situations, Medicare pays for the flexible
sigmoidoscopy and colonoscopy tests as diagnostic tests rather than as
screening tests and the 100 percent payment rate for recommended
preventive services under section 1833(a)(1)(Y) of the Act, as codified
in our regulation at Sec. 410.152(l)(5), has not applied. As such,
beneficiaries currently are responsible for the usual coinsurance that
applies to the services (20 or 25 percent of the cost of the services
depending upon the setting).
Under section 1833(b) of the Act, before making payment under
Medicare Part B for expenses incurred by a beneficiary for covered Part
B services, beneficiaries must first meet the applicable deductible for
the year. Section 4104 of the Affordable Care Act (that is, the Patient
Protection and Affordable Care Act (Pub L. 111-148, March 23, 2010),
and the Health Care and Education Reconciliation Act of 2010 (Pub. L.
111-152, March 30, 2010), collectively referred to as the ``Affordable
Care Act'') amended section 1833(b)(1) of the Act to make the
deductible inapplicable to expenses incurred for certain preventive
services that are recommended with a grade of A or B by the USPSTF,
including colorectal cancer screening tests as defined in section
1861(pp) of the Act. Section 4104 of the Affordable Care Act also added
a sentence at the end of section 1833(b)(1) of the Act specifying that
the exception to the deductible shall apply with respect to a
colorectal cancer screening test 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 screening test. Although amendments made by the
Affordable Care Act addressed the applicability of the deductible in
the case of a colorectal cancer screening test that involves biopsy or
tissue removal, they did not alter the coinsurance provision in section
1833(a) of the Act for such procedures. Although public commenters
encouraged the agency to eliminate the coinsurance in these
circumstances, the agency found that statute did not provide for
elimination of the coinsurance (75 FR 73170 at 73431).
Beneficiaries have continued to contact us noting their concern
that a coinsurance percentage applies (20 or 25 percent depending upon
the setting) under circumstances where they expected to receive only a
colorectal screening test to which coinsurance does not apply. Instead,
these beneficiaries received what Medicare considers to be a diagnostic
procedure because, for example, polyps were discovered and removed
during the procedure. Similarly, physicians have expressed concern
about the reactions of beneficiaries when they are informed that they
will be responsible for coinsurance if polyps are discovered and
removed during a procedure that they had expected to be a screening
procedure to which coinsurance does not apply.
Section 122 of the CAA addresses this coinsurance issue by
successively reducing, over a period of years, the percentage amount of
coinsurance for which the beneficiary is responsible. Ultimately, for
services furnished on or after January 1, 2030, the coinsurance will be
zero.
To implement the amendments made by section 122 of the CAA, we
proposed in the CY 2022 PFS proposed rule to modify our regulations to
reflect the changes to Medicare statute. As amended, the statute
effectively provides that, for services furnished on or after January
1, 2022, a flexible sigmoidoscopy or a colonoscopy can be considered a
screening flexible sigmoidoscopy or a screening colonoscopy test even
if an additional procedure is furnished to remove tissue or other
matter during the screening test. Specifically, section 122(a)(3) of
the CAA added a sentence to the end of section 1833(a) of the Act to
include as colorectal screening tests described in section
1833(a)(1)(Y) of the Act, a colorectal cancer screening test,
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 screening
test. We note that only flexible screening sigmoidoscopies and
screening colonoscopies are recognized currently as colorectal cancer
screening tests that might involve removal of tissue or other matter.
This new sentence added under section 1833(a) uses the same language
that was used to amend the statute at section 1833(b)(1) of the Act to
broaden the scope of colorectal cancer screening tests to which a
deductible does not apply. Section 122(b)(1) of the CAA then limits
application of the 100 percent Medicare payment rate (that is, no
beneficiary coinsurance) under section 1833(a)(1)(Y) of the Act for the
additional colorectal cancer screening tests (those that are not
screening tests ``but for'' the new sentence at the end of section
1833(a) of the Act) by making payment for them subject to a new section
1833(dd) of the Act. Section 1833(dd) of the Act provides for a series
of increases in the Medicare payment rate percentage for those services
over successive periods of years through CY 2029. Thereafter, section
1833(dd) of the Act has no effect, so payment for all colorectal cancer
screening tests would be made at 100 percent under section
1833(a)(1)(Y) of the Act.
To codify the amendments made by section 122 of the CAA in our
regulations, we proposed in the CY 2022 PFS proposed rule to make two
modifications to current regulations.
At Sec. 410.37, we proposed in the CY 2022 PFS proposed rule to
modify our regulation where we define conditions for and limitations on
coverage for colorectal cancer screening tests by adding a new
paragraph (j). That paragraph would provide that, effective January 1,
2022, when a planned colorectal cancer screening test, that is,
screening flexible sigmoidoscopy or colonoscopy screening test,
requires a related procedure, including removal of tissue or other
matter, furnished in connection with, as a result of, and in the same
clinical encounter as the screening test, it is considered to be a
colorectal cancer screening test.
At Sec. 410.152(l)(5), we also proposed in the CY 2022 PFS
proposed rule to modify our regulation. There we describe payment for
colorectal cancer screening tests. Effective January 1, 2022, we
proposed in the CY 2022 PFS proposed rule to provide for an increase in
the Medicare payment percentage that is phased in over time. As the
Medicare payment percentage increases, the beneficiary coinsurance
percentage decreases. We proposed to revise Sec. 410.152(l)(5) to
provide that Medicare payment in a specified year is equal to a
specified percent of the lesser of the
[[Page 63742]]
actual charge for the service or the amount determined under the fee
schedule that applies to the test. The phased in Medicare payment
percentages for colorectal cancer screening services described in the
amendments we proposed in the CY 2022 PFS proposed rule to our
regulation at Sec. 410.37(j) (and the corresponding reduction in
coinsurance) are as follows:
80 percent payment for services furnished during CY 2022
(with coinsurance equal to 20 percent);
85 percent payment for services furnished during CY 2023
through CY 2026 (with coinsurance equal to 15 percent);
90 percent payment for services furnished during CY 2027
through CY 2029 (with coinsurance equal to 10 percent); and
100 percent payment for services furnished from CY 2030
onward (with coinsurance equal to zero percent).
Thus, between CYs 2022 and 2030, the coinsurance required of
Medicare beneficiaries for planned colorectal cancer screening tests
that result in additional procedures furnished in the same clinical
encounter will be reduced over time from the current 20 or 25 percent
to zero percent beginning CY 2030 and will remain at zero percent
thereafter. We refer readers to the CY 2022 PFS proposed rule for the
discussion of these changes to the regulations at Sec. Sec. 410.37 and
410.152(l)(5) to implement section 122 of the CAA.
In the CY 2011 OPPS/ASC final rule with comment period (75 FR 72019
through 72020), we adopted a policy that all surgical services
furnished on the same date as a planned screening colonoscopy, planned
flexible sigmoidoscopy, or barium enema be viewed as being furnished in
connection with, as a result of, and in the same clinical encounter as
the screening test for purposes of implementing section 4104(c)(2) of
the Affordable Care Act. We created the HCPCS modifier ``PT'' for
providers to append to the diagnostic procedure code that is reported
instead of the screening colonoscopy, screening flexible sigmoidoscopy
HCPCS code, or as a result of the barium enema when the screening test
becomes a diagnostic service. Where the modifier appears on a claim,
the claims processing system does not apply the Part B deductible for
all surgical services on the same date as the diagnostic test. We
stated that we believed this interpretation was appropriate because we
believe that it would be very rare for an unrelated surgery to occur on
the same date as one of these scheduled screening tests (75 FR 72019).
We also stated that we would reassess the appropriateness of the
proposed definition of services that are furnished in connection with,
as a result of, and in the same clinical encounter as the colorectal
cancer screening test that becomes diagnostic in the event of a
legislative change to this policy (for example, a statutory change that
would remove the coinsurance for these related services in addition to
the deductible).
As we did for purposes of implementing section 4104(c)(2) of the
Affordable Care Act, to implement the amendments made by section 122 of
the CAA, in the CY 2022 OPPS/ASC proposed rule we proposed that all
surgical services furnished on the same date as a planned screening
colonoscopy or planned flexible sigmoidoscopy would be viewed as being
furnished in connection with, as a result of, and in the same clinical
encounter as the screening test for purposes of determining the
coinsurance required of Medicare beneficiaries for planned colorectal
cancer screening tests that result in additional procedures furnished
in the same clinical encounter. We explained that we believe this
interpretation is appropriate because we continue to believe that it is
very rare for an unrelated surgery to occur on the same date as a
scheduled colorectal cancer screening. We stated that providers must
continue to report HCPCS modifier ``PT'' to indicate that a planned
colorectal cancer screening service converted to a diagnostic service.
We also noted that, if our proposal was finalized, we would examine the
claims data, monitor for any increases in surgical services unrelated
to the colorectal cancer screening test performed on the same date as
the screening test, and consider revising our policy through rulemaking
if there is a notable increase.
Comment: Overall, commenters expressed support for our proposal
that all surgical services furnished on the same date as a planned
screening colonoscopy or planned flexible sigmoidoscopy would be viewed
as being furnished in connection with, as a result of, and in the same
clinical encounter as the screening test for purposes of determining
the coinsurance required of Medicare beneficiaries for planned
colorectal cancer screening tests that result in additional procedures
furnished in the same clinical encounter.
Response: We thank commenters for their support.
Comment: Several commenters requested that CMS allow providers to
waive coinsurance even earlier than 2030 or accelerate the reduction in
the coinsurance amounts if they elect to do so without fear of
violating any CMS rules. A commenter stated the gradual reduction in
coinsurance amounts will lead to patient confusion and administration
challenges. Other commenters stated that if providers are not permitted
to accelerate the reductions in the coinsurance amounts, hospitals
should be able to voluntarily waive the co-insurance prior to January
1, 2030. The commenters believed this process could be similar to CMS
allowing hospitals to reduce the beneficiary copayment for APC payable
services below 20 percent. In addition, one commenter requested that
CMS allow hospitals the option to waive the co-payment amounts as long
as the hospitals electing this option consider it a contractual
allowance not counted as bad debt.
Response: Through this rulemaking, we are adopting Medicare
regulations regarding beneficiary coinsurance that reflect the
decreasing beneficiary financial obligations over time as established
by statute. Prior to the complete phaseout of Medicare coinsurance
amounts for colorectal cancer screening tests in CY 2030, suppliers may
waive coinsurance amounts only if they comply with applicable law,
including the Federal Anti[hyphen]Kickback Statute and the civil
monetary penalty provision prohibiting inducements to beneficiaries. We
also note that the election to offer reduced copayment amounts provided
for in section 1833(t)(8)(B) of the Act provides copayments can be
reduced to amounts not less than 20 percent of the OPD fee schedule
amount. The coinsurance amount for colorectal cancer screening services
in CY 2022 is 20 percent and therefore could not be further reduced
under this provision.
We received several comments that were outside the scope of the
proposals made in the CY 2022 OPPS/ASC proposed rule. These comments
included questions about coverage of bowel preparation products,
coverage of non-invasive screening tests that require a follow-up
colonoscopy, and cost-sharing for new colorectal screening
technologies. Although we are not summarizing and responding to these
comments in this final rule, we will take them into consideration for
possible future healthcare provider education or rulemaking.
After considering public comments, we are finalizing as proposed
the proposals made in the CY 2022 OPPS/
[[Page 63743]]
ASC proposed rule to implement section 122 of the CAA. Specifically, we
are finalizing that all surgical services furnished on the same date as
a planned screening colonoscopy or planned flexible sigmoidoscopy would
be viewed as being furnished in connection with, as a result of, and in
the same clinical encounter as the screening test for purposes of
determining the coinsurance required of Medicare beneficiaries for
planned colorectal cancer screening tests that result in additional
procedures furnished in the same clinical encounter. Providers must
continue to report HCPCS modifier ``PT'' to indicate that a planned
colorectal cancer screening service converted to a diagnostic service.
We will examine the claims data, monitor for any increases in surgical
services unrelated to the colorectal cancer screening test performed on
the same date as the screening test, and consider revising our policy
through rulemaking if there is a notable increase or abuse of this
policy.
C. Low Volume Policy for Clinical and Brachytherapy APCs
Historically, we have used our equitable adjustment authority at
section 1833(t)(2)(E) of the Act on a case-by-case basis to adjust how
we determine the costs for certain low volume services. In the CY 2016
OPPS/ASC final rule with comment period, we acknowledged that for low
volume procedures with significant device costs, the median cost would
be a more appropriate measure of the central tendency for purposes of
calculating the cost and the payment rate for low volume procedures (80
FR 70388 through 70389). We explained that the median cost is impacted
to a lesser degree than the geometric mean cost by more extreme
observations. Therefore, in the CY 2016 OPPS/ASC final rule with
comment period, we used our equitable adjustment authority under
section 1833(t)(2)(E) of the Act to use the median cost, rather than
the geometric mean, to calculate the payment rate for the procedure
described by CPT code 0308T (Insertion of ocular telescope prosthesis
including removal of crystalline lens or intraocular lens prosthesis)
for CY 2016.
In the CY 2017 OPPS/ASC final rule with comment period, we adopted
a payment policy for low-volume device-intensive procedures similar to
the policy we applied to the procedure described by CPT code 0308T.
Under this policy, we calculate the payment rate for any device-
intensive procedure that is assigned to an APC with fewer than 100
single claims for all procedures in the APC using the median cost
instead of the geometric mean cost (81 FR 79660 through 79661). We
explained that we believed this policy would help mitigate to some
extent the significant year-to-year payment rate fluctuations while
preserving accurate claims data-based payment rates for these
procedures.
In the CY 2019 OPPS/ASC final rule with comment period, we
developed a policy for establishing payment rates for low-volume
procedures assigned to New Technology APCs (83 FR 58892 through 58893).
In that rule, we explained that procedures assigned to New Technology
APCs are typically new procedures that do not have sufficient claims
history to establish an accurate payment for them (83 FR 58892). One of
the objectives of establishing New Technology APCs is to generate
sufficient claims data for a new procedure so that it can be assigned
to an appropriate clinical APC. We stated that some procedures that are
assigned to New Technology APCs have very low annual volume, which we
consider to be fewer than 100 claims. There is a higher probability
that payment data for a procedure with fewer than 100 claims per year
may not have a normal statistical distribution, which we were concerned
could affect the quality of our standard cost methodology for assigning
services to clinical APCs. We also noted that services with fewer than
100 claims per year are not generally considered to be significant
contributors to the APC ratesetting calculations, and therefore, are
not included in the assessment of the 2 times rule. For these low-
volume procedures, we were concerned that the methodology we use to
estimate the cost of a procedure under the OPPS--calculating the
geometric mean for all separately paid claims for a HCPCS procedure
code from the most recent available year of claims data--may not
generate an accurate estimate of the actual cost of these procedures.
We noted that low utilization of services can lead to wide
variation in payment rates from year to year. This volatility in
payment rates from year to year can result in even lower utilization
and potential barriers to access for these new technologies, which in
turn limits our ability to assign the service to an appropriate
clinical APC. To mitigate these issues, we believed that it was
appropriate 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. We finalized a policy
to calculate payment rates for low-volume procedures with fewer than
100 claims per year that are assigned to a New Technology APC by using
up to four years of claims data to calculate the geometric mean, the
median, and the arithmetic mean, to include the result of each
statistical methodology in annual rulemaking, and to solicit comment on
which methodology should be used to establish the payment rate. We
explained that once we identify a payment rate for a low-volume
service, we would assign the service to the New Technology APC with the
cost band that includes its payment rate (83 FR 58893).
While we believe that the policies we have adopted to calculate
payment rates for low-volume procedures have mitigated concerns
regarding payment rates for new technologies and device-intensive
procedures, we also believe that additional items and services may
benefit from a policy that applies to clinical APCs with significantly
low claims volume available for ratesetting purposes. In particular, we
believe that where there are fewer than 100 single claims from the most
recent year available for ratesetting for an APC, there is often
significant volatility in the payment rate for those APCs that could be
addressed with a low-volume adjustment policy similar to our low-volume
policies for device-intensive procedures and New Technology APCs. For
example, for CY 2022 ratesetting purposes, there are only 42 single
claims from CY 2019 available for determining the geometric mean cost
for APC 5244 (Level 4 Blood Product Exchange and Related Services) and
the payment rate for this APC has fluctuated significantly from year to
year. The geometric mean cost of APC 5244 was $30,424.15 in CY 2018
(based on CY 2016 claims), increased by 25.6 percent to $38,220.27 in
CY 2019 (based on CY 2017 claims), and decreased by 18.9 percent to
$31,015.17 in CY 2021 (based on CY 2019 claims).
Additionally, for CY 2022 ratesetting purposes, there are only 22
single claims from CY 2019 available for determining the geometric mean
cost of APC 2632 (Iodine i-125 sodium iodide). The payment rates for
this APC have also fluctuated significantly, with a geometric mean cost
of $26.63 in CY 2018 (based on CY 2016 claims), which increased by 43.4
percent to $38.20 in CY 2019 (based on CY 2017 claims), and decreased
by 31.8 percent to $26.04 in CY 2021 (based on CY 2019 claims).
As we stated in the CY 2022 OPPS/ASC proposed rule (86 FR 42181
through 42185), we believe that APCs with low claims volume available
for ratesetting could also benefit from a low-volume adjustment policy
similar to the one we currently utilize to set payment rates for
device-intensive
[[Page 63744]]
procedures and procedures assigned to New Technology APCs.
Specifically, we proposed to expand the existing low volume adjustment
policy applied to procedures assigned to New Technology APCs and
designate clinical APCs and brachytherapy APCs with fewer than 100
single claims that can be used for ratesetting purposes in the claims
year used for ratesetting for the prospective year (for example, the CY
2019 claims year for this CY 2022 OPPS/ASC proposed rule) as low volume
APCs. For clinical and brachytherapy APCs designated as Low Volume, the
number of claims available for ratesetting would include claims for all
procedures assigned to such APC. Whereas, the existing low volume
adjustment policy is applied to procedures assigned to New Technology
APCs with fewer than 100 single claims. For APCs designated as low
volume and for procedures assigned to New Technology APCs, we proposed
to determine a low volume APC's cost and a low volume procedure
assigned to a New Technology APC's cost, choosing the ``greatest of''
the median, arithmetic mean, or geometric mean.
We proposed that the threshold for the low volume APC designation
would be fewer than 100 single claims per year for the APC that can be
used for ratesetting purposes, as this is how we have traditionally
defined low volume under our existing policies. We have defined low
volume as fewer than 100 single claims under our existing policies as
there is a higher probability that payment data for a procedure with
fewer than 100 claims per year may not have a normal statistical
distribution, which we were concerned could affect how we set payment
rates for low volume APCs and procedures assigned to New Technology
APCs. For items and services assigned to clinical and brachytherapy
APCs we proposed to designate as low volume APCs, we proposed to use up
to 4 years of claims data to establish an APC payment rate as we
currently do for low volume services assigned to New Technology APCs.
The availability of multiple years of claims data will allow for more
claims to be used for ratesetting purposes and create a more
statistically reliable payment rate for these APCs than setting rates
for APCs with low claims volume based on one year of data alone.
Further, using multiple years of claims data, we proposed to use the
greatest of the median, arithmetic mean, or geometric mean cost to
approximate the cost of items and services assigned to a low volume
APC. In previous years, we have received few to no public comments on
which statistical methodology to use and have usually chosen the
methodology that yields the highest rate to set the payment rate for
procedures assigned to New Technology APCs. Going forward, we proposed
to formalize this approach for low volume procedures assigned to New
Technology APCs as well as clinical and brachytherapy APCs. We believe
using the greatest of these three methodologies provides a simple and
consistent approach to determining the cost metric to be used for
ratesetting for these APCs and avoids uncertainty where multiple cost
metrics could be used to set the APC's cost. Additionally, due to the
payment volatility and low volume nature of these procedures, we
believe that choosing the methodology that yields the highest rate will
ensure that these procedures receive sufficient payment and that
payment is not a barrier to access for these procedures.
Given the different nature of policies that affect the partial
hospitalization program (PHP), we did not propose to apply this low
volume APC policy to APC 5853 Partial Hospitalization for CMHCs or APC
5863 Partial Hospitalization for Hospital-based PHPs. We are also not
proposing to apply this low volume APC policy to APC 2698 (Brachytx,
stranded, nos) or APC 2699 (Brachytx, non-stranded, nos), as we believe
our current methodology for determining payment rates for non-specified
brachytherapy sources, as discussed in section II.A.2.a.(2). of the CY
2022 OPPS/ASC proposed rule (86 FR 42028 through 42029), is
appropriate. Further, as discussed in section IV.B.5. of the CY 2022
OPPS/ASC proposed rule (86 FR 42116), we proposed to eliminate our low
volume Device-Intensive Procedure policy, as HCPCS code 0308T has been
the only procedure subject to this policy, and subsume the ratesetting
for HCPCS code 0308T within our broader low volume APC proposal.
For information on our proposed low volume APC designations, see
Table 36 of the CY 2022 OPPS/ASC proposed rule (86 FR 42184).
Comment: Many commenters supported our proposal. Commenters stated
that the policy would provide a more accurate calculation of cost, help
mitigate year-to-year payment fluctuations, and create better
predictability in Medicare revenue for hospitals providing these low-
volume procedures. One commenter recommended that New Technology C-
codes with fewer than 100 claims be eligible for such adjustment.
Another commenter recommended that the threshold for Brachytherapy APCs
be increased to fewer than 500 claims.
Response: We thank the commenters for their support of our
proposal. We are not accepting the recommendation to apply our low-
volume adjustment to New Technology C-codes with fewer than 100 claims
that are not assigned to New Technology APCs. New Technology C-codes
are established to describe procedures that utilize emerging
technologies that cannot be adequately described by existing CPT/HCPCS
codes. We have routinely assigned such procedures to clinical APCs due
to resource and clinical similarity of existing technologies described
by other CPT/HCPCS codes and we are not convinced that we should
utilize a unique ratesetting process for New Technology C-codes with
fewer than 100 claims assigned to clinical APCs. We note that we assign
new codes to New Technology APCs only if the service cannot be placed
in any of the existing clinical APCs based on clinical similarity and
resource homogeneity. Further, we believe our policy of addressing
payment fluctuations for clinical and brachytherapy APCs due to limited
claims data at the APC level rather than the CPT/HCPCS code level would
more appropriately address stakeholder concerns and is more consistent
with how our low volume policies have previously addressed limited
claims data.
Additionally, we are not accepting the recommendation to modify our
criteria and apply a low volume adjustment to brachytherapy APCs with
fewer than 500 claims that can be used for ratesetting. As discussed
previously, under our existing policies, we believe that our definition
of low volume as fewer than 100 single claims per year increases the
probability that payment data for a procedure may not have a normal
statistical distribution. Further, we believe that applying the same
per-year limit of fewer than 100 single claims to all brachytherapy
APCs, clinical APCs, and procedures assigned to New Technology APCs to
determine whether they should qualify as low volume APCs or low volume
procedures is the most consistent and equitable approach.
After considering the public comments we received, we are
finalizing our proposal without modification to designate clinical and
brachytherapy APCs as low volume APCs if the APC has fewer than 100
claims that can be used for ratesetting. We also are finalizing our
proposal to designate procedures assigned to New Technology APCs as low
volume
[[Page 63745]]
procedures if there are fewer than 100 claims for the procedure that
can be used for ratesetting for the year. We are also finalizing our
low volume APC payment adjustment to determine the APC cost (or
procedure cost in the case of a low volume procedure assigned to a New
Technology APC) as the greater of the geometric mean cost, arithmetic
mean cost, or median cost based on up to 4 years of claims data. For a
discussion of the low volume adjustment as it applies to certain
procedures assigned to New Technology APCs, see section III.C. of this
final rule with comment period.
In the CY 2022 OPPS/ASC proposed rule (86 FR 42181 through 42185),
we proposed to designate three clinical APCs and five brachytherapy
APCs as low volume APCs. After reviewing updated CY 2019 claims data
available for this final rule, APC 5881 (Ancillary Outpatient Services
When Patient Dies) had 99 single claims available for CY 2022
ratesetting purposes. Therefore, with the addition of APC 5881, we are
finalizing our proposal, with modification, to designate four clinical
APCs and five brachytherapy APCs as low volume APCs under the OPPS. The
four clinical APCs and five brachytherapy APCs meet our criteria of
having fewer than 100 single claims in the claims year (CY 2019 for the
CY 2022 OPPS/ASC final rule with comment period) and therefore, we are
finalizing our proposal, with modification, to designate these APCs as
low volume APCs. Table 49 illustrates the APC geometric mean cost
without the low volume APC designation, the median, arithmetic mean,
and geometric mean cost using up to four years of claims data, as well
as the statistical methodology we are finalizing to use as the APC's
cost for ratesetting purposes for CY 2022. As discussed in section X.E
of this final rule with comment period, given our concerns with CY 2020
claims data as a result of the PHE, the 4 years of claims data are
based on CY 2016 claims through CY 2019 claims.
BILLING CODE 4120-01-P
[[Page 63746]]
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Additionally, for this final rule, based on the number of CY 2019
available claims from the standard ratesetting methodology used for ASC
ratesetting purposes in this final rule, for CY 2022, under the ASC
payment system, we are also finalizing our proposal to designate the
APCs in Table 50 as low volume APCs that meet our criteria of having
fewer than 100 single claims in the claims year (CY 2019 for the CY
2022 OPPS/ASC proposed rule) and are subject to our new low volume APC
payment adjustment under the ASC payment system. Specifically, we are
designating five brachytherapy APCs and four clinical APCs as low
volume APCs for CY 2022. These are the same brachytherapy APCs we are
finalizing as low volume APCs under the OPPS. We are also designating
APC 5244, APC 5494, and APC 5495, which are finalizing as low volume
under the OPPS, as low volume under the ASC payment system.
Additionally, APC 5493--Level 3 Intraocular Procedures meets our
criteria to be designated a low volume APC under the ASC payment system
for CY 2022. The payment rates for these APCs are established at the
highest amount among the geometric mean, median, or arithmetic mean,
calculated using up to four years of data, which, in the case of these
APCs, are claims data from 2016 through 2019, based on the standard
ratesetting methodology. However, as discussed in section XIII.D.1.d of
this final rule with comment period, we are finalizing our proposal to
limit the ASC payment rate for procedures assigned to low volume APCs
at an amount no greater than the procedure's OPPS payment rate.
[[Page 63747]]
[GRAPHIC] [TIFF OMITTED] TR16NO21.130
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D. Comment Solicitation on Temporary Policies To Address the COVID-19
PHE
In response to the COVID-19 pandemic, CMS issued waivers and
undertook emergency rulemaking to implement a number of temporary
policies to address the pandemic, including policies to prevent spread
of the infection and support diagnosis of COVID-19. Many of these
flexibilities were available because certain statutory or regulatory
provisions were waived. These waivers will expire at the conclusion of
the PHE. In the CY 2022 OPPS/ASC proposed rule (86 FR 42185) we sought
comment on the extent to which stakeholders utilized the flexibilities
available under these waivers, as well as whether stakeholders believe
certain of these temporary policies should be made permanent to the
extent possible within our existing authority. Specifically, we sought
comment on stakeholders' experience with hospital staff furnishing
services remotely to beneficiaries in their homes through use of
communications technology; providers furnishing services in which the
direct supervision
[[Page 63748]]
for cardiac rehabilitation, intensive cardiac rehabilitation, and
pulmonary rehabilitation services requirement was met by the
supervising practitioner being available through audio/video real-time
communications technology; and the need for specific coding and payment
to remain available under the OPPS for specimen collection for COVID-
19.
1. Mental Health Services Furnished Remotely by Hospital Staff To
Beneficiaries in Their Homes
Under the Physician Fee Schedule (PFS), Medicare makes payment to
professionals and other suppliers for physicians' services, including
certain diagnostic tests and preventive services. Section 1834(m) of
the Act specifies the payment amounts and circumstances under which
Medicare makes payment for a discrete set of Medicare telehealth
services, all of which must ordinarily be furnished in-person, when
they are instead furnished using interactive, real-time
telecommunications technology. When furnished as Medicare telehealth
services under section 1834(m) of the Act, many of these services are
still reported using codes that describe ``face-to-face'' services even
though they are furnished using audio/video, real-time communications
technology instead of in-person (82 FR 53006). Section 1834(m) of the
Act specifies the types of health care professionals that can furnish
and be paid by Medicare for telehealth services (referred to as distant
site practitioners) and the types and locations of settings where a
beneficiary can be located when receiving telehealth services (referred
to as originating sites). In the CY 2003 PFS final rule with comment
period (67 FR 79988), we established a regulatory process for adding
services to or deleting services from the Medicare telehealth services
list in accordance with section 1834(m)(4)(F)(ii) of the Act (42 CFR
410.78(f)). This process provides the public with an ongoing
opportunity to submit requests for adding services, which we consider
and review through the annual PFS rulemaking process. The regulation at
Sec. 410.78(a)(3) also defines the requirements for the interactive
telecommunications systems that may be used to furnish Medicare
telehealth services.
Due to the circumstances of the COVID-19 pandemic, particularly the
need to maintain physical distance to avoid exposure to the virus, we
anticipated that health care practitioners would develop new approaches
to providing care using various forms of technology when they are not
physically present with the patient. We have established several
flexibilities to accommodate these changes in the delivery of care. For
Medicare telehealth services, using waiver authority under section
1135(b)(8) of the Act in response to the PHE for the COVID-19 pandemic,
we have removed the geographic and site of service originating site
restrictions in section 1834(m)(4)(C) of the Act, as well as the
restrictions in section 1834(m)(4)(E) of the Act on the types of
practitioners who may furnish telehealth services, for the duration of
the PHE for the COVID-19 pandemic. We also used waiver authority to
allow certain telehealth services to be furnished via audio-only
communication technology during the PHE.
According to MedPAC's report, Telehealth in Medicare after the
Coronavirus Public Health Emergency,\192\ there were 8.4 million
telehealth services paid under the PFS in April 2020, compared with
102,000 in February 2020. MedPAC also reported that during focus groups
held in the summer of 2020, clinicians and beneficiaries supported
continued access to telehealth visits with some combination of in-
person visits. They cited benefits of telehealth, including improved
access to care for those with physical impairments, increased
convenience from not traveling to an office, and increased access to
specialists outside of a local area. In their annual beneficiary
survey, over 90 percent of respondents who had a telehealth visit
reported being ``somewhat'' or ``very satisfied'' with their video or
audio visit, and nearly two-thirds reported being ``very satisfied.''
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\192\ http://medpac.gov/docs/default-source/reports/mar21_medpac_report_ch14_sec.pdf?sfvrsn=0.
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Division CC, section 123 of the CAA modified the circumstances
under which Medicare makes payment for mental health services furnished
via telehealth technology under the PFS following the PHE.
Specifically, this legislation removed the geographic originating site
restrictions and added the home of the individual as a permissible
originating site for Medicare telehealth services when furnished for
the purposes of diagnosis, evaluation, or treatment of a mental health
disorder.\193\ This change correlates with a growing acceptance of the
use of technology in the provision of mental health care. According to
the Commonwealth Fund,\194\ the provision of mental and behavioral
health services via communications technology, in particular, has a
robust evidence base and numerous studies have demonstrated its
effectiveness across a range of modalities and mental health diagnoses
(for example, depression, substance use disorders). Clinicians
furnishing tele-psychiatry services at Massachusetts General Hospital
Department of Psychiatry during the PHE observed several advantages of
the virtual format for furnishing psychiatric services, noting that
patients with psychiatric pathologies that interfere with their ability
to leave home (for example, immobilizing depression, anxiety,
agoraphobia, and/or time-consuming obsessive-compulsive rituals) were
able to access care more consistently since eliminating the need to
travel to a psychiatry clinic can increase privacy and therefore
decrease stigma-related barriers to treatment, potentially bringing
care to many more patients in need, as well as enhanced ease of
scheduling, decreased rate of no-shows, increased understanding of
family and home dynamics, and protection for patients and practitioners
with underlying health conditions.\195\
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\193\ There is a longstanding statutory payment exclusion that
prohibits Medicare payment for services that are not furnished
within the United States (see section 1862(a)(4) of the Act). This
payment exclusion was not changed by the CAA.
\194\ https://www.commonwealthfund.org/blog/2020/using-telehealth-meet-mental-health-needs-during-covid-19-crisis.
\195\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7347331/.
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These findings are consistent with our analysis of Medicare claims
data that indicate that interactive communications technology for
mental health care is likely to continue to be in broad use beyond the
circumstances of the pandemic. According to our analysis of Medicare
Part B claims data for services furnished via Medicare telehealth
during the PHE, use of telehealth for many professional services spiked
in utilization around April 2020 and diminished over time. In contrast,
Medicare claims data suggest that for mental health services added to
the Medicare Telehealth list both permanently and temporarily,
subsequent to April 2020, the trend is toward maintaining a steady
state of usage over time. Given this information, broad acceptance in
the public and medical community, and the relatively stable Medicare
utilization of mental health services during the COVID-19 pandemic, we
believe use of interactive communication technology in furnishing
mental health care is becoming an established part of medical practice,
very likely to persist after the COVID-19 pandemic, and available
[[Page 63749]]
across the country under the Medicare statute for the range of
professionals furnishing mental health care and paid under the PFS.
In many cases, hospitals provide hospital outpatient mental health
services (including behavioral health), education, and training
services that are furnished by hospital-employed counselors or other
licensed professionals. Examples of these services include
psychoanalysis, psychotherapy, diabetes self-management training, and
medical nutrition therapy. With few exceptions, the Medicare statute
does not have a benefit category that would allow these types of
professionals (for example, mental health counselors and registered
nurses) to bill Medicare directly for their services. These services
can, in many cases, be billed by providers such as hospitals under the
OPPS or by physicians and other practitioners as services incident to
their professional services under the PFS. We also note that while
partial hospitalization services are paid under the OPPS, section
1861(ff)(3)(A) of the Act explicitly prohibits partial hospitalization
services from being furnished in an individual's home or residential
setting.
As we explained in the interim final rule with comment period
published on May 8, 2020 in the Federal Register titled ``Additional
Policy and Regulatory Revisions in Response to the COVID-19 Public
Health Emergency and Delay of Certain Reporting Requirements for the
Skilled Nursing Facility Quality Reporting Program'' (the May 8th
COVID-19 IFC) (85 FR 27550, 27563), outpatient mental health services,
education, and training services require communication and interaction.
We stated that facility staff can effectively furnish these services
using telecommunication technology and, unlike many hospital services,
the clinical staff and patient are not required to be in the same
location to furnish them. We further explained that blanket waivers in
effect during the COVID-19 PHE allow the hospital to consider the
beneficiary's home, and any other temporary expansion location operated
by the hospital during the COVID-19 PHE, to be a provider-based
department (PBD) of the hospital, so long as the hospital can ensure
the locations meet all of the conditions of participation, to the
extent not waived. In light of the need for infection control and a
desire for continuity of behavioral health care and treatment services,
we recognized the ability of the hospital's clinical staff to continue
to deliver these services even when they are not physically located in
the hospital. Therefore, in the May 8th COVID-19 IFC (85 FR 27564), we
made clear that when a hospital's clinical staff are furnishing
hospital outpatient mental health services, education, and training
services to a patient in the hospital (which can include the patient's
home so long as it is provider-based to the hospital), and the patient
is registered as an outpatient of the hospital, we will consider the
requirements of the regulations at Sec. 410.27(a)(1) to be met. We
reminded readers that the physician supervision level for the vast
majority of hospital outpatient therapeutic services is currently
general supervision under Sec. 410.27. This means a service must be
furnished under the physician's overall direction and control, but the
physician's presence is not required during the performance of the
service.
In the May 8th COVID-19 IFC, we emphasized that all services
furnished by the hospital still require an order by a physician or
qualified NPP and must be supervised by a physician or other NPP
appropriate for supervising the service given their hospital admitting
privileges, state licensing, and scope of practice, consistent with the
requirements in Sec. 410.27 (85 FR 27563). We noted that hospitals may
bill for these services as if they were furnished in the hospital and
consistent with any specific requirements for billing Medicare in
general, including any relevant modifications in effect during the
COVID-19 PHE. We also noted that when these services are provided by
clinical staff of the physician or other practitioner and furnished
incident to their professional services, and are not provided by staff
of the hospital, the hospital would not bill for the services. We
stated that in those circumstances, the physician or other practitioner
should bill for such services incident to their own services and would
be paid under the PFS.
Given that the widespread use of communications technology to
furnish services during the PHE has illustrated acceptance within the
medical community and among Medicare beneficiaries of the possibility
of furnishing and receiving care through the use of that technology, we
stated that we were interested in information on the role of hospital
staff in providing care to beneficiaries remotely in their homes.
During the PHE, hospital staff have had the flexibility to provide
these kinds of services to beneficiaries in their homes through
communications technology; however, this flexibility is tied to waivers
and other temporary policies that expire at the end of the PHE. In
instances where a beneficiary may be receiving mental health services
from a hospital clinical staff member who cannot bill Medicare
independently for their professional service, the beneficiary would
then need to physically travel to the hospital to continue receiving
the services post-PHE. We stated that we were concerned that this could
have a negative impact on access to care in areas where beneficiaries
may only be able to access mental health services provided by hospital
staff and, during the PHE, have become accustomed to receiving these
services in their homes. We also noted that the ability to receive
mental health services in their homes may help expand access to care
for beneficiaries who prefer additional privacy for the treatment of
their condition.
We stated that we were concerned that, during the PHE, practice
patterns may have shifted to support expanded virtual services. During
the PHE, we have not required any claims-based modifier identifying
specifically when a service is furnished by clinical staff of the
hospital to a beneficiary in their home through communications
technology, and therefore we are not able to gauge the magnitude of
these practice pattern shifts. Therefore, we sought comment on the
extent to which hospitals have been billing for mental health services
provided to beneficiaries in their homes through communications
technology during the PHE, and whether they would anticipate continuing
demand for this model of care following the conclusion of the PHE. As
described in preceding paragraphs, billing for Medicare telehealth
services has increased dramatically during the PHE, particularly for
mental health services. We sought comment on whether hospitals have
experienced a similar increase during the PHE in utilization of mental
health services provided by hospital staff to beneficiaries in their
homes through communications technology. We also sought comment on
whether there are changes commenters believe CMS should make to account
for shifting patterns of practice that rely on communication technology
to provide mental health services to beneficiaries in their homes.
Comment: Commenters expressed support for continuing OPPS payment
for mental health services furnished to beneficiaries in their homes by
clinical staff of the hospital through the use of communication
technology as a permanent policy post-PHE, stating that the expansion
of virtual care broadly during the PHE has been instrumental in
maintaining and expanding access to mental health services during the
PHE
[[Page 63750]]
while keeping beneficiaries in their homes and reducing exposure to
COVID. A few commenters requested that CMS continue to allow for the
beneficiary's home to be reclassified as a PBD post-PHE, while other
commenters stated that CMS should ensure that facility-based providers
are adequately reimbursed for their services when furnished remotely. A
few commenters encouraged CMS to ensure that there are relevant quality
and safety measures for services furnished by hospital staff through
communication technology.
Additionally, several commenters expressed support for the
flexibilities allowing PHP services to be furnished to beneficiaries in
their homes via telecommunication technology during the COVID-19 PHE,
and encouraged CMS to maintain these flexibilities beyond the PHE or
consider making these temporary policies permanent. Commenters
expressed that these flexibilities, especially those allowing the use
of audio-only telecommunication technology, increase access to vital
mental health services amidst a persistent shortage of health care
professionals and allow much greater and timelier access to mental
health services, especially in rural areas and for vulnerable
populations, while also helping drive reductions in the rates at which
patients missed appointments. Commenters also shared research and
analysis supporting the effectiveness of providing PHP services using
telecommunication technology. One academic health center discussed
outcomes analysis it conducted of its PHP services and noted that its
analysis did not show a decrement in clinical care for patients who
received only virtual PHP services. A national association of
behavioral healthcare systems shared research showing that the main
differences between patients who participated in PHPs via
telecommunication technology and those who attended in-person was that
those who participated via telecommunication technology had greater
lengths of stay and were more likely to stay in treatment until
completed.\196\
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\196\ https://www.psychiatrist.com/jcp/covid-19/telehealth-treatment-patients-intensive-acute-care-psychiatric-setting-during-covid-19/.
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Response: We thank commenters for their support. We will consider
these comments for future rulemaking and, in addition, will continue to
explore how hospital payment for virtual services could support access
to care in underserved and/or rural areas.
2. Direct Supervision by Interactive Communications Technology
In the interim final rule with comment period titled ``Policy and
Regulatory Provisions in Response to the COVID-19 Public Health
Emergency'' published on April 6, 2020 (the April 6th COVID-19 IFC) (85
FR 19230, 19246, 19286), we changed the regulation at 42 CFR
410.27(a)(1)(iv)(D) to provide that, during a Public Health Emergency
as defined in Sec. 400.200, the presence of the physician for purposes
of the direct supervision requirement for pulmonary rehabilitation,
cardiac rehabilitation, and intensive cardiac rehabilitation 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 practitioner. 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 end of the PHE as defined in Sec. 400.200 or
December 31, 2021, whichever is later (85 FR 86113). We noted that the
public comments we received, along with feedback we have received since
the implementation of the policy in the April 6th COVID-19 IFC allowing
for direct supervision through virtual presence (85 FR 19246) have
convinced us that we need more information on the issues involved with
direct supervision through virtual presence before implementing this
policy permanently. We acknowledged that the additional time between
the issuance of the CY 2021 OPPS/ASC final rule with comment period and
the issuance of the CY 2022 OPPS/ASC proposed rule may have allowed
providers to collect more information that could inform CMS' decision
making and therefore sought additional comment on whether this policy
should be adopted on a permanent basis. While we did not propose to
maintain this flexibility after the later of the end of the PHE or
December 31, 2021, we did seek comment on whether and to what extent
hospitals have relied upon this flexibility during the PHE and whether
providers expect this flexibility would be beneficial outside of the
PHE. We sought comment on whether we should continue to allow direct
supervision for these services to include presence of the supervising
practitioner via two-way, audio/video communication technology
permanently, or for some period of time after the conclusion of the PHE
or beyond December 31, 2021, to facilitate a gradual sunset of the
policy. We also sought comment on whether there are safety and/or
quality of care concerns regarding adopting this policy beyond the PHE
and what policies CMS could adopt to address those concerns if the
policy were extended post-PHE. Finally, if this policy were made
permanent, we sought comment on whether a service-level modifier should
be required to identify when the requirements for direct supervision
for pulmonary rehabilitation, cardiac rehabilitation, and intensive
cardiac rehabilitation services were met using audio/video real-time
communications technology.
Comment: Commenters supported the adoption of the definition of
direct supervision for cardiac rehabilitation and pulmonary
rehabilitation, and intensive cardiac rehabilitation services to
include presence of the supervising practitioner via two-way, audio/
video communication technology on a permanent basis, or, if CMS did not
wish to adopt this policy permanently, commenters encouraged CMS to
maintain it for a period of time following the conclusion of the PHE,
such as until the end of 2022. Most commenters supported development of
a service-level modifier, stating that this requirement will allow CMS
to track and collect data, although a few commenters stated that
requiring a service-level modifier would be unnecessary and create
additional burden on providers.
Response: We appreciate commenters' input on this policy and will
consider these comments for future rulemaking.
3. Payment for COVID-19 Specimen Collection in Hospital Outpatient
Departments
Also in the May 8th COVID-19 IFC, we created a new E/M code to
support COVID-19 testing during the PHE: HCPCS code C9803 (Hospital
outpatient clinic visit specimen collection for severe acute
respiratory syndrome coronavirus 2 (sars-cov-2) (coronavirus disease
[covid-19]), any specimen source) (85 FR 27604). In our review of
available HCPCS and CPT codes for the May 8th COVID-19 IFC, we did not
identify a code that explicitly described the exact services of symptom
assessment and specimen collection that HOPDs were undertaking to
facilitate widespread testing for COVID-19. As stated in the May 8th
COVID-19 IFC, we believed that HCPCS code C9803 was necessary to meet
the resource requirements for HOPDs to provide
[[Page 63751]]
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 27605).
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, which requires
services classified in an APC to be comparable clinically and in terms
of resource use. APC 5731--Level 1 Minor Procedures contains services
similar to HCPCS code C9803 and has a payment rate of $24.67 for CY
2021. 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 another separately payable primary service, 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'' in OPPS
Addendum B.
In the CY 2022 OPPS/ASC proposed rule we solicited public comments
on whether we should keep HCPCS code C9803 active beyond the conclusion
of the COVID-19 PHE and whether we should extend or make permanent the
OPPS payment associated with specimen collection for COVID-19 tests
after the COVID-19 PHE ends, including why commenters believe it would
be necessary to continue to provide OPPS payment for this service, as
well as how long commenters believe payment should be extended for this
code.
Comment: Commenters expressed appreciation for CMS' response to the
pandemic, including the creation of HCPCS code C9803. One commenter
noted that this code has had a positive impact on the delivery of care
during the COVID-19 PHE. We received several comments in support of
maintaining OPPS payment for HCPCS code C9803 beyond the conclusion of
the COVID-19 PHE, with many commenters in support of making payment for
this code permanent. Commenters cited concerns regarding the
continuation of COVID-19 cases after the conclusion of the COVID-19 PHE
and stressed the importance of continued testing in order to track and
control COVID-19 cases. Multiple commenters also requested that CMS
continue to pay for HCPCS code C9803 due to concerns regarding the
unknown future role COVID-19 will play in our lives and potential
increases in cases and new mutations of the virus. One commenter also
requested that CMS continue payment for HCPCS code C9803 and reevaluate
retiring this code when claims volume becomes low.
One commenter also requested that if CMS were to retire HCPCS code
C9803, that we provide significant notice and resources to healthcare
providers to prevent disruptions in the delivery of care.
Response: We appreciate the comments regarding payment for COVID-19
specimen collection in hospital-based outpatient departments (HOPDs).
We plan to take this feedback into consideration for possible future
rulemaking.
E. Use of CY 2019 Claims Data for CY 2022 OPPS and ASC Payment System
Ratesetting Due to the PHE
As described in section I.A. of the CY 2022 OPPS/ASC proposed rule
(86 FR 42020), 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.
In updating the OPPS payment rates and system for each rulemaking
cycle we primarily use two sources of information: The outpatient
Medicare claims data and 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 so that we can accurately estimate the
costs associated with furnishing outpatient services, and thus set
appropriate payment rates. Ordinarily, the best available claims data
is the set of data from 2 years prior to the calendar year that is the
subject of rulemaking. For the CY 2022 OPPS/ASC proposed rule
ratesetting, this typically would have been the set of CY 2020 calendar
year outpatient claims data processed through December 31, 2020. 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. For example, ordinarily, the best
available cost report data used in developing the OPPS relative weights
would be from cost reports beginning 3-fiscal years prior to the year
that is the subject of the rulemaking. For CY 2022 OPPS ratesetting,
under ordinary circumstances, that would be cost report data from HCRIS
extracted in December 2020, which would contain many cost reports
ending in FY 2020 based on each hospital's cost reporting period.
As discussed in section I.F. of the FY 2022 IPPS/LTCH proposed rule
and in the CY 2022 OPPS proposed rule, there are a number of issues
related to the use of the standard hospital data we would otherwise use
for purposes of CY 2022 ratesetting because data from the applicable
time period would include the effects of the COVID-19 PHE (86 FR 25086
through 25090). Even though the specific data elements might be
slightly different between the inpatient and outpatient hospital
settings, the same questions and challenges exist for hospital data
from CY/FY 2020. Some of the issues are focused on the source data and
the degree to which the utilization of services and cost patterns found
in them are affected by the PHE. Other issues are more prospective in
nature and concern whether hospital claims data from this time period
might be consistent with our expectations for the prospective year,
particularly in a changing environment with regards to COVID-19
vaccinations and treatment.
In the FY 2022 IPPS proposed rule, we proposed to use FY 2019 data
for FY 2022 IPPS ratesetting based on our determination that the FY
2019 data would be more representative of FY 2022 inpatient hospital
experience than the FY 2020 data (86 FR 25089). In section X.E. of the
CY 2022 OPPS/ASC proposed rule (86 FR 42188 through 42190) we noted
that there are a number of policies that apply and interact across the
IPPS and OPPS, in part because they both concern services furnished in
the hospital setting. We also discussed how we have previously noted in
annual rulemaking, in regards to adopting the fiscal year IPPS wage
index into the OPPS, the ``inseparable, subordinate status of the HOPD
within the hospital overall'' (85 FR 85908). It is in this context
where inpatient and outpatient hospital departments are inherently
connected to each other, as parts of the broader hospital setting
overall, we identified many of the same reasons to propose to use 2019
data for 2022 ratesetting as discussed in the FY 2022 IPPS proposed
rule.
In section X.E. of the CY 2022 OPPS/ASC proposed rule (86 FR 42188
through 42190) we also noted that we
[[Page 63752]]
observed a number of changes, likely as a result of the PHE, in the CY
2020 OPPS claims data that we would ordinarily use for ratesetting. The
most significant difference compared to prior years is the decrease in
the overall volume of outpatient hospital claims--with approximately 20
percent fewer claims usable for ratesetting purposes when compared to
the prior year. In addition, this decrease in outpatient claims volume
applied to a majority of the clinical APCs in the OPPS.
In some cases, we saw broad changes as a result of the PHE,
including in the APCs for hospital emergency department and clinic
visits. Among those APCs, the decrease in volume was approximately 30
percent--some of which may be related to changing practice patterns
during the PHE. For example, we saw a significant increase in the use
of the HCPCS code Q3014 (Telehealth originating site facility fee) in
the hospital outpatient claims, with the approximately 35,000 services
billed in the CY 2019 OPPS claims increasing to 1.8 million services in
the CY 2020 OPPS claims. This example highlights two types of
differences we see in the CY 2020 set of claims when comparing it to
more typical claims data. One difference is likely due to the degree to
which elective procedures/services were not performed as often during
the PHE. The other difference is the result of site of service changes
due to flexibilities available during the PHE.
In other cases, we saw changes in the claims data that were
associated with specific services that were furnished more frequently
during the PHE. For example, two notable exceptions to this decrease in
claims volume between CY 2019 and CY 2020 are for APC 5731 (Level 1
Minor Procedures) and APC 5801 (Ventilation Initiation and Management).
In the case of APC 5731, HCPCS code C9803 was made effective for
services furnished on or after March 1, 2020 through the interim final
rule with comment period titled ``Additional Policy and Regulatory
Revisions in Response to the COVID-19 Public Health Emergency and Delay
of Certain Reporting Requirements for the Skilled Nursing Facility
Quality Reporting Program'' (85 FR 27602 through 27605) to describe
COVID-19 specimen collection. In the CY 2020 claims, HCPCS C9803 has
1,023,957 single claims available for cost modeling, representing
approximately 93 percent of claims used to model the APC cost. While in
some cases this would be appropriate in establishing the APC cost, we
generally would not expect the same volume of the procedure in the CY
2022 OPPS because we anticipate that specimen collection for COVID-19
testing may be significantly lower than it was in CY 2020. Similarly,
the estimated increase in the geometric mean cost of APC 5801 based on
the CY 2020 claims data may not be predictive of CY 2022 costs for APC
5801 if there is less use of this service in CY 2022 than in CY 2020.
As a result of a number of COVID-19 PHE-related factors, including
the changes in services potentially related to the COVID-19 PHE, the
significant decrease in volume suggesting that patients may have been
deferring elective care during CY 2020, the changes in APC relative
weights for services, and the increasing number of Medicare
beneficiaries vaccinated against COVID-19, 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.
In the CY 2022 OPPS/ASC proposed rule, we also analyzed the extent
to which the decision to use CY 2019 or CY 2020 claims data as the
basis for ratesetting differentially impacts the CY 2022 OPPS rates. To
do this, we estimated the difference in case-mix under the CY 2019-
based weights and the CY 2020-based weights if the CY 2022 outpatient
experience ended up being the reverse of the assumption made when
calculating that set of relative weights. In other words, we compared
estimated case-mix calculated under four different scenarios. For the
CY 2019-based weights, we calculated the case-mix using claims from the
CY 2019-based claims extract as an approximation of the actual CY 2022
experience (Scenario A), and using claims from the CY 2020 based claims
extract as an approximation of the actual CY 2022 experience (Scenario
B). For the CY 2020-based weights, we calculated the case-mix using
claims from the CY 2020 claims based extract as an approximation of the
actual CY 2022 outpatient experience (Scenario C), and using claims
from the CY 2019 claims based extract as an approximation of the actual
CY 2022 experience (Scenario D). The results are shown in the following
Table 51.
[GRAPHIC] [TIFF OMITTED] TR16NO21.131
In Scenario A and Scenario C, there is no differential impact as a
result of a less accurate assumption made when the OPPS relative
weights were calculated: The CY 2022 outpatient experience matches the
assumption made when the OPPS relative weights were calculated. In
Scenario B and Scenario D, the actual experience is the reverse of the
assumption used when the OPPS relative weights were calculated.
In Scenario B, when the CY 2019-based weights were used, but the CY
2022 outpatient experience turns out to be more similar to CY 2020
claims data, the less accurate assumption slightly affects the
calculated case-mix, by 0.1 percent. This can be seen by comparing the
modeled case mix under Scenario B (5.056) with the modeled case-mix
under Scenario C (5.051). In other words, if we use the CY 2019-based
weights and CY 2022 outpatient
[[Page 63753]]
experience turns out to be more similar to the CY 2020 data, then the
modeled case-mix is slightly lower than if we had accurately used the
CY 2020-based weights. This suggests that, while there is some impact
from using the CY 2019 data if CY 2022 outpatient service utilization
ends up being more similar to CY 2020 utilization, that impact would be
limited.
In Scenario D, where the CY 2020-based weights were used, but the
CY 2022 outpatient experience turns out to be more similar to CY 2019
claims data, this inaccurate assumption has a somewhat more significant
effect. In this case, the modeled case-mix is -0.44 percent lower than
it would be if we had correctly assumed that CY 2022 outpatient
services utilization would be more like CY 2019 than CY 2020. This can
be seen by comparing the modeled case-mix under Scenario D (4.600) to
the modeled case-mix under Scenario A (4.620). In other words, if we
use the CY 2020-based weights and the CY 2022 outpatient experience
turns out to be more similar to CY 2019 data, the modeled case-mix is -
0.44 percent lower than if we had used the CY 2019-based weights.
In addition to our expectation that CY 2019 is a more likely
approximation of the CY 2022 outpatient experience for the reasons
discussed earlier, the previous analysis indicates that the
differential effect of making an incorrect assumption about which
year's data to use to set the CY 2022 OPPS relative weights is more
limited if the CY 2019-based weights are used than it is if the CY
2020-based weights are used. While CY 2022 outpatient hospital services
data is unlikely to look exactly like either CY 2019 data or CY 2020
data, we believe that it will be more similar to a standard year (not
having the effects of the PHE) as pandemic-related issues decline and
more of the U.S. population is vaccinated against COVID-19.
Consistent with the proposal to use CY 2019 claims data in
establishing the CY 2022 OPPS rates, we also proposed to use cost
report data from the same set of cost reports we originally used in
final rule 2021 OPPS ratesetting, where we ordinarily would have used
the most updated available cost reports available in HCRIS in
determining the proposed CY 2022 OPPS APC relative weights (as
discussed in greater detail in section II.E. of the CY 2022 OPPS/ASC
proposed rule (86 FR 42053)). As discussed previously, if we were to
proceed with the standard ratesetting process of using updated cost
reports, we would have used approximately 1,000 cost reports with the
fiscal year ending in CY 2020 based on each hospital's cost reporting
period. We note that Medicare outpatient claims data and cost report
data from the HCRIS file are examples of data sources for which we
discussed the proposed use of CY 2019 data for CY 2022 OPPS
ratesetting. While we are generally using CY 2019 claims data and the
data components related to it in establishing the CY 2022 OPPS, we
noted in the CY 2022 OPPS/ASC proposed rule the specific cases where we
used updated information, such as the ASP data used in determining drug
packaging status discussed in section V. of the CY 2022 OPPS/ASC
proposed rule (86 FR 42116).
We also considered the alternative of continuing with our standard
process of using the most updated claims and cost report data
available. To facilitate comment on the alternative proposal for CY
2022, we made available the cost statistics and addenda utilizing the
CY 2020 data we would ordinarily have provided in conjunction with the
CY 2022 OPPS/ASC proposed rule. We provided a file comparing the budget
neutrality and certain other ratesetting adjustments calculated under
our proposal with those adjustments calculated under this alternative
approach. Finally, we made available other proposed rule supporting
data files based on the use of the CY 2020 data that we ordinarily
would have provided, including: The OPPS Impact File, cost statistics
files, addenda, and budget neutrality factors. We refer the reader to
the CMS website for the CY 2022 OPPS/ASC proposed rule for more
information on where these supplemental files may be found.
We note that the CY 2022 OPPS/ASC proposed rule appeared in the
Federal Register on August 4, 2021. In the FY 2022 IPPS/LTCH PPS final
rule, which appeared in the August 13, 2021 issue of the Federal
Register, CMS finalized a policy to use FY 2019 MedPAR data in FY 2022
IPPS ratesetting (rather than FY 2020 MedPAR data) after consideration
of public comments, the vast majority of which supported CMS's proposal
to use the FY 2019 data for FY 2022 ratesetting for circumstances where
the FY 2020 data is significantly impacted by the COVID-19 PHE. Similar
to the comments received on the FY 2022 IPPS proposed rule, we received
broad support from commenters with many agreeing that CY 2019 claims
data would likely be more similar to the CY 2022 outpatient experience.
Comment: Commenters supported the use of CY 2019 claims in CY 2022
OPPS ratesetting, agreeing that the billing patterns found in the CY
2019 claims data would better approximate the outpatient utilization
and costs in the CY 2022 OPPS, due to the effect of the PHE on the CY
2020 claims. A commenter noted challenges during the PHE such as
increasing labor costs and suggested that an interim wage index
adjustment factor be applied. Several stakeholders agreed with using CY
2019 claims for CY 2022 OPPS ratesetting, but noted that their support
applied specifically for the CY 2022 OPPS, as similar policies for
future years would need to be evaluated separately.
Response: We appreciate the commenters' support for our proposal to
use CY 2019 claims in CY 2022 OPPS ratesetting as a result of the
impact of the PHE on CY 2020 claims data. We note that we are
finalizing the use of CY 2019 claims data in CY 2022 OPPS ratesetting.
With regards to the request for an interim wage index adjustment
factor, we currently do not believe an interim wage index adjustment
factor is necessary. The wage index that we would apply in the CY 2022
OPPS is not affected in the same way as claims and cost report data due
to the PHE, as a result of being on a longer data delay. As cost report
information becomes available that reflects changes in labor costs and
wage index inputs, we will continue to review and include as
appropriate in the OPPS. For more detail regarding the OPPS wage index
policy, please see section II.C. of this final rule with comment
period. We note that the final policy to use CY 2019 claims data for
OPPS ratesetting specifically applies to the CY 2022 OPPS, and we will
continue to monitor the claims and cost report data available and their
appropriateness for future OPPS ratesetting, as the PHE continues.
Comment: Certain commenters supported the use of CY 2019 claims
data for broader OPPS ratesetting but requested specific exceptions
that would allow for the use of CY 2020 claims. These suggested
exceptions included requests to use:
CY 2020 claims data for ratesetting purposes for certain
HCPCS codes that only have volume or significant volume in the CY 2020
claims but not in the 2019 claims data;
CY 2020 claims data for establishing the CY 2022 OPPS
relative weights for specific APC series;
CY 2020 claims data for contextual purposes where CY 2019
claims are unavailable to make APC assignments, but to continue to use
CY 2019 claims data for broader ratesetting; and
Either CY 2019 or CY 2020 claims data in identifying which
procedures receive device intensive status and to
[[Page 63754]]
use the higher of the device offsets between the 2 years of claims
data.
Response: We appreciate the commenters' input in determining what
data is most appropriate for developing the CY 2022 OPPS relative
payment weights. We recognize that there are two important distinct
issues raised by these unique requests: (1) The integrity of the OPPS
relative payments weights based on the data used, and (2) data
availability for ratesetting, particularly as there is different
information available in each of the claims and cost report datasets
based on the time frame of data they include.
In reviewing the CY 2019 and CY 2020 claims data available for
developing the CY 2022 OPPS rates, we noted that we believed the CY
2019 claims would be more reflective of our expectation of the CY 2022
outpatient experience. We do not believe it is appropriate to
selectively choose which claims year's data are included or not in
establishing the CY 2022 relative payment weights. We note that the
relative cost of services used in developing the OPPS relative payment
weights is a fundamental part of the OPPS and choosing which claims to
use when both CY 2019 and CY 2020 claims are broadly available may
inappropriately distort certain components of the OPPS. Further, the
choice of different time frames when establishing the claims dataset
would raise additional concerns around data consistency and how to
mitigate their effects, which may be outsized as a result of the COVID-
19 PHE. Potential additional adjustment factors would need to be
applied for aspects such as charge inflation, volume adjustments, and
CCR adjustments similar to how they are applied for other components of
the OPPS, for example, outlier payments. The OPPS relative payment
weights affect the budget neutrality calculations because the volume
and estimated relative costs of services comprise the budget neutral
model. If actual CY 2019 claims were used in some cases and CY 2020
claims in others, we might then inadvertently over or underweight
volume or estimated cost, both of which distort not just the specific
OPPS payment rates for which they are used but also those of all other
services within the budget neutrality model. Based on these data
integrity concerns, we continue to believe using CY 2019 claims data--
and CY 2019 claims data alone--in establishing the CY 2022 OPPS
relative payment weights to the extent possible is the best and most
effective policy. We do not believe that it is appropriate to blend use
of CY 2020 claims in this process.
In the CY 2022 OPPS/ASC proposed rule, we recognized that there
were certain cases in which the CY 2020 claims data may provide
additional information around service costs than are available in the
CY 2019 claims data, and therefore, may be the best data available for
ratesetting. For example, we proposed to make an exception for 11
specific device intensive procedures as described in section IV.B.2. of
the CY 2022 OPPS/ASC proposed rule (86 FR 42114) in establishing the
procedures' device offsets. In these instances, procedures were
previously assigned a default device offset percentage of 31 percent or
a device offset percentage based on claims from a clinically similar
code, and focusing solely on CY 2019 claims data would yield no
changes. However, we recognized that if CY 2020 claims information were
available and provided more specific context around device offsets,
this updated data would yield better and potentially more specific
device offset assignments than the default or clinically similar codes.
For more detailed discussion around device intensive status and device
offsets, please see section IV.B. of this final rule with comment
period.
Along those lines, while we do not believe that it is generally
appropriate to include actual CY 2020 OPPS claims data in the process
of calculating the OPPS relative weights, we believe that in certain
cases it is appropriate to use that cost information as contextual
information for APC and device offset assignments in the CY 2022 OPPS.
That is, while CY 2019 claims data are more representative of our
expectation of the CY 2022 outpatient experience, in cases where there
are no CY 2019 claims data available, the CY 2020 claims data may
provide additional updated information around the estimated costs for
specific services. Therefore, we are establishing an additional limited
exception in this final rule with comment period where we will review
CY 2020 claims data based on commenter requests and identification of
areas where they believe the CY 2020 claims justify alternative
placement, if no significant CY2019 claims data is available, as part
of our review process for determining CY 2022 APC assignment. It has
been our policy for updating OPPS rates annually to use the best
available data for ratesetting, and we believe in certain limited,
specific circumstances the CY 2020 claims data are the best available
for setting CY 2022 rates. We note that throughout this rule, and
particularly in section III.C. of this final rule with comment period,
where we review the APC-specific policies, we discuss where we have
reviewed the CY 2020 claims as part of our evaluation of data for the
CY 2022 APC assignments.
With regards to the request that we apply the device intensive
policy and device offset calculation based on the higher calculation
between that determined by the CY 2019 or CY 2020 claims data, we
believe that in cases where claims are available from both years that
the CY 2019 claims remain more reflective of actual expected outpatient
experience. Based on the issues discussed earlier in this section we
believe it is appropriate to use the CY 2019 claims data for
establishing the device intensive policy, with the exception of device
intensive procedures for which CY 2020 claims remain the only data
source. For a more detailed discussion of the CY 2022 device intensive
policy and the limited exceptions in which CY 2020 claims data will be
used for those purposes, please see section IV.B. of this final rule
with comment period.
After consideration of the public comments received, we are
finalizing the proposal to use CY 2019 claims data in CY 2022 OPPS
ratesetting with modification to allow for review of the CY 2020 claims
in determining CY 2022 APC placements based on commenter request and
where CY 2019 claims data are unavailable. In addition, we note that we
are finalizing the exception to allow for CY 2020 claims data for
device offset assignments for the 11 codes for which we proposed
exceptions, as discussed in more detail in section IV.B. of this final
rule with comment period.
[[Page 63755]]
F. Separate Payment in CY 2022 for the Device Category, Drugs, and
Biologicals With Transitional Pass-Through Payment Status Expiring
Between December 31, 2021 and September 30, 2022
In the CY 2021 OPPS/ASC final rule (85 FR 86012 through 86013), we
discussed the public comments we received in response to the comment
solicitation we included in the CY 2021 OPPS/ASC proposed rule
regarding whether we should utilize our equitable adjustment authority
under section 1833(t)(2)(E) of the Act to provide separate payment for
some period of time after pass-through status ends for devices with
expiring pass-through status in order to account for the period of time
that utilization for the devices was reduced due to the PHE.\197\
Although we only solicited comments on use of our equitable adjustment
authority to pay separately for devices with pass-through status during
the PHE, we received public comments both suggesting that drugs,
biologicals, and biosimilar biological products with pass-through
status during the same time period should also be subject to an
adjustment to extend the pass-through period for those products and
pointing out that most of these products continue to be separately paid
after their pass-through status expires, and therefore, it would be
unnecessary to utilize the equitable adjustment authority to ``extend''
pass-through status for these products.
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\197\ On January 31, 2020, HHS Secretary Azar determined that a
PHE exists retroactive to January 27, 2020, under section 319 of the
Public Health Service Act (42 U.S.C. 247d) in response to COVID-19,
and on April 21, 2020 Secretary Azar renewed, effective April 26,
2020, and again effective July 25, 2020, the determination that a
PHE exists. On March 13, 2020, the President of the United States
declared that the COVID-19 outbreak in the U.S. constitutes a
national emergency, retroactive to March 1, 2020.
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As discussed elsewhere in section X.E. of the CY 2022 OPPS/ASC
proposed rule (86 FR 42188 through 42190) and section I.F. of the FY
2022 IPPS/LTCH proposed rule (86 FR 25211 through 25212), our goal is
to use the best available data for ratesetting. Ordinarily, the best
available claims data is the set of data from 2 years prior to the
calendar year that is the subject of rulemaking, and accordingly, we
would have used claims data from CY 2020 for calculating proposed rates
for the CY 2022 OPPS/ASC proposed rule. As noted in section X.E.,
however, we proposed to use CY 2019 claims data in establishing the CY
2022 OPPS rates and to use cost report data from the same set of cost
reports originally used in the final rule for 2021 OPPS ratesetting. We
recognize that due to the effects of the PHE, the CY 2020 claims data
may not be the best available data for ratesetting, including for
purposes of ratesetting for devices, drugs, and biologicals for which
pass-through status expires between December 31, 2021 and September 30,
2022.
For this reason, and after consideration of the public comments we
received in response to the comment solicitation included in the CY
2021 OPPS/ASC proposed rule (85 FR 48862), we proposed a one-time
equitable adjustment under section 1833(t)(2)(E) of the Act to continue
separate payment for the remainder of CY 2022 for devices, drugs, and
biologicals with pass-through status that expires between December 31,
2021 and September 30, 2022. We have consistently explained that
transitional pass-through payment for drugs, biologicals, and devices
is intended as an interim measure to allow for adequate payment of
certain new technology while we collect the necessary data to
incorporate the costs for these items into the procedure APC rate (66
FR 55861). We believe an equitable adjustment to continue separate
payment for devices, drugs, and biologicals with pass-through status
that expires between December 31, 2021 and September 30, 2022 is
necessary to ensure that we have full claims data from CY 2021 with
which to set payment rates beginning in CY 2023. We also believe it is
necessary to pay separately for these products in CY 2022 in a manner
that mimics continued pass-through status, rather than having to set
rates and make APC assignments and packaging decisions for these
products for CY 2022 based on data from CY 2020, which we do not
believe is the best available data for this purpose.
For those drugs, biologicals and the device for which payment would
be packaged following expiration of their pass-through status, we
believe providing separate payment for up to a full year in CY 2022 is
warranted to ensure there is a full year of data for ratesetting,
including to ensure appropriate APC assignments for the services with
which these products are billed. For drugs and biologicals that would
generally remain separately payable after their pass-through status
expires, we believe providing separate payment for up to a full year in
CY 2022 is necessary to ensure that these drugs and biologicals would,
in fact, be separately payable when their pass-through status expires
or that their payment should be packaged if we determine that the
drug's cost is below the per-day packaging threshold. Specifically, for
threshold-packaged drugs and biologicals, CMS requires current,
appropriate data to determine whether the drug should be packaged and
then to determine the impact of that packaging on the associated
service rates. We also believe separate payment in CY 2022 is necessary
to ensure we have sufficient data in the event payment for the drug is
packaged with payment for a primary C-APC service. Finally, consistent
with our goal of ensuring that the equitable adjustment provides
separate payment for drugs and biologicals with pass-through status
that expires between December 31, 2021 and September 30, 2022 to mimic
pass-through payment to the extent possible, we proposed that
separately payable drugs and biologicals that are eligible for this
adjustment would not be paid the proposed reduced amount of ASP minus
22.5 percent when they are acquired under the 340B program, and would
generally continue to be paid ASP+6 percent for the duration of the
time period during which the adjustment applies.
We explained that under our proposal, the device category, drugs,
and biologicals that would be affected were as follows. One device
category, HCPCS code C1823 (Generator, neurostimulator (implantable),
nonrechargeable, with transvenous sensing and stimulation leads), would
receive adjusted payment equivalent to an additional four quarters of
device pass-through status. There are 27 drugs and biologicals whose
pass-through payment status expires between December 31, 2021 and
September 30, 2022. Based on CY 2020 data, payment for three of the 27
drugs and biologicals would otherwise be packaged after the expiration
of their pass-through status. The remaining 24 drugs and biologicals
would be paid separately and would otherwise receive reduced payment at
the proposed rate of ASP minus 22.5 percent when they are acquired
under the 340B program.
We explained that there are currently six drugs and one device
category whose pass-through payment status will expire on December 31,
2021, nine drugs and three biologicals whose pass-through status will
expire on March 31, 2022, seven drugs whose pass-through status will
expire on June 30, 2022, and two drugs whose pass-through payment
status will expire on September 30, 2022. Because pass-through status
can expire at the end of a quarter, we proposed that the adjusted
payment would be made for between one and four quarters, depending on
when the pass-through period expires for the
[[Page 63756]]
device category, drug, or biological. In particular, we proposed that
separate payment would be made a full year for the device category and
six drugs for which pass-through status will expire on December 31,
2021, three quarters for the twelve drugs and biologicals for which
pass-through status will expire on March 31, 2022, two quarters for the
seven drugs for which pass-through status will expire on June 30, 2022,
and one quarter for the two drugs for which pass-through status will
expire on September 30, 2022.
Table 52 lists pass-through drugs, biologicals and the device
category that we proposed would receive adjusted separate payment,
their pass-through payment period effective dates and end dates, as
well as the number of quarters of separate payment equivalent to an
extension of pass-through status that we proposed each drug or device
category would receive.
BILLING CODE 4120-01-P
[[Page 63757]]
[GRAPHIC] [TIFF OMITTED] TR16NO21.132
[[Page 63758]]
[GRAPHIC] [TIFF OMITTED] TR16NO21.133
BILLING CODE 4120-01-C
In the CY 2022 OPPS/ASC proposed rule we solicited comments on our
proposal to utilize our equitable adjustment authority to pay
separately for the remainder of CY 2022 for the device category, drugs,
and biologicals with pass-through status that expires between December
31, 2021 and September 30, 2022.
Comment: The overwhelming majority commenters generally supported
our proposal to utilize our equitable adjustment authority to pay
separately for between one and four
[[Page 63759]]
quarters for certain devices, drugs, and biologicals whose pass-through
status will expire between December 31, 2021 and September 30, 2022.
One commenter stated their support for CMS' proposal and added that
separate payment for items that will soon lose pass-through status will
help ensure beneficiary access to innovative therapies. The commenter
added that the COVID-19 pandemic has severely skewed hospital
utilization data that is necessary to establish payment rates under the
OPPS.
Response: We thank the commenters for their support for our
proposal.
Comment: Multiple commenters requested changes to our proposed
equitable payment adjustment to either expand or limit its scope. One
commenter strongly supported CMS's policy that makes
radiopharmaceuticals eligible for pass-through status and added that
CMS should apply this pass-through period extension to all
radiopharmaceuticals with pass-through status during the COVID-19 PHE.
Several other commenters asked that the proposed pass-through extension
be expanded to include all pass-through devices, drugs, and biologicals
that currently have pass-through status. One commenter acknowledged the
requirement in section 1833(t)(2)(E) that equitable adjustments be
budget neutral, but nonetheless suggested that to the extent possible,
CMS should consider whether the adjustment to continue separate payment
could be made in a non-budget neutral manner to minimize the impact of
this policy on payment for other items and services under the OPPS.
Another commenter stated that if CMS finalizes use of its equitable
adjustment authority to continue separate payment for certain pass-
through products, it should not do so for products that have already
had more than 3 years of pass-through status. One commenter stated that
CMS should not use its equitable adjustment authority to provide
separate payments for pass-through drugs, biologicals, and biosimilar
biological products after pass-through status expires for these
products where the products would continue to receive separate payment
under our existing policy. Multiple commenters asked for our proposal
to be applied to specific products or HCPCS codes; in some cases the
commenters asserted that products on pass-through status experienced
claims processing challenges that impacted data collection,
ratesetting, and beneficiary access because of the effects of the PHE.
Response: We thank the commenters for the information provided in
response to our proposal to utilize our equitable adjustment authority
to pay separately for the remainder of CY 2022 for the device category,
drugs, and biologicals with pass-through status that expires between
December 31, 2021 and September 30, 2022. We note that our proposal was
limited to an extension for those drugs, biologicals, and devices for
which pass-through status is ending between December 31, 2021 and
September 30, 2022 and for which we would otherwise use data from CY
2020 for ratesetting for these products in CY 2022. We agree that this
proposal should not be applied to pass-through products that have
previously received more than three years of pass-through status,
however, to our knowledge no such product for which we proposed to
provide continued separate payment has already had more than three
years of pass-through status. In response to commenters' request that
we implement the proposed adjustment in a non-budget neutral manner, we
note that the equitable adjustment authority at section 1833(t)(2)(E)
requires that any adjustments made under it be budget neutral.
Furthermore, we note that some commenters alleged that CMS is
effectively removing 1 year of pass-through data with their decision to
use CY 2019 as opposed to CY 2020 data for ratesetting. We note that
CMS is required to provide between 2 and 3 years of pass-through
payment status and that each drug, device and biological will have had
at least 3 years of pass-through status under our proposal. We will
continue to assess this issue as it relates to pass-through status and
ratesetting in future years.
After considering the public comments, we are finalizing our
proposal to utilize our equitable adjustment authority to pay
separately for the remainder of CY 2022 for the device category, drugs,
and biologicals with pass-through status that expires between December
31, 2021 and September 30, 2022.
XI. CY 2022 OPPS Payment Status and Comment Indicators
A. CY 2022 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 also whether
particular OPPS policies apply to the code.
For CY 2022, we did not propose to make any changes to the existing
definitions of status indicators that were listed in Addendum D1 to the
CY 2021 OPPS/ASC final rule with comment period available on the CMS
website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.
We did not receive any comments on the proposed definitions of the
OPPS payment status indicators or their definitions for 2022. We
believe that the existing definitions of the OPPS status indicators
will continue to be appropriate for CY 2022. Therefore, we are
finalizing those definitions without modification for CY 2022.
The complete list of payment status indicators and their
definitions that would apply for CY 2022 is displayed in Addendum D1 to
the CY 2022 OPPS/ASC final rule with comment period, which is available
on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
CY 2022 payment status indicator assignments for APCs and HCPCS
codes are shown in Addendum A and Addendum B, respectively, to the CY
2022 OPPS/ASC final rule with comment period, which are available on
the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
B. CY 2022 Comment Indicator Definitions
In the CY 2022 OPPS/ASC proposed rule, we proposed to use four
comment indicators for the CY 2022 OPPS. These comment indicators,
``CH'', ``NC'', ``NI'', and ``NP'', are in effect for CY 2021 and we
proposed to continue their use in CY 2022. The proposed CY 2022 OPPS
comment indicators are as follows:
``CH''--Active HCPCS code in current and next calendar
year, status indicator and/or APC assignment has changed; or active
HCPCS code that will be discontinued at the end of the current calendar
year.
``NC''--New code for the next calendar year or existing
code with substantial revision to its code descriptor in the next
calendar year, as compared to current calendar year for which we
requested comments in the proposed rule, final APC assignment; comments
will not be accepted on the final APC assignment for the new code.
``NI''--New code for the next calendar year or existing
code with substantial revision to its code descriptor in the next
calendar year, as compared to current calendar year,
[[Page 63760]]
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 2022 are
listed in Addendum D2 to the CY 2022 OPPS/ASC final rule with comment
period, which is available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
We did not receive any comments on the proposed definitions of the
OPPS comment indicators for 2022.
We believe that the existing CY 2021 definitions of the OPPS
comment indicators continue to be appropriate for CY 2022. Therefore,
we are finalizing those definitions without modification for CY 2022.
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 2021 report.
A. OPPS Payment Rates Update
The March 2021 MedPAC ``Report to the Congress: Medicare Payment
Policy,'' recommended that Congress update Medicare OPPS payment rates
by 2 percent, with the difference between this and the update amount
specified in current law to be used to increase payments in a new
suggested Medicare quality program, the ``Hospital Value Incentive
Program (HVIP).'' We refer readers to the March 2021 report for a
complete discussion of these recommendations.\198\ We appreciate
MedPAC's recommendations, but as MedPAC acknowledged in its March 2021
report, the Congress would need to change current law to enable us to
implement its recommendations. Comments received from MedPAC for other
OPPS policies are discussed in the applicable sections of this final
rule with comment period.
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\198\ Medicare Payment Advisory Committee. March 2021 Report to
the Congress. Chapter 3: Hospital Inpatient and outpatient services,
pp.81-82. Available at: http://medpac.gov/docs/default-source/reports/mar21_medpac_report_to_the_congress_sec.pdf?sfvrsn=0.
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B. ASC Conversion Factor Update
In the March 2021 MedPAC ``Report to the Congress: Medicare Payment
Policy,'' MedPAC found that, based on its analysis of indicators of
payment adequacy, the number of ASCs had increased, beneficiaries' use
of ASCs had increased, and ASC access to capital has been
adequate.\199\ As a result, for CY 2022, MedPAC stated that payments to
ASCs are adequate and recommended that, in the absence of cost report
data, no payment update should be given for CY 2022 (that is, the
update factor would be zero percent).
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\199\ Medicare Payment Advisory Committee. March 2020 Report to
the Congress. Chapter 5: Ambulatory surgical center services, p.147.
Available at: http://www.medpac.gov/docs/default-source/reports/mar20_entirereport_sec.pdf?sfvrsn=0.
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In the CY 2019 OPPS/ASC final rule with comment period (83 FR
59079), we adopted a policy, which we codified at 42 CFR 416.171(a)(2),
to apply the productivity-adjusted hospital market basket update to ASC
payment system rates for an interim period of 5 years. We refer readers
to the CY 2019 OPPS/ASC final rule with comment period for complete
details regarding our policy to use the productivity-adjusted hospital
market basket update for the ASC payment system for CY 2019 through CY
2023. Therefore, consistent with our policy for the ASC payment system,
as discussed in section XIII.G. of the CY 2022 OPPS/ASC proposed rule,
we proposed to apply a 2.3 percent productivity-adjusted hospital
market basket update factor to the CY 2021 ASC conversion factor for
ASCs meeting the quality reporting requirements to determine the CY
2022 ASC payment amounts. The final CY 2022 ASC conversion factor for
ASCs meeting quality reporting requirements and the final hospital
market basket update factor are discussed in section XIII. of this
final rule with comment period.
C. ASC Cost Data
In the March 2021 MedPAC ``Report to the Congress: Medicare Payment
Policy,'' MedPAC recommended that Congress require ASCs to report cost
data to enable the Commission to examine the growth of ASCs' costs over
time and analyze Medicare payments relative to the costs of efficient
providers, and that CMS could use ASC cost data to examine whether an
existing Medicare price index is an appropriate proxy for ASC costs or
whether an ASC-specific market basket should be developed. Further,
MedPAC suggested that CMS could limit the scope of the cost reporting
system to minimize administrative burden on ASCs and the program but
should make cost reporting a condition of ASC participation in the
Medicare program.\200\
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\200\ Medicare Payment Advisory Committee. March 2021 Report to
the Congress. Chapter 5: Ambulatory surgical center services, p.157.
Available at: http://medpac.gov/docs/default-source/reports/mar21_medpac_report_to_the_congress_sec.pdf?sfvrsn=0.
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While we recognize that the submission of cost data could place
additional administrative burden on most ASCs, and we did not propose
any cost reporting requirements for ASCs in the CY 2022 OPPS/ASC
proposed rule, we are interested in 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.
Comment: MedPAC reiterated its previous recommendation and
suggested that CMS should collect cost data from ASCs to set ASC
payment rates that accurately reflect the costs of efficient providers
and eliminate payment misalignments that exist as well as inform
decisions about annual payment rate updates to the ASC payment system.
MedPAC stated that it is feasible for ASCs to provide cost information
and that smaller providers, such as hospices, currently provide such
information to CMS. MedPAC suggested CMS could create a streamlined
process of limited cost data with limited cost variables rather than a
formal, and more time-consuming, cost report.
Other commenters suggested that CMS work closely with industry
associations in developing the methodology for cost reporting. An ASC
industry association suggested that CMS recognize that cost experience
can differ greatly depending on factors such as the size of the
facility, location, and the specialties served. Further, the ASC
association suggested that if CMS were to collect ASC cost reports that
we consider developing a single market
[[Page 63761]]
basket update that could be applied to both ASCs as well as HOPDs.
Response: We appreciate MedPAC's comment regarding cost submission
and feedback submitted by other commenters and will take them into
consideration in future rulemaking. While we did not propose any cost
reporting requirements for CY 2022, the comments we did receive are
helpful as we continue to explore methods for obtaining cost
information in a manner that does not place undue burden on ASCs.
Comments received from MedPAC for other ASC payment system policies
are discussed in the applicable sections of this final rule with
comment period. The full March 2021 MedPAC Report to Congress can be
downloaded from MedPAC's website at: http://www.medpac.gov.
XIII. Updates to the Ambulatory Surgical Center (ASC) Payment System
A. Background
1. Legislative History, Statutory Authority, and Prior Rulemaking for
the ASC Payment System
For a detailed discussion of the legislative history and statutory
authority related to payments to ASCs under Medicare, we refer readers
to the CY 2012 OPPS/ASC final rule with comment period (76 FR 74377
through 74378) and the June 12, 1998 proposed rule (63 FR 32291 through
32292). For a discussion of prior rulemaking on the ASC payment system,
we refer readers to the CYs 2012, 2013, 2014, 2015, 2016, 2017, 2018,
2019, 2020, and 2021 OPPS/ASC final rules with comment period (76 FR
74378 through 74379; 77 FR 68434 through 68467; 78 FR 75064 through
75090; 79 FR 66915 through 66940; 80 FR 70474 through 70502; 81 FR
79732 through 79753; 82 FR 59401 through 59424; 83 FR 59028 through
59080; 84 FR 61370 through 61410, and 85 FR 86121 through 86179,
respectively).
2. Policies Governing Changes to the Lists of Codes and Payment Rates
for ASC Covered Surgical Procedures and Covered Ancillary Services
Under Sec. Sec. 416.2 and 416.166 of the Medicare regulations,
subject to certain exclusions, covered surgical procedures in an ASC
are surgical procedures that are separately paid under the OPPS, are
not designated as requiring inpatient care under Sec. 419.22(n) as of
December 31, 2020, are not only able to be reported using a CPT
unlisted surgical procedure code, and are not otherwise excluded under
Sec. 411.15.
In previous years, we identified surgical procedures as those
described by Category I CPT codes in the surgical range from 10000
through 69999 as well as those Category III CPT codes and Level II
HCPCS codes that directly crosswalk or are clinically similar to
procedures in the CPT surgical range that we have determined do not
pose a significant safety risk, that we would not expect to require an
overnight stay when performed in ASCs, and that are separately paid
under the OPPS (72 FR 42478).
Covered ancillary services are specified in Sec. 416.164(b) and,
as stated previously, are eligible for separate ASC payment. As
provided at Sec. 416.164(b), we make separate ASC payments for the
following ancillary items and services when they are provided integral
to ASC covered surgical procedures: (1) Brachytherapy sources; (2)
certain implantable items that have pass-through payment status under
the OPPS; (3) certain items and services that we designate as
contractor-priced, including, but not limited to, procurement of
corneal tissue; (4) certain drugs and biologicals for which separate
payment is allowed under the OPPS; (5) certain radiology services for
which separate payment is allowed under the OPPS; and (6) non-opioid
pain management drugs that function as a supply when used in a surgical
procedure. Payment for ancillary items and services that are not paid
separately under the ASC payment system is packaged into the ASC
payment for the covered surgical procedure.
We update the lists of, and payment rates for, covered surgical
procedures and covered ancillary services in ASCs in conjunction with
the annual proposed and final rulemaking process to update the OPPS and
the ASC payment system (Sec. 416.173; 72 FR 42535). We base ASC
payment and policies for most covered surgical procedures, drugs,
biologicals, and certain other covered ancillary services on the OPPS
payment policies, and we use quarterly change requests (CRs) to update
services paid for under the OPPS. We also provide quarterly update CRs
for ASC covered surgical procedures and covered ancillary services
throughout the year (January, April, July, and October). We release new
and revised Level II HCPCS codes and recognize the release of new and
revised CPT codes by the 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 updates occur in a regular, predictable, and timely manner.
3. Definition of ASC Covered Surgical Procedures
Since the implementation of the ASC prospective payment system, we
have historically defined a ``surgical'' procedure under the payment
system as any procedure described within the range of Category I CPT
codes that the CPT Editorial Panel of the AMA defines as ``surgery''
(CPT codes 10000 through 69999) (72 FR 42478). We also have included as
``surgical,'' procedures that are described by Level II HCPCS codes or
by Category III CPT codes that directly crosswalk or are clinically
similar to procedures in the CPT surgical range.
As we noted in the August 7, 2007 final rule that implemented the
revised ASC payment system, using this definition of surgery would
exclude from ASC payment certain invasive,
[[Page 63762]]
``surgery-like'' procedures, such as cardiac catheterization or certain
radiation treatment services that are assigned codes outside the CPT
surgical range (72 FR 42477). We stated in that final rule that we
believed continuing to rely on the CPT definition of surgery is
administratively straightforward, is logically related to the
categorization of services by physician experts who both establish the
codes and perform the procedures, and is consistent with a policy to
allow ASC payment for all outpatient surgical procedures.
However, in the CY 2019 OPPS/ASC final rule with comment period (83
FR 59029 through 59030), after consideration of public comments
received in response to the CY 2019 OPPS/ASC proposed rule and earlier
OPPS/ASC rulemaking cycles, we revised our definition of a surgical
procedure under the ASC payment system. In that final rule, we defined
a surgical procedure under the ASC payment system as any procedure
described within the range of Category I CPT codes that the CPT
Editorial Panel of the AMA defines as ``surgery'' (CPT codes 10000
through 69999) (72 FR 42476), as well as procedures that are described
by Level II HCPCS codes or by Category I CPT codes or by Category III
CPT codes that directly crosswalk or are clinically similar to
procedures in the CPT surgical range that we determined met the general
standards established in previous years for addition to the ASC CPL.
These criteria included that a procedure is not expected to pose a
significant risk to beneficiary safety when performed in an ASC, that
standard medical practice dictates that the beneficiary would not
typically be expected to require an overnight stay following the
procedure, and that the procedure is separately paid under the OPPS. In
CY 2021, we revised the definition of covered surgical procedures to
surgical procedures specified by the Secretary that are separately paid
under the OPPS, are not designated as requiring inpatient care under
Sec. 419.22(n) as of December 31, 2020, are not only able to be
reported using a CPT unlisted surgical procedure code, and are not
otherwise excluded under Sec. 411.15 (85 FR 86153). As discussed in
section XIII.C.1.d. of this final rule with comment period (below), we
are finalizing our proposal for CY 2022 to revise the language in the
regulation text at Sec. 416.166 and reinstate the general standards
and exclusion criteria in place prior to CY 2021.
B. ASC Treatment of New and Revised Codes
1. Background on Current Process for Recognizing New and Revised
HCPCS Codes Payment for ASC procedures, services, and items are
generally based on medical billing codes, specifically, HCPCS codes,
that are reported on ASC claims. HCPCS codes are used to report
procedures, services, items, and supplies under the ASC payment system.
Specifically, we recognize the following codes on ASC claims:
Category I CPT codes, which describe surgical procedures,
diagnostic and therapeutic services, and vaccine codes;
Category III CPT codes, which describe new and emerging
technologies, services, and procedures; and
Level II HCPCS codes (also known as alpha-numeric codes),
which are used primarily to identify drugs, devices, supplies,
temporary procedures, and services not described by CPT codes.
We finalized a policy in the August 2, 2007 ASC final rule (72 FR
42533 through 42535) to evaluate each year all new and revised Category
I and Category III CPT codes and Level II HCPCS codes that describe
surgical procedures, and to make preliminary determinations during the
annual OPPS/ASC rulemaking process regarding whether or not they meet
the criteria for payment in the ASC setting as covered surgical
procedures and, if so, whether or not they are office-based procedures.
In addition, we identify new and revised codes as ASC covered ancillary
services based upon the final payment policies of the revised ASC
payment system. In prior rulemakings, we 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. We refer to
these codes as new and revised in the CY 2022 OPPS/ASC proposed rule.
We have separated our discussion below based on when the codes are
released and whether we proposed to solicit public comments in the CY
2022 OPPS/ASC proposed rule (and respond to those comments in the CY
2022 OPPS/ASC final rule with comment period) or whether we will be
soliciting public comments in the CY 2022 OPPS/ASC final rule with
comment period (and responding to those comments in the CY 2023 OPPS/
ASC final rule with comment period).
We note that we sought public comments in the CY 2021 OPPS/ASC
final rule with comment period (85 FR 85866) on the new and revised
Level II HCPCS codes effective October 1, 2020 or January 1, 2021.
These new and revised codes were flagged with comment indicator ``NI''
in Addenda AA and BB to the CY 2021 OPPS/ASC final rule with comment
period to indicate that we were assigning them an interim payment
status and payment rate, if applicable, which were subject to public
comment following publication of the CY 2021 OPPS/ASC final rule with
comment period. In the CY 2022 OPPS/ASC proposed rule, we stated that
we will finalize the treatment of these codes under the ASC payment
system in this CY 2022 OPPS/ASC final rule with comment period.
2. April 2021 HCPCS Codes for Which We Solicited Public Comments in
the Proposed Rule
For the April 2021 update, there was one new CPT code and there
were 11 new Level II HCPCS codes. In the April 2021 ASC quarterly
update (Transmittal 10702, CR 12183, dated April 1, 2021), we added 11
new Level II HCPCS codes to the list of ASC covered surgical procedures
and the list of covered ancillary services. Table 39 of the CY 2022
OPPS/ASC proposed rule displayed the new Level II HCPCS codes that were
implemented April 1, 2021, along with their final payment indicators
for CY 2022.
We invited public comments on the proposed payment indicators and
payment rates for the new HCPCS codes that were recognized as ASC
covered surgical procedures and ancillary services in April 2021
through the quarterly update CRs, as listed in Table 53. We proposed to
finalize their payment indicators in this CY 2022 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 2021 and we are finalizing the proposed ASC payment indicator
assignments for these codes, as indicated in Table 53. We note that
several of the temporary drug HCPCS C-codes have been replaced with
permanent drug HCPCS J-codes, effective January 1, 2022. Their
replacement codes are also listed in Table 53.
The final comment indicators, payment indicators and payment rates,
where applicable, for these April 2021 codes can be found in Addendum
BB to this CY 2022 OPPS/ASC final rule with
[[Page 63763]]
comment period rule (which is available via the internet on the CMS
website). The list of final ASC payment indicators and corresponding
definitions can be found in Addendum DD1 to the CY 2022 OPPS/ASC final
rule. These new codes that were effective April 1, 2021, were assigned
to comment indicator ``NP'' in Addendum BB to the CY 2022 OPPS/ASC
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. Also, the list of final comment indicators and definitions
used under the ASC payment system can be found in Addendum DD2 in this
final rule with comment period. We note that ASC Addenda AA, BB, DD1,
and DD2 are available via the internet on the CMS website.
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3. July 2021 HCPCS Codes for Which We Solicited Public Comments in the
Proposed Rule
In the July 2021 ASC quarterly update (Transmittal 10858, Change
Request 12341, dated June 25, 2021), we added several separately
payable CPT and Level II HCPCS codes to the list of covered surgical
procedures and ancillary services. Table 40 of the CY 2022 OPPS/ASC
proposed rule displayed the new HCPCS codes that were effective July 1,
2021. In addition, through the July 2021 quarterly update CR, we added
11 new Category III CPT codes to the list of ASC covered ancillary
services, effective July 1, 2021. These codes were listed in Table 41
of the CY 2021 OPPS/ASC proposed rule, along with the proposed comment
indicators and payment indicators.
We invited public comments on the proposed comment indicators and
payment indicators for the new Level II HCPCS codes newly recognized as
ASC covered surgical procedures and covered ancillary services and the
new Category III CPT codes for covered ancillary services beginning in
July 2021 through the quarterly update CRs, as
[[Page 63764]]
listed in Tables 40 and 41 of the CY 2022 OPPS/ASC proposed rule. We
proposed to finalize the proposed payment indicators in this final rule
with comment period.
We did not receive any public comments on the proposed ASC payment
indicator assignments for the new Category III CPT codes or Level II
HCPCS codes implemented in July 2021 and are finalizing the proposed
ASC payment indicator assignments for these codes, as indicated in
Tables 54 and 55. We note that several of the HCPCS C-codes have been
replaced with HCPCS J-codes, effective January 1, 2022. Their
replacement codes are listed in Table 54. The final CY 2022 payment
rates for these new codes can be found in Addenda AA and BB to this
final rule with comment period.
The list of final ASC payment indicators and corresponding
definitions can be found in Addendum DD1 to this final rule with
comment period (which is available via the internet on the CMS
website). These new codes that were effective July 1, 2021, were
assigned comment indicator ``NP'' in Addendum BB to the CY 2022 OPPS/
ASC proposed rule to indicate that the codes were assigned to an
interim APC assignment and that comments would be accepted on those
assignments. The list of final comment indicators and definitions used
under the ASC payment system can be found in Addendum DD2 to the CY
2022 OPPS/ASC final rule. We note that ASC Addenda AA, BB, DD1, and DD2
are available via the internet on the CMS website.
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4. October 2021 HCPCS Codes for Which We Are Soliciting Public Comments
in This CY 2022 OPPS/ASC Final Rule With Comment Period
In the past, we released new and revised HCPCS codes that are
effective October 1 through the October OPPS quarterly update CRs and
incorporated these new codes in the final rule with comment period.
For CY 2022, consistent with our established policy, we proposed
that the Level II HCPCS codes that will be effective October 1, 2021,
would be flagged with comment indicator ``NI'' in Addendum B to this
final rule with comment period to indicate that we have assigned the
codes an interim OPPS payment status for CY 2022. We did not receive
any public comments regarding this proposed process; and, for CY 2022,
we are finalizing our proposal, without modification, to continue our
established process for recognizing and soliciting public comments on
new Level II HCPCS codes that become effective on October 1, 2021. We
note all codes flagged with comment indicator ``NI'' in ASC Addenda.
AA and BB to this final rule with comment period, including the
codes effective October 1, 2021, will be assigned an interim payment
status to indicate that they are subject to public comment.
In the October 2021 ASC quarterly update (Transmittal 11004, Change
Request 12451, dated September 17, 2021), we added several separately
payable Level II HCPCS codes to the list of covered surgical procedures
and ancillary services. We note that because many of the new drug HCPCS
J codes effective October 1 have predecessor HCPCS C-codes, they are
not completely new to the ASC payment system, and have been paid
separately under their predecessor codes. Table 56 shows the interim
ASC payment indicators for the new codes effective October 1, 2021,
with no predecessor codes. The final comment indicators, payment
indicators, and payment rates, where applicable, for these October 2021
codes can be found in Addendum AA and Addendum BB to this CY 2022 OPPS/
ASC final rule with comment period rule (which is available via the
internet on the CMS website). Because these codes were effective
October 1, 2021, we were not able to include them in the CY 2022 OPPS/
ASC proposed rule that appeared in the Federal Register on August 4,
2021. We note that the definitions for the ASC payment indicators can
be found in Addendum DD1 to this final rule with comment period. In
addition, the definitions for the ASC comment indicators can be found
in Addendum DD2 to this final rule with comment period. We are inviting
public comments in this final rule with comment period for the codes
listed in Table 56 on the interim payment indicators, which would then
be finalized in the CY 2023 OPPS/ASC final rule with comment period.
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[[Page 63768]]
5. January 2022 HCPCS Codes
a. Level II HCPCS Codes for Which We Are Soliciting Public Comments in
This CY 2022 OPPS/ASC Final Rule With Comment Period
As has been our practice in the past, we incorporate those new
Level II HCPCS codes that are effective January 1 in the final rule
with comment period, thereby updating the ASC payment system for the
calendar year. We note that unlike the CPT codes that are effective
January 1 and are included in the OPPS/ASC proposed rules, and except
for the G-codes listed in Addendum O to the CY 2022 OPPS/ASC proposed
rule, most Level II HCPCS codes are not released until sometime around
November to be effective January 1. Because these codes are not
available until November, we are unable to include them in the OPPS/ASC
proposed rules, however, the codes are flagged with comment indicator
``NI'' in ASC Addenda AA and 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 2022
OPPS/ASC proposed rule, these Level II HCPCS codes that will be
effective January 1, 2022 will be released to the public through the
January 2022 ASC Update CR and included on the CMS HCPCS website and in
this final rule with comment period.
In addition, for CY 2022, we proposed to continue our established
policy of assigning comment indicator ``NI'' in Addendum AA and
Addendum BB to the OPPS/ASC final rule with comment period to the new
Level II HCPCS codes that will be effective January 1, 2022, to
indicate that we are assigning them an interim payment indicator, which
is subject to public comment. We are inviting public comments in this
final rule with comment period on the payment indicator assignments,
which would then be finalized in the CY 2023 OPPS/ASC final rule with
comment period.
b. CPT Codes for Which We Solicited Public Comments in the CY 2022
OPPS/ASC Proposed Rule
For new and revised CPT codes effective January 1, 2022, that were
received in time to be included in the CY 2022 OPPS/ASC proposed rule,
we proposed the appropriate payment indicator assignments, and
solicited public comments on those assignments. We stated we would
accept comments and finalize the payment indicators in this final rule
with comment period. For those new/revised CPT codes that were received
too late for inclusion of the CY 2022 OPPS/ASC proposed rule, we stated
that we may either make interim final assignments in this final rule
with comment period or 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.
For the CY 2022 ASC update, the new and revised Category I and III
CPT codes that will be effective on January 1, 2022, can be found in
ASC Addendum AA and Addendum BB to this final rule with comment period
(which are available via the internet on the CMS website). The CPT
codes are assigned to comment indicator ``NP'' 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 payment indicator. Further, we remind readers
that the CPT code descriptors that appear in Addendum AA and Addendum
BB are short descriptors and do not describe the complete procedure,
service, or item described by the CPT code. Therefore, we included the
5-digit placeholder codes and their long descriptors for the new and
revised CY 2022 CPT codes in Addendum O to the CY 2022 OPPS/ASC
proposed rule (which is available via the internet on the CMS website)
so that the public could adequately comment on our proposed payment
indicator assignments. The 5-digit placeholder codes were in Addendum O
to the CY 2022 OPPS/ASC proposed rule, specifically under the column
labeled ``CY 2021 OPPS/ASC Proposed Rule 5-Digit Placeholder Code.''
The final CPT code numbers are included in this final rule with comment
period, and can be found in Addendum AA, Addendum BB, and Addendum O.
In summary, we solicited public comments on the proposed CY 2022
payment indicators for the new and revised Category I and III CPT codes
that will be effective January 1, 2022. Because these codes are listed
in Addenda AA and Addendum BB with short descriptors only, we listed
them again in Addendum O with the long descriptors. We also proposed to
finalize the payment indicator for these codes (with their final CPT
code numbers) in this final rule with comment period. The final payment
indicator and comment indicator for these codes can be found in
Addendum AA and BB to this final rule with comment period. The list of
ASC payment indicators and corresponding definitions can be found in
Addendum DD1 to this final rule with comment period. These new CPT
codes that will be effective January 1, 2022, were assigned to comment
indicator ``NP'' in Addendum AA and BB to the CY 2022 OPPS/ASC proposed
rule to indicate that the codes were assigned to an interim payment
indicator and that comments would be accepted on their interim ASC
payment assignments. Also, the list of comment indicators and
definitions used under the ASC can be found in Addendum DD2 of this
final rule with comment period. We note that ASC Addenda AA, BB, DD1,
and DD2 are available via the internet on the CMS website.
Finally, in Table 57 below, we summarize our process for updating
codes through our ASC quarterly update CRs, seeking public comments,
and finalizing the treatment of these new codes under the ASC payment
system.
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C. Update to the List of ASC Covered Surgical Procedures and Covered
Ancillary Services
1. Covered Surgical Procedures
a. Covered Surgical Procedures Designated as Office-Based
(1) Background
In the August 2, 2007 ASC final rule, we finalized our policy to
designate as ``office-based'' those procedures that are added to the
ASC Covered Procedures List (CPL) in CY 2008 or later years that we
determine are furnished predominantly (more than 50 percent of the
time) in physicians' offices based on consideration of the most recent
available volume and utilization data for each individual procedure
code and/or, if appropriate, the clinical characteristics, utilization,
and volume of related codes. In that rule, we also finalized our policy
to exempt all procedures on the CY 2007 ASC list from application of
the office-based classification (72 FR 42512). The procedures that were
added to the ASC CPL beginning in CY 2008 that we determined were
office-based were identified in Addendum AA to that rule with payment
indicator ``P2'' (Office-based surgical procedure added to ASC list in
CY 2008 or later with MPFS nonfacility PE RVUs; payment based on OPPS
relative payment weight); ``P3'' (Office-based surgical procedures
added to ASC list in CY 2008 or later with MPFS nonfacility PE RVUs;
payment based on MPFS nonfacility PE RVUs); or ``R2'' (Office-based
surgical procedure added to ASC list in CY 2008 or later without MPFS
nonfacility PE RVUs; payment based on OPPS relative payment weight),
depending on whether we estimated the procedure would be paid according
to the ASC standard ratesetting methodology based on its OPPS relative
payment weight or at the MPFS nonfacility PE RVU-based amount.
Consistent with our final policy to annually review and update the
ASC CPL to include all covered surgical procedures eligible for payment
in ASCs, each year we identify covered surgical procedures as either
temporarily office-based (these are new procedure codes with little or
no utilization data that we have determined are clinically similar to
other procedures that are permanently office-based), permanently
office-based, or nonoffice-based, after taking into account updated
volume and utilization data.
Comment: A number of commenters requested that we modify our
approach to incorporate PFS nonfacility PE RVUs in response to our
proposal to update clinical labor pricing data in the CY 2022 PFS
proposed rule. These commenters contended that our proposal to update
clinical labor pricing data would cause significant declines in ASC
payment for certain office-based services. The commenters recommended
we delay or transition the proposed changes in nonfacility PE RVUs
under the ASC payment system.
Response: We are not accepting this recommendation. While we
acknowledge that certain proposals under the PFS may have a downstream
impact on ASC payment rates for office-based procedures, our office-
based policy is meant to achieve payment parity between the ASC and
physician office settings. Therefore, we believe ASC payment rates for
office-based procedures should be consistent with the PFS payment rates
where nonfacility PE RVU data is available. Additionally,
[[Page 63770]]
under the PFS, we are finalizing a policy to update clinical labor
pricing over a four-year transition. For more information on the
proposed clinical labor pricing update under the PFS, see 86 FR 39118
through 39123.
(2) Changes for CY 2022 to Covered Surgical Procedures Designated as
Office-Based
In developing the CY 2022 OPPS/ASC proposed rule, we followed our
policy to annually review and update the covered surgical procedures
for which ASC payment is made and to identify new procedures that may
be appropriate for ASC payment (described in detail in section
XIII.C.1.d. of this final rule with comment period), including their
potential designation as office-based. Historically, we would also
review the most recent claims volume and utilization data (CY 2020
claims) and the clinical characteristics for all covered surgical
procedures that are currently assigned a payment indicator in CY 2020
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 2021 OPPS/
ASC final rule with comment period (85 FR 86131 through 86139).
However, as discussed in section X.E of the CY 2022 OPPS/ASC proposed
rule (86 FR 42188 through 42190), given our concerns with CY 2020
claims data as a result of the PHE, we did not propose to review the
most recent claims volume and utilization data from CY 2020 claims and
instead we proposed not to assign permanent office-based designations
for CY 2022 to any covered surgical procedure 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).
Similarly, we also proposed not to use the most recent claims
volume and utilization data and other information for procedures
designated as temporarily office-based and temporarily assigned one of
the office-based payment indicators, specifically ``P2,'' ``P3'' or
``R2''. Instead, we proposed to continue to designate these procedures,
shown in Table 58 below, as temporarily office-based for CY 2022. CPT
code 0551T (Transperineal periurethral balloon continence device;
adjustment of balloon(s) fluid volume) is removed from Table 58 below
as this code is being deleted effective January 1, 2022. The procedures
we proposed to designate as temporarily office-based for CY 2022 are
identified with an asterisk in Addendum AA to this final rule with
comment period (which is available via the internet on the CMS
website).
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As discussed in the August 2, 2007 ASC final rule revised ASC
payment system 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 would be permanently assigned to the list
of office-based procedures. In the absence of claims data, we stated we
would use other available information, including our clinical advisors'
judgment, predecessor CPT and Level II HCPCS codes, information
submitted by representatives of specialty societies and professional
associations, and information submitted by commenters during the public
comment period.
For CY 2022, we proposed to designate two new CY 2022 CPT codes for
ASC covered surgical procedures as temporarily office-based. After
reviewing the clinical characteristics, utilization, and volume of
related procedure codes, we determined that the procedures listed in
Table 59 would be predominantly performed in physicians' offices. We
believe the procedure described by CPT code 42975
[[Page 63772]]
(Drug-induced sleep endoscopy, with dynamic evaluation of velum,
pharynx, tongue base, and larynx for evaluation of sleep-disordered
breathing, flexible, diagnostic) is similar to CPT code 31505
(Laryngoscopy, indirect; diagnostic (separate procedure)) which is
currently on the list of ASC covered surgical procedures and was
assigned a final payment indicator of ``P3''--Office-based surgical
procedure added to ASC list in CY 2008 or later with MPFS nonfacility
PE RVUs; payment based on MPFS nonfacility PE RVUs--in CY 2021.
Additionally, we believe the procedure described by CPT code 53454
(Periurethral transperineal adjustable balloon continence device;
percutaneous adjustment of balloon(s) fluid volume) is similar to CPT
code 0551T (Transperineal periurethral balloon continence device;
adjustment of balloon(s) fluid volume), which is currently on the list
of ASC covered surgical procedures and was assigned a final payment
indicator of ``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--for CY 2021. As such, we proposed to add
CPT codes 42975 (CMS placeholder code 42XXX) and 53454 (CMS placeholder
code 53XX4) in Table 59 to the list of ASC covered surgical procedures
designated as temporarily office-based for CY 2022.
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Comment: One commenter recommended that we not assign office-based
payment indicator ``P3'' to CPT code 64640 (Destruction by neurolytic
agent; other peripheral nerve or branch) and suggested this procedure
is not predominantly performed in the office setting.
Response: CPT code 64640 has been assigned permanent office-based
status since CY 2008. With the exceptions of procedures assigned
temporary office-based status and calendar years for which office-based
procedures meet the criteria to be assigned device-intensive status,
office-based procedures are not eligible to remove their office-based
designation. As discussed previously, these are permanent assignments.
While we acknowledge that certain office-based procedures can become
more predominantly performed in higher cost settings, such as a
hospital outpatient department, we do not believe this suggests that
our office-based payment policy is hindering access to care for these
procedures in an ASC setting.
Comment: One commenter recommended we reevaluate the permanent
office-based designation for CPT code 42975. The commenter suggested
that this procedure is more similar to CPT code 31546 (Laryngoscopy,
direct, operative, with operating microscope or telescope, with
submucosal removal of non-neoplastic lesion(s) of vocal cord;
reconstruction with graft(s) (includes obtaining autograft))--a
procedure that is not predominantly performed in a physician office
setting.
Response: We are not accepting this recommendation. As discussed
previously, we believe the procedure described by CPT code 42975 is
similar to CPT code 31505 (Laryngoscopy, indirect; diagnostic (separate
procedure)), which is predominantly performed in the physician office
setting and is currently on the list of ASC covered surgical procedures
and was assigned a final payment indicator of ``P3''--Office-based
surgical procedure added to ASC list in CY 2008 or later with MPFS
nonfacility PE RVUs; payment based on MPFS nonfacility PE RVUs--in CY
2021.
After reviewing the public comments we received, we are finalizing
our proposal, without modification, to designate the procedures shown
in Tables 58 and 59 above as temporarily office-based. The procedures
for which the office-based designation for CY 2022 is temporary are
indicated by an asterisk in Addendum AA to this final rule with
[[Page 63773]]
comment period (which is available via the internet on the CMS
website).
b. Device-Intensive ASC Covered Surgical Procedures
(1) Background
We refer readers to the CY 2019 OPPS/ASC final rule with comment
period (83 FR 59040 through 59041), for a summary of our existing
policies regarding ASC covered surgical procedures that are designated
as device-intensive.
(2) Changes to List of ASC Covered Surgical Procedures Designated as
Device-Intensive for CY 2022
In the CY 2019 OPPS/ASC final rule with comment period (83 FR
590401 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. Specifically, for CY 2019 and subsequent years,
we adopted a policy that device-intensive procedures would be subject
to the following criteria:
All procedures must involve implantable devices assigned a
CPT or HCPCS code;
The required devices (including single-use devices) must
be surgically inserted or implanted; and
The device offset amount must be significant, which is
defined as exceeding 30 percent of the procedure's mean cost.
Corresponding to this change in the cost criterion we adopted a policy
that the default device offset for new codes that describe procedures
that involve the implantation of medical devices will be 31 percent
beginning in CY 2019. For new codes describing procedures that are
payable when furnished in an ASC and involve the implantation of a
medical device, we adopted a policy that the default device offset
would be applied in the same manner as the policy we adopted in section
IV.B.2. of the CY 2019 OPPS/ASC final rule with comment period (83 FR
58944 through 58948). We amended Sec. 416.171(b)(2) of the regulations
to reflect these new device criteria.
In addition, as also adopted in section IV.B.2. of CY 2019 OPPS/ASC
final rule with comment period, to further align the device-intensive
policy with the criteria used for device pass-through status, we
specified, for CY 2019 and subsequent years, that for purposes of
satisfying the device-intensive criteria, a device-intensive procedure
must involve a device that:
Has received FDA marketing authorization, has received an
FDA investigational device exemption (IDE) and has been classified as a
Category B device by FDA in accordance with 42 CFR 405.203 through
405.207 and 405.211 through 405.215, or meets another appropriate FDA
exemption from premarket review;
Is an integral part of the service furnished;
Is used for one patient only;
Comes in contact with human tissue;
Is surgically implanted or inserted (either permanently or
temporarily); and
Is not any of the following:
++ Equipment, an instrument, apparatus, implement, or item of this
type for which depreciation and financing expenses are recovered as
depreciable assets as defined in Chapter 1 of the Medicare Provider
Reimbursement Manual (CMS Pub. 15-1); or
++ A material or supply furnished incident to a service (for
example, a suture, customized surgical kit, scalpel, or clip, other
than a radiological site marker).
Based on these criteria, for 2022, we proposed to update the ASC
CPL to indicate procedures that are eligible for payment according to
our device-intensive procedure payment methodology, based on the
proposed individual HCPCS code device-offset percentages using the CY
2019 OPPS claims and cost report data available for the CY 2022 OPPS/
ASC proposed rule.
The ASC covered surgical procedures that we proposed to designate
as device-intensive, and therefore subject to the device-intensive
procedure payment methodology for CY 2022, are assigned payment
indicator ``J8'' and are included in ASC Addendum AA to the CY 2022
OPPS/ASC proposed rule (which is available via the internet on the CMS
website). The CPT code, the CPT code short descriptor, the proposed CY
2022 ASC payment indicator, and an indication of whether the full
credit/partial credit (FB/FC) device adjustment policy would apply
because the procedure is designated as device-intensive are also
included in Addendum AA to the proposed rule (which is available via
the internet on the CMS website).
Under current policy, the payment rate under the ASC payment system
for device-intensive procedures furnished with an implantable or
inserted medical device are calculated by applying the device offset
percentage based on the ASC standard ratesetting methodology to the
OPPS national unadjusted payment based on the ASC standard ratesetting
methodology to determine the device cost included in the OPPS payment
rate for a device-intensive ASC covered surgical procedure, which we
then set as equal to the device portion of the national unadjusted ASC
payment rate for the procedure. We calculate the service portion of the
ASC payment for device intensive procedures by applying the uniform ASC
conversion factor to the service (non-device) portion of the OPPS
relative payment weight for the device-intensive procedure. Finally, we
sum the ASC device portion and ASC service portion to establish the
full payment for the device-intensive procedure under the ASC payment
system (82 FR 59409).
In past rulemaking (79 FR 66924), we have stated that the device-
intensive methodology for ASCs should align with the device-intensive
policies under the OPPS. Further, we have stated that we do not believe
that procedures are device-intensive in one setting and not in another
setting. We have heard concerns from stakeholders that our methodology
does not provide device-intensive status to certain procedures even
though the procedures' device offset percentages are greater than our
30 percent threshold when calculated under the standard ASC ratesetting
methodology. We have also heard concerns from stakeholders that
procedures designated as device-intensive under the OPPS are not
assigned device-intensive status under the ASC payment system even
though the procedure has significant device costs.
The different ratesetting methodologies used under the OPPS and ASC
payment system can create conflicts when determining device-intensive
status. For example, procedures with device offset percentages greater
than 30 percent under the OPPS may not have device offset percentages
greater than 30 percent when calculated under the standard ASC
ratesetting methodology. Under current policy, procedures must be
device-intensive in the OPPS setting to be eligible for device-
intensive status under the ASC payment system. However, this
methodology has caused confusion among stakeholders and has denied
device-intensive status to procedures with significant device costs.
While we believe that device-intensive policies under the ASC payment
system should align with device-intensive policies under the OPPS, we
believe device-intensive
[[Page 63774]]
status under the ASC payment system should, at a minimum, reflect a
procedure's estimated device costs under the ASC standard ratesetting
methodology. Therefore, for CY 2022 and subsequent years, we proposed
to assign device-intensive status to procedures that involve surgically
inserted or implanted, high-cost, single-use devices to qualify as
device-intensive procedures if their device offset percentage exceeds
30 percent under the ASC standard ratesetting methodology, even if the
procedure is not designated as device-intensive under the OPPS.
Further, in situations where a procedure is designated as device-
intensive under the OPPS but the procedure's device offset percentage
is below the device-intensive threshold under the standard ASC
ratesetting methodology, we believe that deference should be given to
the OPPS designation to address this conflict in status. Since the
comprehensive ratesetting methodology under the OPPS packages a greater
amount of non-device costs into the primary procedure and is typically
able to use a greater number of claims in its ratesetting methodology,
we believe that if a device receives OPPS device-intensive status, the
device should also be device-intensive in the ASC setting, given that
fewer non-device costs are generally packaged into a procedure's cost
under the ASC methodology compared to the OPPS methodology. Therefore,
for CY 2022 and subsequent years, we proposed 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.
We solicited comments on our proposed changes related to
designating surgical procedures as device-intensive under the ASC
payment system.
Comment: Many commenters supported our proposed changes related to
designating surgical procedures as device-intensive under the ASC
payment system. One commenter requested that we allow for the
continuation of the default device offset percentage of 31 percent for
procedures with fewer than 100 claims if the device offset percentage
under the comprehensive and standard ratesetting methodology is less
than 30 percent.
Response: We thank the commenters for their support of our
proposal. We do not believe it would be appropriate to eliminate our
device offset calculation for procedures with fewer than 100 claims
because it is not our general policy to judge the accuracy of hospital
charging and hospital cost reporting practices for purposes of
ratesetting. Therefore, we will continue to rely on available claims
data for determining device offset percentages for procedures with
fewer than 100 claims.
Comment: Many commenters requested that we apply the device offset
percentage for several new procedures with the predecessor code's
device offset percentage based on CY 2019 claims data. These procedures
include:
The predecessor CPT code 0191T in assigning the device
offset percentage for 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);
The predecessor CPT code 0191T in assigning the device
offset percentage for 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);
The predecessor CPT code 0191T in assigning the device
offset percentage for 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);
The predecessor CPT code 0548T in assigning the device
offset percentage for CPT code 53451 (Periurethral transperineal
adjustable balloon continence device; bilateral insertion, including
cystourethroscopy and imaging guidance);
The predecessor CPT code 0549T in assigning the device
offset percentage for CPT code 53452 (Periurethral transperineal
adjustable balloon continence device; unilateral insertion, including
cystourethroscopy and imaging guidance); and
The predecessor HCPCS code C9752 in assigning the device
offset percentage for CPT code 64628 (Thermal destruction of
intraosseous basivertebral nerve, including all imaging guidance; first
2 vertebral bodies, lumbar or sacral).
Additionally, at the August 18, 2021 HOP Panel Meeting, a presenter
requested that we use the predecessor CPT code 64568 (Incision for
implantation of cranial nerve (e.g., vagus nerve) neurostimulator
electrode array and pulse generator) in assigning the device offset
percentage for CPT code 64582 (Open implantation of hypoglossal nerve
neurostimulator array, pulse generator, and distal respiratory sensor
electrode or electrode array). Based on the information presented at
the meeting, the HOP Panel recommended we use CPT code 64568 to assign
the device offset percentage for CPT code 64582.
Response: We agree with the commenters and the HOP Panel's
recommendation. We note that we inadvertently did not apply device
offset percentages to the new HCPCS codes mentioned by commenters and
recommended by the HOP Panel where claims data of a predecessor code
was available. Therefore, we are revising the device offset percentages
for these procedures for this final rule to use CY 2019 claims data
from these procedures' predecessor codes.
Comment: One commenter requested that we assign HCPCS code C9778
(Colpopexy, vaginal; minimally invasive extra-peritoneal approach
(sacrospinous)) device-intensive status as this procedure meets our
device-intensive criteria.
Response: After further review, we agree with the commenter that
HCPCS code C9778 meets our criteria for device-intensive status. We are
accepting the commenter's recommendation and assigning a default device
offset percentage of 31 percent to HCPCS code C9778 under the ASC
payment system for CY 2022.
Comment: Commenters requested that we assign device-intensive
status to:
CPT code 0499T (Cystourethroscopy, with mechanical
dilation and urethral therapeutic drug delivery for urethral stricture
or stenosis, including fluoroscopy, when performed);
CPT code 58674 (Laparoscopy, surgical, ablation of uterine
fibroid(s) including intraoperative ultrasound guidance and monitoring,
radiofrequency);
[[Page 63775]]
CPT code 50590 (Lithotripsy, extracorporeal shock wave);
CPT code 59200 (Insertion of cervical dilator (e.g.,
laminaria, prostaglandin) (separate procedure));
CPT code 66174 (Transluminal dilation of aqueous outflow
canal; without retention of device or stent);
CPT code 66175 (Transluminal dilation of aqueous outflow
canal; with retention of device or stent);
CPT code 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); and
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).
Response: Based on CY 2019 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: Some commenters recommended that the 30 percent device-
intensive threshold be based on the final ASC payment rate and not OPPS
costs. Additionally, one commenter requested that we lower the device-
intensive threshold to 25 percent.
Response: We do not believe device offset percentages should be
determined by dividing the OPPS-derived device offset portion by the
final ASC payment rate as this would, in effect, be substantially
reducing the device-intensive threshold under the ASC payment system.
As we stated in the CY 2021 OPPS/ASC final rule with comment period (85
FR 86015), lowering the device-intensive threshold assigns a greater
amount of device costs, which are held constant between the OPPS and
ASC payment system, into the prospective year. Lowering the device-
intensive threshold, even to 25 percent, would put additional downward
pressure on the ASC weight scalar and reduce the nondevice portion of
ASC payment rates for surgical procedures. Therefore, for these reasons
we are not accepting these recommendations.
Comment: One commenter suggested that we modify the device-
intensive criteria to allow packaged procedures that trigger a
complexity adjustment under OPPS to be eligible for device-intensive
status under the ASC payment system.
Response: We do not believe any changes are warranted to our
packaging policies under the ASC payment system at this time.
Therefore, we are not accepting this comment but may consider it in
future rulemaking.
Comment: One commenter recommended we publish an Addendum to our
proposed and final rules that displays the device offset percentages
for both device-intensive and nondevice-intensive procedures under the
ASC payment system similar to Addendum P for the OPPS.
Response: We are accepting this recommendation. We are creating an
Addendum FF for this final rule with comment period and subsequent
proposed and final rules that will display the device offset
percentages calculated under the standard ASC ratesetting methodology
for covered surgical procedures.
After review of the public comments we received, we are finalizing
our proposed methodology, without modification, to designate surgical
procedures as device-intensive under the ASC payment system.
Specifically, for CY 2022 and subsequent years, we are finalizing our
proposal to designate procedures as device-intensive procedures if
their device offset percentage exceeds 30 percent under the ASC
standard ratesetting methodology, even if the procedure is not
designated as device-intensive under the OPPS. Additionally, for CY
2022 and subsequent years, we are finalizing our proposal 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.
Additionally, after reviewing the public comments we received, we
are designating the ASC covered surgical procedures displayed in
Addendum AA with payment indicator ``J8'' as device-intensive and
subject to the device-intensive procedure payment methodology for CY
2022. The full listing of the final CY 2022 device offset percentages
under the ASC payment system for covered surgical procedures can be
found in Addendum FF to the CY 2022 OPPS/ASC final rule with comment
period (which is available via the internet on the CMS website).
c. Adjustment to ASC Payments for No Cost/Full Credit and Partial
Credit Devices
Our ASC payment policy for costly devices implanted or inserted in
ASCs at no cost/full credit or partial credit is set forth in Sec.
416.179 of our regulations, and is consistent with the OPPS policy that
was in effect until CY 2014. We refer readers to the CY 2008 OPPS/ASC
final rule with comment period (72 FR 66845 through 66848) for a full
discussion of the ASC payment adjustment policy for no cost/full credit
and partial credit devices. ASC payment is reduced by 100 percent of
the device offset amount when a hospital furnishes a specified device
without cost or with a full credit and by 50 percent of the device
offset amount when the hospital receives partial credit in the amount
of 50 percent or more of the cost for the specified device.
Effective CY 2014, under the OPPS, we finalized our proposal to
reduce OPPS payment for applicable APCs by the full or partial credit a
provider receives for a device, capped at the device offset amount.
Although we finalized our proposal to modify the policy of reducing
payments when a hospital furnishes a specified device without cost or
with full or partial credit under the OPPS, in the CY 2014 OPPS/ASC
final rule with comment period (78 FR 75076 through 75080), we
finalized our proposal to maintain our ASC policy for reducing payments
to ASCs for specified device-intensive procedures when the ASC
furnishes a device without cost or with full or partial credit. Unlike
the OPPS, there is currently no mechanism within the ASC claims
processing system for ASCs to submit to CMS the amount of the actual
credit received when furnishing a specified device at full or partial
credit. Therefore, under the ASC payment system, we finalized our
proposal for CY 2014 to continue to reduce ASC payments by 100 percent
or 50 percent of the device offset amount when an ASC furnishes a
device without cost or with full or partial credit, respectively.
Under current ASC policy, all ASC device-intensive covered surgical
procedures are subject to the no cost/full credit and partial credit
device adjustment policy. Specifically, when a device-intensive
procedure is performed to implant or insert a device that is furnished
at no cost or with full credit from the manufacturer, the ASC would
append the HCPCS ``FB'' modifier on the line in the claim with the
procedure
[[Page 63776]]
to implant or insert the device. The contractor would reduce payment to
the ASC by the device offset amount that we estimate represents the
cost of the device when the necessary device is furnished without cost
or with full credit to the ASC. We continue to believe that the
reduction of ASC payment in these circumstances is necessary to pay
appropriately for the covered surgical procedure furnished by the ASC.
Effective in CY 2019 (83 FR 59043 through 59044), for partial
credit, we adopted a policy to reduce the payment for a device-
intensive procedure for which the ASC receives partial credit by one-
half of the device offset amount that would be applied if a device was
provided at no cost or with full credit, if the credit to the ASC is 50
percent or more (but less than 100 percent) of the cost of the new
device. The ASC will append the HCPCS ``FC'' modifier to the HCPCS code
for the device-intensive surgical procedure when the facility receives
a partial credit of 50 percent or more (but less than 100 percent) of
the cost of a device. To report that the ASC received a partial credit
of 50 percent or more (but less than 100 percent) of the cost of a new
device, ASCs have the option of either: (1) Submitting the claim for
the device-intensive procedure to their Medicare contractor after the
procedure's performance, but prior to manufacturer acknowledgment of
credit for the device, and subsequently contacting the contractor
regarding a claim adjustment, once the credit determination is made; or
(2) holding the claim for the device implantation or insertion
procedure until a determination is made by the manufacturer on the
partial credit and submitting the claim with the ``FC'' modifier
appended to the implantation procedure HCPCS code if the partial credit
is 50 percent or more (but less than 100 percent) of the cost of the
device. Beneficiary coinsurance would be based on the reduced payment
amount. As finalized in the CY 2015 OPPS/ASC final rule with comment
period (79 FR 66926), to ensure our policy covers any situation
involving a device-intensive procedure where an ASC may receive a
device at no cost or receive full credit or partial credit for the
device, we apply our ``FB''/''FC'' modifier policy to all device-
intensive procedures.
In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59043
through 59044) we stated we would reduce the payment for a device-
intensive procedure for which the ASC receives partial credit by one-
half of the device offset amount that would be applied if a device was
provided at no cost or with full credit, if the credit to the ASC is 50
percent or more (but less than 100 percent) of the cost of the device.
In the CY 2020 OPPS/ASC final rule with comment period, we finalized
continuing our existing policies for CY 2020. We note that we
inadvertently omitted language that this policy would apply not just in
CY 2019 but also in subsequent calendar years. We intended to apply
this policy in CY 2019 and subsequent calendar years.
Therefore, we proposed to apply our policy for partial credits
specified in the CY 2019 OPPS/ASC final rule with comment period (83 FR
59043 through 59044) in CY 2022 and subsequent calendar years.
Specifically, for CY 2022 and subsequent calendar years, we would
reduce the payment for a device-intensive procedure for which the ASC
receives partial credit by one-half of the device offset amount that
would be applied if a device was provided at no cost or with full
credit, if the credit to the ASC is 50 percent or more (but less than
100 percent) of the cost of the device. To report that the ASC received
a partial credit of 50 percent or more (but less than 100 percent) of
the cost of a device, ASCs have the option of either: (1) Submitting
the claim for the device intensive procedure to their Medicare
contractor after the procedure's performance, but prior to manufacturer
acknowledgment of credit for the device, and subsequently contacting
the contractor regarding a claim adjustment, once the credit
determination is made; or (2) holding the claim for the device
implantation or insertion procedure until a determination is made by
the manufacturer on the partial credit and submitting the claim with
the ``FC'' modifier appended to the implantation procedure HCPCS code
if the partial credit is 50 percent or more (but less than 100 percent)
of the cost of the device. Beneficiary coinsurance would be based on
the reduced payment amount.
We did not receive any comments on our policies related to no/cost
full credit or partial credit devices, and we are continuing our
existing policies for CY 2022 and subsequent years.
d. Additions to the List of ASC Covered Surgical Procedures
Section 1833(i)(1) of the Act requires us, in part, to specify, in
consultation with appropriate medical organizations, surgical
procedures that are appropriately performed on an inpatient basis in a
hospital but that can also be safely performed in an ASC, a CAH, or an
HOPD, and to review and update the list of ASC procedures at least
every 2 years. We evaluate the ASC covered procedures list (ASC CPL)
each year to determine whether procedures should be added to or removed
from the list, and changes to the list are often made in response to
specific concerns raised by stakeholders.
From CY 2008 through CY 2020, under our regulations at Sec. Sec.
416.2 and 416.166, covered surgical procedures furnished on or after
January 1, 2008, were surgical procedures that met the general
standards specified in Sec. 416.166(b) and were not excluded under the
general exclusion criteria specified in Sec. 416.166(c). Specifically,
under Sec. 416.166(b), the general standards provided that covered
surgical procedures were surgical procedures specified by the Secretary
and published in the Federal Register and/or via the internet on the
CMS website that were 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
dictated that the beneficiary would not typically be expected to
require active medical monitoring and care at midnight following the
procedure. Section 416.166(c) set 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 provided that
covered surgical procedures do not include those surgical procedures
that: (1) Generally result in extensive blood loss; (2) require major
or prolonged invasion of body cavities; (3) directly involve major
blood vessels; (4) are generally emergent or life threatening in
nature; (5) commonly require systemic thrombolytic therapy; (6) are
designated as requiring inpatient care under Sec. 419.22(n); (7) can
only be reported using a CPT unlisted surgical procedure code; or (8)
are otherwise excluded under Sec. 411.15. For a discussion of the
history of our policies for adding surgical procedures to the ASC CPL,
we refer readers to the CY 2021 OPPS/ASC final rule with comment period
(85 FR 86143 through 86145).
In the CY 2021 OPPS/ASC final rule with comment period, we
significantly revised our policy for adding surgical procedures to the
ASC CPL. We revised the definition of covered surgical procedures at 42
CFR 416.166(a) and (b) to add new subparagraphs to provide that, for
services furnished on or after January 1, 2021, covered surgical
procedures for purposes of the ASC CPL are surgical procedures
specified by the Secretary and published in the Federal Register and/or
via the internet on the
[[Page 63777]]
CMS website that: Are separately paid under the OPPS; and are not:
Designated as requiring inpatient care as of December 31, 2020; only
able to be reported using a CPT unlisted surgical procedure code; or
otherwise excluded under Sec. 411.15.
We added a new paragraph (d) to Sec. 416.166 to provide that the
general exclusion and general standard criteria that we used to
identify covered surgical procedures furnished between January 1, 2008
and December 31, 2020, would, beginning January 1, 2021, be safety
factors that physicians consider as to a specific beneficiary when
determining whether to perform a covered surgical procedure. We also
added a new paragraph (e) to Sec. 416.166 to provide that, on or after
January 1, 2021, we add surgical procedures to the list of ASC covered
surgical procedures either when we identify a surgical procedure that
meets the requirements of paragraph (b)(2) or we are notified of a
surgical procedure that could meet the requirements of paragraph (b)(2)
and we confirm that such procedure meets those requirements. We added
267 surgical procedures to the ASC CPL that met the revised criteria
for covered surgical procedures beginning in CY 2021.
As we explained in the CY 2021 OPPS/ASC final rule with comment
period, there were a number of reasons that we made changes to our ASC
CPL policy, including that ASCs are increasingly able to safely provide
services that meet some of the general exclusion criteria. We explained
that we believed it was important that we adapt the ASC CPL in light of
significant advances in medical practice, surgical techniques, and ASC
capabilities (85 FR 86150). We stated that, while many of the
procedures we were adding to the ASC CPL were performed on non-Medicare
patients who tend to be younger and have fewer comorbidities than the
Medicare population, we believed careful patient selection could
identify Medicare beneficiaries who are suitable candidates to receive
these services in the ASC setting. We also emphasized the importance of
ensuring that the healthcare system has as many access points and
patient choices for Medicare beneficiaries as possible, which includes
enabling physicians and patients to choose the ASC as the site of care
when appropriate. Finally, we reiterated the critical role that
physicians play in determining the appropriate site of care for their
patients, including whether a surgical procedure can be safely
performed in the ASC setting for an individual patient.
1. Proposed Changes to the List of ASC Covered Surgical Procedures for
CY 2022
Since the CY 2021 OPPS/ASC final rule was published, we have
reexamined our ASC CPL policy and the public comments we received in
response to the CY 2021 OPPS/ASC proposed rule, considered the concerns
we received from stakeholders since the final rule was published, and
conducted an internal clinical review of the 267 procedures we added to
the ASC CPL under our revised policy beginning in CY 2021. After
examining our revised policy and the feedback we have received, and
reviewing the procedures we added to the ASC CPL under our revised
policy, we have reconsidered our policy and believe that the policy may
not appropriately assess the safety of performing surgical procedures
on a typical Medicare beneficiary in an ASC, and that 258 of the 267
surgical procedures we added to the ASC CPL beginning in CY 2021 under
our revised policy may not be appropriate to be performed on a typical
beneficiary in the ASC setting.
We believe that our current policy--to shift 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
from CMS to physicians--needs to be modified to better ensure that
surgical procedures added to the ASC CPL under the revised criteria can
be performed safely in the ASC setting on the typical Medicare
beneficiary. We recognize that appropriate patient selection and
physicians' complex medical judgment could help mitigate risks for
patient safety. But while we are always striving to balance the goals
of increasing physician and patient choice, and expanding site neutral
options with patient safety considerations, we nonetheless believe the
current policy could be improved with additional patient safety
considerations in determining whether a surgical procedure should be
added to the ASC CPL.
One issue we identified with our revised policy is that many of the
procedures added in CY 2021 would only be appropriate for Medicare
beneficiaries who are healthier and have less complex medical
conditions than the typical beneficiary. Upon further review, we
believe the subset of Medicare beneficiaries who may be suitable
candidates to receive these procedures in an ASC setting do not
necessarily represent the typical Medicare beneficiary. After
evaluating the 267 surgery or surgery-like codes that were added last
year, CMS clinicians determined that 258 of these surgical procedures
may pose a significant safety risk to a typical Medicare beneficiary
when performed in an ASC, including that nearly all would likely
require active medical monitoring and care at midnight following the
procedure. In the CY 2021 OPPS/ASC final rule with comment period, we
established that physicians would consider certain safety factors as to
a specific beneficiary when determining whether to perform a covered
surgical procedure in an ASC. However, while a physician can make
safety determinations for a specific beneficiary, CMS is in the
position to make safety determinations for the broader population of
Medicare beneficiaries.
While there could be some appropriately selected patient
populations for which some of these procedures could be safely
performed in the ASC setting, that may not be the case for the typical
Medicare beneficiary, due to comorbidities and other health risks that
may require more intensive care and monitoring than provided in an ASC
setting among this population. We believe it is appropriate to assess
the safety of these procedures in the context of the typical Medicare
beneficiary, whose health status is representative of the broader
Medicare population. Thus, we believe evaluating procedures for their
potential to require additional care and monitoring for the typical
beneficiary is an appropriate consideration for CMS to make in
determining which procedures can safely be performed in an ASC.
We are concerned that, under our current policy, we do not make an
active enough determination about whether a procedure is suitable to
perform on a typical Medicare beneficiary in an ASC setting. The policy
finalized last year allows individual physicians discretion to perform
a number of procedures in the ASC setting that would not necessarily be
appropriate for the typical Medicare beneficiary in that setting.
Clinicians apply appropriate screening criteria to determine either
that the procedure should not be performed in the ASC setting because
of the risks to the specific beneficiary, or that the specific
beneficiary presents a low enough risk profile that the procedure could
be safely performed in the ASC setting.
However, we want to reiterate that, in accordance with section
1833(i)(1)(A) of the Act, the Secretary shall specify those surgical
procedures that are appropriately (when considered in
[[Page 63778]]
terms of the proper utilization of hospital inpatient facilities)
performed on an inpatient basis in a hospital but that also can be
performed safely on an ambulatory basis in an ambulatory surgical
center. That is, if Medicare allows payment for these services in the
ASC setting, it means that Medicare has determined that the procedure
is safe to perform on the typical Medicare beneficiary.
Accordingly, the addition of a procedure to the ASC CPL can signal
to physicians that the procedure is safe to perform on the typical
Medicare beneficiary in the ASC setting, even though the current
criteria, adopted in CY 2021, for adding procedures to the ASC CPL do
not include safety criteria other than ensuring that the procedure was
not on the IPO list as of CY 2020. We recognize that, while there are
similarities between the ASC and HOPD settings, there are also
significant differences between the two care settings. The HOPD setting
has additional capabilities, resources, and certifications that are not
required for the ASC setting. For example, hospitals operate 24/7 and
are subject to EMTALA requirements, while ASCs are not. Therefore, a
procedure that can be furnished in the HOPD setting is not necessarily
safe and appropriate to perform in an ASC setting simply because we
make payment for the procedure when it is furnished in the HOPD
setting.
In light of these concerns, in the CY 2022 OPPS/ASC proposed rule,
we proposed to revise the criteria and process for adding procedures to
the ASC CPL by reinstating the ASC CPL policy and regulation text that
were in place in CY 2020. While this approach is a departure from the
revised policy we adopted for CY 2021, it is consistent with our policy
from CY 2008 through CY 2020 where we gradually expanded the ASC CPL
while giving careful consideration to safety concerns and risks to the
typical beneficiary. This approach would also continue to support our
efforts to maximize patient access to care by, when appropriate, adding
procedures to the ASC CPL to further increase the availability of ASCs
as an alternative, lower cost site of care. While expanding the ASC CPL
offers benefits like preserving the capacity of hospitals to treat more
acute patients and promoting site neutrality, it is also essential that
any expansion of the ASC CPL be done in a carefully calibrated fashion
to ensure that Medicare is appropriately signaling that a procedure is
safe to be performed in the ASC setting for a typical Medicare
beneficiary.
Accordingly, for CY 2022, we proposed to revise the requirements
for covered surgical procedures in the regulation at Sec. 416.166 to
reinstate the specifications we had established prior to CY 2021.
Specifically, we proposed that, effective for services furnished on or
after January 1, 2022, covered surgical procedures are those procedures
that meet the general standards and do not meet the general exclusions.
We proposed to again provide in paragraph (b) of Sec. 416.166 that,
subject to the exclusions we proposed to again include in paragraph
(c), 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. We proposed to revise paragraph (c) to again
include the five criteria currently included in paragraph (d) of the
regulation as safety factors physicians consider. We proposed that
revised paragraph (c) would provide that, notwithstanding paragraph
(b), 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. We
proposed to remove the physician considerations at Sec. 416.166(d) and
change the notification process at Sec. 416.166(e) to a nomination
process, which is discussed further in section (d)(2) below.
We stated that we expect that we would continue to expand the ASC
CPL in future years under our proposed revised criteria as the practice
of medicine and medical technology continue to evolve. We believe that
adding appropriate procedures to the ASC CPL that meet the safety
criteria that we proposed to reinstate would have beneficial effects
for Medicare beneficiaries and healthcare professionals, including
increased access, better utilization of existing healthcare resources,
and expansion of the capacity of the healthcare system.
Comment: Commenters were largely split on the issue of reinstating
the general standards and exclusion criteria at Sec. 416.166 that were
in place prior to CY 2021. Many commenters opposed this proposal and
recommended that CMS not re-adopt these criteria. These commenters
expressed concern at the complete reversal to reinstate the
longstanding criteria. Commenters contended that this proposal may
substitute administrative criteria for physician clinical judgment,
reduce beneficiary choice, and increase costs since the lack of payment
for the ASC setting would push these procedures into the higher-cost
hospital setting.
However, numerous other commenters supported our proposal to
reinstate the general standards and exclusion criteria at Sec. 416.166
that were in place prior to CY 2021 due to patient safety and quality
of care concerns. Several commenters urged caution in how CMS modifies
criteria and adds procedures to the ASC CPL, as they believe there is
not enough information about which procedures are clinically
appropriate for the ASC setting. One commenter noted that the general
standards and exclusion criteria that were in effect in CY 2020 allowed
the ASC CPL to evolve and expand with surgical advancements, while
ensuring that procedures that continue to pose significant patient
safety risks would only be payable when furnished in the hospital
setting.
Several commenters, including providers and professional medical
societies, expressed their belief that physicians are best equipped to
conduct the clinical evaluation of the safety of procedures and decide
whether to perform them on a particular beneficiary in a particular
setting.
Response: We thank commenters for their feedback and suggestions.
After reviewing the public comments provided, we believe that
reinstating the longstanding general standards and exclusion criteria
that were in place prior to CY 2021 is the most appropriate way to
ensure that procedures that cannot be safely performed on an ambulatory
basis for the typical Medicare beneficiary are not added to the ASC CPL
and payable under the ASC payment system. The general standards and
exclusion criteria identify procedures that typically require overnight
stays or require post-operative active medical monitoring and care at
midnight following the procedure. When used in conjunction with
information from public comments, data from inpatient, outpatient, and
[[Page 63779]]
ambulatory sites of service, and medical review, we believe these
criteria enable us to make an accurate assessment of whether a
procedure can be safely performed in an ASC on the typical Medicare
beneficiary. As a result, we are finalizing our proposal to revise the
regulatory language at Sec. 416.166 and reinstate the general
standards and exclusion criteria in place prior to CY 2021. We will
take the additional recommendations suggested by commenters into
consideration for future rulemaking.
(1) Comment Solicitation on Procedures That Were Added to the ASC CPL
in CY 2021 and Would Not Meet the Proposed Revised CY 2022 Criteria
As stated above, we proposed to remove 258 procedures from the ASC
CPL for CY 2022 that were added to the ASC CPL in CY 2021 that we
believe do not meet the proposed revised CY 2022 ASC CPL criteria.
These procedures were listed in Table 45 of CY 2022 OPPS/ASC proposed
rule (86 FR 42210). Based on our internal review of preliminary claims
submitted to Medicare, we stated in the proposed rule that we do not
believe that ASCs have been furnishing the majority of the 267
procedures finalized in 2021. Because of this, we explained that we
believed it is unlikely that ASCs have made practice changes in
reliance on the policy we adopted in CY 2021. Therefore, we stated that
we do not anticipate that ASCs would be significantly affected by the
removal of these 258 procedures from the ASC CPL. We sought input from
commenters who believe any of the 258 procedures added to the ASC CPL
in CY 2021 meet the proposed revised CY 2022 criteria and, if those
revised criteria are finalized, should remain on the ASC CPL for CY
2022. We requested any clinical evidence or literature to support
commenters' views that any of these procedures meet the proposed
revised CY 2022 criteria and should remain on the ASC CPL for CY 2022.
Comment: Numerous commenters did not support our proposal to remove
258 surgical procedures from the ASC CPL beginning in CY 2022 that had
been added to the ASC CPL in CY 2021, but that we proposed would not
meet the reinstated general standards and exclusion criteria. These
commenters, including several ambulatory surgical center associations,
providers, and professional associations, supported retaining all 258
procedures on the ASC CPL and requested that CMS reconsider this
proposal. Commenters stated that these procedures are being safely and
effectively performed on Medicare beneficiaries in the ASC setting with
high levels of patient satisfaction, improved efficiency, and lower
cost to both the insurer and the patient. Many noted that CMS's
decision to add and then remove hundreds of procedures from the ASC CPL
was jarring, as well as lacking in transparency and support from data
to justify the decision. Several commenters also noted that access to
additional surgical procedures in ASCs during the PHE may be an
important and viable option for beneficiaries.
However, many other commenters supported our proposal to remove 258
surgical procedures from the ASC CPL, including hospital associations,
professional associations, and device manufacturers. These commenters
believed that our proposal, if finalized, would lead to improved
patient outcomes and safety with fewer complex procedures being done in
the ASC setting. Commenters noted that they believe procedures that
would pose a high risk of complications that ASCs are not equipped to
handle should remain off the ASC CPL until there is careful
consideration of the potential safety risks for beneficiaries and the
procedures are determined appropriate to be performed in the ASC
setting.
Numerous commenters suggested specific codes or code ranges that
they believed should be added to or remain on the ASC CPL. We received
140 surgical procedure recommendations in total, listed in Table 61
below. The majority of these recommendations were not accompanied by
any supporting literature or evidence, with some providing only
experiential data and simply stating support for CMS paying for the
surgical procedures when they are furnished in the ASC setting.
Response: We thank commenters for their input. We assessed the
commenters' recommendations to keep 140 surgical procedures on the ASC
CPL. The recommendations included 123 codes that were part of the 258
codes proposed for removal, 14 codes that were not on the ASC CPL due
to being on the Inpatient Only list or not being surgery-like codes,
and 3 codes that have been on the ASC CPL and that we did not propose
to remove in CY 2022. We individually assessed each of these 140
procedures, evaluating clinical data on these procedures from multiple
sites of services, using literature and experiential data provided in
public comments, and ASC claims volume from CY 2021 to determine
whether these procedures meet each of the proposed regulatory criteria.
Based on our review of the clinical characteristics of the
procedures, claims volume in the ASC setting for CY 2021, and their
similarity to other procedures that are currently on the ASC CPL, we
believe that six procedures (CPT codes 0499T, 54650, 60512, 69660,
28005, and 27412) out of the 140 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
that we are reinstating. These codes have few to no inpatient
admissions and are largely performed in outpatient settings. We agree
with commenters who stated that advancements in clinical practice, less
invasive techniques, and patient selection have contributed to allowing
these procedures to be safely performed in an ASC setting. Therefore,
in this final rule with comment period, we are finalizing keeping each
of these six procedures on the ASC CPL. These procedures, listed in
Table 60 below, are:
CPT 0499T (Cystourethroscopy, with mechanical dilation and
urethral therapeutic drug delivery for urethral stricture or stenosis,
including fluoroscopy, when performed);
CPT 54650 (Orchiopexy, abdominal approach, for intra-
abdominal testis (e.g., fowler-stephens));
CPT 60512 (Parathyroid autotransplantation (list
separately in addition to code for primary procedure));
CPT 69660 (Stapedectomy or stapedotomy with
reestablishment of ossicular continuity, with or without use of foreign
material);
CPT 28005 (Incision, bone cortex (e.g., osteomyelitis or
bone abscess), foot), and
CPT 27412 (Autologous chondrocyte implantation, knee).
Of these six procedures, two of the codes (CPT 69660 and CPT 28005)
were already on the ASC CPL prior to CY 2020. One of the codes (CPT
27412) was added in CY 2020, and was determined to meet the general
standards and exclusion criteria and was not proposed for removal this
year. Three codes (CPT 0499T, CPT 54650, CPT 60512) were added to the
ASC CPL under the revised criteria in CY 2021 and proposed for removal
this year.
Due to patient safety concerns, for the remaining procedures that
we proposed to remove from the ASC CPL but that commenters recommended
that we retain on the list, we believe that 255 of 258 codes proposed
for removal this year should be removed from the ASC CPL and that the
14 procedures not currently on the ASC CPL not be added because they
are on the IPO list or are not surgery-like. In the CY 2022 OPPS/ASC
proposed rule, we assessed all 258
[[Page 63780]]
codes against the revised criteria and proposed to remove them based
upon our determination that they did not meet the criteria we proposed
to reinstate. Therefore, for this final rule with comment period, we
solely re-reviewed the 140 codes that commenters specifically
recommended for review, 123 of which were among the 258 codes proposed
for removal from the ASC CPL beginning in CY 2022, one code of which
was added in CY 2021 that was not proposed for removal, and 16 of which
are new codes, in order to consider the additional information received
from public comments to determine whether these codes should remain on
or be added to the ASC CPL. We explain below for each anatomical
category of the 135 recommended procedures our rationale for not
including them on the ASC CPL beginning in CY 2022.
35 genitourinary codes, including laparoscopic
ureterolithotomy, nephrectomy, and renal ablation, penis and urethra
revision procedures, vaginal repair and removal procedures, and
hysterectomy procedures. Many of these procedures have associated
inpatient admissions, where the beneficiary requires active medical
monitoring and care at midnight following the procedure. Additionally,
a number of these procedures would pose a significant safety risk to
beneficiaries without post-operative inpatient care.
31 musculoskeletal codes, including total shoulder
arthroplasty procedures, incision of hip tendons, amputation through
metatarsal, reconstruction of mandibular rami procedures, open
treatment of orbital floor blowout fracture procedures, knee
arthroscopy meniscal transplantation, and lumbar spine fusion
procedures. Although a few of these procedures have some claims volume
in the outpatient setting, many of them are also complex procedures
with inpatient admissions and multiple post-operative inpatient days,
where infections and need for intravenous antibiotics are not uncommon
events, indicating that the beneficiary would require active monitoring
and care past midnight following the procedure.
24 cardiovascular codes, including procedures like blood
vessel lesion repair, implantable defibrillator electrode removal,
infected graft excision, arm artery repair, insertion and removal of
intravascular vena cava filter, or wireless cardiac stimulator
insertion. These procedures are largely performed in inpatient settings
and require multiple post-operative inpatient days, indicating that the
beneficiary would require active monitoring and care past midnight
following the procedure. These procedures also involve major blood
vessels, are emergent or life threatening in nature, and require
systemic thrombolytic therapy in some cases.
10 respiratory codes, including nasal or sinus
endoscopies, laryngoplasties, and windpipe incision. While several of
these codes have some outpatient volume, these procedures are largely
performed in an inpatient setting. Many of these procedures have
associated inpatient admissions and multiple post-operative days,
indicating the beneficiary would require active monitoring and care
past midnight following the procedure. Additionally, some of these
procedures could be emergent or life-threatening in nature.
12 gastrointestinal codes, including paraesophageal hernia
repairs, laparoscopic esophagogastric fundoplasty, appendectomy,
laparoscopic gastric restrictive procedures, and laparoscopic revision
or removal of gastric neurostimulator electrodes. While some of these
procedures have outpatient volume, many have inpatient admissions and
potential procedure risks (e.g. perforation), 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.
13 nervous system codes, including neck spine disk
surgery, laminectomy and laminotomy procedures, spinal cord
decompression, spinal lamina removal, spinal disk surgery, and spinal
canal catheter implant. These codes have associated inpatient
admissions and post-operative days, indicating that the beneficiary
would require active monitoring and care past midnight following the
procedure. Many of these procedures also pose a significant safety risk
to the beneficiary when close post-operative neurosurgical surveillance
is not frequently provided.
4 endocrine codes including thyroidectomy and
parathyroidectomy procedures. While these procedures have outpatient
volume, there are inpatient admissions associated with these
procedures, indicating the beneficiary would be expected to stay past
midnight following the procedure. Additionally, the intraservice time
for these procedures can vary greatly, often becoming a prolonged
invasion of body cavities.
2 chest and lymphatic codes, including biopsy or excision
of lymph nodes and mediastinoscopy with lymph node biopsy. There are
inpatient admissions associated with these procedures, indicating the
beneficiary would be expected to stay past midnight following the
procedure.
1 ear code, decompression of the internal auditory canal.
This procedure is largely performed in the inpatient setting and has
associated ICU admissions, indicating the beneficiary would be expected
to stay past midnight following the procedure. Additionally, patients
often require frequent neurosurgical checks in the post-operative
period.
1 mastectomy code, modified radical mastectomy. There are
inpatient admissions associated with this procedure, indicating the
beneficiary would be expected to stay past midnight following the
procedure. Additionally, performing this procedure in an ASC can pose
safety risks to the typical beneficiary.
2 imaging/study codes, including esophagus motility study
and liver elastography. These codes are not surgical or surgery-like
procedures and would not be covered when furnished in an ASC.
Given these considerations, we believe that these 135 codes do not
meet the proposed criteria to be included on the ASC CPL due to
inpatient admissions, multiple-day stays past midnight, safety risks to
the typical beneficiary without active post-operative monitoring,
involvement of major blood vessels, or prolonged invasion of a body
cavity. We also note that there is insufficient volume data to fully
assess concerns about patient safety risks when these procedures are
performed in the ASC, with fewer than 25 procedures proposed for
removal from ASC CPL having more than 10 claims in the ASC setting
during CY 2021.
However, as medical practice continues to evolve, we recognize that
there will be additional advancements and improvements that allow these
procedures to be safely offered in the ASC setting for the typical
Medicare beneficiary. We believe that there is potential for some of
the procedures removed this year to be added back to the ASC CPL if
there is adequate evidence that these procedures meet our criteria and
can be safely performed on the typical Medicare beneficiary in the ASC
setting. We encourage stakeholders to continue to submit this
information in future rulemaking.
In summary, we added 267 procedures to the ASC CPL in the CY
[[Page 63781]]
2021 OPPS/ASC final rule with comment period, based on the revised
criteria for the ASC CPL. In the CY 2022 OPPS/ASC proposed rule, we
proposed to remove 258 of the 267 procedures, based on our proposed
reinstatement of the CY 2020 criteria. We requested comment on whether
we should keep any of these procedures on the ASC CPL. During the
public comment period, commenters recommended that 140 surgical
procedures either remain on or be added to the ASC CPL, including 3
codes that have been on the ASC CPL that we did not propose to remove
in CY 2022, 123 codes that were among the 258 we proposed for removal
from ASC CPL, and 14 codes that were not on the ASC CPL due to being on
the IPO list or not surgery-like.
Therefore, in this CY 2022 OPPS/ASC final rule with comment period,
after reviewing those 140 procedure recommendations, we are finalizing
retaining six codes that commenters recommended we retain on the ASC
CPL, specifically the 3 codes that have been on the ASC CPL that we did
not proposed to remove in CY 2022, as well as 3 codes of the 258 codes
proposed for removal. Thus, we are removing the remaining 255 of 258
codes proposed for removal. These procedures are listed below in Tables
60, 61, and 62 of this CY 2022 OPPS/ASC final rule with comment period.
Nomination Process Proposal
For CY 2022, we proposed to change the current notification process
for adding surgical procedures to the ASC CPL to a nomination process.
We proposed that external parties, for example, medical specialty
societies or other members of the public, could nominate procedures to
be added to the ASC CPL. CMS anticipates that stakeholders, such as
specialty societies that specialize in and have a deep understanding of
the complexities involved in providing certain procedures, would be
able to provide valuable suggestions as to which additional procedures
may reasonably and safely be performed in an ASC. While members of the
public may already suggest procedures to be added to the ASC CPL
through meetings with CMS or through public comments on the proposed
rule, we believe it may be beneficial to enable the public,
particularly specialty societies who are very familiar with procedures
in their specialty, to formally nominate procedures based on the latest
evidence available as well as input from their memberships. We proposed
to include the nomination process in a new subparagraph (d)(1) of Sec.
416.166. We proposed that the regulation at Sec. 416.166(d)(2) would
provide that, if we identify a surgical procedure that meets the
requirements at paragraph (a) of this section, including a surgical
procedure nominated by an external party under paragraph (d)(1), we
will propose to add the surgical procedure to the list of ASC covered
surgical procedures in the next available annual rulemaking. Under this
proposal, we would propose to add a nominated procedure to the ASC CPL
if it meets the proposed general standards for covered surgical
procedures at proposed Sec. 416.166(b), and does not meet the general
exclusions in proposed Sec. 416.166(c).
Specifically, for the OPPS/ASC rulemaking for a calendar year, we
proposed to request stakeholder nominations by March 1 of the year
prior to the calendar year for the next applicable rulemaking cycle in
order to be included in that rulemaking cycle. For example,
stakeholders would need to send in nominations by March 1, 2022, to be
considered for the CY 2023 rulemaking cycle and potentially have their
nominated procedures added to the ASC CPL effective January 1, 2023. We
proposed that we would evaluate procedures nominated by stakeholders
based on the applicable statutory and regulatory requirements for ASC
covered surgical procedures. We proposed to address nominated
procedures beginning in the CY 2023 rulemaking cycle. We proposed to
address in rulemaking nominated procedures for which stakeholders have
provided sufficient information for us to evaluate the procedure. We
proposed to include in the applicable proposed rule, a summary of the
justification for proposing to add or not add each nominated procedure,
which would allow members of the public to assess and comment on
nominated procedures during the public comment period. We proposed
that, after reviewing comments provided during the public comment
period, we would indicate whether or not we are adding the procedures
to ASC CPL in this final rule with comment period. In the event that
CMS determines that a nominated procedure does not meet the criteria to
be added to the ASC CPL, we would provide our rationale in the
rulemaking. We indicated that in certain cases we may need to defer a
proposal regarding a nominated procedure to the next regulatory cycle
or future rulemaking in order to have sufficient time to evaluate and
make an appropriate proposal about the nominated procedure.
We also sought comment on how we might prioritize our review of
nominated procedures, in the event we receive an unexpectedly or
extraordinarily large volume of nominations for which CMS has
insufficient resources to address in the annual rulemaking. For
example, if we could not address every nomination in a rulemaking cycle
due to a large volume, we may need to prioritize our review such that
we would only address in rulemaking those nominations that merit
priority. Therefore, we sought comments as to how CMS should prioritize
nominations. For example, whether we would prioritize the nominations
that have codes nominated by multiple organizations or individuals,
codes recently removed from the IPO list, codes accompanied by evidence
that other payers are paying for the service on an outpatient basis or
in an ASC setting, or a variety of other factors. We stated that, if we
were to finalize a prioritization hierarchy for CMS' review of
nominated procedures to the ASC CPL, we would indicate in regulation
text, likely in proposed Sec. 416.166(d)(2) Inclusion in Rulemaking:
(1) That CMS would apply a prioritization hierarchy for reviewing
nominated procedures if necessary because of an unexpectedly or
extraordinarily large volume of nominations; and (2) specify CMS'
prioritization hierarchy.
We stated that we believe this nominations proposal allows for the
expansion of the ASC CPL in a more gradual fashion, which would better
balance the goals of increasing patient choice and expanding site
neutral options with patient safety considerations. We stated that we
believe a nomination process will take time to develop because we want
to incorporate stakeholder input on the most effective way to structure
this process. We also acknowledged that stakeholders will need time to
consider and evaluate potential surgical procedures to nominate. We
proposed to accept nominations for surgical procedures to be added to
the ASC CPL beginning in CY 2023.
Comment: The majority of commenters, which included device
manufacturers, hospital associations, and ambulatory surgery
associations, supported the proposal to establish a process for the
public to nominate procedures for addition to the ASC CPL. Stakeholders
believed this process would provide more transparency and engagement on
procedures earlier in the process, formalize the review process, and
allow for more gradual expansion of the ASC CPL. One commenter
suggested CMS publish nominations publicly before the proposed rule
each year to
[[Page 63782]]
allow more opportunity for input, while another requested more
information on the data needs related to the nomination process. Two
commenters did not support the nomination process as they believe it
would cause additional bureaucracy and delay the ASC CPL additions
process.
Commenters offered suggestions on different approaches for CMS to
consider when approaching criteria including prioritizing procedures
endorsed by physician specialty societies, ASC specialty societies,
and/or multi-specialty physician organizations that can directly attest
to the safety profile of procedures furnished in ASCs; consider real-
world evidence when evaluating a procedure for addition to the ASC CPL;
consider evidence that commercial payers are paying for a service in
the ASC setting for private and/or Medicare Advantage patients;
consider procedures that have been successfully performed for Medicare
FFS patients during the COVID-19 PHE under the ``Hospital without
Walls'' initiative; convene a panel of medical experts to assess the
ASC CPL criteria to ensure they reflect contemporary thinking and
current medical practice; take into account current length of stay
(LOS) requirements of a procedure; determine how procedures promote
access for beneficiaries and providing deference to the patient-
clinician decision-making process; and develop a framework that
combines aspects of cost savings based on site of service, patient
safety considerations, and volume of procedures that can and have been
performed in an ASC setting.
Response: We thank the commenters for their input on the nomination
process. We agree with commenters that a formalized process whereby the
public notifies CMS of procedures to be added to the ASC CPL would
provide more transparency and increase opportunities for CMS to engage
with providers and external stakeholders in adding procedures to the
ASC CPL. We intend to provide details on how procedures can be
nominated early next year, in order for commenters to be able to send
their nominations on March 1, 2022. After consideration of the public
comments we received, we are finalizing our proposal to add a
nomination process under our current regulations at Sec.
416.166(d)(1), which describes how an external party may nominate a
surgical procedure by March 1 of a calendar year for the ASC CPL for
the following year. We are also finalizing the regulation text we
proposed to add at Sec. 416.166(d)(2), which provides that if CMS
identifies a surgical procedure that meets the requirements at Sec.
416.166(a), including a surgical procedure nominated under paragraph
(d)(1), it will propose to add the surgical procedure to the ASC CPL in
the next available rulemaking.
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BILLING CODE 4120-01-C
2. Covered Ancillary Services
In the CY 2019 OPPS/ASC final rule (83 FR 59062 through 59063),
consistent with the established ASC payment system policy (72 FR
42497), we finalized the policy to update the ASC list of covered
ancillary services to reflect the payment status for the services under
the CY 2019 OPPS/ASC final rule with comment period. As discussed in
prior rulemaking, maintaining consistency with the OPPS may result in
changes to ASC payment indicators for some covered ancillary services
because of changes that are being finalized under the OPPS for CY 2022.
For example, if a covered ancillary service was separately paid under
the ASC payment system in CY 2021, but will be packaged under the CY
2022 OPPS, to maintain consistency with the OPPS, we would also package
the ancillary service under the ASC payment system for CY 2022. In the
CY 2019 OPPS/ASC final rule, we finalized the policy to continue this
reconciliation of packaged status for subsequent calendar years.
Comment indicator ``CH'', which was discussed in section XIII.F. of the
CY 2022 OPPS/ASC proposed rule, is used in Addendum BB to this CY 2022
OPPS/ASC final rule (which is available via the internet on the CMS
website) to indicate covered ancillary services for which we are
finalizing a change in the ASC payment indicator to reflect a finalized
change in the OPPS treatment of the service for CY 2022.
For CY 2022, as discussed in section II.A.3.b. of this final rule
with comment period, we are finalizing 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 in
proposed new Sec. 416.174.
New CPT and HCPCS codes for covered ancillary services and their
final payment indicators for CY 2022 can be found in section XIII.B of
this final rule with comment period. All ASC covered ancillary services
and their final payment indicators for CY 2022 are also included in
Addendum BB to the CY 2022 OPPS/ASC proposed rule (which is available
via the internet on the CMS website).
D. Update and Payment for ASC Covered Surgical Procedures and Covered
Ancillary Services
1. 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 retained
payment indicator ``A2'' because it is used to identify procedures that
are exempted from the application of the office-based designation.
The rate calculation established for device-intensive procedures
(payment indicator ``J8'') is structured so only the service portion of
the rate is subject to the ASC conversion factor. In the CY 2021 OPPS/
ASC final rule with comment period (85 FR 86122 through 86179), we
updated the CY 2020 ASC payment rates for ASC covered surgical
procedures with payment indicators of ``A2'', ``G2'', and ``J8'' using
CY 2019
[[Page 63806]]
data, consistent with the CY 2021 OPPS update. We also updated payment
rates for device-intensive procedures to incorporate the CY 2021 OPPS
device offset percentages calculated under the standard APC ratesetting
methodology, as discussed earlier in this section.
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. In the CY 2021 OPPS/ASC final
rule with comment period, we updated the payment amounts for office-
based procedures (payment indicators ``P2'', ``P3'', and ``R2'') using
the most recent available MPFS and OPPS data. We compared the estimated
CY 2021 rate for each of the office-based procedures, calculated
according to the ASC standard rate setting methodology, to the PFS
nonfacility PE RVU-based amount to determine which was lower and,
therefore, would be the CY 2021 payment rate for the procedure under
our final policy for the revised ASC payment system (Sec. 416.171(d)).
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 would be 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
continued to provide separate payment since CY 2014 and assigned the
current ASC payment indicators associated with these procedures.
b. Update to ASC Covered Surgical Procedure Payment Rates for CY 2022
We proposed to update ASC payment rates for CY 2022 and subsequent
years using the established rate calculation methodologies under Sec.
416.171 and using our definition of device-intensive procedures, as
discussed in section XII.C.1.b. of the CY 2022 OPPS/ASC proposed rule.
Because the proposed OPPS relative payment weights are generally based
on geometric mean costs, we proposed that the ASC payment system would
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 use our proposed modified definition to identify
device-intensive procedures, as discussed in section XII.C.1.b. of the
CY 2022 OPPS/ASC proposed rule. Therefore, we proposed to update the
payment amount for the service 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 2022
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 2022 MPFS
nonfacility PE RVU-based amount or the proposed CY 2022 ASC payment
amount calculated according to the ASC standard ratesetting
methodology.
As we did for CYs 2014 through 2021, for CY 2022 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'') would be assigned the current ASC payment
indicators associated with those procedures and would continue to be
paid separately under the ASC payment system.
Comment: Several commenters recommended that Medicare allow ASCs to
bill procedures with an unlisted code, particularly new technologies
and innovative techniques in the ASC setting. They noted that many new
procedures are performed in the ASC setting before procedure-specific
CPT codes are established. These commenters also mentioned that codes
include the narrowly defined anatomic region of the service, which
could provide the basis for a safety determination, and noted there is
not a clear safety rationale for the policy on unlisted codes in the
ASC setting. Another commenter requested that MACs be able to price
unlisted codes. Commenters requested that CMS eliminate the restriction
on billing with unlisted codes in the ASC setting.
Response: Under Sec. 416.166(c)(7), covered surgical procedures do
not include procedures that can only be reported using a CPT unlisted
surgical procedure code. As discussed in the August 2, 2007 ASC final
rule (72 FR 42485), it is not possible to know what specific procedure
would be represented by an unlisted code. Additionally, although the
code may include the narrowly defined anatomic region of the service,
this information is not sufficient to fully assess the procedure
against the applicable regulatory criteria at Sec. 416.166. Therefore,
as it is not possible to appropriately evaluate procedures reported by
unlisted CPT codes, we are not accepting this recommendation.
We are finalizing our proposed policies without modification to
calculate the CY 2022 payment rates for ASC covered surgical procedures
according to our established rate calculation methodologies under Sec.
416.171 and using the modified definition of device-intensive
procedures as discussed in section XIII.C.1.b. of this CY 2022 OPPS/ASC
final rule with comment period. For covered office-based surgical
procedures, the payment rate is the lower of the final CY 2022 MPFS
nonfacility PE RVU-based amount or the final CY 2022 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, 2022. For a discussion of the
PFS rates, we refer readers to the CY 2022 PFS final rule with comment
period, which is available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
[[Page 63807]]
c. Limit on ASC Payment Rates for Procedures Assigned to Low Volume
APCs
As stated in section XIII.D.1.b. of the CY 2022 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. However, for
low-volume device-intensive procedures, the proposed relative payment
weights are based on median costs, rather than geometric mean costs, as
discussed in section IV.B.5. of the CY 2022 OPPS/ASC proposed rule.
In the CY 2020 OPPS/ASC final rule with comment period (84 FR
61400), we finalized our policy to limit the ASC payment rate for low-
volume device-intensive procedures to a payment rate equal to the OPPS
payment rate for that procedure. Under this policy, where the ASC
payment rate based on the standard ASC ratesetting methodology for low
volume device-intensive procedures would exceed the rate paid under the
OPPS for the same procedure, we establish an ASC payment rate for such
procedures equal to the OPPS payment rate for the same procedure.
As discussed in section X.C of the CY 2022 OPPS/ASC proposed rule
(86 FR 42181 through 42185), we proposed a low volume APC policy for CY
2022 and subsequent calendar years. Under our proposal, we expanded the
low volume adjustment policy that is applied to procedures assigned to
New Technology APCs and applied such policy 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 and services assigned to APCs we proposed to designate
as low volume APCs as well as procedures assigned to New Technology
APCs with fewer than 100 claims, we proposed to use up to four years of
claims data to establish a payment rate for each item or service 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. Because we proposed to adopt a low volume APC policy, we
also proposed to eliminate our low volume device-intensive procedure
policy and address ratesetting for HCPCS code 0308T--the only code
designated as a low volume device-intensive procedure--within our
broader low volume APC proposal. Consequently, we proposed to modify
our existing regulations at Sec. 416.171(b)(4) to apply our ASC
payment rate limitation to services assigned to low volume APCs rather
than low volume device-intensive procedures.
We sought comments on our proposal to modify our existing
regulations at Sec. 416.171(b)(4) and limit the ASC payment rate for
services assigned to low volume APCs to the payment rate for the OPPS.
Comment: One commenter recommended that we not finalize our
proposal to apply a limit to the ASC payment rate for services assigned
to low volume APCs to the payment rate for the OPPS. The commenter
argued that only comprehensive APCs would be affected by our proposal
and that the comprehensive ratesetting methodology generally is able to
utilize a greater number of claims than under the ASC standard
ratesetting methodology. The commenter stated that such additional
claims may include claims that are inaccurately coded for other
services and thus produce less accurate payment rates.
Response: We disagree. We do not believe ASCs incur greater costs
than hospitals and that the ASC payment rate should be greater than the
payment rate under the OPPS. We believe such situations represent a
data anomaly and that the ASC payment rate should be limited to the
OPPS payment rate for procedures assigned to low volume APCs.
After reviewing the public comment we received, we are finalizing
our proposal, without modification, to modify our existing regulations
at Sec. 416.171(b)(4) and limit the ASC payment rate for services
assigned to low volume APCs to the payment rate for the OPPS.
d. Changes to Beneficiary Coinsurance for Certain Colorectal Cancer
Screening Tests
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. The reduced coinsurance will
be phased-in beginning January 1, 2022. Detailed discussions on
implementing this legislation are included in the CY 2022 PFS final
rule and section X.B., ``Changes to Beneficiary Coinsurance for Certain
Colorectal Cancer Screening Tests'' of this final rule with comment
period.
After considering public comments, we are finalizing the proposals
made in the CY 2022 OPPS/ASC proposed rule to implement section 122 of
the CAA without modification. Specifically, we are finalizing that all
surgical services furnished on the same date as a planned screening
colonoscopy or planned flexible sigmoidoscopy would be viewed as being
furnished in connection with, as a result of, and in the same clinical
encounter as the screening test for purposes of determining the
coinsurance required of Medicare beneficiaries for planned colorectal
cancer screening tests that result in additional procedures furnished
in the same clinical encounter. Providers must continue to report HCPCS
modifier ``PT'' to indicate that a planned colorectal cancer screening
service converted to a diagnostic service. We will examine the claims
data, monitor for any increases in surgical services unrelated to the
colorectal cancer screening test performed on the same date as the
screening test, and consider revising our policy through rulemaking if
there is a notable increase or abuse of this policy.
2. Payment for Covered Ancillary Services
a. Background
Our payment policies under the ASC payment system for covered
ancillary services generally vary according to the particular type of
service and its payment policy under the OPPS. Our overall policy
provides separate ASC payment for certain ancillary items and services
integrally related to the provision of ASC covered surgical procedures
that are paid separately under the OPPS and provides packaged ASC
payment for other ancillary items and services that are packaged or
conditionally packaged (status indicators ``N'', ``Q1'', and ``Q2'')
under the OPPS. In the CY 2013 OPPS/ASC rulemaking (77 FR 45169 and 77
FR 68457 through 68458), we further clarified our policy regarding the
payment indicator assignment for procedures that are conditionally
packaged in the OPPS (status indicators ``Q1'' and ``Q2''). Under the
OPPS, a conditionally packaged procedure describes a HCPCS code where
the
[[Page 63808]]
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 section
IV. of the CY 2022 OPPS/ASC proposed rule). 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 section
XIII.D.3. of the CY 2022 OPPS/ASC proposed rule, for CY 2022, we
proposed 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 proposed new Sec. 416.174. We generally pay for separately
payable radiology services at the lower of the PFS nonfacility PE RVU-
based (or technical component) amount or the rate calculated according
to the ASC standard ratesetting methodology (72 FR 42497). However, as
finalized in the CY 2011 OPPS/ASC final rule with comment period (75 FR
72050), payment indicators for all nuclear medicine procedures (defined
as CPT codes in the range of 78000 through 78999) that are designated
as radiology services that are paid separately when provided integral
to a surgical procedure on the ASC list are set to ``Z2'' so that
payment is made based on the ASC standard ratesetting methodology
rather than the MPFS nonfacility PE RVU amount (``Z3''), regardless of
which is lower (Sec. 416.171(d)(1)).
Similarly, we also finalized our policy to set the payment
indicator to ``Z2'' for radiology services that use contrast agents so
that payment for these procedures will be based on the OPPS relative
payment weight using the ASC standard ratesetting methodology and,
therefore, will include the cost for the contrast agent (Sec.
416.171(d)(2)).
ASC payment policy for brachytherapy sources mirrors the payment
policy under the OPPS. ASCs are paid for brachytherapy sources provided
integral to ASC covered surgical procedures at prospective rates
adopted under the OPPS or, if OPPS rates are unavailable, at
contractor-priced rates (72 FR 42499). Since December 31, 2009, ASCs
have been paid for brachytherapy sources provided integral to ASC
covered surgical procedures at prospective rates adopted under the
OPPS.
Our ASC policies also provide separate payment for: (1) Certain
items and services that CMS designates as contractor-priced, including,
but not limited to, the procurement of corneal tissue; and (2) certain
implantable items that have pass-through payment status under the OPPS.
These categories do not have prospectively established ASC payment
rates according to ASC payment system policies (72 FR 42502 and 42508
through 42509; Sec. 416.164(b)). Under the ASC payment system, we have
designated corneal tissue acquisition and hepatitis B vaccines as
contractor-priced. Corneal tissue acquisition is contractor-priced
based on the invoiced costs for acquiring the corneal tissue for
transplantation. Hepatitis B vaccines are contractor-priced based on
invoiced costs for the vaccine.
Devices that are eligible for pass-through payment under the OPPS
are separately paid under the ASC payment system and are contractor-
priced. Under the revised ASC payment system (72 FR 42502), payment for
the surgical procedure associated with the pass-through device is made
according to our standard methodology for the ASC payment system, based
on only the service (non-device) portion of the procedure's OPPS
relative payment weight if the APC weight for the procedure includes
other packaged device costs. We also refer to this methodology as
applying a ``device offset'' to the ASC payment for the associated
surgical procedure. This ensures that duplicate payment is not provided
for any portion of an implanted device with OPPS pass-through payment
status.
In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66933
through 66934), we finalized that, beginning in CY 2015, certain
diagnostic tests within the medicine range of CPT codes for which
separate payment is allowed under the OPPS are covered ancillary
services when they are integral to an ASC covered surgical procedure.
We finalized that diagnostic tests within the medicine range of CPT
codes include all Category I CPT codes in the medicine range
established by CPT, from 90000 to 99999, and Category III CPT codes and
Level II HCPCS codes that describe diagnostic tests that crosswalk or
are clinically similar to procedures in the medicine range established
by CPT. In the CY 2015 OPPS/ASC final rule with comment period, we also
finalized our policy to pay for these tests at the lower of the PFS
nonfacility PE RVU-based (or technical component) amount or the rate
calculated according to the ASC standard ratesetting methodology (79 FR
66933 through 66934). We finalized that the diagnostic tests for which
the payment is based on the ASC standard ratesetting methodology be
assigned to payment indicator ``Z2'' and revised the definition of
payment indicator ``Z2'' to include a reference to diagnostic services
and those for which the payment is based on the PFS nonfacility PE RVU-
based amount be assigned payment indicator ``Z3,'' and revised the
definition of payment indicator ``Z3'' to include a reference to
diagnostic services.
Comment: One commenter recommended that we publish guidance on how
MACs are to calculate transitional pass-through payments under the ASC
payment system for devices that are eligible for pass-through payment
under the OPPS similar to how such guidance is provided under the OPPS.
Response: As previously discussed, devices that are eligible for
pass-through payment under the OPPS are separately paid under the ASC
payment system and are contractor-priced. Transitional pass-through
payments under the OPPS utilize hospital cost-to-charge ratios to
reduce the pass-through device to cost and provide the hospital an
additional payment of the amount by which the cost of the pass-through
device exceeds the applicable device offset amount. ASCs do not submit
cost reports and, as such, we are unable to replicate the transitional
pass-through payment under the ASC payment system. Currently, MACs have
been instructed to pay for such devices in the ASC setting based on
invoice or cost. We are unaware of a compelling reason, at this time,
to provide additional guidance or clarification on this process, beyond
that provided in Section 40, Chapter 14 of the Medicare Claims
Processing Manual.
b. Final Payment for Covered Ancillary Services for CY 2022
We are finalizing our proposal to update the ASC payment rates and
to make changes to ASC payment
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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 2022 OPPS and ASC payment rates and
subsequent year's payment rates. We are also finalizing our proposal to
continue to set the CY 2022 ASC payment rates and subsequent year's
payment rates for brachytherapy sources and separately payable drugs
and biologicals equal to the OPPS payment rates for CY 2022 and
subsequent year's payment rates.
Covered ancillary services and their final payment indicators for
CY 2022 are listed in Addendum BB of this final rule with comment
period (which is available via the internet on the CMS website). For
those covered ancillary services where the payment rate is the lower of
the rate under the ASC standard rate setting methodology and the PFS
final rates (similar to our office-based payment policy), the final
payment indicators and rates set forth in the final rule are based on a
comparison using the proposed PFS rates effective January 1, 2022. For
a discussion of the PFS rates, we refer readers to the CY 2022 PFS
final rule, which is available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
3. CY 2022 ASC Packaging Policy for Non-Opioid Pain Management Drugs
and Biologicals
Please refer to Section II.A.3.b for a discussion of the final CY
2022 OPPS/ASC for payment for non-opioid pain management drugs and
biologicals.
E. New Technology Intraocular Lenses (NTIOLs)
New Technology Intraocular Lenses (NTIOLs) are intraocular lenses
that replace a patient's natural lens that has been removed in cataract
surgery and that also meet the requirements listed in Sec. 416.195.
1. NTIOL Application Cycle
Our process for reviewing applications to establish new classes of
NTIOLs is as follows:
Applicants submit their NTIOL requests for review to CMS
by the annual deadline. For a request to be considered complete, we
require submission of the information requested in the guidance
document titled ``Application Process and Information Requirements for
Requests for a New Class of New Technology Intraocular Lenses (NTIOLs)
or Inclusion of an IOL in an Existing NTIOL Class'' posted on the CMS
website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/NTIOLs.html.
We announce annually, in the proposed rule updating the
ASC and OPPS payment rates for the following calendar year, a list of
all requests to establish new NTIOL classes accepted for review during
the calendar year in which the proposal is published. In accordance
with section 141(b)(3) of Public Law 103-432 and our regulations at
Sec. 416.185(b), the deadline for receipt of public comments is 30
days following publication of the list of requests in the proposed
rule.
In the final rule updating the ASC and OPPS payment rates
for the following calendar year, we--
++ Provide a list of determinations made as a result of our review
of all new NTIOL class requests and public comments.
++ When a new NTIOL class is created, identify the predominant
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 2022
We did not receive any requests for review to establish a new NTIOL
class for CY 2022 by March 1, 2021, the due date published in the CY
2021 OPPS/ASC final rule with comment period (85 FR 86173).
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 did not propose to revise the payment adjustment amount for CY 2022.
The comments and our responses to the comments are set forth below.
Comment: Some commenters requested that we re-evaluate our payment
adjustment for a new NTIOL class. Commenters noted that our $50 payment
adjustment has not been adjusted since CY 1999 and that the stagnant
payment adjustment has been a barrier to intraocular lens innovation.
One commenter requested that the $50 be inflated to 2022 dollars and
updated by inflation in subsequent years. Another commenter requested
that the $50 payment adjustment be increased to $100.
Response: We thank the commenter for their recommendations. We did
not propose revising the payment adjustment amount for CY 2022.
However, we will take the commenters' recommendations into
consideration in future rulemaking.
4. Announcement of CY 2022 Deadline for Submitting Requests for CMS
Review of Applications for a New Class of NTIOLS
In accordance with Sec. 416.185(a) of our regulations, CMS
announces that in order to be considered for payment effective
beginning in CY 2023, 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, 2022. Send requests via email to [email protected] or
by mail to ASC/NTIOL, Division of Outpatient Care, Mailstop C4-05-17,
Centers for Medicare and Medicaid Services, 7500 Security Boulevard,
Baltimore, MD 21244-1850. To be considered, requests for NTIOL reviews
must include the information requested on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/NTIOLs.
F. ASC Payment and Comment Indicators
1. Background
In addition to the payment indicators that we introduced in the
August 2, 2007 ASC final rule, we created final comment indicators for
the ASC payment system in the CY 2008 OPPS/ASC final rule with comment
period (72 FR 66855). We created Addendum DD1 to define ASC payment
indicators that we use in Addenda AA and BB to provide payment
information regarding covered surgical procedures and covered ancillary
services, respectively, under the revised ASC payment system. The ASC
payment indicators in Addendum DD1 are intended to capture policy-
relevant characteristics of HCPCS codes that may receive packaged or
separate payment in ASCs, such as whether they were on the ASC CPL
prior to CY 2008; payment designation, such as device-intensive or
office-based, and the corresponding ASC payment
[[Page 63810]]
methodology; and their classification as separately payable ancillary
services, including radiology services, brachytherapy sources, OPPS
pass-through devices, corneal tissue acquisition services, drugs or
biologicals, or NTIOLs.
We also created Addendum DD2 that lists the ASC comment indicators.
The ASC comment indicators included in Addenda AA and BB to the
proposed rules and final rules with comment period serve to identify,
for the revised ASC payment system, the status of a specific HCPCS code
and its payment indicator with respect to the timeframe when comments
will be accepted. The comment indicator ``NI'' is used in the OPPS/ASC
final rule to indicate new codes for the next calendar year for which
the interim payment indicator assigned is subject to comment. The
comment indicator ``NI'' also is assigned to existing codes with
substantial revisions to their descriptors such that we consider them
to be describing new services, and the interim payment indicator
assigned is subject to comment, as discussed in the CY 2010 OPPS/ASC
final rule with comment period (74 FR 60622).
The comment indicator ``NP'' is used in the OPPS/ASC proposed rule
to indicate new codes for the next calendar year for which the proposed
payment indicator assigned is subject to comment. The comment indicator
``NP'' also is assigned to existing codes with substantial revisions to
their descriptors, such that we consider them to be describing new
services, and the proposed payment indicator assigned is subject to
comment, as discussed in the CY 2016 OPPS/ASC final rule with comment
period (80 FR 70497).
The ``CH'' comment indicator is used in Addenda AA and BB to the
proposed rule (these addenda are available via the internet on the CMS
website) to indicate that the payment indicator assignment has changed
for an active HCPCS code in the current year and the next calendar
year, for example if an active HCPCS code is newly recognized as
payable in ASCs; or an active HCPCS code is discontinued at the end of
the current calendar year. The ``CH'' comment indicators that are
published in this final rule with comment period are provided to alert
readers that a change has been made from one calendar year to the next,
but do not indicate that the change is subject to comment.
In the CY 2021 OPPS/ASC final rule with comment period, we
finalized the addition of ASC payment indicator ``K5''--Items, Codes,
and Services for which pricing information and claims data are not
available. No payment made.--to ASC Addendum DD1 (which is available
via the internet on the CMS website) to indicate those services and
procedures that CMS anticipates will become payable when claims data or
payment information becomes available.
2. ASC Payment and Comment Indicators for CY 2022
For 2022, we proposed new and revised Category I and III CPT codes
as well as new and revised Level II HCPCS codes. Therefore, proposed
Category I and III CPT codes that are new and revised for CY 2022 and
any new and existing Level II HCPCS codes with substantial revisions to
the code descriptors for CY 2022, compared to the CY 2021 descriptors,
are included in ASC Addenda AA and BB to the CY 2022 OPPS/ASC proposed
rule and labeled with proposed comment indicator ``NP'' to indicate
that these CPT and Level II HCPCS codes are open for comment as part of
the CY 2022 OPPS/ASC proposed rule. Proposed comment indicator ``NP''
meant a new code for the next calendar year or an existing code with
substantial revision to its code descriptor in the next calendar year,
as compared to the current calendar year; and denoted that comments
would be accepted on the proposed ASC payment indicator for the new
code.
We noted in the CY 2022 OPPS/ASC proposed rule that we would
respond to public comments on ASC payment and comment indicators and
finalize them in this CY 2022 OPPS/ASC final rule with comment period.
We refer readers to Addenda DD1 and DD2 of the CY 2022 OPPS/ASC
proposed rule (these addenda are available via the internet on the CMS
website) for the complete list of ASC payment and comment indicators
proposed for the CY 2022 update. Addenda DD1 and DD2 to this final rule
with comment period (these addenda are available via the internet on
the CMS website) contain the complete list of ASC payment and comment
indicators for CY 2022.
We did not receive any public comments on the proposed ASC payment
and comment indicators and we are finalizing their use as proposed
without modification. Addenda DD1 and DD2 to this CY 2022 OPPS/ASC
final rule (theses addenda are available via the internet on the CMS
website) contain the complete list of ASC payment and comment
indicators for CY 2022.
G. Calculation of the ASC Payment Rates and the ASC Conversion Factor
1. Background
In the August 2, 2007 ASC final rule (72 FR 42493), we established
our policy to base ASC relative payment weights and payment rates under
the revised ASC payment system on APC groups and the OPPS relative
payment weights. Consistent with that policy and the requirement at
section 1833(i)(2)(D)(ii) of the Act that the revised payment system be
implemented so that it would be budget neutral, the initial ASC
conversion factor (CY 2008) was calculated so that estimated total
Medicare payments under the revised ASC payment system in the first
year would be budget neutral to estimated total Medicare payments under
the prior (CY 2007) ASC payment system (the ASC conversion factor is
multiplied by the relative payment weights calculated for many ASC
services in order to establish payment rates). That is, application of
the ASC conversion factor was designed to result in aggregate Medicare
expenditures under the revised ASC payment system in CY 2008 being
equal to aggregate Medicare expenditures that would have occurred in CY
2008 in the absence of the revised system, taking into consideration
the cap on ASC payments in CY 2007, as required under section
1833(i)(2)(E) of the Act (72 FR 42522). We adopted a policy to make the
system budget neutral in subsequent calendar years (72 FR 42532 through
42533; Sec. 416.171(e)).
We note that we consider the term ``expenditures'' in the context
of the budget neutrality requirement under section 1833(i)(2)(D)(ii) of
the Act to mean expenditures from the Medicare Part B Trust Fund. We do
not consider expenditures to include beneficiary coinsurance and
copayments. This distinction was important for the CY 2008 ASC budget
neutrality model that considered payments across the OPPS, ASC, and
MPFS payment systems. However, because coinsurance is almost always 20
percent for ASC services, this interpretation of expenditures has
minimal impact for subsequent budget neutrality adjustments calculated
within the revised ASC payment system.
In the CY 2008 OPPS/ASC final rule with comment period (72 FR 66857
through 66858), we set out a step-by-step illustration of the final
budget neutrality adjustment calculation based on the methodology
finalized in the August 2, 2007 ASC final rule (72 FR 42521 through
42531) and as applied to updated data available for the CY 2008 OPPS/
ASC final rule with comment
[[Page 63811]]
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 XII.D.2. of the CY 2022 OPPS/ASC proposed rule), and certain
diagnostic tests within the medicine range that are covered ancillary
services, the established policy is to set the payment rate at the
lower of the MPFS unadjusted nonfacility PE RVU-based amount or the
amount calculated using the ASC standard ratesetting methodology.
Further, as discussed in the CY 2008 OPPS/ASC final rule with comment
period (72 FR 66841 through 66843), we also adopted alternative
ratesetting methodologies for specific types of services (for example,
device-intensive procedures).
As discussed in the August 2, 2007 ASC final rule (72 FR 42517
through 42518) and as codified at Sec. 416.172(c) of the regulations,
the revised ASC payment system accounts for geographic wage variation
when calculating individual ASC payments by applying the pre-floor and
pre-reclassified IPPS hospital wage indexes to the labor-related share,
which is 50 percent of the ASC payment amount based on a GAO report of
ASC costs using 2004 survey data. Beginning in CY 2008, CMS accounted
for geographic wage variation in labor costs when calculating
individual ASC payments by applying the pre-floor and pre-reclassified
hospital wage index values that CMS calculates for payment under the
IPPS, using updated Core Based Statistical Areas (CBSAs) issued by OMB
in June 2003.
The reclassification provision in section 1886(d)(10) of the Act is
specific to hospitals. We believe that using the most recently
available pre-floor and pre-reclassified IPPS hospital wage indexes
results in the most appropriate adjustment to the labor portion of ASC
costs. We continue to believe that the unadjusted hospital wage
indexes, which are updated yearly and are used by many other Medicare
payment systems, appropriately account for geographic variation in
labor costs for ASCs. Therefore, the wage index for an ASC is the pre-
floor and pre-reclassified hospital wage index under the IPPS of the
CBSA that maps to the CBSA where the ASC is located.
Generally, OMB issues major revisions to statistical areas every 10
years, based on the results of the decennial census. On February 28,
2013, OMB issued OMB Bulletin No. 13-01, which provides the
delineations of all Metropolitan Statistical Areas, Metropolitan
Divisions, Micropolitan Statistical Areas, Combined Statistical Areas,
and New England City and Town Areas in the United States and Puerto
Rico based on the standards published on June 28, 2010 in the Federal
Register (75 FR 37246 through 37252) and 2010 Census Bureau data. (A
copy of this bulletin may be obtained at: https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/bulletins/2013/b13-01.pdf). In the FY
2015 IPPS/LTCH PPS final rule (79 FR 49951 through 49963), we
implemented the use of the CBSA delineations issued by OMB in OMB
Bulletin 13-01 for the IPPS hospital wage index beginning in FY 2015.
OMB occasionally issues minor updates and revisions to statistical
areas in the years between the decennial censuses. On July 15, 2015,
OMB issued OMB Bulletin No. 15-01, which provides updates to and
supersedes OMB Bulletin No. 13-01 that was issued on February 28, 2013.
OMB Bulletin No. 15-01 made changes that are relevant to the IPPS and
ASC wage index. We refer readers to the CY 2017 OPPS/ASC final rule
with comment period (81 FR 79750) for a discussion of these changes and
our implementation of these revisions. (A copy of this bulletin may be
obtained at https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/bulletins/2015/15-01.pdf).
On August 15, 2017, OMB issued OMB Bulletin No. 17-01, which
provided updates to and superseded OMB Bulletin No. 15-01 that was
issued on July 15, 2015. We refer readers to the CY 2019 OPPS/ASC final
rule with comment period (83 FR 58864 through 58865) for a discussion
of these changes and our implementation of these revisions. (A copy of
this bulletin may be obtained at https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/bulletins/2017/b-17-01.pdf).
On April 10, 2018, OMB issued OMB Bulletin No. 18-03 which
superseded the August 15, 2017 OMB Bulletin No. 17-01. On September 14,
2018, OMB issued OMB Bulletin 18-04 which superseded the April 10, 2018
OMB Bulletin No. 18-03. A copy of OMB Bulletin No. 18-04 may be
obtained at https://www.whitehouse.gov/wpcontent/uploads/2018/90/Bulletin-18-04.pdf. We are utilizing the revised delineations as set
forth in the April 10, 2018 OMB Bulletin No. 18-03 and the September
14, 2018 OMB Bulletin No. 18-04 to calculate the CY 2021 ASC wage index
effective beginning January 1, 2021.
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. The attachments to OMB Bulletin No. 20-01 provided
detailed information on the updates to statistical areas since
September 14, 2018, and were based on the application of the 2010
Standards for Delineating Metropolitan and Micropolitan Statistical
Areas to Census Bureau population estimates for July 1, 2017, and July
1, 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). In OMB Bulletin No. 20-01, OMB announced one
new Micropolitan Statistical Area, one new component of an existing
Combined Statistical Area and changes to New England City and Town Area
(NECTA) delineations. In the CY 2022 OPPS/ASC proposed rule (86 FR
42228 through 42229), we inadvertently failed to note that OMB Bulletin
No. 20-01 had revised certain statistical area delineation; however,
after reviewing OMB Bulletin No. 20-01, we have determined that the
changes in Bulletin 20-01 encompassed delineation changes that had no
effect on the ASC wage index for CY 2022. Specifically, the updates
consisted of changes to NECTA delineations and the redesignation of a
single rural county into a newly created Micropolitan Statistical Area.
The ASC wage indexes do not utilize NECTA definitions, and we include
hospitals located in Micropolitan Statistical Areas in each state's
rural wage index. Therefore, we note that these OMB updates would not
affect any geographic areas for purposes of the ASC wage index
calculation for CY 2022.
The final CY 2022 ASC wage indexes fully reflects the OMB labor
market area delineations (including the revisions to the OMB labor
market delineations discussed above, as set forth in OMB Bulletin Nos.
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.
[[Page 63812]]
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 2022, we are applying
a proxy wage index based on this methodology to ASCs located in CBSA
25980 (Hinesville-Fort Stewart, GA).
When all of the areas contiguous to the urban CBSA of interest are
rural and there is no IPPS hospital that has wage index data that could
be used to set the wage index for that area, we determine the ASC wage
index by calculating the average of all wage indexes for urban areas in
the state (75 FR 72058 through 72059). In other situations, where there
are no IPPS hospitals located in a relevant labor market area, we have
continued 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.
Comment: Several 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), we will consider the feasibility of this change and take this
comment into consideration for future rulemaking.
2. Calculation of the ASC Payment Rates
a. Updating the ASC Relative Payment Weights for CY 2022 and Future
Years
We update the ASC relative payment weights each year using the
national OPPS relative payment weights (and PFS nonfacility PE RVU-
based amounts, as applicable) for that same calendar year and uniformly
scale the ASC relative payment weights for each update year to make
them budget neutral (72 FR 42533). The OPPS relative payment weights
are scaled to maintain budget neutrality for the OPPS. We then scale
the OPPS relative payment weights again to establish the ASC relative
payment weights. To accomplish this, we hold estimated total ASC
payment levels constant between calendar years for purposes of
maintaining budget neutrality in the ASC payment system. That is, we
apply the weight scalar to ensure that projected expenditures from the
updated ASC payment weights in the ASC payment system are equal to what
would be the current expenditures based on the scaled ASC payment
weights. In this way we ensure budget neutrality and that the only
changes to total payments to ASCs result from increases or decreases in
the ASC payment update factor.
Where the estimated ASC expenditures for an upcoming year are
higher than the estimated ASC expenditures for the current year, the
ASC weight scalar is reduced, in order to bring the estimated ASC
expenditures in line with the expenditures for the baseline year. This
frequently results in ASC relative payment weights for surgical
procedures that are lower than the OPPS relative payment weights for
the same procedures for the upcoming year. Therefore, over time, even
if procedures performed in the HOPD and ASC receive the same update
factor under the OPPS and ASC payment system, payment rates under the
ASC payment system would increase at a lower rate than payment for the
same procedures performed in the HOPD as a result of applying the ASC
weight scalar to ensure budget neutrality.
As discussed in section II.A.1.a of the CY 2022 OPPS/ASC proposed
rule, given our concerns with CY 2020 claims data as a result of the
PHE, we are using the CY 2019 claims data to be consistent with the
OPPS claims data for the CY 2022 OPPS/ASC proposed rule. Consistent
with our established policy, we proposed to scale the CY 2022 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 2019, we proposed to compare the total payment using
the CY 2021 ASC relative payment weights with the total payment using
the CY 2022 ASC relative payment weights to take into account the
changes in the OPPS relative payment weights between CY 2021 and CY
2022. We proposed to use the ratio of CY 2021 to CY 2022 total payments
(the weight scalar) to scale the ASC relative payment weights for CY
2022. The proposed CY 2022 ASC weight scalar is 0.8591. Based on
updated data for this final rule with comment period, the final CY 2022
ASC weight scalar is 0.8552. Consistent with historical practice, we
would scale the ASC relative payment weights of covered surgical
procedures, covered ancillary radiology services, and certain
diagnostic tests within the medicine range of CPT codes, which are
covered ancillary services for which the ASC payment rates are based on
OPPS relative payment weights.
Scaling would not apply in the case of ASC payment for separately
payable covered ancillary services that have a predetermined national
payment amount (that is, their national ASC payment amounts are not
based on OPPS relative payment weights), such as drugs and biologicals
that are separately paid or services that are contractor-priced or paid
at reasonable cost in ASCs. Any service with a predetermined national
payment amount would be included in the ASC budget neutrality
comparison, but scaling of the ASC relative payment weights would not
apply to those services. The ASC payment weights for those services
without predetermined national payment amounts (that is, those services
with national payment amounts that would be based on OPPS relative
payment weights) would be scaled to eliminate any difference in the
total payment between the current year and the update year.
For any given year's ratesetting, we typically use the most recent
full calendar year of claims data to model budget neutrality
adjustments. While we would ordinarily use CY 2020 claims data to model
the budget neutrality adjustment for the CY 2022 OPPS/ASC final rule,
as discussed in Section X.E. of this final rule, we are finalizing our
proposal to use, in general, CY 2019 claims data to model our budget
neutrality adjustment. At the time of the CY 2022 OPPS/ASC proposed
rule, we had available 100 percent of CY 2019 ASC claims data.
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
[[Page 63813]]
2022, we calculated the proposed adjustment for the ASC payment system
by using the most recent CY 2019 claims data available and estimating
the difference in total payment that would be created by introducing
the proposed CY 2022 ASC wage indexes. Specifically, holding CY 2019
ASC utilization, service-mix, and the proposed CY 2022 national payment
rates after application of the weight scalar constant, we calculated
the total adjusted payment using the CY 2021 ASC wage indexes and the
total adjusted payment using the proposed CY 2022 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 2021 ASC wage indexes to the total adjusted payment
calculated with the proposed CY 2022 ASC wage indexes and applied the
resulting ratio of 0.9999 (the proposed CY 2022 ASC wage index budget
neutrality adjustment) to the CY 2021 ASC conversion factor to
calculate the proposed CY 2022 ASC conversion factor.
Section 1833(i)(2)(C)(i) of the Act requires that, if the Secretary
has not updated amounts established under the revised ASC payment
system in a calendar year, the payment amounts shall be increased by
the percentage increase in the Consumer Price Index for all urban
consumers (CPI-U), U.S. city average, as estimated by the Secretary for
the 12-month period ending with the midpoint of the year involved. The
statute does not mandate the adoption of any particular update
mechanism, but it requires the payment amounts to be increased by the
CPI-U in the absence of any update. Because the Secretary updates the
ASC payment amounts annually, we adopted a policy, which we codified at
Sec. 416.171(a)(2)(ii)), to update the ASC conversion factor using the
CPI-U for CY 2010 and subsequent calendar years.
In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59075
through 59080), we finalized our proposal to apply the productivity-
adjusted hospital market basket update to ASC payment system rates for
an interim period of 5 years (CY 2019 through CY 2023), during which we
will assess whether there is a migration of the performance of
procedures from the hospital setting to the ASC setting as a result of
the use of a productivity-adjusted hospital market basket update, as
well as whether there are any unintended consequences, such as less
than expected migration of the performance of procedures from the
hospital setting to the ASC setting. In addition, we finalized our
proposal to revise our regulations under Sec. 416.171(a)(2), which
address the annual update to the ASC conversion factor. During this 5-
year period, we intend to assess the feasibility of collaborating with
stakeholders to collect ASC cost data in a minimally burdensome manner
and could propose a plan to collect such information. We refer readers
to that final rule for a detailed discussion of the rationale for these
policies.
The proposed hospital market basket update for CY 2022 was
projected to be 2.5 percent, as published in the FY 2022 IPPS/LTCH PPS
proposed rule (86 FR 25435), based on IHS Global Inc.'s (IGI's) 2020
fourth quarter forecast with historical data through the third quarter
of 2020.
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 2022 was projected to be 0.2
percentage point, as published in the FY 2022 IPPS/LTCH PPS proposed
rule (86 FR 25435) based on IGI's 2020 fourth quarter forecast.
For 2022, we proposed to utilize the hospital market basket update
of 2.5 percent reduced by the productivity adjustment of 0.2 percentage
point, resulting in a productivity-adjusted hospital market basket
update factor of 2.3 percent for ASCs meeting the quality reporting
requirements. Therefore, we proposed to apply a 2.3 percent
productivity-adjusted hospital market basket update factor to the CY
2021 ASC conversion factor for ASCs meeting the quality reporting
requirements to determine the CY 2022 ASC payment amounts. The ASCQR
Program affected payment rates beginning in CY 2014 and, under this
program, there is a 2.0 percentage point reduction to the update factor
for ASCs that fail to meet the ASCQR Program requirements. We refer
readers to section XIV.E. of the CY 2019 OPPS/ASC final rule with
comment period (83 FR 59138 through 59139) and section XIV.E. of the CY
2022 OPPS/ASC proposed 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 hospital market basket update
of 2.5 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 0.3 percent productivity-adjusted hospital market basket update
factor to the CY 2021 ASC conversion factor for ASCs not meeting the
quality reporting requirements. We also proposed that if more recent
data are subsequently available (for example, a more recent estimate of
the hospital market basket update or productivity adjustment), we would
use such data, if appropriate, to determine the CY 2022 ASC update for
this final rule with comment period.
For 2022, we proposed to adjust the CY 2021 ASC conversion factor
($48.952) by the proposed wage index budget neutrality factor of 0.9993
in addition to the productivity-adjusted hospital market basket update
of 2.3 percent discussed above, which results in a proposed CY 2022 ASC
conversion factor of $50.043 for ASCs meeting the quality reporting
requirements. For ASCs not meeting the quality reporting requirements,
we proposed to adjust the CY 2021 ASC conversion factor ($48.952) by
the proposed wage index budget neutrality factor of 0.9993 in addition
to the quality reporting/productivity-adjusted hospital market basket
update of 0.3 percent discussed above, which results in a proposed CY
2022 ASC conversion factor of $49.064.
The comments we received on our proposals for updating the CY 2022
ASC conversion factor and our responses are set forth below.
Comment: Commenters supported continued use of the hospital market
basket for updating ASC payments on an annual basis and suggested that
using the hospital market basket better aligns the OPPS and ASC payment
system. One commenter requested that we permanently use the hospital
market basket to update ASC payment rates rather than limiting such
update factor through CY 2023.
Response: We thank the commenters for their support of our
proposal. We believe using the same update factor to calculate payments
to ASC and hospital outpatient departments encourages the migration of
services from the hospital setting to the ASC setting, and could
potentially increase the presence of ASCs in health care markets or
geographic areas where previously there were none or few. The migration
of services from the higher cost hospital
[[Page 63814]]
outpatient setting to the ASC setting is likely to result in savings to
beneficiaries and the Medicare program. This policy will also further
our goal of giving both physicians and beneficiaries a greater choice
in selecting the care setting that best suits their needs.
As we discussed in the CY 2019 OPPS/ASC final rule with comment
period (83 FR 59075 through 59080), we finalized our policy to apply
the hospital market basket update to ASC payment system rates for an
interim period of 5 years (CY 2019 through CY 2023), during which we
will assess whether there is a migration of the performance of
procedures from the hospital setting to the ASC setting as a result of
the use of a hospital market basket update, as well as whether there
are any unintended consequences, such as less than expected migration
of the performance of procedures from the hospital setting to the ASC
setting. We intend to publish our assessment of service migration and
other factors as a result of the hospital market basket update and any
proposals related to our results in the CY 2023 OPPS/ASC proposed rule.
After consideration of the public comments we received, consistent
with our proposal that if more recent data are subsequently available
(for example, a more recent estimate of the hospital market basket
update and productivity adjustment), we would use such data, if
appropriate, to determine the CY 2022 ASC update for the CY 2022 OPPS/
ASC final rule with comment period, we are incorporating more recent
data to determine the final CY 2022 ASC update. Therefore, for this
final rule with comment period, the hospital market basket update for
CY 2022 is 2.7 percent, as published in the FY 2022 IPPS/LTCH PPS final
rule (86 FR 42343), based on IGI's 2021 second quarter forecast with
historical data through the first quarter of 2021. The productivity
adjustment for this CY 2022 OPPS/ASC final rule with comment period is
0.7 percentage point, as published in the FY 2022 IPPS/LTCH PPS final
rule (84 FR 42343) based on IGI's 2021 second quarter forecast.
For CY 2022, we are finalizing the hospital market basket update of
2.7 percent minus the productivity adjustment of 0.7 percentage point,
resulting in a productivity-adjusted hospital market basket update
factor of 2.0 percent for ASCs meeting the quality reporting
requirements. Therefore, we apply a 2.0 percent productivity-adjusted
hospital market basket update factor to the CY 2021 ASC conversion
factor for ASCs meeting the quality reporting requirements to determine
the CY 2022 ASC payment rates. We are finalizing the hospital market
basket update of 2.7 percent reduced by 2.0 percentage points for ASCs
that do not meet the quality reporting requirements and then subtract
the 0.7 percentage point productivity adjustment. Therefore, we apply a
0.0 percent productivity -adjusted hospital market basket update factor
to the CY 2021 ASC conversion factor for ASCs not meeting the quality
reporting requirements.
For CY 2022, we are adjusting the CY 2021 ASC conversion factor
($48.952) by a wage index budget neutrality factor of 0.9997 in
addition to the productivity-adjusted hospital market basket update of
2.0 percent, discussed above, which results in a final CY 2022 ASC
conversion factor of $49.916 for ASCs meeting the quality reporting
requirements. For ASCs not meeting the quality reporting requirements,
we are adjusting the CY 2021 ASC conversion factor ($48.952) by the
wage index budget neutrality factor of 0.9997 in addition to the
quality reporting/productivity-adjusted hospital market basket update
of 0.0 percent discussed above, which results in a final CY 2022 ASC
conversion factor of $48.937.
3. Display of CY 2022 ASC Payment Rates
Addenda AA and BB to this final rule with comment period (which are
available on the CMS website) display the final ASC payment rates for
CY 2022 for covered surgical procedures and covered ancillary services,
respectively. Historically, for those covered surgical procedures and
covered ancillary services where the payment rate is the lower of the
final rates under the ASC standard ratesetting methodology and the MPFS
final rates, the final payment indicators and rates set forth in this
final rule with comment period are based on a comparison using the PFS
rates that would be effective January 1, 2022. For a discussion of the
PFS rates, we refer readers to the CY 2022 PFS final rule that is
available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
The final payment rates included in addenda AA and BB to this final
rule with comment period 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 final
CY 2022 payment rates. Specifically, in Addendum AA, a ``Y'' in the
column titled ``To be Subject to Multiple Procedure Discounting''
indicates that the surgical procedure would be subject to the multiple
procedure payment reduction policy. As discussed in the CY 2008 OPPS/
ASC final rule with comment period (72 FR 66829 through 66830), most
covered surgical procedures are subject to a 50-percent reduction in
the ASC payment for the lower-paying procedure when more than one
procedure is performed in a single operative session.
Comment: One commenter recommended that we remove the ``Y''
indicator for CPT code 64582 and not apply the multiple procedure
discount as the predecessor code, CPT code 64568, was not subject to
the multiple procedure discounting policy.
Response: We agree with the commenter that the predecessor code CPT
code 64568 was not subject to multiple procedure discounting and that
applying our discounting policy to this procedure would be
inappropriate due to its high device costs. Therefore, we are removing
the ``Y'' indicator for CPT code 64582 for CY 2022.
Display of the comment indicator ``CH'' in the column titled
``Comment Indicator'' indicates a change in payment policy for the item
or service, including identifying discontinued HCPCS codes, designating
items or services newly payable under the ASC payment system, and
identifying items or services with changes in the ASC payment indicator
for CY 2022. Display of the comment indicator ``NI'' in the column
titled ``Comment Indicator'' indicates that the code is new (or
substantially revised) and that comments will be accepted on the
interim payment indicator for the new code. Display of the comment
indicator ``NP'' in the column titled ``Comment Indicator'' indicates
that the code is new (or substantially revised) and that comments will
be accepted on the ASC payment indicator for the new code.
In Addendum BB, the column titled ``Drug Pass-Through Expiration
during Calendar Year'' flags, 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 2022 Payment
Weight'' are the final relative payment weights for each of the listed
services for CY 2022. The final relative payment weights for all
covered surgical procedures and covered ancillary services where the
ASC payment rates are based on OPPS relative payment weights were
scaled for budget neutrality. Therefore, scaling was not
[[Page 63815]]
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 2022 payment rate displayed in the ``Final
CY 2022 Payment Rate'' column, each ASC payment weight in the ``Final
CY 2022 Payment Weight'' column was multiplied by the final CY 2022
conversion factor of $49.916. 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 2022 ASC conversion factor uses the CY 2022 productivity-
adjusted hospital market basket update factor of 2.0 percent (which is
equal to the projected hospital market basket update of 2.7 percent
reduced by a projected productivity adjustment of 0.7 percentage
point).
In Addendum BB, there are no relative payment weights displayed in
the ``Final CY 2022 Payment Weight'' column for items and services with
predetermined national payment amounts, such as separately payable
drugs and biologicals. The ``Final CY 2022 Payment'' column displays
the final CY 2022 national unadjusted ASC payment rates for all items
and services. The final CY 2022 ASC payment rates listed in Addendum BB
for separately payable drugs and biologicals are based on ASP data used
for payment in physicians' offices in 2020.
Addendum EE provides the HCPCS codes and short descriptors for
surgical procedures that are proposed to be excluded from payment in
ASCs for CY 2022.
In response to public comments we received, we are finalizing an
Addendum FF to this final rule with comment period as well as
subsequent OPPS/ASC proposed and final rules. Addenda FF to this final
rule with comment period displays the OPPS payment rate (based on the
standard ratesetting methodology), the device offset percentage, and
the device portion of the ASC payment rate for CY 2022 for covered
surgical procedures.
XIV. Advancing to Digital Quality Measurement and the Use of Fast
Healthcare Interoperability Resources (FHIR) in Outpatient Quality
Programs--Request for Information
We aim to move fully to digital quality measurement in the Centers
for Medicare & Medicaid Services (CMS) quality reporting and value-
based purchasing (VBP) programs by 2025. As part of this modernization
of our quality measurement enterprise, in the CY 2022 OPPS/ASC proposed
rule (86 FR 42234) we issued a request for information (RFI). The
purpose of this RFI was to gather broad public input solely for
planning purposes for our transition to digital quality measurement.
Any updates to specific program requirements related to providing data
for quality measurement and reporting provisions would be addressed
through future rulemaking, as necessary. This RFI contains five parts:
Background. This part provides information on our quality
measurement programs and our goal to move fully to digital quality
measurement by 2025. This part also provides a summary of recent HHS
policy developments that are advancing interoperability and could
support our move towards full digital quality measurement.
Definition of Digital Quality Measures (dQMs). This part
provides a potential definition for dQMs. Specific requests for input
are included in the section.
Use of Fast Healthcare Interoperability Resources
(FHIR[supreg]) for Current Electronic Clinical Quality Measures
(eCQMs). This part provides information on current activities underway
to align CMS eCQMs with the FHIR standard and support quality
measurement via application programming interfaces (APIs), and
contrasts this approach to current eCQM standards and practice.
Changes Under Consideration to Advance Digital Quality
Measurement: Potential Actions in Four Areas to Transition to dQMs by
2025. This part introduces four possible steps that would enable
transformation of CMS' quality measurement enterprise to be fully
digital by 2025. Specific requests for input are included in the
section.
Solicitation of Comments. This part lists all requests for
input we had included in the sections of this RFI.
A. Background
As required by law, we implement quality measurement and VBP
programs across a broad range of inpatient acute care, outpatient, and
post-acute care (PAC) settings consistent with our mission to improve
the quality of health care for Americans through measurement,
transparency, and increasingly, value-based purchasing. These quality
programs are foundational for incentivizing value-based care,
contributing to improvements in health care, enhancing patient
outcomes, and informing consumer choice. In October 2017, we launched
the Meaningful Measures Framework. This framework for quality
measurement captures our vision to better address health care quality
priorities and gaps, including emphasizing digital quality measurement,
reducing measurement burden, and promoting patient perspectives, while
also focusing on modernization and innovation. The scope of the
Meaningful Measures Framework evolves as the health care environment
continues to change.\201\ Consistent with the Meaningful Measures
Framework, we aim to move fully to digital quality measurement by 2025.
We acknowledge facilities within the various care and practice settings
covered by our quality programs may be at different stages of readiness
and, therefore, the timeline for achieving full digital quality
measurement across our quality reporting programs may vary.
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\201\ Meaningful Measures 2.0: Moving from Measure Reduction to
Modernization. Available at: https://www.cms.gov/meaningful-measures-20-moving-measure-reduction-modernization.
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[[Page 63816]]
We also continue to evolve the Medicare Promoting Interoperability
Program's focus on the use of certified electronic health record (EHR)
technology, from an initial focus on electronic data capture to
enhancing information exchange and expanding quality measurement (83 FR
41634). However, reporting data for quality measurement via EHRs
remains burdensome, and our current approach to quality measurement
does not readily incorporate emerging data sources such as patient-
reported outcomes (PRO) and patient-generated health data (PGHD).\202\
There is a need to streamline our approach to data collection,
calculation, and reporting to fully leverage clinical and patient-
centered information for measurement, improvement, and learning.
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\202\ What are patient generated health data: https://www.healthit.gov/topic/otherhot-topics/what-are-patient-generated-health-data.
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Additionally, advancements in technical standards and associated
regulatory initiatives to improve interoperability of healthcare data
are creating an opportunity to significantly improve our quality
measurement systems. In May 2020, we finalized interoperability
requirements in the CMS Interoperability and Patient Access final rule
(85 FR 25510) to support beneficiary access to data held by certain
payers. At the same time, the Office of the National Coordinator for
Health Information Technology (ONC) finalized policies in the ONC 21st
Century Cures Act final rule (85 FR 25642) to advance the
interoperability of health information technology (IT) as defined in
section 4003 of the 21st Century Cures Act, including the ``complete
access, exchange, and use of all electronically accessible health
information.'' Closely working with ONC, we collaboratively identified
Health Level 7 (HL7[supreg]) FHIR Release 4.0.1 as the standard to
support API policies in both rules. ONC, on behalf of HHS, adopted the
HL7 FHIR Release 4.0.1 for APIs and related implementation
specifications at 45 CFR 170.215. We believe the FHIR standard has the
potential to be a more efficient and modular standard to enable APIs.
We also believe this standard enables collaboration and information
sharing, which is essential for delivering high-quality care and better
outcomes at a lower cost. By aligning technology requirements for
payers, health care facilities, and health IT developers HHS can
advance an interoperable health IT infrastructure that ensures
healthcare facilities and patients have access to health data when and
where it is needed.
In the ONC 21st Century Cures Act final rule, ONC adopted a
``Standardized API for Patient and Population Services'' certification
criterion for health IT that requires the use of FHIR Release 4 and
several implementation specifications. Health IT certified to this
criterion will offer single patient and multiple patient services that
can be accessed by third party applications (85 FR 25742).\203\ The ONC
21st Century Cures Act final rule also requires health IT developers to
update their certified health IT to support the United States Core Data
for Interoperability (USCDI) standard.\204\ The scope of patient data
identified in the USCDI and the data standards that support this data
set are expected to evolve over time, starting with data specified in
Version 1 of the USCDI. In November 2020, ONC issued an interim final
rule with comment period extending the date when health IT developers
must make technology meeting updated certification criteria available
under the ONC Health IT Certification Program until December 31, 2022
(85 FR 70064).\205\
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\203\ Application Programming Interfaces (API) Resource Guide,
Version 1.0. Available at: https://www.healthit.gov/sites/default/files/page/2020-11/API-Resource-Guide_v1_0.pdf.
\204\ https://www.healthit.gov/isa/united-states-core-data-interoperability-uscdi.
\205\ Information Blocking and the ONC Health IT Certification
Program: Extension of Compliance Dates and Timeframes in Response to
the Covid-19 Public Health Emergency. Available at: https://www.govinfo.gov/content/pkg/FR-2020-11-04/pdf/2020-24376.pdf.
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The CMS Interoperability and Patient Access final rule (85 FR
25510) and program policies build on the ONC 21st Century Cures Act
final rule (85 FR 25642). The CMS Interoperability and Patient Access
final rule and policies require certain payers (for example, Medicare
Advantage organizations, Medicaid and Child Health Insurance Program
(CHIP) Fee-for-Service (FFS) programs, Medicaid managed care plans,
CHIP managed care entities, and issuers of certain Qualified Health
Plan (QHP) on the Federally-facilitated Exchanges (FFEs)) to implement
and maintain a standards-based Patient Access API using HL7 FHIR
Release 4.0.1 to make available claims and encounter data to their
enrollees and beneficiaries (called ``patients'' in the CMS
interoperability rule) with the intent of ensuring enrollees and
beneficiaries have access to their own health care information through
third-party software applications.
The CMS Interoperability and Patient Access final rule also
established new conditions of participation for Medicare and Medicaid
participating hospitals and critical access hospitals (CAHs), requiring
them to send electronic notifications to another healthcare facility or
community provider or practitioner when a patient is admitted,
discharged, or transferred (85 FR 25603).
In the calendar year (CY) 2021 Physician Fee Schedule (PFS) final
rule (85 FR 84472), we finalized a policy to align the certified EHR
technology required for use in the Promoting Interoperability Programs
and the Merit-based Incentive Payment System (MIPS) Promoting
Interoperability performance category with the updates to health IT
certification criteria finalized in the ONC 21st Century Cures Act
final rule. Under this policy, MIPS eligible clinicians, and eligible
hospitals and CAHs participating in the Promoting Interoperability
Programs, must use technology meeting the updated certification
criteria for performance and reporting periods beginning in 2023 (85 FR
84825).
The use of APIs can also reduce long-standing barriers to quality
measurement. Currently, health IT developers are required to implement
individual measure specifications within their health IT products. The
health IT developer must also accommodate how that product connects
with the unique variety of systems within a specific care setting.\206\
This may be further complicated by systems that integrate a wide range
of data schemas. This process is burdensome and costly, and it is
difficult to reliably obtain high quality data across systems. As
health IT developers map their health IT data to the FHIR standard and
related implementation specifications, APIs can enable these structured
data to be easily accessible for quality measurement or other use
cases, such as care coordination, clinical decision support, and
supporting patient access.
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\206\ The Office of the National Coordinator for Health
Information Technology, Strategy on Reducing Regulatory and
Administrative Burden Relating to the Use of Health IT and EHRs,
Final Report (Feb. 2020). Available at: https://www.healthit.gov/sites/default/files/page/2020-02/BurdenReport_0.pdf.
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We believe the emerging data standardization and interoperability
enabled by APIs will support the transition to full digital quality
measurement by 2025, and are committed to exploring and seeking input
on potential solutions for the transition to digital quality
measurement as described in this RFI.
[[Page 63817]]
B. Definition of Digital Quality Measures
In the proposed rule, we sought to refine the definition of digital
quality measures (dQMs) to further operationalize our objective of
fully transitioning to dQMs by 2025. We previously noted dQMs use
``sources of health information that are captured and can be
transmitted electronically and via interoperable systems'' (85 FR
84845). In the RFI, we sought input on future elaboration that would
define a dQM as a software that processes digital data to produce a
measure score or measure scores. Data sources for dQMs may include
administrative systems, electronically submitted clinical assessment
data, case management systems, EHRs, instruments (for example, medical
devices and wearable devices), patient portals or applications (for
example, for collection of patient-generated health data), health
information exchanges (HIEs) or registries, and other sources. We also
note that dQMs are intended to improve the patient experience including
quality of care, improve the health of populations, and/or reduce
costs.
We discussed one potential approach to developing dQM software in
section XIV.D.2. of the preamble of the CY 2022 OPPS/ASC proposed rule
(86 FR 42235) and in this final rule with comment period. In that
section, we sought comment on the potential definition of dQMs in this
RFI.
We also sought feedback on how leveraging advances in technology
(for example, FHIR-based APIs) to access and electronically transmit
interoperable data for dQMs could reinforce other activities to support
quality measurement and improvement (for example, the aggregation of
data across multiple data sources, rapid-cycle feedback, and alignment
of programmatic requirements).
The transition to dQMs relies on advances in data standardization
and interoperability. As providers and payers work to implement the
required advances in interoperability over the next several years, we
will continue to support reporting of eCQMs through CMS quality
reporting programs and through the Promoting Interoperability
Programs.\207\ These fully digital measures continue to be important
drivers of interoperability advancement and learning. As discussed in
the CY 2022 OPPS/ASC proposed rule and the next section of this final
rule with comment period, we are currently re-specifying and testing
these measures to use FHIR rather than the currently adopted Quality
Data Model (QDM) in anticipation of the wider use of FHIR standards. We
intend to apply significant components of the output of this work, such
as the re-specified measure logic and the learning done through measure
testing with FHIR-based APIs, to define and build future dQMs that take
advantage of the expansion of standardized, interoperable data.
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\207\ eCQI Resource Center. Available at: https://ecqi.healthit.gov/.
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C. Use of FHIR for Current eCQMs
Since we adopted eCQMs in our hospital and clinician quality
programs, we have heard from stakeholders about the technological
challenges, burden, and related costs of reporting eCQM data. The CMS
eCQM Strategy Project engaged with stakeholders through site visits and
listening sessions with health systems and provider organizations to
learn about their experiences. This stakeholder feedback identified
recommendations to improve processes related to alignment; development;
implementation and reporting; certification; and communication,
education, and outreach. Over the past 2 years, we have focused on
opportunities to streamline and modernize quality data collection and
reporting processes, such as exploring FHIR (http://hl7.org/fhir) as a
framework for measure structure and data submission for quality
reporting programs, specifically for eCQMs. FHIR is a free and open
source standards framework (in both commercial and government settings)
created by HL7 International that establishes a common language and
process for all health information technology. FHIR allows systems to
communicate and information to be shared seamlessly, with a lower
burden for hospitals, providers, clinicians, vendors, and quality
measurement stakeholders. Specifically, for quality reporting, FHIR
enables representing the data in eCQMs as well as provides a structure
for eCQMs and reporting, using FHIR as the standard for all. Whereas
today, multiple standards being used to report eCQMs is challenging and
burdensome.
We are working to convert current eCQMs to the FHIR standard. We
are currently testing the exchange of data elements represented in FHIR
to CMS through ongoing HL7 Connectathons and integrated system testing
by using and refining implementation guides (IGs). Submitting data
through FHIR-based APIs has the potential to improve data exchange by
providing consistent security, performance, scalability, and structure
to all users. In addition, development of FHIR-based APIs could
decrease provider burden by automating more of the measure data
collection process. We continue to explore and expand potential
applications of the FHIR standard and testing with eCQM use cases, and
we are strongly considering a transition to FHIR-based quality
reporting with the use of the FHIR standard for eCQMs in quality and
value-based reporting programs. As we move to an all-dQM format for
quality programs, we are depending on testing results and community
readiness to improve interoperability, reduce burden, and facilitate
better patient care. We will continue to consider how to leverage the
interoperability advantages offered by the FHIR standards and API-based
data submission, including digital quality measurement.
D. Changes Under Consideration To Advance Digital Quality Measurement:
Potential Actions in Four Areas To Transition to Digital Quality
Measures by 2025
Building on the advances in interoperability and learning from
testing of FHIR-converted eCQMs, we aim to move fully to dQMs,
originating from sources of health information that are captured and
can be transmitted electronically via interoperable systems, by 2025.
To enable this transformation, we are considering further
modernization of the quality measurement enterprise in four major ways:
(1) Leverage and advance standards for digital data and obtain all EHR
data required for quality measures via provider FHIR-based APIs; (2)
redesign our quality measures to be self-contained tools; (3) better
support data aggregation; and (4) work to align measure requirements
across our reporting programs, other Federal programs and agencies, and
the private sector where appropriate.
These changes would enable us to collect and utilize more timely,
actionable, and standardized data from diverse sources and care
settings to improve the scope and quality of data used in quality
reporting and payment programs, reduce quality reporting burden, and
make results available to stakeholders in a rapid-cycle fashion. Data
collection and reporting efforts would become more efficient, supported
by advances in interoperability and data standardization. Aggregation
of data from multiple sources would allow assessments of costs and
outcomes to be measured across multiple care settings for an individual
patient or clinical conditions. We believe that aggregating data for
measurement can incorporate a more holistic assessment of an
individual's health and health care and produce the rich set of data
needed to
[[Page 63818]]
enable patients and caregivers to make informed decisions by combining
data from multiple sources (for example, patient reported data, EHR
data, and claims data) for measurement.
Perhaps most importantly, these steps would help us deliver on the
full promise of quality measurement and drive us toward a learning
health system that transforms healthcare quality, safety, and
coordination and effectively measures and achieves value-based care.
The shift from a static to a learning health system hinges on the
interoperability of healthcare data, and the use of standardized data.
The dQMs would leverage this interoperability to deliver on the promise
of a learning health system wherein standards-based data sharing and
analysis, rapid-cycle feedback, and quality measurement and incentives
are aligned for continuous improvement in patient-centered care.
Similarly, standardized, interoperable data used for measurement can
also be used for other use cases, such as clinical decision support,
care coordination and care decision support, which impacts health care
and care quality.
We requested comments on four potential future actions that would
enable transformation to a fully digital quality measurement enterprise
by 2025.
1. Leveraging and Advancing Standards for Digital Data and Obtaining
All EHR Data Required for Quality Measures via Provider FHIR-Based APIs
We are considering targeting the data required for our quality
measures that utilize EHR data to be data retrieved via FHIR-based APIs
based on standardized, interoperable data. Utilizing standardized data
for EHR-based measurement (based on FHIR and associated IGs) and
aligning where possible with interoperability requirements can
eliminate the data collection burden providers currently experience
with required chart-abstracted quality measures and reduce the burden
of reporting digital quality measure results. We can fully leverage
this advance to adapt eCQMs and expand to other dQMs through the
adoption of interoperable standards across other digital data sources.
We are considering methods and approaches to leverage the
interoperability data requirements for APIs in certified health IT set
by the ONC 21st Century Cures Act final rule to support modernization
of CMS quality measure reporting. As discussed previously, these
requirements will be included in certified technology in future years
(85 FR 84825) including availability of data included in the USCDI via
standards-based APIs, and we will require clinicians and hospitals
participating in MIPS and the Promoting Interoperability Programs,
respectively, to transition to use of certified technology updated
consistent with the 2015 Cures Edition Update (85 FR 84825).
Digital data used for measurement could also expand beyond data
captured in traditional clinical settings, administrative claims data,
and EHRs. Many important data sources are not currently captured
digitally, such as survey and PGHD. We intend to work to innovate and
broaden the digital data used across the quality measurement enterprise
beyond the clinical EHR and administrative claims. Agreed upon
standards for these data, and associated implementation guides will be
important for interoperability and quality measurement. We will
consider developing clear guidelines and requirements for these digital
data that align with interoperability requirements, for example,
requirements for expressing data in standards, exposing data via
standards-based APIs, and incentivizing technologies that innovate data
capture and interoperability.
High quality data are also essential for reliable and valid
measurement. Hence, in implementing the shift to collect all clinical
EHR data via FHIR-based APIs, we would support efforts to strengthen
and test the quality of the data obtained through FHIR-based APIs for
quality measurement. We currently conduct audits of eCQM data submitted
under our quality programs, including the Hospital Inpatient Quality
Reporting (IQR) Program, with functions including checks for data
completeness and data accuracy, confirmation of proper data formatting,
alignment with standards, and appropriate data cleaning (82 FR 38398
through 38402). These functions would continue and be applied to dQMs
and further expanded to automate the manual validation of the data
compared to the original data source (for example, the medical record)
where possible. Analytic advancements such as natural language
processing, big data analytics, and artificial intelligence, can
support this evolution. These techniques can be applied to validating
observed patterns in data and inferences or conclusions drawn from
associations, as data are received, to ensure high quality data are
used for measurement.
We sought feedback on the goal of aligning data needed for quality
measurement with interoperability requirements and the strengths and
limitations of this approach. We also sought feedback on the importance
of and approaches to supporting inclusion of PGHD and other currently
non-standardized data. We also welcomed comment on approaches for
testing data quality and validity.
2. Redesigning Quality Measures To Be Self-Contained Tools
We are considering approaches for including quality measures that
take advantage of standardized data and interoperability requirements
that have expanded flexibility and functionality compared to CMS'
current eCQMs. We are considering defining and developing dQM software
as end-to-end measure calculation solutions that retrieve data from
primarily FHIR-based resources maintained by providers, payers, CMS,
and others; calculate measure score(s); and produce reports. In
general, we believe to optimize the use of standardized and
interoperable data, the software solution for dQMs should do the
following:
Have the flexibility to support calculation of single or
multiple quality measure(s).
Perform three functions--
++ Obtain data via automated queries from a broad set of digital
data sources (initially from EHRs, and in the future from claims, PRO,
and PGHD);
++ Calculate the measure score according to measure logic; and
++ Generate measure score report(s).
Be compatible with any data source systems that implement
standard interoperability requirements.
Exist separately from digital data source(s) and respect
the limitations of the functionality of those data sources.
Be tested and updated independently of the data source
systems.
Operate in accordance with health information protection
requirements under applicable laws and comply with governance functions
for health information exchange.
Have the flexibility to be deployed by individual health
systems, health IT vendors, data aggregators, and health plans; and/or
run by CMS depending on the program and measure needs and
specifications.
Be designed to enable easy installation for supplemental
uses by medical professionals and other non-technical end-users, such
as local calculation of quality measure scores or quality improvement.
Have the flexibility to employ current and evolving
advanced analytic approaches such as natural language processing.
Be designed to support pro-competitive practices for
development, maintenance, and implementation as
[[Page 63819]]
well as diffusion of quality measurement and related quality
improvement and clinical tools through, for example, the use of open-
source core architecture.
We sought comment on these suggested functionalities and other
additional functionalities that quality measure tools should ideally
have particularly in the context of the possible expanding availability
of standardized and interoperable data (for example, standardized EHR
data available via FHIR-based APIs).
We were also interested whether and how this more open, agile
strategy may facilitate broader engagement in quality measure
development, the use of tools developed for measurement for local
quality improvement, and/or the application of quality tools for
related purposes such as public health or research.
3. Building a Pathway to Data Aggregation in Support of Quality
Measurement
Using multiple sources of collected data to inform measurement
would reduce data fragmentation (or, different pieces of data regarding
a single patient stored in many different places). Additionally, we are
considering expanding and establishing policies and processes for data
aggregation and measure calculation by third-party aggregators that
include, but are not limited to, HIEs and clinical registries.
Qualified Clinical Data Registries and Qualified Registries that report
quality measures for eligible clinicians in the MIPS program are
potential examples \208\ at 42 CFR 414.1440(b)(2)(iv) and (v) and
(c)(2)(iii) and (iv) and can also support measure reporting. We are
considering establishing similar policies for third-party aggregators
to maintain the integrity of our measure reporting process and to
encourage market innovation.
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\208\ CY 2021 Physician Fee Schedule Final Rule: Finalized (New
and Updated) Qualified Clinical Data Registry (QCDR) and Qualified
Registry Policies, https://qpp-cm-prod-content.s3.amazonaws.com/uploads/1362/QCDR%20and%20QR%20Updates%202021%20Final%20Rule%20Fact%20Sheet.pdf.
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We sought feedback on aggregation of data from multiple sources to
inform measurement and potential policy considerations. We also sought
feedback on the role data aggregators can and should play in CMS
quality measure reporting in collaboration with providers, and how we
can best facilitate and enable aggregation.
4. Potential Future Alignment of Measures Across Reporting Programs,
Federal and State Agencies, and the Private Sector
We are committed to using policy levers and working with
stakeholders to solve the issue of interoperable data exchange and to
transition to full digital quality measurement. We are considering the
future potential development and multi-staged implementation of a
common portfolio of dQMs across our regulated programs, agencies, and
private payers. This common portfolio would require alignment of: (1)
Measure concepts and specifications including narrative statements,
measure logic, and value sets; and (2) the individual data elements
used to build these measure specifications and calculate the measure
logic. Further, the required data elements would be limited to
standardized, interoperable data elements to the fullest extent
possible; hence, part of the alignment strategy will be the
consideration and advancement of data standards and IGs for key data
elements. We would coordinate closely with quality measure developers,
Federal and state agencies, and private payers to develop and to
maintain a cohesive dQM portfolio that meets our programmatic
requirements and that fully aligns across Federal and state agencies
and payers to the extent possible.
We intend for this coordination to be ongoing and allow for
continuous refinement to ensure quality measures remain aligned with
evolving healthcare practices and priorities (for example, PROs,
disparities, and care coordination), and track with the transformation
of data collection, alignment with health IT module updates including
capabilities and standards adopted by ONC (for example, standards to
enable APIs). This coordination would build on the principles outlined
in HHS' National Health Quality Roadmap.\209\ It would focus on the
quality domains of safety, timeliness, efficiency, effectiveness,
equitability, and patient-centeredness. It would leverage several
existing Federal and public-private efforts including our Meaningful
Measures 2.0 Framework; the Federal Electronic Health Record
Modernization (Department of Defense and Veterans Affairs (DoD/VA));
the Agency for Healthcare Research and Quality's (AHRQ) Clinical
Decision Support Initiative; the Centers for Disease Control and
Prevention's (CDC) Adapting Clinical Guidelines for the Digital Age
initiative; Core Quality Measure Collaborative, which convenes
stakeholders from America's Health Insurance Plans (AHIP), CMS,
National Quality Forum (NQF), provider organizations, private payers,
and consumers and develops consensus on quality measures for provider
specialties; and the NQF-convened Measure Applications Partnership
(MAP), which recommends measures for use in public payment and
reporting programs. We would coordinate with HL7's ongoing work to
advance FHIR resources in critical areas to support patient care and
measurement such as social determinants of health. Through this
coordination, we would identify which existing measures could be used
or evolved to be used as dQMs, in recognition of current healthcare
practice and priorities.
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\209\ Department of Health and Human Services, National Health
Quality Roadmap (May 2020). Available at: https://www.hhs.gov/sites/default/files/national-health-quality-roadmap.pdf.
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This multi-stakeholder, joint Federal, state, and industry effort,
made possible and enabled by the pending advances towards true
interoperability, would yield a significantly improved quality
measurement enterprise. The success of the dQM portfolio would be
enhanced by the degree to which the measures achieve our programmatic
requirements for measures as well as the requirements of other agencies
and payers.
We sought feedback on initial priority areas for the dQM portfolio
given evolving interoperability requirements (for example, measurement
areas, measure requirements, tools, and data standards). We also sought
to identify opportunities to collaborate with other Federal agencies,
states, and the private sector to adopt standards and technology-driven
solutions to address our quality measurement priorities across sectors.
E. Solicitation of Comments
As noted previously, we sought input on the future development of
the following in the CY 2022 OPPS/ASC proposed rule (86 FR 42232):
Definition of Digital Quality Measures. We sought feedback
on the following as described in section XIV.2. of the CY 2022 OPPS/ASC
proposed rule:
++ Do you have feedback on the potential future dQM definition?
++ Does this approach to defining and deploying dQMs to interface
with FHIR-based APIs seem promising? We also welcomed more specific
comments on the attributes or functions to support such an approach of
deploying dQMs.
Use of FHIR for Current eCQMs. We sought feedback on the
following as described in section XIV.3. of the
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preamble of the CY 2022 OPPS/ASC proposed rule:
++ Would a transition to FHIR-based quality reporting reduce burden
on health IT vendors and providers? Please explain.
++ Would access to near real-time quality measure scores benefit
your practice? How so?
++ What parts of the current CMS Quality Reporting Data
Architecture (QRDA) IGs cause the most burden (please explain the
primary drivers of burden)?
++ In what ways could CMS FHIR Reporting IG be modified to reduce
burden on providers and vendors?