[Federal Register Volume 89, Number 140 (Monday, July 22, 2024)]
[Proposed Rules]
[Pages 59186-59581]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-15087]
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Vol. 89
Monday,
No. 140
July 22, 2024
Part II
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
42 CFR Parts 406, 407, 410, et al.
Office of the Secretary
45 CFR Part 180
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Medicare and Medicaid Programs; Proposed Rule
Federal Register / Vol. 89 , No. 140 / Monday, July 22, 2024 /
Proposed Rules
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 406, 407, 410, 411, 416, 419, 435, 440, 457, 482 and
485
Office of the Secretary
45 CFR Part 180
[CMS-1809-P]
RIN 0938-AV35
Medicare and Medicaid Programs: Hospital Outpatient Prospective
Payment and Ambulatory Surgical Center Payment Systems; Quality
Reporting Programs, Including the Hospital Inpatient Quality Reporting
Program; Health and Safety Standards for Obstetrical Services in
Hospitals and Critical Access Hospitals; Prior Authorization; Requests
for Information; Medicaid and CHIP Continuous Eligibility; Medicaid
Clinic Services Four Walls Exceptions; Individuals Currently or
Formerly in Custody of Penal Authorities; Revision to Medicare Special
Enrollment Period for Formerly Incarcerated Individuals; and All-
Inclusive Rate Add-On Payment for High-Cost Drugs Provided by Indian
Health Service and Tribal Facilities
AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of
Health and Human Services (HHS).
ACTION: Proposed rule.
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SUMMARY: This proposed rule would revise the Medicare hospital
Outpatient Prospective Payment System (OPPS) and the Medicare
Ambulatory Surgical Center (ASC) payment system for calendar year 2025
based on our continuing experience with these systems. In this proposed
rule, we describe the changes to the amounts and factors used to
determine the payment rates for Medicare services paid under the OPPS
and those paid under the ASC payment system. Also, this proposed rule
would update and refine the requirements for the Hospital Outpatient
Quality Reporting Program, Rural Emergency Hospital Quality Reporting
Program, Ambulatory Surgical Center Quality Reporting Program, and
Hospital Inpatient Quality Reporting Program. This proposed rule would
request information on options being considered for future changes to
the Overall Hospital Quality Star Rating methodology. The proposed rule
would narrow the description of ``custody'' for purposes of Medicare's
no legal obligation to pay payment exclusion. The proposed rule would
revise the eligibility requirements in the special enrollment period
(SEP) for formerly incarcerated individuals to tie the eligibility for
this SEP to the determination made by the Social Security
Administration that they are no longer incarcerated for releases that
occur on and after January 1, 2025. This rule also proposes to codify
the requirement in the Consolidated Appropriations Act, 2023 (CAA,
2023) to provide 12 months of continuous eligibility to children under
the age of 19 in Medicaid and CHIP, with limited exceptions. Further,
this proposed rule would provide updates to the Conditions of
Participation (CoPs) for hospitals and critical access hospitals (CAHs)
in an effort to advance the health and safety of pregnant, birthing,
and postpartum patients. This rule proposes to separately pay IHS and
tribal hospitals for high-cost drugs furnished in hospital outpatient
departments through an add-on payment in addition to the AIR under the
authorities used to calculate the AIR starting January 1, 2025. This
rule also requests further information related to a Tribal Technical
Advisory Group request to apply the Indian Health Service encounter
rate to all outpatient tribal clinics. Finally, the proposed rule would
provide exceptions to the Medicaid clinic services benefit four walls
requirement for Indian Health Service and Tribal clinics, and, at state
option, for behavioral health clinics and clinics located in rural
areas.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, by September 9, 2024.
ADDRESSES: In commenting, please refer to file code CMS-1809-P.
Comments, including mass comment submissions, must be submitted in
one of the following three ways (please choose only one of the ways
listed):
1. Electronically. You may submit electronic comments on this
regulation to https://www.regulations.gov. Follow the ``Submit a
comment'' instructions.
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-1809-P, P.O. Box 8010,
Baltimore, MD 21244-8010.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments to
the following address ONLY: Centers for Medicare & Medicaid Services,
Department of Health and Human Services, Attention: CMS-1809-P, Mail
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT:
Au'Sha Washington or Elise Barringer at [email protected].
Advisory Panel on Hospital Outpatient Payment (HOP Panel),
contact the HOP Panel mailbox at [email protected].
Ambulatory Surgical Center Quality Reporting (ASCQR) Program
policies, contact Anita Bhatia via email at
[email protected].
Ambulatory Surgical Center Quality Reporting (ASCQR) Program
measures, contact Marsha Hertzberg via email at
[email protected].
All-Inclusive Rate (AIR) Add-On Payment for High-Cost Drugs
Provided by Indian Health Service (IHS) and Tribal Facilities,
contact Nate Vercauteren via email at
[email protected].
Blood and Blood Products, contact Au'Sha Washington via email at
[email protected] or 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].
Medicaid Clinic Services Four Walls Flexibilities, contact Sheri
Gaskins via email at [email protected] or Ryan Tisdale via
email at [email protected].
Composite APCs (Multiple Imaging and Mental Health) and
Comprehensive APCs (C-APCs), via email at Mitali Dayal via email at
[email protected].
Device-Intensive Status and No Cost/Full Credit and Partial
Credit Devices, contact Scott Talaga via email at
[email protected].
Domestic Personal Protection Equipment RFI, contact Jesse
Hawkins via email at [email protected].
Health and Safety Standards for Obstetrical Services in
Hospitals and Critical Access Hospitals, contact The Clinical
Standards Group, [email protected].
Hospital Inpatient Quality Reporting (IQR) Program measures,
contact Melissa Hager or Ngozi Uzokwe via email
[email protected] or [email protected].
Hospital Outpatient Quality Reporting (OQR) Program policies,
contact Kimberly Go via email [email protected].
Hospital Outpatient Quality Reporting (OQR) Program measures,
contact Janis Grady via email [email protected].
Hospital Outpatient Visits (Emergency Department Visits and
Critical Care Visits), contact Abby Cesnik via email at
[email protected] or Nate Vercauteren via email at
[email protected].
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IHS Outpatient Encounter Rate available to all American Indian
and Alaska Native (AI/AN) Outpatient Programs Request for
Information, contact Lisa Parker via email at
[email protected].
Inpatient Only (IPO) Procedures List, contact Abigail Cesnik via
email at [email protected].
Medicaid and CHIP Continuous Eligibility Policy, contact Cassie
Lagorio via email at [email protected].
New Technology Intraocular Lenses (NTIOLs), contact Scott Talaga
via email at [email protected].
No Legal Obligation to Pay Payment Exclusion, contact Frederick
Grabau via email at [email protected].
Non-Opioid Policy or Implementation of Section 4135 of the
Consolidated Appropriations Act (CAA), 2023, contact Mitali Dayal
via email at [email protected] or Cory Duke via email at
[email protected].
OPPS Brachytherapy, contact Cory Duke via email at
[email protected] and Scott Talaga via email at
[email protected].
OPPS Data (APC Weights, Conversion Factor, Copayments, Cost-to-
Charge Ratios (CCRs), Data Claims, Geometric Mean Calculation,
Outlier Payments, and Wage Index), contact Erick Chuang via email at
[email protected], or Scott Talaga via email at
[email protected], or Josh McFeeters via email at
[email protected].
OPPS Dental Policy, contact Nicole Marcos via email at
[email protected].
OPPS Drugs, Radiopharmaceuticals, Biologicals, and Biosimilar
Products, contact Josh McFeeters via email at
[email protected], Gil Ngan via email at
[email protected], Cory Duke via email at [email protected],
or Au'Sha Washington via email at [email protected].
OPPS New Technology Procedures/Services, contact the New
Technology APC mailbox at [email protected].
OPPS Packaged Items/Services, contact Mitali Dayal via email at
[email protected] or Cory Duke via email at
[email protected].
OPPS Pass-Through Devices, contact the Device Pass-Through
mailbox at [email protected].
OPPS Status Indicators (SI) and Comment Indicators (CI), contact
Marina Kushnirova via email at [email protected].
Outpatient Department Prior Authorization Process, contact Kelly
Wojciechowski via email at [email protected].
Overall Hospital Quality Star Rating Request for Information,
contact Tyson Nakashima Sr. via email [email protected].
Partial Hospitalization Program (PHP), Intensive Outpatient
(IOP), and Community Mental Health Center (CMHC) Issues, contact the
PHP Payment Policy Mailbox at [email protected].
Payment Policy for Devices in Category B Investigational Device
Exemption Clinical Trials Policy and Drugs with a Medicare Coverage
with Evidence Development (CED) Designation, contact Cory Duke via
email at [email protected].
Remote Services, contact Emily Yoder via email at
[email protected] or Nate Vercauteren via email at
[email protected].
Rual Emergency Hospital Quality Reporting (REHQR) Program
policies, contact Anita Bhatia via email at
[email protected].
Rual Emergency Hospital Quality Reporting (REHQR) Program
measures, contact Melissa Hager via email [email protected].
Special Enrollment Period for Formerly Incarcerated Individuals,
contact Steve Manning via email at [email protected].
All Other Issues Related to Hospital Outpatient Payments Not
Previously Identified, contact the OPPS mailbox at
[email protected].
All Other Issues Related to the Ambulatory Surgical Center
Payments Not Previously Identified, contact the ASC mailbox at
[email protected].
SUPPLEMENTARY INFORMATION:
Inspection of Public Comments: All comments received before the
close of the comment period are available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. We post all comments
received before the close of the comment period on the following
website as soon as possible after they have been received: https://www.regulations.gov. Follow the search instructions on that website to
view public comments. CMS will not post on Regulations.gov public
comments that make threats to individuals or institutions or suggest
that the individual will take actions to harm the individual. CMS
continues to encourage individuals not to submit duplicative comments.
We will post acceptable comments from multiple unique commenters even
if the content is identical or nearly identical to other comments.
Plain Language Summary: In accordance with 5 U.S.C. 553(b)(4), a
plain language summary of this rule may be found at https://www.regulations.gov/.
Addenda Available Only Through the Internet on the CMS Website
In the past, a majority of the Addenda referred to in our OPPS/ASC
proposed and final rules were published in the Federal Register as part
of the annual rulemakings. However, beginning with the calendar year
(CY) 2012 OPPS/ASC proposed rule, all of the Addenda no longer appear
in the Federal Register as part of the annual OPPS/ASC proposed and
final rules to decrease administrative burden and reduce costs
associated with publishing lengthy tables. Instead, these Addenda are
published and available only on the CMS website. The Addenda relating
to the OPPS are available at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices.
The Addenda relating to the ASC payment system are available at:
https://www.cms.gov/medicare/payment/prospective-payment-systems/ambulatory-surgical-center-asc/asc-regulations-and-notices.
Current Procedural Terminology (CPT) Copyright Notice
Throughout this final rule with comment period, we use CPT codes
and descriptions to refer to a variety of services. We note that CPT
codes and descriptions are copyright 2021 American Medical Association
(AMA). All Rights Reserved. CPT is a registered trademark of the AMA.
Applicable Federal Acquisition Regulations and Defense Federal
Acquisition Regulations apply.
Table of Contents
I. Summary and Background
A. Executive Summary of This Document
B. Legislative and Regulatory Authority for the Hospital OPPS
C. Excluded OPPS Services and Hospitals
D. Prior Rulemaking
E. Advisory Panel on Hospital Outpatient Payment (the HOP Panel
or the Panel)
F. Public Comments Received on the CY 2024 OPPS/ASC Proposed
Rule
II. Proposed Updates Affecting OPPS Payments
A. Recalibration of APC Relative Payment Weights
B. Conversion Factor Update
C. Proposed Wage Index Changes
D. Proposed Statewide Average Default Cost-to-Charge Ratios
(CCRs)
E. Proposed Adjustment for Rural Sole Community Hospitals (SCHs)
and Essential Access Community Hospitals (EACHs) Under Section
1833(t)(13)(B) of the Act for CY 2025
F. Proposed Payment Adjustment for Certain Cancer Hospitals for
CY 2025
G. Proposed Hospital Outpatient Outlier Payments
H. Proposed Calculation of an Adjusted Medicare Payment From the
National Unadjusted Medicare Payment
I. Proposed Beneficiary Copayments
III. Proposed OPPS Ambulatory Payment Classification (APC) Group
Policies
A. Proposed OPPS Treatment of New and Revised HCPCS Codes
B. Proposed OPPS Changes--Variations Within APCs
C. Proposed New Technology APCs
D. Proposed Universal Low Volume APC Policy for Clinical and
Brachytherapy APCs
E. Proposed APC-Specific Policies
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IV. Proposed OPPS Payment for Devices
A. Proposed Pass-Through Payment for Devices
B. Proposed Device-Intensive Procedures
V. Proposed OPPS Payment for Drugs, Biologicals, and
Radiopharmaceuticals
A. Proposed OPPS Transitional Pass-Through Payment for
Additional Costs of Drugs, Biologicals, and Radiopharmaceuticals
B. Proposed OPPS Payment for Drugs, Biologicals, and
Radiopharmaceuticals Without Pass-Through Payment Status
VI. Proposed Estimate of OPPS Transitional Pass-Through Spending for
Drugs, Biologicals, Radiopharmaceuticals, and Devices
A. Amount of Additional Payment and Limit on Aggregate Annual
Adjustment
B. Estimate of Pass-Through Spending for CY 2025
VII. Proposed OPPS Payment for Hospital Outpatient Visits and
Critical Care Services
VIII. Proposed Payment for Partial Hospitalization and Intensive
Outpatient Services
A. Background
B. Coding and Billing for PHP and IOP Services Under the OPPS
C. Proposed CY 2025 Payment Rates for PHP and IOP
D. Proposed Outlier Policy for CMHCs
IX. Services That Will Be Paid Only as Inpatient Services
A. Background
B. Changes to the Inpatient Only (IPO) List
X. Nonrecurring Policy Changes
A. Remote Services
B. Virtual Direct Supervision of Cardiac Rehabilitation (CR),
Intensive Cardiac Rehabilitation (ICR), Pulmonary Rehabilitation
(PR) Services and Diagnostic Services Furnished to Hospital
Outpatients
C. All-Inclusive Rate (AIR) Add-On Payment for High-Cost Drugs
Provided by Indian Health Service and Tribal Facilities
D. Request for Information- IHS Outpatient Encounter Rate
Available to All American Indian and Alaska Native (AI/AN)
Outpatient Programs
E. Coverage Changes for Colorectal Cancer (CRC) Screening
Services
F. Request for Comment on Payment Adjustments Under the IPPS and
OPPS for Domestic Personal Protective Equipment
G. Payment for HIV Pre-Exposure Prophylaxis (PrEP) in Hospital
Outpatient Departments
H. Payment Policy for Devices in Category B Investigational
Device Exemption (IDE) Clinical Trials Policy and Drugs With a
Medicare Coverage With Evidence Development (CED) Designation
XI. Proposed CY 2025 OPPS Payment Status and Comment Indicators
A. Proposed CY 2025 OPPS Payment Status Indicator Definitions
B. Proposed CY 2025 Comment Indicator Definitions
XII. MedPAC Recommendations
A. OPPS Payment Rates Update
B. Medicare Safety Net Index
C. ASC Cost Data
XIII. Proposed Updates to the Ambulatory Surgical Center (ASC)
Payment System
A. Background, Legislative History, Statutory Authority, and
Prior Rulemaking for the ASC Payment System
B. Proposed ASC Treatment of New and Revised Codes
C. Proposed Payment Policies Under the ASC Payment System
D. Proposed Additions to ASC Covered Surgical Procedures and
Covered Ancillary Services Lists
E. ASC Payment Policy for Non-Opioid Post-Surgery Pain
Management Drugs, Biologicals, and Devices
F. Proposed CY 2025 Non-Opioid Policy for Pain Relief Under the
OPPS and ASC Payment System
G. Proposed New Technology Intraocular Lenses (NTIOLs)
H. Proposed Calculation of the ASC Payment Rates and the ASC
Conversion Factor
XIV. Cross-Program Proposals for the Hospital Outpatient Quality
Reporting (OQR), Rural Emergency Hospital Quality Reporting (REHQR),
and Ambulatory Surgical Center Quality Reporting (ASCQR) Programs
A. Background
B. CMS Commitment to Advancing Health Equity Using Quality
Measurement
C. Proposal To Modify the Immediate Measure Removal Policy for
the Hospital Outpatient Quality Reporting (OQR) and Ambulatory
Surgical Center Quality Reporting (ASCQR) Programs Beginning With CY
2025
XV. Hospital Outpatient Quality Reporting (OQR) Program
A. Background and Statutory Authority
B. Program Measure Set Policies
C. Program Measure Proposals
D. Administrative Requirements
E. Form, Manner, and Timing of Data Submission
F. Public Reporting of Measure Data
G. Payment Reduction for Hospitals That Fail To Meet the
Hospital OQR Program
XVI. Rural Emergency Hospital Quality Reporting (REHQR) Program
A. Background and Statutory Authority
B. Program Measure Set Policies: Retention, Suspension or
Removal, Modification, and Adoption
C. Program Measure Proposals
D. Administrative Requirements
E. Form, Manner, and Timing of Data Submission
F. Public Reporting of Measure Data
XVII. Ambulatory Surgical Center Quality Reporting (ASCQR) Program
A. Background and Statutory Authority
B. Program Measure Set Policies
C. Program Measure Proposals
D. Administrative Requirements
E. Form, Manner, and Timing of Data Submission
F. Public Reporting of Measure Data
G. Request for Information (RFI)--Development of Frameworks for
Specialty Focused Reporting and Minimum Case Number for Required
Reporting
H. Payment Reduction for ASCs That Fail To Meet the ASCQR
Program Requirements
XVIII. Medicaid Clinic Services Four Walls Exceptions
XIX. Changes to the Review Timeframes for the Hospital Outpatient
Department (OPD) Prior Authorization Process
XX. Provisions Related to Medicaid and the Children's Health
Insurance Program (CHIP)
XXI. Health and Safety Standards for Obstetrical Services in
Hospitals and Critical Access Hospitals
A. Background
B. Provisions of the Proposed Regulations
XXII. Modification to the Hybrid Hospital-Wide All-Cause Readmission
and Hybrid Hospital-Wide All-Cause Risk Standardized Mortality
Measures in the Hospital Inpatient Quality Reporting Program
XXIII. Individuals Currently or Formerly in the Custody of Penal
Authorities
A. Medicare FFS No Legal Obligation To Pay Payment Exclusion and
Incarceration (Revisions to 42 CFR 411.4)
B. Revision to Medicare Special Enrollment Period for Formerly
Incarcerated Individuals
XXIV. Overall Hospital Quality Star Rating Modification To Emphasize
the Safety of Care Summary
A. Background
B. Current Overall Hospital Quality Star Rating Methodology
C. Safety of Care in Star Ratings
D. Potential Future Options to Greater Emphasize Patient Safety
in the Overall Hospital Quality Star Rating
E. Solicitation of Public Comment
XXIII. Files Available to the Public via the Internet
XXIV. Collection of Information Requirements
A. ICRs for the Hospital Outpatient Quality Reporting (OQR)
Program
B. ICRs for the Rural Emergency Hospitals Quality Reporting
(REHQR) Program
C. ICRs for the Ambulatory Surgical Center Quality Reporting
(ASCQR) Program
D. ICRs Related to Medicaid Clinic Services Four Walls
Exceptions
E. ICRs for Changes to the Review Timeframes for Hospital
Outpatient Department (OPD) Prior Authorization Process
F. ICRs for the Hospital Inpatient Quality Reporting (IQR)
Program
G. ICRs for Continuous Eligibility (42 CFR 435.926 and 457.342)
H. ICRs Regarding Organization, Staffing and Delivery of
Services for Hospitals (Sec. 482.59a and b) and CAHs (Sec.
485.649a Through b)
I. ICRs Regarding OB Staff Training for Hospitals (Sec.
482.59(c) and CAHs (Sec. 485.649(c))
J. ICRs Regarding Revisions to QAPI (Sec. 482.21) Standards for
OB Services
K. ICRS Regarding Emergency Services Readiness in Emergency
Services (Sec. 482.55) for Hospitals
L. Transfer Protocols in Discharge Planning (Sec. 482.43) for
Hospitals
M. Total Costs for all ICRs Related to Maternal Health
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XXV. Response to Comments
XXVI. Economic Analyses
A. Statement of Need
B. Overall Impact of Provisions of Proposed Rule
C. Detailed Economic Analyses
D. Regulatory Review Cost Estimation
E. Regulatory Flexibility Act (RFA) Analysis
F. Unfunded Mandates Reform Act Analysis
G. Federalism
H. Conclusion
I. Summary and Background
A. Executive Summary of this Document
1. Purpose
In this proposed rule, we propose to update the payment policies
and payment rates for services furnished to Medicare beneficiaries in
hospital outpatient departments (HOPDs) and ambulatory surgical centers
(ASCs), beginning January 1, 2025. Section 1833(t) of the Social
Security Act (the Act) requires us to annually review and update the
payment rates for services payable under the Hospital Outpatient
Prospective Payment System (OPPS). Specifically, section 1833(t)(9)(A)
of the Act requires the Secretary of the Department of Health and Human
Services (the Secretary) to review certain components of the OPPS not
less often than annually, and to revise the groups, the relative
payment weights, and the wage and other adjustments that take into
account changes in medical practice, changes in technology, and the
addition of new services, new cost data, and other relevant information
and factors. In addition, under section 1833(i)(D)(v) of the Act, we
annually review and update the ASC payment rates. This proposed rule
also includes additional policy changes made in accordance with our
experience with the OPPS and the ASC payment system and recent changes
in our statutory authority. We describe these and various other
statutory authorities in the relevant sections of this proposed rule.
In addition, this proposed rule would update and refine the
requirements for the Hospital Outpatient Quality Reporting (OQR)
Program, the Rural Emergency Hospital Quality Reporting (REHQR)
Program, the Ambulatory Surgical Center Quality Reporting (ASCQR)
Program, and the Hospital Inpatient Quality Reporting (IQR) Program.
This proposed rule would request information on options being
considered for future changes to the Overall Hospital Quality Star
Rating methodology. Given that the maternal health crisis in the United
States is among the highest in high-income countries and also
disproportionately impacts racial and ethnic minorities, we are
proposing updates to the CoPs for hospitals and CAHs in an effort to
advance the health and safety of pregnant, birthing, and post-partum
women.
The proposed rule would narrow the description of ``custody'' for
the purposes of Medicare's no legal obligation to pay payment exclusion
at Sec. 411.4(b), add a definition of ``penal authority,'' reorganize
the regulation, and make certain technical edits. The proposed rule
would revise the eligibility requirements in the special enrollment
period (SEP) for formerly incarcerated individuals at Sec. Sec.
406.27(d) (Premium Part A) and 407.23(d) (Part B) to tie the
eligibility for this SEP to the determination made by SSA that they are
no longer incarcerated for releases beginning on January 1, 2025 and
limit the current eligibility criteria for the SEP, with reference to
``custody'' associated with Sec. 411.4(b) to releases between January
1, 2023 and December 31, 2024.
Finally, this proposed rule includes a proposal to create
exceptions to the Medicaid clinic services benefit four walls
requirement, to authorize Medicaid payment for services provided
outside the four walls of the clinic for IHS/Tribal clinics, behavioral
health clinics, and clinics located in rural areas. Our current
regulation at 42 CFR 440.90(b) includes an exception to the four walls
requirement under the Medicaid clinic services benefit only for certain
clinic services furnished to individuals who are unhoused. We believe
these proposed exceptions would help maintain and improve access for
the populations served by IHS/Tribal clinics, behavioral health
clinics, and clinics located in rural areas.
Please note, some sections of this proposed rule contain a request
for information (RFI). In accordance with the implementing regulations
of the Paperwork Reduction Act of 1995 (PRA), specifically 5 CFR
1320.3(h)(4), these general solicitations are exempt from the PRA.
Facts or opinions submitted in response to general solicitations of
comments from the public, published in the Federal Register or other
publications, regardless of the form or format thereof, provided that
no person is required to supply specific information pertaining to the
commenter, other than that necessary for self-identification, as a
condition of the agency's full consideration, are not generally
considered information collections and therefore not subject to the
PRA.
Respondents are encouraged to provide complete but concise
responses. These RFIs are issued solely for information and planning
purposes; they do not constitute a Request for Proposal (RFP),
applications, proposal abstracts, or quotations. These RFIs do not
commit the U.S. Government to contract for any supplies or services or
make a grant award. Further, CMS is not seeking proposals through these
RFIs and will not accept unsolicited proposals. Responders are advised
that the U.S. Government will not pay for any information or
administrative costs incurred in response to these RFIs; all costs
associated with responding to these RFIs will be solely at the
interested party's expense. Not responding to these RFIs does not
preclude participation in any future procurement, if conducted. It is
the responsibility of the potential responders to monitor these RFI
announcements for additional information pertaining to these requests.
Please note that CMS will not respond to questions about the policy
issues raised in these RFIs. CMS may or may not choose to contact
individual responders. Such communications would only serve to further
clarify written responses. Contractor support personnel may be used to
review RFI responses. Responses to this notice are not offers and
cannot be accepted by the U.S. Government to form a binding contract or
issue a grant. Information obtained as a result of these RFIs may be
used by the U.S. Government for program planning on a non-attribution
basis. Respondents should not include any information that might be
considered proprietary or confidential. These RFIs should not be
construed as a commitment or authorization to incur cost for which
reimbursement would be required or sought. All submissions become U.S.
Government property and will not be returned. CMS may publicly post the
comments received, or a summary thereof.
2. Summary of the Major Provisions
OPPS Update: For CY 2025, we propose to increase the
payment rates under the OPPS by an Outpatient Department (OPD) fee
schedule increase factor of 2.6 percent. This increase factor is based
on the proposed inpatient hospital market basket percentage increase of
3.0 percent for inpatient services paid under the hospital inpatient
prospective payment system (IPPS) reduced by a proposed productivity
adjustment of 0.4 percentage point. Based on this update, we estimate
that total payments to OPPS providers (including beneficiary cost
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sharing and estimated changes in enrollment, utilization, and case mix)
for calendar year (CY) 2025 would be approximately $88.2 billion, a
proposed increase of approximately $5.2 billion compared to estimated
CY 2024 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 0.9805 to the OPPS payments and copayments for all applicable
services.
ASC Payment Update: For CYs 2019 through 2023, we adopted
a policy to update the ASC payment system using the hospital market
basket update. In light of the impact of the COVID-19 PHE on healthcare
utilization, we extended our policy to update the ASC payment system
using the hospital market basket update an additional 2 years--through
CYs 2024 and 2025. Using the hospital market basket methodology, for CY
2025, we propose to increase payment rates under the ASC payment system
by 2.6 percent for ASCs that meet the quality reporting requirements
under the ASCQR Program. This increase is based on a proposed hospital
market basket percentage increase of 3.0 percent reduced by a
productivity adjustment of 0.4 percentage point. Based on this proposed
update, we estimate that total payments to ASCs (including beneficiary
cost sharing and estimated changes in enrollment, utilization, and
case-mix) for CY 2025 will be approximately $7.4 billion, an increase
of approximately $202 million compared to estimated CY 2024 Medicare
payments.
Data Used in CY 2025 OPPS/ASC Ratesetting: To set OPPS and
ASC payment rates, we normally use the most updated claims and cost
report data available. The best available claims data is the most
recent set of data which would be from 2 years prior to the calendar
year that is the subject of rulemaking. Cost report data usually lags
the claims data by a year, and we believe that using the most updated
cost report extract available from the Healthcare Cost Report
Information System (HCRIS) is appropriate for CY 2025 OPPS ratesetting.
Therefore, we are using our typical data process of using the most
updated cost reports and claims data available for CY 2025 OPPS
ratesetting.
Device Pass-Through Payment Applications: For CY 2025, we
received 14 complete applications for device pass-through payments. We
solicit public comment on these applications and will make final
determinations on these applications in the CY 2025 OPPS/ASC final rule
with comment period.
Changes to the List of ASC Covered Surgical Procedures and
Ancillary Services Lists: For CY 2025, we propose to add 20 medical and
dental procedures to the ASC CPL and ancillary services lists based
upon existing criteria at Sec. 416.166.
Changes to the Inpatient Only (IPO) List: For CY 2025, we
propose to add three services for which codes were newly created by the
AMA CPT Editorial Panel for CY 2025 to the IPO list: CPT codes 0894T
(Cannulation of the liver allograft in preparation for connection to
the normothermic perfusion device and decannulation of the liver
allograft following normothermic perfusion), 0895T (Connection of liver
allograft to normothermic machine perfusion device, hemostasis control;
initial 4 hours of monitoring time, including hourly physiological and
laboratory assessments (e.g., perfusate temperature, perfusate pH,
hemodynamic parameters, bile production, bile pH, bile glucose,
biliary), and 0896T (Connection of liver allograft to normothermic
machine perfusion device, hemostasis control; each additional hour,
including physiological and laboratory assessments (e.g., perfusate
temperature, perfusate pH, hemodynamic parameters, bile production,
bile pH, bile glucose, biliary bicarbonate, lactate levels, macroscopic
assessment)).
Remote Services: For CY 2025, we are clarifying our
policies for remotely furnished outpatient therapy services, Diabetes
Self-Management Training and Medical Nutrition Therapy services and
mental health services furnished remotely to beneficiaries in their
homes by hospital staff to maintain alignment across payment systems.
All-Inclusive Rate (AIR) Add-On Payment for High-Cost
Drugs Provided by Indian Health Service and Tribal Facilities: In CY
2024 OPPS/ASC rulemaking, due to health equity and beneficiary access
concerns, we solicited comment from the public on whether Medicare
should pay separately for certain high-cost drugs provided by IHS and
tribal facilities and, if so, how we might do so. Based on the
responses we received, we are proposing, starting January 1, 2025, to
separately pay IHS and tribal hospitals for high-cost drugs furnished
in hospital outpatient departments through an add-on payment in
addition to the AIR under the authorities used to calculate the AIR.
Clinical Trials Coding and Payment: We propose technical
refinements to our Category B clinical trials coding and payment policy
for devices and procedures. We are also proposing to extend our coding
and payment policy to drugs and devices that meet CAG's coverage and
evidence development (CED) requirement for which there is a control
arm.
Payment for HIV Pre-Exposure Prophylaxis (PrEP) in
Hospital Outpatient Departments: For CY 2025, we are proposing to pay
for HIV PrEP drugs covered as an additional preventive service and
related services under the OPPS, if covered by CMS through a National
Coverage Determination. We propose a site neutral policy where products
are generally paid similar rates under the OPPS and Physician Fee
Schedule.
Diagnostic Radiopharmaceuticals Separate Payment: We
propose to pay separately for diagnostic radiopharmaceuticals with per
day costs above a threshold of $630, which is approximately two times
the volume weighted average cost amount currently associated with
diagnostic radiopharmaceuticals. We also propose to update the $630
threshold in CY 2026 and subsequent years by the Producer Price Index
(PPI) for Pharmaceutical Preparations. Finally, we propose to pay for
separately payable diagnostic radiopharmaceuticals based on their Mean
Unit Cost (MUC) derived from OPPS claims and seek comment on the use of
Average Sales Price (ASP) for payment in future years.
Exclusion of Cell and Gene Therapies from Comprehensive
Ambulatory Payment Classification (C-APC) Packaging: We propose to
exclude qualifying cell and gene therapies from C-APC packaging and
seek comment on whether there are other changes to the C-APC packaging
policy we should consider for future years.
Add-on Payment for Radiopharmaceutical Technetium-99m (Tc-
99m): For CY 2025, an add-on payment applies radiopharmaceuticals that
use Tc-99m produced without use of highly enriched uranium (HEU). We
propose for CY 2026 that we would replace the add-on payment for
radiopharmaceuticals produced without the use of Tc-99m derived from
non-HEU sources with an add-on payment for radiopharmaceuticals that
use Tc-99m derived from domestically produced Mo-99.
Changes to the Review Timeframes for the Hospital
Outpatient Department (OPD) Prior Authorization Process: We are
changing the current review timeframe for prior authorization
[[Page 59191]]
requests for OPD services from 10-business days to 7-calendar days for
standard reviews.
Cross-Program Proposals for the Hospital Outpatient
Quality Reporting (OQR), Rural Emergency Hospital Quality Reporting
(REHQR), and Ambulatory Surgical Center Quality Reporting (ASCQR)
Programs: We propose to: (1) adopt the Hospital Commitment to Health
Equity (HCHE) measure in the Hospital OQR and REHQR Programs and the
Facility Commitment to Health Equity (FCHE) measure in the ASCQR
Program beginning with the CY 2025 reporting period/CY 2027 payment or
program determination; (2) adopt the Screening for Social Drivers of
Health (SDOH) measure in all three programs beginning with voluntary
reporting for the CY 2025 reporting period followed by mandatory
reporting beginning with the CY 2026 reporting period/CY 2028 payment
or program determination; (3) adopt the Screen Positive Rate for SDOH
measure in all three programs beginning with voluntary reporting for
the CY 2025 reporting period followed by mandatory reporting beginning
with the CY 2026 reporting period/CY 2028 payment or program
determination; and (4) modify the Immediate Measure Removal policy for
adopted Hospital OQR and ASCQR Program measures beginning with CY 2025.
Hospital Outpatient Quality Reporting (OQR) Program: In
addition to the cross-program proposals, we propose to: (1) adopt the
Patient Understanding of Key Information Related to Recovery After a
Facility-Based Outpatient Procedure or Surgery, Patient Reported
Outcome-Based Performance Measure (Information Transfer PRO-PM)
beginning with voluntary reporting for the CY 2026 reporting period
followed by mandatory reporting beginning with the CY 2027 reporting
period/CY 2029 payment determination; (2) remove the MRI Lumbar Spine
for Low Back Pain measure beginning with the CY 2025 reporting period/
CY 2027 payment determination; (3) remove the Cardiac Imaging for
Preoperative Risk Assessment for Non-Cardiac, Low-Risk Surgery measure
beginning with the CY 2025 reporting period/CY 2027 payment
determination; (4) require electronic health record (EHR) technology to
be certified to all electronic clinical quality measures (eCQMs)
available to report beginning with the CY 2025 reporting period/CY 2027
payment determination; and (5) publicly report the Median Time from
Emergency Department (ED) Arrival to ED Departure for Discharged ED
Patients measure--Psychiatric/Mental Health Patients stratification on
Care Compare beginning with CY 2025.
Rural Emergency Hospital Quality Reporting (REHQR)
Program: In addition to the cross-program proposals, we propose to: (1)
extend the reporting period for the Risk-Standardized Hospital Visits
Within 7 Days After Hospital Outpatient Surgery measure from one year
to two years beginning with the CY 2027 program determination; and (2)
establish when, after status conversion, REHs would be required to
report data under the REHQR Program.
Ambulatory Surgical Center Quality Reporting
(ASCQR) Program: In addition to the cross-program proposals, we are
requesting public comment on the potential development of frameworks
for specialty focused reporting and minimum case number for required
reporting under the ASCQR Program.
Hospital Inpatient Quality Reporting (IQR)
Program: We propose to continue voluntary reporting of the core
clinical data elements (CCDEs) and linking variables for both the
Hybrid Hospital-Wide Readmission (HWR) and Hybrid Hospital-Wide
Standardized Mortality (HWM) measures, for the performance period of
July 1, 2023 through June 30, 2024, impacting the FY 2026 payment
determination for the Hospital IQR Program.
Overall Hospital Quality Star Rating: We are requesting
information on potential modifications to the Safety of Care measure
group in the Overall Hospital Quality Star Rating methodology.
Medicare FFS No Legal Obligation to Pay Payment Exclusion
and Incarceration: We propose to narrow the description of ``custody''
for purposes of Medicare's no legal obligation to pay payment exclusion
at Sec. 411.4(b), add a definition of ``penal authority,'' reorganize
the regulation, and make certain technical edits.
Revision to Medicare Special Enrollment Period for
Formerly Incarcerated Individuals: The proposed rule would revise the
eligibility requirements in the special enrollment period (SEP) for
formerly incarcerated individuals at Sec. Sec. 406.27(d) and 407.23(d)
to remove the reference to ``custody'' associated with Sec. 411.4(b)
and instead tie the eligibility for this SEP to the determination made
by SSA that they are no longer incarcerated.
Continuous Eligibility in Medicaid and CHIP: We propose to
revise Medicaid and CHIP regulations to codify the requirement within
the CAA, 2023 to require States to provide 12 months of continuous
eligibility to children under the age of 19 in Medicaid and CHIP, with
limited exceptions. Specifically, we propose to remove the option to
provide continuous eligibility to a subgroup of Medicaid and CHIP
enrollees and for a time period of less than 12 months. For CHIP, we
propose to remove the option to disenroll children from CHIP during a
continuous eligibility period for failure to pay premiums.
Medicaid Clinic Services Four Walls Exceptions: Beginning
with the effective date of any final rule implementing this proposal,
we propose to add three exceptions to the Medicaid clinic services
benefit four walls requirement at 42 CFR 440.90. Our current regulation
at 42 CFR 440.90(b) allows for Medicaid payment for clinic services
furnished outside of the four walls of the clinic only to individuals
who are unhoused. Our proposal would add a mandatory exception to the
four walls requirement for IHS/Tribal clinics at 42 CFR 440.90(c) and
optional exceptions for behavioral health clinics and clinics located
in rural areas at 42 CFR 440.90(d) and (e), respectively.
Health and Safety Standards for Obstetrical Services in
Hospitals and Critical Access Hospitals: CMS is proposing new
Conditions of Participation (CoPs) for hospitals and CAHs for
obstetrical services, including new requirements for maternal quality
assessment and performance improvement (QAPI), maternal health data
reporting, baseline standards for the organization, staffing, and
delivery of care within obstetrical units, and staff training on
evidence-based best practices on an annual basis. CMS is further
proposing revisions to the emergency services CoP related to emergency
readiness for hospitals and CAHs that provide emergency services. In
addition, CMS is proposing revisions to the Discharge Planning CoP for
all hospitals and CAHs related to transfer protocols. Lastly, CMS is
soliciting comments on whether these proposed requirements should also
apply to rural emergency hospitals (REHs).
3. Summary of Costs and Benefits
In section XXVI of this proposed rule, we set forth a detailed
analysis of the regulatory and federalism impacts that the proposed
changes would have on affected entities and beneficiaries. Key
estimated impacts are described below.
a. Impacts of All OPPS Changes
Table 131 in section XXVI.C of this proposed rule displays the
distributional impact of all the proposed OPPS changes on various
groups of hospitals and CMHCs for CY 2025
[[Page 59192]]
compared to all estimated OPPS payments in CY 2024. We estimate that
the proposed policies in this proposed rule would result in a 2.3
percent overall increase in OPPS payments to providers. We estimate
that total OPPS payments for CY 2025, including beneficiary cost-
sharing, to the approximately 3,500 facilities paid under the OPPS
(including general acute care hospitals, children's hospitals, cancer
hospitals, and CMHCs) would increase by approximately $1.8 billion
compared to CY 2024 payments, excluding our estimated changes in
enrollment, utilization, and case-mix.
We estimated the isolated impact of our proposed OPPS policies on
CMHCs because CMHCs have historically only been paid for partial
hospitalization services under the OPPS. Since CY 2024, they have also
been paid for new intensive outpatient program (IOP) services under the
OPPS. Continuing the provider-specific structure we adopted beginning
in CY 2011, and basing payment fully on the type of provider furnishing
the service, we estimate a 7.2 percent increase in CY 2025 payments to
CMHCs relative to their CY 2024 payments.
b. Impacts of the Updated Wage Indexes
We estimate that our update of the wage indexes based on the fiscal
year (FY) 2025 IPPS final rule wage indexes would result in a 0.1
percent increase for urban hospitals under the OPPS and a 1.0 percent
increase for rural hospitals. These wage indexes include the
implementation of the Office of Management and Budget (OMB) labor
market area delineations based on 2020 Decennial Census data, with
updates, as discussed in section II.C of this proposed rule.
c. Impacts of the Rural Adjustment and the Cancer Hospital Payment
Adjustment
For CY 2025, we are continuing to provide additional payments to
cancer hospitals so that a cancer hospital's payment-to-cost ratio
(PCR) after the additional payments is equal to the weighted average
PCR for the other OPPS hospitals using the most recently submitted or
settled cost report data. Section 16002(b) of the 21st Century Cures
Act requires that this weighted average PCR be reduced by 1.0
percentage point. In light of the COVID-19 PHE impact on claims and
cost data used to calculate the target PCR, we had maintained the CY
2021 target PCR of 0.89 through CYs 2022 and 2023. However, in CY 2024,
we finalized a policy to reduce the target PCR by 1.0 percentage point
each calendar year until the target PCR equals the PCR of non-cancer
hospitals using the most recently submitted or settled cost report
data. For CY 2024, we finalized a target PCR of 0.88. For CY 2025, we
are proposing a target PCR of 0.87 to determine the CY 2025 cancer
hospital payment adjustment to be paid at cost report settlement. That
is, the payment adjustments would be the additional payments needed to
result in a PCR equal to 0.87 for each cancer hospital.
d. Impacts of the OPD Fee Schedule Increase Factor
For the CY 2025 OPPS/ASC, we are proposing an OPD fee schedule
increase factor of 2.6 percent and proposing to apply that increase
factor to the conversion factor for CY 2025. As a result of the
proposed OPD fee schedule increase factor and the proposed budget
neutrality adjustments, we estimate that urban hospitals would
experience an increase in payments of approximately 2.4 percent and
that rural hospitals would experience an increase in payments of 2.8
percent. Classifying hospitals by teaching status, we estimate non-
teaching hospitals would experience an increase in payments of 2.5
percent, minor teaching hospitals would experience an increase in
payments of 2.6 percent, and major teaching hospitals would experience
an increase in payments of 2.1 percent. We also classified hospitals by
the type of ownership. We estimate that hospitals with voluntary
ownership would experience an increase of 2.3 percent in payments,
while hospitals with government ownership would experience an increase
of 2.4 percent in payments. We estimate that hospitals with proprietary
ownership would experience an increase of 3.5 percent in payments.
e. Impacts of the Proposed ASC Payment Update
For impact purposes, the surgical procedures on the ASC covered
surgical procedure list are aggregated into surgical specialty groups
using CPT and HCPCS code range definitions. The percentage change in
estimated total payments by specialty groups under the CY 2025 payment
rates, compared to estimated CY 2024 payment rates, generally ranges
between an increase of 1 percent and an increase of 4 percent,
depending on the service, with some exceptions. We estimate the impact
of applying the proposed inpatient hospital market basket update to ASC
payment rates will increase payments by $202 million under the ASC
payment system in CY 2025.
f. Impacts of Medicaid Clinic Services Four Walls Exceptions
We estimate that the proposed exceptions to the four walls
requirement under the Medicaid clinic services benefit for IHS/Tribal
clinics, behavioral health clinics, and clinics located in rural areas
would increase total expenditures by $1.18 billion from FY 2025 through
2029. Our estimate includes a Federal impact of $1.15 billion and
impact to States of $30 million. These estimates are discussed in more
detail in section XXVI of this proposed rule.
g. Impacts of Health and Safety Standards for Obstetrical Services in
Hospitals and Critical Access Hospitals
We propose maternal health focused revisions to the CoPs for
hospitals and critical access hospitals (CAHs), which are estimated to
increase burden on hospitals and CAHs by $446 million annually with
total costs estimated at $4.46 billion over 10 years. We expect an
average annual cost of $70,671 per hospital and CAH. As discussed in
detail in section XXVI, we expect the benefits of these proposed
policies to include reduced maternal morbidity and mortality, leading
to financial benefits for patients, their families, and payors. We also
expect that the proposed policies are likely to reduce inequality in
maternal health outcomes among pregnant and postpartum women from
different groups and lead to overall improvements in patient care.
B. Legislative and Regulatory Authority for the Hospital OPPS
When Title XVIII of the Act was enacted, Medicare payment for
hospital outpatient services was based on hospital-specific costs. In
an effort to ensure that Medicare and its beneficiaries pay
appropriately for services and to encourage more efficient delivery of
care, the Congress mandated replacement of the reasonable cost-based
payment methodology with a prospective payment system (PPS). The
Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33) added section
1833(t) to the Act, authorizing implementation of a PPS for hospital
outpatient services. The OPPS was first implemented for services
furnished on or after August 1, 2000. Implementing regulations for the
OPPS are located at 42 CFR parts 410 and 419.
The Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of
1999 (BBRA) (Pub. L. 106-113) made major changes in the hospital OPPS.
The following Acts made additional changes to the OPPS: the Medicare,
[[Page 59193]]
Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000
(BIPA) (Pub. L. 106-554); the Medicare Prescription Drug, Improvement,
and Modernization Act of 2003 (MMA) (Pub. L. 108-173); the Deficit
Reduction Act of 2005 (DRA) (Pub. L. 109-171), enacted on February 8,
2006; the Medicare Improvements and Extension Act under Division B of
Title I of the Tax Relief and Health Care Act of 2006 (MIEA-TRHCA)
(Pub. L. 109-432), enacted on December 20, 2006; the Medicare,
Medicaid, and SCHIP Extension Act of 2007 (MMSEA) (Pub. L. 110-173),
enacted on December 29, 2007; the Medicare Improvements for Patients
and Providers Act of 2008 (MIPPA) (Pub. L. 110-275), enacted on July
15, 2008; the Patient Protection and Affordable Care Act (Pub. L. 111-
148), enacted on March 23, 2010, as amended by the Health Care and
Education Reconciliation Act of 2010 (Pub. L. 111-152), enacted on
March 30, 2010 (these two public laws are collectively known as the
Affordable Care Act); the Medicare and Medicaid Extenders Act of 2010
(MMEA, Pub. L. 111-309); the Temporary Payroll Tax Cut Continuation Act
of 2011 (TPTCCA, Pub. L. 112-78), enacted on December 23, 2011; the
Middle Class Tax Relief and Job Creation Act of 2012 (MCTRJCA, Pub. L.
112-96), enacted on February 22, 2012; the American Taxpayer Relief Act
of 2012 (Pub. L. 112-240), enacted January 2, 2013; the Pathway for SGR
Reform Act of 2013 (Pub. L. 113-67) enacted on December 26, 2013; the
Protecting Access to Medicare Act of 2014 (PAMA, Pub. L. 113-93),
enacted on March 27, 2014; the Medicare Access and CHIP Reauthorization
Act (MACRA) of 2015 (Pub. L. 114-10), enacted April 16, 2015; the
Bipartisan Budget Act of 2015 (Pub. L. 114-74), enacted November 2,
2015; the Consolidated Appropriations Act, 2016 (Pub. L. 114-113),
enacted on December 18, 2015, the 21st Century Cures Act (Pub. L. 114-
255), enacted on December 13, 2016; the Consolidated Appropriations
Act, 2018 (Pub. L. 115-141), enacted on March 23, 2018; the Substance
Use Disorder-Prevention that Promotes Opioid Recovery and Treatment for
Patients and Communities Act (Pub. L. 115-271), enacted on October 24,
2018; the Further Consolidated Appropriations Act, 2020 (Pub. L. 116-
94), enacted on December 20, 2019; the Coronavirus Aid, Relief, and
Economic Security Act (Pub. L. 116-136), enacted on March 27, 2020; the
Consolidated Appropriations Act, 2021 (Pub. L. 116-260), enacted on
December 27, 2020; the Inflation Reduction Act, 2022 (Pub. L. 117-169),
enacted on August 16, 2022; and Consolidated Appropriations Act (CAA),
2023 (Pub. L. 117-238), enacted December 29, 2022.
Under the OPPS, we generally pay for hospital Part B services on a
rate-per-service basis that varies according to the APC group to which
the service is assigned. We use the Healthcare Common Procedure Coding
System (HCPCS) (which includes certain Current Procedural Terminology
(CPT) codes) to identify and group the services within each APC. The
OPPS includes payment for most hospital outpatient services, except
those identified in section I.C of this final rule with comment period.
Section 1833(t)(1)(B) of the Act provides for payment under the OPPS
for hospital outpatient services designated by the Secretary (which
includes partial hospitalization services furnished by CMHCs), and
certain inpatient hospital services that are paid under Medicare Part
B.
The OPPS rate is an unadjusted national payment amount that
includes the Medicare payment and the beneficiary copayment. This rate
is divided into a labor-related amount and a nonlabor-related amount.
The labor-related amount is adjusted for area wage differences using
the hospital inpatient wage index value for the locality in which the
hospital or CMHC is located.
All services and items within an APC group are comparable
clinically and with respect to resource use, as required by section
1833(t)(2)(B) of the Act. In accordance with section 1833(t)(2)(B) of
the Act, subject to certain exceptions, items and services within an
APC group cannot be considered comparable with respect to the use of
resources if the highest median cost (or mean cost, if elected by the
Secretary) for an item or service in the APC group is more than 2 times
greater than the lowest median cost (or mean cost, if elected by the
Secretary) for an item or service within the same APC group (referred
to as the ``2 times rule''). In implementing this provision, we
generally use the cost of the item or service assigned to an APC group.
For new technology items and services, special payments under the
OPPS may be made in one of two ways. Section 1833(t)(6) of the Act
provides for temporary additional payments, which we refer to as
``transitional pass-through payments,'' for at least 2 but not more
than 3 years for certain drugs, biological agents, brachytherapy
devices used for the treatment of cancer, and categories of other
medical devices. For new technology services that are not eligible for
transitional pass-through payments, and for which we lack sufficient
clinical information and cost data to appropriately assign them to a
clinical APC group, we have established special APC groups based on
costs, which we refer to as New Technology APCs. These New Technology
APCs are designated by cost bands which allow us to provide appropriate
and consistent payment for designated new procedures that are not yet
reflected in our claims data. Similar to pass-through payments, an
assignment to a New Technology APC is temporary; that is, we retain a
service within a New Technology APC until we acquire sufficient data to
assign it to a clinically appropriate APC group.
C. Excluded OPPS Services and Hospitals
Section 1833(t)(1)(B)(i) of the Act authorizes the Secretary to
designate the hospital outpatient services that are paid under the
OPPS. While most hospital outpatient services are payable under the
OPPS, section 1833(t)(1)(B)(iv) of the Act excludes payment for
ambulance, physical and occupational therapy, and speech-language
pathology services, for which payment is made under a fee schedule. It
also excludes screening mammography, diagnostic mammography, and
effective January 1, 2011, an annual wellness visit providing
personalized prevention plan services. The Secretary exercises the
authority granted under the statute to also exclude from the OPPS
certain services that are paid under fee schedules or other payment
systems. Such excluded services include, for example, the professional
services of physicians and nonphysician practitioners paid under the
Medicare Physician Fee Schedule (MPFS); certain laboratory services
paid under the Clinical Laboratory Fee Schedule (CLFS); services for
beneficiaries with end-stage renal disease (ESRD) that are paid under
the ESRD prospective payment system; and services and procedures that
require an inpatient stay that are paid under the hospital IPPS. In
addition, section 1833(t)(1)(B)(v) of the Act does not include
applicable items and services (as defined in subparagraph (A) of
paragraph (21)) that are furnished on or after January 1, 2017, by an
off-campus outpatient department of a provider (as defined in
subparagraph (B) of paragraph (21)). We set forth the services that are
excluded from payment under the OPPS in regulations at 42 CFR 419.22.
Under Sec. 419.20(b) of the regulations, we specify the types of
hospitals that are excluded from payment under the OPPS. These excluded
hospitals are:
[[Page 59194]]
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;
Indian Health Service (IHS) hospitals; and
Rural emergency hospitals (REH).
D. Prior Rulemaking
On April 7, 2000, we published in the Federal Register a final rule
with comment period (65 FR 18434) to implement a prospective payment
system for hospital outpatient services. The hospital OPPS was first
implemented for services furnished on or after August 1, 2000. Section
1833(t)(9)(A) of the Act requires the Secretary to review certain
components of the OPPS, not less often than annually, and to revise the
groups, the relative payment weights, and the wage and other
adjustments to take into account changes in medical practices, changes
in technology, the addition of new services, new cost data, and other
relevant information and factors.
Since initially implementing the OPPS, we have published final
rules in the Federal Register annually to implement statutory
requirements and changes arising from our continuing experience with
this system. These rules can be viewed on the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices.
E. Advisory Panel on Hospital Outpatient Payment (the HOP Panel or the
Panel)
1. Authority of the Panel
Section 1833(t)(9)(A) of the Act, as amended by section 201(h) of
Public Law 106-113, and redesignated by section 202(a)(2) of Public Law
106-113, requires that we consult with an expert outside advisory panel
composed of an appropriate selection of representatives of providers to
annually review (and advise the Secretary concerning) the clinical
integrity of the payment groups and their weights under the OPPS. In CY
2000, based on section 1833(t)(9)(A) of the Act, the Secretary
established the Advisory Panel on Ambulatory Payment Classification
Groups (APC Panel) to fulfill this requirement. In CY 2011, based on
section 222 of the Public Health Service Act (the PHS Act), which gives
discretionary authority to the Secretary to convene advisory councils
and committees, the Secretary expanded the panel's scope to include the
supervision of hospital outpatient therapeutic services in addition to
the APC groups and weights. To reflect this new role of the panel, the
Secretary changed the panel's name to the Advisory Panel on Hospital
Outpatient Payment (the HOP Panel). The HOP Panel is not restricted to
using data compiled by CMS, and in conducting its review, it may use
data collected or developed by organizations outside the Department.
2. Establishment of the Panel
On November 21, 2000, the Secretary signed the initial charter
establishing the Panel, and, at that time, named the APC Panel. This
expert panel is composed of appropriate representatives of providers
(currently employed full-time, not as consultants, in their respective
areas of expertise) who review clinical data and advise CMS about the
clinical integrity of the APC groups and their payment weights. Since
CY 2012, the Panel also is charged with advising the Secretary on the
appropriate level of supervision for individual hospital outpatient
therapeutic services. The Panel is technical in nature, and it is
governed by the provisions of the Federal Advisory Committee Act
(FACA). The current charter specifies, among other requirements, that
the Panel--
May advise on the clinical integrity of Ambulatory Payment
Classification (APC) groups and their associated weights;
May advise on the appropriate supervision level for
hospital outpatient services;
May advise on OPPS APC rates for ASC covered surgical
procedures;
Continues to be technical in nature;
Is governed by the provisions of the FACA;
Has a Designated Federal Official (DFO); and
Is chaired by a Federal Official designated by the
Secretary.
The Panel's charter was amended on November 15, 2011, renaming the
Panel and expanding the Panel's authority to include supervision of
hospital outpatient therapeutic services and to add critical access
hospital (CAH) representation to its membership. The Panel's charter
was also amended on November 6, 2014 (80 FR 23009), and the number of
members was revised from up to 19 to up to 15 members. The Panel's
current charter was approved on November 21, 2022, for a 2-year period.
The current Panel membership and other information pertaining to
the Panel, including its charter, Federal Register notices, membership,
meeting dates, agenda topics, and meeting reports, can be viewed on the
CMS website at: https://www.cms.gov/Regulations-and-Guidance/Guidance/FACA/AdvisoryPanelonAmbulatoryPaymentClassificationGroups.html.
3. Panel Meetings and Organizational Structure
The Panel has held many meetings, with the last meeting taking
place on August 21, 2023. Prior to each meeting, we publish a notice in
the Federal Register to announce the meeting, new members, and any
other changes of which the public should be aware. Beginning in CY
2017, we have transitioned to one meeting per year (81 FR 31941). In CY
2022, we published a Federal Register notice requesting nominations to
fill vacancies on the Panel (87 FR 68499). CMS is currently accepting
nominations at: https://mearis.cms.gov.
In addition, the Panel has established an administrative structure
that, in part, currently includes the use of three subcommittee
workgroups to provide preparatory meeting and subject support to the
larger panel. The three current subcommittees include the following:
APC Groups and Status Indicator Assignments Subcommittee,
which advises and provides recommendations to the Panel on the
appropriate status indicators to be assigned to HCPCS codes, including
but not limited to whether a HCPCS code or a category of codes should
be packaged or separately paid, as well as the appropriate APC
assignment of HCPCS codes regarding services for which separate payment
is made;
Data Subcommittee, which is responsible for studying the
data issues confronting the Panel and for recommending options for
resolving them; and
Visits and Observation Subcommittee, which reviews and
makes recommendations to the Panel on all technical issues pertaining
to observation services and hospital outpatient visits paid under the
OPPS.
Each of these workgroup subcommittees was established by a majority
vote from the full Panel during a scheduled Panel meeting, and the
Panel recommended at the August 21, 2023, meeting that the
subcommittees continue. We accepted this recommendation.
For discussions of earlier Panel meetings and recommendations, we
refer readers to previously published OPPS/ASC proposed and final
rules, the CMS website mentioned earlier in this section, and the FACA
database at https://facadatabase.gov.
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F. Public Comments Received on the CY 2024 OPPS/ASC Final Rule With
Comment Period
We received approximately 180 timely pieces of correspondence on
the CY 2024 OPPS/ASC final rule with comment period that appeared in
the Federal Register on November 22, 2023 (88 FR 81540) and the related
correction notice. In-scope comments were related to the interim APC
assignments and/or status indicators of new or replacement Level II
HCPCS codes, which are identified with comment indicator ``NI'' in OPPS
Addendum B, ASC Addendum AA, and ASC Addendum BB to that final rule).
II. Proposed Updates Affecting OPPS Payments
A. Recalibration of APC Relative Payment Weights
1. Database Construction
a. Database Source and Methodology
Section 1833(t)(9)(A) of the Act requires that the Secretary review
not less often than annually and revise the relative payment weights
for Ambulatory Payment Classifications (APCs). In the April 7, 2000,
OPPS final rule with comment period (65 FR 18482), we explained in
detail how we calculated the relative payment weights that were
implemented on August 1, 2000, for each APC group.
For the CY 2025 OPPS, we propose to recalibrate the APC relative
payment weights for services furnished on or after January 1, 2025, and
before January 1, 2026 (CY 2025), using the same basic methodology that
we described in the CY 2024 OPPS/ASC final rule with comment period (88
FR 81549 through 81552), using CY 2023 claims data. That is, we propose
to recalibrate the relative payment weights for each APC based on
claims and cost report data for hospital outpatient department (HOPD)
services to construct a database for calculating APC group weights.
For the purpose of recalibrating the proposed APC relative payment
weights for CY 2025, we began with approximately 145 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, 2023, and before January 1, 2024, before applying our
exclusionary criteria and other methodological adjustments. After the
application of those data processing changes, we used approximately 73
million final action claims to develop the proposed CY 2025 OPPS
payment weights. For exact numbers of claims used and additional
details on the claims accounting process, we refer readers to the
claims accounting narrative under supporting documentation for this
proposed rule on the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient.
Addendum N to this proposed rule (which is available via the
internet on the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices)
includes the proposed list of bypass codes for CY 2025. The proposed
list of bypass codes contains codes that are reported on claims for
services in CY 2023 and, therefore, includes codes that were in effect
in CY 2023 and used for billing. We propose to retain these deleted
bypass codes on the proposed CY 2025 bypass list because these codes
existed in CY 2023 and were covered OPD services in that period, and CY
2023 claims data were used to calculate proposed CY 2025 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 this proposed rule. HCPCS
codes that we propose to add for CY 2025 are identified by asterisks
(*) in the fourth column of Addendum N.
b. Proposed Calculation and Use of Cost-to-Charge Ratios (CCRs)
For CY 2025, we propose to continue to use the hospital-specific
overall ancillary and departmental cost-to-charge ratios (CCRs) to
convert charges to estimated costs through application of a revenue
code-to-cost center crosswalk. To calculate the APC costs on which the
proposed CY 2025 APC payment rates are based, we calculated hospital-
specific departmental CCRs for each hospital for which we had CY 2023
claims data by comparing these claims data to the most recently
available hospital cost reports, which, in most cases, are from CY
2022. For the proposed CY 2025 OPPS payment rates, we used the set of
claims processed during CY 2023. 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 2023 (the year
of claims data we used to calculate the proposed CY 2025 OPPS payment
rates) and updates to the National Uniform Billing Committee (NUBC)
2023 Data specifications Manual. That crosswalk is available for review
and continuous comment on the CMS website at https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient.
In accordance with our longstanding policy, similar to our
finalized policy for CY 2024 OPPS ratesetting, we propose to calculate
CCRs for the standard cost centers--cost centers with a predefined
label--and nonstandard cost centers--cost centers defined by a
hospital--accepted by the electronic cost report database. In general,
the most detailed level at which we calculate CCRs is the hospital-
specific departmental level.
While we generally view the use of additional cost data as
improving our OPPS ratesetting process, we have historically not
included cost report lines for certain nonstandard cost centers in the
OPPS ratesetting database construction when hospitals have reported
these nonstandard cost centers on cost report lines that do not
correspond to the cost center number. We believe it is important to
further investigate the accuracy of these cost report data before
including such data in the ratesetting process. Further, we believe it
is appropriate to gather additional information from the public as well
before including them in OPPS ratesetting. For CY 2025, we propose not
to include the nonstandard cost centers reported in this way in the
OPPS ratesetting database construction.
2. Proposed Data Development and Calculation of Costs Used for
Ratesetting
In this section of this proposed rule, we discuss the use of claims
to calculate the OPPS payment rates for CY 2025. The Hospital OPPS page
on the CMS website on which this proposed rule is posted (https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient) provides an accounting of claims used in the development of
the proposed payment rates. That accounting provides additional detail
regarding the number of claims derived at each stage of the process. In
addition, later in this section we discuss the file of claims that
comprises the data set that is available upon payment of an
administrative fee under a CMS data use agreement. The CMS website,
https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient, includes information about obtaining
[[Page 59196]]
the ``OPPS Limited Data Set,'' which now includes the additional
variables previously available only in the OPPS Identifiable Data Set,
including International Classification of Diseases, Tenth Revision,
Clinical Modification (ICD-10-CM) diagnosis codes and revenue code
payment amounts. This file is derived from the CY 2023 claims that are
used to calculate the proposed payment rates for this proposed rule.
Previously, the OPPS established the scaled relative weights on
which payments are based using APC median costs, a process described in
the CY 2012 OPPS/ASC final rule with comment period (76 FR 74188).
However, as discussed in more detail in section II.A.2.f of the CY 2013
OPPS/ASC final rule with comment period (77 FR 68259 through 68271), we
finalized the use of geometric mean costs to calculate the relative
weights on which the CY 2013 OPPS payment rates were based. While this
policy changed the cost metric on which the relative payments are
based, the data process in general remained the same under the
methodologies that we used to obtain appropriate claims data and
accurate cost information in determining estimated service cost.
We used the methodology described in sections II.A.2.a through
II.A.2.c of this proposed rule to calculate the costs we used to
establish the proposed relative payment weights used in calculating the
OPPS payment rates for CY 2025 shown in Addenda A and B to this
proposed rule (which are available via the internet on the CMS website
at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices). We refer readers to section
II.A.4 of this proposed rule for a discussion of the conversion of APC
costs to scaled payment weights.
We note that under the OPPS, CY 2019 was the first year in which
the claims data used for setting payment rates (CY 2017 data) contained
lines with the modifier ``PN,'' which indicates nonexcepted items and
services furnished and billed by off-campus provider-based departments
(PBDs) of hospitals. Because nonexcepted items and services are not
paid under the OPPS, in the CY 2019 OPPS/ASC final rule with comment
period (83 FR 58832), we finalized a policy to remove those claim lines
reported with modifier ``PN'' from the claims data used in ratesetting
for the CY 2019 OPPS and subsequent years. For the CY 2025 OPPS, we
propose to continue to remove claim lines with modifier ``PN'' from the
ratesetting process.
For details of the claims accounting process used in this CY 2025
OPPS/ASC proposed rule, we refer readers to the claims accounting
narrative under supporting documentation for this proposed rule on the
CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient.
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 propose to continue to establish payment rates for blood and
blood products using our blood-specific CCR methodology (88 FR 49562),
which utilizes actual or simulated CCRs from the most recently
available hospital cost reports to convert hospital charges for blood
and blood products to costs. This methodology has been our standard
ratesetting methodology for blood and blood products since CY 2005. It
was developed in response to data analysis indicating that there was a
significant difference in CCRs for those hospitals with and without
blood-specific cost centers and past public comments indicating that
the former OPPS policy of defaulting to the overall hospital CCR for
hospitals not reporting a blood-specific cost center often resulted in
an underestimation of the true hospital costs for blood and blood
products. To address the differences in CCRs and to better reflect
hospitals' costs, our methodology simulates blood CCRs for each
hospital that does not report a blood cost center by calculating the
ratio of the blood-specific CCRs to hospitals' overall CCRs for those
hospitals that do report costs and charges for blood cost centers and
applies this mean ratio to the overall CCRs of hospitals not reporting
costs and charges for blood cost centers on their cost reports. We
propose to calculate the costs upon which the proposed payment rates
for blood and blood products are based using the actual blood-specific
CCR for hospitals that reported costs and charges for a blood cost
center and a hospital-specific, simulated, blood-specific CCR for
hospitals that did not report costs and charges for a blood cost
center.
We continue to believe that the hospital-specific, simulated,
blood-specific CCR methodology takes into account the unique charging
and cost accounting structure of each hospital, as it better responds
to the absence of a blood-specific CCR for a hospital than alternative
methodologies, such as defaulting to the overall hospital CCR or
applying an average blood-specific CCR across hospitals. This
methodology also yields more accurate estimated costs for these
products and results in payment rates for blood and blood products that
appropriately reflect the relative estimated costs of these products
for hospitals without blood cost centers and for these blood products
in general.
We refer readers to Addendum B to this proposed rule (which is
available via the internet on the CMS website at https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices) for the proposed CY 2025 payment rates for blood
and blood products (which are generally identified with status
indicator ``R'').
For a more detailed discussion of payments for blood and blood
products through APCs, we refer readers to:
the CY 2005 OPPS proposed rule (69 FR 50524 and 50525) for
a more comprehensive discussion of the blood-specific CCR methodology;
the CY 2008 OPPS/ASC final rule with comment period (72 FR
66807 through 66810) for a detailed history of the OPPS payment for
blood and blood products; and
the CY 2015 OPPS/ASC final rule with comment period (79 FR
66795 and 66796) for additional discussion of our policy not to make
separate payments for blood and blood products when they appear on the
same claims as services assigned to a C-APC.
(2) Brachytherapy Sources
Section 1833(t)(2)(H) of the Act mandates the creation of
additional groups of covered OPD services that classify devices of
brachytherapy--cancer treatment through solid source radioactive
implants--consisting of a seed or seeds (or radioactive source)
(``brachytherapy sources'') separately from other services or groups of
services. The statute provides certain criteria for the additional
groups. For the history of OPPS payment for brachytherapy sources, we
refer readers to prior OPPS final rules, such as the CY 2012 OPPS/ASC
final rule with comment period (77 FR 68240 and 68241). As we have
stated in prior OPPS updates, we believe that adopting the
[[Page 59197]]
general OPPS prospective payment methodology for brachytherapy sources
is appropriate for a number of reasons (77 FR 68240). The general OPPS
methodology uses costs based on claims data to set the relative payment
weights for hospital outpatient services. This payment methodology
results in more consistent, predictable, and equitable payment amounts
per source across hospitals by averaging the extremely high and low
values, in contrast to payment based on hospitals' charges adjusted to
costs. We believe that the OPPS methodology, as opposed to payment
based on hospitals' charges adjusted to cost, also would provide
hospitals with incentives for efficiency in the provision of
brachytherapy services to Medicare beneficiaries. Moreover, this
approach is consistent with our payment methodology for the vast
majority of items and services paid under the OPPS. We refer readers to
the CY 2016 OPPS/ASC final rule with comment period (80 FR 70323
through 70325) for further discussion of the history of OPPS payment
for brachytherapy sources.
For CY 2025, except where otherwise indicated, we propose to
continue our policy and use the costs derived from CY 2023 claims data
to set the proposed CY 2025 payment rates for brachytherapy sources
because CY 2023 is the year of data we propose to use to set the
proposed payment rates for most other items and services that would be
paid under the CY 2025 OPPS. With the exception of the proposed payment
rate for brachytherapy source C2645 (Brachytherapy planar source,
palladium-103, per square millimeter) and the proposed payment rates
for low-volume brachytherapy APCs discussed in section III.D of this
proposed rule, we propose to base the payment rates for brachytherapy
sources on the geometric mean unit costs for each source, consistent
with the methodology that we propose for other items and services paid
under the OPPS, as discussed in section II.A.2 of this proposed rule.
We also propose for CY 2025 and subsequent years to continue the other
payment policies for brachytherapy sources that we finalized and first
implemented in the CY 2010 OPPS/ASC final rule with comment period (74
FR 60537). For CY 2025 and subsequent years, we propose to pay for the
stranded and nonstranded not otherwise specified (NOS) codes, HCPCS
codes C2698 (Brachytherapy source, stranded, not otherwise specified,
per source) and C2699 (Brachytherapy source, non-stranded, not
otherwise specified, per source), at a rate equal to the lowest
stranded or nonstranded prospective payment rate for such sources,
respectively, on a per-source basis (as opposed to, for example, per
mCi), which is based on the policy we established in the CY 2008 OPPS/
ASC final rule with comment period (72 FR 66785). For CY 2025 and
subsequent years, we also propose to continue the policy we first
implemented in the CY 2010 OPPS/ASC final rule with comment period (74
FR 60537) regarding payment for new brachytherapy sources for which we
have no claims data, based on the same reasons we discussed in the CY
2008 OPPS/ASC final rule with comment period (72 FR 66786; which was
delayed until January 1, 2010, by section 142 of Pub. L. 110-275).
Specifically, this policy is intended to enable us to assign new HCPCS
codes for new brachytherapy sources to their own APCs, with prospective
payment rates set based on our consideration of external data and other
relevant information regarding the expected costs of the sources to
hospitals. The proposed CY 2025 payment rates for brachytherapy sources
are included on Addendum B to this proposed rule (which is available
via the internet on the CMS website) and identified with status
indicator ``U.''
For CY 2018, we assigned status indicator ``U'' (Brachytherapy
Sources, Paid under OPPS; separate APC payment) to HCPCS code C2645
(Brachytherapy planar source, palladium-103, per square millimeter) in
the absence of claims data and established a payment rate using
external data (invoice price) at $4.69 per mm\2\ for the brachytherapy
source's APC--APC 2648 (Brachytx planar, p-103). For CY 2019, in the
absence of sufficient claims data, we continued to establish a payment
rate for C2645 at $4.69 per mm\2\ for APC 2648 (Brachytx planar, p-
103). Our CY 2018 claims data available for the CY 2020 OPPS/ASC final
rule with comment period (84 FR 61142) included two claims with a
geometric mean cost for HCPCS code C2645 of $1.02 per mm\2\. In
response to comments from interested parties, we agreed that, given the
limited claims data available and a new outpatient indication for
C2645, a payment rate for HCPCS code C2645 based on the geometric mean
cost of $1.02 per mm\2\ may not adequately reflect the cost of HCPCS
code C2645. In the CY 2020 OPPS/ASC final rule with comment period, we
finalized our policy to use our equitable adjustment authority under
section 1833(t)(2)(E) of the Act, which states that the Secretary shall
establish, in a budget neutral manner, other adjustments as determined
to be necessary to ensure equitable payments, to maintain the CY 2019
payment rate of $4.69 per mm\2\ for HCPCS code C2645 for CY 2020.
Similarly, in the absence of sufficient claims data to establish an APC
payment rate, in the CY 2021, CY 2022, CY 2023, and CY 2024 OPPS/ASC
final rules with comment period (85 FR 85879 through 85880, 86 FR
63469, 87 FR 71760-71761, and 88 FR 81553), 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 CYs 2021 through 2024.
There are no CY 2023 claims available that reported HCPCS code
C2645 for this CY 2025 OPPS/ASC proposed rule. Therefore, in the
absence of claims data, we propose to continue to use our equitable
adjustment authority under section 1833(t)(2)(E) of the Act to maintain
the CY 2024 payment rate of $4.69 per mm\2\ for HCPCS code C2645, which
is proposed to be assigned to APC 2648 (Brachytx planar, p-103), for CY
2025.
Additionally, for CY 2022 and subsequent calendar years, we adopted
a Universal Low Volume APC policy for clinical and brachytherapy APCs.
As discussed in further detail in section X.C of the CY 2022 OPPS/ASC
final rule with comment period (86 FR 63743 through 63747), we adopted
this policy to mitigate wide variation in payment rates that occur from
year to year for APCs with low utilization. Such volatility in payment
rates from year to year can result in even lower utilization and
potential barriers to access. Brachytherapy APCs that have fewer than
100 single claims used for ratesetting purposes are designated as Low
Volume APCs unless an alternative payment rate is applied, such as the
use of our equitable adjustment authority under section 1833(t)(2)(E)
of the Act in the case of APC 2648 (Brachytx planar, p-103), for which
HCPCS code C2645 (Brachytherapy planar source, palladium-103, per
square millimeter) is the only code assigned as discussed previously in
this section.
For CY 2025, we propose to designate six brachytherapy APCs as Low
Volume APCs as these APCs meet our criteria to be designated as Low
Volume APCs. For more information on the brachytherapy APCs we propose
to designate as Low Volume APCs, see section III.D of this proposed
rule.
We invite interested parties to submit recommendations for new
codes to describe new brachytherapy sources.
[[Page 59198]]
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 2025
(1) Background
In the CY 2014 OPPS/ASC final rule with comment period (78 FR 74861
through 74910), we finalized a comprehensive payment policy that
packages payment for adjunctive and secondary items, services, and
procedures into the most costly primary procedure under the OPPS at the
claim level. The policy was finalized in CY 2014, but the effective
date was delayed until January 1, 2015, to allow additional time for
further analysis, opportunity for public comment, and systems
preparation. The comprehensive APC (C-APC) policy was implemented
effective January 1, 2015, with modifications and clarifications in
response to public comments received regarding specific provisions of
the C-APC policy (79 FR 66798 through 66810).
A C-APC is defined as a classification for the provision of a
primary service and all adjunctive services provided to support the
delivery of the primary service. We established C-APCs as a category
broadly for OPPS payment and implemented 25 C-APCs beginning in CY 2015
(79 FR 66809 and 66810). We have gradually added new C-APCs since the
policy was implemented beginning in CY 2015, with the number of C-APCs
now totaling 72 (80 FR 70332; 81 FR 79584 and 79585; 83 FR 58844
through 58846; 84 FR 61158 through 61166; 85 FR 85885; 86 FR 63474; 87
FR 71769; and 88 FR 81562).
Under our C-APC policy, we designate a service described by a HCPCS
code assigned to a C-APC as the primary service when the service is
identified by OPPS status indicator ``J1.'' When such a primary service
is reported on a hospital outpatient claim, taking into consideration
the few exceptions that are discussed below, we make payment for all
other items and services reported on the hospital outpatient claim as
being integral, ancillary, supportive, dependent, and adjunctive to the
primary service (hereinafter collectively referred to as ``adjunctive
services'') and representing components of a complete comprehensive
service (78 FR 74865 and 79 FR 66799). Payments for adjunctive services
are packaged into the payments for the primary services. This results
in a single prospective payment for each of the primary, comprehensive
services based on the costs of all reported services at the claim
level. One example of a primary service would be a partial mastectomy
and an example of a secondary service packaged into that primary
service would be a radiation therapy procedure.
Services excluded from the C-APC policy under the OPPS include
services that are not covered OPD services, services that cannot by
statute be paid for under the OPPS, and services that are required by
statute to be separately paid. This includes certain mammography and
ambulance services that are not covered OPD services in accordance with
section 1833(t)(1)(B)(iv) of the Act; brachytherapy seeds, which also
are required by statute to receive separate payment under section
1833(t)(2)(H) of the Act; pass-through payment drugs and devices, which
also require separate payment under section 1833(t)(6) of the Act;
self-administered drugs (SADs) that are not otherwise packaged as
supplies because they are not covered under Medicare Part B under
section 1861(s)(2)(B) of the Act; and certain preventive services (78
FR 74865 and 79 FR 66800 and 66801). A list of services excluded from
the C-APC policy is included in Addendum J to this proposed rule (which
is available via the internet on the CMS website at https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices). If a service does not appear on this
list of excluded services, payment for it will be packaged into the
payment for the primary C-APC service when it appears on an outpatient
claim with a primary C-APC service.
The C-APC policy payment methodology set forth in the CY 2014 OPPS/
ASC final rule with comment period and modified and implemented
beginning in CY 2015 is summarized as follows (78 FR 74887 and 79 FR
66800):
Basic Methodology. As stated in the CY 2015 OPPS/ASC final rule
with comment period, we define the C-APC payment policy as including
all covered OPD services on a hospital outpatient claim reporting a
primary service that is assigned to status indicator ``J1,'' \1\
excluding services that are not covered OPD services or that cannot by
statute be paid for under the OPPS. Services and procedures described
by HCPCS codes assigned to status indicator ``J1'' are assigned to C-
APCs based on our usual APC assignment methodology by evaluating the
geometric mean costs of the primary service claims to establish
resource similarity and the clinical characteristics of each procedure
to establish clinical similarity within each APC.
---------------------------------------------------------------------------
\1\ Status indicator ``J1'' denotes Hospital Part B Services
Paid Through a Comprehensive APC. Further information can be found
in CY 2025 Addendum D1.
---------------------------------------------------------------------------
In the CY 2016 OPPS/ASC final rule with comment period, we expanded
the C-APC payment methodology to qualifying extended assessment and
management encounters through the ``Comprehensive Observation
Services'' C-APC (C-APC 8011). Services within this APC are assigned
status indicator ``J2.'' \2\ Specifically, we make a payment through C-
APC 8011 for a claim that:
---------------------------------------------------------------------------
\2\ Status indicator ``J2'' denotes Hospital Part B Services
That May Be Paid Through a Comprehensive APC. Further information
can be found in CY 2025 Addendum D1.
---------------------------------------------------------------------------
Does not contain a procedure described by a HCPCS code to
which we have assigned status indicator ``T;''
Contains 8 or more units of services described by HCPCS
code G0378 (Hospital observation services, per hour);
Contains services provided on the same date of service or
one day before the date of service for HCPCS code G0378 that are
described by one of the following codes: HCPCS code G0379 (Direct
admission of patient for hospital observation care) on the same date of
service as HCPCS code G0378; CPT code 99281 (Emergency department visit
for the evaluation and management of a patient (Level 1)); CPT code
99282 (Emergency department visit for the evaluation and management of
a patient (Level 2)); CPT code 99283 (Emergency department visit for
the evaluation and management of a patient (Level 3)); CPT code 99284
(Emergency department visit for the evaluation and management of a
patient (Level 4)); CPT code 99285 (Emergency department visit for the
evaluation and management of a patient (Level 5)) or HCPCS code G0380
(Type B emergency department visit (Level 1)); HCPCS code G0381 (Type B
emergency department visit (Level 2)); HCPCS code G0382 (Type B
emergency department visit (Level 3)); HCPCS code G0383 (Type B
emergency department visit (Level 4)); HCPCS code G0384 (Type B
emergency department visit (Level 5)); CPT code 99291 (Critical care,
evaluation and management of the critically ill or critically injured
patient; first 30-74 minutes); or HCPCS code G0463 (Hospital outpatient
clinic visit
[[Page 59199]]
for assessment and management of a patient); and
Does not contain services described by a HCPCS code to
which we have assigned status indicator ``J1.''
The assignment of status indicator ``J2'' to a specific set of
services performed in combination with each other allows for all other
OPPS payable services and items reported on the claim (excluding
services that are not covered OPD services or that cannot by statute be
paid for under the OPPS) to be deemed adjunctive services representing
components of a comprehensive service and resulting in a single
prospective payment for the comprehensive service based on the costs of
all reported services on the claim (80 FR 70333 through 70336).
Services included under the C-APC payment packaging policy, that
is, services that are typically adjunctive to the primary service and
provided during the delivery of the comprehensive service, include
diagnostic procedures, laboratory tests, and other diagnostic tests and
treatments that assist in the delivery of the primary procedure; visits
and evaluations performed in association with the procedure; uncoded
services and supplies used during the service; durable medical
equipment as well as prosthetic and orthotic items and supplies when
provided as part of the outpatient service; and any other components
reported by HCPCS codes that represent services that are provided
during the complete comprehensive service (78 FR 74865 and 79 FR
66800).
In addition, payment for hospital outpatient department services
that are similar to therapy services, such as speech language
pathology, and delivered either by therapists or nontherapists is
included as part of the payment for the packaged complete comprehensive
service. These services that are provided during the perioperative
period are adjunctive services and are deemed not to be therapy
services as described in section 1834(k) of the Act, regardless of
whether the services are delivered by therapists or other nontherapist
health care workers. We have previously noted that therapy services are
those provided by therapists under a plan of care in accordance with
section 1835(a)(2)(C) and section 1835(a)(2)(D) of the Act and are paid
for under section 1834(k) of the Act, subject to annual therapy caps as
applicable (78 FR 74867 and 79 FR 66800). However, certain other
services similar to therapy services are considered and paid for as
hospital outpatient department services. Payment for these nontherapy
outpatient department services that are reported with therapy codes and
provided with a comprehensive service is included in the payment for
the packaged complete comprehensive service. We note that these
services, even though they are reported with therapy codes, are
hospital outpatient department services and not therapy services. We
refer readers to the July 2016 OPPS Change Request 9658 (Transmittal
3523) for further instructions on reporting these services in the
context of a C-APC service.
Items included in the packaged payment provided in conjunction with
the primary service also include all drugs, biologicals, and
radiopharmaceuticals, regardless of cost, except those drugs with pass-
through payment status and SADs, unless they function as packaged
supplies (78 FR 74868, 74869, and 74909 and 79 FR 66800). We refer
readers to Section 50.2M, Chapter 15, of the Medicare Benefit Policy
Manual for a description of our policy on SADs treated as hospital
outpatient supplies, including lists of SADs that function as supplies
and those that do not function as supplies.\3\
---------------------------------------------------------------------------
\3\ https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/bp102c15.pdf.
---------------------------------------------------------------------------
We define each hospital outpatient claim reporting a single unit of
a single primary service assigned to status indicator ``J1'' as a
single ``J1'' unit procedure claim (78 FR 74871 and 79 FR 66801). Line-
item charges for services included on the C-APC claim are converted to
line-item costs, which are then summed to develop the estimated APC
costs. These claims are then assigned one unit of the service with
status indicator ``J1'' and later used to develop the geometric mean
costs for the C-APC relative payment weights. (We note that we use the
term ``comprehensive'' to describe the geometric mean cost of a claim
reporting ``J1'' service(s) or the geometric mean cost of a C-APC,
inclusive of all the items and services included in the C-APC service
payment bundle.) Charges for services that would otherwise be
separately payable are added to the charges for the primary service.
This process differs from our traditional cost accounting methodology
only in that all such services on the claim are packaged (except
certain services as described above). We apply our standard data trims,
which exclude claims with extremely high primary units or extreme
costs.
The comprehensive geometric mean costs are used to establish
resource similarity and, along with clinical similarity, dictate the
assignment of the primary services to the C-APCs. We establish a
ranking of each primary service (single unit only) to be assigned to
status indicator ``J1'' according to its comprehensive geometric mean
costs. For the minority of claims reporting more than one primary
service assigned to status indicator ``J1'' or units thereof, we
identify one ``J1'' service as the primary service for the claim based
on our cost-based ranking of primary services. We then assign these
multiple ``J1'' procedure claims to the C-APC to which the service
designated as the primary service is assigned. If the reported ``J1''
services on a claim map to different C-APCs, we designate the ``J1''
service assigned to the C-APC with the highest comprehensive geometric
mean cost as the primary service for that claim. If the reported
multiple ``J1'' services on a claim map to the same C-APC, we designate
the most costly service (at the HCPCS code level) as the primary
service for that claim. This process results in initial assignments of
claims for the primary services assigned to status indicator ``J1'' to
the most appropriate C-APCs based on both single and multiple procedure
claims reporting these services and clinical and resource homogeneity.
Complexity Adjustments. We use complexity adjustments to provide
increased payment for certain comprehensive services. We apply a
complexity adjustment by promoting qualifying paired ``J1'' service
code combinations or paired code combinations of ``J1'' services and
certain add-on codes (as described further below) from the originating
C-APC (the C-APC to which the designated primary service is first
assigned) to the next higher paying C-APC in the same clinical family
of C-APCs. We apply this type of complexity adjustment when the paired
code combination represents a complex, costly form or version of the
primary service according to the following criteria:
Frequency of 25 or more claims reporting the code
combination (frequency threshold); and
Violation of the 2 times rule, as stated in section
1833(t)(2) of the Act and section III.B.2 of this proposed rule, in the
originating C-APC (cost threshold).
These criteria identify paired code combinations that occur
commonly and exhibit materially greater resource requirements than the
primary service. The CY 2017 OPPS/ASC final rule with comment period
(81 FR 79582) included a revision to the complexity adjustment
[[Page 59200]]
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 2025, we apply the frequency and cost criteria
thresholds discussed above, testing claims reporting one unit of a
single primary service assigned to status indicator ``J1'' and any
number of units of a single add-on code for the primary ``J1'' service.
If the frequency and cost criteria thresholds for a complexity
adjustment are met and reassignment to the next higher cost APC in the
clinical family is appropriate (based on meeting the criteria outlined
above), we make a complexity adjustment for the code combination; that
is, we reassign the primary service code reported in conjunction with
the add-on code to the next higher cost C-APC within the same clinical
family of C-APCs. As previously stated, we package payment for add-on
codes into the C-APC payment rate. If any add-on code reported in
conjunction with the ``J1'' primary service code does not qualify for a
complexity adjustment, payment for the add-on service continues to be
packaged into the payment for the primary service and is not reassigned
to the next higher cost C-APC. We list the complexity adjustments for
``J1'' and add-on code combinations for CY 2025, along with all the
other proposed complexity adjustments, in Addendum J to this proposed
rule (which is available via the internet on the CMS website at https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices).
Addendum J to this proposed rule includes the cost statistics for
each code combination that would qualify for a complexity adjustment
(including primary code and add-on code combinations). Addendum J to
this proposed rule also contains summary cost statistics for each of
the paired code combinations that describe a complex code combination
that would qualify for a complexity adjustment and be reassigned to the
next higher cost C-APC within the clinical family. The combined
statistics for all proposed reassigned complex code combinations are
represented by an alphanumeric code with the first four digits of the
designated primary service followed by a letter. For example, the
proposed geometric mean cost listed in Addendum J for the code
combination described by complexity adjustment assignment 3320R, which
is assigned to C-APC 5224 (Level 4 Pacemaker and Similar Procedures),
includes all paired code combinations that will be reassigned to C-APC
5224 when CPT code 33208 is the primary code. Providing the information
contained in Addendum J to this proposed rule allows interested parties
the opportunity to better assess the impact associated with the
assignment of claims with each of the paired code combinations eligible
for a complexity adjustment.
(2) Exclusion of Procedures Assigned to New Technology APCs From the C-
APC Policy
Services that are assigned to New Technology APCs are typically new
procedures that do not have sufficient claims history to establish an
accurate payment for them. Beginning in CY 2002, we retain services
within New Technology APC groups until we gather sufficient claims data
to enable us to assign the service to an appropriate clinical APC. This
policy allows us to move a service from a New Technology APC in less
than 2 years if sufficient data are available. It also allows us to
retain a service in a New Technology APC for more than 2 years if
sufficient data upon which to base a decision for reassignment have not
been collected (82 FR 59277).
The C-APC payment policy packages payment for adjunctive and
secondary items, services, and procedures into the most costly primary
procedure under the OPPS at the claim level. Prior to CY 2019, when a
procedure assigned to a New Technology APC was included on the claim
with a primary procedure, identified by OPPS status indicator ``J1,''
payment for the new technology service was typically packaged into the
payment for the primary procedure. Because the new technology service
was not separately paid in this scenario, the overall number of single
claims available to determine an appropriate clinical APC for the new
service was reduced. This was contrary to the objective of the New
Technology APC payment policy, which is to gather sufficient claims
data to enable us to assign the service to an appropriate clinical APC.
To address this issue and ensure that there are sufficient claims
data for services assigned to New Technology APCs, in the CY 2019 OPPS/
ASC final rule with comment period (83 FR 58847), we finalized
excluding payment for any procedure that is assigned to a New
Technology APC (APCs 1491 through 1599 and APCs 1901 through 1908) from
being packaged when included on a claim with a ``J1'' service assigned
to a C-APC. In the CY 2020 OPPS/ASC final rule with comment period, we
finalized that beginning in CY 2020, payment for services assigned to a
New Technology APC would be excluded from being packaged into the
payment for comprehensive observation
[[Page 59201]]
services assigned status indicator ``J2'' when they are included on a
claim with a ``J2'' service (84 FR 61167).
(3) Exclusion of Drugs and Biologicals Described by HCPCS Code C9399
(Unclassified Drugs or Biologicals) From the C-APC Policy
Section 1833(t)(15) of the Act, as added by section 621(a)(1) of
the Medicare Prescription Drug, Improvement, and Modernization Act of
2003 (Pub. L. 108-173), provides for payment under the OPPS for new
drugs and biologicals until HCPCS codes are assigned. Under this
provision, we are required to make payment for a covered outpatient
drug or biological that is furnished as part of covered outpatient
department services but for which a HCPCS code has not yet been
assigned in an amount equal to 95 percent of average wholesale price
(AWP) for the drug or biological.
In the CY 2005 OPPS/ASC final rule with comment period (69 FR
65805), we implemented section 1833(t)(15) of the Act by instructing
hospitals to bill for a drug or biological that is newly approved by
the Food and Drug Administration (FDA) and that does not yet have a
HCPCS code by reporting the National Drug Code (NDC) for the product
along with the newly created HCPCS code C9399 (Unclassified drugs or
biologicals). We explained that when HCPCS code C9399 appears on a
claim, the Outpatient Code Editor (OCE) suspends the claim for manual
pricing by the Medicare Administrative Contractor (MAC). The MAC prices
the claim at 95 percent of the drug or biological's AWP, using Red Book
or an equivalent recognized compendium, and processes the claim for
payment. We emphasized that this approach enables hospitals to bill and
receive payment for a new drug or biological concurrent with its
approval by the FDA. The hospital does not have to wait for the next
quarterly release or for approval of a product specific HCPCS code to
receive payment for a newly approved drug or biological or to resubmit
claims for adjustment. We instructed that hospitals would discontinue
billing HCPCS code C9399 and the NDC upon implementation of a product
specific HCPCS code, status indicator, and appropriate payment amount
with the next quarterly update. We also note that HCPCS code C9399 is
paid in a similar manner in the ASC setting, as 42 CFR 416.171(b)
outlines that certain drugs and biologicals for which separate payment
is allowed under the OPPS are considered covered ancillary services for
which the OPPS payment rate, which is 95 percent of AWP for HCPCS code
C9399, applies. Since the implementation of the C-APC policy in 2015,
payment for drugs and biologicals described by HCPCS code C9399 had
been included in the C-APC payment when these products appear on a
claim with a primary C-APC service. Packaging payment for these drugs
and biologicals that appear on a hospital outpatient claim with a
primary C-APC service is consistent with our C-APC packaging policy
under which we make payment for all items and services, including all
non-pass-through drugs, reported on the hospital outpatient claim as
being integral, ancillary, supportive, dependent, and adjunctive to the
primary service and representing components of a complete comprehensive
service, with certain limited exceptions (78 FR 74869). It was our
position that the total payment for the C-APC with which payment for a
drug or biological described by HCPCS code C9399 is packaged includes
payment for the drug or biological at 95 percent of its AWP.
However, we determined that in certain instances, drugs and
biologicals described by HCPCS code C9399 are not being paid at 95
percent of their AWPs when payment for them is packaged with payment
for a primary C-APC service. In order to ensure payment for new drugs,
biologicals, and radiopharmaceuticals described by HCPCS code C9399 at
95 percent of their AWP, for CY 2023 and subsequent years, we finalized
our proposal to exclude any drug, biological, or radiopharmaceutical
described by HCPCS code C9399 from packaging when the drug, biological,
or radiopharmaceutical is included on a claim with a ``J1'' service,
which is the status indicator assigned to a C-APC, and a claim with a
``J2'' service, which is the status indicator assigned to comprehensive
observation services. See Addendum J for the CY 2025 C-APC payment
policy exclusions.
In the CY 2023 OPPS/ASC final rule with comment period, we
finalized the proposal in section XI. ``CY 2023 OPPS Payment Status and
Comment Indicators'' to add a new definition to status indicator ``A''
to include unclassified drugs and biologicals that are reportable with
HCPCS code C9399 (87 FR 72051). The definition, found in Addendum D1,
would ensure the MAC prices claims for drugs, biologicals, or
radiopharmaceuticals billed with HCPCS code C9399 at 95 percent of the
drug or biological's AWP and pays separately for the drug, biological,
or radiopharmaceutical under the OPPS when it appears on the same claim
as a primary C-APC service.
(4) Exclusion of Cell and Gene Therapies From the C-APC Policy
As previously discussed in this section, and in the CY 2014 OPPS/
ASC final rule with comment period (78 FR 74865), the C-APC policy
packages payment for items and services that are typically integral,
ancillary, supportive, dependent, or adjunctive to the primary service
and provided during the delivery of the comprehensive service,
including diagnostic procedures, laboratory tests and other diagnostic
tests and treatments that assist in the delivery of the primary
procedure. In the CY 2014 OPPS/ASC final rule (78 FR 74861), we
finalized defining a comprehensive APC as a classification for the
provision of a primary service and all adjunctive services provided to
support the delivery of the primary service. Because a comprehensive
APC treats all individually reported codes as representing components
of the comprehensive service, we make a single prospective payment
based on the cost of all individually reported codes that represent the
provision of a primary service and all adjunctive services provided to
support that delivery of the primary service.
We generally treat all items and services reported on a C-APC claim
as integral, ancillary, supportive, dependent, and adjunctive to the
primary service and representing components of a comprehensive service.
Historically, items packaged for payment provided in conjunction with
the primary C-APC service also include all drugs, biologicals, and
radiopharmaceuticals, regardless of cost, except those drugs with pass-
through payment status and those drugs that are usually self-
administered (SADs), unless they function as supplies (78 FR 74868
through 74869 and 74909).
Our intent has been to make a single prospective payment based on
the cost of all individually reported codes that appear on a claim with
the primary C-APC service, which we believe represent the provision of
a primary service and all adjunctive services provided to support that
delivery of the primary service. However, there are rare instances
where the cell and gene therapies listed in Table 1, which are usually
separately payable under the OPPS, appear on the same claim as a
primary C-APC service and therefore, have their payment packaged with
payment for the primary C-APC service. The therapies in Table 1 are
usually separately paid and priced using the ASP methodology when not
on a C-APC claim. Given the unique nature of these therapies, we do not
believe they
[[Page 59202]]
function as integral, ancillary, supportive, dependent, or adjunctive
to any of the current C-APCs primary services. The cell therapies
described in Table 1 are primarily for the treatment of specific
cancers and are administered through an intravenous infusion. The gene
therapies listed in Table 1 are generally for the treatment of certain
rare ocular or spinal conditions caused by specific genetic mutations
and are also either intravenously infused or administered through a
subretinal injection. When these products are administered, they are
the primary treatment being administered to a patient and thus, are not
integral, ancillary, supportive, dependent, or adjunctive to any
primary C-APC services. Additionally, the current primary C-APC
services describe common surgical procedures, such as breast/lymphatic
surgery and musculoskeletal procedures. The cell and gene therapies
listed in Table 1 are intended to treat a specific condition and would
not be used to support the outcome of any primary C-APC procedure. For
example, HCPCS code J3399 (Injection, onasemnogene abeparvovec-xioi,
per treatment, up to 5x10[supcaret]15 vector genomes) may be used to
describe the gene therapy Zolgensma. This product is FDA-approved as an
adeno-associated virus (AAV) vector-based gene therapy indicated for
the treatment of pediatric patients less than 2 years of age with
spinal muscular atrophy (SMA) with bi-allelic mutations in the survival
motor neuron 1 (SMN1) gene. The specified mechanism of onasemnogene
abeparvovec is a recombinant AAV9-based gene therapy designed to
deliver a copy of the gene encoding the human SMN protein.\4\ The
function of a product such as Zolgensma, is not intended to be
integral, ancillary, supportive, dependent, and adjunctive to any C-APC
as the gene therapy itself is an independent treatment.
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\4\ Zolgensma. FDA Package Insert. October 2023. https://www.fda.gov/media/126109/download?attachment.
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Yescarta (HCPCS code Q2041) is an example of a cell therapy that
functions as an independent treatment. Based on its FDA-approved
indication,\5\ this product's intended clinical use would not be
integral, ancillary, supportive, dependent, or adjunctive to any
current C-APC primary service. Yescarta is indicated as a CD19-directed
genetically modified autologous T cell immunotherapy for the treatment
of Adult patients with large B-cell lymphoma that is refractory to
first-line chemoimmunotherapy or that relapses within 12 months of
first-line chemoimmunotherapy and adult patients with relapsed or
refractory large B-cell lymphoma after two or more lines of systemic
therapy, including diffuse large B-cell lymphoma (DLBCL) not otherwise
specified, primary mediastinal large B-cell lymphoma, high grade B-cell
lymphoma, and DLBCL arising from follicular lymphoma. Yescarta is the
primary treatment being performed when administered for these FDA-
approved indications and should not be packaged as supportive of any C-
APC primary service even if the two services appear on the same claim.
We explained in the CY 2014 OPPS/ASC final rule with comment period (78
FR 74868) that intravenous drugs, for example, are OPPS services that
are considered adjunctive to the primary procedure because the correct
administration of the drug either promotes a beneficial outcome, such
as the use of intravenous pain medications, or prevents possible
complications, such as the use of intravenous blood pressure
medications to temporarily replace oral blood pressure medications and
reduce the risk of a sudden rise in blood pressure when a normal daily
medication is stopped. In the case of the cell and gene therapies
described in Table 1, however, we do not believe the therapies
``promote a beneficial outcome'' or ``prevent possible complications''
of any of the procedures currently designated as primary C-APC
services. While the cell and gene therapies in Table 1 may ``promote a
beneficial outcome'' for the patient in general, we do not believe the
provision of cell and gene therapies are ``promoting a beneficial
outcome'' for any of the primary C-APC services themselves, as the cell
and gene therapies are serving as independent therapies. These are
distinguishable from the previous examples of intravenous pain
medications that are directly related to the primary C-APC service and
promote a beneficial outcome for that procedure. Further, in the CY
2014 OPPS/ASC final rule with comment period (78 FR 74865), we stated
that we proposed to package into C-APCs all of these integral,
ancillary, supportive, dependent, and adjunctive services, hereinafter
collectively referred to as ``adjunctive services,'' provided during
the delivery of the comprehensive service. This includes the diagnostic
procedures, laboratory tests and other diagnostic tests, and treatments
that assist in the delivery of the primary procedure. We do not believe
that the cell and gene therapies listed in Table 1 are assisting in the
delivery of any primary procedure currently assigned to a C-APC.
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\5\ FDA Package Insert. Yescarta. April 2024. https://www.fda.gov/media/108377/download?attachment.
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Therefore, for CY 2025 only, we propose not to package payment for
the cell and gene therapies listed in Table 1 into the payment for the
primary C-APC service when they appear on the same claim as primary C-
APCs services. We propose this policy for one year only in order to
gather more information from interested parties as to whether this
proposed policy appropriately captures all of the unique therapies,
such as the cell and gene therapies listed in Table 1, that function as
primary treatments and do not support C-APC primary services. As
discussed later in this section, we welcome comments from readers on
this proposal and the potential need for a different, modified,
expanded, or supplemental policy for future rulemaking. We will assess
whether to continue this policy, or a modified version of this policy,
beyond one year in future rulemaking, taking into consideration the
comments received.
We are not proposing to include therapies that are on drug pass-
through status for all of CY 2025 in Table 1 because pass-through drugs
are already excluded from C-APC packaging. We are proposing that
products for which pass-through status is expiring in CY 2025 would be
excluded from C-APC packaging after their pass-through status expires.
For example, the product described by HCPCS code Q2056 has pass-through
status expiring June 30, 2025. Until its pass-through status expires,
the product will be excluded from C-APC packaging due to the pass-
through C-APC exclusion policy, but after its pass-through status
expires, we propose that the therapy would continue to be excluded from
C-APC packaging under our proposed exclusion for cell and gene
therapies. For more information on drug pass-through status, including
expiring and continuing pass-through status, please see section V.A. of
this proposed rule.
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We propose to exclude the therapies listed in Table 1 from C-APC
packaging. We seek comment on this proposal, and we seek comment on
whether there are any additional cell and gene therapies that may be
appropriate to exclude from C-APC packaging for CY 2025. Commenters
should explain why any additional cell and gene therapies that they
believe should be excluded from C-APC packaging are not integral,
ancillary, supportive, dependent, or adjunctive to any C-APC primary
service. We seek comment on whether this proposal should be extended
beyond 1 year or if a different, expanded, or supplemental policy
approach may be warranted in future rulemaking. For example, we are
interested in comments on whether there are other classes of drugs,
biologicals, or other products that are not clearly integral,
ancillary, adjunctive, or supportive of a primary C-APC service but
could appear on the same claim as the C-APC for that primary service
and for which payment would be packaged into the C-APC payment under
our current policy. We would expect clinical evidence supporting
commenters' assertion that other identified classes of drugs,
biologicals, medical devices, or other
[[Page 59204]]
products are not clearly supportive of a primary C-APC service but may
nonetheless appear on the same claim as a primary C-APC procedure.
Similarly, we seek comment on whether interested parties believe it is
appropriate for these other classes of drugs, biologicals, or medical
devices to be excluded from packaging with all C-APCs or only specific
C-APCs, such as the Comprehensive Observation Services C-APC (SI =
``J2'').
Finally, we seek comment on the following:
(1) Because the cell and gene therapies listed in Table 1 are not
integral, ancillary, supportive, dependent, or adjunctive to any
current C-APC procedure, how could CMS structure a new C-APC, or
similar packaged payment policy, for the service to administer cell or
gene therapies, such by creating as a Chimeric Antigen Receptor (CAR)
T-cell therapy administration C-APC, with which the CAR-T or gene
therapy would be integral, ancillary, supportive, dependent, or
adjunctive to the primary C-APC service?
(2) What integral, ancillary, supportive, dependent, or adjunctive
items and services are routinely provided as part of the administration
of cell and gene therapies or in conjunction with cell and gene
therapies generally?
We recognize that currently, the following HCPCS codes are
associated with CAR-T therapy: HCPCS code 0537T (Chimeric antigen
receptor t-cell (car-t) therapy; harvesting of blood-derived t
lymphocytes for development of genetically modified autologous car-t
cells, per day), 0538T (Chimeric antigen receptor t-cell (car-t)
therapy; preparation of blood-derived t lymphocytes for transportation
(e.g., cryopreservation, storage)), 0539T (Chimeric antigen receptor t-
cell (car-t) therapy; receipt and preparation of car-t cells for
administration), and 0540T (Chimeric antigen receptor t-cell (car-t)
therapy; car-t cell administration, autologous) as discussed in
previous OPPS rulemaking, including the CY 2022 OPPS/ASC final rule
with comment period (86 FR 63550 through 63552).
Separately, we also seek comment on whether policy revisions to the
C-APC policy may be appropriate in future rulemaking, such as a
modified outlier payment policy specific to C-APCs to address related
situations in the future. We list all proposed C-APC exclusion
categories for CY 2025 in Addendum J to this proposed rule (which is
available via the internet on the CMS website at https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices).
(5) Exclusion of Non-Opioid Products for Pain Relief Under Section 4135
of the Consolidated Appropriations Act, 2023 From the C-APC Policy
The Consolidated Appropriations Act (CAA), 2023 (Pub. L. 117-328),
was signed into law on December 29, 2022. Section 4135(a) and (b) of
the CAA, 2023, titled ``Access to Non-Opioid Treatments for Pain
Relief,'' amended section 1833(t)(16) and section 1833(i) of the Social
Security Act, respectively, to provide for temporary additional
payments for non-opioid treatments for pain relief (as that term is
defined in section 1833(t)(16)(G)(i) of the Act). In particular,
section 1833(t)(16)(G) provides that with respect to a non-opioid
treatment for pain relief furnished on or after January 1, 2025, and
before January 1, 2028, the Secretary shall not package payment for the
non-opioid treatment for pain relief into payment for a covered OPD
service (or group of services) and shall make an additional payment for
the non-opioid treatment for pain relief as specified in clause (ii) of
that section. Clauses (ii) and (iii) of section 1833(t)(16)(G) of the
Act provide for the amount of additional payment and set a limitation
on that amount. As stated earlier in this section, our current policy
is to exclude from the packaged C-APC payment those items and services
that are required by statute to be separately paid.
Accordingly, we propose to exclude the non-opioid treatments for
pain relief identified as satisfying the required criteria for payment
under Section 4135 of the CAA, 2023 from the C-APC policy to ensure
payment is not packaged into any C-APC and that separate payment is
made in accordance with the statute. Please see section XIII.F. of this
proposed rule for a list of the products that we propose would qualify
for payment under the new payment policy for non-opioid drugs,
biologicals, and devices for pain relief.
(6) C-APCs for CY 2025
For CY 2025 and subsequent years, we propose to continue to apply
the C-APC payment policy methodology. We refer readers to the CY 2017
OPPS/ASC final rule with comment period (81 FR 79583) for a discussion
of the C-APC payment policy methodology and revisions.
Each year, in accordance with section 1833(t)(9)(A) of the Act, we
review and revise the services within each APC group and the APC
assignments under the OPPS. As a result of our annual review of the
services and the APC assignments under the OPPS, we are not proposing
to convert any standard APCs to C-APCs in CY 2025; thus, we propose
that the number of C-APCs for CY 2025 would be the same as the number
for CY 2024, which is 72 C-APCs.
Table 2 lists the proposed C-APCs for CY 2025, all of which were
established in past rules. All C-APCs are also displayed in Addendum J
to this proposed rule (which is available via the internet on the CMS
website). Addendum J to this proposed rule also contains all the data
related to the C-APC payment policy methodology, including the list of
complexity adjustments and other information.
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c. Calculation of Composite APC Criteria-Based Costs
As discussed in the CY 2008 OPPS/ASC final rule with comment period
(72 FR 66613), we believe it is important that the OPPS enhance
incentives for hospitals to provide necessary, high-quality care as
efficiently as possible. For CY 2008, we developed composite APCs to
provide a single payment for groups of services that are typically
performed together during a single clinical encounter and that result
in the provision of a complete service. Combining payment for multiple,
independent services into a single OPPS payment in this way enables
hospitals to manage their resources with maximum flexibility by
monitoring and adjusting the volume and efficiency of services
themselves. An additional advantage to the composite APC model is that
we can use data from correctly coded multiple procedure claims to
calculate payment rates for the specified combinations of services,
rather than relying upon single procedure claims which may be low in
volume and/or incorrectly coded. Under the OPPS, we currently have
composite policies for mental health services and multiple imaging
services. We refer readers to the CY 2008 OPPS/ASC final rule with
comment period (72 FR 66611 through 66614 and 66650 through 66652) for
a full discussion of the development of the composite APC methodology,
and the CY 2012 OPPS/ASC final rule with comment period (76 FR 74163)
and the CY 2018 OPPS/ASC final rule with comment period (82 FR 59241,
59242, and 59246 through 52950) for more recent background.
(1) Mental Health Services Composite APC
For CY 2025, we propose to continue our longstanding policy of
limiting the aggregate payment for specified less resource-intensive
mental health services furnished on the same date to the payment for a
day of partial hospitalization services provided by a hospital, which
we consider to be the most resource-intensive of all outpatient mental
health services (88 FR 49572). We refer readers to the April 7, 2000,
OPPS final rule with comment period (65 FR 18452 through 18455) for the
initial discussion of this longstanding policy and the CY 2012 OPPS/ASC
final rule with comment period (76 FR 74168) for more recent
background.
In the CY 2018 OPPS/ASC proposed rule and final rule with comment
period (82 FR 33580, 33581, 59246, and 59247), 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 for APC 5863, which was the
maximum partial hospitalization per diem payment rate for a hospital,
and finalized a policy that the hospital would continue to be paid the
payment rate for composite APC 8010. This policy applied in CYs 2018
through 2023.
In the CY 2024 OPPS/ASC proposed rule, we stated that APC 5863 was
no longer the maximum partial hospitalization per diem payment rate for
a hospital due to the creation of APC 5864, which is 4 or more
hospital-based PHP services per day (88 FR 49572). We solicited comment
on whether APC 5864 would be appropriate to use as the daily mental
health cap, as we have historically set the daily mental health cap for
composite APC 8010 at the maximum partial hospitalization per diem
payment rate for a hospital (88 FR 49572). Based on public comments
received and our longstanding policy, in CY 2024 OPPS/ASC final rule,
we finalized APC 5864, four hospital-based PHP services per day, as the
daily mental health cap (88 FR 81566).
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.
[[Page 59208]]
For CY 2025 and subsequent years, we propose to continue this policy
that when the aggregate payment for specified mental health services
provided by one hospital to a single beneficiary on a single date of
service, based on the payment rates associated with the APCs for the
individual services, exceeds the per diem payment rate for 4 partial
hospitalization services provided in a day by a hospital (the payment
amount for APC 5864), those specified mental health services would be
paid through composite APC 8010. In addition, we propose to continue to
set the payment rate for composite APC 8010 at the same payment rate
that we propose for APC 5864, which is a partial hospitalization per
diem payment rate for 4 partial hospitalization services furnished in a
day by a hospital.
Under this proposed policy, the Integrated OCE (I/OCE) would
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 5864 for all the specified mental health
services furnished by the hospital on that single date of service by
paying for the services through composite APC 5863.
(2) Multiple Imaging Composite APCs (APCs 8004, 8005, 8006, 8007, and
8008)
Effective January 1, 2009, we provide a single payment each time a
hospital submits a claim for more than one imaging procedure within an
imaging family on the same date of service, to reflect and promote the
efficiencies hospitals can achieve when performing multiple imaging
procedures during a single session (73 FR 41448 through 41450). We
utilize three imaging families based on imaging modality for purposes
of this methodology: (1) ultrasound; (2) computed tomography (CT) and
computed tomographic angiography (CTA); and (3) magnetic resonance
imaging (MRI) and magnetic resonance angiography (MRA). The HCPCS codes
subject to the multiple imaging composite policy and their respective
families are listed in Table 3 below.
While there are three imaging families, there are five multiple
imaging composite APCs due to the statutory requirement under section
1833(t)(2)(G) of the Act that we differentiate payment for OPPS imaging
services provided with and without contrast. While the ultrasound
procedures included under the policy do not involve contrast, both CT/
CTA and MRI/MRA scans can be provided either with or without contrast.
The five multiple imaging composite APCs established in CY 2009 are:
APC 8004 (Ultrasound Composite);
APC 8005 (CT and CTA without Contrast Composite);
APC 8006 (CT and CTA with Contrast Composite);
APC 8007 (MRI and MRA without Contrast Composite); and
APC 8008 (MRI and MRA with Contrast Composite).
We define the single imaging session for the ``with contrast''
composite APCs as having at least one or more imaging procedures from
the same family performed with contrast on the same date of service.
For example, if the hospital performs an MRI without contrast during
the same session as at least one other MRI with contrast, the hospital
will receive payment based on the payment rate for APC 8008, the ``with
contrast'' composite APC.
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 2025, we propose to continue to pay for all multiple imaging
procedures within an imaging family performed on the same date of
service using the multiple imaging composite APC payment methodology.
We continue to believe that this policy would reflect and promote the
efficiencies hospitals can achieve when performing multiple imaging
procedures during a single session.
For CY 2025, except where otherwise indicated, we propose to use
the costs derived from CY 2023 claims data to set the proposed CY 2025
payment rates. Therefore, for CY 2025, the proposed payment rates for
the five multiple imaging composite APCs (APCs 8004, 8005, 8006, 8007,
and 8008) were based on proposed geometric mean costs calculated from
CY 2023 claims available for the CY 2025 OPPS/ASC proposed rule that
qualify for composite payment under the current policy (that is, those
claims reporting more than one procedure within the same family on a
single date of service). To calculate the proposed geometric mean
costs, we used the same methodology that we used to calculate the
geometric mean costs for these composite APCs since CY 2014, as
described in the CY 2014 OPPS/ASC final rule with comment period (78 FR
74918). The imaging HCPCS codes referred to as ``overlap bypass codes''
that we removed from the bypass list for purposes of calculating the
proposed multiple imaging composite APC geometric mean costs, in
accordance with our established methodology as stated in the CY 2014
OPPS/ASC final rule with comment period (78 FR 74918), are identified
by asterisks in Addendum N to this proposed rule (which is available
via the internet on the CMS website) and are discussed in more detail
in section II.A.1.a of this proposed rule.
For this CY 2025 OPPS/ASC proposed rule, we were able to identify
approximately 0.95 million ``single session'' claims out of an
estimated 2.1 million potential claims for payment through composite
APCs from our ratesetting claims data, which represents approximately
45.0 percent of all eligible claims, to calculate the proposed CY 2025
geometric mean costs for the multiple imaging composite APCs. Table 3
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 2025.
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3. Proposed Changes to Packaged Items and Services
a. Background and Rationale for Packaging in the OPPS
Like other prospective payment systems, the OPPS relies on the
concept of averaging to establish a payment rate for services. The
payment may be more or less than the estimated cost of providing a
specific service or a bundle of specific services for a particular
beneficiary. The OPPS packages payments for multiple interrelated items
and services into a single payment to create incentives for hospitals
to furnish services most efficiently and to manage their resources with
maximum flexibility. Our packaging policies support our strategic goal
of using larger payment bundles in the OPPS to maximize hospitals'
incentives to provide care in the most efficient manner. For example,
where there are a variety of devices, drugs, items, and supplies that
could be used to furnish a service, some of which are more costly than
others, packaging encourages hospitals to use the most cost-efficient
item that meets the patient's needs, rather than to routinely use a
more expensive item, which may occur if separate payment is provided
for the item.
Packaging also encourages hospitals to effectively negotiate with
manufacturers and suppliers to reduce the purchase price of items and
services
[[Page 59213]]
or to explore alternative group purchasing arrangements, thereby
encouraging the most economical health care delivery. Similarly,
packaging encourages hospitals to establish protocols that ensure that
necessary services are furnished, while scrutinizing the services
ordered by practitioners to maximize the efficient use of hospital
resources. Packaging payments into larger payment bundles promotes the
predictability and accuracy of payment for services over time. Finally,
packaging may reduce the importance of refining service-specific
payment because packaged payments include costs associated with higher
cost cases requiring many ancillary items and services and lower cost
cases requiring fewer ancillary items and services. Because packaging
encourages efficiency and is an essential component of a prospective
payment system, packaging payments for items and services that are
typically integral, ancillary, supportive, dependent, or adjunctive to
a primary service has been a fundamental part of the OPPS since its
implementation in August 2000. As we continue to develop larger payment
groups that more broadly reflect services provided in an encounter or
episode of care, we have expanded the OPPS packaging policies. Most,
but not necessarily all, categories of items and services currently
packaged in the OPPS are listed in 42 CFR 419.2(b). Our overarching
goal is to make payments for all services under the OPPS more
consistent with those of a prospective payment system and less like
those of a per-service fee schedule, which pays separately for each
coded item. As a part of this effort, we have continued to examine the
payment for items and services provided under the OPPS to determine
which OPPS services can be packaged to further achieve the objective of
advancing the OPPS toward a more prospective payment system.
b. Proposal on Packaged Items and Services
For CY 2025, 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 2025, we do not propose any changes to the overall packaging
policy discussed. We propose to continue to conditionally package the
costs of selected newly identified ancillary services into payment for
a primary service where we believe that the packaged item or service is
integral, ancillary, supportive, dependent, or adjunctive to the
provision of care that was reported by the primary service HCPCS code.
c. Proposed Payment for Diagnostic Radiopharmaceuticals
(1) Background on OPPS Packaging Policy for Diagnostic
Radiopharmaceuticals
Under the OPPS, we package several categories of nonpass-through
drugs, biologicals, and radiopharmaceuticals, regardless of the cost of
the products. Because the products are packaged according to the
policies in Sec. 419.2(b), we refer to them as ``policy-packaged''
drugs, biologicals, and radiopharmaceuticals. In particular, under
Sec. 419.2(b)(15), payment for drugs, biologicals, and
radiopharmaceuticals that function as supplies when used in a
diagnostic test or procedure is packaged with the payment for the
related procedure or service. Packaging costs into a single aggregate
payment for a service, encounter, or episode of care is a fundamental
principle that distinguishes a prospective payment system from a fee
schedule. In general, packaging the costs of supportive items and
services into the payment for the primary procedure or service with
which they are associated encourages hospital efficiencies and enables
hospitals to manage their resources with maximum flexibility.
In the CY 2008 OPPS/ASC final rule with comment period we finalized
the packaging status of diagnostic radiopharmaceuticals as part of our
overall enhanced packaging approach for the CY 2008 OPPS and subsequent
years (72 FR 66635 through 66641). Importantly, we believed diagnostic
radiopharmaceuticals are always intended to be used with a diagnostic
nuclear medicine procedure and function as supplies when used in a
diagnostic test or procedure, making it appropriate to package the
payment for the diagnostic radiopharmaceutical into the payment for the
related nuclear medicine procedure. Diagnostic radiopharmaceuticals are
one specific type of product that is policy packaged under the category
described by Sec. 419.2(b)(15). Since we implemented this policy in CY
2008, interested parties have raised concerns regarding policy
packaging of diagnostic radiopharmaceuticals. In previous rulemaking
(87 FR 71962 and 71963), commenters recommended that CMS always pay
separately under the OPPS for diagnostic radiopharmaceuticals, not just
when the products have pass-through payment status. Many of these
commenters mentioned that pass-through payment status helps the
diffusion of new diagnostic radiopharmaceuticals into the market.
However, commenters believe the packaged payment rate is often
inadequate after pass-through status expires, especially in cases where
the diagnostic radiopharmaceutical is high-cost and has low
utilization.
We have heard from interested parties regarding alternative payment
methodologies, such as subjecting diagnostic radiopharmaceuticals to
the drug packaging threshold and creating separate APC payments for
diagnostic radiopharmaceuticals with a per-day cost greater than $500.
Interested parties have also recommended that we analyze our nuclear
medicine APC structure and consider establishing additional nuclear
medicine APCs to reflect the costs of diagnostic radiopharmaceuticals
more accurately. Historically, commenters opposed incorporating the
cost of diagnostic radiopharmaceuticals into the associated nuclear
medicine APC as the nuclear medicine APCs are sometimes paid at a lower
rate than the payment rate for the diagnostic radiopharmaceutical
itself when it has pass-through payment status (87 FR 71962 and 71963).
Importantly, commenters historically have also been concerned that
packaging payment for precision diagnostic radiopharmaceuticals in the
outpatient hospital setting creates barriers to beneficiary access for
safety net hospitals serving a high proportion of Medicare
beneficiaries and hospitals serving underserved communities (87 FR
71962 and 71963). Commenters specified that certain populations, such
as those with Alzheimer's disease, depend on the use of certain high-
cost diagnostic radiopharmaceuticals. Commenters discussed difficulties
enrolling hospitals in clinical studies due to OPPS packaging policies
and suggested that we pay separately under the OPPS specifically for
radiopharmaceuticals that are used for Alzheimer's disease.
Additionally, commenters have recommended that CMS continue to apply
radiolabeled product edits to the nuclear medicine procedures to ensure
that all packaged costs are included on nuclear medicine
[[Page 59214]]
claims to establish appropriate payment rates in the future. Beginning
January 1, 2008, CMS implemented OPPS edits that require hospitals to
include a HCPCS code for a radiolabeled product when a separately
payable nuclear medicine procedure is present on a claim. This policy
to require hospitals to include a HCPCS code for a radiolabeled product
for a separately payable nuclear medicine procedure ended in CY 2014
(78 FR 75033 through 75034).
Many of these comments and our responses have been discussed in
rulemaking since the policy to package diagnostic radiopharmaceuticals
was adopted, and they prompted us to solicit comment on the payment of
diagnostic radiopharmaceuticals in the CY 2024 OPPS/ASC proposed rule
(88 FR 49577). In that proposed rule, we stated we continue to believe
that diagnostic radiopharmaceuticals are an integral component of many
nuclear medicine and imaging procedures and charges associated with
them should be reported on hospital claims to the extent they are used.
Accordingly, we reiterated our belief that the payment for the
diagnostic radiopharmaceutical should be reflected within the payment
for the primary procedure with which it is used. We noted that
ratesetting uses the geometric mean of reported procedure costs, which
in the example of nuclear medicine procedures includes the costs of the
reported diagnostic radiopharmaceutical, based on data submitted to CMS
from all hospitals paid under the OPPS to set the payment rate for the
service. The costs that are calculated by Medicare reflect the average
costs of items and services that are packaged into a primary procedure
and will not necessarily equal the sum of the cost of the primary
procedure and the average sales price of the specific items and
services used in the procedure in each case. Furthermore, we explained
that the costs are based on the reported costs submitted to Medicare by
the hospitals and not the list price established by the manufacturer.
Claims data that include the diagnostic radiopharmaceutical packaged
with the associated procedure should reflect the combined cost of the
procedure and the radiopharmaceutical used in the procedure.
As we have reiterated over the years, we believe packaging policies
are inherent principles of the OPPS and are essential to a prospective
payment system. At the same time, we have explained that we are
committed to ensuring beneficiary access to diagnostic
radiopharmaceuticals while also ensuring the availability of new and
innovative diagnostic tools for Medicare beneficiaries. Therefore, we
sought public comments on potential modifications to our packaging
policy for diagnostic radiopharmaceuticals to ensure equitable payment
and continued beneficiary access.
As described in the CY 2024 OPPS/ASC proposed rule (88 FR 49578),
we solicited comment on how the OPPS packaging policy for diagnostic
radiopharmaceuticals has impacted beneficiary access, including whether
there are specific patient populations or clinical disease states for
whom this issue is especially critical.
In addition, we solicited comment on the following potential
approaches that would enhance beneficiary access, while also
maintaining the principles of the outpatient prospective payment
system. These approaches included: (1) paying separately for diagnostic
radiopharmaceuticals with per-day costs above the OPPS drug packaging
threshold of $140; (2) establishing a specific per-day cost threshold
that may be greater or less than the OPPS drug packaging threshold; (3)
restructuring APCs, including by adding nuclear medicine APCs for
services that utilize high-cost diagnostic radiopharmaceuticals; (4)
creating specific payment policies for diagnostic radiopharmaceuticals
used in clinical trials; and (5) adopting codes that incorporate the
disease state being diagnosed or a diagnostic indication of a
particular class of diagnostic radiopharmaceuticals.
Finally, we were interested in hearing from stakeholders how the
suggested policy modifications might impact our overarching goal of
utilizing packaging policies to better align OPPS policies with those
of a prospective payment system rather than a fee schedule. We stated
we would also like to know if making any of the suggested policy
changes could have negative consequences for beneficiaries, such as
unintentionally influencing clinical practice decisions, increasing
beneficiary cost-sharing obligations, or inadvertently encouraging the
use of higher-cost diagnostic radiopharmaceuticals over lower cost, but
equally effective, diagnostic options.
We received a significant number of comments in response to the
comment solicitation on potential issues caused by our current payment
policy for diagnostic radiopharmaceuticals under the OPPS and on new
approaches to payment for these products. Commenters expressed concerns
regarding the CMS policy to package diagnostic radiopharmaceuticals and
the financial implications this policy has for facilities. Commenters
believe that, for newer, more innovative radiopharmaceuticals, the
current OPPS packaging policy has led to a lack of patient access to
the technologies after the radiopharmaceutical's pass-through status
expires, especially if there is no clinical alternative to the
radiopharmaceutical. Most commenters requested that CMS provide
separate payment for diagnostic radiopharmaceuticals. Some commenters
believed paying separately for all diagnostic radiopharmaceuticals
regardless of their per-day cost was the best methodology to avoid
encouraging price inflation for diagnostic radiopharmaceuticals to
reach a certain threshold. Other commenters thought that applying the
existing OPPS per-day cost threshold ($135 for CY 2024) to the payment
of diagnostic radiopharmaceuticals would be an adequate solution.
Others supported a $500 threshold, and many cited the Facilitating
Innovative Nuclear Diagnostics Act (FIND Act) of 2023 as their
rationale for that number and recognized that the $500 threshold number
may be a more targeted approach relative to the OPPS drug packaging
threshold as the higher cost diagnostic radiopharmaceuticals are the
most disadvantaged by the OPPS packaging policy in their view. For the
full discussion on the comment solicitation summarized here, refer to
the CY 2024 OPPS/ASC final rule with comment period (88 FR 81573
through 81577).
(2) Proposed Packaging Threshold for Diagnostic Radiopharmaceuticals
As stated in the CY 2024 OPPS final rule with comment period (88 FR
81577), we agree with commenters that payment for diagnostic
radiopharmaceuticals is a complex and important issue. We explained
that we intended to further consider these points and take them into
consideration for future notice and comment rulemaking. After
significant consideration and ongoing engagement from interested
parties, we are proposing a change to our current policy that packages
diagnostic radiopharmaceuticals regardless of their cost.
We continue to believe diagnostic radiopharmaceuticals are always
intended to be used with a diagnostic nuclear medicine procedure and
function as supplies when used in a diagnostic test or procedure,
generally making it appropriate to package payment for them with
payment for the related nuclear medicine procedure. While we continue
to believe that this should be the policy for most diagnostic
[[Page 59215]]
radiopharmaceuticals, we believe there are certain situations in which
the packaged payment amount attributed to the diagnostic
radiopharmaceutical used in an imaging procedure assigned to a nuclear
medicine APC may not adequately account for the cost of a diagnostic
radiopharmaceutical that has a significantly higher cost, but lower
utilization relative to the other diagnostic radiopharmaceuticals that
may be used with the procedure. In situations where a hospital may have
to pay significantly more to purchase a diagnostic radiopharmaceutical
than Medicare pays, a hospital may decide not to provide that specific
diagnostic radiopharmaceutical imaging agent to Medicare beneficiaries.
This could potentially deny access to diagnostic tools for which there
is no clinical alternative. To ensure Medicare payment policy is not
providing a financial disincentive to using high cost, low utilization
diagnostic radiopharmaceuticals, especially when those agents may be
the most clinically appropriate, and to ensure appropriate beneficiary
access, we believe a subset of diagnostic radiopharmaceuticals with
higher per day costs should be paid separately and not packaged into
the diagnostic procedure with which the diagnostic radiopharmaceutical
is used.
To address these concerns, we propose to pay separately for any
diagnostic radiopharmaceutical with a per day cost greater than $630.
Any diagnostic radiopharmaceutical with a per day cost below that
threshold would continue to be policy packaged under the current policy
at Sec. 419.2(b)(15). We discuss our methodology for determining the
proposed per day cost threshold of $630 in further detail in this
section.
To determine an appropriate threshold, we estimated the approximate
payment that would typically be attributable to diagnostic
radiopharmaceutical payment within each nuclear medicine APC (APCs
5591, 5592, 5593, and 5594). We did this by assessing the offsets
associated with these APCs that were directly attributable to ``policy
packaged'' drugs. The offset amounts used are correlated with the
approximate portion of APC payment associated with these ``policy
packaged'' drugs. For nuclear medicine APCs, the primary ``policy
packaged'' drugs are diagnostic radiopharmaceuticals. To calculate this
threshold, we calculated a volume weighted average of the offset dollar
amount of each nuclear medicine APC. This involved taking the offset
percentage for ``policy packaged'' drugs, multiplying it by the APC
geometric mean to get an offset dollar amount, and then multiplying
that offset amount by the number of single claims to get the total
offset amount for each nuclear medicine APC level. We then calculated
the sum of the total offset amount for all 4 of the nuclear medicine
APCs. We divided this number by the total number of single claims for
all 4 nuclear medicine APCs, resulting in $314.28, which represents the
volume weighted average policy packaged offset amount for the nuclear
medicine APC series. We then took that number and multiplied it by 2,
and rounded it to the nearest $5 increment, which resulted in $630. See
Table 4 for the values used to calculate this threshold amount. We note
that the data values in Table 4 were collected without unpackaging the
set of diagnostic radiopharmaceuticals listed in Table 5. If we
finalize our proposal and those diagnostic radiopharmaceuticals are
unpackaged, it would change the APC geometric mean unit costs (MUCs) as
well as the offset percentages. This is why the APC geometric mean cost
values listed below are not the same as in the addenda to this rule.
[GRAPHIC] [TIFF OMITTED] TP22JY24.008
The offset percentages used have been updated based on the
available data for CY 2025 rulemaking and would be updated for the
final rule. However, the file and corresponding offset percentages used
are similar to the ones that can be found in the CY 2024 NFRM APC
Offset File. These files are available via the internet on the CMS OPPS
website.\6\
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\6\ https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/annual-policy-files.
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We propose to multiply by two the volume weighted average amount of
the offset to establish the threshold triggering separate payment
because this amount would ensure that separate payment would apply only
to diagnostic radiopharmaceuticals whose costs significantly exceed the
approximate amount of payment already attributed to the product in the
nuclear medicine APC payment. This is consistent with the principles of
a prospective payment system where some payments are lower than
hospitals' costs while other payments are greater than a hospitals'
[[Page 59216]]
costs. However, diagnostic radiopharmaceuticals with costs more than
double the volume weighted average amount of the offset could present a
hospital with a significant financial loss. This is why the OPPS has
several payment provisions that rely on a multiplier of costs as a
threshold for modifying payment.
Our proposed approach to multiply the average offset amount by two
is consistent with the two-times rule the OPPS uses to determine
Ambulatory Payment Classification (APC) levels, where a significant
service that has a cost greater than two times the lowest cost
significant service in an APC is generally moved to a higher level APC
in the series. The two-times rule requires that the highest calculated
cost of an individual procedure categorized to any given APC cannot
exceed two times the calculated cost of the lowest cost procedure
categorized to that same APC. We note that the two-times rule does not
apply to diagnostic radiopharmaceuticals themselves, but only to the
procedures in which they are used, which is why we are proposing a
diagnostic radiopharmaceutical packaging threshold utilizing a similar
two-times methodology.
Our proposed approach to multiply the average offset amount by two
is also generally consistent with the OPPS outlier policy applicable to
certain high-cost procedures, where costs greater than 1.75 times the
APC payment trigger an additional outlier payment. 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.
Outlier payments are provided on a service basis when the cost of a
service exceeds the APC payment amount multiplier threshold (1.75) as
well as the APC payment amount plus a fixed-dollar amount threshold.
The proposed diagnostic radiopharmaceutical packaging threshold would
serve a similar purpose as the outlier policy, in that it would provide
payments to hospitals to help mitigate the financial risk associated
with high-cost diagnostic radiopharmaceuticals, where a very costly
diagnostic radiopharmaceutical could present a hospital with
significant financial loss.
While we are proposing two, and believe two is the most appropriate
number for the multiplier for the volume weighted average amount of the
offset, for the reasons articulated for the OPPS outlier policy, we
seek comment on the alternatives of using 1.75 times the volume
weighted average amount of the offset as the threshold amount for
triggering separate payment, or another appropriate multiplier amount.
For example, an interested party could present data that a financial
disincentive to use diagnostic radiopharmaceuticals exists when costs
are 1.75 times, or three times or five times, the volume weighted
average offset amount. Since the hospital outpatient outlier payment
policy is a longstanding policy familiar to most hospitals, we seek
comment on utilizing elements of that policy for purposes of our
proposed diagnostic radiopharmaceutical packaging policy in order to
help hospitals mitigate the financial risk that may be associated with
furnishing high-cost and complex diagnostic radiopharmaceuticals. As
previously mentioned, we seek comment on the use of 1.75 times as the
multiplier threshold rather than 2. Although the outlier policy uses
both a 1.75 multiplier threshold and a fixed-dollar threshold, we are
seeking comment regarding the use of 1.75 as the multiplier to set a
fixed dollar threshold for the volume weighted average amount of the
offset as the goals of the outlier policy and this proposed diagnostic
radiopharmaceutical policy are similar.
We also solicit comment on the alternative of using the standard
drug packaging threshold, which is proposed to be $140 for CY 2025 in
this rule, as the threshold for separate payment for diagnostic
radiopharmaceuticals. We believe that diagnostic radiopharmaceuticals
are functioning as supplies to the nuclear medicine procedure in which
they are used. Because diagnostic radiopharmaceuticals function as
supplies in the diagnostic procedures in which they are used, they are
serving as an item that is integral, ancillary, supportive, dependent,
or adjunctive to the primary diagnostic service. This is in contrast to
therapeutic drugs, biologicals, and therapeutic radiopharmaceuticals
that are typically packaged under the standard drug packaging
threshold. These products could be the only therapeutic modality
provided to a patient during an encounter and may not serve as an item
that is integral, ancillary, supportive, dependent, or adjunctive to
the primary service. Due to this clinical difference, we do not believe
that using the standard drug packaging threshold is appropriate for
diagnostic radiopharmaceuticals, and therefore we are proposing a
threshold specific to diagnostic radiopharmaceuticals. We would be
interested to hear from commenters whether they agree or disagree with
this assessment.
(3) Calculating the Per Day Cost of Diagnostic Radiopharmaceuticals
We are proposing to calculate the per day costs for diagnostic
radiopharmaceuticals using a methodology similar to the one we use for
determining the per day costs of drugs and biologicals for comparison
to the OPPS drug packaging threshold, proposed to be $140 for CY 2025.
We propose to calculate the per day cost based on the methodology
described in section V.B.1.b. of this proposed rule, which relies on
the methodology in the CY 2006 OPPS/ASC proposed rule (70 FR 42723 and
42724) and finalized in the CY 2006 OPPS final rule with comment period
(70 FR 68636 through 68638). Though the clinical use of the drugs,
biologicals, and therapeutic radiopharmaceuticals differs from
diagnostic radiopharmaceuticals, we believe the method of determining
how much of that item is used per day should be similar. Therefore, we
are proposing to use a similar methodology for determining the per day
costs of diagnostic radiopharmaceuticals, as we do drugs, biologicals,
and therapeutic radiopharmaceuticals. This methodology consists of nine
steps:
Step 1. After application of the CCRs, we aggregated all line-items
for a single date of service on a single claim for each product. This
resulted in creation of a single line-item with the total number of
units and the total cost of a diagnostic radiopharmaceutical given to a
patient in a single day.
Step 2. We then created a separate record for each diagnostic
radiopharmaceutical by date of service, regardless of the number of
lines on which the diagnostic radiopharmaceutical was billed on each
claim. For example, ``diagnostic radiopharmaceutical X'' is billed on a
claim with two different dates of service, and for each date of
service, the diagnostic radiopharmaceutical is billed on two line-items
with a cost of $10 and 5 units for each line-item. In this case, the
computer program would create two records for this diagnostic
radiopharmaceutical, and each record would have a total cost of $20 and
10 units of the product.
Step 3. We trimmed records with unit counts per day greater or less
than 3 standard deviations from the geometric mean.
Step 4. For each remaining record for a diagnostic
radiopharmaceutical, we calculated the cost per unit of the diagnostic
radiopharmaceutical. If the HCPCS descriptor for ``diagnostic
[[Page 59217]]
radiopharmaceutical X'' is ``per 1 millicurie'' and one record was
created for a total of 10 millicurie (as indicated by the total number
of units for the diagnostic radiopharmaceutical on the claim for each
unique date of service), the computer program divided the total cost
for the record by 10 to give a per unit cost. We then weighted this
unit cost by the total number of units in the record. We did this by
generating a number of line-items equivalent to the number of units in
that particular claim. Thus, a claim with 100 units of ``diagnostic
radiopharmaceutical X'' and a total cost of $200 would be given 100
line-items, each with a cost of $2, while a claim of 50 units with a
cost of $50 would be given 50 line items, each with a cost of $1.
Step 5. We trimmed the unit records with cost per unit greater or
less than 3 standard deviations from the geometric mean.
Step 6. We aggregated the remaining unit records to determine the
mean cost per unit of the diagnostic radiopharmaceutical.
Step 7. Using only the records that remained after records with
unit counts per day greater or less than 3 standard deviations from the
geometric mean were trimmed (step 3), we determined the total number of
units billed for each item and the total number of unique per-day
records for each item. We divided the count of the total number of
units by the total number of unique per day records for each item to
calculate an average number of units per day.
Step 8. We used the payment rate (the mean unit cost (MUC) derived
from the CY 2023 hospital claims data) for each diagnostic
radiopharmaceutical and multiplied the payment rate by the average
number of units per day for each diagnostic radiopharmaceutical to
arrive at its per day cost.
Step 9. We packaged the items with per day costs less than or equal
to $630 and designated items with per day costs greater than $630 as
separately payable.
As just described, to determine the proposed CY 2025 packaging
status for all nonpass-through diagnostic radiopharmaceuticals, we
propose to use the per day cost, calculated on a HCPCS code-specific
basis, of each diagnostic radiopharmaceutical that had a HCPCS code in
CY 2023 and was paid (via packaged or separate payment) under the OPPS.
We used data from CY 2023 claims processed through December 31, 2023,
for this calculation.
We propose to continue to package payment for diagnostic
radiopharmaceuticals with per day costs less than or equal to $630
under our existing packaging policy for diagnostic radiopharmaceuticals
that function as surgical supplies under Sec. 419.2(b)(15). Similar to
our policy for the drug packaging threshold, we propose to use updated
claims data to make final determinations of the packaging status of
HCPCS codes for diagnostic radiopharmaceuticals for each OPPS/ASC final
rule with comment period. We propose to make an annual packaging
determination for each diagnostic radiopharmaceutical HCPCS code only
when we develop the OPPS/ASC final rule with comment period for the
update year. We propose that only diagnostic radiopharmaceutical HCPCS
codes that are identified as separately payable in the final rule with
comment period would be subject to quarterly updates.
Consequently, the packaging status of some HCPCS codes for
diagnostic radiopharmaceuticals in the OPPS/ASC proposed rule may
differ from the same HCPCS codes' packaging status determined based on
the data used for the final rule with comment period. Under these
circumstances, we propose to follow the established policies for the
OPPS drug packaging threshold, which were initially adopted for the CY
2005 OPPS (69 FR 65780), to more equitably pay for those diagnostic
radiopharmaceuticals whose costs fluctuate relative to the proposed CY
2025 OPPS diagnostic radiopharmaceutical packaging threshold in a way
that affects the product's payment status (packaged or separately
payable). Our policy for the OPPS drug packaging threshold has not
changed for many years and is the same as described in the CY 2016
OPPS/ASC final rule with comment period (80 FR 70434). We believe these
same policies should apply to diagnostic radiopharmaceuticals in order
to ensure payment consistency for those diagnostic radiopharmaceuticals
whose costs fluctuate relative to the proposed CY 2025 OPPS diagnostic
radiopharmaceutical packaging threshold. For CY 2025, similar to our
historical practice for the drug packaging threshold, we propose to
apply the following policies to those HCPCS codes for diagnostic
radiopharmaceuticals whose relationship to the diagnostic
radiopharmaceutical packaging threshold changes based on the final
updated data: HCPCS codes for diagnostic radiopharmaceuticals that are
proposed for separate payment in CY 2025, and that then have per day
costs equal to or less than the CY 2025 final rule diagnostic
radiopharmaceutical packaging threshold, based on the updated hospital
claims data used for the CY 2025 final rule, would remain packaged in
CY 2025. HCPCS codes for diagnostic radiopharmaceuticals for which we
proposed packaged payment in CY 2025 but that then have per-day costs
greater than the CY 2025 final rule drug packaging threshold, based on
updated hospital claims data used for the CY 2025 final rule, would
receive separate payment in CY 2025.
(4) Proposal To Update the Diagnostic Radiopharmaceutical Packaging
Threshold in CY 2026
Starting in CY 2026 and subsequent years, we propose to update the
proposed threshold amount of $630 by the PPI for Pharmaceuticals for
Human Use (Prescription) (Bureau of Labor Statistics series code
WPUSI07003) from IHS Global, Inc (IGI). IGI is a nationally recognized
economic and financial forecasting firm with which CMS contracts to
forecast the various price indexes including the Producer Price Index
(PPI) Pharmaceuticals for Human Use (Prescription). This is the same as
the update factor used for the OPPS drug packaging threshold, where we
originally used the four-quarter moving average 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 the
applicable calendar year. We believe it is appropriate to use the same
PPI for Pharmaceuticals for Human Use (Prescription) for the diagnostic
radiopharmaceutical packaging threshold, as diagnostic
radiopharmaceuticals are also prescription pharmaceuticals for human
use. We propose that starting for CY 2026, we would use the most
recently available four quarter moving average PPI levels to trend the
final CY 2025 threshold forward from the third quarter of CY 2024 to
the third quarter of CY 2025 and round the resulting dollar amount to
the nearest $5 increment. This proposal to update the diagnostic
radiopharmaceutical packaging threshold maintains consistency with our
longstanding methodology for updating the OPPS drug packaging
threshold, which is discussed in more detail in section V.B.1.a. of
this rule and also in the CY 2007 OPPS/ASC final rule with comment
period (71 FR 68085 and 68086).
(5) Amount of Separate Payment for Diagnostic Radiopharmaceuticals
Exceeding the Threshold
Once we determine that the per day cost of a nonpass-through
diagnostic
[[Page 59218]]
radiopharmaceutical exceeds the proposed cost threshold of $630 per day
for CY 2025, we then propose to assign that radiopharmaceutical to an
APC, making it a specified covered outpatient drug (SCOD) per section
1833(t)(14)(B) of the Act. Accordingly, we propose to pay for those
nonpass-through, separately payable diagnostic radiopharmaceuticals
based on our authority under section 1833(t)(14)(A)(iii)(II) of the
Act. While under this authority we would ordinarily use the ASP
methodology under section 1847A of the Act, we find that the ASP data
we have is not usable for payment purposes. As previously mentioned,
radiopharmaceuticals are not required to report ASP under 1847A, and as
such, there are very few manufacturers reporting ASP for their products
currently. Of those few manufacturers reporting ASP, the ASP values
that we do have generally do not align with the ASP we would expect
based on the cost and MUC data submitted to CMS by hospitals. For
example, a frequently used diagnostic radiopharmaceutical has a
reported ASP that is over 23,000 percent higher than the MUC derived
from claims data. As manufacturers of diagnostic radiopharmaceuticals
may be unaware of the correct reporting requirements, we believe it
would be inappropriate to propose to pay for separately payable
diagnostic radiopharmaceuticals based on their ASPs as currently
reported, without giving manufacturers the opportunity to submit,
certify, or restate the ASPs of their products. We believe MUC is an
appropriate proxy for the average price for a diagnostic
radiopharmaceutical for a given year, as it is calculated based on the
average costs for a particular year and is directly reflective of the
actual cost data that hospitals submit to CMS.
Under our policy for therapeutic radiopharmaceuticals (74 FR
60520), there are several requirements for reporting ASP. For example,
ASP data submitted would need to be provided for a patient-specific
dose, or patient-ready form, of the radiopharmaceutical in order to
properly calculate the ASP amount for a given HCPCS code if that HCPCS
code dose descriptor was per study dose or similar. ASP data submitted
should align with the code's dose descriptor and billing unit. We
stated we would expect that the ASP data reported by a manufacturer
would be representative of the item(s) sold by the manufacturer. We
used the term ``patient-ready'' in that rule to ensure that ASP data
submitted for OPPS payment purposes for separately payable
radiopharmaceuticals reflect the costs of all the component materials
of the finished radiopharmaceutical product. We expect that the ASP
data would represent the sales price of all of the component materials
of the finished radiopharmaceutical product sold by the manufacturer in
terms that reflect the applicable HCPCS code descriptor such as ``per
study dose'', ``per millicurie''and ``up to XX millicuries.'' For the
few manufacturers currently reporting ASP data for their diagnostic
radiopharmaceuticals, we believe it may be possible that they are not
aware of the reporting requirements or are unaware of how to properly
report ASP for their product, as CMS has not used ASP as the basis of
payment for non-passthrough diagnostic radiopharmaceuticals before.
Therefore, we believe a reasonable alternative for separate payment of
diagnostic radiopharmaceuticals that exceed the per day cost threshold
is the use of their mean unit cost from claims data. This is consistent
with our current practice for therapeutic radiopharmaceuticals when ASP
data is not available. For diagnostic radiopharmaceuticals, we believe
that ASP data is effectively not available for purposes of determining
a payment amount and, therefore, payment based on MUC is a reasonable
alternative.
We previously acknowledged (74 FR 35335), and continue to
acknowledge, the complexities associated with reporting ASP for
radiopharmaceuticals. We encourage manufacturers to submit ASP
information for diagnostic radiopharmaceuticals, if possible. While CMS
is proposing to use MUC to pay for separately payable diagnostic
radiopharmaceuticals in CY 2025, manufacturers can begin, or continue,
to report ASP data for potential future use in paying for diagnostic
radiopharmaceuticals. For CY 2025, ASP reporting is voluntary for
diagnostic radiopharmaceuticals paid under the OPPS. We encourage
interested parties to submit comments regarding potential issues that
may arise that prevent appropriate ASP reporting for diagnostic
radiopharmaceuticals. If manufacturers choose to report ASP data, the
data must meet reporting requirements in order to be used for payment
under the OPPS.
Manufacturers that choose to report ASP data for their diagnostic
radiopharmaceuticals would need to provide comprehensive data in order
for CMS to calculate an ASP amount for a given HCPCS code. In instances
where there is more than one manufacturer of a particular diagnostic
radiopharmaceutical, we propose that all manufacturers would need to
submit ASP information in order for payment to be made based on ASP.
This is because it would be inappropriate for Medicare payment for a
HCPCS code to be based on the payment information submitted by one
manufacturer, if that payment is used for a product made by different
manufacturers. This is because the ASP information reported by one
manufacturer might not reflect the ASP of the same product made by
other manufacturers.
We note that ASP submissions for radiopharmaceutical payment under
the OPPS would need to meet all of the existing regulatory and
subregulatory requirements of the ASP reporting process under sections
1847A and 1927(b)(3) of the Act.
Specifically, we reiterate our ASP reporting requirements outlined
in the CY 2010 OPPS/ASC final rule with comment period (74 FR 60520)
for products for which we are encouraging the reporting of ASP, but for
which reporting is not statutorily required. The ASP data submitted
would need to be provided for a patient-specific dose, or patient-ready
form, of the diagnostic radiopharmaceutical in order to properly
calculate the ASP amount that aligns with the dose descriptor for a
given HCPCS code. When reporting an ASP for a separately payable
radiopharmaceutical, we expect that the ASP data reported by a
manufacturer would be representative of the item(s) sold by the
manufacturer. In the CY 2010 OPPS/ASC final rule with comment period
(74 FR 60520), we used the term ``patient-ready'' to ensure that ASP
data submitted for OPPS payment purposes for separately payable
radiopharmaceuticals reflect the costs of all the component materials
of the finished radiopharmaceutical product. We expect that the ASP
data would represent the sales price of all of the component materials
of the finished radiopharmaceutical product sold by the manufacturer in
terms that reflect the applicable HCPCS code descriptor, such as ``per
study dose'' or ``millicurie.'' We defined a ``patient-ready'' dose for
OPPS purposes as including all component materials of the
radiopharmaceutical, at a minimum, and any other processing the
manufacturer requires to produce the radiopharmaceutical that it sells
that are reflected in the sales price, including radiolabeling, as long
as any fees paid for such processing done on behalf of the manufacturer
meet the definition of ``bona fide service fees'' under Sec. 414.802
(74 FR 60525).
We understand that manufacturers of separately payable
radiopharmaceuticals produce
[[Page 59219]]
radiopharmaceuticals that require a variety of processing steps in
order to prepare the product for administration to a beneficiary. To be
used for separate OPPS radiopharmaceutical payment, the ASP data
reported by a manufacturer must represent sales of all of the component
materials associated with the radiopharmaceutical. For our full policy
on which factors to incorporate into ASP pricing, please see the CY
2010 OPPS/ASC final rule with comment period (74 FR 60520 through
60521).
In order to be used for payment under the OPPS, all
radiopharmaceutical ASP submissions should meet the existing regulatory
and subregulatory requirements of the ASP submission process under
sections 1847A and 1927(b)(3) of the Act. In particular, we believe the
``bona fide service fee'' test in the ASP regulations is instructive
here, and we refer readers to the CY 2010 OPPS/ASC final rule with
comment period for our discussion on radiopharmaceutical ASP reporting
(74 FR 60521).
To summarize our CY 2010 policy for ASP reporting on
radiopharmaceuticals for OPPS payment purposes (74 FR 60521), a
patient-specific dose or patient-ready form in the context of OPPS ASP
submission for radiopharmaceutical payment means that the ASP
reflecting manufacturer sales must represent sales of all of the
component materials for the radiopharmaceutical, including a minimum of
a cold kit and a radioisotope, and be reported in terms that reflect
the applicable HCPCS code descriptor, such as ``treatment dose'' or
``millicurie.'' The ASP would not necessarily take into account the
preparation of the final form of the radiopharmaceutical for patient
administration, including radiolabeling, which may be conducted by the
manufacturer, freestanding radiopharmacy, hospital pharmacy, or other
entity. With respect to the latter, fees paid by the manufacturer for
these services would be excluded from the ASP calculation (that is,
would not be considered price concessions that reduce the ASP) only if
they are ``bona fide service fees'' as defined in the regulations
governing ASP. Thus, if the manufacturer pays a ``bona fide service
fee'' for the services of the freestanding radiopharmacy, hospital
pharmacy, or other entity, and reflects that fee in its price for the
radiopharmaceutical, the amount of the ``bona fide service fee'' would
be taken into account in the reported ASP data. However, manufacturers
are not required to pay for the preparation of a radiopharmaceutical
(including radiolabeling) in a freestanding radiopharmacy, hospital
pharmacy, or other entity after sale of all of the component materials,
and in that case, the cost of those services would not be reflected in
the ASP data submitted to CMS. Manufacturers should submit ASP data for
a separately payable radiopharmaceutical that incorporates prices for
sales of all of the component materials by the manufacturer. We seek
comment on these ASP reporting requirements outlined in the CY 2010
OPPS/ASC final rule with comment period (74 FR 60521) and previous CMS
guidance on the guidelines for the Submission of OPPS ASP Data for
Nonpass-Through Separately Payable Therapeutic Radiopharmaceuticals and
Radiopharmaceuticals with Pass-Through Status.\7\ We continue to
believe that these ASP reporting practices should be applicable to
radiopharmaceuticals, including both therapeutic and diagnostic
radiopharmaceuticals, but seek comment from interested parties in this
space to ensure that these reporting guidelines are clear and
reflective of clinical practice today.
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\7\ https://www.cms.gov/medicare/medicare-fee-for-service-payment/hospitaloutpatientpps/downloads/opps_asp_radiopharm_guidance10302009.pdf.
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We still see the potential value in the use of ASP data for payment
purposes for diagnostic radiopharmaceuticals when reported correctly
and by all manufacturers who manufacture a product that is described by
a given HCPCS code. We believe that the use of ASP information for OPPS
payment could provide an opportunity to improve payment accuracy for
separately payable diagnostic radiopharmaceuticals by applying an
established methodology that has already been successfully implemented
under the OPPS for other separately payable drugs and biologicals, as
well as therapeutic radiopharmaceuticals. Because the per day cost
calculations determine whether a diagnostic radiopharmaceutical
qualifies for separate payment, using the most accurate pricing
information is paramount. The use of ASP information could provide an
opportunity to further improve the accuracy of the per day cost
calculations and the separate payment amounts for diagnostic
radiopharmaceuticals. As previously mentioned, we do not believe that
the limited amount of ASP information submitted currently is adequate
for the purpose of determining separate payment for those few products
that currently do report ASP, which is why we are proposing to pay
diagnostic radiopharmaceuticals with per day costs above the proposed
$630 threshold at each diagnostic radiopharmaceutical's mean unit cost.
However, we are still interested in the potential to use ASP for the
purpose of determining a diagnostic radiopharmaceutical's per day cost
and payment amount in the future. Therefore, we want to engage with
interested parties to learn about the unique aspects and challenges
that may be associated with reporting ASP for diagnostic
radiopharmaceuticals, and radiopharmaceuticals in general. We
specifically seek comment as to whether interested parties believe CMS
should require payment for diagnostic radiopharmaceuticals on ASP in
the future, such as in CY 2026 rulemaking, if interested parties are
confident in their reporting ability.
We do believe that there could be situations in which it is
appropriate to use ASP currently. For example, in section V.A.4. of
this proposed rule, we propose to utilize ASP in payment for diagnostic
radiopharmaceuticals on OPPS transitional pass-through status. In this
situation, we believe the use of ASP is appropriate as the manufacturer
of that diagnostic radiopharmaceutical is actively involved in the
radiopharmaceutical's pass-through application, and CMS can ensure that
pricing is reported appropriately for purposes of the drug pass-through
cost significance tests and for purposes of payment if the pass-through
status is approved. Typically, there is only one manufacturer for a
diagnostic radiopharmaceutical applying for pass-through status, so CMS
does not have to ensure all manufacturers are reporting ASP for that
particular HCPCS code prior to establishing a separate payment amount
based on ASP. Additionally, as discussed in section V.B.5. (Proposed
Payment for Nonpass-Through Drugs, Biologicals, and
Radiopharmaceuticals with HCPCS Codes but Without OPPS Hospital Claims
Data) of this rule, we propose to base the initial payment for new
diagnostic radiopharmaceuticals with HCPCS codes, but which do not have
pass-through status and are without claims data, on ASP, and on the WAC
for these products if ASP data for these diagnostic
radiopharmaceuticals are not available. If the WAC also is unavailable,
we propose to make payment for new diagnostic radiopharmaceuticals at
95 percent of the products' most recent AWP. We believe the volume of
products in this category will typically be very low; however, in these
rare situations, we
[[Page 59220]]
believe it would be appropriate to use ASP until a MUC is available.
Similar to drugs applying for pass-through status, there is typically
only one manufacturer for a diagnostic radiopharmaceutical that is new
and described by a HCPCS code, but without claims data, so CMS does not
have to ensure all manufacturers are reporting ASP for that particular
HCPCS code prior to establishing a separate payment amount based on
ASP. Additionally, although reporting of ASP is not a condition of CMS
approving a HCPCS application, CMS has the opportunity to actively
engage with the manufacturer, or sponsor of a HCPCS application, during
the HCPCS application process. This allows for ongoing dialogue and
education regarding the unique ASP reporting requirements that may be
associated with a particular product, including how to ensure the
reported ASP aligns with the dose descriptor for the newly assigned
HCPCS code.
We seek comments on additional unique situations in which it still
may be appropriate for CMS to use ASP information to assess per day
costs and payment amounts for diagnostic radiopharmaceuticals for CY
2025. For example, one such unique situation could be continuing the
use of ASP for a particular HCPCS code once its pass-through status has
ended, if the HCPCS code was actively being paid based on ASP while on
pass-through status. Under our current proposal, payment for a
diagnostic radiopharmaceutical would be based on MUC once its pass-
through status ends. We seek comment on this potential unique
situation, as well as others of which readers may be aware, and we may
finalize utilizing ASP in additional situations that commenters bring
to our attention in the final rule as policies for CY 2025 depending on
comments received.
As discussed, we propose to base the payment rate for diagnostic
radiopharmaceuticals on mean unit cost data derived from hospital
claims. We are not proposing to use ASP data for determining payment
rates of non-passthrough diagnostic radiopharmaceuticals with claims
data but are seeking comment on its use for determining the per day
cost and setting the payment rate for diagnostic radiopharmaceuticals
in the future. Additionally, we are not proposing to use WAC or AWP as
a basis for payment for diagnostic radiopharmaceuticals. Similar to our
reasoning for payment of therapeutic radiopharmaceuticals in the CY
2012 OPPS/ASC final rule with comment period (77 FR 68390), we believe
that paying for diagnostic radiopharmaceuticals using mean unit cost
would appropriately pay for the average price of nonpass-through
separately payable diagnostic radiopharmaceuticals for the applicable
year. We believe MUC is an appropriate proxy for the average price for
a diagnostic radiopharmaceutical for a given year, as it is calculated
based on the average costs for a particular year and is directly
reflective of the actual cost data that hospitals submit to CMS.
As we stated in the CY 2010 OPPS/ASC final rule with comment period
(74 FR 60523), we believe that WAC or AWP is not an appropriate proxy
to provide OPPS payment for average therapeutic radiopharmaceutical
acquisition cost and associated handling costs when manufacturers are
not required to submit ASP data because payment based on WAC or AWP for
separately payable drugs and biologicals is usually temporary for a
calendar quarter until a manufacturer is able to submit the required
ASP data in accordance with the quarterly ASP submission timeframes for
reporting under section 1847A of the Act. However, WAC and AWP reported
to compendia may not be reflective of a patient ready dose. We are
additionally concerned about the use of WAC and AWP since ASP reporting
for OPPS payment of separately payable diagnostic radiopharmaceuticals
would not be required for CY 2025. The absence of appropriate ASP
reporting could result in payment for a separately payable diagnostic
radiopharmaceutical based on WAC or AWP indefinitely, a result which we
believe would be inappropriate, as these pricing metrics do not capture
all of the pricing discounts that may be reflected in the ASP.
Given all of the concerns we currently have with other pricing
methodologies for diagnostic radiopharmaceuticals, we propose to rely
on CY 2023 mean unit cost data derived from hospital claims data for
payment rates for diagnostic radiopharmaceuticals for CY 2025.
Our proposed payment methodology for diagnostic
radiopharmaceuticals that have costs above a $630 threshold would be
similar, but not the same as the methodology adopted for therapeutic
radiopharmaceuticals as described in the CY 2010 OPPS/ASC final rule
with comment period (74 FR 60518). Although therapeutic
radiopharmaceuticals are generally targeted at treating a certain
disease or condition, and diagnostic radiopharmaceuticals are generally
targeted at diagnosing a certain disease or condition, we believe they
are clinically very similar products, manufactured in a similar manner,
and should generally be paid using a similar payment methodology when
paid separately. As such, we believe the same payment method as is used
for therapeutic radiopharmaceuticals should apply to diagnostic
radiopharmaceuticals above the cost threshold. However, as previously
discussed, given our concerns with current ASP reporting patterns, we
are proposing to use MUC as the basis of payment for non-passthrough
diagnostic radiopharmaceuticals for CY 2025. Therefore, we believe it
is appropriate for the methodology to determine the proposed payment
amounts to differ between diagnostic and therapeutic
radiopharmaceuticals, at least for CY 2025. We will consider aligning
the payment methodologies between therapeutic and diagnostic
radiopharmaceuticals, either based on ASP or MUC, in future rulemaking.
We believe mean unit cost data is an appropriate and adequate proxy
for the average price for diagnostic radiopharmaceuticals and
associated handling costs for these products. Mean unit cost data is
reflective of the actual cost data that hospitals submit to CMS. The
MUC payment methodology is consistent with our payment policy for
therapeutic radiopharmaceuticals as stated in the CY 2010 OPPS/ASC
final rule with comment period (74 FR 60523) and is the basis for
payment of many therapeutic radiopharmaceuticals when ASP is
unavailable currently.
As previously discussed, we find that the ASP data we have is not
usable for the purpose of paying for diagnostic radiopharmaceuticals
and, therefore, we are proposing to pay for qualifying non-passthrough
diagnostic radiopharmaceuticals with claims data based on MUC. However,
we are also seeking comment on how we could potentially use our
equitable adjustment authority at section 1833(t)(2)(E) of the Act to
make an adjustment to the ASP data that has been reported in order to
make it usable for the purpose of paying equitably for these products.
For example, we seek comment as to whether CMS could use its equitable
adjustment authority to adjust payment for diagnostic
radiopharmaceuticals based on an adjusted ASP value when the ASP
amounts reported to CMS deviate by a given threshold, such as two times
the MUC calculated for the diagnostic radiopharmaceutical using claims
data. Alternatively, the adjusted payment rate could be an average of
the reported ASP and MUC, or other methodologies suggested by
commenters. We broadly seek comment on this potential use of equitable
adjustment authority to make the
[[Page 59221]]
limited ASP data reported for diagnostic radiopharmaceuticals usable
for purposes of setting payment rates for qualifying products.
We note, if readers do not believe it is appropriate for CMS to
base the payment amount for diagnostic radiopharmaceuticals on MUC for
CY 2025, we would propose in the alternative to maintain our current
policy of unconditionally policy packaging all diagnostic
radiopharmaceuticals regardless of their cost until an appropriate
payment methodology can be established to determine a separate payment
amount for diagnostic radiopharmaceuticals.
HCPCS codes that describe diagnostic radiopharmaceuticals with per
day costs that meet or exceed the proposed diagnostic
radiopharmaceutical packaging threshold would be assigned to a status
indicator of ``K'', indicating separate payment. An APC and a payment
rate would be assigned as shown in Addendum B to this proposed rule.
HCPCS codes that describe diagnostic radiopharmaceuticals with per day
costs that are at or below the proposed diagnostic radiopharmaceutical
packaging threshold would continue to be assigned to a status indicator
of ``N'', indicating packaged payment. We welcome comment on these
determinations. The proposed list of diagnostic radiopharmaceuticals
that have calculated per day costs that exceed $630 and their proposed
status indicators can be found in table 5.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TP22JY24.009
[[Page 59222]]
BILLING CODE 4120-01-C
Definitions of status indicators can be found in Addendum D1 to
this proposed rule. Addenda to this proposed rule can be found on the
CMS OPPS web page.
We propose corresponding regulation text edits at Sec.
419.2(b)(15) to only package diagnostic radiopharmaceuticals when their
per day cost is at or below the per day diagnostic radiopharmaceutical
packaging threshold for the applicable year. This is achieved by adding
the text ``at or below the per-day diagnostic radiopharmaceutical
packaging threshold for the applicable year'' to qualify the packaging
of diagnostic radiopharmaceuticals. We also propose corresponding
regulation text edits at Sec. 419.41 (Calculation of national
beneficiary copayment amounts and national Medicare program payment
amounts) to codify our proposed payment policy for diagnostic
radiopharmaceuticals and our existing policy for therapeutic
radiopharmaceuticals.
4. Proposed Implementation of Section 4135 of the Consolidated
Appropriations Act (CAA)
The Consolidated Appropriations Act (CAA), 2023 (Pub. L. 117-328),
was signed into law on December 29, 2022. Section 4135(a) and (b) of
the CAA, 2023, titled Access to Non-Opioid Treatments for Pain Relief,
amended sections 1833(t)(16) and 1833(i) of the Act, respectively, to
provide for temporary additional payments for non-opioid treatments for
pain relief (as that term is defined in section 1833(t)(16)(G)(i) of
the Act). In particular, section 1833(t)(16)(G) of the Act provides
that with respect to a non-opioid treatment for pain relief furnished
on or after January 1, 2025, and before January 1, 2028, the Secretary
shall not package payment for the non-opioid treatment for pain relief
into payment for a covered OPD service (or group of services) and shall
make an additional payment for the non-opioid treatment for pain relief
as specified in clause (ii) of that section. Clauses (ii) and (iii) of
section 1833(t)(16)(G) of the Act provide for the amount of additional
payment and set a limitation on that amount, respectively.
As the additional payments are required to begin on January 1,
2025, we propose to implement the CAA, 2023 section 4135 amendments in
this proposed rule. Our proposal to implement section 4135 of CAA, 2023
can be found in section XIII.E of this proposed rule.
5. 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 2024 OPPS/
ASC final rule with comment period (88 FR 81577 through 81578), we
applied this policy and calculated the relative payment weights for
each APC for CY 2024 that were shown in Addenda A and B of the CY 2024
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 2024 OPPS/ASC final rule with
comment period (88 FR 81549 through 81572). For CY 2025, as we did for
CY 2024, we proposed to continue to apply the policy established in CY
2013 and calculate relative payment weights for each APC for CY 2025
using geometric mean-based APC costs.
For CY 2012 and CY 2013, outpatient clinic visits were assigned to
one of five levels of clinic visit APCs, with APC 0606 representing a
mid-level clinic visit. In the CY 2014 OPPS/ASC final rule with comment
period (78 FR 75036 through 75043), we finalized a policy that created
alphanumeric HCPCS code G0463 (Hospital outpatient clinic visit for
assessment and management of a patient), representing all clinic visits
under the OPPS. HCPCS code G0463 was assigned to APC 0634 (Hospital
Clinic Visits). We also finalized a policy to use CY 2012 claims data
to develop the CY 2014 OPPS payment rates for HCPCS code G0463 based on
the total geometric mean cost of the levels one through five CPT
Evaluation or Assessment and Management (E/M) codes for clinic visits
previously recognized under the OPPS (CPT codes 99201 through 99205 and
99211 through 99215). In addition, we finalized a policy to no longer
recognize a distinction between new and established patient clinic
visits.
For CY 2016, we deleted APC 0634 and reassigned the outpatient
clinic visit HCPCS code G0463 to APC 5012 (Level 2 Examinations and
Related Services) (80 FR 70372). For CY 2025, as we did for CY 2024, we
propose to continue to standardize all of the relative payment weights
to APC 5012. We believe that standardizing relative payment weights to
the geometric mean of the APC to which HCPCS code G0463 is assigned
maintains consistency in calculating unscaled weights that represent
the cost of some of the most frequently provided OPPS services. For CY
2025, as we did for CY 2024, we propose to assign APC 5012 a relative
payment weight of 1.00 and to divide the geometric mean cost of each
APC by the geometric mean cost for APC 5012 to derive the unscaled
relative payment weight for each APC. The choice of the APC on which to
standardize the relative payment weights does not affect payments made
under the OPPS because we scale the weights for budget neutrality.
Section 1833(t)(9)(B) of the Act requires that APC reclassification
and recalibration changes, wage index changes, and other adjustments be
made in a budget neutral manner. Budget neutrality ensures that the
estimated aggregate weight under the OPPS for CY 2025 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 2024 scaled relative payment
weights to the estimated aggregate weight using the proposed CY 2025
unscaled relative payment weights.
For CY 2024, we multiplied the CY 2024 scaled APC relative payment
weight applicable to a service paid under the OPPS by the volume of
that service from CY 2023 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 2025, we
propose to apply the same process using the estimated CY 2025 unscaled
relative payment weights rather than scaled relative payment weights.
We propose to calculate the weight scalar by dividing the CY 2024
estimated aggregate weight by the unscaled CY 2025 estimated aggregate
weight.
For a detailed discussion of the weight scalar calculation, we
refer readers to the OPPS claims accounting document available on the
CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices. Click on the
link labeled ``Hospital Outpatient Prospective Payment--Notice of
Proposed Rulemaking with Comment Period (NPRM)'' for 2025, which can be
found under the heading ``Hospital Outpatient Regulations and Notices''
and open the claims accounting document link, which is labeled ``2025
NPRM OPPS Claims Accounting (PDF).''
We propose to compare the estimated unscaled relative payment
weights in CY 2025 to the estimated total relative
[[Page 59223]]
payment weights in CY 2024 using CY 2023 claims data, holding all other
components of the payment system constant to isolate changes in total
weight. Based on this comparison, we propose to adjust the calculated
CY 2025 unscaled relative payment weights for purposes of budget
neutrality. We propose to adjust the estimated CY 2025 unscaled
relative payment weights by multiplying them by a proposed weight
scalar of 1.4405 to ensure that the proposed CY 2025 relative payment
weights are scaled to be budget neutral. The proposed CY 2025 relative
payment weights listed in Addenda A and B to this proposed rule (which
are available via the internet on the CMS website) are scaled and
incorporate the recalibration adjustments discussed in sections II.A.1
and II.A.2 of this proposed rule.
Section 1833(t)(14) of the Act provides the payment rates for
certain specified covered outpatient drugs (SCODs). Section
1833(t)(14)(H) of the Act provides that additional expenditures
resulting from this paragraph shall not be taken into account in
establishing the conversion factor, weighting, and other adjustment
factors for 2004 and 2005 under paragraph (9) but shall be taken into
account for subsequent years. Therefore, the cost of those SCODs (as
discussed in section V.B.2 of this proposed rule) is included in the
budget neutrality calculations for the CY 2025 OPPS.
B. Proposed Conversion Factor Update
1. OPD Fee Schedule Increase Factor
Section 1833(t)(3)(C)(ii) of the Act requires the Secretary to
update the conversion factor used to determine the payment rates under
the OPPS on an annual basis by applying the OPD fee schedule increase
factor. For purposes of section 1833(t)(3)(C)(iv) of the Act, subject
to sections 1833(t)(17) and 1833(t)(3)(F) of the Act, the OPD fee
schedule increase factor is equal to the hospital inpatient market
basket percentage increase applicable to hospital discharges under
section 1886(b)(3)(B)(iii) of the Act. In the FY 2025 IPPS/Long Term
Care Hospital (LTCH) PPS proposed rule (89 FR 36204), consistent with
current law, based on IHS Global, Inc.'s fourth quarter 2023 forecast,
the proposed FY 2025 IPPS market basket percentage increase was 3.0
percent. We note that under our regular process for the CY 2025 OPPS/
ASC final rule with comment period, we would use the market basket
update for the FY 2025 IPPS/LTCH PPS final rule. If that forecast is
different than the IPPS market basket percentage increase used for this
proposed rule, the CY 2025 OPPS/ASC final rule with comment period OPD
fee schedule increase factor would reflect that updated forecast of the
market basket percentage increase.
For CY 2025, we propose to use the estimate of the hospital
inpatient market basket percentage increase of 3.0 percent as one
component to calculate the OPD fee schedule increase factor.
2. Productivity Adjustment
Section 1833(t)(3)(F)(i) of the Act requires that, for 2012 and
subsequent years, the OPD fee schedule increase factor under
subparagraph (C)(iv) be reduced by the productivity adjustment
described in section 1886(b)(3)(B)(xi)(II) of the Act. Section
1886(b)(3)(B)(xi)(II) of the Act defines the productivity adjustment as
equal to the 10-year moving average of changes in annual economy-wide,
private nonfarm business multifactor productivity (MFP) (as projected
by the Secretary for the 10-year period ending with the applicable
fiscal year, year, cost reporting period, or other annual period) (the
``productivity adjustment''). In the FY 2012 IPPS/LTCH PPS final rule
(76 FR 51689 through 51692), we finalized our methodology for
calculating and applying the productivity adjustment. The U.S.
Department of Labor's Bureau of Labor Statistics (BLS) publishes the
official measures of private nonfarm business productivity for the U.S.
economy. We note that previously the productivity measure referenced in
section 1886(b)(3)(B)(xi)(II) of the Act was published by BLS as
private nonfarm business multifactor productivity. Beginning with the
November 18, 2021, release of productivity data, BLS replaced the term
multifactor productivity (MFP) with total factor productivity (TFP).
BLS noted that this is a change in terminology only and will not affect
the data or methodology. As a result of the BLS name change, the
productivity measure referenced in section 1886(b)(3)(B)(xi)(II) of the
Act is now published by BLS as private nonfarm business total factor
productivity. However, as mentioned, the data and methods are
unchanged. Please see www.bls.gov for the BLS historical published TFP
data. A complete description of IHS Global, Inc.'s (IGI) TFP projection
methodology is available on the CMS website at https://www.cms.gov/data-research/statistics-trends-and-reports/medicare-program-rates-statistics/market-basket-research-and-information. In addition, we note
that beginning with the FY 2022 IPPS/LTCH PPS final rule, we refer to
this adjustment as the productivity adjustment rather than the MFP
adjustment to more closely track the statutory language in section
1886(b)(3)(B)(xi)(II) of the Act. We note that the adjustment continues
to rely on the same underlying data and methodology. In the FY 2025
IPPS/LTCH PPS proposed rule (89 FR 36204), the proposed productivity
adjustment for FY 2025 was 0.4 percentage point.
Therefore, we propose that the productivity adjustment for the CY
2025 OPPS/ASC would be 0.4 percentage point. We also propose that if
more recent data subsequently became available after the publication of
the CY 2025 OPPS/ASC proposed rule (for example, a more recent estimate
of the market basket percentage increase and/or the productivity
adjustment), we would use such updated data, if appropriate, to
determine the CY 2025 hospital inpatient market basket update and the
productivity adjustment, which are components in calculating the OPD
fee schedule increase factor under sections 1833(t)(3)(C)(iv) and
1833(t)(3)(F) of the Act.
We note that section 1833(t)(3)(F) of the Act provides that
application of this subparagraph may result in the OPD fee schedule
increase factor under section 1833(t)(3)(C)(iv) of the Act being less
than 0.0 percent for a year and may result in OPPS payment rates being
less than rates for the preceding year. As described in further detail
below, we propose for CY 2025 an OPD fee schedule increase factor of
2.6 percent for the CY 2025 OPPS/ASC (which is the proposed estimate of
the hospital inpatient market basket percentage increase of 3.0
percent, less the proposed 0.4 percentage point productivity
adjustment).
3. Other Conversion Factor Adjustments
To set the OPPS conversion factor for 2025, we propose to increase
the CY 2024 conversion factor of $87.382 by 2.6 percent. In accordance
with section 1833(t)(9)(B) of the Act, we propose further to adjust the
conversion factor for CY 2025 to ensure that any revisions made to the
wage index and rural adjustment are made on a budget neutral basis. We
propose to calculate an overall budget neutrality factor of 1.0026 for
wage index changes by comparing proposed total estimated payments from
our simulation model using the proposed FY 2025 IPPS wage indexes to
those payments using the FY 2024 IPPS wage indexes, as adopted on a
calendar year basis for the OPPS. We further propose to calculate an
additional budget neutrality factor of 0.9982 to account for our
proposed policy to cap wage index reductions for
[[Page 59224]]
hospitals at 5 percent on an annual basis.
For CY 2025, we propose to maintain the current rural adjustment
policy, as discussed in section II.E of this proposed rule. Therefore,
the proposed budget neutrality factor for the rural adjustment is
1.0000.
We propose to calculate a CY 2025 budget neutrality adjustment
factor for the cancer hospital payment adjustment by transitioning from
the target PCR of 0.89 we finalized for CYs 2020 through 2023 (which
included the 1.0 percentage point reduction as required by section
16002(b) of the 21st Century Cures Act) and incrementally reducing the
target PCR by an additional 1.0 percentage point for each calendar
year, beginning with CY 2024, until the target PCR equals the PCR of
non-cancer hospitals calculated using the most recent data minus 1.0
percentage point as required by section 16002(b) of the 21st Century
Cures Act. Therefore, we propose to apply a budget neutrality
adjustment factor of 1.0006 to the conversion factor for the cancer
hospital payment adjustment. In accordance with section 1833(t)(18)(C)
of the Act, as added by section 16002(b) of the 21st Century Cures Act
(Pub. L. 114-255), we reduce the target PCR by 0.01, which brings the
proposed target PCR to 0.87. This is 0.02 less than the target PCR of
0.89 from CY 2021 through CY 2023, which was held at the pre-PHE
target.
For this proposed rule, we estimated that proposed pass-through
spending for drugs, biologicals, and devices for CY 2025 would equal
approximately $625 million, which represents 0.71 percent of total
projected CY 2025 OPPS spending. Therefore, we stated that the proposed
conversion factor would be adjusted by the difference between the 0.27
percent estimate of pass-through spending for CY 2024 and the 0.71
percent estimate of proposed pass-through spending for CY 2025,
resulting in a proposed decrease to the conversion factor for CY 2025
of 0.44 percent.
We propose that estimated payments for outliers would remain at 1.0
percent of total OPPS payments for CY 2025. We estimated for this
proposed rule that outlier payments would be approximately 0.85 percent
of total OPPS payments in CY 2024; the 1.00 percent for proposed
outlier payments in CY 2025 would constitute a 0.15 percent increase in
payment in CY 2025 relative to CY 2024.
For 2025, we propose to use a conversion factor of $87.382 in the
calculation of the national unadjusted payment rates for those items
and services for which payment rates are calculated using geometric
mean costs; that is, the proposed OPD fee schedule increase factor of
2.6 percent for CY 2025, the required proposed wage index budget
neutrality adjustment of approximately 1.0026, the proposed 5 percent
annual cap for individual hospital wage index reductions adjustment of
approximately 0.9982, the proposed cancer hospital payment adjustment
of 1.0006, and the proposed adjustment of a decrease of 0.44 percentage
point of projected OPPS spending for the difference in pass-through
spending, which resulted in a proposed conversion factor for CY 2025 of
$89.379.
For CY 2025, we also propose that hospitals that fail to meet the
reporting requirements of the Hospital OQR Program would continue to be
subject to a further reduction of 2.0 percentage points to the OPD fee
schedule increase factor. For hospitals that fail to meet the
requirements of the Hospital OQR Program, we propose to make all other
adjustments discussed above, but use a reduced OPD fee schedule update
factor of 0.6 percent (that is, the proposed OPD fee schedule increase
factor of 2.6 percent further reduced by 2.0 percentage points). This
would result in a proposed reduced conversion factor for CY 2025 of
$87.636 for hospitals that fail to meet the Hospital OQR Program
requirements (a difference of -1.743 in the conversion factor relative
to hospitals that met the requirements). For further discussion of the
Hospital OQR Program, we refer readers to section XV of this proposed
rule. For 2025, we propose to use a reduced conversion factor of
$87.636 in the calculation of payments for hospitals that fail to meet
the Hospital OQR Program requirements (a difference of -1.743 in the
conversion factor relative to hospitals that met the requirements).
The calculations we performed to determine the CY 2025 proposed
conversion factor are shown in Table 6.
BILLING CODE 4120-01-P
[[Page 59225]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.010
[[Page 59226]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.011
BILLING CODE 4120-01-C
C. Proposed Wage Index Changes
Section 1833(t)(2)(D) of the Act requires the Secretary to
determine a wage adjustment factor to adjust the portion of payment and
coinsurance attributable to labor-related costs for relative
differences in labor and labor-related costs across geographic regions
in a budget neutral manner (codified at 42 CFR 419.43(a)). This portion
of the OPPS payment rate is called the OPPS labor-related share. Budget
neutrality is discussed in section II.A.5 of this proposed rule.
The OPPS labor-related share is 60 percent of the national OPPS
payment. This labor-related share is based on a regression analysis
that determined that, for all hospitals, approximately 60 percent of
the costs of services paid under the OPPS were attributable to wage
costs. We confirmed that this labor-related share for outpatient
services is appropriate during our regression analysis for the payment
adjustment for rural hospitals in the CY 2006 OPPS final rule with
comment period (70 FR 68553). We propose to continue this policy for
the CY 2025 OPPS/ASC. We refer readers to section II.C of this proposed
rule for a description and an example of how the wage index for a
particular hospital is used to determine payment for the hospital.
As discussed in the claims accounting narrative included with the
supporting documentation for this proposed rule (which is available via
the internet on the CMS website (https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices)),
for estimating APC costs, we would standardize 60 percent of estimated
claims costs for geographic area wage variation using the same FY 2025
pre-reclassified wage index that we use under the IPPS to standardize
costs. This standardization process removes the effects of differences
in area wage levels from the determination of a national unadjusted
OPPS payment rate and copayment amount.
Under 42 CFR 419.41(c)(1) and 419.43(c) (published in the OPPS
April 7, 2000, final rule with comment period (65 FR 18495 and 18545)),
the OPPS adopted the final fiscal year IPPS post-reclassified wage
index as the calendar year wage index for adjusting the OPPS standard
payment amounts for labor market differences. Therefore, the wage index
that applies to a particular acute care, short-stay hospital under the
IPPS also applies to that hospital under the OPPS. As initially
explained in the September 8, 1998, OPPS/ASC proposed rule (63 FR
47576), we believe that using the IPPS wage index as the source of an
adjustment factor for the OPPS is reasonable and logical, given the
inseparable, subordinate status of the HOPD within the hospital
overall. In accordance with section 1886(d)(3)(E) of the Act, the IPPS
wage index is updated annually.
The Affordable Care Act contained several provisions affecting the
wage index. These provisions were discussed in the CY 2012 OPPS/ASC
final rule with comment period (76 FR 74191). Section 10324 of the
Affordable Care Act added section 1886(d)(3)(E)(iii)(II) to the Act,
which defines a frontier State and amended section 1833(t) of the Act
to add paragraph (19), which requires a frontier State wage index floor
of 1.00 in certain cases, and states that the frontier State floor
shall not be applied in a budget neutral manner. We codified these
requirements at Sec. 419.43(c)(2) and (3) of our regulations. For CY
2025 we propose to implement this provision in the same manner as we
have since CY 2011. Under this policy, the frontier State hospitals
would receive a wage index of 1.00 if the otherwise applicable wage
index (including reclassification, the rural floor, and rural floor
budget neutrality) is less than 1.00. Because the HOPD receives a wage
index based on the geographic location of the specific inpatient
hospital with which it is associated, the frontier State wage index
adjustment applicable for the inpatient hospital also would apply for
any associated HOPD. We refer readers to the FY 2011 through FY 2024
IPPS/LTCH PPS final rules for discussions regarding this provision,
including our methodology for identifying which areas meet the
definition of ``frontier States'' as provided for in section
1886(d)(3)(E)(iii)(II) of the Act: for FY 2011, 75 FR 50160 through
50161; for FY 2012, 76 FR 51793, 51795, and 51825; for FY 2013, 77 FR
53369 and 53370; for FY 2014, 78 FR 50590 and
[[Page 59227]]
50591; for FY 2015, 79 FR 49971; for FY 2016, 80 FR 49498; for FY 2017,
81 FR 56922; for FY 2018, 82 FR 38142; for FY 2019, 83 FR 41380; for FY
2020, 84 FR 42312; for FY 2021, 85 FR 58765; for FY 2022, 86 FR 45178;
FY 2023, 87 FR 49006; and for FY 2024, 88 FR 58977.
In addition to the changes required by the Affordable Care Act, we
note that the proposed FY 2025 IPPS wage indexes continue to reflect a
number of adjustments implemented in past years, including, but not
limited to, reclassification of hospitals to different geographic
areas, the rural floor provisions, the imputed floor wage index
adjustment in all-urban states, an adjustment for occupational mix, an
adjustment to the wage index based on commuting patterns of employees
(the out-migration adjustment), and the permanent 5-percent cap on any
decrease to a hospital's wage index from its wage index in a prior FY.
Beginning with FY 2024, we include hospitals with Sec. 412.103
reclassification along with geographically rural hospitals in all rural
wage index calculations, and to exclude ``dual reclass'' hospitals
(hospitals with simultaneous Sec. 412.103 and Medicare Geographic
Classification Review Board (MGCRB) reclassifications) implicated by
the hold harmless provision at section 1886(d)(8)(C)(ii) of the Act (88
FR 58971 through 58973). We also propose to continue the low wage index
hospital policy, under which we increase the wage index for hospitals
with a wage index value below the 25th percentile wage index value for
a fiscal year by half the difference between the otherwise applicable
final wage index value for a year for that hospital and the 25th
percentile wage index value for that year across all hospitals. We
refer readers to the FY 2025 IPPS/LTCH PPS proposed rule (89 FR 36181
through 36186) for a detailed discussion of all proposed changes to the
FY 2025 IPPS wage indexes.
We note that in the FY 2023 IPPS/LTCH PPS final rule (87 FR 49018
through 49021), we finalized a permanent approach to smooth year-to-
year decreases in hospitals' wage indexes. Specifically, for FY 2023
and subsequent years, we apply a 5-percent cap on any decrease to a
hospital's wage index from its wage index in the prior FY, regardless
of the circumstances causing the decline. That is, a hospital's wage
index for FY 2025 would not be less than 95 percent of its final wage
index for FY 2024. Except for newly opened hospitals, we apply the cap
for a fiscal year using the final wage index applicable to the hospital
on the last day of the prior fiscal year. A newly opened hospital would
be paid the wage index for the area in which it is geographically
located for its first full or partial fiscal year (subject to any
reclassification), and it would not receive a cap for that first year,
because it would not have been assigned a wage index in the prior year
(in accordance with 42 CFR 419.41(c)(1) and 419.43(c), as noted
previously).
We delineate hospital labor market areas based on Core-Based
Statistical Areas (CBSAs) established by the Office of Management and
Budget (OMB). As discussed in the FY 2025 IPPS/LTCH PPS proposed rule
(89 FR 36139 through 36174), OMB issued revisions to the current labor
market area delineations on July 21, 2023, that included a number of
significant changes such as new CBSAs, urban counties that become
rural, rural counties that become urban, and existing CBSAs that are
split apart (OMB Bulletin 23-01). This bulletin can be found at:
https://www.whitehouse.gov/wp-content/uploads/2023/07/OMB-Bulletin-23-01.pdf. The proposed changes to the IPPS wage index based on the newest
CBSA delineations are available in the FY 2025 IPPS/LTCH PPS proposed
rule. We propose that corresponding changes would be adopted in the
OPPS, which uses the IPPS wage index, based on the new OMB delineations
in this CY 2025 OPPS/ASC proposed rule, consistent with any proposals
in the FY 2025 IPPS/LTCH PPS proposed rule. We believe that using the
revised delineations based on OMB Bulletin No. 23-01 will increase the
integrity of the OPPS wage index system by creating a more accurate
representation of current geographic variations in wage levels. We
refer readers to proposed changes based on the new OMB delineations in
the FY 2025 IPPS/LTCH proposed rule at 89 FR 36139 through 36174, which
includes a discussion of the effects of implementation of the proposal
to adopt the revised OMB labor market area delineations on reclassified
hospitals.
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 from
2020. 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 cross walking 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 cross walking 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 2025, under
the OPPS, we are continuing to use only the FIPS county codes for
purposes of cross walking counties to CBSAs.
We propose to use the FY 2025 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 2025. We note that the proposed FY 2025 IPPS wage indexes
reflect several proposed changes as a result of the revised OMB
delineations, including proposed policies to accommodate changes in
rural or urban status for existing counties, as well as addition or
removal of certain individual CBSAs compared to the previous
delineations. Therefore, any policies and adjustments that are
finalized for the FY 2025 IPPS post-reclassified wage index would be
reflected in the final CY 2025 OPPS wage index beginning on January 1,
2025, if appropriate. We refer readers to the FY 2025 IPPS/LTCH PPS
proposed rule (89 FR 36181 through 36186) and the proposed FY 2025
hospital wage index files posted on the CMS website at https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/fy-2025-ipps-proposed-rule-home-page. Regarding budget
neutrality for the CY 2025 OPPS wage index, we refer readers to section
II.C of this proposed rule. We continue to believe that using the IPPS
post-reclassified wage index as the source of an adjustment factor for
the OPPS is reasonable and logical, given the inseparable, subordinate
status of the HOPD within the hospital overall.
[[Page 59228]]
Hospitals that are paid under the OPPS, but not under the IPPS, do
not have an assigned hospital wage index under the IPPS. Therefore, for
non-IPPS hospitals paid under the OPPS, it is our longstanding policy
to assign the wage index that would be applicable if the hospital was
paid under the IPPS, based on its geographic location and any
applicable wage index policies and adjustments. We propose to continue
this policy for CY 2025. We refer readers to the FY 2025 IPPS/LTCH PPS
proposed rule (89 FR 36181 through 36186) for a detailed discussion of
the proposed changes to the FY 2025 IPPS wage indexes.
It has been our longstanding policy to allow non-IPPS hospitals
paid under the OPPS to qualify for the out-migration adjustment if they
are located in a section 505 out-migration county (section 505 of the
Medicare Prescription Drug, Improvement, and Modernization Act of 2003
(MMA)) (Pub. L. 108-173). Applying this adjustment is consistent with
our policy of adopting IPPS wage index policies for hospitals paid
under the OPPS. We note that, because non-IPPS hospitals cannot
reclassify, they are eligible for the out-migration wage index
adjustment if they are located in a section 505 out-migration county.
This is the same out-migration adjustment policy that would apply if
the hospital were paid under the IPPS. For CY 2025, we propose to
continue our policy of allowing non-IPPS hospitals paid under the OPPS
to qualify for the outmigration adjustment if they are located in a
section 505 out-migration county (section 505 of the MMA) (88 FR 49585
and 49586). Furthermore, we propose that the wage index that would
apply for CY 2025 to non-IPPS hospitals paid under the OPPS would
continue to include the rural floor adjustment and any policies and
adjustments applied to the IPPS wage index to address wage index
disparities. In addition, we propose that the wage index that would
apply to non-IPPS hospitals paid under the OPPS would include the 5-
percent cap on wage index decreases.
For CMHCs, for CY 2025, we propose to continue to calculate the
wage index by using the post-reclassification IPPS wage index based on
the CBSA where the CMHC is located. Furthermore, we propose that the
wage index that would apply to a CMHC for CY 2025 would continue to
include the rural floor adjustment and any policies and adjustments
applied to the IPPS wage index to address wage index disparities. In
addition, the wage index that would apply to CMHCs would include the 5-
percent cap on wage index decreases. Also, we propose that the wage
index that would apply to CMHCs would not include the outmigration
adjustment because that adjustment only applies to hospitals.
Table 4A associated with the FY 2025 IPPS/LTCH PPS proposed rule
(available via the internet on the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/fy-2025-ipps-proposed-rule-home-page) identifies counties that would be
eligible for the out-migration adjustment. Table 2 associated with the
FY 2025 IPPS/LTCH PPS proposed rule (available for download via the
website noted previously) identifies IPPS hospitals that would receive
the out-migration adjustment for FY 2025. We are including the
outmigration adjustment information from Table 2 associated with the FY
2025 IPPS/LTCH PPS proposed rule as Addendum L to this proposed rule,
with the addition of non-IPPS hospitals that would receive the section
505 outmigration adjustment under this proposed rule Addendum L is
available via the internet on the CMS website. We refer readers to the
CMS website for the OPPS at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices. At
this link, readers will find a link to the proposed FY 2025 IPPS wage
index tables and Addendum L.
D. Proposed Statewide Average Default Cost-to-Charge Ratios (CCRs)
In addition to using CCRs to estimate costs from charges on claims
for ratesetting, we use overall hospital-specific CCRs calculated from
the hospital's most recent cost report (OMB control number: 0938-0050
for Form CMS-2552-10) to determine outlier payments, payments for pass-
through devices, and monthly interim transitional corridor payments
under the OPPS during the PPS year. For certain hospitals, under the
regulations at 42 CFR 419.43(d)(5)(iii), we use the statewide average
default CCRs to determine the payments mentioned earlier if it is not
possible to determine an accurate CCR for a hospital in certain
circumstances. This includes hospitals that are new, hospitals that
have not accepted assignment of an existing hospital's provider
agreement, and hospitals that have not yet submitted a cost report. We
also use the statewide average default CCRs to determine payments for
hospitals whose CCR falls outside the predetermined ceiling threshold
for a valid CCR or for hospitals in which the most recent cost report
reflects an all-inclusive rate status (Medicare Claims Processing
Manual (Pub. L. 100-04), Chapter 4, Section 10.11).
We discussed our policy for using default CCRs, including setting
the ceiling threshold for a valid CCR, in the CY 2009 OPPS/ASC final
rule with comment period (73 FR 68594 through 68599) in the context of
our adoption of an outlier reconciliation policy for cost reports
beginning on or after January 1, 2009. For details on our process for
calculating the statewide average CCRs, we refer readers to the Claims
Accounting Narrative for this CY 2025 OPPS/ASC proposed rule, which is
posted on our website. We propose to calculate the default ratios for
CY 2025 using the most recent cost report data.
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 ``Annual Policy Files'' and then select the
relevant year to download the statewide CCRs and upper limit in the
downloads section of the web page.
E. Proposed Adjustment for Rural Sole Community Hospitals (SCHs) and
Essential Access Community Hospitals (EACHs) Under Section
1833(t)(13)(B) of the Act for CY 2025
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 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, as added by section 411 of the Medicare
Prescription Drug, Improvement, and Modernization Act of 2003 (MMA)
(Pub. L. 108-173). Section 1833(t)(13) of the Act provides the
Secretary the authority to make an adjustment to OPPS payments for
rural hospitals, effective January 1, 2006, if justified by a study of
the difference in costs by APC between hospitals in rural areas and
hospitals in urban areas. Our analysis showed a difference in costs for
rural SCHs. Therefore, for the CY 2006 OPPS,
[[Page 59229]]
we finalized a payment adjustment for rural SCHs of 7.1 percent for all
services and procedures paid under the OPPS, excluding separately
payable drugs and biologicals, brachytherapy sources, items paid at
charges reduced to costs, and devices paid under the pass-through
payment policy, in accordance with section 1833(t)(13)(B) of the Act.
In the CY 2007 OPPS/ASC final rule with comment period (71 FR 68010
and 68227), for purposes of receiving this rural adjustment, we revised
our regulations at Sec. 419.43(g) to clarify that essential access
community hospitals (EACHs) are also eligible to receive the rural SCH
adjustment, assuming these entities otherwise meet the rural adjustment
criteria. Currently, two hospitals are classified as EACHs, and as of
CY 1998, under section 4201(c) of the Balanced Budget Act of 1997 (BBA)
(Pub. L. 105-33), a hospital can no longer become newly classified as
an EACH.
This adjustment for rural SCHs is budget neutral and applied before
calculating outlier payments and copayments. We stated in the CY 2006
OPPS final rule with comment period (70 FR 68560) that we would not
reestablish the adjustment amount on an annual basis, but we may review
the adjustment in the future and, if appropriate, would revise the
adjustment. We provided the same 7.1 percent adjustment to rural SCHs,
including EACHs, again in CYs 2008 through 2024.
For CY 2025, we propose to continue the current policy of a 7.1
percent payment adjustment for rural SCHs, including EACHs, for all
services and procedures paid under the OPPS, excluding separately
payable drugs and biologicals, brachytherapy sources, items paid at
charges reduced to costs, and devices paid under the pass-through
payment policy, applied in a budget neutral manner.
F. Proposed Payment Adjustment for Certain Cancer Hospitals for CY 2025
1. Background
Since the inception of the OPPS, which was authorized by the
Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33), Medicare has paid
the 11 hospitals that meet the criteria for cancer hospitals identified
in section 1886(d)(1)(B)(v) of the Act under the OPPS for covered
outpatient department services. These cancer hospitals are exempted
from payment under the IPPS. With the Medicare, Medicaid and SCHIP
Balanced Budget Refinement Act of 1999 (Pub. L. 106-113), the Congress
added section 1833(t)(7), ``Transitional Adjustment to Limit Decline in
Payment,'' to the Act, which requires the Secretary to determine OPPS
payments to cancer and children's hospitals based on their pre-BBA
payment amount (these hospitals are often referred to under this policy
as ``held harmless'' and their payments are often referred to as ``hold
harmless'' payments).
As required under section 1833(t)(7)(D)(ii) of the Act, a cancer
hospital receives the full amount of the difference between payments
for covered outpatient department services under the OPPS and a ``pre-
BBA amount.'' That is, cancer hospitals are permanently held harmless
to their ``pre-BBA amount,'' and they receive transitional outpatient
payments (TOPs) or hold harmless payments to ensure that they do not
receive a payment that is lower in amount under the OPPS than the
payment amount they would have received before implementation of the
OPPS, as set forth in section 1833(t)(7)(F) of the Act. The ``pre-BBA
amount'' is the product of the hospital's reasonable costs for covered
outpatient department services occurring in the current year and the
base payment-to-cost ratio (PCR) for the hospital defined in section
1833(t)(7)(F)(ii) of the Act. The ``pre-BBA amount'' and the
determination of the base PCR are defined at Sec. 419.70(f). TOPs are
calculated on Worksheet E, Part B, of the Hospital Cost Report or the
Hospital Health Care Complex Cost Report (Form CMS-2552-96 or Form CMS-
2552-10 (OMB NO: 0938-0050), respectively), as applicable each year.
Section 1833(t)(7)(I) of the Act exempts TOPs from budget neutrality
calculations.
Section 3138 of the Affordable Care Act (Pub. L. 111-148) amended
section 1833(t) of the Act by adding a new paragraph (18), which
instructs the Secretary to conduct a study to determine if, under the
OPPS, outpatient costs incurred by cancer hospitals described in
section 1886(d)(1)(B)(v) of the Act with respect to APC groups exceed
outpatient costs incurred by other hospitals furnishing services under
section 1833(t) of the Act, as determined appropriate by the Secretary.
Section 1833(t)(18)(A) of the Act requires the Secretary to take into
consideration the cost of drugs and biologicals incurred by cancer
hospitals and other hospitals. Section 1833(t)(18)(B) of the Act
provides that, if the Secretary determines that cancer hospitals' costs
are higher than those of other hospitals, the Secretary shall provide
an appropriate adjustment under section 1833(t)(2)(E) of the Act to
reflect these higher costs. In 2011, after conducting the study
required by section 1833(t)(18)(A) of the Act, we determined that
outpatient costs incurred by the 11 specified cancer hospitals were
greater than the costs incurred by other OPPS hospitals. For a complete
discussion regarding the cancer hospital cost study, we refer readers
to the CY 2012 OPPS/ASC final rule with comment period (76 FR 74200 and
74201).
Based on these findings, we finalized a policy to provide a payment
adjustment to the 11 specified cancer hospitals that reflects their
higher outpatient costs, as discussed in the CY 2012 OPPS/ASC final
rule with comment period (76 FR 74202 through 74206). Specifically, we
adopted a policy to provide additional payments to the cancer hospitals
so that each cancer hospital's final PCR for services provided in a
given calendar year is equal to the weighted average PCR (which we
refer to as the ``target PCR'') for other hospitals paid under the
OPPS. The target PCR is set in advance of the calendar year and is
calculated using the most recently submitted or settled cost report
data that are available at the time of final rulemaking for the
calendar year. The amount of the payment adjustment is made on an
aggregate basis at cost report settlement. We note that the changes
made by section 1833(t)(18) of the Act do not affect the existing
statutory provisions that provide for TOPs for cancer hospitals. The
TOPs are assessed, as usual, after all payments, including the cancer
hospital payment adjustment, have been made for a cost reporting
period. Table 7 displays the target PCR for purposes of the cancer
hospital adjustment for CY 2012 through CY 2024.
[[Page 59230]]
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2. Proposed Policy for CY 2025
Section 16002(b) of the 21st Century Cures Act (Pub. L. 114-255)
amended section 1833(t)(18) of the Act by adding subparagraph (C),
which requires that in applying Sec. 419.43(i) (that is, the payment
adjustment for certain cancer hospitals) for services furnished on or
after January 1, 2018, the target PCR adjustment be reduced by 1.0
percentage point less than what would otherwise apply. Section 16002(b)
also provides that, in addition to the percentage reduction, the
Secretary may consider making an additional percentage point reduction
to the target PCR that takes into account payment rates for applicable
items and services described under section 1833(t)(21)(C) of the Act
for hospitals that are not cancer hospitals described under section
1886(d)(1)(B)(v) of the Act. Further, in making any budget neutrality
adjustment under section 1833(t) of the Act, the Secretary shall not
take into account the reduced expenditures that result from application
of section 1833(t)(18)(C) of the Act.
We propose to provide additional payments to the 11 specified
cancer hospitals so that each cancer hospital's proposed PCR is equal
to the weighted average PCR (or ``target PCR'') for the other OPPS
hospitals, generally using the most recent submitted or settled cost
report data that are available, reduced by 1.0 percentage point, to
comply with section 16002(b) of the 21st Century Cures Act, and
adjusted by the proposed post-Public Health Emergency (PHE) transition
as described later in this section. We are not proposing an additional
reduction beyond the 1.0 percentage point reduction required by section
16002(b) of the 21st Century Cures Act for CY 2025.
To calculate the proposed CY 2025 target PCR, we would use the same
extract of cost report data from HCRIS used to estimate costs for the
CY 2025 OPPS which, in most cases, would be the most recently available
hospital cost reports. Using these cost report data, we included data
from Worksheet E, Part B, for each hospital, using data from each
hospital's most recent cost report, whether as submitted or settled.
We then limited the dataset to the hospitals with CY 2023 claims
data that we used to model the impact of the proposed CY 2025 APC
relative payment weights (3,448 hospitals) because it is appropriate to
use the same set of hospitals that are being used to calibrate the
modeled CY 2025 OPPS. The cost report data for the hospitals in this
dataset were from cost report periods with fiscal year ends ranging
from 2019 to 2023; however, the cost reporting periods were
predominantly from fiscal years ending in 2022 and 2023. We then
removed the cost report data of the 49 hospitals located in Puerto Rico
from our dataset because we did not believe their cost structure
reflected the costs of most hospitals paid under the OPPS, and,
therefore, their inclusion may bias the calculation of hospital-
weighted statistics. We also removed the cost report data of 16
hospitals because these hospitals had cost report data that were not
complete (missing aggregate OPPS payments, missing aggregate cost data,
or missing both), so that all cost reports in the study would have both
the payment and cost data necessary to calculate a PCR for each
hospital, leading to a proposed analytic file of 3,421 hospitals with
cost report data.
Using this smaller dataset of cost report data, we estimated that,
on average, the OPPS payments to other hospitals furnishing services
under the OPPS were approximately 87 percent of reasonable cost
(weighted average PCR of 0.87). Therefore, after applying the 1.0
percentage point reduction, as required by section 16002(b) of the 21st
Century Cures Act, using our standard process the payment amount
associated with the cancer hospital payment adjustment to be determined
at cost report settlement would be the additional payment needed to
result in a target PCR equal to 0.86 for each cancer hospital.
In the CY 2024 OPPS/ASC final rule with comment period (88 FR 81586
through 81589), we explained that we believe we should begin to take
into consideration the PCR of non-cancer hospitals based on the most
recently available data for calculating the target PCR. We noted that
we do not know if the changes in the data that have yielded lower PCRs
for non-cancer hospitals are likely to continue in future years or if,
when data from after the PHE is available, we will see the target PCR
increase toward its historical norm. Therefore, in the CY 2024 OPPS/ASC
final rule with comment period, we finalized our proposal to transition
from the target PCR of 0.89 we finalized for
[[Page 59231]]
CYs 2020 through 2024 (which included the 1.0 percentage point
reduction as required by section 16002(b) of the 21st Century Cures
Act) and incrementally reduce the target PCR by an additional 1.0
percentage point for each calendar year, beginning with CY 2024, until
the target PCR equals the PCR of non-cancer hospitals calculated using
the most recent data minus 1.0 percentage point as required by section
16002(b) of the 21st Century Cures Act. Therefore, utilizing this
methodology for the CY 2025 OPPS/ASC proposed rule, since the target
PCR that would otherwise apply under our standard process would be a
target PCR of 0.86, we propose to reduce the CY 2024 target PCR of 0.88
by 1 percentage point and propose a cancer hospital target PCR of 0.87
for CY 2025.
Table 8 shows the estimated percentage increase in OPPS payments to
each cancer hospital for CY 2025, due to the cancer hospital payment
adjustment policy. The actual, final amount of the CY 2025 cancer
hospital payment adjustment for each cancer hospital will be determined
at cost report settlement and will depend on each hospital's CY 2025
payments and costs from the settled CY 2025 cost report. We note that
the requirements contained in section 1833(t)(18) of the Act do not
affect the existing statutory provisions that provide for TOPs for
cancer hospitals. The TOPs will be assessed, as usual, after all
payments, including the cancer hospital payment adjustment, have been
made for a cost reporting period.
BILLING CODE 4120-01-P
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BILLING CODE 4120-01-C
G. Proposed Hospital Outpatient Outlier Payments
1. Background
The OPPS provides outlier payments to hospitals to help mitigate
the financial risk associated with high-cost and complex procedures,
where a very costly service could present a hospital with significant
financial loss. As explained in the CY 2015 OPPS/ASC final rule with
comment period (79 FR 66832 through 66834), we set our projected target
for aggregate outlier payments at 1.0 percent of the estimated
aggregate total payments under the OPPS for the prospective year.
Outlier payments are provided on a service-by-service basis when the
cost of a service exceeds the APC payment amount multiplier threshold
(the APC payment amount multiplied by a certain amount) as well as the
APC payment amount plus a fixed-dollar amount threshold (the APC
payment plus a certain dollar amount). In CY 2024, the outlier
threshold was met when the hospital's cost of furnishing a service
exceeded 1.75 times the APC payment amount (the multiplier threshold)
and exceeded the APC payment amount plus $7,750 (the fixed-dollar
amount threshold) (88 FR 81589 through 81591). If the hospital's cost
of furnishing a service exceeds both the multiplier threshold and the
fixed-dollar threshold, the outlier payment is calculated as 50 percent
of the amount by which the hospital's cost of furnishing the service
exceeds 1.75 times the APC payment amount. Beginning with CY 2009
payments, outlier payments are subject to a reconciliation process
similar to the IPPS outlier reconciliation process for cost reports, as
discussed in the CY 2009 OPPS/ASC final rule with
[[Page 59232]]
comment period (73 FR 68594 through 68599).
It has been our policy to report the actual amount of outlier
payments as a percent of total spending in the claims being used to
model the OPPS. Our estimate of total outlier payments as a percent of
total CY 2023 OPPS payments, using CY 2023 claims available for this CY
2025 OPPS proposed rule, is approximately 0.68 percent. Therefore, for
CY 2023, we estimate that we did not meet the outlier target by 0.32
percent of total aggregated OPPS payments.
For this proposed rule, using CY 2023 claims data and CY 2024
payment rates, we estimate that the aggregate outlier payments for CY
2024 would be approximately 0.85 percent of the total CY 2024 OPPS
payments. We provide estimated CY 2025 outlier payments for hospitals
and CMHCs with claims included in the claims data that we used to model
impacts in the Hospital-Specific Impacts--Provider-Specific Data file
on the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient.
2. Outlier Calculation for CY 2025
For CY 2025, we propose to continue our policy of estimating
outlier payments to be 1.0 percent of the estimated aggregate total
payments under the OPPS. We propose that a portion of that 1.0 percent,
an amount equal to less than 0.01 percent of outlier payments (or
0.0001 percent of total OPPS payments), would be allocated to CMHCs for
partial hospitalization program (PHP) and intensive outpatient program
(IOP) outlier payments. This is the amount of estimated outlier
payments that would result from the proposed CMHC outlier threshold as
a proportion of total estimated OPPS outlier payments. We propose to
continue our outlier policy that if a CMHC's cost for PHP and IOP
services exceeds 3.40 times the APC payment rate, the outlier payment
would be calculated as 50 percent of the amount by which the cost
exceeds 3.40 times the proposed APC payment rate.
For further discussion of CMHC outlier payments, we refer readers
to section VIII.C of this proposed rule.
To ensure that the estimated CY 2025 aggregate outlier payments
would equal 1.0 percent of estimated aggregate total payments under the
OPPS, we propose that the hospital outlier threshold be set so that
outlier payments would be triggered when a hospital's cost of
furnishing a service exceeds 1.75 times the APC payment amount and
exceeds the APC payment amount plus the fixed-dollar threshold.
We calculated the proposed fixed-dollar threshold using the
standard methodology most recently used for CY 2024 (88 FR 81589
through 81591). For purposes of estimating outlier payments for CY
2025, we use the hospital-specific overall ancillary CCRs available in
the April 2024 update to the Outpatient Provider-Specific File (OPSF).
The OPSF contains provider-specific data, such as the most current
CCRs, which are maintained by the MACs and used by the OPPS Pricer to
pay claims. The claims that we generally use to model each OPPS update
lag by 2 years.
In order to estimate the CY 2025 hospital outlier payments, we
inflate the charges on the CY 2023 claims using the same proposed
charge inflation factor of 1.084555 that we used to estimate the IPPS
fixed-loss cost threshold for the FY 2025 IPPS/LTCH PPS proposed rule
(89 FR 36572). We used an inflation factor of 1.04142 to estimate CY
2024 charges from the CY 2023 charges reported on CY 2023 claims before
applying CY 2024 CCRs to estimate the percent of outliers paid in CY
2024. The proposed methodology for determining these charge inflation
factors is discussed in the FY 2025 IPPS/LTCH PPS proposed rule (89 FR
36572). As we stated in the CY 2005 OPPS final rule with comment period
(69 FR 65844 through 65846), we believe that the use of the same charge
inflation factors is appropriate for the OPPS because, with the
exception of the inpatient routine service cost centers, hospitals use
the same ancillary and cost centers to capture costs and charges for
inpatient and outpatient services.
As noted in the CY 2007 OPPS/ASC final rule with comment period (71
FR 68011), we are concerned that we could systematically overestimate
the OPPS hospital outlier threshold if we did not apply a CCR inflation
adjustment factor. Therefore, we propose to apply the same CCR
adjustment factor that we proposed to apply for the FY 2025 IPPS
outlier calculation to the CCRs used to simulate the proposed CY 2025
OPPS outlier payments to determine the fixed-dollar threshold.
Specifically, for CY 2025, we propose to apply an adjustment factor of
1.03331 to the CCRs that were in the April 2024 OPSF to trend them
forward from CY 2024 to CY 2025. The methodology for calculating the
proposed CCR adjustment factor is discussed in the FY 2025 IPPS/LTCH
PPS proposed rule (89 FR 36572 through 36573).
To model hospital outlier payments for the proposed rule, we
applied the overall CCRs from the April 2024 OPSF after adjustment
(using the proposed CCR inflation adjustment factor of 1.03331 to
approximate CY 2025 CCRs) to charges on CY 2023 claims that were
adjusted (using the proposed charge inflation factor of 1.084555 to
approximate CY 2025 charges). We simulated aggregated CY 2023 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 2025 OPPS payments. We
estimated that a proposed fixed-dollar threshold of $8,000, combined
with the proposed multiplier threshold of 1.75 times the APC payment
rate, would allocate 1.0 percent of aggregated total OPPS payments to
outlier payments. For CMHCs, we propose that, if a CMHC's cost for
partial hospitalization or intensive outpatient services exceeds 3.40
times the APC payment rate, the outlier payment would be calculated as
50 percent of the amount by which the cost exceeds 3.40 times the APC
payment rate.
Section 1833(t)(17)(A) of the Act, which applies to hospitals, as
defined under section 1886(d)(1)(B) of the Act, requires that hospitals
that fail to report data required for the quality measures selected by
the Secretary, in the form and manner required by the Secretary under
section 1833(t)(17)(B) of the Act, incur a 2.0 percentage point
reduction to their OPD fee schedule increase factor; that is, the
annual payment update factor. The application of a reduced OPD fee
schedule increase factor results in reduced national unadjusted payment
rates that would apply to certain outpatient items and services
furnished by hospitals that are required to report outpatient quality
data and that fail to meet the Hospital Outpatient Quality Reporting
(OQR) Program requirements. For hospitals that fail to meet the
Hospital OQR Program requirements, we proposed to continue the policy
that we implemented in CY 2010 that the hospitals' costs would be
compared to the reduced payments for purposes of outlier eligibility
and payment calculation. For more information on the Hospital OQR
Program, we refer readers to section XV of this proposed rule.
[[Page 59233]]
H. Proposed Calculation of an Adjusted Medicare Payment From the
National Unadjusted Medicare Payment
The national unadjusted payment rate is the payment rate for most
APCs before accounting for the wage index adjustment or any applicable
adjustments. The basic methodology for determining prospective payment
rates for HOPD services under the OPPS is set forth in existing
regulations at 42 CFR part 419, subparts C and D. For this proposed
rule, the payment rate for most services and procedures for which
payment is made under the OPPS is the product of the conversion factor
calculated in accordance with section II.B of this proposed rule and
the relative payment weight described in section II.A of this proposed
rule. The national unadjusted payment rate for most APCs contained in
Addendum A to this proposed rule (which is available via the CMS
website ``Hospital Outpatient Regulations and Notices'') and for most
HCPCS codes to which separate payment under the OPPS has been assigned
in Addendum B to this proposed rule (which is available on the CMS
website link above) is calculated by multiplying the proposed CY 2025
scaled weight for the APC by the CY 2025 conversion factor.
We note that section 1833(t)(17) of the Act, which applies to
hospitals, as defined under section 1886(d)(1)(B) of the Act, requires
that hospitals that fail to submit data required to be submitted on
quality measures selected by the Secretary, in the form and manner and
at a time specified by the Secretary, incur a reduction of 2.0
percentage points to their OPD fee schedule increase factor, that is,
the annual payment update factor. The application of a reduced OPD fee
schedule increase factor results in reduced national unadjusted payment
rates that apply to certain outpatient items and services provided by
hospitals that are required to report outpatient quality data and that
fail to meet the Hospital OQR Program requirements. For further
discussion of the payment reduction for hospitals that fail to meet the
requirements of the Hospital OQR Program, we refer readers to section
XIV of this proposed rule.
Below we demonstrate the steps used to determine the APC payments
that will be made in a CY under the OPPS to a hospital that fulfills
the Hospital OQR Program requirements and to a hospital that fails to
meet the Hospital OQR Program requirements for a service that has any
of the following status indicator assignments: ``J1,'' ``J2,'' ``P,''
``Q1,'' ``Q2,'' ``Q3,'' ``Q4,'' ``R,'' ``S,'' ``T,'' ``U,'' or ``V''
(as defined in Addendum D1 to this proposed rule, which is available
via the internet on the CMS website), in a circumstance in which the
multiple procedure discount does not apply, the procedure is not
bilateral, and conditionally packaged services (status indicator of
``Q1'' and ``Q2'') qualify for separate payment. We note that, although
blood and blood products with status indicator ``R'' and brachytherapy
sources with status indicator ``U'' are not subject to wage adjustment,
they are subject to reduced payments when a hospital fails to meet the
Hospital OQR Program requirements.
Individual providers interested in calculating the payment amount
that they would receive for a specific service from the national
unadjusted payment rates presented in Addenda A and B to this proposed
rule (which are available via the internet on the CMS website) should
follow the formulas presented in the following steps. For purposes of
the payment calculations below, we refer to the national unadjusted
payment rate for hospitals that meet the requirements of the Hospital
OQR Program as the ``full'' national unadjusted payment rate. We refer
to the national unadjusted payment rate for hospitals that fail to meet
the requirements of the Hospital OQR Program as the ``reduced''
national unadjusted payment rate. The reduced national unadjusted
payment rate is calculated by multiplying the reporting ratio of 0.9805
times the ``full'' national unadjusted payment rate. The national
unadjusted payment rate used in the calculations below is either the
full national unadjusted payment rate or the reduced national
unadjusted payment rate, depending on whether the hospital met its
Hospital OQR Program requirements to receive the full CY 2025 OPPS fee
schedule increase factor.
Step 1. Calculate 60 percent (the labor-related portion) of the
national unadjusted payment rate. Since the initial implementation of
the OPPS, we have used 60 percent to represent our estimate of that
portion of costs attributable, on average, to labor. We refer readers
to the April 7, 2000 OPPS/ASC final rule with comment period (65 FR
18496 through 18497) for a detailed discussion of how we derived this
percentage. During our regression analysis for the payment adjustment
for rural hospitals in the CY 2006 OPPS final rule with comment period
(70 FR 68553), we confirmed that this labor-related share for hospital
outpatient services is appropriate.
The formula below is a mathematical representation of Step 1 and
identifies the labor-related portion of a specific payment rate for a
specific service.
X is the labor-related portion of the national unadjusted payment
rate.
X = .60 * (national unadjusted payment rate).
Step 2. Determine the wage index area in which the hospital is
located and identify the wage index level that applies to the specific
hospital. The wage index values assigned to each area would reflect the
geographic statistical areas (which are based upon OMB standards) to
which hospitals are assigned for FY 2025 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 2025 OPPS wage index any adjustments for the FY 2025
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 2025 OPPS, we refer readers to section II.C of this proposed
rule.
Step 3. Adjust the wage index of hospitals located in certain
qualifying counties that have a relatively high percentage of hospital
employees who reside in the county, but who work in a different county
with a higher wage index, in accordance with section 505 of the
Medicare Prescription Drug, Improvement, and Modernization Act of 2003
(Pub. L. 108-173). Addendum L to this proposed rule (which is available
via the internet on the CMS website) contains the qualifying counties
and the associated wage index increase developed for the proposed FY
2025 IPPS wage index, which are listed in Table 3 associated with the
FY 2025 IPPS proposed rule and available via the internet on the CMS
website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps. (Click on the link on the left side of the
screen titled ``FY 2025 IPPS Proposed Rule Home Page'' and select ``FY
2025 Proposed Rule Tables.'') This step is to be followed only if the
hospital is not reclassified or redesignated under section 1886(d)(8)
or section 1886(d)(10) of the Act.
Step 4. Multiply the applicable wage index determined under Steps 2
and 3 by the amount determined under Step 1
[[Page 59234]]
that represents the labor-related portion of the national unadjusted
payment rate.
The formula below is a mathematical representation of Step 4 and
adjusts the labor-related portion of the national unadjusted payment
rate for the specific service by the wage index.
Xa is the labor-related portion of the national unadjusted payment
rate (wage adjusted).
Xa = labor-portion of the national unadjusted payment rate * applicable
wage index.
Step 5. Calculate 40 percent (the nonlabor-related portion) of the
national unadjusted payment rate and add that amount to the resulting
product of Step 4. The result is the wage index adjusted payment rate
for the relevant wage index area.
The formula below is a mathematical representation of Step 5 and
calculates the remaining portion of the national payment rate, the
amount not attributable to labor, and the adjusted payment for the
specific service.
Y is the nonlabor-related portion of the national unadjusted
payment rate.
Y = 0.40 * (national unadjusted payment rate).
Step 6. If a provider is an SCH, as set forth in the regulations at
Sec. 412.92, or an EACH, which is considered to be an SCH under
section 1886(d)(5)(D)(iii)(III) of the Act, and located in a rural
area, as defined in Sec. 412.64(b), or is treated as being located in
a rural area under Sec. 412.103, multiply the wage index adjusted
payment rate by 1.071 to calculate the total payment.
The formula below is a mathematical representation of Step 6 and
applies the rural adjustment for rural SCHs.
Adjusted Medicare Payment (SCH or EACH) = Adjusted Medicare Payment *
1.071.
Step 7. The adjusted payment rate is the sum of the wage adjusted
labor-related portion of the national unadjusted payment rate and the
nonlabor-related portion of the national unadjusted payment rate.
Xa is the labor-related portion of the national unadjusted payment
rate (wage adjusted).
Y is the nonlabor-related portion of the national unadjusted
payment rate.
Adjusted Medicare Payment = Xa + Y
We are providing examples below of the calculation of both the full
and reduced national unadjusted payment rates that would apply to
certain outpatient items and services performed by hospitals that meet
and that fail to meet the Hospital OQR Program requirements, using the
steps outlined previously. For purposes of this example, we are using a
provider that is located in Brooklyn, New York that is assigned to CBSA
35614. This provider bills one service that is assigned to APC 5071
(Level 1 Excision/Biopsy/Incision and Drainage). The proposed CY 2025
full national unadjusted payment rate for APC 5071 is $700.10. The
proposed reduced national adjusted payment rate for APC 5071 for a
hospital that fails to meet the Hospital OQR Program requirements is
$686.45. This reduced rate is calculated by multiplying the reporting
ratio of 0.9805 by the full unadjusted payment rate for APC 5071.
Step 1. The labor-related portion of the proposed full national
unadjusted payment is approximately $420.06 (0.60 * $700.10). The
labor-related portion of the proposed reduced national adjusted payment
is approximately $411.87 (0.60 * $686.45).
Step 2 & 3. The FY 2025 wage index for a provider located in CBSA
35614 in New York, which includes the adoption of the proposed IPPS
2025 wage index policies, is 1.2867.
Step 4. The wage adjusted labor-related portion of the proposed
full national unadjusted payment is approximately $540.49 ($420.06
*1.2867). The wage adjusted labor-related portion of the proposed
reduced national adjusted payment is approximately $529.95 ($411.87 *
1.2867).
Step 5. The nonlabor-related portion of the proposed full national
unadjusted payment is approximately $280.04 (0.40 * $700.10). The
nonlabor-related portion of the proposed reduced national adjusted
payment is approximately $274.58 (0.40 * $686.45).
Step 6. For this example of a provider located in Brooklyn, New
York, the rural adjustment for rural SCHs does not apply.
Step 7. The sum of the labor-related and nonlabor-related portions
of the proposed full national unadjusted payment is approximately
$820.53 ($540.49 + $280.04). The sum of the portions of the proposed
reduced national adjusted payment is approximately $804.53 ($529.95 +
$274.58) as shown in Table 9.
[GRAPHIC] [TIFF OMITTED] TP22JY24.014
I. Proposed Beneficiary Copayments
1. Background
Section 1833(t)(3)(B) of the Act requires the Secretary to set
rules for determining the unadjusted copayment amounts to be paid by
beneficiaries for covered OPD services. Section 1833(t)(8)(C)(ii) of
the Act specifies that the Secretary must reduce the national
unadjusted copayment amount for a covered OPD service (or group of such
services) furnished in a year in a manner so that the effective
copayment rate (determined on a national unadjusted basis) for that
service in the year does not exceed a specified percentage. As
specified in section 1833(t)(8)(C)(ii)(V) of the Act, the effective
copayment rate for a covered OPD service paid under the OPPS in CY
2006, and in CYs thereafter, shall not exceed 40 percent of the APC
payment rate.
Section 1833(t)(3)(B)(ii) of the Act provides that, for a covered
OPD service (or group of such services) furnished in a year, the
national unadjusted copayment amount cannot be less than 20 percent of
the OPD fee schedule amount. However, section 1833(t)(8)(C)(i) of the
Act limits the amount of beneficiary copayment that may be collected
for a procedure
[[Page 59235]]
(including items such as drugs and biologicals) performed in a year to
the amount of the inpatient hospital deductible for that year.
Section 4104 of the Affordable Care Act eliminated the Medicare
Part B coinsurance for preventive services furnished on and after
January 1, 2011, that meet certain requirements, including flexible
sigmoidoscopies and screening colonoscopies, and waived the Part B
deductible for screening colonoscopies that become diagnostic during
the procedure. For a discussion of the changes made by the Affordable
Care Act with regard to copayments for preventive services furnished on
and after January 1, 2011, we refer readers to section XII.B of the CY
2011 OPPS/ASC final rule with comment period (75 FR 72013).
Section 122 of the Consolidated Appropriations Act (CAA) of 2021
(Pub. L. 116-260), Waiving Medicare Coinsurance for Certain Colorectal
Cancer Screening Tests, amended section 1833(a) of the Act to offer a
special coinsurance rule for screening flexible sigmoidoscopies and
screening colonoscopies, regardless of the code that is billed for the
establishment of a diagnosis as a result of the test, or for the
removal of tissue or other matter or other procedure, that is furnished
in connection with, as a result of, and in the same clinical encounter
as the colorectal cancer screening test. We refer readers to section
X.B, ``Changes to Beneficiary Coinsurance for Certain Colorectal Cancer
Screening Tests,'' of the CY 2022 OPPS/ASC final rule with comment
period for the full discussion of this policy (86 FR 63740 through
63743). Under the regulation at 42 CFR 410.152(l)(5)(i)(B), the
Medicare Part B payment percentage for colorectal cancer screening
tests described in the regulation at Sec. 410.37(j) that are furnished
in CY 2023 through CY 2026 is 85 percent, with beneficiary coinsurance
equal to 15 percent.
On August 16, 2022, the Inflation Reduction Act of 2022 (IRA) (Pub.
L. 117-169) was signed into law. Section 11101(a) of the IRA amended
section 1847A of the Act by adding a new subsection (i), which requires
the payment of rebates into the Supplementary Medical Insurance Trust
Fund for Part B rebatable drugs if the payment limit amount exceeds the
inflation-adjusted payment amount, which is calculated as set forth in
section 1847A(i)(3)(C) of the Act. The provisions of section 11101 of
the IRA thus far have primarily been implemented through program
instruction, as permitted under section 1847A(c)(5)(C) of the Act. As
such, we issued guidance for the computation of inflation-adjusted
beneficiary coinsurance under section 1847A(i)(5) of the Act and
amounts paid under section 1833(a)(1)(EE) of the Act on February 9,
2023.\8\ \9\ For additional information regarding implementation of
section 11101 of the IRA, please see the inflation rebates resources
page at https://www.cms.gov/inflation-reduction-act-and-medicare/inflation-rebates-medicare.
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\8\ https://www.cms.gov/files/document/medicare-part-b-inflation-rebate-program-initial-guidance.pdf.
\9\ In addition, beginning with the April 2023 ASP Drug Pricing
file, the file includes the coinsurance percentage for each drug and
specifies ``inflation-adjusted coinsurance'' in the ``Notes'' column
if the coinsurance for a drug is less than 20 percent of the
Medicare Part B payment amount. Drug pricing files are available at
https://www.cms.gov/medicare/medicare-fee-for-service-part-b-drugs/mcrpartbdrugavgsalesprice.
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Section 11101(b) of the IRA amended sections 1833(i) and 1833(t)(8)
of the Act by adding a new paragraph (9) and subparagraph (F),
respectively. Section 1833(i)(9) requires under the ASC payment system
that in the case of a Part B rebatable drug, in lieu of calculation of
coinsurance that would otherwise apply under the ASC payment system,
the provisions of section 1847A(i)(5) of the Act shall, as determined
appropriate by the Secretary, apply for calculation of beneficiary
coinsurance in the same manner as the provisions of section 1847A(i)(5)
of the Act apply under that section. Similarly, section 1833(t)(8)(F)
of the Act requires under the OPPS that in the case of a Part B
rebatable drug (except for a drug that has no copayment applied under
subparagraph (E) of such section or for which payment is packaged into
the payment for a covered OPD service or group of services), in lieu of
the calculation of the copayment amount that would otherwise apply
under the OPPS, the provisions of section 1847A(i)(5) of the Act shall,
as determined appropriate by the Secretary, apply in the same manner as
the provisions of section 1847A(i)(5) of the Act apply under that
section. Section 1847A(i)(5) of the Act requires that for Part B
rebatable drugs, as defined in section 1847A(i)(2)(A) of the Act,
furnished on or after April 1, 2023, in quarters in which the payment
amount described in section 1847A(i)(3)(A)(ii)(I) of the Act (or, in
the case of selected drugs described under section 1192(c) of the Act,
the payment amount described in section 1847A(b)(1)(B) of the Act),
exceeds the inflation-adjusted payment amount determined in accordance
with section 1847A(i)(3)(C) of the Act, the coinsurance will be 20
percent of the inflation-adjusted payment amount for such quarter
(hereafter, the inflation-adjusted coinsurance amount). This inflation-
adjusted coinsurance amount is applied as a percent, as determined by
the Secretary, to the payment amount that would otherwise apply for
such calendar quarter in accordance with section 1847A(b)(1)(B) or (C)
of the Act, as applicable, including in the case of a selected drug.
Paragraph (9) of section 1833(i) of the Act and subparagraph (F) of
section 1833(t)(8) of the Act, as added by section 11101(b) of the IRA,
also provide that in lieu of the amounts of payment otherwise
applicable under the ASC payment system and the OPPS, the provisions of
paragraph (1)(EE) of subsection (a) of section 1833 of the Act shall
apply, as determined appropriate by the Secretary. Section 11101(b) of
the IRA amended section 1833(a)(1) of the Act by adding a new
subparagraph (EE), which requires that if the payment amount under
section 1847A(i)(3)(A)(ii)(I) of the Act or, in the case of a selected
drug, the payment amount described in section 1847A(b)(1)(B) of the
Act, for that drug exceeds the inflation-adjusted payment amount for a
Part B rebatable drug, the Part B payment amount would, subject to the
Part B deductible and sequestration, equal the difference between such
payment amount and the inflation-adjusted coinsurance amount.
Consistent with the policy adopted in section 40 of the revised
Medicare Part B Drug Inflation Rebate Guidance, the calculation to
determine the applicable beneficiary coinsurance amount would not be
adjusted for sequestration. CMS codified the Medicare payment for Part
B rebatable drugs in the CY 2024 PFS final rule by adding new paragraph
(m) to Sec. 410.152.
In the CY 2024 OPPS/ASC final rule with comment period (88 FR
81594), we codified the OPPS program payment and cost sharing amounts
for Part B rebatable drugs as required by section 1833(t)(8)(F) by
adding a new paragraph (e) to Sec. 419.41, which cross-references the
regulations adopted in the CY 2024 PFS final rule (Sec. Sec.
410.152(m) and 489.30(b)(6)). We also amended the regulation text to
reflect our longstanding policies for calculating the Medicare program
payment and cost sharing amounts for separately payable drugs and
biologicals by adding a new paragraph (d) to Sec. 419.41. Similarly,
we codified the ASC cost sharing amounts for Part B rebatable drugs as
required by section 1833(i)(9) of the Act by revising Sec. 416.172(d)
to include a cross-reference to 42 CFR 489.30(b)(6), which codified
[[Page 59236]]
the cost sharing amounts for Part B rebatable drugs with prices
increasing at a rate faster than inflation.
In the CY 2025 Medicare PFS proposed rule, CMS proposes to adopt
new provisions at Sec. 427.200 and Sec. 427.201 to codify the
policies regarding the computation of the inflation-adjusted
beneficiary coinsurance, defined in Sec. 427.200, for Part B rebatable
drugs as required by section 1847A(i)(5) of the Act. This proposed new
provision includes references to the existing provisions at Sec. Sec.
410.152(m), 419.41(e), and 489.30(b)(6) of this title. CMS further
proposes at Sec. 427.201(c) that any category of products that is
excluded from the identification of Part B rebatable drugs at Sec.
427.101(b) is not subject to the inflation-adjusted beneficiary
coinsurance. Examples of these excluded products include separately
payable radiopharmaceuticals, skin substitute products, and qualifying
biosimilar biological products.
Additionally, CMS proposes at Sec. 427.201(b) that CMS will use
the published payment amount in quarterly pricing files
10 11 12 to determine if a Part B rebatable drug should have
an adjusted beneficiary coinsurance equal to 20 percent of the
inflation-adjusted payment amount as described in section
1847A(i)(3)(C) for a calendar quarter. This proposed approach deviates
from the rebate calculation approach proposed in Sec. 427.302, which
relies on the specified amount defined at Sec. 427.20 even when the
specified amount and the published payment amount in quarterly pricing
files differ. The approach proposed at Sec. 427.201(b) would be used
only to determine whether there should be a coinsurance adjustment and
would not impact the applicability or calculation of inflation rebates.
CMS believes this approach is consistent with the statutory language
and appropriately reflects the differences in the statutory text of
section 1847A(i)(5) of the Act, which sets forth the payment amount
that is used to determine whether coinsurance should be adjusted, and
section 1847A(i)(3)(A) of the Act, which sets forth the ``specified
amount'' used to determine rebate amounts.
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\10\ See: https://www.cms.gov/medicare/payment/part-b-drugs/asp-pricing-files.
\11\ See: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/addendum-a-b-updates.
\12\ See: https://www.cms.gov/medicare/payment/prospective-payment-systems/ambulatory-surgical-center-asc/asc-payment-rates-addenda.
---------------------------------------------------------------------------
We refer readers to the CY 2025 Medicare PFS proposed rule for a
detailed discussion of proposals related to the Part B inflation
rebates, including inflation-adjusted beneficiary coinsurance and
Medicare payment for Medicare Part B rebatable drugs.
2. Proposed OPPS Copayment Policy
For CY 2025, we propose to determine copayment amounts for new and
revised APCs using the same methodology that we implemented beginning
in CY 2004. (We refer readers to the November 7, 2003 OPPS final rule
with comment period for a discussion of that methodology (68 FR
63458).) In addition, we propose to use the same standard rounding
principles that we have historically used in instances where the
application of our standard copayment methodology would result in a
copayment amount that is less than 20 percent and cannot be rounded,
under standard rounding principles, to 20 percent. (We refer readers to
the CY 2008 OPPS/ASC final rule with comment period (72 FR 66687) in
which we discuss our rationale for applying these rounding principles.)
The proposed national unadjusted copayment amounts for services payable
under the OPPS that would be effective January 1, 2025, are included in
Addenda A and B to this proposed rule (which are available via the
internet on the CMS website).
As discussed in section XIV.E of this proposed rule, for CY 2025,
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
[[Page 59237]]
authority to set rules for determining copayment amounts for new
services. We further noted that the use of this methodology would, in
general, reduce the beneficiary coinsurance rate and copayment amount
for APCs for which the payment rate changes as the result of the
reconfiguration of APCs and/or recalibration of relative payment
weights (68 FR 63459).
3. Proposed Calculation of an Adjusted Copayment Amount for an APC
Group
Individuals interested in calculating the national copayment
liability for a Medicare beneficiary for a given service provided by a
hospital that met or failed to meet its Hospital OQR Program
requirements should follow the formulas presented in the following
steps.
Step 1. Calculate the beneficiary payment percentage for the APC by
dividing the APC's national unadjusted copayment by its proposed
payment rate. For example, using APC 5071, $140.02 is approximately 20
percent of the full national unadjusted payment rate of $700.10. For
APCs with only a minimum unadjusted copayment in Addenda A and B to
this 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 this with comment period. Calculate the rural
adjustment for eligible providers, as indicated in Step 6 under section
II.H of this final rule with comment period.
Step 3. Multiply the percentage calculated in Step 1 by the payment
rate calculated in Step 2. The result is the wage-adjusted copayment
amount for the APC.
The formula below is a mathematical representation of Step 3 and
applies the beneficiary payment percentage to the adjusted payment rate
for a service calculated under section II.H of this proposed rule, 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 0.9805.
The unadjusted copayments for services payable under the OPPS that
would be effective January 1, 2025, are shown in Addenda A and B to
proposed rule (which are available via the CMS website). We note that
the proposed national unadjusted payment rates and copayment rates
shown in Addenda A and B to this proposed rule reflect the proposed CY
2025 OPD fee schedule increase factor discussed in section II.B of this
proposed rule.
In addition, as noted earlier, section 1833(t)(8)(C)(i) of the Act
limits the amount of beneficiary copayment that may be collected for a
procedure performed in a year to the amount of the inpatient hospital
deductible for that year.
III. Proposed OPPS Ambulatory Payment Classification (APC) Group
Policies
A. Proposed OPPS Treatment of New and Revised HCPCS Codes
Payments for OPPS procedures, services, and items are generally
based on medical billing codes, specifically, HCPCS codes, that are
reported on HOPD claims. HCPCS codes are used to report surgical
procedures, medical services, items, and supplies under the hospital
OPPS. The HCPCS is divided into two principal subsystems, referred to
as Level I and Level II of the HCPCS. Level I is comprised of CPT
(Current Procedural Terminology) codes, a numeric and alphanumeric
coding system that is established and maintained by the American
Medical Association (AMA), and consists of Category I, II, III, MAAA,
and PLA CPT codes. Level II, which is established and maintained by
CMS, is a standardized coding system that is used primarily to identify
products, supplies, and services not included in the CPT codes.
Together, Level I and II HCPCS codes are used to report procedures,
services, items, and supplies under the OPPS payment system.
Specifically, we recognize the following codes on OPPS claims:
Category I CPT codes, which describe surgical procedures,
diagnostic and therapeutic services, and vaccine codes;
Category III CPT codes, which describe new and emerging
technologies, services, and procedures;
MAAA CPT codes, which describe laboratory multianalyte
assays with algorithmic analyses (MAA);
PLA CPT codes, which describe proprietary laboratory
analyses (PLA) services; and
Level II HCPCS codes (also known as alpha-numeric codes),
which are used primarily to identify drugs, devices, supplies,
temporary procedures, and services not described by CPT codes.
The codes are updated and changed throughout the year. CPT and
Level II HCPCS code changes that affect the OPPS are published through
the annual rulemaking cycle and through the OPPS quarterly update
Change Requests (CRs). Generally, these code changes are effective
January 1, April 1, July 1, or October 1. CPT code changes are released
by the AMA (via their website) while Level II HCPCS code changes are
released to the public via the CMS HCPCS website. CMS recognizes the
release of new CPT and Level II HCPCS codes outside of the formal
rulemaking process via OPPS quarterly update CRs. Based on our review,
we assign the new codes to interim status indicators (SIs) and APCs.
These interim assignments are finalized in the OPPS/ASC final rules.
This quarterly process offers hospitals access to codes that more
accurately describe the items or services furnished and provides
payment for these items or services in a timelier manner than if we
waited for the annual rulemaking process. We solicit public comments on
the new CPT and Level II HCPCS codes, status indicators, and APC
assignments through our annual rulemaking process.
We note that, under the OPPS, the APC assignment determines the
payment rate for an item, procedure, or service. The items, procedures,
or services not exclusively paid separately under the hospital OPPS are
assigned to appropriate status indicators. Certain payment status
indicators provide separate payment while other payment status
indicators do not. In section XI ``Proposed CY 2025 Payment Status and
Comment Indicators'' of this proposed rule, we discuss the various
status indicators and comment indicators used under the OPPS. We also
provide a complete list of the proposed status indicators and their
definitions in Addendum D1 to this proposed rule.
1. April 2024 HCPCS Codes Proposed Rule Comment Solicitation
For the April 2024 update, 73 new HCPCS codes were established and
[[Page 59238]]
made effective on April 1, 2024. Through the April 2024 OPPS quarterly
update CR (Transmittal 12552, Change Request 13568, dated March 21,
2024), we recognized several new HCPCS codes for payment under the
OPPS. In this proposed rule, we solicit public comments on the proposed
APC and status indicator assignments for the codes listed in Table 10
(New HCPCS Codes Effective April 1, 2024). The proposed status
indicator, APC assignment, and payment rate for each HCPCS code can be
found in Addendum B to this proposed rule. The new codes effective
April 1, 2024, are assigned to comment indicator ``NP'' in Addendum B
to this proposed rule to indicate that the codes are assigned to an
interim APC assignment and comments will be accepted on their interim
APC assignments. The complete list of proposed status indicators and
definitions used under the OPPS can be found in Addendum D1 to this
proposed rule, while the complete list of proposed comment indicators
and definitions can be found in Addendum D2. We note that OPPS Addendum
B (OPPS payment file by HCPCS code), Addendum D1 (OPPS Status
Indicators), and Addendum D2 (OPPS Comment Indicators) are available
via the CMS website.
BILLING CODE 4120-01-P
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2. July 2024 HCPCS Codes Proposed Rule Comment Solicitation
For the July 2024 update, 127 new codes were established and made
effective July 1, 2024. Through the July 2024 OPPS quarterly update CR
(Transmittal 12665, Change Request 13632, dated May 31, 2024), we
recognized several new codes for payment and assigned them to
appropriate interim OPPS status indicators and APCs. In this proposed
rule, we solicit public comments on the proposed APC and status
indicator assignments for the codes listed in Table 11 (New HCPCS Codes
Effective July 1, 2024). The proposed status indicator, APC assignment,
and payment rate for each HCPCS code can be found in Addendum B to this
proposed rule. The complete list of proposed status indicators and
corresponding definitions used under the OPPS can be found in Addendum
D1 to this proposed rule. In addition, the new codes are assigned to
comment indicator ``NP'' in Addendum B to this proposed rule to
indicate that the codes are assigned to an interim APC assignment and
comments will be accepted on their interim APC assignments. The
complete list of proposed comment indicators and definitions used under
the OPPS can be found in Addendum D2 to this proposed rule. We note
that OPPS Addendum B (OPPS payment file by HCPCS code), Addendum D1
(OPPS Status Indicators), and Addendum D2 (OPPS Comment Indicators) are
available via the internet on the CMS website.
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3. October 2024 HCPCS Codes Final Rule Comment Solicitation
As has been our practice in the past, we will solicit comments on
the new CPT and Level II HCPCS codes that will be effective October 1,
2024, in the CY 2025 OPPS/ASC final rule with comment period, thereby
allowing us to finalize the status indicators and APC assignments for
the codes in the CY 2025 OPPS/ASC final rule with comment period. The
HCPCS codes will be released to the public through the October 2024
OPPS Update CR and the CMS HCPCS website while the CPT codes will be
released to the public through the AMA website.
For CY 2025, we propose to continue our established policy of
assigning comment indicator ``NI'' in Addendum B to the OPPS/ASC final
rule with comment period to those new HCPCS codes that will be
effective October 1, 2024, to indicate that we are assigning them an
interim status indicator, which is subject to public comment. We will
be inviting public comments in the CY 2025 OPPS/ASC final rule with
comment period on the status indicator and APC assignments, which would
then be finalized in the CY 2026 OPPS/ASC final rule with comment
period.
4. January 2025 HCPCS Codes
a. New Level II HCPCS Codes Final Rule Comment Solicitation
Consistent with past practice, we will solicit comments on the new
Level II HCPCS codes that will be effective January 1, 2025, in the CY
2025 OPPS/ASC final rule with comment period, thereby allowing us to
finalize the status indicators and APC assignments for the codes in the
CY 2026 OPPS/ASC final rule with comment period. Unlike the CPT codes
that are effective January 1 and are included in the OPPS/ASC proposed
rules, and except for the proposed new C-codes and G-codes listed in
Addendum O of this proposed rule, most Level II HCPCS codes are not
released until sometime around November to be effective January 1.
Because these codes are not available until November, we are unable to
include them in the OPPS/ASC proposed rules. Consequently, for CY 2025,
we propose to include the new Level II HCPCS codes effective January 1,
2025, in Addendum B to the CY 2025 OPPS/ASC final rule with comment
period, which would be incorporated in the January 2025 OPPS quarterly
update CR. Specifically, for CY 2025, we propose to continue our
established policy of assigning comment indicator ``NI'' in Addendum B
to the OPPS/ASC final rule with comment period to the new HCPCS codes
that will be effective January 1, 2025, to indicate that we are
assigning them an interim status indicator, which is subject to public
comment. We will be inviting public comments in the CY 2025 OPPS/ASC
final rule with comment period on the status indicator and APC
assignments, which would then be finalized in the CY 2026 OPPS/ASC
final rule with comment period.
b. New CPT Codes Proposed Rule Comment Solicitation
In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66841
through 66844), we finalized a revised process of assigning APC and
status indicators for new and revised Category I and III CPT codes that
would be effective January 1. Specifically, for the new/revised CPT
codes that we receive in a timely manner from the AMA's CPT Editorial
Panel, we finalized our proposal to include the codes that would be
effective January 1 in the OPPS/ASC proposed rules, along with proposed
APC and status indicator assignments for them, and to finalize the APC
and status indicator assignments in the OPPS/ASC final rules beginning
with the CY 2016 OPPS update. For those new/revised CPT codes that were
received too late for inclusion in the OPPS/ASC proposed rule, we
finalized our proposal to establish and use HCPCS G-codes that mirror
the predecessor CPT codes and retain the current APC and status
indicator assignments for a year until we can propose APC and status
indicator assignments in the following year's rulemaking cycle. We note
that even if we find that we need to create HCPCS G-codes in place of
certain CPT codes for the PFS proposed rule, we do not anticipate that
these HCPCS G-codes will always be necessary for OPPS purposes. We will
make every effort to include proposed APC and status indicator
assignments for all new and revised CPT codes that the AMA makes
publicly available in time for us to include them in the proposed rule,
and to avoid resorting to use of HCPCS G-codes and the resulting delay
in utilization of the most current CPT codes. Also, we finalized our
proposal to make interim APC and status indicator assignments for CPT
codes that are not available in time for the proposed rule and that
describe wholly new services (such as new technologies or new surgical
procedures), to solicit public comments in the final rule, and to
finalize the specific APC and status indicator assignments for those
codes in the following year's final rule.
For the CY 2025 OPPS update, we received the CPT codes that will be
effective January 1, 2025, from the AMA in time to be included in this
proposed rule. The new, revised, and deleted CPT codes can be found in
Addendum B to this proposed rule (which is available via the internet
on the CMS website). We note that the new and revised CPT codes are
assigned to comment indicator ``NP'' in Addendum B of this proposed
rule to indicate that the code is new for the next calendar year or the
code is an existing code with substantial revision to its code
descriptor in the next calendar year as compared to the current
calendar year with a proposed APC assignment, and that comments will be
accepted on the proposed APC assignment and status indicator. Further,
we note that the CPT code descriptors that appear in Addendum B are
short descriptors and do not accurately describe the complete
procedure, service, or item described by the CPT code. Therefore, we
are including the 5-digit placeholder codes and the long descriptors
for the new and revised CY 2025 CPT codes in Addendum O, specifically
under the column labeled ``CY 2025 OPPS/ASC Proposed Rule 5-Digit AMA/
CMS Placeholder Code.'' The final HCPCS code numbers will be included
in the CY 2025 OPPS/ASC final rule with comment period. In summary, we
solicit public comments on the proposed CY 2025 status indicators and
APC assignments for the new and revised CPT codes that will be
effective January 1, 2025. The CPT codes listed in Addendum B appear
with short descriptors only, therefore, we list them again in Addendum
O to this proposed rule with long descriptors. In addition, we propose
to finalize the status indicator and APC assignments for these codes
(with their final CPT code numbers) in the CY 2025 OPPS/ASC final rule
with comment period. The proposed status indicator and APC assignment
for these codes can be found in Addendum B to this proposed rule. In
addition, the complete list of proposed comment indicators and
definitions used under the OPPS can be found in Addendum D2 to this
proposed rule. We note that OPPS Addendum B (OPPS payment file by HCPCS
code), Addendum D1 (OPPS Status Indicators), and Addendum D2 (OPPS
Comment Indicators) are available via the internet on the CMS website.
Finally, in Table 12 (Comment and Finalization Timeframes for New
and Revised OPPS-Related HCPCS Codes) below, we summarize our current
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process for updating codes through our OPPS quarterly update CRs,
seeking public comments, and finalizing the treatment of these codes
under the OPPS.
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B. Proposed OPPS Changes--Variations Within APCs
1. Background
Section 1833(t)(2)(A) of the Act requires the Secretary to develop
a classification system for covered hospital outpatient department
services. In addition, section 1833(t)(2)(B) of the Act provides that
the Secretary may establish groups of covered OPD services within this
classification system, so that services classified within each group
are comparable clinically and with respect to the use of resources. In
accordance with these provisions, we developed a grouping
classification system, referred to as Ambulatory Payment
Classifications (APCs), as set forth in regulations at 42 CFR 419.31.
We use Level I (also known as CPT codes) and Level II HCPCS codes (also
known as alphanumeric codes) to identify and group the services within
each APC. The APCs are organized such that each group is homogeneous
both clinically and in terms of resource use. Using this classification
system, we have established distinct groups of similar services. We
also have developed separate APC groups for certain medical devices,
drugs, biologicals, therapeutic radiopharmaceuticals, and brachytherapy
devices that are not packaged into the payment for the procedure.
We have packaged into the payment for each procedure or service
within an APC group, the costs associated with those items and services
that are typically ancillary and supportive to a primary diagnostic or
therapeutic modality and, in those cases, are an integral part of the
primary service they support. Therefore, we do not make separate
payment for these packaged items or services. In general, packaged
items and services include, but are not limited to, the items and
services listed in regulations at 42 CFR 419.2(b). A further discussion
of packaged services is included in section II.A.3 of this proposed
rule.
Under the OPPS, we generally pay for covered hospital outpatient
services on a rate-per-service basis, where the service may be reported
with one or more HCPCS codes. Payment varies according to the APC group
to which
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the independent service or combination of services is assigned. For CY
2025, we propose that each APC relative payment weight represents the
hospital cost of the services included in that APC, relative to the
hospital cost of the services included in APC 5012 (Clinic Visits and
Related Services). The APC relative payment weights are scaled to APC
5012 because it is the hospital clinic visit APC and clinic visits are
among the most frequently furnished services in the hospital outpatient
setting.
2. Application of the 2 Times Rule
Section 1833(t)(9)(A) of the Act requires the Secretary to review,
not less often than annually, and revise the APC groups, the relative
payment weights, and the wage and other adjustments described in
paragraph (2) to consider changes in medical practice, changes in
technology, the addition of new services, new cost data, and other
relevant information and factors. Section 1833(t)(9)(A) of the Act also
requires the Secretary to consult with an expert outside advisory panel
composed of an appropriate selection of representatives of providers to
review (and advise the Secretary concerning) the clinical integrity of
the APC groups and the relative payment weights. We note that the
Advisory Panel on Hospital Outpatient Payment (also known as the HOP
Panel or the Panel) recommendations for specific services for the CY
2025 OPPS update will be discussed in the relevant specific sections
throughout the CY 2025 OPPS/ASC final rule with comment period.
In addition, section 1833(t)(2) of the Act provides that, subject
to certain exceptions, the items and services within an APC group
cannot be considered comparable regarding the use of resources if the
highest cost for an item or service in the group is more than 2 times
greater than the lowest cost for an item or service within the same
group (referred to as the ``2 times rule''). The statute authorizes the
Secretary to make exceptions to the 2 times rule in unusual cases, such
as for low-volume items and services (but the Secretary may not make
such an exception in the case of a drug or biological that has been
designated as an orphan drug under section 526 of the Federal Food,
Drug, and Cosmetic Act). In determining the APCs with a 2 times rule
violation, we consider only those HCPCS codes that are significant
based on the number of claims. We note that, for purposes of
identifying significant procedure codes for examination under the 2
times rule, we consider procedure codes that have more than 1,000
single major claims or procedure codes that both have more than 99
single major claims and contribute at least 2 percent of the single
major claims used to establish the APC cost to be significant (75 FR
71832). This longstanding definition of when a procedure code is
significant for purposes of the 2 times rule was selected because we
believe that a subset of 1,000 or fewer claims is negligible within the
set of approximately 100 million single procedure or single session
claims we use for establishing costs. Similarly, a procedure code for
which there are fewer than 99 single claims and that comprises less
than 2 percent of the single major claims within an APC will have a
negligible impact on the APC cost (75 FR 71832). In this section of
this proposed rule, for CY 2025, we propose to make exceptions to this
limit on the variation of costs within each APC group in unusual cases,
such as for certain low-volume items and services.
For the CY 2025 OPPS update, we identified the APCs with violations
of the 2 times rule, and we propose changes to the procedure codes
assigned to these APCs (with the exception of those APCs for which we
propose a 2 times rule exception) in Addendum B to this proposed rule.
We note that Addendum B does not appear in the printed version of the
Federal Register as part of this proposed rule. Rather, it is published
and made available via the internet on the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices. To eliminate a violation of the 2 times
rule and improve clinical and resource homogeneity in the APCs for
which we are not proposing a 2 times rule exception, we propose to
reassign these procedure codes to new APCs that contain services that
are similar with regard to both their clinical and resource
characteristics. In many cases, the proposed HCPCS code reassignments
and associated APC reconfigurations for CY 2025 included in this
proposed rule are related to changes in costs of services that were
observed in the CY 2023 claims data available for CY 2025 ratesetting.
Addendum B to this proposed rule identifies with a comment indicator
``CH'' those procedure codes for which we propose a change to the APC
assignment or status indicator, or both, that were initially assigned
in the July 1, 2024, OPPS Addendum B Update, which is available via the
internet on the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/addendum-a-b-updates.
3. Proposed APC Exceptions to the 2 Times Rule
While considering the APC changes that we propose for CY 2025, we
reviewed all of the APCs for which we identified 2 times rule
violations to determine whether any of the APCs would qualify for an
exception. We used the following criteria to evaluate whether to
propose exceptions to the 2 times rule for affected APCs:
Resource homogeneity;
Clinical homogeneity;
Hospital outpatient setting utilization;
Frequency of service (volume); and
Opportunity for upcoding and code fragments.
For a detailed discussion of these criteria, we refer readers to
the April 7, 2000 final rule (65 FR 18457 through 18458).
Based on the CY 2023 claims data available for this 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 propose
to make exceptions under the 2 times rule for CY 2025 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 2023 claims data available for this
proposed rule. We note that, on an annual basis, based on our analysis
of the latest claims data, we identify violations to the 2 times rule
and propose changes when appropriate. Those APCs that violate the 2
times rule are identified and appear in Table 13 below. In addition, we
did not include in that determination those APCs where a 2 times rule
violation was not a relevant concept, such as APC 5401 (Dialysis),
which only has two HCPCS codes assigned to it that have similar
geometric mean costs and do not create a 2 times rule violation.
Therefore, we have only identified those APCs, including those with
criteria-based costs, such as device-dependent CPT/HCPCS codes, with
violations of the 2 times rule, where a 2 times rule violation is a
relevant concept.
Table 13 of this proposed rule lists the 23 APCs for which we
propose to make an exception under the 2 times rule for CY 2025 based
on the criteria cited above and claims data submitted between January
1, 2023, and December 31, 2023, and processed on or before December 31,
2023, and CCRs, if available. The proposed geometric mean costs for
covered hospital outpatient services for these and all other APCs that
were used in the development of
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this proposed rule can be found on the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices.
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C. Proposed New Technology APCs
1. Background
In the CY 2002 OPPS final rule (66 FR 59903), we finalized changes
to the time period in which a service can be eligible for payment under
a New Technology APC. Beginning in CY 2002, we retain services within
New Technology APC groups until we gather sufficient claims data to
enable us to assign the service to an appropriate clinical APC. This
policy allows us to move a service from a New Technology APC in less
than 2 years if sufficient data are available. It also allows us to
retain a service in a New Technology APC for more than 2 years if
sufficient data upon which to base a decision for reassignment have not
been collected.
We also adopted in the CY 2002 OPPS final rule the following
criteria for assigning a complete or comprehensive service to a New
Technology APC: (1)
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the service must be truly new, meaning it cannot be appropriately
reported by an existing HCPCS code assigned to a clinical APC and does
not appropriately fit within an existing clinical APC; (2) the service
is not eligible for transitional pass-through payment (however, a truly
new, comprehensive service could qualify for assignment to a new
technology APC even if it involves a device or drug that could, on its
own, qualify for pass-through payment); and (3) the service falls
within the scope of Medicare benefits under section 1832(a) of the Act
and is reasonable and necessary in accordance with section
1862(a)(1)(A) of the Act (66 FR 59898 through 59903). For additional
information about our New Technology APC policy, we refer readers to
https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/pass-through-payment-status-new-technology-ambulatory-payment-classification-apc on the CMS website and then
follow the instructions to access the MEARISTM system for
OPPS New Technology APC applications.\13\
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\13\ Currently approved under OMB control number 0938-0860;
expires 07/31/2024.
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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 2024, there were 52 New Technology APC levels, ranging from
the lowest cost band assigned to APC 1491 (New Technology--Level 1A
($0-$10)) to the highest cost band assigned to APC 1908 (New
Technology--Level 52 ($145,001-$160,000)). We note that the cost bands
for the New Technology APCs, specifically, APCs 1491 through 1599 and
1901 through 1908, vary with increments ranging from $10 to $14,999.
These cost bands identify the APCs to which new technology procedures
and services with estimated service costs that fall within those cost
bands are assigned under the OPPS. Payment for each APC is made at the
mid-point of the APC's assigned cost band. For example, payment for New
Technology APC 1507 (New Technology--Level 7 ($501-$600)) is made at
$550.50.
Under the OPPS, one of our goals is to make payments that are
appropriate for the services that are necessary for the treatment of
Medicare beneficiaries. The OPPS, like other Medicare payment systems,
is budget neutral and increases are limited to the annual hospital
market basket increase reduced by the productivity adjustment. We
believe that our payment rates reflect the costs that are associated
with providing care to Medicare beneficiaries and are adequate to
ensure access to services (80 FR 70374). For many emerging
technologies, there is a transitional period during which utilization
may be low, often because providers are first learning about the
technologies and their clinical utility. Quite often, parties request
that Medicare make higher payments under the New Technology APCs for
new procedures in that transitional phase. These requests, and their
accompanying estimates for expected total patient utilization, often
reflect very low rates of patient use of expensive equipment, resulting
in high per-use costs for which requesters believe Medicare should make
full payment. Medicare does not, and we believe should not, assume
responsibility for more than its share of the costs of procedures based
on projected utilization for Medicare beneficiaries and does not set
its payment rates based on initial projections of low utilization for
services that require expensive capital equipment. For the OPPS, we
rely on hospitals to make informed business decisions regarding the
acquisition of high-cost capital equipment, taking into consideration
their knowledge about their entire patient base (Medicare beneficiaries
included) and an understanding of Medicare's and other payers' payment
policies. We refer readers to the CY 2013 OPPS/ASC final rule with
comment period (77 FR 68314) for further discussion regarding this
payment policy.
Some services assigned to New Technology APCs have low annual
volume, which we consider to be fewer than 100 claims in the year of
claims data used for ratesetting (86 FR 63528). Where utilization of
services assigned to a New Technology APC is low, it can lead to wide
variation in payment rates from year to year, resulting in even lower
utilization and potential barriers to access to new technologies, which
ultimately limits our ability to assign the service to the appropriate
clinical APC. To mitigate these issues, we finalized a policy in the CY
2019 OPPS/ASC final rule with comment period to utilize our equitable
adjustment authority at section 1833(t)(2)(E) of the Act to adjust how
we determine the costs for low-volume services assigned to New
Technology APCs (83 FR 58892 through 58893). Specifically, in the CY
2019 OPPS/ASC final rule with comment period (83 FR 58893), we
established that, in each of our annual rulemakings, we would calculate
and present the result of each statistical methodology (arithmetic
mean, geometric mean, and median) based on up to 4 years of claims data
and solicit public comment on which methodology should be used to
establish the payment rate for the low-volume new technology service.
In the CY 2022 OPPS/ASC final rule (86 FR 63529), we replaced the New
Technology APC low volume policy with the universal low volume APC
policy. Unlike the New Technology APC low volume policy, the universal
low volume APC policy applies to clinical APCs and brachytherapy APCs,
in addition to procedures assigned to New Technology APCs, and uses the
highest of the geometric mean, arithmetic mean, or median based on up
to 4 years of claims data to set the payment rate for the APC. We refer
readers to the CY 2022 OPPS/ASC final rule with comment period (86 FR
63529) for further discussion regarding this policy.
Finally, we note that, in a budget-neutral system, payments may not
fully cover hospitals' costs in a particular circumstance, including
those for the purchase and maintenance of capital equipment. We rely on
hospitals to make their decisions regarding the acquisition of high-
cost equipment with the understanding that the Medicare program must be
careful to establish its initial payment rates, including those made
through New Technology APCs, for new services that lack hospital claims
data based on realistic utilization projections for all such services
delivered in cost-efficient hospital outpatient settings. As the OPPS
acquires claims data regarding hospital costs associated with new
procedures, we regularly examine the claims data and any available new
information regarding the clinical aspects of new procedures to confirm
that our OPPS payments remain appropriate for procedures as they
transition into mainstream medical practice (77 FR 68314). For CY 2025,
we included the proposed payment rates for New Technology APCs 1491 to
1599 and 1901 through 1908 in Addendum A to this proposed rule (which
is available on the CMS website at https://
[[Page 59255]]
www.cms.gov/medicare/payment/prospective-payment-systems/hospital-
outpatient/regulations-notices.
2. Proposal To Exempt Services With Very Low Claims Volume From APC
Reassignment Based on the Universal Low Volume Policy
We continue to be concerned about payment stability for services
assigned to New Technology APCs, specifically services with very low
claims volume of fewer than 10 claims in the 4-year lookback period
used under the universal low volume APC policy. Historically, we have
used our equitable adjustment authority at section 1833(t)(2)(E) of the
Act to exempt a number of services with very low claims volume from the
universal low volume APC policy in instances where application of the
universal low volume policy would lead to significant fluctuations in
payment. Given the frequency with which we have needed to utilize our
equitable adjustment authority to address significant fluctuations in
payment for very low volume services, we believe that refinements to
our universal low volume policy for services assigned to New Technology
APCs may be necessary. We also recognize that determining initial cost
estimates for these services may be particularly challenging, given the
lack of cost information for new and innovative technologies.
To allow time for us to consider these issues, we propose for CY
2025 to exempt services assigned to New Technology APCs with fewer than
10 claims over the 4-year lookback period used for the universal low
volume policy. Instead of assigning these services to a different New
Technology APC based on the very few claims available, we propose that
we would maintain the New Technology APC assignment for each service
from the prior year, which in this case would be the New Technology APC
assignment for CY 2024. We believe it is appropriate to apply this
policy to New Technology APCs because services assigned to New
Technology APCs represent new technologies for which it may be more
challenging to determine an appropriate cost than for other, more
established services. We believe 10 claims is an appropriate ceiling
for exempting services from reassignment based on the universal low
volume policy because we believe that at 10 claims a rough standard
distribution begins to appear. We also believe that services with so
few claims over the 4-year lookback period would be especially
vulnerable to large changes in payment rates year-to-year as a result
of one or two new claims being available or one or two claims from what
was previously the fourth year of the lookback period no longer being
included in that period.
Consistent with our overall policy regarding use of updated claims
data in the final rule, we propose to perform a similar analysis for
the final rule using updated claims data, including determining whether
specific HCPCS codes continue to meet the criteria for our universal
low volume APC policy or our proposal to exempt services with fewer
than 10 claims in the 4-year lookback period from the universal low
volume APC policy and maintain their CY 2024 New Technology APC
assignment. We will update the APC placement as needed in the final
rule.
3. Procedures Assigned to New Technology APCs for CY 2025
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 2025, we propose to
retain services within New Technology APC groups until we obtain
sufficient claims data to justify reassignment of the service to an
appropriate clinical APC. The flexibility associated with this policy
allows us to reassign a service from a New Technology APC in less than
2 years if we have obtained sufficient claims data. It also allows us
to retain a service in a New Technology APC for more than 2 years if we
have not obtained sufficient claims data upon which to base a
reassignment decision (66 FR 59902).
a. Administration of Subretinal Therapies Requiring Vitrectomy (APC
1563)
Effective January 1, 2021, CMS established HCPCS code C9770
(Vitrectomy, mechanical, pars plana approach, with subretinal injection
of pharmacologic/biologic agent) and assigned it to a New Technology
APC based on the geometric mean cost of CPT code 67036 (Vitrectomy,
mechanical, pars plana approach) due to similar resource utilization.
For CY 2021, HCPCS code C9770 was assigned to APC 1561 (New
Technology--Level 24 ($3,001-$3,500)). This code may be used to
describe the administration of HCPCS code J3398 (Injection, voretigene
neparvovec-rzyl, 1 billion vector genomes). This procedure was
previously discussed in depth in the CY 2021 OPPS/ASC final rule with
comment period (85 FR 85939 through 85940). For CY 2022, we maintained
the APC assignment of APC 1561 (New Technology--Level 24 ($3,001-
$3,500)) for HCPCS code C9770 (86 FR 63531 through 63532).
HCPCS code J3398 (Injection, voretigene neparvovec-rzyl, 1 billion
vector genomes) is for a gene therapy product indicated for a rare
mutation-associated retinal dystrophy. Voretigene neparvovec-rzyl
(Luxturna[supreg]) was approved by FDA in December of 2017 and is an
adeno-associated virus vector-based gene therapy indicated for the
treatment of patients with confirmed biallelic RPE65 mutation-
associated retinal dystrophy.\14\ This therapy is administered through
a subretinal injection, which interested parties describe as an
extremely delicate and sensitive surgical procedure. The FDA-approved
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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\14\ Luxturna. FDA Package Insert. Available: https://www.fda.gov/media/109906/download.
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Interested parties, including the manufacturer of Luxturna[supreg],
recommended CPT code 67036 (Vitrectomy, mechanical, pars plana
approach) for the administration of the gene therapy.\15\ However, the
manufacturer previously contended the administration was not accurately
described by any existing codes as CPT code 67036 (Vitrectomy,
mechanical,
[[Page 59256]]
pars plana approach) does not account for the administration itself.
---------------------------------------------------------------------------
\15\ LUXTURNA REIMBURSEMENT GUIDE FOR TREATMENT CENTERS. https://mysparkgeneration.com/uploads/2022/09/LUXTURNA-Reimbursement-Guide-for-Treatment-Centers-ISI-Update-April-2022-P-RPE65-US-320025.pdf.
---------------------------------------------------------------------------
CMS recognized the need to accurately describe the unique procedure
that is required to administer the therapy described by HCPCS code
J3398. Therefore, in the CY 2021 OPPS/ASC proposed rule (85 FR 48832),
we proposed to establish a new HCPCS code, C97X1 (Vitrectomy,
mechanical, pars plana approach, with subretinal injection of
pharmacologic/biologic agent) to describe this process. We stated that
we believed this new HCPCS code accurately described the unique service
associated with intraocular administration of HCPCS code J3398. We
recognized that CPT code 67036 represents a clinically similar
procedure and process that approximates similar resource utilization to
C97X1. However, we also recognized that it is not prudent for the code
that describes the administration of this unique gene therapy, C97X1,
to be assigned to the same C-APC to which CPT code 67036 is assigned,
as this would package the primary therapy, HCPCS code J3398, into the
code that represents the process to administer the gene therapy.
Therefore, for CY 2021, we proposed to assign the services
described by C97X1 to a New Technology APC with a cost band that
contains the geometric mean cost for CPT code 67036. The placeholder
code C97X1 was replaced by HCPCS code C9770. For CY 2021, we finalized
our proposal to create HCPCS code C9770 (Vitrectomy, mechanical, pars
plana approach, with subretinal injection of pharmacologic/biologic
agent), and we assigned this code to APC 1561 (New Technology--Level 24
($3,001-$3,500)) using the geometric mean cost of CPT code 67036. For
CY 2022, we continued to assign HCPCS code C9770 to APC 1561 (New
Technology--Level 24 ($3,001-$3,500)) using the geometric mean cost of
CPT code 67036.
CY 2023 was the first year that claims data were available for
HCPCS code C9770; therefore, we proposed and finalized a policy to base
the payment rate of HCPCS code C9770 on claims data for that code
rather than on the geometric mean cost of CPT code 67036. Given the low
number of claims for this procedure, we designated HCPCS code C9770 as
a low volume procedure under our universal low volume APC policy and
used the greater of the geometric mean, arithmetic mean, or median cost
calculated based on the available claims data to calculate an
appropriate payment rate for purposes of assigning HCPCS code C9770 to
a New Technology APC.
Based on the claims data available for the CY 2023 OPPS/ASC final
rule with comment period, we found the median was the statistical
methodology that estimated the highest cost for the service. The
payment rate calculated using this methodology fell within the cost
band for New Technology APC 1562 (New Technology--Level 25 ($3,501-
$4,000)). Therefore, we finalized our proposal to assign HCPCS code
C9770 to APC 1562 for CY 2023.
For CY 2024, we proposed and finalized that we would delete HCPCS
code C9770 effective December 31, 2023 and recognize CPT code 0810T
(Subretinal injection of a pharmacologic agent, including vitrectomy
and 1 or more retinotomies) starting January 1, 2024 (88 FR 81617
through 81619). We determined the payment rate for CPT code 0810T using
the claims data for HCPCS code C9770 and designated CPT code 0810T as a
low volume procedure under our universal low volume APC policy and used
the greater of the geometric mean, arithmetic mean, or median cost
calculated based on the available claims data for HCPCS code C9770 to
calculate an appropriate payment rate for purposes of assigning CPT
code 0810T to a New Technology APC. For CY 2024, we finalized
assignment of CPT code 0810T to APC 1563 (New Technology--Level 26
($4,001-$4,500)) (88 FR 81617 through 81619).
Since CMS recognized CPT code 0810T starting January 1, 2024, we do
not have claims data for CPT code 0810T available for CY 2025
rulemaking. However, as HCPCS code C9770 was still in use until
December 31, 2023, we propose to determine the payment rate for CPT
code 0810T using the claims data for HCPCS code C9770. This is similar
to the policy we finalized for CY 2024. For CY 2025, we propose to
designate CPT code 0810T as a low volume procedure under our universal
low volume APC policy, given that there are only 34 claims available
for HCPCS code C9770 and none for CPT code 0810T. This is below the
threshold of 100 claims for a service within a year required to
designate a service as a low volume service and apply our universal low
volume APC policy. Therefore, we propose to use the greater of the
geometric mean, arithmetic mean, or median cost calculated based on the
available claims data for HCPCS code C9770 to calculate an appropriate
payment rate for purposes of assigning CPT code 0810T to a New
Technology APC.
Using all available claims from the 4-year lookback period, based
on 34 claims, we determined the geometric mean cost to be $3,934, the
arithmetic mean cost to be $4,173, and the median cost to be $4,103.
Because the arithmetic mean is the statistical methodology that
estimated the highest cost for the service, we propose to use this cost
to determine the New Technology APC placement. The arithmetic mean of
$4,173 falls within the cost band for New Technology APC 1563 (New
Technology--Level 26 ($4,001-$4,500)). Therefore, we propose to assign
CPT code 0810T to APC 1563 for CY 2025. Additionally, we propose to
perform a similar analysis using updated claims data, including
determining if CPT code 0810T continues to meet the criteria for our
universal low volume APC policy, in the CY 2025 OPPS/ASC final rule
with comment period and update the APC assignment as needed.
Please refer to Table 14 below for the proposed OPPS New Technology
APC and status indicator assignments for CPT code 0810T for CY 2025.
The proposed CY 2025 payment rates can be found in Addendum B to this
proposed rule via the internet on the CMS website.
[[Page 59257]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.028
b. BgRT (APC 1521)
Biology Guided Radiation Therapy (BgRT) uses positron-emitting
radiopharmaceuticals to control delivery of radiation therapy to treat
primary and metastatic lung or bone tumors. During radiation treatment
delivery, the same system applies these firing filters to the real-time
positron emission tomography (PET) data collected by the radiation
treatment delivery machine. Effective January 1, 2024, CMS created
HCPCS codes C9794 (Therapeutic radiology simulation-aided field
setting; complex, including acquisition of PET and CT imaging data
required for radiopharmaceutical-directed radiation therapy treatment
planning (i.e., modeling) and C9795 (Stereotactic body radiation
therapy, treatment delivery, per fraction to 1 or more lesions,
including image guidance and real-time positron emissions-based
delivery adjustments to 1 or more lesions, entire course not to exceed
5 fractions) to describe the modeling and treatment delivery portions
of the BgRT service. We assigned HCPCS code C9794 to APC 1521 (New
Technology--Level 21 ($1,901-$2,000)) and HCPCS code C9795 to APC 1525
(New Technology--Level 25 ($3,501-$4,000)) for CY 2024.
For CY 2025, the proposed OPPS payment rates are based on available
CY 2023 claims data. As HCPCS codes C9794 and C9795 were effective
January 1, 2024, we do not have any claims data for the service.
Therefore, for CY 2025, we propose to continue to assign HCPCS code
C9794 to APC 1521 (New Technology--Level 21 ($1,901-$2,000)) with a
payment rate of $1,950.50 and HCPCS code C9795 to APC 1525 (New
Technology--Level 25 ($3,501-$4,000)) with a payment rate of $3,750.50.
Please refer to Table 15 below for the proposed OPPS New Technology
APC and status indicator assignment for HCPCS codes C9794 and C9795 for
CY 2025. The proposed CY 2025 payment rates can be found in Addendum B
to this proposed rule via the internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TP22JY24.029
[[Page 59258]]
c. Blinded Procedure for NYHA Class III/IV Heart Failure (APC 1590)
A randomized, double-blinded, controlled IDE study is currently in
progress for the V-Wave interatrial shunt. The V-Wave interatrial shunt
is for patients with severe symptomatic heart failure and is designed
to regulate left atrial pressure in the heart. All participants who
passed initial screening for the study receive a right heart
catheterization procedure described by CPT code 93451 (Right heart
catheterization including measurement(s) of oxygen saturation and
cardiac output, when performed). Participants assigned to the
experimental group also receive the V-Wave interatrial shunt procedure
while participants assigned to the control group only receive right
heart catheterization. The developer of V-Wave was concerned that the
current coding of these services by Medicare would reveal to the study
participants whether they had received the interatrial shunt because an
additional procedure code, CPT code 93799 (Unlisted cardiovascular
service or procedure), would be included on the claims for participants
receiving the interatrial shunt. Therefore, for CY 2020, we created a
temporary HCPCS code to describe the V-Wave interatrial shunt procedure
for both the experimental group and the control group in the study.
Specifically, we established HCPCS code C9758 (Blinded procedure for
NYHA class III/IV heart failure; transcatheter implantation of
interatrial shunt or placebo control, including right heart
catheterization, trans-esophageal echocardiography (TEE)/intracardiac
echocardiography (ICE), and all imaging with or without guidance (for
example, ultrasound, fluoroscopy), performed in an approved
investigational device exemption (IDE) study) to describe the service,
and we assigned the service to New Technology APC 1589 (New
Technology--Level 38 ($10,001-$15,000)) with a payment rate of
$12,500.50.
In the CY 2021 OPPS/ASC final rule with comment period (85 FR
85946), we stated that we believe similar resources and device costs
are involved with the V-Wave interatrial shunt procedure and the Corvia
Medical interatrial shunt procedure (HCPCS code C9760), except that
payment for HCPCS codes C9758 and C9760 differs based on how often the
interatrial shunt is implanted when each code is billed. An interatrial
shunt is implanted one-half of the time HCPCS code C9758 is billed,
whereas an interatrial shunt is implanted every time HCPCS code C9760
is billed. Accordingly, for CY 2021, we reassigned HCPCS code C9758 to
New Technology APC 1590 (New Technology--Level 39 ($15,001-$20,000)),
which reflects the cost of furnishing the interatrial shunt one-half of
the time the procedure is performed.
For CY 2022, we used the same claims data from CY 2019 that we did
for the CY 2021 OPPS/ASC final rule with comment period. Because there
were no claims reporting HCPCS code C9758, we continued to assign HCPCS
code C9758 to New Technology APC 1590 with a payment rate of $17,500.50
for CY 2022. For CY 2023 we used claims data from CY 2019 through CY
2022. Because there were no claims reporting HCPCS code C9758 in CY
2023 or CY 2024, we continued to assign HCPCS code C9758 to New
Technology APC 1590 with a payment rate of $17,500.50 for CY 2023 and
2024.
For CY 2025, the OPPS payment rates are proposed to be based on
available CY 2023 claims data. There were only three claims for HCPCS
code C9758 within this time period. As this is below the threshold of
100 claims for a service within a year, we would designate C9758 as a
low volume service and apply our universal low volume APC policy. Under
this policy, we would use the highest of the geometric mean cost,
arithmetic mean cost, or median cost based on up to 4 years of claims
data to assign HCPCS code C9758 to the appropriate New Technology APC.
Given our proposal to maintain current New Technology APC assignments
for CY 2025 for New Technology APC services with fewer than 10 claims
in the 4-year lookback period applicable for the universal low-volume
APC policy, we propose to continue assigning HCPCS code C9758 to New
Technology New Technology APC 1590 with a proposed payment rate of
$17,500.50.
Please refer to Table 16 below for the proposed OPPS New Technology
APC and status indicator assignments for HCPCS code C9758 for CY 2025.
The proposed CY 2025 payment rates can be found in Addendum B to this
proposed rule via the internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TP22JY24.030
[[Page 59259]]
d. 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 (e.g.,
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. We
assigned the procedure to New Technology APC 1571 (New Technology--
Level 34 ($8,001-$8,500)) for CY 2019.
In claims data available from CY 2019 for the CY 2021 OPPS/ASC
final rule with comment period, there were four claims reported for
bronchoscopy with transbronchial ablation of lesions by microwave
energy. Given the low volume of claims for the service, we proposed for
CY 2021 to apply the universal low volume APC policy we adopted in CY
2019, under which we utilize our equitable adjustment authority under
section 1833(t)(2)(E) of the Act to calculate the geometric mean,
arithmetic mean, and median costs to determine an appropriate payment
rate for purposes of assigning bronchoscopy with transbronchial
ablation of lesions by microwave energy to a New Technology APC. We
found the geometric mean cost for the service to be approximately
$2,693, the arithmetic mean cost to be approximately $3,086, and the
median cost to be approximately $3,708. The median was the statistical
methodology that estimated the highest cost for the service. The
payment rate calculated using this methodology fell within the cost
band for New Technology APC 1562 (New Technology--Level 25 ($3,501-
$4,000)). Therefore, we assigned HCPCS code C9751 to APC 1562 for CY
2021.
In CY 2022, we again used the claims data from CY 2019 for HCPCS
code C9751. Because the claims data was unchanged from when it was used
in CY 2021, the values for the geometric mean cost ($2,693), the
arithmetic mean cost ($3,086), and the median cost ($3,708) for the
service described by HCPCS code C9751 remained the same. The highest
cost metric using these methodologies was again the median and within
the cost band for New Technology APC 1562 (New Technology--Level 25
($3,501-$4,000)). Therefore, we continued to assign HCPCS code C9751 to
APC 1562 (New Technology--Level 25 ($3,501-$4,000)), with a payment
rate of $3,750.50 for CY 2022.
There have been no separately payable claims reported for HCPCS
code C9751 since 2019. Therefore, we continued to use claims from CY
2019 to determine to payment rate for this service; and the reported
claims are the same claims used to calculate the payment rate for the
service in the CY 2023 and CY 2024 OPPS/ASC final rules with comment
period. We continued to assign HCPCS code C9751 to APC 1562 (New
Technology--Level 25 ($3,501-$4,000)), with a payment rate of
$3,750.50.
For CY 2025, there are no new claims for HCPCS code C9751. Given
our proposal to maintain current New Technology APC assignments for CY
2025 for New Technology APC services with fewer than 10 claims in the
4-year lookback period applicable for the universal low-volume APC
policy, we propose for CY 2025 to continue to assign HCPCS code C9751
to APC 1562 (New Technology--Level 25 ($3,501-$4,000)), with a payment
rate of $3,750.50.
Please refer to Table 17 below for the proposed OPPS New Technology
APC and status indicator assignments for HCPCS code C9751 for CY 2025.
The proposed CY 2025 payment rates can be found in Addendum B to this
proposed rule via the internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TP22JY24.031
[[Page 59260]]
e. Cardiac Positron Emission Tomography (PET)/Computed Tomography (CT)
Studies (APCs 1520 and 1522)
For CY 2025, the OPPS payment rates for the service described by
CPT codes 78431, 78432, and 78433 are proposed to be based on available
CY 2023 claims data. CPT code 78431 had over 26,000 single frequency
claims in CY 2023. The geometric mean for CPT code 78431 is
approximately $2,350. The geometric mean falls within APC 1522 (New
Technology--Level 22 ($2,001-$2,500)) with a payment rate of $2,250.50,
which is the current APC assignment for this service. Therefore, we
propose, for CY 2025, to assign CPT code 78431 to APC 1522 (New
Technology--Level 22 ($2,001-$2,500)) with a payment rate of $2,250.50.
There were only 19 single frequency claims in CY 2023 for CPT code
78432. As this is below the threshold of 100 claims for a service
within a year, we propose to apply our universal low volume New
Technology APC policy and use the highest of the geometric mean cost,
arithmetic mean cost, or median cost based on up to 4 years of claims
data to assign CPT code 78432 to the appropriate New Technology APC.
Using available claims data from CY 2021, CY 2022, and CY 2023, our
analysis found the geometric mean cost of the service is approximately
$1,762, the arithmetic mean cost of the service is approximately
$1,923, and the median cost of the service is approximately $1,544. The
arithmetic mean is the statistical methodology that estimates the
highest cost for the service. The arithmetic mean cost of $1,923, is an
amount that is above the cost band for APC 1520 (New Technology--Level
20 ($1,801-$1,900)), where the procedure is currently assigned.
Therefore, we propose, for CY 2025, to assign CPT code 78432 to APC
1521 (New Technology--Level 21 ($1,901-$2,000)) with a payment rate of
$1950.50.
There were over 1,400 single frequency claims for CPT code 78433 in
CY 2023. The geometric mean for CPT code 78433 is approximately $2,010,
which is an amount that is above the current New Technology APC cost
band APC 1521 (New Technology--Level 21 ($1,901-$2,000)) to which it is
assigned. Therefore, for CY 2025, we propose to reassign CPT code 78433
to APC 1522 (New Technology--Level 22 ($2,001-$2,500)) with a payment
rate of $2,250.50.
Please refer to Table 18 below for the proposed OPPS New Technology
APC and status indicator assignments for CPT codes 78431, 78432, and
78433 for CY 2025. The proposed CY 2025 payment rates can be found in
Addendum B to the CY 2025 OPPS/ASC proposed rule via the internet on
the CMS website.
[[Page 59261]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.032
f. CardiAMP (APC 1590)
The CardiAMP cell therapy IDE studies are two randomized, double-
blinded, controlled IDE studies: the CardiAMP Cell Therapy Chronic
Myocardial Ischemia Trial \16\ and the CardiAMP Cell Therapy Heart
Failure Trial.\17\ The two trials are designed to investigate the
safety and efficacy of autologous bone marrow mononuclear cell
treatment for the following: (1) patients with medically refractory and
symptomatic ischemic cardiomyopathy; and (2) patients with refractory
angina pectoris and chronic myocardial ischemia. On April 1, 2022, we
established HCPCS code C9782 to describe the CardiAMP cell therapy IDE
studies and assigned HCPCS code C9782 to APC 1574 (New Technology--
Level 37 ($9,501-$10,000)) with the status indicator ``T.'' We
subsequently revised the descriptor for HCPCS code C9782 to: (Blinded
procedure for New York Heart Association (NYHA) Class II or III heart
failure, or Canadian Cardiovascular Society (CCS) Class III or IV
chronic refractory angina; transcatheter intramyocardial
transplantation of autologous bone marrow cells (e.g., mononuclear) or
placebo control, autologous bone marrow harvesting and preparation for
transplantation, left heart catheterization including ventriculography,
all laboratory services, and all imaging with or without guidance
(e.g., transthoracic echocardiography, ultrasound,
[[Page 59262]]
fluoroscopy), all device(s), performed in an approved Investigational
Device Exemption (IDE) study) to clarify the inclusion of the Helix
trans endocardial injection catheter device in the descriptor.
Additionally, we determined that APC 1590 (New Technology--Level 39
($15,001-$20,000)) most accurately accounted for the resources
associated with furnishing the procedure described by HCPCS code C9782.
---------------------------------------------------------------------------
\16\ ClinicalTrials.gov. ``Randomized Controlled Pivotal Trial
of Autologous Bone Marrow Cells Using the CardiAMP Cell Therapy
System in Patients With Refractory Angina Pectoris and Chronic
Myocardial Ischemia.'' Accessed May 10, 2022. https://clinicaltrials.gov/ct2/show/NCT03455725?term=NCT03455725&rank=1.
\17\ ClinicalTrials.gov. ``Randomized Controlled Pivotal Trial
of Autologous Bone Marrow Mononuclear Cells Using the CardiAMP Cell
Therapy System in Patients With Post Myocardial Infarction Heart
Failure.'' Accessed May 10, 2022. https://clinicaltrials.gov/ct2/show/NCT02438306.
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For CY 2025, the OPPS payment rates are proposed to be based on
available CY 2023 claims data. We have identified three single
frequency paid claims for C9782 for ratesetting for CY 2025. As this is
below the threshold of 100 claims for a service within a year, we would
designate C9782 as a low volume service and apply our universal low
volume APC policy. Under this policy, we would use the highest of the
geometric mean cost, arithmetic mean cost, or median cost based on up
to 4 years of claims data to assign CPT codes C9782 to the appropriate
New Technology APC. Our analysis of the data found the geometric mean
cost of the service is approximately $18,045, the arithmetic mean cost
of the service is approximately $18,332, and the median cost of the
service is approximately $20,394. The median was the statistical
methodology that estimated the highest cost for the service. However,
because there are only three claims for HCPCS code C9782 from the CY
2023 claims data, we have concerns that the universal low volume APC
policy calculations do not accurately capture the cost of the service.
Given our proposal to maintain current New Technology APC assignments
for CY 2025 for New Technology APC services with fewer than 10 claims
in the 4-year lookback period applicable for the universal low-volume
APC policy, we therefore propose to continue to assign HCPCS code C9782
to New Technology APC 1590 with a payment rate of $17,050.50.
Please refer to Table 19 below for the proposed OPPS New Technology
APC and status indicator assignments for HCPCS code C9782 for CY 2025.
The proposed CY 2025 payment rates can be found in Addendum B to this
proposed rule via the internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TP22JY24.033
g. Atherosclerosis Imaging-Quantitative Computer Tomography (AI-QCT)
(APC 1511)
Atherosclerosis Imaging-Quantitative Computer Tomography (AI-QCT)
is a Software as a Service (SaaS) that assesses the extent of coronary
artery disease severity. This procedure is performed to quantify the
extent of coronary plaque and stenosis in patients who have undergone
coronary computed tomography analysis (CCTA). The AMA CPT Editorial
Panel established the following four codes associated with this
service, effective January 1, 2021:
0623T: Automated quantification and characterization of coronary
atherosclerotic plaque to assess severity of coronary disease, using
data from coronary computed tomographic angiography; data preparation
and transmission, computerized analysis of data, with review of
computerized analysis output to reconcile discordant data,
interpretation and report.
0624T: Automated quantification and characterization of coronary
atherosclerotic plaque to assess severity of coronary disease, using
data from coronary computed tomographic angiography; data preparation
and transmission.
0625T: Automated quantification and characterization of coronary
atherosclerotic plaque to assess severity of coronary disease, using
data from coronary computed tomographic angiography; computerized
analysis of data from coronary computed tomographic angiography.
0626T: Automated quantification and characterization of coronary
atherosclerotic plaque to assess severity of coronary disease, using
data from coronary computed tomographic angiography; review of
computerized analysis output to reconcile discordant data,
interpretation and report.
Of these four CPT codes, only CPT code 0625T was determined to be
separately payable in the OPPS and was assigned to status indicator =
``S'' (Procedure or Service, Not Discounted
[[Page 59263]]
When Multiple) starting October 1, 2022. We assigned CPT code 0625T to
a separately payable status indicator based on the technology and its
potential utilization in the HOPD setting, our evaluation of the
service, as well as input from our medical advisors. The procedure was
assigned to APC 1511 (New Technology--Level 11 ($900-$1,000)) with a
payment rate of $950.50.
For CY 2024, the OPPS payment rates were proposed to be based on
available CY 2022 claims data. There were 37 claims for CPT code 0625T
during this time period. As this was below the threshold of 100 claims
for a service within a year, we explained that we could propose to
designate CPT code 0625T as a low volume service under our universal
low volume New Technology APC policy and use the highest of the
geometric mean cost, arithmetic mean cost, or median cost based on up
to 4 years of claims data to assign code 0625T to the appropriate New
Technology APC. We found the geometric mean cost for the service to be
approximately $3.70, the arithmetic mean cost to be approximately
$4.10, and the median cost to be approximately $3.50. Under our
universal low volume New Technology APC policy, we would use the
greatest of the statistical methodologies, the arithmetic mean, to
assign CPT code 0625T to New Technology 1491 (New Technology Level 1A--
(0-$10)) with a payment rate of $5.00. However, we acknowledged that,
because CPT code 0625T was only made separately payable as part of the
OPPS in October 2022, and, therefore, the claims available only reflect
two months of data, we were concerned that we do not have sufficient
claims data to justify reassignment to another New Technology APC (66
FR 69902). Therefore, consistent with our current policy to retain
services within New Technology APC groups until we obtain sufficient
claims data to justify reassignment (66 FR 59902), for CY 2024 we
adopted as final our proposal to maintain CPT code 0625T's current
assignment to APC 1511 (New Technology--Level 11 ($901-$1,000) with a
payment rate of $950.50.
For setting CY 2025 payment rates, there were only three separately
payable claims in the CY 2023 data reported for CPT code 0625T that
have a geometric mean of approximately $180, which is substantially
lower than the current payment rate of $950.50. In CY 2022 and CY 2023,
there are a total of 40 separately payable claims reported for CPT code
0625T, but it is unlikely that a service with a current payment rate of
$950.50 would have a geometric mean of $4.20, an arithmetic mean of
$6.60, and a median of $3.52. These findings lead to uncertainty about
the appropriate payment rate for the service described by CPT code
0625T. A review of the evidence submitted by the developer of the
procedure when this procedure was originally assigned to a New
Technology APC before any claims data were available indicated the
procedure had a cost between $901 and $1,000. Claims assigned to CPT
code 0625T from CY 2021 and CY 2022, indicate that the cost of the
procedure is less than $10, which would not appear to cover basic cost
of this procedure including computing time, generating a report, and
having medical personnel interpret the report. For CY 2023, the
geometric mean cost of approximately $180 based on three claims may
better reflect the cost of the procedure described by CPT code 0625T,
but there are not enough claims to be confident about the result.
Therefore, we propose to use our authority under section 1833(t)(2)(E)
for CY 2025 to continue to assign CPT code 0625T to APC 1511 (New
Technology--Level 11 ($901-$1,000) with a payment rate of $950.50 based
on the data currently available to us, which we believe best reflects
the cost of the service as described by the New Technology APC
application.
Refer to Table 20 below for the proposed OPPS New Technology APC
and status indicator assignments for CPT code 0625T for CY 2025. The
proposed CY 2025 payment rates can be found in Addendum B to the CY
2025 OPPS/ASC proposed rule via the internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TP22JY24.034
h. Corvia Medical Interatrial Shunt Procedure (APC 1592)
On July 1, 2020, we established HCPCS code C9760 (Non-randomized,
non-blinded procedure for nyha class ii, iii, iv heart failure;
transcatheter implantation of interatrial shunt, 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,
performed in an approved investigational device exemption (ide) study)
to facilitate payment for the
[[Page 59264]]
implantation of the Corvia Medical interatrial shunt.
As we stated in the CY 2021 OPPS final rule with comment period (85
FR 85947), we believe that similar resources and device costs are
involved with the Corvia Medical interatrial shunt procedure and the V-
Wave interatrial shunt procedure. Unlike the V-Wave interatrial shunt,
which is implanted half the time the associated interatrial shunt
procedure described by HCPCS code C9758 is billed, the Corvia Medical
interatrial shunt is implanted every time the associated interatrial
shunt procedure (HCPCS code C9760) is billed. Therefore, for CY 2021,
we assigned HCPCS code C9760 to New Technology APC 1592 (New
Technology--Level 41 ($25,001-$30,000)) with a payment rate of
$27,500.50. We also modified the code descriptor for HCPCS code C9760
to remove the phrase ``or placebo control,'' from the descriptor. In CY
2022, we generally used the same claims data as was used in the CY 2021
OPPS final rule to set the payment rates for that year. Accordingly,
because there were no claims for this service in CY 2019, we continued
to assign HCPCS code C9760 to New Technology APC 1592 in CY 2022. There
continued to be no claims data for this service in CYs 2021 or 2022, so
we continued to assign HCPCS code C9760 to New Technology APC 1592 in
CY 2023 and CY 2024, the years for which we used CY 2021 and CY 2022
data, respectively, for ratesetting.
For CY 2025, the OPPS payment rates are proposed to be based on
available CY 2023 claims data. There were no claims for HCPCS code
C9760 in CY 2023. Therefore, we propose to continue assigning HCPCS
code C9760 to New Technology APC 1592.
Refer to Table 21 below for the proposed OPPS New Technology APC
and status indicator assignments for CPT code C9760. The proposed CY
2025 payment rates can be found in Addendum B to this proposed rule via
the internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TP22JY24.035
i. DARI Motion Procedure (APC 1505)
Effective January 1, 2022, CPT code 0693T (Comprehensive full body
computer-based markerless 3D kinematic and kinetic motion analysis and
report) is associated with the DARI Motion Procedure, a service that
provides human motion analysis to aid clinicians in pre- and post-
operative surgical intervention and in making other treatment
decisions, including selecting the best course of physical therapy and
rehabilitation. The technology consists of eight cameras that surround
a patient, which send live video to a computer workstation that
analyzes the video to create a 3D reconstruction of the patient without
the need for special clothing, markers, or devices attached to the
patient's clothing or skin. For CY 2022, we assigned CPT code 0693T to
New Technology APC 1505 (New Technology--Level 5 ($301-$400)). For CY
2023, the OPPS payment rates were based on claims submitted between
January 1, 2021, and December 31, 2021, processed through June 30,
2022. Due to its effective date of January 1, 2022, there were no
claims available for CPT code 0693T for rate setting in CY 2023.
Therefore, in CY 2023, we continued to assign CPT code 0693T to New
Technology APC 1505. For CY 2024, there were no claims available, so we
again continued to assign CPT code 0693T to New Technology APC 1505.
For CY 2025, the OPPS payment rates are proposed based on available
CY 2023 claims data. Although CPT code 0693T was effective January 1,
2022, we have no claims data at this time. Because we have no claims
data, for CY 2025, we propose to continue to assign CPT code 0693T to
APC 1505 with a proposed payment rate of $350.50.
Please refer to Table 22 below for the proposed OPPS New Technology
APC and status indicator assignments for CPT code 0693T for CY 2025.
The proposed CY 2025 payment rates can be found in Addendum B to this
proposed rule via the internet on the CMS website.
[[Page 59265]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.036
j. Instillation of Anti-Neoplastic Pharmacologic/Biologic Agent Into
Renal Pelvis (APC 1558)
Effective October 1, 2023, CMS established HCPCS code C9789
(Instillation of anti-neoplastic pharmacologic/biologic agent into
renal pelvis, any method, including all imaging guidance, including
volumetric measurement if performed) and assigned it to New Technology
APC 1559 (New Technology--Level 22 ($2,001-$2,500)), with a payment
rate of $2,250.50 based on our review of the clinical and resource
characteristics of this service.
This code may be used to describe the unique procedure associated
with the administration of the drug described by HCPCS code J9281
(Mitomycin pyelocalyceal instillation, 1 mg) or similar products. HCPCS
code J9281 may be used to describe the product, Jelmyto (mitomycin for
pyelocalyceal solution). The FDA approved Jelmyto in 2020, and the FDA
approved indication and usage for Jelmyto is as an alkylating drug
indicated for the treatment of adult patients with low-grade Upper
Tract Urothelial Cancer (LG-UTUS).\18\
---------------------------------------------------------------------------
\18\ Jelmyto Package Insert. 01/14/2021. https://www.accessdata.fda.gov/drugsatfda_docs/label/2021/211728s002lbl.pdf.
---------------------------------------------------------------------------
Because we created HCPCS code C9789 effective October 1, 2023, we
have limited claims data from CY 2023 available for CY 2025 rulemaking.
Specifically, we only have 6 claims available. Given our proposal to
maintain current New Technology APC assignments for CY 2025 for New
Technology APC services with fewer than 10 claims in the 4-year
lookback period applicable for the universal low-volume APC policy, we
therefore propose to continue to assign HCPCS code C9789 to New
Technology APC 1559 (New Technology--Level 22 ($2,001-$2,500)).
Please refer to Table 23 below for the proposed OPPS New Technology
APC and status indicator assignments for CPT code C9789 for CY 2025.
The proposed CY 2025 payment rates can be found in Addendum B to this
proposed rule via the internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TP22JY24.037
k. LimFlow TADV Procedure CPT Code 0620T (APC 1579)
The LimFlow TADV procedure, which is described by CPT code 0620T
(Endovascular venous arterialization, tibial or peroneal vein, with
transcatheter placement of intravascular stent graft(s) and closure by
any method, including percutaneous or open vascular access, ultrasound
guidance for vascular access when performed, all catheterization(s) and
intraprocedural roadmapping and imaging guidance necessary to complete
the intervention, all associated radiological supervision and
interpretation, when performed), is an endovascular procedure that is
used to treat patients with chronic limb-
[[Page 59266]]
threatening ischemia. According to the developer, these patients are no
longer eligible for conventional endovascular or open bypass surgery to
treat their artery blockage, and without this procedure, they are
likely to face limb amputation.
CPT code 0620T was established in January 2021 and was assigned to
APC 5194 (Level 4 Endovascular Procedures) with a payment rate of
approximately $17,400, which is the highest-paying APC for endovascular
procedures. While we proposed to continue to assign CPT code 0620T to
APC 5194 for CY 2024, we finalized a reassignment to a New Technology
APC with a higher payment rate based on comments received expressing
concern that the low payment rate of the procedure would discourage
providers from performing the procedure and deny access to the
procedure. To determine the appropriate New Technology APC assignment
for CY 2024, we looked at the available cost information. There were
only 15 claims for the procedure for CY 2021 and CY 2022, so the
LimFlow TADV procedure was subject to our new technology procedure low
volume APC policy. An analysis of the median, arithmetic mean, and
geometric mean of CPT code 0620T for CY 2024 rulemaking found that the
median was approximately $25,800, the arithmetic mean was approximately
$28,600, and the geometric mean was approximately $26,700. Because the
arithmetic mean had the highest value of the three cost statistics, for
CY 2024, we assigned CPT code 0620T to New Technology APC 1578 (New
Technology--Level 41 ($25,001-$30,000)) with a payment rate of
$27,500.50.
For CY 2025, the OPPS payment rates are proposed to be based on
available CY 2023 claims data. There are only six single frequency
claims for CPT code 0620T in the CY 2023 claims data. As this is below
the threshold of 100 claims for a service within a year, we propose to
again apply our universal low volume APC policy and use the highest of
the geometric mean cost, arithmetic mean cost, or median cost based on
up to 4 years of claims data to assign HCPCS code 0620T to the
appropriate New Technology APC. Considering the available claims data
for HCPCS code 0620T, the arithmetic mean is approximately $35,000; the
median is approximately $36,000; and the geometric mean cost is
approximately $33,000. Of these, the median is the statistical
methodology that estimates the highest cost for the service. The
payment rate calculated using this methodology falls within the cost
band for New Technology APC 1579 (New Technology--Level 42 ($30,001-
$40,000)) with a payment rate of $35,000.50. Therefore, for CY 2024, we
propose to assign HCPCS code 0620T to New Technology APC 1579.
Please refer to Table 24 for the proposed New Technology APC and
status indicator assignments for CPT code 0620T. The proposed CY 2025
payment rates can be found in Addendum B to this proposed rule via the
internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TP22JY24.038
l. Liver Histotripsy Service (APC 1576)
CPT code 0686T (Histotripsy (i.e., non-thermal ablation via
acoustic energy delivery) of malignant hepatocellular tissue, including
image guidance) was first effective July 1, 2021, and describes the
histotripsy service associated with the use of the HistoSonics system.
Histotripsy is a non-invasive, non-thermal, mechanical process that
uses a focused beam of sonic energy to destroy cancerous liver tumors
and is currently in a non-randomized, prospective clinical trial to
evaluate the efficacy and safety of the device for the treatment of
primary or metastatic tumors located in the liver.\19\ When HCPCS code
0686T was first effective, the histotripsy procedure was designated as
a Category A IDE clinical study (NCT04573881). Since devices in
Category A IDE studies are excluded from Medicare payment, payment for
CPT code 0686T only reflected the cost of the service that is performed
(absent the cost of the device) each time it is reported on a claim. On
March 2, 2023, the histotripsy IDE clinical study was re-designated as
a Category B (Non-experimental/Investigational) IDE study. Due to this
new designation, payment for CPT code 0686T in CY 2024 reflects payment
for both the service that is performed and the device used each time it
is reported on a claim. For CY 2024, we assigned CPT code 0686T to
[[Page 59267]]
New Technology APC 1576 (New Technology--Level 39 ($15,001-$20,000))
with a payment rate of $17,500.50.
---------------------------------------------------------------------------
\19\ ClinicalTrials.gov. ``The HistoSonics System for Treatment
of Primary and Metastatic Liver Tumors Using Histotripsy
(#HOPE4LIVER) (#HOPE4LIVER).'' Accessed May 10, 2022. https://clinicaltrials.gov/ct2/show/study/NCT04573881.
---------------------------------------------------------------------------
For CY 2025, OPPS payment rates are proposed to be based on
available CY 2023 claims data. We have identified one claim for CPT
code 0686T within the CY 2023 claims data. As the available claims data
is below the threshold of 100 claims for a service within a year, we
would propose to designate CPT code 0686T as a low volume service under
our universal low volume APC policy, and use the highest of the
geometric mean cost, arithmetic mean cost, or median cost to assign CPT
code 0686T to the appropriate New Technology APC. However, because
there is only a single claim in the CY 2023 data, we have concerns that
the universal low volume APC policy calculations do not accurately
capture the cost of the service.
Given our proposal to maintain current New Technology APC
assignments for CY 2025 for New Technology APC services with fewer than
10 claims in the 4-year lookback period applicable for the universal
low-volume APC policy, and based on the fact that there have only been
3 claims for CPT code 0686T in the prior 4-year period, we propose to
continue to assign CPT code 0686T to APC 1576 (New Technology--Level 39
($15,001-$20,000)) with a payment rate of $17,500.50 as shown in Table
25.
Please refer to Table 25 below for the proposed OPPS New Technology
APC and status indicator assignments for CPT code 0686T for CY 2025.
The proposed CY 2025 payment rates can be found in Addendum B to this
proposed rule.
[GRAPHIC] [TIFF OMITTED] TP22JY24.039
m. LiverMultiScan Service (APC 1511)
Effective July 1, 2021, CPT codes 0648T (Quantitative magnetic
resonance for analysis of tissue composition (e.g., fat, iron, water
content), including multiparametric data acquisition, data preparation
and transmission, interpretation and report, obtained without
diagnostic mri examination of the same anatomy (e.g., organ, gland,
tissue, target structure) during the same session; single organ) and
0649T (Quantitative magnetic resonance for analysis of tissue
composition (e.g., fat, iron, water content), including multiparametric
data acquisition, data preparation and transmission, interpretation and
report, obtained with diagnostic mri examination of the same anatomy
(e.g., organ, gland, tissue, target structure); single organ (list
separately in addition to code for primary procedure)) are associated
with the LiverMultiScan service. LiverMultiScan is a Software as a
medical Service (SaaS) that is intended to aid the diagnosis and
management of chronic liver disease, the most prevalent of which is
Non-Alcoholic Fatty Liver Disease (NAFLD). It provides standardized,
quantitative imaging biomarkers for the characterization and assessment
of inflammation, hepatocyte ballooning, and fibrosis, as well as
steatosis, and iron accumulation. LiverMultiScan receives MR images
acquired from patients' providers and analyzes the images using their
proprietary Artificial Intelligence (AI) algorithms. It then sends the
providers a quantitative metric report of the patient's liver fibrosis
and inflammation. In accordance with our SaaS add-on codes policy (87
FR 72032 to 72033), SaaS CPT add-on codes are assigned to the same APCs
and status indicators as their standalone codes. Thus, CPT code 0649T,
the add-on code for LiverMultiScan, is assigned to the identical APC
and status indicator as CPT code 0648T, the standalone code for the
same service. For CY 2024, we assigned CPT codes 0648T and 0649T to New
Technology APC 1511 (New Technology--Level 11 ($901-$1,000) with a
payment rate of $950.50.
For CY 2025, the OPPS payment rates are proposed to be based on
available CY 2023 claims data. We identified 71 claims for CPT code
0648T and 72 claims CPT code 0649T for CY 2023. As this is below the
threshold of 100 claims for each code within a year, we propose to
apply our universal low volume APC policy and use the highest of the
geometric mean cost, arithmetic mean cost, or median cost based on up
to 4 years of claims data to assign CPT codes 0648T and 0649T to the
appropriate New Technology APC. There are available claims data from CY
2021 and CY 2022 for CPT codes 0648T and 0649T. Our analysis of the
combined data, 114 claims for CPT code 0648T and 115 claims for CPT
code 0649T, yielded a geometric mean cost of approximately $180, an
arithmetic mean cost of approximately $234, and a median cost of
approximately $197. We believe it is appropriate to utilize our
universal low volume APC policy to assign the LiverMultiScan service to
a New Technology APC because we believe that the combined claims data
from CY 2021 to CY 2023 provide sufficient claims to capture the cost
of the service. The arithmetic mean was the statistical methodology
that estimated the highest cost for CPT codes 0648T and 0649T.
Therefore, we
[[Page 59268]]
propose to reassign CPT codes 0648T and 0649T to New Technology APC
1504 (New Technology--Level 4 ($201-$300)) with a payment rate of
$250.50 as shown in Table 26.
[GRAPHIC] [TIFF OMITTED] TP22JY24.040
n. Optellum Lung Cancer Prediction (LCP) (APC 1508)
CPT codes 0721T (Quantitative computed tomography (CT) tissue
characterization, including interpretation and report, obtained without
concurrent CT examination of any structure contained in previously
acquired diagnostic imaging) and 0722T (Quantitative computed
tomography (CT) tissue characterization, including interpretation and
report, obtained with concurrent CT examination of any structure
contained in the concurrently acquired diagnostic imaging dataset (list
separately in addition to code for primary procedure)) became effective
July 1, 2022, and are associated with the Optellum LCP technology. The
Optellum LCP applies an algorithm to a patient's CT scan to produce a
raw risk score for a patient's pulmonary nodule. The physician uses the
risk score to quantify the risk of lung cancer and to determine what
the next management step should be for the patient (for example, CT
surveillance versus invasive procedure). In accordance with our SaaS
add-on codes policy (87 FR 72032 to 72033), SaaS CPT add-on codes are
assigned to the same APCs and status indicators as their standalone
codes. Thus, CPT code 0722T, the add-on code for the Optellum LCP
service, is assigned to the identical APC and status indicator as CPT
code 0721T, the standalone code for the same service. For CY 2024, we
assigned CPT codes 0721T and 0722T to APC New Technology 1508 (New
Technology--Level 8 ($601-$700)).
For CY 2025, the OPPS payment rates are proposed to be based on
available CY 2023 claims data. We identified three claims for CPT codes
0721T and 0722T for ratesetting for CY 2025. As this is below the
threshold of 100 claims for a service within a year, we would usually
propose to apply our universal low volume APC policy and use the
highest of the geometric mean cost, arithmetic mean cost, or median
cost based on up to 4 years of claims data to assign CPT codes 0721T
and 0722T to the appropriate New Technology APC. There are available
claims data only from CY 2023 for CPT codes 0721T and 0722T. Our
analysis of the data for CPT code 0721T found the geometric mean cost
of the service is approximately $84, the arithmetic mean cost of the
service is approximately $98, and the median cost of the service is
approximately $130. We did not identify any reported claims for CPT
code 0722T. However, because there are only three claims for the
Optellum LCP service and these claims show a much lower cost than would
be expected based on the current APC assignment of this service, we
have concerns that the universal low volume APC policy calculations do
not accurately capture the cost of the service. We believe it is
appropriate to continue assigning the Optellum LCP service to its
current APC assignment determined from the New Technology APC
application review due to insufficient claims data to capture the cost
of this service at this time. Given our proposal to maintain current
New Technology APC assignments for CY 2025 for New Technology APC
services with fewer than 10 claims in the 4-year lookback period
applicable for the universal low-volume APC policy, we propose to
continue to assign CPT codes
[[Page 59269]]
0721T and 0722T to New Technology APC 1508 (New Technology--Level 8
($601-$700)) with a proposed payment rate of $650.50.
Please refer to Table 27 below for the proposed OPPS New Technology
APC and status indicator assignments for HCPCS codes 0721T and 0722T
for CY 2025. The proposed CY 2025 payment rates can be found in
Addendum B to this proposed rule via the internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TP22JY24.041
o. Quantitative Magnetic Resonance (QMR) for Analysis of Tissue
Composition (APC 1511)
Effective January 1, 2022, CPT codes 0697T (Quantitative magnetic
resonance for analysis of tissue composition (e.g., fat, iron, water
content), including multiparametric data acquisition, data preparation
and transmission, interpretation and report, obtained without
diagnostic mri examination of the same anatomy (e.g., organ, gland,
tissue, target structure) during the same session; multiple organs) and
0698T (Quantitative magnetic resonance for analysis of tissue
composition (e.g., fat, iron, water content), including multiparametric
data acquisition, data preparation and transmission, interpretation and
report, obtained with diagnostic mri examination of the same anatomy
(e.g., organ, gland, tissue, target structure); multiple organs (list
separately in addition to code for primary procedure)) are associated
with the CoverScan Software as a medical Service (SaaS). This service
is a medical image management and processing software package that
analyzes MR data and provides quantified metrics of multiple organs
such as the heart, lungs, liver, spleen, pancreas, and kidney. In
accordance with our SaaS add-on codes policy (87 FR 72032 to 72033),
SaaS CPT add-on codes are assigned to the same APCs and status
indicators as their standalone codes. Thus, CPT code 0698T, the add-on
code for CoverScan is be assigned to the identical APC and status
indicator as CPT code 0697T, the standalone code for the same service.
For CY 2024, we assigned CPT codes 0697T and 0698T to New Technology
APC 1511 (New Technology--Level 11 ($900-$1,000)).
For CY 2025, the OPPS payment rates are proposed to be based on
available CY 2023 claims data. We identified 46 claims for CPT code
0698T and no claims for CPT code 0697T in CY 2023. As this is below the
threshold of 100 claims for a service within a year, we propose to
apply our universal low volume APC policy and use the highest of the
geometric mean cost, arithmetic mean cost, or median cost based on up
to 4 years of claims data to assign CPT codes 0697T and 0698T to the
appropriate New Technology APC. There are available claims data from CY
2022 and CY 2023 for CPT code 0697T and 0698T. Our analysis of the
combined data, zero claims for CPT code 0697T and 46 claims for CPT
code 0698T, yielded a geometric mean cost of approximately $444, an
arithmetic mean cost of approximately $622, and a median cost of
approximately $786. The median cost is the statistical methodology that
estimates the highest cost for CPT codes 0697T and 0698T. Therefore, we
propose, for CY 2025, to reassign CPT codes 0697T and 0698T to APC 1509
(New Technology--Level 9 ($701-$800)) with a payment rate of $750.50.
Refer to Table 28 below for the proposed OPPS New Technology APC
and status indicator assignments for CPT codes 0697T and 0698T for CY
2025. The proposed CY 2025 payment rates can be found in Addendum B to
this proposed rule via the internet on the CMS website.
[[Page 59270]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.042
p. Quantitative Magnetic Resonance Cholangiopancreatography (QMRCP)
(APC 1511)
Effective July 1, 2022, CPT codes 0723T (Quantitative magnetic
resonance cholangiopancreatography (QMRCP) including data preparation
and transmission, interpretation and report, obtained without
diagnostic magnetic resonance imaging (MRI) examination of the same
anatomy (e.g., organ, gland, tissue, target structure) during the same
session) and 0724T (Quantitative magnetic resonance
cholangiopancreatography (QMRCP), including data preparation and
transmission, interpretation and report, obtained with diagnostic
magnetic resonance imaging (MRI) examination of the same anatomy (e.g.,
organ, gland, tissue, target structure) (list separately in addition to
code for primary procedure)) are associated with the QMRCP Software as
a medical Service (SaaS). The service performs quantitative assessment
of the biliary tree and gallbladder. It uses a proprietary algorithm
that produces a three-dimensional reconstruction of the biliary tree
and pancreatic duct and also provides precise quantitative information
of biliary tree volume and duct metrics. In accordance with our SaaS
add-on codes policy (87 FR 72032 to 72033), SaaS CPT add-on codes are
assigned to the same APCs and status indicators as their standalone
codes. Consistent with our SaaS add-on codes policy, CPT code 0724T,
the add-on code for QMRCP is assigned to the identical APC and status
indicator as CPT code 0723T, the standalone code for the same service.
For CY 2024, we assigned CPT codes 0723T and 0724T to New Technology
APC 1511 (New Technology--Level 11 ($900-$1,000)).
For CY 2025, the OPPS payment rates are proposed to be based on
available CY 2023 claims data. We identified 3 claims for CPT code
0724T and no claims for CPT code 0723T in CY 2023. As this is below the
threshold of 100 claims for a service within a year, we would usually
propose to apply our universal low volume APC policy and use the
highest of the geometric mean cost, arithmetic mean cost, or median
cost based on up to 4 years of claims data to assign CPT codes 0723T
and 0724T to the appropriate New Technology APC. There is only a single
claim from CY 2022 for CPT code 0724T and no claims for CPT code 0723T.
For CY 2023, we received 3 claims for CPT code for CPT 0724T and no
claims for CPT code 0723T. Our analysis of the combined CY 2022 and CY
2023 data for CPT code 0723T and 0724T found the geometric mean cost of
the service is approximately $26, the arithmetic mean cost of the
service is approximately $26, and the median cost of the service is
approximately $27. However, because there are only three claims for CPT
codes 0723T and 0724T and these claims show costs far below what would
be expected for these services given their current APC assignments, we
have concerns that the universal low volume APC policy calculations do
not accurately capture the cost of the service. Given our proposal to
maintain current New Technology APC assignments for CY 2025 for New
Technology APC services with fewer than 10 claims in the 4-year
lookback period applicable for the universal low-volume APC policy, we
propose to continue to assign the CPT codes 0723T and 0724T to New
Technology APC 1511 (New Technology--Level 11 ($901-$1,000)) with a
payment rate of $950.50.
Refer to Table 29 below for the proposed OPPS New Technology APC
and status indicator assignments for
[[Page 59271]]
CPT codes 0723T and 0724T for CY 2025. The proposed CY 2025 payment
rates can be found in Addendum B to this proposed rule via the internet
on the CMS website.
[GRAPHIC] [TIFF OMITTED] TP22JY24.043
q. Scalp Cooling (APC 1514)
CPT code 0662T (Scalp cooling, mechanical; initial measurement and
calibration of cap) became effective on July 1, 2021, to describe
initial measurement and calibration of a scalp cooling device for use
during chemotherapy administration to prevent hair loss. According to
Medicare's National Coverage Determination (NCD) policy, specifically,
NCD 110.6 (Scalp Hypothermia During Chemotherapy to Prevent Hair Loss),
the scalp cooling cap itself is classified as an incident to supply to
a physician service, and would not be paid under the OPPS; however,
interested parties have indicated that there are substantial resource
costs of around $1,900 to $2,400 associated with calibrating and
fitting the cap. CPT guidance states that CPT code 0662T should be
billed once per chemotherapy session, which we interpret to mean once
per course of chemotherapy. Therefore, if a course of chemotherapy
involves, for example, 6 or 18 sessions, HOPDs should report CPT 0662T
only once for that 6 or 18 therapy sessions. For CY 2022, we assigned
CPT code 0662T to APC New Technology 1520 (New Technology--Level 20
($1,801-$1,900)) with a payment rate of $1,850.50. For CY 2023, we did
not have any claims data, so we continued to assign CPT code 0662T to
APC 1520. For CY 2024 we finalized reassignment of CPT code 0662T to
APC 1514 (New Technology--Level 14 ($1,201-$1,300)) with a payment rate
of $1,250.50 based on 11 single frequency claims.
For CY 2025, the OPPS payment rates are proposed to be based on
available CY 2023 claims data. The Scalp Cooling service became
effective in the OPPS in CY 2022, and we have identified 38 single
frequency paid claims for CPT code 0662T for CY 2023. As this is below
the threshold of 100 claims for a service within a year, we propose to
designate CPT code 0662T as a low volume service under our universal
low volume APC policy and to use the highest of the geometric mean
cost, arithmetic mean cost, or median cost based on up to 4 years of
claims data to assign the service to the appropriate New Technology
APC. Based on our review of the available claims, the geometric mean
cost for CPT code 0662T is approximately $841; the median is
approximately $1,351; and the arithmetic mean is approximately $1,361.
Therefore, for CY 2025, we propose to designate this service as a low
volume service under our universal low volume APC policy and to
reassign CPT code 0662T to APC 1515 (New Technology--Level 15 ($1,301-
$1,400)) with a payment rate of $1,350.50 for CY 2025 based on the
arithmetic mean of approximately $1,361.
Refer to Table 30 below for the current and proposed OPPS New
Technology APC and status indicator assignments for CPT code 0662T. The
proposed CY 2025 payment rates can be found in Addendum B to this
proposed rule via the internet on the CMS website.
[[Page 59272]]
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r. Supervised Visits for Esketamine Self-Administration (APCs 1513 and
1518)
On March 5, 2019, FDA approved SpravatoTM (esketamine)
nasal spray, used in conjunction with an oral antidepressant, for
treatment of depression in adults who have tried other antidepressant
medicines but have not benefited from them (treatment-resistant
depression (TRD)). This is the first FDA approval of esketamine for any
use.
Esketamine is a noncompetitive N-methyl D-aspartate (NMDA) receptor
antagonist. It is a nasal spray supplied as an aqueous solution of
esketamine hydrochloride in a vial with a nasal spray device. Each
device delivers two sprays containing a total of 28 mg of esketamine.
Patients would require either two (2) devices (for a 56 mg dose) or
three (3) devices (for an 84 mg dose) per treatment.
Because of the risk of serious adverse outcomes resulting from
sedation and dissociation caused by esketamine nasal spray
administration, and the potential for misuse of the product, it is only
available through a restricted distribution system under a Risk
Evaluation and Mitigation Strategy (REMS). A REMS is a drug safety
program that the FDA can require for certain medications with serious
safety concerns to help ensure the benefits of the medication outweigh
its risks. The SpravatoTM REMS program requires the
esketamine nasal spray to be dispensed and administered to enrolled
patients in health care settings that are certified in the REMS. See
www.fda.gov for more information regarding the SpravatoTM
REMS program compliance requirements.
A treatment session of esketamine consists of instructed nasal
self-administration by the patient followed by a period of at least 2
hours post-administration observation of the patient under direct
supervision of a health care professional in the certified health care
setting. Refer to the CY 2020 PFS final rule and interim final rule for
more information about supervised visits for esketamine nasal spray
self-administration (84 FR 63102 through 63105).
To facilitate prompt beneficiary access to the new, potentially
life-saving treatment for TRD using esketamine, we created two new
HCPCS G codes, G2082 and G2083, effective January 1, 2020. HCPCS code
G2082 is for an outpatient visit for the evaluation and management of
an established patient who requires the supervision of a physician or
other qualified health care professional and provision of up to 56 mg
of esketamine through nasal self-administration and includes two hours
of post-administration observation. For CY 2020, HCPCS code G2082 was
assigned to New Technology APC 1508 (New Technology--Level 8 ($601-
$700)) with a payment rate of $650.50. HCPCS code G2083 describes a
similar service to HCPCS code G2082 but involves the administration of
more than 56 mg of esketamine. For CY 2020, HCPCS code G2083 was
assigned to New Technology APC 1511 (New Technology--Level 11 ($901-
$1,000)) with a payment rate of $950.50. Updates to the APC assignments
for G2082 and G2083 have been made in past rules. See the CY 2021 OPPS/
ASC final rule with comment period (85 FR 85948), CY 2022 OPPS/ASC
final rule with comment period (86 FR 63538), CY 2023 OPPS/ASC final
rule with comment period (87 FR 71816-71817), and CY 2024 OPPS/ASC
final rule with comment period (88 FR 81628-81630) for these updates.
For CY 2025, the OPPS payment rates are proposed based on available
CY 2023 claims data as the available single frequency claims exceed the
100 claims threshold generally used for our universal low volume
policy. Therefore, for CY 2025, we propose to assign HCPCS codes G2082
and G2083 to New Technology APCs based on the codes' geometric mean
costs. Specifically, we propose to assign HCPCS code G2082 to New
Technology APC 1512 (New Technology--Level 12 ($1,001-$1,100)) with a
payment rate of $1,050.50 based on its geometric mean cost of $1,087,
which was calculated using the available 424 single frequency claims
from CY 2023 claims data. We also propose to assign HCPCS code G2083 to
New Technology APC 1518 (New Technology--Level 18 ($1,601-$1,700)) with
a payment rate of $1,650.50 based on its geometric mean cost of $1,643,
which was calculated using the available 2,482 single frequency claims
from CY 2023 claims data. We note, as we have begun to gather adequate
claims data on these codes, we are considering placing HCPCS codes
G2082 and G2083 in clinical APCs through future rulemaking.
The proposed New Technology APC and status indicator assignments
for HCPCS codes G2082 and G2083 are shown in Table 31. The proposed CY
2025 payment rates for these HCPCS codes can be found in Addendum B to
this proposed rule.
[[Page 59273]]
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s. Surfacer[supreg] Inside-Out[supreg] Access Catheter System (APC
1534)
HCPCS code C9780 (Insertion of central venous catheter through
central venous occlusion via inferior and superior approaches (e.g.,
inside-out technique), including imaging guidance) describes the
procedure associated with the use of the Surfacer[supreg] Inside-
Out[supreg] Access Catheter System that is designed to address central
venous occlusion. HCPCS code C9780 was established on October 1, 2021,
and since its establishment the code has been assigned to New
Technology APC 1534 (New Technology--Level 34 ($8,001-$8,500)).
For CY 2025, there were only 3 single frequency claims in CY 2023
for HCPCS code C9780. There were no available claims from CY 2021 or CY
2022. Given our proposal to maintain current New Technology APC
assignments for CY 2025 for New Technology APC services with fewer than
10 claims in the 4-year lookback period applicable for the universal
low-volume APC policy, we propose to continue to assign HCPCS code
C9780 to APC 1534 (New Technology--Level 34 ($8,001-$8,500))) with a
payment rate of $8,250.50. Refer to Table 32 for the proposed New
Technology APC and status indicator assignments for HCPCS code C9780.
[[Page 59274]]
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t. TASS (APC 1537)
The Transcatheter Atrial Shunt System (TASS) is a nitinol self-
expanding cardiovascular implant consisting of four arms including two
left atrial (LA) arms and two coronary sinus (CS) arms placed between
the left atrium and coronary sinus to create a 7mm flow diameter
channel for blood to flow from the high pressure region of the left
atrium to the lower pressure region of the right atrium via the
coronary sinus. TASS is currently in a Category B IDE clinical trial.
Effective October 1, 2023 CMS created HCPCS code C9792 (Blinded or
nonblinded procedure for symptomatic New York Heart Association (NYHA)
Class II, III, IVa heart failure; transcatheter implantation of left
atrial to coronary sinus shunt using jugular vein access, including all
imaging necessary to intra procedurally map the coronary sinus for
optimal shunt placement (e.g., TEE or ICE ultrasound, fluoroscopy),
performed under general anesthesia in an approved investigational
device exemption (IDE) study) to describe the TASS service and assigned
it to APC 1537 (New Technology--Level 37 ($9,501-$10,000)) with a
payment rate of $9750.50.
For CY 2025, the proposed OPPS payment rates are based on available
CY 2023 claims data. Due to the effective date of the code of October
1, 2023, there were no claims available for HCPCS code C9792 for rate
setting in CY 2024. Therefore, in CY 2025, we propose to continue to
assign HCPCS code C9792 to APC 1537.
Please refer to Table 33 below for the current and proposed OPPS
New Technology APC and status indicator assignment for HCPCS code
C9792. The proposed CY 2025 payment rates can be found in Addendum B to
this proposed rule via the internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TP22JY24.047
u. Magnetic Resonance Imaging With Inhaled Hyperpolarized Xenon-129
Contrast Agent (APC 1551)
HCPCS code C9791 (Magnetic resonance imaging with inhaled
hyperpolarized xenon-129 contrast agent, chest, including preparation
and administration of agent) was established on October 1, 2023. For CY
2023, we assigned HCPCS code C9791 to New Technology APC 1551 (New
Technology--Level 14 ($1,201-$1,300)). For CY 2024, the OPPS payment
rates were based on claims submitted between January 1, 2022, and
December 31, 2022, processed through June 30, 2023. Due to the
effective date of the
[[Page 59275]]
service of October 1, 2023, there were no claims available for HCPCS
code C9791 for rate setting in CY 2024. Therefore, in CY 2024, we
continued to assign HCPCS code C9791 to New Technology APC 1551.
For CY 2025, the proposed OPPS payment rates are generally based on
available CY 2023 claims data. Although HCPCS code C9791 was effective
October 1, 2023, we do not have any claims data for the service.
Therefore, for CY 2025, we propose to continue to assign HCPCS code
C9791 to APC 1551 with a proposed payment rate of $1,250.50.
Refer to Table 34 for the proposed OPPS New Technology APC and
status indicator assignment for HCPCS code C9791 for CY 2025. The
proposed CY 2025 payment rates can be found in Addendum B to this
proposed rule via the internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TP22JY24.048
D. Universal Low Volume APC Policy for Clinical and Brachytherapy APCs
In the CY 2022 OPPS/ASC final rule with comment period (86 FR 63743
through 63747), we adopted a policy to designate clinical and
brachytherapy APCs as low volume APCs if they have fewer than 100
single claims that can be used for ratesetting purposes in the claims
year used for ratesetting for the prospective year. For the CY 2025
OPPS/ASC proposed rule, CY 2023 claims are generally the claims used
for ratesetting; and clinical and brachytherapy APCs with fewer than
100 single claims from CY 2023 that can be used for ratesetting would
be low volume APCs subject to our universal low volume APC policy. As
we stated in the CY 2022 OPPS/ASC final rule with comment period, we
adopted this policy to reduce the volatility in the payment rate for
those APCs with fewer than 100 single claims. Where a clinical or
brachytherapy APC has fewer than 100 single claims that can be used for
ratesetting, under our low volume APC payment adjustment policy, we
determine the APC cost as the greatest of the geometric mean cost,
arithmetic mean cost, or median cost based on up to 4 years of claims
data. We excluded APC 5853 (Partial Hospitalization for CMHCs) and APC
5863 (Partial Hospitalization for Hospital-based PHPs) from our
universal low volume APC policy given the different nature of policies
that affect the partial hospitalization program. We also excluded APC
2698 (Brachytx, stranded, nos) and APC 2699 (Brachytx, non-stranded,
nos) as our current methodology for determining payment rates for non-
specified brachytherapy sources is appropriate.
Based on claims data available for the CY 2025 OPPS/ASC proposed
rule, we proposed to designate six brachytherapy APCs and five clinical
APCs as low volume APCs under the OPPS. The six brachytherapy APCs and
five clinical APCs meet our criteria of having fewer than 100 single
claims in the claims' year used for ratesetting (CY 2023 for the CY
2025 OPPS/ASC proposed rule). Nine of the 11 APCs were designated as
low volume APCs in CY 2024. Based on data for the CY 2025 OPPS/ASC
proposed rule, APC 2645 (Brachytx, non-stranded, gold-198) and APC 5881
(Ancillary Outpatient Services When Patient Dies) now meet our criteria
to be designated a Low Volume APCs; and we proposed to designate those
APCs as such for CY 2025.
Table 35 includes the CY 2023 claims available for ratesetting for
each of the APCs we are proposing to be designated as low volume APCs
for CY 2025. The cost statistics for our proposed low volume APCs, such
as the median, arithmetic mean, and geometric mean cost are available
for download with this proposed rule on the CMS website. We refer
readers to our website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices;
click on the relevant regulation to download the low volume APC cost
statistics under the comprehensive (OPPS) ratesetting methodology in
the downloads section of the web page.
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E. APC-Specific Policies
1. Request for Information on Cardiac CT Services
For the 2006 coding update, the AMA's CPT Editorial Panel
established six Category III CPT codes to describe cardiac computed
tomography angiography (cardiac CT services) with contrast materials
effective January 1, 2006. The codes were active and separately payable
under the OPPS between January 1, 2006 and December 31, 2009. The CPT
Editorial Panel deleted the Category III CPT codes and replaced them
with Category I CPT codes 75572 through 75574 effective January 1,
2010. With the deletion of the Category III CPT codes on December 31,
2009, we crosswalked the APC assignments from the Category III CPT
codes (predecessor codes) to the new Category I CPT codes effective
January 1, 2010. Since 2010, the Category I CPT codes describing
cardiac computed tomography angiography with contrast materials are CPT
codes 75572, 75573, and 75574. The codes and their long descriptors are
listed below.
75572: Computed tomography, heart, with contrast material,
for evaluation of cardiac structure and morphology (including 3D image
postprocessing, assessment of cardiac function, and evaluation of
venous structures, if performed).
75573: Computed tomography, heart, with contrast material,
for evaluation of cardiac structure and morphology in the setting of
congenital heart disease (including 3D image postprocessing, assessment
of left ventricular (LV) cardiac function, right ventricular (RV)
structure and function and evaluation of vascular structures, if
performed).
75574: Computed tomographic angiography, heart, coronary
arteries and bypass grafts (when present), with contrast material,
including 3D image postprocessing (including evaluation of cardiac
structure and morphology, assessment of cardiac function, and
evaluation of venous structures, if performed).
The cardiac CT codes that are described by CPT codes 75572, 75573,
and 75574 have been paid separately under the OPPS since 2010. From CY
2015 through CY 2024, the OPPS payment rate, based on the geometric
mean cost (GMC) for the cardiac CT codes, has ranged between $175 and
$265 for these codes, as listed in Table 36 below.
[[Page 59277]]
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We note that the OPPS payment rate applies only to the hospital
outpatient facility and does not include the physician service payment.
Physician services are paid under Medicare's Physician Fee Schedule
(PFS).
As we have stated in every OPPS/ASC proposed and final rule, we
update the OPPS payment rates on an annual basis consistent with the
requirements set forth in section 1833(t)(9)(A) of the Act, which
requires the HHS Secretary to review, not less often than annually, and
revise the APC groups, the relative payment weights, and the wage and
other adjustments to take into account changes in medical practice,
changes in technology, the addition of new services, new cost data, and
other relevant information and factors. Because of the annual updates,
OPPS payment rates for services may fluctuate from year to year. We
note that we generally use the latest claims data available to set the
annual payment rates. Payment rates for the CY 2025 OPPS/ASC final rule
will be based on claims with dates of service between January 1, 2023,
and December 31, 2023, processed through June 30, 2024.
Over the years we have received comments noting that the payment
for these codes has declined since 2017. Commenters have indicated that
the payment amount is insufficient to cover the cost of providing the
service and have stated that the payment amount does not consider the
hospital resources required to perform these services, including the
use of the equipment, medication administration, staff time, and
scanner time. We have maintained over the years that an analysis of our
claims data for these three (3) codes have shown geometric mean costs
consistent with the geometric mean cost for APC 5571 (Level 1 Imaging
with Contrast).
We have also received comments in the past urging CMS to allow
hospitals the flexibility to submit charges for cardiac CT services
with a revenue code other than CT scan (035X) and Radiology Diagnostic
(032X) revenue codes, implying that MACs had applied edits to the
cardiac CT codes that prevented hospitals from reporting a cardiology
(048X) revenue code when appropriate. It is longstanding CMS policy
that hospital outpatient facilities are responsible for reporting the
appropriate cost centers and revenue codes on claims. 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, HOPDs should report their charges under the revenue code that
will result in the charges being assigned to the same cost center to
which the cost of those services are assigned in the cost report.'' We
have consistently stated that hospital outpatient facilities must
determine the most appropriate cost center and revenue code for the
cardiac CT codes (87 FR 71849, 88 FR 81664).
After we issued the CY 2024 OPPS/ASC final rule, interested parties
notified CMS of a specific claims edit that may have affected the
revenue codes reported with the cardiac CT codes in prior years' claims
data. CMS confirmed the existence of the revenue code edit and removed
the revenue code edit in early December 2023. We informed the public of
our findings and the changes that we made in the January 2024 OPPS
Update (Transmittal 12421, Change Request 13488), dated December 21,
2023. Specifically, we stated the following: ``We recently identified
an outdated return-to-provider (RTP) Healthcare Common Procedure Coding
System-to-revenue code edit that resulted in certain claims submissions
being limited to specific revenue codes for CPT codes 75572, 75573, and
75574. These claims were returned to the providers for resubmission.
The outdated edit has been removed; and providers, when appropriate,
may begin billing these codes with any appropriate revenue code.''
We believe the edit may have prevented some providers from
reporting the cardiology revenue code (048X), which maps to the
cardiology cost center (03140), when billing for cardiac CT services.
In the past, commenters have indicated that the cardiology cost center
has a higher cost-to-charge ratio (CCR) than the imaging cost centers,
and they believe the inability to report the cardiology revenue code
has resulted in a lower payment rate for cardiac CT services. Since the
OPPS ratesetting process utilizes the applicable cost center's CCR to
reduce the charges on the claim to estimated cost, utilizing cost
centers with lower CCRs results in a lower OPPS payment compared to
utilizing cost centers with higher CCRs. With the edit no longer in
place, hospitals may bill for cardiac CT services with whichever
revenue code they believe appropriate for CY 2024, and the CY 2026 OPPS
payment rates (which most likely will be based on CY 2024 claims) will
reflect those updated revenue code billing patterns.
We note that for CY 2025, based on our standard ratesetting
methodology using claims submitted during CY 2023, our analysis reveals
that the angiocardiography and CT scan revenue
[[Page 59278]]
codes were reported with CPT codes 75572-75574, which were mapped to
cost centers angiocardiography and CT scan, as shown in Table 37.
[GRAPHIC] [TIFF OMITTED] TP22JY24.051
Because we wanted to determine the extent to which the revenue edit
may have affected the GMC for CPT codes 75572-75574, we conducted a
study to calculate HCPCS geometric mean costs for these codes based on
a simulation that assumed that differing numbers of HOPDs (specifically
25 percent, 50 percent, and 75 percent of the total number of HOPDs
billing for these services) would have assigned these services to the
cardiology revenue code (048X) and cardiology cost center (03140).
Based upon the results of the study, we found that if 50 percent or
more of HOPDs had billed these services with the cardiology revenue
code (048X) and cardiology cost center (03140), the GMC for these codes
would have increased and would have resulted in a revised APC
assignment from APC 5571 (Level 1 Imaging with Contrast) to APC 5572
(Level 2 Imaging with Contrast). Specifically, as noted in Table 38,
under our standard ratesetting methodology, the GMC for the cardiac CT
codes would be approximately $182, which maps to APC 5571, while an
assumption that 50 percent of HOPDs billed with the cardiology revenue
code (048X) and cardiology cost center (03140) on CY 2023 claims would
result in a GMC of about $386, which maps to APC 5572.
[GRAPHIC] [TIFF OMITTED] TP22JY24.052
[[Page 59279]]
Because the RTP edit associated with the cardiac CT codes may have
affected the CY 2023 data we have available to establish the CY 2025
OPPS payment rates for these services, in this CY 2025 OPPS/ASC
proposed rule, we are requesting information on the following topics
regarding hospitals' billing practices for cardiac CT services:
(1) Where are cardiac CT services performed in a hospital? Are
cardiac CT services performed in a dedicated cardiology department,
radiology department, or some other hospital outpatient department?
(2) What factors determine the revenue code assignment for cardiac
CT services (i.e., the department in which the service is performed,
the type of service that is performed, or some other factor)?
(3) What revenue codes are HOPDs reporting for these services in CY
2024? Are HOPDs using the cardiology revenue code on claims for cardiac
CT services now that they are no longer restricted from using this
revenue code?
In addition to reviewing comments received, we will review the
limited CY 2024 claims data for Cardiac CT services to ascertain the
percentage of HOPDs that are utilizing the cardiology revenue code
(048X) and cardiology cost center (03140) with the understanding that
many HOPDs may still be updating their current billing practices. The
comments received and the information we glean from the CY 2024 claims
data will help us identify whether the current OPPS payment is
appropriate for the cardiac CT codes, or whether we should consider
revising the payment methodology for the CY 2025 OPPS. If these
comments indicate a number of HOPDs sufficient to affect the geometric
mean and APC assignment for these codes (i.e., 50 percent or more of
HOPDs) are now billing these codes with the cardiology revenue code and
cardiology cost center, we would change the payment methodology for
these codes to simulate the GMC these codes would have had for CY 2025
ratesetting, with the assumption that 50 percent or more of HOPDs would
have billed in CY 2023 using the cardiology revenue code (048X) and
cardiology cost center (03140) if not for the revenue code edit. We
would assign these services to the APC that corresponds to the
simulated GMC, which we currently project to be APC 5572 (Level 2
Imaging with Contrast). We note that if a revision in payment
methodology is implemented for CY 2025 for the cardiac CT codes,
specifically, CPT codes 75572, 75573, and 75574, for CY 2025, such a
change would not involve reprocessing of claims with dates prior to
January 1, 2025. If, after comments are received and the limited CY
2024 claims data for cardiac CT services is reviewed, we are not
persuaded that 50 percent or more of HOPDs would have billed using the
cardiology revenue codes (048X) and cardiology cost center (03140) in
CY 2023 if not for the revenue code edit, we would maintain our
standard ratesetting for these services as proposed in this proposed
rule.
2. Neurostimulator and Related Procedures (APCs 5461 Through 5465)
In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66807
through 66808), we finalized a restructuring of what were previously
several neurostimulator procedure-related APCs into a four-level
series. In addition to that restructuring, in the CY 2015 OPPS/ASC
final rule with comment period, we also made the Levels 2 through 4
APCs comprehensive APCs (79 FR 66807 through 66808). Later, in the CY
2020 OPPS/ASC final rule with comment period, we also made the Level 1
Neurostimulator and Related Procedure APC (APC 5461) a comprehensive
APC (84 FR 61162 through 61166).
In reviewing the claims data available for the CY 2021 OPPS/ASC
proposed rule, we believed that it was appropriate to create an
additional Neurostimulator and Related Procedures level, between what
were then the Levels 2 and 3 APCs. Creating this APC allowed for a
smoother distribution of the costs between the different levels based
on their resource costs and clinical characteristics. Therefore, for
the CY 2021 OPPS, we finalized a five-level APC structure for the
Neurostimulator and Related Procedures series (85 FR 85968 through
85970). In addition to creating the new level, we also assigned CPT
code 0398T (Magnetic resonance image guided high intensity focused
ultrasound (mrgfus), stereotactic ablation lesion, intracranial for
movement disorder including stereotactic navigation and frame placement
when performed) to the new Level 3 APC (85 FR 85970).
Some interested parties requested for the CY 2023 OPPS/ASC proposed
rule that we create a Level 6 Neurostimulator and Related Procedures
APC, due to their concerns around clinical and resource cost similarity
in the Level 5 Neurostimulator and Related Procedures APC. Based on our
review of the data available for the CY 2023 OPPS/ASC proposed rule, we
believed that the five-level structure for the Neurostimulator and
Related Procedures APC series remained appropriate. The proposed
geometric mean cost for the Level 5 Neurostimulator and Related
Procedures was $30,198.36 with the geometric means of cost significant
codes in Level 5 ranging from approximately $28,000 to $36,000, which
was well within the range of the 2 times rule. In addition, a review of
the clinical characteristics of the services in the APC suggested that
the current structure was appropriate. Finally, as discussed in the CY
2021 OPPS/ASC final rule with comment period, we reiterated that the
OPPS is a prospective payment system. We group procedures with similar
clinical characteristics and resource costs into APCs and establish a
payment rate that reflects the geometric mean of all services in the
group even though the cost of any individual service within the APC may
be higher or lower than the APC's geometric mean. As a result, in the
OPPS any individual procedure may potentially be overpaid or underpaid
because the payment rate is based on the geometric mean of the entire
group of services in the APC. However, the impact of these payment
differences should be mitigated when distributed across a large number
of APCs (85 FR 85968).
While we did not propose any changes in the CY 2023 OPPS/ASC
proposed rule to the 5-level structure of the Neurostimulator and
Related Procedures APC series, we recognized the interested parties'
concerns regarding the granularity of the current APC levels and their
request to create an additional level to address such concerns.
Accordingly, we solicited comments on the potential creation of a new
Level 6 APC. After consideration of those comments, we finalized a five
level APC structure for the series and reassigned HCPCS code 0424T to
New Tech APC 1581 (87 FR 71869).
In the CY 2024 OPPS/ASC final rule with comment period, we did not
make any changes to the 5 level APC structure for the Neurostimulator
and Related Procedures series. However, we made temporary changes to
services previously assigned to the neurostimulator APCS: reassigning
HCPCS codes 0424T and 33276 from New Tech APC 1581 to New Tech APC 1580
(88 FR 81645 through 81647) and assigning HCPCS code 0266T to New Tech
APC 1580 (88 FR 81658).
For this CY 2025 OPPS/ASC proposed rule, we believe that the 5
level APC structure for the series remains appropriate. We note that
while we have claims data available for HCPCS codes 0424T, 0266T, and
several other codes in the APC series that are no longer active, there
will be cost and coding changes associated with the new CPT codes as
their claims data become
[[Page 59280]]
available. For example, CPT codes 33276 (Insertion of phrenic nerve
stimulator system (pulse generator and stimulating lead[s]), including
vessel catheterization, all imaging guidance, and pulse generator
initial analysis with diagnostic mode activation, when performed) and
33287 (Removal and replacement of phrenic nerve stimulator, including
vessel catheterization, all imaging guidance, and interrogation and
programming, when performed; pulse generator) both became newly active
in CY 2024. With the changes associated with those codes we believe
that it is appropriate to reassign HCPCS codes 0266T and 33276 to the
clinical APCs, specifically to the level 5 APC in the series. We will
continue to monitor as more claims data become available for the new
codes.
While we continue to believe that a five-level structure for the
Neurostimulator and Related Procedures APC series remains appropriate,
we continue to solicit comments from interested parties on the need for
a Level 6 APC given the clinical and estimated cost characteristics of
the services currently assigned to the Level 5 APC.
In summary, for the CY 2025 OPPS, we propose to maintain the
current 5-level structure for the Neurostimulator and Related Procedure
APC series and assign HCPCS codes 0424T, 0266T, and 33276 to the level
5 APC. However, we are also soliciting comment on potentially creating
an additional Level 6 APC in the series from the current Level 5 APC
that would include HCPCS codes 33276, 0266T, 64568, 0424T, 0427T, and
0431T.
See Table 39 for the services that will be reassigned to the Level
5 APC and Table 40 below for the proposed CY 2025 Neurostimulator and
Related Procedures APCs.
[[Page 59281]]
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[[Page 59282]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.054
3. Focal Laser Ablation (APC 5374)
Focal laser ablation is an MRI directed and image guided, minimally
invasive procedure that targets prostate cancer tissue. The focal laser
ablation procedure, represented by CPT code 0655T (Transperineal focal
laser ablation of malignant prostate tissue, including transrectal
imaging guidance, with mr-fused images or other enhanced ultrasound
imaging), became effective July 1, 2021, and describes the destruction
of localized prostate cancer tissue with the high energy source of
focal laser radiation. The procedure utilizes real-time intraoperative
prostate ultrasound fused with MRI guidance to allow the surgeon to
precisely plan the ablation and guide the laser targeting as well as
providing real-time feedback to minimize changes to the tissues outside
of the targeted ablation zone. This procedure offers another therapy
option for select patients with localized intermediate risk prostate
cancer.
For CY 2024, we assigned CPT code 0655T to APC 5374 (Level 4
Urology and Related Services) with a payment rate of $3,321.58 based on
its geometric mean cost of approximately $10,323, which was calculated
using the available 16 single frequency claims from the CY 2022 claims
data.
For this CY 2025 OPPS/ASC proposed rule, we reviewed the CY 2023
claims submitted between January 1, 2023, through December 31, 2023,
that were processed on or before December 31, 2023, for CPT code 0655T
and found seven single frequency claims available for ratesetting, with
a resulting geometric mean cost of $12,777. Additionally, for this CY
2025 OPPS/ASC proposed rule, we examined the procedures assigned to the
Urology Procedures APCs. Based on our examination of the procedures
assigned to Urology and Related Procedures APCs and the available CY
2023 claims data, we believe it is appropriate to move CPT code 0655T
to APC 5375 (Level 5 Urology and Related Services) from APC 5374 (Level
4 Urology and Related Services) because 0655T shares more resource cost
and clinical homogeneity with procedures in APC 5375. Specifically, we
believe CPT code 0655T shares resource and clinical homogeneity with
CPT code 0714T (Transperineal laser ablation of benign prostatic
hyperplasia, including imaging guidance), and CPT code 52648 (Laser
vaporization of prostate, including control of postoperative bleeding,
complete (vasectomy, meatotomy, cystourethroscopy, urethral calibration
and/or dilation, internal urethrotomy and transurethral resection of
prostate are included if performed)). We note that the seven available
CY 2023 single frequency claims for CPT code 0655T would not
significantly impact the geometric mean cost calculations for APC 5374
and APC 5375. Therefore, for CY 2025, we propose to reassign CPT code
0655T from APC 5374 (Level 4 Urology and Related Services) to APC 5375
(Level 5 Urology and Related Services).
4. Bone Mass Measurement: Biomechanical Computed Tomography (BCT)
Analysis With Vertebral Fracture Assessment (APCs 5521, 5523, and 5731)
CPT code 0743T (Bone strength and fracture risk using finite
element analysis of functional data and bone mineral density (BMD),
with concurrent vertebral fracture assessment, utilizing data from a
computed tomography scan, retrieval and transmission of the scan data,
measurement of bone strength and BMD and classification of any
vertebral fractures, with overall fracture-risk assessment,
interpretation and report) became effective January 1, 2023. This code
describes the service associated with BCT analysis with concurrent
vertebral fracture assessment (VFA).
In the CY 2023 OPPS/ASC final rule (87 FR71844 through 71846), we
stated that, based on our review and understanding of the service, BCT
analysis does not meet Medicare's definition of bone mass measurement,
as specified in Sec. 410.31(a), which specifies the coverage of, and
payment for, bone mass measurements for Medicare beneficiaries.
Therefore, we assigned the BCT codes (CPT codes 0554T-0558T) and CPT
code 0743T to status indicator ``E1'' to indicate that these codes are
not covered by Medicare, and not paid by Medicare when submitted on
outpatient claims (any outpatient bill type). The complete long
descriptors for the codes can be found in Table 41 below.
In the CY 2024 OPPS/ASC proposed rule, we proposed to continue to
assign the codes to status indicator ``E1'' to indicate non-coverage
and non-payment for the services. (See Addendum B for CY 2024/ASC
proposed rule via the internet on the CMS website.) However, as
discussed in the CY 2024 OPPS/ASC final rule (88 FR 81660 through
81661), based on comments received and further review of the issue, we
did not finalize our proposal. We instead assigned CPT code 0555T to
APC 5731 (Level 1 Minor
[[Page 59283]]
Procedures) and SI of ``S,'' (Procedure or Service, Not Discounted When
Multiple; Paid under OPPS; separate APC payment.), CPT code 0556T to
APC 5523 (Level 3 Imaging without Contrast) and SI of ``S,'' and CPT
code 0558T to APC 5521 (Level 1 Imaging without Contrast) with SI of
``S,'' which were the same APC assignments for the codes between CY
2019 and CY 2022. In addition, we assigned CPT codes 0554T, 0557T, and
0743T to SI of ``M'' (Items and Services Not Billable to the MAC. Not
paid under OPPS.) to indicate that these codes are not payable under
the OPPS because they describe physician-only services. The final
payment rates for these codes were listed in the OPPS Addendum B that
was released with the CY 2024 OPPS/ASC final rule via the internet on
the CMS website.
For CY 2025, we propose to continue to assign CPT codes 0554T and
0557T to status indicator of ``M'' as the codes include or describe a
professional component of the service that is provided by a physician
as evidenced by ``interpretation and report'' in the descriptor. It is
important to note that CPT code 0554T is a comprehensive code (or
``parent code'') that includes both technical and professional
components. Because there are additional CPT codes (``child codes'')
that facilities can use to describe the technical components of BCT
analysis, it is appropriate for the comprehensive code that includes
the professional component to be assigned a SI of ``M''. In addition,
we propose to continue to assign CPT code 0555T to APC 5731 (Level 1
Minor Procedures) and a SI of ``S,'' CPT code 0556T to APC 5523 (Level
3 Imaging without Contrast) and a SI of ``S,'' and CPT code 0558T to
APC 5521 (Level 1 Imaging without Contrast) with a SI of ``S.''
However, for CY 2025, based on input from our medical advisors, we now
believe the service described by CPT code 0743T is a comprehensive code
and involves both a technical component and a professional component
that are performed by hospital outpatient facilities. Unlike CPT 0554T,
there are no additional codes to describe the technical component(s) of
this service (BCT analysis and VFA) and there is a parenthetical note
instructing facilities to not report the BCT analysis codes (0554T-
0557T) with CPT code 0743T. Consequently, we propose to assign CPT code
0743T to APC 5523 (Level 3 Imaging without Contrast) and we propose to
change the status indicator for 0743T from a ``M'' in CY 2024 to a
``S'' (Procedure or Service, Not Discounted When Multiple; Paid under
OPPS; separate APC payment) for CY 2025. As a reminder, Medicare
Administrative Contractors (MACs) determine whether a drug, device,
procedure, or other service meets all program requirements and
conditions for coverage and payment. Accordingly, we emphasize that
HOPDs would only receive payment for these services when the
appropriate MAC determines that the service meets the relevant
conditions for coverage and payment. As we have consistently stated in
past OPPS/ASC final rules (see, e.g., 87 FR 71879 and 88 FR 81660
through 81661)), the fact that a drug, device, procedure or service is
assigned a HCPCS code and a payment rate under the OPPS does not imply
coverage by the Medicare program, but indicates only how the product,
procedure, or service may be paid if covered by the program (see, e.g.,
Pub 100-04 Medicare Claims Processing, Transmittal 11937).
Please refer to Table 41 below for the proposed APCs and status
indicator assignment for CPT codes 0554T-0558T and CPT code 0743T for
CY 2025. The proposed CY 2025 payment rates, where applicable, can be
found in Addendum B to this proposed rule via the internet on the CMS
website.
[[Page 59284]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.055
IV. Proposed OPPS Payment for Devices
A. Proposed Pass-Through Payment for Devices
1. Beginning Eligibility Date for Device Pass-Through Status and
Quarterly Expiration of Device Pass-Through Payments
a. Background
The intent of transitional device pass-through payment, as
implemented at Sec. 419.66, is to facilitate access for beneficiaries
to the advantages of new and truly innovative devices by allowing for
adequate payment for these new devices while the necessary cost data is
collected to incorporate the costs for these devices into the procedure
APC rate (66 FR 55861). Under section 1833(t)(6)(B)(iii) of the Act,
the period for which a device category eligible for transitional pass-
through payments under the OPPS can be in effect is at least 2 years
but not more than 3 years. Prior to CY 2017, our regulation at Sec.
419.66(g) provided that this pass-through payment eligibility period
began on the date CMS established a particular transitional pass-
through category of devices, and we based the pass-through status
expiration date for a device category on the date on which pass-through
payment was effective for the category. In the CY 2017 OPPS/ASC final
rule with comment period (81 FR 79654), in accordance with section
1833(t)(6)(B)(iii)(II) of the Act, we amended Sec. 419.66(g) to
provide that the pass-through eligibility period for a
[[Page 59285]]
device category begins on the first date on which pass-through payment
is made under the OPPS for any medical device described by such
category.
In addition, prior to CY 2017, our policy was to propose and
finalize the dates for expiration of pass-through status for device
categories as part of the OPPS annual update. This means that device
pass-through status would expire at the end of a calendar year when at
least 2 years of pass-through payments had been made, regardless of the
quarter in which the device was approved. In the CY 2017 OPPS/ASC final
rule with comment period (81 FR 79655), we changed our policy to allow
for quarterly expiration of pass-through payment status for devices,
beginning with pass-through devices approved in CY 2017 and subsequent
calendar years, to afford a pass-through payment period that is as
close to a full 3 years as possible for all pass-through payment
devices. We also have an established policy to package the costs of the
devices that are no longer eligible for pass-through payments into the
costs of the procedures with which the devices are reported in the
claims data used to set the payment rates (67 FR 66763).
We refer readers to the CY 2017 OPPS/ASC final rule with comment
period (81 FR 79648 through 79661) for a full discussion of the current
device pass-through payment policy.\20\
---------------------------------------------------------------------------
\20\ To apply for OPPS transitional device pass-through status,
applicants complete an application that is subject to the Paperwork
Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et seq.). This
information collection (CMS-10052) is currently approved under OMB
control number 0938-0857 and has an expiration date of November 30,
2025.
---------------------------------------------------------------------------
In the CY 2023 OPPS/ASC final rule with comment period, we
finalized our policy to publicly post online OPPS device pass-through
applications received on or after March 1, 2023, beginning with the
issuance of the CY 2025 proposed rule and for each OPPS rulemaking
thereafter. We refer readers to the CY 2023 OPPS/ASC final rule with
comment period (87 FR 71934 through 71938) for a full discussion of the
policy to publicly post OPPS device pass-through applications.
b. Expiration of Transitional Pass-Through Payments for Certain Devices
As stated earlier, section 1833(t)(6)(B)(iii) of the Act requires
that, under the OPPS, a category of devices be eligible for
transitional pass-through payments for at least 2 years, but not more
than 3 years. Currently, there are 13 device categories eligible for
pass-through payment. These devices are listed in Table 42 of this
proposed rule where we detail the expiration dates of pass-through
payment status for each of the 13 devices currently receiving device
pass-through payment.
BILLING CODE 4120-01-P
[[Page 59286]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.056
BILLING CODE 4120-01-C
[[Page 59287]]
As discussed in section IV.A.2. New Device Pass-Through
Applications for CY 2024 of the CY 2024 OPPS/ASC final rule with
comment period, we approved HCPCS code C1601 (Endoscope, single-use
(i.e. disposable), pulmonary, imaging/illumination device
(insertable)), as a new device category for pass-through status under
the OPPS, with an effective date of January 1, 2024. For the full
discussion of the criteria used to evaluate device pass-through
applications, refer to the CY 2024 OPPS/ASC final rule with comment
period, which was published in the Federal Register on November 22,
2023 (88 FR 81729 through 81743). We note that HCPCS code C1601 was
established for a bronchoscope that can only be used for a single
procedure and cannot be reprocessed. As such, HCPCS code C1601 only
describes devices that cannot be reprocessed.
In addition, as discussed in section IV.A.2. New Device Pass-
Through Applications for CY 2023 of the CY 2023 OPPS/ASC final rule
with comment period, we approved HCPCS code C1747 (Endoscope, single-
use (i.e., disposable), urinary tract, imaging/illumination device
(insertable)), as a new device category for pass-through status under
the OPPS, with an effective date of January 1, 2023. For the full
discussion on the criteria used to evaluate device pass-through
applications, refer to the CY 2023 OPPS/ASC final rule with comment
period, which was published in the Federal Register on November 23,
2022 (87 FR 71929 through 71934). We note that HCPCS code C1747 was
established for a ureteroscope that can only be used for a single
procedure and cannot be reprocessed. As such, HCPCS code C1747 only
describes devices that cannot be reprocessed.
2. New Device Pass-Through Applications for CY 2025
a. Background
Section 1833(t)(6) of the Act provides for pass-through payments
for devices, and section 1833(t)(6)(B) of the Act requires CMS to use
categories in determining the eligibility of devices for pass-through
payments. As part of implementing the statute through regulations, we
have continued to believe that it is important for hospitals to receive
pass-through payments for devices that offer substantial clinical
improvement in the treatment of Medicare beneficiaries to facilitate
access by beneficiaries to the advantages of the new technology.
Conversely, we have noted that the need for additional payments for
devices that offer little or no clinical improvement over previously
existing devices is less apparent. In such cases, these devices can
still be used by hospitals, and hospitals will be paid for them through
appropriate APC payment. Moreover, a goal is to target pass-through
payments for those devices where cost considerations are most likely to
interfere with patient access (66 FR 55852; 67 FR 66782; and 70 FR
68629).
As specified in regulations at Sec. 419.66(b)(1) through (3), to
be eligible for transitional pass-through payment under the OPPS, a
device must meet the following criteria:
If required by FDA, the device must have received FDA
approval or clearance and FDA marketing authorization (except for a
device that has received an FDA investigational device exemption (IDE)
and has been classified as a Category B device by FDA), or meet another
appropriate FDA exemption; and the pass-through payment application
must be submitted within 3 years from the date of the initial FDA
marketing authorization, if required, unless there is a documented,
verifiable delay in U.S. market availability after FDA marketing
authorization is granted, in which case CMS will consider the pass-
through payment application if it is submitted within 3 years from the
date of market availability;
The device is determined to be reasonable and necessary
for the diagnosis or treatment of an illness or injury or to improve
the functioning of a malformed body part, as required by section
1862(a)(1)(A) of the Act; and
The device is an integral part of the service furnished,
is used for one patient only, comes in contact with human tissue, and
is surgically implanted or inserted (either permanently or
temporarily), or applied in or on a wound or other skin lesion.
In addition, according to Sec. 419.66(b)(4), a device is not
eligible to be considered for device pass-through payment if it is any
of the following: (1) equipment, an instrument, apparatus, implement,
or item of this type for which depreciation and financing expenses are
recovered as depreciation assets as defined in Chapter 1 of the
Medicare Provider Reimbursement Manual (CMS Pub. 15-1); or (2) a
material or supply furnished incident to a service (for example, a
suture, customized surgical kit, or clip, other than a radiological
site marker).
Separately, we use the following criteria, as set forth under Sec.
419.66(c), to determine whether a new category of pass-through payment
devices should be established. The device to be included in the new
category must--
Not be appropriately described by an existing category or
by any category previously in effect established for transitional pass-
through payments, and was not being paid for as an outpatient service
as of December 31, 1996;
Have an average cost that is not ``insignificant''
relative to the payment amount for the procedure or service with which
the device is associated as determined under Sec. 419.66(d) by
demonstrating: (1) the estimated average reasonable cost of devices in
the category exceeds 25 percent of the applicable APC payment amount
for the service related to the category of devices; (2) the estimated
average reasonable cost of the devices in the category exceeds the cost
of the device-related portion of the APC payment amount for the related
service by at least 25 percent; and (3) the difference between the
estimated average reasonable cost of the devices in the category and
the portion of the APC payment amount for the device exceeds 10 percent
of the APC payment amount for the related service (with the exception
of brachytherapy and temperature-monitored cryoablation, which are
exempt from the cost requirements as specified at Sec. 419.66(c)(3)
and (e)); and
Demonstrate a substantial clinical improvement, that is,
substantially improve the diagnosis or treatment of an illness or
injury or improve the functioning of a malformed body part compared to
the benefits of a device or devices in a previously established
category or other available treatment, or, for devices for which pass-
through payment status will begin on or after January 1, 2020, as an
alternative pathway to demonstrating substantial clinical improvement,
a device is part of the FDA's Breakthrough Devices Program and has
received marketing authorization for the indication covered by the
Breakthrough Device designation.
Beginning in CY 2016, we changed our device pass-through evaluation
and determination process. Device pass-through applications are still
submitted to CMS through the quarterly subregulatory process, but the
applications are subject to notice and comment rulemaking in the next
applicable OPPS annual rulemaking cycle. Under this process, all
applications that are preliminarily approved upon quarterly review will
automatically be included in the next applicable OPPS annual rulemaking
cycle, while submitters of applications that are not approved upon
quarterly review will have the option of being
[[Page 59288]]
included in the next applicable OPPS annual rulemaking cycle or
withdrawing their application from consideration. Under this notice-
and-comment process, applicants may submit new evidence, such as
clinical trial results published in a peer-reviewed journal or other
materials, for consideration during the public comment process for the
proposed rule. This process allows those applications that we are able
to determine meet all of the criteria for device pass-through payment
under the quarterly review process to receive timely pass-through
payment status, while still allowing for a transparent, public review
process for all applications (80 FR 70417 through 70418).
In the CY 2020 annual rulemaking process, we finalized an
alternative pathway for devices that are granted a Breakthrough Device
designation (84 FR 61295) and receive FDA marketing authorization for
the indication covered by the Breakthrough Device designation. Under
this alternative pathway, devices that are granted an FDA Breakthrough
Device designation are not evaluated in terms of the current
substantial clinical improvement criterion at Sec. 419.66(c)(2) for
the purposes of determining device pass-through payment status, but do
need to meet the other requirements for pass-through payment status in
our regulation at Sec. 419.66. Devices that are part of the
Breakthrough Devices Program, have received FDA marketing authorization
for the indication covered by the Breakthrough Devices designation, and
meet the other criteria in the regulation can be approved through the
quarterly process and announced through that process (81 FR 79655).
Proposals regarding these devices and whether pass-through payment
status should continue to apply are included in the next applicable
OPPS rulemaking cycle. This process promotes timely pass-through
payment status for innovative devices, while also recognizing that such
devices may not have a sufficient evidence base to demonstrate
substantial clinical improvement at the time of FDA marketing
authorization.
More details on the requirements for device pass-through payment
applications are included on the CMS website in the application form
itself at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/passthrough_payment.html, in the
``Downloads'' section. In addition, CMS is amenable to meeting with
applicants or potential applicants to facilitate information sharing to
support the evaluation of an OPPS device pass-through payment
application or discuss general application criteria, including the
substantial clinical improvement criterion.
b. Applications Received for Device Pass-Through Status for CY 2025
We received 14 complete applications by the March 1, 2024 quarterly
deadline, which was the last quarterly deadline for applications to be
received in time to be included in this proposed rule. Of the complete
applications, we received two applications in the second quarter of
2023, two application in the third quarter of 2023, three applications
in the fourth quarter of 2023, and seven applications in the first
quarter of 2024. Three of the applications were approved for device
pass-through payment during the quarterly review process: The
DETOURTM System, which received was preliminarily approved
upon quarterly review under the alternative pathway effective January
1, 2024, and the AVEIRTM DR Dual Chamber Leadless Pacemaker
System and the EndoSound Vision System[supreg] (EVS) which both were
preliminarily approved upon quarterly review under the alternative
pathway effective July 1, 2024. 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 DETOURTM System, the
AVEIRTM DR Dual Chamber Leadless Pacemaker System, and the
EndoSound Vision System[supreg] (EVS) are discussed in the following
section IV.2.b.1.
We note that the quarterly application process and requirements
have not changed because of the addition of rulemaking review. Detailed
instructions on submission of a quarterly device pass-through payment
application are included on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Downloads/catapp.pdf.
Discussions of the applications we received by the March 1, 2024
deadline are included in this proposed rule.
(1) Alternative Pathway Device Pass-Through Applications
We received 10 device pass-through applications by the March 2024
quarterly application deadline for devices that have received
Breakthrough Device designation from FDA and FDA marketing
authorization for the indication for which they have a Breakthrough
Device designation, and therefore were eligible to apply under the
alternative pathway.
(a) AGENT\TM\ Paclitaxel-Coated Balloon Catheter
Boston Scientific Corporation submitted an application for a new
device category for transitional pass-through payment status for
AGENT\TM\ Paclitaxel-Coated Balloon Catheter for CY 2025. Per the
applicant, AGENT\TM\ Paclitaxel-Coated Balloon Catheter is a device/
drug combination product consisting of a semi-compliant intracoronary
balloon catheter with a paclitaxel/acetyl tributyl citrate drug coating
on the balloon component. The applicant asserted that AGENT\TM\
Paclitaxel-Coated Balloon Catheter delivers paclitaxel, an
antiproliferative drug, directly to the arterial tissue which inhibits
the proliferation of neointimal smooth muscle cells without introducing
an additional stent layer, thereby reducing the rate of restenosis.
According to the applicant, AGENT\TM\ Paclitaxel-Coated Balloon
Catheter is intended for use in adult patients, after appropriate
vessel preparation, undergoing percutaneous coronary intervention (PCI)
in coronary arteries 2.0 mm to 4.0 mm in diameter and lesions up to 26
mm in length for the purpose of improving myocardial perfusion when
treating in-stent restenosis (ISR) and the management of
atherosclerotic coronary artery disease.
Please refer to the online application posting for the AGENT\TM\
Paclitaxel-Coated Balloon Catheter, available at https://mearis.cms.gov/public/publications/device-ptp/DEP2402295H2TU, for
additional detail describing this device and the disease treated by the
device.
As stated previously, to be eligible for transitional pass-through
payment under the OPPS, a device must meet the criteria at Sec.
419.66(b)(1) through (4). With respect to the newness criterion at
Sec. 419.66(b)(1), AGENT\TM\ Paclitaxel-Coated Balloon Catheter
received FDA Breakthrough Device designation effective January 22,
2021, as a combination product indicated for percutaneous transluminal
coronary angioplasty in coronary arteries 2.0 mm to 4.0 mm in diameter
to treat ISR, up to 26 mm in length, for the purpose of improving
myocardial perfusion. FDA approved the premarket approval application
(PMA) for AGENT\TM\ Paclitaxel-Coated Balloon Catheter on February 29,
2024, as indicated for use after appropriate vessel preparation in
adult patients undergoing PCI in coronary arteries 2.0 mm to 4.0 mm in
diameter and lesions up to 26 mm in length for the purpose of improving
myocardial perfusion when treating ISR. We note that while the
indication for
[[Page 59289]]
the FDA Breakthrough Device designation and the indication for the FDA
premarket approval vary slightly, we believe that FDA premarket
approval indication is the indication covered by the Breakthrough
Device designation. We received the application for a new device
category for transitional pass-through payment status for AGENT\TM\
Paclitaxel-Coated Balloon Catheter on February 29, 2024, which is
within three years of the date of the initial FDA marketing
authorization.
We are inviting public comments on whether AGENT\TM\ Paclitaxel-
Coated Balloon Catheter meets the newness criterion at Sec.
419.66(b)(1).
With respect to the eligibility criterion at Sec. 419.66(b)(3),
the device must be an integral part of the service furnished, used for
one patient only, come in contact with human tissue, and be surgically
inserted or implanted, or applied in or on a wound or other skin
lesion. The applicant did not explicitly indicate whether the AGENT\TM\
Paclitaxel-Coated Balloon Catheter is integral to the service provided.
The applicant stated that the AGENT\TM\ Paclitaxel-Coated Balloon
Catheter is used for one patient only, comes in contact with human
tissue, and is surgically implanted or inserted as required by Sec.
419.66(b)(3).
We are inviting public comments on whether AGENT\TM\ Paclitaxel-
Coated Balloon Catheter meets the eligibility criterion at Sec.
419.66(b)(3).
With respect to the exclusion criterion at 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). The applicant did not indicate whether AGENT\TM\
Paclitaxel-Coated Balloon Catheter is equipment, an instrument,
apparatus, implement, or item of this type for which depreciation and
financing expenses are recovered, or if AGENT\TM\ Paclitaxel-Coated
Balloon Catheter is a supply or material furnished incident to a
service.
We are inviting public comments on whether AGENT\TM\ Paclitaxel-
Coated Balloon Catheter meets the exclusion criterion at Sec.
419.66(b)(4).
In addition to the criteria at Sec. 419.66(b)(1) through (4), the
criteria for establishing new device categories are specified at Sec.
419.66(c). The first criterion, at Sec. 419.66(c)(1), provides that
CMS determines that a device to be included in the category is not
appropriately described by any of the existing categories or by any
category previously in effect, and was not being paid for as an
outpatient service as of December 31, 1996. According to the applicant,
no previous or existing device categories for pass-through payment
appropriately describe the AGENT\TM\ Paclitaxel-Coated Balloon
Catheter. Per the applicant, while device category C2623 (Catheter,
transluminal angioplasty, drug-coated, non-laser) describes related or
similar products to the AGENT\TM\ Paclitaxel-Coated Balloon Catheter,
the AGENT\TM\ Paclitaxel-Coated Balloon Catheter is not appropriately
described by C2623 because the devices in this category differ from
AGENT\TM\ Paclitaxel-Coated Balloon Catheter in both size and indicated
use, and therefore, the device is not appropriately described by C2623.
The applicant further claimed that the devices described by C2623 are
approved for use in the femoral or popliteal arteries in vessels with a
diameter of at least 4.0 mm, whereas AGENT\TM\ Paclitaxel-Coated
Balloon Catheter is indicated for use in coronary arteries that are
between 2.0 mm to 4.0 mm in diameter. In addition, the applicant also
noted that the length of the lesions (up to 180 mm) treated with
devices in this device category greatly exceeds the maximum lesion size
of 26 mm for AGENT\TM\ Paclitaxel-Coated Balloon Catheter. Moreover,
the applicant asserted that the devices described by C2623 are used to
treat peripheral arterial disease and are contraindicated for use in
coronary arteries. Per the applicant, the AGENT\TM\ Paclitaxel-Coated
Balloon Catheter is used in conjunction with transluminal PCIs which
are described by different procedure codes than the percutaneous
transluminal angioplasty services used for the devices in C2623.
Lastly, the applicant stated that an analysis of claims found that the
devices described by C2623 are typically reported with femoral or
popliteal revascularization procedures (CPT[supreg] codes from 37224 to
37227).
We note that, based on the description the applicant provided, the
AGENT\TM\ Paclitaxel-Coated Balloon Catheter is a device/drug
combination product consisting of a semi-compliant intracoronary
balloon catheter with a paclitaxel/acetyl tributyl citrate drug coating
on the balloon component and thus could be appropriately described by
C2623. Specifically, we believe that C2623 may appropriately describe
the AGENT\TM\ Paclitaxel-Coated Balloon Catheter because it is a non-
laser, drug-coated catheter used for transluminal angioplasty
procedures. In this context, we believe the AGENT\TM\ Paclitaxel-Coated
Balloon Catheter may be similar to the devices described by C2623, and
therefore, the AGENT\TM\ Paclitaxel-Coated Balloon Catheter may also be
appropriately described by C2623.
In addition, while we acknowledge that when C2623 was established
as a device category code effective April 1, 2015, the procedure codes
with which C2623 could be reported (CPT[supreg] 37224 and CPT[supreg]
37226) were limited to use in the femoral or popliteal arteries.
However, based on the subsequent changes that were made to the
procedure codes with which C2623 could be reported, we do not agree
that C2623 is limited to use with femoral or popliteal
revascularization procedures. First, we note that effective August 25,
2017, while C2623 was in device pass-through payment status, CMS added
two procedure codes with which C2623 could be reported that were for
procedures other than femoral popliteal revascularization procedures.
Specifically, based on the FDA approval of a new indication for an
existing device (a drug-coated balloon catheter for use with dialysis
circuit procedures for the treatment of patients with dysfunctional
arteriovenous fistulae \21\), CMS added two procedure codes,
CPT[supreg] codes 36902 and 36903 (transluminal balloon angioplasty
procedures in peripheral dialysis segments), with which C2623 could be
reported effective August 25, 2017. The devices used with these two
added CPT[supreg] codes, 36902 and 36903, which are also described by
C2623, are drug-coated balloon catheters used for dialysis circuit
procedures in the upper extremities. We believe that the inclusion of
these additional reportable procedure codes illustrates our belief that
devices that may be described by C2623 were neither intended to be
restricted to the treatment of vascular lesions of a specified
dimension nor anatomically limited to femoral or popliteal
revascularization procedures and is inconsistent with the applicant's
assertion that AGENT\TM\ Paclitaxel-Coated Balloon Catheter is not
appropriately described by C2623 because the category is only
applicable for devices used in femoral or popliteal
[[Page 59290]]
arteries with a diameter of at least 4.0 mm, and not smaller coronary
arteries.
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\21\ Centers for Medicare & Medicaid Services (2017). Pub 100-04
Medicare Claims Processing (Transmittal 3941) in CMS Manual System.
Accessed at https://www.cms.gov/regulations-and-guidance/guidance/transmittals/2017downloads/r3941cp.pdf.
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Further, beginning January 1, 2018, upon the expiration of device
pass-through payment status for C2623, CMS packaged the payment for the
costs of each of the devices described by C2623 into the payment for
the costs related to the procedure with which each device is reported
in the hospital claims data (FR 82 59321 through 59323). We further
note that upon becoming packaged for payment, C2623 effectively became
reportable with other transluminal angioplasty procedure codes,
including procedure codes for percutaneous coronary transluminal
angioplasty services. Finally, we note that while, per the applicant,
the devices described by C2623 are typically reported with femoral or
popliteal revascularization procedures, other procedure codes,
including procedure codes for other percutaneous transluminal
angioplasty services and other related coronary procedure codes can and
have been performed with devices described by C2623. As such, we
believe that the procedures with which AGENT\TM\ Paclitaxel-Coated
Balloon Catheter is utilized could be reported with C2623.
In this context, based on the description the applicant provided,
we believe the AGENT\TM\ Paclitaxel-Coated Balloon Catheter may be
similar to the devices described by C2623, and therefore, the AGENT\TM\
Paclitaxel-Coated Balloon Catheter may also be appropriately described
by C2623.
We are inviting public comment on whether AGENT\TM\ Paclitaxel-
Coated Balloon Catheter meets the device category criterion at Sec.
419.66(c)(1).
The second criterion for establishing a device category, at Sec.
419.66(c)(2), provides that CMS determines either of the following: (i)
that a device to be included in the category has demonstrated that it
will substantially improve the diagnosis or treatment of an illness or
injury or improve the functioning of a malformed body part compared to
the benefits of a device or devices in a previously established
category or other available treatment; or (ii) for devices for which
pass-through status will begin on or after January 1, 2020, as an
alternative to the substantial clinical improvement criterion, the
device is part of the FDA's Breakthrough Devices Program and has
received FDA marketing authorization for the indication covered by the
Breakthrough Device designation. AGENT\TM\ Paclitaxel-Coated Balloon
Catheter has a Breakthrough Device designation and marketing
authorization from FDA for the indication covered by the Breakthrough
Device designation (as explained in the discussion of the newness
criterion) and therefore is not evaluated for substantial clinical
improvement.
We are inviting public comment on whether AGENT\TM\ Paclitaxel-
Coated Balloon Catheter meets the device category criterion at Sec.
419.66(c)(2)(ii).
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 AGENT\TM\
Paclitaxel-Coated Balloon Catheter would be reported with the HCPCS
codes as shown in Table 43.
[GRAPHIC] [TIFF OMITTED] TP22JY24.057
To meet the cost criterion for device pass-through payment status,
a device must pass all three tests of the cost criterion for at least
one APC. As we explained in the CY 2005 OPPS final rule (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
[[Page 59291]]
significance criterion, thus increasing the probability the device will
pass the cost significance test. Beginning in CY 2017, we calculate the
device offset amount at the HCPCS/CPT code level instead of the APC
level (81 FR 79657). We note the applicant utilized the CY 2024 payment
rates for the three tests of the cost criterion. For our calculations,
we used APC 5192, which had a CY 2024 payment rate of $5,445.84 at the
time the application was received. HCPCS code 92920 in APC 5192 had a
device offset amount of $1,662.61 at the time the application was
received. According to the applicant, the cost of AGENT\TM\ Paclitaxel-
Coated Balloon Catheter is $5,500.00.
Section 419.66(d)(1), the first cost significance requirement,
provides that the estimated average reasonable cost of devices in the
category must exceed 25 percent of the applicable APC payment amount
for the service related to the category of devices. The average
reasonable cost of $5,500.00 for AGENT\TM\ Paclitaxel-Coated Balloon
Catheter is 101.00 percent of the applicable APC payment amount for the
service related to the category of devices of $5,445.84 (($5,500.00/
$5,445.84) x 100 = 101.00 percent). Therefore, we believe AGENT\TM\
Paclitaxel-Coated Balloon 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). The estimated average reasonable cost of $5,500.00 for
AGENT\TM\ Paclitaxel-Coated Balloon Catheter is 330.81 percent of the
cost of the device-related portion of the APC payment amount for the
related service of $1,662.61 (($5,500.00/$1,662.61) x 100 = 330.81
percent). Therefore, we believe that AGENT\TM\ Paclitaxel-Coated
Balloon 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 $5,500.00 for AGENT\TM\ Paclitaxel-Coated Balloon
Catheter and the portion of the APC payment amount for the device of
$1,662.61 is 70.46 percent of the APC payment amount for the related
service of $5,445.84 ((($5,500.00-$1,662.61)/$ 5,445.84) x 100 = 70.46
percent). Therefore, we believe that AGENT\TM\ Paclitaxel-Coated
Balloon Catheter meets the third cost significance requirement.
We are inviting public comment on whether the AGENT\TM\ Paclitaxel-
Coated Balloon Catheter meets the device pass-through payment criteria
discussed in this section, including the cost criterion for device
pass-through payment status.
(b) Aveir\TM\ DR Dual Chamber Leadless Pacemaker System
Abbott Laboratories submitted an application for a new device
category for transitional pass-through payment status for the Aveir\TM\
DR Dual Chamber Leadless Pacemaker System (Aveir\TM\ DR System) for CY
2025. Per the applicant, the Aveir\TM\ DR System is comprised of two
leadless pacemakers, one atrial and one ventricular with each
containing a generator and electrodes, that provide dual-chamber pacing
therapy after being placed within the heart's myocardium through a
minimally invasive catheter-based procedure. According to the
applicant, the Aveir\TM\ DR System is a programmable system equipped
with bidirectional implant-to-implant communication without the need
for traditional wire electrodes and can provide beat-to-beat
communication and synchrony between the two pacemakers for the
treatment of arrhythmia/bradycardia. Per the applicant, patients with
indication for dual-chamber pacing would benefit from a dual-chamber
leadless pacemaker system that provides atrial and ventricular
bradycardia therapy, while eliminating the complications associated
with conventional pacing systems.
Please refer to the online application posting for the Aveir\TM\ DR
System, available at https://mearis.cms.gov/public/publications/device-ptp/DEP230831B8DX0, for additional detail describing the device and the
disease treated by the device.
As stated previously, to be eligible for transitional pass-through
payment under the OPPS, a device must meet the criteria at Sec.
419.66(b)(1) through (4). With respect to the newness criterion at
Sec. 419.66(b)(1), the Aveir\TM\ DR System received FDA Breakthrough
Device designation effective March 27, 2020, as a pacemaker
implantation indicated in one or more of the following permanent
conditions: syncope, presyncope, fatigue, disorientation due to
arrhythmia/bradycardia, or any combination of these symptoms. FDA
approved the premarket approval application (PMA) for the Aveir\TM\ DR
System on June 29, 2023, for the indication covered by the Breakthrough
Device designation. We received the application for a new device
category for transitional pass-through payment status for the Aveir\TM\
DR System on March 23, 2023, which is within three years of the date of
the initial FDA marketing authorization.
We are inviting public comments on whether the Aveir\TM\ DR System
meets the newness criterion at Sec. 419.66(b)(1).
With respect to the eligibility criteria at Sec. 419.66(b)(3), the
device must be an integral part of the service furnished, used for one
patient only, come in contact with human tissue, and be surgically
inserted or implanted, or applied in or on a wound or other skin
lesion. The applicant did not indicate whether the Aveir\TM\ DR System
is integral to the service furnished. The applicant also did not
explicitly state that the AveirTM DR System is single-use;
however, the applicant stated that one AveirTM DR System is
required per patient per procedure. While the applicant did not
explicitly state whether the Aveir\TM\ DR System comes in contact with
human tissue or is surgically inserted or implanted, the applicant
noted that the two AveirTM Delivery Catheters are inserted
into the peripheral vasculature and the cardiovascular system to
deliver and implant the AveirTM AR Atrial Leadless Pacemaker
and the AveirTM VR Ventricular Leadless Pacemaker into the
right atrium and right ventricle of the heart, respectively.
We are inviting public comments on whether the Aveir\TM\ DR System
meets the eligibility criterion at Sec. 419.66(b)(3).
With respect to the exclusion criterion at 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). The applicant did not indicate whether the Aveir\TM\ DR
System is equipment, an instrument, apparatus, implement, or item of
this type for which depreciating and financing expenses are recovered,
or if the Aveir\TM\ DR System is a supply
[[Page 59292]]
or material furnished incident to a service.
We are inviting public comments on whether the Aveir\TM\ DR System
meets the exclusion criterion at Sec. 419.66(b)(4).
In addition to the criteria at Sec. 419.66(b)(1) through (4), the
criteria for establishing new device categories are specified at Sec.
419.66(c). The first criterion, at Sec. 419.66(c)(1), provides that
CMS determines that a device to be included in the category is not
appropriately described by any of the existing categories or by any
category previously in effect, and was not being paid for as an
outpatient service as of December 31, 1996. The applicant asserted that
the Aveir\TM\ DR System is the only dual-chamber leadless pacemaker
authorized by FDA and indicated for implantation in patients with one
or more of the following permanent conditions: syncope, presyncope,
fatigue, disorientation due to arrhythmia/bradycardia, or any
combination of those conditions. Per the applicant, the Aveir\TM\ DR
System is a modular dual-chamber leadless pacemaker system with
bidirectional implant-to-implant communication that can accommodate all
pacing indications. According to the applicant, no previous or existing
device categories for pass-through payment appropriately describe the
Aveir\TM\ DR System. The applicant stated that device categories C1785
(Pacemaker, dual-chamber, rate-responsive (implantable)) and C1889
(Insertable/implantable device, not otherwise classified) do not
appropriately describe the Aveir\TM\ DR System because the Aveir\TM\ DR
System received Breakthrough Device designation from FDA and has
specific functionality and capabilities that are new to the market. The
applicant also asserted that the AveirTM DR system is
modular, such that a single device can be implanted in a heart chamber
initially, and the second pacemaker added to the other heart chamber in
the future should the clinical need arise; and therefore, it is not
appropriately described by either C1785 or C1889.
We have not identified an existing pass-through payment category
that describes the Aveir\TM\ DR System. We are inviting public comment
on whether the Aveir\TM\ DR System meets the device category criterion
at Sec. 419.66(c)(1).
The second criterion for establishing a device category, at Sec.
419.66(c)(2), provides that CMS determines either of the following: (i)
that a device to be included in the category has demonstrated that it
will substantially improve the diagnosis or treatment of an illness or
injury or improve the functioning of a malformed body part compared to
the benefits of a device or devices in a previously established
category or other available treatment; or (ii) for devices for which
pass-through status will begin on or after January 1, 2020, as an
alternative to the substantial clinical improvement criterion, the
device is part of the FDA's Breakthrough Devices Program and has
received FDA marketing authorization for the indication covered by the
Breakthrough Device designation. The Aveir\TM\ DR System has a
Breakthrough Device designation and marketing authorization from FDA
for the indication covered by the Breakthrough Device designation (as
explained in more detail in the discussion of the newness criterion),
and therefore, is not evaluated for substantial clinical improvement.
We are inviting public comment on whether Aveir\TM\ DR System meets
the device category criterion at Sec. 419.66(c)(2)(ii).
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 Aveir\TM\ DR
System would be reported with HCPCS codes as shown in Table 44.
[[Page 59293]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.058
To meet the cost criterion for device pass-through payment status,
a device must pass all three tests of the cost criterion for at least
one APC. As we explained in the CY 2005 OPPS final rule (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. Beginning in CY 2017, we calculate the
device offset amount at the HCPCS/CPT code level instead of the APC
level (81 FR 79657). We note the applicant used the CY 2023 payment
rates for the three tests of the cost criterion. For our calculations,
we used APC 5224, which had a CY 2023 payment rate of $18,672.01 at the
time the application was received. We used the CY 2023 APC level device
offset amount of $11,739.09 for APC 5224, as HCPCS codes 0795T and
0801T provided by the applicant were not included in Addendum P to the
CY 2023 OPPS/ASC final rule with comment period and no CY 2023 HCPCS/
CPT code level device offset amount was available at the time the
application was received.\22\ According to the applicant, the cost of
the AveirTM DR System is $24,000.00.
---------------------------------------------------------------------------
\22\ We note that the applicant originally utilized APC 5231
(Level 1 ICD and Similar Procedures) for the three tests of the cost
criteria in the application. However, the applicant provided
supplemental information indicating that, HCPCS codes 0795T and
0801T were assigned to APC 5224 (Level 4 Pacemaker and Similar
Procedures) in the corrected Addendum B to the CY 2024 OPPS/ASC
final rule with comment period and they believed that APC 5224 is
currently the appropriate APC for the purposes of performing the
cost significance calculations. We agree with the applicant and
selected APC 5224 for our calculation, which we believe is a more
appropriate APC to use based on the assignment of HCPCS codes 0795T
and 0801T to APC 5224 and the clinical similarity to other pacemaker
insertion codes in APC 5224.
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Section 419.66(d)(1), the first cost significance requirement,
provides that the estimated average reasonable cost of devices in the
category must exceed 25 percent of the applicable APC payment amount
for the service related to the category of devices. The average
reasonable cost of $24,000.00 for the Aveir\TM\ DR System is 128.54
percent of the applicable APC payment amount for the service related to
the category of devices of $18,672.01 (($24,000.00/$18,672.01) x 100 =
128.54 percent). Therefore, we believe the Aveir\TM\ DR System meets
the first cost significance requirement.
The second cost significance requirement, at Sec. 419.66(d)(2),
provides that the estimated average reasonable cost of the devices in
the category must exceed the cost of the device-related portion of the
APC payment amount for the related service by at least 25 percent,
which means that the device cost needs to be at least 125 percent of
the offset amount (the device-related portion of the APC found on the
offset list). The estimated average reasonable cost of $24,000.00 for
the Aveir\TM\ DR System is 204.45 percent of the cost of the device-
related portion of the APC payment amount for the related service of
$11,739.09 (($24,000.00/$11,739.09) x 100 = 204.45 percent). Therefore,
we believe that the Aveir\TM\ DR System meets the second cost
significance requirement.
The third cost significance requirement, at Sec. 419.66(d)(3),
provides that the difference between the estimated average reasonable
cost of the devices in the category and the portion of the APC payment
amount for the device must exceed 10 percent of the APC payment amount
for the related service. The difference between the estimated average
reasonable cost of $24,000.00 for the Aveir\TM\ DR System and the
portion of the APC payment
[[Page 59294]]
amount for the device of $11,739.09 is 65.66 percent of the APC payment
amount for the related service of $18,672.01 ((($24,000.00 -
$11,739.09)/$ 18,672.01) x 100 = 65.66 percent). Therefore, we believe
that the Aveir\TM\ DR System meets the third cost significance
requirement.
We are inviting public comment on whether the Aveir\TM\ DR System
meets the device pass-through payment criteria discussed in this
section, including the cost criterion for device pass-through payment
status.
(c) CANTURIOTM Tibial Extension (CTE) With Canary Health
Implanted Reporting Processor (CHIRP[supreg]) System
Canary Medical, Inc. submitted an application for a new device
category for transitional pass-through payment status for the CTE with
CHIRP[supreg] System for CY 2025. The applicant is only seeking a new
device category for transitional pass-through payment status for the
CTE component (hereinafter referred to as ``CTE'') of the CTE with
CHIRP[supreg] System. According to the applicant, the CTE implant is a
physical implant that is attached to the tibial baseplate as part of a
total knee arthroplasty (TKA) to form the patient's knee prosthesis and
provide additional stability to the replacement knee joint. Per the
applicant the software and electronics within the CTE implant with
CHIRP[supreg] system collects unprocessed 3-D accelerometer and 3-D
gyroscopic sensor data using its Inertial Measurement Unit on the
patient's functional movement and gait parameter post-surgery and
transmits the encrypted data via the Home Base Station to the cloud
platform. According to the applicant, the CTE implant with
CHIRP[supreg] System is indicated for use in patients undergoing a
cemented TKA procedure that are normally indicated for at least a 58 mm
sized tibial stem extension.
Please refer to the online application posting for the CTE implant
with CHIRP[supreg] System, available at https://mearis.cms.gov/public/publications/device-ptp/DEP240229Q7CYC, for additional detail
describing the device and the disease treated by the device.
As stated previously, to be eligible for transitional pass-through
payment under the OPPS, a device must meet the criteria at Sec.
419.66(b)(1) through (4). With respect to the newness criterion at
Sec. 419.66(b)(1), the CTE implant with CHIRP[supreg] System received
FDA Breakthrough Device designation effective October 24, 2019, as
indicated for use with the Zimmer Persona[supreg] Personalized Knee
System (K113369) for TKA in patients with severe knee pain and
disabilities, including: (1) rheumatoid arthritis, osteoarthritis,
traumatic arthritis, polyarthritis; (2) collagen disorders, and/or
avascular necrosis of the femoral condyle; (3) post-traumatic loss of
joint configuration, particularly when there is patellofemoral erosion,
dysfunction or prior patellectomy; (4) moderate valgus, varus, or
flexion deformities; and (5) the salvage of previously failed surgical
attempts or for a knee in which satisfactory stability in flexion
cannot be obtained at the time of surgery. The CTE implant with
CHIRP[supreg] System is indicated to provide objective kinematic data
from the implanted medical device during a patient's TKA post-surgical
care. FDA noted that the kinematic data are an adjunct to standard of
care and physiological parameter measurement tools applied or utilized
by the physician during the course of patient monitoring and treatment
post-surgery. FDA granted De Novo classification for the CTE implant
with CHIRP[supreg] System on August 27, 2021, with the following
indications for use: (1) to provide objective kinematic data from the
implanted medical device during a patient's TKA post-surgical care. The
kinematic data are an adjunct to other physiological parameter
measurement tools applied or utilized by the physician during the
course of patient monitoring and treatment post-surgery; (2) for use in
patients undergoing a cemented TKA procedure that are normally
indicated for at least a 58 mm sized tibial stem extension; (3) the
objective kinematic data generated by the CTE implant with
CHIRP[supreg] System are not intended to support clinical decision-
making and have not been shown to provide any clinical benefit; and (4)
the CTE implant with CHIRP[supreg] System is compatible with Zimmer
Persona[supreg] Personalized Knee System. We note that while the
indication for the FDA Breakthrough Device designation and the
indication for the FDA premarket approval vary slightly, we believe
that FDA premarket approval indication is the indication covered by the
Breakthrough Device designation. We received the application for a new
device category for transitional pass-through payment status for the
CTE implant with CHIRP[supreg] System on February 29, 2024, which is
within three years of the date of the initial FDA marketing
authorization.
We are inviting public comments on whether the CTE implant with
CHIRP[supreg] System meets the newness criterion at Sec. 419.66(b)(1).
Regarding the eligibility criterion at Sec. 419.66(b)(3), the
device must be an integral part of the service furnished, used for one
patient only, come in contact with human tissue, and be surgically
inserted or implanted, or applied in or on a wound or other skin
lesion. The applicant did not indicate whether the CTE implant is
integral to the service furnished. We note that in CY 2014 final rule
with comment period (78 FR 75005), we stated that we have interpreted
the term ``integral'' to mean that the device is necessary to furnish
or deliver the primary procedure with which it is used. For example, a
pacemaker is integral to the procedure of implantation of a pacemaker.
Per the applicant, the CTE implant is a physical implant that is
attached to the tibial baseplate as part of a TKA to form the patient's
knee prosthesis and provide additional stability to the replacement
knee joint. We question whether the CTE implant is integral to the
service furnished because utilization of the CTE implant during the
primary procedure, TKA, appears to be purely additive in nature and not
necessary to furnish or deliver the TKA consistent with our previous
interpretation of integral. Further, we note that the indications for
use of the CTE implant with CHIRP[supreg] System listed in the FDA
DeNovo review letter states that the objective kinematic data generated
by the CTE implant with CHIRP[supreg] System are not intended to
support clinical decision-making and have not been shown to provide any
clinical benefit. Moreover, a warning included in the device IFU for
the CTE implant with CHIRP[supreg] System provides that the kinematic
data obtained from this device have not been demonstrated to have
clinical benefit. It is not intended to be utilized for clinical
decision-making, and no data have been evaluated by FDA regarding
clinical benefits. We note that the inclusion of the CTE implant does
not appear to be necessary to furnish or deliver a TKA, nor does it
appear that the data generated from the CTE implant post-procedure is
necessary to furnish or deliver the primary service. In this context,
we question whether the CTE implant can be considered integral in
accordance with eligibility criteria at Sec. 419.66(b)(3).
The applicant stated that the CTE implant was single-use, intended
to be used with one patient only, comes into contact with human tissue,
and is implanted into the patient's knee prosthesis.
We are inviting public comments on whether the CTE implant meets
the eligibility criterion at Sec. 419.66(b)(3).
With respect to the exclusion criterion at 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)
[[Page 59295]]
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). The
applicant did not indicate whether the CTE implant is equipment, an
instrument, apparatus, implement, or item of this type for which
depreciation and financing expenses are recovered, or if the CTE
implant is a supply or material furnished incident to a service.
We are inviting public comments on whether the CTE implant meets
the exclusion criterion at Sec. 419.66(b)(4).
In addition to the criteria at Sec. 419.66(b)(1) through (4), the
criteria for establishing new device categories are specified at Sec.
419.66(c). The first criterion, at Sec. 419.66(c)(1), provides that
CMS determines that a device to be included in the category is not
appropriately described by any of the existing categories or by any
category previously in effect, and was not being paid for as an
outpatient service as of December 31, 1996. The applicant asserted that
the CTE implant with CHIRP[supreg] System is the only device authorized
by FDA with an indication to provide objective kinematic data from the
implanted medical device during a patient's TKA post-surgical care.
According to the applicant, no previous or existing device categories
for pass-through payment appropriately describe the CTE implant. Per
the applicant, the device category code C1776 (Joint device
(implantable)) does not appropriately describe the CTE implant because
C1776 was created for older technology that performs the function of
the joint and does not describe a device that captures activity and
kinematic data but is not a substitute for the natural knee.
We have not identified an existing pass-through payment category
that describes the CTE implant. We are inviting public comment on
whether the CTE implant meets the device category criterion at Sec.
419.66(c)(1).
The second criterion for establishing a device category, at Sec.
419.66(c)(2), provides that CMS determines either of the following: (i)
that a device to be included in the category has demonstrated that it
will substantially improve the diagnosis or treatment of an illness or
injury or improve the functioning of a malformed body part compared to
the benefits of a device or devices in a previously established
category or other available treatment; or (ii) for devices for which
pass-through status will begin on or after January 1, 2020, as an
alternative to the substantial clinical improvement criterion, the
device is part of the FDA's Breakthrough Devices Program and has
received FDA marketing authorization for the indication covered by the
Breakthrough Device designation. The CTE implant with CHIRP[supreg]
system has a Breakthrough Device designation and marketing
authorization from FDA for the indication covered by the Breakthrough
Device designation (as explained in the discussion of the newness
criterion) and therefore is not evaluated for substantial clinical
improvement.
We are inviting public comment on whether the CTE implant meets the
device category criterion at Sec. 419.66(c)(2)(ii).
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 CTE implant
would be reported with the HCPCS code as shown in Table 45.
[GRAPHIC] [TIFF OMITTED] TP22JY24.059
To meet the cost criterion for device pass-through payment status,
a device must pass all three tests of the cost criterion for at least
one APC. As we explained in the CY 2005 OPPS final rule (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. Beginning in CY 2017, we calculate the
device offset amount at the HCPCS/CPT code level instead of the APC
level (81 FR 79657). We note the applicant utilized the CY 2024 payment
rates for the three cost criterion tests. For our calculations, we used
APC 5115, which had a CY 2024 payment rate of $12,539.82 at the time
the application was received. HCPCS code 27447 had a device offset
amount of $5,659.22 at the time the application was received. According
to the applicant, the cost of the CTE implant part of the CTE implant
with CHIRP[supreg] System is $7,250.00.
Section 419.66(d)(1), the first cost significance requirement,
provides that the estimated average reasonable cost of devices in the
category must exceed 25 percent of the applicable APC payment amount
for the service related to the category of devices. The average
reasonable cost of $7,250.00 for the CTE implant is 57.82 percent of
the applicable APC payment amount for the service related to the
category of devices of $12,539.82 (($7,250.00/$12,539.82) x 100 = 57.82
percent). Therefore, we believe the CTE implant 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 $7,250.00 for
the CTE implant is 128.11 percent of the cost of the device-related
portion of the APC payment amount for the related service of $5,659.22
(($7,250.00/$5,659.22) x 100 = 128.11 percent). Therefore, we believe
that the CTE implant 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
[[Page 59296]]
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 $7,250 for the CTE implant and the portion of the
APC payment amount for the device of $5659.22 is 12.69 percent of the
APC payment amount for the related service of $12,539.82 ((($7,250-
$5,659.22)/$12,539.82) x 100 =12.69 percent). Therefore, we believe
that the CTE implant meets the third cost significance requirement.
We are inviting public comment on whether the CTE implant meets the
device pass-through payment criteria discussed in this section,
including the cost criterion for device pass-through payment status.
(d) The DETOURTM System
Endologix, LLC submitted an application for a new device category
for transitional pass-through payment status for the
DETOURTM System for CY 2025. According to the applicant, the
DETOURTM System is an implantable component, used to create
a femoropopliteal bypass routed through the femoral vein. The
DETOURTM System is comprised of two main components: (1) the
TORUSTM Stent Graft System, which is comprised of the
TORUSTM Stent Graft and the TORUSTM Stent Graft
Delivery System, and (2) the ENDOCROSSTM Device. Per the
applicant, the DETOURTM System is used to treat patients
with advanced peripheral vascular disease, specifically those with long
complex femoropopliteal artery stenoses and occlusions resulting in
lifestyle limiting claudication or severe lower limb threatening
ischemia. According to the applicant, the DETOURTM System
can restore arterial blood flow to the lower limb around the blocked
femoral artery and allows for venous blood flow around the conduit for
normal venous return, to reduce signs and symptoms of lower limb
ischemia and prevent amputation.
Please refer to the online application posting for the
DETOURTM System, available at https://mearis.cms.gov/public/publications/device-ptp/DEP23090164QL2, for additional detail
describing the device and the disease treated by the device.
As stated previously, to be eligible for transitional pass-through
payment under the OPPS, a device must meet the criteria at Sec.
419.66(b)(1) through (4). With respect to the newness criterion at
Sec. 419.66(b)(1), the DETOURTM System received FDA
Breakthrough Device designation effective September 2, 2020, under the
name the PQ Bypass System, as a device intended for percutaneous
revascularization of symptomatic femoropopliteal lesions 200mm to 460mm
with a chronic total occlusion 100mm to 425mm, and/or moderate-to-
severe calcification, and/or in-stent-restenosis in patients with
severe peripheral arterial disease. FDA approved the premarket approval
application (PMA) for the DETOURTM System on June 7, 2023,
indicated for use for percutaneous revascularization in patients with
symptomatic femoropopliteal lesions from 200 mm to 460 mm in length
with chronic total occlusions (100 mm to 425 mm) or diffuse stenosis
>70 percent who may be considered suboptimal candidates for surgical or
alternative endovascular treatments. The DETOURTM System, or
any of its components, is not for use in the coronary and cerebral
vasculature. We note that while the indication for the FDA Breakthrough
Device designation and the indication for the FDA premarket approval
vary slightly, we believe that FDA premarket approval indication is the
indication covered by the Breakthrough Device designation. We received
the application for a new device category for transitional pass-through
payment status for the DETOURTM System on September 1, 2023,
which is within three years of the date of the initial FDA marketing
authorization.
We are inviting public comments on whether the DETOURTM
System meets the newness criterion at Sec. 419.66(b)(1).
With respect to the eligibility criteria at Sec. 419.66(b)(3), the
device must be an integral part of the service furnished, used for one
patient only, come in contact with human tissue, and be surgically
inserted or implanted, or applied in or on a wound or other skin
lesion. Per the applicant, the DETOURTM System is integral
to the service provided and is used for one patient only. While the
applicant did not indicate whether the DETOURTM System comes
in contact with human tissue, the applicant did specify that both
components of the DETOURTM System, the TORUSTM
Stent Graft System and the ENDOCROSSTM Device, are inserted
or implanted during the percutaneous transmural femoropopliteal bypass
procedure, as required by Sec. 419.66(b)(3).
We are inviting public comments on whether the DETOURTM
System meets the eligibility criterion at Sec. 419.66(b)(3).
With respect to the exclusion criterion at 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). The applicant asserted that the DETOURTM
System meets the device eligibility requirements because it is not an
instrument, apparatus, implement, or item of this type for which
depreciation and financing expenses are recovered, and it is not a
supply or material furnished incident to a service.
We are inviting public comments on whether the DETOURTM
System meets the exclusion criterion at Sec. 419.66(b)(4).
In addition to the criteria at Sec. 419.66(b)(1) through (4), the
criteria for establishing new device categories are specified at Sec.
419.66(c). The first criterion, at Sec. 419.66(c)(1), provides that
CMS determines that a device to be included in the category is not
appropriately described by any of the existing categories or by any
category previously in effect, and was not being paid for as an
outpatient service as of December 31, 1996. The applicant described
that the DETOURTM System is a minimally invasive, single-use
device with an implantable component, used to create a femoropopliteal
bypass routed through the femoral vein. According to the applicant, no
previous or existing device categories for pass-through payment
appropriately describe the DETOURTM System. The applicant
provided a list of existing and previous device categories for pass-
through payment for other stents and explained why they do not believe
any of the categories describe the DETOURTM System. In
summary, the applicant asserted that the referenced device categories
do not adequately describe the DETOURTM System because, in
contrast to the DETOURTM System, the referenced device
categories do not have: (1) a crossing device with long needle for
transmural access, (2) a crossing device with high pressure needle
delivery for heavily calcified and atherosclerotic arteries, (3) a high
radial strength transmural stent graft capable of self-support and
sustaining blood flow through conduit bridging artery to vein and back
to artery, (4) a percutaneous stent graft delivery catheter, (5) a
covered stent graft to allow for arterial blood flow within the conduit
as venous blood flows around it in the vein, or (6) a permanent implant
to maintain arterial and venous blood flow. The reasons the applicant
asserted
[[Page 59297]]
for why the DETOURTM System is not adequately described by
each of the device categories are shown in Table 46.
[GRAPHIC] [TIFF OMITTED] TP22JY24.060
We have not identified an existing pass-through payment category
that describes the DETOURTM System. We are inviting public
comment on whether the DETOURTM System meets the device
category criterion at Sec. 419.66(c)(1).
The second criterion for establishing a device category, at Sec.
419.66(c)(2), provides that CMS determines either of the following: (i)
that a device to be included in the category has demonstrated that it
will substantially improve the diagnosis or treatment of an illness or
injury or improve the functioning of a malformed body part compared to
the benefits of a device or devices in a previously established
category or other available treatment; or (ii) for devices for which
pass-through status will begin on or after January 1, 2020, as an
alternative to the substantial clinical improvement criterion, the
device is part of the FDA's Breakthrough Devices Program and has
received FDA marketing authorization for the indication covered by the
Breakthrough Device designation. The DETOURTM System has a
Breakthrough Device designation and marketing authorization from FDA
for the indication covered by the Breakthrough Device designation (as
explained in more detail in the discussion of the newness criterion)
and therefore is not evaluated for substantial clinical improvement.
We are inviting public comment on whether the DETOURTM
System meets the device category criterion at Sec. 419.66(c)(2)(i).
The third criterion for establishing a device category, at Sec.
419.66(c)(3), requires us to determine that the cost of the device is
not insignificant, as described in Sec. 419.66(d). Section 419.66(d)
includes three cost
[[Page 59298]]
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 DETOURTM System would be
reported with HCPCS code as shown in Table 47.
[GRAPHIC] [TIFF OMITTED] TP22JY24.061
To meet the cost criterion for device pass-through payment status,
a device must pass all three tests of the cost criterion for at least
one APC. As we explained in the CY 2005 OPPS final rule (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. Beginning in CY 2017, we calculate the
device offset amount at the HCPCS/CPT code level instead of the APC
level (81 FR 79657). We note the applicant used the CY 2023 payment
rates for the three tests of the cost criterion. For our calculations,
like the applicant, we used APC 5193, which had a CY 2023 payment rate
of $10,615.31 at the time the application was received. HCPCS code
0505T in APC 5193 had a CY 2023 device offset amount of $5,229.10 at
the time the application was received. According to the applicant, the
cost of the DETOURTM System is $25,000.00.
Section 419.66(d)(1), the first cost significance requirement,
provides that the estimated average reasonable cost of devices in the
category must exceed 25 percent of the applicable APC payment amount
for the service related to the category of devices. The average
reasonable cost of $25,000.00 for the DETOURTM System is
235.51 percent of the applicable APC payment amount for the service
related to the category of devices of $10,615.31 (($25,000.00/
$10,615.31) x 100 = 235.51 percent). Therefore, we believe the
DETOURTM System meets the first cost significance
requirement.
The second cost significance requirement, at Sec. 419.66(d)(2),
provides that the estimated average reasonable cost of the devices in
the category must exceed the cost of the device-related portion of the
APC payment amount for the related service by at least 25 percent,
which means that the device cost needs to be at least 125 percent of
the offset amount (the device-related portion of the APC found on the
offset list). The estimated average reasonable cost of $25,000.00 for
the DETOURTM System is 478.09 percent of the cost of the
device-related portion of the APC payment amount for the related
service of $5,229.10 (($25,000.00/$5,229.10) x 100 = 478.09 percent).
Therefore, we believe that the DETOURTM System meets the
second cost significance requirement.
The third cost significance requirement, at Sec. 419.66(d)(3),
provides that the difference between the estimated average reasonable
cost of the devices in the category and the portion of the APC payment
amount for the device must exceed 10 percent of the APC payment amount
for the related service. The difference between the estimated average
reasonable cost of $25,000.00 for the DETOURTM System and
the portion of the APC payment amount for the device of $5,229.10 is
186.25 percent of the APC payment amount for the related service of
$10,615.31 ((($25,000.00 - $5,229.10)/$10,615.31) x 100 = 186.25
percent). Therefore, we believe that the DETOURTM System
meets the third cost significance requirement.
We are inviting public comment on whether the DETOURTM
System meets the device pass-through payment criteria discussed in this
section, including the cost criterion for device pass-through payment
status.
(e) EndoSound Vision SystemTM (EVSTM)
EndoSound, Inc. submitted an application for a new device category
for transitional pass-through payment status for the EVSTM
for CY 2025. The applicant is only seeking a new device category for
transitional pass-through payment status for the Ultrasound Disposable
Kit--Diagnostic/Therapeutic (UDK-T) component (hereinafter referred to
as ``UDK-T'') of the EVSTM. According to the applicant, the
EVSTM is an ultrasound system designed to externally attach
to an upper gastrointestinal (GI) endoscope (gastroscope/upper (EGD)
endoscope). Per the applicant, the EVSTM is a device that,
once attached to an EGD endoscope, temporarily converts the EGD
endoscope to a fully capable endoscopic ultrasound (EUS) endoscope. The
applicant asserted that the EVSTM can be coupled with an
upper GI endoscope device to enable real-time ultrasound imaging,
ultrasound guided needle aspiration, and other EUS guided procedures
within the upper GI tract and surrounding organs. According to the
applicant, the EVSTM consists of: (1) the EVSScanner, a
beamformer/scanner that performs ultrasound signal processing; (2) the
Ultrasound Transducer Module (UTM), a reusable transducer assembly that
converts the electrical signals from the scanner into ultrasound
energy; (3) the Transducer Extension Cable (TEC), a cable/connector to
interface the UTM to the EVSScanner; and (4) the UDK-T, a disposable
mounting kit with an operator control mechanism used to
[[Page 59299]]
externally affix the EVSTM to a standard EGD endoscope and
to provide needle and transducer angulation while maintaining the
native gastroscope controls.
Please refer to the online application posting for the
EVSTM, available at https://mearis.cms.gov/public/publications/device-ptp/DEP240228GJT0X, for additional detail
describing this device and the disease treated by the device.
As stated previously, to be eligible for transitional pass-through
payment under the OPPS, a device must meet the criteria at Sec.
419.66(b)(1) through (4). With respect to the newness criterion at
Sec. 419.66(b)(1), the EVSTM, which includes the UDK-T,
received FDA Breakthrough Device designation effective July 29, 2021,
as a device intended to provide optical visualization of, ultrasonic
visualization of, and therapeutic access to, the upper GI tract
including but not restricted to the organs, tissues, and subsystems:
esophagus, stomach, duodenum, and underlying areas. The instrument is
introduced ``per orally'' when indications consistent with the
requirement for procedure are observed in adult patient populations.
FDA granted the applicant 510(k) clearance for the EVSTM on
December 27, 2023, indicated for use such that when affixed to an
endoscope, is intended to provide ultrasonic visualization of, and
ultrasound guided therapeutic access to the upper GI tract including
but not restricted to the organs, tissues, and subsystems: esophagus,
stomach, duodenum, and underlying areas. The EVSTM, mounted
on an endoscope, is introduced orally when indications consistent with
the requirement for a GI procedure are met. The EVSTM is a
prescription-only device to be used by a qualified physician. The
clinical environments where the system can be used include clinics,
hospitals, and ambulatory surgery centers. We note that while the
indication for the FDA Breakthrough Device designation and the
indication for the FDA premarket approval vary slightly, we believe
that FDA premarket approval indication is the one covered by the
Breakthrough Device designation. We received the application for a new
device category for transitional pass-through payment status for the
EVSTM on February 28, 2024, which is within three years of
the date of the initial FDA marketing authorization.
We are inviting public comments on whether the EVSTM,
inclusive of the UDK-T component, meets the newness criterion at Sec.
419.66(b)(1).
With respect to the eligibility criterion at Sec. 419.66(b)(3),
the device must be an integral part of the service furnished, used for
one patient only, come in contact with human tissue, and be surgically
inserted or implanted, or applied in or on a wound or other skin
lesion. The applicant did not indicate whether the UDK-T component of
the EVSTM is integral to the service furnished; however, the
applicant did indicate that the UDK-T is single-use, comes in contact
with human tissue, and is inserted as part of an endoscopy procedure.
We preliminarily approved the EndoSound Vision System[supreg] (EVS)
HCPCS code C1606 (Adapter, single-use (i.e. disposable), for attaching
ultrasound system to upper gastrointestinal endoscope) upon quarterly
review under the alternative pathway with an effective of July 1, 2024.
We note that HCPCS code C1606 was established for an adapter for
attaching an ultrasound system to an upper gastrointestinal endoscope
that can only be used for a single procedure and cannot be reprocessed.
As such, HCPCS code C1606 only describes devices that cannot be
reprocessed.
We are inviting public comments on whether the UDK-T component of
the EVSTM meets the eligibility criterion at Sec.
419.66(b)(3).
With respect to the exclusion criterion at 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). The applicant claimed that the UDK-T meets the device
eligibility requirements because it is not equipment or an item for
which depreciation and financing expenses are recovered. In addition,
the applicant asserted that the UDK-T is not a supply or material.
We are inviting public comments on whether the UDK-T component of
the EVSTM meets the exclusion criterion at Sec.
419.66(b)(4).
In addition to the criteria at Sec. 419.66(b)(1) through (4), the
criteria for establishing new device categories are specified at Sec.
419.66(c). The first criterion, at Sec. 419.66(c)(1), provides that
CMS determines that a device to be included in the category is not
appropriately described by any of the existing categories or by any
category previously in effect, and was not being paid for as an
outpatient service as of December 31, 1996. According to the applicant,
the EVSTM is an ultrasound system designed to externally
attach to an upper gastrointestinal (GI) endoscope (gastroscope/upper
(EGD) endoscope). According to the applicant, no previous or existing
device categories for pass-through payment appropriately describe the
UDK-T. Per the applicant, device category C1748 (Endoscope, single-use
(i.e., disposable), Upper GI, imaging/illumination device (insertable))
does not appropriately describe the EVSTM, inclusive of the
UDK-T, because: (1) the EVSTM, inclusive of the UDK-T,
enables an endoscope that a hospital has to have added functionalities
such as the ability to perform an EUS procedure, but is not an
endoscope like the devices in C1748; (2) the EVSTM,
inclusive of the UDK-T, when used with an endoscope allows EUS
procedures to be done without an elevator, unlike the other devices
described in C1748; and (3) the EVSTM, inclusive of the UDK-
T, and the devices described in C1748 are used in different procedures.
The applicant explained that CMS indicated that C1748 should always be
billed with a CPT code in the ranges of 43260-43265 and 43274-43278,
but there is no overlap between those CPT codes billed with C1748 and
the CPT codes the applicant stated that the EVSTM would be
reported with as shown in Table 48.
We have not identified an existing pass-through payment category
that describes the UDK-T component of the EVSTM.
We are inviting public comment on whether the UDK-T component of
the EVSTM meets the device category criterion at Sec.
419.66(c)(1).
The second criterion for establishing a device category, at Sec.
419.66(c)(2), provides that CMS determines either of the following: (i)
that a device to be included in the category has demonstrated that it
will substantially improve the diagnosis or treatment of an illness or
injury or improve the functioning of a malformed body part compared to
the benefits of a device or devices in a previously established
category or other available treatment; or (ii) for devices for which
pass-through status will begin on or after January 1, 2020, as an
alternative to the substantial clinical improvement criterion, the
device is part of the FDA's Breakthrough Devices Program and has
received FDA marketing authorization for the indication covered by the
Breakthrough Device designation. The EVSTM, inclusive of the
UDK-T, has a Breakthrough Device designation and
[[Page 59300]]
marketing authorization from FDA for the indication covered by the
Breakthrough Device designation (as explained in more detail in the
discussion of the newness criterion) and therefore is not evaluated for
substantial clinical improvement.
We are inviting public comment on whether the EVSTM,
inclusive of the UDK-T component, meets the device category criterion
at Sec. 419.66(c)(2)(ii).
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
EVSTM would be reported with HCPCS codes as shown in Table
48.
[GRAPHIC] [TIFF OMITTED] TP22JY24.062
To meet the cost criterion for device pass-through payment status,
a device must pass all three tests of the cost criterion for at least
one APC. As we explained in the CY 2005 OPPS final rule (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. Beginning in CY 2017, we calculate the
device offset amount at the HCPCS/CPT code level instead of the APC
level (81 FR 79657). We note the applicant used the CY 2024 payment
rates for the three tests of the cost criterion. For our calculations,
we used APC 5302, which had a CY 2024 payment rate of $1,812.99 at the
time the application was received. HCPCS code 43232 in APC 5302 had a
CY 2024 device offset amount of $14.50 at the time the application was
received.\23\ According to the applicant, the cost of the disposable,
single-use UDK-T component of the EVSTM is $500.00.
---------------------------------------------------------------------------
\23\ We note that the applicant selected the APC payment rate of
$1,814.88 and the APC level device offset amount of $178.95 for APC
5302. However, the values selected are inconsistent with the APC
payment rate and the APC level device offset amount found in CY 2024
OPPS APC Offset File, which were corrected as described in the CY
2024 OPPS/ASC final rule with comment period correction (89 FR
9002). The HCPCS/CPT code level device offset amounts for the HCPCS/
CPT codes provided by the applicant are available in the corrected
Addendum P to the CY 2024 OPPS/ASC final rule with comment period.
For our calculation, we selected the APC payment rate of $1,812.99
and the HCPCS/CPT code level device offset amount of $14.50 related
to HCPCS 43232 in APC 5302 found in the corrected Addendum P, which
are the accurate values for these codes. Based on our initial
assessment for this proposed rule, using the APC payment rate of
$1,812.99 and the device offset amount of $14.50 would result in the
EVSTM meeting the cost significance requirement.
---------------------------------------------------------------------------
Section 419.66(d)(1), the first cost significance requirement,
provides that the estimated average reasonable cost of devices in the
category must exceed 25
[[Page 59301]]
percent of the applicable APC payment amount for the service related to
the category of devices. The average reasonable cost of $500.00 for the
UDK-T is 27.59 percent of the applicable APC payment amount for the
service related to the category of devices of $1,812.99 (($500.00/
$1,812.99) x 100 = 27.59 percent). Therefore, we believe the UDK-T
component of the EVSTM 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 $500.00 for the
UDK-T is 3,448.28 percent of the cost of the device-related portion of
the APC payment amount for the related service of $14.50 (($500.00/
$14.50) x 100 = 3,448.28 percent). Therefore, we believe that the UDK-T
component of the EVSTM 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 $500.00 for the UDK-T and the portion of the APC
payment amount for the device of $14.50 is 26.78 percent of the APC
payment amount for the related service of $1,812.99 ((($500.00--
$14.50)/$1,812.99) x 100 = 26.78 percent). Therefore, we believe that
the UDK-T component of the EVSTM meets the third cost
significance requirement.
We are inviting public comment on whether the UDK-T component of
the EVSTM meets the device pass-through payment criteria
discussed in this section, including the cost criterion for device
pass-through payment status.
(f) iFuse Bedrock Granite\TM\ Implant System
SI-BONE submitted an application for a new device category for
transitional pass-through payment status for the iFuse Bedrock
Granite\TM\ Implant System for CY 2025. According to the applicant, the
iFuse Bedrock Granite\TM\ Implant System consists of iFuse Granite\TM\
implants of various lengths and diameters and associated instruments
sets. The titanium (Ti-6Al-4V ELI) iFuse Granite\TM\ implant consists
of a porous fusion sleeve with threaded length attached to a solid post
that has connection and implant placement features of a typical pedicle
fixation screw. The iFuse Granite\TM\ implant is intended to provide
sacropelvic fusion of the sacroiliac joint (when placed in the sacral-
alar-iliac (SAI) trajectory) and fixation to the pelvis when used in
conjunction with commercially available pedicle screw fixation systems
as a foundational element for segmental spinal fusion only when
performing both a lumbar and a sacroiliac joint (SIJ) fusion procedure
in the same operative session. The applicant asserted that joint fusion
occurs as a result of the device's porous surface and interstices and
fixation occurs through the device's helical threaded design and
traditional posterior fixation rod connection.
Per the applicant, the device can be placed into the pelvis in two
trajectories: the SAI trajectory (i.e., into the sacrum, across the SIJ
and into the ilium), or directly into the ilium. The applicant
explained that the iFuse Granite\TM\ implant is typically placed in the
SAI trajectory, bilaterally, and oftentimes stacked to achieve two
points of fusion and fixation/stabilization across each SIJ. According
to the applicant, the iFuse Granite\TM\ implant may also be used in a
single, but bilateral, configuration, where only two implants may be
required when replacing traditional pedicle screws in either a SAI
trajectory or iliac trajectory. The applicant asserted that the iFuse
Bedrock Granite\TM\ Implant System is always used in addition to lumbar
fusion instrumentation when used to perform lumbar and SIJ fusion at
the same time.
Please refer to the online application posting for the iFuse
Bedrock Granite\TM\ Implant System, available at https://mearis.cms.gov/public/publications/device-ptp/DEP240220LPFNM, for
additional detail describing the device and the disease treated by the
device.
As stated previously, to be eligible for transitional pass-through
payment under the OPPS, a device must meet the criteria at Sec.
419.66(b)(1) through (4). With respect to the newness criterion at
Sec. 419.66(b)(1), the iFuse Bedrock Granite\TM\ Implant System
received FDA Breakthrough Device designation effective November 23,
2021, as a treatment of the acute and chronic instabilities or
deformities of the thoracic, lumbar, and sacral spine, including: (1)
degenerative disc disease (DDD), as defined by back pain of discogenic
origin with degeneration of the disc confirmed by patient history and
radiographic studies; (2) severe spondylolisthesis (Grades 3 and 4) of
the L5-S1 vertebra; (3) skeletally mature patients receiving fusions by
autogenous bone graft having implants attached to the lumbar and sacral
spine (L3 to sacrum) with removal of the implants after the attainment
of a solid fusion; (4) spondylolisthesis; (5) trauma (i.e., fracture or
dislocation); (6) spinal stenosis; (7) deformities or curvatures (i.e.,
scoliosis, kyphosis, and/or lordosis); (8) spinal tumor; and (9)
pseudarthrosis, and/or failed previous fusion. Subsequently, FDA also
granted the applicant 510(k) clearance for the iFuse Bedrock
Granite\TM\ Implant System on May 26, 2022 and December 22, 2022, for
the indication covered by the Breakthrough Device designation with one
additional indication for use: SIJ dysfunction that is a direct result
of SIJ disruption and degenerative sacroiliitis, including conditions
whose symptoms began during pregnancy or in the peripartum period and
have persisted postpartum for more than 6 months. We note that the
510(k) clearance dated December 22, 2022, expanded the previously
cleared indication of the iFuse Bedrock Granite\TM\ Implant System to
include general compatibility with certain compatible pedicle screw
systems, whereas the indications under the May 26, 2022, 510(k)
clearance only addressed compatibility of the iFuse Bedrock Granite\TM\
Implant System with the SeaSpine Mariner Pedicle Screw System. Each
510(k) clearance, the May 26, 2022, and the December 22, 2022, are
covered by the November 23, 2021 Breakthrough Device designation for
the iFuse Bedrock Granite\TM\ Implant System. We received the
application for a new device category for transitional pass-through
payment status for the iFuse Bedrock Granite\TM\ Implant System on
February 20, 2024, which is within three years of the dates of the May
26, 2022 and December 22, 2022 FDA marketing authorizations for the
iFuse Bedrock Granite\TM\ Implant System.
We are inviting public comments on whether the iFuse Bedrock
Granite\TM\ Implant System meets the newness criterion at Sec.
419.66(b)(1).
With respect to the eligibility criterion at Sec. 419.66(b)(3),
the device must be an integral part of the service furnished, used for
one patient only, come in contact with human tissue, and be surgically
inserted or implanted, or applied in or on a wound or other skin
lesion. The applicant did not indicate if the iFuse Bedrock Granite\TM\
Implant System is integral to the service furnished. The applicant
provided that
[[Page 59302]]
the iFuse Bedrock Granite\TM\ Implant is single-use, permanently
implanted, and surgically inserted into the patient. However, we note
that we do not have sufficient information to determine if the
associated instruments sets included in the iFuse Bedrock Granite\TM\
Implant System meet the eligibility criterion at Sec. 419.66(b)(3).
We are inviting public comments on whether the iFuse Bedrock
Granite\TM\ Implant System meets the eligibility criterion at Sec.
419.66(b)(3).
With respect to the exclusion criterion at 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). The applicant did not indicate whether the iFuse Bedrock
Granite\TM\ Implant System is equipment, an instrument, apparatus,
implement, or item of this type for which depreciation and financing
expenses are recovered, or if the iFuse Bedrock Granite\TM\ Implant
System is a supply or material furnished incident to a service.
We are inviting public comments on whether the iFuse Bedrock
Granite\TM\ Implant System meets the exclusion criterion at Sec.
419.66(b)(4).
In addition to the criteria at Sec. 419.66(b)(1) through (4), the
criteria for establishing new device categories are specified at Sec.
419.66(c). The first criterion, at Sec. 419.66(c)(1), provides that
CMS determines that a device to be included in the category is not
appropriately described by any of the existing categories or by any
category previously in effect, and was not being paid for as an
outpatient service as of December 31, 1996. According to the applicant,
no previous or existing device categories for pass-through payment
appropriately describe the iFuse Bedrock Granite\TM\ Implant System.
Per the applicant, the device category C1821 (Interspinous process
distraction device) does not appropriately describe the iFuse Bedrock
Granite\TM\ Implant System because the iFuse Bedrock Granite\TM\
Implant System is used to fixate and fuse, while the devices described
in C1821 are interspinous spacers which, after implantation, are opened
or expanded to distract the neural foramina and decompress the nerves.
The applicant asserted that device category C1713 (Anchor/screw for
opposing bone-to-bone or soft tissue-to-bone (implantable)) also does
not appropriately describe the iFuse Bedrock Granite\TM\ Implant System
because the iFuse Bedrock Granite\TM\ Implant System allows for
simultaneous fusion of the SIJ and fixation of the pelvis by connecting
via Tulip Connector to the base of the stabilizing rods within the
lumbosacral spinal construct, while C1713 includes implantable pins
and/or screws that are used to oppose soft tissue-to-bone, tendon-to-
bone, or bone-to-bone. Per the applicant, the device category C1889
(Implantable/insertable device, not otherwise classified) also does not
appropriately describe the iFuse Bedrock Granite\TM\ Implant System
because it does not describe any specific device category, and
therefore does not uniquely describe the device category proposed for
the iFuse Bedrock Granite\TM\ Implant System.
We note that, according to the applicant, the iFuse Bedrock
Granite\TM\ implant is intended to provide sacropelvic fusion of the
sacroiliac joint (when placed in the sacral-alar-iliac (SAI)
trajectory) and fixation to the pelvis when used in conjunction with
commercially available pedicle screw fixation systems as a foundational
element for segmental spinal fusion only when performing both a lumbar
and sacroiliac joint (SIJ) fusion procedure in the same operative
session. The applicant asserted that joint fusion occurs as a result of
the device's porous surface and interstices and fixation occurs through
the device's helical threaded design and traditional posterior fixation
rod connection. We believe that the device category C1713 may
appropriately describe the iFuse Bedrock Granite\TM\ Implant System and
question whether a transfixing device utilizing the Tulip Connector is
sufficiently distinguishable from traditional implantable pins or
screws that it is meant to replace. In this context, based on the
description the applicant provided, we believe the iFuse Bedrock
Granite\TM\ Implant System may be similar to the devices described by
C1713, and therefore, the iFuse Bedrock Granite\TM\ Implant System may
also be appropriately described by C1713.
In addition, we believe that the device category C1889 may
appropriately describe the iFuse Bedrock Granite\TM\ Implant System
because C1889 may be used to describe any implantable/insertable device
that is not otherwise described by a more specific device category and
is, therefore, sufficiently broad to include implantable devices that
allow for simultaneous fusion of the SIJ and fixation of the pelvis. We
note that in the CY 2017 OPPS/ASC final rule with comment period (81 FR
79562), CMS created C1889 with the specific intent to recognize devices
furnished during a device intensive procedure that are not described by
a specific Level II HCPCS Category C-code. In this context, we believe
the iFuse Bedrock Granite\TM\ Implant System may be appropriately
described by either C1713 or C1889.
We are inviting public comment on whether the iFuse Bedrock
Granite\TM\ Implant System meets the device category criterion at Sec.
419.66(c)(1).
The second criterion for establishing a device category at Sec.
419.66(c)(2) provides that CMS determines either of the following: (i)
that a device to be included in the category has demonstrated that it
will substantially improve the diagnosis or treatment of an illness or
injury or improve the functioning of a malformed body part compared to
the benefits of a device or devices in a previously established
category or other available treatment; or (ii) for devices for which
pass-through status will begin on or after January 1, 2020, as an
alternative to the substantial clinical improvement criterion, the
device is part of the FDA's Breakthrough Devices Program and has
received FDA marketing authorization for the indication covered by the
Breakthrough Device designation. The iFuse Bedrock Granite\TM\ Implant
System has a Breakthrough Device designation and marketing
authorization from FDA for the indication covered by the Breakthrough
Device designation (as explained in the discussion of the newness
criterion) and therefore is not evaluated for substantial clinical
improvement.
We are inviting public comment on whether the iFuse Bedrock
Granite\TM\ Implant System meets the device category criterion at Sec.
419.66(c)(2)(ii).
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 iFuse Bedrock
Granite\TM\ Implant System would be reported with HCPCS codes shown in
Table 49.
[[Page 59303]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.063
According to the applicant, the iFuse Bedrock GraniteTM
Implant System is only used when both a SIJ fusion procedure and a
lumbar fusion procedure are performed in the same operative session.
The applicant stated that the iFuse Bedrock GraniteTM
Implant System is not utilized when only a SIJ fusion procedure is
performed (HCPCS code 27279) or when only a lumbar fusion procedure is
performed (HCPCS code 22612, 22630 or 22633). Rather, per the
applicant, the appropriate coding of the procedure where the iFuse
Bedrock GraniteTM Implant System is used should include the
CPT code for SIJ fusion (HCPCS code 27279) and a CPT code for lumbar
fusion (HCPCS code 22612, 22630 or 22633). Per the applicant, the
selection of the primary lumbar fusion CPT code (HCPCS code 22612,
22630 or 22633) is dependent on the procedure performed.
To meet the cost criterion for device pass-through payment status,
a device must pass all three tests of the cost criterion for at least
one APC. As we explained in the CY 2005 OPPS final rule (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. Beginning in CY 2017, we calculate the
device offset amount at the HCPCS/CPT code level instead of the APC
level (81 FR 79657). We note the applicant utilized the CY 2024 payment
rates for the three tests of the cost criterion. For our calculations,
we used APC 5116, which had a CY 2024 payment rate of $17,756.28 at the
time the application was received. The applicant stated the iFuse
Bedrock GraniteTM Implant System device should be reported
with the SIJ fusion procedure HCPCS code 27279 along with one of the
three lumbar fusion procedures (HCPCS code 22612, 22630 or 22633).
While the applicant utilized HCPCS code 22612 for the device offset
amount for test two of the cost criterion, we believe that HCPCS code
27279 is the appropriate HCPCS code for the offset and subsequent
calculation. Specifically, it is our understanding that code 27279 is
always reported when the iFuse device is used along with only one of
the three specified lumbar fusion codes. That is to say, the SIJ fusion
procedure described by code 27279 is always performed when the iFuse
device is used along with just one of three possible lumbar procedures,
depending on the specific surgical approach used. Therefore, we believe
that neither HCPCS code 22612, 22630, nor 22633 is appropriate to use
for the cost criterion calculation. As such, we used HCPCS 27279, the
code that should always be reported with the iFuse device, for our
calculations.
HCPCS code 27279 in APC 5116 had a CY 2024 device offset amount of
$12,264.26 at the time the application was received. According to the
applicant, the cost of the iFuse Bedrock GraniteTM Implant
System is $11,689.00. Section 419.66(d)(1), the first cost significance
requirement, provides that the estimated average reasonable cost of
devices in the category must exceed 25 percent of the applicable APC
payment amount for the service related to the category of devices. The
average reasonable cost of $11,689.00 for the iFuse Bedrock
GraniteTM Implant System is 65.83 percent of the applicable
APC payment amount for the service related to the category of devices
of $17,756.28 (($11,689.00/$17,756.28) x 100 = 65.83 percent).
Therefore, we believe the iFuse Bedrock GraniteTM Implant
System meets the first cost significance requirement.
The second cost significance requirement, at Sec. 419.66(d)(2),
provides that the estimated average reasonable cost of the devices in
the category must exceed the cost of the device-related portion of the
APC payment amount for the related service by at least 25 percent,
which means that the device cost needs to be at least 125 percent of
the offset amount (the device-related portion of the APC found on the
offset list). The estimated average reasonable cost of $11,689.00 for
the iFuse Bedrock GraniteTM Implant System is 95.31 percent
of the cost of the device-related portion of the APC payment amount for
the related service of $12,264.26 (($11,689.00/$12,264.26) x 100 =
95.31 percent). Therefore, we believe that the iFuse Bedrock
GraniteTM Implant System does not meet the second cost
significance requirement.
The third cost significance requirement, at Sec. 419.66(d)(3),
provides
[[Page 59304]]
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 $11,689.00 for the iFuse Bedrock
GraniteTM Implant System and the portion of the APC payment
amount for the device of $12,264.26 is negative 3.24 percent of the APC
payment amount for the related service of $17,756.28 ((($11,689.00-
$12,264.26)/$17,756.28) x 100 = -3.24 percent). Therefore, we believe
that the iFuse Bedrock GraniteTM Implant System does not
meet the third cost significance requirement.
We are inviting public comment on whether the iFuse Bedrock
GraniteTM Implant System meets the device pass-through
payment criteria discussed in this section, including the cost
criterion for device pass-through payment status.
(g) Paradise[supreg] Ultrasound Renal Denervation (RDN) System
ReCor Medical, Inc. submitted an application for a new device
category for transitional pass-through payment status for the
Paradise[supreg] Ultrasound RDN System for CY 2025. Per the applicant,
the Paradise[supreg] Ultrasound RDN System is a catheter-based system
that delivers ultrasound energy in the location of sympathetic nerves
surrounding the renal arteries. The applicant explained that the
Paradise[supreg] Ultrasound RDN System is indicated to reduce blood
pressure as an adjunctive treatment in patients with hypertension in
whom lifestyle modifications and antihypertensive medications do not
adequately control blood pressure. According to the applicant, the
Paradise[supreg] Catheter, when used with the other Paradise[supreg]
Ultrasound RDN System components, provides complete 360-degree energy
delivery and targeted ablation depth with each energy emission with the
goal of disrupting the nerves and consequently achieving a reduction in
systemic arterial blood pressure. The applicant asserted that the
Paradise[supreg] Catheter protects the artery walls using a cooling
system during periods of ultrasound energy emission (also called
sonications).
Per the applicant's instructions for use, the Paradise[supreg]
Ultrasound RDN System includes the following components: (1)
Paradise[supreg] Generator, which circulates coolant fluid and
electrical energy to the Paradise[supreg] Catheter via the
Paradise[supreg] Cable and Paradise[supreg] Cartridge; (2)
Paradise[supreg] Catheter, which connects with the Paradise[supreg]
Generator and has a distal balloon (available in six different
diameters that correspond to varying artery diameter ranges) that is
pressurized using coolant fluid; (3) Paradise[supreg] Cartridge, which
controls the fluid flow into and out of the Paradise[supreg] Catheter
when used in conjunction with the Paradise[supreg] Generator; (4)
Paradise[supreg] Connection Cable, which transfers electrical energy
from the Paradise[supreg] Generator to the Paradise[supreg] Catheter;
(5) Paradise[supreg] Remote, included with the Paradise[supreg]
Generator for optional use; and (6) Paradise[supreg] Cart, an optional
wheeled cart to which the Paradise[supreg] Generator can be mounted to
stabilize the Paradise[supreg] Generator during a procedure and to
transport the Paradise[supreg] Generator from one location to another.
Per the applicant, additional items required for the procedure include:
(1) a bag of coolant fluid for inflation and cooling of balloon; (2) a
0.014 inch guidewire to track the Paradise[supreg] Catheter into
position for delivery of ultrasound energy; (3) a Push/Pull style
hemostasis valve; (4) a 6 French (Fr) or larger guide sheath; and (5) a
7 Fr or larger guide catheter. According to the applicant, the
Paradise[supreg] Catheter, Paradise[supreg] Cartridge, and
Paradise[supreg] Connection Cable are single-patient, one-time use
components of the system. According to the applicant, key steps for
operating the Paradise[supreg] Ultrasound RDN System include: (1)
gaining access to the femoral artery using standard interventional
techniques and placing a 7 Fr (or larger) guide catheter; (2) advancing
the 7 Fr guide catheter into the left or right renal artery under
fluoroscopic guidance; (3) performing an angiogram to verify the
patency of the left or right renal artery; (4) measuring the distal,
mid, and proximal artery diameters and selecting the appropriate
Paradise[supreg] Catheter balloon size; (5) preparing and attaching the
Paradise[supreg] Cartridge, Paradise[supreg] Connection Cable, and
sterile water supply, and connecting the Paradise[supreg] Cartridge
extension tubing to the Paradise[supreg] Catheter; (6) preparing and
flushing the Paradise[supreg] Catheter; removing access devices from
the lumen of the guide catheter and inserting a 0.014 inch guidewire;
(7) verifying the balloon on the Paradise[supreg] Catheter is deflated;
(8) tracking the Paradise[supreg] Catheter over the guidewire and
gently inserting the Paradise[supreg] Catheter into the push/pull style
hemostasis valve and guide catheter; (9) advancing and positioning the
Paradise[supreg] Catheter in desired locations within the renal
arteries; (10) inflating the balloon via the Paradise[supreg]
Generator; (11) verifying the position of the balloon and catheter
transducer via fluoroscopy and contrast injection; (12) performing
denervation of the left and/or right renal artery by delivery of
ultrasound energy; (13) verifying balloon deflation via fluoroscopy
before moving to the next location; (14) withdrawing the
Paradise[supreg] Catheter back into the guide catheter prior to moving
the device into an alternate artery or accessory vessel, continuing to
another position and exchanging the balloon catheter, as needed; (15)
removing the Paradise[supreg] Catheter, ensuring that Paradise[supreg]
Catheter balloon is in a deflated state prior to removal, by slowly
withdrawing the Paradise[supreg] Catheter through the guide catheter,
until completely withdrawn, and removing the guidewire and guide
catheter; and (16) closing the wound per standard of practice.
Please refer to the online application posting for the
Paradise[supreg] RDN System, available at https://mearis.cms.gov/public/publications/device-ptp/DEP231128137E1, for additional detail
describing the device and the disease treated by the device.
As stated previously, to be eligible for transitional pass-through
payment under the OPPS, a device must meet the criteria at Sec.
419.66(b)(1) through (4). With respect to the newness criterion at
Sec. 419.66(b)(1), the Paradise[supreg] Ultrasound RDN System received
FDA Breakthrough Device designation effective December 4, 2020, as a
device with the indicated use to reduce blood pressure in adult (>=22
years of age) patients with uncontrolled hypertension, who may be
inadequately responsive to, or who are intolerant to anti-hypertensive
medications. FDA approved the premarket approval application (PMA) for
the Paradise[supreg] Ultrasound RDN System on November 7, 2023 for the
indicated use to reduce blood pressure as an adjunctive treatment in
hypertension patients in whom lifestyle modifications and
antihypertensive medications do not adequately control blood pressure.
We note that while the indication for the FDA Breakthrough Device
designation and the indication for the FDA premarket approval vary
slightly, we believe that FDA premarket approval indication is the one
covered by the Breakthrough Device designation. We received the
application for a new device category for transitional pass-through
payment status for the Paradise[supreg] Ultrasound RDN System on
November 28, 2023, which is within 3 years of the date of the initial
FDA marketing authorization.
[[Page 59305]]
We are inviting public comments on whether the Paradise[supreg]
Ultrasound RDN System meets the newness criterion at Sec.
419.66(b)(1).
With respect to the eligibility criteria at Sec. 419.66(b)(3), the
device must be an integral part of the service furnished, be used for
one patient only, come in contact with human tissue, and be surgically
inserted or implanted, or applied in or on a wound or other skin
lesion. The applicant did not explicitly state whether the
Paradise[supreg] Ultrasound RDN System is integral to the service
furnished. With respect to whether the Paradise[supreg] Ultrasound RDN
System is used for one patient only, the applicant asserted that the
Paradise[supreg] Catheter, Paradise[supreg] Cartridge, and
Paradise[supreg] Connection Cable are single patient use. However, the
Paradise[supreg] Generator, Paradise[supreg] Remote, and
Paradise[supreg] Cart are reusable and are capital equipment. While the
applicant did not explicitly state whether the Paradise[supreg]
Ultrasound RDN System comes into contact with human tissue, the
applicant provided that the Paradise[supreg] Catheter is placed within
the renal artery. According to the applicant, the Paradise[supreg]
Ultrasound RDN System is an implantable device. We note that the
Paradise[supreg] Generator, Paradise[supreg] Remote, and
Paradise[supreg] Cart are reusable, do not come in contact with the
patient's tissue, are not surgically implanted or inserted, or applied
in or on a wound or other skin lesion, as required by Sec.
419.66(b)(3).
We are inviting public comments on whether the Paradise[supreg]
Ultrasound RDN System meets the eligibility criterion at Sec.
419.66(b)(3).
With respect to the exclusion criterion at 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). While the applicant did not explicitly state whether the
Paradise[supreg] Ultrasound RDN System, or select components, is
equipment, an instrument, apparatus, implement, or item for which
depreciation and financing expenses are recovered, per the applicant,
the Paradise[supreg] Catheter, Paradise[supreg] Cartridge, and
Paradise[supreg] Connection Cable are single-use only. The applicant
further explained that the Paradise[supreg] Generator, Paradise[supreg]
Cart, and Paradise[supreg] Remote are capital equipment; as such, they
are excluded from device pass-through payment eligibility under Sec.
419.66(b)(4). The applicant did not explicitly state whether the
Paradise[supreg] Ultrasound RDN System is a supply or material
furnished incident to a service.
The applicant requested pass-through payment for the
Paradise[supreg] Ultrasound RDN System, but we question whether only
the Paradise[supreg] Catheter component of the Paradise[supreg]
Ultrasound RDN System, as opposed to the whole system, is eligible for
pass-through payments under Sec. 419.66(b)(3) or at Sec.
419.66(b)(4). We do not believe that the Paradise[supreg] Generator,
Paradise[supreg] Cable, Paradise[supreg] Cartridge, Paradise[supreg]
Connection Cable, Paradise[supreg] Remote, or Paradise[supreg] Cart
meet the eligibility requirements under Sec. 419.66(b)(3) or at Sec.
419.66(b)(4), and, as such, are not eligible for pass-through payments.
We are inviting public comments on whether the Paradise[supreg]
Ultrasound RDN System meets the exclusion criterion at Sec.
419.66(b)(4).
In addition to the criteria at Sec. 419.66(b)(1) through (4), the
criteria for establishing new device categories are specified at Sec.
419.66(c). The first criterion, at Sec. 419.66(c)(1), provides that
CMS determines that a device to be included in the category is not
appropriately described by any of the existing categories or by any
category previously in effect, and was not being paid for as an
outpatient service as of December 31, 1996. Per the applicant, the
Paradise[supreg] Ultrasound RDN System is a catheter-based system that
delivers ultrasound energy in the location of sympathetic nerves
surrounding the renal arteries. According to the applicant, no previous
or existing device categories for pass-through payment have encompassed
the Paradise[supreg] Ultrasound RDN System. Per the applicant, device
categories C1753 (Catheter, intravascular ultrasound) and C1888
(Catheter, ablation, noncardiac, endovascular (implantable)) do not
appropriately describe the Paradise[supreg] Ultrasound RDN System. The
applicant asserted that C1753 does not appropriately describe the
Paradise[supreg] Ultrasound RDN System because the Paradise[supreg]
Ultrasound RDN System is used to treat a disease and denervates renal
nerves, whereas C1753 was created to describe ultrasound catheter
devices that are not used to treat a disease and are used for imaging
of the vessel. According to the applicant, C1888 does not appropriately
describe the Paradise[supreg] Ultrasound RDN System because the
Paradise[supreg] Ultrasound RDN System is intended to denervate renal
nerves by using ultrasound energy that does not otherwise affect the
blood vessel tissue, whereas C1888 was created to describe devices that
use radiofrequency or laser technologies to occlude or obliterate blood
vessels.\24\
---------------------------------------------------------------------------
\24\ The applicant referenced the Medicare Claims Processing
Manual, Chapter 4 to support these assertions.
---------------------------------------------------------------------------
We have not identified an existing pass-through payment category
that describes the Paradise[supreg] Ultrasound RDN System. We are
inviting public comment on whether the Paradise[supreg] Ultrasound RDN
System meets the device category criterion at Sec. 419.66(c)(1).
We note that the applicant indicated the Paradise[supreg]
Ultrasound RDN System is the only device authorized by FDA with an
indication for renal denervation using ultrasound energy to achieve
reductions in blood pressure. However, we note that the Symplicity
Spyral\TM\ Catheter (Symplicity SpyralTM RDN System) device,
for which we also received an application for transitional pass-through
payments for CY 2025 as discussed in this proposed rule, is authorized
by FDA with an indication for renal denervation using a radiofrequency
modality to achieve reductions in blood pressure. Accordingly, we note
that while the Paradise[supreg] Ultrasound RDN System device may have a
different modality (i.e., ultrasound compared to radiofrequency) to
that of the Symplicity Spyral\TM\ Catheter device, the Paradise[supreg]
Ultrasound RDN System device may have a similar mechanism of action to
that of the Symplicity Spyral\TM\ Catheter device. We question whether
the device descriptions provided in the respective applications support
establishing two modality specific pass-through payment device
categories or a single device category that would encompass both RDN
device modalities. We address this question in detail immediately
following the full discussion of all other applicable eligibility
criteria for both the Paradise[supreg] Ultrasound RDN System and the
Symplicity SpyralTM RDN System applications.
We are inviting public comment on whether Paradise[supreg]
Ultrasound RDN System meets the device category criterion at Sec.
419.66(c)(1).
The second criterion for establishing a device category, at Sec.
419.66(c)(2), provides that CMS determines either of the following: (i)
that a device to be included in the category has demonstrated that it
will substantially improve the diagnosis or treatment of an illness or
injury or improve the functioning of a malformed body part
[[Page 59306]]
compared to the benefits of a device or devices in a previously
established category or other available treatment; or (ii) for devices
for which pass-through status will begin on or after January 1, 2020,
as an alternative to the substantial clinical improvement criterion,
the device is part of the FDA's Breakthrough Devices Program and has
received FDA marketing authorization for the indication covered by the
Breakthrough Device designation. As previously stated, the
Paradise[supreg] Ultrasound RDN System has Breakthrough Device
designation and marketing authorization from FDA for the indication
covered by the Breakthrough Device designation (as explained in more
detail in the discussion of the newness criterion) and therefore is not
evaluated for substantial clinical improvement.
We are inviting public comment on whether the Paradise[supreg]
Ultrasound RDN System meets the device category criterion at Sec.
419.66(c)(2)(ii).
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 Paradise[supreg]
Ultrasound RDN System would be reported with HCPCS codes shown in Table
50.
[GRAPHIC] [TIFF OMITTED] TP22JY24.064
To meet the cost criterion for device pass-through payment status,
a device must pass all three tests of the cost criterion for at least
one APC. As we explained in the CY 2005 OPPS final rule (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. Beginning in CY 2017, we calculate the
device offset amount at the HCPCS/CPT code level instead of the APC
level (81 FR 79657). We note the applicant used the CY 2023 payment
rates for the three tests of the cost criterion. For our calculations,
we
[[Page 59307]]
used APC 5192, which had a CY 2023 payment rate of $5,215.40 at the
time the application was received. We used the CY 2023 APC level device
offset amount of $1,491.08 for APC 5192, since HCPCS codes 0338T and
0339T were not included in Addendum P to the CY 2023 OPPS/ASC final
rule with comment period and no CY 2023 HCPCS/CPT code level device
offset amount was available at the time the application was
received.\25\ According to the applicant, the operating cost \26\ of
the Paradise[supreg] Ultrasound RDN System is $23,000.00.
---------------------------------------------------------------------------
\25\ The applicant stated as neither HCPCS code 0338T nor 0339T
had a device offset amount listed in Addendum P to the CY 2023 OPPS/
ASC final rule with comment period, it selected a device offset
amount of $0.00. However, for our calculation, we selected the CY
2023 APC level device offset amount of $1,491.08 for APC 5192 found
in CY 2023 NFRM OPPS APC Offset File, as no CY 2023 HCPCS/CPT code
level device offset amount was available at the time the application
was received. Based on our initial assessment for this proposed
rule, using the device offset amount of $1,491.08 would result in
Paradise[supreg] RDN meeting the cost significance requirement.
\26\ According to the applicant, the current total cost of the
Paradise[supreg] Ultrasound RDN System device is $23,235.00. For the
cost criteria estimates, the applicant submitted an operating cost
of $23,000.00 for the Paradise[supreg] Ultrasound RDN System device.
Per the applicant, the individual component costs are as follows:
Paradise[supreg] Remote (capital equipment) is $5.00;
Paradise[supreg] Cart (capital equipment) is $5.00; Paradise[supreg]
Generator (capital equipment) is $225.00; Paradise[supreg] RDN
Catheter Kit (one time use) is $22,000.00; Paradise RDN Cable (one
time use) is $250.00; and the Paradise[supreg] RDN Cartridge (one
time use) is $750.00.
---------------------------------------------------------------------------
Section 419.66(d)(1), the first cost significance requirement,
provides that the estimated average reasonable cost of devices in the
category must exceed 25 percent of the applicable APC payment amount
for the service related to the category of devices. The average
reasonable cost of $23,000.00 for the Paradise[supreg] Ultrasound RDN
System is 441.00 percent of the applicable APC payment amount for the
service related to the category of devices of $5,215.40 (($23,000.00/
$5,215.40) x 100 = 441.00 percent). Therefore, we believe the
Paradise[supreg] Ultrasound RDN System meets the first cost
significance requirement.
The second cost significance requirement, at Sec. 419.66(d)(2),
provides that the estimated average reasonable cost of the devices in
the category must exceed the cost of the device-related portion of the
APC payment amount for the related service by at least 25 percent,
which means that the device cost needs to be at least 125 percent of
the offset amount (the device-related portion of the APC found on the
offset list). The estimated average reasonable cost of $23,000.00 for
the Paradise[supreg] Ultrasound RDN System is 1,542.51 percent of the
cost of the device-related portion of the APC payment amount for the
related service of $1,491.08 (($23,000.00/$1,491.08) x 100 = 1,542.51
percent). Therefore, we believe that the Paradise[supreg] Ultrasound
RDN System meets the second cost significance requirement.
The third cost significance requirement, at Sec. 419.66(d)(3),
provides that the difference between the estimated average reasonable
cost of the devices in the category and the portion of the APC payment
amount for the device must exceed 10 percent of the APC payment amount
for the related service. The difference between the estimated average
reasonable cost of $23,000.00 for the Paradise[supreg] Ultrasound RDN
System and the portion of the APC payment amount for the device of
$1,491.08 is 412.41 percent of the APC payment amount for the related
service of $5,215.40 ((($23,000.00-$1,491.08)/$5,215.40) x 100 = 412.41
percent). Therefore, we believe that the Paradise[supreg] Ultrasound
RDN System meets the third cost significance requirement.
We are inviting public comment on whether the Paradise[supreg]
Ultrasound RDN System meets the device pass-through payment criteria
discussed in this section, including the cost criterion for device
pass-through payment status.
(h) Precision GI
Limaca Medical submitted an application for a new device category
for transitional pass-through payment status for Precision GI for CY
2025. According to the applicant, Precision GI is a motorized, battery
operated, single-use, fully disposable endoscopic ultrasound-guided
(EUS) fine needle biopsy device used to obtain biopsies of tissue for
definitive diagnosis of pancreatic cancer and other life-threatening GI
abnormalities. Per the applicant, Precision GI is untethered and
battery operated with an internally powered and controlled motor,
featuring a long flexible shaft transferring the proximal force of the
motor through the inserted endoscope to the needle circumferential
cutting tip. The device is controlled by a physician, who inserts the
device into the patient's gastrointestinal (GI) tract via the
ultrasound endoscope. Upon reaching the designated biopsy site, the
physician operates the device's motorized mechanism that automatically
rotates the needle (which is included in the device's package) to cut
and extract tissue. The biopsy site is accessed through the instrument
channel of an ultrasound imaging endoscope that detects the device's
echogenic needle tip.
Please refer to the online application posting for Precision GI,
available at https://mearis.cms.gov/public/publications/device-ptp/DEP23113023REE, for additional detail describing the device and the
disease treated by the device.
As stated previously, to be eligible for transitional pass-through
payment under the OPPS, a device must meet the criteria at Sec.
419.66(b)(1) through (4). With respect to the newness criterion at
Sec. 419.66(b)(1), Precision GI received FDA Breakthrough Device
designation effective March 24, 2022, as a device used with an
ultrasound endoscope for fine needle biopsy of submucosal lesions,
mediastinal masses, lymph nodes, and intraperitoneal masses within or
adjacent to the GI tract. FDA granted the applicant 510(k) clearance
for Precision GI on August 28, 2023, for the indication covered by the
Breakthrough Device designation. We received the application for a new
device category for transitional pass-through payment status for
Precision GI on November 30, 2023, which is within three years of the
date of the initial FDA marketing authorization.
We are inviting public comments on whether Precision GI meets the
newness criterion at Sec. 419.66(b)(1).
With respect to the eligibility criteria at Sec. 419.66(b)(3), the
device must be an integral part of the service furnished used for one
patient only, come in contact with human tissue, and be surgically
inserted or implanted, or applied in or on a wound or other skin
lesion. The applicant did not indicate whether Precision GI is an
integral part of the service furnished. The applicant stated that the
device is intended for single-use. While the applicant did not
explicitly state whether Precision GI comes in contact with human
tissue and is surgically inserted or implanted, the applicant noted
that Precision GI is used to sample targeted submucosal lesions,
mediastinal masses, lymph nodes, and intraperitoneal masses within or
adjacent to the GI tract and this is achieved by a physician who
inserts Precision GI into the patient's GI tract using an ultrasound
endoscope. However, we note that, while the needle (which is a
component of the device and is included in the device's package) does
come into contact with human tissue and is surgically inserted, the
motorized mechanism of the Precision GI device itself may not come in
contact with human tissue and may not be surgically implanted or
inserted (either permanently or temporarily), or applied in or on a
wound or other skin lesion, as required at Sec. 419.66(b)(3).
[[Page 59308]]
We are inviting public comments on whether Precision GI meets the
eligibility criterion at Sec. 419.66(b)(3).
With respect to the exclusion criterion at 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). The applicant indicated that Precision GI is equipment,
an instrument, apparatus, implement, or item of this type for which
depreciation and financing expenses are recovered as depreciation
assets, the applicant noted that Precision GI is a motorized, single-
use, fully disposable EUS fine needle biopsy device that functions with
no related capital component. The applicant stated that Precision GI is
not a material or supply furnished incident. However, based on the
description of the device as a biopsy device, we question whether
Precision GI may be considered a supply or material furnished incident
to a service and excluded from device pass-through payment eligibility
under Sec. 419.66(b)(4).
Specifically, in the CY 2001 OPPS interim final rule with comment
period (65 FR 67804 through 67805), we explained how we interpreted
Sec. 419.43(e)(4)(iv). We stated that we consider a device to be
surgically implanted or inserted if it is introduced into the human
body through a surgically created incision. We also stated that we do
not consider an item used to cut or otherwise create a surgical opening
to be a device that is surgically implanted or inserted. We consider
items used to create incisions, such as scalpels, electrocautery units,
biopsy apparatuses, or other commonly used operating room instruments,
to be supplies or capital equipment not eligible for transitional pass-
through payments. We stated that we believe the function of these items
is different and distinct from that of devices that are used for
surgical implantation or insertion. Finally, we stated that, generally,
we would expect that surgical implantation or insertion of a device
occurs after the surgeon uses certain primary tools, supplies, or
instruments to create the surgical path or site for implanting the
device. Further, in the CY 2006 OPPS final rule with comment period (70
FR, 68629 through 68630), we adopted as final our interpretation that
the surgical insertion or implantation criterion can be met by devices
that are surgically inserted or implanted via a natural or surgically
created orifice, as well as those devices that are inserted or
implanted via a surgically created incision. We reiterated that we
maintain all of the other criteria in Sec. 419.66 of the regulations,
namely, that we do not consider an item used to cut or otherwise create
a surgical opening to be a device that is surgically implanted or
inserted. We reiterated this interpretation in the CY 2024 OPPS final
rule (88 FR 81543, 81743).
We note that Precision GI, is inserted into the patient's GI tract
via the ultrasound endoscope to reach the designated biopsy site where
the device's motorized mechanism is then used for cutting and
extraction of tissue endoscopically from within or adjacent to the
patient's GI tract. However, we question whether Precision GI, which is
described as a biopsy device, may be considered a supply or material
furnished incident to a service consistent with our previous
interpretation of Sec. 419.43(e)(4)(iv) and therefore excluded from
device pass-through payment eligibility under Sec. 419.66(b)(4).
We welcome additional evidence regarding whether Precision GI
should be considered a material or supply incident to a service based
on our previous interpretation of Sec. 419.43(e)(4)(iv) as it has been
applied to biopsy devices and we invite public comments on whether
Precision GI meets the exclusion criterion at Sec. 419.66(b)(4).
In addition to the criteria at Sec. 419.66(b)(1) through (4), the
criteria for establishing new device categories are specified at Sec.
419.66(c). The first criterion, at Sec. 419.66(c)(1), provides that
CMS determines that a device to be included in the category is not
appropriately described by any of the existing categories or by any
category previously in effect, and was not being paid for as an
outpatient service as of December 31, 1996. The applicant asserted that
Precision GI is authorized by FDA with an indication to sample targeted
submucosal lesions, mediastinal masses, lymph nodes, and
intraperitoneal masses within or adjacent to the gastrointestinal
tract. Per the applicant, the device category C1830 (Powered bone
marrow biopsy needle) does not appropriately describe Precision GI
because Precision GI is not targeting the bone marrow and instead is
targeting sub[hyphen]mucosal and extramural gastrointestinal lesions.
According to the applicant, another device category C1782 (Morcellator)
does not appropriately describe Precision GI because that device
category, per Medicare Claims Processing Manual, Ch. 4, Sec. 60.4.3,
is only for laparoscopic procedures. The applicant added that Precision
GI cuts and extracts tissue endoscopically, not laparoscopically.
We have not identified an existing pass-through payment category
that describes Precision GI. We are inviting public comment on whether
Precision GI meets the device category criterion at Sec. 419.66(c)(1).
The second criterion for establishing a device category, at Sec.
419.66(c)(2), provides that CMS determines either of the following: (i)
that a device to be included in the category has demonstrated that it
will substantially improve the diagnosis or treatment of an illness or
injury or improve the functioning of a malformed body part compared to
the benefits of a device or devices in a previously established
category or other available treatment; or (ii) for devices for which
pass-through status will begin on or after January 1, 2020, as an
alternative to the substantial clinical improvement criterion, the
device is part of the FDA's Breakthrough Devices Program and has
received FDA marketing authorization for the indication covered by the
Breakthrough Device designation. Precision GI has a Breakthrough Device
designation and marketing authorization from FDA for the indication
covered by the Breakthrough Device designation (as explained in more
detail in the discussion of the newness criterion) and therefore is not
evaluated for substantial clinical improvement.
We are inviting public comment on whether the Precision GI meets
the device category criterion at Sec. 419.66(c)(2)(ii). 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 Precision GI would
be reported with HCPCS codes as shown in Table 51.
[[Page 59309]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.065
To meet the cost criterion for device pass-through payment status,
a device must pass all three tests of the cost criterion for at least
one APC. As we explained in the CY 2005 OPPS final rule (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. Beginning in CY 2017, we calculate the
device offset amount at the HCPCS/CPT code level instead of the APC
level (81 FR 79657). We note the applicant utilized the CY 2024 payment
rates for the three tests of the cost criterion. For our calculations,
we used APC 5302, which had a CY 2024 payment rate of $1,812.99 at the
time the application was received. HCPCS code 43242 in APC 5302 had a
CY 2024 device offset amount of $23.75 at the time the application was
received.\27\ According to the applicant, the cost of Precision GI is
$1,400.00.
---------------------------------------------------------------------------
\27\ We note that the applicant selected the APC payment rate of
$1,814.88 and the APC level device offset amount of $178.95 for APC
5302. However, the values selected are inconsistent with the APC
payment rate and the APC level device offset amount found in CY 2024
OPPS APC Offset File, which were corrected as described in the CY
2024 OPPS/ASC final rule with comment period correction (89 FR
9002). The HCPCS/CPT code level device offset amounts for the HCPCS/
CPT codes provided by the applicant are available in the corrected
Addendum P to the CY 2024 OPPS/ASC final rule with comment period.
For our calculation, we selected the APC payment rate of $1,812.99
and the HCPCS/CPT code level device offset amount of $23.75 related
to HCPCS 43242 in APC 5302 found in the corrected Addendum P, which
are the accurate values for these codes. Based on our initial
assessment for this proposed rule, using the APC payment rate of
$1,812.99 and the device offset amount of $23.75 would result in
Precision GI meeting the cost significance requirement.
---------------------------------------------------------------------------
Section 419.66(d)(1), the first cost significance requirement,
provides that the estimated average reasonable cost of devices in the
category must exceed 25 percent of the applicable APC payment amount
for the service related to the category of devices. The average
reasonable cost of $1,400.00 for Precision GI is 77.22 percent of the
applicable APC payment amount for the service related to the category
of devices of $1,812.99 (($1,400.00/$1,812.99) x 100 = 77.22 percent).
Therefore, we believe Precision GI 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 estimated average reasonable cost of $1,400.00
for Precision GI is 5894.74 percent of the cost of the device-related
portion of the APC payment amount for the related service of $23.75
(($1,400.00/$23.75) x 100 = 5894.74 percent). Therefore, we believe
that Precision GI meets the second cost significance requirement.
The third cost significance requirement, at Sec. 419.66(d)(3),
provides that the difference between the estimated average reasonable
cost of the devices in the category and the portion of the APC payment
amount for the device must exceed 10 percent of the APC payment amount
for the related service. The difference between the estimated average
reasonable cost of $1,400.00 for Precision GI and the portion of the
APC payment amount for the device of $23.75 is 75.91 percent of the APC
payment amount for the related service of $1,812.99 ((($1,400-$23.75)/
$1,812.99) x 100 = 75.91 percent). Therefore, we believe that Precision
GI meets the third cost significance requirement.
We are inviting public comment on whether Precision GI meets the
device pass-through payment criteria discussed in this section,
including the cost criterion for device pass-through payment status.
(i) PulseSelectTM Pulsed Field Ablation (PFA) System
Medtronic, Inc. submitted an application for a new device category
for transitional pass-through payment status for the
PulseSelectTM PFA System for CY 2025. Per the applicant, the
PulseSelectTM PFA System is used to perform pulmonary vein
isolation (PVI) via cardiac catheter ablation to treat atrial
fibrillation. According to the applicant, unlike existing methods that
rely on thermal energy (either radiofrequency or cryoablation), the
PulseSelectTM PFA System uses non-thermal irreversible
electroporation (IRE) to induce cardiac tissue cell death. The pulsed
field ablation, or IRE for PVI during cardiac catheter ablation, is
performed as a percutaneous, transvenous procedure under imaging
guidance. The applicant stated the PulseSelectTM PFA System
consists of three elements: (1) the PulseSelectTM PFA Loop
Catheter (Loop Catheter), a one-time use, steerable, multi-electrode
loop catheter used to deliver IRE in pulmonary vein isolation as a
treatment for atrial fibrillation; (2) the PulseSelectTM PFA
Catheter Interface Cable (Catheter Interface Cable), a one-time use
interface cable used to connect the Loop Catheter to the
PulseSelectTM
[[Page 59310]]
PFA Generator system; and (3) the PulseSelectTM PFA
Generator system (Generator system) used to deliver IRE in pulmonary
vein isolation as a treatment for atrial fibrillation.
Please refer to the online application posting for the
PulseSelectTM PFA System, available at https://mearis.cms.gov/public/publications/device-ptp/DEP240228J1461, for
additional detail describing the device and the disease treated by the
device.
As stated previously, to be eligible for transitional pass-through
payment under the OPPS, a device must meet the criteria at Sec.
419.66(b)(1) through (4). With respect to the newness criterion at
Sec. 419.66(b)(1), the PulseSelectTM PFA System received
FDA Breakthrough Device designation effective September 27, 2018, for
the treatment of drug refractory recurrent symptomatic atrial
fibrillation. The Medtronic multi-electrode cardiac ablation catheter
(which is now known as PulseSelectTM) is also intended to be
used for cardiac electrophysiological (EP) mapping and measuring of
intracardiac electrograms, delivery of diagnostic pacing stimuli, and
verifying electrical isolation post-treatment. FDA approved the
premarket approval application (PMA) for the PulseSelectTM
PFA System on December 13, 2023, for the indication covered by the
Breakthrough Device designation. We received the application for a new
device category for transitional pass-through payment status for the
PulseSelectTM PFA System on February 28, 2024, which is
within three years of the date of the initial FDA marketing
authorization.
We are inviting public comments on whether the
PulseSelectTM PFA System meets the newness criterion at
Sec. 419.66(b)(1).
With respect to the eligibility criterion at Sec. 419.66(b)(3),
the device must be an integral part of the service furnished, used for
one patient only, come in contact with human tissue, and be surgically
inserted or implanted, or applied in or on a wound or other skin
lesion. The applicant did not indicate whether the
PulseSelectTM PFA System is integral to the service
furnished. Per the applicant, the Loop Catheter and Catheter Interface
Cable components are single-use. While the applicant did not explicitly
state whether any of the device components come in contact with human
tissue, based on the device description, the procedure with which the
PulseSelectTM PFA System Loop Catheter is used is performed
percutaneously (i.e., passing through the skin) and transvenously
(i.e., through or across a vein) using the Loop Catheter to achieve
ablation in the targeted areas. However, neither the Generator system
nor the Catheter Interface Cable which is used to connect the Loop
Catheter to the Generator system appear to come in contact with the
patient's tissue, be surgically implanted or inserted, or applied in or
on a wound or other skin lesion, as required by Sec. 419.66(b)(3) and
therefore, we do not believe that either component is eligible for
device pass-through payments. We discuss the Catheter Interface Cable
in more detail in the following criteria discussions.
We are inviting public comments on whether the
PulseSelectTM PFA System meets the eligibility criterion at
Sec. 419.66(b)(3).
With respect to the exclusion criterion at 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). The applicant did not indicate whether the Loop Catheter
and the Catheter Interface Cable are equipment, an instrument,
apparatus, implement, or item of this type for which depreciation and
financing expenses are recovered or a material or supply furnished
incident to a service. However, we note that in the application for a
new device category for transitional pass-through payment status for CY
2025, the applicant stated that the Catheter Interface Cable is a one-
time use cable that cannot be reprocessed. This assertion appears
contrary to the information provided to CMS by the applicant in their
application submission for FY 2025 IPPS new technology add-on payment
under the name ``PulseSelectTM Pulsed Field Ablation (PFA)
Loop Catheter'' (https://mearis.cms.gov/public/publications/ntap/NTP231017BMQKQ). Specifically, in the FY 2025 IPPS/LTCH PPS proposed
rule, CMS noted that the applicant stated that the
PulseSelectTM PFA Interface Cable is a component of the
PulseSelectTM PFA Generator Reusable Accessories. Further,
CMS explained that the new technology add-on payment application is for
the PulseSelectTM PFA Loop Catheter (as opposed to the
PulseSelectTM PFA System) and that the applicant had
specified in its application that the PulseSelectTM PFA
Generator System is not the subject of this new technology add-on
payment application (89 FR 36124). Therefore, we stated that we believe
the total cost should be based only on the cost of the
PulseSelectTM PFA Loop Catheter.
In contrast to the new technology add-on payment application, the
application for a new device category for transitional pass-through
payment status is for the PulseSelectTM PFA System, which
includes the PulseSelect\TM\ PFA Generator system. The
PulseSelectTM PFA Interface Cable is listed as a component
of the PulseSelectTM PFA Generator System, which the
applicant described as capital equipment in its new technology add-on
payment application. We therefore believe the PulseSelectTM
PFA Generator System, including the Catheter Interface Cable, is an
item for which depreciation and financing expenses are recovered as
depreciation assets and thus, is ineligible for device pass-through
payment under Sec. 419.66(b)(4).
We are inviting public comments on whether the
PulseSelectTM PFA System meets the exclusion criterion at
Sec. 419.66(b)(4).
In addition to the criteria at Sec. 419.66(b)(1) through (4), the
criteria for establishing new device categories are specified at Sec.
419.66(c). The first criterion, at Sec. 419.66(c)(1), provides that
CMS determines that a device to be included in the category is not
appropriately described by any of the existing categories or by any
category previously in effect, and was not being paid for as an
outpatient service as of December 31, 1996. The applicant asserted that
the PulseSelectTM PFA System is the only device authorized
by FDA with an indication for cardiac electrophysiological mapping
(stimulation and recording) and for treatment of drug refractory,
recurrent, symptomatic paroxysmal atrial fibrillation or persistent
atrial fibrillation (episode duration less than 1 year) through the use
of IRE. According to the applicant, no previous or existing device
categories for pass-through payment appropriately describe the
PulseSelectTM PFA System. Per the applicant, device
categories C2630 (Catheter, electrophysiology, diagnostic/ablation,
other than 3D or vector mapping, cool-tip) and C1733 (Catheter,
electrophysiology, diagnostic/ablation, other than 3D or vector
mapping, other than cool-tip) do not appropriately describe the
PulseSelectTM PFA System because, unlike cardiac catheter
ablation technologies using thermal energy where options are either
heat (radiofrequency) or cold (cryoablation), the
PulseSelectTM PFA System uses non-thermal IRE to elicit
targeted
[[Page 59311]]
cardiac tissue cell death. The applicant stated that the
PulseSelectTM PFA System's non-thermal IRE mechanism of
action avoids many risks present in thermal cardiac catheter ablation
technologies.
We note that, based on the description the applicant provided, the
PulseSelectTM PFA System is used to achieve catheter
ablation to treat atrial fibrillation, and thus could be appropriately
described by C1733. Specifically, we believe that C1733 may
appropriately describe the PulseSelectTM PFA System because
it includes a catheter used for ablation of tissue without a cool-tip.
Further, C1733 does not specify the modality needed to deliver the
ablation, whether thermal or by electroporation. In this context, we
believe the PulseSelectTM PFA System may be similar to the
devices described by C1733, and therefore, the PulseSelectTM
PFA System may also be appropriately described by C1733.
We are inviting public comment on whether the
PulseSelectTM PFA System meets the device category criterion
at Sec. 419.66(c)(1).
The second criterion for establishing a device category, at Sec.
419.66(c)(2), provides that CMS determines either of the following: (i)
that a device to be included in the category has demonstrated that it
will substantially improve the diagnosis or treatment of an illness or
injury or improve the functioning of a malformed body part compared to
the benefits of a device or devices in a previously established
category or other available treatment; or (ii) for devices for which
pass-through status will begin on or after January 1, 2020, as an
alternative to the substantial clinical improvement criterion, the
device is part of the FDA's Breakthrough Devices Program and has
received FDA marketing authorization for the indication covered by the
Breakthrough Device designation. The PulseSelectTM PFA
System has a Breakthrough Device designation and marketing
authorization from FDA for the indication covered by the Breakthrough
Device designation (as explained in the discussion of the newness
criterion) and therefore is not evaluated for substantial clinical
improvement.
We are inviting public comment on whether the
PulseSelectTM PFA System meets the device category criterion
at Sec. 419.66(c)(2)(ii).
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
PulseSelectTM PFA System would be reported with the HCPCS
code shown in Table 52.
[GRAPHIC] [TIFF OMITTED] TP22JY24.066
To meet the cost criterion for device pass-through payment status,
a device must pass all three tests of the cost criterion for at least
one APC. As we explained in the CY 2005 OPPS final rule (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. Beginning in CY 2017, we calculate the
device offset amount at the HCPCS/CPT code level instead of the APC
level (81 FR 79657). We note that the applicant utilized the CY 2024
payment rates for the three tests of the cost criterion. For our
calculations, we used APC 5213, which had a CY 2024 payment rate of
$22,629.19 at the time the application was received. HCPCS code 93656
in APC 5213 had a CY 2024 device offset amount of $11,251.23 at the
time the application was received.
According to the applicant, the cost of the one-time use Loop
Catheter is $9,750.00. We note the applicant included the cost of the
Loop Catheter ($9,750.00) and the cost of the Catheter Interface Cable
($800.00) in the cost significance tests, totaling the cost of the
device as $10,550.00. However, as previously discussed, we believe that
the PulseSelectTM PFA Generator System, including the
PulseSelectTM PFA Catheter Interface Cable, is capital
equipment and therefore not eligible for device pass-through status
payment. As such we removed the cost of Catheter Interface Cable in our
calculations and only included the cost of the Loop Catheter, which
changed the total device cost from $10,550.00 to $9,750.00; we have
used $9,750.00 to perform the cost significance tests. We further note
that the decision to exclude the cost of the Catheter Interface Cable
($800.00) in the cost significance tests did not change the outcome of
the cost significance criterion determinations.
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 average
reasonable cost of $9,750.00 for the PulseSelectTM PFA
System is 43.09 percent of the applicable APC payment amount for the
service related to the category of devices of $22,629.19 (($9,750.00/
$22,629.19) x 100 = 43.09 percent). Therefore, we believe the
[[Page 59312]]
PulseSelectTM PFA System meets the first cost significance
requirement.
The second cost significance requirement, at Sec. 419.66(d)(2),
provides that the estimated average reasonable cost of the devices in
the category must exceed the cost of the device-related portion of the
APC payment amount for the related service by at least 25 percent,
which means that the device cost needs to be at least 125 percent of
the offset amount (the device-related portion of the APC found on the
offset list). The estimated average reasonable cost of $9,750.00 for
the PulseSelectTM PFA System is 86.66 percent of the cost of
the device-related portion of the APC payment amount for the related
service of $11,251.23 (($9,750.00/$11,251.23) x 100 = 86.66 percent).
Therefore, we believe that the PulseSelectTM PFA System does
not meet 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 $9,750.00 for the PulseSelectTM PFA
System and the portion of the APC payment amount for the device of
$11,251.23 is negative 6.63 percent of the APC payment amount for the
related service of $22,629.19 ((($9,750.00-$11,251.23)/$22,629.19) x
100 = -6.63 percent). Therefore, we believe that the
PulseSelectTM PFA System does not meet the third cost
significance requirement.
We are inviting public comment on whether the
PulseSelectTM PFA System meets the device pass-through
payment criteria discussed in this section, including the cost
criterion for device pass-through payment status.
(j) Symplicity Spyral\TM\ Renal Denervation (RDN) System
Medtronic submitted an application for a new device category for
transitional pass-through payment status for the Symplicity
SpyralTM RDN System, for CY 2025. The applicant is only
seeking a new device category for transitional pass-through payment
status for the Symplicity SpyralTM Multi-Electrode RDN
Catheter (hereinafter Symplicity SpyralTM Catheter) the
Symplicity SpyralTM RDN System. According to the applicant,
the Symplicity SpyralTM RDN System consists of the
Symplicity SpyralTM Catheter and the Symplicity
G3TM generator; the applicant requested device pass-through
status for the catheter component of the system only. The applicant
further explained that the Symplicity Spyral\TM\ RDN System is
indicated to reduce blood pressure as an adjunctive treatment in
hypertension patients in whom lifestyle modifications and
antihypertensive medications do not adequately control blood pressure.
Per the applicant, the Symplicity Spyral\TM\ Catheter, when used with
the Symplicity G3\TM\ generator, delivers radiofrequency (RF) energy
through the wall of the renal artery to disrupt the surrounding renal
nerves with the aim of modulating or suppressing sympathetic nerve
hyperactivity. According to the applicant, the Symplicity Spyral\TM\
Catheter is a single-use catheter used to deliver multiple ablations in
both kidneys, in the renal main, accessory, and branch arteries, based
on a patient's artery anatomy and size.
Per the applicant, the Symplicity Spyral\TM\ Catheter is designed
to be used with the Symplicity G3\TM\ generator and includes the
following components: (1) 4 gold radiopaque electrodes at the spiral
(helical) distal end that are deployed into a spiral (helical) shape by
partially retracting the guidewire proximal to the spiral section of
the catheter; (2) self-expanding electrode array assembly which
radially spaces the four gold electrodes for quadratic ablation; (3)
rapid exchange port; (4) straightening tool intended to facilitate safe
insertion of the guidewire into the catheter; (5) cable connector
attached to the catheter handle that connects the catheter to the
generator; (6) catheter handle; and (7) femoral marker. Per the
applicant, additional components of the Symplicity SpyralTM
RDN System include the: (1) Symplicity G3\TM\ generator, which is only
compatible with the Symplicity SpyralTM Catheter, which
includes a remote control, power cable, and output for the Symplicity
SpyralTM Catheter; (2) Symplicity G3\TM\ generator cart, an
optional mobile cart; and (3) foot switch, an optional component. Per
the applicant, additional items required for the procedure include: (1)
a 0.36 mm (0.014 in) guidewire, preferably without hydrophilic coating;
(2) a dispersive electrode; (3) a sterile bag to cover the remote
control if used in the sterile field; (4) a 6 French (Fr) guide-
catheter; (5) an introducer sheath; (6) a stopcock sidearm; (7) a
Tuohy-Borst adapter; and (8) other standard items used to aid
percutaneous transluminal catheterization in renal arteries.
According to information submitted by the applicant, key steps for
operating the Symplicity SpyralTM Catheter include: (1)
connecting the Symplicity SpyralTM Catheter to the
Symplicity G3TM generator; (2) inserting the Symplicity
SpyralTM Catheter through a small femoral incision and
guiding it to the renal artery via the abdominal aorta; (3) advancing
the Symplicity SpyralTM Catheter until the distal electrode
is located in the desired position within the renal artery; (4)
retracting the guidewire, allowing the self-expanding catheter to
expand and fit the renal arterial vessel walls; (5) delivering the
treatment of RF energy to ablate the renal nerves through the
activation of the catheter electrodes, which is controlled using the
generator; (6) if treating another vessel, repositioning the guide
catheter within the next vessel and repeating the procedure for
positioning the catheter and delivering treatments; (7) upon completion
of all treatments, straightening the distal end by advancing the
guidewire and withdrawing both the guidewire and the straightened
catheter from the guide catheter; (8) retracting the guide catheter
from the sheath and removing the introducer sheath from the artery; (9)
using standard of care procedures to achieve hemostasis at the puncture
site; and (10) disposing of the devices.
Please refer to the online application posting for the Symplicity
SpyralTM RDN System, available at https://mearis.cms.gov/public/publications/device-ptp/DEP231130WPU4J, for additional detail
describing the device and the disease treated by the device.
As stated previously, to be eligible for transitional pass-through
payment under the OPPS, a device must meet the criteria at Sec.
419.66(b)(1) through (4). With respect to the newness criterion at
Sec. 419.66(b)(1), the Symplicity SpyralTM RDN System
received FDA Breakthrough Device designation effective March 27, 2020,
as a device with the following indicated use: the Symplicity Spyral
multi-electrode renal denervation catheter and the Symplicity G3 RF
Generator are indicated for the reduction of blood pressure in patients
with uncontrolled hypertension despite the use of anti-hypertensive
medications or in patients who may have documented intolerance to anti-
hypertensive medications. FDA approved the premarket approval
application (PMA) for the Symplicity Spyral\TM\ RDN System on November
17, 2023, for the indicated use to reduce blood pressure as an
adjunctive treatment in patients with hypertension in whom lifestyle
modifications and antihypertensive medications do not adequately
control blood pressure. We received the application for a new device
category for transitional pass-
[[Page 59313]]
through payment status for the Symplicity Spyral\TM\ Catheter on
November 30, 2023, which is within 3 years of the date of the initial
FDA marketing authorization.
We are inviting public comments on whether the Symplicity
Spyral\TM\ Catheter meets the newness criterion at Sec. 419.66(b)(1).
With respect to the eligibility criteria at Sec. 419.66(b)(3), the
device must be an integral part of the service furnished, used for one
patient only, come in contact with human tissue, and be surgically
inserted or implanted, or applied in or on a wound or other skin
lesion. The applicant did not indicate whether the Symplicity
SpyralTM Catheter is integral to the service furnished. Per
the applicant, the Symplicity SpyralTM Catheter is intended
for single patient use only. While the applicant did not explicitly
state whether the Symplicity SpyralTM Catheter comes into
contact with human tissue, the applicant asserted that the
SymplicityTM Catheter ablates renal nerve tissue by
positioning the catheter within the renal artery, which expands and
fits the renal arterial vessel walls. While the applicant did not
explicitly state if the Symplicity SpyralTM Catheter is
surgically inserted or implanted, per the device description, the
Symplicity SpyralTM Catheter is inserted through a small
femoral incision, after which it is inserted into the renal arterial
vessel.
We are inviting public comments on whether the Symplicity
SpyralTMCatheter meets the eligibility criterion at Sec.
419.66(b)(3).
With respect to the exclusion criterion at 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). The applicant did not state whether the Symplicity
SpyralTM Catheter is equipment, an instrument, apparatus,
implement, or item of this type for which depreciation and financing
expenses are recovered whether the Symplicity SpyralTM
Catheter is a supply or material furnished incident to a service.
We are inviting public comments on whether the Symplicity
SpyralTM Catheter meets the exclusion criterion at Sec.
419.66(b)(4).
In addition to the criteria at Sec. 419.66(b)(1) through (4), the
criteria for establishing new device categories are specified at Sec.
419.66(c). The first criterion, at Sec. 419.66(c)(1), provides that
CMS determines that a device to be included in the category is not
appropriately described by any of the existing categories or by any
category previously in effect, and was not being paid for as an
outpatient service as of December 31, 1996. According to the applicant,
the Symplicity SpyralTM Catheter is a single-use catheter
used to deliver multiple ablations in both kidneys, in the renal main,
accessory, and branch arteries, based on a patient's artery anatomy and
size. According to the applicant, no previous or existing device
categories for pass-through payment appropriately describe the
Symplicity SpyralTM Catheter. The applicant asserted that
two categories, C1886 (Catheter, extravascular tissue ablation, any
modality (insertable)) and C1888 (Catheter, ablation, noncardiac,
endovascular (implantable)), do not appropriately describe the
Symplicity SpyralTM Catheter. Per the applicant, C1886 does
not appropriately describe the Symplicity SpyralTM Catheter
because the Symplicity SpyralTM Catheter ablates renal nerve
tissue via an endovascular approach by positioning the catheter within
the renal artery and was created to describe devices that ablate
extravascular tissue (via an extravascular approach).\28\ According to
the applicant, C1888 does not appropriately describe the Symplicity
SpyralTM Catheter because the Symplicity SpyralTM
Catheter does not ablate or otherwise affect the blood vessel tissue
and was created to describe devices designed to occlude or obliterate
blood vessels.\29\
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\28\ The applicant referenced CY 2013 OPPS FR (77 FR 68352) and
Transmittal 2386, Change Request 7672 (Jan 13, 2012) to support
these assertions.
\29\ The applicant referenced the Medicare Claims Processing
Manual, Chapter 4, section 60.4.3 to support these assertions.
---------------------------------------------------------------------------
We have not identified an existing pass-through payment category
that describes the Symplicity SpyralTM Catheter. We are
inviting public comment on whether the Symplicity SpyralTM
Catheter meets the device category criterion at Sec. 419.66(c)(1).
We note that the applicant indicated the Symplicity
SpyralTM Catheter is not the only device authorized by FDA
with an indication for renal denervation to achieve reductions in blood
pressure. Paradise[supreg] Ultrasound RDN System, for which we also
received an application for transitional pass-through payments for CY
2025 as discussed in more detail in this proposed rule, is also
authorized by FDA with an indication for renal denervation using
ultrasound energy to achieve reductions in blood pressure. Per the
applicant, the Paradise[supreg] Ultrasound RDN System would also be
described by the applicant's proposed pass-through payment category:
Ablation catheter, renal nerve, via endovascular approach, any
modality. Accordingly, we note that while the Symplicity
SpyralTM Catheter device may have a different modality
(i.e., radiofrequency compared to ultrasound), the Symplicity
SpyralTM Catheter device may have a similar mechanism of
action to that of the Paradise[supreg] Ultrasound RDN System device. We
question whether the device descriptions provided in the respective
applications support establishing two modality specific pass-through
payment device categories or a single device category that would
encompass both RDN device modalities. We will address this question in
detail immediately following the full discussion of all other
applicable eligibility criteria for the Symplicity SpyralTM
RDN System application.
We are inviting public comment on whether Symplicity
SpyralTM Catheter meets the device category criterion at
Sec. 419.66(c)(1).
The second criterion for establishing a device category, at Sec.
419.66(c)(2), provides that CMS determines either of the following: (i)
that a device to be included in the category has demonstrated that it
will substantially improve the diagnosis or treatment of an illness or
injury or improve the functioning of a malformed body part compared to
the benefits of a device or devices in a previously established
category or other available treatment; or (ii) for devices for which
pass-through status will begin on or after January 1, 2020, as an
alternative to the substantial clinical improvement criterion, the
device is part of the FDA's Breakthrough Devices Program and has
received FDA marketing authorization for the indication covered by the
Breakthrough Device designation. As previously stated, the Symplicity
SpyralTM Catheter has Breakthrough Device designation and
marketing authorization from FDA for the indication covered by the
Breakthrough Device designation (as explained in more detail in the
discussion of the newness criterion) and therefore is not evaluated for
substantial clinical improvement.
We are inviting public comment on whether the Symplicity
SpyralTM Catheter meets the device category criterion at
Sec. 419.66(c)(2)(ii).
The third criterion for establishing a device category, at Sec.
419.66(c)(3),
[[Page 59314]]
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 Symplicity
SpyralTM Catheter would be reported with HCPCS codes shown
in Table 53.
[GRAPHIC] [TIFF OMITTED] TP22JY24.067
To meet the cost criterion for device pass-through payment status,
a device must pass all three tests of the cost criterion for at least
one APC. As we explained in the CY 2005 OPPS final rule (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. Beginning in CY 2017, we calculate the
device offset amount at the HCPCS/CPT code level instead of the APC
level (81 FR 79657). We note the applicant used the CY 2024 payment
rates for the three tests of the cost criterion. For our calculations,
we used APC 5192, which had a CY 2024 payment rate of $5,445.84 at the
time the application was received. HCPCS code 0339T in APC 5192 had a
CY 2024 device offset amount of $3,362.26 at the time the application
was received.\30\ According to the applicant, the cost of the
Symplicity SpyralTM Catheter is $16,000.00.
---------------------------------------------------------------------------
\30\ We note that the applicant selected the APC payment rate of
$5,451.51 and the HCPCS/CPT code level device offset amount of
$3,365.76 for HCPCS 0339T in APC 5192. However, the values selected
are inconsistent with the APC payment rate and the device offset
amount found in the corrected Addendum P to the CY 2024 OPPS/ASC
final rule with comment period. For our calculation, we selected the
APC payment rate of $5,445.84 and the HCPCS/CPT code level device
offset amount of $3,362.26 for HCPCS 0339T in APC 5192 found in the
corrected Addendum P, which are the accurate values for these codes.
Based on our initial assessment for this proposed rule, using the
APC payment rate of $5,445.84 and the HCPCS/CPT code level device
offset amount of $3,362.26 would result in Symplicity
SpyralTM Catheter meeting the cost significance
requirement.
---------------------------------------------------------------------------
Section 419.66(d)(1), the first cost significance requirement,
provides that the estimated average reasonable cost of devices in the
category must exceed 25 percent of the applicable APC payment amount
for the service related to the category of devices. The average
reasonable cost of $16,000.00 for the Symplicity SpyralTM
Catheter is 293.80 percent of the applicable APC payment amount for the
service related to the category of devices of $5,445.84 (($16,000.00/
$5,445.84) x 100 = 293.80 percent). Therefore, we believe the
Symplicity SpyralTM 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). The estimated average reasonable cost of $16,000.00 for
the Symplicity SpyralTM Catheter is 475.87 percent of the
cost of the device-related portion of the APC payment amount for the
related service of $3,362.26 (($16,000.00/$3,362.26) x
[[Page 59315]]
100 = 475.87 percent). Therefore, we believe that the Symplicity
SpyralTM 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 $16,000.00 for the Symplicity SpyralTM
Catheter and the portion of the APC payment amount for the device of
$3,362.26 is 232.06 percent of the APC payment amount for the related
service of $5,445.84 ((($16,000.00-$3,362.26)/$5,445.84) x 100 = 232.06
percent). Therefore, we believe that the Symplicity SpyralTM
Catheter meets the third cost significance requirement.
We are inviting public comment on whether the Symplicity
SpyralTM Catheter meets the device pass-through payment
criteria discussed in this section, including the cost criterion for
device pass-through payment status.
(k) Paradise[supreg] Ultrasound RDN System and the Symplicity
SpyralTM RDN System Device Category Code Establishment
As previously discussed, we received two applications, the
Paradise[supreg] Ultrasound RDN System and the Symplicity
SpyralTM RDN System (Symplicity SpyralTM
Catheter) for transitional device pass-through payments for CY 2025
that, per the applicants, are RDN devices that use an endovascular
approach to enter the renal arteries and ablate renal sympathetic
nerves to achieve reductions in blood pressure. We question whether the
information provided for each respective nominated device supports
establishing two modality specific device pass-through payment device
categories or establishing a single device category that would
encompass both RDN devices.
We note that the Paradise[supreg] Ultrasound RDN System and the
Symplicity SpyralTM RDN System are both authorized by FDA
for the indicated use to reduce blood pressure as an adjunctive
treatment in patients with hypertension in whom lifestyle modifications
and antihypertensive medications do not adequately control blood
pressure. In addition, based on the information provided in the
respective applications, it appears that the Paradise[supreg]
Ultrasound RDN System and the Symplicity SpyralTM RDN System
use the same procedure (renal sympathetic denervation, also called
renal sympathetic nerve ablation), treat the same disease
(hypertension) in the same patient population (patients in whom
lifestyle modifications and antihypertensive medications do not
adequately control blood pressure), and aim to achieve the same
therapeutic outcome (to reduce blood pressure), using the same or
similar mechanism of action (thermal ablation). We note that in
addition to having the same indicated use, per the applicants, both the
Paradise[supreg] Ultrasound RDN System and the Symplicity
SpyralTM RDN System may be used with the same HCPCS
procedure codes: 0338T \31\ or 0339T.\32\ In addition, the applicant
for the Symplicity SpyralTM RDN System asserted that the
Paradise[supreg] Ultrasound RDN System similarly generates heat to
ablate the same renal sympathetic nerves to achieve reductions in blood
pressure and this similarity supports establishing a single device
category that would encompass RDN devices regardless of the specified
modality.
---------------------------------------------------------------------------
\31\ HCPCS procedure code 0338T (Transcatheter renal sympathetic
denervation, percutaneous approach including arterial puncture,
selective catheter placement(s) renal artery(ies), fluoroscopy,
contrast injection(s), intraprocedural roadmapping and radiological
supervision and interpretation, including pressure gradient
measurements, flush aortogram and diagnostic renal angiography when
performed; unilateral).
\32\ HCPCS procedure code 0339T (Transcatheter renal sympathetic
denervation, percutaneous approach including arterial puncture,
selective catheter placement(s) renal artery(ies), fluoroscopy,
contrast injection(s), intraprocedural roadmapping and radiological
supervision and interpretation, including pressure gradient
measurements, flush aortogram and diagnostic renal angiography when
performed; bilateral).
---------------------------------------------------------------------------
Despite these similarities, the applicants have proposed different
device category descriptions. Based on the information submitted, it
appears that the device category proposed for the Paradise[supreg]
Ultrasound RDN System does not appropriately describe the Symplicity
SpyralTM RDN System, however, we believe the device category
proposed for the Symplicity SpyralTM RDN System would
appropriately describe the Paradise[supreg] Ultrasound RDN System.
Specifically, the applicant for the Paradise[supreg] Ultrasound RDN
System proposed the following device category: Catheter, intravascular
renal denervation, ultrasound, with balloon cooling; \33\ while the
applicant for the Symplicity SpyralTM RDN System proposed
the following device category: Ablation catheter, renal nerve, via
endovascular approach, any modality. The device category descriptor the
applicant proposed for the Paradise[supreg] Ultrasound RDN System
specifies the device's treatment or procedure (catheter renal
denervation), the ablation modality (i.e., ultrasound), and an
attribute of the catheter (i.e., the cooling balloon). We note that
while the device category descriptor the applicant proposed for the
Symplicity SpyralTM RDN System device also specifies the
device's treatment or procedure (catheter ablation of the renal
nerves), it does not specify an ablation modality or any additional
attributes of the catheter; rather, the proposed device category for
the Symplicity SpyralTM RDN System device more broadly
describes any ablation modality (e.g., radiofrequency or ultrasound).
---------------------------------------------------------------------------
\33\ The Paradise[supreg] Ultrasound RDN System device category
does not explicitly describe using an endovascular approach;
however, it does describe renal nerve ablation via a catheter. We
believe that the device category describes the intravascular
sonication (ultrasound treatment) delivered by the catheter. We note
that this proposed device description does not preclude an
endovascular approach, and that, per the applicant, the
Paradise[supreg] Ultrasound RDN system is a catheter-based
endovascular based system.
---------------------------------------------------------------------------
We note several differences in procedural technique with use of the
Paradise[supreg] Ultrasound RDN System device compared to the
Symplicity SpyralTM RDN System device. Per the applicants,
the Paradise[supreg] Ultrasound RDN System delivers ablation while
positioned in the main renal arteries only, whereas the Symplicity
SpyralTM RDN System may deliver ablation while positioned in
the main renal, accessory and branch arteries and therefore may require
advancing the catheter beyond the main renal arteries. According to the
applicants, the Paradise[supreg] Ultrasound RDN System procedural
technique requires the measurement of the main renal artery diameter to
select the appropriate size cooling balloon catheter, whereas the
Symplicity SpyralTM RDN System's one size catheter does not
require this measurement. Similarly, per the applicants, the
Paradise[supreg] Catheter's cooling balloon requires specific
procedural techniques to ensure the balloon is appropriately inflated
and deflated during the procedure, but the Symplicity
SpyralTM Catheter does not have this requirement.
Both the Paradise[supreg] Ultrasound RDN System and the Symplicity
SpyralTM RDN System received FDA Breakthrough Device
designation and marketing authorization from FDA for the indications
covered by the Breakthrough Device designation, and therefore, are not
evaluated for substantial clinical improvement. However, we note that
per the applicant of the Paradise[supreg] Ultrasound RDN System, a
separate device category
[[Page 59316]]
associated with ultrasound denervation is supported by possible
differences in clinical efficacy between RDN devices using ultrasound
and RDN devices using radiofrequency ablation. Specifically, the
applicant of the Paradise[supreg] Ultrasound RDN System asserted that,
when compared to radiofrequency RDN, on average ultrasound RDN requires
fewer ablations per patient (5.4 compared to 46.9), less time per
ablation (7 seconds compared to 60 seconds), less time for the total
procedure (72 minutes compared to 100 minutes), and less ablation depth
(1 to 6 mm compared to 2 to 3 mm). The applicant of the
Paradise[supreg] Ultrasound RDN System further stated that the
Paradise[supreg] Ultrasound RDN System circumferential (360 degrees)
emission per individual ablation and the lack of a requirement for
distal renal artery branch ablation to deliver the treatment are
technological features not shared by the radiofrequency RDN device.\34\
However, we note that we did not evaluate the validity or
generalizability of these claims nor is it is clear if the two
different ablation modalities (i.e., ultrasound and radiofrequency)
would render different clinical results in larger studies or in the
long term.35 36 We further note that we discuss these claims
here solely for the purpose of determining whether the information
provided supports establishing two modality-specific pass-through
payment device categories or establishing a single device category that
may encompass both RDN devices.
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\34\ See Application's Device Info tab, attachment, Procedural
Comparison Ultrasound RDN_11.21.2023.
\35\ Fengler K, Rommel K-P, Kriese W, et al. Research
Correspondence: 6- and 12-Month Follow-Up From a Randomized Clinical
Trial of Ultrasound vs Radiofrequency Renal Denervation (RADIOSOUND-
HTN). JACC: CARDIOVASCULAR INTERVENTIONS VOL. 16, NO. 3, 2023
Letters FEBRUARY 13, 2023:367-369.
\36\ Fengler K, Rommel K-P, Blazek S, et al. A three-arm
randomized trial of different renal denervation devices and
techniques in patients with resistant hypertension (RADIOSOUND-HTN).
Circulation. 2019;139:590-600.
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In seeking comment, we note that in accordance with section
1833(t)(6)(B)(ii)(II) of the Act, new categories must be established in
such a way that no medical device is described by more than one
category. We further note that CMS does not establish pass-through
device categories for the purposes of describing specific devices, but
rather, device categories which are intended to encompass all devices
that can be appropriately described by a category. However, there are
examples in which CMS has defined specific ablation modalities such as
high intensity ultrasound, microwave, and cryoablation in HCPCS codes
for use with the OPPS. In addition, we note the existence of several
modality specific tissue ablation procedure codes in the Current
Procedural Terminology (CPT[supreg]) 2024. However, there are examples
where CMS has established device categories with additional granularity
to differentiate similar devices with special characteristics (e.g.,
implantable neurostimulators). In addition, there are examples where
CMS has created HCPCS codes specifying the modality of ablation (e.g.,
ultrasound, microwave). Finally, we note as previously mentioned, 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). We question whether two modality-specific
device category codes may facilitate the collection of more accurate
data for incorporating the costs of these two devices into the
procedure APC rate as well as foster the tracking of efficacy data for
these two ablation modalities.
As such, we are inviting public comment on whether the device
descriptions provided in the Paradise[supreg] Ultrasound RDN System and
the Symplicity SpyralTM RDN System applications support
establishing two modality specific pass-through payment device
categories or a single device category that would encompass both RDN
device modalities.
(2) Traditional Device Pass-Through Applications
(a) Ambu[supreg] aScopeTM Gastro
Ambu Inc. submitted an application for a new device category for
transitional pass-through payment status for the Ambu[supreg]
aScopeTM Gastro for CY 2025. Per the applicant, the
Ambu[supreg] aScopeTM Gastro is a sterile, single-use,
flexible gastroscope intended to be used for: (1) endoscopic access to
and examination of the upper gastrointestinal (GI) anatomy; and (2)
upper GI endoscopy or esophagogastroduodenoscopy (EGD) to diagnose and
treat problems in the upper GI tract, including dysphagia,
gastroesophageal reflux disease, narrowing or blockages, esophageal
varices, inflammation, ulcers, tumors, hiatal hernia, Celiac disease,
Crohn's disease, and infections of the upper GI tract in adult
patients.
According to the applicant, the Ambu[supreg] aScopeTM
Gastro works with the Ambu[supreg] aBoxTM 2, a compatible,
reusable displaying unit. The Ambu[supreg] aScopeTM Gastro
endoscope is inserted into the upper GI anatomy airway through the
mouth, while the Ambu[supreg] aBoxTM 2 is a non-sterile
digital monitor intended to display live imaging data from Ambu
visualization devices. The applicant is only seeking a new device
category for transitional pass-through payment status for the
Ambu[supreg] aScopeTM Gastro.
Please refer to the online application posting for the Ambu[supreg]
aScopeTM Gastro, available at https://mearis.cms.gov/public/publications/device-ptp/DEP2305305795M, for additional detail
describing this device and the disease treated by the device.
As stated previously, to be eligible for transitional pass-through
payment under the OPPS, a device must meet the criteria at Sec.
419.66(b)(1) through (4). With respect to the newness criterion at
Sec. 419.66(b)(1), on February 3, 2022, the applicant received 510(k)
clearance from FDA for the Ambu[supreg] aScopeTM Gastro,
Ambu[supreg] aBoxTM 2, as a sterile, single-use, flexible
gastroscope intended to be used for endoscopic access to and
examination of the upper gastrointestinal anatomy. The Ambu[supreg]
aScopeTM Gastro is intended to provide visualization via a
compatible Ambu displaying unit and to be used with endotherapy
accessories and other ancillary equipment. We received the application
for a new device category for transitional pass-through payment status
for the Ambu[supreg] aScopeTM Gastro on May 30, 2023, which
is within three years of the date of the initial FDA marketing
authorization.
We are inviting public comments on whether Ambu[supreg]
aScopeTM Gastro meets the newness criterion at Sec.
419.66(b)(1).
With respect to the eligibility criteria at Sec. 419.66(b)(3), the
device must be an integral part of the service furnished, used for one
patient only, come in contact with human tissue, and be surgically
inserted or implanted, or applied in or on a wound or other skin
lesion. The applicant did not indicate whether the Ambu[supreg]
aScopeTM Gastro is integral to the service furnished. The
applicant stated that the device was single-use and is intended to be
used with one patient only. We note that the Ambu[supreg]
aScopeTM Gastro, based on the device description provided by
the applicant and the evidence provided in support of the substantial
clinical improvement as discussed in detail in the Sec. 419.66(c)(2)
analysis in this
[[Page 59317]]
application summary write-up, explicitly provides that the nominated
device is intended to be used on one patient, for a single procedure
and then disposed of. As such, we note that our evaluation and final
decision as it relates to this potential category of devices
(gastroscopes) will be based on the understanding that devices included
in this device category (gastroscopes) can only be used for a single
procedure, on a single patient, and cannot be reprocessed. While the
applicant did not explicitly state whether the device comes in contact
with human tissue or is surgically inserted, per the device
description, Ambu[supreg] aScopeTM Gastro is a flexible
gastroscope intended to be used for endoscopic access to and
examination of the upper GI anatomy.
We are inviting public comments on whether Ambu[supreg]
aScopeTM Gastro meets the eligibility criterion at Sec.
419.66(b)(3).
With respect to the exclusion criterion at 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). The applicant indicated that the Ambu[supreg]
aScopeTM Gastro is single-use equipment, not intended for
use in multiple patients, for which depreciation and financing expenses
are not recovered. The applicant explained that the Ambu[supreg]
aScopeTM Gastro is purely an operating cost and is not
subject to capitalization or a depreciation schedule.
We note that the applicant stated in the application that the
Ambu[supreg] aScopeTM Gastro is a supply furnished incident
to a service rendered, as described, Ambu[supreg] aScopeTM
Gastro would be considered a supply or material furnished incident to a
service and excluded from device pass-through payment eligibility under
Sec. 419.66(b)(4).
We are inviting public comments on whether the Ambu[supreg]
aScopeTM Gastro meets the exclusion criterion at Sec.
419.66(b)(4).
In addition to the criteria at Sec. 419.66(b)(1) through (4), the
criteria for establishing new device categories are specified at Sec.
419.66(c). The first criterion, at Sec. 419.66(c)(1), provides that
CMS determines that a device to be included in the category is not
appropriately described by any of the existing categories or by any
category previously in effect, and was not being paid for as an
outpatient service as of December 31, 1996. Per the applicant, the
Ambu[supreg] aScopeTM Gastro is a sterile, single-use,
flexible, imaging/illumination gastroscope device that uses an
integrated camera module and built-in dual light-emitting diode (LED)
illumination to provide access to, illumination, and imaging of the
upper GI anatomy for diagnostic and therapeutic purposes for a GI
patient. According to the applicant, no previous or existing device
categories for pass-through payment appropriately describe the
Ambu[supreg] aScopeTM Gastro. Per the applicant, the two
device categories, C1747 (Endoscope, single-use (i.e., disposable),
urinary tract, imaging/illumination device (insertable)) and C1748
(Endoscope, single-use (i.e., disposable), upper gastrointestinal tract
(GI), imaging/illumination device, (insertable)), do not appropriately
describe the Ambu[supreg] aScopeTM Gastro. Specifically, the
applicant asserted that the urinary tract scopes described in C1747 are
not indicated for use in the GI system and therefore, do not
appropriately describe Ambu[supreg] aScopeTM Gastro. The
applicant further asserted that while C1748 describes a single-use
endoscopic device, C1748 is only appropriate for single-use
duodenoscopes and endoscopic retrograde cholangiopancreatography (ERCP)
services. While the long descriptor of C1748 describes disposable
endoscopes with imaging and illumination capabilities intended for use
in the upper GI and the applicant describes the Ambu[supreg]
aScopeTM Gastro as a single-use, gastroscope with
illumination and imaging intended for use in the upper GI anatomy, we
note that C1748 only describes single-use duodenoscopes and ERCP
services. As such, Ambu[supreg] aScopeTM Gastro is not
described by C1748.
We have not identified an existing pass-through payment category
that describes Ambu[supreg] aScopeTM Gastro. We are inviting
public comment on whether the Ambu[supreg] aScopeTM Gastro
meets the device category criterion at Sec. 419.66(c)(1).
The second criterion for establishing a device category, at Sec.
419.66(c)(2), provides that CMS determines either of the following: (i)
that a device to be included in the category has demonstrated that it
will substantially improve the diagnosis or treatment of an illness or
injury or improve the functioning of a malformed body part compared to
the benefits of a device or devices in a previously established
category or other available treatment; or (ii) for devices for which
pass-through status will begin on or after January 1, 2020, as an
alternative to the substantial clinical improvement criterion, the
device is part of the FDA's Breakthrough Devices Program and has
received FDA marketing authorization for the indication covered by the
Breakthrough Device designation. The applicant claimed that
Ambu[supreg] aScopeTM Gastro represents a substantial
clinical improvement over existing technologies in the diagnosis and
management of endoscopic procedures and examination within the upper GI
anatomy. The applicant outlined the following areas in which it claimed
the Ambu[supreg] aScopeTM Gastro would provide a substantial
clinical improvement: (1) elimination of the risk of cross-
contamination between patients and scopes, (2) elimination of the risk
of cross-contamination for reusable gastroscopes, (3) elimination of
the risk of resistant infections that originate from reusable
gastroscopes, (4) avoidance of scope damage and debris after
reprocessing, (5) avoidance of damaged and contaminated scopes from
being used on patients, (6) elimination of the risk of patient-to-
patient infections associated with contaminated scopes, and (7)
avoidance of infection and death associated with reusable gastroscope
contamination.
The applicant provided seven background articles about reusable GI
endoscopes to support its claims. Table 54 summarizes the applicant's
assertions regarding the substantial clinical improvement criterion.
Please see the online posting for Ambu[supreg] aScopeTM
Gastro for the applicant's complete statements regarding the
substantial clinical improvement criterion and the supporting evidence
provided.
BILLING CODE 4120-01-P
[[Page 59318]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.068
[[Page 59319]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.069
BILLING CODE 4120-01-C
After review of the information provided by the applicant, we have
the following concerns regarding whether Ambu[supreg]
aScopeTM Gastro meets the substantial clinical improvement
criterion.
First, we note that the applicant identified 11 other devices that
it believed are most like the Ambu[supreg] aScopeTM Gastro:
(1) Olympus GIF-HQ 190; (2) Olympus GIF-1TH190; (3) Olympus GIF-H190;
(4) Olympus GIF-CP190N; (5) Fujifilm EG-760R; (6) Fujifilm EG-760CT;
(7) Fujifilm EG-
[[Page 59320]]
760Z; (8) Fujifilm EG-740N; (9) Pentax HD Video Gastroscope EG34 i10;
(10) Pentax MagniView EG 2990Zi; and (11) Pentax G EYE. According to
the applicant, these devices are used during the same specific
procedure(s) and/or services with which the nominated device is used.
The applicant stated that the nominated device's single-use feature is
unique among the comparators because its single-use feature eliminates
gastroscope reprocessing. The applicant also indicated that there are
no HCPCS Level I and/or Level II code(s) used to identify these
existing devices. While the evidence provided demonstrates that the
Ambu[supreg] aScopeTM Gastro may be different than the other
11 closely related devices, it does not provide any comparative data
that demonstrates that the Ambu[supreg] aScopeTM Gastro
offers a substantial clinical improvement when compared to the other 11
devices.
Second, we note that the nominated device was determined to be
substantially equivalent to a predicate device: OLYMPUS EVIS EXERA II
Gastrointestinal Videoscope GIF H180 (K100584). The FDA 510(k) summary
indicated that both devices share the same technological
characteristics such as insertion portion length, working channel
diameter, direction of view and bending angles. We note that the 510(k)
summary indicated that, unlike the predicate device, the Ambu[supreg]
aScopeTM Gastro is a sterile, single-use device and not
intended to be reprocessed. Again, while this demonstrates that the
Ambu[supreg] aScopeTM Gastro may be different than the
predicate device, it is unclear whether this difference demonstrates
substantial clinical improvement. No comparative data demonstrating
that the Ambu[supreg] aScopeTM Gastro provides a substantial
clinical improvement when compared to the OLYMPUS EVIS EXERA II
Gastrointestinal Videoscope GIF H180 was provided. We would be
interested in additional information to demonstrate whether the
nominated device demonstrates a substantial clinical benefit in
comparison to other existing devices.
Further, the applicant indicated that while other single-use
endoscopes are available, there are no known competitive devices on the
market that are single-use, transoral, and marketed in the U.S. The
applicant compared the Ambu[supreg] aScopeTM Gastro to the
following two existing devices: (1) EndoFresh Single-Use Gastroscope;
and (2) EvoEndo Model LE Single-Use Gastroscope. Specifically, the
applicant noted that although EndoFresh Single-Use Gastroscope is FDA-
cleared and a similar device that could also become eligible for
transitional pass-through payment under the proposed additional
category, it has no commercial activity in the U.S. According to the
applicant, while EvoEndo Model LE Single-Use Gastroscope is used during
the same specific procedure(s) and/or services as the Ambu[supreg]
aScopeTM Gastro, the Ambu[supreg] aScopeTM Gastro
is different from EvoEndo Model LE Single-Use Gastroscope because the
Ambu[supreg] aScopeTM Gastro is a transoral scope, not
transnasal. The applicant also indicated that there are no HCPCS Level
I and/or Level II code(s) used to identify EvoEndo Model LE Single-Use
Gastroscope. However, we note that EvoEndo Model LE Single-Use
Gastroscope is both transoral and transnasal, which is indicated on the
EvoEndo's website \37\ and on its FDA 510(k) \38\ clearance letter. We
also note that the applicant did not compare the Ambu[supreg]
aScopeTM Gastro to another single-use, FDA-cleared endoscope
available on the market--EXALT\TM\ Model D, Single-Use Duodenoscope
\39\--which we believe may be similar. We would be interested in
additional information to demonstrate whether the nominated device
demonstrates a substantial clinical improvement in comparison to
similar single-use competitive devices such as the EvoEndo Model LE
Single-Use Gastroscope and the EXALT\TM\ Model D, Single-Use
Duodenoscope.
---------------------------------------------------------------------------
\37\ EvoEndo[supreg] Model LE Single-Use Gastroscope and EvoEndo
Controller.
\38\ EvoEndo[supreg] Model LE Single-use Gastroscope is FDA
cleared and marketed under 510(k) since 2022 (FDA 510(k)) letter:
https://www.accessdata.fda.gov/cdrh_docs/pdf21/K213606.pdf). The
EvoEndo Model LE Gastroscope is intended for the visualization of
the upper digestive tract in adults and pediatric patients,
specifically for the observation, diagnosis, and endoscopic
treatment of the esophagus, stomach, and duodenal bulb in patients
over the age of five years. The gastroscope is a sterile single-use
device and can be inserted orally or transnasally.
\39\ EXALT\TM\ Model D, Single-Use Duodenoscope is FDA cleared
and marketed under 510(k) since 2019 (FDA 510(k)) letter: https://www.accessdata.fda.gov/cdrh_docs/pdf19/K193202.pdf). The EXALTTM
Model D, Single-Use Duodenoscope is intended for use with a Boston
Scientific endoscopic video imaging system, for endoscopy and
endoscopic surgery within the duodenum.
---------------------------------------------------------------------------
In addition, we note that the applicant's self-sponsored studies,
which are background articles by Muscarella, L.F. (2022),\40\
Muscarella, L.F. (2023),\41\ and Ofstead, et. al. (2022),\42\ lack
direct comparison of the nominated device to other devices, and do not
directly show any clinical improvement that results from the use of the
nominated device compared to the use of other devices. In order to
demonstrate substantial clinical improvement over currently available
treatments, we consider supporting evidence, preferably published peer-
reviewed clinical trials, that shows improved clinical outcomes, such
as reduction in mortality, complications, subsequent interventions,
future hospitalizations, recovery time, pain, or a more rapid
beneficial resolution of the disease process compared to the standard
of care. Additional supporting evidence, preferably published peer-
reviewed clinical trials, that shows these improved clinical outcomes
would help inform our assessment of whether the Ambu[supreg]
aScopeTM Gastro demonstrates substantial clinical
improvement over existing technologies.
---------------------------------------------------------------------------
\40\ Muscarella, L. F. (2022). Contamination of Flexible
Endoscopes and Associated Infections: A Comprehensive Review and
Analysis of FDA Adverse Event Reports. https://lfm-hcs.com/2022/01/contamination-of-flexible-endoscopes-and-associated-infections/.
\41\ Muscarella, L. F. (2023). Gastroscopes Have Been Linked to
A Cluster of Resistant E. coli Infections--Is the Risk Sufficiently
Recognized? https://lfm-hcs.com/2023/01/gastroscopes-have-been-linked-to-a-cluster-of-resistant-e-coli-infections-is-the-risk-sufficiently-recognized/.
\42\ Ofstead, C. L., Smart, A. G., Hopkins, K. M., & Wetzler, H.
P. (2023). The utility of lighted magnification and borescopes for
visual inspection of flexible endoscopes. American Journal of
Infection Control, 51(1), 2-10.
---------------------------------------------------------------------------
Moreover, while the details provided in the application and all the
articles submitted as evidence of substantial clinical improvement
discuss potential adverse events from reusable gastroscope procedures,
they do not appear to directly show any clinical improvement that
results from the use of the Ambu[supreg] aScopeTM Gastro.
Rather, the applicant provided evidence which seems to rely on indirect
inferences from other sources of data. Specifically, the applicant
included an FDA Manufacturer and User Facility Device Experience
(MAUDE) report \43\ which provides the details of multiple adverse
event reports associated with the contamination or suspected
contamination of reusable gastroscopes but does not directly show any
clinical improvement that results from the use of the Ambu[supreg]
aScopeTM Gastro.
---------------------------------------------------------------------------
\43\ MAUDE Adverse Event Report: AIZU OLYMPUS CO., LTD. EVIS
EXERA III GASTROINTESTINAL VIDEOSCOPE (fda.gov).
---------------------------------------------------------------------------
While the applicant claims that the Ambu[supreg]
aScopeTM Gastro eliminates cross-contamination associated
with reusable gastroscopes and eliminates the risk of infections that
originate from reusable gastroscopes, we do not believe that we have
sufficient information on the prevalence of infection to evaluate the
applicant's substantial clinical improvement claims for the
Ambu[supreg] aScopeTM Gastro. We note the
[[Page 59321]]
analyses 44 45 on adverse event reports and the FDA MAUDE
report \46\ appear to apply to flexible, reprocessed gastroscope or
endoscopes, broadly, but not to disposable, single-use devices
comparable to the nominated device. Therefore, we question the direct
relevance of these background articles to the nominated device and the
applicant's substantial clinical improvement claims. Further, we note
that many of the applicant's substantial clinical improvement claims
rely on an assumption that inadequate reprocessing of reusable
endoscopes is positively correlated with heightened risk of infection.
We note that the applicant's self-sponsored analyses of FDA adverse
event reports and studies 47 48 49 and the FDA MAUDE report
\50\ do not provide evidence on the prevalence of infection, establish
a clear relationship between infection risk and reprocessing
procedures, or substantiate that single-use disposable scopes, or the
nominated device specifically, would be a substantial clinical
improvement over currently available devices. We would be interested in
more information on the prevalence of infection due to incomplete/
inadequate processing for gastroscopes in the U.S. and whether single-
use gastroscopes reduce the infection rate in patients to identify the
extent of the problem with existing technologies.
---------------------------------------------------------------------------
\44\ Muscarella, L. F. (2022). Contamination of Flexible
Endoscopes and Associated Infections: A Comprehensive Review and
Analysis of FDA Adverse Event Reports. https://lfm-hcs.com/2022/01/contamination-of-flexible-endoscopes-and-associated-infections/.
\45\ Muscarella, L. F. (2023). Gastroscopes Have Been Linked to
A Cluster of Resistant E. coli Infections--Is the Risk Sufficiently
Recognized? https://lfm-hcs.com/2023/01/gastroscopes-have-been-linked-to-a-cluster-of-resistant-e-coli-infections-is-the-risk-sufficiently-recognized/.
\46\ MAUDE Adverse Event Report: AIZU OLYMPUS CO., LTD. EVIS
EXERA III GASTROINTESTINAL VIDEOSCOPE (fda.gov).
\47\ Muscarella, L. F. (2022). Contamination of Flexible
Endoscopes and Associated Infections: A Comprehensive Review and
Analysis of FDA Adverse Event Reports. https://lfm-hcs.com/2022/01/contamination-of-flexible-endoscopes-and-associated-infections/.
\48\ Muscarella, L. F. (2023). Gastroscopes Have Been Linked to
A Cluster of Resistant E. coli Infections--Is the Risk Sufficiently
Recognized? https://lfm-hcs.com/2023/01/gastroscopes-have-been-linked-to-a-cluster-of-resistant-e-coli-infections-is-the-risk-sufficiently-recognized/.
\49\ Ofstead, C. L., Smart, A. G., Hopkins, K. M., & Wetzler, H.
P. (2023). The utility of lighted magnification and borescopes for
visual inspection of flexible endoscopes. American Journal of
Infection Control, 51(1), 2-10.
\50\ MAUDE Adverse Event Report: AIZU OLYMPUS CO., LTD. EVIS
EXERA III GASTROINTESTINAL VIDEOSCOPE (fda.gov).
---------------------------------------------------------------------------
We are inviting public comment on whether Ambu[supreg]
aScopeTM Gastro meets the device category 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 Ambu[supreg]
aScopeTM Gastro would be reported with HCPCS codes shown in
Table 55.
BILLING CODE 4120-01-P
[[Page 59322]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.070
[[Page 59323]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.071
BILLING CODE 4120-01-C
To meet the cost criterion for device pass-through payment status,
a device must pass all three tests of the cost criterion for at least
one APC. As we explained in the CY 2005 OPPS final rule (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. Beginning in CY 2017, we calculate the
device offset amount at the HCPCS/CPT code level instead of the APC
level (81 FR 79657).
[[Page 59324]]
We note the applicant used the CY 2023 payment rates for the three
tests of the cost criterion. For our calculations, we used APC 5301,
which had a CY 2023 payment rate of $825.51 at the time the application
was received. HCPCS code 43239 in APC 5301 had a CY 2023 device offset
amount of $2.64 at the time the application was received.\51\ According
to the applicant, the cost of Ambu[supreg] aScopeTM Gastro
is $799.00.
---------------------------------------------------------------------------
\51\ We note that the applicant selected a device offset amount
of $21.55 for APC 5301 without selecting a specific HCPCS/CPT code.
However, for the HCPCS/CPT codes provided by the applicant, we note
the HCPCS/CPT code level device offset amounts are available in
Addendum P to the CY 2023 OPPS/ASC final rule with comment period.
For our calculation, we selected the HCPCS/CPT code level device
offset amount of $2.64 related to HCPCS 43239 in APC 5301 found in
Addendum P to the CY 2023 OPPS/ASC final rule with comment period.
Based on our initial assessment for this proposed rule, using the
device offset amount of $2.64 would result in Ambu[supreg]
aScopeTM Gastro meeting the cost significance
requirement.
---------------------------------------------------------------------------
Section 419.66(d)(1), the first cost significance requirement,
provides that the estimated average reasonable cost of devices in the
category must exceed 25 percent of the applicable APC payment amount
for the service related to the category of devices. The average
reasonable cost of $799.00 for Ambu[supreg] aScopeTM Gastro
is 96.79 percent of the applicable APC payment amount for the service
related to the category of devices of $825.51 (($799.00/$825.51) x 100
= 96.79 percent). Therefore, we believe Ambu[supreg]
aScopeTM Gastro 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 $799.00 for
Ambu[supreg] aScopeTM Gastro is 30,265.15 percent of the
cost of the device-related portion of the APC payment amount for the
related service of $2.64 (($799.00/$2.64) x 100 = 30,265.15 percent).
Therefore, we believe that the Ambu[supreg] aScopeTM Gastro
meets the second cost significance requirement.
The third cost significance requirement, at Sec. 419.66(d)(3),
provides that the difference between the estimated average reasonable
cost of the devices in the category and the portion of the APC payment
amount for the device must exceed 10 percent of the APC payment amount
for the related service. The difference between the estimated average
reasonable cost of $799.00 for Ambu[supreg] aScopeTM Gastro
and the portion of the APC payment amount for the device of $2.64 is
96.47 percent of the APC payment amount for the related service of
$825.51 ((($799.00-$2.64)/$825.51) x 100 = 96.47 percent). Therefore,
we believe that Ambu[supreg] aScopeTM Gastro meets the third
cost significance requirement.
We are inviting public comment on whether the Ambu[supreg]
aScopeTM Gastro meets the device pass-through payment
criteria discussed in this section, including the cost criterion for
device pass-through payment status.
(b) OMEZA Wound Care Matrix (OCM\TM\)
OMEZA LLC submitted an application for a new device category for
transitional pass-through payment status for OCM\TM\ for CY 2025.
According to the applicant, OCM\TM\ is an amorphous, solid, malleable
sheet comprised of hydrolyzed fish peptides infused with cod liver oil,
which acts as an anhydrous skin protectant. Per the applicant,
OCMTM is indicated for the management of wounds. The
applicant asserted that, when applied to a clean wound surface, OCM\TM\
is naturally incorporated into the wound over time. Per the applicant,
OCMTM's cold water fish peptides provide building blocks for
tissue regeneration and cell signaling molecules stimulate tissue
growth. Additionally, OCMTM's matrix-like device also
contains active pharmaceutical ingredient(s) (API) and nutrients that
continuously reduce biofilm impact, reduce inflammation, increase
tissue proliferation, and support remodeling of tissue.
Please refer to the online application posting for the OCM\TM\,
available at https://mearis.cms.gov/public/publications/device-ptp/DEP2403016HWP6 , for additional detail describing the device and the
disease treated by the device.
As stated previously, to be eligible for transitional pass-through
payment under the OPPS, a device must meet the criteria at Sec.
419.66(b)(1) through (4). With respect to the newness criterion at
Sec. 419.66(b)(1), on September 1, 2021, the applicant received 510(k)
clearance from FDA for OCM\TM\ as a device to be used for the
management of wounds including: (1) partial and full-thickness wounds,
(2) pressure ulcers, (3) venous ulcers, (4) diabetic ulcers, (5)
chronic vascular ulcers, (6) tunneled/undermined wounds, (7) surgical
wounds (donor sites/grafts, post-Moh's surgery, post-laser surgery,
podiatric, wound dehiscence), (8) trauma wounds (abrasions,
lacerations, superficial partial thickness burns, skin tears), and (9)
draining wounds. We received the application for a new device category
for transitional pass-through payment status for OCM\TM\ on March 1,
2024, which is within three years of the date of the initial FDA
marketing authorization.
We are inviting public comments on whether OCM\TM\ meets the
newness criterion at Sec. 419.66(b)(1).
With respect to the eligibility criteria at Sec. 419.66(b)(3), the
device must be an integral part of the service furnished, used for one
patient only, come in contact with human tissue, and be surgically
inserted or implanted, or applied in or on a wound or other skin
lesion. The applicant did not indicate whether OCM\TM\ is integral to
the service furnished. We note that in the CY 2014 final rule with
comment period (78 FR 75005), we stated that we have interpreted the
term ``integral'' to mean that the device is necessary to furnish or
deliver the primary procedure with which it is used. For example, a
pacemaker is integral to the procedure of implantation of a pacemaker.
OCMTM does not appear to be necessary to furnish or deliver
the primary procedure with which it is used, specifically debridement.
Rather, the use of OCMTM following the debridement
procedure, including the duration of treatment and the reapplication
frequency, seems to be based entirely on provider discretion. As such,
we do not believe that OCMTM is integral to the service
furnished as required by Sec. 419.66(b)(3). The applicant stated that
OCMTM is classified for one-time use and is designed for
intimate contact with both regular and irregular wound beds, and as
such, it is applied in or on a wound.
We are inviting public comments on whether OCM\TM\ meets the
eligibility criterion at Sec. 419.66(b)(3).
With respect to the exclusion criterion at 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). The applicant did not indicate whether OCM\TM\ is
equipment, an instrument, apparatus, implement, or item of this type
for which depreciation and financing expenses are recovered, or if
OCM\TM\ is a supply or material
[[Page 59325]]
furnished incident to a service. However, in the CY 2014 final rule, we
described skin substitutes as a type of supply used in a surgical
procedure (78 FR 74929 through 74930). As explained the CY 2014 final
rule, supplies are a large category of items that typically are either
for single patient use or have a shorter life span in use than
equipment. Supplies can be anything that is not equipment and include
not only minor, inexpensive, or commodity-type items but also include a
wide range of products used in the hospital outpatient setting,
including certain implantable medical devices, which we have considered
supplies since the inception of the OPPS (78 FR 74929 through 74930).
We clarified that we believe skin substitutes are supplies used in a
surgical procedure because, as a part of a surgical repair procedure,
they reinforce and aid the healing of tissue like implantable
biologicals, but with skin substitutes, the tissue is skin instead of
internal connective tissues. (78 FR 74931). As such, we question
whether OCM\TM\ would be considered a supply, and as such it would be
excluded from device pass-through payments under Sec. 419.66(b)(4).
We are inviting public comments on whether OCM\TM\ meets the
exclusion criterion at Sec. 419.66(b)(4).
In addition to the criteria at Sec. 419.66(b)(1) through (4), the
criteria for establishing new device categories are specified at Sec.
419.66(c). The first criterion, at Sec. 419.66(c)(1), provides that
CMS determines that a device to be included in the category is not
appropriately described by any of the existing categories or by any
category previously in effect, and was not being paid for as an
outpatient service as of December 31, 1996. The applicant asserted that
OCM\TM\ is indicated for the comprehensive treatment of advanced wounds
and provides continuous delivery of pharmaceutical grade products
through an amorphous, anhydrous solid, which reduces biofilm while
simultaneously promoting tissue proliferation and remodeling. According
to the applicant, no previous or existing device categories for pass-
through payment appropriately describe OCM\TM\.
We have not identified an existing pass-through payment category
that describes OCM\TM\. We are inviting public comment on whether
OCM\TM\ meets the device category criterion at Sec. 419.66(c)(1).
The second criterion for establishing a device category, at Sec.
419.66(c)(2), provides that CMS determines either of the following: (i)
that a device to be included in the category has demonstrated that it
will substantially improve the diagnosis or treatment of an illness or
injury or improve the functioning of a malformed body part compared to
the benefits of a device or devices in a previously established
category or other available treatment; or (ii) for devices for which
pass-through status will begin on or after January 1, 2020, as an
alternative to the substantial clinical improvement criterion, the
device is part of the FDA's Breakthrough Devices Program and has
received FDA marketing authorization for the indication covered by the
Breakthrough Device designation. The applicant claimed that OCM\TM\
represents a substantial clinical improvement over existing
technologies in the treatment of hard to heal or chronic wounds which
require advanced wound care procedures such as venous leg ulcers,
diabetic foot ulcers, pressure ulcers, and wound dehiscence where
proper wound preparation, product application, and proper secondary
dressings are a requirement. Specifically, the applicant claimed that
OCM\TM\ demonstrates: (1) superior clinical outcomes and healing for
Diabetic Foot Ulcers (DFU) compared to standard of care; (2) faster
healing rates than standard of care for Venous Leg Ulcers (VLUs); (3)
superior clinical outcomes for patients who could not qualify for
clinical trials due to comorbidities; (4) improved results when
compared to results with standard of care for patients who failed prior
treatment; (5) in vitro/in vivo antimicrobial properties and patient
safety; and (6) improved patient safety.
The applicant provided the following clinical trial data and case
studies to support these claims: (1) two randomized controlled trials
(a single-site trial of patients with DFUs to evaluate percent area
reduction, and a randomized, multicenter, open label study for a
patient group with VLUs); (2) two real-world trials comprised of two
separate case studies of patients receiving follow-up care at two
different wound treatment centers; (3) one in vitro study; (4) one in
vivo porcine study; and (5) one consumer research study assessing the
safety of OCM\TM\ using the skin prick method. Table 56 summarizes the
applicant's assertions regarding the substantial clinical improvement
criterion. Note that there are multiple variations in poster
presentations for the same study; these posters are identified by study
number and presentation number in parentheses. Please see the online
posting for OCM\TM\ for the applicant's complete statements regarding
the substantial clinical improvement criterion and the supporting
evidence provided.
BILLING CODE 4120-01-P
[[Page 59326]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.072
[[Page 59327]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.073
[[Page 59328]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.074
[[Page 59329]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.075
BILLING CODE 4120-01-C
After review of the information provided by the applicant, we
identified the following concerns regarding whether the applicant
presents clinical data to suggest that OCM\TM\ provides a substantial
clinical improvement over other similar skin protectant and wound
healing products to meet the criterion at Sec. 419.66(c)(2)(i). Based
on the evidence submitted in the application, we note the following
concerns: (1) lack of direct comparison between the nominated device
and the predicate or reference devices for skin substitutes,
particularly with respect to treatment of deep or persistent chronic
wounds in people with DFU and VLU; (2) reliance on non-peer-reviewed
studies, such as unpublished abstracts or conference posters, the
results of which are only presented in a final data table; and (3)
reliance on studies which were sponsored by the device manufacturer
rather than independent research. At this time, we note that the
unpublished abstract for OCM\TM\ lacked a detailed discussion of study
limitations, patient population, and assurances that studies have been
thoroughly peer-reviewed, and free from implicit bias. The abstract
furthermore did not state if or how standard of care treatment was
administered within the same time period to control groups, and
therefore we are not clear if there was a direct comparison between
OCM\TM\ and its predicate or reference devices. Furthermore, the two
randomized controlled trials 52 53 and two real world
studies 54 55 submitted by the applicant
[[Page 59330]]
to support its claims had relatively small sample sizes, some
investigating only two patients total, which potentially limits the
statistical significance of the results.
---------------------------------------------------------------------------
\52\ Desmond P. Bell, DPM, CWS, FFPM RCPS, et al. A Clinical
Study Using Combination Therapy with Standard of Care for the
Treatment of Diabetic Foot Ulcers: Interim Analysis. ProMedica Jobst
Wound Care, Toledo, OH, US; ProMedica Jobst Vascular Institute,
Sylvania, OH, US; University of Toledo College of Medicine, Toledo,
OH, US, Omeza, LLC, Sarasota, FL, US (poster presented at the 20th
Annual Desert Foot Conference, December 6-9, 2023, Phoenix, AZ,
USA).
\53\ Randomized Controlled Trial in Venous Leg Ulcers
(NCT05291169) (no author or publication date given).
\54\ A Novel Combination Therapy Technology: Case Studies of
Complete Closure of a Diabetic Foot Ulcer and a Charcot Foot Ulcer
Greg Black, DPM; Suzanne Bakewell, Ph.D.; Desmond Bell, DPM, CWS,
FFPM RCPS 1Sylvania Podiatry, Sylvania, OH; Omeza, LLC, Sarasota, FL
(poster presented resented at the 2023 Diabetic Foot Conference,
September 28-30, 2023, Anaheim, CA).
\55\ A Novel Combination Therapy Technology: Case Studies of
Complete Closure of Diabetic Foot Ulcers Christopher L. Barrett,
DPM, CWS; Suzanne J. Bakewell, Ph.D.; Desmond Bell, DPM, CWS, FFPM
RCPS 1Wound Care Specialist, Downingtown, PA, USA; 2Omeza, Sarasota,
FL, USA Presented at the 2023 Diabetic Foot Conference, September
28-30, 2023, Anaheim, CA.
---------------------------------------------------------------------------
We note that the applicant did not provide a comparison of OCM\TM\
to other devices it identified are closely related or similar to
OCM\TM\. Specifically, the FDA authorization letter dated September 1,
2021, FDA identified one predicate device, SweetBio Apis (K182725), and
three reference devices, INTEGRA\TM\ Flowable Wound Matrix (K072113),
Kerecis MariGen Wound Dressing (K132343), and Southwest Technologies
Stimulen Collagen (K030774) to which OCM\TM\ may be compared. We note
that we did not approve transitional device pass-through payment for
Kerecis MariGen Wound Dressing (K132343) for CY 2018 after determining
that the clinical data provided by the applicant did not support the
claim that Kerecis Omega3 Wound Dressing provides a substantial
clinical improvement over other similar skin substitute products (82 FR
59330 through 59332). The FDA authorization letter noted that OCM\TM\
and the predicate device SweetBio Apis have similar indications and the
same intended use, namely, to manage wounds by providing an animal-
derived collagen product that is biodegradable and incorporates into
the surrounding tissue during the body's natural wound healing
processes. Both products supplement the collagen constituent with
additional biocompatible materials to achieve a final product that
covers and protects the wound, assists in managing wound exudate, and
maintains a moist wound environment. Further, the substantial
equivalence table included in the FDA authorization letter indicated
that OCM\TM\ raised no new questions of safety or effectiveness when
compared to the predicate and reference devices.
In the first claim, the applicant asserted OCM\TM\ has superior
clinical outcomes and healing for DFU compared to the standard of care.
Based on the evidence submitted by the applicant, we note the following
concerns: (1) lack of a direct comparison to the predicate or reference
devices in the two randomized controlled trials and the two real world
clinical studies; (2) reliance on unpublished studies; (3) reliance on
manufacturer sponsored studies; and (4) small sample sizes. First,
Simman, et al. (2023) describes the results of a single-site trial in
patients with DFUs to evaluate percent area reduction in wound healing.
The stated goal of this study was to demonstrate that a combination
therapy, using OCM\TM\ plus standard of care treatment, moves chronic
DFUs from a stalled state to a healing state in a 4-week period. The
study enrolled 25 patients, five of whom did not complete the study,
and one of whom died during the study from comorbidities related to
their underlying condition. Study group DFUs were managed with
combination therapy from 4-12 weeks, and control group DFUs (comprised
of six total study participants) were managed with standard of care
treatment involving cleaning and debridement only.
Interim analyses presented as a poster (Bell, et al., 2023) as
evidence to support the first claim was limited to 12 total study
participants. The interim analysis concluded that healing rates showed
an average of 63 percent area reduction for the remaining participants
at 4 weeks following standard of care treatment, and an average of 91
percent area reduction at 12 weeks following the treatment in patients
with DFUs managed with the combination therapy. The interim analysis
study further showed that one patient with a 12-week percent area
reduction of 73 percent continued to improve through week 14 while
three patients' wounds had not healed at the time of analysis for those
receiving combination therapy.
In the final results presented in Simman et al. (2023), the average
4-week percent area reduction was 60 percent, with three patients
experiencing 100 percent closure with combination therapy. At 12 weeks,
the median wound size was 0.0 cm\2\ (range, 0-2.59), and the average
percent area reduction was 93 percent, with five additional patients
experiencing 100 percent closure with combination therapy. Average 4-
and 12-week percent area reductions with standard of care alone were 42
percent and 45 percent, respectively. According to the final analysis
study abstract, every wound treated with OCM\TM\ combination therapy
was reduced by more than 70 percent in 12 weeks and all wounds
previously failed treatments.
We note that the Simman et al. (2023) study abstract and the
interim analysis do not provide any direct comparison to standard of
care treatment with another collagen-based wound matrix or device that
is otherwise similar to the indications for use of OCM\TM\ in
nonhealing wounds. In addition, it is unclear if any of the control
group patients received collagen-based treatments including the
predicate or reference devices to draw comparisons to collagen-based
skin protectants that perform similarly to OCM\TM\. While we recognize,
given the number of skin substitute products on the U.S. market, it is
not possible to compare OCM\TM\ to each product, we believe that
studies comparing the product against other powder, liquid, or gel skin
substitute products could provide more evidence demonstrating the
clinical superiority of OCM\TM\. In addition to the lack of comparison
to other collagen-based wound matrix devices, the standard of care
treatment in this study was limited to cleaning and debridement, which,
based on the applicant's description for methods for administering
OCM\TM\, is a step prior to administering OCM\TM\.
In reference to the applicant's statements that debridement
combined with application of OCM\TM\ is more effective in the removal
of biofilm compared to the standard of care of debridement alone, we
note that neither the abstract nor the interim analysis for this study
analyzed results on removal or prevention of biofilm in isolation from
the overall metric on wound percent area reduction. We note that FDA
recommends sharp debridement alone as an effective method to remove the
biofilm and necrotic tissue in a chronic wound (Bettle, et al., 2023).
We question whether the results describing the average percent area
reduction in wounds transitioning from a nonhealing state to a healing
state are sufficient to show substantial clinical improvement in
removal or prevention of biofilm. We further question whether the
results in percent area reduction can be attributed to debridement
combined with application of OCM\TM\ as opposed to debridement alone
because it is unclear if debridement was performed on all participants
in the retrospective control group. Furthermore, we note that only the
effects of historic standard of care treatments administered prior to
the start of the study to patients in the control group were included
for analysis. While one of the selection criteria for study
participants was having failed prior treatment, neither the abstract
nor interim analysis discussed how other variables, such as age and
comorbidities, may have contributed to treatment failure, or which
specific treatments failed in each of the six control group
participants. We note that not all patients in the control group
received, or were eligible to receive, the same standard of care
treatments prior to the study and did not receive any skin substitute
or wound dressing treatments during the study as a comparison to the
test group patients that were treated with OCM\TM\. Due to the stated
limitations in the
[[Page 59331]]
study as previously described, we do not believe that the applicant has
demonstrated that OCM\TM\ offers a substantial clinical improvement
over existing treatments.
Finally, the sample size of 19 individuals (six of whom were
assigned to the control group) in the Simman et al. (2023) study limits
the generalizability of the findings. Therefore, we question whether
OCM\TM\ has superior clinical outcomes and healing for DFUs compared to
the standard of care or the predicate or reference devices.
Additionally, we note that the Simman et al. (2023) study abstract and
interim analysis were sponsored by the manufacturer and have not been
published, and therefore are not based on independent and peer-reviewed
findings.
In addition to the Simman et al. (2023) study (including the
abstract and interim results), in support of its first claim, the
applicant submitted two posters presenting results from limited case
studies investigating two patients who received treatment using OCM\TM\
combination therapy at the point of care. The first poster (Black, et
al., 2023) discussed the treatment of two patients seeking treatment
for DFUs at a wound care clinic: (1) a 75-year-old female patient who
developed a DFU on her right third toe whose DFU wound progressed from
nonhealing to healing after one application of the combination OCM\TM\
therapy; and (2) a 65-year-old female patient with a history of
diabetes and a blister of 3-month duration that progressed from
nonhealing (after treatment with collagen powder, a gauze covering, an
absorbent dressing, and a protective bandage) to completely closed
after nine applications of the combination OCM\TM\ therapy over 63
days. The study authors concluded that these case studies demonstrated:
(1) rapid and durable healing of chronic/nonhealing wounds in two
patients with diabetes who received the combination therapy for their
chronic wounds; (2) significantly faster closure of a DFU within 1 week
using OCM\TM\ combination therapy than the average healing rate of 84
days for a 1-3 cm\2\ plantar ulcer managed using standard care
practices; and (3) that early treatment of chronic/nonhealing wounds
with OCM\TM\ combination therapy improves outcomes and can lead to
complete closure.
Similarly, the second poster (Barrett et al. (2023) presented
results from a case study of two patients who received follow-up care
at an outpatient wound center: (1) a 58-year-old male patient with a
distal plantar lateral ulceration with infection, which required
hospitalization; and (2) a 56-year-old male patient with leg trauma
that had obliterated the patient's anterior tibial and peroneal
arteries, leaving him with single vessel runoff to the left foot via
the posterior tibial artery. In the first patient, after 5 weeks of
initial negative pressure wound therapy following surgery, the
percentage area reduction of the wound was 19 percent. In comparison,
after three weekly follow-up applications of OCM\TM\ combination
therapy, the patient's percentage area reduction was 95 percent. In the
second patient, the amputation site was noted as completely necrotic,
and therefore not a candidate for standard of care negative pressure
wound therapy due to poor skin condition, ischemia, and hyperalgesia.
It was noted that after three applications of OCM\TM\ combination
therapy, there was a significant improvement in the wound depth and
tissue color, with visible epithelialization at the wound edges despite
the patient's obvious ischemia. It was noted that the wound size
improved and completely healed between the fourth and fifth application
of OCM\TM\ combination therapy and after the seventh application of
OCM\TM\ combination therapy. The researchers concluded that the case
studies demonstrate complete and rapid healing of refractory DFUs in
two patients with diabetes who had previously undergone lower extremity
amputations and that early use of OCM\TM\ combination therapy has the
potential to reduce the rate of amputations and improve patients'
quality of life.
We note that both case studies (Barrett et al. (2023) and (Black,
et al., 2023), were sponsored by the manufacturer and only had two
study participants treated with OCM\TM\ combination therapy, which
limits the generalizability of the findings. Although the studies
suggest that the two participants treated with OCM\TM\ combination
therapy showed transition to a healing state subsequent to the
application of OCM\TM\, the results varied widely in terms of number of
applications needed to achieve positive results and treatment duration.
Further, these case studies provide no direct comparison to the
standard of care treatment or the predicate or reference devices. We
note that eligibility for standard of care treatments also varied
across patients and resulted in varying degrees of percent area
reduction or wound closure from prior treatments before application of
OCM\TM\ combination therapy. While in one patient, the study showed an
improved clinical outcome in percentage area reduction (19 percent to
95 percent) with treatment utilizing OCM\TM\ combination therapy, we
note that the treatment including OCM\TM\ was not only completed
subsequent to standard of care treatment with a collagen wound
protectant, but also delivered to the same individual rather than as a
comparison to standard of care treatments in a control group.
We question whether the submitted evidence adequately supports the
claim that OCM\TM\ has superior clinical outcomes and healing for DFU
compared to the standard of care. We would be interested in additional
information to demonstrate whether the nominated device demonstrates a
substantial clinical improvement in comparison to similar collagen-
based matrix devices.
In the second claim, the applicant asserted that OCM\TM\ provides
faster healing rates than standard of care for VLUs. However, based on
the evidence submitted, we note the following concerns: (1) reliance on
unpublished studies; and (2) a lack of any documentation indicating the
study authors, study description, methods, limitations, information on
standard of care treatment for the comparison or control groups,
analysis, or discussion. The only data provided were in the form of two
tables. One table \56\ provided demographic information for the study
participants such as race, age, gender, presence of VLUs,
comorbidities, wound area, and wound age; however, there is no
indication of how many initial study participants were included in the
final results or how many were assigned to either the treatment or
control group receiving the standard of care. The other table \57\
presented one row of data from the final results of a randomized
controlled trial on VLUs showing an average percent area reduction of
66 percent at 12 weeks in OCM\TM\ treatment group (there was no
comparison to the standard of care treatment group) and an average
percent area reduction of 34 percent at 4 weeks in the OCM\TM\
treatment group compared to an average percent area reduction of 31
percent at 4 weeks in the standard of care group. Due to the lack of a
study report, we have insufficient information to adequately assess
this study or make a determination as to whether the study supports the
claim that OCM\TM\
[[Page 59332]]
provides faster healing rates than standard of care for VLU.
---------------------------------------------------------------------------
\56\ Demographics for RCT in VLU (no author or publication date
given).
\57\ Randomized Controlled Trial in Venous Leg Ulcers
(NCT05291169) (no author or publication date given).
---------------------------------------------------------------------------
In order to demonstrate substantial clinical improvement over
currently available treatments, we consider supporting evidence,
preferably published peer-reviewed clinical trials, that shows improved
clinical outcomes, such as reduction in mortality, complications,
subsequent interventions, future hospitalizations, recovery time, pain,
or a more rapid beneficial resolution of the disease process compared
to the standard of care. Additional supporting evidence, preferably
published peer-reviewed clinical trials, that shows these improved
clinical outcomes would help inform our assessment of whether OCM\TM\
demonstrates substantial clinical improvement over existing
technologies.
In the third claim, the applicant asserted that OCM\TM\ provides
superior clinical outcomes for patients who could not qualify for
clinical trials due to comorbidities, and in the fourth claim, the
applicant stated that OCM\TM\ improved results when compared to results
with standard of care for patients who failed prior treatment. The
applicant used the same pair of documents as supporting evidence for
both the third and fourth claims: (1) a case study by 16 independent
investigators (Bettle, et al., 2023), and (2) a final summary table
\58\ of the results of that case study. In the case study by the 16
independent investigators, OCM\TM\ combination therapy was administered
to 65 patients with wound ages ranging from 12 weeks to 15 years who
failed prior treatment, including six patients with prior failed
cellular tissue product therapies. Patients were not otherwise
subjected to inclusion or exclusion criteria. According to the
applicant, the findings by the 16 independent investigators showed 77
percent of wounds were closed by 12 weeks and the average area
reduction was 90 percent. Wounds treated included DFUs, VLUs, pressure
injuries, arterial, pyoderma, hematomas, surgical, and trauma. We note
that the study lacked direct comparison to a standard of care
treatment. Rather, the study compared patient data to standardized data
on wound closure and mean time to total wound closure by wound type
based on standardized data from the U.S. Wound Registry.
---------------------------------------------------------------------------
\58\ OCM treating Multiple Etiologies Final Trial Data (no
author or publication date given.
---------------------------------------------------------------------------
We question whether the submitted evidence adequately supports the
claims that OCM\TM\ provides superior clinical outcomes for patients
who could not qualify for clinical trials, due to comorbidities, or
that OCM\TM\ improved results when compared to results with standard of
care for patients who failed prior treatment. We would welcome further
investigation with comparators to help determine whether the device
demonstrates substantial clinical improvement over currently available
treatments in the clinical setting where it is most likely to be used.
In its fifth claim, the applicant asserted that in vitro (Davis, et
al., 2023) and in vivo (Davis, Jozic, et al., 2023) study results
demonstrate antimicrobial properties and patient safety. The applicant
further asserted that OCM\TM\ addresses an unmet medical need, stating
that no other product demonstrates antimicrobial properties and leads
to complete wound healing. In the in vivo study (Davis, Jozic, et al.,
2023), researchers made 31 deep reticular wounds across the
paravertebral and thoracic areas on each of specific pathogen-free
pigs. Pathogenic strains of Methicillin-Resistant Staphylococcus Aureus
(USA300) or Pseudomonas Aeruginosa (ATCC 27312), prepared as 106 CFU/ml
inoculum suspensions, were used to inoculate all wounds within 20
minutes after wounding followed by application of polyurethane
dressings (Tegaderm, 3M, USA) for 72 hours before being treated.
Subsequent treatment consisted of OCM\TM\ alone in one test group,
OCM\TM\ plus a skin protectant in another test group, Aquacel Ag
Advantage in the positive control group, or the wounds were left
untreated in the negative control group. We note that the only in vivo
study (Davis, Jozic, et al., 2023) with direct comparison to a skin
protectant was conducted on non-human subjects (pigs). We question
whether these data can be extrapolated to demonstrate significant
clinical improvement in humans. In addition, according to the
applicant, the in vitro study (Davis, et al., 2023) showed OCM\TM\
significantly inhibiting Methicillin-resistant Staphylococcus aureus
and Pseudomonas aeruginosa compared to negative controls. We note that
the in vitro study (Davis, Jozic, et al., 2023) lacked a direct
comparison to performance of other similar skin protectant products or
wound therapies besides infection control methods such as silver
sulfadiazine or Mupirocin antibiotic. We further note that both the in
vitro and in vivo studies were submitted as poster presentations and
that the studies have not been published and peer-reviewed in full.
We question whether the submitted evidence adequately supports the
claims that OCM\TM\ demonstrates antimicrobial properties and patient
safety. Additional supporting evidence, preferably published peer-
reviewed clinical trials, that demonstrates 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, would help inform
our assessment of whether OCM\TM\ demonstrates substantial clinical
improvement over the standard of care and existing technologies.
For its sixth claim, the applicant asserted that study results
demonstrated patient safety of OCM\TM\. In support of this claim, the
applicant provided one consumer research study--Princeton Consumer
Research Corp. (2019)--of 25 subjects showing no immediate allergic
reaction to OCM\TM\. We note that, similar to our previously stated
concerns, the study did not include a direct comparison to predicate or
reference devices despite claiming an improvement over standard of care
treatment. Additionally, this study was also sponsored by the
manufacturer and, therefore, not an independent study. Furthermore,
since this study only included one type of adverse effect
(allergenicity), and was limited to only 25 research subjects, there
are limitations in demonstrating safety. We note that the submitted
evidence does not adequately support the claims that OCM\TM\
demonstrates substantial clinical improvement in product safety in
comparison to similar products.
Finally, we note that OCM\TM\ may not demonstrate that it
substantially improves the diagnosis or treatment of an illness when
compared to the benefits of other available treatments. OCM\TM\ was
determined to be substantially equivalent to a legally marketed device,
the SweetBio Apis, which received 510(k) clearance on April 29, 2019.
The FDA 510(k) summary for OCM\TM\ indicated that both devices share
similar technological characteristics. Per FDA,\59\ the main
differences between OCM\TM\ and the predicate are the specific collagen
source (OCM\TM\ uses whitefish skin-derived collagen, while the
SweetBio Apis uses porcine skin-derived collagen) and the specific
identity of the supplemental components (which serve the same
fundamental purpose in enabling each wound dressing to achieve the
shared intended use).
---------------------------------------------------------------------------
\59\ The SweetBio Apis is FDA cleared and marketed under 510(k)
since 2019 (FDA 510(k)) letter: https://www.accessdata.fda.gov/cdrh_docs/pdf21/K211972.pdf.
---------------------------------------------------------------------------
[[Page 59333]]
We are inviting public comment on whether OCM\TM\ meets the device
category criterion at Sec. 419.66(c)(2)(i).
The third criterion for establishing a device category, at Sec.
419.66(c)(3), requires us to determine that the cost of the device is
not insignificant, as described in Sec. 419.66(d). Section 419.66(d)
includes three cost significance criteria that must each be met. The
applicant provided the following information in support of the cost
significance requirements. The applicant stated that OCM\TM\ would be
reported with HCPCS codes as shown in Table 57.
[GRAPHIC] [TIFF OMITTED] TP22JY24.076
To meet the cost criterion for device pass-through payment status,
a device must pass all three tests of the cost criterion for at least
one APC. As we explained in the CY 2005 OPPS final rule (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. Beginning in CY 2017, we calculate the
device offset amount at the HCPCS/CPT code level instead of the APC
level (81 FR 79657). We note the applicant utilized the CY 2024 payment
rates for the three tests of the cost criterion. For our calculations,
we used APC 5052, which had a CY 2024 payment rate of $379.92 at the
time the application was received.
[[Page 59334]]
HCPCS code 11042 in APC 5052 had a device offset amount of $0.04 at the
time the application was received. According to the applicant, the cost
of OCM\TM\ is $1,320.00.
Section 419.66(d)(1), the first cost significance requirement,
provides that the estimated average reasonable cost of devices in the
category must exceed 25 percent of the applicable APC payment amount
for the service related to the category of devices. The average
reasonable cost of $1,320.00 of OCM\TM\ is 347.44 percent of the
applicable APC payment amount for the service related to the category
of devices of $379.92 (($1,320.00/$379.92) x 100 = 347.44 percent).
Therefore, we believe OCM\TM\ meets the first cost significance
requirement.
The second cost significance requirement, at Sec. 419.66(d)(2),
provides that the estimated average reasonable cost of the devices in
the category must exceed the cost of the device-related portion of the
APC payment amount for the related service by at least 25 percent,
which means that the device cost needs to be at least 125 percent of
the offset amount (the device-related portion of the APC found on the
offset list). The estimated average reasonable cost of $1,320.00 for
OCM\TM\ is 3,300,000.00 percent of the cost of the device-related
portion of the APC payment amount for the related service of $0.04
(($1,320.00/$0.04) x 100 = 3,300,000.00 percent). Therefore, we believe
that OCM\TM\ meets the second cost significance requirement.
The third cost significance requirement, at Sec. 419.66(d)(3),
provides that the difference between the estimated average reasonable
cost of the devices in the category and the portion of the APC payment
amount for the device must exceed 10 percent of the APC payment amount
for the related service. The difference between the estimated average
reasonable cost of $1,320.00 for OCM\TM\ and the portion of the APC
payment amount for the device of $0.04 is 347.43 percent of the APC
payment amount for the related service of $379.92 ((($1,320.00-$0.04)/
$379.92) x 100 = 347.43 percent). Therefore, we believe that OCM\TM\
meets the third cost significance requirement.
We are inviting public comment on whether OCM\TM\ meets the device
pass-through payment criteria discussed in this section, including the
cost criterion for device pass-through payment status.
(c) OPN NC
SIS Medical AG submitted an application for a new device category
for transitional pass-through payment status for OPN NC for CY 2025.
Per the applicant, OPN NC percutaneous transluminal coronary
angioplasty (PTCA) dilatation catheter is a sterile, single-use, rapid
exchange catheter with a distal non-compliant double layer balloon
attached to a flexible distal polymer shaft. The applicant explained
that OPN NC is intended for balloon dilatation of the stenotic portion
of a coronary artery or bypass graft stenosis for the purpose of
improving myocardial perfusion. Per the applicant, the balloon
dilatation catheter is also indicated for post deployment expansion of
balloon expandable coronary stents. The applicant asserted that the
device is inserted to position a balloon in a calcified coronary lesion
where super-high pressure is used with the intention of achieving
acceptable expansion of the lesion. Per the applicant, radiopaque
balloon marker bands enable accurate positioning of the device, and
shaft markers for brachial and femoral techniques are also in place.
According to the applicant, OPN NC is intended for all patient
populations.
Please refer to the online application posting for OPN NC,
available at https://mearis.cms.gov/public/publications/device-ptp/DEP231214L8XQC, for additional detail describing the device and the
disease treated by the device.
As stated previously, to be eligible for transitional pass-through
payment under the OPPS, a device must meet the criteria at Sec.
419.66(b)(1) through (4). With respect to the newness criterion at
Sec. 419.66(b)(1), on March 14, 2022, the applicant received 510(k)
clearance from FDA for OPN NC as a device intended for balloon
dilatation of the stenotic portion of a coronary artery or bypass graft
stenosis for the purpose of improving myocardial perfusion. The balloon
dilatation catheter is also indicated for post deployment expansion of
balloon expandable coronary stents. We received the application for a
new device category for transitional pass-through payment status for
OPN NC on December 14, 2023, which is within three years of the date of
the initial FDA marketing authorization.
We are inviting public comments on whether OPN NC meets the newness
criterion at Sec. 419.66(b)(1).
With respect to the eligibility criteria at Sec. 419.66(b)(3), the
device must be an integral part of the service furnished, used for one
patient only, come in contact with human tissue, and be surgically
inserted or implanted, or applied in or on a wound or other skin
lesion. Per the applicant, OPN NC is integral to the service provided
and is used for one patient only. While the applicant did not
explicitly state whether the device is surgically inserted or comes in
contact with human tissue, per the device description, OPN NC is
inserted into the patient for balloon dilation of the stenotic portion
of a coronary artery or bypass graft stenosis for the purpose of
improving myocardial perfusion.
We are inviting public comments on whether OPN NC meets the
eligibility criterion at Sec. 419.66(b)(3).
With respect to the exclusion criterion at 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). The applicant did not address whether OPN NC is
equipment, an instrument, apparatus, implement, or item of this type
for which depreciation and financing expenses are recovered, or if OPN
NC is a supply or material furnished incident to a service.
We are inviting public comments on whether OPN NC meets the
exclusion criterion at Sec. 419.66(b)(4).
In addition to the criteria at Sec. 419.66(b)(1) through (4), the
criteria for establishing new device categories are specified at Sec.
419.66(c). The first criterion, at Sec. 419.66(c)(1), provides that
CMS determines that a device to be included in the category is not
appropriately described by any of the existing categories or by any
category previously in effect, and was not being paid for as an
outpatient service as of December 31, 1996. The applicant described OPN
NC as a percutaneous transluminal coronary angioplasty (PTCA)
dilatation catheter with a distal non-compliant double layer balloon
attached to a flexible distal polymer shaft. According to the
applicant, no previous or existing device categories for pass-through
payment appropriately describe the OPN NC. Per the applicant, the
device category, C1725 (Catheter, transluminal angioplasty, non-laser
(may include guidance, infusion/perfusion capability)) does not
appropriately describe OPN NC because OPN NC is a super high pressure,
non-compliant double (twin) layer balloon. Based on the description the
applicant provided, OPN NC is a transluminal vascular dilatation
catheter with a balloon intended for dilatation of the stenotic portion
of a coronary artery or
[[Page 59335]]
bypass graft stenosis for the purpose of improving myocardial
perfusion, which is consistent with the devices described by C1725. In
this context, we believe OPN NC may be similar to the devices described
by C1725, and therefore, OPN NC may also be appropriately described by
C1725.
We are inviting public comment on whether OPN NC meets the device
category criterion at Sec. 419.66(c)(1).
The second criterion for establishing a device category, at Sec.
419.66(c)(2), provides that CMS determines either of the following: (i)
that a device to be included in the category has demonstrated that it
will substantially improve the diagnosis or treatment of an illness or
injury or improve the functioning of a malformed body part compared to
the benefits of a device or devices in a previously established
category or other available treatment; or (ii) for devices for which
pass-through status will begin on or after January 1, 2020, as an
alternative to the substantial clinical improvement criterion, the
device is part of the FDA's Breakthrough Devices Program and has
received FDA marketing authorization for the indication covered by the
Breakthrough Device designation. According to the applicant, OPN NC
represents a substantial clinical improvement over existing
technologies in the management of patients with highly calcified
coronary lesions by providing optimal lumen expansion and demonstrating
better outcomes in lesion treatment compared to other devices.
The applicant provided the following evidence to support its claim:
three peer-reviewed studies; a PowerPoint presenting an indirect
comparison of OPN NC versus another device, Shockwave Intravascular
Lithotripsy (IVL) System with Shockwave C2 Coronary Intravascular
Lithotripsy (IVL) Catheter (Shockwave),\60\ that uses intravascular
lithotripsy (IVL) to treat calcium lesions; a spreadsheet summarizing
the data presented in the PowerPoint document comparing OPN NC and
Shockwave; and a background article providing an expert consensus
statement from the Society for Cardiovascular Angiography &
Interventions on management of in-stent restenosis and stent
thrombosis.\61\ Table 58 summarizes the applicant's assertion regarding
the substantial clinical improvement criterion. Please see the online
posting for OPN NC for the applicant's complete statements regarding
the substantial clinical improvement criterion and the supporting
evidence provided.
---------------------------------------------------------------------------
\60\ CMS approved an application for the Shockwave IVL System
with Shockwave C2 Coronary IVL Catheter as a new device category for
transitional pass-through payment status and established HCPCS code
C1761 as a new device category effective July 1, 2021. We refer
readers to the CY 2022 OPPS/ASC final rule with comment period (86
FR 63577 through 63583) for a full discussion the Shockwave IVL
System with Shockwave C2 Coronary IVL Catheter application and
decision.
\61\ Background articles are not included in the following table
but can be accessed via the online posting for the technology.
---------------------------------------------------------------------------
BILLING CODE 4120-01-P
[[Page 59336]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.077
[[Page 59337]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.078
BILLING CODE 4120-01-C
After review of the information provided by the applicant, we have
the following concerns regarding whether OPN NC meets the substantial
clinical improvement criterion. The applicant presented the published
results of one study of 50 patients undergoing optical coherence
tomography (OCT)-guided percutaneous coronary interventions, including
OPN NC, to treat calcified lesions (Natalia Pinilla-Echeverri, et al.,
2023). The retrospective study aimed to gain a better understanding of
OPN NC calcium modification mechanisms, such as creating deep and wide
calcium fractures during percutaneous coronary interventions with the
intended clinical outcome of improving myocardial perfusion. Per the
applicant, the study showed a primary efficacy endpoint of >=80 percent
expansion of the mean reference lumen area achieved in 80 percent of
the patients treated. The applicant also presented a retrospective
study evaluating 326 highly resistant coronary lesions that had failed
to achieve adequate post-dilatation luminal gain with conventional NC-
balloons (Secco et al., 2019). Per the study authors, an OPN NC balloon
was inflated to achieve a uniform balloon expansion after the failed
attempts with conventional NC-balloons. According to the authors, 413
OPN NC balloons were used (1.26 per lesion), and angiographic success
was achieved in 318 lesions (97.5 percent), procedural success was
achieved in 315 lesions (96.6 percent), and technical success was
achieved in 288 patients (90.5 percent). The study authors also
reported that the OPN NC balloon alone was able to achieve adequate
expansion in 288 cases (90.5 percent), while in 30 patients, rotational
atherectomy was needed and performed because of the impossibility to
cross the lesion with a proper sized OPN NC balloon. The applicant
presented a third study focused on patients needing treatment of in-
stent restenosis (ISR) (Seiler et at., 2023). According to the authors,
208 ISR lesions were treated in 188 patients. The study authors
concluded that the use of OPN NC for treatment of ISR lesions was safe
(primary endpoint of the study) and may lead to a low rate of target
lesion/vessel failure (TLF/TVF) during long-term follow-up. We note
that these studies were not randomized clinical trials with a
comparator to demonstrate clinical improvement. Instead, the applicant
presented results from registries using non-randomized, retrospective
study designs without a control group, which we believe may reduce the
strength of the evidence presented to support the claim. The authors
noted in all three studies that randomized trials may be needed to
compare OPN NC to other similar devices.
Further, we also note that in one of the studies (Natalia Pinilla-
Echeverri, et al., 2023), the study authors indicated that use of other
calcium lesion modification devices prior to applying
[[Page 59338]]
OPN NC to the patients in that study is a potential confounder that
could result in overestimation of OPN NC effectiveness. The study
authors stated that this was controlled by having an exclusive OCT
pullback pre-OPN NC, but indicated that calcium plaque modification
caused by other devices may not be evident on OCT. The study authors
further noted that since other devices were used before OPN NC, they
could not comment on calcium modification from OPN NC use upfront or an
OPN NC-only strategy. We would welcome any additional evidence
supporting the claim that that OPN NC provides optimal lumen expansion
and the impact of using other calcium lesion modification devices prior
to applying OPN NC to a patient.
With regards to safety, in the Natalia Pinilla-Echeverri, et al.
(2023) study, one patient was found to have had a flow limiting
dissection requiring stent deployment; however, no coronary
perforations or no-reflow were reported. In the Secco et al. (2019)
study, three patients (0.9 percent) were reported to have experienced
coronary rupture after balloon inflation and were successfully treated
with stent implantation. In the Seiler, et al. (2023) study, coronary
perforation was reported to have occurred twice (0.96 percent) with
both successfully treated by balloon inflation and implantation of a
covered stent; a total of nine (4.3 percent) locally limited, but flow
limiting dissections were reported to have occurred and were
successfully treated with implantation of a drug-eluting stent; 4 (1.9
percent) cases of flow deterioration due to embolization of thrombotic
material (no-reflow) were found; and one patient (0.5 percent) was
reported to have suffered from immediate vessel closure after stent
implantation. The application did not address whether the use of the
device is safe beyond the data on safety endpoints presented in the
studies provided. We would welcome additional studies or evidence
discussing the risk of adverse events with the use of these types of
non-compliant balloons.
Finally, we are concerned that the evidence may not demonstrate
that OPN NC substantially improves the treatment of an illness when
compared to the benefits of other available treatments. The applicant
asserted in a supporting document included in the application that OPN
NC is not the only FDA-authorized device with an indication for balloon
dilatation of the stenotic portion of a coronary artery or bypass graft
stenosis for the purpose of improving myocardial perfusion and also an
indication for post deployment expansion of balloon expandable coronary
stents. OPN NC was determined to be substantially equivalent to a
legally marketed device, the NC Euphora Rapid Exchange Balloon
Dilatation Catheter (Medtronic Inc; K141090), which received 510(k)
clearance on August 15, 2014. The FDA 510(k) summary for OPN NC
indicated that the devices share similar technological characteristics.
In fact, the FDA 510(k) summary indicated that OPN NC differs only in
the rated burst pressure of the balloon. We note that the applicant did
not compare the nominated device with the NC Euphora Rapid Exchange
Balloon Dilatation Catheter, which we believe may be similar. While the
applicant asserted that OPN NC is the only super-high pressure, non-
compliant twin layer balloon dilatation catheter available in the U.S.
and the only device on the market of this nature and capability, we
would be interested in additional information to demonstrate whether
the nominated device demonstrates a substantial clinical benefit in
comparison to other similar NC balloon devices.
We are inviting public comment on whether OPN NC 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 OPN NC would be
reported with HCPCS codes shown in Table 59.
[GRAPHIC] [TIFF OMITTED] TP22JY24.079
To meet the cost criterion for device pass-through payment status,
a device must pass all three tests of the cost criterion for at least
one APC. As we explained in the CY 2005 OPPS final rule (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. Beginning in CY 2017, we calculate the
device offset amount at the HCPCS/CPT code level instead of the APC
level (81 FR 79657). We note the applicant did not provide details
regarding the payment rates it applied for the three tests of the cost
criterion. For our calculations, we used APC 5192, which had a CY 2023
payment rate of $5,215.40 at the time the application was received.
HCPCS code 92920 in APC 5192 had a CY 2023
[[Page 59339]]
device offset amount of $1609.99 at the time the application was
received.
We note that the applicant provided two cost amounts for OPN NC:
(1) a price list showing the cost of OPN NC as $2,200.00; and (2) a
product list that lists the cost of OPN NC as $1,200.00. We further
note that the cost included on the product list provided by the
applicant for OPN NC ($1,200.00) does not pass any of the three tests
of the cost criterion, but the cost included on the price list for OPN
NC ($2,200.00) passes all three tests of the cost criterion.
When performed with the price list cost for OPN NC of $2,200.00, we
note the following calculation outcomes: 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 average reasonable cost of $2,200.00 for
OPN NC is 42.18 percent of the applicable APC payment amount for the
service related to the category of devices of $5,215.40 (($2,200.00/
$5,215.40) x 100 = 42.18 percent). Therefore, when utilizing the price
list cost of $2,200.00 provided, we believe OPN NC 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 $2,200.00 for
OPN NC is 136.65 percent of the cost of the device-related portion of
the APC payment amount for the related service of $1,609.99 ($2,200.00/
$1,609.99) x 100 = 136.65 percent). Therefore, when utilizing the price
list cost of $2,200.00 provided, we believe that OPN NC 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 $2,200.00 for OPN NC and the portion of the APC
payment amount for the device of $1,609.99 is 11.31 percent of the APC
payment amount for the related service of $5,215.40 ((($2,200.00-
$1,609.99)/$5,215.40) x 100 = 11.31 percent). Therefore, when utilizing
the price list cost of $2,200.00 provided, we believe that OPN NC meets
the third cost significance requirement.
When performed with the product list cost for OPN NC of $1,200.00,
we note the following calculation outcomes: 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 average reasonable cost of $1,200.00 for
OPN NC is 23.01 percent of the applicable APC payment amount for the
service related to the category of devices of $5,215.40 (($1,200.00/
$5,215.40) x 100 = 23.01 percent). Therefore, when utilizing the
product list cost of $1,200.00 provided, we believe OPN NC does not
meet the first cost significance requirement.
The second cost significance requirement, at Sec. 419.66(d)(2),
provides that the estimated average reasonable cost of the devices in
the category must exceed the cost of the device-related portion of the
APC payment amount for the related service by at least 25 percent,
which means that the device cost needs to be at least 125 percent of
the offset amount (the device-related portion of the APC found on the
offset list). The estimated average reasonable cost of $1,200.00 for
OPN NC is 74.53 percent of the cost of the device-related portion of
the APC payment amount for the related service of $1,609.99 ($1,200.00/
$1,609.99) x 100 = 74.53 percent). Therefore, when utilizing the
product list cost of $1,200.00 provided, we believe OPN NC does not
meet the second cost significance requirement.
The third cost significance requirement, at Sec. 419.66(d)(3),
provides that the difference between the estimated average reasonable
cost of the devices in the category and the portion of the APC payment
amount for the device must exceed 10 percent of the APC payment amount
for the related service. The difference between the estimated average
reasonable cost of $1,200.00 for OPN NC and the portion of the APC
payment amount for the device of $1,609.99 is negative 7.86 percent of
the APC payment amount for the related service of $5,215.40
((($1,200.00-$1,609.99)/$5,215) x 100 = -7.86 percent). Therefore, when
utilizing the product list cost of $1,200.00 provided, we believe that
OPN NC does not meet the third cost significance requirement.
Based on the conflicting amounts provided for the reasonable cost
of OPN NC, we question whether OPN NC meets the cost significance
criterion. We would welcome additional information regarding this
inconsistency on the estimated average reasonable cost of OPN NC.
We are inviting public comment on whether the OPN NC meets the
device pass-through payment criteria discussed in this section,
including the cost criterion for device pass-through payment status.
(d) OSCAR[supreg] Peripheral Multifunctional Catheter
Biotronik, Inc. submitted an application for a new device category
for transitional pass-through payment status for OSCAR[supreg]
Peripheral Multifunctional Catheter (OSCAR[supreg]) for CY 2025.
According to the applicant, OSCAR[supreg] is a tool used to simplify
the treatment of peripheral artery disease (PAD), a disease process
characterized by the narrowing of arteries that supply blood to the
limbs, usually the legs. In severe cases PAD can cause tissue death and
gangrene, leading to amputation. Per the applicant, OSCAR[supreg] can
simplify the process of peripheral interventions, reduce the time
required to perform the procedure and the need for repeat procedures,
reduce the risk of complications associated with changing out multiple
medical devices, minimize radiation exposure, and enhance patient
comfort.
Please refer to the online application posting for OSCAR[supreg],
available at https://mearis.cms.gov/public/publications/device-ptp/DEP230601F6NM2, for additional detail describing the device and the
disease treated by the device.
As stated previously, to be eligible for transitional pass-through
payment under the OPPS, a device must meet the criteria at Sec.
419.66(b)(1) through (4). With respect to the newness criterion at
Sec. 419.66(b)(1), on July 5, 2022, the applicant received 510k
clearance from FDA for OSCAR[supreg] as a device to be used for
percutaneous transluminal interventions in the peripheral vasculature
to provide support during access into and to dilate stenoses in
femoral, popliteal and infrapopliteal arteries. The product is also
intended for injecting radiopaque contrast media for angiography. We
received the application for a new device category for transitional
pass-through payment status for OSCAR[supreg] on June 1, 2023, which is
within three years of the date of the initial FDA marketing
authorization.
We are inviting public comments on whether OSCAR[supreg] meets the
newness criterion at Sec. 419.66(b)(1).
[[Page 59340]]
With respect to the eligibility criteria at Sec. 419.66(b)(3), the
device must be an integral part of the service furnished, used for one
patient only, come in contact with human tissue, and be surgically
inserted or implanted, or applied in or on a wound or other skin
lesion. The applicant did not explicitly state whether OSCAR[supreg] is
integral to the service provided. While the applicant did not
explicitly state whether the device is used for one patient only or
whether it comes in contact with human tissue, per the device
description, OSCAR[supreg] is surgically inserted into the lower
extremity peripheral vascular system and is single-use. We are inviting
public comments on whether OSCAR[supreg] meets the eligibility
criterion at Sec. 419.66(b)(3).
With respect to the exclusion criterion at 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). The applicant did not indicate whether OSCAR[supreg] is
equipment, an instrument, apparatus, implement, or item of this type
for which depreciation and financing expenses are recovered, or if
OSCAR[supreg] is a supply or material furnished incident to a service.
We are inviting public comments on whether OSCAR[supreg] meets the
exclusion criterion at Sec. 419.66(b)(4).
In addition to the criteria at Sec. 419.66(b)(1) through (4), the
criteria for establishing new device categories are specified at Sec.
419.66(c). The first criterion, at Sec. 419.66(c)(1), provides that
CMS determines that a device to be included in the category is not
appropriately described by any of the existing categories or by any
category previously in effect, and was not being paid for as an
outpatient service as of December 31, 1996. The applicant asserted that
OSCAR[supreg] is a combination device authorized by FDA with an
indication to diagnose and treat peripheral vascular lesions, identify
obstructions, and cross the areas of obstruction and restore blood flow
using a single system. According to the applicant, no previous or
existing device categories for pass-through payment appropriately
describe OSCAR[supreg]. Per the applicant, OSCAR[supreg] has the
functionality of multiple devices currently used during lower extremity
peripheral vasculature interventions. The applicant provided multiple
HCPCS codes that could describe some of the components of
OSCAR[supreg]; however, only one of the codes provided, C1725, is a
device category HCPCS code, and, therefore, C1725 is the only device
category we evaluated for this criterion. Per the applicant, the device
category C1725 (Catheter, transluminal angioplasty, non-laser (may
include guidance, infusion/perfusion capability)) does not
appropriately describe OSCAR[supreg] because OSCAR[supreg] can cover
the functionality of support catheters, several sizes of angioplasty
balloons, chronic total occlusion crossing devices, reentry catheters,
resistant lesion preparation devices, and dissection-reducing devices.
According to the applicant, current pass-through coding does not
adequately capture OSCAR[supreg]'s full functionality and the added
clinical and economic value derived from its simplification of
peripheral vascular interventions.
We note, based on the description the applicant provided, that when
the OSCAR[supreg] support catheter and OSCAR[supreg] dilator are
combined with the OSCAR[supreg] PTA balloon, the device is used to
complete a transluminal angioplasty, which is consistent with the
devices described by C1725. In this context, we believe that
OSCAR[supreg] may be similar to the devices described by C1725 and,
therefore, may be appropriately described by C1725.
We are inviting public comment on whether OSCAR[supreg] meets the
device category criterion at Sec. 419.66(c)(1).
The second criterion for establishing a device category, at Sec.
419.66(c)(2), provides that CMS determines either of the following: (i)
that a device to be included in the category has demonstrated that it
will substantially improve the diagnosis or treatment of an illness or
injury or improve the functioning of a malformed body part compared to
the benefits of a device or devices in a previously established
category or other available treatment; or (ii) for devices for which
pass-through status will begin on or after January 1, 2020, as an
alternative to the substantial clinical improvement criterion, the
device is part of the FDA's Breakthrough Devices Program and has
received FDA marketing authorization for the indication covered by the
Breakthrough Device designation. The applicant claimed that
OSCAR[supreg] represents a substantial clinical improvement over
existing technologies in the diagnosis and management of peripheral
artery disease because it uses less equipment, cuts down procedure
time, and mitigates risks like vascular damage, infections, and
radiation exposure, thereby enhancing clinical efficiency and safety.
The applicant provided four background documents supporting its
substantial clinical improvement claim.\62\ Please see the online
posting for OSCAR[supreg] for the applicant's complete statements
regarding the substantial clinical improvement criterion and the
supporting evidence provided.
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\62\ Background articles are not included in the following table
but can be accessed via the online posting for the technology.
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After review of the information provided by the applicant, we have
the following concerns regarding whether OSCAR[supreg] meets the
substantial clinical improvement criterion. First, the applicant did
not submit peer-reviewed or published clinical evidence to substantiate
clinical improvement over existing devices. The applicant submitted
four background documents in support of OSCAR[supreg]: (1) a clinical
benefit table, (2) a presentation on the Evaluation of Market
Acceptance, (3) the OSCAR[supreg] US Evaluation of Market Acceptance
Report, and the (4) OSCAR[supreg] Clinical Evaluation Report. All four
of these documents rely on data from the Evaluation of Market
Acceptance. We note these documents are not published or peer-reviewed,
and reflect data collected for marketing purposes rather than clinical
improvement purposes. The data included appear to be opinion-based
survey questions asked of
[[Page 59342]]
physicians recruited by the applicant for the purpose of the Evaluation
of Market Acceptance and note that these documents suggest an implicit
bias. We question the link between these documents and the claims the
applicant made that OSCAR[supreg] shows substantial clinical
improvement because it uses less equipment, cuts down procedure time,
and mitigates risks like vascular damage, infections, and radiation
exposure, thereby enhancing clinical efficiency and safety. We request
clarification on how the support documents directly relate to the
substantial clinical improvement claims.
Further, we question how a collection of devices currently
available on the market consolidated into a single packaged product
demonstrates substantial clinical improvement. According to the
applicant, with OSCAR[supreg] some procedures may be performed with a
single device which cuts down procedure time and mitigates risks like
vascular damage, infections, and radiation exposure, thereby enhancing
clinical efficiency and safety. The applicant asserted several benefits
of using OSCAR[supreg] over multiple devices, including reducing (1)
the need to remove and replace multiple devices, which may reduce the
incidence of complications like infection and vessel damage; (2) the
need to use ill-fitting devices; (3) the need for multiple guidewires
in several procedures; and (4) the incidence of complications, such as
infections and vessel damage. However, we did not receive comparative
data supporting the claim that OSCAR[supreg] offers superiority over
currently available treatments in terms of clinical benefit or safety.
The evidence provided did not discuss any advantages of using a single
system of devices rather than multiple individual devices with diverse
functionalities. We would welcome any additional evidence supporting
these claims.
Furthermore, per the applicant, OSCAR[supreg] is effective in
preparing intravascular lesions for advanced interventions,
particularly stenting, and by ensuring optimal lesion preparation,
OSCAR[supreg] elevates the success rate of these procedures, enhances
patient safety, and streamlines institutional operations. According to
the applicant, OSCAR[supreg] handles chronic total occlusions (CTOs)
and incorporates reentry capabilities, features traditionally found in
standalone devices. The applicant asserted this integration enhances
patient safety, simplifies procedures, and elevates the efficiency of
operations. However, we note that the applicant did not provide
clinical information in support of these claims. Again, we would
welcome any additional evidence supporting these claims.
Finally, we question whether OSCAR[supreg] can be sufficiently
distinguished from similar existing technologies to demonstrate
substantial clinical improvement. OSCAR[supreg] was determined to be
substantially equivalent to a legally marketed device, the INFINITY
Angioplasty Balloon Catheter\TM\, which received 510(k) clearance on
May 20, 2020. The FDA 510(k) summary for OSCAR[supreg] indicated that
the devices share similar technological characteristics, and that
OSCAR[supreg] differs only in that it combines support catheters to be
used with the dilator and balloon catheter. We did not receive data
demonstrating how OSCAR[supreg] offers a substantial clinical
improvement compared to the INFINITY Angioplasty Balloon Catheter. We
would be interested in additional information to demonstrate whether
the nominated device demonstrates a substantial clinical benefit in
comparison to INFINITY Angioplasty Balloon Catheter.
Further, per the applicant, there are six device types that it
believed OSCAR[supreg] is most closely related to: (1) workhorse
guidewires (Abbott, Boston Scientific, Terumo, Medtronic, Biotronik,
Cook Medical, Cordis); (2) premium guidewires (Abbott, Asahi Intecc,
Boston Scientific, Cook Medical and more); (3) workhorse & premium
support catheters (Philips, Boston Scientific, Cook Medical, Medtronic,
Asahi Intecc, Teleflex and more); (4) angioplasty balloons (Abbott, BD
Interventional, Biotronik, Cook Medical, Medtronic and more); (5)
lesion preparation balloons (Philips, Medtronic, BD Interventional and
Cagent Vascular); and (6) chronic total occlusion and reentry devices.
We do not believe that OSCAR[supreg] is similar to the workhorse
guidewires and premium guidewires listed because OSCAR[supreg] does not
include guidewires. We would welcome additional information
illustrating how OSCAR[supreg] is similar to the listed workhorse
guidewires and premium guidewires and evidence demonstrating the
benefits of OSCAR[supreg] over these other devices.
While we note that OSCAR[supreg] is comparable, we did not receive
data demonstrating how OSCAR[supreg] offers a substantial clinical
improvement compared to the workhorse and premium support catheters,
angioplasty balloons, lesion preparation balloons, or chronic total
occlusion and reentry devices and would be interested in additional
evidence demonstrating the substantial clinical benefits of
OSCAR[supreg] over these other devices.
Additional evidence comparing OSCAR[supreg] to existing
technologies would be particularly helpful to determine whether the
device demonstrates substantial clinical improvements over currently
available treatments in the clinical setting where it is most likely to
be used. Specifically, we would welcome published peer-reviewed
clinical trials that show 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 are inviting public comment on whether OSCAR[supreg] meets the
device category criterion at Sec. 419.66(c)(2)(i).
The third criterion for establishing a device category, at Sec.
419.66(c)(3), requires us to determine that the cost of the device is
not insignificant, as described in Sec. 419.66(d). Section 419.66(d)
includes three cost significance criteria that must each be met. The
applicant provided the following information in support of the cost
significance requirements. The applicant stated that OSCAR[supreg]
would be reported with HCPCS codes as shown in Table 61.
BILLING CODE 4120-01-P
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[GRAPHIC] [TIFF OMITTED] TP22JY24.082
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[GRAPHIC] [TIFF OMITTED] TP22JY24.083
BILLING CODE 4120-01-C
To meet the cost criterion for device pass-through payment status,
a device must pass all three tests of the cost criterion for at least
one APC. As we explained in the CY 2005 OPPS final rule (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. Beginning in CY 2017, we calculate the
device offset amount at the HCPCS/CPT code level instead of the APC
level (81 FR 79657). We note the applicant used the CY 2023 payment
rates for the three tests of the cost criterion. For our calculations,
we used APC 5183, which had a CY 2023 payment rate of $2,978.97 at the
time the application was received. HCPCS code 75625 in APC 5183 had a
CY 2023 device offset amount of $530.85 at the time the application was
received.\63\ According to the applicant, the cost of OSCAR[supreg] is
$2,020.00.
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\63\ We note the applicant selected APC 5192 and an APC payment
rate of $5,061.89 for the three tests of the cost criteria. However,
for our calculation, we selected APC 5183, which we believe had the
lowest applicable APC payment rate of $2,978.97 found in Addendum P
to the CY 2023 OPPS/ASC final rule with comment period, among the
APCs related to the HCPCS/CPT codes provided by the applicant. We
selected the HCPCS/CPT code level device offset amount of $530.85
related to HCPCS 75625 in APC 5183. Based on our initial assessment
for this proposed rule, using the APC payment rate of $2,978.97 and
the device offset amount of $530.85 would result in OSCAR[supreg]
meeting the cost significance requirement.
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Section 419.66(d)(1), the first cost significance requirement,
provides that the estimated average reasonable cost of devices in the
category must exceed 25 percent of the applicable APC payment amount
for the service related to the category of devices. The estimated
average reasonable cost of $2,020.00 for OSCAR is 67.81 percent of the
applicable APC payment amount for the service related to the category
of devices of $2,978.97 (($2,020.00/$2,978.97) x 100 = 67.81 percent).
Therefore, we believe OSCAR 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 $2,020.00 for
OSCAR[supreg] is 380.52 percent of the cost of the device-related
portion of the APC payment amount for the related service of $530.85
(($2,020.00/$530.85) x 100 = 380.52 percent). Therefore, we believe
that OSCAR[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 $2,020.00 for OSCAR[supreg] and the portion of the
APC payment amount for the device of $530.85 is 49.99 percent of the
APC payment amount for the related service of $2978.97 ((($2,020.00-
$530.85)/$ 2,978.97) x 100 = 49.99 percent). Therefore, we believe that
OSCAR[supreg] meets the third cost significance requirement.
We are inviting public comment on whether the OSCAR[supreg] meets
the device pass-through payment criteria discussed in this section,
including the cost criterion for device pass-through payment status.
B. Proposed Device-Intensive Procedures
1. Background
Under the OPPS, prior to CY 2017, device-intensive status for
procedures was determined at the APC level for APCs with a device
offset percentage greater than 40 percent (79 FR 66795). Beginning in
CY 2017, CMS began determining device-intensive status at the HCPCS
code level. In assigning device-intensive status to an APC prior to CY
2017, the device costs of all the procedures within the APC were
calculated and the geometric mean device offset of all of the
procedures had to exceed 40 percent. Almost all of the procedures
assigned to device-intensive APCs utilized devices, and the device
costs for the associated HCPCS codes exceeded the 40-percent threshold.
The no cost/full credit and partial credit device policy (79 FR 66872
through
[[Page 59346]]
66873) applies to device-intensive procedures and is discussed in
detail in section IV.B.4 of this proposed rule. A related device policy
was the requirement that certain procedures assigned to device-
intensive APCs require the reporting of a device code on the claim (80
FR 70422) and is discussed in detail in section IV.B.3 of this proposed
rule. For further background information on the device-intensive APC
policy, we refer readers to the CY 2016 OPPS/ASC final rule with
comment period (80 FR 70421 through 70426).
a. HCPCS Code-Level Device-Intensive Determination
As stated earlier, prior to CY 2017, under the device-intensive
methodology we assigned device-intensive status to all procedures
requiring the implantation of a device that were assigned to an APC
with a device offset greater than 40 percent and, beginning in CY 2015,
that met the three criteria as listed. Historically, the device-
intensive designation was at the APC level and applied to the
applicable procedures within that APC. In the CY 2017 OPPS/ASC final
rule with comment period (81 FR 79658), we changed our methodology to
assign device-intensive status at the individual HCPCS code level
rather than at the APC level. Under this policy, a procedure could be
assigned device-intensive status regardless of its APC assignment, and
device-intensive APC designations were no longer applied under the OPPS
or the ASC payment system.
We believe that a HCPCS code-level device offset is, in most cases,
a better representation of a procedure's device cost than an APC-wide
average device offset based on the average device offset of all of the
procedures assigned to an APC. Unlike a device offset calculated at the
APC level, which is a weighted average offset for all devices used in
all of the procedures assigned to an APC, a HCPCS code-level device
offset is calculated using only claims for a single HCPCS code. We
believe that this methodological change results in a more accurate
representation of the cost attributable to implantation of a high-cost
device, which ensures consistent device-intensive designation of
procedures with a significant device cost. Further, we believe a HCPCS
code-level device offset removes inappropriate device-intensive status
for procedures without a significant device cost that are granted such
status because of their APC assignment.
Under our existing policy, procedures that meet the criteria listed
in section IV.C.1.b of this proposed rule are identified as device-
intensive procedures and are subject to all the policies applicable to
procedures assigned device-intensive status under our established
methodology, including our policies on device edits and no cost/full
credit and partial credit devices discussed in sections IV.C.3 and
IV.C.4 of this proposed rule.
b. Use of the Three Criteria To Designate Device-Intensive Procedures
We clarified our established policy in the CY 2018 OPPS/ASC final
rule with comment period (82 FR 52474), where we explained that device-
intensive procedures require the implantation of a device and
additionally are subject to the following criteria:
All procedures must involve implantable devices that would
be reported if device insertion procedures were performed;
The required devices must be surgically inserted or
implanted devices that remain in the patient's body after the
conclusion of the procedure (at least temporarily); and
The device offset amount must be significant, which is
defined as exceeding 40 percent of the procedure's mean cost.
We changed our policy to apply these three criteria to determine
whether procedures qualify as device-intensive in the CY 2015 OPPS/ASC
final rule with comment period (79 FR 66926), where we stated that we
would apply the no cost/full credit and partial credit device policy--
which includes the three criteria listed previously--to all device-
intensive procedures beginning in CY 2015. We reiterated this position
in the CY 2016 OPPS/ASC final rule with comment period (80 FR 70424),
where we explained that we were finalizing our proposal to continue
using the three criteria established in the CY 2007 OPPS/ASC final rule
with comment period for determining the APCs to which the CY 2016
device intensive policy will apply. Under the policies we adopted in
CYs 2015, 2016, and 2017, all procedures that require the implantation
of a device and meet the previously described criteria are assigned
device-intensive status, regardless of their APC placement.
2. Proposed Device-Intensive Procedure Policy
As part of our effort to better capture costs for procedures with
significant device costs, in the CY 2019 OPPS/ASC final rule with
comment period (83 FR 58944 through 58948), for CY 2019, we modified
our criteria for device-intensive procedures. We had heard from
interested parties that the criteria excluded some procedures that
interested parties believed should qualify as device-intensive
procedures. Specifically, we were persuaded by interested party
arguments that procedures requiring expensive surgically inserted or
implanted devices that are not capital equipment should qualify as
device-intensive procedures, regardless of whether the device remains
in the patient's body after the conclusion of the procedure. We agreed
that a broader definition of device-intensive procedures was warranted,
and made two modifications to the criteria for CY 2019 (83 FR 58948).
First, we allowed procedures that involve surgically inserted or
implanted single-use devices that meet the device offset percentage
threshold to qualify as device-intensive procedures, regardless of
whether the device remains in the patient's body after the conclusion
of the procedure. We established this policy because we no longer
believe that whether a device remains in the patient's body should
affect a procedure's designation as a device-intensive procedure, as
such devices could, nonetheless, comprise a large portion of the cost
of the applicable procedure. Second, we modified our criteria to lower
the device offset percentage threshold from 40 percent to 30 percent,
to allow a greater number of procedures to qualify as device intensive.
We stated that we believe allowing these additional procedures to
qualify for device-intensive status will help ensure these procedures
receive more appropriate payment in the ASC setting, which will help
encourage the provision of these services in the ASC setting. In
addition, we stated that this change would help to ensure that more
procedures containing relatively high-cost devices are subject to the
device edits, which leads to more correctly coded claims and greater
accuracy in our claims data. Specifically, for CY 2019 and subsequent
years, we finalized that device-intensive procedures will be subject to
the following criteria:
All procedures must involve implantable devices assigned a
CPT or HCPCS code;
The required devices (including single-use devices) must
be surgically inserted or implanted; and
The device offset amount must be significant, which is
defined as exceeding 30 percent of the procedure's mean cost (83 FR
58945).
In addition, to further align the device-intensive policy with the
criteria used for device pass-through payment status, we finalized, for
CY 2019 and subsequent years, that for purposes of
[[Page 59347]]
satisfying the device-intensive criteria, a device-intensive procedure
must involve a device that:
Has received FDA marketing authorization, has received an
FDA investigational device exemption (IDE), and has been classified as
a Category B device by FDA in accordance with Sec. Sec. 405.203
through 405.207 and 405.211 through 405.215, or meets another
appropriate FDA exemption from premarket review;
Is an integral part of the service furnished;
Is used for one patient only;
Comes in contact with human tissue;
Is surgically implanted or inserted (either permanently or
temporarily); and
Is not either of the following:
++ Equipment, an instrument, apparatus, implement, or item of the
type for which depreciation and financing expenses are recovered as
depreciable assets as defined in Chapter 1 of the Medicare Provider
Reimbursement Manual (CMS Pub. 15-1); or
++ A material or supply furnished incident to a service (for
example, a suture, customized surgical kit, scalpel, or clip, other
than a radiological site marker) (83 FR 58945).
In addition, for new HCPCS codes describing procedures requiring
the implantation of devices that do not yet have associated claims
data, in the CY 2017 OPPS/ASC final rule with comment period (81 FR
79658), we finalized a policy for CY 2017 to apply device-intensive
status with a default device offset set at 41 percent for new HCPCS
codes describing procedures requiring the implantation or insertion of
a device that did not yet have associated claims data until claims data
are available to establish the HCPCS code-level device offset for the
procedures. This default device offset amount of 41 percent was not
calculated from claims data; instead, it was applied as a default until
claims data were available upon which to calculate an actual device
offset for the new code. The purpose of applying the 41-percent default
device offset to new codes that describe procedures that implant or
insert devices was to ensure ASC access for new procedures until claims
data become available.
As discussed in the CY 2019 OPPS/ASC proposed rule and final rule
with comment period (83 FR 37108 through 37109 and 58945 through 58946,
respectively), in accordance with our policy stated previously to lower
the device offset percentage threshold for procedures to qualify as
device-intensive from greater than 40 percent to greater than 30
percent, for CY 2019 and subsequent years, we modified this policy to
apply a 31-percent default device offset to new HCPCS codes describing
procedures requiring the implantation of a device that do not yet have
associated claims data until claims data are available to establish the
HCPCS code-level device offset for the procedures. In conjunction with
the policy to lower the default device offset from 41 percent to 31
percent, we continued our current policy of, in certain rare instances
(for example, in the case of a very expensive implantable device),
temporarily assigning a higher offset percentage if warranted by
additional information such as pricing data from a device manufacturer
(81 FR 79658). Once claims data are available for a new procedure
requiring the implantation or insertion of a device, device-intensive
status is applied to the code if the HCPCS code-level device offset is
greater than 30 percent, according to our policy of determining device-
intensive status by calculating the HCPCS code-level device offset.
In addition, in the CY 2019 OPPS/ASC final rule with comment
period, we clarified that since the adoption of our policy in effect as
of CY 2018, the associated claims data used for purposes of determining
whether or not to apply the default device offset are the associated
claims data for either the new HCPCS code or any predecessor code, as
described by CPT coding guidance, for the new HCPCS code. Additionally,
for CY 2019 and subsequent years, in limited instances where a new
HCPCS code does not have a predecessor code as defined by CPT, but
describes a procedure that was previously described by an existing
code, we use clinical discretion to identify HCPCS codes that are
clinically related or similar to the new HCPCS code but are not
officially recognized as a predecessor code by CPT, and to use the
claims data of the clinically related or similar code(s) for purposes
of determining whether or not to apply the default device offset to the
new HCPCS code (83 FR 58946). Clinically related and similar procedures
for purposes of this policy are procedures that have few or no clinical
differences and use the same devices as the new HCPCS code. In
addition, clinically related and similar codes for purposes of this
policy are codes that either currently or previously describe the
procedure described by the new HCPCS code. Under this policy, claims
data from clinically related and similar codes are included as
associated claims data for a new code, and where an existing HCPCS code
is found to be clinically related or similar to a new HCPCS code, we
apply the device offset percentage derived from the existing clinically
related or similar HCPCS code's claims data to the new HCPCS code for
determining the device offset percentage. We stated that we believe
that claims data for HCPCS codes describing procedures that have minor
differences from the procedures described by new HCPCS codes will
provide an accurate depiction of the cost relationship between the
procedure and the device(s) that are used, and will be appropriate to
use to set a new code's device offset percentage, in the same way that
predecessor codes are used. If a new HCPCS code has multiple
predecessor codes, the claims data for the predecessor code that has
the highest individual HCPCS-level device offset percentage is used to
determine whether the new HCPCS code qualifies for device-intensive
status. Similarly, in the event that a new HCPCS code does not have a
predecessor code but has multiple clinically related or similar codes,
the claims data for the clinically related or similar code that has the
highest individual HCPCS level device offset percentage is used to
determine whether the new HCPCS code qualifies for device-intensive
status.
a. Proposed Change to the Device-Intensive Status Default Offset
Methodology for New HCPCS Codes
As described above, under our existing policies for assigning a
device offset percentage to new HCPCS codes, we first rely on the
associated claims data for new HCPCS codes. For new HCPCS codes that do
not have available claims data yet, we rely on any available claims
data from a predecessor code for the new HCPCS code, as described by
CPT coding guidance. We assign the device offset percentage to the new
HCPCS code that is the device offset percentage of the predecessor code
for which we have available claims data. If claims data from the new
HCPCS or any predecessor code is unavailable, 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 a device offset
percentage to the new HCPCS code (83 FR 58946). Clinically related and
similar procedures for purposes of this policy are procedures that have
few or no clinical differences and use the same devices. If a
clinically similar procedure that uses the same devices is not
available, then for new HCPCS codes
[[Page 59348]]
describing procedures requiring the insertion or implantation of
devices that do not yet have claims data (from either the new HCPCS
code or any predecessor code), we apply a default device offset set at
31 percent.
As we stated previously, the purpose of applying the default device
offset to new codes that describe procedures that implant or insert
devices is to ensure access in the ASC setting for new procedures until
claims data become available. Also, under the OPPS, the default device
offset is useful for establishing a device amount for new device-
intensive procedures. For example, under our policy for no cost/full
credit or partial credit devices, we reduce the OPPS payment for
device-intensive procedures by the lesser of the full or partial credit
a hospital receives for a replaced device or the device offset amount.
Additionally, we may remove the device offset amount from the OPPS
payment for procedures that are terminated prior to administering
anesthesia (since the device was not used for the procedure).
While we do allow for additional information in consideration of a
higher offset percentage than the default device offset, it would be
extremely rare that the appropriate determination of a device offset
percentage would rely on pricing data or invoices from a device
manufacturer rather than the default device offset percentage. However,
we are aware that there may be certain situations where the default
device offset percentage would not adequately reflect the existing
device portion of the procedure's costs when compared to the cost of
similar devices. This difference could impede our ability to accurately
remove device offset amounts from new device-intensive procedures under
the OPPS. As HOPDs and ASCs perform new procedures with significant
device costs, we believe it is appropriate to modify our default device
offset methodology to pay HOPDs and ASCs more appropriately when we
lack claims data for these newer procedures. Therefore, for this CY
2025 OPPS/ASC proposed rule and subsequent calendar years, we propose
to modify our default device offset percentage policy for new device-
intensive procedures. Specifically, for new HCPCS codes that describe a
procedure that requires the implantation or insertion of a single-use
device that meets our requirements of a device as described above and
the procedure lacks claims data (from either the new HCPCS code or any
predecessor code), we would apply a default device offset percentage
that is the greater of 31 percent or the device offset percentage of
the APC to which the procedure has been assigned. We propose this
methodological change for both the OPPS and ASC Payment System for CY
2025 and subsequent calendar years. We still believe that a HCPCS code-
level device offset is, in most cases, a more accurate representation
of a procedure's device cost than an APC-wide average device offset
based on the average device offset of all the procedures assigned to an
APC. However, because newer device-intensive procedures lack claims
data, we believe the APC-wide average device offset percentage is, in
many cases, a better reflection of the estimated device costs of the
procedure than a default 31 percent offset. Additionally, there can be
instances where the typical device costs of procedures in an APC can be
significantly greater than the 31 percent default device offset. For
these reasons, we propose to modify our default device offset
percentage for new device-intensive procedures that describe the
implantation or insertion of a single-use device that meets our
requirements of a device (as described above) and that do not yet have
associated claims data, by applying a default device offset percentage
that is the greater of 31 percent or the device offset percentage of
the APC to which the procedure has been assigned. This proposal would
apply to new procedures assigned to clinical APCs, but not new
procedures assigned to New Technology APCs.
As we indicated in the CY 2019 OPPS/ASC proposed rule and final
rule with comment period, we may consider additional information for an
offset percentage greater than the default offset percentage (which,
for this proposed rule, is the greater of 31 percent or the APC-level
offset percentage) 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. This would be for our consideration in
extremely rare circumstances, such as an extremely high-cost
implantable device. While we believe our proposed modification of a
default device offset will improve payment under the OPPS and ASC
payment system, we will continue to accept additional information in
consideration of an alternative offset percentage. This information
should be directed to the Division of Outpatient Care, Mail Stop C4-01-
26, Centers for Medicare & Medicaid Services, 7500 Security Boulevard,
Baltimore, MD 21244-1850, or electronically at
[email protected]. Additional information can be submitted
prior to issuance of an OPPS/ASC proposed rule or as a public comment
in response to an issued OPPS/ASC proposed rule. Device offset
percentages will be set in each year's final rule.
The full listing of the proposed CY 2025 device-intensive
procedures, which incorporates our proposed changes to the default
device offset policy, can be found in Addendum P to this proposed rule
(which is available via the internet on the CMS website). Further, our
claims accounting narrative contains a description of our device offset
percentage calculation. Our claims accounting narrative for this
proposed rule can be found under supporting documentation for the CY
2025 OPPS/ASC proposed rule on our website at: https://www.cms.gov/medicare/medicare-fee-for-service-payment/hospitaloutpatientpps.
3. Device Edit Policy
In the CY 2015 OPPS/ASC final rule with comment period (79 FR
66795), we finalized a policy and implemented claims processing edits
that require any of the device codes used in the previous device-to-
procedure edits to be present on the claim whenever a procedure code
assigned to any of the APCs listed in Table 5 of the CY 2015 OPPS/ASC
final rule with comment period (the CY 2015 device-dependent APCs) was
reported on the claim. In addition, in the CY 2016 OPPS/ASC final rule
with comment period (80 FR 70422), we modified our previously existing
policy and applied the device coding requirements exclusively to
procedures that require the implantation of a device assigned to a
device-intensive APC. In the CY 2016 OPPS/ASC final rule with comment
period, we also finalized our policy that the claims processing edits
are such that any device code, when reported on a claim with a
procedure assigned to a device-intensive APC (listed in Table 42 of the
CY 2016 OPPS/ASC final rule with comment period (80 FR 70422)), will
satisfy the edit.
In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79658
through 79659), we changed our policy for CY 2017 and subsequent years
to apply the CY 2016 device coding requirements to the newly defined
device-intensive procedures. For CY 2017 and subsequent years, we also
specified that any device code, when reported on a claim with a device-
intensive procedure, will satisfy the edit. In addition, we created
HCPCS code C1889 to recognize devices furnished during a device-
intensive procedure that are not described by a specific Level II HCPCS
Category C-code. Reporting HCPCS code C1889
[[Page 59349]]
with a device-intensive procedure will satisfy the edit requiring a
device code to be reported on a claim with a device-intensive
procedure. In the CY 2019 OPPS/ASC final rule with comment period, we
revised the description of HCPCS code C1889 to remove the specific
applicability to device-intensive procedures (83 FR 58950). For CY 2019
and subsequent years, the description of HCPCS code C1889 is
``Implantable/insertable device, not otherwise classified.''
In the CY 2024 OPPS/ASC final rule with comment period (88 FR 81758
through 81759), we finalized our proposal to establish a procedure-to-
device edit for the procedures assigned to APC 5496 (Level 6
Intraocular Procedures) and require hospitals to report the correct
device HCPCS codes when reporting any of the four procedures--CPT codes
0308T, 0616T, 0617T, and 0618T. While we noted that interested parties
have previously recommended in past rulemaking that we reestablish all
of our previous procedure-to-device edits, we did not expect to extend
this policy beyond the procedures assigned to APC 5496 (Level 6
Intraocular Procedures). This APC represents a unique situation--the
APC (which was the Level 5 Intraocular APC in previous years) had been
a Low Volume APC (fewer than 100 claims in a claims year) since we
established our Low Volume APC policy, the procedures associated with
this APC have significant procedure costs often greater than $15,000,
and the procedures associated with this APC require the implantation of
a high-cost intraocular device. Additionally, in our review of claims
data for some of the procedures, we noticed unusual coding, charge, and
cost data. These claims had an outsized impact because of the low
volume of claims for the APC which impeded our ability to determine a
payment rate accurately and appropriately for APC 5496 (Level 6
Intraocular Procedures). Further, because of the low volume of
procedures assigned to this APC, we did not believe the reinstatement
of procedure-to-device edits for the four procedures assigned to this
APC would be administratively burdensome to hospitals. We finalized our
proposal to modify our device edits policy to require a procedure-to-
device edit for procedures assigned to APC 5496 (Level 6 Intraocular
Procedures) for CY 2024. We propose to continue this policy for APC
5496 (Level 6 Intraocular Procedures) for CY 2025 and subsequent CYs
and note that new CPT placeholder code 6X004 (Implantation of iris
prosthesis, including suture fixation and repair or removal of iris,
when performed) is replacing CPT code 0616T (Insertion of iris
prosthesis, including suture fixation and repair or removal of iris,
when performed; without removal of crystalline lens or intraocular
lens, without insertion of intraocular lens) effective January 1, 2025.
Additionally, CPT codes 0617T and 0618T currently assigned to APC 5496
(Level 6 Intraocular Procedures) will be deleted effective January 1,
2025. Therefore, for CY 2025, the procedure-to-device edit for
procedures assigned to APC 5496 (Level 6 Intraocular Procedures) will
apply to CPT code 0308T and 6X004.
We are not proposing any other changes to our device edit policy
for CY 2025.
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
[[Page 59350]]
to reduce OPPS payment for device-intensive procedures, by the full or
partial credit a provider receives for a replaced device, when a
hospital furnishes a specified device without cost or with a full or
partial credit. Under our current policy, hospitals continue to be
required to report on the claim the amount of the credit in the amount
portion for value code ``FD'' when the hospital receives a credit for a
replaced device that is 50 percent or greater than the cost of the
device.
In the CY 2014 OPPS/ASC final rule with comment period (78 FR 75005
through 75007), we adopted a policy of reducing OPPS payment for
specified APCs when a hospital furnishes a specified device without
cost or with a full or partial credit by the lesser of the device
offset amount for the APC or the amount of the credit. We adopted this
change in policy in the preamble of the CY 2014 OPPS/ASC final rule
with comment period and discussed it in subregulatory guidance,
including Chapter 4, Section 61.3.6 of the Medicare Claims Processing
Manual. Further, in the CY 2021 OPPS/ASC final rule with comment period
(85 FR 86017 through 86018, 86302), we made conforming changes to our
regulations at Sec. 419.45(b)(1) and (2) that codified this policy.
We are not proposing any changes to our policies regarding payment
for no cost/full credit and partial credit devices for CY 2025.
V. Proposed OPPS Payment for Drugs, Biologicals, and
Radiopharmaceuticals
A. Proposed OPPS Transitional Pass-Through Payment for Additional Costs
of Drugs, Biologicals, and Radiopharmaceuticals
1. Background
Section 1833(t)(6) of the Act provides for temporary additional
payments or ``transitional pass-through payments'' for certain drugs
and biologicals. Throughout this 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 this 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. 106113), 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 2025 pass-through drugs and
biologicals and their designated APCs are assigned status indicator
``G'' in Addenda A and B to this proposed rule (which are available on
the CMS website).\64\
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\64\ https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient.
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Section 1833(t)(6)(D)(i) of the Act specifies that the pass-through
payment amount, in the case of a drug or biological, is the amount by
which the amount determined under section 1842(o) of the Act for the
drug or biological exceeds the portion of the otherwise applicable
Medicare OPD fee schedule that the Secretary determines is associated
with the drug or biological. The methodology for determining the pass-
through payment amount is set forth in regulations at 42 CFR 419.64.
These regulations specify that the pass-through payment equals the
amount determined under section 1842(o) of the Act minus the portion of
the APC payment that CMS determines is associated with the drug or
biological.
Section 1847A of the Act establishes the average sales price (ASP)
methodology, which is used for payment for drugs and biologicals
described in section 1842(o)(1)(C) of the Act furnished on or after
January 1, 2005. The ASP methodology, as applied under the OPPS, uses
several sources of data as a basis for payment, including the ASP, the
wholesale acquisition cost (WAC), and the average wholesale price
(AWP). In this proposed rule, the term ``ASP methodology'' and ``ASP-
based'' are inclusive of all data sources and methodologies described
therein. Additional information on the ASP methodology can be found on
our website at: https://www.cms.gov/medicare/payment/fee-for-service-providers/part-b-drugs/average-drug-sales-price.
The pass-through application \65\ and review process for drugs and
biologicals is described on our website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/pass-through-payment-status-new-technology-ambulatory-payment-classification-apc.
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\65\ To apply for OPPS transitional Pass-Through Payment Status
and New Technology Ambulatory Payment Classification (APC),
applicants complete an application that is subject to the Paperwork
Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et seq.). This
information collection (CMS-10008) is currently approved under OMB
control number of 0938-0802 and has an expiration date of January
31, 2025.
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2. Transitional Pass-Through Payment Period for Pass-Through Drugs,
Biologicals, and Radiopharmaceuticals and Quarterly Expiration of Pass-
Through Status
As required by statute, transitional pass-through payments for a
drug or biological described in section 1833(t)(6)(C)(i)(II) of the Act
can be made for a period of at least 2 years, but not more than 3
years, after the payment was first made for the drug or biological as a
hospital outpatient service under Medicare Part B. Our current policy
is to accept pass-through applications on a quarterly basis and to
begin pass-through payments for approved pass-through drugs and
biologicals on a quarterly basis through the next available OPPS
quarterly update after the approval of a drug's or biological's pass-
through status. However, prior to CY 2017, we expired pass-through
status for drugs and biologicals on an annual basis through notice-and-
comment rulemaking (74 FR 60480). In the CY 2017 OPPS/ASC final rule
with comment period (81 FR 79662), we finalized a policy change,
beginning with pass-through drugs and biologicals approved in CY 2017
and subsequent calendar years, to allow for a quarterly expiration of
pass-through payment status for drugs, biologicals, and
radiopharmaceuticals to afford a pass-through payment period that is as
close to a full 3 years as possible for all pass-through drugs,
biologicals, and radiopharmaceuticals.
This change eliminated the variability of the pass-through payment
eligibility period, which previously varied based
[[Page 59351]]
on when a particular application was initially received. We adopted
this change for pass-through approvals beginning on or after CY 2017,
to allow, on a prospective basis, for the maximum pass-through payment
period for each pass-through drug without exceeding the statutory limit
of 3 years. Notice of drugs for which pass-through payment status is
ending during the calendar year is included in the quarterly OPPS
Change Request transmittals.
3. Drugs and Biologicals With Expiring Pass-Through Payment Status in
CY 2024
There are 25 drugs and biologicals for which pass-through payment
status expires by December 31, 2024, as listed in Table 62. These drugs
and biologicals will have received OPPS pass-through payment for 3
years during the period of April 1, 2021 through December 31, 2024. In
accordance with the policy finalized in CY 2017 and described earlier,
pass-through payment status for drugs and biologicals approved in CY
2017 and subsequent years will expire on a quarterly basis, with a
pass-through payment period as close to 3 years as possible.
With the exception of those groups of drugs and biologicals that
are always packaged when they do not have pass-through payment status
(specifically, anesthesia drugs; drugs, biologicals, and
radiopharmaceuticals \66\ 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), our standard
methodology for providing payment for drugs and biologicals with
expiring pass-through payment status in an upcoming calendar year is to
determine the product's estimated per day cost and compare it with the
OPPS drug packaging threshold for that calendar year, which is proposed
to be $140 for CY 2025 for all drugs, biologicals, and therapeutic
radiopharmaceuticals (for diagnostic radiopharmaceuticals we propose
separate payment when their per day cost exceeds the proposed threshold
of $630). These proposals are discussed further in section V.B.1 of
this proposed rule. If the estimated per day cost for the drug or
biological is less than or equal to the applicable OPPS drug packaging
threshold, we package payment for the drug or biological into the
payment for the associated procedure in the upcoming calendar year. If
the estimated per day cost of the drug or biological is greater than
the OPPS drug packaging threshold, we provide separate payment at the
applicable ASP methodology-based payment amount (which is generally ASP
plus 6 percent), as discussed further in section V.B.2 of this proposed
rule.
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\66\ We propose to pay separately for diagnostic
radiopharmaceuticals with per-day costs above a proposed threshold.
If our proposal is finalized, this category of policy-packaged drugs
that function as supplies in a diagnostic test or procedure would
include diagnostic radiopharmaceuticals with per-day costs below the
threshold for the applicable year. Please refer to Section II.A.3.c.
for more information regarding our proposal.
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4. Drugs, Biologicals, and Radiopharmaceuticals With Pass-Through
Payment Status Expiring in CY 2025
We propose to end pass-through payment status in CY 2025 for 28
drugs and biologicals. These drugs and biologicals, which were
initially approved for pass-through payment status between April 1,
2022 and January 1, 2023, are listed in Table 63. The APCs and HCPCS
codes for these drugs and biologicals, which have pass-through payment
status that will end by December 31, 2025, are assigned status
indicator ``G'' (Pass-Through Drugs and Biologicals) in Addenda A and B
to this proposed rule (which are available on the CMS website).\67\ The
APCs and HCPCS codes for these drugs and biologicals are assigned
status indicator ``G'' only for the duration of their pass-through
status.
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\67\ https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient.
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Section 1833(t)(6)(D)(i) of the Act sets the amount of pass-through
payment for pass-through drugs and biologicals (the pass-through
payment amount) as the difference between the amount authorized under
section 1842(o) of the Act and the portion of the otherwise applicable
OPD fee schedule that the Secretary determines is associated with the
drug or biological. For CY 2025, we are continuing our policy to pay
for pass-through drugs and biologicals using the ASP methodology,
meaning a payment rate based on ASP, WAC, or AWP, as applicable. This
payment rate is generally ASP plus 6 percent, equivalent to the payment
rate these drugs and biologicals would receive in the physician's
office setting in CY 2025. We note that, under the OPD fee schedule,
separately payable drugs assigned to an APC are generally payable at
ASP plus 6 percent. Therefore, a $0 pass-through payment amount would
continue to be paid for pass-through drugs and biologicals under the CY
2025 OPPS because the difference between the amount authorized under
section 1842(o) of the Act, which is generally ASP plus 6 percent, and
the portion of the otherwise applicable OPD fee schedule that the
Secretary determines is appropriate, which is generally ASP plus 6
percent, is $0.
In the case of policy-packaged drugs (which include the following:
anesthesia drugs; drugs, biologicals, and radiopharmaceuticals \68\
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), their pass-through payment amount will continue to
be equal to a payment rate calculated using the ASP methodology,
meaning a payment rate based on ASP, WAC, or AWP. This payment rate
will generally continue to be ASP plus 6 percent for CY 2025, 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. We note that if not for the pass-through payment status of
these policy-packaged products, payment for these products would be
packaged into the associated procedure and therefore, there are
associated OPD fee schedule amounts for them.
---------------------------------------------------------------------------
\68\ We propose to pay separately for diagnostic
radiopharmaceuticals with per-day costs above a proposed threshold.
If our proposal is finalized, this category of policy-packaged drugs
that function as supplies in a diagnostic test or procedure would
include diagnostic radiopharmaceuticals with per-day costs below the
threshold for the applicable year. Please refer to Section II.A.3.c.
for more information regarding our proposal.
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We will continue our policy to update pass-through payment rates on
a quarterly basis on the CMS website during CY 2025 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 2025, consistent with our CY 2024 policy for diagnostic and
therapeutic radiopharmaceuticals, we would continue to provide payment
for both diagnostic and therapeutic radiopharmaceuticals that are
granted pass-through payment status based on the ASP methodology. As
stated earlier, for purposes of pass-through payment, we consider
radiopharmaceuticals to be drugs under the OPPS. Therefore, if a
diagnostic or therapeutic radiopharmaceutical receives pass-through
payment status during CY 2025, we would continue to follow the standard
ASP methodology to determine the pass-through payment rate that drugs
receive under section 1842(o) of the Act, which is generally ASP plus 6
percent. If ASP data are not available for a radiopharmaceutical, we
would continue to provide pass-through payment at WAC plus 3 percent
(consistent with our policy in section V.B.2.a of this proposed rule),
the equivalent payment provided for pass-through drugs and biologicals
without ASP information. Additional detail on the WAC plus 3 percent
payment policy can be found in section V.B.2.a of this proposed rule.
If WAC information also is not available, we would continue to provide
payment for the pass-through radiopharmaceutical at 95 percent of its
most recent AWP.
We refer readers to Table 63 below for the list of drugs and
biologicals with pass-through payment status expiring during CY 2025.
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BILLING CODE 4120-01-C
5. Drugs, Biologicals, and Radiopharmaceuticals With Pass-Through
Payment Status Continuing Through CY 2025
We propose to continue pass-through payment status in CY 2025 for
57 drugs and biologicals. These drugs and biologicals, which were
approved for pass-through payment status with effective dates beginning
between April 1, 2023 and April 1, 2024, are listed in Table 64. The
APCs and HCPCS codes for these drugs and biologicals, which have pass-
through payment status that would continue after December 31, 2025, are
assigned status indicator ``G'' in Addenda A and B to this proposed
rule (which are available on the CMS website).\69\
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\69\ https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient.
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Section 1833(t)(6)(D)(i) of the Act sets the amount of pass-through
payment for pass-through drugs and biologicals (the pass-through
payment amount) as the difference between the amount authorized under
section 1842(o) of the Act and the portion of the otherwise applicable
OPD fee schedule that the Secretary determines is associated with the
drug or biological. For CY 2025, we are continuing our policy to pay
for pass-through drugs and biologicals at a payment rate based on the
ASP methodology, which may be based on ASP, WAC, or AWP, but is
generally ASP plus 6 percent, which is equivalent to the payment rate
these drugs and biologicals would receive in the physician's office
setting in CY 2025. We will continue with our policy of paying a $0
pass-through payment amount for pass-through drugs and biologicals that
are not policy-packaged under the CY 2025 OPPS, because the difference
between the amount authorized under section 1842(o) of the Act, which
would generally be ASP plus 6 percent, and the portion of the otherwise
applicable OPD fee schedule that the Secretary determines is
appropriate, which would also generally be ASP plus 6 percent, is $0.
In the case of policy-packaged drugs (which include the following:
anesthesia drugs; drugs, biologicals, and radiopharmaceuticals \70\
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), their pass-through payment amount would continue
to be equal to a payment rate based on the ASP methodology, which may
be based on ASP, WAC, or AWP, but would generally be ASP plus 6 percent
for CY 2025, minus a payment offset for any predecessor drug products
contributing to the pass-through payment. We note if not for the pass-
through payment status of these policy-packaged products, payment for
these products would be packaged into the associated procedure and
therefore, there are associated OPD fee schedule amounts for them. We
are continuing our policy to update pass-through payment rates on a
quarterly basis on our website during CY 2025 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).
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\70\ We propose to pay separately for diagnostic
radiopharmaceuticals with per-day costs above a proposed threshold.
If our proposal is finalized, the category of policy-packaged drugs
that function as supplies in a diagnostic test or procedure would
include diagnostic radiopharmaceuticals with per-day costs below the
threshold for the applicable year. Please refer to Section II.A.3.c.
for more information regarding our proposal.
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For CY 2025, consistent with our CY 2024 policy for diagnostic and
therapeutic radiopharmaceuticals, we propose to continue our policy 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 2025, we will continue to follow
the standard ASP methodology to determine the pass-through payment rate
that drugs receive under section 1842(o) of the Act, which would
generally be ASP plus 6 percent. If ASP data are not available for a
radiopharmaceutical, we would provide pass-through payment at WAC plus
3 percent (consistent with our policy in section V.B.2.a of this
proposed rule), the equivalent payment provided for pass-through drugs
and biologicals without ASP information. Additional detail on the WAC
plus 3 percent payment policy can be found in section V.B.2.a of this
proposed rule. If WAC information also is not available, we would
provide payment for the pass-through radiopharmaceutical at 95 percent
of its most recent AWP.
The drugs and biologicals that would have pass-through payment
status expire after December 31, 2025, are shown in Table 64.
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B. Proposed OPPS Payment for Drugs, Biologicals, and
Radiopharmaceuticals Without Pass-Through Payment Status
1. Proposed Criteria for Packaging Payment for Drugs, Biologicals, and
Radiopharmaceuticals
a. Proposed Packaging Threshold
In accordance with section 1833(t)(16)(B) of the Act, the threshold
for establishing separate APCs for payment of drugs and biologicals was
set to $50 per administration during CYs 2005 and 2006. In CY 2007, we
used the four-quarter moving average Producer Price Index (PPI) levels
for Pharmaceutical Preparations (Prescription) to trend the $50
threshold forward from the third quarter of CY 2005 (when the Pub. L.
108-173 mandated threshold became effective) to the third quarter of CY
2007. We then rounded the resulting dollar amount to the nearest $5
increment in order to determine the CY 2007 threshold amount of $55.
Using the same methodology as that used in CY 2007 (which is discussed
in more detail in the CY 2007 OPPS/ASC final rule with comment period
(71 FR 68085 through 68086)), we set the packaging threshold for
establishing separate APCs for drugs and biologicals at $135 for CY
2024 (88 FR 81776 through 81777).
Following the CY 2007 methodology, for this proposed rule, we use
the most recently available four quarter moving average PPI levels to
trend the $50 threshold forward from the third quarter of CY 2005 to
the third quarter of CY 2025 and round the resulting dollar amount
($140.81) to the nearest $5 increment, which yielded a figure of $140.
In performing this calculation, we used the most recent forecast of the
quarterly index levels for the PPI for Pharmaceuticals for Human Use
(Prescription) (Bureau of Labor Statistics series code WPUSI07003) from
IGI. IGI is a nationally recognized economic and financial forecasting
firm with which CMS contracts to forecast the various price indexes
including the PPI Pharmaceuticals for Human Use (Prescription). Based
on these calculations using the CY 2007 OPPS methodology, we propose a
packaging threshold for CY 2025 of $140 for drugs, biologicals, and
therapeutic radiopharmaceuticals.
We propose in section II.A.3.c of this proposed rule to pay
separately for diagnostic radiopharmaceuticals with a per-day cost
above the proposed packaging threshold for CY 2025 of $630. We also
propose that starting in CY 2026 and subsequent years, we would update
this threshold by the PPI for Pharmaceuticals for Human Use
(Prescription) (Bureau of Labor Statistics series code WPUSI07003) from
IHS Global, Inc (IGI). For the diagnostic radiopharmaceutical packaging
threshold, we propose to use the same methodology as that used in CY
2007 (which is discussed in more detail in the CY 2007 OPPS/ASC final
rule with comment period (71 FR 68085 and 68086)) to calculate the
update to the OPPS drug packaging threshold. Specifically, we propose
that starting for the CY 2026 rulemaking, we would use the most
recently available four quarter moving average PPI levels to trend the
final CY 2025 threshold forward from the third quarter of CY 2024 to
the third quarter of CY 2025 and round the resulting dollar amount to
the nearest $5 increment. We refer readers to section II.A.3.c.(4) of
this proposed rule for information regarding our proposal to update the
proposed diagnostic radiopharmaceutical packaging threshold in future
years.
We also propose that if more recent data are subsequently available
(for example, a more recent estimate of the PPI for Pharmaceutical
Preparations (Prescription), we would use such data, if appropriate, to
determine the CY 2025 packaging threshold for drugs, biologicals,
therapeutic radiopharmaceuticals, and diagnostic radiopharmaceuticals
for the CY 2025 OPPS/ASC final rule with comment period.
b. Proposed Packaging of Payment for HCPCS Codes That Describe Certain
Drugs, Certain Biologicals, and Certain Radiopharmaceuticals Under the
Cost Thresholds
To determine the proposed CY 2025 packaging status for all nonpass-
through drugs, biologicals, diagnostic and therapeutic
radiopharmaceuticals 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 2023
and were paid (via packaged or separate payment) under the OPPS. We
used data from CY 2023 claims processed through December 31, 2023, for
this calculation. However, we did not perform this calculation for
those drugs and biologicals with multiple HCPCS codes that include
different dosages, as described in section V.B.1.d of this proposed
rule, or for the following policy-packaged items that we propose to
continue to package in CY 2025: anesthesia drugs; drugs, biologicals,
and contrast agents and other drugs 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. Consistent with
our policy described in section V.B.5., in situations where we have no
claims data and must determine if these products exceed the per-day
cost threshold, we estimated the average number of units of each
product that would typically be furnished to a patient during one day
in the hospital outpatient setting and utilized the ASP methodology to
determine whether their payment will be packaged as well as their
payment status indicators.
In order to calculate the per day costs for drugs, biologicals,
diagnostic radiopharmaceuticals, and therapeutic radiopharmaceuticals
to determine their proposed packaging status in CY 2025, we used the
methodology that was described in detail in the CY 2006 OPPS proposed
rule (70 FR 42723 through 42724) and finalized in the CY 2006 OPPS
final rule with comment period (70 FR 68636 through 68638). For each
drug and biological HCPCS code, we used an estimated payment rate based
on the ASP methodology, which is generally ASP plus 6 percent (which is
the payment rate we propose for separately payable drugs and
biologicals for CY 2025, as discussed in more detail in section V.A.1
of this proposed rule) to calculate the CY 2025 proposed rule per day
costs. We used the manufacturer-submitted ASP data from the fourth
quarter of CY 2023 (data that were used for payment purposes in the
physician's office setting, effective April 1, 2024) to determine the
proposed rule per day cost.
As is our standard methodology, for CY 2025, we propose to use
payment rates based on the ASP data from the fourth quarter of CY 2023
for budget neutrality estimates, packaging determinations, impact
analyses, and completion of Addenda A and B to this proposed rule
(which are available via the internet on the CMS website) because these
are the most recent data available for use at the time of development
of the CY 2025 OPPS proposed rule. These data also are the basis for
drug payments in the physician's office setting, effective April 1,
2024. Exceptions to our standard methodology include:
For therapeutic radiopharmaceuticals that do not have
pass-through status as of October 1, 2024, and do not have an ASP-based
payment rate, we did not use a payment rate based on WAC or AWP for
those items, consistent with our policy described in section V.B.3.a of
this proposed rule. We used their mean unit cost derived from the CY
2023 hospital
[[Page 59364]]
claims data to determine their per day cost.
For diagnostic radiopharmaceuticals that do not have pass-
through status as of October 1, 2024, we used their mean unit cost
derived from the CY 2023 hospital claims data to determine their per
day cost. We did not use an ASP-based, WAC-based, or AWP-based payment
rate for those items unless there was no mean unit cost reported for
the product, consistent with our proposed policy described in section
V.B.3.b of this proposed rule.
For items other than diagnostic or therapeutic
radiopharmaceuticals that did not have either an ASP-based payment
rate, a payment rate based on WAC, or a payment rate based on AWP, we
used mean unit cost of the items derived from the CY 2023 hospital
claims data to determine their per day cost.
We propose to package drugs, biologicals, and therapeutic
radiopharmaceuticals with a per day cost less than or equal to $140 and
identify items with a per day cost greater than $140 as separately
payable unless they are policy-packaged. For diagnostic
radiopharmaceuticals, we propose to package those items with a per day
cost less than or equal to $630 and identify items with a per day cost
greater than $630 as separately payable. Consistent with our past
practice, we cross-walked historical OPPS claims data from the CY 2023
HCPCS codes that were reported to the CY 2023 HCPCS codes that we
display in Addendum B to this proposed rule (which is available on the
CMS website) \71\ for proposed payment in CY 2025.
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\71\ https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient.
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Our policy during previous cycles of OPPS rulemaking has been to
use updated ASP and claims data to make final determinations of the
packaging status of HCPCS codes for drugs, biologicals, and therapeutic
radiopharmaceuticals for the OPPS/ASC final rule with comment period.
We note that it is also our policy to make an annual packaging
determination for a HCPCS code only when we develop the OPPS/ASC final
rule with comment period for the update year. Only HCPCS codes that are
identified as separately payable in the final rule with comment period
are subject to quarterly updates. For our calculation of per day costs
of HCPCS codes for drugs, biologicals, and radiopharmaceuticals in this
proposed rule, we propose to use ASP data from the fourth quarter of CY
2023, 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, 2024, along with updated hospital
claims data from CY 2023. We note that we also propose to use these
data for budget neutrality estimates and impact analyses for this
proposed rule.
Payment rates for HCPCS codes for separately payable drugs and
biologicals included in Addenda A and B of this proposed rule are based
on ASP data from the second quarter of CY 2024. 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, 2024. These payment rates would then be updated in the January 2025
OPPS update, based on the most recent ASP data to be used for
physicians' office and OPPS payment as of January 1, 2025. For drugs
and biologicals that do not currently have a payment rate based on ASP,
WAC, or AWP, for therapeutic radiopharmaceuticals that do not currently
have an ASP payment rate, and for all diagnostic radiopharmaceuticals,
we calculate their mean unit cost from all of the CY 2023 claims data
and updated cost report information available for this proposed rule to
determine their final per day cost.
Consequently, the packaging status of some HCPCS codes for drugs,
biologicals, and radiopharmaceuticals in the OPPS/ASC proposed rule may
be different from the same drugs' HCPCS codes' packaging status
determined based on the data used for this final rule with comment
period. Under such circumstances, we propose to continue to follow the
established policies initially adopted for the CY 2005 OPPS (69 FR
65780) in order to more equitably pay for those drugs whose costs
fluctuate relative to the proposed CY 2025 OPPS drug packaging
threshold and the drug's payment status (packaged or separately
payable) in CY 2024. 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 2025 and
subsequent years, consistent with our historical practice, we propose
to apply the following policies to those HCPCS codes for drugs,
biologicals, and therapeutic radiopharmaceuticals whose relationship to
the drug packaging threshold changes based on the updated drug
packaging threshold and on the final updated data:
HCPCS codes for drugs, biologicals, and
radiopharmaceuticals that were paid separately in CY 2024 and that are
proposed for separate payment in CY 2025, and that then have per day
costs equal to or less than the CY 2025 final rule drug packaging
threshold or diagnostic radiopharmaceutical packaging threshold, based
on the updated ASPs and hospital claims data used for the CY 2025 final
rule, would continue to receive separate payment in CY 2025.
HCPCS codes for drugs, biologicals, and
radiopharmaceuticals that were packaged in CY 2024 and that are
proposed for separate payment in CY 2025, and that then have per day
costs equal to or less than the CY 2025 final rule drug packaging
threshold or diagnostic radiopharmaceutical packaging threshold, based
on the updated ASPs and hospital claims data used for the CY 2025 final
rule, would remain packaged in CY 2025.
HCPCS codes for drugs, biologicals, and
radiopharmaceuticals for which we proposed packaged payment in CY 2025
but that then have per-day costs greater than the CY 2025 final rule
drug packaging threshold or diagnostic radiopharmaceutical packaging
threshold, based on the updated ASPs and hospital claims data used for
the CY 2025 final rule, would receive separate payment in CY 2025.
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,\72\
[[Page 59365]]
contrast agents, and pharmacologic stress agents) (Sec. 419.2(b)(15));
and
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\72\ We propose to pay separately for diagnostic
radiopharmaceuticals with per-day costs above a proposed threshold.
If our proposal is finalized, this category of policy-packaged drugs
that function as supplies in a diagnostic test or procedure would
include diagnostic radiopharmaceuticals with per-day costs below the
threshold for the applicable year. Please refer to Section II.A.3.c.
for more information regarding our proposal.
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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 the policy 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 that
have a per day cost below the proposed diagnostic radiopharmaceutical
packaging threshold that we discussed in section II.A.3 of this
proposed rule,\73\ 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).
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\73\ In section II.A.3 of this proposed rule, we propose to pay
separately for diagnostic radiopharmaceuticals with per-day costs
above a proposed threshold. If our proposal is finalized, this
category of policy-packaged drugs that function as supplies in a
diagnostic test or procedure would include diagnostic
radiopharmaceuticals with per-day costs below the threshold for the
applicable year. Please refer to Section II.A.3.c. for more
information regarding our proposal.
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We welcome ongoing dialogue and engagement from interested parties
regarding suggestions for payment changes for consideration in future
rulemaking.
d. Packaging Determination for HCPCS Codes That Describe the Same Drug
or Biological But Different Dosages
In the CY 2010 OPPS/ASC final rule with comment period (74 FR 60490
through 60491), we finalized a policy to make a single packaging
determination for a drug, rather than an individual HCPCS code, when a
drug has multiple HCPCS codes describing different dosages because we
believe that adopting the standard HCPCS code-specific packaging
determinations for these codes could lead to inappropriate payment
incentives for hospitals to report certain HCPCS codes instead of
others. We continue to believe that making packaging determinations on
a drug-specific basis eliminates payment incentives for hospitals to
report certain HCPCS codes for drugs and allows hospitals flexibility
in choosing to report all HCPCS codes for different dosages of the same
drug or only the lowest dosage HCPCS code. Therefore, we propose to
continue our policy to make packaging determinations on a drug-specific
basis, rather than a HCPCS code-specific basis, for those HCPCS codes
that describe the same drug or biological but different dosages in CY
2025.
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 2023 claims data and our
pricing information, which is based on the ASP methodology, generally
ASP plus 6 percent, across all of the HCPCS codes that describe each
distinct drug or biological in order to determine the mean units per
day of the drug or biological in terms of the HCPCS code with the
lowest dosage descriptor. The following drugs did not have pricing
information available for the ASP methodology for this proposed rule;
and, as is our current policy for determining the packaging status of
other drugs, we used the mean unit cost available from the CY 2023
claims data to make the proposed packaging determinations for them:
HCPCS code C9257 (Injection, bevacizumab, 0.25 mg); HCPCS code J3471
(injection, hyaluronidase, ovine, preservative free, per 1 usp unit (up
to 999 usp units)); HCPCS code J3472 (Injection, hyaluronidase, ovine,
preservative free, per 1000 usp units); HCPCS code J7100 (Infusion,
dextran 40,500 ml); and HCPCS code J7110 (Infusion, dextran 75,500 ml).
For all other drugs and biologicals that have HCPCS codes
describing different doses, we then multiplied the proposed weighted
average ASP methodology based payment rate, which is generally ASP plus
6 percent, per-unit payment amount across all dosage levels of a
specific drug or biological by the estimated units per day for all
HCPCS codes that describe each drug or biological from our claims data
to determine if the estimated per day cost of each drug or biological
is less than or equal to the proposed CY 2025 drug packaging threshold
of $140 (in which case all HCPCS codes for the same drug or biological
would be packaged) or greater than the proposed CY 2025 drug packaging
threshold of $140 (in which case all HCPCS codes for the same drug or
biological would be separately payable). The proposed packaging status
of each drug and biological HCPCS code to which this methodology would
apply in CY 2025 is displayed in Table 65.
[[Page 59366]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.094
We propose that 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 2025 would also apply to diagnostic radiopharmaceuticals.
In order to propose a packaging determination that is consistent across
all HCPCS codes that describe different dosages of the same diagnostic
radiopharmaceutical, we would aggregate our CY 2023 claims data across
all of the HCPCS codes that describe each distinct diagnostic
radiopharmaceutical in order to determine the mean units per day of the
diagnostic radiopharmaceutical in terms of the HCPCS code with the
lowest dosage descriptor. We would then analyze the aggregate per day
cost of the diagnostic radiopharmaceutical to determine if the per day
cost is less than or equal to the proposed CY 2025 diagnostic
radiopharmaceutical packaging threshold of $630 (in which case all
HCPCS codes for the same diagnostic radiopharmaceutical would be
packaged) or greater than the proposed CY 2025 diagnostic
radiopharmaceutical packaging threshold of $630 (in which case all
HCPCS codes for the same diagnostic radiopharmaceutical would be
separately payable). There are currently no diagnostic
radiopharmaceuticals that this policy would apply to.
2. Proposed Payment for Drugs and Biologicals Without Pass-Through
Status That Are Not Packaged
a. Proposed Payment for Specified Covered Outpatient Drugs (SCODs) and
Other Separately Payable Drugs and Biologicals
Section 1833(t)(14) of the Act defines certain separately payable
radiopharmaceuticals, drugs, and biologicals and mandates specific
payments for these items. Under section 1833(t)(14)(B)(i) of the Act, a
``specified covered outpatient drug'' (known as a SCOD) is defined as a
covered outpatient drug, as defined in section 1927(k)(2) of the Act,
for which a separate APC has been established and that either is a
radiopharmaceutical agent or a drug or biological for which payment was
made on a pass-through basis on or before December 31, 2002.
Under section 1833(t)(14)(B)(ii) of the Act, certain drugs and
biologicals are designated as exceptions and are not included in the
definition of SCODs. These exceptions are--
A drug or biological for which payment is first made on or
after January 1, 2003, under the transitional pass-through payment
provision in section 1833(t)(6) of the Act.
A drug or biological for which a temporary HCPCS code has
not been assigned.
During CYs 2004 and 2005, an orphan drug (as designated by
the Secretary).
Section 1833(t)(14)(A)(iii) of the Act requires that payment for
SCODs in CY
[[Page 59367]]
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 considering the hospital acquisition
cost survey data collected by the Government Accountability Office
(GAO) in CYs 2004 and 2005, and later periodic surveys conducted by the
Secretary as set forth in the statute. If hospital acquisition cost
data are not available, the law requires that payment be equal to
payment rates established under the methodology described in section
1842(o), section 1847A, or section 1847B of the Act, as calculated and
adjusted by the Secretary as necessary for purposes of paragraph (14).
We refer to this alternative methodology as the ``statutory default.''
Most physician Part B drugs are paid at ASP plus 6 percent in
accordance with section 1842(o) and section 1847A of the Act.
Section 1833(t)(14)(E)(ii) of the Act provides for an adjustment in
OPPS payment rates for SCODs to consider 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 consider
the findings of the MedPAC study.\74\
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\74\ Medicare Payment Advisory Committee. June 2005 Report to
the Congress. Chapter 6: Payment for pharmacy handling costs in
hospital outpatient departments. Available at: https://www.medpac.gov/wp-content/uploads/import_data/scrape_files/docs/default-source/reports/June05_ch6.pdf.
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It has been our policy since CY 2006 to apply the same treatment to
all separately payable drugs and biologicals, which include SCODs, and
drugs and biologicals that are not SCODs. Therefore, we apply the
payment methodology in section 1833(t)(14)(A)(iii) of the Act to SCODs,
as required by statute, but we also apply it to separately payable
drugs and biologicals that are not SCODs, which is a policy
determination rather than a statutory requirement. For CY 2023 and
subsequent years, we finalized a policy to apply section
1833(t)(14)(A)(iii)(II) of the Act to all separately payable drugs and
biologicals, including SCODs. Although we do not distinguish SCODs in
this discussion, we note that we are required to apply section
1833(t)(14)(A)(iii)(II) of the Act to SCODs; but we also are applying
this provision to other separately payable drugs and biologicals,
consistent with our history of using the same payment methodology for
all separately payable drugs and biologicals.
For a detailed discussion of our OPPS drug payment policies from CY
2006 to CY 2012, we refer readers to the CY 2013 OPPS/ASC final rule
with comment period (77 FR 68383 through 68385). In the CY 2013 OPPS/
ASC final rule with comment period (77 FR 68386 through 68389), we
first adopted the statutory default policy to pay for separately
payable drugs and biologicals at ASP plus 6 percent based on section
1833(t)(14)(A)(iii)(II) of the Act. We have continued this policy of
paying for separately payable drugs and biologicals at the statutory
default for CYs 2014 through 2024.
In the case of a drug or biological during an initial sales period
in which data on the prices for sales of the drug or biological are not
sufficiently available from the manufacturer, section 1847A(c)(4) of
the Act permits the Secretary to make payments that are based on WAC.
Under section 1833(t)(14)(A)(iii)(II) of the Act, the amount of payment
for a separately payable drug equals the average price for the drug for
the year established under, among other authorities, section 1847A of
the Act. As explained in greater detail in the CY 2019 PFS final rule,
under section 1847A(c)(4) of the Act, although payments may be based on
WAC, unlike section 1847A(b) of the Act (which specifies that payments
using ASP or WAC must be made with a 6 percent add-on), section
1847A(c)(4) of the Act does not require that a particular add-on amount
be applied to WAC-based pricing for this initial period when ASP data
are not available. Consistent with section 1847A(c)(4) of the Act, in
the CY 2019 PFS final rule (83 FR 59661 to 59666), we finalized a
policy that, effective January 1, 2019, WAC-based payments for Part B
drugs made under section 1847A(c)(4) of the Act will utilize a 3-
percent add-on in place of the 6 percent add-on that was being used
according to our policy in effect as of CY 2018. For the CY 2019 OPPS,
we followed the same policy finalized in the CY 2019 PFS final rule (83
FR 59661 to 59666). Since CY 2020, we have continued to utilize a 3
percent add-on instead of a 6 percent add-on for drugs that are paid
based on WAC pursuant to our authority under section
1833(t)(14)(A)(iii)(II) of the Act (84 FR 61318 and 85 FR 86039), which
provides, in part, that the amount of payment for a SCOD is the average
price of the drug in the year established under section 1847A of the
Act. We also apply this provision to non-SCOD separately payable drugs.
Because we establish the average price for a drug paid based on WAC
under section 1847A of the Act as WAC plus 3 percent instead of WAC
plus 6 percent, we believe it is appropriate to price separately
payable drugs paid based on WAC at the same amount under the OPPS. Our
policy to pay for drugs and biologicals at WAC plus 3 percent, rather
than WAC plus 6 percent, applies whenever WAC-based pricing is used for
a drug or biological under section 1847A(c)(4). We refer readers to the
CY 2019 PFS final rule (83 FR 59661 to 59666) for additional background
on this policy.
Consistent with our current policy, payments for separately payable
drugs and biologicals are included in the budget neutrality
adjustments, under the requirements in section 1833(t)(9)(B) of the
Act. Also, the budget neutral weight scalar is not applied in
determining payments for these separately payable drugs and
biologicals.
Separately payable drug, biological, and radiopharmaceutical
payment rates are listed in Addenda A and B to this proposed rule
(available on the CMS website).\75\ These addenda provide the proposed
CY 2025 payment rates based on the ASP methodology for separately
payable nonpass-through drugs, biologicals, and radiopharmaceuticals
and the ASP methodology for pass-through drugs, biologicals, and
radiopharmaceuticals. Except for proposed payment rates for
radiopharmaceuticals, these rates are based either on ASP information
that is the basis for calculating payment rates for drugs and
biologicals in the physician's office setting effective April 1, 2024,
or WAC, AWP, or mean unit cost from CY 2023 claims data and updated
cost report information available for this proposed rule. For nonpass-
through therapeutic radiopharmaceuticals, payment rates are based on
ASP data or mean unit cost. We propose in section II.A.3.c.(5) to pay
separately at mean unit cost for diagnostic radiopharmaceuticals with
per day costs above the proposed threshold; the payment rates proposed
for qualifying diagnostic radiopharmaceuticals are entirely mean unit
cost. In general, these published proposed payment rates are not the
same as the actual January 2025 payment rates. This is because payment
rates for drugs, biologicals, and
[[Page 59368]]
therapeutic radiopharmaceuticals with ASP information for January 2025
will be determined through the standard quarterly process where ASP
data submitted by manufacturers for the third quarter of CY 2024 (July
1, 2024, through September 30, 2024) will be used to set the payment
rates that are released for the quarter beginning in January 2025 in
December 2024. In addition, in Addenda A and B to this proposed rule,
payment rates for drugs, biologicals, and therapeutic
radiopharmaceuticals for which there was no ASP, WAC, or AWP
information available for April 2024, as well as all separately payable
diagnostic radiopharmaceuticals, are based on mean unit cost in the
available CY 2023 claims data. If new pricing information becomes
available for payment for the quarter beginning in January 2025, we
will price payment for these drugs, biologicals, therapeutic
radiopharmaceuticals, and diagnostic radiopharmaceuticals based on
their newly available information. Finally, there may be drugs,
biologicals and therapeutic radiopharmaceuticals that have ASP, WAC, or
AWP information available for this proposed rule (reflecting April 2024
ASP data) that do not have ASP, WAC, or AWP information available for
the quarter beginning in January 2025. These drugs, biologicals and
therapeutic radiopharmaceuticals would then be paid based on mean unit
cost data derived from CY 2023 hospital claims. Therefore, the proposed
payment rates listed in Addenda A and B to this proposed rule are not
for January 2025 payment purposes and are only illustrative of the CY
2025 OPPS payment methodology using the most recently available
information at the time of issuance of this proposed rule.
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We note that payment amounts for most drugs separately payable
under Medicare Part B are determined using the methodology in section
1847A of the Act, and in many cases, payment is based on the average
sales price (ASP) plus a statutorily mandated 6 percent add-on.
For CY 2025, we propose to clarify that only ASP data or, if ASP
data are not available, mean unit cost data, would be used to set
payment rates for separately payable nonpass-through therapeutic
radiopharmaceuticals under the OPPS as described further in section
V.B.3.a of this proposed rule. We propose for CY 2025 to use mean unit
cost data to set payment rates for separately payable nonpass-through
diagnostic radiopharmaceuticals for which we propose separate payment
because their cost exceeds the per-day threshold. Otherwise, we are not
proposing any changes to our policies for payment for separately
payable drugs and biologicals; and we propose to continue our payment
policy that has been in effect since CY 2013 to pay for separately
payable drugs and biologicals in accordance with section
1833(t)(14)(A)(iii)(II) of the Act (the statutory default).
b. Biosimilar Biological Products
For CY 2024, we finalized the exception of biosimilars from the
OPPS threshold packaging policy when their reference products are
separately paid (88 FR 81783 through 81785). This policy allows for
separate payment for biosimilars even if the biosimilar's per-day cost
is below the packaging threshold if the biosimilar's reference product
is separately paid. This policy removes the financial incentive to use
a more expensive separately payable biological and promotes biosimilar
use as a lower cost alternative to higher cost reference products.
Payment rates for drugs and biologicals (including biosimilars)
under Medicare Part B are determined using the methodology in section
1847A of the Act, and in many cases, payment is based on the average
sales price (ASP) plus a statutorily mandated 6 percent add-on.
Additionally, Section 11403 of the IRA requires that a qualifying
biosimilar be paid at ASP plus 8 percent of the reference product's ASP
rather than 6 percent during the applicable 5-year period. Section
1847A(b)(8)(B)(ii) of the Act defines the applicable 5-year period for
a qualifying biosimilar for which payment has been made using ASP (that
is, payment under section 1847A(b)(8) of the Act) as of September 30,
2022 as the 5-year period beginning on October 1, 2022. For a
qualifying biosimilar for which payment is first made using ASP during
the period beginning October 1, 2022, and ending December 31, 2027, the
statute defines the applicable 5-year period as the 5-year period
beginning on the first day of such calendar quarter of such payment (88
FR 81783). These payment rates are published in the quarterly release
of Addendum B or ASP pricing files.
d. Invoice Drug Pricing Proposal for CY 2026
We have observed that in recent years there has been an increasing
number of drug and biological HCPCS codes for which ASP, WAC, AWP, and
mean unit cost information is not available. These are often HCPCS
codes for new drugs or biologicals that have been approved for
marketing, but for which the manufacturer does not have sales data, and
WAC, AWP, and mean unit cost information is not available. As a result,
we are unable to assign a payable status indicator to these drugs or
biologicals due to of a lack of payment data. The numbers of drug and
biological HCPCS codes without payment rates from Addendum B for the CY
2022 through CY 2024 OPPS/ASC final rules with comment period are
listed in Table 66.
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In order to provide appropriate payment rates for these drugs and
biologicals without pricing data, we propose to adopt an invoice
pricing policy beginning in CY 2026. Because this policy necessitates
significant operational changes to implement, we propose to implement
it beginning in CY 2026, rather than CY 2025. For CY 2025, the affected
drugs and biologicals would continue to be assigned a non-payable
status indicator until we implement our invoice pricing policy, if
adopted. We believe invoice pricing is appropriate for use under the
OPPS because it provides temporary drug or biological cost information
to generate a representative payment rate for a drug or biological and
supports the utilization of new drug or biological HCPCS codes.
Otherwise, the new drug and biological HCPCS codes would not receive
payment under the OPPS, which would discourage their use by providers.
Currently, the Physician Fee Schedule utilizes invoice pricing for
drugs and biologicals when other types of pricing information are not
available.
We propose that, for separately payable drugs or biologicals for
which CMS does not provide a payment rate in Addendum B, which would
indicate to MACs that CMS does not have pricing information
(specifically, that ASP, WAC, AWP, and mean unit cost information is
not available to determine a payment rate), MACs would calculate the
payment based on provider invoices. The drug or biological invoice cost
would be the net acquisition cost minus any rebates, chargebacks, or
post-sale concessions. Before calculating an invoice-based payment
amount, MACs would use the provider invoice to determine that: (a) the
drug is not policy packaged; and (b) the per-day cost of the drug,
biological, therapeutic radiopharmaceutical or diagnostic
radiopharmaceutical is above the threshold packaging amount, as
applicable. If both conditions are met, we propose that MACs would use
the provider invoice amount to set a payment rate for the separately
payable drug, biological, or radiopharmaceutical until its payment
amount becomes available to CMS. We generally would expect invoice
pricing to be temporary, lasting two to three quarters, for qualified
drugs required to report ASP under 1847A of the Act. For drug products
that are not required to report ASP under 1847A of the Act (i.e.,
diagnostic pharmaceuticals), invoice pricing may be used longer term
until a MUC can be calculated. We propose that we would not begin using
invoice pricing for drugs, biologicals, and radiopharmaceuticals
without pricing information until CY 2026 because we would need to make
technical updates to outpatient hospital claims to allow the hospitals
to report drug invoice pricing. We intend to work with the National
Uniform Billing Committee (NUBC) in order to create a value code that
would allow for the reporting of invoice prices of drugs, biologicals,
and radiopharmaceuticals for purposes of this policy.
3. Payment Policy for Radiopharmaceuticals
For a complete history of the OPPS payment policy for
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).
a. Payment Policy for Therapeutic Radiopharmaceuticals
In the CY 2023 OPPS/ASC final rule with comment period, we adopted
as final our proposal to continue our longstanding payment policy for
therapeutic radiopharmaceuticals for CY 2023 and subsequent years.
Accordingly, this payment policy for therapeutic radiopharmaceuticals
will continue to apply in CY 2025.
Specifically, our policy of paying for separately payable pass-
through therapeutic radiopharmaceuticals under the ASP methodology
adopted for separately payable drugs and biologicals described in
section V.A.1 of this proposed rule will continue to apply for CY 2025.
We will pay for separately payable nonpass-through therapeutic
radiopharmaceuticals through a modified ASP methodology where we pay at
ASP plus 6 percent if ASP data are available. However, if ASP
information is unavailable for a separately payable nonpass-through
therapeutic radiopharmaceutical, we will continue to base the payment
rate on mean unit cost data derived from hospital claims. Our policy
not to use WAC or AWP to establish payment for separately payable
nonpass-through therapeutic radiopharmaceuticals if ASP is not
available will continue for CY 2025. We explained our rationale in the
CY 2010 OPPS/ASC final rule with comment period (74 FR 60524 through
60525) when we first adopted our policy to apply the principles of
separately payable drug pricing to therapeutic radiopharmaceuticals.
We note that in the CY 2024 OPPS final rule with comment period (88
FR 81786), we stated that the ASP payment methodology for separately
payable nonpass-through therapeutic radiopharmaceuticals did allow for
using WAC or AWP to establish a payment rate for these items. This was
an error and conflicted with the policy implemented in CY 2010 and
continued in subsequent years. The statement also conflicted with the
policy that we proposed and finalized for CY 2023 and subsequent years
in the CY 2023 OPPS/ASC final rule with comment period (87 FR 71969).
The policy implemented in CY 2010 regarding ASP payment for separately
payable nonpass-through therapeutic radiopharmaceuticals remains our
intended policy. Therefore, we will pay for all nonpass-through
separately payable therapeutic radiopharmaceuticals at ASP plus 6
percent based on the statutory default described in section
1833(t)(14)(A)(iii)(II) of the Act. For a full discussion of ASP-based
payment for therapeutic radiopharmaceuticals, we refer readers to the
CY 2010 OPPS/ASC final rule with comment period (74 FR 60520 through
60521). We will rely on CY 2023 mean unit cost data derived from
hospital claims data for payment rates for separately payable nonpass-
through therapeutic radiopharmaceuticals for which ASP data are
unavailable and update the payment rates for these products according
to our usual process for updating the payment rates for separately
payable drugs and biologicals on a quarterly basis if updated ASP
information becomes available.
The proposed CY 2025 payment rates for separately payable nonpass-
through therapeutic radiopharmaceuticals are included in Addenda A and
B of this proposed rule (which are available on the CMS website).\76\
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b. Payment Policy for Diagnostic Radiopharmaceuticals
For CY 2025, we propose, as described in section II.A.3 of this
proposed rule, to pay separately for diagnostic radiopharmaceuticals
with a per day cost above our proposed diagnostic radiopharmaceutical
packaging threshold (proposed at $630 for CY 2025). We propose to pay
for pass-through diagnostic radiopharmaceuticals based on ASP WAC, and
AWP.
We propose to base the payment rate for separately payable nonpass-
through diagnostic radiopharmaceuticals on mean unit cost data derived
from hospital claims. As discussed in Section II.A.3.c.(5), we are not
proposing to use
[[Page 59370]]
ASP data when mean unit cost data are available for a separately
payable nonpass-through diagnostic radiopharmaceutical, but we are
seeking comment on using ASP for setting the payment rate for nonpass-
through diagnostic radiopharmaceuticals in the future. Additionally, we
are not proposing to use WAC or AWP as a basis for payment for nonpass-
through diagnostic radiopharmaceuticals when mean unit cost data
derived from hospital claims is available. We believe that paying for
nonpass-through diagnostic radiopharmaceuticals using mean unit cost
would appropriately pay for the average price of a nonpass-through
separately payable diagnostic radiopharmaceutical. In our view, MUC is
an appropriate proxy for the average price for a diagnostic
radiopharmaceutical for a given year, as it is calculated based on the
average costs for a particular year and is directly reflective of the
actual cost data that hospitals submit to CMS. As we stated in the CY
2010 OPPS/ASC final rule with comment period (74 FR 60523), we believe
that WAC or AWP is not an appropriate proxy to provide OPPS payment for
radiopharmaceuticals because these pricing methodologies do not include
discounts. Specifically, the absence of appropriate ASP reporting could
result in payment for a separately payable diagnostic
radiopharmaceutical based on WAC or AWP indefinitely, a result which we
believe would be inappropriate, as these pricing metrics do not capture
all of the pricing discounts that may be reflected in the ASP.
Additionally, we propose to base the initial payment for new
diagnostic radiopharmaceuticals with HCPCS codes that do not have pass-
through status or claims data on ASP, and on the WAC for these products
if ASP data for these diagnostic radiopharmaceuticals are not
available. If the WAC also is unavailable, we propose to make payment
for new diagnostic radiopharmaceuticals at 95 percent of the products'
most recent AWP. We believe the volume of products in this category
will typically be very low; however, in these rare situations, we
believe it would be appropriate to use ASP until a MUC is established
for new diagnostic radiopharmaceuticals with HCPCS codes that do not
have passthrough status or claims data.
The proposed CY 2025 payment rates for separately payable nonpass-
through diagnostic radiopharmaceuticals are included in Addenda A and B
of this proposed rule (which are available on the CMS website).\77\
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4. Proposed Payment for Blood Clotting Factors
For CY 2025, we propose to continue our established policy to
provide payment for blood clotting factors using the same methodology
as other separately payable drugs and biologicals under the OPPS and to
continue to pay a furnishing fee. For a full discussion of our
established payment policy for blood clotting factors, please refer to
the CY 2023 OPPS/ASC final rule with comment period (87 FR 71969
through 71970). In accordance with our policy as finalized in the CY
2008 OPPS/ASC final rule with comment period (72 FR 66765), we will
announce the actual figure 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 at
https://www.cms.gov/medicare/payment/fee-for-service-providers/part-b-drugs/average-drug-sales-price.
5. Proposed Payment for Nonpass-Through Drugs, Biologicals, and
Radiopharmaceuticals With HCPCS Codes But Without OPPS Hospital Claims
Data
In the CY 2023 OPPS/ASC final rule with comment period, we adopted
as final our proposal to continue our longstanding payment policy for
nonpass-through drugs, biologicals, and radiopharmaceuticals with HCPCS
codes but without OPPS hospital claims data for CY 2023 and subsequent
years. Therefore, for CY 2025, this policy will continue to apply. For
a detailed discussion of the payment policy and methodology, we refer
readers to the CY 2016 OPPS/ASC final rule with comment period (80 FR
70442 through 70443). Consistent with our policy, because we have no
claims data and must determine if these products exceed the per-day
cost threshold, we estimated the average number of units of each
product that would typically be furnished to a patient during one day
in the hospital outpatient setting and utilized the ASP methodology to
determine whether their payment will be packaged as well as their
payment status indicators.
6. Requirement in the CY 2025 Physician Fee Schedule Proposed Rule for
HOPDs and ASCs To Report Discarded Amounts of Certain Single-Dose or
Single-Use Package Drugs
Section 90004 of the Infrastructure Investment and Jobs Act (Pub.
L. 117-9, November 15, 2021) (``the Infrastructure Act'') amended
section 1847A of the Act to re-designate subsection (h) as subsection
(i) and insert a new subsection (h), which requires manufacturers to
provide a refund to CMS for certain discarded amounts from a refundable
single-dose container or single-use package drug. The CY 2025 PFS
proposed rule includes proposals related to the discarded drug refund
policy, including proposals that may impact hospital outpatient
departments (HOPDs) and ambulatory surgical centers (ASCs). Similar to
our CY 2023 and CY 2024 notice in the OPPS/ASC proposed rule (87 FR
71988), we wanted to ensure interested parties were aware of these
proposals and knew to refer to the CY 2025 PFS proposed rule for a full
description of the proposed policy. Interested parties are asked to
submit comments on any proposals to implement Section 90004 of the
Infrastructure Act to the CY 2025 PFS proposed rule. Public comments on
these proposals will be addressed in the CY 2025 PFS final rule with
comment period.
7. High-Cost/Low-Cost Threshold for Packaged Skin Substitutes
a. Background
In the CY 2014 OPPS/ASC final rule with comment period (78 FR
74938), we unconditionally packaged skin substitute products into their
associated surgical procedures as part of a broader policy to package
all drugs and biologicals that function as supplies when used in a
surgical procedure. As part of the policy to package skin substitutes,
we also finalized a methodology that divides the skin substitutes into
a high-cost group and a low-cost group, to ensure adequate resource
homogeneity among APC assignments for the skin substitute application
procedures (78 FR 74933). In the CY 2015 OPPS/ASC final rule with
comment period (79 FR 66886), we stated that skin substitutes are best
characterized as either surgical supplies or devices because of their
required surgical application and because they share significant
clinical similarity with other surgical devices and supplies.
Skin substitutes assigned to the high-cost group are described by
HCPCS codes 15271 through 15278. Skin
[[Page 59371]]
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 codes
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 codes 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 2024, the payment rate for APC
5053 (Level 3 Skin Procedures) was $599.02, the payment rate for APC
5054 (Level 4 Skin Procedures) was $1,739.33, and the payment rate for
APC 5055 (Level 5 Skin Procedures) was $3,421.82. This information is
also available in Addenda A and B of the CY 2024 final rule with
comment period (88 FR 81540) (the Addenda A and B are available on the
CMS website https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices).
We have continued the high-cost/low-cost categories policy since CY
2014. 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, we adopted a policy where we
determined the high-cost/low-cost status for each skin substitute
product based on either a product's geometric mean unit cost (MUC)
exceeding the geometric MUC threshold or the product's per day cost
(PDC) (the total units of a skin substitute multiplied by the mean unit
cost and divided by the total number of days) exceeding the PDC
threshold. We assigned each skin substitute that exceeded either the
MUC threshold or the PDC threshold to the high-cost group. In addition,
we assigned any skin substitute with a MUC or a PDC that did not exceed
either the MUC threshold or the PDC threshold to the low-cost group (87
FR 71976).
However, some skin substitute manufacturers have raised concerns
about significant fluctuation in both the MUC threshold and the PDC
threshold from year to year using the methodology developed in CY 2016.
The fluctuation in the thresholds may result in the reassignment of
several skin substitutes from the high-cost group to the low-cost
group, which, under current payment rates, can be a difference of over
$1,000 in the payment amount for the same procedure. In addition, these
interested parties were concerned that the inclusion of cost data from
skin substitutes with pass-through payment status in the MUC and PDC
calculations would artificially inflate the thresholds. Skin substitute
interested parties requested that CMS consider alternatives to the
current methodology used to calculate the MUC and PDC thresholds and
whether it might be appropriate to establish a new cost group in
between the low-cost group and the high-cost group to allow for
assignment of moderately priced skin substitutes to a newly created
middle group.
We share the goal of promoting payment stability for skin
substitute products and their related procedures as price stability
allows hospitals using such products to more easily anticipate future
payments associated with these products. We have attempted to limit
year-to-year shifts for skin substitute products between the high-cost
and low-cost groups through multiple initiatives implemented since CY
2014, including: establishing separate skin substitute application
procedure codes for low-cost skin substitutes (78 FR 74935); using a
skin substitute's MUC calculated from outpatient hospital claims data
instead of an average of ASP plus 6 percent as the primary methodology
to assign products to the high-cost or low-cost group (79 FR 66883);
and establishing the PDC threshold as an alternate methodology to
assign a skin substitute to the high-cost group (80 FR 70434 through
70435).
To allow additional time to evaluate concerns and suggestions from
interested parties about the volatility of the MUC and PDC thresholds,
in the CY 2018 OPPS/ASC proposed rule (82 FR 33627), we proposed that a
skin substitute that was assigned to the high-cost group for CY 2017
would be assigned to the high-cost group for CY 2018, even if it did
not exceed the CY 2018 MUC or PDC thresholds. We finalized this policy
in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59347).
For more detailed information and discussion regarding the goals of
this policy and the subsequent comment solicitations in CY 2019 and CY
2020 regarding possible alternative payment methodologies for graft
skin substitute products, please refer to the CY 2018 OPPS/ASC final
rule with comment period (82 FR 59347); the CY 2019 OPPS/ASC final rule
with comment period (83 FR 58967 to 58968); and the CY 2020 OPPS/ASC
final rule with comment period (84 FR 61328 to 61331).
b. Proposals for Packaged Skin Substitutes for CY 2025
For CY 2025, consistent with our policy since CY 2016, we propose
to continue to determine the high-cost/low-cost status for each skin
substitute product based on either a product's geometric MUC exceeding
the geometric MUC threshold or the product's PDC (the total units of a
skin substitute multiplied by the MUC and divided by the total number
of days) exceeding the PDC threshold. Consistent with the methodology
as established in the CY 2014 OPPS/ASC through CY 2018 OPPS/ASC final
rules with comment period, we analyzed CY 2023 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 2025 MUC threshold is $50 per cm\2\ (rounded to
the nearest $1) and the proposed CY 2025 PDC threshold is $840 (rounded
to the nearest $1). Also, the availability of a HCPCS code for a
particular human cell, tissue, or cellular or tissue-based product
(HCT/P) does not mean that that product is appropriately regulated
solely under section 361 of the PHS Act and the FDA regulations in 21
CFR part 1271. Manufacturers of HCT/Ps should consult with the FDA
Tissue Reference Group (TRG) or obtain a determination through a
Request for Designation (RFD) on whether their HCT/Ps are appropriately
regulated solely under section 361 of the PHS Act and the regulations
in 21 CFR part 1271.
For CY 2025, as we did for CY 2024, we propose to assign each skin
substitute that exceeds either the MUC
[[Page 59372]]
threshold or the PDC threshold to the high-cost group. In addition, we
propose to assign any skin substitute that does not exceed either the
MUC threshold or the PDC threshold to the low-cost group except that we
propose that any skin substitute product that is assigned to the high-
cost group in CY 2024 would be assigned to the high-cost group for CY
2025, regardless of whether it exceeds or falls below the CY 2025 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 2025, we propose to continue to assign skin substitutes with
pass-through payment status to the high-cost category. We propose to
assign skin substitutes with pricing information but without claims
data to calculate a geometric MUC or PDC to either the high-cost or
low-cost category based on the product's ASP plus 6 percent payment
rate as compared to the MUC threshold. If ASP is not available, we
propose to use WAC plus 3 percent to assign a product to either the
high-cost or low-cost category. Finally, if neither ASP nor WAC is
available, we propose to use 95 percent of AWP to assign a skin
substitute to either the high-cost or low-cost category. We propose to
continue to use WAC plus 3 percent instead of WAC plus 6 percent to
conform to our proposed policy described in section V.B.2.b of this
proposed rule to establish a payment rate of WAC plus 3 percent for
separately payable drugs and biologicals that do not have ASP data
available. We propose that any skin substitute product that is assigned
a code in the HCPCS A2XXX series would be assigned to the high-cost
skin substitute group including new products without pricing
information. New skin substitutes without pricing information that are
not assigned a code in the HCPCS A2XXX series would be assigned to the
low-cost category until pricing information is available to compare to
the CY 2024 MUC and PDC thresholds. For a discussion of our policy
under which we assign skin substitutes without pricing information that
are not assigned a code in the HCPCS A2XXX series to the low-cost
category until pricing information is available, we refer readers to
the CY 2016 OPPS/ASC final rule with comment period (80 FR 70436).
Table 67 includes the proposed CY 2025 cost category assignment for
each skin substitute product.
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8. Radioisotopes Derived From Non-Highly Enriched Uranium (Non-HEU)
Sources
Radioisotopes are widely used in modern medical imaging,
particularly for cardiac imaging and predominantly for the Medicare
population. Technetium-99m (Tc-99m), the radioisotope used in the
majority of such diagnostic imaging services, is produced through the
radioactive decay of molybdenum-99 (Mo-99). Historically, most of the
Mo-99 used in the United States was produced in legacy reactors outside
of the United States using highly enriched uranium (HEU).
The United States wanted to eliminate domestic reliance on these
reactors and promoted the conversion of all medical radioisotope
production to non-HEU sources. Alternative methods for producing Tc-99m
without HEU are technologically and economically viable, but it was
expected that this change in the supply source for the radioisotope
used for modern medical imaging would introduce increased costs into
the payment system that would not be fully accounted for in the
historical claims data until all Tc-99m was produced from non-HEU
sources.
Therefore, beginning in CY 2013, we finalized a policy to provide
an additional payment of $10 for the marginal cost for radioisotopes
produced by non-HEU sources (77 FR 68323). Under this policy, hospitals
report HCPCS code Q9969 (Tc-99m from non-highly enriched uranium
source, full cost recovery add-on per study dose) once per dose along
with any diagnostic scan or scans furnished using Tc-99m as long as the
Tc-99m doses used can be certified by the hospital to be at least 95
percent derived from non-HEU sources (77 FR 68323).
We stated in the CY 2013 OPPS/ASC final rule with comment period
(77 FR 68321) that our expectation was that this additional payment
would be needed for the duration of the industry's conversion to
alternative methods of producing Tc-99m without HEU. We also stated
that we would reassess, and propose, if necessary, on an annual basis
whether such an adjustment continued to be necessary and whether any
changes to the adjustment were warranted (77 FR 68321). The Secretaries
of Energy and Health and Human Services issued a certification
regarding the supply of non-HEU-sourced Mo-99 effective January 2, 2022
(86 FR 73270). Mo-99 is the precursor material from which Tc-99m is
sourced. The certification by the Secretary of Energy stated that there
was a sufficient global supply of Mo-99 produced without the use of HEU
available to meet the needs of patients in the United States. In the CY
2023 OPPS/ASC final rule with comment period, we stated that we
believed the conversion to non-HEU sources of Tc-99m had reached a
point where it was necessary to reassess our policy of providing an
additional payment of $10 for the marginal cost for radioisotopes
produced by non-HEU sources (87 FR 71987).
In the OPPS, diagnostic radiopharmaceuticals are currently packaged
into the cost of the associated diagnostic imaging procedure no matter
the per day cost of the radiopharmaceutical (though we are proposing in
this rule to provide separate payment for high-cost diagnostic
radiopharmaceuticals starting in CY 2025). The cost of the
radiopharmaceutical is included as a part of the cost of the diagnostic
imaging procedure and is reported through Medicare claims data.
Medicare claims data used to set payment rates under the OPPS generally
is from 2 years prior to the payment year.
As we explained in the CY 2023 OPPS/ASC final rule with comment
period (87 FR 71987), the claims data we used to set payment rates for
CY 2024 (generally CY 2022 claims data) contained claims for diagnostic
radiopharmaceuticals that reflect both HEU-sourced Tc-99m and non-HEU-
sourced Tc99m, rather than radiopharmaceuticals sourced solely from
non-HEU Tc-99m. The cost of HEU-sourced Tc-99m is substantially lower
than the cost of non-HEU-sourced Tc-99m. Therefore, we explained that
providers who use radiopharmaceuticals in CY 2024 that contain only
non-HEU-sourced Tc-99m might not receive a payment that is reflective
of the radiopharmaceutical's current cost without the add-on payment.
We believed that extending the additional $10 add-on payment described
by HCPCS code Q9969 for non-HEU-sourced Tc-99m through the end of CY
2024 would ensure adequate payment for non-HEU-sourced Tc-99m. Starting
in CY 2025, we believed the Medicare claims data utilized to set
payment rates (likely CY 2023 claims data) would only include claims
for diagnostic radiopharmaceuticals that utilized non-HEU-sourced Tc-
99m, meaning the data would reflect the full cost of the Tc-99m
diagnostic radiopharmaceuticals that would be used by providers in CY
2025. As a
[[Page 59378]]
result, we believed there would no longer be a need for the additional
$10 add-on payment for CY 2025 or future years.
The conversion of the last major global Mo-99 producer from HEU to
Low Enriched Uranium (LEU) was previously expected to complete by
December 31, 2022 but did not occur until March 2023, so it is possible
that some claims for diagnostic radiopharmaceuticals in CY 2023 would
report the cost of HEU-sourced Tc-99m. This means that in CY 2025, as
in CY 2024, there is the possibility that the payment rate for
procedures using diagnostic radiopharmaceuticals could be lower than
the costs providers will face for these procedures because providers
will only have access to non-HEU-sourced Tc-99m. Therefore, we adopted
a policy in the CY 2024 OPPS final rule with comment period (88 FR
81803) to extend the additional $10 add-on payment described by HCPCS
code Q9969 for non-HEU-sourced Tc-99m through the end of CY 2025 to
continue to ensure adequate payment for non-HEU-sourced Tc-99m.
Recently, the Department of Energy and other interested parties
raised another issue affecting the domestic supply chain for Mo-99 and
Tc-99 that, left unaddressed, could cause payment inequity among
outpatient hospital providers. Foreign Mo-99 production has
historically been subsidized by foreign governments, resulting in
prices below the true cost of production. These artificially low,
government-subsidized prices have created a disincentive for
investments in Mo-99 production infrastructure, and they also created a
barrier to entry for new producers, including U.S. companies. This in
turn has resulted in unreliable production and periodic shortages. In
response to the 2009-2010 shortages, Congress passed the American
Medical Isotopes Production Act of 2012 (AMIPA), which directs the
Secretary of Energy to provide financial and technical support to U.S.
companies working to build new irradiation and manufacturing facilities
to produce Mo-99 without HEU.
It was expected that the transition from HEU to LEU-based
production would also involve the transition to a Full Cost Recovery
pricing model; however, it does not appear that this transition has
occurred in practice. Foreign producers continue to rely on
multipurpose nuclear research reactors for Mo-99 production, and the
global Mo-99 supply chain has not established a system of verifying
that all of the costs attributable to Mo-99 production are being
incorporated into the price of the product.
U.S. companies have made significant progress towards establishing
the infrastructure needed for large-scale Mo-99 production. Unlike many
foreign producers, U.S. companies must price their products high enough
to cover the full cost of operating their production facilities. Based
in part on the differences in pricing models, U.S. companies have
experienced challenges in competing with foreign producers for
customers. Currently, there is no domestic production of Mo-99.
Once U.S. companies initiate or resume Mo-99 production, the
difference in pricing models will likely create a payment inequity, as
hospitals purchasing Tc-99m derived from domestically produced Mo-99
would likely pay higher prices than those purchasing Tc-99m derived
from imported Mo-99. We propose to address the payment inequity
resulting from the higher cost of domestically produced Tc-99m by
establishing a new add-on payment of $10 per dose for
radiopharmaceuticals that use Tc-99m derived from domestically produced
Mo-99 starting on January 1, 2026 using our equitable adjustment
authority under section 1833(t)(2)(E) of the Act. We believe the $10
add-on payment for domestically produced Tc-99m would ensure equitable
payments by paying providers who use domestically produced Tc-99m
radiopharmaceuticals when available an amount that reflects the
anticipated higher cost of these products. The $10 add-on payment will
help to preserve provider and beneficiary access to domestically
produced Tc-99m radiopharmaceuticals by providing an additional payment
amount that addresses the additional costs of domestically produced Tc-
99m radiopharmaceuticals. DOE/NNSA would establish the criteria to
certify whether the Tc-99m radiopharmaceutical dose is domestically
produced and eligible for the add-on payment, which would be included
in the CY 2026 OPPS/ASC proposed rule. The CY 2026 OPPS/ASC proposed
rule would include additional details on how providers would bill for
this add-on payment in CY 2026.
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 2025 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 2025. 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 2024 or beginning in CY
2025. The sum of the proposed CY 2025 pass-through spending estimates
for these two groups of device categories equals the proposed total CY
2025 pass-through spending estimate for device categories with pass-
through payment status. We determined the device pass-through estimated
payments for each device category based on the amount of payment as
required by section 1833(t)(6)(D)(ii) of the Act, and as outlined in
previous rules, including the CY 2014 OPPS/ASC final rule with comment
period (78 FR 75034 through 75036). We note that, beginning in CY 2010,
the pass-through evaluation process and pass-through payment
methodology for implantable biologicals newly approved for pass-through
payment beginning on or after January 1, 2010, that are surgically
inserted or implanted (through a surgical incision
[[Page 59379]]
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 propose 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 2025, we also
propose to include an estimate of any skin substitutes and similar
products in our estimate of pass-through spending for devices.
For drugs and biologicals eligible for pass-through payment,
section 1833(t)(6)(D)(i) of the Act establishes the pass-through
payment amount as the amount by which the amount authorized under
section 1842(o) of the Act (or, if the drug or biological is covered
under a competitive acquisition contract under section 1847B of the
Act, an amount determined by the Secretary equal to the average price
for the drug or biological for all competitive acquisition areas and
year established under such section as calculated and adjusted by the
Secretary) exceeds the portion of the otherwise applicable fee schedule
amount that the Secretary determines is associated with the drug or
biological. Consistent with current policy, we propose to apply a rate
of ASP plus 6 percent to most drugs and biologicals for CY 2025, and
therefore our estimate of drug and biological pass-through payment for
CY 2025 for this group of items is $10.2 million.
Payment for certain drugs, specifically diagnostic
radiopharmaceuticals and contrast agents without pass-through payment
status, is packaged into payment for the associated procedures, and
these products are not separately paid. In addition, we policy-package
all non-pass-through drugs, biologicals, and radiopharmaceuticals that
function as supplies when used in a diagnostic test or procedure, drugs
and biologicals that function as supplies when used in a surgical
procedure, drugs and biologicals used for anesthesia, and other
categories of drugs and biologicals, as discussed in section V.B.1.c of
this proposed rule. Consistent with current policy, we propose 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 2025, 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 2025 is not $0. This is because the pass-through
payment amount and the fee schedule amount associated with the drug or
biological will not be the same, unlike for separately payable drugs
and biologicals. In section V.A.6 of this proposed rule, we discuss our
policy to determine if the costs of certain policy-packaged drugs or
biologicals are already packaged into the existing APC structure. If we
determine that a policy-packaged drug or biological approved for pass-
through payment resembles predecessor drugs or biologicals already
included in the costs of the APCs that are associated with the drug
receiving pass-through payment, we propose to offset the amount of
pass-through payment for the policy-packaged drug or biological. For
these drugs or biologicals, the APC offset amount is the portion of the
APC payment for the specific procedure performed with the pass-through
drug or biological, which we refer to as the policy-packaged drug APC
offset amount. Consistent with current policy, if we determine that an
offset is appropriate for a specific policy-packaged drug or biological
receiving pass-through payment, we propose to reduce our estimate of
pass-through payments for these drugs or biologicals by the APC offset
amount.
Similar to pass-through spending estimates for devices, the first
group of drugs and biologicals requiring a pass-through payment
estimate consists of those products that were recently made eligible
for pass-through payment and that will continue to be eligible for
pass-through payment in CY 2025. 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 2024 or beginning in CY 2025.
The sum of the CY 2025 pass-through spending estimates for these two
groups of drugs and biologicals equals the total CY 2025 pass-through
spending estimate for drugs and biologicals with pass-through payment
status.
B. Proposed Estimate of Pass-Through Spending for CY 2025
For CY 2025, we propose to set the applicable pass-through payment
percentage limit at 2.0 percent of the total projected OPPS payments
for CY 2025, consistent with section 1833(t)(6)(E)(ii)(II) of the Act
and our OPPS policy from CY 2004 through CY 2024 (88 FR 81805). 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 2025, there are 8 active
categories for CY 2025. The active categories are described by HCPCS
codes C1747, C1826, C1827, C1600, C1601, C1602, C1603 and C1604. Based
on the information from the device manufacturers, we estimate that
HCPCS code C1747 will cost $19.5 million in pass-through expenditures
in CY 2025, HCPCS code C1826 will cost $151,991 in pass-through
expenditures in CY 2025, HCPCS code C1827 will cost $364,793 in pass-
through expenditures in CY 2025, HCPCS code C1600 will cost $21.9
million in pass-through expenditures in CY 2025, HCPCS code C1601 will
cost $14.4 million in pass-through expenditures in CY 2025, HCPCS code
C1602 will cost $8.2 million in pass-through expenditures in CY 2025,
HCPCS code C1603 will cost $6.6 million in pass-through expenditures in
CY 2025, and HCPCS code C1604 will cost $20.0 million in pass-through
expenditures in CY 2025. Therefore, we propose an estimate for the
first group of devices of $91.1 million.
In estimating our proposed CY 2025 pass-through spending for device
categories in the second group, we included the following: (1) device
categories that we assumed at the time of the development of the
proposed rule would be newly eligible for pass-through payment in CY
2025; (2) additional device categories that we estimated could be
approved for pass-through status after the development of this proposed
rule and before January 1, 2025; and (3) contingent projections for new
device categories established in the second through fourth quarters of
CY 2025. For CY 2025, we propose to use the general methodology
described in the CY 2008 OPPS/ASC final rule with comment period (72 FR
66778), while also taking into account recent OPPS experience in
approving new pass-through device categories. For this proposed rule,
the proposed estimate of CY 2025 pass-through spending for this second
group of device categories was $523.7 million.
To estimate proposed CY 2025 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 2025, we propose to use
[[Page 59380]]
the CY 2023 Medicare hospital outpatient claims data regarding their
utilization, information provided in their respective pass-through
applications, other historical hospital claims data, pharmaceutical
industry information, and clinical information regarding these drugs
and biologicals to project the CY 2025 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 2025, we estimated the pass-
through payment amount as the difference between the general payment
rate of ASP+6 percent and the payment rate for non-pass-through drugs
and biologicals that would be separately paid. Because we propose to
utilize a payment rate of ASP plus 6 percent for most drugs and
biologicals in this proposed rule, the proposed payment rate difference
between the pass-through payment amount and the non-pass-through
payment amount is $0 for this group of drugs.
Because payment for policy-packaged drugs and biologicals is
packaged if the product is not paid separately due to its pass-through
payment status, we propose to include in the CY 2025 pass-through
estimate the difference between payment for the policy-packaged drug or
biological at ASP+6 percent (or WAC+6 percent, or 95 percent of AWP, if
ASP or WAC information is not available) and the policy-packaged drug
APC offset amount, if we determine that the policy-packaged drug or
biological approved for pass-through payment resembles a predecessor
drug or biological already included in the costs of the APCs that are
associated with the drug receiving pass-through payment. Given the
proposal to pay separately for diagnostic radiopharmaceuticals that
exceed the proposed per-day threshold referenced in section II.A.3.c of
this proposed rule, for CY 2025, all diagnostic radiopharmaceuticals
that are currently on pass-through will be separately payable once
their pass-through status has expired. For this first group of policy-
packaged drugs and biologicals, we estimate pass-through spending for
CY 2025 of $200,000 as compared to $90 million for CY 2024 OPPS/ASC
final rule (88 FR 81806).
To estimate proposed CY 2025 pass-through spending for drugs and
biologicals in the second group (that is, drugs and biologicals that we
knew at the time of development of this proposed rule were newly
eligible or recently became eligible for pass-through payment in CY
2024, additional drugs and biologicals that we estimated could be
approved for pass-through status subsequent to the development of this
proposed rule and before January 1, 2025, and projections for new drugs
and biologicals that could be initially eligible for pass-through
payment in the second through fourth quarters of CY 2025), we propose
to use utilization estimates from pass-through applicants,
pharmaceutical industry data, clinical information, recent trends in
the per unit ASPs of hospital outpatient drugs, and projected annual
changes in service volume and intensity as our basis for making the CY
2025 pass-through payment estimate. We also propose to consider the
most recent OPPS experience in approving new pass-through drugs and
biologicals. Using our proposed methodology for estimating CY 2025
pass-through payments for this second group of drugs, we calculated a
proposed spending estimate for this second group of drugs and
biologicals of approximately $10 million.
We estimate for this proposed rule that the amount of pass-through
spending for the device categories and the drugs and biologicals that
are continuing to receive pass-through payment in CY 2025 and the
amount of pass-through spending for those device categories, drugs, and
biologicals that first become eligible for pass-through payment during
CY 2025 would be approximately $625 million (approximately $614.8
million for device categories and approximately $10.2 million for drugs
and biologicals), which represents only 0.71 percent of total projected
OPPS payments for CY 2025 (approximately $88.2 billion). Therefore, we
estimate that pass-through spending in CY 2025 would not exceed the 2.0
percent of total projected OPPS CY 2025 program spending limit provided
for in section 1833(t)(6)(E) of the Act.
VII. Proposed OPPS Payment for Hospital Outpatient Visits and Critical
Care Services
For CY 2025, we propose to continue our current clinic and
emergency department (ED) hospital outpatient visits payment policies.
For a description of these policies, we refer readers to the CY 2016
OPPS/ASC final rule with comment period (80 FR 70448). We also propose
to continue our payment policy for critical care services for CY 2025.
For a description of this policy, we refer readers to the CY 2016 OPPS/
ASC final rule with comment period (80 FR 70449), and for the history
of this payment policy, we refer readers to the CY 2014 OPPS/ASC final
rule with comment period (78 FR 75043).
As we stated in the CY 2022 OPPS/ASC final rule with comment period
(86 FR 63663), the volume control method for clinic visits furnished by
non-excepted off-campus provider-based departments (PBDs) applies for
CY 2022 and subsequent years. More specifically, we finalized a policy
to continue to utilize a PFS-equivalent payment rate for the hospital
outpatient clinic visit service described by HCPCS code G0463 when it
is furnished by these departments for CY 2022 and beyond. The PFS-
equivalent rate for CY 2025 is 40 percent of the proposed OPPS payment.
Under this policy, these departments will be paid approximately 40
percent of the OPPS rate for the clinic visit service in CY 2025.
In the CY 2023 OPPS/ASC final rule with comment period (87 FR
71748), we finalized a policy that excepted off-campus provider-based
departments (PBDs) (departments that bill the modifier ``PO'' on claim
lines) of rural Sole Community Hospitals (SCHs), as described under 42
CFR 412.92 and designated as rural for Medicare payment purposes, are
exempt from the clinic visit payment policy that applies a PFS-
equivalent payment rate for the clinic visit service, as described by
HCPCS code G0463, when provided at an off-campus PBD excepted from
section 1833(t)(21) of the Act. For the full discussion of this policy,
we refer readers to the CY 2023 OPPS/ASC final rule with comment period
(87 FR 72047 through 72051). For CY 2025, we propose to continue to
exempt excepted off-campus PBDs of rural SCHs from the clinic visit
payment policy. We will continue to monitor the effect of this change
in Medicare payment policy, including on the volume of these types of
OPD services.
VIII. Payment for Partial Hospitalization and Intensive Outpatient
Services
This section discusses payment for partial hospitalization services
as well as intensive outpatient services. Since CY 2000, Medicare has
paid for partial hospitalization services under the OPPS. Beginning in
CY 2024, as authorized by section 4124 of the Consolidated
Appropriations Act (CAA), 2023 (Pub. L. 117-328), Medicare began paying
for intensive outpatient services furnished by hospital outpatient
departments,
[[Page 59381]]
community mental health centers, federally qualified health centers,
and rural health clinics in addition to opioid treatment programs.
Additional background on the partial hospitalization and intensive
outpatient benefits is included in the following paragraphs.
A. Background
1. Partial Hospitalization
A partial hospitalization program (PHP) is an intensive outpatient
program of psychiatric services provided as an alternative to inpatient
psychiatric care for individuals who have an acute mental illness,
which includes, but is not limited to, conditions such as depression,
schizophrenia, and substance use disorders (SUD). Section 1861(ff)(1)
of the Act defines partial hospitalization services as the items and
services described in paragraph (2) prescribed by a physician and
provided under a program described in paragraph (3) under the
supervision of a physician pursuant to an individualized, written plan
of treatment established and periodically reviewed by a physician (in
consultation with appropriate staff participating in such program),
which sets forth the physician's diagnosis, the type, amount,
frequency, and duration of the items and services provided under the
plan, and the goals for treatment under the plan. Section 1861(ff)(2)
of the Act describes the items and services included in partial
hospitalization services. Section 1861(ff)(3)(A) of the Act specifies
that a PHP is a program furnished by a hospital to its outpatients or
by a community mental health center (CMHC), as a distinct and organized
intensive ambulatory treatment service, offering less than 24-hour-
daily care, in a location other than an individual's home or inpatient
or residential setting. Section 1861(ff)(3)(B) of the Act defines a
CMHC for purposes of this benefit. We refer readers to sections
1833(t)(1)(B)(i), 1833(t)(2)(B), 1833(t)(2)(C), and 1833(t)(9)(A) of
the Act and 42 CFR 419.21, for additional information regarding PHP.
Partial hospitalization program policies and payment have been
addressed under OPPS since CY 2000. In CY 2008, we began efforts to
strengthen the PHP benefit through extensive data analysis, along with
policy and payment changes, by implementing two refinements to the
methodology for computing the PHP median. For a detailed discussion on
these policies, we refer readers to the CY 2008 OPPS/ASC final rule
with comment period (72 FR 66670 through 66676). In CY 2009, we
implemented several regulatory, policy, and payment changes. For a
detailed discussion on these policies, we refer readers to the CY 2009
OPPS/ASC final rule with comment period (73 FR 68688 through 68697). In
CY 2010, we retained the two-tier payment approach for partial
hospitalization services and used only hospital-based PHP data in
computing the PHP APC per diem costs, upon which PHP APC per diem
payment rates are based (74 FR 60556 through 60559). In CY 2011 (75 FR
71994), we established four separate PHP APC per diem payment rates:
two for CMHCs (APC 0172 and APC 0173) and two for hospital-based PHPs
(APC 0175 and APC 0176) and instituted a two-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 OPPS/ASC final rule with comment period (80 FR
70453 through 70467), 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 the CY 2017 OPPS/ASC final
rule with comment period (81 FR 79687 through 79691), we continued to
apply our established policies to calculate the PHP APC per diem
payment rates based on geometric mean per diem costs and finalized a
policy to combine the Level 1 and Level 2 PHP APCs for CMHCs and for
hospital-based PHPs. We also implemented an eight-percent outlier cap
for CMHCs to mitigate potential outlier billing vulnerabilities. For a
comprehensive description of PHP payment policy, including a detailed
methodology for determining PHP per diem amounts, we refer readers to
the CY 2016 and CY 2017 OPPS/ASC final rules with comment period (80 FR
70453 through 70455 and 81 FR 79678 through 79680, respectively).
In the CYs 2018 and 2019 OPPS/ASC final rules with comment period
(82 FR 59373 through 59381 and 83 FR 58983 through 58998,
respectively), we continued to apply our established policies to
calculate the PHP APC per diem payment rates based on geometric mean
per diem costs, designated a portion of the estimated 1.0 percent
hospital outpatient outlier threshold specifically for CMHCs, and
proposed updates to the PHP allowable HCPCS codes. We finalized these
proposals in the CY 2020 OPPS/ASC final rule with comment period (84 FR
61352).
In the CY 2020 OPPS/ASC final rule with comment period (84 FR 61339
through 61350), we finalized a proposal to use the calculated CY 2020
CMHC geometric mean per diem cost and the calculated CY 2020 hospital-
based PHP geometric mean per diem cost, but with a cost floor equal to
the CY 2019 final geometric mean per diem costs as the basis for
developing the CY 2020 PHP APC per diem rates. Also, we continued to
designate a portion of the estimated 1.0 percent hospital outpatient
outlier threshold specifically for CMHCs, consistent with the
percentage of projected payments to CMHCs under the OPPS, excluding
outlier payments.
In the April 30, 2020 interim final rule with comment (85 FR 27562
through 27566), effective as of March 1, 2020 and for the duration of
the COVID-19 Public Health Emergency (PHE), hospital and CMHC staff
were 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, as long as the location
met all conditions of participation to the extent not waived. A
hospital or CMHC could furnish such services using telecommunications
technology to a
[[Page 59382]]
beneficiary in a temporary expansion location if that beneficiary was
registered as an outpatient. In the CY 2023 OPPS/ASC final rule (87 FR
72247), we confirmed that these provisions applied only for the
duration of the COVID-19 PHE. On May 11, 2023, the COVID-19 PHE ended,
and accordingly, these flexibilities ended as well.
In the CY 2021 OPPS/ASC final rule with comment period (85 FR 86073
through 86080), we continued our current methodology to utilize cost
floors, as needed. Since the final calculated geometric mean per diem
costs for both CMHCs and hospital-based PHPs were significantly higher
than each proposed cost floor, a floor was not necessary at the time,
and we did not finalize the proposed cost floors in the CY 2021 OPPS/
ASC final rule with comment period.
In the CY 2022 OPPS/ASC final rule with comment period (86 FR 63665
through 63666), we explained that we observed a number of changes,
likely as a result of the COVID-19 PHE, in the CY 2020 OPPS claims that
we would have ordinarily used for CY 2022 ratesetting, and this
included changes in the claims for partial hospitalization. We
explained that significant decreases in utilization and in the number
of hospital-based PHP providers who submitted CY 2020 claims led us to
believe that CY 2020 data were not the best overall approximation of
expected PHP services in CY 2022. Therefore, we finalized our proposal
to calculate the PHP per diem costs using the year of claims consistent
with the calculations that would be used for other OPPS services, by
using the CY 2019 claims and the cost reports that were used for CY
2021 final rulemaking to calculate the CY 2022 PHP per diem costs. In
addition, for CY 2022 and subsequent years, we finalized our proposal
to use cost and charge data from the Hospital Cost Report Information
System (HCRIS) as the source for the CMHC cost-to-charge ratios (CCRs),
instead of using the Outpatient Provider Specific File (OPSF) (86 FR
63666).
In the CY 2023 OPPS/ASC final rule with comment period (87 FR
71995), we explained that we continued to observe a decrease in the
number of hospital-based and CMHC PHP days in our trimmed dataset due
to the continued effects of COVID-19; however, the Medicare outpatient
service volumes appeared to be returning to more normal, pre-pandemic
levels. Therefore, we finalized our proposal to use the latest
available CY 2021 claims but use the cost information from prior to the
COVID-19 PHE for calculating the CY 2023 CMHC and hospital-based PHP
APC per diem costs. The application of the OPPS standard methodology,
including the effect of budget neutralizing all other OPPS policy
changes unique to CY 2023, resulted in the final calculated CMHC PHP
APC payment rate being unexpectedly lower than the CY 2022 final CMHC
PHP APC rate. Therefore, in the interest of accurately paying for CMHC
PHP services, under the unique circumstances of budget neutralizing all
other OPPS policy changes for CY 2023, and in keeping with our
longstanding goal of protecting continued access to PHP services
provided by CMHCs by ensuring that CMHCs remain a viable option as
providers of mental health care in the beneficiary's own community, we
finalized utilizing the equitable adjustment authority of section
1833(t)(2)(E) of the Act to appropriately pay for CMHC PHP services at
the same payment rate as for CY 2022, that is, $142.70. In addition, we
clarified the payment under the OPPS for new HCPCS codes that designate
non-PHP services provided for the purposes of diagnosis, evaluation, or
treatment of a mental health disorder and are furnished to
beneficiaries in their homes by clinical staff of the hospital would
not be recognized as PHP services; however, none of the PHP regulations
would preclude a patient that is under a PHP plan of care from
receiving other reasonable and medically necessary non-PHP services
from a hospital (87 FR 72001 and 72002).
In the CY 2024 OPPS/ASC final rule with comment period (88 FR
81811), we revised the regulation at Sec. 424.24(e)(1)(i) to require
the physician certification for PHP services to include a certification
that the patient requires such services for a minimum of 20 hours per
week, as required by section 1861(ff)(1) of the Act, as amended by
section 4124(a) of Division FF of the CAA, 2023. In addition, we
modified the regulations for PHP at Sec. 410.43 to include references
to SUD. In the same CY 2024 OPPS/ASC final rule, we also established
separate payment rates for PHP days with 3 services and days with 4 or
more services. Accordingly, we established four separate PHP APC per
diem payment rates: one for CMHCs for 3-service days and another for
CMHCs for 4-service days (APC 5853 and APC 5854, respectively), and one
for hospital-based PHPs for 3-service days and another for hospital-
based PHPs for 4-service days (APC 5863 and APC 5864, respectively). We
also finalized a policy to utilize the separate CMHC rates for 3-
service and 4-service PHP days as the Medicare Physician Fee Schedule
(MPFS) rates, depending upon whether a nonexcepted off-campus hospital
outpatient department furnishes 3 or 4 PHP services in a day. Lastly,
we finalized several changes beginning in CY 2024 to align coding,
billing, and payment between PHPs and intensive outpatient programs,
which are discussed in greater detail in the following sections of this
CY 2025 OPPS/ASC proposed rule.
2. Intensive Outpatient Program Services
Section 4124(b) of the CAA, 2023 established Medicare coverage for
intensive outpatient services effective for items and services
furnished on or after January 1, 2024. An intensive outpatient program
(IOP) is a distinct and organized program of psychiatric services for
individuals who have an acute mental illness, which includes, but is
not limited to, conditions such as depression, schizophrenia, and SUD.
Intensive outpatient services are not required to be provided in lieu
of inpatient hospitalization. Section 1861(ff)(4) of the Act defines
intensive outpatient services as the items and services described in
paragraph (2) prescribed by a physician for an individual determined
(not less frequently than every other month) by a physician to have a
need for such services for a minimum of 9 hours per week and provided
under a program described in paragraph (3) under the supervision of a
physician pursuant to an individualized, written plan of treatment
established and periodically reviewed by a physician (in consultation
with appropriate staff participating in such program), which plan 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 intensive outpatient
services. Section 1861(ff)(4)(C) of the Act specifies that an IOP is a
program furnished by a hospital to its outpatients, a CMHC, a Federally
qualified health center (FQHC), or by a rural health clinic (RHC) as a
distinct and organized intensive ambulatory treatment service, offering
less than 24-hour-daily care, in a location other than an individual's
home or inpatient or residential setting. Section 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
[[Page 59383]]
Act and 42 CFR 419.21, for additional information regarding IOP.
In the CY 2024 OPPS/ASC final rule with comment period (88 FR 81812
through 81857), we established payment and program requirements for the
IOP benefit furnished by a hospital to its outpatients, or by a CMHC,
an FQHC, or an RHC. In addition, we established Medicare Part B
coverage for IOP services provided by Opioid Treatment Programs (OTPs)
for the treatment of opioid use disorder (OUD). We refer readers to the
CY 2025 Physician Fee Schedule (PFS) proposed rule, published elsewhere
in the Federal Register, for additional information regarding CY 2025
proposed payment policies for IOP services furnished by FQHCs and RHCs.
Consistent with the statutory definition of intensive outpatient
services under section 1861(ff)(2) of the Act, we finalized regulations
at 42 CFR 410.44 to set forth the conditions and exclusions applicable
for intensive outpatient services, and at Sec. 424.24 to set forth the
content of the certification and plan of treatment requirements for
intensive outpatient services. We also revised certain existing
regulations at Sec. Sec. 410.2, 410.3, 410.10, 410.27, 410.150, and
419.21 to add a regulatory definition of intensive outpatient services
and to include intensive outpatient services in the regulations for
medical and other health services paid for under Medicare Part B, and
in the case of Sec. 419.21, under the OPPS. Additionally, we created
regulations at Sec. 410.111 to establish the requirements for coverage
of IOP services furnished in CMHCs, and at Sec. 410.173 to establish
conditions of payment for IOP services furnished in CMHCs. Lastly, we
revised Sec. 410.155 to exclude IOP services from the outpatient
mental health treatment limitation, consistent with the statutory
requirement of section 1833(c)(2) of the Act, as amended by section
4124(b)(3) of the CAA, 2023.
In addition, as discussed in greater detail in the following
sections, we established coding, billing, and payment policies for IOP
that align with the policies established for PHP provided in the same
settings. Specifically, we established four separate IOP APC per diem
payment rates at the same rates we proposed for the PHP APCs: one for
CMHCs for 3-service days and another for CMHCs for 4-service days (APC
5851 and APC 5852, respectively), and one for hospital-based IOPs for
3-service days and another for hospital-based IOPs for 4-service days
(APC 5861 and APC 5862, respectively). Similar to the policy finalized
for PHP, we finalized a policy to utilize the CMHC rates for 3-service
and 4-service IOP days as the MPFS rates, depending upon whether a
nonexcepted hospital outpatient department furnishes 3 or 4 IOP
services in a day.
We also established payment for IOP provided by an RHC or FQHC at
the same rate as APC 5861, which is the 3-service hospital-based IOP
rate (Sec. 405.2462(j)). Furthermore, we established a payment
adjustment for IOP provided by an OTP based on 3 times the payment rate
for APC 5861 beginning in CY 2024 (Sec. 410.67(d)(4)(i)(F)). As noted
earlier in this CY 2025 OPPS/ASC proposed rule, additional information
regarding CY 2025 proposed payment policies for IOP services furnished
by FQHCs and RHCs can be found in the CY 2025 PFS proposed rule,
published elsewhere in the Federal Register.
B. Coding and Billing for PHP and IOP Services Under the OPPS
In the CY 2024 OPPS/ASC final rule, we finalized a billing
requirement that all providers use condition code 41 to indicate that a
claim is for partial hospitalization services and use condition code 92
to identify intensive outpatient claims, effective January 1, 2024.
Since the statutory definitions of both IOP and PHP generally include
the same types of items and services covered, we stated in the CY 2024
final OPPS rule that we believe it is appropriate to align the programs
using a consistent list of services, so that level of intensity would
be the only differentiating factor between partial hospitalization
services and intensive outpatient services. The use of condition codes
41 for PHP claims and 92 for IOP claims allows us to differentiate
between these services for billing purposes.
We recognize that the level of intensity of mental health services
that a patient requires may vary over time; therefore, we believe
utilizing a consolidated list of HCPCS codes to identify services under
both the IOP and PHP benefits supports a smooth transition for patients
when a change in the intensity of their services is necessary to best
meet their needs. For example, a patient receiving IOP services may
experience an acute mental health need that necessitates more intense
services through a PHP. Alternatively, an IOP patient that no longer
requires the level of intensity provided by the IOP can access less
intense mental health services, such as individual mental health
services. The full list of HCPCs codes recognized under the PHP and IOP
benefits can be found in the Medicare Claims Processing internet Only
Manual, Chapter 4, Sections 260.1 and 261.1, respectively, and their
subsections, available at https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/clm104c04.pdf.
To qualify for payment for the IOP APC (5851, 5852, 5861, or 5862)
or the PHP APC (5853, 5854, 5863, or 5864), one service provided that
day must be from the Partial Hospitalization and Intensive Outpatient
Primary list. We refer readers to the CY 2024 OPPS final rule for
further discussion regarding our expectation that at least one of the
services on the PHP and IOP Primary list will be indicated per day for
patients who need the level of care offered by a PHP or IOP program.
The PHP and IOP Primary List can be found in the CY 2024 OPPS/ASC final
rule at 88 FR 81821.
Beginning in CY 2024, we recognized caregiver training services and
Principal Illness Navigation (PIN) services as PHP and IOP services. We
explained that the reported costs associated with providing such
services are included when we calculate the PHP and IOP payment rates;
however, these services do not count toward the determination of
whether a PHP or IOP day is paid at the 3-service or 4-service rate. We
refer readers to the CY 2024 OPPS final rule for a detailed discussion
of this policy (88 FR 81823 through 81825).
As finalized in the CY 2024 OPPS final rule, if new codes are
established that represent the PHP and IOP services described under
Sec. Sec. 410.43(a)(4) and 410.44(a)(4), respectively, such codes are
added to the list of codes recognized for payment for PHP or IOP
through sub-regulatory guidance. We note that coding updates frequently
occur outside of the standard rulemaking timeline. We adopted this sub-
regulatory process in order to pay expeditiously when new codes are
created that describe any of the services enumerated at Sec. Sec.
410.43(a)(4) and 410.44(a)(4), which PHPs and IOPs, respectively, would
provide. We explained that this policy applies to new codes that are
crosswalked to a previously included code, or whose code descriptor is
substantially similar to a descriptor for a code on the list or
describes a service on the list. We stated that any additional services
not described at Sec. Sec. 410.43(a)(4) or 410.44(a)(4) would be added
to the lists in regulation through notice and comment rulemaking. We
note that for CY 2025, we are not proposing to add any new services not
described at Sec. Sec. 410.43(a)(4) or 410.44(a)(4) to the list of PHP
and IOP services.
[[Page 59384]]
C. Proposed CY 2025 Payment Rates for PHP and IOP
1. Background
Beginning in CY 2024, we established four separate PHP APC per diem
payment rates: one for CMHCs for 3-service days and another for CMHCs
for 4-service days (APC 5853 and APC 5854, respectively), and one for
hospital-based PHPs for 3-service days and another for hospital-based
PHPs for 4-service days (APC 5863 and APC 5864, respectively). In
addition, for hospital-based PHPs, we finalized a policy to calculate
payment rates using the broader OPPS data set, instead of using
hospital-based PHP data only. We explained that using the broader OPPS
data set allows CMS to capture data from claims not identified as PHP,
but that also include the service codes and intensity required for a
PHP day. Because we established consistent coding and payment between
the PHP and IOP benefits, we considered all OPPS data for PHP days and
non-PHP days that include 3 or more of the same service codes. We
established four separate IOP APC per diem payment rates at the same
rates we proposed for the PHP APCs: one for CMHCs for 3-service days
and another for CMHCs for 4-service days (APC 5851 and APC 5852,
respectively), and one for hospital-based IOPs for 3-service days and
another for hospital-based IOPs for 4-service days (APC 5861 and APC
5862, respectively).
In the CY 2024 OPPS/ASC final rule, we noted that the standard PHP
day is typically four services or more per day. We explained that we
have historically provided payment for three services a day for
extenuating circumstances when a beneficiary would be unable to
complete a full day of PHP treatment. As we stated in the CY 2008 OPPS/
ASC final rule with comment period (72 FR 66672), it was never our
intention that days with only three units of service should represent
the number of services provided in a typical PHP day. Our intention was
to cover days that consisted of three units of service only in certain
limited circumstances. For example, as we noted in the CY 2009 OPPS/ASC
proposed rule (73 FR 41513), we believe 3-service days may be
appropriate when a patient is transitioning towards discharge (or days
when a patient is at the beginning of his or her PHP stay). Another
example of when it may be appropriate for a program to provide only
three units of service in a day is when a patient is required to leave
the PHP early for the day due to an unexpected medical appointment.
We also explained that prior to CY 2024, we historically prepared
the data by first applying PHP-specific trims and data exclusions and
assessing CCRs. We direct the reader to the CY 2016 OPPS/ASC final rule
with comment period (80 FR 70463 through 70465) for a more complete
discussion of these trims, data exclusions, and CCR adjustments. In
prior rules, we have typically included a discussion of PHP-specific
data trims, exclusions, and CCR adjustments; we did not include that
discussion in the CY 2024 OPPS/ASC proposed or final rule. We stated
that these PHP-specific data trims and exclusions addressed limitations
as well as anomalies in the PHP data. However, as noted earlier, we
finalized a methodology for CY 2024 to calculate hospital-based PHP
payment rates for 3 services per day and 4 services per day based on
cost per day using the broader OPPS data set. Accordingly, we did not
apply PHP-specific trims and data exclusions, but rather we applied the
same trims and data exclusions consistent with the OPPS.
We stated in the CY 2024 OPPS/ASC final rule (88 FR 81830) that
while no IOP benefit existed prior to the CAA, 2023, the types of items
and services included in IOP had been, and were, paid for by Medicare
either as part of the PHP benefit or under the OPPS more generally.
Additionally, we stated that prior to the CAA, 2023, CMS had begun
gathering information from interested parties on IOP under Medicare. In
the CY 2023 OPPS/ASC proposed rule (87 FR 44679), we issued a comment
solicitation on intensive outpatient mental health treatment, including
SUD treatment furnished by IOPs, to collect information regarding
whether there are any gaps in coding that may be limiting access to
needed levels of care for treatment of mental health disorders or SUDs
for Medicare beneficiaries, and specific information about IOP
services, such as the settings of care in which these programs
typically furnish services, the range of services typically offered,
and the range of practitioner types that typically furnish these
services.
We explained that along with the requirements for IOP mandated by
the CAA, 2023, we took into consideration information we received from
the comment solicitation to construct an appropriate data set to
develop proposed rates for IOP. Since IOPs furnish the same types of
services as PHP, just at a lower intensity, we stated that we believe
it was appropriate to use the same data and methodology for calculating
payment rates for both PHP and IOP for CY 2024. We explained that
although PHP claims can be specifically identified, there was no
specific identifier or billing code to indicate IOP services that may
have been provided before CY 2024. However, we noted that hospitals
have been permitted to furnish and bill for many of these services as
outpatient services under the OPPS. Thus, we analyzed a broader set of
data that included both PHP and non-PHP days with 3 or more services in
order to calculate proposed payment for PHP services. In order to
establish consistent payment between PHP and IOP, we set IOP payment
rates at the same rates as PHP. We stated that the primary goal in
developing the payment rate methodology for IOP and PHP services was to
pay providers an appropriate amount relative to the patients' needs,
and to avoid cost inversion in future years. We stated that setting the
IOP payment rates equal to the PHP payment rates was appropriate
because IOP was a newly established benefit, and we did not have
definitive data on utilization. However, we explained that both
programs utilize the same services, but furnish them at different
levels of intensity, with different numbers of services furnished per
day and per week, depending on the program. Therefore, we stated that
we expect it would be appropriate to pay the same per diem rates for
IOP and PHP services unless future data analysis supports calculating
rates independently.
2. CY 2025 Payment Rate Methodology for PHP and IOP
For CY 2025, we propose to use the latest available cost
information, from cost reports beginning three fiscal years prior to
the year that is the subject of the rulemaking, and CY 2023 OPPS claims
to update the payment rates for the four PHP APCs and the four IOP APCs
finalized in the CY 2024 OPPS/ASC final rule. This proposal is
consistent with the overall proposed use of cost data for the OPPS,
which is discussed in section II.A.1.a of this proposed rule. In
accordance with the methodology finalized in the CY 2024 OPPS/ASC final
rule, we propose to base the payment rate for each PHP APC on the
geometric mean per diem cost for days with 3 services and 4 or more
services, calculated separately for CMHCs and hospital outpatient
departments. We propose to use the broader set of OPPS data to
calculate the geometric mean costs for hospital outpatient departments,
and we propose to apply the same trims and exclusions consistent with
the OPPS. We also propose to set the payment rates for the four IOP
APCs based on the geometric mean per diem cost for PHP days with
[[Page 59385]]
3 services and 4 or more services, calculated separately for CMHCs and
hospital outpatient departments. Lastly, we propose that if more recent
data subsequently become available after the publication of this
proposed rule, we would use such updated data, if appropriate, to
determine the CY 2025 payment rates for the four PHP APCs and the four
IOP APCs finalized in the CY 2024 OPPS/ASC final rule.
Table 68 below shows the proposed APCs and the calculated geometric
mean per diem costs for the CY 2025 OPPS/ASC proposed rule. Additional
information about the data trims, data exclusions, and CCR adjustments
applicable to the data used for this final rule can be found online at:
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html).\78\
---------------------------------------------------------------------------
\78\ Click on the link labeled ``CY 2025 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 ``2025 NPRM OPPS Claims Accounting (PDF)''.
[GRAPHIC] [TIFF OMITTED] TP22JY24.101
For beneficiaries in a PHP or IOP, we propose to apply the four-
service payment rate (that is, payment for PHP APCs 5854 for CMHCs and
5864 for hospitals, and IOP APCs 5852 for CMHCs and 5862 for hospitals)
for days with 4 or more services. For days with three or fewer
services, we propose to apply the three-service payment rate (that is,
payment for PHP APCs 5853 for CMHCs and 5863 for hospitals, and IOP
APCs 5851 for CMHCs and 5861 for hospitals), which is consistent with
the policy we established in the CY 2024 OPPS/ASC final rule (88 FR
81833). As we noted in the CY 2024 OPPS/ASC final rule, we expect days
with fewer than three services would be very infrequent, and we intend
to monitor the provision of these days among providers and individual
patients.
D. Proposed Outlier Policy for CMHCs
For CY 2025, we propose to maintain the calculations of the CMHC
outlier percentage, cutoff point and percentage payment amount, outlier
reconciliation, outlier payment cap, and fixed dollar threshold
according to previously established policies to include PHP and IOP
services. We refer readers to the CY 2024 OPPS/ASC final rule with
comment period (88 FR 81834 through 81836) for more details on CMHC
outlier policies, and to section II.G.1 of this proposed rule for our
general policies for hospital outpatient outlier payments.
1. Background
As discussed in the CY 2004 OPPS final rule with comment period (68
FR 63469 through 63470), we 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.
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 are not proposing any changes to the CMHC outlier percentage
policy for CY 2025.
3. Cutoff Point and Percentage Payment Amount
Also described in the CY 2018 OPPS/ASC final rule with comment
period (82 FR 59381), our policy has been to pay CMHCs for outliers if
the estimated cost of the day exceeds a cutoff point. In CY 2006, we
set the cutoff point for outlier payments at 3.4 times the highest CMHC
PHP APC payment rate implemented for that calendar year (70 FR 68551).
For CY 2018, the highest CMHC PHP APC payment rate was the payment rate
for CMHC PHP APC 5853. In addition, in CY 2002, the final OPPS outlier
payment percentage for costs above the multiplier threshold was set at
50 percent (66 FR 59889). In CY 2018, we
[[Page 59386]]
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. This same policy was also
reiterated in the CY 2019 OPPS/ASC final rule with comment period (83
FR 58996 through 58997), the CY 2020 OPPS/ASC final rule with comment
period (84 FR 61351), the CY 2021 OPPS/ASC final rule with comment
period (85 FR 86082 through 86083), the CY 2022 OPPS/ASC final rule
with comment period (86 FR 63670), the CY 2023 OPPS/ASC final rule with
comment period (87 FR 72004), and the CY 2024 OPPS/ASC final rule with
comment period (88 FR 81835). For CY 2024, we extended this policy to
intensive outpatient services. We are not proposing any changes to the
cutoff point and payment amount policy for CY 2025.
4. Outlier Reconciliation
In the CY 2009 OPPS/ASC final rule with comment period (73 FR 68594
through 68599), we established an outlier reconciliation policy to
address charging aberrations related to OPPS outlier payments. We
addressed vulnerabilities in the OPPS outlier payment system that led
to differences between billed charges and charges included in the
overall CCR, which are used to estimate cost and would apply to all
hospitals and CMHCs paid under the OPPS. We initiated steps to ensure
that outlier payments appropriately account for the financial risk when
providing an extraordinarily costly and complex service but are only
being made for services that legitimately qualify for the additional
payment.
For a comprehensive description of outlier reconciliation, we refer
readers to the CY 2023 OPPS/ASC and CY 2019 OPPS/ASC final rules with
comment period (83 FR 58874 through 58875 and 81 FR 79678 through
79680, respectively). We are not proposing any changes to the outlier
reconciliation policy for CY 2025.
5. Outlier Payment Cap
In the CY 2017 OPPS/ASC final rule with comment period, we
implemented a CMHC outlier payment cap to be applied at the provider
level, such that in any given year, an individual CMHC will receive no
more than a set percentage of its CMHC total per diem payments in
outlier payments (81 FR 79692 through 79695). Our analysis of CY 2014
claims data found that CMHC outlier payments began to increase
similarly to the way they had prior to CY 2004. This was due to
inflated cost from three CMHCs that accounted for 98 percent of all
CMHC outlier payments that year and received outlier payments that
ranged from 104 percent to 713 percent of their total per diem
payments. To balance our concern about disadvantaging CMHCs with our
interest in protecting the benefit from excessive outlier payments and
to mitigate potential inappropriate outlier billing vulnerabilities, we
finalized the CMHC outlier payment cap at 8 percent of the CMHC's total
per diem payments (81 FR 79694 through 79695) to limit the impact of
inflated CMHC charges on outlier payments. This outlier payment cap
only affects CMHCs; it does not affect other provider types (that is,
hospital-based PHPs), and is in addition to and separate from the
current outlier policy and reconciliation policy in effect. We are not
proposing any changes to the outlier payment cap for CY 2025.
6. Fixed-Dollar Threshold
In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59267
through 59268), for the hospital outpatient outlier payment policy, we
set a fixed-dollar threshold in addition to an APC multiplier
threshold. Fixed-dollar thresholds are typically used to drive outlier
payments for very costly items or services, such as cardiac pacemaker
insertions. Currently, for CY 2024, CMHC PHP APCs (5853 or 5854) and
IOP APCs (5851 or 5852) are the only APCs for which CMHCs may receive
payment under the OPPS, and these APCs are 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 APCs (5853 or 5854) and IOP
APCs (5851 or 5852), it is not necessary to also impose a fixed-dollar
threshold on CMHCs. Therefore, in the CY 2018 OPPS/ASC final rule with
comment period, we did not set a fixed-dollar threshold for CMHC
outlier payments (82 FR 59381). This same policy was also reiterated in
the CY 2020 OPPS/ASC final rule with comment period (84 FR 61351), the
CY 2021 OPPS/ASC final rule with comment period (85 FR 86083), the CY
2022 OPPS/ASC final rule with comment period (86 FR 63508), the CY 2023
OPPS/ASC final rule with comment period (87 FR 72004), and the CY 2024
OPPS/ASC final rule with comment period (88 FR 81836). We are not
proposing any changes to the fixed-dollar threshold policy for CY 2025.
IX. Services That Will Be Paid Only as Inpatient Services
A. Background
Established in rulemaking as part of the initial implementation of
the OPPS, the inpatient only (IPO) list identifies services for which
Medicare will only make payment when the services are furnished in the
inpatient hospital setting because of the invasive nature of the
procedure, the underlying physical condition of the patient, or the
need for at least 24 hours of postoperative recovery time or monitoring
before the patient can be safely discharged (70 FR 68695). The IPO list
was created based on the premise (rooted in the practice of medicine at
that time), that Medicare should not pay for procedures furnished as
outpatient services that are performed on an inpatient basis virtually
all of the time for the Medicare population, for the reasons described
above, because performing these procedures on an outpatient basis would
not be safe or appropriate, and therefore not reasonable and necessary
under Medicare rules (63 FR 47571). Services included on the IPO list
were those determined to require inpatient care, such as those that are
highly invasive, result in major blood loss or temporary deficits of
organ systems (such as neurological impairment or respiratory
insufficiency), or otherwise require intensive or extensive
postoperative care (65 FR 67826). There are some services designated as
inpatient only that, given their clinical intensity, would not be
expected to be performed in the hospital outpatient setting. For
example, we have traditionally considered certain surgically invasive
procedures on the brain, heart, and abdomen, such as craniotomies,
coronary-artery bypass grafting, and laparotomies, to require inpatient
care (65 FR 18456). Designation of a service as inpatient only does not
preclude the service from being furnished in a hospital outpatient
setting but rather means that Medicare will not make payment for the
service if it is furnished to a Medicare beneficiary in the hospital
outpatient setting (65 FR 18443). Conversely, the fact that a procedure
is not on the IPO list should not be interpreted to mean the procedure
is only appropriately performed in the hospital outpatient setting (70
FR 68696).
As part of the annual update process, we have historically worked
with interested parties, including
[[Page 59387]]
professional societies, hospitals, surgeons, hospital associations, and
beneficiary advocacy groups, to evaluate the IPO list and to determine
whether services should be added to or removed from the list.
Interested parties are encouraged to request reviews for a particular
code or group of codes; and we have asked that their requests include
evidence that demonstrates that the procedure was performed on an
outpatient basis in a safe and appropriate manner in a variety of
different types of hospitals--including but not limited to--operative
reports of actual cases, peer-reviewed medical literature, community
medical standards and practice, physician comments, outcome data, and
post-procedure care data (67 FR 66740).
We traditionally have used five longstanding criteria to determine
whether a procedure should be removed from the IPO list. As noted in
the CY 2012 OPPS/ASC final rule with comment period (76 FR 74353), we
assess whether a procedure or service meets these criteria to determine
whether it should be removed from the IPO list and assigned to an APC
group for payment under the OPPS when provided in the hospital
outpatient setting. We have explained that while we only require a
service to meet one criterion to be considered for removal, satisfying
only one criterion does not guarantee that the service will be removed;
instead, the case for removal is strengthened with the more criteria
the service meets. The criteria for assessing procedures for removal
from the IPO list are as follows:
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 covered procedures list.
In the past, we have requested that interested parties submit
corresponding evidence in support of their claims that a code or group
of codes meet the longstanding criteria for removal from the IPO list
and are safe to perform on the Medicare population in the hospital
outpatient setting--including, but not limited to case reports,
operative reports of actual cases, peer-reviewed medical literature,
medical professional analysis, clinical criteria sets, and patient
selection protocols. Our clinicians then thoroughly review all
information submitted within the context of the established criteria
and if, following this review, we determine that there is sufficient
evidence to confirm that the code could be safely and appropriately
performed on an outpatient basis, we assign the service to an APC and
include it as a payable procedure under the OPPS (67 FR 66740). We
determine the APC assignment for services removed from the IPO list by
evaluating the clinical similarity and resource costs of the service
compared to other services paid under the OPPS and by reviewing the
Medicare Severity Diagnosis Related Groups (MS-DRG) rate for the
service under the IPPS, though we note we would generally expect the
cost to provide a service in the outpatient setting to be less than the
cost to provide the service in the inpatient setting.
We stated in prior rulemaking that, over time, given advances in
technology and surgical technique, we would continue to evaluate
services to determine whether they should be removed from the IPO list.
Our goal is to ensure that inpatient only designations are consistent
with the current standards of practice. We have asserted in prior
rulemaking that, insofar as advances in medical practice mitigate
concerns about these procedures being performed on an outpatient basis,
we would be prepared to remove procedures from the IPO list and provide
payment for them under the OPPS (65 FR 18443). Further, CMS has at
times had to reclassify codes as inpatient only services with the
emergence of new information.
We refer readers to the CY 2012 OPPS/ASC final rule with comment
period (76 FR 74352 through 74353) for a full discussion of our
historic policies for identifying services that are typically provided
only in an inpatient setting and that, therefore, will not be paid by
Medicare under the OPPS, as well as the criteria we have used to review
the IPO list to determine whether any services should be removed.
B. Changes to the Inpatient Only (IPO) List
As stated above, we encourage interested parties to request reviews
for a particular code or group of codes for removal from the IPO list.
For the CY 2025 OPPS/ASC proposed rule, we received requests from
interested parties recommending that certain services be removed from
the IPO list. Following our clinical review using the five criteria
listed above, we did not find sufficient evidence that any of those
services meet the criteria to be removed from the IPO list for CY 2025.
Therefore, we are not proposing to remove any services from the IPO
list for CY 2025. Interested parties may comment on this proposed rule
if they believe a service should be removed from the IPO list for CY
2025 and we will consider that recommendation and address the comment
in the CY 2025 OPPS/ASC final rule.
We propose to add three services for which codes were newly created
by the AMA CPT Editorial Panel for CY 2025 to the IPO list. These new
services are described by CPT codes 0894T, 0895T, and 0896T, which will
be effective on January 1, 2025. After clinical review of these
services, we found that they require a hospital inpatient admission or
stay and are not appropriate for payment under the OPPS. We propose to
assign these services to status indicator ``C'' (Inpatient Only) for CY
2025. The CPT codes, long descriptors, and the proposed CY 2025 payment
indicators are displayed in Table 69.
Table 69 below contains the proposed changes to the IPO list for CY
2025. The complete list of codes describing services that we propose to
designate as inpatient only services beginning in CY 2025 is also
included as Addendum E to this proposed rule, which is available via
the internet on the CMS website.
[[Page 59388]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.102
X. Nonrecurring Policy Changes
A. Remote Services
1. Payment for Outpatient Therapy Services, Diabetes Self-Management
Training, and Medical Nutrition Therapy When Furnished by Institutional
Staff to Beneficiaries in Their Homes Through Communications Technology
Section 1861(p) of the Act establishes the benefit category for
outpatient PT, SLP and OT services (expressly for PT services and,
through section 1861(ll)(2) of the Act, for outpatient SLP services
and, through section 1861(g) of the Act, for outpatient OT services).
Section 1861(p) of the Act defines outpatient therapy services in
the three disciplines as those furnished by a provider of services, a
clinic, rehabilitation agency, or a public health agency, or by others
under an arrangement with, and under the supervision of, such provider,
clinic, rehabilitation agency, or public health agency to an individual
as an outpatient; and those furnished by a therapist not under
arrangements with a provider of services, clinic, rehabilitation
agency, or a public health agency. As such, section 1861(p) of the Act
defines outpatient therapy services very broadly to include those
furnished by providers and other institutional settings, as well as
those furnished in office settings. Section 1834(k)(3) of the Act
requires payment for outpatient therapy services to be made based on
the PFS (via section 1848 of the Act), for all institutional providers
listed at sections 1833(a)(8) and (9) of the Act. These providers
include clinics, rehabilitation agencies, public health agencies,
comprehensive outpatient rehabilitation agencies (CORFs), SNFs, home
health agencies (HHAs) (to individuals who are not homebound),
hospitals to outpatients or hospital inpatients who are entitled to
benefits under Part A but have exhausted benefits for inpatient
hospital services during a spell of illness or is not so entitled to
benefits under Part A, and all other CORF services.
Section 1861(qq) of the Act defines Diabetes Self-Management
Training (DSMT) services and authorizes CMS to regulate Medicare DSMT
outpatient services. A ``certified provider'' of DSMT is further
defined in section 1861(qq)(2)(A) of the Act as a physician or other
individual or entity designated by the Secretary who meets certain
quality requirements described in section 1861(qq)(2)(B) of the Act. In
CY 2000, we finalized a standalone rule titled ``Medicare Program;
Expanded Coverage for Outpatient Diabetes Self-Management Training and
Diabetes Outcome Measurements.'' In that rule, we finalized that
payment for outpatient DSMT would be made under the PFS (65 FR 83132).
We further established that, in the case of payments made to other
approved entities, such as hospital outpatient departments, ESRD
facilities, and durable medical equipment suppliers, the payment would
be equal to the amounts established under the PFS and made under the
appropriate payment systems (65 FR 83142).
Section 1861(s)(2)(V) of the Act authorizes Medicare Part B
coverage of medical nutrition therapy services (MNT) for certain
beneficiaries who have diabetes or a renal disease. In the CY 2000 PFS
final rule, we established that payment for MNT services furnished in
the institutional setting, including hospital outpatient departments
(HOPDs), would be made under the PFS, not under the hospital Outpatient
Prospective Payment System (OPPS) (66 FR 55279). Telehealth services
may be paid under the PFS only when the services are furnished to a
beneficiary at an originating site (defined at 410.78), which prior to
the PHE was not typically defined to include a beneficiary's home.
During the PHE for COVID-19, outpatient therapy services, DSMT, and
MNT could be furnished via a telecommunications system to
[[Page 59389]]
beneficiaries in their homes, and bills for these services were
submitted and paid either separately or as part of a bundled payment,
when either personally provided by the billing practitioner or provided
by institutional staff and billed for by institutions, such as HOPDs,
SNFs, and HHAs. For professionals, CMS used waiver authority provided
under section 1135 of the Act to expand the range of practitioners that
could serve as distant site practitioners for Medicare telehealth
services as described in section 1834(m)(4)(E) of the Act and 42 CFR
410.78(b)(2), as well as to waive the originating site requirements for
Medicare telehealth services described in section 1834(m)(4)(C) of the
Act. This allowed for outpatient therapy services to be furnished and
billed by therapists (PTs, OTs and SLPs) in private practice, and for
DSMT and MNT to be furnished via Medicare telehealth to beneficiaries
in urban areas, as well as rural areas, including to beneficiaries
located in their homes.\79\
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\79\ https://www.cms.gov/files/document/03092020-covid-19-faqs-508.pdf.
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When CMS expanded the types of practitioners who may bill for their
services when furnished as Medicare telehealth services from a distant
site to include therapists using section 1135 waiver authority during
the PHE for COVID-19, CMS generally took the position for services
furnished in HOPDs that separate waiver authority was needed to allow
hospitals to bill for services furnished by hospital staff through
communication technology to beneficiaries in their homes. CMS
implemented the Hospitals Without Walls (HWW) policy that relied on
waiver authority, which allowed hospitals to reclassify patients' homes
as part of the hospital. HWW allowed hospitals to bill two different
kinds of fees for services furnished remotely to patients in their
homes: (1) hospital facility payment in association with professional
services billed under the PFS; and (2) single payment for a limited
number of practitioner services, when statute or other applicable rules
only allow the hospital to bill for services personally provided by
their staff. These services are either billed by hospitals or by
professionals, there would not be separate facility and professional
billing. This latter category includes outpatient therapy services,
DSMT, and MNT. However, while CMS relied upon PHE-specific waiver
authority to allow hospital billing for these services, CMS also issued
guidance instructing HOPDs to bill using modifiers consistent with
those used for Medicare telehealth services. For further background, we
refer readers to https://www.cms.gov/files/document/03092020-covid-19-faqs-508.pdf. In the same referenced document, CMS also issued specific
guidance for other institutional providers of therapy services to use
modifier 95 (indicating a Medicare telehealth service), along with the
specific bill types for outpatient therapy services furnished by their
staff.
The Consolidated Appropriations Act (CAA), 2023 (Pub. L. 117-328)
extended many of the flexibilities that were available for Medicare
telehealth services during the PHE for COVID-19 under emergency waiver
authorities, including adding PTs, OTs and SLPs as distant site
practitioners through the end of CY 2024. In developing post-PHE
guidance, CMS initially took the position that institutions billing for
services furnished remotely by their employed practitioners (where the
practitioners do not bill for their own services), would end with the
PHE for COVID-19 along with the HWW waivers).\80\ However, after
reviewing input from interested parties, as well as relevant guidance,
including applicable billing instructions, we considered whether
certain institutions, as the furnishing providers, can bill for certain
remotely furnished services personally performed by employed
practitioners.
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\80\ https://www.cms.gov/files/document/frequently-asked-questions-cms-waivers-flexibilities-and-end-covid-19-public-health-emergency.pdf.
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In the CY 2024 PFS final rule, we stated that, while we considered
how we might address this topic in future rulemaking, in the interests
of maintaining access to outpatient therapy, DSMT, and MNT services
furnished remotely by institutional staff to beneficiaries in their
homes consistent with the accessibility of these services when
furnished by professionals via Medicare telehealth, we finalized that
we would continue to allow institutional providers to bill for these
services when furnished remotely in the same manner they have during
the PHE for COVID-19 through the end of CY 2024. We sought comment on
current practice for these services when billed, including how and to
what degree they continue to be provided remotely to beneficiaries in
their homes. We sought comment as to whether these services may fall
within the scope of Medicare telehealth at section 1834(m) of the Act
or if there are other relevant authorities CMS might consider in future
rulemaking. For further information on this comment solicitation,
please see the discussion in the CY 2024 PFS final rule (88 FR 78886
through 78888).
For DSMT specifically, we stated that the clinical staff personally
delivering the service may be a type of practitioner authorized to
furnish Medicare telehealth services under section 1834(m) of the Act;
but we also understood that DSMT may be provided by other types of
staff. Accordingly, we noted in an FAQ that we were exercising
enforcement discretion in reviewing the telehealth eligibility status
of the practitioner personally providing any part of a remotely
furnished DSMT service, so long as the persons were otherwise qualified
to provide the service until the end of 2024. For more background we
refer readers to https://www.cms.gov/files/document/frequently-asked-questionscms-waivers-flexibilities-and-end-covid19-public-health-emergency.pdf.
While the amendments made by section 4113 of the CAA, 2023 to
section 1834(m) of the Act have continued to expand the range of
practitioners eligible to furnish telehealth services through CY 2024,
without subsequent legislation these practitioners will no longer be
able to bill for Medicare telehealth services beginning January 1,
2025.
In the CY 2024 PFS final rule, we articulated the importance of
maintaining access to outpatient therapy, DSMT, and MNT services
furnished remotely by institutional staff to beneficiaries in their
homes consistent with the availability of these services when furnished
by professionals via Medicare telehealth as part of our rationale for
allowing institutional providers to bill for these services when
furnished remotely in the same manner they have during the PHE for
COVID-19 through the end of CY 2024.
We recognize that for the past several years, through the PHE for
COVID-19 and several legislative extensions of PHE-related
flexibilities for Medicare telehealth services under section 1834(m) of
the Act, we have generally aligned payment policies for outpatient
therapy, DSMT, and MNT services furnished remotely by hospital staff to
beneficiaries in their homes with policies for Medicare telehealth
services. To the extent that therapists and DSMT and MNT practitioners
continue to be distant site practitioners for purposes of Medicare
telehealth services, we anticipate aligning our policy for these
services with policies under the PFS and continuing to make payment to
the hospital for these
[[Page 59390]]
services when furnished by hospital staff.
2. Periodic In-Person Visits for Mental Health Services Furnished
Remotely by Hospital Staff to Beneficiaries in Their Homes
In the CY 2023 OPPS/ASC final rule with comment period (87 FR
72017), we finalized a requirement that payment for mental health
services furnished remotely to beneficiaries in their homes using
telecommunications technology may only be made if the beneficiary
receives an in-person service within 6 months prior to the first time
the hospital clinical staff provides the mental health services
remotely; and that there must be an in-person service without the use
of telecommunications technology within 12 months of each mental health
service furnished remotely by the hospital clinical staff. We also
finalized that we would permit exceptions to the requirement that there
be an in-person service without the use of communications technology
within 12 months of each remotely furnished mental health service when
the hospital clinical staff member and beneficiary agree that the risks
and burdens of an in-person service outweigh the benefits of it. We
stated that exceptions to the in-person visit requirement should
involve a clear justification documented in the beneficiary's medical
record including the clinician's professional judgement that the
patient is clinically stable and/or that an in-person visit has the
risk of worsening the person's condition, creating undue hardship on
the person or their family, or would otherwise result in disengaging
with care that has been effective in managing the person's illness. We
also finalized that hospitals must document that the patient has a
regular source of general medical care and has the ability to obtain
any needed point of care testing, including vital sign monitoring and
laboratory studies. We finalized that these requirements would not go
into effect until the 152nd day after the PHE for COVID-19 ends to
maintain consistency with similar policies implemented for professional
services paid under the PFS, and for RHCs/FQHCs (87 FR 72018).
Section 4113(d) of the CAA, 2023, extended the delay in
implementing the in-person visit requirements until January 1, 2025,
for both professionals billing for mental health services via Medicare
telehealth and for RHCs/FQHCs furnishing remote mental health visits.
In the CY 2024 OPPS we reiterated that we believe it is important to
maintain consistent requirements for these policies across payment
systems; therefore, we finalized delaying the in-person visit
requirements for mental health services furnished remotely by hospital
staff to beneficiaries in their homes until January 1, 2025. As such,
these in-person visit requirements are currently set to take effect for
services furnished on or after January 1, 2025 (88 FR 81874).
However, to the extent that these in-person visit requirements are
delayed in the future for professionals billing for mental health
services via Medicare telehealth, we anticipate that we would align the
requirements for mental health services furnished remotely to
beneficiaries in their homes through communications technology with
mental health services furnished via Medicare telehealth in future
rulemaking.
3. Proposed HOPD Payment for Telemedicine Evaluation and Management
Services
The CPT Editorial Panel created 17 new codes describing audio/video
and audio-only telemedicine E/M services. For further discussion of
these 17 new codes and CMS' related proposals, please see section
II.E.4.18 of the CY 2025 PFS proposed rule.
In 2014, CMS established HCPCS code G0463 (Hospital outpatient
clinic visit for assessment and management of a patient) to describe
the service associated with a hospital outpatient clinic visit for
assessment and management of a patient. In the CY 2014 OPPS/ASC final
rule with comment period (78 FR 75042), we stated that the code is
applicable for hospital use only representing any clinic visit under
the OPPS. We further stated that HCPCS code G0463 replaces evaluation
and management (E/M) CPT codes 99201-99205 (new patient) and 99211-
99215 (established patient), thereby eliminating the distinction
between new and established clinic visits.
Given the similarities between the new telemedicine E/M code set
and the office/outpatient E/M code set, we believe that the
telemedicine E/M codes fall within the scope of the hospital outpatient
clinic visit policy because the predecessor codes (the office/
outpatient E/M code set) would be reported by hospitals using HCPCS
code G0463. Under the hospital outpatient clinic visit policy, the CPT
codes describing office/outpatient E/M visits are not recognized under
OPPS and instead hospitals report HCPCS code G0463 (Hospital outpatient
clinic visit for assessment and management of a patient) when billing
for the facility costs associated with an outpatient E/M visit.
Therefore, we propose not to recognize the telemedicine E/M code set
under OPPS. We are, however, seeking comment on the hospital resources
associated with the telemedicine E/M services, particularly any
resource costs that would not be included in the payment for HCPCS code
G0463. We are also seeking comment, should CMS finalize separate
payment for these telemedicine E/M codes under the PFS, on the resource
costs that would be associated with these services for hospitals and
whether we should develop separate coding to describe the resource
costs associated with a telemedicine E/M service.
B. Virtual Direct Supervision of Cardiac Rehabilitation (CR), Intensive
Cardiac Rehabilitation (ICR), Pulmonary Rehabilitation (PR) Services
and Diagnostic Services Furnished to Hospital Outpatients
1. Background
a. Virtual Direct Supervision of CR, ICR and PR Services Furnished to
Hospital Outpatients (42 CFR 410.27(a)(1)(B)(1))
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) \81\ to provide that, during a Public Health
Emergency as defined in 42 CFR 400.200, the presence of the physician
for purposes of the direct supervision requirement for PR, CR, and ICR
services includes virtual presence through audio/video real-time
communications technology when use of such technology is indicated to
reduce exposure risks for the beneficiary or health care provider.
Specifically, the required direct physician supervision can be provided
through virtual presence using audio/video real-time communications
technology (excluding audio-only) subject to the clinical judgment of
the supervising practitioner. We further amended Sec.
410.27(a)(1)(iv)(B) \82\ in the CY 2021 OPPS/ASC final rule with
comment period to provide that this flexibility continues until the
later of the end of the calendar year in which the PHE as defined in
Sec. 400.200 ends or December 31, 2021 (85 FR 86113 and 86299). In
[[Page 59391]]
the CY 2021 OPPS/ASC final rule with comment period we also clarified
that this flexibility excluded the presence of the supervising
practitioner via audio-only telecommunications technology (85 FR
86113).
---------------------------------------------------------------------------
\81\ In the CY 2023 OPPS/ASC final rule with comment period, we
removed Sec. 410.27(a)(1)(iv)(D) in its entirety and added its
language regarding pulmonary rehabilitation, cardiac rehabilitation,
and intensive cardiac rehabilitation services and the virtual
presence of a physician through audio/video real-time communications
technology during the PHE to the newly designated Sec.
410.27(a)(1)(iv)(B)(1) (87 FR 72024).
\82\ Ibid.
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In the CY 2023 OPPS/ASC final rule with comment period, we
finalized a policy to extend the revised definition of direct
supervision of CR, ICR, and PR to include the presence of the
supervising practitioner through two-way, audio/video
telecommunications technology until December 31, 2023 (87 FR 72019 and
72020). In the CY 2024 OPPS/ASC final rule with comment period, we
finalized a policy to further revise Sec. 410.27(a)(1)(iv)(B)(1) \83\
to allow for the direct supervision requirement for CR, ICR, and PR to
include the virtual presence of the physician through audio-video real-
time communications technology (excluding audio-only) through December
31, 2024 and to extend this policy to the nonphysician practitioners,
that is NPs, PAs, and CNSs, who were eligible to supervise these
services beginning in CY 2024 (88 FR 81863 through 81867).
---------------------------------------------------------------------------
\83\ Ibid.
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b. Virtual Direct Supervision of Diagnostic Services Furnished to
Hospital Outpatients (42 CFR 410.28(e)(2)(iii))
In the April 6th COVID-19 IFC, for consistency with the revisions
made to 42 CFR 410.27(a)(1)(iv)(D) \84\ and 410.32(b)(3)(ii), we
changed the regulation at 42 CFR 410.28(e) to provide that, during a
Public Health Emergency as defined in 42 CFR 400.200, the presence of
the physician for purposes of the direct supervision requirement for
diagnostic services includes virtual presence through audio/video real-
time communications technology when use of such technology is indicated
to reduce exposure risks for the beneficiary or health care provider
(85 FR 19245 and 19246).
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\84\ Ibid.
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In the CY 2023 OPPS/ASC final rule with comment period, to ensure
consistency with additional revisions made to 42 CFR
410.27(a)(1)(iv)(B)(1) and 410.32(b)(3)(ii) extending the end date of
the flexibility allowing for the virtual supervision of the services
governed by those regulations, we revised Sec. 410.28(e) to extend the
end date of the flexibility allowing for the virtual supervision of
outpatient diagnostic services through audio/video real-time
communications technology (excluding audio-only) from the end of the
PHE to the end of the calendar year in which the PHE ends (87 FR 72024
through 72026).
In the CY 2024 final OPPS rule with comment period, to again ensure
consistency with further revisions made to 42 CFR
410.27(a)(1)(iv)(B)(1) and 410.32(b)(3)(ii) extending the end date of
the flexibility allowing for the virtual supervision of the services
governed by those regulations, we revised Sec. 410.28(e) to extend the
end date of the flexibility allowing for the virtual supervision of
outpatient diagnostic services through audio/video real-time
communications technology (excluding audio-only) through December 31,
2024 (88 FR 81866 and 81867).
2. Extension of Virtual Direct Supervision of CR, ICR, PR Services and
Diagnostic Services Furnished to Hospital Outpatients Through December
31, 2025
In the CY 2025 PFS proposed rule, we propose to revise the
definition of direct supervision at Sec. 410.32(b)(3)(ii) to extend
the availability of virtual direct supervision of therapeutic and
diagnostic services under the PFS through December 31, 2025. As
explained in that proposed rule, we propose this extension based on our
concern that an immediate reversion to the pre-PHE definition of direct
supervision would prohibit virtual direct supervision, which may
present a barrier to access to many services that have been facilitated
by our PHE-related policy over the past several years; and that
physicians and other practitioners need time to reorganize their
practice patterns established during the PHE to reimplement the pre-PHE
approach to direct supervision without the use of audio/video
technology. For the complete discussion of the proposed revision to
Sec. 410.32(b)(3)(ii), we refer readers to the CY 2025 PFS proposed
rule.
In addition to desiring uniformity under the PFS and OPPS in how
regulations are applied to similarly situated providers, the
beneficiary access and provider preparedness concerns motivating us to
propose extending the availability of virtual direct supervision of
therapeutic and diagnostic services under the PFS through December 31,
2025, are also concerns with respect to the direct supervision of CR,
ICR, PR and diagnostic services under the OPPS. Consequently, we
propose to revise Sec. 410.27(a)(1)(iv)(B)(1) and Sec.
410.28(e)(2)(iii) to allow for the direct supervision of CR, ICR, PR
services and diagnostic services via audio-video real-time
communications technology (excluding audio-only) through December 31,
2025.
C. All-Inclusive Rate (AIR) Add-On Payment for High-Cost Drugs Provided
by Indian Health Service and Tribal Facilities
1. Background
In the CY 2000 OPPS final rule (65 FR 18434), CMS implemented the
PPS for hospital outpatient services furnished to Medicare
beneficiaries, as set forth in section 1833(t) of the Act. In this
final rule, we noted that the OPPS applies to covered hospital
outpatient services furnished by all hospitals participating in the
Medicare program with a few exceptions. We identified one of these
exceptions as ``outpatient services provided by hospitals of the Indian
Health Service (IHS).'' We stated that these services would ``continue
to be paid under separately established rates which are published
annually in the Federal Register'' and, in the CY 2002 OPPS/ASC final
rule (66 FR 59856), we finalized a revision to Sec. 419.20 (Hospitals
subject to the hospital outpatient prospective payment system) by
adding paragraph (b)(4), which specifies that hospitals of the IHS are
excluded from the OPPS.
In the intervening years, IHS and tribal facilities have been paid
under the separately established All-Inclusive Rate (AIR). On an annual
basis, the IHS calculates and publishes, in the Federal Register,
calendar year reimbursement rates.\85\ Due to the higher cost of living
in Alaska, separate rates are calculated for Alaska and the lower 48
States. For CY 2024, the Medicare Outpatient per Visit Rate is $667 for
the lower 48 states and $961 for Alaska.\86\
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\85\ https://www.ihs.gov/BusinessOffice/reimbursement-rates/.
\86\ https://www.federalregister.gov/documents/2023/12/19/2023-27815/reimbursement-rates-for-calendar-year-2024.
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IHS and tribal facilities have continued to expand the breadth of
services that they provide to their communities. Increasingly, this has
meant providing higher-cost drugs along with more complex and expensive
services. While the majority of IHS and tribal facilities appear to be
well served by the AIR, some IHS and tribal facilities provide
specialized services for which the AIR might not adequately represent
Medicare's share of costs. If providing a drug or service costs IHS and
tribal facilities thousands of dollars more than the payment they
receive through the AIR, it is likely not financially feasible for
these facilities to routinely provide that drug or service. For
example, the cost of providing a
[[Page 59392]]
frequently used cancer drug such as Opdualag (HCPCS code 00003-7125),
which has a per day cost of $28,975, greatly exceeds the $667 payment a
IHS or tribal facility receives through the AIR. We are concerned that,
if payments under the AIR are inadequate for high-cost drugs, this
could potentially threaten the viability of the few IHS and tribal
hospital outpatient specialty programs currently in operation and
provide less incentive to IHS hospitals and tribal facilities not
currently offering specialty services to begin doing so. This
constitutes a significant equity and beneficiary access concern if IHS
and tribal hospitals are not able to provide oncology services or other
services that require high-cost drugs because the hospital would always
receive payment for those services that is far below what it would have
to pay to acquire those high-cost drugs.
Consequently, in the CY 2024 OPPS/ASC proposed rule, we sought
comment on whether Medicare should pay separately for certain high-cost
drugs provided by IHS and tribal facilities and, if so, how we might do
so. Among other topics, we specifically requested input on which drugs
it would be appropriate to pay separately for (high-cost oncology drugs
or all high-cost drugs), how we might define high-cost drugs (for
example, a list of named drugs versus any drugs exceeding a certain
cost threshold), and what the appropriate payment amount for the
separately paid drugs should be (ASP plus 6 percent, which is what
hospitals are generally paid under the OPPS for separately payable
drugs, or the Federal Supply Schedule (FSS), which is where IHS and
tribal hospitals acquire the majority of their drugs at rates
significantly lower than ASP plus 6 percent). For a full discussion of
the comment solicitation, we refer readers to the CY 2024 OPPS/ASC
proposed rule (88 FR 49741 through 49742).
Commenters, including a tribal facility, the CMS Tribal Technical
Advisory Group (TTAG), organizations representing tribal healthcare
providers, pharmaceutical companies, and other interested parties,
expressed universal support for establishing a policy that would allow
IHS and tribal healthcare facilities to receive separate payment
outside of the AIR for high-cost drugs. The preferred approach of those
commenters who provided input on how to define a high-cost drug
eligible for separate payment was to treat the amount of the Medicare
Outpatient per Visit Rate for the lower 48 States' AIR (hereinafter
referred to as ``the lower 48 AIR'') as a payment threshold. Under this
approach, if the cost of a particular drug is less than or equal to the
lower 48 AIR, the provider would not receive a separate payment for the
drug and if the cost of the drug was more than the lower 48 AIR, then
the provider would receive a separate payment for the drug. Commenters
noted that this payment approach is currently being used for all drugs
(oncology and otherwise) receiving payment through Arizona Medicaid
(AHCCCS) for IHS and tribal facilities located in Arizona. With respect
to the payment amount, several commenters requested that separately
payable drugs furnished by IHS and tribal facilities be paid at a rate
of ASP plus 6 percent rather than the FSS rate. These commenters argued
that the IHS is chronically underfunded and that paying ASP plus 6
percent for high-cost drugs could help with remedying those funding
issues. For a full discussion of the comments we received as a result
of our comment solicitation and our responses to those comments, we
refer readers to the CY 2024 OPPS/ASC final rule with comment period
(88 FR 81896 through 81897).
2. Proposed AIR Add-On Payment for High-Cost Drugs Provided by Indian
Health Service and Tribal Facilities
In light of the equity and beneficiary access concerns that
prompted our CY 2024 comment solicitation and the input received in
response to that solicitation, we propose, starting January 1, 2025, to
separately pay IHS and tribal hospitals \87\ for high-cost drugs
furnished in hospital outpatient departments through an add-on payment
in addition to the AIR using the authority under which the annual AIR
is calculated.\88\ We emphasize the amount of this proposed add-on
payment would not be carved out of the annual AIR payment amount
calculation. In other words, we propose that the add-on payment would
have no effect on the calculation of the annual AIR payment amount. We
seek comment on separately paying IHS and tribal hospitals for high-
cost drugs furnished in hospital outpatient departments through the
establishment of an add-on payment to the AIR using the authority under
which the annual AIR is calculated.
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\87\ IHS Critical Access Hospitals (CAHs) are paid for covered
outpatient services based on 101 percent of an all-inclusive
facility specific rate rather than the national AIR rate.
Consequently, they are excluded from the proposed separate payment
policy.
\88\ Sections 321(a) and 322(b) of the Public Health Service Act
(42 U.S.C. 248), Public Law 83-568 (42 U.S.C. 2001(a)), and the
Indian Health Care Improvement Act (25 U.S.C. 1601 et seq.).
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We propose that the drugs to which the add-on payment would apply
would not be limited to high-cost oncology drugs but would include all
high-cost drugs furnished in hospital outpatient departments of IHS and
tribal hospitals to the extent those drugs are covered under Medicare
Part B and would be paid for under the OPPS if furnished by a hospital
paid under that system. In determining which drugs would be eligible
for the add-on payment, we considered limiting the add-on payment to
high-cost oncology drugs. However, we determined that it would be
appropriate to apply the add-on payment to all high-cost drugs for
several reasons. First, the same equity and access concerns that
support utilizing an add-on payment for oncology drugs also support
utilizing an add-on for high-cost drugs used in other care specialties.
Although this issue arose in the context of removing barriers to
beneficiaries' access to high-cost oncology drugs, there are presumably
similar barriers to other specialties that use high-cost drugs that
would be addressed through a broader application of the add-on payment.
Second, applying the add-on payment to all high-cost drugs would
eliminate the possibility of unintentionally excluding an oncology drug
from separate payment due to the inherent challenge of defining a class
of drugs. Third, the proposal would parallel how drugs are being paid
for under Arizona Medicaid (AHCCCS) for IHS and tribal facilities. We
seek comment on applying the add-on payment to all high-cost drugs
furnished in hospital outpatient departments of IHS and tribal
hospitals to the extent those drugs are covered under Medicare Part B
and would be paid for under the OPPS if furnished by a hospital paid
under that system.
As to what constitutes a high-cost drug, we propose to define high-
cost drugs for the purpose of this policy as all drugs covered under
Medicare Part B and for which payment would otherwise be made under the
OPPS whose per day cost exceeds two times the lower 48 AIR ($1,334 in
CY 2024). We propose a threshold greater than the lower 48 AIR to
account for the fact that IHS and tribal hospitals would continue to
receive the lower 48 AIR payment, in addition to the add-on payment,
for encounters that include a high-cost drug. While it is true that
under the Arizona Medicaid program, IHS and tribal hospitals are paid
the lower 48 AIR payment in addition to an add-on payment for drugs
whose costs exceed the lower 48 AIR, we are concerned that providing
separate payment for drugs whose costs only slightly exceed the lower
48 AIR could result in excessive
[[Page 59393]]
payment for those drugs. For example, for a drug that costs $700, using
the CY 2024 lower 48 AIR as the threshold for our proposal would result
in a payment of at least $1,367 (the $667 AIR encounter payment plus an
add-on payment for the high-cost drug as calculated under the payment
methodology we propose later in this section) for the provision of a
drug whose cost exceeds the lower 48 AIR by only $33.00. Such an
outcome would be at odds with the objective of the proposed policy,
which is to provide adequate payment for drugs that are high cost in
relation to the lower 48 AIR. Consequently, we propose two times the
lower 48 AIR as the threshold triggering the add-on payment because
this amount would ensure that the add-on payment would apply only to
drugs whose costs significantly exceed the lower 48 AIR. This cost-
multiplier approach is also consistent with how CMS has implemented
thresholds relating to payments to hospitals under other payment
systems. For example, the OPPS outlier policy \89\ requires that the
cost of a service exceed 1.75 times the payment amount for the service
to qualify for an additional payment. Similarly, the OPPS two-times
rule requires that the highest calculated cost of an individual
procedure categorized to any given Ambulatory Payment Classification
(APC) not exceed two times the calculated cost of the lowest cost
procedure categorized to that same APC.
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\89\ 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. Outlier payments are provided on a
service basis when the cost of a service exceeds the APC payment
amount multiplier threshold (the APC payment amount multiplied by
1.75) as well as the APC payment amount plus a fixed-dollar amount
threshold (the APC payment plus a certain dollar amount).
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An alternative to our proposal to set the threshold at two times
the lower 48 AIR would be to set the threshold at the lower 48 AIR
despite our previously described concerns. Another alternative would be
to set the threshold at 1.75 times the lower 48 AIR ($1,167.25 in CY
2024) to align it with the multiplier used to calculate the threshold
triggering outlier payments under the OPPS. We seek comment on the
alternatives of using the lower 48 AIR or 1.75 times the lower 48 AIR
as the threshold amount for triggering the add-on payment for high-cost
drugs.
We also seek comment on whether we should adopt an exception to
whichever AIR-based threshold we adopt that would parallel the drug
packaging threshold exception for biosimilars \90\ under the OPPS.
Under the OPPS, if a drug's per-day cost is less than or equal to the
drug packaging threshold, then payment for the drug is packaged.
Conversely, if a drug's per-day cost exceeds the drug packaging
threshold, then it is paid for separately. For a more detailed
discussion of the drug packaging threshold, we refer readers to the CY
2024 OPPS/ASC final rule with comment period (88 FR 81776 through
81778). In CY 2024, we established an exception to this threshold for
biosimilars when the biosimilar's per-day cost does not exceed the
threshold, but its reference product's per-day cost does. In other
words, if the biosimilar's reference product is paid separately
(because its per-day cost exceeds the threshold), then we also pay
separately for the biosimilar even if its per-day cost does not exceed
the threshold. This exception was based on our concern that packaging
biosimilars when the reference product or other marketed biosimilars
are separately paid might create financial incentives for providers to
select more expensive, but clinically similar, products. For a more
detailed discussion of the exception for biosimilars to the drug
packaging threshold, we refer readers to the CY 2024 OPPS/ASC final
rule with comment period (88 FR 81783 through 81786). Because we
propose to use a threshold to trigger application of the add-on payment
for high-cost drugs to IHS and tribal hospitals, we have the same
concerns about financial incentives that motivated us to establish the
exception for biosimilars to the drug packaging threshold.
Consequently, we seek comment on whether we should pay the add-on
payment to IHS and tribal hospitals for biosimilars whose per-day costs
do not exceed the threshold but whose reference products do exceed the
threshold.
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\90\ A biosimilar is a biologic medication. It is highly similar
to a biologic medication already approved by FDA--the original
biologic (also called the reference product).
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We also propose that the amount of the add-on payment for a high-
cost drug would be the average sales price (ASP) for the drug with no
additional payment (i.e., ASP). This payment amount would be consistent
with what hospitals receive as payment for most drugs under the OPPS
(ASP plus 6 percent) but would exclude the 6 percent additional payment
in recognition of the fact that IHS and tribal facilities, unlike
hospitals paid under the OPPS, primarily obtain their drugs through the
FSS, whose rates are significantly lower than ASP. This approach is
also consistent with our existing policies of paying ASP without any
additional payment for certain Opioid Treatment Program drugs under 42
CFR 410.67(d)(2)(i)(A) and (B). In the event ASP pricing information is
not available for a particular drug, we propose to pay the Wholesale
Acquisition Cost (WAC) plus 0 percent. If WAC pricing information is
not available, we propose to pay 89.6 percent of Average Wholesale
Price (AWP).
We seek comment on whether we should instead pay ASP plus 6
percent. If we were to adopt this alternative policy and pricing
information is not available for a particular drug, we would pay WAC
plus 6 percent and if WAC pricing information is not available, we
would pay 95 percent of AWP. We seek comment on our proposal to pay an
add-on of ASP plus 0 percent in addition to the AIR for drugs
administered by IHS and tribal facilities with costs that exceed two
times the lower 48 AIR. We also seek comment on our proposed pricing
hierarchy for drugs for which ASP pricing information is not available.
To implement this policy, we propose that, starting with IHS's
annual announcement in the Federal Register in December 2024 of the
lower 48 AIR amount for CY 2025, we would multiply the lower 48 AIR
amount by two and then compare the result to the estimated per day
costs of all drugs covered under Part B for which payment would
otherwise be made under the OPPS. To determine the calculated per day
cost for each drug and biological HCPCS code, we propose to follow a
methodology similar to our longstanding methodology used to calculate
the per day cost of drugs and biologicals for OPPS payment purposes as
discussed in section V.B.1.b of this proposed rule. Specifically, to
calculate the per day cost, we propose to use an estimated payment rate
based on the ASP methodology payment rate, which for purposes of this
proposal is generally ASP plus 0 percent (which is the payment rate we
propose for separately payable IHS drugs and biologicals) for CY 2025
to calculate the CY 2025 proposed rule per day costs. We used the
manufacturer-submitted ASP data from the fourth quarter of CY 2023 to
determine the proposed rule per day cost. For drugs and biologicals
that did not have either an ASP-based payment rate or a payment rate
based on WAC, we used mean unit cost of the items derived from the CY
2023 hospital claims data to determine their per day cost.
A list of drugs whose costs exceeds two times the lower 48 AIR
would be
[[Page 59394]]
generated and communicated to IHS and tribal hospitals prior to January
1, 2025. During CY 2025, IHS and tribal hospitals would submit claims
for drugs included on this list. The list of drugs would be updated on
a quarterly basis using existing drug compendia and CMS ASP quarterly
reporting only to account for newly introduced drugs. The payment rates
for drugs on the list would be updated quarterly as well based on
changes in drug prices. We would then repeat this process on an annual
basis each December when the lower 48 AIR amount for the following
calendar year is announced by IHS. For example, had our proposed policy
been in place for CY 2024, the drugs for which the add-on payment would
have been made (drugs with a per day cost exceeding two times the CY
2024 lower 48 AIR) are those listed in Addendum Q. We seek comment on
this proposed implementation plan.
Finally, we propose to implement this policy on a permanent basis
but may revisit it in the future if we have any concerns about its
impact once it has been implemented.
D. Request for Information--Paying All IHS and Tribally Operated
Clinics the IHS Medicare Outpatient All Inclusive Rate
CMS established a Tribal Technical Advisory Group (TTAG) in 2004 to
provide advice and input to CMS on policy and program issues impacting
AI/AN populations served by CMS programs. Although not a substitute for
formal consultation with tribal leaders, the TTAG enhances the
government-to-government relationship between HHS and federally
recognized tribes and improves understanding between CMS and tribes.
The TTAG has subject specific subcommittees that meet on a regular
basis in order to be more effective and perform in-depth analysis of
Medicare, Medicaid, CHIP, and Health Insurance Marketplace[supreg] \91\
policies that have tribal implications. The TTAG is composed of 17
representatives. It has historically included an elected tribal leader
or an appointed representative from each of the 12 geographic areas of
the IHS delivery system and a representative from each of the national
Indian organizations headquartered in Washington, DC--the National
Indian Health Board, the National Congress of American Indians, and the
Tribal Self-Governance Advisory Group. Section 5006(e)(1) of the
American Recovery and Reinvestment Act of 2009, which became effective
July 1, 2009, mandates that TTAG shall be maintained within CMS and
added two new representatives: a representative from a national urban
Indian health organization; and a representative from the IHS.
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\91\ Health Insurance Marketplace[supreg] is a registered
service mark of the U.S. Department of Health & Human Services.
---------------------------------------------------------------------------
In June 2020, the TTAG requested[thinsp]that CMS amend its Medicare
regulations to make all IHS and tribally-operated outpatient facilities
eligible for Medicare payment at the IHS Medicare outpatient per visit
rate/AIR. The TTAG explained that outpatient clinics, which are
otherwise similar to grandfathered tribal FQHCs, are paid at different
rates depending upon whether they meet the requirements as a provider-
based facility, a grandfathered tribal FQHC, a non-grandfathered tribal
FQHC, or none of the above. TTAG's position is that the rates vary
based on Medicare regulatory definitions, rather than the actual costs
of the outpatient clinic.\92\ There are varying payment differentials
among Medicare enrolled providers and suppliers under the authorities
of the SSA. For example, ASCs are paid differently than HOPDs; which
are paid differently depending on whether they are located in a
critical access hospital.
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\92\ https://www.nihb.org/tribalhealthreform/wp-content/uploads/2020/06/TTAG-letter-to-CMS-requesting-IHS-rate-for-all-tribal-clinics-06.10.2020.pdf.
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In the CY 2022 PFS proposed rule (86 FR 39240), we acknowledged
that the TTAG is concerned about ensuring appropriate Medicare payments
for similar services and is also concerned about the impact on tribal
Medicare beneficiaries and on ensuring equitable access to healthcare.
We take these concerns seriously but noted in the CY 2022 PFS proposed
rule that we had insufficient information to evaluate the costs and
benefits of potential changes to these policies. Therefore, we
solicited comments on the TTAG's request for CMS to amend its Medicare
regulations to make all IHS- and tribally operated outpatient
facilities/clinics eligible for payment at the Medicare outpatient per
visit rate/AIR, regardless of whether they were owned, operated, or
leased by IHS. In response to the solicitation, we did not receive
specific information on costs or specific types of clinics; however, in
the CY 2022 PFS final rule (86 FR 65211 through 65214), we stated we
would like to continue these discussions to evaluate the impact of the
commenters' proposed changes to the current Medicare payment policies
and will consider these recommendations for future rulemaking. Thus, to
continue these discussions, we would like to request this information
again in this proposed rule.
Beginning in the Fall of 2023, CMS began participating in a
workgroup related to the TTAG's Medicare priority to make the IHS
Medicare outpatient AIR available to all IHS and tribally operated
outpatient facilities that request it. Although we have received some
information through the workgroup, we would like to request information
consistent with our comment solicitation in the CY 2022 PFS proposed
rule.
We seek information on the kinds of and number of facilities or
clinics that the Medicare outpatient IHS AIR could apply to; that is,
it is unclear whether TTAG anticipates that these facilities enroll in
Medicare as FQHCs going forward, or whether they are referring to FQHCs
that are currently paid under the FQHC PPS. Moreover, we request
information on whether the facilities in question are freestanding or
provider-based. We would like commenters to confirm or clarify whether
the clinics are physician offices, or whether they are recommending
establishment of a new provider type. We seek information regarding the
relative operating costs of tribally operated outpatient clinics, as
well as feedback and supporting evidence to address whether or why
payment set at the IHS AIR would be more appropriate than payment rates
under the FQHC PPS, the physician fee schedule, or other some other
Medicare payment system. Further, we seek comment on how the Medicare
outpatient AIR, which is based upon a limited number of hospital cost
reports, relates to costs in tribal clinics and the kinds of services
that the clinics furnish. Finally, we seek comment on the concerns that
the AI/AN community may have regarding access to or inequity of care in
situations where a payment differential exists.
We have information on historically excepted FQHCs, the outpatient
provider-based clinics to the hospital, and some general information
about the composition of IHS and tribal facilities and clinics.
However, there are still gaps in the data and therefore we are
soliciting answers to the following questions: If the clinic or
facilities in question are not enrolled in Medicare as an FQHC or
provider-based to a hospital, are they physician practices? How are
these facilities organized and related?
Because paying the Medicare outpatient AIR to additional IHS and
tribally operated facilities that are currently paid under another
Medicare payment methodology or not yet enrolled in Medicare as all
would
[[Page 59395]]
potentially increase expenditures, we also solicit information on how
tribally operated facilities participate in Medicare currently, which
would help us to estimate the impacts of such a policy change.
E. Coverage Changes for Colorectal Cancer (CRC) Screening Services
Medicare coverage for colorectal cancer (CRC) screening tests under
Part B is described in statutes (sections 1861(s)(2)(R), 1861(pp),
1862(a)(1)(H) and 1834(d) of the Social Security Act (the Act)),
regulation (42 CFR 410.37), and a National Coverage Determination (NCD)
(Section 210.3 of the Medicare National Coverage Determinations
Manual). Section 1861(pp)(1)(D) of the Act includes in its definition
of colorectal cancer screening test ``[s]uch 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.''
42 CFR 410.37 lists and defines the tests and procedures covered by
Medicare as colorectal cancer screening tests. Specifically, the
following tests and procedures furnished to an individual for the
purpose of early detection of colorectal cancer are covered by
Medicare:
Screening fecal-occult blood tests.
Screening flexible sigmoidoscopies.
Screening colonoscopies, including anesthesia furnished in
conjunction with the service.
Screening barium enemas.
Other tests or procedures established by a national
coverage determination, and modifications to tests under this
paragraph, with such frequency and payment limits as CMS determines
appropriate, in consultation with appropriate organizations.
In recent years we have received recommendations from the public to
remove Medicare coverage for the barium enema test since the test no
longer meets modern clinical standards and is no longer recommended in
clinical guidelines. As a replacement to the barium enema test,
organizations have suggested the use of CT colonography, which is a
more effective test for colorectal cancer screening. For a more
extensive discussion on the background and proposal to revise the
Medicare coverage for colorectal cancer screening services, we refer
readers to the CY 2025 Physician Fee Schedule (PFS) proposed rule.
For CY 2025, based on public input and consultation with specialty
societies, and as discussed in the CY 2025 PFS proposed rule, we
propose to exercise our authority under section 1861(pp)(1)(D) of the
Act to update and expand coverage for CRC screening. As discussed in
the CY 2025 PFS proposed rule, we propose to make the following
revisions to Sec. 410.37:
Remove coverage for the barium enema procedure.
Add coverage for the computed tomography colonography
(CTC) procedure.
Expand the existing definition of a ``complete colorectal
cancer screening'' to include a follow-on screening colonoscopy after a
Medicare covered blood-based biomarker CRC screening test (described
and authorized in NCD 210.3).
The above screening tests are currently described by existing HCPCS
codes. These HCPCS codes are listed in Table 70 along with their long
descriptors.
[GRAPHIC] [TIFF OMITTED] TP22JY24.103
Based on the proposed coverage changes for CRC screening, we
propose to make the following changes under the OPPS for CY 2025:
HCPCS codes G0106 and G0120 (screening barium enema):
These codes were established by CMS effective January 1, 1998, to
implement Medicare coverage for barium enema as a test for colorectal
cancer screening. Since we propose to remove Medicare coverage for
barium enema effective January 1, 2025, and we no longer need to keep
these codes active, we propose to delete them on December 31, 2024.
Therefore, we are revising the status indicator for the HCPCS codes
from status indicator ``S'' (Procedure or Service, Not Discounted When
Multiple. Paid under OPPS; separate APC payment.) to ``D''
(Discontinued code) to indicate that HCPCS codes G0106 and G0120 will
be deleted on December 31, 2024. In addition to the deletion of these
codes, we also propose to delete HCPCS code G0122 (Colorectal cancer
screening; barium enema), which is already non-covered by Medicare, on
December 31, 2024.
[[Page 59396]]
CPT code 74263 (screening computed tomography colonography
(CTC)/virtual colonoscopy): We are reassigning this code from status
indicator ``E1'' (not covered/not payable) to status indicator ``S''
and APC 5522 (Level 2 Imaging Without Contrast) to indicate that the
code is separately payable. Based on our review, the time and resources
associated with performing a screening virtual colonoscopy is similar
to a diagnostic virtual colonoscopy, which is described by CPT code
74261 (Computed tomographic (ct) colonography, diagnostic, including
image postprocessing; without contrast material). Consequently, the
proposed APC assignment for CPT code 74263 is based on its clinical and
resource homogeneity to CPT code 74261, which is assigned to APC 5522.
HCPCS code G0327 (screening blood-based biomarker): This
HCPCS code is currently assigned to status indicator ``A'' to indicate
that the test is paid separately under a different Medicare payment
system than the OPPS. Since HCPCS G0327 is currently separately payable
under the Clinical Laboratory Fee Schedule (CLFS), we are not proposing
to revise the status indicator. Specifically, with the expanded
coverage to include blood-based biomarker as a screening test to detect
colorectal cancer, we propose to continue to assign HCPCS code G0327 to
status indicator ``A'' for CY 2025.
In summary, based on the proposed coverage changes for colorectal
cancer screening services, we propose to revise the OPPS status
indicator for certain HCPCS codes for CY 2025. Table 71 shows the long
descriptors, current CY 2024 OPPS status indicators, and proposed CY
2025 OPPS status indicators for HCPCS codes G0106, G0120, G0122, 74263,
and G0327. The proposed CY 2025 OPPS payment rates, where applicable,
for these HCPCS codes can be found in Addendum B to this proposed rule.
In addition, for the complete list of the proposed status indicators
and their definitions, refer to Addendum D1 of this proposed rule.
[GRAPHIC] [TIFF OMITTED] TP22JY24.104
F. Request for Comment on Payment Adjustments Under the IPPS and OPPS
for Domestic Personal Protective Equipment
1. General Background
As discussed in the FY 2023 IPPS/LTCH PPS and CY 2023 OPPS/ASC
rules, President Biden issued Executive Order (E.O.) 13987 ``Organizing
and Mobilizing the United States Government To Provide a Unified and
Effective Response To Combat COVID-19 and To Provide United States
Leadership on Global Health and Security'' on January 20, 2021 (86 FR
7019). This order launched a whole-of-government effort to combat the
coronavirus disease 2019 (COVID-19) and prepare for future biological
and pandemic threats. As the COVID-19 pandemic eased, work has
continued to prepare for future pandemics. As the COVID-19 pandemic
demonstrated, sufficient availability of personal protective equipment
(PPE) in the health care sector is a critical component of
preparedness.
The CY 2023 OPPS/ASC final rule implemented payment adjustments
under the OPPS and IPPS to support a resilient and reliable supply of
surgical N95 respirators--a specific type of filtering facepiece
respirator that is a subset of N95 masks used in some clinical settings
under conditions requiring respiratory protection from airborne
pathogens and splash protection from exposure to fluids. Early on in
the COVID-19 pandemic, ``just-in-time'' supply chains, minimal
stockpiling, and overreliance on foreign imports left U.S. hospitals
unable to obtain enough N95 respirators to protect health care workers.
Prices for surgical N95s soared from an estimated $0.25-$0.40/unit to
$5.75/unit (and up to $12.00/unit in some reported cases). Unable to
obtain surgical N95s regulated by NIOSH, hospitals had to turn to
KN95s--a Chinese standard respirator--and other non-NIOSH-approved
respirators under Emergency Use Authorization (EUA). Skyrocketing
[[Page 59397]]
demand during the COVID-19 pandemic also raised counterfeit respirator
concerns.
Currently available payment adjustments offset the marginal costs
that hospitals face in procuring domestically made NIOSH-approved and
FDA-certified surgical N95 respirators. These marginal costs are due to
higher per-unit acquisition prices that stem from higher costs of
inputs and labor in the U.S., as compared to international suppliers,
where many N95 and other respirators are made, as well as a
demonstrated record of more consistent high quality for domestically
made products.\93\ These payment adjustments offset the additional
marginal costs of hospitals that purchase domestically made NIOSH-
approved surgical N95 respirators to help sustain demand for--and thus
domestic production of--high-quality domestically made respirators in
order to ensure quality PPE is available to health care personnel when
needed.
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\93\ https://www.cdc.gov/niosh/npptl/respirators/testing/NonNIOSHresults.html.
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The policy goal to maintain a baseline domestic production capacity
of high-quality PPE in order to ensure that quality PPE is readily
available to health care personnel when needed is emphasized in the
National Strategy for a Resilient Public Health Supply Chain, published
in July 2021 as directed by President Biden's Executive Order 14001 on
``A Sustainable Public Health Supply Chain.'' The U.S. Government has
committed to purchase wholly domestically-made PPE in line with section
70953 of the Infrastructure Investment and Jobs Act (Pub. L. 117-58).
2. Potential Modifications to Payment Adjustments for Domestic NIOSH-
Approved Surgical N95 Respirators
Although the payment adjustments for domestic NIOSH-approved
surgical N95 respirators under the OPPS and IPPS have applied to cost
reporting periods beginning on or after January 1, 2023, use of the
payment adjustments has been limited. Furthermore, market data suggests
that a majority of surgical N95 respirators purchased by hospitals are
not wholly domestically made. In the CY 2023 OPPS/ASC final rule, we
stated that as we gain more experience with this policy and the data
collected, we may also consider modifications to the reasonable cost-
based payment approach we were finalizing. HHS has conducted
stakeholder outreach to better understand barriers to awareness and
uptake and seek feedback on potential modifications that could increase
effectiveness, and continues to engage hospitals and other
manufacturers on these payment adjustments. We are interested in
feedback and comments on potential modifications to the payment
adjustment in order to reduce reporting burden and achieve the policy
goal to maintain a baseline domestic production capacity of PPE in
order to ensure that quality PPE is readily available to health care
personnel when needed.
Payment adjustment methodology: In the CY 2023 OPPS/ASC final rule,
we finalized to initially base the payment adjustments on the IPPS and
OPPS shares of the estimated difference in the reasonable costs. We
created a new supplemental cost reporting form to enable calculation of
a hospital-specific unit cost differential between domestic and non-
domestic NIOSH-approved surgical N95 respirators. We noted that, based
on available data, our best estimate of the difference in the average
unit cost of domestic and non-domestic NIOSH-approved surgical N95
respirators was $0.20. In the CY 2023 OPPS/ASC final rule, we also
noted that MedPAC, while not supportive of the proposed payment
adjustments, stated that CMS should set the unit cost differential
between domestic and non-domestic NIOSH-approved surgical N95
respirators at a national level (rather than on a hospital-by-hospital
basis). MedPAC believed this would reduce the administrative burden on
hospitals, encourage hospitals to purchase the most economical
domestically made product, and reduce the ability of hospitals to
increase their payments by artificially inflating reported N95 costs.
We solicit comment on the following questions:
Should we consider modifying the payment adjustment
methodology calculation to provide a national standard unit cost
differential between domestic and non-domestic NIOSH-approved surgical
N95 respirators (rather than on a hospital-by-hospital basis)?
If so, how should we calculate that standard unit cost
differential between domestic and non-domestic NIOSH-approved surgical
N95 respirators, and what should the current unit cost differential be?
If we modified the payment adjustment methodology
calculation to provide a national standard unit cost differential,
would it be appropriate to calculate the payment adjustment by
multiplying the unit cost differential by the total quantity of
domestic NIOSH-approved surgical N95 respirators used by the hospital,
and then multiplying by the Medicare Part A hospital inpatient cost
share (to calculate the IPPS payment adjustment) or the Medicare Part B
hospital outpatient cost share (to calculate the OPPS payment
adjustment)?
Do hospitals need additional support to purchase domestic-
made surgical N95 respirators as opposed to non-domestic surgical N95
respirators? If so, how much support is needed, and in what form?
Payment adjustment eligibility: In the CY 2023 OPPS/ASC final rule,
we stated that we recognize that a hospital cannot fully independently
determine if a NIOSH-approved surgical N95 respirator it purchases is
domestic under our definition. Therefore, we finalized that a hospital
may rely on a written statement from the manufacturer stating that the
NIOSH-approved surgical N95 respirator the hospital purchased is
domestic under our definition. We solicit comment on the following
questions:
Do hospitals have sufficient access to information on
which surgical N95 models on the market are wholly domestically made?
Have hospitals been able to obtain written statements from
manufacturers stating that the NIOSH-approved surgical N95 respirator
the hospital purchased is domestic under our definition?
Would a publicly available list of products eligible for
the payment adjustment (for example, if provided by CMS, NIOSH, or
another government entity) make it easier for hospitals to locate
products eligible for the payment adjustment?
If we modified the payment adjustment such that hospitals
that attested to purchasing wholly domestically made surgical N95
models from such a list did not need to obtain a written statement from
the manufacturer, would hospitals more easily be able to utilize the
payment adjustment?
Types of N95 respirators: In the CY 2023 OPPS/ASC proposed rule,
for purposes of the payment adjustment policy, we proposed to
categorize all NIOSH-approved surgical N95 respirators purchased by
hospitals into two categories: (1) Domestic NIOSH-approved surgical N95
respirators; and (2) Non-domestic NIOSH-approved surgical N95
respirators. Feedback from external stakeholders has suggested that it
is a challenge that the payment adjustments are limited to surgical N95
respirators, given some hospitals also procure non-surgical N95
respirators. Both surgical N95 respirators and non-surgical N95
respirators are primarily
[[Page 59398]]
used to protect the wearer from inhaling airborne particles, including
infectious agents like bacteria and viruses. They are highly efficient
at filtering out at least 95% of airborne particles and are commonly
used by healthcare workers during procedures that may generate
aerosols, such as intubation or suctioning, or when caring for patients
with infectious respiratory diseases like tuberculosis or coronavirus.
Both types of N95 respirators serve as frontline defense for medical
professionals. They are crucial for preventing the transmission of
diseases within healthcare settings and safeguarding the health and
well-being of both healthcare workers and patients. Surgical N95
respirators have the added protection against fluid penetration, and
may be most useful is specialized health care settings (e.g., ICU,
Emergency Department, Operating Room) where the risk of fluid exposure
may be greater. Additionally, during the COVID-19 pandemic, both types
of N95 respirators saw issues around lack of availability and risk of
counterfeit outlined in the CY 2023 OPPS/ASC final rule--issues which
could compromise the safety of health care personnel and patients. We
solicit comment on the following questions:
Do hospitals procure both surgical N95 respirators and
non-surgical N95 respirators?
Has the payment adjustment's current focus on surgical N95
respirators inhibited uptake of the payment adjustments?
Are the quality differentials between domestic and non-
domestic surgical respirators also applicable to non-surgical
respirators, and is a sustained and reliable source of domestically
made non-surgical N95 respirators important for strengthening
hospitals' ability to protect the health and safety of personnel and
patients in a public health emergency?
Should CMS consider expanding the payment adjustments to
include all domestic NIOSH-approved N95 respirators--i.e., non-surgical
and surgical N95 respirators?
If we expanded the payment adjustments to include all
domestic NIOSH-approved N95 respirators, and if we modified the payment
adjustment methodology calculation to provide a national standard unit
cost differential between domestic and non-domestic NIOSH-approved
surgical N95 respirators (rather than on a hospital-by-hospital basis),
would the unit cost differential for non-surgical N95 respirators be
different than the one for surgical N95 respirators?
3. Potential Modifications To Include Nitrile Gloves
In addition to N95 respirators, nitrile gloves are another type of
PPE for which it is particularly crucial to maintain a resilient,
quality supply. Nitrile gloves protect health care workers and patients
from the spread of micro-organisms that may potentially cause infection
or illness during medical procedures and examination. They create a
barrier between germs and the wearer's hands, and are generally worn
anytime a health care worker touches blood, bodily fluids, bodily
tissues, mucous membranes, or broken skin. They are disposable,
enabling the use of new gloves for each patient. A resilient healthcare
system needs readily available, high-quality nitrile gloves to respond
efficiently and effectively to public health emergencies. During the
COVID-19 pandemic, supply chain breakdowns limited the supply of
quality nitrile gloves, putting U.S. health care workers and patients
at risk. As with N95 respirators, non-domestic-sourced gloves during
the COVID-19 pandemic saw counterfeit and quality challenges. The
receipt of non-U.S.-made counterfeit or already-used gloves put the
safety of health care workers and patients at risk.94 95
Prior to 2020, over 95 percent of nitrile gloves sold in the U.S. came
from other countries. As the pandemic escalated in 2020, U.S. demand
for gloves outstripped available supply, leading to shortages. Around
the same time, supply was also limited by coronavirus-related lockdowns
in other countries that decreased production capacity, and by export
restrictions of PPE. Further adding to supply pressures, forced labor
violations by subsidiaries of a major glove producer led U.S. Customs
and Border Protection (CBP) to issue a Withhold and Release Order,
resulting in seizure of all listed products, including nitrile gloves,
at CBP inspections. During the initial months of the pandemic, the cost
of gloves increased, rising 18 percent from July to August 2020 (to
$0.03 per glove) and then an additional 20 percent from November to
December 2020 (to $0.05 per glove).\96\
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\94\ https://www.cnn.com/2021/10/24/health/medical-gloves-us-thailand-investigation-cmd-intl/index.html.
\95\ https://www.propublica.org/article/ppe-covid-scams-fraud-nitrile-gloves.
\96\ Glove Story Global Glove Production Amidst the COVID-19
Pandemic (usitc.gov).
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During the pandemic, the U.S. government has invested in domestic
glove manufacturing capabilities. U.S. glove-manufacturing projects
received approximately $290 million in public funding as part of a
broader $1.5-billion investment to support domestic glove
manufacturing. These investments have resulted in an increase of 3.91
billion in annual production capacity for domestically manufactured
nitrile gloves. The U.S. government also invested in manufacturing
capacity for nitrile glove inputs such as nitrile butadiene rubber, and
this manufacturing capacity is expected to become available in 2026.
However, since the pandemic began, some U.S. factories have been
forced to consolidate operations or exit the industry. Further, non-
U.S. nitrile glove producers have deployed cost-cutting tactics such as
using lower-grade raw materials, prompting some purchasers to seek
other sources out of concern for quality.\97\ Producers of these lower
quality products began selling gloves for the price of $0.02 each,
rapidly increasing U.S. market share, going from 13% of U.S. market
share in July 2020 to 19 percent in February 2021. As of 2024, only
three producers of nitrile gloves are left in the United States, and
they supply an estimated .05% percent of U.S. demand for nitrile
gloves.
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\97\ Glove Story Global Glove Production Amidst the COVID-19
Pandemic (usitc.gov).
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As with N95 respirators, a resilient public health industrial base
requires baseline manufacturing capacity for nitrile gloves as critical
PPE items, to ensure that hospitals and other institutions will be able
to procure high quality gloves reliably. To help achieve this goal,
certain U.S. Government departments have committed to purchase wholly
domestically made nitrile gloves in line with the requirements in
section 70953 of the Infrastructure Investment and Jobs Act. However,
federal demand alone cannot sustain a baseline level of nitrile glove
production in the U.S. Private medical and health care users are the
primary purchasers and users of medical-grade PPE, including nitrile
gloves.
To ensure access to high quality products, as with N95 respirators,
it is critically important to ensure that a sufficient share of nitrile
gloves is wholly made in the U.S.--that is, including raw materials and
components. In the CY 2023 OPPS/ASC rule, we stated our belief that the
most appropriate framework for determining if a NIOSH-approved surgical
N95 respirator is wholly made in the U.S. and therefore, considered
domestic for purposes of the proposed adjustments, is the Berry
Amendment. The Berry Amendment is a statutory requirement familiar to
manufacturers that restricts the Department of Defense (DoD) from
[[Page 59399]]
using funds appropriated or otherwise available to DoD for procurement
of food, clothing, fabrics, fibers, yarns, other made-up textiles, and
hand or measuring tools that are not grown, reprocessed, reused, or
produced in the United States. For nitrile gloves, which are not
covered by the Berry Amendment, we believe the Make PPE in America
domestic content requirements outlined in section 70953 of the
Infrastructure Investment and Jobs Act is the most appropriate
framework for determining if a nitrile glove is wholly made in the U.S.
These statutory requirements, which apply to procurement of nitrile
gloves and other PPE by the U.S. Departments of Health and Human
Services, and Veterans Affairs, and Homeland Security, require the
procurement PPE, including the materials and components thereof, that
is grown, reprocessed, reused, or produced in the U.S. These statutory
requirements have become familiar to manufacturers of nitrile gloves
and other PPE. With respect to domestic manufacturing capabilities for
raw materials and components, we understand that nitrile butadiene
rubber (NBR), a key nitrile glove input, is currently not yet available
domestically in sufficient quantity or quality to meet market needs. We
understand that U.S. manufacturers do anticipate having the capability
to source and manufacture all glove components domestically within the
next two years.
Wholly domestically made, high quality nitrile gloves are generally
more expensive than foreign-made ones, especially those of lower
quality. This fact is also true for domestically made nitrile gloves
that include non-domestically sourced NBR. These higher prices
primarily stem from higher costs of manufacturing labor in the U.S.
compared to costs in other countries, where most nitrile gloves and
their inputs are made, and higher quality standards. These higher
prices mean higher marginal costs for hospitals for procuring wholly
domestically made nitrile gloves. Based on available data, our best
estimate of the difference in the average unit cost of domestic and
non-domestic nitrile gloves, is $0.13 per glove.
As outlined in this section, quality nitrile gloves are a crucial
component of PPE needed to ensure the safety of health care workers and
patients. The COVID-19 pandemic highlighted how overreliance on foreign
imports of gloves jeopardized public health and the health and safety
of healthcare workers and patients. We solicit comment on the following
questions:
Would modifying the payment adjustment to include nitrile
gloves help offset the marginal costs that hospitals face in procuring
high quality domestically made nitrile gloves?
Would modifying the payment adjustment to include nitrile
gloves help to sustain a baseline level of domestic manufacturing of
nitrile gloves to ensure that hospitals and other stakeholders have
ongoing, reliable access to an adequate supply of quality product?
Would having access to a sustained and reliable source of
domestically made nitrile gloves strengthen hospitals' ability to
protect the health and safety of personnel and patients in a public
health emergency?
Are there other reasons why hospitals would benefit from
an extension of the payment adjustment to include nitrile gloves not
covered in the preceding questions?
Do stakeholders believe a significant portion of hospitals
would use domestic nitrile gloves if the payment adjustment were
offered?
If the payment adjustment was modified to include nitrile
gloves, how should CMS define wholly domestically made nitrile gloves?
Would it be appropriate to categorize all nitrile gloves purchased by
hospitals into two categories: (1) domestic nitrile gloves that--with
the exception of nitrile butadiene rubber (NBR)--comply with the
Infrastructure Investment and Jobs Act's Make PPE in America Act
domestic content requirements; and (2) non-domestic nitrile gloves?
If the payment adjustment was modified to include nitrile
gloves, and the categories were defined as described previously, would
it be appropriate to eliminate the domestic content exception for NBR
if domestic NBR production reaches a sufficient level to meet market
needs?
If the payment adjustment was modified to include nitrile
gloves, should a national standard unit cost differential between
domestic and non-domestic nitrile gloves be used to calculate the
payment adjustment, and if so, what should the current unit cost
differential be (or, what should the data source be)?
4. Potential Modifications To Include Other PPE and Medical Devices
As noted in the CY 2023 OPPS/ASC final rule, we received many
comments urging CMS to expand this policy to cover other forms of PPE
and critical medical supplies. A few commenters stated that other forms
of PPE suffered shortages during the pandemic similar to surgical N95
respirators and therefore investing in domestic production for these
products was also important for future emergency preparedness. We
stated that we will consider these comments for future rulemaking if
appropriate as we gain more experience with our policy. We seek comment
on other PPE types and medical devices that could be appropriate for a
similar payment adjustment.
G. Payment for HIV Pre-Exposure Prophylaxis (PrEP) in Hospital
Outpatient Departments
On July 12, 2023, CMS proposed to cover Pre-Exposure Prophylaxis
(PrEP) to prevent Human Immunodeficiency Virus (HIV) under Medicare
Part B. This proposed coverage would include coverage for the HIV PrEP
drugs, drug administration, HIV and hepatitis B screening, and
individual counseling performed by either physicians or certain other
health care practitioners. If finalized as proposed, all of the
components would be covered as an additional preventive service without
Part B cost-sharing (i.e., deductibles or co-pays), The final National
Coverage Determination (NCD) has not been issued as of the issuance of
this proposed rule.\98\
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\98\ https://www.cms.gov/files/document/faq-prep-hiv-06242024.pdf.
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The HCPCS codes that describe these services are described in Table
72.
BILLING CODE 4120-01-P
[[Page 59400]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.105
BILLING CODE 4120-01-C
For CY 2025, we propose to pay for HIV PrEP drugs and related
services as additional preventive services under the OPPS, if covered
in the final NCD. We believe the resource costs for HCPCS codes listed
in Table 72 would be similar across different settings of care,
including the HOPD and physician office, and therefore the proposed
policies for determining the payment amounts for these services in the
CY 2025 PFS proposed rule would be appropriate for use under the OPPS
as well. Therefore, we propose to pay for the HCPCS codes listed in
Table 72 that are furnished in HOPDs in a similar manner as when these
codes are furnished in the physician office.
HCPCS code G0012 (Injection of pre-exposure prophylaxis (prep) drug
for hiv prevention, under skin or into muscle) may be used to describe
the injection of a PrEP drug for HIV prevention. For CY 2025, if
covered as an additional preventative service, we propose to assign
this HCPCS code to APC 5692 (Level 2 Drug Administration) based on the
crosswalk to HCPCS code 96372 (Therapeutic, prophylactic, or diagnostic
injection (specify substance or drug); subcutaneous or intramuscular)
based on the anticipated similarity in resource use. For the HIV PrEP
counseling services performed by hospital staff, specifically HCPCS
code G0013, if covered as an additional preventative service, we are
proposing to assign this service to a clinical APC with a payment rate
that approximates the payment rate in the physician office setting. The
proposed CY 2025 payment rates can be found in Addendum B to this
proposed rule via the internet on the CMS website. We are not proposing
to pay for HIV PrEP counseling performed by physicians under the OPPS
as this is a physician-only service.
To determine the OPPS payment amount for HIV PrEP drugs we propose
to utilize the ASP methodology under section 1847A of the Act when ASP
data is available. As discussed in the CY 2025 PFS proposed rule, we
believe the use of ASP data would be preferable for determining the
payment amount for HIV PrEP, for two reasons. First, this approach
would determine the payment amount for these drugs in the same way as
the payment amount is usually determined for most other drugs that are
separately payable under Part B, when possible. This would include the
application of payment limit calculations for multiple source drugs,
single source drugs and biologicals, and biosimilar biological
products, as is done products under section 1847A of the Act, for each
applicable billing and payment code. Second, because section
1847A(c)(3) of the Act requires that calculation of the manufacturer's
ASP for an NDC must include volume discounts, prompt pay discounts,
cash discounts, free goods that are contingent on any purchase
requirement, chargebacks, and rebates (other than rebates under the
Medicaid drug rebate
[[Page 59401]]
program, discounts under the 340B Program, and rebates under the Part B
and Part D Medicare inflation rebate program), this would set a payment
amount that would likely better reflect acquisition cost of the drug
than list prices in available compendia (such as Wholesale Acquisition
Cost (WAC)).
Specifically, for HIV PrEP drugs, if ASP data is not available for
a particular drug, the PFS proposal describes the use of alternative
pricing sources. As previously stated, we believe the resource costs
should be similar regardless of whether HIV PrEP drugs are furnished in
the HOPD or the physician office, and we propose to use the same method
of utilizing alternative pricing sources for drugs paid under the OPPS
as additional preventive services as is proposed under the PFS.
If ASP data for HIV PrEP is not available, we propose to determine
the payment amount for the applicable billing and payment code using
the most recently published amount for the drug in Medicaid's National
Average Drug Acquisition Cost (NADAC) survey (OMB control number 0938-
1041).\99\ When using NADAC data, we propose to determine the payment
amount per billing unit, which would be an average of NADAC prices for
all NDCs for the drug. If a drug is available in generic and brand
formulations, we propose all NDCs will be averaged together to
determine the payment amount.
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\99\ https://www.medicaid.gov/medicaid/prescription-drugs/retail-price-survey/index.html.
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Most recently published for purposes of this policy means the most
recently updated NADAC survey available 30 days after the close of the
quarter for which ASP data would have been reported if it were
available.\100\ For example, if NADAC is used to determine the payment
amount effective for dates of service in the third calendar quarter,
CMS would use the most recent NADAC survey update available on the 30th
day after the close of the first calendar quarter. This survey provides
a national drug pricing benchmark for certain drugs that is adequately
comprehensive to serve as the first alternative pricing source in the
case that ASP data is not available. CMS conducts surveys of retail
community pharmacy prices to develop the NADAC pricing benchmark in the
annual NADAC pricing file. The pricing benchmark is reflective of the
prices paid by retail community pharmacies to acquire prescription and
over-the-counter covered outpatient drugs. NADAC data is publicly
available and it can be accessed at https://data.medicaid.gov/nadac.
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\100\ 42 CFR 414.804(a)(5).
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Since NADAC pricing is only available for drugs typically dispensed
through retail community pharmacies, there could be circumstances in
which ASP and NADAC are not available for HIV PrEP. Therefore, if both
ASP and NADAC pricing data are not available for a DCAPS drug, we
propose to use the most recently published and listed prices for
pharmaceutical products in the Federal Supply Schedule (FSS) to
calculate the payment amount for the applicable billing and payment
code. Most recently published for purposes of this policy means the
most recently updated FSS survey available 30 days after the close of
the quarter for which ASP data would have been reported if it were
available.\101\ For example, if FSS is used to determine the payment
amount effective for dates of service in the third calendar quarter,
CMS would use the most recent FSS update available on the 30th day
after the close of the first calendar quarter. When using the FSS, we
would calculate the average price per billing unit (as described in the
billing and payment code for the drug) for all NDCs listed for a drug.
Drug pricing information, including FSS pricing, from the Veteran
Affairs' (VA's) pharmaceutical pricing database is publicly available
at the NDC level and published at https://www.va.gov/opal/nac/fss/pharmPrices.asp.
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\101\ 42 CFR 414.804(a)(5).
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We propose to use FSS data when ASP and NADAC data are not
available because FSS data is one of the few existing options for drug
pricing that includes a wide variety of drug formulations, including
both self-administered drugs typically dispensed through retail
community pharmacies and drugs administered incident to a physician's
service. For more details on this pricing methodology for the physician
office setting, please see the CY 2025 PFS proposed rule.
We note that the PFS proposal includes a final step of invoice
pricing; however, invoice pricing is not currently available under the
OPPS, so we are not proposing to adopt that portion of the PFS
proposal. However, please see our Invoice Drug Pricing Proposal for CY
2026 in section V.B.2.d. of this proposed rule. Because invoice pricing
is not available in the OPPS currently, we propose that if ASP, NADAC,
and FSS pricing are not available for a particular drug covered as an
additional preventive service, we will use WAC plus 6 percent, or 3
percent if in an initial sales period, consistent with payment for
separately payable drugs paid under the OPPS. This would result in
different pricing between the OPPS and PFS if ASP, NADAC, and FSS
pricing are not available, but we believe it is appropriate because
invoice pricing is not an option under the OPPS and this pricing metric
should only apply to a small subset of drugs covered as additional
preventive services until one of the other pricing metrics becomes
available. We are proposing to treat other drugs covered as additional
preventative services under this same methodology.
If the HIV PrEP drugs are covered as additional preventative
services, we propose to update the payment rates determined using the
methodologies previously summarized on January 1, 2025 or the date of
coverage, whichever is later, which would be further updated on the
same schedule as the ASP pricing file, which is updated each calendar
quarter. We propose to assign the drug products covered as additional
preventive services to status indicator K (Nonpass-Through Drugs and
Nonimplantable Biologicals, Including Therapeutic Radiopharmaceuticals;
Paid under OPPS; separate APC payment), as this status indicator
identifies drugs and biologicals that are separately paid under the
OPPS and therefore would allow us to operationalize separate payment
for PrEP drugs. If the HIV PrEP drugs are covered as additional
preventative services, on January 1, 2025 or the date of coverage,
whichever is later, we propose that we would assign each HIV PrEP drug
covered as an additional preventative to its own APC, which will have a
payment rate assigned according to the previously defined methodology.
HCPCS code J0799 (Hiv prep, fda approved, noc) was created
effective January 2, 2024, and may be used to describe an HIV PrEP drug
that is FDA approved but is not otherwise classified. We propose to pay
95 percent of AWP for HCPCS code J0799, which is consistent with how
unlisted drugs and biologicals are paid under the OPPS when they are
reported with HCPCS code C9399 (Unclassified drugs or biologicals). As
HCPCS code J0799 and HCPCS code C9399 both describe drugs that are
unclassified or not otherwise classified, we believe the payment
methodologies should be similarly aligned. Section 1833(t)(15) of the
Act, as added by section 621(a)(1) of the Medicare Prescription Drug,
Improvement, and Modernization Act of 2003 (Pub. L. 108-173), provides
for payment under the OPPS for new drugs and biologicals until HCPCS
codes are assigned. Under this provision, we are
[[Page 59402]]
required to make payment for a covered outpatient drug or biological
that is furnished as part of covered outpatient department services but
for which a HCPCS code has not yet been assigned in an amount equal to
95 percent of AWP for the drug or biological.
In the CY 2005 OPPS/ASC final rule with comment period (69 FR
65805), we implemented section 1833(t)(15) of the Act by instructing
hospitals to bill for a drug or biological that is newly approved by
the FDA and that does not yet have a HCPCS code by reporting the NDC
for the product along with the newly created HCPCS code C9399
(Unclassified drugs or biologicals). We explained that when HCPCS code
C9399 appears on a claim, the Shared Systems suspends the claim for
manual pricing by the Medicare Administrative Contractor (MAC). The MAC
prices the claim at 95 percent of the drug or biological's AWP, using
Red Book or an equivalent recognized compendium, and processes the
claim for payment. We emphasized that this approach enables hospitals
to bill and receive payment for a new drug or biological concurrent
with its approval by the FDA. The hospital does not have to wait for
the next quarterly release or for approval of a product-specific HCPCS
code to receive payment for a newly approved drug or biological or to
resubmit claims for adjustment. We instructed that hospitals would
discontinue billing HCPCS code C9399 and the NDC upon implementation of
a product specific HCPCS code, status indicator, and appropriate
payment amount with the next quarterly update. While the statute does
not require drugs that are covered as additional preventive services to
be paid at 95 percent of AWP when not assigned to a product specific
HCPCS code, we believe it would be appropriate to create a parallel
policy given that HCPCS code J0799 and HCPCS code C9399 both describe
drugs that are unclassified or not otherwise classified. As the payment
amount for HCPCS code C9399 is statutorily mandated at 95 percent of
AWP, we believe that the payment amount for HCPCS code J0799 should
also be 95 percent of AWP.
Therefore, we propose to establish an identical payment policy for
HCPCS code J0799, which may be used to describe drugs that are FDA-
approved for PrEP and are covered as additional preventive services. In
order to effectuate payment at 95 percent of AWP, we propose to require
hospitals to bill for a drug that is newly FDA approved for HIV PrEP,
and covered as an additional preventive service, and that does not yet
have a HCPCS code, by reporting the NDC for the product along with the
newly created HCPCS code J0799. Similar to HCPCS code C9399, when HCPCS
code J0799 appears on a claim, the Shared Systems will suspend the
claim for manual pricing by the MAC. The MAC would price the claim at
95 percent of the drug or biological's AWP, using Red Book or an
equivalent recognized compendium, and process the claim for payment.
This approach would enable hospitals to bill and receive payment for a
drug that is newly FDA approved for HIV PrEP and covered as an
additional preventive service concurrent with its approval by the FDA.
The hospital would not have to wait for the next quarterly release or
for approval of a product-specific HCPCS code to receive payment for a
newly approved drug or to resubmit claims for adjustment. We would
instruct hospitals to discontinue billing HCPCS code C9399 and the NDC
upon implementation of a product specific HCPCS code, status indicator,
and appropriate payment amount with the next quarterly update.
Finally, if covered as an additional preventive service, we propose
to assign all HCPCS codes describing pharmacy suppling fees for HIV
PrEP to an OPPS status indicator of ``B''. This follows the
longstanding OPPS practice of assigning HCPCS codes that describe a
pharmacy supply or dispensing fee to status indicator ``B'' (Codes that
are not recognized by OPPS when submitted on an outpatient hospital
Part B bill type (12x and 13x); Not paid under OPPS), such as HCPCS
code Q0512 (Pharmacy supply fee for oral anti-cancer, oral anti-emetic
or immunosuppressive drug(s); for a subsequent prescription in a 30-day
period) and HCPCS code Q0513 (Pharmacy dispensing fee for inhalation
drug(s); per 30 days).
H. Payment Policy for Devices in Category B Investigational Device
Exemption (IDE) Clinical Trials Policy and Drugs/Devices With a
Medicare Coverage With Evidence Development (CED) Designation
In the CY 2023 OPPS/ASC final rule with comment period (87 FR
72027), and as authorized by section 1833(w) of the Act, we finalized a
policy to make a single blended payment for devices and services in
Category B IDE studies in order to preserve the scientific validity of
these studies by avoiding differences in Medicare payment methods that
would otherwise reveal the group (treatment or control) to which a
patient has been assigned. Specifically, we codified our process of
utilizing a single packaged payment for Category B IDE studies,
including the cost of the device and routine care items and services,
in the regulation text for payment to hospitals in a new Sec. 419.47.
We provided in new Sec. 419.47(a) and (b) that CMS will create a new
HCPCS code, or revise an existing HCPCS code, to describe a Category B
IDE study, which will include both the treatment and control arms,
related device(s) of the study, as well as routine care items and
services, as specified under 42 CFR 405.201, when CMS determines that
the Medicare coverage IDE study criteria at Sec. 405.212 are met, and
a new or revised code is necessary to preserve the scientific validity
of the IDE study, such as by preventing the unblinding of the study. We
finalized that the single blended payment rate would be dependent on
the specific trial protocol and would account for the frequency with
which the investigational device is used compared to the control where
the investigational device is not used. For example, in a study for
which CMS determines the Medicare coverage IDE study criteria in Sec.
405.212 are met and where there is a 1:1 assignment of the device to
control (no device), Medicare's payment rate would prospectively
average the payment for the device with the zero payment for the
control in a 1:1 ratio. Furthermore, costs for routine care items and
services in the study, as specified under Sec. 405.201, would be
included in the single blended payment (87 FR 72026 through 72027).
Since implementing this policy, we have heard from interested
parties that our regulation at Sec. 419.47(a) and (b) excluded
clinical trials for which there is no control arm. We appreciate the
input. Category B IDE studies with no control arm would be paid
normally because an alternative payment methodology would not be
necessary to preserve their scientific validity. Our policy at Sec.
419.47 applies only to IDE studies with a control arm and where a
payment adjustment is necessary to preserve the scientific validity of
such a study. The rule was not intended to suggest that CMS will not
pay for Category B IDEs with no control arm, provided the studies meet
the coverage criteria. In those circumstances, Medicare payments would
be made using the usual Medicare payment methodologies.
In many instances, requests for coding and payment for devices in
Category B IDE studies are submitted through our New Technology APC
application process and include the submission of cost information.
However, we have encountered difficulties determining accurate payment
rates for Category B IDE studies in the absence of New Technology APC
applications such as
[[Page 59403]]
when coding for Category B IDE studies is developed through the CPT
Editorial Panel process. We encourage interested parties to use the New
Technology APC application process where applicable to submit cost
information to CMS. Absent information on the resource costs associated
with the services and devices in a Category B IDE study, we may assign
a SI of E2 to indicate an item, code or service for which pricing
information and claims data are not available, and, therefore, the
item, code or service is not paid by Medicare when submitted by an
outpatient claim.
For CY 2025, we are proposing to utilize a payment methodology
similar to the one developed for Category B IDE clinical trials for
drugs and devices covered under a national coverage determination (NCD)
that uses the Coverage with Evidence Development (CED) paradigm and a
payment adjustment is necessary to preserve the scientific validity of
such a study. Specifically, we propose to use our authority at section
1833(w) of the Act to develop alternative methods of payment under
Medicare Part B for drugs and devices being studied in clinical trials
under a CED NCD. These CED NCDs will be listed on the CMS CED
website.\102\
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\102\ https://www.cms.gov/medicare/coverage/evidence.
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Similar to our policy on devices in Category B IDE trials, for
devices under a CED NCD, we propose to make a single blended payment
rate that would be dependent on the specific trial protocol and would
account for the frequency with which the investigational device is used
compared to the control where the investigational device is not used.
For example, in a study for which there is a 1:1 assignment of the
device to control (no device), Medicare's payment rate would
prospectively average the payment for the device with the zero payment
for the control in a 1:1 ratio.
As described previously and when necessary to preserve the
scientific validity of the study, we propose to make payment using an
adjusted payment level representing the frequency with which the study
drug and placebo, or comparator drug, is furnished. A placebo, or
comparator drug, could represent what a beneficiary would typically
receive in order to serve as a comparator to assess the effectiveness,
or therapeutic benefit, of the study drug. These adjusted payments
would protect the scientific validity of the trial by avoiding
differences in Medicare payment methods that could otherwise invalidate
the scientific validity of the trial, such as by revealing the group
(treatment or control) to which a patient has been assigned. We propose
to base the payment amount for the study drug, or active comparator
drug, on the ASP methodology, that is ASP plus 6 percent if ASP data is
available. If ASP data is not available, then we propose to pay the
wholesale acquisition cost (WAC). During an initial sales period, we
propose to base the payment on WAC plus 3 percent, otherwise, we
propose to base payment on WAC plus 6 percent. If WAC is not available,
then we propose to pay 95 percent of average wholesale price (AWP).
This payment hierarchy is consistent with CMS payment for non-
passthrough separately payable drugs in the OPPS as discussed in
section V.B. of this proposed rule.
These payment amounts would be used to calculate the adjusted
payment level representing the frequency with which the study drug and
placebo, or comparator drug, is furnished. For purposes of setting this
adjusted payment level, we propose to use a zero dollar amount for a
placebo or comparator. A new, or revised, HCPCS code would be created
for the drug and placebo or comparator in the CED study. We propose
that we would assign this HCPCS code to its own APC reflecting the
payment amount determined appropriate based on available pricing
information and the frequency with which the study drug and placebo, or
comparator drug, is used.
For example, as most drugs are currently paid per dosage unit, such
as per 1 mg, a payment rate, potentially priced per 1 mg of drug,
placebo, or active comparator, might be based on the average sales
price methodology for the drug averaged with a zero-dollar payment for
the placebo, or the applicable payment rate of the comparator drug. A
single averaged payment would be made regardless of whether 1 mg of
study drug, 1 mg of placebo, or 1 mg of comparator drug is used. If the
trial is a 1:1 (treatment: placebo) then the payment rate would be the
same for every trial participant and would represent half of the total
payment for the drug. In a simplified example, if the ASP plus 6
percent payment rate for Drug X was $1 per 1 mg then in this example,
the payment rate for the blended code of Drug X and placebo would be
$0.50 per 1 mg. If a beneficiary received 100 mg of the study drug,
then a $50 payment would be made. If a beneficiary received 100 mg of
the placebo, then a $50 payment would be made. The same HCPCS code
would be billed in both the study drug and placebo examples. The same
payment methodology would apply if the study design was 1:2 (treatment:
placebos, which equals payment at \1/3\ the cost of the study drug) or
1:3 (treatment: placebos, which equals payment at \1/4\ the cost of the
study drug). In situations where there are multi-arm, or single-arm,
cross over trials where participants receive placebo, or sham, for the
first half of the trial and then the study drug for the second half of
the trial, the payment would be reflective of this, and set in the same
manner as a 1:1 trial, since half of the time the beneficiary would
receive the placebo and the other half they would receive the study
drug. No matter the trial design, CMS payment would be reflective of
the expected frequency with which the study treatment, control, active
comparator, or placebo is provided. We note that we propose to assign
payment rates based on an adjusted payment level representing the
frequency with which the study drug and placebo, or comparator drug, is
projected to be furnished for the trial as a whole, and not necessarily
the exact frequency with which the study drug and placebo, or
comparator drug, is furnished to a particular hospital enrolled as a
clinical trial site. Clinical trial sponsors should work with CMS to
ensure timely establishment of payment and coding for drugs being
studied under a CED designation requiring an adjusted level of payment.
While the items and services furnished as placebo controls may not
be considered reasonable and necessary under section 1862(a)(1)(A) of
the Act because they have no health benefit, these items and services
can be necessary in order to conduct a scientifically valid clinical
study. As such, these items can be covered under section 1862(a)(1)(E)
of the Act when furnished in the context of a qualifying clinical
study.\103\
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\103\ Guidance for the Public, Industry, and CMS Staff: Coverage
with Evidence Development. November 20, 2014. https://www.cms.gov/medicare-coverage-database/view/medicare-coverage-document.aspx?MCDId=27.
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CMS may cover and pay for routine costs of an approved clinical
trial in both the treatment arm and the control (standard of care or
placebo). Routine costs include all items and services that are
otherwise generally available to Medicare beneficiaries (i.e., there
exists a benefit category for the item or service, coverage is not
statutorily excluded for the item or service, and there is not a
national non-coverage decision for the item or service) that are
provided in either the experimental or the control arms of a clinical
trial. Although CMS
[[Page 59404]]
may cover and pay for routine costs of an CED approved clinical trial
in both the treatment arm and the control (standard of care or
placebo), there may be circumstances, such as single arm studies, where
no unique coding or unique payment would be required to preserve the
scientific validity of such a study created for routine costs
associated with clinical trials. Similarly, if the routine costs are
the exact same between different arms of a trial, and routine billing
and payment of those routine costs would not unblind a study, then no
unique coding or payment would be required for those costs. There would
be no need to include these routine costs in the HCPCS code assigned to
a blended payment rate. If covered, these routine costs would be paid
according to existing coding and Medicare payment mechanisms. Under the
proposed rule an alternate method of payment would be established only
when necessary to maintain the scientific validity of the trial, such
as to prevent the billing and payment of routine costs from unblinding
the trial. These determinations will be made based on the clinical
trial protocol communicated to CMS by the clinical trial sponsor,
before CMS would establish an appropriate code with an adjusted payment
level for routine costs for CED trials. CMS's determination will be
different in CED trials from our policy regarding devices and
procedures in Category B IDE trials, where the provision of an
investigational device usually requires a combination of procedures or
services to implant, or administer, the device to a patient. In
contrast, the infusion of a drug is typically a more straightforward
process, and associated routine costs may not be provided at the same
time that the drug is administered, making it impractical to create a
single code to describe the study drug and all associated routine
costs.
Finally, we want to be sure there are no other instances where
Medicare payment methodologies might interfere with the scientific
validity of a trial. We are seeking comment on these possible
alternative scenarios, such as Medicare payment interfering with
clinical trial recruitment in such a way that could compromise the
scientific integrity of a clinical trial and would consider adjustments
to our payment policy for devices in Category B IDE clinical trials and
devices/drugs in clinical trials with a CED designation in future
rulemaking.
We propose to codify our coding and payment policy to Category B
IDE clinical trials with control arms through revisions to Sec.
419.47(a) to specify that these are placebo control arms. We also
propose to codify our proposed process for developing coding and
payment for devices/drugs in CED-designated clinical trials by adding
new paragraphs (c) and (d) to Sec. 419.47. Specifically, we propose to
provide in new Sec. 419.47(c) that CMS would create a new HCPCS code,
or revise an existing HCPCS code, to describe a device/drug studied in
a clinical trial with the Medicare CED designation, which would include
the study device/drug and control arm, when CMS determines it is
necessary to establish a CED designation for a device/drug subsequent
to a CED NCD. Additionally, in new Sec. 419.47(d) we propose that when
we create a new HCPCS code or revise an existing HCPCS code under
proposed paragraph (c), we would make a single payment for the HCPCS
code that includes payment for the investigational device/drug and any
control.
XI. Proposed CY 2025 OPPS Payment Status and Comment Indicators
A. Proposed CY 2025 OPPS Payment Status Indicator Definitions
Payment status indicators (SIs) that we assign to HCPCS codes and
APCs serve an important role in determining payment for services under
the OPPS. They indicate whether a service represented by a HCPCS code
is payable under the OPPS or another payment system and whether
particular OPPS policies apply to the code.
For CY 2025 and subsequent years, we propose to create two new
status indicators, ``K1'' and ``H1.'' We propose these two new status
indicators to identify the products that qualify for separate payment
under our new payment policy for non-opioid post-surgical pain
management drugs, biologicals, and devices, as authorized by section
4135 of the Consolidated Appropriations Act, 2023. This policy is
discussed further in section XIII.E of this proposed rule. The proposed
definitions and payment status of proposed status indicators ``K1'' and
``H1'' can be found in Table 73.
[GRAPHIC] [TIFF OMITTED] TP22JY24.106
[[Page 59405]]
For CY 2025 and subsequent years, we propose to modify the
definition of status indicator ``K'' to remove the word ``therapeutic''
from the phrase ``therapeutic radiopharmaceuticals'' to indicate that
both diagnostic and therapeutic radiopharmaceuticals may be assigned to
status indicator ``K'' in accordance with our policy proposal in
section II.A.3.a. of this proposed rule. The proposed definition and
payment status of status indicator ``K'' can be found in Table 74.
[GRAPHIC] [TIFF OMITTED] TP22JY24.107
We do not propose to make any other changes to the existing
definitions of status indicators that are listed in Addendum D1 to this
proposed rule, which is available on the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices.
The complete list of proposed CY 2025 payment status indicators and
their definitions is displayed in Addendum D1 to this proposed rule,
which is available on the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices.
The proposed CY 2025 payment status indicator assignments for APCs
and HCPCS codes are shown in Addendum A and Addendum B, respectively,
to this proposed rule, which are available on the CMS website at:
https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices.
B. Proposed CY 2025 Comment Indicator Definitions
We propose to use four comment indicators for the CY 2025 OPPS.
These comment indicators, ``CH,'' ``NC,'' ``NI,'' and ``NP,'' are in
effect for CY 2024; and we propose to continue their use in CY 2025.
The proposed CY 2025 OPPS comment indicators are as follows:
``CH''--Active HCPCS code in current and next calendar
year, status indicator and/or APC assignment has changed; or active
HCPCS code that will be discontinued at the end of the current calendar
year.
``NC''--New code for the next calendar year or existing
code with substantial revision to its code descriptor in the next
calendar year, as compared to current calendar year for which we
requested comments in the CY 2024 OPPS/ASC proposed rule, final APC
assignment; comments will not be accepted on the final APC assignment
for the new code.
``NI''--New code for the next calendar year or existing
code with substantial revision to its code descriptor in the next
calendar year, as compared to current calendar year, interim APC
assignment; comments will be accepted on the interim APC assignment for
the new code.
``NP''--New code for the next calendar year or existing
code with substantial revision to its code descriptor in the next
calendar year, as compared to current calendar year, proposed APC
assignment; comments will be accepted on the proposed APC assignment
for the new code.
The definitions of the proposed OPPS comment indicators for CY 2025
are listed in Addendum D2 to this proposed rule, which is available on
the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices.
We solicit public comments on our proposed definitions of the OPPS
comment indicators for 2025.
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 2024 report.
A. OPPS Payment Rates Update
The March 2024 MedPAC ``Report to the Congress: Medicare Payment
Policy,'' recommended that Congress update Medicare OPPS payment rates
by the amount specified in current law plus 1.5 percent. We refer
readers to the March 2024 report for a complete discussion of this
recommendation.\104\ We appreciate MedPAC's recommendation and, as
discussed further in section II.B of this proposed rule, we propose to
increase the OPPS payment rates by the amount specified in current law.
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\104\ Medicare Payment Advisory Committee. March 2024 Report to
the Congress. Chapter 3: Hospital inpatient and outpatient services,
p.49. Available at: https://www.medpac.gov.
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B. Medicare Safety Net Index
In the March 2024 MedPAC ``Report to the Congress: Medicare Payment
Policy,'' MedPAC stated that their recommended update to IPPS and OPPS
payment rates of current law plus 1.5 percent may not be sufficient to
ensure the financial viability of some Medicare safety-net hospitals
with a poor payer mix. MedPAC recommends redistributing the current
Medicare safety-net payments (disproportionate share hospital and
uncompensated care payments) using the MedPAC-developed Medicare
Safety-Net Index (MSNI) for hospitals. In addition, MedPAC recommends
adding $4 billion to this MSNI pool of funds to help
[[Page 59406]]
maintain the financial viability of Medicare safety-net hospitals and
recommended to the Congress transitional approaches for a MSNI policy.
We appreciate MedPAC's recommendation and, as discussed further in
section II.B of this proposed rule, we propose to increase the OPPS
payment rates by the amount specified in current law.
C. ASC Cost Data
In the March 2024 MedPAC ``Report to the Congress: Medicare Payment
Policy,'' MedPAC reiterated its longstanding recommendation that
Congress require ASCs to report cost data to enable the Commission to
examine the growth of ASCs' costs over time and analyze Medicare
payments relative to the costs of efficient providers. MedPAC suggested
that such cost data would enable policymakers to establish payment
rates that accurately reflect ASC costs and are also necessary to
determine whether an existing Medicare market basket is an appropriate
proxy for ASC costs or whether an ASC-specific market basket should be
developed, stating both the CPI-U and hospital market basket update
likely do not reflect an ASC's cost structure. MedPAC contended that it
is feasible for small facilities, such as ASCs, to provide cost
information since other small facilities, such as home health agencies,
hospices, and rural health clinics, currently furnish cost data to CMS.
Further, ASCs in Pennsylvania submit cost and revenue data annually to
a state agency to estimate margins for those ASCs, and that, as
businesses, ASCs keep records of their costs for filing taxes and other
purposes.\105\
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\105\ Medicare Payment Advisory Committee. March 2024 Report to
the Congress. Chapter 10: Ambulatory surgical center services:
Status report, p. 297. Available at: https://www.medpac.gov/wp-content/uploads/2024/03/Mar24_MedPAC_Report_To_Congress_SEC.pdf.
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While we recognize that the submission of cost data could place
additional administrative burden on most ASCs, and we do not propose
any cost reporting requirements for ASCs in this proposed rule, as in
previous years, we continue to seek public comment on methods that
would mitigate the burden of reporting costs on ASCs while also
collecting enough data to reliably use such data in the determination
of ASC costs. Such cost data would be beneficial in establishing an
ASC-specific market basket for updating payment rates under the ASC
payment system.
XIII. Proposed Updates to the Ambulatory Surgical Center (ASC) Payment
System
A. Background, Legislative History, Statutory Authority, and Prior
Rulemaking for the ASC Payment System
For a detailed discussion of the legislative history and statutory
authority related to payments to ASCs under Medicare, we refer readers
to the CY 2012 OPPS/ASC final rule with comment period (76 FR 74377
through 74378) and the June 12, 1998 proposed rule (63 FR 32291 through
32292). For a discussion of prior rulemaking on the ASC payment system,
we refer readers to the CYs 2012 to 2024 OPPS/ASC final rules with
comment period (76 FR 74378 through 74379; 77 FR 68434 through 68467;
78 FR 75064 through 75090; 79 FR 66915 through 66940; 80 FR 70474
through 70502; 81 FR 79732 through 79753; 82 FR 59401 through 59424; 83
FR 59028 through 59080; 84 FR 61370 through 61410; 85 FR 86121 through
86179; 86 FR 63761 through 63815; 87 FR 72054 through 72096; and 88 FR
81900 through 81961).
B. Proposed ASC Treatment of New and Revised Codes
1. Background on Process for New and Revised HCPCS Codes
We update the lists and payment rates for covered surgical
procedures and covered ancillary services in ASCs in conjunction with
the annual proposed and final rulemaking process to update the OPPS and
the ASC payment systems (Sec. 416.173; 72 FR 42535). We base ASC
payment and policies for most covered surgical procedures, drugs,
biologicals, and certain other covered ancillary services on the OPPS
payment policies and we use quarterly change requests (CRs) to update
services paid for under the OPPS. We also provide quarterly update CRs
for ASC covered surgical procedures and covered ancillary services
throughout the year (January, April, July, and October). We release new
and revised Level II HCPCS codes and recognize the release of new and
revised CPT codes by the American Medical Association (AMA) and make
these codes effective (that is, the codes are recognized on Medicare
claims) via these ASC quarterly update CRs. We recognize the release of
new and revised Category III CPT codes in the July and January CRs.
These updates implement newly created and revised Level II HCPCS and
Category III CPT codes for ASC payments and update the payment rates
for separately paid drugs and biologicals based on the most recently
submitted ASP data. New and revised Category I CPT codes, except
vaccine codes, are released only once a year, and are implemented only
through the January quarterly CR update. New and revised Category I CPT
vaccine codes are released twice a year and are implemented through the
January and July quarterly CR updates. We refer readers to Table 41 in
the CY 2012 OPPS/ASC proposed rule for an example of how this process
is used to update HCPCS and CPT codes, which we finalized in the CY
2012 OPPS/ASC final rule with comment period (76 FR 42291; 76 FR 74380
through 74384).
In our annual updates to the ASC list of, and payment rates for,
covered surgical procedures and covered ancillary services, we
undertake a review of excluded surgical procedures, new codes, and
codes with revised descriptors, to identify any that we believe meet
the criteria for designation as ASC covered surgical procedures or
covered ancillary services. Updating the lists of ASC covered surgical
procedures and covered ancillary services, as well as their payment
rates, in association with the annual OPPS rulemaking cycle, is
particularly important because the OPPS relative payment weights and,
in some cases, payment rates, are used as the basis for the payment of
many covered surgical procedures and covered ancillary services under
the revised ASC payment system. This joint update process ensures that
the ASC updates occur in a regular, predictable, and timely manner.
Payment for ASC procedures, services, and items are generally based
on medical billing codes, specifically, HCPCS codes, that are reported
on ASC claims. The HCPCS is divided into two principal subsystems,
referred to as Level I and Level II. Level I is comprised of CPT
(Current Procedural Terminology) codes, a numeric and alphanumeric
coding system maintained by the AMA, and includes Category I, II, and
III CPT codes. Level II of the HCPCS, which is maintained by CMS, is a
standardized coding system that is used primarily to identify products,
supplies, and services not included in the CPT codes. Together, Level I
and II HCPCS codes are used to report procedures, services, items, and
supplies under the ASC payment system. Specifically, we recognize the
following codes on ASC claims:
Category I CPT codes, which describe surgical procedures,
diagnostic and therapeutic services, and vaccine codes;
Category III CPT codes, which describe new and emerging
[[Page 59407]]
technologies, services, and procedures; and
Level II HCPCS codes (also known as alpha-numeric codes),
which are used primarily to identify drugs, devices, supplies,
temporary procedures, and services not described by CPT codes.
We finalized a policy in the August 2, 2007 final rule (72 FR 42533
through 42535) to evaluate each year all new and revised Category I and
Category III CPT codes and Level II HCPCS codes that describe surgical
procedures, and to make preliminary determinations during the annual
OPPS/ASC rulemaking process regarding whether or not they meet the
criteria for payment in the ASC setting as covered surgical procedures
and, if so, whether or not they are office-based procedures. In
addition, we identify new and revised codes as ASC covered ancillary
services based upon the final payment policies of the revised ASC
payment system. In prior rulemakings, we refer to this process as
recognizing new codes. However, this process has always involved the
recognition of new and revised codes. We consider revised codes to be
new when they have substantial revision to their code descriptors that
necessitate a change in the current ASC payment indicator. To clarify,
we refer to these codes as new and revised in this CY 2025 OPPS/ASC
proposed rule.
We have separated our discussion below based on when the codes are
released and whether we propose to solicit public comments in this
proposed rule (and respond to those comments in the CY 2025 OPPS/ASC
final rule with comment period) or whether we will be soliciting public
comments in the CY 2025 OPPS/ASC final rule with comment period (and
responding to those comments in the CY 2026 OPPS/ASC final rule with
comment period).
1. April 2024 HCPCS Codes Proposed Rule Comment Solicitation
For the April 2024 update, there were no new CPT codes; however,
there were several new Level II HCPCS codes. In the April 2024 ASC
quarterly update (Transmittal 12559, dated March 28, 2024, CR 13577),
we added several new Level II HCPCS codes to the list of covered
ancillary services. Table 75 (New Level II HCPCS Codes for Ancillary
Services Effective April 1, 2024) of this proposed rule, lists the new
Level II HCPCS codes that were implemented April 1, 2024. The proposed
comment indicators, payment indicators and payment rates, where
applicable, for these April codes can be found in Addendum BB to this
proposed rule. The list of ASC payment indicators and corresponding
definitions can be found in Addendum DD1 to this proposed rule. These
new codes that are effective April 1, 2024, are assigned to comment
indicator ``NP'' in Addendum BB to this proposed rule to indicate that
the codes are assigned to an interim APC assignment and that comments
will be accepted on their interim APC assignments. The list of comment
indicators and definitions used under the ASC payment system can be
found in Addendum DD2 to this proposed rule. We note that the following
ASC addenda are available via the internet on the CMS website.
ASC Addendum AA: Proposed ASC Covered Surgical Procedures
for CY 2025 (Including Surgical Procedures for Which Payment is
Packaged),
ASC Addendum BB: Proposed ASC Covered Ancillary Services
Integral to Covered Surgical Procedures for CY 2025 (Including
Ancillary Services for Which Payment is Packaged),
ASC Addendum DD1: Proposed ASC Payment Indicators (PI) for
CY 2025,
ASC Addendum DD2: Proposed ASC Comment Indicators (CI) for
CY 2025,
ASC Addendum EE: Proposed Surgical Procedures to be
Excluded from Payment in ASC for CY 2025, and
ASC Addendum FF: Proposed ASC Device Offset Percentages
for CY 2025,
Addendum O: Long Descriptors for New Category I CPT Codes,
Category III CPT Codes, C-codes, and G-Codes Effective January 1, 2025.
We invite public comments on the proposed payment indicators for
the new HCPCS codes that were recognized as ASC covered ancillary
services in April 2024 through the quarterly update CRs, as listed in
Table 75 (New Level II HCPCS Codes for Ancillary Services Effective
April 1, 2024) of this proposed rule. We propose to finalize their
payment indicators in the CY 2025 OPPS/ASC final rule with comment
period.
BILLING CODE 4120-01-P
[[Page 59408]]
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2. July 2024 HCPCS Codes Proposed Rule Comment Solicitation
In the July 2024 ASC quarterly update (Transmittal 12673, Change
Request 13656, dated June 13, 2024), we added several separately
payable CPT and Level II HCPCS codes to the list of covered surgical
procedures and covered ancillary services. Table 76 (New HCPCS Codes
for Covered Surgical Procedures and Covered Ancillary Services
Effective July 1, 2024) of this proposed rule, lists the new HCPCS
codes that are effective July 1, 2024. The proposed comment indicators,
payment indicators, and payment rates for the codes can be found in
Addendum AA and Addendum BB to this proposed rule. The list of ASC
payment indicators and corresponding definitions can be found in
Addendum DD1 to this proposed rule. These new codes that are effective
July 1, 2024, are assigned to comment indicator ``NP'' in Addendum AA
and BB to this proposed rule to indicate that the codes are assigned to
an interim APC assignment and that comments will be accepted on their
interim APC assignments. The list of comment indicators and definitions
used under the ASC payment system can be found in Addendum DD2 to this
proposed rule. We note that ASC Addenda AA, BB, DD1, and DD2 are
available via the internet on the CMS website.
[[Page 59409]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.109
BILLING CODE 4120-01-C
We invite public comments on the proposed payment indicators for
the new HCPCS codes newly recognized as ASC covered surgical procedures
and
[[Page 59410]]
covered ancillary services effective April 1, 2024 and July 1, 2024,
through the quarterly update CRs, as listed in Tables 75 and 76. We
propose to finalize the payment indicators in the CY 2025 OPPS/ASC
final rule with comment period.
3. October 2024 HCPCS Codes Final Rule Comment Solicitation
For CY 2025, consistent with our established policy, we propose
that the Level II HCPCS codes that will be effective October 1, 2024,
would be flagged with comment indicator ``NI'' in Addendum BB to the CY
2025 OPPS/ASC final rule with comment period to indicate that we have
assigned the codes an interim ASC payment status for CY 2024. We will
invite public comments in the CY 2025 OPPS/ASC final rule with comment
period on the interim payment indicators, which would then be finalized
in the CY 2026 OPPS/ASC final rule with comment period.
5. January 2025 HCPCS Codes
a. Level II HCPCS Codes Final Rule Comment Solicitation
As has been our practice in the past, we incorporate those new
Level II HCPCS codes that are effective January 1 in the final rule
with comment period, thereby updating the ASC payment system for the
calendar year. We note that unlike the CPT codes that are effective
January 1 and are included in the OPPS/ASC proposed rules, and except
for the G-codes listed in Addendum O to this proposed rule, most Level
II HCPCS codes are not released until sometime around November to be
effective January 1. Because these codes are not available until
November, we are unable to include them in the OPPS/ASC proposed rules.
Therefore, these Level II HCPCS codes will be released to the public
through the CY 2025 OPPS/ASC final rule with comment period, January
2025 ASC Update CR, and the CMS HCPCS website.
In addition, for CY 2025, we propose to continue our established
policy of assigning comment indicator ``NI'' in Addendum AA and
Addendum BB to the OPPS/ASC final rule with comment period to the new
Level II HCPCS codes that will be effective January 1, 2025, to
indicate that we are assigning them an interim payment indicator, which
is subject to public comment. We will be inviting public comments in
the CY 2025 OPPS/ASC final rule with comment period on the payment
indicator assignments, which would then be finalized in the CY 2026
OPPS/ASC final rule with comment period.
b. CPT Codes Proposed Rule Comment Solicitation
For the CY 2025 ASC update, we received the CPT codes that will be
effective January 1, 2025, from the AMA in time to be included in this
proposed rule. The new, revised, and deleted CPT codes can be found in
ASC Addendum AA and Addendum BB to this proposed rule (which are
available via the internet on the CMS website). We note that the new
and revised CPT codes are assigned to comment indicator ``NP'' in ASC
Addendum AA and Addendum BB of this proposed rule to indicate that the
code is new for the next calendar year, or the code is an existing code
with substantial revision to its code descriptor in the next calendar
year as compared to the current calendar year with a proposed payment
indicator assignment. We will accept comments and finalize the payment
indicators in the CY 2025 OPPS/ASC final rule with comment period.
Further, we remind readers that the CPT code descriptors that appear in
Addendum AA and Addendum BB are short descriptors and do not describe
the complete procedure, service, or item described by the CPT code.
Therefore, we include the 5-digit placeholder codes and their long
descriptors for the new CY 2025 CPT codes in Addendum O to this
proposed rule (which is available via the internet on the CMS website)
so that the public can comment on our proposed payment indicator
assignments. The 5-digit placeholder codes can be found in Addendum O
to this proposed rule, specifically under the column labeled ``CY 2025
OPPS/ASC Proposed Rule 5-Digit AMA/CMS Placeholder Code.'' We intend to
include the final CPT code numbers the CY 2025 OPPS/ASC final rule with
comment period.
In summary, we solicit public comments on the proposed CY 2025
payment indicators for the new Category I and III CPT codes that will
be effective January 1, 2025. Because these codes are listed in
Addendum AA and Addendum BB with short descriptors only, we are listing
them again in Addendum O with the long descriptors. We also propose to
finalize the payment indicator for these codes (with their final CPT
code numbers) in the CY 2025 OPPS/ASC final rule with comment period.
The proposed payment indicators and comment indicators for these codes
can be found in Addendum AA and BB to this proposed rule. The list of
ASC payment indicators and corresponding definitions can be found in
Addendum DD1 to this proposed rule. The new CPT codes that will be
effective January 1, 2025, are assigned to comment indicator ``NP'' in
Addendum AA and BB to this proposed rule to indicate that the codes are
assigned to an interim payment indicator and that comments will be
accepted on their interim ASC payment assignments. The list of comment
indicators and definitions used under the ASC payment system can be
found in Addendum DD2 to this proposed rule. We note that ASC Addenda
AA, BB, DD1, and DD2 are available via the internet on the CMS website.
Finally, in Table 77, we summarize our process for updating codes
through our ASC quarterly update CRs, seeking public comments, and
finalizing the treatment of these new codes under the ASC payment
system.
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6. ASC Payment and Comment Indicators
a. Background
In addition to the payment indicators that we introduced in the
August 2, 2007 ASC final rule, we created final comment indicators for
the ASC payment system in the CY 2008 OPPS/ASC final rule with comment
period (72 FR 66855). We created Addendum DD1 to define ASC payment
indicators that we use in Addenda AA and BB to provide payment
information regarding covered surgical procedures and covered ancillary
services, respectively, under the revised ASC payment system. The ASC
payment indicators in Addendum DD1 are intended to capture policy-
relevant characteristics of HCPCS codes that may receive packaged or
separate payment in ASCs, such as whether they were on the ASC CPL
prior to CY 2008; payment designation, such as device-intensive or
office-based, and the corresponding ASC payment methodology; and their
classification as separately payable ancillary services, including
radiology services, brachytherapy sources, OPPS pass-through devices,
corneal tissue acquisition services, drugs or biologicals, or NTIOLs.
We also created Addendum DD2 that lists the ASC comment indicators.
The ASC comment indicators included in Addenda AA and BB to the
proposed rules and final rules with comment period serve to identify,
for the revised ASC payment system, the status of a specific HCPCS code
and its payment indicator with respect to the timeframe when comments
will be accepted. The comment indicator ``NI'' is used in the OPPS/ASC
final rule with comment period to indicate new codes for the next
calendar year for which the interim payment indicator assigned is
subject to comment. The comment indicator ``NI'' also is assigned to
existing codes with substantial revisions to their descriptors such
that we consider them to be describing new services, and the interim
payment indicator assigned is subject to comment, as discussed in the
CY 2010 OPPS/ASC final rule with comment period (74 FR 60622).
The comment indicator ``NP'' is used in the OPPS/ASC proposed rule
to indicate new codes for the next calendar year for which the proposed
payment indicator assigned is subject to comment. The comment indicator
``NP'' also is assigned to existing codes with substantial revisions to
their descriptors, such that we consider them to be describing new
services, and the proposed payment indicator assigned is subject to
comment, as discussed in the CY 2016 OPPS/ASC final rule with comment
period (80 FR 70497).
The ``CH'' comment indicator is used in Addenda AA and BB to the
proposed rule (these addenda are available via the internet on the CMS
website) to indicate that the payment indicator assignment has changed
for an active HCPCS code in the current year and the next calendar
year, for example, if an active HCPCS code is newly recognized as
payable in ASCs or an active HCPCS code is discontinued at the end of
the current calendar year. The ``CH'' comment indicators that are
published in the final rule are provided to alert readers that a change
has been made from one calendar year to the next, but do not indicate
that the change is subject to comment.
[[Page 59412]]
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.
In CY 2024 OPPS/ASC final rule with comment period, we finalized
the addition of two ASC payment indicators, ``D1''--``Ancillary dental
service/item; no separate payment made'' and ``D2''--``Non office-based
dental procedure added in CY 2024 or later'', for new dental codes for
CY 2024 and subsequent calendar years to indicate potentially payable
dental services and procedures in the ASC setting (88 FR 81907). We
added these two codes to Addendum DD1 (which is available via the
internet on the CMS website).
b. Proposed ASC Payment and Comment Indicators for CY 2025
For CY 2025, we propose new and revised Category I and III CPT
codes as well as new and revised Level II HCPCS codes. Proposed
Category I and III CPT codes that are new and revised for CY 2025 and
any new and existing Level II HCPCS codes with substantial revisions to
the code descriptors for CY 2025, compared to the CY 2024 descriptors,
are included in ASC Addenda AA and BB to this proposed rule and labeled
with comment indicator ``NP'' to indicate that these CPT and Level II
HCPCS codes are open for comment as part of the CY 2025 OPPS/ASC
proposed rule.
We propose to modify the descriptor of ASC payment indicator
``L6''--``New Technology Intraocular Lens (NTIOL); special payment'' to
``Special payment; New Technology Intraocular Lens (NTIOL) or
qualifying non-opioid devices'', to account for non-opioid devices paid
for under the ASC payment system pursuant to section 4135 of the CAA,
2023. More information about this non-opioid policy can be found in
section XIII.E of this proposed rule.
We refer readers to Addenda DD1 and DD2 of this proposed rule
(these addenda are available via the internet on the CMS website) for
the complete list of ASC payment and comment indicators proposed for
the CY 2025 update.
C. Proposed Payment Policies Under the ASC Payment System
1. Proposed ASC Payment for Covered Surgical Procedures
a. Background
Our ASC payment policies for covered surgical procedures under the
revised ASC payment system are described in the CY 2008 OPPS/ASC final
rule with comment period (72 FR 66828 through 66831). Under our
established policy, we use the ASC standard ratesetting methodology of
multiplying the ASC relative payment weight for the procedure by the
ASC conversion factor for that same year to calculate the national
unadjusted payment rates for procedures with payment indicators ``G2''
and ``A2.'' Payment indicator ``A2'' was developed to identify
procedures that were included on the list of ASC covered surgical
procedures in CY 2007 and, therefore, were subject to transitional
payment prior to CY 2011. Although the 4-year transitional period has
ended and payment indicator ``A2'' is no longer required to identify
surgical procedures subject to transitional payment, we have retained
payment indicator ``A2'' because it is used to identify procedures that
are exempted from the application of the office-based designation.
Payment rates for office-based procedures (payment indicators
``P2,'' ``P3,'' and ``R2'') are the lower of the PFS nonfacility PE
RVU-based amount or the amount calculated using the ASC standard rate
setting methodology for the procedure. As detailed in section
XIII.C.3.b of this proposed rule, we update the payment amounts for
office-based procedures (payment indicators ``P2,'' ``P3,'' and ``R2'')
using the most recent available MPFS and OPPS data. We compare the
estimated current year rate for each of the office-based procedures,
calculated according to the ASC standard rate setting methodology, to
the PFS nonfacility PE RVU-based amount to determine which is lower
and, therefore, would be the current year payment rate for the
procedure under our final policy for the revised ASC payment system
(Sec. 416.171(d)).
The rate calculation established for device-intensive procedures
(payment indicator ``J8'') is structured so only the service (non-
device) portion of the rate is subject to the ASC conversion factor. We
update the payment rates for device-intensive procedures to incorporate
the most recent device offset percentages calculated under the ASC
standard ratesetting methodology, as discussed in section XIII.C.4 of
this proposed rule.
In the CY 2014 OPPS/ASC final rule with comment period (78 FR
75081), we finalized our proposal to calculate the CY 2014 payment
rates for ASC covered surgical procedures according to our established
methodologies, with the exception of device removal procedures. For CY
2014, we finalized a policy to conditionally package payment for device
removal procedures under the OPPS. Under the OPPS, a conditionally
packaged procedure (status indicators ``Q1'' and ``Q2'') describes a
HCPCS code where the payment is packaged when it is provided with a
significant procedure but is separately paid when the service appears
on the claim without a significant procedure. Because ASC services
always include a covered surgical procedure, HCPCS codes that are
conditionally packaged under the OPPS are always packaged (payment
indicator ``N1'') under the ASC payment system. Under the OPPS, device
removal procedures are conditionally packaged and, therefore, would be
packaged under the ASC payment system. There is no Medicare payment
made when a device removal procedure is performed in an ASC without
another surgical procedure included on the claim; therefore, no
Medicare payment would be made if a device was removed but not
replaced. To ensure that the ASC payment system provides separate
payment for surgical procedures that only involve device removal--
conditionally packaged in the OPPS (status indicator ``Q2'')--we have
continued to provide separate payment since CY 2014 and assign the
current ASC payment indicators associated with these procedures.
b. Update to ASC Covered Surgical Procedure Payment Rates for CY 2025
We propose to update ASC payment rates for CY 2025 and subsequent
years using the established rate calculation methodologies under Sec.
416.171 and using our definition of device-intensive procedures, as
discussed in section XIII.C.4 of this proposed rule. As the proposed
OPPS relative payment weights are generally based on geometric mean
costs, we propose that the ASC payment system will generally use the
geometric mean cost to determine proposed relative payment weights
under the ASC standard methodology. We propose to continue to use the
amount calculated under the ASC standard ratesetting methodology for
procedures assigned payment indicators ``A2'' and ``G2.''
We propose to calculate payment rates for office-based procedures
(payment indicators ``P2,'' ``P3,'' and ``R2'') and device-intensive
procedures
[[Page 59413]]
(payment indicator ``J8'') according to our established policies and to
identify device-intensive procedures using the methodology discussed in
section XIII.C.4 of this proposed rule. Therefore, we propose to update
the payment amount for the service portion (the non-device portion) of
the device-intensive procedures using the standard ASC ratesetting
methodology and the payment amount for the device portion based on the
proposed CY 2025 device offset percentages that have been calculated
using the standard OPPS APC ratesetting methodology. We propose that
payment for office-based procedures would be at the lesser of the
proposed CY 2025 MPFS nonfacility PE RVU-based amount or the proposed
CY 2025 ASC payment amount calculated according to the ASC standard
ratesetting methodology.
As we did for CYs 2014 through 2024, for CY 2025, we propose to
continue our policy for device removal procedures, such that device
removal procedures that are conditionally packaged in the OPPS (status
indicators ``Q1'' and ``Q2'') will be assigned the current ASC payment
indicators associated with those procedures and will continue to be
paid separately under the ASC payment system.
c. Proposed Payment for ASC Add-On Procedures Eligible for Complexity
Adjustments Under the OPPS
In this section, we discuss the policy to provide increased payment
under the ASC payment system for combinations of certain ``J1'' service
codes and add-on procedure codes that are eligible for a complexity
adjustment under the OPPS.
(1) OPPS C-APC Complexity Adjustment Policy
Under the OPPS, complexity adjustments are utilized to provide
increased payment for certain comprehensive services. As discussed in
section II.A.2.b of this proposed rule, we apply a complexity
adjustment by promoting qualifying paired ``J1'' service code
combinations or paired code combinations of ``J1'' services and add-on
codes from the originating Comprehensive APC (C-APC) (the C-APC to
which the designated primary service is first assigned) to the next
higher paying C-APC in the same clinical family of C-APCs. A ``J1''
status indicator refers to a hospital outpatient service paid through a
C-APC. We package payment for all add-on codes, which are codes that
describe a procedure or service always performed in addition to a
primary service or procedure, into the payment for the C-APC. However,
certain combinations of primary service codes and add-on codes may
qualify for a complexity adjustment.
We apply complexity adjustments when the paired code combination
represents a complex, costly form or version of the primary service
when the frequency and cost thresholds are met. The frequency threshold
is met when there are 25 or more claims reporting the code combination,
and the cost threshold is met when there is a violation of the 2 times
rule, as specified in section 1833(t)(2) of the Act and described in
section III.A.2.b of this proposed rule, in the originating C-APC.
These paired code combinations that meet the frequency and cost
threshold criteria represent those that exhibit materially greater
resource requirements than the primary service. After designating a
single primary service for a claim, we evaluate that service in
combination with each of the other procedure codes reported on the
claim that are either assigned to status indicator ``J1'' or add-on
codes to determine if there are paired code combinations that meet the
complexity adjustment criteria. Once we have determined that a
particular combination of ``J1'' services, or combinations of a ``J1''
service and add-on code, represents a complex version of the primary
service because it is sufficiently costly, frequent, and a subset of
the primary comprehensive service overall according to the criteria
described previously, we promote the claim to the next higher cost C-
APC within the clinical family unless the primary service is already
assigned to the highest cost APC within the C-APC clinical family or
assigned to the only C-APC in a clinical family. We do not create new
C-APCs with a comprehensive geometric mean cost that is higher than the
highest geometric mean cost (or only) C-APC in a clinical family just
to accommodate potential complexity adjustments. Therefore, the highest
payment for any claim including a code combination for services
assigned to a C-APC would be the highest paying C-APC in the clinical
family (79 FR 66802).
As previously stated, we package payment for add-on codes into the
C-APC payment rate. If any add-on code reported in conjunction with the
``J1'' primary service code does not qualify for a complexity
adjustment, payment for the add-on service continues to be packaged
into the payment for the primary service and the primary service code
reported with the add-on code is not reassigned to the next higher cost
C-APC. We list the proposed complexity adjustments for ``J1'' and add-
on code combinations for CY 2025, along with all of the other proposed
complexity adjustments, in Addendum J to this proposed rule (which is
available via the internet on the CMS website at https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices).
(2) CY 2025 ASC Special Payment Policy Proposal for OPPS Complexity-
Adjusted C-APCs
For CY 2025, we propose to continue the special payment policy and
methodology for OPPS complexity-adjusted C-APCs that was finalized in
the CY 2023 OPPS/ASC final rule with comment period (87 FR 72078
through 72080).
For those ASC complexity adjustment codes for which we have claims
data, we propose to use the claims data to calculate the code
combination utilization and estimated payments for the ASC payment
system budget neutrality calculations for CY 2025. The ASC complexity
adjustment budget neutrality calculations are discussed further in
section XIII.H.2.a of this proposed rule. The full list of the proposed
ASC complexity adjustment codes for CY 2025 can be found in the ASC
addenda and the supplemental policy file, which also includes both the
existing ASC complexity adjustment codes and proposed additions, is
published with the proposed rule on the CMS website at https://www.cms.gov/medicare/medicare-fee-for-service-payment/ascpayment/asc-regulations-and-notices. Since the complexity adjustment assignments
change each year under the OPPS, the proposed list of ASC complexity
adjustment codes eligible for this proposed payment policy has changed
slightly from the previous year.
d. Proposed Low Volume APCs and Limit on ASC Payment Rates for
Procedures Assigned to Low Volume APCs
As stated in section XIII.D.1.b of this proposed rule, the ASC
payment system generally uses OPPS geometric mean costs under the
standard methodology to determine proposed relative payment weights
under the standard ASC ratesetting methodology.
In the CY 2022 OPPS/ASC final rule with comment period (86 FR 63743
through 63747), we adopted a universal Low Volume APC policy for CY
2022 and subsequent calendar years. Under our policy, we expanded the
low volume adjustment policy that is applied to procedures assigned to
New Technology APCs to also apply to clinical and brachytherapy APCs.
[[Page 59414]]
Specifically, a clinical APC or brachytherapy APC with fewer than 100
claims per year would be designated as a Low Volume APC. For items or
services assigned to a Low Volume APC, we use up to 4 years of claims
data to establish a payment rate for the APC as we currently do for low
volume services assigned to New Technology APCs. The payment rate for a
Low Volume APC or a low volume New Technology procedure would be based
on the highest of the median cost, arithmetic mean cost, or geometric
mean cost calculated using multiple years of claims data.
Based on claims data available for this proposed rule, we propose
to designate six brachytherapy APCs and four clinical APCs as Low
Volume APCs under the ASC payment system and shown in Table 78. The
four clinical APCs and six brachytherapy APCs meet our criteria of
having fewer than 100 single claims in the relevant claims year (CY
2023 for this CY 2025 OPPS/ASC proposed rule) and therefore, we propose
that they would be subject to our universal Low Volume APC policy and
the APC cost metric would be based on the greater of the median cost,
arithmetic mean cost, or geometric mean cost using up to 4 years of
claims data. Nine of the ten APCs were designated as low volume APCs in
CY 2024. Based on data for the CY 2025 OPPS/ASC proposed rule, APC 2645
(Brachytx, non-stranded, hold-198) now meets our criteria to be
designated a low volume APC; and we propose to designate it as such for
CY 2025.
Table 78 includes the CY 2023 claims available for ratesetting for
each of the APCs we propose be designated as low volume APCs for CY
2025. The cost statistics for our proposed low volume APCs, such as the
median, arithmetic mean, and geometric mean cost are available for
download with this proposed rule on the CMS website. We refer readers
to our website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/ambulatory-surgical-center-asc/asc-regulations-and-notices; click on the relevant regulation to download the low volume
APC cost statistics under the standard (ASC) ratesetting methodology in
the downloads section of the web page.
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2. Payment for Covered Ancillary Services
a. Background
Our payment policies under the ASC payment system for covered
ancillary services generally vary according to the particular type of
service and its payment policy under the OPPS. Our overall policy
provides separate ASC payment for certain ancillary items and services
integrally related to the provision of ASC covered surgical procedures
that are paid separately under the OPPS and provides packaged ASC
payment for other ancillary items and services that are packaged or
conditionally packaged (status indicators ``N,'' ``Q1,'' and ``Q2'')
under the OPPS.
In the CY 2013 OPPS/ASC rulemaking (77 FR 45169 and 77 FR 68457
through 68458), we further clarified our policy regarding the payment
indicator assignment for procedures that are conditionally packaged in
the OPPS (status indicators ``Q1'' and ``Q2''). Under the OPPS, a
conditionally packaged procedure describes a HCPCS code where the
payment is packaged when it is provided with a significant procedure
but is separately paid when the service appears on the claim without a
significant procedure. Because ASC services always include a surgical
procedure, HCPCS codes that are conditionally packaged under the OPPS
are generally packaged (payment indictor ``N1'') under the ASC payment
system (except for device removal procedures, as discussed in the CY
2022 OPPS/ASC proposed rule (86 FR 42083)). Thus, our policy generally
aligns ASC payment bundles with those under the OPPS (72 FR 42495). In
all cases, in order for ancillary items and services also to be paid,
the ancillary items and services must be provided integral to the
performance of ASC covered surgical procedures for which the ASC bills
Medicare.
[[Page 59415]]
Our ASC payment policies generally provide separate payment for
drugs and biologicals that are separately paid under the OPPS at the
OPPS rates and package payment for drugs and biologicals for which
payment is packaged under the OPPS. However, as discussed in the CY
2022 OPPS/ASC final rule with comment period, for CY 2022, we finalized
a policy to unpackage and pay separately at ASP plus 6 percent for the
cost of non-opioid pain management drugs and biologicals that function
as a supply when used in a surgical procedure as determined by CMS
under Sec. 416.174 (86 FR 63483).
We generally pay for separately payable radiology services at the
lower of the PFS nonfacility PE RVU-based (or technical component)
amount or the rate calculated according to the ASC standard ratesetting
methodology (72 FR 42497). However, as finalized in the CY 2011 OPPS/
ASC final rule with comment period (75 FR 72050), payment indicators
for all nuclear medicine procedures (defined as CPT codes in the range
of 78000 through 78999) that are designated as radiology services that
are paid separately when provided integral to a surgical procedure on
the ASC list are set to ``Z2'' so that payment is made based on the ASC
standard ratesetting methodology rather than the MPFS nonfacility PE
RVU amount (``Z3''), regardless of which is lower (Sec.
416.171(d)(1)).
Similarly, we also finalized our policy to set the payment
indicator to ``Z2'' for radiology services that use contrast agents so
that payment for these procedures will be based on the OPPS relative
payment weight using the ASC standard ratesetting methodology and,
therefore, will include the cost for the contrast agent (Sec.
416.171(d)(2)).
ASC payment policy for brachytherapy sources mirrors the payment
policy under the OPPS. ASCs are paid for brachytherapy sources provided
integral to ASC covered surgical procedures at prospective rates
adopted under the OPPS or, if OPPS rates are unavailable, at
contractor-priced rates (72 FR 42499). Since December 31, 2009, ASCs
have been paid for brachytherapy sources provided integral to ASC
covered surgical procedures at prospective rates adopted under the
OPPS.
Our ASC policies also provide separate payment for: (1) certain
items and services that CMS designates as contractor-priced, including,
but not limited to, the procurement of corneal tissue; and (2) certain
implantable items that have pass-through payment status under the OPPS.
These categories do not have prospectively established ASC payment
rates according to ASC payment system policies (72 FR 42502 and 42508
through 42509; Sec. 416.164(b)). Under the ASC payment system, we have
designated corneal tissue acquisition and hepatitis B vaccines as
contractor-priced. Corneal tissue acquisition is contractor-priced
based on the invoiced costs for acquiring the corneal tissue for
transplantation. Hepatitis B vaccines are contractor-priced based on
invoiced costs for the vaccine.
Devices that are eligible for pass-through payment under the OPPS
are separately paid under the ASC payment system and are contractor-
priced. Under the revised ASC payment system (72 FR 42502), payment for
the surgical procedure associated with the pass-through device is made
according to our standard methodology for the ASC payment system, based
on only the service (non-device) portion of the procedure's OPPS
relative payment weight if the APC weight for the procedure includes
other packaged device costs. We also refer to this methodology as
applying a ``device offset'' to the ASC payment for the associated
surgical procedure. This ensures that duplicate payment is not provided
for any portion of an implanted device with OPPS pass-through payment
status.
In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66933
through 66934), we finalized that, beginning in CY 2015, certain
diagnostic tests within the medicine range of CPT codes for which
separate payment is allowed under the OPPS are covered ancillary
services when they are integral to an ASC covered surgical procedure.
We finalized that diagnostic tests within the medicine range of CPT
codes include all Category I CPT codes in the medicine range
established by CPT, from 90000 to 99999, and Category III CPT codes and
Level II HCPCS codes that describe diagnostic tests that crosswalk or
are clinically similar to procedures in the medicine range established
by CPT. In the CY 2015 OPPS/ASC final rule with comment period, we also
finalized our policy to pay for these tests at the lower of the PFS
nonfacility PE RVU-based (or technical component) amount or the rate
calculated according to the ASC standard ratesetting methodology (79 FR
66933 through 66934). We finalized that the diagnostic tests for which
the payment is based on the ASC standard ratesetting methodology be
assigned to payment indicator ``Z2'' and revised the definition of
payment indicator ``Z2'' to include a reference to diagnostic services
and those for which the payment is based on the PFS nonfacility PE RVU-
based amount be assigned payment indicator ``Z3,'' and revised the
definition of payment indicator ``Z3'' to include a reference to
diagnostic services.
b. Proposed Payment for Covered Ancillary Services for CY 2025
We propose to update the ASC payment rates and to make changes to
ASC payment indicators, as necessary, to maintain consistency between
the OPPS and ASC payment system regarding the packaged or separately
payable status of services and the proposed CY 2025 OPPS and ASC
payment rates and subsequent years' payment rates. We also propose to
continue to set the CY 2025 ASC payment rates and subsequent years'
payment rates for brachytherapy sources and separately payable drugs
and biologicals equal to the OPPS payment rates for CY 2025 and
subsequent years' payment rates.
Covered ancillary services and their proposed payment indicators
for CY 2025 are listed in Addendum BB of this proposed rule (which is
available via the internet on the CMS website). For those covered
ancillary services where the payment rate is the lower of the rate
under the ASC standard rate setting methodology and the PFS final rates
(similar to our office-based payment policy), the proposed payment
indicators and rates set forth in this proposed rule are based on a
comparison using the proposed PFS rates effective January 1, 2025. For
a discussion of the PFS rates, we refer readers to the CY 2025 PFS
proposed rule, which is available on the CMS website at: https://www.cms.gov/medicare/payment/fee-schedules/physician/federal-regulation-notices.
3. Covered Surgical Procedures Designated as Office-Based Procedures
a. Background
In the August 2, 2007 ASC final rule, we finalized our policy to
designate as ``office-based'' those procedures that are added to the
ASC Covered Procedures List (CPL) in CY 2008 or later years that we
determine are furnished predominantly (more than 50 percent of the
time) in physicians' offices based on consideration of the most recent
available volume and utilization data for each individual procedure
code and/or, if appropriate, the clinical characteristics, utilization,
and volume of related codes. In that final rule, we also finalized our
policy to exempt all procedures on the CY 2007 ASC list
[[Page 59416]]
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
final 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.
b. CY 2025 Proposed Office-Based Procedures
In developing this proposed rule, we followed our policy to
annually review and update the covered surgical procedures for which
ASC payment is made and to identify new procedures that may be
appropriate for ASC payment (described in detail in section XIII.C.1.d
of this proposed rule), including their potential designation as
office-based. Historically, we would also review the most recent claims
volume and utilization data (CY 2023 claims) and the clinical
characteristics for all covered surgical procedures that are currently
assigned a payment indicator in CY 2024 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 2023 OPPS/ASC final rule with comment
period (86 FR 63769 through 63773).
Our review of the CY 2023 volume and utilization data of covered
surgical procedures currently assigned a payment indicator of ``G2''
(Non office-based surgical procedure added in CY 2008 or later; payment
based on OPPS relative payment weight) resulted in the identification
of two surgical procedures that we believed met the criteria for
designation as permanently office-based. The data indicate that these
procedures are performed more than 50 percent of the time in
physicians' offices, and the services are of a level of complexity
consistent with other procedures performed routinely in physicians'
offices. The CPT codes that we propose to permanently designate as
office-based for CY 2025 are listed in Table 79.
[GRAPHIC] [TIFF OMITTED] TP22JY24.112
As discussed in the August 2, 2007 ASC final rule (72 FR 42533
through 42535), we finalized our policy to designate certain new
surgical procedures as temporarily office-based until adequate claims
data are available to assess their predominant sites of service,
whereupon if we confirm their office-based nature, the procedures are
permanently assigned to the list of office-based procedures. In the
absence of claims data, we use other available information, including
our clinical advisors' judgment, predecessor CPT and Level II HCPCS
codes, information submitted by representatives of specialty societies
and professional associations, and information submitted by commenters
during the public comment period.
We reviewed CY 2023 volume and utilization data for nine surgical
procedures designated as temporarily office-based in the CY 2023 OPPS/
ASC final rule with comment period and temporarily assigned one of the
office-based payment indicators, specifically ``P2,'' ``P3,'' or
``R2.'' In Table 122 of the CY 2024 OPPS/ASC final rule with comment
period, we finalized assigning temporary office-based designations to
seven surgical procedures for CY 2024 (88 FR 81919). As shown in Table
80, for one of the seven surgical procedures, there was greater than 50
claims available and the volume and utilization data indicated this
procedure was performed predominantly in the office setting. Therefore,
we propose to no
[[Page 59417]]
longer designate this procedure as temporarily office-based and to
permanently designate this procedure as office-based and assign one of
the office-based payment indicators, specifically ``P2,'' ``P3,'' or
``R2.''
[GRAPHIC] [TIFF OMITTED] TP22JY24.113
For six of the seven procedures that were designated as temporarily
office-based in the CY 2023 OPPS/ASC final rule with comment period and
temporarily assigned one of the office-based payment indicators,
specifically ``P2,'' ``P3,'' or ``R2,'' there were fewer than 50
claims; therefore, there was an insufficient amount to determine if the
office setting was the predominant setting of care for these
procedures. Therefore, as shown in Table 81, we propose to continue to
designate such procedures as temporarily office-based for CY 2025 and
assign one of the office-based payment indicators.
For CY 2025, we propose to designate three new CY 2025 CPT codes
for ASC covered surgical procedures as temporarily office-based--CPT
codes XX34T (Removal of integrated neurostimulation system, vagus
nerve), 15XX3 (Preparation of skin cell suspension autograft, requiring
enzymatic processing, manual mechanical disaggregation of skin cells,
and filtration; first 25 sq cm or less of harvested skin), and 5XX06
(Catheterization with removal of temporary device for ischemic
remodeling (i.e., pressure necrosis) of bladder neck and prostate).
After reviewing the clinical characteristics, utilization, and volume
of related procedure codes, we determined that CPT code XX34T is most
similar to 0588T, which is temporarily designated as an office-based
surgical procedure. Additionally, CPT code 15XX3 is most similar to CPT
code 11310 (Shaving of epidermal or dermal lesion, single lesion, face,
ears, eyelids, nose, lips, mucous membrane; lesion diameter 0.5 cm or
less), which is designated as an office-based surgical procedure.
Lastly, CPT code 5XX06 is most similar to CPT code 51705 (Change of
bladder tube) which is also designated as an office-based surgical
procedure. Therefore, as shown in Table 81, we propose to also
designate these three new CPT codes as temporarily office-based for CY
2025.
BILLING CODE 4120-01-P
[[Page 59418]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.114
BILLING CODE 4120-01-C
The procedures for which the proposed office-based designation for
CY 2025 is temporary are indicated by an asterisk in Addendum AA to
this proposed rule (which is available via the internet on the CMS
website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-
Payment/ASCPayment/ASC-Regulations-and-Notices).
4. Device-Intensive ASC Covered Surgical Procedures
a. Background
We refer readers to the CY 2019 OPPS/ASC final rule with comment
[[Page 59419]]
period (83 FR 59040 through 59041), for a summary of our existing
policies regarding ASC covered surgical procedures that are designated
as device-intensive.
b. CY 2025 Proposed Device Intensive Procedures
In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59040
through 59043), for CY 2019, we modified our criteria for device-
intensive procedures to better capture costs for procedures with
significant device costs. We adopted a policy to allow procedures that
involve surgically inserted or implanted, high-cost, single-use devices
to qualify as device-intensive procedures. In addition, we modified our
criteria to lower the device offset percentage threshold from 40
percent to 30 percent. The device offset percentage is the percentage
of device costs within a procedure's total costs. Specifically, for CY
2019 and subsequent years, we adopted a policy that device-intensive
procedures would be subject to the following criteria:
All procedures must involve implantable or insertable
devices assigned a CPT or HCPCS code;
The required devices (including single-use devices) must
be surgically inserted or implanted; and
The device offset amount must be significant, which is
defined as exceeding 30 percent of the procedure's mean cost.
Corresponding to this change in the cost criterion, we adopted a policy
that the default device offset for new codes that describe procedures
that involve the implantation of medical devices will be 31 percent
beginning in CY 2019. For new codes describing procedures that are
payable when furnished in an ASC and involve the implantation of a
medical device, we adopted a policy that the default device offset
would be applied in the same manner as the policy we adopted in section
IV.B.2 of the CY 2019 OPPS/ASC final rule with comment period (83 FR
58944 through 58948). We amended Sec. 416.171(b)(2) of the regulations
to reflect these new device criteria.
In addition, as also adopted in section IV.B.2 of the CY 2019 OPPS/
ASC final rule with comment period, to further align the device-
intensive policy with the criteria used for device pass-through status,
we specified, for CY 2019 and subsequent years, that for purposes of
satisfying the device-intensive criteria, a device-intensive procedure
must involve a device that:
Has received FDA marketing authorization, has received an
FDA investigational device exemption (IDE) and has been classified as a
Category B device by FDA in accordance with 42 CFR 405.203 through
405.207 and 405.211 through 405.215, or meets another appropriate FDA
exemption from premarket review;
Is an integral part of the service furnished;
Is used for one patient only;
Comes in contact with human tissue;
Is surgically implanted or inserted (either permanently or
temporarily); and
Is not any of the following:
++ Equipment, an instrument, apparatus, implement, or item of this
type for which depreciation and financing expenses are recovered as
depreciable assets as defined in Chapter 1 of the Medicare Provider
Reimbursement Manual (CMS Pub. 15-1); or
++ A material or supply furnished incident to a service (for
example, a suture, customized surgical kit, scalpel, or clip, other
than a radiological site marker).
In the CY 2022 OPPS/ASC final rule with comment period (86 FR 63773
through 63775), we modified our approach to assigning device-intensive
status to surgical procedures under the ASC payment system. First, we
adopted a policy of assigning device-intensive status to procedures
that involve surgically inserted or implanted, high-cost, single-use
devices if their device offset percentage exceeds 30 percent under the
ASC standard ratesetting methodology, even if the procedure is not
designated as device-intensive under the OPPS. Second, we adopted a
policy that if a procedure is assigned device-intensive status under
the OPPS, but has a device offset percentage below the device-intensive
threshold under the standard ASC ratesetting methodology, the procedure
will be assigned device-intensive status under the ASC payment system
with a default device offset percentage of 31 percent. The policies
were adopted to provide consistency between the OPPS and ASC payment
system and provide a more appropriate payment rate for surgical
procedures with significant device costs under the ASC payment system.
In the CY 2023 OPPS/ASC final rule with comment period (87 FR 72078
through 72080), we finalized our policy to create certain C-codes, or
ASC complexity adjustment codes that describe certain combinations of a
primary covered surgical procedure as well as a packaged (payment
indicator = ``N1'') procedure that are otherwise eligible for a
complexity adjustment under the OPPS (as listed in Addendum J). Each
ASC complexity adjustment code's APC assignment is based on its
corresponding OPPS complexity adjustment code's APC assignment. In the
CY 2023 OPPS/ASC final rule with comment period, we stated our belief
that it would be appropriate for these ASC complexity adjustment codes
to qualify for device-intensive status under the ASC payment system if
the primary procedure of the code was also designated as device-
intensive. Under our current policy, the ASC complexity adjustment code
retains the device portion of the primary procedure (also called the
``device offset amount'') and not the device offset percentage.
Therefore, for device-intensive ASC complexity adjustment codes, we set
the device portion of the combined procedure equal to the device
portion of the primary procedure and calculate the device offset
percentage by dividing the device portion by the ASC complexity
adjustment code's APC payment rate. Further, we apply our standard ASC
payment system ratesetting methodology to the non-device portion of the
ASC complexity adjustment code's APC payment rate; that is, we multiply
the OPPS relative weight by the ASC budget neutrality adjustment and
the ASC conversion factor and sum that amount with the device portion
to calculate the ASC payment rate.
As discussed in section IV.B of this proposed rule, the purpose of
applying the default device offset percentage to new codes that
describe procedures that implant or insert devices is to ensure access
in the ASC setting for new procedures until claims data become
available. Our ratesetting methodology sets the ASC device offset
amount constant at the OPPS device offset amount. Device offset amounts
under the OPPS and ASC Payment System are the device offset percentages
of a procedure multiplied by the OPPS or ASC Payment System payment
rate, respectively, for that procedure. While the ASC ratesetting
methodology relies on the ASC conversion factor and the scaled OPPS APC
relative weights to construct ASC payment rates, for device-intensive
procedures, the device offset percentage of the procedure relies on the
higher OPPS conversion factor while the non device portion relies on
the lower ASC conversion factor. For non device-intensive procedures
for which the payment is based on OPPS relative payment weight, one
hundred percent of the procedure's payment rate relies on the ASC
conversion factor. Therefore, the greater the device offset percentage
under the ASC Payment System, the greater the ASC payment rate.
Device offset percentages, which represent the device cost portion
of a
[[Page 59420]]
procedure's total cost, are determined using the most recent claims
data for that procedure. For newer procedures that describe procedures
which implant or insert single-use devices that meet our definition of
a device and for which the device costs are estimated to be greater
than 30 percent of the total procedure cost and lack claims data, we
have relied on several policies to determine an appropriate device
offset percentage until such claims data becomes available. First, if
the new procedure has claims data from a predecessor code, as described
by CPT coding guidance, we rely on claims data from the predecessor
code in assigning the device offset percentage for the new HCPCS code
(88 FR 81919 through 81922). Second, in limited instances where a new
device-intensive procedure does not have a predecessor code as defined
by CPT, but describes a procedure that was previously described by an
existing code, we may 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 use the
claims data of the clinically related or similar code(s) for purposes
of determining whether to use the device offset percentage of the
clinically related or similar code(s) or to apply the default device
offset to the new HCPCS code (83 FR 58946). Clinically related and
similar procedures for purposes of this policy are procedures that have
few or no clinical differences and use the same device(s). If the new
device-intensive procedure does not have claims data from a predecessor
code or a clinically similar code that uses the same device, we have
assigned a default device offset percentage of 31 percent. While we do
allow for additional information in our consideration of a higher
offset percentage than the default device offset, our payment policies
under both the OPPS and ASC Payment System are meant to encourage
efficiencies and promote savings to the Medicare program and we believe
relying on claims data rather than external pricing data helps put
downward pressure on changes in medical device prices. Therefore, it
would be extremely rare that the appropriate determination of a device
offset percentage would rely on pricing data or invoices from a device
manufacturer rather than the default device offset percentage.
However, we are aware that there may be certain situations where
newer device-intensive procedures lack claims data from a predecessor
code and a clinically similar code that uses the same device, but the
default device offset percentage would not adequately reflect the
existing device portion of the procedure's costs when compared to the
cost of similar devices. The difference in the default device portion
and the potential device cost could possibly limit access to newer,
more complex, device-intensive procedures in the ASC setting if the
cost of the new device does indeed reflect a cost equivalent to that of
the similar existing devices. As HOPDs and ASCs perform new procedures
with significant device costs, we believe it is appropriate to modify
our default device offset methodology to pay HOPDs and ASCs more
appropriately when we lack claims data for these newer procedures.
Therefore, for this proposed rule and subsequent calendar years, we
propose to modify our default device offset percentage for new device-
intensive procedures. Specifically, for all new covered surgical HCPCS
codes that describe procedures which implant or insert single-use
devices that meet our definition of a device and for which the device
costs are estimated to be greater than 30 percent of the total
procedure cost and lack claims data, we would apply a default device
offset percentage that is the greater of: 31 percent or the device
offset percentage of the APC to which the procedure has been assigned.
We propose this methodological change for both the OPPS and ASC Payment
System for CY 2025 and subsequent calendar years.
We still believe that a HCPCS code-level device offset is, in most
cases, a more accurate representation of a procedure's device cost than
an APC-wide average device offset based on the average device offset of
all the procedures assigned to an APC. However, because newer device-
intensive procedures lack claims data and therefore a HCPCS code-level
device offset may not be possible, we believe the APC-wide average
device offset percentage is, in most cases, a better reflection of the
estimated device costs of the procedure than a default 31 percent
offset. Additionally, there can be instances where the typical device
costs of procedures in an APC can be significantly greater than the 31
percent default device offset. For these reasons, we propose to modify
our methodology for determining the device offset percentage for new
procedures that describe the implantation or insertion of a single-use
device that meet our definition of a device and for which the device
cost is projected to be greater than 30 percent of the total procedure
cost that do not yet have associated claims data to apply a device
offset percentage that is the greater of 31 percent or the device
offset percentage of the APC to which the procedure has been assigned.
This proposal would apply to new device-intensive procedures assigned
to clinical APCs and would not apply to new procedures assigned to New
Technology APCs.
Under our proposal, we would continue to first rely on the
associated claims data for the new HCPCS code or any predecessor code,
as described by CPT coding guidance, for the new HCPCS code. If there
is no claims data from the new HCPCS or any predecessor code, we may
continue to 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 a device offset percentage to the new HCPCS code (83 FR
58946). Clinically related and similar procedures for purposes of this
policy are procedures that have few or no clinical differences and use
the same devices. For new device-intensive procedures that describe the
implantation or insertion of a single-use device that meet our
definition of a device and for which the device cost is significant,
projected to be greater than 30 percent of the total procedure cost,
and lack claims data, we would then rely on our proposed device offset
policy and apply the greater of 31 percent or the device offset
percentage of the APC to which the procedure has been assigned.
We solicit comments on our proposed changes to our default device
offset policy for CY 2025 and subsequent calendar years under the OPPS
and ASC payment system. The listing of proposed payment indicators for
covered surgical procedures as well as their respective proposed device
offset percentages and device offset amounts, which incorporates our
proposed changes to the default device offset policy, can be found in
Addendum FF to this proposed rule (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
[[Page 59421]]
discussion of the ASC payment adjustment policy for no cost/full credit
and partial credit devices. ASC payment is reduced by 100 percent of
the device offset amount when a hospital furnishes a specified device
without cost or with a full credit and by 50 percent of the device
offset amount when the hospital receives partial credit in the amount
of 50 percent or more of the cost for the specified device.
Effective CY 2014, under the OPPS, we finalized our proposal to
reduce OPPS payment for applicable APCs by the full or partial credit a
provider receives for a device, capped at the device offset amount.
Although we finalized our proposal to modify the policy of reducing
payments when a hospital furnishes a specified device without cost or
with full or partial credit under the OPPS, in the CY 2014 OPPS/ASC
final rule with comment period (78 FR 75076 through 75080), we
finalized our proposal to maintain our ASC policy for reducing payments
to ASCs for specified device-intensive procedures when the ASC
furnishes a device without cost or with full or partial credit. Unlike
the OPPS, there is currently no mechanism within the ASC claims
processing system for ASCs to submit to CMS the amount of the actual
credit received when furnishing a specified device at full or partial
credit. Therefore, under the ASC payment system, we finalized our
proposal for CY 2014 to continue to reduce ASC payments by 100 percent
or 50 percent of the device offset amount when an ASC furnishes a
device without cost or with full or partial credit, respectively.
Under current ASC policy, all ASC device-intensive covered surgical
procedures are subject to the no cost/full credit and partial credit
device adjustment policy. Specifically, when a device-intensive
procedure is performed to implant or insert a device that is furnished
at no cost or with full credit from the manufacturer, the ASC appends
the HCPCS ``FB'' modifier on the line in the claim with the procedure
to implant or insert the device. The contractor reduces payment to the
ASC by the device offset amount that we estimate represents the cost of
the device when the necessary device is furnished without cost or with
full credit to the ASC. We continue to believe that the reduction of
ASC payment in these circumstances is necessary to pay appropriately
for the covered surgical procedure furnished by the ASC.
In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59043
through 59044) we adopted a policy to reduce the payment for a device-
intensive procedure for which the ASC receives partial credit by one-
half of the device offset amount that would be applied if a device was
provided at no cost or with full credit if the credit to the ASC is 50
percent or more (but less than 100 percent) of the cost of the new
device. The ASC will append the HCPCS ``FC'' modifier to the HCPCS code
for the device-intensive surgical procedure when the facility receives
a partial credit of 50 percent or more (but less than 100 percent) of
the cost of a device. To report that the ASC received a partial credit
of 50 percent or more (but less than 100 percent) of the cost of a new
device, ASCs have the option of either: (1) submitting the claim for
the device-intensive procedure to their Medicare contractor after the
procedure's performance, but prior to manufacturer acknowledgment of
credit for the device, and subsequently contacting the contractor
regarding a claim adjustment, once the credit determination is made; or
(2) holding the claim for the device implantation or insertion
procedure until a determination is made by the manufacturer on the
partial credit and submitting the claim with the ``FC'' modifier
appended to the implantation procedure HCPCS code if the partial credit
is 50 percent or more (but less than 100 percent) of the cost of the
device. Beneficiary coinsurance would be based on the reduced payment
amount. As finalized in the CY 2015 OPPS/ASC final rule with comment
period (79 FR 66926), to ensure our policy covers any situation
involving a device-intensive procedure where an ASC may receive a
device at no cost or receive full credit or partial credit for the
device, we apply our ``FB''/``FC'' modifier policy to all device-
intensive procedures.
In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59043
through 59044) we stated we would reduce the payment for a device-
intensive procedure for which the ASC receives partial credit by one-
half of the device offset amount that would be applied if a device was
provided at no cost or with full credit, if the credit to the ASC is 50
percent or more (but less than 100 percent) of the cost of the device.
In the CY 2020 OPPS/ASC final rule with comment period, we finalized
continuing our existing policies for CY 2020. We note that we
inadvertently omitted language that this policy would apply not just in
CY 2019 but also in subsequent calendar years. We intended to apply
this policy in CY 2019 and subsequent calendar years. Therefore, we
finalized our proposal to apply our policy for partial credits
specified in the CY 2019 OPPS/ASC final rule with comment period (83 FR
59043 through 59044) in CY 2022 and subsequent calendar years (86 FR
63775 through 63776). Specifically, for CY 2022 and subsequent calendar
years, we would reduce the payment for a device-intensive procedure for
which the ASC receives partial credit by one-half of the device offset
amount that would be applied if a device was provided at no cost or
with full credit, if the credit to the ASC is 50 percent or more (but
less than 100 percent) of the cost of the device. To report that the
ASC received a partial credit of 50 percent or more (but less than 100
percent) of the cost of a device, ASCs have the option of either: (1)
submitting the claim for the device intensive procedure to their
Medicare contractor after the procedure's performance, but prior to
manufacturer acknowledgment of credit for the device, and subsequently
contacting the contractor regarding a claim adjustment, once the credit
determination is made; or (2) holding the claim for the device
implantation or insertion procedure until a determination is made by
the manufacturer on the partial credit and submitting the claim with
the ``FC'' modifier appended to the implantation procedure HCPCS code
if the partial credit is 50 percent or more (but less than 100 percent)
of the cost of the device. Beneficiary coinsurance would be based on
the reduced payment amount.
We are not proposing any changes to our policies related to no
cost/full credit or partial credit devices for CY 2025.
5. Requirement in the Physician Fee Schedule CY 2025 Proposed Rule for
HOPDs and ASCs To Report Discarded Amounts of Certain Single-Dose or
Single-Use Package Drugs
Section 90004 of the Infrastructure Investment and Jobs Act (Pub.
L. 117-9, November 15, 2021) (``the Infrastructure Act'') amended
section 1847A of the Act to re-designate subsection (h) as subsection
(i) and insert a new subsection (h), which requires manufacturers to
provide a refund to CMS for certain discarded amounts from a refundable
single-dose container or single-use package drug. The CY 2025 PFS
proposed rule includes proposals related to the discarded drug refund
policy, including proposals that may impact hospital outpatient
departments (HOPDs) and ambulatory surgical centers (ASCs). Similar to
our CY 2023 and CY 2024 notice in the OPPS/ASC proposed rules (87 FR
71988 and 88 FR 49760), we wanted to ensure interested parties were
[[Page 59422]]
aware of these proposals and knew to refer to the CY 2025 Physician Fee
Schedule proposed rule for a full description of the proposed policy.
Interested parties are asked to submit comments on any proposals to
implement Section 90004 of the Infrastructure Act to the CY 2025 PFS
proposed rule. Public comments on these proposals will be addressed in
the CY 2025 PFS final rule with comment period. We note that this same
notice appears in section V.B.6 of this proposed rule with respect to
the OPPS.
D. Proposed Additions to ASC Covered Surgical Procedures and Covered
Ancillary Services Lists
1. Proposed Additions to the List of ASC Covered Surgical Procedures
Section 1833(i)(1) of the Act requires us, in part, to specify, in
consultation with appropriate medical organizations, surgical
procedures that are appropriately performed on an inpatient basis in a
hospital but that can also be safely performed in an ASC, a CAH, or an
HOPD, and to review and update the list of ASC covered surgical
procedures at least every 2 years. We evaluate the ASC covered
procedures list (ASC CPL) each year to determine whether procedures
should be added to or removed from the list, and changes to the list
are often made in response to specific concerns raised by stakeholders.
Under our regulations at Sec. Sec. 416.2 and 416.166, covered
surgical procedures furnished on or after January 1, 2022, are surgical
procedures that meet the general standards specified in Sec.
416.166(b) and are not excluded under the general exclusion criteria
specified in Sec. 416.166(c). Specifically, under Sec. 416.166(b),
the general standards provide that covered surgical procedures are
surgical procedures specified by the Secretary and published in the
Federal Register and/or via the internet on the CMS website that are
separately paid under the OPPS, that would not be expected to pose a
significant safety risk to a Medicare beneficiary when performed in an
ASC, and for which standard medical practice dictates that the
beneficiary would not typically be expected to require active medical
monitoring and care at midnight following the procedure.
Section 416.166(c) sets out the general exclusion criteria used
under the ASC payment system to evaluate the safety of procedures for
performance in an ASC. The general exclusion criteria provide that
covered surgical procedures do not include those surgical procedures
that: (1) generally result in extensive blood loss; (2) require major
or prolonged invasion of body cavities; (3) directly involve major
blood vessels; (4) are generally emergent or life-threatening in
nature; (5) commonly require systemic thrombolytic therapy; (6) are
designated as requiring inpatient care under Sec. 419.22(n); (7) can
only be reported using a CPT unlisted surgical procedure code; or (8)
are otherwise excluded under Sec. 411.15.
In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59029
through 59030), we defined a surgical procedure under the ASC payment
system as any procedure described within the range of Category I CPT
codes that the CPT Editorial Panel of the AMA defines as ``surgery''
(CPT codes 10000 through 69999) (72 FR 42476), as well as procedures
that are described by Level II HCPCS codes or by Category I CPT codes
or by Category III CPT codes that directly crosswalk or are clinically
similar to procedures in the CPT surgical range that we determined met
the general standards established in previous years for addition to the
ASC CPL.
In the CY 2024 OPPS/ASC final rule with comment period, we
finalized adding several dental surgical procedures to the ASC CPL that
met our regulatory criteria at Sec. Sec. 416.166. We note that there
are statutory and regulatory limitations regarding Medicare coverage
and payment for dental services. Section 1862(a)(12) of the Act
generally precludes Medicare Part A or Part B payment for services in
connection with the care, treatment, filling, removal, or replacement
of teeth or structures directly supporting teeth (collectively referred
to in this section as ``dental services''). The regulation at Sec.
411.15(i) similarly prohibits payment for dental services. In the CY
2023 PFS final rule (87 FR 69663), we explained that there are certain
instances where dental services are so integral to other medically
necessary services that they are not in connection with dental services
within the meaning of section 1862(a)(12) of the Act. Rather, such
dental services are inextricably linked to, and substantially related
to the clinical success of, other covered services (hereafter in this
section, ``inextricably linked''). To provide greater clarity to
current policies, the CY 2023 PFS final rule finalized: (1) a
clarification of our interpretation of section 1862(a)(12) of the Act
to permit payment for dental services that are inextricably linked to
other covered services; (2) clarification and codification of certain
longstanding Medicare FFS payment policies for dental services that are
inextricably linked to other covered services; (3) that, beginning for
CY 2023, Medicare Parts A and B payment can be made for certain dental
services inextricably linked to Medicare-covered organ transplant,
cardiac valve replacement, or valvuloplasty procedures; and, (4)
beginning for CY 2024, that Medicare Parts A and B payment can be made
for certain dental services inextricably linked to Medicare-covered
services for treatment of head and neck cancers (87 FR 69670 through
69671).
For the ASC setting, services must meet all applicable Medicare
conditions for coverage and payment to be paid by Medicare, including
those as specified under the CY 2023 PFS final rule (87 FR 69687
through 69688) and Sec. 411.15(i)(3). Medicare payment may be made in
the ASC setting for dental services for which payment may be made under
Medicare Part B, paid under the OPPS, and that meet the ASC CPL
criteria. The fact that a drug, device, procedure, or service is
assigned a HCPCS code and a payment rate under the ASC payment system
indicates only how the product, procedure, or service may be paid if
covered by the program. MACs will be involved in the final decision
regarding whether a drug, device, procedure, or other service meets all
program requirements and conditions for coverage and payment.
Therefore, even if a code describing a dental service has an associated
payment rate on the ASC CPL, Medicare will only make payment for the
service if it meets applicable requirements. We also clarify that
adding dental procedures to the ASC CPL does not serve as a coverage
determination for dental services under general anesthesia. We direct
readers to the CY 2025 PFS proposed rule for additional discussion of
Medicare coverage and payment for dental services, which is available
on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
For a detailed discussion of the history of our policies for adding
surgical procedures to the ASC CPL, we refer readers to the CY 2021
through CY 2024 OPPS/ASC final rules with comment period (85 FR 86143
through 86145; 86 FR 63777 through 63805; 87 FR 72068 through 72076;
and 88 FR 81923 through 81945).
2. Proposed Changes to the List of ASC Covered Surgical Procedures for
CY 2025
Our current policy, which includes consideration of the general
standards and exclusion criteria we have historically used to determine
whether
[[Page 59423]]
a surgical procedure should be added to the ASC CPL, is intended to
ensure that surgical procedures added to the ASC CPL can be performed
safely in the ASC setting on the typical Medicare beneficiary.
As part of our evaluation process to add procedures to the CPL, we
assess potential procedures against the specific list of ASC CPL
criteria at Sec. 416.166. We also examine clinical data on these
procedures from multiple sites of services, review literature and
experiential data, and analyze claims data trends to ensure that these
procedures meet all our criteria and are not expected to pose a
significant risk to beneficiary safety when performed in an ASC. For CY
2025, we also reviewed supporting evidence received in the pre-proposed
rule nominations process to inform our procedure evaluations. Based
upon this review, we propose to update the ASC CPL by adding 20 medical
and dental surgical procedures to the list for CY 2025, as shown in
Table 82.
After reviewing the clinical characteristics of these twenty
procedures and consulting with stakeholders and multiple clinical
advisors, we determined that these procedures are separately paid under
the OPPS, would not be expected to pose a significant risk to
beneficiary safety when performed in an ASC, and would not be expected
to require active medical monitoring and care of the beneficiary at
midnight following the procedure. These procedures are surgical or
surgery-like, clinically similar to procedures in the CPT surgical
range that we determined met the general standards for addition to the
ASC CPL. These procedures are not excluded from being included on the
ASC CPL because they do not generally result in extensive blood loss,
require major or prolonged invasion of body cavities, commonly require
systemic thrombolytic therapy, or directly involve major blood vessels;
are not generally emergent or life-threatening in nature or designated
as requiring inpatient care; or can only be reported using a CPT
unlisted surgical procedure code or are otherwise excluded under
Medicare. Therefore, we believe these procedures may all be
appropriately performed in an ASC and propose to include them on the
ASC CPL for CY 2025.
We continue to focus on maximizing patient access to care by adding
procedures to the ASC CPL when appropriate. While expanding the ASC CPL
offers benefits, such as preserving the capacity of hospitals to treat
more acute patients and promoting site neutrality, we also believe that
any additions to the CPL should be added in a carefully calibrated
fashion to ensure that the procedure is safe to be performed in the ASC
setting. We encourage interested parties to submit procedure
recommendations to be added to the ASC CPL, particularly if there is
evidence that these procedures meet our criteria and can be safely
performed in the ASC setting. We expect to continue to gradually expand
the ASC CPL, as medical practice and technology continue to evolve and
advance in future years.
BILLING CODE 4120-01-P
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[[Page 59425]]
BILLING CODE 4120-01-C
3. Covered Ancillary Services
Covered ancillary services are specified in Sec. 416.164(b) and,
as stated previously, are eligible for separate ASC payment. As
provided at Sec. 416.164(b), we make separate ASC payments for
ancillary items and services when they are provided integral to ASC
covered surgical procedures that include the following: (1)
brachytherapy sources; (2) certain implantable items that have pass-
through payment status under the OPPS; (3) certain items and services
that we designate as contractor-priced, including, but not limited to,
procurement of corneal tissue; (4) certain drugs and biologicals for
which separate payment is allowed under the OPPS; (5) certain radiology
services for which separate payment is allowed under the OPPS; and (6)
non-opioid pain management drugs that function as a supply when used in
a surgical procedure. Payment for ancillary items and services that are
not paid separately under the ASC payment system is packaged into the
ASC payment for the covered surgical procedure.
In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59062
through 59063), consistent with the established ASC payment system
policy (72 FR 42497), we finalized the policy to update the ASC list of
covered ancillary services to reflect the payment status for the
services under the OPPS and to continue this reconciliation of packaged
status for subsequent calendar years. As discussed in prior rulemaking,
maintaining consistency with the OPPS may result in changes to ASC
payment indicators for some covered ancillary services. For example, if
a covered ancillary service was separately paid under the ASC payment
system in CY 2024, but will be packaged under the CY 2025 OPPS, we
would also package the ancillary service under the ASC payment system
for CY 2025 to maintain consistency with the OPPS. Comment indicator
``CH'' is used in Addendum BB (which is available via the internet on
the CMS website) to indicate covered ancillary services for which we
propose a change in the ASC payment indicator to reflect a proposed
change in the OPPS treatment of the service for CY 2025.
In the CY 2022 OPPS/ASC final rule with comment period, we
finalized our proposal to revise 42 CFR 416.164(b)(6) to include, as
ancillary items that are integral to a covered surgical procedure and
for which separate payment is allowed, non-opioid pain management drugs
and biologicals that function as a supply when used in a surgical
procedure as determined by CMS (86 FR 63490).
New CPT and HCPCS codes for covered ancillary services for CY 2025
can be found in section XIII.B of this proposed rule. All ASC covered
ancillary services and their final payment indicators for CY 2025 are
also included in Addendum BB to this proposed rule (which is available
via the internet on the CMS website). Claims Processing Limitations for
Covered Ancillary Procedures Performed with G0330.
We finalized adding HCPCS code G0330 (Facility services for dental
rehabilitation procedure(s) performed on a patient who requires
monitored anesthesia (e.g., general, intravenous sedation (monitored
anesthesia care) and use of an operating room)) to the ASC CPL in the
CY 2024 OPPS/ASC final rule (88 FR 81924). In ASC Addendum BB, there is
a specific and definitive list of covered ancillary dental services
with payment indicator of ``D1,'' indicating an ancillary dental
service or item with no separate payment made. In the CY 2024 OPPS/ASC
final rule with comment period (88 FR 81945 through 46), we finalized
that code G0330 could only be billed when accompanied by a covered
ancillary procedure that has the payment indicator of ``D1.''
Performance of at least one of these covered ancillary services is
integral to each of the surgical procedures that correspond to G0330.
This limitation ensures that only covered ancillary services we
evaluated for safety in the ASC setting could be performed with code
G0330.
While HCPCS code G0330 must be billed with a covered ancillary
procedure with a payment indicator of ``D1,'' these covered ancillary
procedures with a payment indicator of ``D1'' can be billed with
surgical procedures other than G0330. When billed with procedures other
than code G0330, these ancillary procedures would be packaged in
accordance with our policy for covered ancillary procedures.
Additionally, other than HCPCS code G0330, procedures assigned to
payment indicator ``D2'', indicating non office-based dental procedure
added in CY 2024 or later, are not required to be billed with a covered
ancillary procedure assigned to payment indicator ``D1'' to receive
payment for the procedure.
The fact that a drug, device, procedure, or service is assigned a
HCPCS code and a payment rate under the ASC payment system indicates
only how the product, procedure, or service may be paid if covered by
the program. MACs will be involved in the final decision regarding
whether a drug, device, procedure, or other service meets all program
requirements and conditions for coverage and payment. Therefore, even
if a code describing a dental service has an associated payment rate on
the ASC CPL, Medicare will only make payment for the service if it
meets applicable requirements.
E. ASC Payment Policy for Non-Opioid Post-Surgery Pain Management
Drugs, Biologicals, and Devices
1. Background on OPPS/ASC Non-Opioid Pain Management Packaging Policies
On October 24, 2018, the Substance Use-Disorder Prevention that
Promotes Opioid Recovery and Treatment for Patients and Communities
(SUPPORT) Act (Pub. L. 115-271) was enacted. Section 1833(t)(22)(A)(i)
of the Act, as added by section 6082(a) of the SUPPORT Act, states that
the Secretary must review payments under the OPPS for opioids and
evidence based non-opioid alternatives for pain management (including
drugs and devices, nerve blocks, surgical injections, and
neuromodulation) with a goal of ensuring that there are not financial
incentives to use opioids instead of non-opioid alternatives. As part
of this review, under section 1833(t)(22)(A)(iii) of the Act, the
Secretary must consider the extent to which revisions to such payments
(such as the creation of additional groups of covered outpatient
department (OPD) services to separately classify those procedures that
utilize opioids and non-opioid alternatives for pain management) would
reduce the payment incentives for using opioids instead of non-opioid
alternatives for pain management. In conducting this review and
considering any revisions, the Secretary must focus on covered OPD
services (or groups of services) assigned to C-APCs, APCs that include
surgical services, or services determined by the Secretary that
generally involve treatment for pain management. If the Secretary
identifies revisions to payments pursuant to section
1833(t)(22)(A)(iii) of the Act, section 1833(t)(22)(C) of the Act
requires the Secretary to, as determined appropriate, begin making
revisions for services furnished on or after January 1, 2020. Revisions
under this paragraph are required to be treated as adjustments for
purposes of paragraph (9)(B) of the Act, which requires any adjustments
to be made in a budget neutral manner. Section 1833(i)(8) of the Act,
as added by section 6082(b) of the SUPPORT Act, requires the Secretary
to conduct a similar type of review as required for
[[Page 59426]]
the OPPS and to make revisions to the ASC payment system in an
appropriate manner, as determined by the Secretary.
For a detailed discussion of rulemaking on non-opioid alternatives
prior to CY 2020, we refer readers to the CYs 2018 and 2019 OPPS/ASC
final rules with comment period (82 FR 59345; 83 FR 58855 through
58860).
For the CY 2020 OPPS/ASC proposed rule (84 FR 39423 through 39427),
as required by section 1833(t)(22)(A)(i) of the Act, we reviewed
payments under the OPPS for opioids and evidence-based non-opioid
alternatives for pain management (including drugs and devices, nerve
blocks, surgical injections, and neuromodulation) with a goal of
ensuring that there are not financial incentives to use opioids instead
of non-opioid alternatives. For the CY 2020 OPPS/ASC proposed rule (84
FR 39423 through 39427), we proposed to continue our policy to pay
separately at ASP plus 6 percent for non-opioid pain management drugs
that function as surgical supplies in the performance of surgical
procedures when they are furnished in the ASC setting and to continue
to package payment for non-opioid pain management drugs that function
as surgical supplies in the performance of surgical procedures in the
hospital outpatient department setting.
In the CY 2020 OPPS/ASC final rule with comment period (84 FR 61173
through 61180), after reviewing data from stakeholders and Medicare
claims data, we did not find compelling evidence to suggest that
revisions to our OPPS payment policies for non-opioid pain management
alternatives were necessary for CY 2020. We finalized our proposal to
continue to unpackage and pay separately at ASP plus 6 percent for non-
opioid pain management drugs that function as surgical supplies when
furnished in the ASC setting for CY 2020. Under this policy, for CY
2020, the only drug that qualified for separate payment in the ASC
setting as a non-opioid pain management drug that functions as a
surgical supply was Exparel.
In the CY 2021 OPPS/ASC final rule with comment period (85 FR 85896
through 85899), we continued the policy to pay separately at ASP plus 6
percent for non-opioid pain management drugs that function as surgical
supplies in the performance of surgical procedures when they were
furnished in the ASC setting and to continue to package payment for
non-opioid pain management drugs that function as surgical supplies in
the performance of surgical procedures in the hospital outpatient
department setting for CY 2021. For CY 2021, only Exparel and Omidria
met the criteria as non-opioid pain management drugs that function as
surgical supplies in the ASC setting and received separate payment
under the ASC payment system.
In the CY 2022 OPPS/ASC final rule with comment period (86 FR
63483), we finalized a policy to unpackage and pay separately at ASP
plus 6 percent for non-opioid pain management drugs that function as
surgical supplies when they are furnished in the ASC setting, are FDA-
approved, have an FDA-approved indication for pain management or as an
analgesic, and have a per-day cost above the OPPS/ASC drug packaging
threshold; and we finalized our proposed regulation text changes at 42
CFR 416.164(a)(4) and (b)(6), 416.171(b)(1), and 416.174 as proposed.
In the CY 2023 OPPS/ASC final rule with comment period (87 FR
72089), we determined that five products were eligible for separate
payment in the ASC setting under our final policy for CY 2022. We noted
that future products, or products not discussed in that rulemaking that
may be eligible for separate payment under this policy, would be
evaluated in future rulemaking (86 FR 63496). In the CY 2023 final rule
with comment period, we finalized that five drugs would receive
separate payment in the ASC setting for CY 2023 under the policy for
non-opioid pain management drugs and biologicals that function as
surgical supplies (86 FR 63496).
In the CY 2023 OPPS/ASC final rule with comment period, we
finalized a clarification of our policy by codifying the two additional
criteria for separate payment for non-opioid pain management drugs and
biologicals that function as surgical supplies in the regulatory text
at Sec. 416.174 as a technical change. First, we finalized at new
Sec. 416.174(a)(3) that non-opioid pain management drugs or
biologicals that function as a supply in a surgical procedure are
eligible for separate payment if the drug or biological does not have
transitional pass-through payment status under Sec. 419.64. In the
case where a drug or biological otherwise meets the requirements under
Sec. 416.174 and has transitional pass-through payment status that
will expire during the calendar year, the drug or biological would
qualify for separate payment under Sec. 416.174 during such calendar
year on the first day of the next calendar year quarter after its pass-
through status expires. Second, we finalized that new Sec.
416.174(a)(4) would reflect that the drug or biological must not
already be separately payable in the OPPS or ASC payment system under a
policy other than the one specified in Sec. 416.174.
In the CY 2024 OPPS/ASC final rule with comment period, we
finalized four drugs as eligible to receive separate payment as a non-
opioid pain management drug that functions as a supply in a surgical
procedure under the ASC payment system and which met the criteria at
Sec. 416.174(a) for CY 2024. (See Table 83.)
[[Page 59427]]
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F. Proposed CY 2025 Non-Opioid Policy for Pain Relief Under the OPPS
and ASC Payment System
1. Background on Access to Non-Opioid Treatments for Pain Relief
The Consolidated Appropriations Act (CAA), 2023 (Pub. L. 117-328),
was signed into law on December 29, 2022. Section 4135(a) and (b) of
the CAA, 2023, titled Access to Non-Opioid Treatments for Pain Relief,
amended section 1833(t)(16) and section 1833(i) of the Social Security
Act, respectively, to provide for temporary additional payments for
non-opioid treatments for pain relief (as that term is defined in
section 1833(t)(16)(G)(i) of the Act). In particular, section
1833(t)(16)(G) provides that with respect to a non-opioid treatment for
pain relief furnished on or after January 1, 2025 and before January 1,
2028, the Secretary shall not package payment for the non-opioid
treatment for pain relief into payment for a covered OPD service (or
group of services) and shall make an additional payment for the non-
opioid treatment for pain relief as specified in clause (ii) of that
section. Clauses (ii) and (iii) of section 1833(t)(16)(G) of the Act
provide for the amount of additional payment and set a limitation on
that amount.
Paragraph (10) of section 1833(i) of the Act cross-references the
OPPS provisions about the additional payment amount and payment
limitation for non-opioid treatments for pain relief and applies them
to payment under the ASC payment system. In particular, subparagraph
(A) of paragraph (10) of section 1833(i) of the Act, as added by
section 4135(b) of the CAA, 2023, provides that in the case of surgical
services furnished on or after January 1, 2025, and before January 1,
2028, additional payments shall be made under the ASC payment system
for non-opioid treatments for pain relief in the same amount provided
in clause (ii) and subject to the limitation in clause (iii) of section
1833(t)(16)(G) of the Act for the OPPS. Subparagraph (B) of section
1833(i)(10) of the Act provides that a drug or biological that meets
the requirements of 42 CFR 416.174 and is a non-opioid treatment for
pain relief shall also receive additional payment in the amount
provided in clause (ii) and subject to the limitation in clause (iii)
of section 1833(t)(16)(G) of the Act. Additional payments are required
to begin on January 1, 2025. The statute directs CMS to provide
``additional payment'', and for purposes of this proposal, we interrupt
this language to be equivalent to ``separate payment,'' since CMS
provides an additional payment by unpackaging the product and then
making a separate payment. ``Separate payment'' is the more commonly
used terminology in the OPPS rule and likely more familiar with
readers, therefore, to avoid confusion we will be using ``separate
payment'' throughout the rest of this section, which we believe to be
synonymous with ``additional payment.''
Our proposals to implement the amendments to sections 1833(t)(16)
and section 1833(i) of the Act required by section 4135 of the CAA,
2023 are discussed below.
2. Proposed CY 2025 Non-Opioid Policy Implementation of Section 4135 of
the CAA, 2023
a. Statutory Authority for OPPS/ASC Non-Opioid Policy
Prior to CY 2025, the statutory authority for the ASC non-opioid
policy is section 1833(i)(8) of the Act, as added by section 6082(b) of
the SUPPORT Act. Section 1833(i)(8) of the Act refers to paragraph
(t)(22), which states that the Secretary shall conduct a similar type
of review as the one required for 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 and make such revisions as the
Secretary determines appropriate. As discussed in the previous section,
CMS's policy for CY 2024 is to provide separate payment in the ASC
setting for certain qualifying non-opioid pain management drugs that
[[Page 59428]]
function as a supply in a surgical procedure.
As noted previously, section 4135 of the CAA, 2023, provides for
temporary separate payments for certain non-opioid treatments for pain
relief in both the hospital outpatient department and ambulatory
surgical center settings from January 1, 2025 through December 31,
2027. Specifically, these separate payments are for qualifying drugs,
biologicals, and devices that, among other requirements, have their
payment packaged into payment for a covered OPD service (or group of
services). Pursuant to section 1833(t)(2)(E) of the Act, the temporary
separate payments must be made in a budget neutral manner.
(1) Drugs and Biologicals Subject to the ASC Non-Opioid Policy (42 CFR
416.174)
Section 1833(i)(10)(B), titled ``Transition,'' provides that a drug
or biological that meets the requirements of the regulation at 42 CFR
416.174 (the current ASC non-opioid policy) and that meets the
definition of a non-opioid treatment for pain relief at section
1833(t)(16)(G)(iv) shall receive separate payments under section 4135
of the CAA, 2023, subject to the payment limitation. In light of this
requirement, we propose that drugs and biologicals that meet the
definition of a non-opioid treatment for pain relief for purposes of
section 4135 that are currently subject to the ASC policy for non-
opioid treatments authorized by section 6082 of the SUPPORT Act, would
instead receive separate payments, subject to the limitation, for the
duration of the payment period for section 4135. These drugs and
biologicals are described in the discussions that follow.
(2) Definition of Non-Opioid Treatment for Pain Relief
Section 1833(t)(16)(G)(iv) of the Act defines a non-opioid
treatment for pain relief. In order for a drug or biological product to
qualify as a non-opioid treatment for pain relief, pursuant to section
1833(t)(16)(G)(iv)(I), the product must have ``a label indication
approved by the Food and Drug Administration to reduce postoperative
pain, or produce postsurgical or regional analgesia, without acting
upon the body's opioid receptors.'' In order for a medical device to
qualify as a non-opioid treatment for pain relief, pursuant to section
1833(t)(16)(G)(iv)(II)(bb), the medical devices must be ``used to
deliver a therapy to reduce postoperative pain, or produce post-
surgical or regional analgesia.'' This subparagraph also defines such a
device as having ``an application under section 515 of the Federal
Food, Drug, and Cosmetic Act that has been approved with respect to the
device, been cleared for market under section 510(k) of such Act, or is
exempt from the requirements of section 510(k) of such Act pursuant to
subsection (l) or (m) or section 510 of such Act or section 520(g) of
such Act'' and ``demonstrated the ability to replace, reduce, or avoid
intraoperative or postoperative opioid use or the quantity of opioids
prescribed in a clinical trial or through data published in a peer-
reviewed journal.''
(3) Evidence Requirement for Medical Devices
To determine whether a medical device fulfills the requirement that
it has demonstrated the ability to replace, reduce, or avoid
intraoperative or postoperative opioid use or the quantity of opioids
prescribed in a clinical trial or through data published in a peer-
reviewed journal, we propose to review all data submitted during the
public comment period to determine if the device demonstrates the
ability to replace, reduce, or avoid intraoperative or postoperative
opioid use or the quantity of opioids. When interested parties submit
non-opioid device recommendations for CY 2025, we encourage them to
also submit with their public comments any relevant literature that
demonstrates that the named medical device replaces, reduces, or avoids
opioid use per this statutory provision. We propose that CMS will
review any literature submitted and determine whether it meets this
evidence criterion. We are not requiring that commenters submit any
data or literature with their device recommendations. If there is no
data or literature submitted for a medical device, or if the materials
submitted do not demonstrate any ability of the medical device to
replace, reduce, or avoid opioids, the medical device will not meet
this evidence criterion and will therefore not qualify for separate
payment under section 4135.
c. Non-Opioid Product Indications
(1) FDA-Approved Indications for Drugs and Biologicals
Section 1833(t)(16)(G)(iv)(I) of the Act specifies that to meet the
definition of a non-opioid treatment for pain relief and to be eligible
for separate payment, a drug or biological product must have a label
indication approved by the Food and Drug Administration to reduce
postoperative pain, or produce postsurgical or regional analgesia,
without acting upon the body's opioid receptors.
Given these statutory requirements, we propose only to approve
separate payment for drug or biological products with an FDA-approved
indication that closely aligns with the statutorily required indication
language to reduce post-operative pain or produce post-surgical or
regional analgesia. Products with an indication that does not meet the
statutory requirement will not qualify. Table 84 includes citations to
the indications of the drugs and biologicals that we propose meet the
statutory requirements and should qualify for separate payment for CY
2025.
(2) Indications for Medical Devices
With respect to medical devices, section 1833(t)(16)(G)(iv)(II) of
the Act specifies that such a device must be used to deliver a therapy
to reduce postoperative pain or produce post-surgical or regional
analgesia to qualify for separate payment under section 4135. It also
must have an application approved under section 515 of the Federal
Food, Drug, and Cosmetic Act (FDCA), have been cleared for market under
section 510(k) of the FDCA, or be exempt from the requirements of
section 510(k) of the FDCA pursuant to section 510(l) or (m) or 520(g)
of the FDCA. For medical devices, we propose to only approve medical
devices with an indication that specifies that the device is used to
deliver a therapy to reduce postoperative pain or produce post-surgical
or regional analgesia and which also have FDA approval, market
clearance, or an appropriate exemption from the requirements of section
510(k). Table 84 includes citations to the indication of one device
that we propose meets the statutory requirements and should qualify for
separate payment for CY 2025.
d. Amount of Payment
Section 1833(t)(16)(G)(ii)(I) of the Act provides that, for a non-
opioid treatment for pain relief that is a drug or biological product,
the amount of separate payment is the amount of payment for such
product determined under section 1847A of the Act that exceeds the
portion of the otherwise applicable Medicare OPD fee schedule that the
Secretary determines is associated with the drug or biological, subject
to a limitation, as described in the next section. Section
1833(t)(16)(G)(ii)(II) of the Act provides that, for a non-opioid
treatment for pain relief that is a medical device, the amount of
separate payment is the amount of the hospital's charges for the
[[Page 59429]]
device, adjusted to cost, that exceeds the portion of the otherwise
applicable Medicare OPD fee schedule that the Secretary determines is
associated with the device, subject to a limitation, as described in
the next section. As the language in Section 1833(t)(16)(G)(ii)(II) of
the Act is very similar to the transitional pass-through language at
section 1833(t)(6)(D)(i) and (ii) of the Act, we propose implementing a
similar payment methodology for non-opioid products. A payment offset
is the amount reflecting the portion of the non-opioid product in the
procedure payment rate. We propose to assign a payment offset of zero
dollars for the qualifying drugs, biologicals, and devices for CY 2025.
A zero offset means that we would not offset or remove the amount that
the non-opioid product represents from the procedure payment rate when
setting payment rates. We propose this would apply for CY 2025 for all
non-opioid drugs, biologicals, and devices that qualify for separate
payment. We believe it makes sense to propose a zero dollar offset for
the initial year of the policy as some of these products are new
products or newly separately paid in the OPPS setting and their costs
may not be fully reflected yet in the cost of procedures in which they
may be used. Therefore, the separate payment for a drug or biological
will be determined by subtracting from the amount calculated using the
methodology outlined in section 1847A of the Act the portion of the
otherwise applicable Medicare OPD fee schedule associated with the drug
or biological, which as previously discussed, we propose to be zero
dollars for CY 2025. For the amount of payment for a medical device,
the separate payment amount will be determined by subtracting from the
hospital's charges for the device, adjusted to cost, the portion of the
otherwise applicable Medicare OPD fee schedule amount associated with
the medical device, which as previously discussed, we propose to be
zero dollars for CY 2025. These separate payment amounts will all be
subject to the payment limitation described in the subsequent section.
Section 1833(i)(10) of the Act establishes the same separate
payment for the ASC setting as for hospital outpatient departments, as
described in section 1833(t)(16)(G)(ii) of the Act. Both separate
payments are subject to the limitation in section 1833(t)(16)(G)(iii)
of the Act, which specifies that the separate payment amount shall not
exceed the estimated average of 18 percent of the OPD fee schedule
amount for the OPD service (or group of services) with which the non-
opioid treatment for pain relief is furnished. Our proposed
implementation of this payment limitation is discussed in further
detail below. Given this statutory requirement, we propose to pay the
same separate payment amount for qualifying non-opioid products in both
the HOPD and ASC settings.
As the statute requires separate payment for these non-opioid
treatments for pain relief, these products cannot be packaged into the
procedure payment. Under our current threshold packaging policy, if the
estimated per day cost for a drug or biological is less than or equal
to the applicable OPPS drug packaging threshold, we package payment for
the drug or biological into the payment for the associated procedure.
Similarly, under our comprehensive APC (C-APC) policy, we package all
payments for services integral, ancillary, supportive, dependent, and
adjunctive to the primary service into a single payment for the primary
comprehensive service. For more information on the drug packaging
threshold, see section V.B.1.a of this proposed rule, and section
II.A.b of this proposed rule for further information on C-APC
packaging. We propose that non-opioid treatments for pain relief would
not be subject to the threshold packaging policy in section V.B.1.a. of
the proposed rule (88 FR 49676) and would also be separately paid when
used during a comprehensive APC (C-APC) procedure in the HOPD setting.
e. Payment Limitation
Section 1833(t)(16)(G)(iii) of the Act states that the separate
payment amount specified in clause (ii), (which is described in the
previous section) shall not exceed the estimated average of 18 percent
of the OPD fee schedule amount for the OPD service (or group of
services) with which the non-opioid treatment for pain relief is
furnished, as determined by the Secretary.
For the non-opioid products that are currently billed under the
OPPS, we conducted a claims analysis of CY 2023 OPPS claims, which are
the claims available for CY 2025 rulemaking, and found that
approximately 90 percent of the utilization, on average, for these non-
opioid products is focused in the top five most frequently performed
services for each product. Given this, we believe that using the top
five services would provide a representative estimate for purposes of
the payment limitation. As illustrated in Table 85, we propose to use
the top five services by volume associated with a drug, biological, or
medical device, to determine the volume-weighted payment rate per claim
and the 18 percent payment limitation specified by statute, based on
the most recent claims data available. This payment limitation approach
is also generally consistent with the comments received in response to
the comment solicitation in the CY 2024 OPPS/ASC proposed rule (88 FR
49767 through 49769). For example, in response to the CY 2024 comment
solicitation, several commenters supported CMS establishing a payment
limitation for each non-opioid treatment item based on a volume-
weighted OPPS payment rate for the top five services that package the
item into their payment rate.
We propose to apply the 18 percent payment limitation per date of
service billed, rather than per HCPCS dosage unit. This is due to the
fact that there are typically multiple HCPCS dosage units (also called
billing units) of each drug or biological billed per claim. Thus, the
total units of a drug billed on a date of service is more reflective of
the cost of the drug in that encounter. The amount of drug or
biological used during an encounter, represented by a date of service
for purposes of this proposal, will impact whether the separate payment
for the drug or biological exceeds the payment limitation required by
statute. Meaning, the same drug or biological may or may not be subject
to the payment limitation depending on the amount of drug used. For
example, a drug is paid $1 per 1 mg (per billing unit) and has a
payment limitation set at $100 based on 18 percent of the volume
weighted average of the payment of the top 5 services associated with
the use of the drug. If 50 mg (50 billing units) of this drug were to
be billed during one patient encounter or one date of service, then $50
would be paid. The payment limitation would not apply as the payment
for the drug did not exceed the payment limitation of $100. If 200 mg
(200 billing units) of that same drug were to be billed during one
patient encounter or one date of service, then the $200 payment would
be limited to $100. In this case the payment limitation would apply as
the payment for the drug exceeded the payment limitation of $100. We
propose to apply this payment limitation to the date of service billed
as the payment limitation applies to the total amount of separate
payment, rather than the HCPCS dosage unit payment, which may only
represent a small fraction of the total amount of payment.
We propose to create new status indicators for non-opioid drugs and
[[Page 59430]]
devices to implement this payment limitation. Under the OPPS, non-
opioid drugs and biologicals under this policy would be assigned a
status indicator of K1, while non-opioid devices would be assigned a
status indicator of H1. Further discussion of these new status
indicators can be found in section X1.A of this proposed rule.
As discussed in section XIII.B.6.b. of this proposed rule, we
propose to modify the descriptor of ASC payment indicator ``L6''--``New
Technology Intraocular Lens (NTIOL); special payment'' to ``Special
payment; New Technology Intraocular Lens (NTIOL) or qualifying non-
opioid devices'' and propose to assign qualifying non-opioid medical
devices to this payment indicator to operationalize payment of these
devices. We propose to assign qualifying drugs and biologicals to
existing payment indicator ``K2.'' We refer readers to Addenda DD1 and
DD2 of this proposed rule (these addenda are available via the internet
on the CMS website) for the complete list of ASC payment and comment
indicators proposed for the CY 2025 update.
We have presented our proposed payment limitation calculations for
qualifying non-opioid products in Table 85. We welcome public comment
on the methodology used to determine the payment limitation.
d. Payment Limitation With No Claims Data
For drugs, biologicals, and devices with no claims data, such as
for newly FDA-approved and marketed products or products that did not
previously have their own product-specific HCPCS code by which to track
payment and utilization data, we are soliciting comment on the best
approach for determining a payment limitation, as required by section
1833(t)(16)(G)(iii) of the Act. As discussed in the CY 2024 OPPS/ASC
final rule with comment period (88 FR 81953), CMS could utilize the
services with which a product would be expected to be furnished and
would typically be packaged absent this policy, based on expected
clinical use patterns. Determining the service, or group of services,
to use to calculate the payment limitation could be accomplished
through engagement with interested parties and a review by CMS Medical
Officers and clinical staff. Absent engagement from interested parties,
CMS could determine the service, or group of services, to use to
calculate the payment limitation based on expected clinical use
patterns. CMS could then adjust the services that are used to calculate
the payment limitation as claims data becomes available in subsequent
years. We welcome comments on how to set a payment limitation for a
product for which we do not have claims data on which to base a payment
limitation. The product is described by HCPCS code C98X4 (ON-Q Pump).
We solicit comment on the top 5 procedures performed with this product,
and the HCPCS code that describes the procedure, in order to calculate
a volume weighted payment limitation for this device for CY 2025.
We anticipate that we may update the payment limitation amount in
future rulemaking as we gather additional claims data on the
utilization of and payment for this product.
e. Qualifying Products
The following tables (Tables 84 and 85) list the non-opioid
alternatives of which we are aware that we propose would receive
separate payment as a non-opioid pain management drug or device under
section 4135 criteria for CY 2025. With respect to one medical device,
Table 84 also includes references to literature previously submitted to
CMS, which CMS has reviewed and based on that review, has determined
that the device shows the ability to replace, reduce, or avoid
intraoperative or postoperative opioid use or the quantity of opioids
prescribed in a clinical trial or through data published in a peer-
reviewed journal. Based on this determination, we propose the device
listed in Table 84 is eligible for separate payment.
In general, CMS routinely receives comments from readers of the
proposed rule with detailed rationale as to why and how a particular
drug, biological, medical device, or other item or service should be
paid in their view. We are soliciting comment on whether there are any
additional drugs, biologicals, or medical devices that meet the
statutory requirements outlined in 1833(t)(16)(G) and 1833(i)(10). As
discussed in this section, there are specific requirements with respect
to FDA approval that must be met in order for the product to qualify
for separate payment. For medical devices, the statute also requires
that the device has demonstrated the ability to replace, reduce, or
avoid intraoperative or postoperative opioid use or the quantity of
opioids prescribed in a clinical trial or through data published in a
peer-reviewed journal. Interested parties that believe that a product
not addressed in this proposed rule meets the statutory requirements
should submit information during the comment period that indicates that
such product meets the statutory eligibility requirements. If CMS
determines that such product(s) does in fact meet the statutory
eligibility requirements, we would finalize separate payment for that
product in the CY 2025 OPPS/ASC final rule with comment period. For
drugs and biological products not addressed in this proposed rule, if
no comment is submitted that outlines how that drug or biological meets
the statutory criteria, then CMS will not finalize separate payment for
such product for CY 2025. For medical devices not addressed in this
proposed rule, unless a comment is submitted that both outlines how
that device meets the statutory criteria and includes literature that
demonstrates that the device has the ability to replace, reduce, or
avoid intraoperative or postoperative opioid use or the quantity of
opioids prescribed in a clinical trial or through data published in a
peer-reviewed journal, then CMS will not finalize separate payment for
such device for CY 2025.
BILLING CODE 4120-01-P
[[Page 59431]]
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\106\ Exparel. FDA Package Insert. November 2023. https://www.accessdata.fda.gov/drugsatfda_docs/label/2023/022496s051lbl.pdf.
\107\ Omidria. FDA Package Insert. December 2017. https://www.accessdata.fda.gov/drugsatfda_docs/label/2017/205388s006lbl.pdf.
\108\ Dextenza. FDA Package Insert. October 2021. https://www.accessdata.fda.gov/drugsatfda_docs/label/2021/208742s007lbl.pdf.
\109\ Xaracoll. FDA Package Insert. August 2020. https://www.accessdata.fda.gov/drugsatfda_docs/label/2020/209511s000lbl.pdf.
\110\ Zynrelef. FDA Package Insert. January 2024. https://www.accessdata.fda.gov/drugsatfda_docs/label/2024/211988s013lbl.pdf.
\111\ Ketorolac tromethamine Injection. FDA Package Insert. May
2014. https://www.accessdata.fda.gov/drugsatfda_docs/label/2014/074802s038lbl.pdf.
\112\ On-Q Pump. FDA 510K. February 2019. https://www.accessdata.fda.gov/cdrh_docs/pdf18/K181360.pdf.
\113\ Ding DY, Manoli A 3rd, Galos DK, Jain S, Tejwani NC.
Continuous Popliteal Sciatic Nerve Block Versus Single Injection
Nerve Block for Ankle Fracture Surgery: A Prospective Randomized
Comparative Trial. J Orthop Trauma. 2015;29(9):393-398. https://pubmed.ncbi.nlm.nih.gov/2616525.
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[[Page 59432]]
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BILLING CODE 4120-01-C
Conforming proposed regulation text changes can be found at 42 CFR
416.174 for the ASC payment system and Sec. 419.43 for the OPPS. We
propose revisions to Sec. 419.174(a) to establish the eligibility for
non-opioid pain management drugs and biologicals, and by adding
modifications to subparagraphs (1), (2), and (3) to outline drug and
biological FDA approval requirements, the exclusion of drugs and
biologicals with pass-through status, and the requirement that the drug
or biological has payment that is packaged. We propose new Sec.
419.174(b) to establish the eligibility for non-opioid pain management
medical devices, which includes new subparagraphs (1),
[[Page 59433]]
(2), (3), and (4). These new subparagraphs describe medical device FDA
requirements, medical device clinical trial or peer-reviewed journal
requirements, the exclusion of medical devices with pass-through
status, and the requirement that the medical device has payment that is
packaged. New paragraph (c) describes the payment amounts for
qualifying drugs and biologicals in subparagraph (1) and medical
devices in subparagraph (2), as well as the payment limitation for
drugs, biologicals, and medical devices in subparagraph (3). Similarly,
we also propose new 419.43(k), which contains payment for non-opioid
pain management drugs and biologicals. Specifically, new paragraph (1)
outlines the eligibility for separate payment for non-opioid pain
management drugs and biologicals, with new subparagraphs outlining (i)
the drug or biological's required FDA status, (ii) the drug or
biological's pass-through status, and (iii) the drug or biological's
packaged status. We also propose to add new paragraph 419.43(k)(2),
which contains payment for non-opioid pain management medical devices.
Specifically, new paragraph (2) outlines the eligibility for separate
payment for non-opioid pain management medical devices, with new
subparagraphs outlining (i) the medical device's required FDA status,
(ii) the medical device clinical trial or peer-reviewed journal
requirements, (iii) the medical device's pass-through status, and (iv)
the medical device's packaged status. New 419.43(k)(3) describes the
separate payment amount for qualifying non-opioid treatments for pain
relief. Specifically, subparagraph (i) sets the separate payment amount
for a qualifying drug or biological, subparagraph (ii) sets the
separate payment amount for a qualifying medical device, and
subparagraph (iii) sets the payment limitation for drugs, biologicals,
and medical devices.
G. Proposed New Technology Intraocular Lenses (NTIOLs)
New Technology Intraocular Lenses (NTIOLs) are intraocular lenses
that replace a patient's natural lens that has been removed in cataract
surgery and that also meet the requirements listed in Sec. 416.195.
1. NTIOL Application Cycle
Our process for reviewing applications to establish new classes of
NTIOLs is as follows:
Applicants submit their NTIOL requests for review to CMS
by the annual deadline which is announced in the annual OPPS/ASC final
rule with comment period. For a request to be considered complete, we
require submission of the information requested in the guidance
document titled ``Application Process and Information Requirements for
Requests for a New Class of New Technology Intraocular Lenses (NTIOLs)
or Inclusion of an IOL in an Existing NTIOL Class'' posted on the CMS
website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/ambulatory-surgical-center-asc/new-technology-intraocular-lenses-ntiols.
We announce annually, in the proposed rule updating the
ASC and OPPS payment rates for the following calendar year, a list of
all requests to establish new NTIOL classes accepted for review during
the calendar year in which the proposal is published. In accordance
with section 141(b)(3) of Public Law 103-432 and our regulations at
Sec. 416.185(b), the deadline for receipt of public comments is 30
days following publication of the list of requests in the proposed
rule.
In the final rule with comment period updating the ASC and
OPPS payment rates for the following calendar year, we--
++ Provide a list of determinations made as a result of our review
of all new NTIOL class requests and public comments.
++ When a new NTIOL class is created, identify the predominant
characteristic of NTIOLs in that class that sets them apart from other
IOLs (including those previously approved as members of other expired
or active NTIOL classes) and that is associated with an improved
clinical outcome.
++ Set the date of implementation of a payment adjustment in the
case of approval of an IOL as a member of a new NTIOL class
prospectively as of 30 days after publication of the ASC payment update
final rule, consistent with the statutory requirement.
++ Announce the deadline for submitting requests for review of an
application for a new NTIOL class for the following calendar year.
2. Requests To Establish New NTIOL Classes for CY 2025
We did not receive any requests for review to establish a new NTIOL
class for CY 2025 by March 1, 2024, the due date published in the CY
2024 OPPS/ASC final rule with comment period (88 FR 81956).
3. Payment Adjustment
The current payment adjustment for a 5-year period from the
implementation date of a new NTIOL class is $50 per lens. Since
implementation of the process for adjustment of payment amounts for
NTIOLs in 1999, we have not revised the payment adjustment amount, and
we do not propose to revise the payment adjustment amount for CY 2025.
H. Proposed Calculation of the ASC Payment Rates and the ASC Conversion
Factor
1. Background
In the August 2, 2007, ASC final rule (72 FR 42493), we established
our policy to base ASC relative payment weights and payment rates under
the revised ASC payment system on APC groups and the OPPS relative
payment weights. Consistent with that policy and the requirement at
section 1833(i)(2)(D)(ii) of the Act that the revised payment system be
implemented so that it would be budget neutral, the initial ASC
conversion factor (CY 2008) was calculated so that estimated total
Medicare payments under the revised ASC payment system in the first
year would be budget neutral to estimated total Medicare payments under
the prior (CY 2007) ASC payment system (the ASC conversion factor is
multiplied by the relative payment weights calculated for many ASC
services in order to establish payment rates). That is, application of
the ASC conversion factor was designed to result in aggregate Medicare
expenditures under the revised ASC payment system in CY 2008 being
equal to aggregate Medicare expenditures that would have occurred in CY
2008 in the absence of the revised system, taking into consideration
the cap on ASC payments in CY 2007, as required under section
1833(i)(2)(E) of the Act (72 FR 42522). We adopted a policy to make the
system budget neutral in subsequent calendar years (72 FR 42532 through
42533; Sec. 416.171(e)).
We note that we consider the term ``expenditures'' in the context
of the budget neutrality requirement under section 1833(i)(2)(D)(ii) of
the Act to mean expenditures from the Medicare Part B Trust Fund. We do
not consider expenditures to include beneficiary coinsurance and
copayments. This distinction was important for the CY 2008 ASC budget
neutrality model that considered payments across the OPPS, ASC, and
MPFS payment systems. However, because coinsurance is almost always 20
percent for ASC services, this interpretation of expenditures has
minimal impact for subsequent budget neutrality adjustments calculated
within the revised ASC payment system.
In the CY 2008 OPPS/ASC final rule with comment period (72 FR 66857
through 66858), we set out a step-by-
[[Page 59434]]
step illustration of the final budget neutrality adjustment calculation
based on the methodology finalized in the August 2, 2007, ASC final
rule (72 FR 42521 through 42531) and as applied to updated data
available for the CY 2008 OPPS/ASC final rule with comment period. The
application of that methodology to the data available for the CY 2008
OPPS/ASC final rule with comment period resulted in a budget neutrality
adjustment of 0.65.
For CY 2008, we adopted the OPPS relative payment weights as the
ASC relative payment weights for most services and, consistent with the
final policy, we calculated the CY 2008 ASC payment rates by
multiplying the ASC relative payment weights by the final CY 2008 ASC
conversion factor of $41.401. For covered office-based surgical
procedures, covered ancillary radiology services (excluding covered
ancillary radiology services involving certain nuclear medicine
procedures or involving the use of contrast agents, as discussed in
section XIII.D.2 of the CY 2023 OPPS/ASC proposed rule (87 FR 44715
through 44716)), and certain diagnostic tests within the medicine range
that are covered ancillary services, the established policy is to set
the payment rate at the lower of the MPFS unadjusted nonfacility PE
RVU-based amount or the amount calculated using the ASC standard
ratesetting methodology. Further, as discussed in the CY 2008 OPPS/ASC
final rule with comment period (72 FR 66841 through 66843), we also
adopted alternative ratesetting methodologies for specific types of
services (for example, device-intensive procedures).
As discussed in the August 2, 2007 ASC final rule (72 FR 42517
through 42518) and as codified at Sec. 416.172(c) of the regulations,
the revised ASC payment system accounts for geographic wage variation
when calculating individual ASC payments by applying the pre-floor and
pre-reclassified IPPS hospital wage indexes to the labor-related share,
which is 50 percent of the ASC payment amount based on a GAO report of
ASC costs using 2004 survey data. Beginning in CY 2008, CMS accounted
for geographic wage variation in labor costs when calculating
individual ASC payments by applying the pre-floor and pre-reclassified
hospital wage index values that CMS calculates for payment under the
IPPS, using updated Core Based Statistical Areas (CBSAs) issued by OMB
in June 2003.
The reclassification provision in section 1886(d)(10) of the Act is
specific to acute care 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 pre-floor, pre-
reclassified hospital wage indexes, which are updated yearly and are
used by several other Medicare payment systems, appropriately account
for geographic variation in labor costs for ASCs (89 FR 23424).
Therefore, the wage index for an ASC is the pre-floor and pre-
reclassified hospital wage index for the fiscal year under the IPPS of
the CBSA that maps to the CBSA where the ASC is located.
On July 21, 2023, OMB issued OMB Bulletin No. 23-01, 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 July 16, 2021, in the Federal
Register (86 FR 37770) and 2020 Census Bureau data. (A copy of this
bulletin may be obtained at: https://www.whitehouse.gov/wp-content/uploads/2023/07/OMB-Bulletin-23-01.pdf). The pre-floor pre-reclassified
IPPS hospital wage indexes for CY 2024 do not reflect OMB's new area
delineations and, because the ASC wage indexes are the pre-floor and
pre-reclassified IPPS hospital wages indexes, the CY 2024 ASC wage
indexes do not reflect the most recent OMB changes. As discussed in the
FY 2025 IPPS/LTCH PPS proposed rule (89 FR 36139 through 36150), we
proposed to use the new CBSAs delineations issued by OMB in OMB
Bulletin 23-01 for the IPPS hospital wage index beginning in CY 2025.
Therefore, because the ASC wage indexes for the calendar year are the
pre-floor and pre-reclassified IPPS hospital wage indexes for the
fiscal year, we propose to incorporate the new OMB delineations into CY
2025 ASC wage indexes. We believe that using the revised delineations
based on OMB Bulletin No. 23-01 will increase the integrity of the ASC
wage index system by creating a more accurate representation of current
geographic variations in wage levels.
In adopting the revised CBSA delineations from the 2010 Census data
which were issued by OMB on July 15, 2015 through OMB Bulletin No. 15-
01, for ASCs in counties that would see a decline in their ASC wage
index for CY 2015, we adopted a blended wage index of 50 percent of the
CY 2014 wage index value and 50 percent of the CY 2015 wage index value
(79 FR 66937). However, we note that other Medicare payment systems
incorporate a policy of capping year-to-year wage index decreases for
each facility at 5 percent of the previous year's wage index value (89
FR 23431 through 23433). We believe such a policy would also be
appropriate for the ASC payment system as we transition to the CBSA
delineations based on the 2020 Census data. As discussed in the IPPS/
LTCH FY 2025 proposed rule, the 5-percent cap mitigates any large
negative impacts of adopting the new delineations and prevents large
year-to-year declines in wage index values as a means to reduce
volatility (89 FR 36150). Therefore, for CY 2025, we propose to
incorporate the new OMB delineations into the CY 2025 ASC wage indexes
and propose to apply a 5-percent cap on wage index decreases at the
county level (or county-equivalent level) and the ASC wage index of
that county would apply to all ASCs physically located in that county.
We note that this 5-percent cap is applied in a budget neutral manner.
The 5-percent cap reduces the wage index scalar for a calendar year
which, in turn, will reduce the ASC conversion factor and the payment
rates for covered ASC services in counties that are not affected by the
5-percent cap on wage index decreases. Further, we are soliciting
comments on whether we should extend this policy after CY 2025 and
permanently adopt a budget-neutral 5-percent cap on year-to-year wage
index decreases.
The proposed CY 2025 ASC wage indexes fully reflect the OMB labor
market area delineations (including the revisions to the OMB labor
market delineations discussed previously, as set forth in OMB Bulletin
Nos. 23-01) including replacing the eight counties with the county-
equivalent planning regions of Connecticut. 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. 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, our
policy has been to determine the ASC wage index by calculating the
average of all wage indexes for urban areas in the State (75 FR 72058
through 72059). In other situations, where there are no IPPS hospitals
located in a relevant labor market area, we apply our current policy of
calculating an urban or rural area's wage index by calculating the
average of the wage indexes for CBSAs (or metropolitan divisions where
applicable) that are contiguous to the
[[Page 59435]]
area with no wage index. For example, for CY 2025, we are applying a
proxy wage index based on this methodology to ASCs located in CBSA
25980 (Hinesville, GA) and in CBSA 35 (Rural North Dakota).
2. Calculation of the ASC Payment Rates
a. Updating the ASC Relative Payment Weights for CY 2025 and Future
Years
We update the ASC relative payment weights each year using the
national OPPS relative payment weights (and PFS nonfacility PE RVU-
based amounts, as applicable) for that same calendar year and uniformly
scale the ASC relative payment weights for each update year to make
them budget neutral (72 FR 42533). The OPPS relative payment weights
are scaled to maintain budget neutrality for the OPPS. We then scale
the OPPS relative payment weights again to establish the ASC relative
payment weights. To accomplish this, we hold estimated total ASC
payment levels constant between calendar years for purposes of
maintaining budget neutrality in the ASC payment system. That is, we
apply the weight scalar to ensure that projected expenditures from the
updated ASC payment weights in the ASC payment system are equal to what
would be the current expenditures based on the scaled ASC payment
weights. In this way, we ensure budget neutrality and that the only
changes to total payments to ASCs result from increases or decreases in
the ASC payment update factor.
Where the estimated ASC expenditures for an upcoming year are
higher than the estimated ASC expenditures for the current year, the
ASC weight scalar is reduced, in order to bring the estimated ASC
expenditures in line with the expenditures for the baseline year. This
frequently results in ASC relative payment weights for surgical
procedures that are lower than the OPPS relative payment weights for
the same procedures for the upcoming year. Therefore, over time, even
if procedures performed in the HOPD and ASC receive the same update
factor under the OPPS and ASC payment system, payment rates under the
ASC payment system would increase at a lower rate than payment for the
same procedures performed in the HOPD as a result of applying the ASC
weight scalar to ensure budget neutrality.
As discussed in section II.A.1.a of this proposed rule, we are
using the CY 2023 claims data to be consistent with the OPPS claims
data for this proposed rule. Consistent with our established policy, we
propose to scale the CY 2025 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 2023, we
propose to compare the estimated total payment using the CY 2024 ASC
relative payment weights with the estimated total payment using the CY
2025 ASC relative payment weights to take into account the changes in
the OPPS relative payment weights between CY 2024 and CY 2025.
In consideration of our policy to provide a higher ASC payment rate
with ASC complexity adjustment codes for certain primary procedures
when performed with add-on packaged services, we incorporated estimated
total spending and estimated utilization for these codes in our budget
neutrality calculation for CYs 2023 and 2024. We estimated in the CY
2023 OPPS/ASC final rule with comment period (87 FR 72094) that the
impact on CY 2023 estimated total payments from our finalized CY 2023
ASC complexity adjustment codes would be $5 million in spending and we
finalized our proposal to incorporate this $5 million in estimated CY
2023 total payments for the budget neutrality calculation. Based on CY
2023 utilization data, we now estimate that the actual amount of
spending on the new CY 2023 ASC complexity adjustment codes for CY 2023
was $24 million. We estimate that there will not be an additional
increase in ASC spending related to our newly proposed ASC complexity
adjustment codes for CY 2025.
Additionally, as discussed in Section XIII.E of this proposed rule,
section 4135(a) and (b) of the CAA, 2023, titled Access to Non-Opioid
Treatments for Pain Relief, amended section 1833(t)(16) and section
1833(i) of the Act, respectively, to provide for temporary separate
payments for non-opioid treatments for pain relief. As discussed in
further detail in Section XIII.E.e of this proposed rule, for
qualifying nonopioid products, we propose to apply the 18 percent
payment limitation on the volume weighted payment average of the top 5
services associated with the use of the qualifying nonopioid product.
Currently, four of these qualifying nonopioid products are separately
payable without the 18 percent payment limitation--HCPCS Codes C9089
(Bupivacaine implant, 1 mg), C9290 (Inj, bupivacaine liposome), J1096
(Dexametha opth insert 0.1 mg), and J1097 (Phenylep ketorolac opth
soln). Therefore, to maintain budget neutrality, we must estimate the
total anticipated reduction as a result of the 18 percent payment
limitation required by Section 4135 of the CAA, 2023. Using CY 2023
utilization for these four drugs and CY 2024 ASC payment rates, we
anticipate that the 18 percent payment limitation will reduce CY 2025
ASC expenditures by approximately $9 million. Therefore, we are
reducing estimated CY 2025 total payments by $9 million in our weight
scalar calculation as a result of Section 4135 of the CAA, 2023.
We propose to use the ratio of estimated CY 2024 to estimated CY
2025 total payments (the weight scalar) to scale the ASC relative
payment weights for CY 2025. The proposed CY 2025 ASC weight scalar is
0.876. We note that we have historically displayed this figure rounded
to the nearest ten thousandth; however, we believe this level of
specificity is unnecessarily burdensome for an ASC payment system that
is less than one-tenth the size of the OPPS (in which the weight scalar
is rounded to the nearest ten-thousandth). An ASC weight scalar rounded
to the nearest ten thousandth is highly sensitive to spending changes
and can require the costly reissuance of new ASC payment rates from
only very minor payment rate changes within the ASC Payment System,
such as a revised PFS conversion factor as a result of Congressional
action. Therefore, for CY 2025 and subsequent calendar years, we
propose to set the ASC weight scalar rounded to the nearest thousandth.
Consistent with historical practice, we propose to scale, using this
method, the ASC relative payment weights of covered surgical
procedures, covered ancillary radiology services, and certain
diagnostic tests within the medicine range of CPT codes, which are
covered ancillary services for which the ASC payment rates are based on
OPPS relative payment weights.
We propose that we would not scale ASC payment for separately
payable covered ancillary services that have a predetermined national
payment amount (that is, their national ASC payment amounts are not
based on OPPS relative payment weights), such as drugs and biologicals
that are separately paid or services that are contractor-priced or paid
at reasonable cost in ASCs. Any service with a predetermined national
payment amount would be included in the ASC budget neutrality
comparison, but scaling of the ASC relative payment weights would not
apply to those 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
[[Page 59436]]
total payment between the current year and the update year.
For any given year's ratesetting, we typically use the most recent
full calendar year of claims data to model budget neutrality
adjustments. We propose to use the CY 2023 claims data to model our
budget neutrality adjustment for CY 2025.
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 2025, we calculated the proposed adjustment for the ASC payment
system by using the most recent CY 2023 claims data available and
estimating the difference in total payment that would be created by
introducing the proposed CY 2025 ASC wage indexes. Specifically,
holding CY 2023 ASC utilization, service-mix, and the proposed CY 2025
national payment rates after application of the weight scalar constant,
we calculated the total adjusted payment using the CY 2024 ASC wage
indexes and the total adjusted payment using the proposed CY 2025 ASC
wage indexes which included our proposed 5-percent cap on wage index
declines. 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 2024 ASC wage indexes to the total
adjusted payment calculated with the proposed CY 2025 ASC wage indexes
and applied the resulting ratio of 0.9958 (the proposed CY 2025 ASC
wage index budget neutrality adjustment) to the CY 2024 ASC conversion
factor to calculate the proposed CY 2025 ASC conversion factor.
Section 1833(i)(2)(D)(v) of the Act requires that the ASC
conversion factor be reduced by a productivity adjustment in each
calendar year. Section 1886(b)(3)(B)(xi)(II) of the Act defines the
productivity adjustment to be equal to the 10-year moving average of
changes in annual economy-wide private nonfarm business multifactor
productivity (MFP). We finalized the methodology for calculating the
productivity adjustment in the CY 2011 PFS final rule with comment
period (75 FR 73394 through 73396) and revised it in the CY 2012 PFS
final rule with comment period (76 FR 73300 through 73301) and the CY
2016 OPPS/ASC final rule with comment period (80 FR 70500 through
70501). The proposed productivity adjustment for CY 2025 was projected
to be 0.4 percentage point, as published in the FY 2025 IPPS/LTCH PPS
proposed rule (89 FR 36204) based on IGI's 2023 fourth quarter
forecast.
Section 1833(i)(2)(C)(i) of the Act requires that, if the Secretary
has not updated amounts established under the revised ASC payment
system in a calendar year, the payment amounts shall be increased by
the percentage increase in the Consumer Price Index for all urban
consumers (CPI-U), U.S. city average, as estimated by the Secretary for
the 12-month period ending with the midpoint of the year involved. The
statute does not mandate the adoption of any particular update
mechanism, but it requires the payment amounts to be increased by the
CPI-U in the absence of any update. Because the Secretary updates the
ASC payment amounts annually, we adopted a policy, which we codified at
Sec. 416.171(a)(2)(ii)), to update the ASC conversion factor using the
CPI-U for CY 2010 and subsequent calendar years.
In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59075
through 59080), we finalized a policy to apply the productivity-
adjusted hospital market basket update to ASC payment system rates for
an interim period of 5 years (CY 2019 through CY 2023), during which we
would assess whether there is a migration of the performance of
procedures from the hospital setting to the ASC setting as a result of
the use of a productivity-adjusted hospital market basket update, as
well as whether there are any unintended consequences, such as less
than expected migration of the performance of procedures from the
hospital setting to the ASC setting. The most recent available full
year of claims data to assess the expected migration applying the
productivity-adjusted hospital market basket update during the interim
period would fall within the period from CY 2019 through CY 2022.
However, the impact of the COVID-19 PHE on health care utilization, in
particular in CY 2020, was tremendously profound, particularly for
elective surgeries, because many beneficiaries avoided healthcare
settings, when possible, to avoid possible infection from the SARS-CoV-
2 virus. As a result, it is nearly impossible to disentangle the
effects from the COVID-19 PHE in our analysis of whether the higher
update factor for the ASC payment system caused increased migration to
the ASC setting. To analyze whether procedures migrated from the
hospital setting to the ASC setting, we need to use claims data from a
period during which the COVID-19 PHE had less of an impact on health
care utilization. Therefore, for CY 2024, we finalized our proposal to
extend the 5-year interim period an additional 2 years, that is,
through CY 2024 and CY 2025. We believed hospital outpatient and ASC
utilization data from CYs 2023 and 2024 will enable us to more
accurately analyze whether the application of the productivity-adjusted
hospital market basket update to the ASC payment system had an effect
on the migration of services from the hospital setting to the ASC
setting. We revised our regulations at 42 CFR 416.171(a)(2)(iii) and
(iv), which establish the annual update to the ASC conversion factor,
to reflect this 2-year extension. We also revised our regulations at
Sec. 416.171(a)(2)(vi) and (vii), which establish the 2.0 percentage
point reduction for ASCs that fail to meet the standards for reporting
ASC quality measures, and Sec. 416.171(a)(2)(viii)(B) and (C), which
establish the productivity adjustment, to reflect this 2-year
extension.
For CY 2025, we propose to utilize the proposed hospital market
basket percentage increase of 3.0 percent reduced by the proposed
productivity adjustment of 0.4 percentage point, resulting in a
proposed productivity-adjusted hospital market basket update of 2.6
percent for ASCs meeting the quality reporting requirements. Therefore,
we propose to apply a proposed 2.6 percent productivity-adjusted
hospital market basket update factor to the CY 2024 ASC conversion
factor for ASCs meeting the quality reporting requirements to determine
the CY 2025 ASC payment amounts. The ASCQR Program affected payment
rates beginning in CY 2014 and, under this program, there is a 2.0
percentage point reduction to the productivity-adjusted hospital market
basket update factor for ASCs that fail to meet the ASCQR Program
requirements.
[[Page 59437]]
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
this proposed rule for a detailed discussion of our policies regarding
payment reduction for ASCs that fail to meet ASCQR Program
requirements. We propose to utilize the proposed inpatient hospital
market basket percentage increase of 3.0 percent reduced by 2.0
percentage points for ASCs that do not meet the quality reporting
requirements and then reduced by the proposed 0.4 percentage point
productivity adjustment. Therefore, we propose to apply a 0.6 percent
productivity-adjusted hospital market basket update factor to the CY
2024 ASC conversion factor for ASCs not meeting the quality reporting
requirements. We also propose that if more recent data are subsequently
available (for example, a more recent estimate of the inpatient
hospital market basket percentage increase or productivity adjustment),
we would use such data, if appropriate, to determine the CY 2025 ASC
update for the CY 2025 OPPS/ASC final rule with comment period.
For CY 2025, we propose to adjust the CY 2024 ASC conversion factor
($53.514) by the proposed wage index budget neutrality factor of 0.9958
in addition to the proposed productivity-adjusted hospital market
basket update of 2.6 percent discussed previously, which results in a
proposed CY 2025 ASC conversion factor of $54.675 (a 2.2 percent
increase) for ASCs meeting the quality reporting requirements. For ASCs
not meeting the quality reporting requirements, we propose to adjust
the CY 2024 ASC conversion factor ($53.514) by the proposed wage index
budget neutrality factor of 0.9958 in addition to the proposed quality
reporting/productivity-adjusted hospital market basket update of 0.2
percent discussed previously, which results in a proposed CY 2025 ASC
conversion factor of $53.609 for ASCs not meeting the quality reporting
requirements.
3. Display of the Proposed CY 2025 ASC Payment Rates
Addenda AA and BB to this proposed rule (which are available on the
CMS website) display the proposed ASC payment rates for CY 2025 for
covered surgical procedures and covered ancillary services,
respectively. The proposed payment rates included in Addenda AA and BB
to this proposed rule reflect the full ASC proposed payment update and
not the reduced payment update used to calculate payment rates for ASCs
not meeting the quality reporting requirements under the ASCQR Program.
These Addenda contain several types of information related to the
proposed CY 2025 payment rates. Specifically, in Addendum AA, a ``Y''
in the column titled ``To be Subject to Multiple Procedure
Discounting'' indicates that the surgical procedure would be subject to
the multiple procedure payment reduction policy. As discussed in the CY
2008 OPPS/ASC final rule with comment period (72 FR 66829 through
66830), most covered surgical procedures are subject to a 50 percent
reduction in the ASC payment for the lower-paying procedure when more
than one procedure is performed in a single operative session.
For CY 2021, we finalized adding a new column to ASC Addendum BB
titled ``Drug Pass-Through Expiration during Calendar Year'' where we
flag through the use of an asterisk each drug for which pass-through
payment is expiring during the calendar year (that is, on a date other
than December 31st).
The values displayed in the column titled ``Proposed CY 2025
Payment Weight'' are the proposed relative payment weights for each of
the listed services for CY 2025. The proposed relative payment weights
for all covered surgical procedures and covered ancillary services
where the ASC payment rates are based on OPPS relative payment weights
were scaled for budget neutrality. Therefore, scaling was not applied
to the device portion of the device-intensive procedures; services that
are paid at the MPFS nonfacility PE RVU-based amount; separately
payable covered ancillary services that have a predetermined national
payment amount, such as drugs and biologicals and brachytherapy sources
that are separately paid under the OPPS; or services that are
contractor-priced or paid at reasonable cost in ASCs. This includes
separate payment for non-opioid pain management drugs.
To derive the proposed CY 2025 payment rate displayed in the
``Proposed CY 2025 Payment Rate'' column, each ASC payment weight in
the ``Proposed CY 2025 Payment Weight'' column was multiplied by the
proposed CY 2025 conversion factor. The conversion factor includes a
budget neutrality adjustment for changes in the wage index values and
the annual update as reduced by the productivity adjustment. The
proposed CY 2025 ASC conversion factor uses the proposed CY 2025
productivity-adjusted hospital market basket update factor of 2.6
percent (which is equal to the proposed inpatient hospital market
basket percentage increase of 3.0 percent reduced by the proposed
productivity adjustment of 0.4 percentage point).
In Addendum BB, there are no relative payment weights displayed in
the ``Proposed CY 2025 Payment Weight'' column for items and services
with predetermined national payment amounts, such as separately payable
drugs and biologicals. The ``Proposed CY 2025 Payment'' column displays
the proposed CY 2025 national unadjusted ASC payment rates for all
items and services. The proposed CY 2025 ASC payment rates listed in
Addendum BB for separately payable drugs and biologicals are based on
the most recently available data used for payment in physicians'
offices.
Addendum EE to this proposed rule provides the HCPCS codes and
short descriptors for surgical procedures that are proposed to be
excluded from payment in ASCs for CY 2025.
Addendum FF to this proposed rule displays the OPPS payment rate
(based on the standard ratesetting methodology), the APC device offset
percentage, the device offset percentage for determining device-
intensive status (based on the standard ratesetting methodology), and
the device portion of the ASC payment rate for CY 2025 for covered
surgical procedures.
XIV. Cross-Program Proposals for the Hospital Outpatient Quality
Reporting (OQR), Rural Emergency Hospital Quality Reporting (REHQR),
and Ambulatory Surgical Center Quality Reporting (ASCQR) Programs
A. Background
We refer readers to sections XV, XVI, and XVII of this proposed
rule for program-specific background information, including the
statutory authorities and previously finalized and newly proposed
measure sets, for the Hospital Outpatient Quality Reporting (OQR),
Rural Emergency Hospital Quality Reporting (REHQR), and Ambulatory
Surgical Center Quality Reporting (ASCQR) Programs, respectively.
B. CMS Commitment To Advancing Health Equity Using Quality Measurement
We are committed to advancing health equity and improving health
outcomes through our quality reporting programs. The CMS Framework for
Health Equity acknowledges that ``addressing health and healthcare
disparities and achieving health equity should underpin efforts to
focus attention and drive action on our nation's top health
priorities.'' CMS
[[Page 59438]]
defines health equity as ``the attainment of the highest level of
health for all people, where everyone has a fair and just opportunity
to attain their optimal health regardless of race, ethnicity,
disability, sexual orientation, gender identity, socioeconomic status,
geography, preferred language, or other factors that affect access to
care and health outcomes.'' \114\
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\114\ Centers for Medicare & Medicaid Services. (2022). CMS
Framework for Health Equity 2022-2032. Available at: https://www.cms.gov/files/document/cms-framework-health-equity-2022.pdf.
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Significant and persistent disparities in health care outcomes
exist in the United States (U.S.). Belonging to a racial or ethnic
minority group, living with a disability, being a member of the
lesbian, gay, bisexual, transgender, and queer (LGBTQ+) community,
living in a rural area, or being near or below the poverty level are
often associated with worse health outcomes.115 116 117
Health disparities manifest primarily as worse health outcomes in
populations where access to care is inequitable.118 119 Such
differences persist across geography and healthcare settings
irrespective of improvements in quality of care over
time.120 121 Inequities in the social determinants of health
affecting these groups are interrelated and influence a wide range of
health and quality of life outcomes and risks.\122\
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\115\ Polyakova M, Udalova V, Kocks G, Genadek K, Finlay K,
Finkelstein AN. (2021). Racial Disparities in Excess All-Cause
Mortality During The Early COVID-19 Pandemic Varied Substantially
Across States. Health Affairs, 40(2), 307-316. https://doi.org/10.1377/hlthaff.2020.02142.
\116\ Rural Health Research Gateway. (2018). Rural Communities:
Age, Income, and Health Status. Rural Health Research Recap.
Available at: https://www.ruralhealthresearch.org/assets/2200-8536/rural-communities-age-income-health-status-recap.pdf.
\117\ Heslin KC, Hall JE. (2021). Sexual Orientation Disparities
in Risk Factors for Adverse COVID-19-Related Outcomes, by Race/
Ethnicity--Behavioral Risk Factor Surveillance System, United
States, 2017-2019. MMWR Morbidity Mortality Weekly Report, 70(5),
149. http://dx.doi.org/10.15585/mmwr.mm7005a1.
\118\ The Physicians Foundation. (2020). Survey of America's
Patients, Part Three. Available at: https://physiciansfoundation.org/wp-content/uploads/2020/10/2020-Physicians-Foundation-Survey-Part3.pdf.
\119\ Office of the Assistant Secretary for Planning and
Evaluation. (2020). Report to Congress: Social Risk Factors and
Performance Under Medicare's Value-Based Purchasing Program (Second
of Two Reports). Available at: https://aspe.hhs.gov/pdf-report/second-impact-report-to-congress.
\120\ Ibid.
\121\ Khullar D, Schpero WL, Bond AM, Qian Y, Casalino LP.
(2020). Association Between Patient Social Risk and Physician
Performance Scores in the First Year of the Merit-based Incentive
Payment System. JAMA, 324(10), 975-983. https://jamanetwork.com/journals/jama/fullarticle/2770410.
\122\ Office of Disease Prevention and Health Promotion. (2021).
Healthy People 2020: Disparities. Available at: https://wayback.archive-it.org/5774/20220414003754/https://www.healthypeople.gov/2020/about/foundation-health-measures/Disparities.
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Inequities related to the social determinants of health may affect
health-related social needs (HRSNs). HRSNs are individual-level,
adverse social conditions that negatively impact an individual's health
or healthcare and are associated with worse health outcomes and
increased healthcare utilization.\123\ While HRSNs account for 50 to 70
percent of health outcomes, the mechanisms by which this connection
emerges are complex and multifaceted.124 125 Growing
evidence demonstrates that specific HRSNs are directly associated with
patient health outcomes as well as healthcare utilization, costs, and
performance in quality-based payment programs.126 127 The
persistent interactions among individuals' HRSNs, medical providers'
practices and behaviors, and community resources significantly impact
healthcare access, quality, and costs, as described in the CMS Equity
Plan for Improving Quality in Medicare.128 129 Assessment of
HRSNs is an essential mechanism for capturing the interaction between
social, community, and environmental factors associated with health
status and health outcomes.130 131 Studies indicate that
healthcare facility leadership can positively influence culture for
better quality, patient outcomes, and experience of
care.132 133 134
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\123\ Centers for Medicare & Medicaid Services. (2021). A Guide
to Using the Accountable Health Communities Health-Related Social
Needs Screening Tool: Promising Practices and Key Insights.
Available at: https://www.cms.gov/priorities/innovation/media/document/ahcm-screeningtool-companion.
\124\ Kaiser Family Foundation. (2021). Racial and Ethnic Health
Inequities and Medicare. Available at: https://www.kff.org/medicare/report/racial-and-ethnic-health-inequities-and-medicare/.
\125\ The Physicians Foundation. (2021). Viewpoints: Social
Determinants of Health. Available at: https://physiciansfoundation.org/wp-content/uploads/2019/08/The-Physicians-Foundation-SDOH-Viewpoints.pdf.
\126\ Zhang Y, Li J, Yu J, Braun RT, Casalino LP. (2021), Social
Determinants of Health and Geographic Variation in Medicare per
Beneficiary Spending. JAMA Network Open, 4(6), e2113212. https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2780864.
\127\ Khullar D, Schpero WL, Bond AM, Qian Y, Casalino LP
(2020). Association Between Patient Social Risk and Physician
Performance Scores in the First Year of the Merit-based Incentive
Payment System. JAMA, 324(10), 975-983. https://doi.org/10.1001/jama.2020.13129.
\128\ Centers for Medicare & Medicaid Services. (2021). Paving
the Way to Equity: A Progress Report. Available at: https://www.cms.gov/files/document/paving-way-equity-cms-omh-progress-report.pdf.
\129\ Centers for Medicare & Medicaid Services Office of
Minority Health. (2021). The CMS Equity Plan for Improving Quality
in Medicare. 2015-2021. Available at: https://www.cms.gov/About-CMS/Agency-Information/OMH/OMH_Dwnld-CMSEquityPlanforMedicare_090615.pdf.
\130\ Alley DE, Asomugha CN, Conway PH, Sanghavi DM. (2016).
Accountable Health Communities-Addressing Social Needs through
Medicare and Medicaid. New England Journal of Medicine, 374(1), 8-
11. Available at: https://www.nejm.org/doi/10.1056/NEJMp1512532.
\131\ Centers for Disease Control and Prevention. (July 2020).
CDC COVID-19 Response Health Equity Strategy: Accelerating Progress
Towards Reducing COVID-19 Disparities and Achieving Health Equity.
Available at: https://www.cdc.gov/coronavirus/2019-ncov/downloads/community/CDC-Strategy.pdf.
\132\ We use the term ``healthcare facility'' to refer to
hospital outpatient departments (HOPDs), rural emergency hospitals
(REHs), and ambulatory surgical centers (ASCs) collectively.
\133\ Smith SA, Yount N, Sorra J. (2017). Exploring
Relationships Between Hospital Patient Safety Culture and Consumer
Reports Safety Scores. BMC Health Services Research, 17(1), 143.
https://doi.org/10.1186/s12913-017-2078-6.
\134\ Bradley EH, Brewster AL, McNatt Z, et al. (2018). How
Guiding Coalitions Promote Positive Culture Change in Hospitals: A
Longitudinal Mixed Methods Interventional Study. BMJ Quality &
Safety, 27(3), 218-225. https://qualitysafety.bmj.com/content/27/3/218.
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We are committed to supporting healthcare facility leadership in
building a culture of equity that focuses on eliminating health
disparities to provide patients with high quality healthcare through
the collection and public reporting of health equity focused measures,
including in outpatient care settings.\135\
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\135\ Smith SA, Yount N, Sorra J. (2017). Exploring
Relationships Between Hospital Patient Safety Culture and Consumer
Reports Safety Scores. BMC Health Services Research, 17(1), 143.
https://bmchealthservres.biomedcentral.com/articles/10.1186/s12913-017-2078-6.
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Health equity quality measurement supports the Meaningful Measures
2.0 goal to ``Leverage Quality Measures to Promote Equity and Close
Gaps in Care'' as well as the objective to ``commit to a patient-
centered approach in quality measure and value-based incentives
programs.'' Additionally, under the CMS National Quality Strategy,
adoption of health equity quality measures would support addressing the
quality priority to ``advance health equity and whole-person care'' by
employing a uniform approach for gathering, reporting, and analyzing
health equity data across CMS quality programs.\136\
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\136\ Centers for Medicare & Medicaid Services. (2024). CMS
National Quality Strategy. Centers for Medicare and Medicaid
Services. Available at: https://www.cms.gov/medicare/quality/meaningful-measures-initiative/cms-quality-strategy.
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[[Page 59439]]
1. Proposal To Adopt the Hospital Commitment to Health Equity (HCHE)
Measure for the Hospital Outpatient Quality Reporting (OQR) and Rural
Emergency Hospital Quality Reporting (REHQR) Programs and the Facility
Commitment to Health Equity (FCHE) Measure for the Ambulatory Surgical
Center Quality Reporting (ASCQR) Program Beginning With the CY 2025
Reporting Period/CY 2027 Payment Determination or Program
Determination.\137\
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\137\ We use the phrase ``payment determination'' for the
Hospital OQR and ASCQR Programs to represent our assessment of
whether the 2-percentage point reduction in payment for failing to
meet program requirements is warranted. We use the phrase ``program
determination'' for the REHQR Program to represent our assessment of
compliance with program requirements for an applicable year because
the REHQR Program does not include an associated payment adjustment.
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a. Background
Strong and committed leadership from healthcare facility management
is essential in shifting organizational culture to reduce health
disparities and reach health equity goals.\138\ The Agency for
Healthcare Research and Quality and The Joint Commission identified
that healthcare facility leadership plays an important role in
promoting a culture of quality and safety.139 140 The
Institute of Healthcare Improvement's research shows that health equity
must be a priority championed by leadership teams to improve both
patient access to needed healthcare services and outcomes among
disadvantaged populations.\141\ Based upon these findings, we believe
that healthcare facility leadership is instrumental in setting
specific, measurable, attainable, realistic, and time-based (SMART)
goals to assess progress towards achieving equity priorities and
ensuring high-quality care is equally accessible to all individuals.
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\138\ Bradley EH, Brewster AL, McNatt Z, Linnander EL, Cherlin
E, Fosburgh H, Ting HH, Curry LA. (2018). How Guiding Coalitions
Promote Positive Culture Change in Hospitals: A Longitudinal Mixed
Methods Interventional Study. BMJ Quality & Safety, 27(3), 218-225.
https://pubmed.ncbi.nlm.nih.gov/29101290/.
\139\ Agency for Healthcare Research and Quality. (September
2019). Leadership Role in Improving Patient Safety. Patient Safety
Network. Available at: https://psnet.ahrq.gov/primer/leadership-role-improving-safety.
\140\ Joint Commission on Accreditation of Healthcare
Organizations. (June 2021). The essential role of leadership in
developing a safety of culture. Sentinel Event Alert. (57), 1-8.
https://www.jointcommission.org/-/media/tjc/newsletters/sea-57-safety-culture-and-leadership-final3.pdf.
\141\ Mate KS, Wyatt R. (2017). Health Equity Must Be a
Strategic Priority. NEJM Catalyst. Available at: https://catalyst.nejm.org/doi/full/10.1056/CAT.17.0556.
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In the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25592 and 25593),
we sought public comment on potential future efforts to address health
equity in the Hospital Inpatient Quality Reporting (IQR) Program,
particularly the inclusion of a structural measure to assess the degree
of hospital leadership commitment to collecting and monitoring health
equity performance data. We specifically sought feedback on (1)
conceptual and measurement priorities to facilitate organizational
efforts to improve health equity; and (2) an appropriate measure
regarding organizational commitment to health equity and accessibility
for individuals with intellectual and developmental disabilities. In
response, we received support for the development and implementation of
a health equity structural measure. We also received comments
expressing concerns about such a health equity structural measure. We
refer readers to the FY 2022 IPPS/LTCH PPS final rule (86 FR 45414
through 45416) for summaries of the comments we received related to
this solicitation.
We considered this feedback with the intent that future health
equity measures would align across the Medicare quality reporting
programs, including the Hospital OQR, REHQR, and ASCQR Programs, to
ensure equitable care across both inpatient and outpatient settings to
the greatest extent possible within facilities and hospitals
participating in Medicare. In addition, we believe that measuring
leadership commitment to health equity should not be limited to the
inpatient hospital setting but should cover the continuum of care as
patients seek and receive care at various care settings.
We initially developed the HCHE and FCHE measures for use in the
Hospital IQR and Inpatient Psychiatric Facility Quality Reporting
(IPFQR) Programs, respectively, with the expectation of expansion into
other Medicare quality reporting programs. The HCHE and FCHE measures
are attestation-based structural measures that assess hospitals' and
facilities' commitment to health equity across the following five
domains adapted from the CMS Office of Minority Health's ``Building an
Organizational Response to Health Disparities'' framework: equity as a
strategic priority, data calculation, data analysis, quality
improvement, and leadership engagement.\142\ These measures are
intended to encourage hospitals and facilities to analyze their data to
understand how factors, including race, ethnicity, and the social
determinants of health can contribute to the delivery of more equitable
care.\143\
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\142\ Centers for Medicare & Medicaid Services. (2021). Building
an Organizational Response to Health Disparities [Fact Sheet]. U.S.
Department of Health and Human Services. Available at: https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/Health-Disparities-Guide.pdf.
\143\ We note that the term ``hospital'' includes HOPDs and REHs
for the purposes of this measure.
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We believe these domains provide actionable focus areas for the
assessment of healthcare facility leadership commitment because they
are foundational to incentivizing hospitals and facilities to collect
and utilize data to identify critical equity gaps, implement plans to
address those gaps, and ensure that resources are dedicated toward
healthcare equity initiatives. We also believe these measures support
hospitals and facilities in quality improvement, promote efficient and
effective use of resources, and leverage available data.
Adoption of these measures in the Hospital OQR, REHQR, and ASCQR
Programs would support our efforts to align measures across CMS
programs, including the Hospital Inpatient Quality Reporting (IQR)
Program (87 FR 49191 through 49201), Inpatient Psychiatric Facility
Quality Reporting (IPFQR) Program (88 FR 51100 through 51107), PPS-
Exempt Cancer Hospital Quality Reporting (PCHQR) Program (88 FR 59204
through 59210), and End-Stage Renal Disease Quality Incentive Program
(ESRD QIP) (88 FR 76437 through 76446). We believe that alignment
across the quality reporting programs is important to ensure that
health equity, which impacts patients regardless of where they receive
their care, is addressed in every healthcare delivery setting. Adopting
these measures across quality reporting programs would incentivize
quality reporting entities to collect and utilize data to identify
critical equity gaps, implement plans to address said gaps, and ensure
that resources are dedicated toward addressing health equity
initiatives.
b. Overview of the Measures
The HCHE and FCHE measures assess a hospital's or facility's
commitment to health equity by using equity-focused organizational
domains aimed at advancing health equity for all patients, including
but not limited to those in racial and ethnic minority groups, people
with disabilities, members of the LGBTQ+ community, individuals with
limited English proficiency, rural populations, religious minorities,
and people facing socioeconomic challenges. Table 86 and Table 87
describe the five attestation domains and their elements
[[Page 59440]]
for the HCHE and FCHE measures, respectively.
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[GRAPHIC] [TIFF OMITTED] TP22JY24.119
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[GRAPHIC] [TIFF OMITTED] TP22JY24.120
BILLING CODE 4120-01-C
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The HCHE measure is currently used in the Hospital IQR and PCHQR
Programs. As further discussed below, we propose to adopt the HCHE
measure for the Hospital OQR and REHQR Programs. The FCHE measure is
currently used in the IPFQR Program and ESRD QIP. As further discussed
below, we propose to adopt the FCHE measure for the ASCQR Program.
We note that there are two measure specification variations between
the HCHE and FCHE measures, as reflected in Tables 86 and 87. First,
Table 86 references hospitals (such as HOPDs and REHs) in connection
with HCHE; Table 87 references facilities (such as ASCs, which are not
hospitals) in connection with FCHE. Second, Domain 2C of the HCHE
measure requires hospitals to use a certified electronic health record
(EHR) technology (CEHRT) \144\ in order to attest ``yes''; Domain 2C of
the FCHE measure requires facilities to use EHR technology, but does
not require the use of CEHRT, in order to attest ``yes.'' We recognize
that ASCs have governance structures and operational circumstances that
are distinct from hospitals. We also recognize that many non-hospital
facilities, including ASCs, have not adopted CEHRT, but may use some
EHR technology,\145\ justifying this variation in Domain 2C between the
HCHE and FCHE measures.\146\
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\144\ CEHRT refers to the certified health IT requirements
established by CMS and the Office of the National Coordinator for
Health Information Technology (ONC). ONC health IT certification
criteria referenced in the CEHRT definition can be found at 45 CFR
170.315. Please refer to the following for more details on CEHRT
requirements: https://www.cms.gov/medicare/regulations-guidance/promoting-interoperability-programs/certified-ehr-technology. Please
refer to the Measure Calculation section for more details on CEHRT
and the HCHE Measure.
\145\ We define the term ``EHR technology'' as ONC's definition
for Electronic Health Record, ``a real-time patient health record
with access to evidence-based decision support tools that can be
used to aid clinicians in decision making. The EHR can automate and
streamline a clinician's workflow, ensuring that all clinical
information is communicated. It can also prevent delays in response
that result in gaps in care. The EHR can also support the collection
of data for uses other than clinical care, such as billing, quality
management, outcome reporting, and public health disease
surveillance and reporting,'' at https://www.healthit.gov/topic/health-it-and-health-information-exchange-basics/glossary.
\146\ Taira A. (June 2021). ASCA Survey Shows Mixed Usage of EHR
among ASCs. ASC Focus. Available at: https://www.ascfocus.org/ascfocus/content/articles-content/articles/2021/digital-debut/asca-survey-shows-mixed-usage-of-ehr-among-ascs.
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c. Pre-Rulemaking Measure Review
As required under section 1890A of the Act, the Consensus-Based
Entity (CBE), currently Battelle, established the Partnership for
Quality Measurement (PQM), comprised of clinicians, patients, measure
experts, and health information technology specialists, to participate
in the pre-rulemaking process and the measure endorsement process and
provide input on the selection of quality and efficiency measures. The
pre-rulemaking process, which we refer to as the Pre-Rulemaking Measure
Review (PRMR), includes a review of measures published on the publicly
available list of Measures Under Consideration (MUC List) by one of
several committees convened by the PQM for the purpose of providing
multi-stakeholder input to the Secretary on the selection of quality
and efficiency measures under consideration for use in certain Medicare
quality programs, including the Hospital OQR, REHQR, and ASCQR
Programs. More details regarding the PRMR process may be found in the
PQM Guidebook of Policies and Procedures for Pre-Rulemaking Measure
Review and Measure Set Review, including details of the measure review
processes in Chapter 3.\147\
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\147\ Partnership for Quality Measurement. (September 2023).
Guidebook of Policies and Procedures for Pre-Rulemaking Measure
Review and Measure Set Review. Available at: https://p4qm.org/sites/default/files/2023-09/Guidebook-of-Policies-and-Procedures-for-Pre-Rulemaking-Measure-Review-%28PRMR%29-and-Measure-Set-Review-%28MSR%29-Final_0.pdf.
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As part of the PRMR process, the Hospital Recommendation Group
reviewed and voted on the HCHE and FCHE measures during their meeting
on January 18 and 19, 2024.148 149 The voting results of the
HCHE measure for the Hospital OQR and REHQR Programs were ``recommend
with conditions,'' and the voting results of the FCHE measure were
``recommended without conditions'' for the ASCQR Program. The
conditions for the HCHE measure for the Hospital OQR and REHQR Programs
were: (1) obtaining CBE endorsement; (2) additional specificity around
attestation requirements; and (3) ongoing data collection for further
measure testing, particularly with regard to smaller entities.\150\ We
have taken these conditions into account, as follows, and are proposing
both of these measures for adoption. We discuss CBE endorsement in
section XIV.B.1.d below.
---------------------------------------------------------------------------
\148\ Partnership for Quality Measurement. 2023 Pre-Rulemaking
Measure Review (PRMR) Meeting Summary: Hospital Committee. Available
at: https://p4qm.org/sites/default/files/2024-02/PRMR-Hospital-Recommendation-Group-Meeting-Summary-Final.pdf.
\149\ Partnership for Quality Measurement. Pre-Rulemaking
Measure Review Measures Under Consideration: 2023 Recommendations
Report. Available at: https://p4qm.org/sites/default/files/2024-02/PRMR-2023-MUC-Recommendations-Report-Final.pdf.
\150\ Ibid.
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Regarding the condition to provide additional specificity around
attestation requirements, we note that these domains were developed
based on the recommendations from a technical expert panel (TEP) that
informed our initial selection and development of this measure.\151\ We
also addressed this concern during the January 18-19, 2024 PRMR meeting
by sharing that there are accompanying guidance documents available to
provide information and examples of qualifying activities for the HCHE
measure (which can also be applied to the FCHE
measure).152 153
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\151\ Centers for Medicare & Medicaid Services. (February 2022).
Summary of Technical Expert Panel (TEP) Meeting #1, November 16,
2021: Health Equity Quality Measurement, Hospital Commitment to
Health Equity Measure. Available at: https://mmshub.cms.gov/sites/default/files/HealthEquityQualityMeasurementTEP1SumReport.pdf.
\152\ Centers for Medicare & Medicaid Services (January 2024).
Attestation Guidance for the Hospital Commitment to Health Equity
Measure (v 1.2). Available at: https://qualitynet.cms.gov/files/659c609eca7fd3001b35edab?filename=AttstGdnceHCHEMeas_v1.2.pdf.
\153\ Centers for Medicare & Medicaid Services (January 2024).
Frequently Asked Questions Hospital Commitment to Health Equity,
HIQR. Available at: https://qualitynet.cms.gov/files/659c60afd4b704001df0af51?filename=FAQ_HCHE_HIQR.pdf.
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With respect to the condition related to ongoing data collection
for further measure testing due to concerns that smaller entities may
face challenges regarding data collection and analysis, we reiterate
that HCHE is an attestation measure only in Hospital OQR, a pay-for-
reporting program, and REHQR, a program with no associated payment
adjustment.\154\ While we acknowledge the limitations in testing
structural measures, we believe this measure captures useful
information regarding providers' commitment to promoting health equity
to inform patient choice. We have therefore considered the Hospital
Recommendation Group's concerns and determined that they are adequately
addressed.
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\154\ Partnership for Quality Measurement. (2023). 2023 PRMR
Final MUC Recommendation Spreadsheet. Available at: https://p4qm.org/PRMR.
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d. CBE Endorsement
Section 1833(t)(17)(C)(i) of the Act provides that the Hospital OQR
Program, to the extent feasible and practicable, shall include measures
set forth by one or more national consensus building entities (not
necessarily the CBE). Under section 1833(i)(7)(B) of the Act, this
requirement at section 1833(t)(17)(C) applies to the ASCQR Program
except as the Secretary may otherwise provide. For the Hospital OQR
Program and ASCQR Program, we
[[Page 59443]]
note that section 1833(t)(17) of the Act does not require that each
measure we adopt for these programs be CBE-endorsed (75 FR 72064 and
72065 for the Hospital OQR Program and 76 FR 74494 for the ASCQR
Program).
Section 1833(t)(17)(C)(i) of the Act also requires measures
developed for the Hospital OQR Program to reflect consensus among
affected parties. Under section 1833(i)(7)(B) of the Act, this
requirement also applies to the ASCQR Program except as the Secretary
may otherwise provide. As we have noted in previous rulemaking,
consensus among affected parties can be reflected in ways other than
CBE endorsement, including through the measure development process,
through broad acceptance and use of the measure(s), and through public
comment (75 FR 72064 and 72065 for the Hospital OQR Program and 76 FR
74494 for the ASCQR Program).
For the REHQR Program, section 1861(kkk)(7)(C)(i) of the Act
generally requires that quality measures specified by the Secretary for
the REHQR Program be endorsed by a CBE; however, section
1861(kkk)(7)(C)(ii) of the Act provides an exception to the general
CBE-endorsement requirement, stating that in the case of a specified
area or medical topic determined appropriate by the Secretary for which
a measure has not been endorsed by the entity with a contract under
section 1890(a) of the Act, the Secretary may specify a measure that is
not endorsed as long as due consideration is given to measures that
have been endorsed or adopted by a consensus organization identified by
the Secretary. We reviewed CBE-endorsed measures and were unable to
identify any other CBE-endorsed measures on this topic, and therefore
we believe the exception in section 1861(kkk)(7)(C)(ii) of the Act
applies for purposes of this measure for the REHQR Program.
At this time, we find no other feasible and practicable measures
set forth by a national consensus building entity on the topic of a
hospital's or facility's leadership commitment to health equity. While
we recognize the value of measures undergoing CBE endorsement review
and prefer to use endorsed measures, there are currently no CBE-
endorsed measures that address hospital or facility commitment to
health equity. Given the urgency of achieving health equity, it is
important to implement this measure as soon as possible. As previously
noted, the HCHE measure was developed based on the consensus of a TEP
whose recommendations informed the initial selection, development, and
emphasis of the importance of this measure and subsequently the FCHE
measure, which, as noted in section XIV.B.1.b above, is a similar
measure with only two measure specification variations to accommodate
setting-specific realities with regards to CEHRT adoption.\155\ We will
consider submitting the HCHE and FCHE measures to the CBE for
endorsement in the future.
---------------------------------------------------------------------------
\155\ Centers for Medicare & Medicaid Services. (February,
2022). Summary of Technical Expert Panel (TEP) Meeting #1 November
16, 2021: Health Equity Quality Measurement Hospital Commitment to
Health Equity Measure. Available at: https://mmshub.cms.gov/sites/default/files/HealthEquityQualityMeasurementTEP1SumReport.pdf.
---------------------------------------------------------------------------
e. Measure Calculation
The proposed HCHE and FCHE measures each consist of the same five
attestation-based domains as shown in Table 86 and Table 87,
respectively, subject to variations noted above.
The numerator of both the HCHE and FCHE measures would capture the
total number of domains to which the hospital or facility is able to
attest affirmatively, up to a maximum of five domains. We propose that
a hospital or facility would only receive a point for a domain if it
attested ``yes'' to all of the elements within that domain. We would
not accept an attestation whereby a hospital or facility attests
``yes'' to some, but not all, of the elements; in the event a hospital
or facility would not be able to attest ``yes'' to one or more elements
within a domain, or the entirety of a domain, they would respond
``no.'' For example, for Domain 1, if the hospital or facility's
strategic plan meets elements (A) and (B), but not (C) and (D) of
Domain 1, then the hospital or facility would not be able to
affirmatively attest ``yes'' and would receive zero points for Domain
1.
The denominator of both the HCHE and FCHE measures would constitute
a total of five points (that is, one point per domain).
We also refer readers to the measure specifications, available on
our QualityNet website.\156\
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\156\ The proposed Hospital OQR and REHQR Program measure
specifications can be found at https://qualitynet.cms.gov/outpatient/oqr/proposedmeasures. The proposed ASCQR Program measure
specifications can be found at https://qualitynet.cms.gov/asc/ascqr/proposedmeasures.
---------------------------------------------------------------------------
As noted above, Domain 2C of the HCHE measure requires the use of
CEHRT, while Domain 2C of the FCHE measure requires the use of EHR
technology, which is not required to be certified by ONC in accordance
with ONC's requirements. We made this distinction because we recognize
that many non-hospital facilities, including ASCs, currently have not
adopted CEHRT and instead use non-certified EHR technology,\157\ while
a majority of hospitals have adopted CEHRT.\158\ Although REHs are a
new Medicare provider type, the majority of REH-eligible facilities, as
noted in the CY 2024 OPPS/ASC final rule (88 FR 82069), have met
requirements for the reporting of electronic clinical quality measures
(eCQMs), which require CEHRT, under the Medicare Promoting
Interoperability Program.
---------------------------------------------------------------------------
\157\ Taira A. (June 2021). ASCA Survey Shows Mixed Usage of EHR
among ASCs. ASC Focus. Available at: https://www.ascfocus.org/ascfocus/content/articles-content/articles/2021/digital-debut/asca-survey-shows-mixed-usage-of-ehr-among-ascs.
\158\ Office of the National Coordinator for Health Information
Technology. (2023). National Trends in Hospital and Physician
Adoption of Electronic Health Records. Available at: https://www.healthit.gov/data/quickstats/national-trends-hospital-and-physician-adoption-electronic-health-records.
---------------------------------------------------------------------------
f. Data Submission Requirements
We propose to require hospitals and ASCs to submit their yes/no
attestation responses on these structural measures in all three
programs by an annual deadline using the CMS-designated information
system (currently, the Hospital Quality Reporting (HQR) system)
consistent with the data submission requirements of these measures in
the Hospital IQR, IPFQR and PCHQR Programs. We refer readers to
sections XV.E.2.a, XVI.E.3.b, and XVII.E.2.a of this proposed rule for
additional details regarding data submission deadlines for web-based
measure reporting such as the HCHE and FCHE measures for the Hospital
OQR, REHQR, and ASCQR Programs, respectively.
We invite public comment on our proposal to adopt the HCHE measure
for the Hospital OQR Program beginning with the CY 2025 reporting
period/CY 2027 payment determination, to adopt the HCHE measure for the
REHQR Program beginning with the CY 2025 reporting period/CY 2027
program determination, and to adopt the FCHE measure for the ASCQR
Program beginning with the CY 2025 reporting period/CY 2027 payment
determination.
2. Proposal To Adopt the Screening for Social Drivers of Health (SDOH)
Measure for the Hospital Outpatient Quality Reporting (OQR), Rural
Emergency Hospital Quality Reporting (REHQR), and Ambulatory Surgical
Center Quality Reporting (ASCQR) Programs Beginning With Voluntary
Reporting for the CY 2025 Reporting Period Followed by Mandatory
Reporting for the CY 2026 Reporting Period/CY 2028 Payment or Program
Determination
[[Page 59444]]
a. Background
SDOH is an umbrella term that refers to community-level factors
that impact health and well-being, while HRSNs are social and economic
needs that individuals experience that affect their ability to maintain
their health and well-being.\159\ Consistent screening of patients for
potential HRSNs helps healthcare facilities identify individuals who
have historically been underserved by the healthcare system and could
support ongoing quality improvement initiatives at the population level
by providing data to stratify patient risk and organizational
performance to address SDOH.160 161 While widespread
interest exists in addressing SDOH at community, state, and national
levels and in supporting HRSNs for patients who experience one or more
HRSNs, action is inconsistent, with 92 percent of hospitals screening
for one or more of the five HRSNs listed in Table 88 but only 24
percent of hospitals screening for all five of these HRSNs.\162\
Additionally, pilot studies screening for HRSNs have been conducted in
the HOPD and ASC settings, with clinicians and staff agreeing that HRSN
data are important and relevant to collect in these settings to improve
patient care and communication as well as to connect patients with
social-related services.163 164 We believe that it is
essential for healthcare facilities to screen for patient-level HRSN
data to support the improvement of patient outcomes and their
identified social needs.
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\159\ Assistant Secretary for Planning and Evaluation. (November
2023). Call to Action: Addressing Health-Related Social Needs in
Communities Across the Nation. Available at: https://aspe.hhs.gov/sites/default/files/documents/3e2f6140d0087435cc6832bf8cf32618/hhs-call-to-action-health-related-social-needs.pdf.
\160\ Assistant Secretary for Planning and Evaluation.
(September 2022). Reflections Accompanying a Report on Addressing
Social Drivers of Health: Evaluating Area-level Indices. Available
at: https://aspe.hhs.gov/sites/default/files/documents/474a62378abf941f20b3eaa74ca5721c/Area-level-Indices-ASPE-Reflections.pdf.
\161\ American Hospital Association. (December 2020). Health
Equity, Diversity & Inclusion Measures for Hospitals and Health
System Dashboards. Available at: https://ifdhe.aha.org/system/files/media/file/2020/12/ifdhe_inclusion_dashboard.pdf.
\162\ Fraze TK, Brewster AL, Lewis VA, Beidler LB, Murray GF,
Colla, CH. (2019). Prevalence of Screening for Food Insecurity,
Housing Instability, Utility Needs, Transportation Needs, and
Interpersonal Violence by US Physician Practices and Hospitals. JAMA
Network Open, 2(9), e1911514. https://doi.org/10.1001/jamanetworkopen.2019.11514.
\163\ Berkowitz RL, Bui L, Shen Z, Pressman A, Moreno M, Brown
S, Nilon, A Miller-Rosales, Azar KM. (2021). Evaluation of a social
determinants of health screening questionnaire and workflow pilot
within an adult ambulatory clinic. BMC Family Practice, 22(1), 256.
https://doi.org/10.1186/s12875-021-01598-.
\164\ Schickedanz A, Hamity C, Rogers A, Sharp AL, Jackson A.
(2019). Clinician Experiences and Attitudes Regarding Screening for
Social Determinants of Health in a Large Integrated Health System.
Medical Care, 57, S197-S201. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6721844/.
---------------------------------------------------------------------------
In 2017, the CMS Center for Medicare and Medicaid Innovation (CMMI)
launched the Accountable Health Communities (AHC) Model, which tested
whether systematically identifying and addressing the HRSNs of Medicare
and Medicaid beneficiaries through screening, referral, and community
navigation services impacted their health outcomes and related
healthcare utilization and costs.165 166 Evaluation of the
AHC Model's standard 10-item AHC Health-Related Social Needs Screening
Tool (AHC HRSN Screening Tool) found a reduction in emergency
department (ED) visits among Medicaid and Medicare fee-for-service
(FFS) beneficiaries.\167\
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\165\ Centers for Medicare & Medicaid Services. (2021). A Guide
to Using the Accountable Health Communities Health-Related Social
Needs Screening Tool: Promising Practices and Key Insights.
Available at: https://innovation.cms.gov/media/document/ahcm-screeningtool-companion.
\166\ Centers for Medicare & Medicaid Services. (2021).
Accountable Health Communities Model. Accountable Health Communities
Model. Available at: https://www.cms.gov/priorities/innovation/innovation-models/ahcm.
\167\ Centers for Medicare & Medicaid Services. (2023).
Accountable Health Communities (AHC) Model Evaluation: Second
Evaluation Report. CMS Innovation Center. Available at: https://www.cms.gov/priorities/innovation/data-and-reports/2023/ahc-second-eval-rpt.
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Under the AHC Model, the following five core domains were selected
to screen for HRSNs among Medicare and Medicaid beneficiaries: (1) food
insecurity; (2) housing instability; (3) transportation needs; (4)
utility difficulties; and (5) interpersonal safety. These domains were
chosen based upon literature review and expert consensus utilizing the
following criteria: (1) availability of high-quality scientific
evidence linking a given HRSN to adverse health outcomes and increased
healthcare utilization, including hospitalizations and associated
costs; (2) ability for a given HRSN to be screened and identified prior
to discharge, be addressed by community-based services, and potentially
improve healthcare outcomes, including reduced readmissions; and (3)
evidence that a given HRSN is not systematically addressed by
healthcare providers.\168\ In addition to established evidence of their
association with health status, risk, and outcomes, these five domains
were selected for the AHC Model because they can be assessed across the
broadest spectrum of individuals in a variety of settings.\169\
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\168\ Billioux A, Verlander, K, Anthony S, Alley D. (2017).
Standardized Screening for Health-Related Social Needs in Clinical
Settings: The Accountable Health Communities Screening Tool. NAM
Perspectives, 7(5). https://doi.org/10.31478/201705b.
\169\ Centers for Medicare & Medicaid Services. (2021).
Accountable Health Communities Model. Accountable Health Communities
Model. Available at: https://innovation.cms.gov/innovation-models/ahcm.
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[[Page 59445]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.121
These five evidence-based HRSN domains described in Table 88
informed our development of the Screening for SDOH and Screen Positive
Rate for
[[Page 59446]]
SDOH measures. We used these five HRSN domains to inform the
development of the SDOH measure we propose to adopt in this proposed
rule because the AHC Model's HRSN Screening Tool allows healthcare
facilities to quickly screen for patients' core health-related social
needs and was designed to work in a variety of clinical settings,
making it ideal for implementing across quality reporting programs,
including the Hospital OQR, REHQR, and ASCQR Programs, with minimal
burden to healthcare facilities.\186\
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\170\ Berkowitz SA, Seligman HK, Meigs JB, Basu S. (2018). Food
Insecurity, Healthcare Utilization, and High Cost: A Longitudinal
Cohort Study. The American Journal of Managed Care, 24(9), 399-404.
http://www.ncbi.nlm.nih.gov/pmc/articles/pmc6426124/.
\171\ Seligman HK, Berkowitz, SA. (2019). Aligning Programs and
Policies to Support Food Security and Public Health Goals in the
United States. Annual Review of Public Health, 40(1), 319-337.
https://www.annualreviews.org/doi/10.1146/annurev-publhealth-040218-044132.
\172\ National Academies of Sciences, Engineering, and Medicine.
(2006). Executive Summary: Cost-Benefit Analysis of Providing Non-
Emergency Medical Transportation. Washington, DC: The National
Academies Press. Available at: https://nap.nationalacademies.org/catalog/23285/executive-summary-cost-benefit-analysis-of-providing-non-emergency-medical-transportation.
\173\ Berkowitz SA, Seligman HK, Meigs JB, Basu S. (2018). Food
Insecurity, Healthcare Utilization, and High Cost: A Longitudinal
Cohort Study. The American Journal of Managed Care, 24(9), 399-404.
http://www.ncbi.nlm.nih.gov/pmc/articles/pmc6426124/.
\174\ Dean EB, French MT, Mortensen, K. (2020). Food insecurity,
health care utilization, and health care expenditures. Health
Services Research, 55(S2), 883-893. Available at: https://doi.org/10.1111/1475-6773.13283.
\175\ Hill-Briggs, F. (2020). Social Determinants of Health and
Diabetes: A Scientific Review. Diabetes Care, 44(1), 258-279.
https://pubmed.ncbi.nlm.nih.gov/33139407/.
\176\ Henry M, de Sousa T, Roddey C, Gayen S, Bednar T, Abt
Associates. (January 2021). The 2020 Annual Homeless Assessment
Report (AHAR) to Congress; Part 1: Point-in-Time Estimates of
Homelessness. U.S. Department of Housing and Urban Development.
Available at: https://www.huduser.gov/portal/sites/default/files/pdf/2020-AHAR-Part-1.pdf.
\177\ Baxter A, Tweed E, Katikireddi S, Thomson H. (2019).
Effects of Housing First approaches on health and well-being of
adults who are homeless or at risk of homelessness: systematic
review and meta-analysis of randomized controlled trials. Journal of
Epidemiology and Community Health, 73; 379-387. https://doi.org/10.1136/jech-2018-210981.
\178\ Centers for Medicare and Medicaid Services. (2023)
Addressing Transportation Barriers: A User Case in Leveraging the
Value-Based Insurance Design (VBID) Model. Available at: https://www.cms.gov/priorities/innovation/innovation-models/vbid.
\179\ Billioux A, Verlander, K, Anthony S, Alley D. (2017).
Standardized Screening for Health-Related Social Needs in Clinical
Settings: The Accountable Health Communities Screening Tool. NAM
Perspectives, 7(5). https://doi.org/10.31478/201705b.
\180\ Shier G, Ginsburg M, Howell J, Volland P, Golden R.
(2013). Strong Social Support Services, Such as Transportation And
Help For Caregivers, Can Lead To Lower Health Care Use And Costs.
Health Affairs, 32(3), 544-551. https://www.healthaffairs.org/doi/10.1377/hlthaff.2012.0170.
\181\ National Alliance on Mental Illness. Medicaid: Non-
Emergency Medical Transportation (NEMT). Available at: https://www.nami.org/Advocacy/Policy-Priorities/Supporting-Community-Inclusion-and-Non-Discrimination/Medicaid-Non-Emergency-Medical-Transportation.
\182\ Baxter A, Tweed E, Katikireddi S, Thomson H. (2019).
Effects of Housing First approaches on health and well-being of
adults who are homeless or at risk of homelessness: systematic
review and meta-analysis of randomized controlled trials. Journal of
Epidemiology and Community Health, 73; 379-387. https://doi.org/10.1136/jech-2018-210981.
\183\ Wright BJ, Vartanian KB, Li HF, Royal N, Matson JK (2016).
Formerly Homeless People Had Lower Overall Health Care Expenditures
After Moving into Supportive Housing. Health Affairs, 35(1), 20-27.
https://www.healthaffairs.org/doi/10.1377/hlthaff.2015.0393.
\184\ Billioux A, Verlander K, Anthony S, Alley D. (2017).
Standardized Screening for Health-Related Social Needs in Clinical
Settings: The Accountable Health Communities Screening Tool. NAM
Perspectives, 7(5). https://doi.org/10.31478/201705b.
\185\ Henry M, de Sousa T, Roddey C, Gayen S, Bednar T, Abt
Associates. (January 2021). The 2020 Annual Homeless Assessment
Report (AHAR) to Congress; Part 1: Point-in-Time Estimates of
Homelessness. U.S. Department of Housing and Urban Development.
Available at: https://www.huduser.gov/portal/sites/default/files/pdf/2020-AHAR-Part-1.pdf.
\186\ Centers for Medicare & Medicaid Services. (2021). A Guide
to Using the Accountable Health Communities Health-Related Social
Needs Screening Tool: Promising Practices and Key Insights.
Available at: https://innovation.cms.gov/media/document/ahcm-screeningtool-companion.
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We recognize that patient interaction with the healthcare system
may be limited by setting. For example, a patient receiving care in an
HOPD, REH, or ASC may not have recently received care in an acute care
hospital paid under IPPS, inpatient psychiatric facility cancer
hospital, or dialysis facility, and therefore would not have the
opportunity to benefit from being screened for SDOHs despite this
measure's prior adoption in other quality programs. By adopting aligned
Screening for SDOH measures within the Hospital OQR, REHQR, and ASCQR
Programs, we expect to increase the likelihood that these settings will
screen patients and provide contextualized care and any necessary
relevant referrals to address their patient's needs.
Screening for food insecurity, housing instability, transportation
needs, utility difficulties, and interpersonal safety in HOPDs, REHs,
and ASCs can help identify and provide appropriate referrals for
patients who may benefit from greater support in one or more of those
areas. Adoption of the Screening for SDOH measure in the Hospital OQR,
REHQR, and ASCQR Programs would continue to support our priority of
identifying risk factors for inadequate health care access and adverse
health outcomes among patients.
b. Measure Overview
The Screening for SDOH measure is a process measure that assesses
the total number of patients, who were 18 years or older on the date of
service, screened for social risk factors (specifically, the five HRSNs
of food insecurity, housing instability, transportation needs, utility
difficulties, and interpersonal safety) as they receive care from a
HOPD, REH, or ASC.
c. Pre-Rulemaking Measure Review
As part of the PRMR process, the Hospital Recommendation Group
reviewed and voted on the Screening for SDOH measure during their
meeting on January 18 and 19, 2024.\187\ The Hospital Recommendation
Group ``recommended with conditions'' the Screening for SDOH measure
for all three programs (that is, the Hospital OQR, REHQR, and ASCQR
Programs).
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\187\ The Screening for SDOH measure is identified on the MUC
List as MUC2023-156.
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The committee recommended a condition specific to the Hospital OQR
Program, which was to allow hospitals to report this measure one time
each year for both the Hospital IQR Program and Hospital OQR Program if
applicable.\188\ We note that we considered allowing hospitals to
report this measure jointly for the Hospital IQR and Hospital OQR
Programs (if applicable); however, as the patient populations
represented by the programs are different, as is the measure
calculation due to this difference in the denominator, we propose to
require a separate data submission for each program. More importantly,
patients and consumers would likely find useful Compare tool
information on screening rates separated for inpatient and outpatient
departments of the same hospital.
---------------------------------------------------------------------------
\188\ Partnership for Quality Measurement. 2023 Pre-Rulemaking
Measure Review (PRMR) Meeting Summary: Hospital Committee. Available
at: https://p4qm.org/sites/default/files/2024-02/PRMR-Hospital-Recommendation-Group-Meeting-Summary-Final.pdf.
---------------------------------------------------------------------------
d. CBE Endorsement
Section 1833(t)(17)(C)(i) of the Act provides that the Hospital OQR
Program, to the extent feasible and practicable, shall include measures
set forth by one or more national consensus building entities (not
necessarily the CBE). Under section 1833(i)(7)(B) of the Act, this
requirement at section 1833(t)(17)(C) applies to the ASCQR Program
except as the Secretary may otherwise provide. For the Hospital OQR
Program and ASCQR Program, we note that section 1833(t)(17) of the Act
does not require that each measure we adopt for these programs be CBE-
endorsed (75 FR 72064 and 72065 for the Hospital OQR Program and 76 FR
74494 for the ASCQR Program).
Section 1833(t)(17)(C)(i) of the Act also requires measures
developed for the Hospital OQR Program to reflect consensus among
affected parties. Under section 1833(i)(7)(B), this requirement also
applies to the ASCQR Program except as the Secretary may otherwise
provide. As we have noted in previous rulemaking, consensus among
affected parties can be reflected in ways other than CBE endorsement,
including through the measure development process, through broad
acceptance and use of the measure(s), and through public comment (75 FR
72064 and 72065 for the Hospital OQR Program and 76 FR 74494 for the
ASCQR Program).
For the REHQR Program, section 1861(kkk)(7)(C)(i) of the Act
generally requires that quality measures specified by the Secretary for
the REHQR Program be endorsed by a CBE; however, section
1861(kkk)(7)(C)(ii) of the Act provides an exception to the general
CBE-endorsement requirement, stating that in the case of a specified
area or medical topic determined appropriate by the Secretary for which
a measure has not been endorsed by the entity with a contract under
section 1890(a) of the Act, the Secretary may specify a measure that is
not endorsed as long as due consideration is given to measures that
have been endorsed or adopted by
[[Page 59447]]
a consensus organization identified by the Secretary. We reviewed CBE-
endorsed measures and were unable to identify any other CBE-endorsed
measures on this topic, and therefore we believe the exception in
section 1861(kkk)(7)(C)(ii) of the Act applies for purposes of this
measure for the REHQR Program.
At this time, we find no other feasible and practicable measures
set forth by a national consensus building entity on the topic of
screening for SDOH. While we recognize the value of measures undergoing
CBE endorsement review and prefer to use endorsed measures, there are
currently no CBE-endorsed measures that address screening for SDOH in
the outpatient setting. Given the urgency of achieving health equity,
it is important to implement this measure as soon as possible. We note
that the five domains for which patients would be screened were chosen
based upon literature review and expert consensus, and that these five
domains informed development of the Screening for SDOH measure. We will
consider submitting the Screening for SDOH measure to the CBE for
endorsement in the future.
e. Data Sources
For data collection of the Screening for SDOH measure, we propose
that healthcare facilities would use a self-selected screening tool to
collect these data. We propose to allow healthcare facilities to select
their screening tool to reduce burden and in recognition of the fact
that some healthcare facilities may already be screening their patients
for HRSNs. If a healthcare facility is not already doing so, many
screening tools for HRSNs already exist. While we acknowledge the
potential benefits of requiring all healthcare facilities to use the
same screening instrument or a prescribed set of standards around the
number or types of screening questions used, we also recognize the
benefits of providing healthcare facilities with flexibility to
customize screening and data collection to their patient populations
and individual needs.
One example of a screening tool that healthcare facilities could
consider using is the AHC HRSN Screening Tool, which providers used in
the AHC Model to screen for HRSNs in their Medicare, Medicaid, and
dually eligible beneficiary populations.\189\ We have tested the AHC
HRSN Screening Tool across many care delivery sites in diverse
geographic locations and determined that it demonstrates evidence of
both reliability and validity.\190\ The AHC HRSN Screening Tool can be
implemented in a variety of healthcare settings, including HOPDs, REHs,
and ASCs. While the AHC Model focused on HRSNs among community-dwelling
Medicare and Medicaid beneficiaries, the AHC HRSN Screening Tool can be
used to screen patients with any insurance status or type, including
commercially insured and uninsured individuals. The AHC HRSN Screening
Tool has broad applicability in settings outside of the AHC Model as it
screens for a range of five HRSN domains while also being concise,
limited to only ten questions. We believe this promotes manageable
integration into clinical workflow settings and provides greater
accessibility and application to diverse patient
populations.191 192
---------------------------------------------------------------------------
\189\ Centers for Medicare and Medicaid Services. The
Accountable Health Communities Health-Related Social Needs Screening
Tool. Available at: https://www.cms.gov/priorities/innovation/files/worksheets/ahcm-screeningtool.pdf.
\190\ Centers for Medicare and Medicaid Services. (2023). A
Guide to Using the Accountable Health Communities Health-Related
Social Needs Screening Tool: Promising Practices and Key Insights.
Available at: https://www.cms.gov/priorities/innovation/media/document/ahcm-screeningtool-companion.
\191\ Ibid.
\192\ Billioux A, Verlander, K, Anthony S, Alley D. (2017).
Standardized Screening for Health-Related Social Needs in Clinical
Settings: The Accountable Health Communities Screening Tool. NAM
Perspectives, 7(5). https://doi.org/10.31478/201705b.
---------------------------------------------------------------------------
For additional screening tools for healthcare facilities to
consider using to collect data for this proposed Screening for SDOH
measure, we refer readers to evidence-based resources like the Social
Interventions Research and Evaluation Network (SIREN) website, for
example, which provides comprehensive information about the most widely
used HRSN screening tools.193 194 SIREN contains
descriptions of the content and characteristics of various tools,
including information about intended populations, completion time, and
number of questions.
---------------------------------------------------------------------------
\193\ Social Interventions Research & Evaluation Network.
(2019). Social Needs Screening Tool Comparison Table. Available at:
https://sirenetwork.ucsf.edu/tools-resources/resources/screening-tools-comparison.
\194\ The Social Interventions Research and Evaluation Network
(SIREN) at University of California San Francisco was launched in
the spring of 2016 to synthesize, disseminate, and catalyze research
on SDOH and healthcare delivery.
---------------------------------------------------------------------------
We also encourage healthcare facilities to consider digital
standardized screening tools. We refer readers to the FY 2023 IPPS/LTCH
PPS final rule (87 FR 49207 through 49208), where we discuss how the
use of certified health information technology (IT), including but not
limited to CEHRT,\195\ can support capture of HRSN information in a
standardized, interoperable fashion. We also encourage healthcare
facilities to learn about the United States Core Data for
Interoperability (USCDI) standard used in certified health IT and how
this standard can support interoperable exchange of health and HRSN
assessment data.\196\
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\195\ CEHRT refers to certified health IT requirements defined
by CMS for certain programs which incorporate health IT
certification criteria established by the Office of the National
Coordinator for Health Information Technology (ONC) at 45 CFR
170.315.
\196\ Office of the National Coordinator for Health IT (ONC).
United States Core Data for Interoperability. Available at: https://www.healthit.gov/isa/united-states-core-data-interoperability-uscdi.
---------------------------------------------------------------------------
In alignment with the Hospital IQR Program, we propose that HOPDs,
REHs, and ASCs could confirm the current status of any previously
reported HRSNs in another care setting and inquire about others not
previously reported, in lieu of re-screening a patient within the
reporting period. In addition, if this information has been captured in
the EHR in another outpatient setting or the inpatient setting during
the same reporting period, we propose that the HOPD, REH, and ASC could
use that information for purposes of reporting the measure in lieu of
screening the patient. We intend to monitor and evaluate the measure
screening requirements, including frequency, in these outpatient
settings to ensure balance between quality of care for patients and
facility burden.
f. Measure Calculation
The Screening for SDOH measure is calculated as a percentage equal
to the numerator over the denominator. The numerator is defined as the
number of patients admitted to an HOPD, REH, or ASC, who are 18 years
or older on the date of admission and are screened for all five HRSNs
described in Table 88 during their receipt of services in the HOPD,
REH, or ASC, as applicable.\197\ The denominator is defined as the
number of patients who are admitted to a HOPD, REH, or ASC, as
applicable, and who are 18 years or older.
---------------------------------------------------------------------------
\197\ The term ``admitted patients'' appears in the measure
specifications and MUC documentation and is intended to refer to a
person who receives ambulatory care in these designated settings.
---------------------------------------------------------------------------
The measure excludes patients who: (1) opt-out of screening; or (2)
are themselves unable to complete the screening and have no legal
guardian or caregiver able to do so on the patient's behalf.
[[Page 59448]]
g. Data Submission and Reporting
We propose to allow healthcare facilities to voluntarily submit to
CMS aggregate data for this measure for the CY 2025 reporting period
and then to require mandatory reporting beginning with the CY 2026
reporting period/CY 2028 payment or program determination.
Specifically, we propose that healthcare facilities would aggregate
data they collect for the numerator and the denominator to CMS (as
described in section XIV.B.2.f of this proposed rule), and that they
would not be required to submit patient-level data. We propose to
require aggregate data because we believe patient-level reporting is
unnecessary and would cause undue burden due to the transfer of large
quantities of data. However, in the future, we may consider requiring
the reporting of patient-level information. This measure aims to
encourage healthcare facilities to screen for and identify HRSNs in
order to identify and address social needs among their patient
populations.
We also propose that healthcare facilities would be required to
submit data on this measure annually using the CMS-designated
information system (currently, the HQR system) consistent with the data
submission requirements for this measure in the Hospital IQR, IPFQR and
PCHQR Programs. We refer readers to sections XV.E.2.a, XVI.E.3.b, and
XVII.E.2.a of this proposed rule for additional details regarding data
submission using the CMS-designated information system in the Hospital
OQR, REHQR, and ASC Programs, respectively.
We propose to adopt this measure beginning with voluntary reporting
for the CY 2025 reporting period followed by mandatory reporting
beginning with the CY 2026 reporting period/CY 2028 payment or program
determination. We propose to begin with one year of voluntary reporting
to provide a transition period for healthcare facilities to select and
integrate screening tools into their clinical workflow processes.
We invite public comment on our proposal to adopt the Screening for
SDOH measure for the Hospital OQR, REHQR, and ASCQR Programs beginning
with voluntary reporting for the CY 2025 reporting period, and to
require mandatory reporting beginning with the CY 2026 reporting
period/CY 2028 payment or program determination, as described above.
3. Proposal To Adopt the Screen Positive Rate for Social Drivers of
Health (SDOH) Measure for the Hospital Outpatient Quality Reporting
(OQR), Rural Emergency Hospital Quality Reporting (REHQR), and
Ambulatory Surgical Center Quality Reporting (ASCQR) Programs Beginning
With Voluntary Reporting for the CY 2025 Reporting Period Followed by
Mandatory Reporting Beginning With the CY 2026 Reporting Period/CY 2028
Payment or Program Determination
a. Background
In the outpatient setting, we encourage systematic screening of
patients' HRSNs to identify patient needs and support improvements in
health outcomes. While the Screening for SDOH measure (discussed
previously in section XIV.B.2 of this proposed rule) identifies
individuals with HRSNs, the Screen Positive Rate for SDOH measure
estimates the magnitude of these needs for a healthcare facility's
patient population served. We believe the adoption of the Screen
Positive Rate for SDOH measure would encourage healthcare facilities to
track the prevalence of specific HRSNs among patients over time and use
the data to stratify risk as part of quality performance improvement
efforts.
We propose that healthcare facilities would be required to report
the Screen Positive Rate for SDOH measure as the rate of patients who
screened positive for each of the five core HRSNs domains discussed in
Table 88: food insecurity, housing instability, transportation needs,
utility difficulties, and interpersonal safety.\198\
---------------------------------------------------------------------------
\198\ Billioux A, Verlander, K, Anthony S, Alley D. (2017).
Standardized Screening for Health-Related Social Needs in Clinical
Settings: The Accountable Health Communities Screening Tool. NAM
Perspectives, 7(5). https://doi.org/10.31478/201705b.
---------------------------------------------------------------------------
b. Measure Overview
While the Screening for SDOH measure (discussed in section XIV.B.2)
enables identification of individuals with HRSNs, the Screen Positive
Rate for SDOH measure would allow healthcare facilities to capture the
magnitude of these needs by requiring healthcare facilities to report
the rates of patients who screened positive for each of the five core
HRSNs. The Screen Positive Rate for SDOH is a process measure that
provides information on the percent of patients receiving care at an
HOPD, REH, or ASC, who were 18 years or older on the date of service,
who were screened for all five HRSNs described in Table 88, and who
screened positive for one or more of those HRSNs. Healthcare facilities
would report this measure as five separate rates, one for each of the
HRSNs: food insecurity, housing instability, transportation needs,
utility difficulties, and interpersonal safety. This measure is not
intended for comparison of screen positive rates of HRSNs between
healthcare facilities but is rather to provide transparency in the
delivery of care and actionable information to healthcare facilities on
the unmet needs among their patients.
c. Pre-Rulemaking Measure Review
As part of the PRMR process, the Hospital Recommendation Group
reviewed and voted on the Screen Positive Rate for SDOH measure \199\
during their meeting on January 18 and 19, 2024.200 201 The
committee did not reach the75 percent vote required to reach a
consensus as to its recommendation for the Screen Positive Rate for
SDOH measure for the Hospital OQR, REHQR, or ASCQR Programs. The
committee expressed a concern about ambiguity in the interpretation of
data from the Screen Positive Rate for SDOH measure as well as
expectations regarding healthcare facilities. We acknowledge that a
high score could be interpreted in different ways but that the
objective of this measure is to incentivize collection of these data to
help identify patient needs and where resources constraints exist. The
committee also discussed a condition specific to the Hospital OQR
Program, which was to allow hospitals to report this measure one time
each year for both the Hospital IQR Program and Hospital OQR
Program.\202\ We note that we considered allowing hospitals to report
this measure jointly for the Hospital IQR and Hospital OQR Programs (if
applicable); however, as the patient-populations represented by the
programs are different, as is the measure calculation due to this
difference in the denominator, we propose to require a
[[Page 59449]]
separate data submission for each program.
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\199\ The Screen Positive Rate for SDOH measure is identified on
the MUC List as MUC2023-171.
\200\ Centers for Medicare & Medicaid Services. List of Measures
Under Consideration for December 1, 2023. Available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
\201\ Centers for Medicare & Medicaid Services. (December 2023).
Overview of the List of Measures Under Consideration. Available at:
https://mmshub.cms.gov/sites/default/files/2023-MUC-List-Overview.pdf.
\202\ Partnership for Quality Measurement. (2023). 2023 Pre-
Rulemaking Measure Review (PRMR) Meeting Summary: Hospital
Committee. Available at: https://p4qm.org/sites/default/files/2024-02/PRMR-Hospital-Recommendation-Group-Meeting-Summary-Final.pdf.
---------------------------------------------------------------------------
Further, we have identified the implementation of this measure in
the Hospital OQR, REHQR, and ASCQR Programs as an important way to
address the health equity measurement gap. We also believe that the
information collected from this measure can help HOPDs, REHs, and ASCs
understand SDOH needs in their patient population and to devise
appropriate interventions. On this basis, we propose this measure for
adoption for all three of our programs.
d. CBE Endorsement
As discussed in section XIV.B.2.d, we find no other feasible and
practicable measures set forth by a national consensus building entity
on the topic of screening for SDOH. While we recognize the value of
measures undergoing CBE endorsement review and prefer to use endorsed
measures, there are currently no CBE-endorsed measures that address
screening for SDOH in the outpatient setting. Given the urgency of
achieving health equity, it is important to implement this measure as
soon as possible. We note that the five domains for which patients
would be screened were chosen based upon literature review and expert
consensus, and that these five domains informed development of the
Screen Positive Rate for SDOH measure. We will consider submitting the
Screen Positive Rate for SDOH measure to the CBE for endorsement in the
future.
e. Data Sources
The data sources for this measure are as described for the
Screening for SDOH measure found in section XIV.B.2.e of this proposed
rule.
f. Measure Calculation
The Screen Positive Rate for SDOH measure is calculated with a
numerator and denominator. The numerator is defined as the number of
patients receiving care at an HOPD, REH, or ASC who are 18 years or
older on the date of admission, who were screened for all five HRSNs
described in Table 88, and who screen positive for having a need in one
or more of those HRSNs (calculated separately). The denominator is
defined as the number of patients receiving care at the HOPD, REH, or
ASC who are 18 years or older on the date of admission and are screened
for all five HRSNs during their care.
The results of this measure are calculated and reported as five
separate rates--one for each HRSN, each calculated with the same
denominator. The measure excludes patients who: (1) opt-out of
screening; or (2) are themselves unable to complete the screening and
have no legal guardian or caregiver able to do so on the patient's
behalf.
g. Data Submission and Reporting
While this measure would require healthcare facilities to collect
patient-level data on their patients' SDOH screening results,
consistent with the Screening for SDOH measure, we propose to adopt
this measure as an aggregate measure. Specifically, we propose that
healthcare facilities would be required to submit aggregated data
representing the total numerator results for each of the five screening
areas and the total number of patients screened for all five of the
HRSNs. We propose to require aggregate data because we believe it is
unnecessary for healthcare facilities to submit data collected at the
patient level as this would cause undue burden due to the transfer of
large quantities of data. However, in the future, we may consider the
reporting of patient-level information. This measure aims to encourage
healthcare facilities to screen for and identify HRSNs as it is most
important for healthcare facilities to collect this HRSN data to
address social needs among their patient populations.
Healthcare facilities would be required to submit information via a
CMS-designated information system (currently the HQR system) consistent
with the prior adoption of this measure in the Hospital IQR, IPFQR and
PCHQR Programs. We refer readers to sections XV.E.2.a, XVI.E.3.b, and
XVII.E.2.a of this proposed rule for additional details regarding data
submission using the CMS-designated information system in the Hospital
OQR, REHQR, and ASC Programs, respectively.
We note that we considered requiring hospitals to report this
measure jointly for the Hospital IQR and Hospital OQR Programs; that
is, requiring hospitals to submit once under both programs rather than
submitting data twice in the HQR system. However, as the populations
represented by the programs are different, resulting in different
calculations of the measure denominator under each program, we propose
to require a separate data submission for each program.
We propose to adopt this Screen Positive Rate for SDOH measure
beginning with voluntary reporting for the CY 2025 reporting period,
followed by mandatory reporting beginning with the CY 2026 reporting
period/CY 2028 payment or program determination to be consistent with
the Screening for SDOH measure. Similar to the Screening for SDOH
measure, a voluntary period would allow time for healthcare facilities
to select and integrate screening tools into their clinical workflow
processes and gain experience with both measures before measure results
are publicly displayed on the Compare tool.
We invite public comment on our proposal to adopt the Screen
Positive Rate for SDOH measure for the Hospital OQR, REHQR, and ASCQR
Programs beginning with voluntary reporting on this measure for the CY
2025 reporting period followed by mandatory reporting beginning with
the CY 2026 reporting period/CY 2028 payment or program determination,
as described above.
C. Proposal To Modify the Immediate Measure Removal Policy for the
Hospital Outpatient Quality Reporting (OQR) and Ambulatory Surgical
Center Quality Reporting (ASCQR) Programs Beginning With CY 2025
In the CY 2010 OPPS/ASC final rule with comment period (74 FR 60634
through 60635) and the CY 2015 OPPS/ASC final rule with comment period
(79 FR 66967 through 66968), we finalized a process for immediate
removal of Hospital OQR and ASCQR Program measures, respectively, based
on evidence that the continued use of a measure as specified raises
patient safety concerns. We refer readers to our regulations at 42 CFR
419.46(i)(2) for the Hospital OQR Program and 42 CFR 416.320(b) for the
ACSQR Program for the codification of these immediate measure removal
policies.
When there is evidence that continued use of a measure potentially
raises patient safety concerns, we believe that immediate action should
be taken to discontinue collection of the measure to not encourage
potentially harmful practices. We also believe that seeking public
input on the removal of such measures increases the public's voice in
decision-making and increases transparency. We noted this in the CY
2024 OPPS/ASC final rule (88 FR 82052), where we finalized an immediate
measure suspension policy for the REHQR Program in lieu of an immediate
measure removal policy. The REHQR Program's immediate measure
suspension policy more appropriately provides that, in cases where we
believe that a measure raises patient safety concerns, we will suspend
the measure's use in the program, instead of immediately removing the
measure, until its potential removal undergoes the standard rulemaking
process (88 FR 82052).
[[Page 59450]]
We believe that our rationale for finalizing the immediate measure
suspension policy in the REHQR Program (88 FR 82052) also applies to
the Hospital OQR and ASCQR Programs. On this basis, we propose to
modify the immediate measure removal policies in the Hospital OQR and
ASCQR Programs so that they are more appropriately referred to as
immediate measure suspension policies beginning with CY 2025.
Under this proposed immediate measure suspension policy in the
Hospital OQR or ASCQR Programs, in cases where we determine there is
evidence that the collection and reporting of a measure raises
potential patient safety concerns, we would suspend the measure from
the program (as applicable) until potential removal can be proposed
through the rulemaking process. We will notify the healthcare facility
(HOPDs or ASCs, as applicable) and the public of the decision to
suspend the measure through standard communication channels, including,
but not limited to, program-specific listservs and program guidance
currently housed on a CMS-designated website. We would then address the
suspension and propose policies regarding any such suspended measure in
the next feasible rulemaking cycle.
We also propose to revise the Hospital OQR Program regulatory text
at Sec. 419.46(i)(2) and the ASCQR Program regulatory text at Sec.
416.320(b) to codify the immediate measure suspension policy. We
further propose to clarify the standard for immediate measure
suspension in these regulatory texts by revising references to patient
safety concerns raised by ``continued use of a measure as specified''
to patient safety concerns raised by ``collection and reporting
activities related to a quality measure''.
We invite public comment on these proposals.
XV. Hospital Outpatient Quality Reporting (OQR) Program
A. Background and Statutory Authority
The Hospital Outpatient Quality Reporting (OQR) Program is a pay-
for-reporting program intended to improve the quality of care provided
to Medicare beneficiaries, facilitate public transparency, and ensure
accountability of hospital outpatient departments (HOPDs). Section
1833(t)(17)(A) of the Social Security Act (the Act) states that
subsection (d) hospitals (as defined under section 1886(d)(1)(B) of the
Act) that do not submit data required for measures selected with
respect to such a year, in the form and manner required by the
Secretary, will incur a 2.0 percentage point reduction to their annual
Outpatient Department (OPD) fee schedule increase factor.
We refer readers to the CY 2011 OPPS/ASC Payment System final rule
(75 FR 72064 through 72065) for a detailed discussion of the statutory
history of the Hospital OQR Program, as well as program requirements
codified at 42 CFR 419.46, and to the CY 2024 OPPS/ASC final rule for
information regarding the program's regulatory history (88 FR 81961
through 82012).
1. Previously Finalized Program Measure Set Beginning With the CY 2027
Payment Determination
Table 89 summarizes the previously finalized Hospital OQR Program
measures beginning with the CY 2027 payment determination:
BILLING CODE 4120[dash]01-P
[[Page 59451]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.123
BILLING CODE 4120[dash]01-C
B. Program Measure Set Policies
1. Measure Retention
We refer readers to Sec. 419.46(i)(1) and the CY 2013 OPPS/ASC
final rule (77 FR 68471) for our policies regarding measure retention.
We are not proposing any changes to these policies in this proposed
rule.
2. Measure Suspension or Removal
We refer readers to Sec. Sec. 419.46(i)(2) and (3) and the CY 2013
OPPS/ASC final rule (77 FR 68472 and 68473) for our program policies
regarding: (1) general measure removal, suspension, and replacement;
and (2) immediate measure removal.
We refer readers to section XIV.C of this proposed rule for our
cross-program proposal to modify the immediate removal policy for
adopted Hospital OQR Program measures.
3. Measure Adoption
We refer readers to the CY 2024 OPPS/ASC final rule (88 FR 81973)
for a discussion of the statutory requirements and our considerations
for adopting quality measures under the Hospital OQR Program.
We are not proposing any changes to these policies in this proposed
rule.
C. Program Measure Proposals
1. Proposed New Measures for the Hospital OQR Program Measure Set
a. Proposals To Adopt Health Equity Measures in the Hospital OQR
Program
We refer readers to sections XIV.B.1, XIV.B.2, and XIV.B.3,
respectively, of
[[Page 59452]]
this proposed rule for our cross-program proposals to adopt the
following measures in the Hospital OQR Program: (1) the Hospital
Commitment to Health Equity (HCHE) measure, beginning with the CY 2025
reporting period/CY 2027 payment determination; (2) the Screening for
Social Drivers of Health (SDOH) measure, beginning with voluntary
reporting for the CY 2025 reporting period followed by mandatory
reporting beginning with the CY 2026 reporting period/CY 2028 payment
determination; and (3) the Screen Positive Rate for SDOH measure,
beginning with voluntary reporting for the CY 2025 reporting period and
mandatory reporting beginning with the CY 2026 reporting period/CY 2028
payment determination.
b. Proposal To Adopt the Patient Understanding of Key Information
Related to Recovery After a Facility-Based Outpatient Procedure or
Surgery Patient Reported Outcome-Based Performance Measure (Information
Transfer PRO-PM) Beginning With Voluntary Reporting For the CY 2026
Reporting Period Followed by Mandatory Reporting Beginning With the CY
2027 Reporting Period/CY 2029 Payment Determination
(1) Background
Recent studies have shown that compared to inpatient settings,
outpatient settings are associated with worse patient understanding and
lower patient activation (that is, an individual's understanding,
competence, and willingness to participate in care decisions during
their recovery), indicating an area for quality of care
improvement.203 204 205 One study found that providers in
the inpatient setting provided more complete discharge instructions and
end-of-visit summaries to patients when compared to providers in the
ambulatory setting, including continuing medication names and
instructions (96 percent vs. 40 percent), new medication names and
instructions (99 percent vs. 29 percent), and pending diagnostic test
names and instructions (90 percent vs. 61 percent).\206\ A lack of
understanding of recovery information \207\ and other aspects of health
literacy have been linked to poor adherence to treatment, decreased
patient safety, increased return to the emergency department (ED),
lower levels of patient satisfaction, and disproportionate effects on
patients with limited English proficiency and patients over age 65, who
face additional barriers and recovery issues after their receipt of a
hospital outpatient service.208 209 Reduced patient
engagement and a deficiency in detailed discharge information in the
inpatient setting were also associated with a higher risk of
readmissions to an inpatient setting.\210\ Research indicates that
information that is simpler to read and more complete has been
associated with fewer follow-up calls to providers as well as less
frequent hospital readmissions.211 212
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\203\ Kang E, Gillespie BM, Tobiano G, et al. (2018). Discharge
education delivered to general surgical patients in their management
of recovery post discharge: A systematic mixed studies review. Int J
Nurs Stud. 87:1-13. https://doi.org/10.1016/j.ijnurstu.2018.07.004.
\204\ Hoek AE, Anker SCP, van Beeck EF, et al. (2020). Patient
Discharge Instructions in the Emergency Department and Their Effects
on Comprehension and Recall of Discharge Instructions: A Systematic
Review and Meta-analysis. Ann Emerg Med. 75(3):435-444. https://doi.org/10.1016/j.annemergmed.2019.06.008.
\205\ Downey E, Olds DM. (2021). Comparison of Documentation on
Inpatient Discharge and Ambulatory End-of-Visit Summaries. J Healthc
Qual. 43(3):e43-e52. https://doi.org/10.1097/JHQ.0000000000000269.
\206\ Ibid.
\207\ We use the term ``recovery information'' to mean the
clinical care instructions provided to patients or their caregivers
after the completion of surgery or a non-surgical procedure.
\208\ DeSai C, Janowiak K, Secheli B, et al. (2021). Empowering
patients: simplifying discharge instructions. BMJ Open
Quality;10(3)001419. http://doi.org/10.1136/bmjoq-2021-001419.
\209\ Malevanchik L., Wheeler M., Gagliardi K., Karliner L.,
Shah S.J. (2021). Disparities After Discharge: The Association of
Limited English Proficiency and Postdischarge Patient-Reported
Issues,TheIssues, The Joint Commission Journal on Quality and
Patient Safety, 47(12):775-782. https://doi.org/10.1016/j.jcjq.2021.08.013.
\210\ Erlang AS, Schj[oslash]dt K, Linde JKS, Jensen AL. (2021).
An observational study of older patients' experiences of involvement
in discharge planning. Geriatr Nurs 42(4):855-862. http://doi.org/10.1016/j.gerinurse.2021.04.002
\211\ Choudhry AJ, Younis M, Ray-Zack MD, et al. (2019).
Enhanced readability of discharge summaries decreases provider
telephone calls and patient readmissions in the posthospital
setting. Surgery. 165(4):789-794. https://doi.org/10.1016/j.surg.2018.10.014.
\212\ Mitchell JP. (2015). Association of provider communication
and discharge instructions on lower readmissions. J Healthc Qual.,
37(1):33-40. https://doi.org/10.1097/01.JHQ.0000460126.88382.13.
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(2) Measure Overview
The Information Transfer PRO-PM aims to assess the level of clear,
personalized recovery information provided to patients aged 18-years or
older who had surgery or a procedure at an HOPD. The measure reports
the average score of a patient's ratings on a three-domain, 9-item
survey \213\ to evaluate the clarity of the clinical information
patients are given before, during, and after an outpatient surgery or
procedure. The survey covers three domains for patients or their
caregivers to rate the clarity of information received regarding their
post-discharge \214\ recovery: applicability to patient needs,
medication, and daily activities. The applicability to patient needs
domain assesses whether the recovery information considered a patient's
health needs and personal circumstances. The medications domain
examines the clarity of medication information provided, specifically
guidance on taking new medications, potential side effects, and
discontinuing medication. The daily activities domain assesses the
clarity of guidelines around diet, physical activity, returning to
work, and driving. Results from the survey provide hospitals with
patient reported outcome (PRO) data designed to assess communication
efforts and enable hospitals to reduce the risk of patient harm that
may occur if the patient does not fully understand the recovery
information.
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\213\ A copy of the survey instrument is available at: https://www.cms.gov/files/document/patient-understanding-key-information-related-recovery-after-facility-based-outpatient-procedure-or.pdf.
\214\ The term ``discharge'' appears in the measure
specifications and is intended to refer to the transition of a
patient from the outpatient hospital setting to home or next level
of care.
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This measure addresses the priority area stated in our Meaningful
Measures Framework of adopting high-quality measures that focus on
person-centered care.\215\ Additionally, the Information Transfer PRO-
PM supports the National Quality Strategy goal of equity and engagement
by engaging individuals to become partners in their care and ensuring
that individuals and caregivers have the information needed to make the
best choices for their health.\216\
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\215\ Centers for Medicare & Medicaid Services. (2024).
Meaningful Measures 2.0. Available at:https://www.cms.gov/medicare/quality/meaningful-measures-initiative/meaningful-measures-20.
\216\ Centers for Medicare & Medicaid Services. (2024). CMS
Quality Strategy. Available at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/CMS-Quality-Strategy.
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Pilot testing conducted by the measure developer in 26 HOPDs in
five states demonstrated that the measure is reliable and
meaningful.217 218 The measure developer assessed
reliability of the measure using the Cronbach alpha score \219\ to
determine whether the nine survey questions reliably measured
[[Page 59453]]
the same underlying characteristic; that is, the clarity and
applicability of recovery instructions. The Cronbach alpha score, which
compares the amount of shared variance, or covariance, among the
instrument items to the total variance, indicated that the survey items
are reliable because they reflect a high level of covariance relative
to the total variance.\220\ Additionally, the measure developer found
the performance scores among facilities in the pilot study to be
moderately reliable using a signal-to-noise ratio, which estimated
variance among facilities and facility specific errors to determine the
extent to which variance in facility scores can be attributed to
variance in actual performance.\221\ To assess meaningfulness, the
measure developer asked members of a Patient and Family Engagement
(PFE) Work Group and a Technical Expert Panel (TEP) to vote on the
measure's ability to distinguish between good and poor quality of care
at measured facilities.222 223 All of the patients from the
PFE Work Group and 80% of the TEP panel members who participated in the
vote agreed that the measure could distinguish between good and poor
quality of care.\224\ We refer readers to https://p4qm.org/measures/4210 for more information about the feasibility, scientific
acceptability, meaningfulness, and validity of the Information Transfer
PRO-PM.
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\217\ Partnership for Quality Measurement. (2024). 2023 Pre-
Rulemaking Measure Review (PRMR) Meeting Summary: Hospital
Committee. Available at: https://p4qm.org/sites/default/files/2024-02/PRMR-Hospital-Recommendation-Group-Meeting-Summary-Final.pdf.
\218\ Partnership for Quality Measurement. Submission Tool and
Repository Measure Database. https://p4qm.org/measures/4210.
\219\ For more information on what the Cronbach alpha score
determines and how it is used, we refer readers to: Tavakol M &
Dennick R. (2011). Making sense of Cronbach's alpha. Int J Med Educ.
27;2: 53-55. www.doi.org/10.5116/ijme.4dfb.8dfd.
\220\ Ibid.
\221\ Partnership for Quality Measurement. Submission Tool and
Repository Measure Database. https://p4qm.org/measures/4210.
\222\ Partnership for Quality Measurement. 2023 Pre-Rulemaking
Measure Review (PRMR) Meeting Summary: Hospital Committee. Available
at: https://p4qm.org/sites/default/files/2024-02/PRMR-Hospital-Recommendation-Group-Meeting-Summary-Final.pdf.
\223\ See also https://www.cms.gov/medicare/quality/initiatives/hospital-quality-initiative/measure-methodology.
\224\ Ibid.
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As previously stated in the CY 2024 OPPS/ASC final rule (88 FR
81985), while we acknowledge that PRO-PMs require providers to
integrate data collection into clinical information systems, this
integration provides an important opportunity for patient-reported
outcomes to inform clinical decision-making and benefits patients by
engaging them in discussions about potential outcomes. The testing of
this measure by the measure developer, which included interviews with
clinicians, nurses, quality improvement officers, and data
administrators in HOPDs, indicated that the increased burden on HOPDs
would be minimal because the data would be collected and reported
electronically by administrative staff and quality officers engaged in
data sharing activities, outside of the clinical workflow, before being
integrated into a clinical information system. Additionally, testing
indicated that the increased burden on respondents would be minimal and
contribute minimally to patient survey fatigue because the survey is
easily understood and consists of only nine questions administered
electronically,\225\ presenting a low burden for completion.
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\225\ Examples of survey administration and collection include
email, text, and patient information portals. These examples are not
exhaustive. By leaving the method of survey administration and
collection to the HOPD, we allow facilities the flexibility to
choose the most appropriate method for their current infrastructure
and patient base.
---------------------------------------------------------------------------
(3) Pre-Rulemaking Measure Review
Under the PRMR process, the Hospital Recommendation Group reviewed
and voted on the Information Transfer PRO-PM \226\ during their meeting
on January 18-19, 2024.\227\ The voting results for the Information
Transfer PRO-PM measure for the Hospital OQR Program were ``recommend
with conditions''. The condition was that the survey be administered at
the time of the surgery or procedure so there is no conflict with other
measured pain and function outcomes to improve response rates.\228\ We
have taken into account the condition to administer the survey at the
time of the surgery or procedure; however, we have determined that
allowing time after the surgery or procedure before administration of
the survey is important to limit the possibility that the patient's
responses are influenced by time-dependent variables related to
proximity to the surgery or procedure, such as medications that could
affect comprehension, fatigue, or acute pain. In addition,
administering the survey more than one day but less than seven days
post-procedure mitigates overlap of the initial administration and
survey reminder of the OAS CAHPS, which is administered on the first
day post-procedure and then followed up at 14 days.\229\
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\226\ The Information Transfer PRO-PM is identified on the MUC
List as MUC2023-17.
\227\ Partnership for Quality Measurement. (2024). 2023 Pre-
Rulemaking Measure Review (PRMR) Meeting Summary: Hospital
Committee. Available at: https://p4qm.org/sites/default/files/2024-02/PRMR-Hospital-Recommendation-Group-Meeting-Summary-Final.pdf.
\228\ Ibid.
\229\ Centers for Medicare and Medicaid Services. Schedule of
OAS CAHPs Contact Attempts by Survey Mode. Available at: https://oascahps.org/ScheduleOASCAHPSContactAttempts_7-20-21.pdf.
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(4) CBE Endorsement
We submitted the Information Transfer PRO-PM to the CBE for
endorsement review in the Fall 2023 cycle (CBE #4210), and the CBE
endorsed the measure on March 18, 2024.\230\
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\230\ Partnership for Quality Measurement. Submission Tool and
Repository Measure Database. https://p4qm.org/measures/4210.
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(5) Data Collection, Submission, and Reporting
(a) Data Collection
(i) Data Sources
We propose that the Information Transfer PRO-PM would be calculated
based on PRO data collected by HOPDs directly or through their
authorized third-party vendors through a web-based survey instrument
distributed to patients or their caregivers.
We also propose that the survey would be administered two-to-seven
days post-procedure or surgery, based on evidence that the most common
time period for patients to be delivered a survey is within 0-48 hours
post-procedure or surgery at a HOPD
(n=6),231 232 233 234 235 236 while other time periods
include within two weeks post-procedure or surgery
(n=4),237 238 239 240
[[Page 59454]]
one week post-procedure or surgery, (n=3) 241 242 243 or 90
days post-procedure or surgery (n=1).\244\ We propose that the survey
would be administered not less than two days post-procedure or surgery
because we have determined, as discussed above, that allowing time
after the surgery or procedure before administration of the survey will
limit the possibility that the patient's responses are influenced by
time-dependent variables related to proximity to the surgery or
procedure, such as medications that could affect comprehension,
fatigue, or acute pain. We propose that the survey would be
administered no later than seven days post-procedure or surgery because
this timeframe may be more appropriate for patient reporting of
specific events than longer time periods.245 246 In pilot
testing, patients were sent a reminder to complete the survey seven
days after receipt. The survey remained open until pilot testing was
completed, with the mean length of time between the procedure date to
the survey response date being 65 days, or approximately two months. We
are therefore proposing a 65-day window for patient response.
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\231\ Engel KG, Buckley BA, Forth VE, et al. (2012). Patient
understanding of emergency department discharge instructions: where
are knowledge deficits greatest? Acad Emerg Med. 19(9):E1035-1044.
\232\ Engel KG, Heisler M, Smith DM, Robinson CH, Forman JH,
Ubel PA. (2009). Patient comprehension of emergency department care
and instructions: are patients aware of when they do not understand?
Ann Emerg Med. 53(4):454-461 e415.
\233\ Erlang AS, Schjodt K, Linde JKS, Jensen AL. (2021). An
observational study of older patients' experiences of involvement in
discharge planning. Geriatr Nurs. 42(4):855-862.
\234\ Lin MJ, Tirosh AG, Landry A. (2015). Examining patient
comprehension of emergency department discharge instructions: Who
says they understand when they do not? Intern Emerg Med. 10(8):993-
1002.
\235\ Makaryus AN, Friedman EA. (2005). Patients' understanding
of their treatment plans and diagnosis at discharge. Mayo Clin Proc.
80(8):991-994.
\236\ Hastings S, Stechuchak K, Oddone E, et al. (2012). Older
veterans and emergency department discharge information. BMJ Qual
Saf. 21(10):835-842.
\237\ Clarke C, Friedman SM, Shi K, Arenovich T, Monzon J,
Culligan C. (2005). Emergency department discharge instructions
comprehension and compliance study. CJEM. 7(1):5-11.
\238\ Henderson A, Zernike W. A study of the impact of discharge
information for surgical patients. (2001). J Adv Nurs. 35(3):435-
441.
\239\ Karliner LS, Auerbach A, Napoles A, Schillinger D,
Nickleach D, Perez-Stable EJ. (2012). Language barriers and
understanding of hospital discharge instructions. Med Care.
50(4):283-289.
\240\ Makaryus AN, Friedman EA. (2005). Patients' understanding
of their treatment plans and diagnosis at discharge. Mayo Clin PRac.
80(8):991-994.
\241\ Albrecht JS, Gruber-Baldini AL, Hirshon JM, et al. (2014).
Hospital discharge instructions: comprehension and compliance among
older adults. J Gen Intern Med. 29(11):1491-1498.
\242\ Coleman EA, Chugh A, Williams MV, et al. (2013).
Understanding and execution of discharge instructions. AM J Med
Qual. 28(5):383-391.
\243\ Flacker J, Park W. Sims A. (2007). Hospital discharge
information and older patients; do they get what they need? J Hosp
Med. 2(5):291-296.
\244\ Hastings SN, Barrett A, Weinberger M, et al. (2011). Older
patients' understanding of emergency department discharge
information and its relationship with adverse outcomes. J Patient
Saf. 7(1):19-25.
\245\ Stull, D, Leidy, N, Parasuraman, B, et al. (2009). Optimal
recall periods for patient-reported outcomes: Challenges and
potential solutions. Current medical research and opinion. 25. 929-
42. www.doi.org/10.1185/03007990902774765.
\246\ Peasgood T, Caruana JM, Mukuria C. (2023). Systematic
Review of the Effect of a One-Day Versus Seven-Day Recall Duration
on Patient Reported Outcome Measures (PROMs). Patient. 16(3):201-
221. www.doi.org/10.1007/s40271-022-00611-w.
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The survey has been tested and reliability determined in English
and Spanish, and the survey can be completed using a translator, proxy,
or caregiver.
(ii) Measure Specifications
The measure numerator is the sum of all individual scores a HOPD
receives from eligible respondents, which could be patients or
caregivers. Individual scores are calculated using a top-box approach;
each individual score is calculated for each respondent by taking the
sum of items for which the respondent gave the most positive response
(``Yes'' or ``Very Clear'') and dividing by the number of items the
respondent deemed applicable to their procedure or surgery. Applicable
items are calculated by subtracting the sum of items for which the
respondent selected ``Does not apply'' from the total number of survey
items (nine).\247\
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\247\ Partnership for Quality Measurement. Submission Tool and
Repository Measure Database. https://p4qm.org/measures/4210.
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The measure denominator is the total number of patients 18-years or
older who had a procedure or surgery in an HOPD, left the HOPD alive,
and responded to the survey.248 249 Only fully completed
surveys are included in the measure calculation.
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\248\ Surveys could be completed by patient or a caregiver.
\249\ Partnership for Quality Measurement. Submission Tool and
Repository Measure Database. https://p4qm.org/measures/4210.
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The intent of the measure is to encourage HOPDs to provide
individualized recovery instructions regardless of the patient's unique
characteristics; therefore, there is no need for risk-adjustment. For
additional details regarding the measure specifications, we refer
readers to our QualityNet website.\250\
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\250\ The proposed OQR Program measure specifications can be
found at https://qualitynet.cms.gov/outpatient/oqr/proposedmeasures.
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(b) Data Submission and Reporting
We propose to adopt the Information Transfer PRO-PM as a voluntary
measure for the CY 2026 reporting period followed by mandatory
reporting beginning with the CY 2027 reporting period/CY 2029 payment
determination. We would utilize the voluntary period to monitor the
implementation and operationalization of the measure.
We refer readers to section XV.E.2.c of this proposed rule for a
discussion of the Information Transfer PRO-PM form, manner, and timing
of data submission and reporting requirements.
We invite public comment on this proposal.
2. Proposed Measure Removals From the Hospital OQR Program Measure Set
a. Proposal To Remove the MRI Lumbar Spine for Low Back Pain Measure
Beginning With the CY 2025 Reporting Period/CY 2027 Payment
Determination
In the CY 2009 OPPS/ASC final rule (73 FR 68766), we adopted the
MRI Lumbar Spine for Low Back Pain measure beginning with the CY 2010
payment determination. This claims-based measure evaluates the
percentage of magnetic resonance imaging (MRI) of the lumbar spine
studies for low back pain performed in the outpatient setting where
conservative therapy was not attempted prior to the MRI. The MRI Lumbar
Spine for Low Back Pain measure was initially endorsed by a consensus-
based entity (CBE) in 2008, but endorsement of this measure was removed
in 2017 because the measure developer did not submit the measure for
review during its designated measure endorsement maintenance cycle.
When we adopted this measure for the Hospital OQR Program, we cited
growing concerns about the overuse of imaging services and evidence
that a substantial portion of MRIs for low back pain does not lead to
any modification of therapy based on MRI results, especially when
performed on the first visit prior to any attempt to diagnose or treat
the patient through more conservative means (73 FR 68764). Since then,
our internal analyses have shown that the measure has maintained stable
national performance (excluding the CY 2022 performance period impacted
by our COVID-19 exception policies) and low average volumes, indicating
limited reliability and capacity to improve the quality of care for
patients with reported low back pain. A study in the Journal of the
American College of Radiology found that documentation of conditions
that fall into the exclusion criteria of the measure increased after
implementation, resulting in smaller patient populations and indicating
that the measure may not translate to improvement of imaging
appropriateness.\251\ Other studies have shown that the MRI Lumbar
Spine for Low Back Pain measure has not correlated with improved
outcomes.252 253 254 The latest findings are consistent with
responses to a 2020 request for public comment where commenters
expressed concerns regarding measure exclusion conditions,
[[Page 59455]]
imaging modalities, measure validity, and measure usability. In
response to that request for public comments, commenters also stated
that an unintended consequence of using this measure may be delayed
diagnoses.\255\
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\251\ Flug JA and Lind KE. (2017). Public Reporting of MRI of
the Lumbar Spine for Low Back Pain and Changes in Clinical
Documentation, Journal of the American College of Radiology (14)12:
1545-1551. https://doi.org/10.1016/j.jacr.2017.07.012.
\252\ Blackmore CC. (2019). The Relationship Between Medicare
Outpatient Efficiency Measure OP8 and Lumbar MRI Utilization,
Journal of the American College of Radiology 16(3): 276-281. https://doi.org/10.1016/j.jacr.2018.10.026.
\253\ Lind KE and Flug JA. (2019). Sociodemographic Variation in
the Use of Conservative Therapy Before MRI of the Lumbar Spine for
Low Back Pain in the Era of Public Reporting, Journal of the
American College of Radiology 16(4): 560-569. https://doi.org/10.1016/j.jacr.2018.12.047.
\254\ Martin BI and Jarvik JG. (2015). The Medicare Outpatient
Imaging Efficiency Measure for Low Back Pain (``OP-8''), Radiology
276(1). https://doi.org/10.1148/radiol.2015150648.
\255\ Ibid.
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Based on these findings, this measure meets the criteria that we
have adopted for measure removal Factor 2 (that is, performance or
improvement on a measure does not result in better patient outcomes),
as codified under Sec. 419.46(i)(3)(i)(B). Therefore, we propose to
remove the MRI Lumbar Spine for Low Back Pain measure from the Hospital
OQR Program beginning with the CY 2025 reporting period/CY 2027 payment
determination.
We invite public comment on this proposal, including feedback on
other potential measures that may better address unnecessary imaging,
which we will consider for adoption into the Hospital OQR Program in
future rulemaking.
b. Proposal To Remove the Cardiac Imaging for Preoperative Risk
Assessment for Non-Cardiac, Low-Risk Surgery Measure Beginning With the
CY 2025 Reporting Period/CY 2027 Payment Determination
In the CY 2011 OPPS/ASC final rule (75 FR 72079 and 72080), we
adopted the claims-based Cardiac Imaging for Preoperative Risk
Assessment for Non-Cardiac, Low-Risk Surgery measure beginning with the
CY 2012 payment determination. This measure calculates the percentage
of stress echocardiography, single photon emission computed tomography
myocardial perfusion imaging (SPECT MPI), stress magnetic resonance
imaging (MRI), or computed coronary tomography angiography (CCTA)
performed at each facility in the 30 days prior to an ambulatory non-
cardiac, low-risk surgery performed at any location, and was endorsed
by a CBE in 2011. Endorsement was removed in 2021 after the measure
developer did not submit the measure for review during its designated
measure endorsement maintenance cycle.
We adopted the measure for the Hospital OQR measure set, in part,
to address an area of patient safety related to one of the most common
imaging services in the Medicare population at the time, as we believed
inappropriate use could increase the patient's risk of cancer,
contribute no benefit to the quality of care, and result in the
unnecessary waste of services (75 FR 72076). In response to commenter
concerns regarding the infrequent occurrence of low-risk non-cardiac
surgeries, and whether this measure may assess significant differences
in the provision of imaging tests and their impact on the quality of
care provided, we stated our belief at the time that the measure could
identify outlier practice patterns and encourage HOPDs to improve their
quality of care.
Our routine monitoring and evaluation shows that the range of cases
per HOPD varies greatly (that is, from one to over 1,300 cases), posing
limitations when assessing and interpreting comparative performance
trends over time.\256\ In addition, while there was a slight average
performance score improvement from payment determination years CY 2020
to 2024 (despite the COVID-19 pandemic and the larger pool of
reporters) of about one percent (4.7 percent and 3.6, respectively),
the variation between the 10th and 25th percentiles of performance is
not statistically distinguishable, indicating the measure may not
provide meaningful data for informing consumers about quality of care
for this service in HOPDs. Furthermore, at a 3.5 percent average
overall rate for this measure for the CY 2024 payment determination
year, there is little room for national performance on this measure to
show significant improvement as lower rates are better for this
measure.
---------------------------------------------------------------------------
\256\ Ibid.
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Based on these findings, this measure meets the criteria for
measure removal Factor 2 (that is, performance or improvement on a
measure does not result in better patient outcomes), as codified under
Sec. 419.46(i)(3)(i)(B). Therefore, we propose to remove the Cardiac
Imaging for Preoperative Risk Assessment for Non-Cardiac, Low-Risk
Surgery measure beginning with the CY 2025 reporting period/CY 2027
payment determination.
We invite public comment on this proposal, including feedback on
other potential measures that may better address unnecessary imaging,
which we will consider for adoption into the Hospital OQR Program in
future rulemaking.
3. Summary of Proposed Program Measure Set Updates
a. Proposed Program Measure Set Beginning With the CY 2027 Payment
Determination
Table 90 summarizes the newly proposed Hospital OQR Program measure
set beginning with the CY 2027 payment determination, which would
remove the two imaging efficiency measures discussed above and add the
three cross-program health equity measures discussed in sections
XV.C.2.a, XV.C.2.b, and XIV.B, respectively, of this proposed rule.
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[[Page 59456]]
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b. Proposed Program Measure Set Updates Beginning With the CY 2031
Payment Determination
Table 91 summarizes the newly proposed Hospital OQR Program measure
set for the CY 2031 payment determination, which would remove the two
imaging efficiency measures, discussed in sections XV.C.2.a and
XV.C.2.b of this proposed rule; add the Information Transfer PRO-PM,
discussed in section XV.C.1.b of this proposed rule; and add the three
cross-program health equity measures, discussed in sections XIV.B.1,
XIV.B.2, and XIV.B.3 of this proposed rule.
[[Page 59457]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.125
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D. Administrative Requirements
We refer readers to Sec. 419.46(b) and (c) and the CYs 2014, 2016,
and 2019 OPPS/ASC final rules (78 FR 75108 through 75109, 80 FR 70519,
and 83 FR 59103 through 59104, respectively) for our policies regarding
program participation requirements and withdrawal from the program.
We are not proposing any changes to these policies in this proposed
rule.
E. Form, Manner, and Timing of Data Submission
1. General Data Submission Policy
We refer readers to Sec. 419.46(d) and the CY 2023 OPPS/ASC final
rule (87 FR 72110 through 72112) for our general program policies
regarding: (1) submission of data under the Hospital OQR Program
generally; (2) review and correction of submitted data; and (3)
extraordinary circumstance exception requests (ECE) for data
submission.
We also refer readers to the CYs 2019 and 2022 OPPS/ASC final rules
(83 FR 59104 through 59105 and 86 FR 63861, respectively) for details
regarding our maintenance of technical specifications. We maintain
measure technical specification manuals (referred to as Specifications
Manuals) that can be found on the CMS website at: https://qualitynet.cms.gov/outpatient/specifications-manuals.
We are not proposing any changes to these policies in this proposed
rule.
2. Measure Specific Data Submission and Reporting Requirements
We refer readers to the CYs 2014, 2016, 2022, 2023, and 2024 OPPS/
ASC final rules (77 FR 68484; 80 FR 70521, 87 FR 72110 through 72112;
78 FR
[[Page 59458]]
75097 through 75100; and 88 FR 82004 through 82006, respectively) for
information regarding our claims-based, web-based, eCQM, chart-
abstracted, PRO-PM, and survey-based data submission and reporting
requirements.
a. Web-Based Measures
(1) CMS-Designated Information System and Proposal for Data Submission
for the Hospital Commitment to Health Equity (HCHE), Screening for
Social Drivers of Health (SDOH), and Screen Positive Rate for SDOH
Measures
We refer readers to the CY 2014 OPPS/ASC final rule (78 FR 75112
through 75115), the CY 2016 OPPS/ASC final rule (80 FR 70521), and the
CMS website, currently available at https://qualitynet.cms.gov, for a
discussion of the requirements for measure data submitted via the
Hospital Quality Reporting (HQR) System (formerly referred to as the
QualityNet Secure Portal). The HQR System safeguards protected health
information in compliance with the HIPAA Privacy and Security Rules (45
CFR part 160 and 45 CFR part 164, subparts A, C, and E).
In section XIV.B.1, XIV.B.2, and XIV.B.3 of this proposed rule, we
proposed adoption of:
(1) the Hospital Commitment to Health Equity measure, beginning
with the CY 2025 reporting period/CY 2027 payment determination;
(2) the Screening for SDOH measure, beginning with voluntary
reporting for the CY 2025 reporting period followed by mandatory
reporting beginning with the CY 2026 reporting period/CY 2028 payment
determination; and
(3) the Screen Positive Rate for SDOH measure, beginning with
voluntary reporting for the CY 2025 reporting period followed by
mandatory reporting beginning with the CY 2026 reporting period/CY 2028
payment determination.
Consistent with our established data submission requirements (80 FR
70521 and 70522), we propose that HOPDs would be required to submit all
of the data required to calculate each of these three measures annually
using a CMS-approved, web-based, data collection tool available within
the HQR System starting January 1 through and including May 15 in the
year prior to the applicable payment determination year. For the
Hospital OQR Program, the performance period (which we refer to as the
CY reporting period) for each of these measures on which data is
submitted using a web-based tool would be January 1 through and
including December 31 of the year that is 2 years prior to the
applicable payment determination year; and the data submission period
would be January 1 through and including May 15 in the calendar year
immediately following the CY reporting period and immediately prior to
applicable payment determination year. For example, for the CY 2025
reporting period/2027 payment determination, the data submission period
would be January 1, 2026, through and including May 15, 2026, covering
the performance period of January 1, 2025, through and including
December 31, 2025. Pursuant to Sec. 419.46(d)(4), a review and
corrections period runs concurrently with the data submission period.
During this timeframe, HOPDs would be able to enter, review, and
correct data submitted for these measures.
We invite public comment on this proposal.
(2) National Healthcare Safety Network (NHSN)
We refer readers to the CY 2014 OPPS/ASC final rule (78 FR 75097
through 75100) for a discussion of the previously finalized
requirements for measure data submitted via the Centers for Disease
Control and Prevention NHSN website.
We are not proposing any changes to these policies in this proposed
rule.
b. Electronic Clinical Quality Measures (eCQMs) and Proposal To Require
Electronic Health Record (EHR) Technology To Be Certified to All eCQMs
Available To Report Beginning With the CY 2025 Reporting Period/CY 2027
Payment Determination
In the CY 2024 Medicare Physician Fee Schedule (PFS) final rule (88
FR 79307 through 79312), we finalized revisions to the definition of
certified electronic health record technology (CEHRT) for the Medicare
Promoting Interoperability Program at 42 CFR 495.4 and for the Quality
Payment Program at 42 CFR 414.1305. Specifically, we added a reference
to the ``Base EHR definition,'' which ONC proposed in the Health Data,
Technology, and Interoperability: Certification Program Updates,
Algorithm Transparency, and Information Sharing (HTI-1) proposed rule
(88 FR 23759, 23905). We finalized these revisions to ensure, if the
HTI-1 proposals were finalized, the ``Base EHR definition'' would be
applicable for the CEHRT definitions going forward (88 FR 79309 through
79312).\257\ ONC subsequently finalized a definition of ``Base EHR'' in
the Health Data, Technology, and Interoperability: Certification
Program Updates, Algorithm Transparency, and Information Sharing final
rule (89 FR 1192, 1298).
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\257\ Revisions to the CEHRT definition are intended to
incorporate ONC's approach of discontinuing references to yearly
editions. For additional background, we refer readers to HTI-1
proposed rule (88 FR 23759).
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We also finalized the replacement of references to the ``2015
Edition health IT certification criteria'' with ``ONC health IT
certification criteria,'' and the addition of the regulatory citation
for ONC health IT certification criteria in 45 CFR 170.315. We
finalized the proposal to specify that EHR technology must meet ONC's
health IT certification criteria ``as adopted and updated in 45 CFR
170.315'' to qualify as CEHRT (88 FR 79553). These revisions, finalized
in the CY 2024 PFS final rule, are consistent with the policy
subsequently finalized in ONC's HTI-1 final rule, which appeared in the
Federal Register on January 9, 2024 (89 FR 1205 through 1210). For
additional background and information on this update, we refer readers
to the discussion in the CY 2024 PFS final rule on this topic (88 FR
79307 through 79312).
In the CY 2022 OPPS/ASC final rule (86 FR 63868 and 63869), we
adopted a requirement for hospitals to utilize certified technology
updated to be consistent with the 2015 Edition Cures Update for
reporting eCQMs under the Hospital OQR Program, beginning with the CY
2023 reporting period/CY 2025 payment determination. However, we did
not finalize a requirement that the EHR technology used for eCQM
reporting must be certified to all eCQMs (that is, tested and validated
on each individual eCQM) in the Hospital OQR Program.
The Hospital IQR Program and the Medicare Promoting
Interoperability Program require EHRs to be certified to all available
eCQMs in the programs. We finalized this policy for the Hospital IQR
Program in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38393) for the
FY 2019 and FY 2020 payment determination years, and we finalized in
the FY 2020 IPPS/LTCH PPS final rule (84 FR 42505 through 42506) that
this policy would continue beginning with the CY 2020 reporting period/
FY 2022 payment determination. For the Medicare Promoting
Interoperability Program, we finalized this policy in the FY 2018 and
FY 2019 IPPS/LTCH PPS final rules for CYs 2018 and 2019, respectively
(82 FR 38483 through 38485 and 83 FR 41671 through 41672,
respectively). We also finalized the continuation of this requirement
in the FY 2020 IPPS/LTCH PPS final rule (84 FR 42600 and 42601) for CY
2020 and subsequent years. When EHRs are certified to all available
eCQMs in a program measure set, hospitals are able to accurately
capture and report data for these measures. For this reason, and to
[[Page 59459]]
align the Hospital OQR Program's eCQM certification requirements with
the Hospital IQR Program and Medicare Promoting Interoperability
Program clinical quality measure electronic submission requirements for
eligible hospitals, we propose that beginning with the CY 2025
reporting period/CY 2027 payment determination, a HOPD using EHR
technology certified to the ONC health IT certification criteria would
be required to have its EHR technology certified to all eCQMs that are
available to report under the Hospital OQR Program to meet reporting
requirements for the Hospital OQR Program.
We further propose that for the CY 2025 reporting period/CY 2027
payment determination and subsequent years, HOPDs would additionally be
required to use the most recent version of the eCQM electronic measure
specifications for the designated reporting period available on the
Electronic Clinical Quality Improvement (eCQI) Resource Center website
at: https://ecqi.healthit.gov/. We noted in the CY 2021 OPPS/ASC final
rule (86 FR 63861) that we would generally update the measure
specifications on an annual basis to align with current clinical
guidelines and code systems.
Our proposal to require that EHRs be certified to all available
eCQMs would promote more accurate electronic quality reporting by
incentivizing HOPDs to have their EHR and other health information
technology (IT) vendors test all available eCQMs and offer reporting
modules with certified eCQMs. Through this requirement, we expect
greater certainty for hospitals that their EHR systems are capable of
accurately calculating the eCQMs reported to CMS under the Hospital OQR
Program because the EHR technology would be up to date and tested on
each eCQM. Additionally, we anticipate this requirement would help
reduce burden for hospitals by potentially reducing the frequency of
needing to consult with their EHR and other health IT vendors to
troubleshoot implementation or reporting issues.
Finally, we propose to revise regulatory text at Sec. 419.46 to
add a new section (j) to codify submission requirements for eCQMs under
the Hospital OQR Program. Under this proposal, we would codify in Sec.
419.46(j)(1) the requirement for hospitals to utilize certified
technology updated to be consistent with ONC's health IT certification
criteria, as adopted and updated in 45 CFR 170.315, for reporting eCQMs
under the Hospital OQR Program. We propose to codify in Sec.
419.46(j)(2) the requirement that the EHR technology used for eCQM
reporting must be certified to all eCQMs (that is, tested and validated
on each individual eCQM) available to report under the Hospital OQR
Program. We also propose to codify in Sec. 419.46(j)(3) the
requirement that hospitals use the most recent version of the eCQM
electronic measure specifications for the applicable reporting period
available on the Electronic Clinical Quality Improvement (eCQI)
Resource Center website at: https://ecqi.healthit.gov/ or another
website as designated by CMS.
We invite public comment on these proposals.
c. Patient-Reported Outcome-Based Performance Measures (PRO-PMs)
(1) Proposal for Data Submission of PRO-PM Data
In the CY 2024 OPPS/ASC final rule (88 FR 82006) we finalized that
for the Total Hip Arthroplasty and/or Total Knee Arthroplasty (THA/TKA)
PRO-PM, hospitals must use the HQR system for data submission for a
PRO-PM. In this proposed rule, we propose to apply this submission
method to PRO-PMs generally, including the Information Transfer PRO-PM.
We propose that hospitals must use the HQR system for data submission
for any PRO-PM that we adopt for the Hospital OQR Program measure set.
HOPDs may choose to: (1) directly submit their PRO-PM data to CMS using
the HQR system; or (2) utilize a third-party entity, such as a vendor
or registry, to submit their data using the HQR system. The HQR system
allows for data submission using multiple file formats (such as CSV,
XML) and a manual data entry option, allowing HOPDs additional
flexibility in data submission.
We invite public comment on this proposal.
(2) Proposal for Data Submission and Reporting Requirements for the
Patient Understanding of Key Information Related to Recovery After a
Facility-Based Outpatient Procedure or Surgery, Patient Reported
Outcome-Based Performance Measure (Information Transfer PRO-PM)
In section XV.C.1.b of this proposed rule, we discuss the proposed
adoption of the Information Transfer PRO-PM beginning with voluntary
reporting for the CY 2026 reporting period followed by mandatory
reporting beginning with the CY 2027 reporting period/CY 2029 payment
determination. We propose that the performance period on which data is
submitted would be January 1 through and including December 31 of the
year that is two years prior to the applicable payment determination
year. We propose to require HOPDs to submit their Information Transfer
PRO-PM data between the period starting January 1st though and
including May 15 of the year prior to the applicable payment
determination year. All deadlines occurring on a Saturday, Sunday, or
legal holiday, or on any other day all or part of which is declared to
be a non-workday for federal employees by statute or Executive Order
would be extended to the first day thereafter. We propose to require
HOPDs to offer all patients meeting the measure's denominator
specifications the opportunity to complete the survey. Additionally, we
propose a minimum random sample size of 300 completed surveys to ensure
the reliability of the measure, as this is a recommended minimum sample
size for a population of 1,500 to provide a 95 percent confidence
interval and a 90 percent confidence interval for a population of over
10,000; this is also generally accepted as a minimum sample size for
stable population estimates.258 259 HOPDs that are unable to
collect 300 completed surveys will not be able to perform random
sampling, and would instead be required to submit data on survey
responses from all completed surveys received.
---------------------------------------------------------------------------
\258\ Ahmad, H., & Halim, H. (2017). Determining Sample Size for
Research Activities. Selangor Business Review, 2(1), 20-34.
Retrieved from https://sbr.journals.unisel.edu.my/ojs/index.php/sbr/article/view/12.
\259\ Voorhis, C & Morgan, B. (2007). Understanding Power and
Rules of Thumb for Determining Sample Size. Tutorials in
Quantitative Methods for Psychology. 3 (2), 43-50. www.doi.org/10.20982/tqmp.03.2.p043.
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We invite public comment on these proposals.
F. Public Reporting of Measure Data
1. General Policy
We refer readers to the CY 2024 OPPS/ASC final rules (88 FR 81995
and 81996) for our previously finalized policies regarding public
display of quality measures.
2. Proposal To Publicly Report the Median Time From Emergency
Department (ED) Arrival to ED Departure for Discharged ED Patients--
Psychiatric/Mental Health Patients Strata on Care Compare
We refer readers to the CY 2011 OPPS/ASC final rule (75 FR 72086)
where we adopted the Median Time from ED Arrival to ED Departure for
Discharged ED Patients (Median Time for Discharged ED Patients) measure
beginning with CY 2013 payment determination. The Median Time for
[[Page 59460]]
Discharged ED Patients measure is a chart-abstracted measure that
evaluates the time from ED arrival to departure, also known as ED
throughput time. The measure data are stratified into four separate
calculations: (a) Median Time for Discharged ED Patients--Overall Rate;
(b) Median Time for Discharged ED Patients--Reporting Measure, which
excludes psychiatric/mental health and transfer patients; (c) Median
Time for Discharged ED Patients--Psychiatric/Mental Health Patients,
which includes information only for psychiatric/mental health patients;
and (d) Median Time for Discharged ED Patients--Transfer Patients,
which includes information only for patients transferred from the ED.
In the CY 2024 OPPS/ASC final rule (88 FR 81995 and 81996), we
finalized that data for three measure strata (that is, the Overall
Rate, Reporting Measure, and Transfer Patients strata) would be
publicly reported both on data.medicare.gov in downloadable data files
and on Care Compare (or subsequent CMS-designated websites). Data for
the Psychiatric/Mental Health Patients stratum are not currently
publicly reported on the Care Compare site, though these data are
published on data.medicare.gov in downloadable data files (82 FR
59438). In the CY 2018 OPPS/ASC final rule (82 FR 52576 through 52578),
we summarized commenters' concerns that delays in ED discharge of
mental health patients may be influenced, in part, by the availability
of community resources. In response, we stated that we would take
additional time for further consideration prior to displaying this
subset of data on Care Compare. We have considered commenters' concern
that factors outside of an HOPD's control may influence ED throughput
for psychiatric/mental health patients; however, it is our
understanding that many hospitals face such concerns, and that timely
care is a critical aspect of quality of care. We also stated in the CY
2024 OPPS/ASC final rule (88 FR 82061) in the context of adopting this
measure for the REHQR Program that the public reporting of these data
on Care Compare could help patients and their caregivers identify which
facilities are performing better than others despite potential
challenges, and drive quality improvement efforts.
Our routine monitoring and evaluation of the CY 2024 performance
period for this measure has shown a median ED throughput time of 4.7
hours for psychiatric/mental health patients compared to 2.6 hours for
non-psychiatric/mental health patients, suggesting this is an area that
may benefit from additional quality improvement efforts. Data from the
Median Time for Discharged ED Patients--Psychiatric/Mental Health
Patients will be useful for patients choosing a care location, as well
as researchers and hospital staff as they attempt to address health
disparities and improve the timeliness of care for mental health
patients. Since the data required for public reporting are already
collected and submitted by participating HOPDs, publicly reporting this
stratification would not create additional hospital burden.
For these reasons, we propose to make data for the Psychiatric/
Mental Health Patients stratification available on Care Compare,
including data that were previously published on data.medicare.gov but
not displayed on the Care Compare site, beginning in CY 2025.
We invite public comment on this proposal.
G. Payment Reduction for Hospitals That Fail To Meet the Hospital OQR
Program Requirements for the CY 2025 Payment Determination
1. Background
Section 1833(t)(17) of the Act, which applies to subsection (d)
hospitals (as defined under section 1886(d)(1)(B) of the Act), states
that hospitals that fail to report data required to be submitted on
measures selected by the Secretary, in the form and manner, and at a
time, specified by the Secretary will incur a 2.0 percentage point
reduction to their Outpatient Department (OPD) fee schedule increase
factor; that is, the annual payment update factor. Section
1833(t)(17)(A)(ii) of the Act specifies that any reduction applies only
to the payment year involved and will not be taken into account in
computing the applicable OPD fee schedule increase factor for a
subsequent year.
The application of a reduced OPD fee schedule increase factor
results in reduced national unadjusted payment rates that apply to
certain outpatient items and services provided by hospitals that are
required to report outpatient quality data in order to receive the full
payment update factor and that fail to meet the Hospital OQR Program
requirements. Hospitals that meet the reporting requirements receive
the full OPPS payment update without the reduction. For a more detailed
discussion of how this payment reduction was initially implemented, we
refer readers to the CY 2009 OPPS/ASC final rule with comment period
(73 FR 68769 through 68772).
The national unadjusted payment rates for many services paid under
the OPPS equal the product of the OPPS conversion factor and the scaled
relative payment weight for the APC to which the service is assigned.
The OPPS conversion factor, which is updated annually by the OPD fee
schedule increase factor, is used to calculate the OPPS payment rate
for services with the following status indicators (listed in Addendum B
to the proposed rule, which is available via the internet on the CMS
website): ``J1,'' ``J2,'' ``P,'' ``Q1,'' ``Q2,'' ``Q3,'' ``R,'' ``S,''
``T,'' ``V,'' or ``U.'' Payment for all services assigned to these
status indicators will be subject to the reduction of the national
unadjusted payment rates for hospitals that fail to meet Hospital OQR
Program requirements, with the exception of services assigned to New
Technology APCs with assigned status indicator ``S'' or ``T.'' We refer
readers to the CY 2009 OPPS/ASC final rule with comment period (73 FR
68770 through 68771) for a discussion of this policy. In the CY 2017
OPPS/ASC final rule with comment period (81 FR 79796), we clarified
that the reporting ratio does not apply to codes with status indicator
``Q4'' because services and procedures coded with status indicator
``Q4'' are either packaged or paid through the Clinical Laboratory Fee
Schedule and are never paid separately through the OPPS.
The OPD fee schedule increase factor is an input into the OPPS
conversion factor, which is used to calculate OPPS payment rates. To
reduce the OPD fee schedule increase factor for hospitals that fail to
meet reporting requirements, we calculate two conversion factors--a
full market basket conversion factor (that is, the full conversion
factor), and a reduced market basket conversion factor (that is, the
reduced conversion factor). We then calculate a reduction ratio by
dividing the reduced conversion factor by the full conversion factor.
We refer to this reduction ratio as the ``reporting ratio'' to indicate
that it applies to payment for hospitals that fail to meet their
reporting requirements. Applying this reporting ratio to the OPPS
payment amounts results in reduced national unadjusted payment rates
that are mathematically equivalent to the reduced national unadjusted
payment rates that would result if we multiplied the scaled OPPS
relative payment weights by the reduced conversion factor. For example,
to determine the reduced national unadjusted payment rates that applied
to hospitals that failed to meet their quality reporting requirements
for the
[[Page 59461]]
CY 2010 OPPS/ASC final rule with comment period, we multiplied the
final full national unadjusted payment rate found in Addendum B of the
CY 2010 OPPS/ASC final rule with comment period by the CY 2010 OPPS
final rule with comment period reporting ratio of 0.980 (74 FR 60642).
We note that the only difference in the calculation for the full
conversion factor and the calculation for the reduced conversion factor
is that the full conversion factor uses the full OPD update, and the
reduced conversion factor uses the reduced OPD update. The baseline
OPPS conversion factor calculation is the same since all other
adjustments would be applied to both conversion factor calculations.
Therefore, our standard approach of calculating the reporting ratio as
described earlier in this section is equivalent to dividing the reduced
OPD update factor by that of the full OPD update factor. In other
words:
Full Conversion Factor = Baseline OPPS conversion factor * (1 + OPD
update factor)
Reduced Conversion Factor = Baseline OPPS conversion factor * (1 + OPD
update factor-0.02)
Reporting Ratio = Reduced Conversion Factor/Full Conversion Factor
Which is equivalent to:
Reporting Ratio = (1 + OPD Update factor-0.02)/(1 + OPD update factor)
In the CY 2009 OPPS/ASC final rule with comment period (73 FR 68771
through 68772), we established a policy that the Medicare beneficiary's
minimum unadjusted copayment and national unadjusted copayment for a
service to which a reduced national unadjusted payment rate applies
would each equal the product of the reporting ratio and the national
unadjusted copayment or the minimum unadjusted copayment, as
applicable, for the service. Under this policy, we apply the reporting
ratio to both the minimum unadjusted copayment and national unadjusted
copayment for services provided by hospitals that receive the payment
reduction for failure to meet the Hospital OQR Program reporting
requirements. This application of the reporting ratio to the national
unadjusted and minimum unadjusted copayments is calculated according to
Sec. 419.41 of our regulations, prior to any adjustment for a
hospital's failure to meet the quality reporting standards according to
Sec. 419.43(h). Beneficiaries and secondary payers thereby share in
the reduction of payments to these hospitals.
In the CY 2009 OPPS/ASC final rule with comment period (73 FR
68772), we established the policy that all other applicable adjustments
to the OPPS national unadjusted payment rates apply when the OPD fee
schedule increase factor is reduced for hospitals that fail to meet the
requirements of the Hospital OQR Program. For example, the following
standard adjustments apply to the reduced national unadjusted payment
rates: the wage index adjustment, the multiple procedure adjustment,
the interrupted procedure adjustment, the rural sole community hospital
adjustment, and the adjustment for devices furnished with full or
partial credit or without cost. Similarly, OPPS outlier payments made
for high cost and complex procedures will continue to be made when
outlier criteria are met. For hospitals that fail to meet the quality
data reporting requirements, the hospitals' costs are compared to the
reduced payments for purposes of outlier eligibility and payment
calculation. We established this policy in the OPPS beginning in the CY
2010 OPPS/ASC final rule with comment period (74 FR 60642). For a
complete discussion of the OPPS outlier calculation and eligibility
criteria, we refer readers to section II.G of the CY 2023 OPPS/ASC
proposed rule (87 FR 44533 through 44534).
2. Reporting Ratio Application and Associated Adjustment Policy for CY
2025
We propose to continue our established policy of applying the
reduction of the OPD fee schedule increase factor through the use of a
reporting ratio for those hospitals that fail to meet the Hospital OQR
Program requirements for the full CY 2025 annual payment update factor.
For the CY 2025 OPPS/ASC proposed rule, the proposed reporting ratio is
0.9805, which, when multiplied by the proposed full conversion factor
of $89.379, equals a proposed conversion factor for hospitals that fail
to meet the requirements of the Hospital OQR Program (that is, the
reduced conversion factor) of $87.636. We propose to continue to apply
the reporting ratio to all services calculated using the OPPS
conversion factor. We propose to continue to apply the reporting ratio,
when applicable, to all HCPCS codes to which we have proposed status
indicator assignments of ``J1,'' ``J2,'' ``P,'' ``Q1,'' ``Q2,'' ``Q3,''
``R,'' ``S,'' ``T,'' ``V,'' and ``U'' (other than New Technology APCs
to which we have proposed status indicator assignments of ``S'' and
``T''). We propose to continue to exclude services paid under New
Technology APCs. We propose to continue to apply the reporting ratio to
the national unadjusted payment rates and the minimum unadjusted and
national unadjusted copayment rates of all applicable services for
those hospitals that fail to meet the Hospital OQR Program reporting
requirements. We also propose to continue to apply all other applicable
standard adjustments to the OPPS national unadjusted payment rates for
hospitals that fail to meet the requirements of the Hospital OQR
Program. Similarly, we propose to continue to calculate OPPS outlier
eligibility and outlier payment based on the reduced payment rates for
those hospitals that fail to meet the reporting requirements. In
addition to our proposal to implement the policy through the use of a
reporting ratio, we also propose to calculate the reporting ratio to
four decimals (rather than the previously used three decimals) to more
precisely calculate the reduced adjusted payment and copayment rates.
For CY 2025, the proposed reporting ratio is 0.9805, which, when
multiplied by the proposed full conversion factor of $89.379, equaled a
proposed conversion factor for hospitals that fail to meet the
requirements of the Hospital OQR Program (that is, the reduced
conversion factor) of $87.636.
XVI. Rural Emergency Hospital Quality Reporting (REHQR) Program
A. Background and Statutory Authority
The Rural Emergency Hospital Quality Reporting (REHQR) Program's
overarching goals are to improve the quality of care provided to
Medicare beneficiaries, facilitate public transparency, ensure
accountability, and safeguard the accessibility of hospitals in rural
settings.
Section 1861(kkk)(7)(A) of the Social Security Act (the Act)
provides that the Secretary shall establish quality measurement
reporting requirements for Rural Emergency Hospitals (REHs), which may
include the use of a small number of claims-based outcomes measures or
surveys of patients with respect to their experience in the REH. In
selecting measures for quality reporting, section 1861(kkk)(7)(C)(iii)
provides that the Secretary shall take into consideration ways to
account for REHs that lack sufficient case volume to ensure that the
performance rates for such measures are reliable. Although section
1861(kkk)(7)(C)(i) of the Act requires that measures specified by the
Secretary for use in the REHQR Program be endorsed by the entity with a
contract under section 1890(a) of the Act, section 1861(kkk)(7)(C)(ii)
of the
[[Page 59462]]
Act states that in the case of a specified area or medical topic
determined appropriate by the Secretary for which a feasible and
practical measure has not been endorsed by the entity with a contract
under section 1890(a) of the Act, the Secretary may specify a measure
that is not so endorsed as long as due consideration is given to
measures that have been endorsed or adopted by a consensus organization
identified by the Secretary.
In addition, section 1861(kkk)(7)(D) of the Act provides that the
Secretary shall establish procedures for making data submitted by REHs
for the REHQR Program available to the public, following the
opportunity for the REH to review and submit corrections on such data,
with such data to be posted on a CMS website as determined appropriate
by the Secretary. Beginning with 2023 (or each year beginning on or
after the date that is one year after one or more measures are first
specified), section 1861(kkk)(7)(B)(ii) of the Act requires REHs to
submit quality measure data to the Secretary ``in a form and manner,
and at a time, specified by the Secretary.''
We refer readers to section XVI of the CY 2024 OPPS/ASC final rule
(88 FR 82046 through 82076) for an overview of the REHQR Program, which
includes a more detailed discussion of the statutory history and
program requirements codified at 42 CFR 419.95.
1. Previously Finalized Program Measure Sets
We refer readers to the CY 2024 OPPS/ASC final rule (88 FR 82066
through 82067) for more information regarding the previously finalized
REHQR Program measure set beginning with the CY 2024 reporting period.
Table 92 below summarizes the previously finalized REHQR Program
measure set and initial reporting periods with program determinations
beginning with the CY 2026 program determination.\260\
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\260\ We are using the phrase ``Program Determination'' for the
REHQR Program to represent our assessment of compliance with program
requirements for an applicable year because the REHQR Program does
not include an associated payment adjustment.
[GRAPHIC] [TIFF OMITTED] TP22JY24.126
B. Program Measure Set Policies: Retention, Suspension or Removal,
Modification, and Adoption
We refer readers to Sec. 419.95(e) and the CY 2024 OPPS/ASC final
rule (88 FR 82051 through 82053) for our program policies regarding
measure retention, and immediate and general measure suspension and
removal, and to Sec. 419.95(d) and the CY 2024 OPPS/ASC final rule (88
FR 82054) for our program policies regarding modifications to
previously adopted measures.
We further refer readers to the CY 2024 OPPS/ASC final rule (88 FR
82047 through 82051) for a discussion of our considerations for
adopting quality measures under the REHQR Program, and to section
XIV.B.1.c of this proposed rule for information regarding the pre-
rulemaking process.
We are not proposing any changes to these policies in this proposed
rule.
C. Program Measure Proposals
1. Proposal To Adopt Health Equity Quality Measures in the REHQR
Program
We refer readers to sections XIV.B.1, XIV.B.2, and XIV.B.3 of this
proposed rule for our cross-program proposals to adopt the following
measures in the REHQR Program: (1) the Hospital Commitment to Health
Equity (HCHE) measure, beginning with the CY 2025 reporting period/CY
2027 program determination; (2) the Screening for Social Drivers of
Health (SDOH) measure, beginning with voluntary reporting for the CY
2025 reporting period, followed by mandatory reporting beginning with
the CY 2026 reporting period/CY 2028 program determination; and (3) the
Screen Positive Rate for SDOH measure, beginning with voluntary
reporting for the CY 2025 reporting period, followed by mandatory
reporting beginning with the CY 2026 reporting period/CY 2028 program
determination.
Under the REHQR Program's statutory requirement under section
1861(kkk)(7)(C)(iii) of the Act to consider the impact of low case
volumes, we note that once mandatory reporting begins, the measure
specifications require all patients to be screened and thus we do not
believe the Screening for SDOH measure or the
[[Page 59463]]
Screen Positive Rate for SDOH measure would suffer from low case
volumes. In addition, as stated in the CY 2024 OPPS/ASC final rule (88
FR 82066), CMS does not report measures publicly unless it achieves
sufficient case volumes to allow for public reporting of the collected
data.
2. Proposal To Modify the Reporting Period for the Risk-Standardized
Hospital Visits Within 7 Days After Hospital Outpatient Surgery Measure
Beginning With the CY 2027 Program Determination
In the CY 2024 OPPS/ASC final rule, we adopted the Risk-
Standardized Hospital Visits Within 7 Days After Hospital Outpatient
Surgery measure in the REHQR Program with a one-year reporting period
beginning with the CY 2024 reporting period (88 FR 82064 through
82066).
This measure is calculated from Part A and Part B Medicare
administrative claims data for Medicare FFS beneficiaries with an
outpatient same-day surgical procedure excluding eye surgeries and
colonoscopies (except colonoscopy with biopsy). Colonoscopies are
excluded from this measure as these procedures are examined separately
on their own. Eye surgeries are excluded because they are performed in
high volume and are generally perceived as being ``low risk.'' As
stated in the CY 2024 OPPS/ASC final rule (88 FR 82064), this measure
makes unplanned patient hospital visits (ED visits, observation stays,
or unplanned inpatient admissions) after surgery more visible to
providers and patients through publicly reporting scores.
As we noted in the CY 2024 OPPS/ASC final rule (88 FR 82064), we
believe this measure could also encourage providers to engage in
quality improvement activities to reduce these visits by providing
feedback to hospitals and providers. This measure meets the National
Quality Strategy goals of embedding quality into the care journey and
promoting safety,\261\ and we expect that the measure would promote
improvement in patient care over time (88 FR 82064 through 82065).
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\261\ CMS, What is the CMS National Quality Strategy?. Available
at: https://www.cms.gov/medicare/quality/meaningful-measures-initiative/cms-quality-strategy.
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We have continued to monitor and evaluate the reporting patterns of
hospitals that have converted to REH status and have found that under
the Hospital OQR Program, a limited number of current REHs are able to
publicly report on this measure as specified based on case threshold
minimums. Therefore, in consideration of our statutory obligation to
consider ways to account for low case volumes and to publicly report on
quality-of-care metrics for REHs, we propose to increase the reporting
period from one year to two years beginning with the CY 2027 program
determination.
Under this proposal, the previously finalized one-year data
collection period for the CY 2026 program determination would remain
the same (that is, encounters from January 1, 2024 through December 31,
2024), and then beginning with the CY 2027 program determination, the
reporting period would be supplemented with data from the prior
calendar year. For example, for the CY 2027 program determination, the
reporting period would comprise data from CYs 2024 and 2025 (that is,
encounters from January 1, 2024 through December 31, 2025). We note
that, as stated in the CY 2024 OPPS/ASC final rule (88 FR 82066), CMS
does not report measures publicly unless it achieves sufficient case
volumes to allow for public reporting of the collected data.
[GRAPHIC] [TIFF OMITTED] TP22JY24.127
As seen in Table 93, the longer reporting period of two years would
facilitate greater case volumes for this measure and, subsequently, a
larger portion of REHs would have data that could be reported publicly
as more REHs attain the Risk-Standardized Hospital Visits Within 7 Days
After Outpatient Surgery measure's minimum case threshold for
reliability of 30 surgical cases. In addition, REHs reporting on the
measure with two years
[[Page 59464]]
of data would have more eligible patients to assess; this increase in
eligible cases would reduce the error estimate, making the confidence
interval narrower, that is, increasing the reliability of the
calculated measure. We refer readers to the CY 2019 OPPS/ASC final rule
(83 FR 59106 through 59107) where we finalized a similar policy to
extend the reporting period of the Facility 7-Day Risk-Standardized
Hospital Visit Rate After Outpatient Colonoscopy measure in the
Hospital OQR Program from two to three years.
Under this proposal, there would be no gap in public reporting nor
delay in providing REHs with data for quality improvement efforts. As
this is a claims-based measure, REHs would not have any additional
reporting burden associated with a longer reporting period.
We invite public comment on this proposal.
3. Summary of Proposed Program Measure Set Updates
a. Proposed Program Measure Set Beginning With the CY 2027 Program
Determination
Table 94 summarizes the proposed updated REHQR Program measure set
and reporting periods beginning with the CY 2027 program determination.
Specifically, Table 94 includes the previously finalized measure
set with updates to reflect the proposed extension of the reporting
period for the Risk-Standardized Hospital Visits Within 7 Days After
Hospital Outpatient Surgery measure beginning with the CY 2027 program
determination, and the three proposed new cross-program health equity
measures as detailed in sections XIV.B.1, XIV.B.2, and XIV.B.3,
respectively, of this proposed rule:
[GRAPHIC] [TIFF OMITTED] TP22JY24.128
b. Proposed Program Measure Set Beginning With the CY 2028 Program
Determination
Table 95 summarizes the proposed updated REHQR Program measure set
and reporting periods beginning with the CY 2028 program determination.
Specifically, Table 95 includes the previously finalized measure
set with updates to reflect the proposed extension of the reporting
period for the Risk-Standardized Hospital Visits Within 7 Days After
Hospital Outpatient Surgery measure beginning with the CY 2028 program
determination, and the three proposed new cross-program health equity
measures as detailed in sections XIV.B.1, XIV.B.2, and XIV.B.3,
respectively, of this proposed rule:
[[Page 59465]]
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D. Administrative Requirements
We refer readers to Sec. 419.95(b) and the CY 2024 OPPS/ASC final
rule (88 FR 82074) for our policies regarding administrative
requirements previously finalized for the REHQR Program.
We are not proposing any changes to these policies in this proposed
rule.
E. Form, Manner, and Timing of Data Submission
1. General Policy
We refer readers to Sec. 419.95(c) and Sec. 419.95(g) and the CY
2024 OPPS/ASC final rule (88 FR 82074 through 82076) for our general
policies regarding: (1) submission of data under the REHQR Program
generally; (2) review and correction of submitted data; and (3)
extraordinary circumstance exception (ECE) requests for data
submission.
We are not proposing any changes to these policies in this proposed
rule.
2. Proposed Data Submission Policy Following Conversion to REH Status
As we have implemented these general policies and some hospitals
have converted to REH status, we believe that it is necessary to
specify when a hospital that converts to REH status is required to
report data to the REHQR Program. Thus, we propose that an REH must
begin submitting data to the REHQR Program on the first day of the
quarter following the date that a hospital has been designated as
converted to an REH in accordance with the process outlined in section
1861(kkk) of the Act.
We invite public comment on this proposal.
3. Measure-Specific Data Submission and Reporting Requirements
a. Data Submission Requirements for Chart-Abstracted Measures
We refer readers to the CY 2024 OPPS/ASC final rule (88 FR 82074
through 82075) for information regarding chart-abstracted data
submission and reporting requirements.
We are not proposing any changes to these policies in this proposed
rule.
b. Proposal for the HCHE, Screening for SDOH, and Screen Positive Rate
for SDOH Measures' Data Submission Requirements and Reporting
Requirements
To align with the Hospital OQR (80 FR 70521 through 70522) and
ASCQR (81 FR 79821 through 79822) Programs, we propose a web-based
submission policy where REHs would submit data for applicable measures
once annually using a CMS-approved, web-based, data collection tool
available within the Hospital Quality Reporting (HQR) System. In
alignment with the Hospital OQR and ASCQR Programs, REHs would submit
data during the period of January 1 to May 15 in the year prior to the
affected program determination year. For example, for the CY 2025
reporting period/CY 2027 program determination, the data submission
period would be January 1, 2026, to May 15, 2026, covering the
performance period of January 1, 2025, to December 31, 2025. Under the
review and corrections period provided at Sec. 419.95(c)(3), REHs
would be able to enter, review, and correct data submitted during the
data submission period.
These policies would apply to web-based measures adopted by the
REHQR program, including the following three measures proposed for
adoption in this year's rule:
The HCHE measure, beginning with the CY 2025 reporting
period/CY 2027 program determination;
The Screening for SDOH measure, beginning with voluntary
reporting for the CY 2025 reporting period, followed by mandatory
reporting beginning with the CY 2026 reporting period/CY 2028 program
determination; and
The Screen Positive Rate for SDOH measure, beginning with
voluntary reporting for the CY 2025 reporting period, followed by
mandatory reporting beginning with the CY 2026 reporting period/CY 2028
program determination.
We refer readers to sections XIV.B.1, XIV.B.2, and XIV.B.3 for
additional information on the HCHE, Screening for SDOH, and Screen
Positive Rate for SDOH measures.
[[Page 59466]]
We invite public comment on this proposal.
c. Data Submission Requirements for Claims-Based Measure Data
In addition, we refer readers to section XVI.C.2 of this proposed
rule where we discuss our proposal to modify the Risk-Standardized
Hospital Visits Within 7 Days After Hospital Outpatient Surgery Measure
beginning with the CY 2027 program determination. This claims-based
measure would continue to be reported in accordance with other claims-
based measures, as previously finalized in the CY 2024 OPPS/ASC final
rule (88 FR 85075).
We are not proposing any changes to these policies in this proposed
rule.
F. Public Reporting of Measure Data
We refer readers to Sec. 419.95(f) and the CY 2024 OPPS/ASC final
rule (88 FR 82071 through 82074) for our program policy regarding the
public reporting of quality data.
We are not proposing any changes to these policies in this proposed
rule.
XVII. Ambulatory Surgical Center Quality Reporting (ASCQR) Program
A. Background and Statutory Authority
The Ambulatory Surgical Center Quality Reporting (ASCQR) Program is
a pay-for-reporting program intended to improve the quality of care
provided to Medicare beneficiaries, facilitate public transparency, and
ensure accountability of ambulatory surgical centers (ASCs).
Section 1833(i)(7)(A) of the Act authorizes the Secretary to reduce
any annual increase under the revised ambulatory surgical center (ASC)
payment system by 2.0 percentage points for such year that an ASC that
fails to submit required data on quality measures specified by the
Secretary in accordance with section 1833(i)(7)(B) of the Act. Section
1833(i)(7)(B) of the Act states that, except as the Secretary may
otherwise provide, several of the statutory provisions governing the
Hospital Outpatient Quality Reporting (OQR) Program, specifically
sections 1833(t)(17)(B) through (E) of the Act, also apply to the
services of ASCs under the ASCQR Program in a similar manner to the
manner in which they apply to the services of hospital outpatient
departments under the Hospital OQR Program. Sections 1833(t)(17)(B)
through (E) of the Act generally govern the development and replacement
of quality measures, the form and manner of submission of data to CMS,
and procedures for making the data submitted to CMS available to the
public.
We refer readers to the CY 2012 OPPS/ASC final rule (76 FR 74492
through 74494) for a detailed discussion of the program's statutory
authority, as well as program requirements codified at 42 CFR part 416,
subpart H (Sec. 416.300 through Sec. 416.330), and the CY 2024 OPPS/
ASC final rule (88 FR 82012) for information regarding the program's
regulatory history.
1. Previously Finalized Program Measure Sets
We refer readers to the CY 2024 OPPS/ASC final rule (88 FR 82038)
for additional information regarding the previously finalized ASCQR
Program measure set beginning with the CY 2027 payment determination.
a. Previously Finalized Measure Set Beginning With the CY 2027 Payment
Determination
Table 96 summarizes the previously finalized ASCQR Program measures
beginning with the CY 2027 payment determination.
[[Page 59467]]
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b. Previously Finalized Measure Set Beginning With the CY 2031 Payment
Determination
Table 97 summarizes the previously finalized ASCQR Program measures
beginning with the CY 2031 payment determination.
[[Page 59468]]
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B. Program Measure Set Policies
1. Measure Retention
We refer readers to Sec. 416.320 and the CY 2012 OPPS/ASC final
rule (76 FR 74504) for our policies regarding measure retention.
We are not proposing any changes to these policies in this proposed
rule.
2. Measure Suspension or Removal
We refer readers to Sec. 416.320 and the CY 2019 OPPS/ASC final
rule (83 FR 59111 through 59115) for our program policies regarding:
(1) general measure removal, suspension, or replacement; and (2)
immediate measure removal.
We refer readers to section XIV.C of this proposed rule for our
cross-program proposal to modify the immediate measure removal policy
for quality measures for the ASCQR Program.
3. Measure Modification
We refer readers to Sec. 416.325 and the CY 2016 OPPS/ASC final
rule (80 FR 70531) for our program policies regarding modifications to
previously adopted measures.
We are not proposing any changes to these policies in this proposed
rule.
4. Measure Adoption
We refer readers to the CY 2013 OPPS/ASC final rule (77 FR 68493
and 68494) for details regarding program priorities we consider for
quality measure selection.
We are not proposing any changes to these policies in this proposed
rule.
C. Program Measure Proposals
1. Proposal To Adopt Health Equity Quality Measures in the ASCQR
Program
We refer readers to sections XIV.B.1, XIV.B.2, and XIV.B.3 of this
proposed rule for our cross-program proposals to adopt the following
measures in the ASCQR Program: (1) the Facility Commitment to Health
Equity (FCHE) measure, beginning with the CY 2025 reporting period/CY
2027 payment determination; (2) the Screening for Social Drivers of
Health (SDOH) measure, beginning with voluntary reporting for the CY
2025 reporting period followed by mandatory reporting beginning with
the CY 2026 reporting period/CY 2028 payment determination; and (3) the
Screen Positive Rate for SDOH measure, beginning with voluntary
reporting for the CY 2025 reporting period followed by mandatory
reporting beginning with the CY 2026 reporting period/CY 2028 payment
determination.
2. Summary of Proposed Program Measure Set Updates
a. Proposed Program Measure Set Beginning With the CY 2027 Payment
Determination
Table 98 summarizes the proposed updated ASCQR Program measure set
beginning with the CY 2027 payment determination.
Specifically, Table 98 includes the previously finalized measure
set and the
[[Page 59469]]
three proposed new cross-program health equity measures, as detailed in
sections XIV.B.1, XIV.B.2, and XIV.B.3, respectively, of this proposed
rule.
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b. Proposed Program Measure Set Beginning With the CY 2031 Payment
Determination
Table 99 summarizes the proposed updated ASCQR Program measure set
beginning with the CY 2031 payment determination.
Specifically, Table 99 includes the previously finalized measure
set and the three proposed new cross-program health equity measures, as
detailed in sections XIV.B.1, XIV.B.2, and XIV.B.3, respectively, of
this proposed rule.
[[Page 59470]]
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D. Administrative Requirements
We refer readers to Sec. 416.305 and the CY 2016 OPPS/ASC final
rule (80 FR 70533 and 70534) for our program policies regarding
participation and withdrawal requirements.
We are not proposing any changes to these policies in this proposed
rule.
E. Form, Manner, and Timing of Data Submission
1. General Policy
We refer readers to Sec. 416.310 and the CYs 2017, 2018, and 2021
OPPS/ASC final rules (81 FR 79824 and 79825; 82 FR 59472 through 59475;
and 85 FR 86191 and 86192, respectively) for our general program
policies regarding: (1) submission of data under the ASCQR Program
generally; (2) review and correction of submitted data; and (3)
extraordinary circumstance exception (ECE) requests for data
submission.
We are not proposing any changes to these policies in this proposed
rule.
We also refer readers to the CY 2016 OPPS/ASC final rule (80 FR
70531) for details regarding submission requirements for previously
adopted ASCQR Program measures in the ASCQR Program Specifications
Manual.
2. Measure-Specific Data Submission and Reporting Requirements
We refer readers to Sec. 416.310 and the CYs 2016, 2022, and 2024
OPPS/ASC final rules (80 FR 70534 through 70536; 86 FR 63905 through
63909; and 88 FR 82041 through 82045, respectively) for information
regarding our claims-based, survey-based, and PRO-PM data submission
and reporting requirements.
a. Web-Based Measures
[[Page 59471]]
(1) CMS-Designated Information System and Proposal for Data Submission
for the Facility Commitment to Health Equity (FCHE), Screening for
Social Drivers of Health (SDOH), and Screen Positive Rate for SDOH
Measures
We refer readers to Sec. 416.310(c)(1), the CY 2017 OPPS/ASC final
rule (81 FR 79821 and 79822), the CY 2018 OPPS/ASC final rule (82 FR
59473), and the CY 2024 final rule (88 FR 82039 and 82040) for details
regarding submission of web-based data via a CMS-designated information
system (currently the Hospital Quality Reporting (HQR) System).
In sections XIV.B.1, XIV.B.2, and XIV.B.3 of this proposed rule, we
propose the adoption of:
(1) the FCHE measure, beginning with the CY 2025 reporting period/
CY 2027 payment determination;
(2) the Screening for SDOH measure, beginning with voluntary
reporting for the CY 2025 reporting period followed by mandatory
reporting beginning with the CY 2026 reporting period/CY 2028 payment
determination; and
(3) the Screen Positive Rate for SDOH measure, beginning with
voluntary reporting for the CY 2025 reporting period followed by
mandatory reporting beginning with the CY 2026 reporting period/CY 2028
payment determination.
Consistent with our established data submission requirements (81 FR
79821 and 79822; 82 FR 59473; 88 FR 82039 and 82040), we propose that
ASCs would be required to submit all of the data required to calculate
each of these three measures annually using a CMS-approved, web-based,
data collection tool available within the HQR System starting January 1
through and including May 15 in the year prior to the applicable
payment determination year. For the ASCQR Program, the performance
period (which we refer to as the CY reporting period) for each measure
on which data is submitted using a web-based tool would be January 1
through and including December 31 of the year that is two years prior
to the applicable payment determination year; and the data submission
period would be January 1 through and including May 15 in the calendar
year immediately following the CY reporting period and immediately
prior to applicable payment determination year. For example, for the CY
2025 reporting period/2027 payment determination, the data submission
period would be January 1, 2026, through and including May 15, 2026,
covering the performance period of January 1, 2025, through and
including December 31, 2025. Pursuant to Sec. 416.310(c)(1)(iii), a
review and corrections period runs concurrently with the data
submission period. During this timeframe, ASCs would be able to enter,
review, and correct data submitted during the data submission period.
We invite public comment on this proposal.
(2) National Health Safety Network (NHSN)
We refer readers to Sec. 416.310(c)(2) and the CY 2014 OPPS/ASC
final rule (78 FR 75139 and 75140) for our policies regarding
submission of web-based data via the Center for Disease Control and
Prevention's NHSN.
We are not proposing any changes to these policies in this proposed
rule.
F. Public Reporting of Measure Data
We refer readers to Sec. 416.315 and the CY 2018 OPPS/ASC final
rule (82 FR 59472) for our program policies regarding public reporting
of quality data.
We are not proposing any changes to these policies in this proposed
rule.
G. Request for Information (RFI)--Development of Frameworks for
Specialty Focused Reporting and Minimum Case Number for Required
Reporting
The ASCQR Program promotes informed patient decision-making
regarding clinical care across ASC procedures through a robust set of
quality measures, data on which the ASCQR Program publicly reports as
discussed in section XVII.F of this proposed rule. The ASCQR Program's
current measure set captures clinical quality across all ASCs,
including specialty clinical procedures performed only by a subset of
ASCs. Thus, a portion of the ASCQR Program measure set only applies to
an ASC if it performs those specialty procedures. Currently, ASCs are
required to attest if they do not have cases for a given measure,
increasing reporting burden.
We seek to ensure the most meaningful measures apply to each
facility, as requiring an ASC to report on measures minimally relevant
to their patient population increases burden with minimum benefit.
Therefore, we are seeking comment on two potential future frameworks
which would achieve the following outcomes: (1) the addition of case
minimums for specialty measure reporting; (2) the removal of the zero
case attestation requirement for specialty measures to decrease
reporting burden; and (3) the verification of individual measure case
counts using claims data to determine which specialty measures would
potentially be required for reporting for individual ASCs. Verifying
case counts using claims data would allow us to confirm that individual
ASCs are reporting on measures meeting or surpassing case minimums.
Under these potential frameworks, we are considering revising the
data reporting requirements for the ASCQR Program to only require that
ASCs report data to CMS on quality measures that are related to their
medical interventions, policies, processes, and procedures, or can be
abstracted from claims. These potential frameworks would require ASCs
to report measures generally applicable to all ASCQR Program
participants and relevant specialty-specific measures, defined as those
which evaluate performance on certain specialty clinical procedures
performed only by a subset of ASCs.
The current ASCQR Program measure set has seven generally
applicable measures for which reporting would be required in both
frameworks for all ASCs: four patient safety measures (Patient Burn;
Patient Fall; Wrong Site, Wrong Patient, Wrong Procedure, Wrong
Implant; All-Cause Hospital Transfer Admission), one general surgery
measure (Facility-Level 7-Day Hospital Visits After General Surgery
Procedures Performed at Ambulatory Surgical Centers), one vaccination
measure (COVID-19 Vaccination Coverage Among Health Care Personnel),
and one patient experience of care survey measure (OAS CAHPS). In
addition, we have proposed in this proposed rule to adopt three new
generally applicable measures (FCHE, Screening for SDOH, and Screen
Positive Rate for SDOH), which ASCs would also be required to report if
finalized.
The specialties addressed by the current ASCQR Program measure set,
and the related specialty-specific measures, are described in Table
100. Under our first potential framework, the ``Specialty-Select''
framework, all ASCs would be required to report all specialty-specific,
claims-based measures (currently, four) because these measures are not
administratively burdensome to ASCs. Additionally, ASCs would also be
required to select a specified number of the remaining non-claims-based
specialty-specific measures (currently, four) to report if those
measures are applicable to that ASC. We would define the number of non-
claims-based specialty-specific measures that ASCs would be required to
report in future rulemaking.
To determine if a non-claims-based specialty-specific measure is
applicable
[[Page 59472]]
to an ASC, we are considering the implementation of a case threshold
minimum which we would specify in future rulemaking, for each measure.
We would determine if case threshold minimums, defined as the number of
cases for a specific measure that must be met or exceeded to
potentially require reporting, have been met using claims data. Once an
ASC met the measure's case threshold minimum, that measure would become
available for that ASC to select to meet reporting requirements. We
note that reporting claims-based specialty-specific measures would be
required regardless of whether the case threshold minimum is met. In
this RFI we are seeking comment on the number of non-claims-based
specialty-specific measures that ASCs should be required to report and
what the appropriate threshold for the case threshold minimum should
be.
We are considering the use of Medicare Fee-for-Service (FFS) and
Medicare Advantage claim volume data to determine which non-claims-
based specialty-specific measures have met the specified case threshold
minimum (that is, claims information would indicate an ASC was
performing sufficient case volumes in a specialty area). We note that
this threshold would be independent from our ``Minimum case volume for
program participation'' policy, which exempts ASCs with fewer than 240
total Medicare claims per year from participating in the ASCQR Program,
in the manner specified at Sec. 416.305(c). The case threshold minimum
discussed in this RFI would be applied to individual non-claims-based
specialty-specific measures for ASCs required to participate in the
ASCQR Program.
For example, if we decide that each ASC must select three out of
the four available non-claims-based specialty-specific measures to
report, and an ASC surpasses the specified case threshold minimum for
all four non-claims-based specialty-specific measures, the ASC would
then choose three out of the four non-claims-based specialty-specific
measures to report. If an ASC surpasses the specified case threshold
minimum for only one or two non-claims-based specialty-specific
measures, the ASC will no longer have a choice, and must report all
measures meeting the case threshold minimum. If an ASC does not meet
the case threshold minimum for any non-claims-based specialty-specific
measures, reporting for any of these measures would be voluntary. Under
such a framework, ASCs could not utilize the claims-based measures to
meet Specialty-Select reporting requirements nor could ASCs opt-out of
reporting these measures. ASCs which do not have one or more cases for
a given measure would no longer be required to provide an attestation
of having zero cases.
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[[Page 59473]]
Four of these measures are not claims-based and, under this
potential framework, would not be applicable or required for all ASCs
to report, but would rather be available for selection upon meeting a
specified case threshold minimum:
Unplanned Anterior Vitrectomy;
Cataracts Visual Function (Previously referred to as
Cataracts: Improvement in Patient's Visual Function within 90 Days
Following Cataract Surgery) (voluntary);
Normothermia Outcome; and
Risk-Standardized Patient-Reported Outcome-Based
Performance Measure (PRO-PM) Following Elective Primary Total Hip
Arthroplasty (THA) and/or Total Knee Arthroplasty (TKA) in the ASC
Setting (THA/TKA PRO-PM).
We acknowledge that currently there are few non-claims-based
specialty-specific measures from which to choose to report. However, we
are interested to learn if such a framework with both mandatory
measures applicable to all ASCs and selectable, specialty-specific
measures could lay the groundwork for providing higher quality data to
patients while ensuring ASCs are not reporting data on measures that
are minimally relevant, if not irrelevant, to their patient population.
Regarding this Specialty-Select framework, we are requesting
comment on the following questions:
Given that ASCs would still be required to report claims-
based specialty-specific measures, as these measures are not
administratively burdensome to ASCs, and there are currently only four
non-claims-based specialty-specific quality measures in the ASCQR
Program data set, how many non-claims-based specialty-specific measures
should we require ASCs select to report?
Are there specialty-specific measures that commenters
would recommend for development and adoption in the ASCQR Program
measure set to create a more robust selection?
How should we determine what non-claims-based specialty-
specific measures would be eligible for a given ASC to select toward
meeting reporting requirements? In other words, how can we determine if
an ASC meets the minimum case number for a given measure, which would
allow the ASC to choose that measure to meet reporting requirements?
As an alternative to the Specialty-Select framework discussed
previously, we are considering requiring reporting for all non-claims-
based specialty-specific measures for which case counts reach a
specified case threshold minimum. This case threshold minimum would not
apply to claims-based specialty-specific measures, as their reporting
would be mandatory since these measures are not administratively
burdensome to ASCs. Under this alternative framework, mandatory data
reporting for non-claims-based specialty-specific measures would occur
only if an ASC met established case threshold minimums. For example, if
an ASC has 30 or more qualifying patients for the measure during the
applicable reporting period, which is the current minimum case
threshold required for public reporting for some measures, the ASC
would be required to submit data for these measures. Likewise, if an
ASC has fewer than 30 patients for the measure, data reporting on the
measure would be voluntary. This framework could be termed a Specialty
Threshold framework and would differ from the previously discussed
Specialty-Select framework as an ASC would be required to report on all
non-claims-based specialty-specific measures for which the ASC reaches
the case threshold minimum.
Regarding both the Specialty Threshold framework and the Specialty-
Select framework, we are requesting comment on the following questions:
Would use of Medicare Fee-for-Service (FFS) claim volume
be sufficient for determining minimum case volumes?
Should Medicare Advantage claim volume or service data be
included when determining case volume thresholds for reporting a
measure?
Do commenters recommend any processes that could be
followed or analyses we could conduct to determine case minimums?
We invite public comment on both the Specialty-Select framework and
the alternative Specialty Threshold framework for potential inclusion
in the ASCQR Program.
H. Payment Reduction for ASCs That Fail to Meet the ASCQR Program
Requirements
1. Statutory Background
We refer readers to the CY 2012 OPPS/ASC final rule with comment
period (76 FR 74492 through 74493) for a detailed discussion of the
statutory background regarding payment reductions for ASCs that fail to
meet the ASCQR Program requirements.
2. Policy Regarding Reduction to the ASC Payment Rates for ASCs That
Fail To Meet the ASCQR Program Requirements for a Payment Determination
Year
The national unadjusted payment rates for many services paid under
the ASC payment system are equal to the product of the ASC conversion
factor and the scaled relative payment weight for the APC to which the
service is assigned. For CY 2025, the ASC conversion factor is equal to
the conversion factor calculated for the previous year updated by the
productivity-adjusted hospital market basket update factor. The
productivity adjustment is set forth in section 1833(i)(2)(D)(v) of the
Act. The productivity-adjusted hospital market basket update is the
annual update for the ASC payment system for a 5-year period (CY 2019
through CY 2023), which was extended an additional two years (through
CY 2025) in the CY 2024 OPPS/ASC final rule with comment period (88 FR
81960). Under the ASCQR Program, in accordance with section
1833(i)(7)(A) of the Act and as discussed in the CY 2013 OPPS/ASC final
rule with comment period (77 FR 68499), any annual increase in certain
payment rates under the ASC payment system shall be reduced by 2.0
percentage points for ASCs that fail to meet the reporting requirements
of the ASCQR Program. This reduction applied beginning with the CY 2014
payment rates (77 FR 68500). For a complete discussion of the
calculation of the ASC conversion factor and our finalized proposal to
update the ASC payment rates using the inpatient hospital market basket
update for CYs 2019 through 2023, we refer readers to the CY 2019 OPPS/
ASC final rule with comment period (83 FR 59073 through 59080).
In the CY 2013 OPPS/ASC final rule with comment period (77 FR 68499
through 68500), in order to implement the requirement to reduce the
annual update for ASCs that fail to meet the ASCQR Program
requirements, we finalized the following policies: (1) to calculate a
full update conversion factor and an ASCQR Program reduced update
conversion factor; (2) to calculate reduced national unadjusted payment
rates using the ASCQR Program reduced update conversion factor that
would apply to ASCs that fail to meet their quality reporting
requirements for that calendar year payment determination; and (3) that
application of the 2.0 percentage point reduction to the annual update
may result in the update to the ASC payment system being less than zero
prior to the application of the
[[Page 59474]]
productivity adjustment. The ASC conversion factor is used to calculate
the ASC payment rate for services with the following payment indicators
(listed in Addenda AA and BB to the proposed rule, which are available
via the internet on the CMS website): ``A2,'' ``G2,'' ``P2,'' ``R2''
and ``Z2,'' as well as the service portion of device-intensive
procedures identified by ``J8'' (77 FR 68500). We finalized our
proposal that payment for all services assigned the payment indicators
listed would be subject to the reduction of the national unadjusted
payment rates for applicable ASCs using the ASCQR Program reduced
update conversion factor (77 FR 68500).
The conversion factor is not used to calculate the ASC payment
rates for separately payable services that are assigned status
indicators other than payment indicators ``A2,'' ``D2'', ``G2,''
``J8,'' ``P2,'' ``R2'' and ``Z2.'' These services include separately
payable drugs and biologicals, pass-through devices that are
contractor-priced, brachytherapy sources that are paid based on the
OPPS payment rates, and certain office-based procedures, radiology
services and diagnostic tests where payment is based on the PFS
nonfacility PE RVU-based amount, and a few other specific services that
receive cost-based payment (77 FR 68500). As a result, we also
finalized our proposal that the ASC payment rates for these services
would not be reduced for failure to meet the ASCQR Program requirements
because the payment rates for these services are not calculated using
the ASC conversion factor and, therefore, are not affected by
reductions to the annual update (77 FR 68500).
Office-based surgical procedures (generally those performed more
than 50 percent of the time in physicians' offices) and separately paid
radiology services (excluding covered ancillary radiology services
involving certain nuclear medicine procedures or involving the use of
contrast agents) are paid at the lesser of the PFS nonfacility PE RVU-
based amounts or the amount calculated under the standard ASC
ratesetting methodology. Similarly, in the CY 2015 OPPS/ASC final rule
with comment period (79 FR 66933 through 66934), we finalized our
proposal that payment for certain diagnostic test codes within the
medical range of CPT codes for which separate payment is allowed under
the OPPS will be at the lower of the PFS nonfacility PE RVU-based (or
technical component) amount or the rate calculated according to the
standard ASC ratesetting methodology when provided integral to covered
ASC surgical procedures. In the CY 2013 OPPS/ASC final rule with
comment period (77 FR 68500), we finalized our proposal that the
standard ASC ratesetting methodology for this type of comparison would
use the ASC conversion factor that has been calculated using the full
ASC update adjusted for productivity. This is necessary so that the
resulting ASC payment indicator, based on the comparison, assigned to
these procedures or services is consistent for each HCPCS code,
regardless of whether payment is based on the full update conversion
factor or the reduced update conversion factor.
For ASCs that receive the reduced ASC payment for failure to meet
the ASCQR Program requirements, we have noted our belief that it is
both equitable and appropriate that a reduction in the payment for a
service should result in proportionately reduced coinsurance liability
for beneficiaries (77 FR 68500). Therefore, in the CY 2013 OPPS/ASC
final rule with comment period (77 FR 68500), we finalized our proposal
that the Medicare beneficiary's national unadjusted coinsurance for a
service to which a reduced national unadjusted payment rate applies
will be based on the reduced national unadjusted payment rate.
In the CY 2013 OPPS/ASC final rule with comment period, we
finalized our proposal that all other applicable adjustments to the ASC
national unadjusted payment rates would apply in those cases when the
annual update is reduced for ASCs that fail to meet the requirements of
the ASCQR Program (77 FR 68500). For example, the following standard
adjustments would apply to the reduced national unadjusted payment
rates: the wage index adjustment; the multiple procedure adjustment;
the interrupted procedure adjustment; and the adjustment for devices
furnished with full or partial credit or without cost (77 FR 68500). We
believe that these adjustments continue to be equally applicable to
payment for ASCs that do not meet the ASCQR Program requirements (77 FR
68500).
In the CY 2015 through CY 2024 OPPS/ASC final rules with comment
period, we did not make any other changes to these policies. We propose
to continue applying these policies for the CY 2025 reporting period/CY
2027 payment determination and for subsequent years.
XVIII. Medicaid Clinic Services Four Walls Exceptions
A. Background
Under section 1902(a)(10) of the Act, States may offer certain
Medicaid benefits, at State option, to categorically needy and
medically needy Medicaid beneficiaries, as described in that section of
the statute. Clinic services are one of these optional benefit
categories. Section 1905(a)(9) of the Act, as amended by section 4105
of part 1 of subtitle B of title IV of the Omnibus Budget
Reconciliation Act of 1987 (OBRA '87, Pub. L. 110-203), defines clinic
services as services furnished by or under the direction of a
physician, without regard to whether the clinic itself is administered
by a physician, including such services furnished outside the clinic by
clinic personnel to an eligible individual who does not reside in a
permanent dwelling or does not have a fixed home or mailing address
(hereinafter referred to as ``individuals who are
unhoused'').262 263
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\262\ Public Law 100-203, enacted December 22, 1987, 100 Stat.
1330, 1330-147, https://www.congress.gov/100/statute/STATUTE-101/STATUTE-101-Pg1330.pdf.
\263\ This document contains links to non-United States
Government websites. We are providing these links because they
contain additional information relevant to the topic(s) discussed in
this document or that otherwise may be useful to the reader. We
cannot attest to the accuracy of information provided on the cited
third-party websites or any other linked third-party site. We are
providing these links for reference only; linking to a non-United
States Government website does not constitute an endorsement by CMS,
HHS, or any of their employees of the sponsors or the information
and/or any products presented on the website. Also, please be aware
that the privacy protections generally provided by United States
Government websites do not apply to third-party sites.
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The regulation implementing section 1905(a)(9) of the Act, 42 CFR
440.90, includes certain conditions and limitations on Medicaid
coverage of clinic services. Specifically, Sec. 440.90 defines clinic
services as preventive, diagnostic, therapeutic, rehabilitative, or
palliative services that are furnished by a facility that is not part
of a hospital but is organized and operated to provide medical care to
outpatients.\264\ Section 440.90 further provides that clinic services
include two types of services furnished to outpatients, listed at Sec.
440.90(a) and (b). The first type of services included in the benefit,
under Sec. 440.90(a), is services furnished at the clinic (hereinafter
referred to as the ``four walls'' requirement) by or under the
direction of a physician or dentist. Section 440.90(b) implements the
statutory language providing that clinic services also include services
furnished outside the clinic, by clinic personnel under the direction
of a physician, to an
[[Page 59475]]
eligible individual who is unhoused. In section 4320 of the State
Medicaid Manual, we explained that if a State elects to cover clinic
services, the State may choose the type of clinics or clinic services
that are covered.\265\
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\264\ An outpatient is defined at 42 CFR 440.2 as a patient of
an organized medical facility, or distinct part of that facility who
is expected by the facility to receive and who does receive
professional services for less than a 24-hour period regardless of
the hour of admission, whether or not a bed is used, or whether or
not the patient remains in the facility past midnight.
\265\ U.S. Department of Health and Human Services, Health Care
Financing Administration (HCFA), The State Medicaid Manual, Manual,
(Baltimore, MD, 1985), Section 4320, https://www.cms.gov/regulations-and-guidance/guidance/manuals/paper-based-manuals-items/cms021927.
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We added Sec. 440.90(b) in 1991, after Congress added the language
about services furnished outside the clinic to individuals who are
unhoused to section 1905(a)(9) of the Act in OBRA '87.\266\ In the
preamble to that rule, we explained that clinic services have always
been limited to people who go to the clinic (or a satellite location)
and get the services onsite, and that the exception added by OBRA '87
represents an exception to the general coverage requirement for
services to be furnished on the premises of the clinic. Further, we
explained our view that Congress ratified the requirement that other
clinic services must be furnished onsite by establishing an explicit
exception to the requirement that clinic services be furnished onsite
in order to be covered. CMS has long interpreted the exception to the
four walls requirement at Sec. 440.90(b) to be mandatory for States
that opt to cover the clinic services benefit. We reiterated CMS's
longstanding interpretation that section 1905(a)(9) of the Act and
Sec. 440.90 establish a four walls requirement in a frequently asked
questions document that we published on January 18, 2017 (hereinafter
referred to as ``the January 18, 2017 FAQ''), to supplement State
Health Official letter number 16-002, Federal Funding for Services
``Received Through'' an IHS/Tribal Facility and Furnished to Medicaid-
Eligible American Indians and Alaska Natives.267 268
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\266\ Medicare and Medicaid Programs; OBRA '87 Conforming
Amendments, 56 FR 8832, 8835 (March 1, 1991) (hereinafter referred
to as the 1991 rule). https://archives.Federalregister.gov/issue_slice/1991/3/1/8829-8854.pdf.
\267\ CMS, Federal Funding for Services ``Received Through'' an
IHS/Tribal Facility and Furnished to Medicaid-Eligible American
Indians and Alaska Natives, State Health Official Letter (SHO) #16-
002, (Baltimore, MD, 2016), https://www.medicaid.gov/sites/default/files/Federal-Policy-Guidance/Downloads/sho022616.pdf.
\268\ CMS, Frequently-Asked Questions (FAQs) Federal Funding for
Services ``Received Through'' an IHS/Tribal Facility and Furnished
to Medicaid Eligible American Indians and Alaska Natives (SHO #16-
002), FAQ, (Baltimore, MD, 2017), https://www.medicaid.gov/media/40241.
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The Medicaid clinic services benefit is distinct from the Medicaid
federally qualified health center (FQHC) services benefit and the
Medicaid rural health clinic (RHC) services benefit. The Medicaid FQHC
services benefit is defined at section 1905(a)(2)(C) of the Act, and
FQHCs and FQHC services are further defined at section 1905(l)(2) of
the Act. The Medicaid RHC services benefit is defined at section
1905(a)(2)(B) of the Act, and RHCs and RHC services are further defined
at section 1905(l)(1) of the Act. Unlike the clinic services benefit,
which is an optional benefit for States, the FQHC and RHC benefits are
mandatory for categorically needy Medicaid beneficiaries under section
1902(a)(10) of the Act. In addition, there is no Federal four walls
requirement under the Medicaid FQHC or RHC services benefits, unlike
the clinic services benefit. Federal Medicaid law does not prevent
States from covering Medicaid FQHC and RHC services provided outside of
the four walls of an FQHC or RHC.\269\
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\269\ We note that the Consolidated Appropriations Act, 2024,
Division G, Title I, Section 209 (P.L. 118-42) amended section 1905
of the Act to establish a certified community behavioral health
clinic (CCBHC) services benefit effective March 9, 2024. The CCBHC
services benefit is distinct from the clinic services benefit and
there is no four walls requirement for the CCBHC services benefit
under Federal Medicaid law.
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On January 28, 2021, the President signed Executive Order (E.O.)
14009, ``Strengthening Medicaid and the Affordable Care Act,'' which
established the policy objective to protect and strengthen Medicaid and
the Affordable Care Act and to make high-quality health care accessible
and affordable for every American, and directed executive departments
and agencies to review existing regulations, orders, guidance
documents, and policies to determine whether such agency actions are
inconsistent with this policy.\270\ As part of this review of existing
policies, E.O. 14009 directed Federal agencies to consider whether to
suspend, revise, or rescind agency actions considered inconsistent with
this objective. On April 5, 2022, E.O. 14070, ``Continuing to
Strengthen Americans' Access to Affordable, Quality Health Coverage,''
directed Federal agencies with responsibilities related to Americans'
access to health coverage to review agency actions to identify ways to
continue to expand the availability of affordable health coverage, to
improve the quality of coverage, to strengthen benefits, and to help
more Americans enroll in quality health coverage.\271\
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\270\ Exec. Order No. 14009, 86 FR 7793 (Jan. 28, 2021). See,
https://www.Federalregister.gov/documents/2021/02/02/2021-02252/strengthening-medicaid-and-the-affordable-care-act.
\271\ Exec. Order No. 14070, 87 FR 20689 (Apr. 8, 2021). See,
https://www.Federalregister.gov/documents/2022/04/08/2022-07716/continuing-to-strengthen-americans-access-to-affordable-quality-health-coverage.
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On November 6, 2000, President Clinton signed E.O. 13175,
``Consultation and Coordination With Indian Tribal Governments,'' which
recognizes the unique legal relationship between the United States and
Indian Tribal governments and, to strengthen this government-to-
government relationship and support tribal sovereignty and self-
determination, charges all executive departments and agencies with
engaging in meaningful and timely consultation with Tribal officials in
the development of Federal policies that have Tribal implications.\272\
On January 26, 2021, President Biden issued a ``Memorandum on Tribal
Consultation and Strengthening Nation-to-Nation Relationships,'' which
reaffirms E.O. 13175's directive to engage in regular, meaningful, and
robust consultation with Tribal officials in the development of Federal
policies that have Tribal implications.\273\
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\272\ Exec. Order No. 13175, 65 FR 67249 (Nov. 6, 2000). See,
https://www.Federalregister.gov/documents/2000/11/09/00-29003/consultation-and-coordination-with-indian-tribal-governments.
\273\ President Joseph R. Biden to Heads of Executive
Departments and Agencies, memorandum, ``Tribal Consultation and
Strengthening Nation-to-Nation Relationships,'' January 26, 2021,
Presidential Actions, https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/26/memorandum-on-tribal-consultation-and-strengthening-nation-to-nation-relationships/.
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Consistent with E.O. 13175, CMS issued a Tribal Consultation policy
in 2011 and updated it in 2015 for the purpose of building meaningful
relationships with Indian Tribes and to establish a clear, concise and
mutually acceptable process through which consultation can take place
between CMS and Tribes.274 275 As one of its core
principles, the policy provides that, because Congress amended titles
XVIII and XIX of the Act to authorize Indian Health Service (IHS) and
Tribal health programs to bill Medicare and Medicaid, ``[t]he
involvement of Indian tribes in the development of CMS policy is
crucial for mutual understanding and development of culturally
appropriate approaches to improve greater access to CMS programs for
American Indians and Alaska Natives (AI/ANs), to enhance health care
resources to IHS
[[Page 59476]]
and tribal health programs, and to contribute to overall improved
health outcomes for American Indians.'' As part of its government-to-
government relationship with the Tribes, CMS has engaged in meaningful
consultation with Tribes and Tribal leaders, the CMS Tribal Technical
Advisory Group (TTAG), and the HHS Secretary's Tribal Advisory
Committee (STAC) regarding concerns about the impact that the four
walls requirement could have on IHS/Tribal clinics and AI/AN
beneficiaries' access to health care when a grace period currently in
place for IHS/Tribal clinics (as discussed below) ends. As part of this
consultation, Tribes requested a permanent exemption from the four
walls requirement for IHS/Tribal clinics. In the development of this
proposed rule, we have taken into consideration comments and feedback
received during Tribal consultation.
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\274\ CMS, ``Tribal Consultation,'' CMS.gov, September 6, 2023,
https://www.cms.gov/training-education/partner-outreach-resources/american-indian-alaska-native/tribal-consultation.
\275\ CMS, Tribal Consultation Policy, Policy, (Washington, DC,
2015), https://www.cms.gov/outreach-and-education/american-indian-alaska-native/aian/downloads/cmstribalconsultationpolicy2015.pdf.
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IHS, a Federal agency within the Department of Health and Human
Services, is responsible for furnishing comprehensive, culturally
appropriate health services to, as of April 2024, almost 2.8 million
AI/ANs who are eligible for services from IHS, per regulations at 42
CFR part 136, as well as other individuals whom IHS or Tribes are
authorized to serve under 25 U.S.C. 1680c.\276\ IHS's provision of
health services to its beneficiaries stems from the special government-
to-government relationship between the Federal government and Indian
Tribes. The Federal government's relationship with Tribes is based on
Article I, section 8 of the Constitution, and has been given form and
substance by numerous treaties, statutes, Supreme Court decisions, and
Executive Orders. The IHS delivery system includes hospitals and
clinics that are owned and operated by IHS, owned by IHS and Tribally-
operated as authorized by the Indian Self-Determination and Education
Assistance Act (ISDEAA, Pub. L. 93-638 (as amended)), or owned and
operated by Tribes and Tribal organizations as authorized by the
ISDEAA.\277\ We refer to these three kinds of facilities in our
discussions of the proposed amendments to Sec. 440.90 as ``IHS/Tribal
facilities'' or, when referring to circumstances where these facilities
operate as Medicaid clinic services providers, ``IHS/Tribal clinics.''
\278\ Section 1911 of the Act and implementing regulations at Sec.
431.110 provide that a facility of IHS, whether operated by IHS or by a
Tribe or Tribal organization (CMS has interpreted similar language in
section 1905(b) of the Act to refer to all three kinds of IHS/Tribal
facilities described above),\279\ may participate in the Medicaid
program subject to the conditions and requirements generally applicable
under Title XIX of the Act. Many IHS/Tribal facilities are covered and
paid as clinic services providers in the Medicaid program. Under
section 1903(a)(1) of the Act, the Federal government is required to
match State expenditures for medical assistance at the Federal Medical
Assistance Percentage (FMAP), which is defined at section 1905(b) of
the Act to be 100 percent for State expenditures for Medicaid-covered
services received through an IHS facility whether operated by IHS or by
a Tribe or Tribal organization (which, again, CMS has interpreted to
refer to all three kinds of IHS/Tribal facilities described above).
Under CMS's longstanding interpretation of section 1905(b) of the Act,
this 100 percent FMAP is available only for State expenditures on
services received through an IHS/Tribal facility (such as a clinic) by
AI/AN Medicaid beneficiaries. State expenditures on services furnished
by an IHS/Tribal facility to other individuals are not matched by the
Federal government at 100 percent, but rather at the State's regularly
applicable FMAP rate.
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\276\ IHS, Indian Health Service Health Equity Report, Fact
Sheet, (2024), https://www.ihs.gov/sites/newsroom/themes/responsive2017/display_objects/documents/factsheets/IHS_Health_Equity_Report_FactSheet_2024.pdf.
\277\ HCFA and IHS, ``Memorandum of Agreement Between the Indian
Health Services and the Health Care Financing Administration,''
Memorandum of Agreement, December 19, 1996, https://www.cms.gov/Outreach-and-Education/American-Indian-Alaska-Native/AIAN/LTSS-TA-Center/pdf/memorandum-of-agreement.pdf.
\278\ Although Urban Indian Organizations that operate under
Title V of the Indian Health Care Improvement Act are also part of
the IHS delivery system, for purposes of our discussions of the
proposed amendments to Sec. 440.90, the terms IHS/Tribal facility
and IHS/Tribal clinic do not include a facility operated by an Urban
Indian Organization.
\279\ HCFA and IHS, Memorandum of Agreement.
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As part of our Center for Medicaid & CHIP Services (CMCS) Mental
Health and Substance Use Disorder Action Plan published in July 2023,
we are pursuing strategies to increase access to prevention and
treatment, engagement in care, and improve quality of care for
beneficiaries with behavioral health disorders.\280\ Behavioral health
disorders include both substance use disorders and mental health
disorders. Medicaid plays a crucial role in financing health care for
individuals with behavioral health disorders and is the largest payer
of behavioral health services.\281\ There are no Federal requirements
for States to cover services furnished by behavioral health clinics or
any specific types of behavioral health clinics under the clinic
services benefit. However, we are aware that approximately 16 States
cover services provided by behavioral health clinics of varying types
under the clinic services benefit, such as Community Mental Health
Centers certified under the Medicare Conditions of Participation at 42
CFR part 485 Subpart J, substance use disorder clinics, or mental
health clinics.
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\280\ CMS, Mental Health and Substance Use Disorder Action Plan,
(2023), Action Plan, https://www.medicaid.gov/medicaid/benefits/downloads/cmcs-mntl-helth-substnce-disrdr-actn-plan.pdf.
\281\ Guth, Madeline, Heather Saunders, Lauren Niles, Angela
Bergefurd, Kathleen Gifford, and Roxanne Kennedy Published. 2023.
``How Do States Deliver, Administer, and Integrate Behavioral Health
Care? Findings from a Survey of State Medicaid Programs.'' KFF. May
25, 2023. https://www.kff.org/mental-health/issue-brief/how-do-states-deliver-administer-and-integrate-behavioral-health-care-findings-from-a-survey-of-state-medicaid-programs/.
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We released a framework for advancing health care in rural, Tribal,
and geographically isolated communities in November 2022.\282\ Our
framework focuses on six priorities, including expanding access to
comprehensive health care coverage, benefits, and services and supports
to individuals who live in these communities. Medicaid plays an
important role in financing health care in rural areas, as nearly a
quarter of individuals under age 65 who live in rural areas are covered
by Medicaid. Importantly, Medicaid also provides critical access to
care for individuals in rural areas who are older or disabled, as more
than one in five residents of rural areas (approximately 22 percent)
are dually enrolled in Medicaid and Medicare.\283\ There are no Federal
requirements under the clinic services benefit governing how States
should provide coverage of services furnished specifically by clinics
located in rural areas under that benefit--the Federal requirements
that apply generally to that benefit, including the four walls
requirement, also apply to services furnished by clinics in rural
areas. A State may cover Medicaid clinic services provided by various
types of clinics located in rural areas, such as primary care clinics,
behavioral health clinics, surgical clinics, and other types of
clinics. As noted earlier in this
[[Page 59477]]
section of the proposed rule, the Medicaid RHC services benefit is
different from the Medicaid clinic services benefit and does not
include a four walls requirement under Federal Medicaid law; thus,
facilities that qualify as RHCs under Federal Medicaid law could
provide Medicaid services under the RHC services benefit, including
outside of the four walls.
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\282\ CMS, CMS Framework for Advancing Health Care in Rural,
Tribal, and Geographically Isolated Communities, (2022), Framework,
https://www.cms.gov/files/document/cms-geographic-framework.pdf.
\283\ Medicaid and CHIP Payment and Access Commission (MACPAC),
Medicaid and Rural Health, Issue Brief, (Washington, DC, 2021), 1,
https://www.macpac.gov/wp-content/uploads/2021/04/Medicaid-and-Rural-Health.pdf.
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Section 1902(a)(30)(A) of the Act requires that Medicaid payments
for services be consistent with efficiency, economy, and quality of
care, and be sufficient to enlist enough providers so that care and
services are available under the plan at least to the extent that such
care and services are available to the general population in the
geographic area. Under this requirement, States generally have
significant latitude in setting payment methodologies and rates for
covered services, and there is no specific payment methodology required
for clinic services, although regulations at Sec. 447.321 require the
application of upper payment limits for clinics that are not IHS/Tribal
clinics. States generally pay for clinic services via a facility rate.
They typically adopt, as the payment rate for Medicaid clinic services
furnished by IHS/Tribal clinics, the Outpatient per Visit Rate
(excluding Medicare) that IHS establishes for services provided by IHS
facilities to Medicaid beneficiaries and for certain other Federal
programs. This rate, and a set of three other rates for Medicare
outpatient visits and certain inpatient services, are frequently
referred to collectively as the IHS all-inclusive rates (AIRs), and
therefore this IHS Outpatient per Visit Rate (excluding Medicare) is
hereinafter referred to as the ``AIR.'' \284\ In contrast, States
generally pay for Medicaid benefits provided by individual
practitioners, such as the physician services benefit, at a
professional fee schedule rate under the Medicaid State plan.
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\284\ IHS establishes the AIRs under the authority in sections
321(a) and 322(b) of the Public Health Service Act (42 U.S.C. 248
and 249(b)), Public Law 83-568 (42 U.S.C. 2001(a)), and the Indian
Health Care Improvement Act (25 U.S.C. 1601 et seq.). IHS calculates
AIRs on an annual basis and the rates are then published in the
Federal Register. The AIRs are based on annual cost report analysis
prepared by IHS's contractor. IHS reviews the cost report analysis
and upon completion of the review, IHS submits recommended rates to
the Office of Management and Budget (OMB) for final approval through
HHS and CMS. Upon approval by OMB, the approved rates are published
in the Federal Register. See https://www.ihs.gov/BusinessOffice/reimbursement-rates/. Calendar year 2024 rates and additional
information can be found in the Federal Register published December
19, 2023 (88 FR 87789): https://www.Federalregister.gov/documents/
2023/12/19/2023-27815/reimbursement-rates-for-calendar-year-2024.
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As we noted in the January 18, 2017 FAQ, CMS recognized in 2017
that IHS/Tribal clinics were providing services outside of the four
walls, including to individuals to whom the existing statutory and
regulatory exception does not apply, and that States were paying for
these services at the clinic services rate (which in all or nearly all
cases is the AIR). In the January 18, 2017 FAQ, we announced a 4-year
grace period to January 30, 2021, to allow States time to come into
compliance with the four walls requirement for IHS/Tribal clinics. On
January 15, 2021, due to the COVID-19 Public Health Emergency (PHE),
CMS issued a CMCS Informational Bulletin (CIB) announcing an extension
of the four walls grace period to October 31, 2021. CMS issued
subsequent CIBs on October 4, 2021 and September 8, 2023, announcing
further extensions of the grace period to nine months from when the
COVID-19 PHE ended, and February 11, 2025, respectively.\285\
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\285\ CMS, Further Extension of Grace Period Related to the
``Four Walls'' Requirement under 42 CFR 440.90 for Indian Health
Service and Tribal Facilities to February 11, 2025, CMCS
Informational Bulletin, (Baltimore, MD, 2023), https://www.medicaid.gov/sites/default/files/2023-09/cib090823.pdf.
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Since the release of the January 18, 2017 FAQ and throughout the
grace period, we have heard from Tribes, the CMS TTAG, and the HHS
STAC, that the four walls requirement will create barriers in access to
care for Medicaid beneficiaries who receive care from IHS/Tribal
clinics after the grace period expires. Tribes, the TTAG, and the STAC
have asked CMS to eliminate the four walls requirement for IHS/Tribal
clinics. In addition to these requests, CMS has received a handful of
other requests from States to allow exceptions to the four walls
requirements for clinics that serve vulnerable populations. For
example, we received one section 1115 demonstration request to cover
clinic services outside of the four walls for behavioral health
clinics, under which the State sought to use the requested section 1115
demonstration authority to improve access to and retention in
behavioral health treatment. In addition, we received inquiries from
States seeking to cover, under the clinic services benefit, mobile
crisis services provided by behavioral health clinics to individuals
experiencing a behavioral health crisis, but we advised those States
that we could not approve coverage of mobile crisis services under the
clinic services benefit due to the four walls requirement.
This proposed rule aims to address the concerns we have heard from
Tribes, the TTAG, the STAC, States, and other interested parties. It
aims to fulfill E.O.s 14009 and 14070 by helping States to strengthen
and improve access to clinic services. It also helps to fulfill E.O.
13175 by recognizing the United States' unique legal relationship with
Tribes and by responding to advice and input received from Tribes
through consultation. In addition, we believe this proposed rule is
consistent with our strategies, goals, and objectives to advance health
equity and improve health care access for Tribal, behavioral health,
and rural populations as described in our CMCS Mental Health and
Substance Use Disorder Action Plan and CMS Framework for Advancing
Health Care in Rural, Tribal, and Geographically Isolated Communities.
Consistent with our statutory authority at section 1905(a)(9) of
the Act, we propose to add three exceptions to the four walls
requirement at Sec. 440.90, for the reasons set forth in section
XVIII.B of this proposed rule. First, we propose to add an exception
for clinic services furnished by IHS/Tribal clinics. Second, we propose
to add an exception for clinic services furnished by a clinic that is
primarily organized for the care and treatment of outpatients with
behavioral health disorders, including mental health and substance-use
disorders. Third, we propose to add an exception for clinic services
furnished by a clinic located in a rural area (and that is not an RHC,
which could already provide services covered under a separate Medicaid
benefit). We propose to make the exception for clinic services
furnished by IHS/Tribal clinics a mandatory component of the clinic
benefit and to make the exceptions for clinic services furnished by
behavioral health clinics and clinics located in rural areas optional
for States.
B. Provisions of the Proposed Regulations
As explained in section XVIII.A of this proposed rule, we
previously interpreted section 1905(a)(9) of the Act to limit Medicaid
clinic services to services furnished within the four walls of the
clinic, except only for services furnished by clinic personnel to
individuals who are unhoused. We continue to believe that because
Congress added only one specific reference to services furnished
outside the clinic to the statute in OBRA `87, it generally ratified
our prior interpretation of the four walls requirement. Thus, we
continue to believe that the statute authorizes neither broad
exceptions to the four walls requirement that have no relationship to
the current exception nor
[[Page 59478]]
a complete elimination of the four walls requirement. However, we are
now reinterpreting section 1905(a)(9) of the Act as permitting
additional exceptions to the four walls requirements for populations
served by clinics if those populations have similar health care access
issues to individuals who are unhoused. When Congress added the
exception to the statute, it introduced the exception with the word
``including'' (OBRA '87). We interpret the word ``including'' in the
statute as not precluding additional exceptions to the four walls
requirement, so long as any additional exception is similar to the
exception for individuals who are unhoused. Had Congress wanted to
limit the clinic benefit to only services provided within the four
walls and services provided outside the four walls to the unhoused, it
could have written a narrower exception instead of using ``including''
as it did when adding the exception to section 1905(a)(9) of the Act.
As discussed in the Congressional record for OBRA '87 in H.R. Rep. 100-
391, Congress amended section 1905(a)(9) of the Act to create an
exception to the four walls requirement for individuals who are
unhoused to address access concerns for a population that has unmet
health needs, distrusts mainstream providers, and has difficulty
accessing care when providers are unable to meet them where they are
located.\286\ We believe that adding exceptions to the four walls
requirement for populations with similar needs and barriers to access
as individuals who are unhoused is consistent with the statutory text
and purpose of the initial exception.
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\286\ H.R. Rep. No. 100-391, at 523 (1987), reprinted in 1987
U.S.C.C.A.N. 2313-1, 2313-343.
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In developing the proposed exceptions, we considered the
characteristics of the unhoused population that is targeted by the
current statutory and regulatory exception. According to data from the
Department of Housing and Urban Development (HUD), 21 percent of
individuals who are unhoused reported having a serious mental illness
while 16 percent reported having a substance use disorder.\287\
Individuals who are unhoused often lack transportation to access health
care and cite this lack of transportation as a barrier to managing
their health.288 289 In many cases, individuals who are
unhoused distrust providers due to perceptions of disrespect and
discrimination.\290\ Individuals who are unhoused also experience much
poorer health outcomes than those who are housed; for example, nearly
two thirds of individuals who are unhoused experience clinically
significant dental problems and are four times as likely to visit an
emergency department.291 292 A recent study found that when
controlling for demographic and geographic differences, an individual
who is unhoused is three and one half times more likely to experience
early mortality than an individual who is housed.\293\ As indicated
earlier in this section of the proposed rule, we believe that providing
additional exceptions to the clinic services four walls requirement for
populations with similar needs and barriers to access as individuals
who are unhoused is consistent with the statute.
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\287\ U.S. Department of Housing and Urban Development (HUD),
HUD 2022 Continuum of Care Homeless Assistance Programs Homeless
Populations and Subpopulations, Summary Report, (Washington, DC,
2022), https://files.hudexchange.info/reports/published/CoC_PopSub_NatlTerrDC_2022.pdf.
\288\ Yale University, ``Barrier to Care,'' Hypertension
Awareness & Prevention Program at Yale, accessed March 15, 2024,
https://happy.sites.yale.edu/barriers-care.
\289\ Murphy, Erin Roark. 2019. ``Transportation and
Homelessness: A Systematic Review.'' Journal of Social Distress and
the Homeless 28 (2): 1-10. https://doi.org/10.1080/10530789.2019.1582202.
\290\ Becker, Jenna N., and Karen J. Foli. 2021. ``Health-
Seeking Behaviours in the Homeless Population: A Concept Analysis.''
Health & Social Care in the Community 30 (2). https://doi.org/10.1111/hsc.13499.
\291\ Baggett, Travis P., James J. O'Connell, Daniel E. Singer,
and Nancy A. Rigotti. 2010. ``The Unmet Health Care Needs of
Homeless Adults: A National Study.'' American Journal of Public
Health 100 (7): 1326-33. https://doi.org/10.2105/ajph.2009.180109.
\292\ Lin, Wen-Chieh, Monica Bharel, Jianying Zhang, Elizabeth
O'Connell, and Robin E. Clark. 2015. ``Frequent Emergency Department
Visits and Hospitalizations among Homeless People with Medicaid:
Implications for Medicaid Expansion.'' American Journal of Public
Health 105 (S5): S716-22. https://doi.org/10.2105/ajph.2015.302693.
\293\ Logani, Ilina, Bruce Meyer, and Angela Wyse. 2023. The
Mortality of the US Homeless Population. BF Becker Friedman
Institute for Economics at UChicago. The University of Chicago.
March 27, 2023. https://bfi.uchicago.edu/insight/research-summary/the-mortality-of-the-us-homeless-population/.
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The exceptions outlined in this proposed rule follow four criteria
that mirror the needs and barriers to access experienced by individuals
who are unhoused:
The population experiences high rates of behavioral health
diagnoses or difficulty accessing behavioral health services;
The population experiences issues accessing services due
to lack of transportation;
The population experiences a historical mistrust of the
health care system; and
The population experiences high rates of poor health
outcomes and mortality.
By authorizing additional clinic services to be furnished outside
of the four walls, the proposed exceptions are expected to improve
access to care for the populations targeted by the exceptions. The
exceptions would authorize States to pay the facility-based clinic
services payment rates (such as the AIR for IHS/Tribal clinics) for the
excepted services. Currently, due to the four walls requirement, States
can cover and pay for services that are provided by clinic personnel
outside the four walls--but that do not fit within the exception at
Sec. 440.90(b)--only under Medicaid practitioner services benefits,
such as physician services, rehabilitative services, or other licensed
practitioner services--not under the clinic services benefit.
It is CMS's understanding that State payment rates for these
Medicaid practitioner services benefits are generally lower than the
facility-based payment rates that States establish or adopt for
Medicaid clinic services (such as the facility-based payment rate under
the AIR, in the case of IHS/Tribal clinics), because the facility-based
payment rates typically account for more overhead costs. While it is
CMS's understanding that States generally pay lower rates for Medicaid
practitioner services than they do for Medicaid facility-based
services, it should be noted that States generally have the flexibility
to increase practitioner services payment rates. States must also
comply with section 1902(a)(30)(A) of the Act, which requires States to
assure that payments are consistent with efficiency, economy, and
quality of care, and are sufficient to enlist enough providers so that
care and services are available under the Medicaid State plan at least
to the extent that such care and services are available to the general
population in the geographic area.
Creating the exceptions could thus result in higher payments to
providers for the excepted services. Studies of Medicaid payment rates
have found that provider willingness to furnish services may be greater
in States that pay providers at higher rates.294 295
Further, practitioners may be reluctant to
[[Page 59479]]
provide home-based care when paid under a professional fee schedule
rate, since travel expenses and time are often not factored into the
payment rate.\296\ As this evidence suggests, higher payment rates for
services are more likely to incentivize providers to furnish those
services. Because the proposal would authorize payment at the generally
higher facility-based clinic services payment rates for the excepted
services, we believe that it would incentivize providers to provide
these services, and thereby meet these beneficiaries where they are
located, which for reasons further discussed below, will help to ensure
access to necessary care.
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\294\ Candon, Molly, Stephen Zuckerman, Douglas Wissoker,
Brendan Saloner, Genevieve M. Kenney, Karin Rhodes, and Daniel
Polsky. 2018. ``Declining Medicaid Fees and Primary Care Appointment
Availability for New Medicaid Patients.'' JAMA Internal Medicine 178
(1): 145. https://doi.org/10.1001/jamainternmed.2017.6302.
\295\ Holgash, Kayla, and Martha Heberlein. 2019. Physician
Acceptance of New Medicaid Patients: What Matters and What Doesn't.
Health Affairs Blog (blog). April 19, 2019. https://www.healthaffairs.org/content/forefront/physician-acceptance-new-medicaid-patients-matters-and-doesn-t.
\296\ Klein, Sarah, Martha Hostetter, and Douglas McCarthy.
2017. An Overview of Home-Based Primary Care: Learning from the
Field. The Commonwealth Fund. The Commonwealth Fund. June 7, 2017.
https://www.commonwealthfund.org/publications/issue-briefs/2017/jun/overview-home-based-primary-care-learning-field.
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We considered whether this change in interpretation could burden
States, beneficiaries, providers, or others who have relied on our
current interpretation. Based on our current awareness of how States
implement the Medicaid clinic services benefit, we do not anticipate
that our proposal would create burdens for Medicaid clinic services
providers or Medicaid beneficiaries, and we have considered the
possible burden for State Medicaid programs in developing the proposal.
We invite comments on whether our proposal might create any burdens for
States, beneficiaries, providers, or other interested parties.
1. IHS/Tribal Clinics
In response to advice and input received through Tribal
consultation, we propose to add a new paragraph (c) to Sec. 440.90 to
add an exception to the four walls requirement for IHS/Tribal clinics,
to authorize payment for clinic services provided outside the four
walls by IHS/Tribal clinic personnel. This exception would be mandatory
for all States that opt to cover the Medicaid clinic services benefit.
We refer in the proposed regulation text to clinics that are facilities
of the IHS, whether operated by IHS or by a Tribe or Tribal
organization as authorized by the ISDEAA, to make clear that this
exception applies only to IHS/Tribal clinics. The proposed regulatory
language identifying the facilities that would be subject to the
exception is consistent with our longstanding interpretation of the
language used in sections 1905(b) and 1911 of the Act, and would mean
clinics that are owned and operated by IHS, clinics that are owned by
IHS and Tribally-operated as authorized by the ISDEAA, or clinics that
are owned and operated by Tribes and Tribal organizations as authorized
by the ISDEAA.\297\
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\297\ HCFA and IHS, Memorandum of Agreement.
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Under section 1903(a)(1) of the Act, as discussed earlier, the
Federal government is required to match State expenditures for medical
assistance at the Federal Medical Assistance Percentage (FMAP), which
is defined at section 1905(b) of the Act to be 100 percent for State
expenditures for Medicaid-covered services received through an IHS
facility whether operated by IHS or by a Tribe or Tribal organization
(which, again, CMS has interpreted to refer to all three kinds of IHS/
Tribal facilities described above). Under CMS's longstanding
interpretation of section 1905(b) of the Act, this 100 percent FMAP is
available only for State expenditures on services received through an
IHS/Tribal facility (such as a clinic) by AI/AN Medicaid beneficiaries.
State expenditures on services furnished by an IHS/Tribal facility to
other Medicaid beneficiaries are not matched by the Federal government
at 100 percent, but rather at the otherwise applicable FMAP, and this
would continue to apply for services provided outside the four walls of
a clinic.
We are not proposing to include facilities operated by urban Indian
organizations (UIOs) in this proposed exception, because it is our
understanding that many of those facilities currently participate in
Medicaid as providers of the Medicaid FQHC services benefit, not as
providers of the clinic services benefit. Because Medicaid FQHC
services are not subject to a four walls requirement under Federal
Medicaid law, we believe that UIOs are unlikely to need the proposed
exception. UIO facilities that provide Medicaid clinic services might
qualify as behavioral health clinics or clinics in rural areas and be
exempt from the four walls requirement under one of the two optional
exceptions discussed below.
This exception would apply to any Medicaid beneficiary who receives
services from the IHS/Tribal clinic. Under IHS authorities, these
clinics serve Medicaid beneficiaries who are eligible to receive
services from the IHS/Tribal clinic under IHS regulations at 42 CFR
part 136, and also may serve other Medicaid beneficiaries under 25
U.S.C. 1680c. As mentioned in section XVIII.A of this proposed rule,
all services covered under the clinic services benefit must be
furnished by or under the direction of a physician, so we propose to
include language in this exception specifying that services subject to
the exception would have to be furnished under the direction of a
physician to make that requirement clear.
We propose this exception based on advice and input received
through Tribal consultation and because the population served by IHS/
Tribal clinics, which is predominately AI/AN, tends to meet the
criteria CMS has identified that warrant an exception from the four
walls requirement (for example, high rates of behavioral health needs,
lack of accessible transportation, mistrust of the health care system,
and high rates of morbidity and poor health outcomes).
AI/ANs experience high rates of behavioral health diagnoses. In
particular, the opioid crisis plaguing many communities is especially
acute in Tribal communities.\298\ As reported by the Centers for
Disease Control and Prevention (CDC), AI/ANs have the highest rate of
drug overdose compared to other U.S. populations, and they experienced
a 39 percent increase in overdoses between 2019 and 2020.\299\
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\298\ Tipps, Robin T., Gregory T. Buzzard, and John A.
McDougall. 2018. ``The Opioid Epidemic in Indian Country.'' The
Journal of Law, Medicine & Ethics 46 (2): 422-36. https://doi.org/10.1177/1073110518782950.
\299\ Centers for Disease Control and Prevention (CDC), ``Drug
Overdose Prevention in Tribal Communities,'' CDC, May 2, 2024,
https://www.cdc.gov/overdose-prevention/health-equity/tribal-communities.html?CDC_AAref_Val=https://www.cdc.gov/drugoverdose/health-equity/tribal.html.
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Many AI/ANs also experience difficulties accessing services due to
lack of transportation. Tribal lands encompass about 56 million acres
nationwide, including 145,000 miles of roads.\300\ Roads in Tribal
communities are typically rudimentary and in poor condition. For
example, about 70 percent of Tribal roads across the country are
unpaved compared to 45 percent of all rural roads.301 302
Because Tribal communities are often located in rural or remote areas
covering vast distances, providers can be extremely far away from their
patients. For example, it is common for AI/ANs to have to travel
between 60 and 90 miles one-way for health care appointments.\303\ Many
AI/ANs also do
[[Page 59480]]
not have reliable personal transportation. The rate of AI/ANs without a
personal vehicle is more than double that of individuals in other rural
areas.\304\ Per a recent CDC report, approximately 17.1 percent of AI/
ANs lack reliable transportation, the highest rate compared to other
U.S. populations, and this is a barrier to accessing health care.\305\
Many AI/ANs have a profound mistrust of the Federal government and
mainstream providers based on trauma from a long history of harmful
U.S. Tribal policies, such as removal of AI/ANs from homelands and
Tribal community structures, bans on cultural practices and language,
forced relocation to reservations, abusive boarding school practices,
and other destructive policies. AI/AN health disparities are the
visible, lingering result of these harmful policies.\306\
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\300\ Congressional Research Service (CRS), Highways and Highway
Safety on Indian Lands, CRS Report, (Washington, DC, 2016), https://www.everycrsreport.com/files/20160202_R44359_38af583fdef681edc7b5d4daeeeb5bc506a4f919.pdf.
\301\ Id.
\302\ CRS, Rural Highways, CRS Report, (Washington, DC, 2018),
https://crsreports.congress.gov/product/pdf/R/R45250.
\303\ Government Accountability Office (GAO), Indian Health
Service: Health Care Services Are Not Always Available to Native
Americans, GAO-05-789, (Washington, DC, 2005), https://www.gao.gov/assets/gao-05-789.pdf.
\304\ CRS, Tribal Highway and Public Transportation Programs, In
Focus, (Washington, DC, 2022), https://crsreports.congress.gov/product/pdf/IF/IF12129.
\305\ CDC, National Center for Health Statistics (NCHS), Lack of
Reliable Transportation for Daily Living Among Adults: United
States, 2022, by Amanda E. Ng, Dzifa Adjaye-Gbewonyo, and James
Dahlhamer, NCHS Data Brief No. 490, (Hyattsville, MD, 2024), https://dx.doi.org/10.15620/cdc:135611.
\306\ U.S. Commission Civil Rights, Broken Promises: Continuing
Federal Funding Shortfall for Native Americans, Briefing Report,
(Washington, DC, 2018), https://www.usccr.gov/files/pubs/2018/12-20-Broken-Promises.pdf.
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Furthermore, AI/ANs face poorer health outcomes than all other
adults on average and have the lowest life expectancy compared to other
U.S. populations. For example, AI/ANs have higher rates of obesity,
heart disease, and diabetes than other adults in the U.S. population on
average.\307\ The CDC's Provisional Life Expectancy Estimates for 2021
found a severe drop in life expectancy for AI/ANs--decreasing by 6.6
years from 2019 to 2021.\308\ Not only do AI/ANs, on average, die
younger than all other Americans, but this disparity is worsening at an
alarming rate. AI/AN life expectancy today is the same as it was for
the average American in 1944.\309\
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\307\ MACPAC, Medicaid's Role in Health Care for American
Indians and Alaska Natives, Issue Brief, (Washington, DC, 2021),
https://www.macpac.gov/wp-content/uploads/2021/02/Medicaids-Role-in-Health-Care-for-American-Indians-and-Alaska-Natives.pdf.
\308\ CDC, NCHS, Provisional Life Expectancy Estimates for 2021,
by Elizabeth Arias, Betzaida Tejada-Vera, Kenneth D. Kochanek, and
Farida B. Ahmad, Vital Statistics Rapid Release Report No. 23,
(Hyattsville, MD, 2022), https://dx.doi.org/10.15620/cdc:118999.
\309\ IHS, ``Disparities,'' Indian Health Services, October
2019, https://www.ihs.gov/newsroom/factsheets/disparities/.
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This evidence indicates that an exception to the four walls
requirement is warranted for IHS/Tribal clinics because the individuals
served by these clinics are more likely than those in other groups to
meet a higher number of the four criteria we described in this proposed
rule. Through Tribal Consultation, Tribal leaders indicated that IHS/
Tribal clinics need the flexibility to provide services to AI/ANs where
they are located due to their high levels of behavioral health
diagnoses, challenges accessing services due to lack of transportation
and appropriate infrastructure, historic mistrust of the Federal
government and the health care system, and poor health outcomes.
As explained below, we propose that behavioral health clinics and
clinics in rural areas would serve as a proxy for their patient
populations, instead of limiting the exception for behavioral health
clinics to patients with behavioral health disorders or limiting the
exception for clinics in rural areas to patients residing in rural
areas. We proposed this approach because we believe that these clinics
serve predominantly patients with behavioral health disorders or who
live in rural areas (as applicable), and to reduce the operational
burden of implementing these exceptions. Similar to the proposed
exceptions for behavioral health clinics and clinics in rural areas, we
are also proposing that the IHS/Tribal clinics would be a proxy for
their patient population, but for somewhat different reasons. The
operational burden that the proposed proxy approach would address for
behavioral health clinics and clinics in rural areas would not be as
much of an issue for IHS/Tribal clinics, because the entire patient
population of an IHS/Tribal clinic is likely to meet some or all of the
four criteria described in this proposed rule. For that same reason, a
proxy approach would be appropriate for these clinics. These clinics
serve a clearly identifiable group of Medicaid beneficiaries under IHS
statutes and regulations: Medicaid beneficiaries whom IHS/Tribal
clinics serve under 42 CFR part 136 or other Medicaid beneficiaries
whom these clinics may serve under 25 U.S.C. 1680c. As discussed above,
the population served by IHS/Tribal clinics, which is predominately AI/
AN, is more likely than other groups to meet a higher number of the
criteria identified in this proposed rule as warranting an exception.
2. Behavioral Health Clinics
We propose to add a new paragraph (d) to Sec. 440.90 to authorize
an exception to the four walls requirement for clinic services provided
outside the four walls by personnel of behavioral health clinics. This
exception would not be mandatory in States that opt to cover the clinic
services benefit but could be implemented as a State option.
Specifically, we propose an exception for clinics that are primarily
organized for the care and treatment of outpatients with behavioral
health disorders, including mental health disorders and substance use
disorders. We note that this proposed exception would include any
clinic services furnished outside of the four walls by a behavioral
health clinic, including non-behavioral clinic services such as
physical health services.
This proposed exception would include behavioral clinic types that
are recognized nationally, such as Community Mental Health Centers, and
other behavioral health clinics organized in a State. We recognize that
the types of behavioral health clinics within a State may vary, so we
are not proposing to limit this exception to specific types of
behavioral health clinics. However, to be considered a behavioral
health clinic under this proposed exception, the clinic would have to
be primarily organized to treat outpatients with behavioral health
disorders regardless of the patient mix of the clinic. For example, if
a State has established separate licensure or certification
requirements for mental health clinics and primary care clinics, under
which primary care clinics are licensed to treat outpatients for a
range of services beyond the treatment of behavioral health disorders,
then we would consider a mental health clinic in that State to be
primarily organized to treat outpatients with behavioral health
disorders but would not consider a primary care clinic in that State to
be primarily organized to treat such outpatients. We recognize that
there may be other means by which a State determines that a clinic is
primarily organized to treat outpatients with behavioral health
disorders (that is, other than through licensure or certification),
including behavioral health accreditation by accrediting organizations,
such as The Joint Commission, or based on the organizing documents of
the clinic, such as a business charter. If this proposal is finalized
as described, States that choose to adopt this exception would describe
the types of behavioral health clinics such exception applies to in
their Medicaid State plan. Just like our proposed exception for IHS/
Tribal clinics, we propose to include language in this exception
specifying that services subject to the exception would
[[Page 59481]]
have to be furnished under the direction of a physician.
Per 2022 data from the Substance Abuse and Mental Health Services
Administration (SAMHSA), approximately 94.7 percent of adults
nationwide with a substance use disorder did not seek substance use
treatment and nearly half of adults nationwide with a mental health
disorder did not receive mental health treatment, which suggests that
this population may have difficulty accessing behavioral health
services.\310\ Lack of transportation and geographic distance from
behavioral health services are often cited in research as barriers to
behavioral health treatment.\311\ One study of transportation-
disadvantaged adults found that nearly half of adults nationwide who
lacked medical transportation were diagnosed with depression or another
mental health disorder.\312\ Studies have found that individuals with
behavioral health disorders often report negative experiences with
providers and stigmatizing attitudes from providers are common, which
can lead to a mistrust of the health care system and forgone care.\313\
Finally, research has found that individuals with a severe mental
illness or substance use disorder experience worse health outcomes and
increased risk of premature mortality, with one recent study finding
individuals with a severe mental illness or substance use disorder
experiencing a shorter life span than comparable individuals by an
average of 6 years.\314\
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\310\ Substance Abuse and Mental Health Services Administration
(SAMHSA), Key substance use and mental health indicators in the
United States: Results from the 2022 National Survey on Drug Use and
Health, HHS Publication No. PEP23-07-01-006, NSDUH Series H-58,
(Rockville, MD, 2023), https://www.samhsa.gov/data/report/2022-nsduh-annual-national-report.
\311\ Priester, Mary Ann, Teri Browne, Aidyn Iachini, Stephanie
Clone, Dana DeHart, and Kristen D. Seay. 2016. ``Treatment Access
Barriers and Disparities among Individuals with Co-Occurring Mental
Health and Substance Use Disorders: An Integrative Literature
Review.'' Journal of Substance Abuse Treatment 61 (61): 47-59.
https://doi.org/10.1016/j.jsat.2015.09.006.
\312\ Wallace, Richard J, Paul Hughes-Cromwick, Hillary J Mull,
and Snehamay Khasnabis. 2005. ``Access to Health Care and
Nonemergency Medical Transportation: Two Missing Links.''
Transportation Research Record 1924 (January): 76-84. https://doi.org/10.3141/1924-10.
\313\ Knaak, Stephanie, Ed Mantler, and Andrew Szeto. 2017.
``Mental Illness-Related Stigma in Healthcare.'' Healthcare
Management Forum 30 (2): 111-16. https://doi.org/10.1177/0840470416679413.
\314\ Iturralde, Esti, Natalie Slama, Andrea H. Kline-Simon,
Kelly C. Young-Wolff, Don Mordecai, and Stacy A. Sterling. 2021.
``Premature Mortality Associated with Severe Mental Illness or
Substance Use Disorder in an Integrated Health Care System.''
General Hospital Psychiatry 68 (January): 1-6. https://doi.org/10.1016/j.genhosppsych.2020.11.002.
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State-specific circumstances may affect the degree to which a
State's population of individuals with behavioral health disorders
meets the four criteria described in this proposed rule. The Health
Resources and Services Administration (HRSA), in coordination with
State primary care offices, designates as Health Professional Shortage
Areas (HPSAs) \315\ areas experiencing a shortage in primary care,
dental care, or mental health care providers for a whole geographic
area, a specific population within a geographic area, and facilities
that serve these areas. HRSA publishes data for each State on the
percent of need met for primary care, dental care, and mental health
providers, with a lower percentage indicating a lower availability of
providers. It should be noted that the types of mental health providers
counted in HPSAs are set in regulation, and based on the regulations,
HRSA allows State Primary Care Offices to choose whether to count:
psychiatrists only, core mental health professionals (psychiatrists,
clinical psychologists, clinical social workers, psychiatric nurse
specialists, and marriage and family therapists), or a combination of
all types. As of December 31, 2023, there is significant variation
among States in the percent of need met for mental health care, with a
low of 9 percent and a high of 63 percent.\316\ This variation in
availability of mental health care providers may suggest that
populations of individuals with behavioral health disorders in some
States may have greater difficulty accessing behavioral health services
or accessing transportation to a behavioral health provider than those
populations in other States. There may also be significant variability
between States with regard to behavioral health outcomes and mortality.
For example, in 2021 the age-adjusted drug overdose mortality rate by
State had significant variation, from a low of 11 per 100,000 to a high
of 90 per 100,000.\317\ These differences between populations of
individuals with behavioral health disorders in different States may
suggest that the degree to which a State's population of individuals
with behavioral health disorders meets the four criteria may be
variable.
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\315\ Health Resources & Services Administration (HRSA), ``What
is Shortage Designation?'' HRSA Health Workforce, June 2023, https://bhw.hrsa.gov/workforce-shortage-areas/shortage-designation.
\316\ HRSA, Designated Health Professional Shortage Areas
Statistics, Designated HPSA Quarterly Summary, (Rockville, MD,
2024), https://data.hrsa.gov/Default/GenerateHPSAQuarterlyReport.
\317\ CDC, NCHS, ``Drug Overdose Mortality by State,'' CDC,
March 1, 2022, https://www.cdc.gov/nchs/pressroom/sosmap/drug_poisoning_mortality/drug_poisoning.htm.
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This evidence indicates that an exception to the clinic services
four walls requirement could be warranted, based on State-specific
circumstances, for clinics that are primarily organized for the care
and treatment of outpatients with a behavioral health disorder, as
these clinics might primarily serve a patient population that may be
more likely than other groups to meet more of the four criteria we
described in this proposed rule. The evidence also suggests that this
patient population is less likely to meet as many of the criteria as
consistently nationwide as patients served by IHS/Tribal clinics. Under
the proposal, a State could determine that individuals with a
behavioral health disorder in that State should be engaged by
behavioral health clinic personnel where they are located due to their
challenges accessing services, including lack of transportation and
geographic distance from services, historic mistrust and stigmatization
in the health care system, and poor health outcomes.
We considered proposing that, to qualify for this proposed
exception, clinic services would have to be provided specifically to
individuals with a behavioral health disorder, in addition to being
provided by personnel of a behavioral health clinic. However, we
believe that such a requirement would be too operationally burdensome
and that instead behavioral health clinics can serve as a proxy for a
population that generally consists of individuals with a behavioral
health disorder. We recognize there may be circumstances in which a
behavioral health clinic furnishes services to an individual who does
not have a behavioral health disorder, but it is our understanding that
behavioral health clinics generally serve a patient population that
consists primarily of individuals with behavioral health disorders
(including individuals with a formal behavioral health disorder
diagnosis and those with an undiagnosed behavioral health disorder).
Thus, these clinics can serve as a proxy for a patient population that
is more likely to have such a disorder--and thus, that includes people
who are more likely to meet more of the four criteria. In addition, we
believe that requiring clinics or States to verify that a clinic
patient has a behavioral health disorder and to deny coverage of
Medicaid clinic services provided outside the four walls if the patient
does not, would be too operationally
[[Page 59482]]
burdensome. For example, an individual might experience or present
their behavioral health symptoms in an uncommon way, an individual
might be misdiagnosed, or an individual might be experiencing a crisis
where services are needed urgently and verifying that they have a
behavioral health disorder might delay needed care. Because we believe
that behavioral health clinics can serve as a proxy for individuals
with behavioral health disorders, and because we do not want to make
this exception too operationally burdensome, we are not proposing that
to qualify for the proposed exception, clinic services must be provided
by a behavioral health clinic specifically to an individual with a
behavioral health disorder.
3. Clinics Located in Rural Areas
We propose to add a new paragraph (e) to Sec. 440.90 to authorize
an exception to the four walls requirement for clinic services provided
outside the four walls by personnel of clinics located in rural areas,
but that are not RHCs as referenced in section 1905(a)(2)(B) of the Act
and Sec. 440.20(b). This exception would not be mandatory in States
that opt to cover the clinic services benefit, but could be implemented
at State option. Just like our proposed exception for IHS/Tribal
clinics and behavioral health clinics, we propose to include language
in this exception specifying that services subject to the exception
would have to be under the direction of a physician.
Per SAMHSA data, rates of mental illness and substance use
disorders are similar in rural and urban areas.\318\ However,
individuals in rural areas with a mental illness or substance use
disorder are less likely to receive treatment than individuals in urban
areas due to more limited access to providers, as rural areas are more
likely to lack trained and specialized behavioral health
providers.\319\ For example, in 2021 the number of psychologists per
100,000 people in rural counties was less than half of the number in
urban counties.\320\ A recent study found that rural individuals on
average are 22 percent less likely than urban individuals to utilize
primary and specialty clinic services.\321\ Studies have found that
lack of transportation and distance to providers is a common barrier to
rural individuals accessing health care services.\322\ Furthermore, a
recent Government Accountability Office (GAO) report found that rural
individuals need to travel 40 miles on average to access specialty
services.\323\ With regards to mistrust of the health care system,
research has found that rural individuals have historically mistrusted
the health care at higher rates, and that some of this mistrust comes
from a perception that the health care system prioritizes urban
communities over rural communities.\324\ Per the CDC, rural individuals
are at greater risk of poor health outcomes as they tend to be older
and sicker than urban individuals.\325\ Finally, according to a CDC
National Center for Health Statistics (NCHS) study, age-adjusted
mortality rates are higher for rural individuals, with the mortality
gap increasing since 1999 between rural and urban individuals.\326\
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\318\ SAMHSA, ``2022 NSDUH Detailed Tables,'' SAMHSA, November
13, 2023, https://www.samhsa.gov/data/report/2022-nsduh-detailed-tables.
\319\ Morales, Dawn A., Crystal L. Barksdale, and Andrea C.
Beckel-Mitchener. 2020. ``A Call to Action to Address Rural Mental
Health Disparities.'' Journal of Clinical and Translational Science
4 (5): 1-20. https://doi.org/10.1017/cts.2020.42.
\320\ WWAMI Rural Health Research Center, University of
Washington. Changes in the Supply and Rural-Urban Distribution of
Psychologists in the U.S., 2014-2021. 2022. https://familymedicine.uw.edu/rhrc/wp-content/uploads/sites/4/2022/10/RHRC_DBOCT2022_PSYCHOLOGIST_Andrilla.pdf.
\321\ Nuako, Akua, Jingxia Liu, Giang Pham, Nina Smock, Aimee
James, Timothy Baker, Laura Bierut, Graham Colditz, and Li-Shiun
Chen. 2022. ``Quantifying Rural Disparity in Healthcare Utilization
in the United States: Analysis of a Large Midwestern Healthcare
System.'' Edited by Nickolas D. Zaller. PLOS ONE 17 (2): e0263718.
https://doi.org/10.1371/journal.pone.0263718.
\322\ Arcury, Thomas A., John S. Preisser, Wilbert M. Gesler,
and James M. Powers. 2005. ``Access to Transportation and Health
Care Utilization in a Rural Region.'' The Journal of Rural Health 21
(1): 31-38. https://doi.org/10.1111/j.1748-0361.2005.tb00059.x.
\323\ GAO, Rural Hospital Closures, GAO-21-93, (Washington, DC,
2020), https://www.gao.gov/assets/gao-21-93.pdf.
\324\ Lister, Jamey J., and Paul J. Joudrey. 2022. ``Rural
Mistrust of Public Health Interventions in the United States: A Call
for Taking the Long View to Improve Adoption.'' The Journal of Rural
Health 39 (1): 18-20. https://doi.org/10.1111/jrh.12684.
\325\ CDC, ``About Rural Health,'' CDC, May 16, 2024, https://www.cdc.gov/rural-health/php/about/?CDC_AAref_Val=https://www.cdc.gov/ruralhealth/about.html.
\326\ CDC, NCHS, Trends in death rates in urban and rural areas:
United States, 1999-2019, by Sally C. Curtin and Merianne Rose
Spencer, NCHS Data Brief No. 417, (Hyattsville, MD, 2021), https://dx.doi.org/10.15620/cdc:109049.
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State-specific circumstances may affect the degree to which a
State's population of individuals in rural areas meets the four
criteria described in this proposed rule. A study found that 21 percent
of adults without access to a vehicle or public transit reported
skipping needed medical care compared to only 9 percent who did not own
a vehicle but had access to public transit.\327\ According to a Federal
Highway Administration publication, just under 90 percent of passenger
trips in rural areas occur in personal vehicles.\328\ For the rural
individuals who lack access to a personal vehicle, public transit is
generally less available, with an approximate 40 percent of rural
individuals living in an area without public transit.\329\ However,
some States establish rural public transit systems that guarantee
service coverage to all residents.\330\ This variation between States
in their rural populations' access to public transit may suggest that
the degree to which a State's rural population is able to access
transportation to medical services may differ from State to State.
There may also be significant variability between States with regards
to health outcomes and mortality. For example, a CDC report found that
the percentage of excess mortality from heart disease in rural counties
varied significantly between States in the northeast and the south with
a 13 percent excess rate for the northeast States and 56 percent for
the southern States.\331\ These differences between State populations
of individuals in rural areas may suggest that the degree to which a
State's rural population meets the four criteria may be variable.
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\327\ Smith, Laura Berrie, Michael Karpman, Dulce Gonzalez, and
Sarah Morriss, ``More than One in Five Adults with Limited Public
Transit Access Forgo Health Care Because of Transportation
Barriers,'' Robert Wood Johnson Foundation, April 26, 2023, https://www.rwjf.org/en/insights/our-research/2023/04/more-than-one-in-five-adults-with-limited-public-transit-access-forgo-healthcare-because-of-transportation-barriers.html.
\328\ U.S. Department of Transportation (DOT), Federal Highway
Administration (FHWA), Chapter 11: Rural America, Status of the
Nation's Highways, Bridges, and Transit Conditions and Performance
Report, 24th Edition (Washington, DC, 2021), https://www.fhwa.dot.gov/policy/24cpr/pdf/Chapter11.pdf.
\329\ Id.
\330\ Id.
\331\ CDC, Potentially Excess Deaths from the Five Leading Cause
of Death in Metropolitan and Nonmetropolitan Counties--United
States, 2010-2017, by Macarena C. Garcia, Lauren M. Rossen, Brigham
Bastian, Mark Faul, Nicole F. Dowling, Cheryll C. Thomas, Linda
Schieb, Yuling Hong, Paula W. Yoon, and Michael F. Iademarco,
Morbidity and Mortality Weekly Report Vol. 68, No. 10, (Atlanta, GA,
2019), https://www.cdc.gov/mmwr/volumes/68/ss/pdfs/ss6810a1-H.pdf.
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This evidence indicates that an exception to the clinic services
four walls requirement could be warranted, based on State-specific
circumstances, for services furnished by clinics located in rural areas
that are not RHCs, as these clinics might primarily serve a patient
population that may be more likely than other groups to meet more of
the four criteria we identified in this proposed rule. The evidence
also suggests that this patient population is less likely to meet as
many of the criteria as
[[Page 59483]]
consistently nationwide as patients served by IHS/Tribal clinics. Under
the proposal, a State could determine that individuals who reside in
rural areas in that State should be engaged where they are located by
personnel of a clinic located in a rural area, due to their challenges
accessing behavioral health services, overall health care access
challenges stemming from lack of transportation and distance from
providers, historic mistrust of the health care system, and poor health
outcomes. We note that clinics located in rural areas providing
optional services as authorized under sections 1902(a)(10) and
1905(a)(9) of the Act and 42 CFR 440.90 are distinct from RHCs
providing mandatory services as authorized under sections 1902(a)(10)
and 1905(a)(2)(B) of the Act and 42 CFR 440.20(b). RHC services are a
separate Medicaid benefit provided by a type of facility that is
referenced in section 1905(a)(2)(B) of the Act and 42 CFR 440.20(b),
and a four walls requirement does not apply to that benefit under
Federal Medicaid law.
We considered proposing that, to qualify for this proposed
exception, clinic services would have to be provided specifically to
individuals who reside in rural areas, in addition to being provided by
personnel of a clinic located in a rural area. However, we believe
clinics located in rural areas can serve as a proxy for a population
that generally consists of individuals who reside in rural areas, and
that such a requirement would be too operationally burdensome. We
recognize there may be circumstances in which a clinic located in a
rural area furnishes services to an individual who does not reside in a
rural area, but it is our understanding that clinics located in rural
areas generally serve a patient population that consists primarily of
individuals who reside in rural areas. Thus, these clinics can serve as
a proxy for a patient population that is more likely to reside in a
rural area--and thus, that includes people who are more likely to meet
more of the four criteria. In addition, we believe that requiring
clinics or States to verify that a clinic patient lives in a rural
area, and to deny coverage of Medicaid clinic services provided outside
the four walls if the patient does not, would be too operationally
burdensome. For example, an individual's address might change
frequently, an individual might refuse to provide their address, or the
clinic might be located in a rural area that borders a non-rural area.
Because we believe that clinics located in rural areas can serve as a
proxy for individuals who reside in rural areas, and because we do not
want to make this exception too operationally burdensome, we are not
proposing that to qualify for the proposed exception, clinic services
must be provided by a clinic located in a rural area specifically to an
individual who resides in a rural area.
We have not included a definition of ``rural'' in proposed rule
text, but are considering defining that term in the final rule and are
considering various approaches to doing so, on which we seek comment.
There are many Federal and State definitions of rural for various
programs, and no single definition precisely identifies all rural
areas. The Rural Health Information Hub provides a non-official tool
that could be used to help identify if a specific location is
considered a rural location based on various definitions.\332\ Some
rural definitions may categorize areas that are generally recognized as
suburban as rural, while other definitions may classify sparsely
populated remote areas as urban. For example, the population residing
in rural areas identified by a more limited rural definition may more
closely meet more of the four criteria identified in this proposed rule
than the population residing in rural areas identified under a broader
definition. Definitions of rural adopted and used by Federal
governmental agencies for programmatic purposes include the definition
used by the Census Bureau, the definition used by the Office of
Management and Budget (OMB), and the definition used by HRSA's Federal
Office of Rural Health Policy (FORHP).333 334 In addition,
we believe that State-level variations may also affect whether certain
ways of defining rural are appropriate in specific States. States may
have their own definitions of rural under State law or regulation for
various programmatic purposes, such as definitions adopted by State
primary care offices or State Offices of Rural Health.
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\332\ ``Am I Rural?--Tool,'' Rural Health Information Hub,
accessed May 7, 2024, https://www.ruralhealthinfo.org/am-i-rural.
This tool is not official and should not be relied upon as a formal
Federal determination that a location is rural.
\333\ HRSA, ``Defining Rural Population,'' Health Resources &
Services Administration, January 2024, https://www.hrsa.gov/rural-health/about-us/what-is-rural.
\334\ Response to Comments on Revised Geographic Eligibility for
Federal Office of Rural Health Policy Grants, 86 FR 2418 (January
12, 2021). See, https://www.federalregister.gov/documents/2021/01/12/2021-00443/response-to-comments-on-revised-geographic-eligibility-for-federal-office-of-rural-health-policy.
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Under any definition of rural, the specific areas identified as
rural may change over time and that would have a direct impact on the
scope of clinics eligible for this proposed four walls exception. For
example, areas identified as rural under the Census definition may
change after the decennial census, which may result in some clinics no
longer being located in rural areas under that updated definition.
We considered the following approaches to defining rural: adopting
one of the commonly used definitions of rural adopted by the Federal
governmental agencies referenced above, permitting a State to adopt a
definition of rural that is adopted and used by a Federal governmental
agency for programmatic purposes, permitting a State to adopt a
definition of rural that is adopted and used by a State governmental
agency with a role in setting State rural health policy, or not
adopting any definition of rural.
We note that the research, data, and reports cited earlier in this
section do not all use the same definition of rural, and for four of
the citations it is unclear what definition of rural was used. The
SAMHSA data, the study on primary and specialty care utilization, and
NCHS study use the OMB definition while the CDC health outcomes
research uses the Census Bureau definition and the GAO report uses the
FORHP definition of rural.
If we adopt a Federal definition, we would finalize in rulemaking
that for the purposes of this exception rural is defined as the
definition of rural adopted or used by the Census Bureau, OMB, or FORHP
(we would adopt only one of these definitions). The benefits to
adopting a Federal definition include that the definition would be
consistent for all States electing to implement the exception and all
clinics located in rural areas in such States. However, if we adopted a
specific Federal definition of rural then States could not consider the
variation in which their rural populations under different rural
definitions meet the four criteria we describe in this proposed rule.
In addition, CMS does not directly control any of these Federal
definitions, so if we adopt a specific Federal definition then future
rulemaking might be necessary to align our rule with another Federal
agency's changes to that Federal definition.
The Census Bureau does not specifically define rural but considers
any area that is not urban as rural. An urban area must meet certain
density standards and contain at least 2,000 housing units or at least
5,000 people. There are 2,644 urban areas defined by the Census Bureau
following the 2020 Census. Over 80 percent of the Census-defined urban
areas (2,134 urban areas) have populations of less than 50,000
[[Page 59484]]
people while the remaining 19 percent (510 urban areas) have
populations of 50,000 people or more.\335\ Following the 2020 Census,
the Census Bureau does not sub-categorize urban areas as Urbanized
Areas or Urban Clusters.\336\ If we adopted the Census Bureau
definition, then we would finalize in rulemaking that a rural area is
defined as an area identified by the Census Bureau in ``Urban Area
Criteria for the 2020 Census-Final Criteria,'' 87 FR 16706 as not being
an urban area. The advantage to the Census Bureau definition of rural
is that it is a widely recognized definition, which may make it an
easier definition to implement for purposes of an exception to the
clinic services four walls requirement, if this proposed rule is
finalized. A disadvantage to the Census Bureau definition is that the
Census Bureau's urban area boundaries do not follow other
administrative units, such as county or municipality borders, and may
be complex to operationalize. The Census Bureau provides TIGERweb
Decennial online mapping tools for urban area boundaries at https://tigerweb.geo.census.gov/ that may be helpful for interested parties
considering what it would mean for CMS to finalize a rule that defines
rural according to the U.S. Census Bureau's definition. The CDC
research on health outcomes we cite elsewhere in this section used the
Census Bureau definition, which demonstrates that this definition can
be linked to the four criteria described in this proposed rule.
However, the Census Bureau definition is broad, and some policy experts
point out that the definition classifies many suburban areas as rural
while also classifying towns and small cities with populations of less
than 50,000 people as non-rural.\337\
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\335\ Census Bureau, ``Urban and Rural,'' United States Census
Bureau, September 2023, https://www.census.gov/programs-surveys/geography/guidance/geo-areas/urban-rural.html.
\336\ Urban Area Criteria for the 2020 Census-Final Criteria, 87
FR 16706 (Mar. 24, 2022). See, https://www.federalregister.gov/documents/2022/03/24/2022-06180/urban-area-criteria-for-the-2020-census-final-criteria.
\337\ Revised Geographic Eligibility for Federal Office of Rural
Health Policy Grants, 85 FR 59806 (Oct. 23, 2020). See, https://www.federalregister.gov/documents/2020/09/23/2020-20971/revised-geographic-eligibility-for-federal-office-of-rural-health-policy-grants.
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OMB also does not specifically define rural, but designates areas
as metropolitan, micropolitan, or neither (also known as noncore).\338\
A metropolitan area consists of an urban core of 50,000 or more
individuals, a micropolitan area consists of an urban core of 10,000 to
49,999 individuals, and all other areas are considered neither. Areas
that are micropolitan or neither are considered rural while
metropolitan areas are considered urban.\339\ If we adopted the OMB
definition, then we would finalize in regulation text that a rural area
is defined as an area not identified as metropolitan by OMB, as
described in ``2020 Standards for Delineating Core Based Statistical
Areas,'' 86 FR 37770. Like the Census Bureau definition of rural, the
OMB definition is a widely recognized definition that may be an easier
definition to implement for purposes of an exception to the clinic
services four walls requirement, if this proposed rule is finalized.
For example, the study on primary and specialty care utilization and
the NCHS study on mortality we cite elsewhere in this section use the
OMB definition, which demonstrates that this definition can be linked
to the four criteria described in this proposed rule. In addition, the
NCHS Urban-Rural Classification Scheme for Counties follows the OMB
definition of rural and is widely used in health research.\340\
However, the OMB definition is considered by some policy experts to be
too narrow as areas OMB defines as metropolitan include areas that are
often considered to be rural, like for example the Grand Canyon.\341\
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\338\ 2020 Standards for Delineating Core Based Statistical
Areas, 86 FR 37770 (July 16, 2021). See, https://www.federalregister.gov/documents/2021/07/16/2021-15159/2020-standards-for-delineating-core-based-statistical-areas.
\339\ HRSA, Defining Rural Population.
\340\ CDC, NCHS, ``NCHS Urban-Rural Classification Scheme for
Counties,'' CDC, June 1, 2017, https://www.cdc.gov/nchs/data_access/urban_rural.htm.
\341\ Revised Geographic Eligibility for Federal Office of Rural
Health Policy Grants, 85 FR 59806 (Oct. 23, 2020).
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The last Federal definition of rural we are considering is the
FORHP definition, which consists of all non-metropolitan counties, all
metropolitan census tracts with Rural-Urban Commuting Area (RUCA) codes
four through ten, large area census tracts of at least 400 square miles
in area with population density of 35 or less per square mile with RUCA
codes two to three, and all outlying metropolitan counties without an
Urbanized Area.342 343 If we adopted the FORHP definition,
then we would finalize in regulation text that a rural area is defined
as an area identified as rural by FORHP, as described in ``Response to
Comments on Revised Geographic Eligibility for Federal Office of Rural
Health Policy Grants,'' 86 FR 2418. We recognize that the FORHP
definition uses terminology that has not yet been updated to align with
the latest Census Bureau terminology, that is, FORHP currently refers
to urbanized area, but we are still considering the FORHP definition,
as is, based on its wide use and the benefits described in this
paragraph. We note that FORHP is proposing to update the FORHP
definition to incorporate the U.S. Department of Agriculture's Economic
Research Service (ERS) Road Ruggedness Scale (RRS) measure of rugged
terrain into the existing definition, specifically for census tracts of
at least 20 square miles in area in metro counties with RRS 5 and RUCA
code 2 or 3. In addition, if finalized, the update will align the FORHP
definition's use of Census Bureau terminology with the current Census
Bureau definition.\344\ If this proposed update to the FORHP definition
is finalized, we would then consider the updated FORHP definition for
the final rule over the existing FORHP definition. The advantage to the
FORHP definition is that it is more precise, as it is narrower than the
Census Bureau definition and broader than the OMB definition. In
addition, as described elsewhere in this section, the GAO report that
identified rural individuals needing to travel 40 miles on average to
access specialty care used the FORHP definition in effect at the time
of the report, which demonstrates that this definition can be linked to
the four criteria we describe in this proposed rule. However, some have
criticized the FORHP definition for excluding some areas that used to
be considered rural while others consider the definition to be too
expansive.\345\
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\342\ Response to Comments on Revised Geographic Eligibility for
Federal Office of Rural Health Policy Grants, 86 FR 2418 (January
12, 2021).
\343\ HRSA, Defining Rural Population.
\344\ Proposed Inclusion of Terrain Factors in the Definition of
Rural Area for Federal Office of Rural Health Policy Grants, 89 FR
32451 (April 26, 2024). See, https://www.federalregister.gov/documents/2024/04/26/2024-08931/proposed-inclusion-of-terrain-factors-in-the-definition-of-rural-area-for-federal-office-of-rural.
\345\ Response to Comments on Revised Geographic Eligibility for
Federal Office of Rural Health Policy Grants, 86 FR 2418 (January
12, 2021).
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Instead of specifying a uniform definition of rural nationwide for
this exception, we are also considering allowing States to adopt a
definition of rural that has been adopted by a Federal governmental
agency. If we permit States to adopt a definition of rural that is
adopted by a Federal governmental agency for programmatic purposes,
then we would finalize in regulation text that a rural area is defined
by the State based upon a reasonable definition adopted by a Federal
governmental agency for programmatic purposes. We would not
specifically list out the Federal
[[Page 59485]]
definitions of rural that we consider reasonable in the regulation
text. In addition to the Census, OMB, and FORHP definitions, we would
consider rural definitions developed by the U.S. Department of
Agriculture's Economic Research Service (ERS) to be reasonable
definitions for a State to select if we adopt this option in the final
rule (this would include RUCAs, Rural-Urban Continuum Codes, Urban-
Influence Codes, and Frontier and Remote Area Codes).\346\ We did not
consider adopting any of the ERS definitions as one of the Federal
definitions we are considering (as described above) because it is our
understanding that the ERS definitions are less commonly used on their
own (that is, not in conjunction with other Federal definitions) in
identifying rural areas in health care. However, the ERS definitions
could be used by States if we opt to permit States to identify a
Federal definition. While we do not believe that any of the ERS
definitions should be adopted as one definition for all States to
follow, if we provide States with the flexibility to adopt a Federal
definition, then we want to ensure that we are not too prescriptive in
the definitions they may choose from. It is possible that a State could
determine that one of the ERS definitions better captures the
population of rural individuals that meets the four criteria described
in this proposed rule. Under such an approach, States that elect this
exception would identify the specific Federal definition of rural (that
is, Census Bureau, OMB, FORHP definition, or one of the ERS
definitions) they are adopting in their State plan and attest that the
selected definition best captures the population of rural individuals
that meets more of the four criteria described in this proposal. The
benefits to this approach include that each State can consider which
Federal definition of rural best captures the population of rural
individuals that meet more of the four criteria described in this
proposed rule for that State (and States would attest to this in their
State plan), while also being required to adopt a rural definition
commonly accepted as a legitimate definition for programmatic purposes
at the national level. Requiring the State to attest that the selected
Federal definition best captures the population of rural individuals
that meets more of the four criteria would help to ensure that there is
an explanation for any variations in the definitions selected by
different states. However, even if the variations in the definitions
chosen by different States can be explained, it might burden or cause
confusion for some beneficiaries if the States that elect this
exception have different definitions of rural. For example, a
beneficiary that moves from a State that has adopted this exception
with a broader definition of rural to another State that has adopted
the exception but has a narrower definition of rural might lose access
to clinic services provided outside of the four walls. In addition, if
we finalize this proposal, clinics that operate in different States
that have adopted this exception might find it confusing or burdensome
to track each such State's definition of rural.
---------------------------------------------------------------------------
\346\ U.S. Department of Agriculture (USDA), Economic Research
Services (ERS), ``Rural Classifications,'' USDA, September 8, 2023,
https://www.ers.usda.gov/topics/rural-economy-population/rural-classifications/.
---------------------------------------------------------------------------
If we permit States to adopt a definition of rural that is adopted
by a State governmental agency with a role in setting State rural
health policy, then we would finalize in regulation text that a rural
area is defined by the State based upon a rural definition adopted by a
State governmental agency with a role in setting State rural health
policy. Under such an approach, a State that elects this exception
would describe in its State plan the specific definition of rural that
it is adopting, attest that this definition has been adopted by a State
governmental agency with a role in setting State rural health policy
(such as a State primary care office or State Office of Rural Health),
and attest that the selected definition best captures the population of
rural individuals that meets more of the four criteria described in
this proposal. The benefits to this approach include that States may
consider a State definition of rural that best identifies the
population of rural individuals that meet more of the four criteria
described in this proposed rule, and attest to in their State plan that
the definition does so. Requiring the State to attest that the selected
definition best captures the population of rural individuals that meets
more of the four criteria would help to ensure that there is an
explanation for any variations in the definitions selected by different
States. In addition, under this approach to defining rural, the State
would adopt a rural definition commonly accepted and used to manage
State programs, which thus may be a more familiar definition to
providers and be easier for a State to implement since that definition
is also used for other health policy purposes in that State. However,
even if the variations in the definitions chosen by different States
can be explained, it might burden or cause confusion for some
beneficiaries if the States that elect this exception have different
definitions of rural. For example, a beneficiary that moves from a
State that has adopted this exception with a broader definition of
rural to another State that has adopted the exception but has a
narrower definition of rural may lose access to clinic services
provided outside of the four walls. In addition, if we finalize this
proposal, clinics that operate in different States that have adopted
this exception might find it confusing or burdensome to track each such
State's definition of rural.
Finally, if we choose not to define rural in the final rule, then
we would finalize proposed regulation text with no definition of rural.
Under this approach, a State that elects this exception would choose
any definition of rural that can be linked to the four criteria we
describe in this proposed rule and meets its program needs, but would
not identify the definition in the State plan or submit it to CMS for
review and approval. We would require and finalize in rule text that
the State would publish its rural definition on a website maintained by
the State that is accessible to the public. The benefits to not
adopting a definition of rural under the final rule would include that
States can consider which definition of rural best captures the
population of rural individuals that meets more of the four criteria
described in this proposed rule. This approach also recognizes that
States may have the best information and data to determine the
definition of rural that best meets their operational needs. However,
under this approach CMS would not be reviewing State definitions of
rural, and a State might adopt a definition of rural that could be
considered to be overly broad or overly narrow. For example, a State
might adopt a definition of rural that encompasses large urban areas,
such as a populous city. As we stated earlier in this section of the
proposed rule, we are aware that there are many definitions of rural,
so the other approaches we are considering could potentially leave out
reasonable definitions of rural, although we are not currently aware of
any such reasonable definitions. We invite comment on which approach to
defining rural we should adopt if the rule is finalized.
4. Additional Four Walls Considerations
We propose that the proposed exception to the four walls
requirement for IHS/Tribal clinics would be a mandatory component of
the clinic services benefit for States electing to cover that benefit.
We propose that the proposed exceptions for behavioral health clinics
and clinics located in
[[Page 59486]]
rural areas would be optional for States covering that benefit. In
addition, we propose to codify in regulation text our longstanding
interpretation (discussed in section XVIII.A of this proposed rule)
that existing Sec. 440.90(a) and (b) are mandatory components of the
clinic services benefit for States that elect to cover that benefit.
Finally, we propose to delete the word ``eligible'' from existing
regulation text at Sec. 440.90(b) because there is no Federal
authority for States to provide Medicaid-covered services to
individuals who are ineligible for Medicaid, so we believe it is
unnecessary to specify that the individuals who would receive services
under this exception are eligible.
We propose to make the exception for IHS/Tribal clinics mandatory
because the population served by IHS/Tribal clinics more consistently
meets the four criteria described above, both within and across States,
than the populations targeted by the optional exceptions, especially
given the degree of State variability in whether the populations
targeted by the optional exceptions meet those criteria. Further,
Medicaid is the largest source of third-party payment for services
billed by IHS facilities, accounting for nearly two-thirds of health
coverage payments to these facilities.\347\ Given the significant role
of Medicaid as a payer for IHS/Tribal clinic services, any reduction in
the Medicaid payments IHS/Tribal clinics receive for services (such as
a reduction in payment from the AIR to a professional services rate for
services furnished outside the four walls by the clinic) might uniquely
burden IHS/Tribal clinics. These clinics might need to curtail their
available services, or no longer provide services outside the four
walls, which could significantly impede their ability to serve their
patients. For these reasons, we propose a mandatory exception to the
clinic services four walls requirement for IHS/Tribal clinics.
---------------------------------------------------------------------------
\347\ Assistant Secretary of Planning and Evaluation (ASPE), How
Increased Funding Can Advance the Mission of the Indian Health
Service to Improve Health Outcomes for American Indians and Alaska
Natives, Report No. HP-2022-21, (Washington, DC, 2022), https://aspe.hhs.gov/sites/default/files/documents/1b5d32824c31e113a2df43170c45ac15/aspe-ihs-funding-disparities-report.pdf.
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In contrast to the exception for IHS/Tribal clinics, we believe
that the exceptions for behavioral health clinics and clinics located
in rural areas should be optional because there may be geographic
variability in the degree to which the populations served by these
clinics meet the four criteria we described above, and thus there may
be State-specific variation in the degree to which these populations
have the four characteristics described in this proposed rule. For
example, the populations served by behavioral health clinics and
clinics located in rural areas may not as consistently face
transportation challenges nationwide, to the extent that Tribal
populations do. In addition, it is our understanding that Medicaid
funding is less often the largest source of payment for behavioral
health clinics and clinics located in rural areas, compared to IHS/
Tribal clinics. We believe it best to let each State assess the degree
to which these two exceptions might be warranted based on the State's
specific circumstances. In making this assessment, each State should
consider the degree to which individuals located in rural areas of the
State and/or individuals with behavioral health disorders in the State
meet the four criteria described in this proposed rule. We solicit
comment on the arguments made in this proposed rule in support of the
mandatory and optional exceptions, and on whether the optional
exceptions should also be mandatory for States opting to cover the
clinic services benefit.
If we finalize this proposed rule as proposed, then upon the
effective date of the final rule, services qualifying for the exception
for IHS/Tribal clinics must be paid for as Medicaid clinic services in
States that opt to cover that benefit. Accordingly, we would require
States that cover the clinic services benefit to submit a State plan
amendment (SPA), as applicable, to attest to coverage of IHS/Tribal
clinic services under the exception. Similarly, if we finalize this
proposed rule as proposed, then no earlier than the effective date of a
SPA or SPAs implementing one or both of the optional exceptions,
services provided outside the four walls under the exceptions may be
paid for as Medicaid clinic services. Under any of the exceptions, the
excepted services could be paid for using a facility-based Medicaid
clinic services payment methodology, which for most IHS/Tribal clinics
is the AIR.
We are not proposing any additional exceptions to the clinic
services four walls requirement. It is our understanding that other
populations are better able than those targeted by the proposed
exceptions to access services through Medicaid benefits to which a four
walls requirement does not apply under Federal Medicaid law (for
example, FQHC services, RHC services, outpatient hospital services,
etc.). As described in section XVIII.A of this proposed rule, States
have considerable discretion regarding the types of clinics they opt to
cover under the clinic services benefit. There are no specific Federal
Medicaid credentialling requirements, such as licensure or
certification, for providers of the Medicaid clinic services benefit
like there are for other Medicaid facility State plan benefits, such as
hospitals and nursing facilities. This leads to considerable
variability in the types of clinics providing services that a State may
cover under the clinic services benefit. We invite comment on whether
there are additional populations that are likely to meet the four
criteria described in this proposed rule and that have no alternative
access to services through Medicaid benefits not subject to a four
walls requirement under Federal Medicaid law, and on whether there are
additional types of clinics that might serve as a proxy for such a
population.
XIX. Changes to the Review Timeframes for the Hospital Outpatient
Department (OPD) Prior Authorization Process
The CMS Interoperability and Prior Authorization final rule (89 FR
8758) (Medicare and Medicaid Programs; Patient Protection and
Affordable Care Act; Advancing Interoperability and Improving Prior
Authorization Processes for Medicare Advantage Organizations, Medicaid
Managed Care Plans, State Medicaid Agencies, Children's Health
Insurance Program (CHIP) Agencies and CHIP Managed Care Entities,
Issuers of Qualified Health Plans on the Federally-Facilitated
Exchanges, Merit-Based Incentive Payment System (MIPS) Eligible
Clinicians, and Eligible Hospitals and Critical Access Hospitals in the
Medicare Promoting Interoperability Program) creates, improves, or
shortens prior authorization timeframes for certain payers such as
Medicare Advantage organizations and applicable integrated plans, CHIP
FFS programs, Medicaid managed care plans, and CHIP managed care
entities to respond to prior authorization requests for covered items
and services, excluding drugs (89 FR 8878). The final rule requires
impacted payers (excluding Qualified Health Plan issuers on the
Federally-Facilitated Exchanges) to send prior authorization decisions
as expeditiously as the enrollee's health condition requires or as the
beneficiary's health condition requires but no later than 72 hours for
expedited (that is, urgent) requests and 7 calendar days for standard
(that is, non-urgent) requests.
As part of the CY 2020 OPPS/ASC final rule with comment period (84
FR 61446 through 61456), CMS established a nationwide prior
authorization
[[Page 59487]]
process and requirements for certain OPD services. OPD providers must
submit to the Medicare Administrative Contractor (MAC) a prior
authorization request for any service on the list of outpatient
department services that require prior authorization. CMS currently
requires prior authorization for the following services:
blepharoplasty, rhinoplasty, botulinum toxin injections,
panniculectomy, vein ablation, cervical fusion with disc removal,
implanted spinal neurostimulators, and facet joint interventions. Upon
receipt of the prior authorization request, the MAC should review it
and issue a decision within specific timeframes, which are listed in
the regulation text at Sec. 419.82(d)(1)(iii) and Sec. 419.82(d)(2).
These timeframes ensure providers receive timely responses and
beneficiaries get appropriate care. While Medicare FFS is not an
impacted payer under the CMS Interoperability and Prior Authorization
final rule, we propose to align our Medicare FFS prior authorization
review timeframe for standard review requests for hospital outpatient
department services with the timeframe in this final rule. This change
would not only streamline the prior authorization processes so that
they are the same across payers but would also help to reduce provider
burden by having the same timeframe and reducing the potential for
delays in care by decreasing the time beneficiaries and providers wait
for prior authorization decisions on standard requests in FFS Medicare.
We propose to change the current review timeframe for provisionally
affirmed or non-affirmed standard review requests for these services
from 10-business days to 7-calendar days in Sec. 419.82(d)(1)(iii).
For example, if a standard request is submitted on a Tuesday, June 2,
under the new timeframe, a decision must be rendered by the next
Monday, June 8, whereas under the old timeframe, the decision must be
rendered by Monday, June 15.
We are still considering the impact of aligning our expedited
review decision timeframe with the expedited review decision timeframe
in the CMS Interoperability and Prior Authorization final rule because,
depending on when the expedited request is submitted, it may take
longer for OPD provider to receive a decision using the 72-hour
timeframe than our current expedited timeframe of 2-business days. The
goal of changing the standard review timeframe is not only to align the
timeframe across the prior authorization programs but also to reduce
the time beneficiaries wait to access the care they need. Since
changing the expedited review decision timeframe from 2-business days
to 72 hours would not reduce beneficiaries' wait time in all
circumstances, we are not proposing to conform that timeframe with the
one in the CMS Interoperability and Prior Authorization final rule at
this time, but we may address this issue in future rulemaking.
XX. Provisions Related to Medicaid and the Children's Health Insurance
Program (CHIP)
A. Continuous Eligibility in Medicaid and CHIP (42 CFR 435.926 and
457.342)
Continuous eligibility (CE) provides important coverage protections
for low-income children who are eligible for Medicaid or CHIP. Research
indicates that children who are disenrolled from coverage for all or
part of a year are more likely to have fair or poor health status
compared to children who have health coverage continuously throughout
the year.\348\ CE, in those States that have adopted it, has shown to
reduce financial barriers to accessing health care for low-income
families, promote health equity, and provide States with better tools
to hold health plans (where applicable) accountable for quality care
and improved health outcomes.\349\ CE policies may also be beneficial
to States, as they may result in reduced administrative burden on State
agencies associated with repeated eligibility reviews and re-
enrollments following a gap in coverage.\350\
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\348\ Brantley, E., & Ku, L. (2022). Continuous eligibility for
Medicaid associated with improved child health outcomes. Medical
Care Research and Review, 79(3), 404-413.
\349\ Park, E., Alker, J., & Corcoran, A. (2020). Jeopardizing a
Sound Investment: Why Short-Term Cuts to Medicaid Coverage During
Pregnancy and Childhood Could Result in Long-Term Harm. Retrieved
from: https://www.commonwealthfund.org/publications/issue-briefs/2020/dec/short-term-cuts-medicaid-long-term-harm.
\350\ Georgetown University. (2021). Advancing Health Equity for
Children and Adults with a Critical Tool: Medicaid and Children's
Health Insurance Program Continuous Coverage. Retrieved from https://ccf.georgetown.edu/wp-content/uploads/2021/10/continuity-of-coverage-final.pdf.
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Prior to January 1, 2024, States had the option to provide up to 12
months of continuous coverage to children under age 19 enrolled in
Medicaid or CHIP, regardless of changes in circumstances that otherwise
would impact their eligibility for these programs. This option has been
available to State Medicaid programs under section 1902(e)(12) of the
Act and Federal regulations at Sec. 435.926 and to States' separate
CHIP programs through Federal regulations at Sec. 457.342. Under this
option, States had the option to elect an age limit under age 19 and/or
CE periods shorter than 12 months. However, except for the limited
exceptions defined in the regulations, states could not terminate the
coverage of children during a CE period.
Section 5112 of Title V, subtitle B of the Consolidated
Appropriations Act, 2023 (CAA, 2023) amended section 1902(e)(12) of the
Act to make the previously optional CE policy a requirement under the
state plan or waiver of the state plan for children enrolled in
Medicaid. The CAA, 2023 also added a new paragraph (K) to section
2107(e)(1) of the Act, incorporating by reference Medicaid's CE policy
into CHIP. Thus, effective January 1, 2024, States are required to
provide a 12-month period of CE that offers continuous coverage to
children under the age of 19 in Medicaid and CHIP, with limited
exceptions.
The existing Medicaid continuous eligibility regulation includes
three exceptions that were unaffected by the CAA, 2023, and that would
not be altered by this proposed rule. These exceptions permit States to
terminate coverage for children during a CE period if the child or
child's representative requests a voluntary termination of eligibility;
the agency determines that eligibility was erroneously granted at the
most recent determination, redetermination, or renewal of eligibility
because of agency error or fraud, abuse, or perjury attributed to the
child or the child's representative; or the child is deceased. The CAA,
2023 amended section 1902(e)(12) of the Act to make the CE option
mandatory for state Medicaid programs, but it did not foreclose these
existing exceptions that CMS had already promulgated pursuant to
section 1902(e)(12), which are important to maintain program integrity.
We described our intention to retain these exceptions in CMS State
Health Official (SHO) Letter #23-004, Section 5112 Requirement for all
States to Provide Continuous Eligibility to Children in Medicaid and
CHIP under the Consolidated Appropriations Act, 2023, which was issued
on September 29, 2023. We do not propose any changes to these
exceptions in this proposed rule.
We propose to update the Medicaid regulations at Sec. 435.926 to
conform to changes to the CE policy effectuated by the CAA, 2023
amendments to section 1902(e)(12) of the Act, which are incorporated by
cross reference into the CHIP regulations at Sec. 457.342(a).
Specifically, as required by section 5112 of the CAA, 2023, and under
our authority under section 2101(a) of the
[[Page 59488]]
Act to ``initiate and expand the provision of child health assistance
to uninsured, low-income children in an effective and efficient
manner,'' and at section 2107(e)(1)(K) of the Act (cross-referencing
section 1902(e)(12) of the Act as amended by CAA, 2023 relating to
continuous eligibility), we propose to revise Sec. 435.926(b) to
specify that a state must provide CE for the specified period. We also
propose to revise Sec. 435.926(b)(1) to remove the option to limit CE
to an age younger than 19. We further propose to revise Sec.
435.926(c)(1) to remove the option to limit CE to a period of time of
less than 12 months. Finally, we propose to revise Sec. 435.926(d)(1)
to remove the option of ending a CE period for a person when they reach
the state-specified maximum age, as now all States must provide CE to
children until they reach age 19.
Prior to January 1, 2024, States also had the option under Sec.
457.342(b) to disenroll children from a separate CHIP for failure to
pay required premiums or enrollment fees required under the state plan,
subject to the disenrollment protections afforded under section
2103(e)(3)(C) of the Act (related to premium grace periods) and Sec.
457.570 (related to other disenrollment protections). The CAA, 2023,
changed the statutory authority for the CE period in the CHIP statute,
requiring that CE ``shall'' apply to CHIP ``in the same manner'' as it
does to Medicaid. The Medicaid continuous eligibility regulation at
Sec. 435.926 never contained an exception permitting States to
terminate coverage for failure to pay premiums or enrollment fees, so
after the CAA, 2023, the CHIP CE period also could not contain this
exception.
Therefore, under the above-mentioned authority in section 2101(a)
of the Act to enable States to provide child health assistance in an
effective and efficient manner and in section 2107(e)(1) of the Act as
amended by CAA, 2023 relating to continuous eligibility, we propose to
remove the option in Sec. 457.342(b) to disenroll children from
separate CHIP coverage for failure to pay required premiums or
enrollment fees during a continuous eligibility period. This change
will not preclude States from disenrolling children with an unpaid
premium balance at the end of their 12-month CE period, provided the
state has followed the premium grace period requirements of section
2103(e)(3)(C) of the Act. Under section 2103(e)(3)(C)(ii) of the Act,
the State must provide the child with a grace period of ``at least 30
days from the beginning of a new coverage period to make premium
payments before the individual's coverage'' may be terminated. Section
2103(e)(3)(C)(ii)(II) of the Act defines ``new coverage period'' as
``the month immediately following the last month for which the premium
has been paid.'' If a child does not pay a premium in a given month
during the CE period, the grace period extends from that month until
the 12-month CE period expires. Section 2103(e)(3)(C)(ii) of the Act
also requires the State to provide notice no later than 7 days after
the first day of the grace period (typically 7 days after the premium
payment was due) that failure to make a premium payment within the
grace period will result in termination of coverage and when such
termination will be effective.
Although current paragraph (b) of Sec. 457.342, which includes a
reference to enrollment fees, would be eliminated, the collection of
enrollment fees, as referenced in Sec. Sec. 457.10 and 457.510, would
remain an option to States. States would maintain the option to require
payment of an enrollment fee prior to initial enrollment. States will
also continue to have the option to require payment of the first
month's premium prior to enrolling a child who is determined eligible
at application and to require payment of the first month's premium or
re-enrollment fee prior to re-enrolling a child into a new CE period,
if the child is determined eligible at renewal.
XXI. Health and Safety Standards for Obstetrical Services in Hospitals
and Critical Access Hospitals
A. Background and Statutory Authority
CMS has broad statutory authority to establish health and safety
regulations, which includes the authority to establish requirements
that protect the health and safety of pregnant, postpartum, and
birthing patients. Several statutes applicable to specific provider and
supplier types explicitly give CMS the authority to enact regulations
that the Secretary finds necessary in the interest of the health and
safety of individuals who are furnished services in an institution,
while others give CMS the authority to prescribe regulations as may be
necessary to carry out the administration of the program.
Sections 1861(e)(1) through (8) of the Social Security Act (the
Act) provide that a hospital participating in the Medicare program must
meet certain specified requirements. Section 1861(e)(9) of the Act
specifies that a hospital also must meet such other requirements as the
Secretary finds necessary in the interest of the health and safety of
individuals furnished services in the institution. Under this
authority, the Secretary has established regulatory requirements that a
hospital must meet to participate in Medicare at 42 CFR part 482,
Conditions of Participation (CoPs) for Hospitals. Section 1905(a) of
the Act provides that Medicaid payments from States may be applied to
hospital services. Under regulations at 42 CFR 440.10(a)(3)(iii) and 42
CFR 440.20(a)(3)(ii), hospitals are required to meet the Medicare CoPs
in order to participate in Medicaid.
Sections 1820 and 1861(mm) of the Act, as amended by section 4201
of the Balanced Budget Act (BBA) of 1997, replaced the EACH/RPCH
program with the Medicare Rural Hospital Flexibility Program (MRHFP),
under which a qualifying facility can be designated and certified as a
critical access hospital (CAH). CAHs participating in the MRHFP must
meet the conditions for designation specified in the statute under
section 1820(c)(2)(B) of the Act, and to be certified must also meet
other criteria the Secretary may require, under section 1820(e)(3) of
the Act. Under this authority, the Secretary has established regulatory
requirements that a CAH must meet to participate in Medicare at 42 CFR
part 485, subpart F.
The CoPs for hospitals and CAHs are organized according to the
types of services a hospital or CAH may offer, and include specific,
process-oriented requirements for each hospital or CAH service or
department. The purposes of these CoPs are to protect patient health
and safety and to ensure that quality care is furnished to all patients
in Medicare-participating hospitals and CAHs. In accordance with
Section 1864 of the Act, State surveyors assess hospital and CAH
compliance with the conditions as part of the process of determining
whether a hospital qualifies for a provider agreement under Medicare.
However, under section 1865 of the Act, hospitals and CAHs can elect to
be reviewed instead by private accrediting organizations approved by
CMS as having standards that meet or exceed the applicable Medicare
standards and survey procedures comparable to those CMS requires for
State survey agencies.
1. The U.S. Maternal Health Crisis
The U.S. is currently facing a maternal health crisis which has not
only led to a maternal mortality rate that is amongst the highest in
high-income countries, but also disproportionately affects racial and
ethnic minorities. In 2022, the most recent year for which there is
data, there were 22 maternal deaths for every 100,000 live births in
the U.S. which is more than double the rate for most other high-income
[[Page 59489]]
countries. For example, in 2022, Canada, France, the United Kingdom,
Germany, and Japan had maternal death rates of 8.6 deaths per 100,000
live births or lower.\351\ In the U.S. in 2021, 1,205 women were
identified as having died while pregnant or within 42 days after
pregnancy ended. In 2022, 817 women were identified as having died in
this manner.352 353 Over 80 percent of pregnancy-related
deaths are considered preventable.\354\ Approximately 13 percent of all
pregnancy-related deaths (deaths during and up to one year after
pregnancy) occur at the time of delivery, and nearly 12 percent occur
between 1 and 6 days after the end of pregnancy.
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\351\ Munira Gunja et al., Insights into the U.S. Maternal
Mortality Crisis: An International Comparison (Commonwealth Fund,
June 2024). https://doi.org/10.26099/cthn-st75.
\352\ https://www.cdc.gov/nchs/data/hestat/maternal-mortality/2022/maternal-mortality-rates-2022.pdf.
\353\ https://stacks.cdc.gov/view/cdc/103855.
\354\ https://www.cdc.gov/reproductivehealth/maternal-mortality/erase-mm/data-mmrc.html.
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Native Hawaiian and Pacific Islander women, Black women, and
American Indian/Alaska Native (AI/AN) women are two to four times more
likely to suffer a pregnancy-related death than non-Hispanic White
women.\355\ Black and AI/AN women experience severe maternal morbidity
rates that are more than two times higher than their White
counterparts.356 357 Systemic societal barriers, including a
patient's social determinants of health, have meant that these
individuals experience a greater share of these poor maternal health
outcomes.358 359 360
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\355\ https://www.cms.gov/files/document/maternal-health-may-2022.pdf.
\356\ Centers for Disease Control and Prevention. Pregnancy
Mortality Surveillance System. Available at: https://www.cdc.gov/maternal-mortality/php/pregnancy-mortality-surveillance/index.html/
Accessed June 5th, 2024.
\357\ https://www.commonwealthfund.org/publications/issue-
briefs/2021/oct/severe-maternal-morbidity-united-states-
primer#:~:text=Approximately%20140%20of%2010%2C000%20women,severe%20m
aternal%20morbidity%20every%20year.
\358\ https://www.whitehouse.gov/wp-content/uploads/2022/06/Maternal-Health-Blueprint.pdf.
\359\ Taylor, J., Novoa, C., Hamm, K., & Phadke, S. (2021,
December 3). Eliminating Racial Disparities in Maternal and Infant
Mortality. Center for American Progress. https://www.americanprogress.org/article/eliminating-racialdisparities-maternal-infant-mortality/.
\360\ Hoffman, K.M., Trawalter, S., Axt, J.R., Oliver, M.N.
Racial bias in pain assessment and treatment recommendations, and
false beliefs about biological differences between blacks and
whites. Proc. Natl. Acad. Sci. U.S.A. 2016;113(16):4296-4301.
doi:10.1073/pnas.1516047113 https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4843483/.
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Pregnant women who live in rural communities face a higher risk for
severe maternal morbidity and have about 60 percent higher risk of
pregnancy-related deaths and are more likely to die before, during, or
the year after delivery than those living in urban
settings.361 362 Pregnant women with disabilities receive
lower quality maternity care, experience a higher risk of pregnancy and
birth-related complications, and are eleven times more likely to
experience maternal death than people without
disabilities.363 364
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\361\ White House Fact Sheet: Vice President Kamala Harris
Announces Call to Action to Reduce Maternal Mortality and Morbidity.
https://www.whitehouse.gov/briefing-room/statementsreleases/2021/12/07/fact-sheet-vice-presidentkamala-harris-announces-call-to-action-to-reducematernal-mortality-and-morbidity/.
\362\ Kozhimannil, K.B., Interrante, J.D., Henning-Smith, C., &
Admon, L.K. (2019). Rural-urban differences in severe maternal
morbidity and mortality in the US, 2007-15. Health affairs, 38(12),
2077-2085. Available at: https://www.healthaffairs.org/doi/10.1377/hlthaff.2019.00805.
\363\ Gleason, J.L., Grewal, J., Chen, Z., Cernich, A.N.,
Grantz, K.L., Risk of Adverse Maternal Outcomes in Pregnant Women
With Disabilities. JAMA Netw. Open. 2021;4(12):e2138414.
doi:10.1001/jamanetworkopen.2021.38414.
\364\ Willi Horner-Johnson et al., Perinatal Health Risks and
Outcomes Among U.S. Women With Self-Reported Disability, 41 Health
Aff. 2011 (September. 2022), https://doi.org/10.1377/hlthaff.2022.00497.
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2. Efforts To Improve Maternal Health
CMS has undertaken various efforts to improve the state of maternal
health care. In 2023, CMS launched the first ever ``Birthing-Friendly''
designation icon on CMS' Care Compare online tool.\365\ To earn the
designation, hospitals and health systems report their progress on our
Maternal Morbidity Structural Measure to the Hospital Inpatient Quality
Reporting (IQR) Program. The measure determines whether a hospital or
health system has participated in a Statewide or national perinatal
quality improvement collaborative program and implemented evidence-
based quality interventions in hospital settings to improve maternal
health, such as maternal safety bundles. Maternal safety bundles have
demonstrated success in driving improvements, particularly with regards
to obstetric hemorrhage, severe hypertension in pregnancy, and
nonmedically indicated Cesarean deliveries.366 367 368
Hospitals and health professionals also have access to evidence-based
best practices for determining the risk of obstetric hemorrhage and
hypertension and for managing patients with these complications
(including in an emergency setting). However, these best practices are
not universally utilized nor incorporated into facilities' standards of
care.\369\
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\365\ https://data.cms.gov/provider-data/birthing-friendly-hospitals-and-health-systems.
\366\ Jennifer A. Callaghan-Koru et al. Implementation of the
Safe Reduction of PrimaryCesarean Births safety bundle during the
first year of a statewide collaborative in Maryland. Obstet Gynecol
2019; 134:109-19.
\367\ Elliott K. Main et al. Reduction of severe maternal
morbidity from hemorrhage using a state perinatal quality
collaborative. Am J Obstet Gynecol 2017;216(3); 298.e1-298.e11.
\368\ Patricia Lee King et al. Reducing time to treatment for
severe maternal hypertension through statewide quality improvement.
Am J Obstet Gynecol 2018; 218:S4.
\369\ Jennifer A. Callaghan-Koru et al. Implementation of the
Safe Reduction of Primary Cesarean Births safety bundle during the
first year of a statewide collaborative in Maryland. Obstet Gynecol
2019; 134:109-19.
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We also published the quality, safety, and oversight memorandum
(QSO-22-05--Hospitals) which encourages hospitals to consider the
implementation of evidence-based best practices for the management of
obstetric emergencies, along with interventions to address other key
contributors to maternal health disparities, and to support the
delivery of equitable, high-quality care for all pregnant and
postpartum individuals.\370\ Facilities can implement these best
practices voluntarily as part of a hospital's QAPI program (Sec.
482.21), which requires that hospitals develop, implement, and maintain
an effective, ongoing, hospital wide, datadriven quality assessment and
performance improvement program.
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\370\ https://www.cms.gov/files/document/qso-22-05-hospitals.pdf.
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We have taken several steps to better understand the impacts of the
maternal health crisis and the potential need for revisions to the CoPs
to protect the health and safety of pregnant and postpartum women. In
the FY 2023 IPPS/LTCH PPS final rule, we published responses to a
maternal health RFI that solicited feedback on a wide range of maternal
health issues and opportunities for CMS to improve maternal health care
(87 FR 49290 through 49292). Some commenters were concerned that
failure to comply with any new CoP could result in the loss of Medicare
certification and that access to obstetrical care would be negatively
impacted, potentially exacerbating rates of maternal morbidity/
mortality and disparities in obstetrical care. Other commenters
supported the creation of a CoP specifically for labor and delivery, to
establish minimum health and safety standards across participating
hospitals.
We conducted a literature review on maternal health with a focus on
obstetric (OB) services delivery, staff training, and best practices
for maternal health and safety to help inform the proposals in this
rule. We also held a
[[Page 59490]]
series of listening sessions with industry stakeholders, patient
advocacy groups, and health care professionals on ways the CoPs can be
revised to improve maternal health care outcomes and reduce
disparities. We received valuable feedback from stakeholders regarding
establishing an OB services CoP, staff training and the importance of
providing culturally competent care. Some groups also highlighted the
value of recommendations from Maternal Mortality Review Committees
(MMRCs). Other stakeholders cautioned on being overly specific (that
is, certain diseases) in the CoPs and encouraged CMS to instead
leverage existing regulations text or quality metrics rather than
create new CoPs.
Finally, we issued a request for information (RFI) in the FY 2025
Inpatient Prospective Payment System (IPPS) proposed rule (89 FR 36498
through 36502) to gather stakeholder feedback on several options for
establishing an obstetrical services CoP for participating hospitals,
CAHs, and rural emergency hospitals (REHs) and other detailed
questions.
Request for Information on Obstetrical Services Standards for
Hospitals, CAHs, and REHs: Summary and Responses to Public Comments
In May 2024, we published a Request for Information (RFI) on
Obstetrical Services Standards for hospitals, CAHs, and REHs in the FY
2024 Hospital IPPS proposed rule (89 FR 35934). We solicited public
comments on developing targeted baseline health and safety standards
for obstetrical services. We received comments from a variety of
parties interested in addressing obstetrical care including advocacy
groups, industry associations, state health departments, labor unions,
and professional organizations. Commenters supportive of CoPs for
obstetrical care services noted that establishing CoPs for obstetrical
care would enhance the quality and safety of maternal care and provide
the opportunity to standardize services across various healthcare
settings. These commenters also stated that obstetrical services CoPs
regarding organization and staffing would promote multidisciplinary,
team-based care with specialists, such as cardiologists, maternal fetal
medicine practitioners, primary care physicians, and adult congenital
heart disease specialists, among others providing care to pregnant
women. Other commenters stated that establishing obstetrical training
standards for hospital/CAH non-OB units can help to mitigate the impact
of OB unit closures on maternal health outcomes and also supported
staff training on respectful care, cultural competency, trauma-informed
care, and nondiscrimination. Some commenters supported requiring
facilities to report directly to the Maternal Mortality Review
Committee (MMRC) and others supported specific transfer protocol
requirements.
Other commenters expressed concerns regarding establishing CoPs for
obstetrical care services for a variety of reasons including the
current regulatory environment related to obstetrical and gynecological
services, conflicting regulations between the State and Federal
requirements, insufficient clinical evidence, impact on access,
regulatory burden, accelerating closures, potential redundancy with
CMS' quality measurement programs, severity of consequences for not
meeting CoP requirements, and unintended consequences. One commenter
stated that existing CoPs provide adequate protection for patients and
was concerned that more requirements specific to obstetrical services
may lead to overlapping, conflicting or otherwise confusing
requirements that may negatively impact care, while others believed
that an obstetrical services CoP would not address the main drivers of
maternal morbidity and mortality.
After analyzing the issue of high rates of maternal mortality and
morbidity in the U.S. receiving feedback from various stakeholders on
improving maternal health care, and reviewing available resources and
current requirements, we believe that it is necessary to establish new
requirements for the provision of obstetrical services to protect the
health and safety of pregnant, birthing, and post-partum patients.
Currently, there are no baseline care requirements for hospitals and
CAHs that are specific to maternal-child services (that is, labor and
delivery, prenatal and post-partum care, and care for newborn infants,
alternately referred to in this discussion as obstetrical services,
obstetrics, maternal health, or maternity care). In addition to
obstetrical units, care for pregnant and postpartum patients may also
occur in other parts of facilities such as other inpatient units,
emergency departments, hospital outpatient departments, as well as in
facilities without obstetrical units and/or emergency services. Such
care may occur before, during, or after delivery. Based on the issues
regarding the delivery of maternity care referenced, we propose a new
OB services CoP, including proposed requirements for the organization,
staffing, and delivery of OB services and staff training. We also
propose revisions to the current hospital and CAH QAPI, hospital and
CAH emergency services requirements, and hospital discharge planning
requirements specific to OB services. We also solicit comments on
whether these proposed requirements should also apply to REHs.
B. Provisions of the Proposed Regulations
1. Organization, Staffing, and Delivery of Services (Sec. 482.59 and
Sec. 485.649)
a. Background
The Hospital CoPs at 42 CFR 482.51 through 482.58 include
requirements for optional services that hospitals are not required by
law to provide but may elect to offer to their patients. If a hospital
provides an optional service to its patients, the hospital must comply
with the requirements of the CoP specific to that service. The hospital
CoPs include requirements for optional services such as surgery (Sec.
482.51), anesthesia (Sec. 482.52), outpatient services (Sec. 482.54),
emergency services (Sec. 482.55), and other health care services. CAHs
may also opt to provide certain services to its patients. CoPs for the
provision of optional CAH services such as surgeries, inpatient
psychiatric services, and inpatient rehabilitation services have been
established at Sec. 485.639, Sec. 485.647(a)(1) and Sec.
485.647(a)(2), respectively. Outside of an emergency department (ED),
hospitals and CAHs may also offer obstetrical services to their
patients. Currently, there are no baseline requirements for the
organization, staffing, and delivery of such OB services in hospitals
and CAHs.
Several accrediting bodies and professional medical specialty
societies including the American College of Obstetricians and
Gynecologists (ACOG), the Society for Maternal-Fetal Medicine (SMFM),
and The Center for Improvement in Healthcare Quality (CIHQ), have
discussed recommendations for standards of practice for OB staffing and
organization within a hospital care setting. For example, ACOG and SMFM
have developed a system that defines four different levels of maternal
care that range from least complex care to the most complex care and
they have recommended the obstetrical care providers and services, as
well as the capabilities and equipment, that should be available at
each level based on the patient's need.\371\ They recommend that an OB-
GYN physician be present onsite 24 hours a day, 7 days a week (24/7),
[[Page 59491]]
within the two highest facility levels that can treat complex maternal
medical conditions (levels III and IV). Within a level II facility,
which can treat moderate-to-high-risk maternal medical conditions, ACOG
and SMFM suggest that such facility retain a family physician with an
OB fellowship or equivalent training can be present in place of an OB-
GYN physician. Lastly, they recommend a certified nurse-midwife (CNM),
certified midwife (CM), or family physician accompanied by a qualified
registered nurse (RN) should be present 24/7 within the lowest level
facility that provides basic care for low-risk, uncomplicated
conditions (level I).\372\ ACOG and SMFM also recommend appropriately
trained and qualified RNs, along with a formally trained nursing
leadership team with maternal care experience for hospitals and CAHs
providing maternal care.\373\
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\371\ https://www.acog.org/clinical/clinical-guidance/obstetric-care-consensus/articles/2019/08/levels-of-maternal-care.
\372\ https://www.acog.org/clinical/clinical-guidance/obstetric-care-consensus/articles/2019/08/levels-of-maternal-care.
\373\ https://www.acog.org/clinical/clinical-guidance/obstetric-care-consensus/articles/2019/08/levels-of-maternal-care.
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CIHQ has recommended that an OB-GYN physician with advanced
cardiovascular life support and neonatal resuscitation training should
always be present at a facility providing emergency OB services.\374\
They also recommend that OB services be organized to allow for
effective communication, collaboration, and coordination of care
between the emergency services program and inpatient maternal/child
services.\375\
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\374\ https://cihq.org/acc-default-hospitals.asp.
\375\ https://cihq.org/acc-default-hospitals.asp.
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We understand that State law regarding OB staffing varies, and some
States have enacted laws and regulations regarding OB services
organizational standards and require levels of maternal care
designation. We believe that proposing standards for obstetrical
services ensures that all Medicare and Medicaid participating hospitals
and CAHs that offer these services are held to a consistent set of
requirements, supports high-quality maternity care and protects the
health and safety of patients. Therefore, we believe it is necessary to
propose CoPs specific to obstetrical services for hospital and CAH
CoPs, similar to the current requirements for optional services
provided in these facilities.
b. Proposals
We propose at new sections Sec. 482.59 and Sec. 485.649 new CoPs
for hospitals and CAHs offering obstetrical services outside of an ED.
Specifically, we propose to require that if a hospital or a CAH offers
obstetrical services, the services must be well organized and provided
in accordance with nationally recognized acceptable standards of
practice for physical and behavioral (inclusive of both mental health
and substance use disorders) health care of pregnant, birthing, and
postpartum patients. If outpatient obstetrical services are offered,
the services must be consistent in quality with inpatient care in
accordance with the complexity of services offered. Nationally
recognized acceptable standards of practice may be based on medical
professional society and/or accrediting organization standards. While
these CoPs would not require adherence to a specific organization's
guideline or recommendations, we expect that facilities would be able
to articulate their standards and the source(s) and to demonstrate that
their standards are based on evidence and nationally recognized
sources. This overarching requirement for obstetric services is
consistent with other hospital and CAH CoPs and is foundational to
ensuring high-quality safe care.
At new subsections Sec. 482.59(a) and Sec. 485.649(a), we further
propose that the organization of the obstetrical services be
appropriate to the scope of services offered by the facility and
integrated with other departments of the facility. For example, in
order to provide high quality and safe care, a labor and delivery unit
needs to ensure good communication and collaboration with services such
as laboratory, surgical services, and anesthesia services as
applicable. At Sec. 482.59(a)(1) and Sec. 485.649(a)(1), we propose
that the OB patient care units (that is, labor rooms, delivery rooms,
including rooms for operative delivery, and post-partum/recovery rooms
whether combined or separate) be supervised by an individual with the
necessary education and training, and specify that that person should
be an experienced registered nurse, certified nurse midwife, nurse
practitioner, physician assistant, or a doctor of medicine or
osteopathy. This individual is typically responsible for a variety of
activities important to patient safety, such as overseeing staff,
training, overall patient care, and supporting communications within
the unit and across the facility. Given the importance of the role,
ensuring appropriate training and education is imperative.
At Sec. 482.59(a)(2) and Sec. 485.649(a)(2), we propose that
obstetrical privileges be delineated for all practitioners providing
obstetrical care in accordance with the competencies of each
practitioner. The obstetrical service must maintain a roster of
practitioners specifying the privileges of each practitioner. While a
variety of practitioners may deliver a wide range of obstetric services
and perform a wide range of procedures, not every practitioner can
provide all services nor perform every procedure. All hospitals are
already required, at Sec. 482.22(c)(6), to have medical staff bylaws
that include criteria for determining the privileges to be granted to
individual practitioners and a procedure for applying the criteria to
individuals requesting privileges. This process ensures that
practitioners have the necessary education, training, and experience to
provide safe, effective care and safely perform specific procedures.
This proposed CoP provides additional specificity for an obstetrics
service. Such an approach is consistent with existing hospital optional
services CoPs, such as surgical services at Sec. 482.51(a)(4)) and,
given existing requirements, adds little additional burden. The
proposed obstetric services CoPs at Sec. 482.59(a)(2) and Sec.
485.649(a)(2) also recognize that practitioners other than physicians
are important to delivering obstetric services and we considered them
when developing these provisions. We remind hospitals that existing
CoPs allow for the privileging and credentialling of practitioners
other than physicians, including nurse midwives (Sec. 482.12(a) and
(c); Sec. 482.22). Specifically, the hospital regulations at Sec.
482.12(c) permit licensed practitioners (for example, nurse
practitioners, nurse midwives, etc.), as allowed by the State, to admit
patients to a hospital. CMS does not require that these practitioners
be employed by, under the supervision of, or associated with, a Doctor
of Medicine (MD) or doctor of osteopathic medicine (DO) unless required
by State law, regulations, or facility policy. A hospital is not
precluded from credentialing and granting privileges to practitioners
not listed under Sec. 482.12(c)(1). Additionally, if not otherwise
prohibited by State law, a hospital may elect to include these
practitioners (such as advanced practice providers, including advanced
practice registered nurses, clinical nurse specialists, physician
assistants, and nurse midwives) as part of their medical staff.
Moreover, the hospital CoPs prohibit a hospital from granting staff
membership or professional privileges in the hospital solely upon
certification, fellowship, or membership in a specialty body or
society. (Sec. 482.12(a)(7)). In States that permit nurse midwives to
admit patients (in accordance with hospital policy and practitioner
privileges), per statute
[[Page 59492]]
(section 1861(e)(4) of the Act) CMS requires only Medicare patients of
a nurse midwife to be under the care of an MD or DO (Sec.
482.12(c)(2)). CMS does not require Medicaid nor other non-Medicare
patients admitted by a nurse midwife to be under the care of an MD or
DO.\376\ For CAHs, CMS does not have the authority to remove the
physician oversight requirement for inpatients at Sec.
485.631(b)(1)(iv), as this is a statutory requirement and the physician
oversight requirement for outpatients at Sec. 485.631(b)(1)(v) is only
applicable if required by State law.
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\376\ Quality Safety & Oversight Memorandum QSO-23-22-Hospital,
September 21, 2123. https://www.cms.gov/files/document/qso-23-22-hospital.pdf Accessed April 23 2024.
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At new subsections Sec. 482.59(b) and Sec. 485.649(b), ``Delivery
of services'', we propose to require that OB services must be
consistent with the needs and resources of the facility. Policies
governing obstetrical care must be designed to assure the achievement
and maintenance of high standards of medical practice and patient care
and safety. We additionally propose at paragraphs Sec. 482.59 (b)(1)
and Sec. 485.649(b)(1) that labor and delivery room suites have
certain basic resuscitation equipment readily available, including a
call-in-system, cardiac monitor, and fetal doppler or monitor. We
believe a basic set of equipment should be in place for all obstetric
services to ensure efficient, effective delivery of care as well as
timely response to emergency situations. However, we recognize that
different facilities offer different levels of service. We welcome
public comment on what is an appropriate minimum set of equipment for
all hospitals offering obstetric services.
Furthermore, at Sec. 482.59 (b)(2) and Sec. 485.649(b)(2) we
propose that the service ensure that it has protocols, consistent with
evidence-based, nationally recognized guidelines, as well as readily
available provisions (that is, necessary supplies and equipment on the
unit or in close proximity and easily accessed by unit personnel) for
obstetrical emergencies, complications, immediate post-delivery care,
and other patient health and safety events as identified as part of the
facility's QAPI program. While this requirement does not require any
specific items, we would expect provisions to include equipment, in
addition to the equipment required under Sec. 482.59 (b)(1) and Sec.
485.649(b)(1), supplies, blood, and medication used in treating
emergency cases. Examples of such emergency equipment or supplies could
include: resuscitator, defibrillator, aspirator, and airways,
endotracheal tubes, ambu bag/valve/mask, oxygen, tourniquets,
nasogastric tubes, IV therapy supplies, suction machine, and
defibrillator. Emergency medications could include analgesics, local
anesthetics, anti-arrhythmics, cardiac glycosides, antihypertensives,
antiepileptics, uterotonics, anticoagulants, antifibrinolytics,
electrolytes and replacement solutions. As discussed in section XXI.B.2
of this proposed rule, obstetric readiness is a concern in avoiding
preventable maternal morbidity and mortality. Provisions and protocols,
as we propose to require, are one step towards addressing those
concerns and improving perinatal outcomes.
We solicit public comments on these proposals, including whether
these proposed requirements should be applicable to REHs.
2. Training for Obstetrical Staff in Hospitals and CAHs (Sec. Sec.
482.59(c), 485.649(c))
a. Background
Given the worsening maternal health crisis as discussed in
XXI.A.1.a of this proposed rule and research indicating that over 80
percent of pregnancy-related deaths in the U.S. are preventable, CMS is
committed to ensuring that all Medicare and Medicaid participating
hospitals and CAHs offering obstetrical services are held to a
consistent standard of high-quality maternity care and patient health
and safety. Currently, the CoPs for hospitals and CAHs include no
baseline requirements for the training of obstetrical staff.
The majority of hospitals participate in the Medicare program
through deemed status with an accrediting organization.\377\ These
accrediting organizations may have additional requirements that exceed
the Medicare CoP requirements as part of their CMS- approved deeming
program. For example, The Joint Commission (TJC) requires education on
the provision of care, treatment, and services standards for maternal
safety for all staff and providers who treat pregnant/postpartum
patients. Specifically, TJC requires training on the hospital's
evidence-based severe hypertension/preeclampsia and hemorrhage
procedures.\378\ The TJC standards also require that hospitals use in-
situ training and drills that include multidisciplinary teams.\379\
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\377\ https://www.jointcommission.org/resources/news-and-multimedia/fact-sheets/facts-about-hospital-accreditation/.
\378\ https://www.jointcommission.org/standards/r3-report/r3-report-issue-24-pc-standards-for-maternal-safety/.
\379\ https://www.jointcommission.org/-/media/tjc/documents/standards/r3-reports/r3-issue-24-maternal-12-7-2021.pdf.
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Despite the requirements of accrediting organizations, several
organizations have determined that in their view, obstetrical readiness
for hospitals with obstetrical services is
suboptimal.380 381 382 Additionally, the lack of
standardized approaches to emergency OB care may contribute to poor
maternal health outcomes.383 384 Variation in processes of
care is problematic because it may lead to increased rates of
error.\385\ Appropriate training, best practice protocols (such as
recognizing early warning signs of hemorrhage, preeclampsia, and other
adverse events associated with pregnancy and birth), and appropriate
transfer protocols are critical to averting avoidable maternal
complications and deaths, establishing and maintaining facilities'
obstetrical readiness,\386\ and ensuring compliance with existing
regulations.
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\380\ https://www.acog.org/news/news-articles/2022/01/commitment-to-action-eliminating-preventable-maternal-mortality.
\381\ https://rhrc.umn.edu/wp-content/uploads/2021/09/UMN-emOB-Training-Needed_11.12.20_508.pdf.
\382\ https://www.cdcfoundation.org/sites/default/files/files/ReportfromNineMMRCs.pdf.
\383\ Jennifer A. Callaghan-Koru et al. Implementation of the
Safe Reduction of Primary Cesarean Births safety bundle during the
first year of a statewide collaborative in Maryland. Obstet Gynecol
2019;134:109-19.
\384\ https://www.acpjournals.org/doi/10.7326/M19-3258.
\385\ https://www.acog.org/clinical/clinical-guidance/committee-opinion/articles/2019/10/clinical-guidelines-and-standardization-of-practice-to-improve-outcomes.
\386\ https://saferbirth.org/aim-obstetric-emergency-readiness-resource-kit/.
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Research shows that women with any form of disability are at
heightened risk for pregnancy and labor and delivery complications, as
well as severe maternal morbidity and mortality, including pre-term
birth, hypertensive disorders during pregnancy, gestational diabetes,
and cesarean delivery.\387\ Understanding these risks, and education to
help health care practitioners be more comfortable managing care for
people with disabilities before, during, and after pregnancy can help
ensure patients with
[[Page 59493]]
disabilities receive safe, high quality OB care.\388\
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\387\ Tarasoff LA, Ravindran S, Malik H, Salaeva D, Brown HK.
Maternal disability and risk for pregnancy, delivery, and postpartum
complications: a systematic review and meta-analysis. Am J Obstet
Gynecol. 2020;222(1):27.e1-27.e32. doi: 10.1016/j.ajog.2019.07.01
\388\ Gleason JL, Grewal J, Chen Z, Cernich AN, Grantz KL. Risk
of Adverse Maternal Outcomes in Pregnant Women With Disabilities.
JAMA Netw Open. 2021 Dec 1;4(12):e2138414. doi: 10.1001/
jamanetworkopen.2021.38414. PMID: 34910153; PMCID: PMC8674748. and
Smeltzer SC, Mitra M, Long-Bellil L, Iezzoni LI, Smith LD. Obstetric
clinicians' experiences and educational preparation for caring for
pregnant women with physical disabilities: a qualitative study.
Disabil Health J. 2018;11(1):8-13. doi: 10.1016/j.dhjo.2017.07.004).
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Research also indicates that women with limited English proficiency
(LEP) are also found to experience disparities in OB care and are at
risk for mental health conditions, including post-partum depression and
substandard newborn care following neonatal intensive care unit (ICU)
discharge due to insufficient patient education by
staff.389 390 Language-concordant care and awareness among
medical providers regarding the use of medical interpreters and
materials in diverse languages can improve patient satisfaction,
decrease medical errors, and improve patient
safety.391 392 393
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\389\ Togioka, Brandon & Seligman, Katherine & Delgado Upegui,
Carlos. (2022). Limited English proficiency in the labor and
delivery unit. Current Opinion in Anaesthesiology. 35. 285-291.
\390\ Sentell, Tetine & Chang, Ann & Ahn, Hyeong Jun & Miyamura,
Jill. (2015). Maternal Language and Adverse Birth Outcomes in a
Statewide Analysis. Women & health. 56.).
\391\ Togioka, Brandon & Seligman, Katherine & Delgado Upegui,
Carlos. (2022). Limited English proficiency in the labor and
delivery unit. Current Opinion in Anaesthesiology. 35. 285-291.
10.1097/ACO.0000000000001131.
\392\ Sentell, Tetine & Chang, Ann & Ahn, Hyeong Jun & Miyamura,
Jill. (2015). Maternal Language and Adverse Birth Outcomes in a
Statewide Analysis. Women & health. 56. 10.1080/
03630242.2015.1088114.
\393\ https://www.ahrq.gov/sites/default/files/publications/files/lepguide.pdf).
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Studies have shown a direct correlation between the experience of a
severe maternal event and the development or exacerbation of a mental
health disorder, such as posttraumatic stress disorder (PTSD).\394\
Posttraumatic stress disorder affects about three to four percent of
mothers, with higher rates among some population groups. Perinatal PTSD
includes PTSD episodes occurring during pregnancy through one year
postpartum. Perinatal PTSD negatively affects physical and mental
health, interpersonal relationships, and parenting capacity.\395\ After
a severe event, patients and their families may struggle to understand
why an event occurred and how they might have received better
information or care throughout the experience, adding to their overall
emotional distress.\396\ These examples highlight the need for new
requirements for hospitals that provide obstetrical services.
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\394\ https://www.sciencedirect.com/science/article/pii/S0884217520303166?via%3Dihub.
\395\ https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2023.01447.
\396\ https://www.sciencedirect.com/science/article/pii/S0884217520303166?via%3Dihub.
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b. Proposed Requirements for Staff Training for Hospitals and CAHs With
OB Services
Given the existing literature and prevalence of health and safety
concerns impacting maternal health outcomes (as described earlier in
this section), we propose a core set of requirements for hospitals and
CAHs offering OB services to protect the health and safety of pregnant,
birthing, and postpartum patients. We believe that training of OB
services staff on evidence-based best practices and protocols would
enhance the quality of care and services provided to pregnant,
birthing, and postpartum women and improve patient health and safety.
We therefore propose at new paragraph Sec. Sec. 482.59(c) and
485.649(c) that hospitals and CAHs with OB services would be required
to develop policies and procedures that would ensure that relevant
obstetrical services staff would be trained on select topics for
improving the delivery of maternal care. We propose at Sec.
482.59(c)(1) and Sec. 485.649(c)(1) training topics would have to
reflect the scope and complexity of services offered, including, but
not limited to, facility-identified evidence-based best practices and
protocols to improve the delivery of maternal care within the facility.
Performing critical tasks consistently through standardized practices
can reduce errors, especially when fatigue is a factor, and in
stressful environments such as the labor and delivery suite or
operating room.\397\ To facilitate improvements in care, the Centers
for Disease Control and Prevention (CDC) established perinatal quality
collaboratives (PQCs).\398\ PQCs are state or multistate networks of
teams that work to improve the quality of care for mothers and babies
by identifying health care processes in need of improvement. In
addition, the Health Resource and Services Administration (HRSA)
partnered with the Alliance for Innovation on Maternal Health (AIM) to
establish patient safety bundles.\399\ Facilities may participate in
local or regional PQCs and implement patient safety bundles. The
Institute for Healthcare Improvement defines bundles as, ``a small,
straightforward set of evidence-based best practices that, when
performed collectively and reliably, have been demonstrated to improve
patient outcomes.'' \400\ Maternal safety bundles, often implemented
through PQCs, have demonstrated success in driving improvements,
particularly with regards to obstetric hemorrhage, severe hypertension
in pregnancy, and non-medically indicated Cesarean
deliveries.401 402 403 404 Other examples of evidence-based
trainings topics for obstetrical staff may include education in trauma
informed care,405 406 cultural
competency,407 408 409 410 411 412 413 414 415 416 417 418 419 420 421 422 423 424 425 426
and
[[Page 59494]]
person-centered care.427 428 429 430 431 432 433 434 We also
point readers to training resources at CMS' Medicare Learning Network:
https://www.cms.gov/training-education/medicare-learning-network/web-based-training.
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\397\ https://www.acog.org/clinical/clinical-guidance/committee-opinion/articles/2019/10/clinical-guidelines-and-standardization-of-practice-to-improve-outcomes.
\398\ https://www.cdc.gov/reproductivehealth/maternalinfanthealth/pqc.htm.
\399\ https://saferbirth.org/about-us/.
\400\ https://www.ihi.org/insights/what-is-a-bundle.
\401\ Jennifer, A., Callaghan-Koru, et al., Implementation of
the Safe Reduction of Primary Cesarean Births safety bundle during
the first year of a statewide collaborative in Maryland. Obstet
Gynecol 2019;134:109-19.
\402\ Elliott K. Main et al. Reduction of severe maternal
morbidity from hemorrhage using a state perinatal quality
collaborative. Am. J. Obstet. Gynecol. 2017;216(3):298.e1-298.e11.
\403\ Patricia Lee King et al. Reducing time to treatment for
severe maternal hypertension through statewide quality improvement.
Am. J. Obstet. Gynecol. 2018;218:S4.
\404\ https://www.cms.gov/files/document/qso-22-05-hospitals.pdf.
\405\ https://saferbirth.org/wp-content/uploads/13-FINAL_AIM_OERRK_RESC.pdf.
\406\ https://www.acog.org/clinical/clinical-guidance/committee-opinion/articles/2021/04/caring-for-patients-who-have-experienced-trauma.
\407\ https://store.samhsa.gov/sites/default/files/sma16-4931.pdf.
\408\ Effects of Cultural Sensitivity Training on Health Care
Provider Attitudes and Patient Outcomes https://sigmapubs.onlinelibrary.wiley.com/doi/10.1111/j.1547-5069.2004.04029.
\409\ Lelutiu-Weinberger, Corina. Implementation and Evaluation
of a Pilot Training to Improve Transgender Competency Among Medical
Staff in an Urban Clinic https://www.liebertpub.com/doi/full/10.1089/trgh.2015.0009.
\410\ Rotenberg, Sara et al., Disability Training for health
Workers: A Global Narrative Systematic Review. Disability and Health
Journal doi: 10.1016/j.dhjo.2021.101260.
\411\ Cultural Competency: A Systemic Review of Health Care
Provider Educational Interventions. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3137284/.
\412\ https://journals.sagepub.com/doi/10.1177/0163278712454137.
\413\ Linda Govere et al., How Effective Is Cultural Competence
Training of Healthcare Providers on Improving Patient Satisfaction
of Minority Groups? A Systematic Review of Literature. https://doi.org/10.1111/wvn.12176 October 25, 2016.
\414\ https://onlinelibrary.wiley.com/doi/10.1111/j.1745-7599.2009.00406.x.
\415\ https://journals.sagepub.com/doi/10.1177/0163278712454137.
\416\ Santana, Maria. How to Practice Person-Centered Care: A
conceptual Framework. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5867327/.
\417\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3726251/.
\418\ https://pubmed.ncbi.nlm.nih.gov/12013268/.
\419\ https://thinkculturalhealth.hhs.gov/clas.
\420\ https://ethnomed.org/.
\421\ https://minorityhealth.hhs.gov/clas-behavioral-health-implementation-guide.
\422\ https://minorityhealth.hhs.gov/assets/PDF/Evaluation_of_the_Natn_CLAS_Standards_Toolkit_PR3599_final.508Compliant.pdf.
\423\ https://www.cms.gov/about-cms/agency-information/omh/downloads/clas-toolkit-12-7-16.pdf.
\424\ https://www.albany.edu/cphce/bridging-gaps-vital-role-cultural-competence-healthcare.
\425\ https://thinkculturalhealth.hhs.gov/resources/presentations/1/fundamentals-of-the-national-standards-for-culturally-and-linguistical.
\426\ https://thinkculturalhealth.hhs.gov/education/maternal-health-care.
\427\ An approach to coordinate health care services to better
address an individual's physical, mental, behavioral, and social
needs (See https://www.cms.gov/priorities/innovation/key-concepts/person-centered-care).
\428\ https://www.cms.gov/priorities/innovation/key-concepts/person-centered-care.
\429\ https://www.hrsa.gov/about/organization/bureaus/ohe/health-literacy/culture-language-and-health-literacy.
\430\ https://edit.cms.gov/about-cms/agency-information/omh/downloads/language-access-plan.pdf.
\431\ https://www.marchofdimes.org/our-work/beyond-labels.
\432\ https://www.acog.org/education-and-events/emodules/respectful-care.
\433\ https://www.perinatalgi.org/page/mmtrends.
\434\ https://www.cci.training/courses/maternal-mental-health-support-specialist.
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Additionally, at Sec. 482.59(c)(1)(ii) and Sec.
485.649(c)(1)(ii), we propose that hospitals and CAHs that provide OB
services use findings from their QAPI programs, as required at Sec.
482.21 and Sec. 485.641, respectively, to inform obstetrical staff
training needs and any additions, revisions, or updates to training
topics on an ongoing basis. Stratified data can produce meaningful
measures that can be used to expose health disparities, develop
interventions to reduce them, and monitor performance to ensure
interventions aimed at improving care do not have unintended
consequences for certain patients and improve patient outcomes.\435\
Continuous quality improvement depends on a disciplined and well-
defined data-driven process that constantly is monitored and
improved.\436\ We note that patient satisfaction and quality measures
may be an effective way to measure the success of staff training.
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\435\ https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2011.0617.
\436\ https://www.acog.org/clinical/clinical-guidance/committee-opinion/articles/2019/10/clinical-guidelines-and-standardization-of-practice-to-improve-outcomes.
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At new paragraph Sec. 482.59(c)(2) and Sec. 485.649(c)(2), we
propose to require the governing body to identify and document which
staff must complete annual training on the topics identified at Sec.
482.59(c)(1) and Sec. 485.649(c)(1). In addition, we propose at Sec.
482.59(c)(3) and Sec. 485.649(c)(3) to require the hospital and CAH to
document in the staff personnel records that the training was
successfully completed. Further, at new paragraph Sec. 482.59(c)(4)
and Sec. 485.649(c)(4), we propose that the hospital and CAH be able
to demonstrate staff knowledge on the topics identified at Sec.
482.59(c)(1) and Sec. 485.649(c)(1), respectively. We are not
proposing to require the specific manner or method in which a facility
would be required to demonstrate that their staff is knowledgeable and
competent in the ways to improve the delivery of maternal care, since
this would likely vary based on the training delivery method. There are
various ways in which a facility can assess their staff knowledge on
ways to improve the delivery of maternal care. Facilities could do so
through self-assessments, surveys, or questionnaires administered to
their staff. Some examples of how a facility can demonstrate knowledge
on these concepts include instructor-led training, computer-based or
printed self-learning packets that contain a test to demonstrate their
staff person's knowledge. In addition, for those trainings that are
instructor-led, a question-and-answer session could follow the
training. However the facility chooses to demonstrate this knowledge,
we would expect the facility to maintain documentation that the
training was completed, and that the facility's staff are knowledgeable
of the ways to improve the delivery of maternal care.
We would expect facilities to consider the qualifications of the
individuals or organizations that would be conducting the staff
training and utilize trainers that are knowledgeable on the subjects
that they are teaching and are qualified to conduct the training. These
requirements allow facilities the flexibility to determine the
curriculum that would be used to train their staff on evidence-based
best practices and protocols to improve the delivery of maternal care
and other training topics as identified by the facilities' QAPI
program. We would expect facilities to provide high quality training
that is consistent with and tailored to the staff's expected role, with
the goal of improving maternal health outcomes. We acknowledge that
many hospitals and CAHs may have already implemented these practices
and that those practices may satisfy this proposed requirement. Of
note, these required staff trainings are in addition to the education
and training necessary for a clinician to administer care within the
scope of their practice or for a staff member to perform their job.
While there is, as noted above, ample objective research
demonstrating the need for such requirements, we are also asking the
public for any additional data, detailed analysis, academic studies, or
any other information on the link between the proposed requirements and
patient health and safety. We solicit public comment on these
proposals, including whether these proposed staff training requirements
should be applicable to REHs. We also seek public comment on whether
CMS should require specific training on person-centered care, trauma-
informed care, cultural competency, and/or other topics as part of the
evidence-based training.
3. Quality Assessment and Performance Improvement (QAPI) Program (Sec.
482.21; Sec. 485.641)
a. Background
i. Existing QAPI CoP Requirements
Medicare-participating hospitals and CAHs are required by CMS
regulations to engage in quality activities to improve patient care and
outcomes and to facilitate efficient and effective operations under the
QAPI program standards (42 CFR 482.21; 42 CFR 485.641). Specifically,
the QAPI standards are a data-driven and proactive approach to
continuous quality improvement, with the end goal of improving the
overall quality of care and services delivered to patients. The
governing body is required to be involved in the QAPI program by
ensuring that the program reflects the complexity of the facility's
organization and services.\437\ These data and measures remain with the
facility; there is no requirement to transmit QAPI data to CMS or other
Federal entities.
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\437\ RNHCIs (at Sec. 403.732), ASCs (at Sec. 416.43),
hospices (at Sec. 418.58), hospitals (at Sec. 482.21), transplant
programs (at Sec. 482.96), LTC facilities (at Sec. 483.75), HHAs
(at Sec. 484.65), CAHs (at Sec. 485.641), CMHCs (at Sec.
485.917), OPOs (at Sec. 486.348), and ESRD dialysis facilities (at
Sec. 494.110).
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ii. Data Analysis and Stratification
In executing these QAPI requirements, hospitals and CAHs (including
those with OB services) use patient population data to identify,
reduce, and eliminate unfavorable patient health and safety outcomes,
while identifying opportunities for
[[Page 59495]]
improvement. As such, CMS considers QAPI a critical tool for improving
facilities' maternal health outcomes amid the ongoing maternal health
crisis. For while existing QAPI regulations (Sec. 482.21; Sec.
485.641) require facilities to ``develop, implement, and maintain an
effective, ongoing, facility-wide, data-driven'' QAPI program that
focuses on ``indicators related to improved health outcomes and the
prevention and reduction of medical errors,'' existing regulations do
not require that hospitals focus on addressing the worsening public
health crises such as the U.S. maternal health crisis.
Moreover, in performing their data analysis, facilities may
aggregate patient data in such a way that masks health outcome
differences among patient subpopulations.\438\ Existing QAPI standards
do not require that facilities monitor for or address health
disparities, or otherwise analyze or stratify QAPI data by patient
subpopulations. Yet, research has repeatedly shown the important role
of data collection and analysis by patient subgroup within health care
facilities in order to improve patient care consistently across patient
populations.439 440 441 442 443 Specifically, analysis by
patient subgroup can produce meaningful measures that can be used to
expose health disparities, develop interventions to reduce them, and
monitor performance to ensure interventions to improve care do not have
unintended consequences for certain patients.444 445
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\438\ https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2011.0617.
\439\ https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2011.0617.
\440\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3861327/.
\441\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6259664/.
\442\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7647227/.
\443\ https://pubmed.ncbi.nlm.nih.gov/16567608/.
\444\ https://www.nejm.org/doi/full/10.1056/NEJMp1911700.
\445\ https://www.nejm.org/doi/full/10.1056/NEJMp1911700.
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However, such data practices are not universally applied by
hospitals.\446\ The persistent maternal health crisis and well-
documented correlations between certain patient demographics and
maternal health outcomes as discussed at length in section XXI.A.1 of
this proposed rule, strongly indicate that the absence of analyses by
diverse subpopulations among obstetrical patients likely serves as a
barrier to facilities' effectiveness in achieving performance
improvement in maternal health outcomes. Therefore, we believe
requiring QAPI analyses of maternal health data, quality indicators,
and outcomes by diverse subpopulations served by a facility would
support facilities in establishing structures to assess and improve
health and safety conditions on an ongoing basis, thereby promoting
access and high-quality care for all pregnant, birthing, and postpartum
patients.
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\446\ https://ifdhe.aha.org/benchmarking-study-us-hospitals-surveys.
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iii. Maternal Mortality Review Committees
Initially created in the 1930s to combat high rates of maternal
mortality in the U.S.,\447\ Maternal Mortality Review Committees
(MMRCs) are multi-disciplinary teams that work at the State or local
level to engage stakeholders, comprehensively review deaths that occur
during or within a year of pregnancy (pregnancy-related deaths), and
develop recommendations aimed at preventing future pregnancy-related
deaths.448 449 As of April 2024, MMRCs exist in 47 States
and often function under the authority of State health and safety
codes.450 451 452 MMRC composition varies but can consist of
individuals with training in public health, obstetrics and gynecology,
maternal-fetal medicine, nursing, midwifery, forensic pathology,
behavioral health professionals, patient advocacy groups, and
community-based organizations to determine cause of death,
preventability of death, and relationship to
pregnancy.453 454 Specifically, as of 2021, all existing
MMRCs included representation from State public health agencies as well
as provider groups (inclusive of hospitals, hospital organizations,
State health professional chapters, State medical societies, etc.).
Twenty-one out of forty-four (21/44; 47.7 percent) included
representation from State Medicaid agencies, 20/44 (45.5 percent)
included State behavioral health agencies, 18/44 (40.9 percent)
included a violence prevention agency, and 27/44 (61.4 percent)
included community-based organizations.\455\ Among provider groups, 28/
44 (63.6 percent) of existing MMRCs included social workers; 12/44
(27.3 percent) included doulas and 14/44 (31.8 percent) substance use
counselors.\456\ MMRCs may use a variety of data sources including:
birth and death certificate data, prenatal care records, hospital
records, autopsy reports, and social services records in their review
process.\457\ Yet such data reporting and sharing is dependent upon
State requirements and often voluntary for health care
facilities.458 459 MMRCs generally disseminate annual or
biennial reports reflecting their findings.
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\447\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6511983/.
\448\ https://www.cdc.gov/reproductivehealth/maternal-mortality/erase-mm/index.html.
\449\ https://doi.org/10.1097/AOG.0000000000002417.
\450\ https://www.cdc.gov/reproductivehealth/maternal-mortality/erase-mm/index.html.
\451\ https://doi.org/10.1097/AOG.0000000000002417.
\452\ https://www.guttmacher.org/state-policy/explore/maternal-mortality-review-committees.
\453\ https://www.cdc.gov/reproductivehealth/maternal-mortality/erase-mm/index.html.
\454\ https://doi.org/10.1097/AOG.0000000000002417.
\455\ https://nashp.org/state-tracker/state-maternal-mortality-review-committee-membership-and-recommendations/.
\456\ https://nashp.org/state-tracker/state-maternal-mortality-review-committee-membership-and-recommendations/.
\457\ https://www.cdcfoundation.org/sites/default/files/upload/pdf/MMRIAReport.pdf.
\458\ https://www.cdcfoundation.org/sites/default/files/upload/pdf/MMRIAReport.pdf.
\459\ https://www.guttmacher.org/state-policy/explore/maternal-mortality-review-committees.
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In FY 2023, CDC supported MMRC initiatives through cooperative
agreements in 44 States and 2 territories via its Enhancing Reviews and
Surveillance to Eliminate Maternal Mortality (ERASE MM) Program.\460\
Other sources of funding include the Federally-funded and State-
administered Title V Maternal and Child Health (MCH) Services Block
Grants, State government appropriations, non-governmental grants,
philanthropic contributions, and dedicated initiative funds.\461\
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\460\ https://www.cdc.gov/reproductivehealth/maternal-mortality/erase-mm/index.html.
\461\ https://www.cdc.gov/reproductivehealth/maternal-mortality/erase-mm/index.html.
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Despite their pivotal role, MMRCs encounter various challenges,
including resource constraints, funding challenges, data accessibility
issues (including timeliness of data), operational authority, and
limited to no ability to directly implement or enforce their
recommendations.462 463 464 Moreover while, policies in 36
States and the District of Columbia legally require MMRCs to operate
and review pregnancy associated deaths, only 10 States and the District
of Columbia mandate the consideration of health disparities during
MMRCs' review despite the widening maternal health disparities
described in section XXI.A.1
[[Page 59496]]
of this proposed rule.465 466 Moreover, thirteen States
require that MMRC membership reflect and/or consider the jurisdiction's
demographic composition (for example, geographic, racial, socioeconomic
status, communities most affected) when selecting Committee
members.\467\
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\462\ https://doi.org/10.1097/AOG.0000000000002417.
\463\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6511983/.
\464\ https://www.cdc.gov/reproductivehealth/maternal-mortality/preventing-pregnancy-related-deaths/state-strategies.html.
\465\ https://www.guttmacher.org/state-policy/explore/maternal-mortality-review-committees.
\466\ https://pubmed.ncbi.nlm.nih.gov/31499056/.
\467\ https://www.guttmacher.org/state-policy/explore/maternal-mortality-review-committees.
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Stakeholders highlight the need for improved hospital engagement in
data standardization and data collection as part of a comprehensive
strategy to reduce rates of maternal mortality. Collaborative and
consistent reporting at the hospital level directly impacts the quality
and timeliness of MMRCs' work, as well as informs targeted
recommendations and next steps within facilities. Specifically,
Perinatal Quality Collaboratives (PQC) are a central method for how
MMRCs' recommendations are implemented. PQCs are State or regional
networks working to improve maternal and infant quality of care by
identifying possible improvements in health care processes and
leveraging the best available methods to enact changes
expeditiously.\468\ As of April 2024, there are 49 State-based PQCs, of
which 36 are funded by the CDC.\469\ Through Federal grants and
cooperative agreements with the CDC \470\ and/or funding and support
from State and local governments, PQCs have achieved notable
improvements in maternal health and safety, including in severe
pregnancy complications.\471\ Of note, participation in State or
national Perinatal Quality Improvement (QI) Collaborative is a part of
CMS' ``birthing friendly'' hospital designation for hospitals that
provide high quality maternal care.\472\
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\468\ https://www.cdc.gov/reproductivehealth/maternalinfanthealth/pqc.htm.
\469\ https://www.cdc.gov/reproductivehealth/maternalinfanthealth/pqc-states.html.
\470\ https://www.cdc.gov/maternal-infant-health/pqc/index.html.
\471\ https://www.cdc.gov/reproductivehealth/maternalinfanthealth/pqc.htm.
\472\ https://data.cms.gov/provider-data/birthing-friendly-hospitals-and-health-systems.
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As an example of the collaboration between MMRCs and PQCs, the
State of California demonstrates the impact that high quality hospital
data collection and reporting can have in supporting MMRCs' work and
patient care improvements.\473\ California's MMRC, known as the
California Pregnancy-Associated Mortality Review project (CA-PAMR), was
created in 2006 to ``identify pregnancy-related deaths, causation, and
contributing factors, and then make recommendations on quality
improvements to maternity care.'' CA-PAMR has consistently reported a
pregnancy-related mortality rate below the U.S. rate since 2011.\474\
As mentioned above, California's approach centers on a collaborative
model, wherein CA-PAMR serves as a data collector, evaluator, and
recommender, while the California Maternal Quality Care Collaborative
(CMQCC; one of California's PQCs with over 200 hospital members) \475\
works to implement recommendations. This close collaboration has been
described as critical to California's success in reducing maternal
mortality.\476\ Specifically, the California Maternal Data Center
allows for direct links between hospital reporting and State vital
records offices for 95 percent of births, allowing for real time
evaluation of perinatal metrics and quality improvement
benchmarks.\477\ These comprehensive reporting efforts support the
development of evidence-based quality improvement toolkits, which have
driven a 65 percent reduction in maternal morbidity between 2006 (the
year of CA-PAMR and CMQCC's founding) to 2016 in California in the
latest analysis.\478\
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\473\ https://www.cmqcc.org/research/maternal-mortality-review-ca-pamr/ca-pamr-recent-data.
\474\ https://www.cmqcc.org/research/maternal-mortality-review-ca-pamr/ca-pamr-recent-data.
\475\ https://www.cmqcc.org/about-cmqcc/member-hospitals.
\476\ https://www.cmqcc.org/about-cmqcc/what-we-do.
\477\ https://www.cmqcc.org/about-cmqcc/what-we-do.
\478\ https://www.cmqcc.org/who-we-are.
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b. Proposals
Given the above challenges and examples of success from MMRCs'
work, we propose to revise the existing QAPI standards (Sec. 482.21;
Sec. 485.641) for hospitals and CAHs that offer obstetrical
services.\479\ First, we propose that a hospital or CAH that offers OB
services would be required to use its QAPI program to assess and
improve health outcomes and disparities among OB patients on an ongoing
basis ((Sec. 482.21(b); Sec. 485.641 (e)(1)). Specifically, the
facility at a minimum would have to: (1) analyze data and quality
indicators collected for the QAPI program by diverse subpopulations as
identified by the facility among OB patients; (2) measure, analyze, and
track data, measures, and quality indicators on patient outcomes and
disparities in processes of care, services and operations, and outcomes
among OB patients; (3) analyze and prioritize patient health outcomes
and disparities, develop and implement actions to improve patient
health outcomes and disparities, measure results, and track performance
to ensure improvements are sustained when disparities exist among OB
patients; and (4) conduct at least one performance improvement project
focused on improving health outcomes and disparities among the
hospital's population(s) of OB patients annually.
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\479\ For purposes of this proposal, CMS considers a facility to
``offer obstetrical services'' when the facility ``[holds itself]
out to the public (by name, posted signs, advertising, or other
means) as a place that provides care for obstetrical medical
conditions.'' This is similar to how emergency departments are
defined in EMTALA (42 CFR 489.24(b)(2) ``Dedicated emergency
department'').
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For the analysis required in item (1), hospitals have flexibility
in determining the data analysis methodology most appropriate for their
patient population and number of cases. For example, hospitals would
stratify data and quality indicators collected for the QAPI program by
diverse subpopulations as identified by the hospital among OB patients.
For items 2 and 3, we expect hospitals will be able to use this data
analysis to monitor and assess for the presence of disparities. If
disparities are identified, we expect hospitals to prioritize QAPI work
to address these areas. For all QAPI work, we remind hospitals that
such analysis must comply with HIPAA, while ensuring such
subpopulations are not excluded from QAPI efforts based solely on low
numbers of patients.
In terms of existing Federal maternal health data and metrics and
their relation to this proposal, in August 2022 CMS finalized the
adoption of two additional maternal health quality measures to the
Hospital IQR program, both of which are electronic clinical quality
measures including: (1) a measure of severe obstetric complications
(which describes the number of inpatient hospitalizations for patients
with severe complications occurring during the delivery
hospitalization, such as hemorrhage), and (2) a measure of low-risk
Cesarean section rates, which describes the share of patients with low-
risk pregnancies who give birth via a Cesarean section. Hospitals may
use these maternal health quality metrics to inform their QAPI
activities and are an example of how a hospital could comply with this
new standard. Hospitals may also choose to utilize CMS' mandatory
Health Related Social Needs screening metrics and data to inform
maternal health QAPI
[[Page 59497]]
activities.\480\ Hospitals may also collaborate with their Quality
Improvement Organization (QIOs) in this work. We refer readers to the
following website which discusses CMS' Action Plan for Maternity Care
in greater detail: https://www.cms.gov/files/document/cms-maternity-care-action-plan.pdf.
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\480\ https://www.cms.gov/newsroom/fact-sheets/fy-2023-hospital-inpatient-prospective-payment-system-ipps-and-long-term-care-hospitals-ltch-pps.
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Next, under a new standard for Maternal Health QAPI activities for
hospitals (Sec. 482.21(e)(1)) and CAHs (Sec. 485.641(d)(4)(i)), we
propose to require that for hospitals and CAHs that offer OB services,
leadership must be engaged in the facility's QAPI activities. For
purposes of this provision, leadership is defined as facility
leadership, obstetrical services leadership, or their designate(s).
Per existing state statutes as applicable, facilities are already
required to report data to MMRCs.\481\ We therefore propose that if a
MMRC is available at the State or local jurisdiction in which the
facility was located, hospitals (at Sec. 482.21(e)(2)) and CAHs (at
Sec. 485.641(d)(4)(ii)) that offer OB services must have to have a
process for incorporating MMRC data and recommendations into the
facility's QAPI program. Participation in a PQC or pursuing a QI
project based on information from a MMRC are examples of how a facility
could comply with this proposal. Of note, facilities can review CDC and
state resources to identify the coordinating body and/or existence of
MMRC in their state or locality.\482\
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\481\ https://www.cdc.gov/maternal-mortality/php/mmrc/index.html.
\482\ https://www.cdc.gov/maternal-mortality/php/mmrc/index.html.
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c. Solicitation of Comments
We welcome public comments on the enhancements to the existing QAPI
standards for hospitals and CAHs that offer obstetrical services
proposed above. Our central goal with these proposals is to improve the
health and safety of all pregnant, birthing, and postpartum patients in
Medicare-participating hospitals and CAHs, including reducing worsened
health outcomes among vulnerable subpopulations, and we invite comment
on how effectively these proposals would achieve this goal. We are
additionally interested in data, evidence, and experience related to
QAPI's impact and role in addressing maternal health disparities as
well as any benefits, costs, and unintended consequences of the above
policies. We welcome public input from a broad range of commenters,
including but not limited to patients, community-based organizations,
public health professionals, health care professionals, staff,
hospitals, operators, researchers, those representing diverse
perspectives (such as those from rural and otherwise underserved
communities), those disproportionately providing or engaged in maternal
health care for specific populations discussed in this rule such as
people experiencing health disparities, social risk factors and mental
health conditions and substance use disorder which may lead to stigma,
discrimination, and adverse outcomes). We also solicit public comments
on the following questions:
How effectively would these proposals achieve CMS' central
goal of improving the health and safety of all pregnant, birthing, and
postpartum patients in Medicare-participating hospitals and CAHs,
including reducing worsened health outcomes among vulnerable
subpopulations?
To what extent do facilities already stratify, measure,
analyze, and track quality data and indicators over time by diverse
subpopulations or conduct performance improvement projects focused on
reducing maternal health disparities as part of their QAPI activities?
What are examples and outcomes of such work to date? What challenges do
facilities (including those in rural areas or geographically isolated
areas) face in performing such data stratification (for example,
administrative recordkeeping processes, information systems, patient
willingness to disclose information, and staff time/expertise) and
implementing maternal health equity related QAPI projects? How can such
challenges be overcome? What is needed for facilities to collect and
stratify data by diverse sub-populations?
What types of data stratifications/subgroups/categories
are key to ensuring the health and safety of all pregnant, birthing,
and postpartum patient subgroups? How can facilities best ensure their
subgroup data collection and analysis reflects the diverse
subpopulations served? What is the benefit versus possible unintended
consequences of CMS defining and requiring a minimum set of data
stratifications/subgroup/categories in facilities' maternal health QAPI
program analyses? For example, should facilities be required to, at
minimum, collect and stratify data by the subgroups included in MMRIA?
How can facilities meaningfully acquire and disseminate subpopulation
data in a way that avoids disclosure (that is, protecting individual
privacy and confidentiality of their data), which can lead to increased
vulnerability for underserved populations? How should facilities
address stratifying small populations?
How can facilities best involve and/or share the results
of the facilities' maternal health equity focused QAPI efforts with
patients, their families/caregivers, and community members? What are
examples and outcomes of such efforts to date? What gaps and challenges
exist?
Should any of these proposals apply to other types of
Medicare-participating facilities besides hospitals and CAHs that offer
OB services? For example, should similar requirements apply to REHs?
What could be the benefits, challenges, or potential unintended
consequences of such policies? How could CMS minimize the burden of any
such requirements?
4. Emergency Services Readiness (Sec. 482.55; Sec. 485.618)
a. Background
In compliance with the EMTALA statute (42 U.S.C. 1395dd) and its
implementing regulations (42 CFR 489.24), Medicare-participating
hospitals and CAHs with emergency departments must be continually
prepared to provide individuals presenting to the emergency department
with an appropriate medical screening exam and stabilizing treatment if
an emergency medical condition is found or, under certain
circumstances, appropriately transfer such individuals to receive
stabilizing care at another facility with higher treatment capabilities
not available at the originating hospital. Such readiness is essential
to the health and safety of emergency services patients, and relies on
adequate staff training, provisions, protocols, and supplies.
However, several organizations have reported that that emergency
department readiness can be suboptimal, especially for obstetrical,
geriatric, and pediatric populations, among
others.483 484 485 486 487 488 Specific to obstetrical
patients, as discussed in section XXI.A.1 of this proposed rule,
[[Page 59498]]
given the worsening maternal morality crisis and declining access to
inpatient and outpatient maternity care in the U.S. in recent years,
especially in rural and low-income communities, non-obstetrical
professionals working in hospital emergency departments, CAHs, and REHs
nationwide may experience a higher acuity and frequency of patients
needing OB care, which may result in patients receiving care by staff
with less training in obstetrical emergencies. Moreover, pregnant women
who live in rural communities, have low income, are members of certain
racial/ethnic groups (non-Hispanic Black, American Indian/Alaska Native
(AI/AN)), and have disabilities experience disproportionately higher
rates of pregnancy-related morbidity and mortality. For some pregnant
women, the emergency department may be their first and/or only contact
with the health care system during the pregnancy. Hospital emergency
departments, CAHs, and REHs must therefore continue to ensure they are
prepared to meet the needs of these high-risk patient populations in
order to maintain high quality of care and reduce disparate health
outcomes. Research shows that additional obstetric training for
emergency department staff improves staff competencies (that is,
skills, knowledge, comfort, confidence, and effectiveness) in managing
obstetric emergencies, supporting improved maternal health and
safety.489 490 491 492 493 494 Similarly, staff training in
pediatric readiness 495 496 497 and geriatric readiness
498 499 500 501 502 improves staff capabilities in caring
for these populations as well as patient health and safety.
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\483\ https://www.acog.org/news/news-articles/2022/01/commitment-to-action-eliminating-preventable-maternal-mortality.
\484\ https://rhrc.umn.edu/wp-content/uploads/2021/09/UMN-emOB-Training-Needed_11.12.20_508.pdf.
\485\ https://www.cdcfoundation.org/sites/default/files/files/ReportfromNineMMRCs.pdf.
\486\ https://emscimprovement.center/domains/pediatric-readiness-project/.
\487\ https://publications.aap.org/pediatrics/article/142/5/e20182459/38608/Pediatric-Readiness-in-the-Emergency-Department.
\488\ https://forms.ihi.org/hubfs/Guide%20to%20Recognition%20for%20GEDA%20Sites_FINAL.pdf.
\489\ Burke SM, Schmitt T, Kennedy P, et al. Emergency Medicine
Obstetrics and Gynecology: A Case-Based Curriculum for Residents.
MedEdPORTAL. 2023;19:11330.
\490\ Espey E, Baty G, Rask J, Chungtuyco M, Pereda B, Leeman L.
Emergency in the clinic: a simulation curriculum to improve
outpatient safety. Am J Obstet Gynecol. Dec 2017;217(6):699.e1-
699.e13.
\491\ Cooper MI, Papanagnou D, Meguerdichian M, Bajaj K.
Emergency Obstetrics for the Emergency Medicine Provider.
MedEdPORTAL. October 13 2016;12:10481.
\492\ Jacobs PJ. Using High-Fidelity Simulation and Video-
Assisted Debriefing to Enhance Obstetrical Hemorrhage Mock Code
Training. J Nurses Prof Dev. Sep/Oct 2017;33(5):234-239.
\493\ Hopmann P, Varre JS, Duncan G, Devoe WB, Gable BD.
Multidisciplinary Simulation of Trauma in Pregnancy with
Resuscitative Endovascular Balloon Occlusion of the Aorta (REBOA)
Utilization. Cureus. December 2022; 14(12): e32820.
\494\ Harrington J, Duncan G, D. Angelo KG. Multidisciplinary
Simulation Improves Resident Confidence for Pregnant Patients
Requiring Surgical Intervention. Cureus. Mar 2022;14(3): e23454.
\495\ https://pubmed.ncbi.nlm.nih.gov/31444254/.
\496\ https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2800400.
\497\ https://publications.aap.org/pediatrics/article/144/3/e20190568/76984/Emergency-Department-Pediatric-Readiness-and.
\498\ https://www.sciencedirect.com/science/article/pii/S0196064413015527?via%3Dihub.
\499\ https://onlinelibrary.wiley.com/doi/10.1111/acem.13880.
\500\ https://onlinelibrary.wiley.com/doi/10.1111/j.1741-6612.2010.00499.x.
\501\ https://www.sciencedirect.com/science/article/pii/S1525861021001961?via%3Dihub.
\502\ https://pubmed.ncbi.nlm.nih.gov/37389490/.
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While the hospital Emergency Services CoP requires that ``there
must be adequate medical and nursing personnel qualified in emergency
care to meet the written emergency procedures and needs anticipated by
the facility'' (Sec. 482.55(b)(2)), CMS believes clearer expectations
surrounding ``qualified in emergency care'' and maintenance of
qualifications (that is, training) would improve facilities' readiness
to care for patients with emergency conditions, enhancing patient
health and safety.
b. Proposal
Given CMS' commitment to ensuring the health and safety of all
emergency services patients, including OB patients, we propose a new
standard entitled ``Emergency Services Readiness'' within the existing
Emergency Services CoP for hospitals (Sec. 482.55) and CAHs (Sec.
485.618) to set clear expectations as well as improve facility
readiness in caring for emergency services patients, including
pregnant, birthing, and postpartum patients. Notably, these
requirements would apply to all hospitals and CAHs offering emergency
services,\503\ whether or not a hospital/CAH offers an additional
specialty service lines (such as OB services). This is done with the
intention of ensuring baseline health, safety, and training standards
for the care of patients with emergency conditions.
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\503\ For purposes of this proposal, CMS considers a facility to
``offer emergency services'' when it meets the definition of
``dedicated emergency department'' as defined in EMTALA (42 CFR
489.24(b) ``Dedicated emergency department'').''
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First for hospitals (Sec. 482.55(c)) and CAHs (Sec. 485.618(e))
that offer emergency services, we propose that these facilities would
be required to have adequate provisions and protocols to meet the
emergency needs of patients in accordance with the complexity and scope
of services offered. For protocols, hospitals (Sec. 482.55(c)(1)) and
CAHs (Sec. 485.618(e)(1)) must have protocols consistent with
nationally recognized and evidence-based guidelines for the care of
patients with emergency conditions. For example, facilities may utilize
national medical professional society, accrediting organization,
credentialling body, or other national guidelines to develop
appropriate protocols for their emergency services patient populations.
While these CoPs would not require adherence to a specific
organization's guideline or recommendations, we expect that facilities
would be able to articulate their standards and the source(s) and to
demonstrate that their standards are based on evidence and nationally
recognized sources. The American College of Emergency Physicians, for
instance, has issued multiple guidelines for best practices in managing
common and critical emergency conditions and has developed a Geriatric
Emergency Department Accreditation Program, which provides best
practice standards for this at-risk population.504 505 For
obstetrical emergencies, the Alliance for Innovation on Maternal
Health's (AIM; a partnership between HRSA and American College of
Obstetricians and Gynecologists (ACOG) and other stakeholders) has
developed resources which include example protocols and training
resources for responding to obstetrical hemorrhage, severe
hypertension, perinatal mental health conditions, sepsis, substance use
disorder, and cardiac conditions, among others.\506\ ACOG has also
developed resources for Obstetric Emergencies in Nonobstetric
Settings.\507\ Similarly, the HRSA-supported Emergency Medical Services
for Children (EMSC) Innovation and Improvement Center has resources for
emergency departments seeking to improve ``pediatric readiness.'' \508\
We expect hospitals to be able to identify the source of the nationally
recognized and evidence-based guidelines utilized in their protocols.
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\504\ https://www.acep.org/patient-care/clinical-policies.
\505\ https://www.acep.org/geda.
\506\ https://saferbirth.org/.
\507\ https://www.acog.org/programs/obstetric-emergencies-in-nonobstetric-settings.
\508\ https://emscimprovement.center/domains/pediatric-readiness-project/.
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For hospitals (Sec. 482.55(c)(3)) and CAHs (Sec. 485.618(e)(2))
that offer emergency services, applicable emergency services personnel,
as determined by the facility, would need to be trained on these
protocols and provisions annually. However given the diversity of staff
and services offered by hospitals and CAHs, we are not proposing which
emergency services staff should be trained. Once staff are identified,
hospitals and CAHs would be expected to document that applicable staff
have successfully completed such facility-identified training and
[[Page 59499]]
demonstrate staff knowledge on these topics.
Finally, for hospitals that offer emergency services, we further
propose at Sec. 482.55(c)(2) that provisions include equipment,
supplies, and medication used in treating emergency cases. Such
provisions must be kept at the hospital and be readily available for
treating emergency cases. The available provisions must include: (1)
drugs, blood and blood products, and biologicals commonly used in life-
saving procedures; (2) equipment and supplies commonly used in life-
saving procedures; and (3) a call-in-system for each patient in each
emergency services treatment area. These supply requirements are
similar to existing CAHs (at Sec. 485.618(b) and (c)) and REHs (at
Sec. 485.516(c)(2)) supply standards for emergency services, as well
as the surgical services CoP supply requirements (Sec. 482.51(b)(3)).
We are not proposing any new emergency services equipment, supplies, or
medication requirements for CAHs or REHs. Of note, hospitals have the
flexibility to contract for services (Sec. 482.12(e)), which could
include procurement and storage of blood and blood products.
Like CAHs and REHs, hospitals would have flexibility in identifying
and determining the type and necessary quantity of drugs, blood
products, biologicals, equipment and supplies commonly used in
emergency procedures needed to meet the needs of their patients. This
CMS proposal does not require facilities to maintain supplies of
particular drugs, biologicals, equipment, or supplies or amounts.
Rather each facility would be expected to tailor their equipment and
supplies to meet the needs of their patient populations, consistent
with the needs, services, and resources of the facility. Examples of
drugs and biologicals commonly used in life-saving procedures could
include analgesics, local anesthetics, antibiotics, anticonvulsants,
antidotes and emetics, serums and toxoids, antiarrhythmics, cardiac
glycosides, antihypertensives, diuretics, and electrolytes and
replacement solutions. Supply and equipment commonly used in life-
saving procedures could include airways, endotracheal tubes, ambu bag/
valve/mask, oxygen, tourniquets, immobilization devices, nasogastric
tubes, splints, IV therapy supplies, suction machine, defibrillator,
cardiac monitor, chest tubes, and indwelling urinary catheters. Such
standards would be consistent with existing CAH (Sec. 485.618(b) and
(c)) and REH (Sec. 485.516(c)(2)) emergency services standards.
Lastly, the proposed requirement for a call-in-system for each
patient in each emergency services treatment area is in line with the
surgical services CoP (Sec. 482.51(b)(3)) and promotes patient safety
by ensuring patients have a ready means of notifying staff of any
emergencies or concerns.
c. Solicitation of Comments
We welcome public comments on the above enhancements to the
existing emergency services standards for hospitals and CAHs. Our goal
with this section's proposals is to improve the health and safety of
all emergency services patients, including pregnant, birthing, and
postpartum patients. We seek comments on how effectively these
proposals would achieve this goal. We are additionally interested in
data, evidence, and experience related to these proposals as well as
any benefits, costs, and unintended consequences of the above policies.
We welcome public input from a broad range of commenters, including but
not limited to patients, community-based organizations, public health
professionals, health care professionals, staff, hospitals, operators,
and researchers. Specifically, we solicit public comments on the
following questions:
While REHs do have existing equipment, supply, and
medication standards, should the above proposals related to provisions,
protocols, and staff training apply to REHs as well?
What would be the benefits versus burden of such an
approach? How could any burdens be mitigated?
5. Transfer Protocols (Sec. 482.43)
a. Background
The Discharge Planning CoP for hospitals at Sec. 482.43 currently
require facilities to have an effective discharge planning process that
focuses on the patient's goals and treatment preferences and includes
the patient and his or her caregivers/support person(s) in the process.
The discharge planning CoP include standards for the discharge planning
process, the provision and transmission of the patient's necessary
medical information, and discharge to post-acute services. However, the
hospital Discharge Planning CoP does not currently include baseline
requirements related to patient transfers.
Errors can occur during hospital transfers, including incomplete or
inaccurate communication at the time of transfer. This is associated
with worse patient outcomes, including delayed diagnoses, redundant
tests, longer length of stays, and increased costs.\509\ Additionally,
delays from the time a patient is accepted to another hospital to when
they are transferred can be exacerbated by limited bed
availability.\510\ These delays can prevent patients from receiving the
medical care they need in a timely manner. Establishing transfer
protocols can enhance patient health and safety by ensuring consistent
and thorough communication between healthcare providers, minimize the
risks of errors, reduce delays, and ensure that patients receive timely
and appropriate care.
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\509\ Mueller S, Schnipper JL. Physician Perspectives on
Interhospital Transfers. J Patient Safety. 2019 June; 15(2): 86-89.
doi: 10.1097/PTS.0000000000000312.
\510\ Carroll M, Fanning C, Herrigel DJ, Parikh A, et al.
Interhospital Transfer Handoff Practices Among US Tertiary Care
Centers: A Descriptive Study. J. Hosp Med. 2017 Dec, 11(6):
doi:10.1002/jhm.2577.
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Hospitals regularly encounter situations where they may be unable
to provide the appropriate level of care to meet the needs of a patient
and must transfer the patient to another facility. As noted previously,
EMTALA (42 CFR 489.24) requires Medicare-participating hospitals with
emergency departments to provide an appropriate medical screening
examination to a presenting individual to determine whether an
emergency medical condition exists. If the hospital determines that the
individual has an emergency medical condition, the hospital must offer
stabilizing treatment or, under certain circumstances, appropriately
transfer such patients to receive stabilizing care that the originating
hospital does not have the capability to provide.\511\ Roughly 20
percent of patients seen in U.S. emergency departments are admitted to
the hospital as inpatients or transferred to a different facility \512\
In 2018, about 2.8 percent of patients were transferred from the ED to
another hospital. Lower-volume EDs had the highest transfer rates, at
about 5 percent.\513\ However, hospitals that do not have an emergency
department or are otherwise not covered by EMTALA, may also have a need
to transfer patients to other facilities to receive needed
[[Page 59500]]
services. Additionally, patients that are admitted as hospital
inpatients may require transfer between facilities to meet the needs of
the patient (for example, changing clinical condition, need for
specialty and/or higher level of care). It is estimated that each year,
patient transfers between acute care hospitals make up approximately
3.5 percent of all hospital inpatient admissions (roughly 1.5 million
admissions).\514\
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\511\ https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-G/part-489/subpart-B/section-489.24.
\512\ American College of Emergency Physicians--ACEP Now (2019).
Latest Data Reveal the ED's Role as Hospital Admission Gatekeeper.
https://www.acepnow.com/article/latest-data-reveal-theeds-role-as-hospital-admission-gatekeeper/.
\513\ American College of Emergency Physicians--ACEP Now (2019).
Latest Data Reveal the ED's Role as Hospital Admission Gatekeeper.
https://www.acepnow.com/article/latest-data-reveal-theeds-role-as-hospital-admission-gatekeeper/.
\514\ Hernandez-Boussard T, Davies S, McDonald K, Wang NE.
Interhospital Facility Transfers in the United States: A Nationwide
Outcomes Study. J Patient Saf. 2017 Dec;13(4):187-191. doi: 10.1097/
PTS.0000000000000148. PMID: 25397857; PMCID: PMC4956577.
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Existing CoPs for CAHs and REHs include requirements related to the
transfer of patients in the event that the facility is unable to
furnish needed services for a patient or the patient requires a higher
level of care. For example, the CAH CoPs at Sec. 485.616(a) require
CAHs that are members of a rural health network to have an agreement in
place with at least one hospital that is also a member of the network
for patient transfer. Additionally, the discharge planning requirements
at Sec. 485.642(b) require CAHs to discharge, transfer, or refer the
patient, where applicable, with all necessary medical information
pertaining to the patient's condition. We require similar actions
regarding patient transfers for REHs at Sec. 485.538.
Efficient transfers to hospitals that can treat complex conditions
and provide higher levels of care is critical for patients that are
experiencing obstetrical emergencies or complications, or patients that
require immediate post-delivery care. Elements of safe transfer would
include: (1) risk identification and determination of conditions
necessitating consultation, referral, and transfer; (2) mechanisms and
procedures for transfer/transport to a higher-level hospital at all
times; (3) a reliable, accurate, and comprehensive communication system
between participating hospitals, hospital personnel, and transport
teams.\515\
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\515\ https://www.acog.org/clinical/clinical-guidance/obstetric-care-consensus/articles/2019/08/levels-of-maternal-care.
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b. Proposals
We believe that comprehensive discharge planning CoP for hospitals,
including documented requirements for transfer protocols, will enhance
this process and better protect the health and safety needs of all
patients, including pregnant, birthing, and postpartum women. Having an
established process with identified policies and procedures, and a
medical staff that has received training regarding transfer protocols
can support hospitals in expediting transfers when necessary.
Therefore, we propose revisions to the hospital discharge planning
regulations to include requirements for transfer protocols.
We propose at Sec. 482.43(c) to require that hospitals have
written policies and procedures for transferring patients under their
care. This would be inclusive of hospital inpatients (for example,
transfers from the emergency department to inpatient admission,
transfers between inpatient units in the same hospital, as well as
transfers between inpatient units at different hospitals). This would
ensure patients are transferred to the appropriate level of care
promptly and without undue delay, in order to meet their needs.
We also propose to require the hospital to provide training to the
relevant staff (as determined by the facility) regarding the hospital
policies and procedures for transferring patients under its care.
Although we have established requirements for certain facilities
regarding patient transfers and propose standards for transfer
protocols and training requirements here, in general hospitals are not
required to accept or receive patients transferred from other
facilities unless the receiving hospital has the capacity to treat the
individual (42 CFR 489.24(f)). To ensure that patients receive the care
their medical conditions require, we encourage all recipient hospitals
to have policies and procedures in place regarding the acceptance of
transfers and remind hospitals of their obligations to comply with
EMTALA and Federal civil rights laws.\516\ EMTALA requires hospitals
with emergency departments to provide an appropriate medical screening
examination to determine whether an emergency medical condition exists,
provide stabilizing treatment if hospital determines that there is an
emergency medical condition, and if necessary, to appropriately
transfer individuals with an emergency medical condition as needed,
whether or not the individual is eligible for Medicare benefits and
regardless of ability to pay (42 CFR 489.24(a)). Federal civil rights
laws prohibit discrimination based on an individual's race, color,
national origin, sex, religion, disability, and age. Further, hospitals
that have specialized capabilities or facilities (including, but not
limited to, facilities such as burn units, shock-trauma units, neonatal
intensive care units, or, with respect to rural areas, regional
referral centers) may not refuse to accept from a referring hospital an
appropriate transfer of an individual who requires such specialized
capabilities or facilities, if the receiving hospital has the capacity
to treat the individual (42 CFR 489.24(f)). We solicit comments on
these proposals.
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\516\ Recipients of Federal financial assistance must comply
with Federal civil rights laws, including but not limited to Title
VI of the Civil Rights Act of 1964 (45 CFR part 80), Section 504 of
the Rehabilitation Act of 1973 (45 CFR part 84), The Age
Discrimination Act (45 CFR part 90), and Section 1557 of the
Affordable Care Act (45 CFR part 92).
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We also solicit public comments on the following questions:
How often should staff be trained in transfer protocols?
What definitions or criteria exist to determine if a
transfer is carried out ``promptly and without undue delay''?
Should hospitals be required to have written policies and
procedures outlining their standards and conditions for accepting
transfers?
Should all hospitals (inclusive of CAHs and REHs) be
required to have a documented partnership with another hospital that
both provides OB services, as well as has a Medical Fetal Medicine
(MFM) specialist available for consultations in urgent situations, if
such service(s) are already offered directly by the hospital? What
would be the benefits versus burden of such a policy? How could any
burden be mitigated?
XXII. Modification to the Hybrid Hospital-Wide All-Cause Readmission
and Hybrid Hospital-Wide All-Cause Risk Standardized Mortality Measures
in the Hospital Inpatient Quality Reporting Program
A. Background
We refer readers to the following final rules for detailed
discussions of the history of the Hospital IQR Program, including
statutory history, and for the measures we have previously adopted for
the Hospital IQR Program measure set:
The FY 2010 Hospital Inpatient Prospective Payment Systems
for Acute Care Hospitals and the Long-Term Care Hospital Prospective
Payment System (IPPS/LTCH PPS) final rule (74 FR 43860 through 43861);
The FY 2011 IPPS/LTCH PPS final rule (75 FR 50180 through
50181);
The FY 2012 IPPS/LTCH PPS final rule (76 FR 51605 through
61653);
The FY 2013 IPPS/LTCH PPS final rule (77 FR 53503 through
53555);
The FY 2014 IPPS/LTCH PPS final rule (78 FR 50775 through
50837);
The FY 2015 IPPS/LTCH PPS final rule (79 FR 50217 through
50249);
[[Page 59501]]
The FY 2016 IPPS/LTCH PPS final rule (80 FR 49660 through
49692);
The FY 2017 IPPS/LTCH PPS final rule (81 FR 57148 through
57150);
The FY 2018 IPPS/LTCH PPS final rule (82 FR 38326 through
38328 and 38348);
The FY 2019 IPPS/LTCH PPS final rule (83 FR 41538 through
41609);
The FY 2020 IPPS/LTCH PPS final rule (84 FR 42448 through
42509);
The FY 2021 IPPS/LTCH PPS final rule (85 FR 58926 through
58959);
The FY 2022 IPPS/LTCH PPS final rule (86 FR 45360 through
45426);
The FY 2023 IPPS/LTCH PPS final rule (87 FR 49190 through
49310); and
The FY 2024 IPPS/LTCH PPS final rule (88 FR 59144 through
59203).
We also refer readers to 42 CFR 412.140 for Hospital IQR Program
regulations and the FY 2025 IPPS/LTCH PPS proposed rule published on
May 2, 2024 (89 FR 36306 through 36341).
B. Proposed Update to the Form, Time, and Manner Requirements for the
Hybrid Hospital-Wide All-Cause Readmission (HWR) and Hybrid Hospital-
Wide All-Cause Risk Standardized Mortality (HWM) Measures for the FY
2026 Payment Determination
1. Background of the Hybrid HWR and Hybrid HWM Measures in the Hospital
IQR Program
The Hospital IQR Program previously adopted two hybrid measures:
(1) the Hybrid Hospital-Wide Readmission (HWR) measure; and (2) the
Hybrid Hospital-Wide All-Cause Risk Standardized Mortality (HWM)
measure. Hybrid measures use more than one data source for measure
calculation; specifically for the Hybrid HWR and Hybrid HWM measures,
they use core clinical data elements (CCDEs), linking variables, and
claims data (80 FR 49698). CCDEs are a set of clinical variables
derived from electronic health records (EHRs) that can be used to risk
adjust hospital outcome measures (80 FR 49699). Linking variables are
administrative data that can be used to link or merge the CCDEs and
administrative claims data for measure calculation (80 FR 49703). These
measures are designed to enhance risk adjustment of administrative
claims-based outcome measures by utilizing patient clinical data
captured in EHRs (80 FR 49698).
We initially solicited public comment on the potential future
adoption of hybrid measures into the Hospital IQR Program in the FY
2016 IPPS/LTCH PPS final rule adoption (80 FR 49698 through 49704). In
subsequent years, we adopted both the Hybrid HWR measure and the Hybrid
HWM measure with initial voluntary reporting periods. A discussion of
the measure history for both measures follows.
The Hybrid HWR was the first hybrid measure introduced into the
Hospital IQR Program. The Hybrid HWR measure is designed to capture all
unplanned readmissions that arise from acute clinical events requiring
urgent rehospitalization within 30 days of discharge. The measure was
adopted in a stepwise fashion starting with voluntary reporting
periods. In the FY 2018 IPPS/LTCH PPS final rule, we finalized 6 months
of voluntary reporting for the CY 2018 reporting period (82 FR 38350
through 38355). In the FY 2020 IPPS/LTCH PPS final rule, we finalized 2
additional years of voluntary reporting, followed by mandatory
reporting impacting the FY 2026 payment determination (84 FR 42465
through 42479). Then, in the FY2024 IPPS/LTCH PPS final rule, we
modified the Hybrid HWR measure cohort to include both Medicare fee-
for-service (FFS) patients and Medicare Advantage (MA) patients 65
years and older for the FY 2027 payment determination and for
subsequent years (88 FR 59161 through 59168).
The Hybrid HWM measure was the second hybrid measure to be adopted
into the Hospital IQR Program. The Hybrid HWM measure is an outcome
measure that captures the hospital-level, risk-standardized mortality
rate (RSMR) of unplanned, all-cause mortality within 30 days of
hospital admission for any eligible condition. Similar to the Hybrid
HWR measure, we adopted the Hybrid HWM measure in a stepwise fashion,
starting with a period of voluntary reporting. We initially adopted the
Hybrid HWM measure in the FY 2022 IPPS/LTCH PPS final rule and
finalized one voluntary reporting period followed by mandatory
reporting impacting the FY 2026 payment determination (86 FR 45365
through 45374). Then in the FY 2024 IPPS/LTCH PPS final rule, we
modified the Hybrid HWM measure cohort to include both Medicare fee-
for-service (FFS) patients and Medicare Advantage (MA) patients 65 to
94 years old for the FY 2027 payment determination and for subsequent
years (88 FR 59161 through 59168).
As previously noted, these hybrid measures use data from claims in
combination with CCDEs and linking variables pulled from hospital EHRs.
We require that hospitals submit linking variables on 95 percent of
hospital discharges (84 FR 42470; 86 FR 45371). The previously
finalized linking variables are: (1) CMS Certification Number; (2)
Health and Insurance Claims Number or Medicare Beneficiary Identifier;
(3) Date of Birth; (4) Sex; (5) Admission date; and (6) Discharge date
(84 FR 42469; 86 FR 45371). The previously finalized CCDEs are vital
signs and laboratory results (84 FR 42469; 86 FR 45371). We also
previously finalized that hospitals would be required to report CCDEs
on 90 percent of discharges in a given reporting period (84 FR 42469;
86 FR 45371). These submission requirements were finalized beginning
with mandatory reporting for the FY 2026 payment determination (84 FR
42469 through 42470; 86 FR 45371). We refer readers to the FY 2020
IPPS/LTCH PPS final rule (84 FR 42465 through 42479) and FY 2022 IPPS/
LTCH PPS final rule (86 FR 45365 through 45374) for more information
regarding data sources, measure calculation, and risk adjustment
requirements. We also refer readers to the FY 2020 IPPS/LTCH PPS final
rule (84 FR 42506 through 42508), the FY 2021 IPPS/LTCH PPS final rule
(85 FR 58941), the CY 2021 PFS final rule (85 FR 84472), and the FY
2022 IPPS/LTCH PPS final rule (86 FR 45421) for our previously adopted
policies regarding certification, file format, and data submission
requirements for hybrid measures in the Hospital IQR Program. For both
hybrid measures, hospitals are currently required to submit data for
the mandatory reporting period impacting the FY 2026 payment
determination, based on performance data from July 1, 2023 through June
30, 2024, by October 1, 2024 (86 FR 45370).
Under our stepwise approach when we adopted the hybrid measures, we
finalized that data collected during the voluntary reporting periods
would not be publicly reported (84 FR 42470; 86 FR 45371). We also
finalized that we would begin public reporting of both hybrid measures'
results, beginning with data collected from the July 1, 2023 through
June 30, 2024 reporting period, impacting the FY 2026 payment
determination (84 FR 42470 through 42471; 86 FR 45371).
2. Proposal To Extend Voluntary Reporting of CCDE and Linking Variable
Data for the Hybrid HWR and Hybrid HWM Measures
Based on hospital performance during the most recent voluntary
reporting period, it appears that hospitals are unprepared for
mandatory reporting of the Hybrid HWR and Hybrid HWM measures. As a
part of measure maintenance, we routinely monitor hospital performance
on the Hospital IQR Program's measures. We have been closely monitoring
the results of
[[Page 59502]]
voluntary reporting for both hybrid measures, including most recently
the results of the second voluntary period for Hybrid HWR and the first
voluntary period for Hybrid HWM. During these periods, approximately
one-third of IPPS hospitals participated. The data currently indicate
that three-fourths of the participating hospitals would not have met
the reporting thresholds for the CCDEs and linking variables if the
reporting requirement had been mandatory, and accordingly, would have
been subject to a one quarter reduction to their annual payment update
under the Hospital IQR Program for the given fiscal year.
The hospitals that participated in the voluntary reporting were
mostly large, non-rural, non-critical access, and non-safety net. Based
on our experience with implementing new types of digital measures, we
understand that small and rural hospitals, as well as hospitals with
fewer financial resources, may need additional time and flexibility to
successfully implement new measure reporting requirements relative to
larger, non-rural hospitals (82 FR 38357). We therefore believe the
reporting failure rate may have been even higher if all IPPS hospitals
participated.
In addition, we received feedback from hospitals (via email and
help desk questions) raising various issues with reporting including
issues related to CCDE collection timing and clinical workflow, issues
with the types of units required for CCDE values, and achievability of
the data submission requirement thresholds. We are investigating
whether any of these issues or any other issues may be making it
difficult for hospitals to meet CCDE and linking variable thresholds
(that is, of 90 percent and 95 percent, respectively, of hospital
discharges), and need additional time to analyze and identify the root
cause of these challenges.
We appreciate that, in light of the information discussed above,
hospitals participating in the Hospital IQR Program may need an
additional year to remediate the issues and develop experience with
reporting of CCDEs and linking variables before being subject to the
associated program payment adjustments for noncompliance. We therefore
propose that for the FY 2026 payment determination (based on
performance data from July 1, 2023 through June 30, 2024), the
submission of CCDEs and linking variables would remain voluntary. We
propose that for the FY 2027 payment determination and subsequent
years, the submission of CCDEs and linking variables become mandatory.
Under our proposal, a hospital's annual payment determination for
FY 2026 would not be affected by the voluntary reporting of CCDEs and
linking variables, although we would still evaluate and assess the
claims data portion of these measures. The Hybrid HWR and Hybrid HWM
measures would be publicly reported based on claims data. This proposal
would allow the Hospital IQR Program to publicly display hospital
information on these important clinical areas and provide patients with
visibility into hospital performance, while providing hospitals with
more time to improve reporting on CCDEs and linking variables.
Hospitals would continue to receive confidential hospital-specific
reports in the Spring as a preview of public reporting. We note that
the hospital-specific reports would reflect the CCDEs and linking
variables, should hospitals choose to submit them. We continue to
evaluate potential changes to the reporting requirements related to
CCDEs and linking variables.
We invite public comment on our proposal to continue voluntary
reporting of the CCDEs and linking variables for both the Hybrid HWR
and Hybrid HWM measures, for the performance period of July 1, 2023
through June 30, 2024, impacting the FY 2026 payment determination for
the Hospital IQR Program. We specifically request feedback regarding
the difficulties hospitals have in meeting the thresholds and any
recommendations hospitals may have based on their experiences reporting
on hybrid measures.
XXIII. Individuals Currently or Formerly in the Custody of Penal
Authorities
A. Medicare FFS No Legal Obligation To Pay Payment Exclusion and
Incarceration (revisions to 42 CFR 411.4)
1. Background
Section 1862(a)(2) of the Act prohibits Medicare payment under Part
A or Part B for any expenses incurred for items or services for which
the individual furnished such items or services has no legal obligation
to pay, and which no other person (by reason of such individual's
membership in a prepayment plan or otherwise) has a legal obligation to
provide or pay for, except in the case of Federally qualified health
center services. We refer to this payment exclusion as the ``no legal
obligation to pay'' payment exclusion. The no legal obligation to pay
payment exclusion is codified in regulation at Sec. 411.4. The
regulatory exclusion includes a general rule at Sec. 411.4(a) that
applies to all services (except as provided in Sec. 411.8(b)) and a
special condition at Sec. 411.4(b) for services furnished to
individuals in custody of penal authorities.
In the 1989 final rule establishing the special condition at Sec.
411.4(b) for services furnished to individuals in custody of penal
authorities, we explained that the purpose of Sec. 411.4(b) is to
clarify how the no legal obligation to pay payment exclusion applies to
services furnished to prisoners (see 54 FR 41716, 41723 (Oct. 11,
1989)) (``1989 final rule''). We explained that prisoners generally
have the status of public charges and, as such, have no obligation to
pay for the medical care they receive. Consequently, under the
statutory no legal obligation to pay payment exclusion, Medicare is
prohibited for paying for such care. We noted, however, that in certain
circumstances prisoners could have a legal obligation to pay for health
care items or services they receive, and in such circumstances,
Medicare may pay for the items or services.
As finalized in the 1989 final rule, the special rule at Sec.
411.4(b) specifies the conditions that must be satisfied to establish
that a prisoner has a legal obligation to pay for health care items or
services, and thus that Medicare may pay for such items or services.
Specifically, Sec. 411.4(b) provides that Medicare may pay for
services furnished to individuals in custody of police or other penal
authorities or in the custody of a government agency under a penal
statute only if the following conditions are met: (1) State or local
law must require individuals in custody to repay the cost of the
medical services they receive while in custody; and (2) the State or
local government must enforce the requirement to pay by billing all
such individuals, whether or not covered by Medicare or any other
health insurance, and by pursuing collection of the amounts they owe in
the same way and with the same vigor that it pursues the collection of
other debts.
In 2007, we added a definition of ``custody'' to the special
condition at Sec. 411.4(b) for services furnished to individuals in
custody of penal authorities (see 72 FR 47130, 47405 through 47406
(Aug. 22, 2007)) (``2007 final rule''). We noted that CMS would not
defer to a particular State or local government's definition or
interpretation of what constitutes ``custody.'' Instead, we adopted a
definition of ``custody'' that is consistent with how the term has been
defined by Federal courts for purposes of the habeas corpus protections
of the U.S. Constitution. As finalized,
[[Page 59503]]
Sec. 411.4(b) provides that individuals who are in custody include,
but are not limited to, individuals who are under arrest, incarcerated,
imprisoned, escaped from confinement, under supervised release, on
medical furlough, required to reside in mental health facilities,
required to reside in halfway houses, required to live under home
detention, or confined completely or partially in any way under a penal
statute or rule. We explained that, under this description, individuals
who are on parole, probation, bail, or supervised release may be in
custody for purposes of the payment exclusion. We also stressed that
individuals who are under supervised release for the purpose of
receiving medical services on so-called ``medical furlough,'' and who
are required to return to a State or local government facility after
the medical services are furnished, are considered to be in custody for
purposes of the no legal obligation to pay payment exclusion.
In the 2007 final rule, we responded to several commenters who
objected to the breadth of the definition of custody that we adopted.
The commenters maintained that the policy would place an unreasonable
burden on hospitals, because hospitals often have no means of
identifying whether an individual is in custody for purposes of Sec.
411.4(b) if the individual is not physically confined in a correctional
facility or brought to the hospital by government authorities. Another
commenter added that a hospital has no way of knowing whether an
individual who is in custody for purposes of Sec. 411.4(b) has a legal
obligation to pay for his or her medical care. In response, we stated
that hospitals are not required to seek criminal histories or do
background checks on all patients being registered. We explained that,
if Medicare denies payment because the individual receiving care is in
custody of penal authorities, the provider or supplier will be directed
to seek payment from the State or local government that has custody of
the individual. We concluded that, if the State or local government
believes in such circumstances that it is not responsible for the care
provided to the individual, it should be prepared to prove to Medicare
either that the individual would not be considered to be in custody
under Federal habeas corpus law or that the State or local government
has no legal obligation to pay for the services because the conditions
in Sec. 411.4(b)(1) and (b)(2) are satisfied.
There have been no further revisions to Sec. 411.4 since it was
revised in 2007.
2. Proposal
a. Overview of Proposed Changes
The special condition at Sec. 411.4(b) for services furnished to
individuals in custody of penal authorities operates as a rebuttable
presumption. The presumption is that individuals who are in custody, as
the term is described in Sec. 411.4(b), have no legal obligation to
pay for health care items or services they receive while in custody;
therefore, Medicare is prohibited from paying for such health care
items or services under the no legal obligation to pay payment
exclusion. The presumption can be rebutted by a showing that: (1) the
State or local government requires individuals in custody to repay the
cost of the medical services they receive while in custody; and (2) the
State or local government enforces the requirement to pay by billing
all such individuals, whether or not covered by Medicare or any other
health insurance, and by pursuing collection of the amounts they owe in
the same way and with the same vigor that it pursues the collection of
other debts.
We propose to narrow the description of ``custody'' in Sec.
411.4(b), because, as explained in greater detail below, we no longer
believe that certain classes of individuals should be presumed to be in
custody for purposes of the no legal obligation to pay payment
exclusion. Specifically, we propose to remove individuals who are under
supervised release or required to live under home detention from the
description of ``custody'' in Sec. 411.4(b), and we propose to strike
the phrase ``or confined completely or partially in any way under a
penal statute or rule.'' We are also seeking comments on a proposal,
described in greater detail below, to determine when individuals who
are required to reside in halfway houses should be considered to be in
custody for purposes of the no legal obligation to pay payment
exclusion.
In addition to the proposed changes to the description of
``custody,'' we are also taking this opportunity to reorganize and
renumber the regulation at Sec. 411.4(b). Currently, Sec. 411.4(b)
includes both a description of ``custody'' and a statement of the
conditions that must be satisfied for payment to be made under Medicare
for items or services furnished to individuals in custody of penal
authorities. Our proposed reorganization would separately codify the
description of ``custody'' and the special conditions for payments.
Specifically, at proposed Sec. Sec. 411.4(b)(1)(i) through
411.4(b)(1)(iii), we propose to state the conditions that must be
satisfied for Medicare to pay for items or services furnished to an
individual in custody of penal authorities; we also propose certain
non-substantive edits to the regulatory language adopted from current
Sec. 411.4(b). At proposed Sec. 411.4(b)(2), we propose a definition
of ``penal authority'' that would apply generally to Sec. 411.4(b). At
Sec. 411.4(b)(3), we propose a description of ``custody'' that is
narrower in scope than the current description.
In addition to these proposed changes, which are discussed in
greater detail below, we are making certain non-substantive edits to
Sec. 411.4(a) to align the regulatory text with the statutory no legal
obligation to pay payment exclusion at section 1862(a)(2) of the Act.
Specifically, where the statute refers to items and services, the
current regulation refers only to services; consistent with the
statute, we propose to refer to both items and services in the
regulatory text. We are also adding a reference to Federally Qualified
Health Center services at Sec. 411.4(a) to align with the statute. The
regulatory text at Sec. 411.4(a)(2) currently states that no other
person or organization has a legal obligation to pay, whereas the
statute refers only to a person; we propose to delete ``organization''
from the regulation because the term ``person'' includes both natural
and non-natural persons, and the term ``organization'' is therefore
superfluous. We also propose to align the parenthetical in Sec.
411.4(a)(2) with the statutory parenthetical and to replace the term
``beneficiary'' in Sec. Sec. 411.4(a)(1) and 411.4(a)(2) with
``individual,'' to align with section 1862(a)(2) of the Act.
We also propose to redesignate the special conditions that are
specified in Sec. Sec. 411.4(b)(1) and 411.4(b)(2) as Sec. Sec.
411.4(b)(1)(i) through 411.4(b)(1)(iii). Under the proposal, the
rebuttable presumption in Sec. 411.4(b)(1) would apply to all items or
services furnished to individuals in custody of penal authorities,
regardless of who provides the items or services. We are seeking
comments on whether the scope of the rebuttable presumption in proposed
Sec. 411.4.(b)(1) should be limited to items or services furnished by
the penal authority or by a third party with which the penal authority
has arranged to provide the items or services. Were we to limit the
scope of the rebuttable presumption in this way, the rebuttable
presumption in proposed Sec. 411.4(b)(1) would not apply to items or
services furnished to individuals in custody of penal authorities by
third parties who do not have an arrangement or contract
[[Page 59504]]
with the penal authority to provide the items or services. We are also
seeking comments on whether individuals in custody of penal authorities
are permitted to arrange for their own health care with third parties
who do not have an agreement with the penal authority to provide the
items or services.
Lastly, we propose at proposed Sec. 411.4(b)(3)(v) to clarify that
an individual who is required to reside in a mental health facility
would only be considered to be in custody under the no legal obligation
to pay payment exclusion if the individual is required to reside in
such a facility under a penal statute or rule.
b. Description of ``Custody''--Proposed Sec. 411.4(b)(3)
We propose to redesignate the description of ``custody'' as Sec.
411.4(b)(3), to remove individuals who are on supervised release and
home detention from the current description of ``custody,'' and to
strike the phrase ``completely or partially in any way under a penal
statute or rule.'' (We are also seeking comments on a separate proposal
for individuals residing in halfway houses; this proposal is discussed
below at section c.) Under the proposal, individuals who have been
lawfully released from confinement in jail, prison, penitentiary, or
similar institution, or released following arrest (that is, the
individuals are no longer physically detained by law enforcement or
penal authorities) on bail, parole, probation, or home detention would
not be presumed to be in custody for purposes of the no legal
obligation to pay payment exclusion, even if such individuals are
required to return to jail, prison, penitentiary, or similar
institution at some later time (for example, due to conviction or
failure to satisfy the conditions of their supervised release).
However, individuals who are on ``medical furlough'' or similar
arrangements (that is, the individuals are under the control of law
enforcement or penal authorities and required to return to jail or
prison after medical services have been provided) would still be
considered in custody for purposes of Sec. 411.4(b)(3). Given the
differences in terminology used by various Federal, State, and local
government penal authorities to refer to different levels of control
and confinement in the criminal justice system, we are seeking comments
on the appropriateness of the terminology in the existing description
of ``custody'' in our regulations and whether additional or different
terminology should be incorporated in the description of ``custody'' at
Sec. 411.4(b)(3) in the final rule. We are also seeking comment on
whether we should explicitly state in regulatory text that individuals
on bail, parole, probation, or home confinement are not considered to
be in custody for purposes of proposed Sec. 411.4(b).
We propose to narrow the description of custody in Sec.
411.4(b)(3) for several reasons. First, we believe that individuals who
have been released from jail or prison on bail, parole, probation, or
home detention typically have a legal obligation to pay for the health
care items or services they receive. We do not believe that such
individuals have the status of public charges, and we do not believe
that Federal, State, or local government law enforcement or penal
authorities are typically responsible for providing for the health care
of such individuals. Therefore, we no longer believe that such
individuals (and the providers and suppliers who furnish services to
them) should have the burden to prove that the special conditions in
existing Sec. Sec. 411.4(b)(1) and 411.4(b)(2) have been satisfied in
order to receive payment from Medicare. We are seeking specific,
detailed comments on the circumstances in which individuals who have
been released from incarceration on bail, parole, probation, or home
detention have a legal obligation to pay for some or all of the health
care items or services they receive. We are also seeking comment on
what specific health care items or services, if any, are typically
furnished by Federal, State, or local governments at no cost to
individuals who have been released from jail or prison on bail, parole,
probation, or home detention.
We also propose to narrow the description of ``custody'' in Sec.
411.4(b) to remove barriers to access to Medicare by individuals who
are returning to the community after incarceration. According to
advocates, confusion about the applicability of the payment exclusion
has led individuals released from incarceration to not apply for
Medicare, even if they are eligible, or to apply only for Medicaid,
because they believe that Medicare will not pay for items or services
that they receive under the payment exclusion. Advocates have also
maintained that certain providers or suppliers may be hesitant or
refuse to treat individuals who are on bail, parole, probation, or home
detention because the providers or suppliers believe that Medicare
payment is not available for items or services provided to such
individuals. As a result, such individuals may delay or forgo necessary
treatment, including treatment for substance use disorders, upon
release from incarceration. The proposed changes to the description of
``custody'' would clarify that Medicare may pay for health care items
and services furnished to an individual while on bail, parole,
probation, or home detention, provided the individual has a legal
obligation to pay for such items or services, without having to prove
that the special conditions in Sec. 411.4(b)(1) have been satisfied.
(See section XII.2 of this proposed rule for a discussion of proposed
modifications to the special enrollment periods (SEP) for formerly
incarcerated individuals under Sec. Sec. 406.27(d) and 407.23(d) that
would also increase access to Medicare for individuals returning to the
community from incarceration.)
Finally, our proposal to narrow the description of ``custody'' in
Sec. 411.4(b) would bring the Medicare no legal obligation to pay
payment exclusion into greater alignment with certain related Social
Security and Medicaid provisions. CMS relies on data provided by the
Social Security Administration to identify individuals who are in
custody of penal authorities. However, under Social Security
regulations, individuals who are released from incarceration on parole,
probation, or home detention are generally not considered to be
confined for purposes of a limitation on payment of certain benefits
(see section 202(x)(1) of the Social Security Act (42 U.S.C. 402)), and
the Social Security data does not track such individuals. Our proposal
to narrow the description of ``custody'' would improve the alignment
between the no legal obligation to pay regulation at Sec. 411.4(b) and
the data that is used to help carry out the rule. We note, however,
that there would still be substantive differences between the Social
Security definition of ``confinement'' and the proposed description of
``custody'' at Sec. 411.4(b)(3). Most notably, the Social Security
Administration suspends benefits if the individual has been convicted
of a criminal offense and sentenced to a period of confinement, and
based on that conviction remains confined for more than 30 days. In
contrast, under proposed Sec. 411.4(b)(3), an individual is considered
to be in custody of penal authorities for purposes of the Medicare no
legal obligation to pay payment exclusion if the individual is under
arrest; confined in jail, prison, penitentiary, or similar institution
while awaiting trial (that is, the person has not yet been convicted);
or confined in jail, prison, penitentiary, or similar institution
following conviction for any period of time,
[[Page 59505]]
including sentences of less than 30 days. We note these differences are
a result of Medicare's statutory no legal obligation to pay payment
exclusion. Specifically, we believe that individuals who are confined
to jail while awaiting trial typically do not have a legal obligation
to pay for health care items or services. We seek comments on whether
such individuals confined to jail while awaiting trial typically pay
for health care items or services they receive or have a legal
obligation to do so.
Our proposal to narrow the description of ``custody'' in Sec.
411.4(b)(3) would also bring the Medicare no legal obligation to pay
payment exclusion into closer alignment with Medicaid. Under Medicaid
regulations, Federal Financial Participation (FFP) is not available for
services provided to individuals who are inmates of public institutions
(see Sec. 435.1009), and an ``inmate of a public institution is
defined generally as ``a person living in a public institution'' (see
Sec. 435.1010). According to Medicaid State Health Official Letter
(SHO) # 16-007, however, individuals who are on parole, probation, or
home confinement are generally not considered to be inmates for
purposes of Medicaid (see SHO # 16-007 (RE: To facilitate successful
re-entry for individuals transitioning from incarceration to their
communities) (April 28, 2016)). By no longer including such individuals
in the Medicare description of ``custody'' at Sec. 411.4(b)(3), our
proposal would improve dually eligible individuals' access to both
Medicare and, potentially, Medicaid, including accessing benefits for
already-enrolled individual. For example, advocates have shared
anecdotally that some Medicaid agencies automatically suspend payment
for services to an individual whose Medicare benefits are suspended due
to a presumption that the individual is in custody. In addition,
according to advocates, some individuals who are recently released from
jail or prison on bail, parole, probation, or home detention have only
enrolled in Medicaid, because they believe, even where they have a
legal obligation to pay, that Medicare will not pay for their health
care under the no legal obligation to pay payment exclusion. Our
proposal to narrow the description of ``custody'' in Sec. 411.4(b)(3)
is intended to remove this real or perceived barrier to Medicare
access.
We caution that, even if we finalize the proposed modification of
the description of ``custody'' in Sec. 411.4(b)(3), the generally
applicable no legal obligation to pay payment exclusion at Sec.
411.4(a) would continue to apply to services furnished to individuals
on bail, parole, probation, or home detention in the same way it
applies to any other Medicare beneficiary who receives an item or
service where there is no legal obligation to pay. The no legal
obligation to pay payment exclusion in Sec. 411.4(a) is a general rule
that is applicable to all health care items or services (except
Federally qualified health center services and as provided in Sec.
411.8(b)) received by any Medicare beneficiary, regardless of whether
the individual is in custody of penal authorities. Nothing in the
proposed modification of the special condition at Sec. 411.4(b) would
affect the scope of the general rule at Sec. 411.4(a). Thus, if an
individual on bail, parole, probation, or home detention has no legal
obligation to pay for a health care item or service, the general rule
at Sec. 411.4(a) would continue to prohibit Medicare from paying for
such a service, regardless of the scope of the description of
``custody'' in Sec. 411.4(b)(3). For example, if a State or local
government requires substance use disorder counseling as a condition of
parole, and the State or local government does not charge all parolees
for such services, then the parolee has no legal obligation to pay for
such service under Sec. 411.4(a); therefore, Medicare is prohibited
under Sec. 411.4(a) from paying for the service. We are seeking
comments on what types of medically necessary health care items or
services, if any, are typically provided at no cost to individuals on
parole, probation, or home detention.
c. Halfway Houses
According to the National Institute of Justice (NIJ), a research,
development, and evaluation agency of the U.S. Department of Justice,
the term ``halfway house'' usually refers to temporary housing,
provided in a community-based residential facility, which uses around-
the-clock supervision and offers services to assist with the transition
from incarceration to the community (see https://crimesolutions.ojp.gov/ratedpractices/90#1-0). The NIJ notes that,
although the degree to which services are provided to residents varies
significantly among halfway house programs, the following
characteristics are common to most halfway houses: (1) constant
supervision and daily contact between staff and returning individuals;
(2) a requirement for participants to abide by rules (such as curfews
and drug testing); and (3) access to employment, education, life skills
training, and additional services as needed (such as substance use
disorder treatment and counseling).
As the name suggests, halfway houses occupy a middle ground between
complete custodial incarceration and unconditional release, and there
appears to be wide variation in the degree of control exercised over
halfway house residents in various State, local, and Federal
facilities. We are therefore soliciting comments on whether halfway
house residents typically have a legal obligation to pay for health
care items and services, and if so, to what extent (that is, do they
have a legal obligation to pay for all or most health care items or
services, or only certain items or services) and under what conditions.
In particular, we are interested in receiving detailed comments, with
examples as appropriate, focusing specifically on the legal obligation
that halfway house residents have to pay for the health care items and
services they receive.
To provide greater focus for our comment solicitation on halfway
houses, we propose regulatory text at Sec. 411.4(b)(3)(vi) that is
drawn from the Medicaid payment exclusion rule at Sec. 435.1009. As
explained in SHO # 16-007, FFP is available for services furnished to
Medicaid-eligible individuals living in halfway houses, provided the
following conditions are met: (1) residents are not precluded from
working outside the facility in employment available to individuals who
are not under justice system supervision; (2) residents can use
community resources (libraries, grocery stores, recreation, education,
etc.) at will; and (3) residents can seek health care treatment in the
broader community to the same or similar extent as other Medicaid
enrollees in the state. SHO # 16-007 adds that ``at will'' is
consistent with certain house rule restrictions and travel limitations,
and stipulates that the State Medicaid agency must ensure that the
halfway house meets the requirements enumerated above.
Consistent with Medicaid guidance, we propose at Sec.
411.4(b)(3)(vi) to consider an individual to be in custody for purposes
of the special condition for payment at Sec. 411.4(b) if the
individual is required to reside in a halfway house under any of the
following conditions: residents are precluded from working outside the
facility in employment that is available to individuals who are not
under penal authority supervision; residents may not use community
resources (for example, libraries, grocery stores, recreation, or
educational institutions) at will; or residents may not seek health
care items and services
[[Page 59506]]
in the broader community to the same or similar extent as individuals
who are not under penal authority supervision. Like Medicaid, we would
interpret ``at will'' to be consistent with certain house rule
restrictions and travel limitations. Our proposal to align the Medicare
no legal obligation to pay payment exclusion at Sec. 411.4(b) with
Medicaid guidance would facilitate access to Medicare for dually
eligible individuals returning to the community from incarceration and
residing in halfway houses.
Consistent with our discussion above regarding bail, parole,
probation, and home detention, we note that the general no legal
obligation to pay payment exclusion at Sec. 411.4(a) would continue to
apply to services furnished to individuals in halfway houses even if
those individuals do not meet any of the conditions in proposed Sec.
411.4(b)(3)(vi) and thus are not considered to be in custody for
purposes of Sec. 411.4(b). If an individual has no legal obligation to
pay for a health care item or service, then Medicare may not pay for
the item or service.
We are seeking comments on whether individuals who reside in
halfway houses under the conditions described in proposed Sec.
411.4(b)(3)(vi) typically do not have a legal obligation to pay for
health care items or services, or whether fewer, other, or additional
factors compared to the factors described in the proposal would form a
more appropriate basis for a presumption that the individual is in
custody and has no legal obligation to pay for health care items or
services.
d. Definition of Penal Authority--Proposed Sec. 411.4(b)(2)
As noted above, we propose to reorganize Sec. 411.4(b) to
separately codify the special conditions under which payment may be for
items or services provided to an individual in custody at Sec. Sec.
411.4(b)(1)(i) through 411.4(b)(1)(iii) and the description of
``custody'' at Sec. 411.4(b)(3). We also propose to define ``penal
authority'' at Sec. 411.4(b)(2) as a police department or other law
enforcement agency, a government agency operating under a penal
statute, or a State, local or Federal jail, prison, penitentiary, or
similar institution. We are aware that private contractors in some
circumstances may be responsible for operating certain penal
institutions or halfway houses, and we are seeking comment on whether
such contractors should explicitly be included in the proposed
definition of ``penal authority.'' The proposed definition is intended
to be broad enough to include all agencies or institutions that might
place or hold an individual in custody, as the term is described at
proposed Sec. 411.4(b)(3), regardless of whether the individual has
been convicted of a crime. We are aware that the term ``penal
authority'' does not appear to be commonly used outside of the Medicare
context. We are seeking comments on whether other terminology would be
more appropriate or would align more closely with terms commonly used
in the criminal justice system. We are also seeking comments on whether
the proposed definition of ``penal authority'' is too broad or narrow
for purposes of the no legal obligation to pay payment exclusion.
B. Revision to Medicare Special Enrollment Period for Formerly
Incarcerated Individuals
1. Background
The Consolidated Appropriations Act, 2021 provided the authority to
establish Medicare Part A and B special enrollment periods (SEP) for
individuals due to exceptional conditions. In the final rule titled
``Medicare Program; Implementing Certain Provisions of the Consolidated
Appropriations Act, 2021 and Other Revisions to Medicare Enrollment and
Eligibility Rules'' which appeared in the Federal Register on November
3, 2022 (87 FR 66454), CMS used this authority to establish an SEP for
formerly incarcerated individuals. Individuals who use this SEP are
able to enroll in Medicare Premium Part A and Part B and avoid
potential gaps in coverage and late enrollment penalties (LEPs). As
established in Sec. Sec. 406.27(d)(1) and 407.23(d)(1), an individual
is eligible to enroll in Medicare Parts A and/or B using this SEP so
long as they demonstrate that they are eligible for Medicare and failed
to enroll or reenroll in Parts A and/or B due to being in custody of
penal authorities, and there is a record of release either through
discharge documents or data available to the Social Security
Administration (SSA). The SEP provisions at Sec. Sec. 406.27(d) and
407.23(d) incorporate the description of `in custody of penal
authorities' from the payment exclusion parameters already established
in Sec. 411.4(b). In the November 2022 final rule, we stated that it
was important to align the scope of the SEP with the scope of
individuals specified in Sec. 411.4(b) as individuals in custody of
penal authorities; alignment with Sec. 411.4(b) provides a measure of
assurance that individuals who are no longer subject to the payment
exclusion are able to enroll in Medicare (Part B and, if necessary,
premium Part A). We also noted that we would continue to assess the
impact of alignment of the SEP with the scope of the payment exclusion.
(87 FR 66464).
2. Proposal
Section 202 of the Act generally provides the basis for SSA to
determine an individual's eligibility for old age, survivors, and
disability insurance (OASDI) benefits, also known as social security
benefits, under Title II of the Act. For most Medicare beneficiaries,
entitlement to Medicare Part A is based on entitlement to OASDI
benefits under Title II per section 226 of the Act.\517\ In addition,
the SSA is responsible for determining entitlement to Part A and
eligibility for Part B of Medicare. (See Pub. L. 103-296, sec. 105.)
Section 202(x) of the Act suspends payment of OASDI benefits to
prisoners, certain other inmates of publicly funded institutions,
fugitives, probationers, and parolees, including when an individual is
confined in a jail, prison, or other penal institution or correctional
facility pursuant to conviction of a criminal offense for a period of
more than 30 days. We propose to amend the SEP at Sec. Sec.
406.27(d)(1) and 407.23(d)(1) to align the SEP triggering event more
closely with the bases on which an individual's OASDI benefit is
reinstated or initiated rather than on the scope of the Medicare
payment exclusion in Sec. 411.4(b). We believe that these proposed
amendments would streamline the administrative process for determining
an individual eligible for this SEP and align eligibility for this SEP
with an individual's obligation and ability to pay for services that
would otherwise be covered by Medicare. Furthermore, we believe that
the alignment of this SEP with the initiation or reinstatement of OASDI
benefits is appropriate, as it allows a population facing many
challenges reintegrating into society to enroll or reenroll in Medicare
by having premiums deducted from their OASDI benefits, rather than
paying out of pocket.
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\517\ For more detailed information about entitlement and
eligibility for Medicare, please refer to sections 226, 226A, 1818,
1818A, 1836, and 1881A of the Act and 42 CFR parts 406 and 407.
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The proposed amendments to Sec. 411.4(b), discussed in section
XXIII.A of this proposed rule, would narrow the list of settings where
an individual is presumed to have no obligation to pay for Medicare-
covered items and services--and, thus, Medicare is prohibited from
paying for those services--because the individual is in custody of a
penal authority. The rebuttable presumption at Sec. 411.4(b) provides
the individual an opportunity
[[Page 59507]]
to indicate to CMS that the other entity did not cover certain items or
services and ask that Medicare provide payment, but this option is moot
if the individual is not able to enroll in Medicare. (See section
XXIII.A of this proposed rule for more information about the rebuttable
presumption and operation of the payment exclusion.) Under the current
version of this SEP, beneficiary advocate groups raised concerns about
the possibility for scenarios where an individual is not able to enroll
when their items and services could be covered by Medicare, or they are
able to enroll (and pay monthly premiums) but Medicare is not able to
pay for their services.
In making determinations about the suspension of OASDI benefits due
to an individual's incarceration, SSA uses data it collects from jails,
prisons, other penal institutions or correctional facilities and
certain mental health institutions regarding individuals confined in
those and similar institutions for the reasons outlined in section
202(x)(1)(A) of the Act. See SSA System of Records Notice: Prisoner
Update Processing System 60-0269, at 64 FR 11076 (Mar. 8, 1999) and
updated at 72 FR 69723 (Dec. 10, 2007), 78 FR 40542 (Jul. 5, 2013) and
83 FR 54969 (Nov. 1, 2018). However, information about individuals
within the full scope of the current provisions at Sec. 411.4(b),
including not only individuals who are confined in certain institutions
but also individuals who are under arrest but not yet convicted, on
medical furlough, or residing in half-way houses may not be as
extensively or reliably available. As a result, making eligibility
determinations for the SEP for Formerly Incarcerated Individuals as it
is currently drafted is operationally difficult. In addition, the
current SEP for Formerly Incarcerated Individuals incorporates the
rebuttable presumption that is included in Sec. 411.4(b) for
situations where an individual (or healthcare provider seeking to bill
Medicare for the services) can demonstrate that state or local law
requires individuals to repay the cost of medical services while they
are in custody and the state or local government entity enforces the
requirement to pay by billing all such individuals, whether or not
covered by Medicare or any other health insurance, and by pursuing
collection of the amounts they owe in the same way and with the same
vigor that it pursues the collection of other debts. However, SSA does
not have a role in administering the Medicare payment exclusion in
Sec. 411.4(b). Therefore, there is a high likelihood of potential
inconsistency and administrative burden with tying the implementation
of the SEP at Sec. Sec. 406.27(d)(1) and 407.23(d)(1) to the Medicare
payment exclusion under Sec. 411.4(b). Although the proposed changes
to Sec. 411.4(b) discussed in section XXIII.A to narrow the scope of
the payment exclusion would flow through to Sec. Sec. 406.27(d) and
407.23(d) without amendment to the SEP parameters, we believe that
addressing the rebuttable presumption and potential administration
burden is appropriate and will reduce potential confusion.
Further, since the establishment of the SEP in January 2023, we
have received feedback that raised concerns about tying SEP eligibility
to the Medicare payment definition at Sec. 411.4(b) and how SSA has
begun administering the SEP using the data in SSA's systems. We have
heard that the SEP eligibility parameters are confusing and potentially
prevent or discourage eligible individuals from accessing the SEP.
Conversely, situations may arise in which an individual is enrolled in
Medicare using the SEP due to SSA data; however, due to the payment
exclusion and limited exceptions for these settings, claims for health
care may not be paid even if the specific state or local government
does not provide health care in this type of setting.
Under our proposal, we intend that SSA would make a determination
of an individual's eligibility to enroll using the Medicare SEP at
Sec. Sec. 406.27(d)(1) and 407.23(d)(1) based on the data SSA collects
and keeps in its systems for determining OASDI benefit suspensions and
any additional documentation provided by individuals to demonstrate
that they have been released from incarceration. By more closely
aligning the eligibility criteria for the SEP for Formerly Incarcerated
Individuals with the data used by SSA in applying the OASDI benefit
suspension requirement in section 202(x)(1)(A) of the Act, we intend
that the SEP can be more efficiently and accurately administered. With
the proposed revisions, the SEP at Sec. Sec. 406.27(d) and 407.23(d)
will provide an opportunity, beginning January 1, 2025, for an
individual to enroll in Medicare if the individual was released from
incarceration on or after January 1, 2023, failed to enroll in Medicare
(Premium Part A or Part B) due to being incarcerated, and is still
within the 12-month SEP described in Sec. Sec. 406.27(d) and
407.23(d).
Overall, we propose to revise the eligibility requirements at
Sec. Sec. 406.27(d) and 407.23(d), beginning January 1, 2025, to
remove the use of a release from the ``custody of penal authorities as
described in Sec. 411.4(b)'' and instead tie the eligibility for this
SEP to whether an individual is ``released from confinement in a jail,
prison, or other penal institution or correctional facility,'' which is
phrasing that is more consistent with section 202(x)(1)(A)(i) of the
Act. However, we are not proposing that a criminal conviction or formal
sentencing be required for an individual to have been confined in a
jail, prison, or other penal institution or correctional facility
because conviction of crime is not required for the payment exclusion
in Sec. 411.4(b) to apply. As this differs from the requirements under
section 202(x)(1)(A) of the Act, we also solicit comment on what
documentation an individual can provide to demonstrate they were
confined and released without conviction to determine eligibility for
the SEP for formerly incarcerated individuals under Sec. Sec.
406.27(d) and 407.23(d). Further, individuals who have escaped
confinement are not considered to be ``released'' from confinement.
Under our proposal, both Sec. Sec. 406.27(d) and 407.23(d) would use
the terms ``incarcerated'' and ``incarceration'' as a general reference
for individuals who meet either standard. This proposed change in the
eligibility criteria for the SEP for Formerly Incarcerated Individuals
would align more closely with the standards SSA uses to determine
whether an individual is within the scope of the limitation on payment
of OASDI benefits established by section 202(x)(1)(A)(i) of the Act.
In the rulemaking to adopt and finalize Sec. Sec. 406.27(d) and
407.23(d), we did not fully contemplate the implications of tying the
SEP's eligibility criteria to the Medicare no legal obligation to pay
payment exclusion (which includes a rebuttable presumption). A
rebuttable presumption like the one available under the payment
exclusion does not work well in enrollment context because although
payment can be determined at the service level, an enrollment is either
effectuated or not. It may be that for some services, the presumption
that the individual has no legal obligation to pay can be rebutted
while for other services it is not rebutted based on the scope of the
state or local entity's policies and the individual's (or the
healthcare providers) ability to provide sufficient evidence. However,
enrollment in Medicare, including the obligation to pay Medicare
premiums, would not vary with the specific service. While the proposed
changes to Sec. 411.4(b) would
[[Page 59508]]
narrow the range of settings in which an individual is presumed to be
in custody and another entity is responsible for the individual's
health care coverage, we believe that the proposed revisions to
Sec. Sec. 406.27(d) and 407.23(d) would best address concerns about
access to and confusion with the SEP for individuals who have been
released from incarceration.
We propose several changes to Sec. Sec. 406.27(d) and 407.23(d) to
significantly align the SEP eligibility criteria, beginning January 1,
2025, with the criteria used by SSA to determine whether an individual
is incarcerated. Throughout, our proposed changes are largely to
replace references to an individual being in custody of penal
authorities as described in Sec. 411.4(b) with references to an
individual's confinement in a jail, prison, or other penal institution
or correctional facility. First, we propose to amend the introductory
text in paragraph (d) of both Sec. Sec. 406.27 and 407.23 to state the
general rule that there is an SEP for Medicare eligible individuals who
are no longer incarcerated after January 1, 2023. We use
``incarcerated'' and ``incarceration'' in this introductory language
and in paragraph (d)(3), respectively, to include both being in custody
of penal authorities as described in Sec. 411.4(b) (and in the
proposed revisions to paragraph (d)(1) of each regulation regarding the
current scope of the SEP) and being confined as described in our
proposed amendments to paragraph (d)(2) of each regulation. Using the
term ``incarcerated'' is consistent with how these regulations were
originally established and leads to more streamlined and less
repetitive regulation text. We are seeking comments on this proposal,
especially its implications for people in halfway houses, to ensure
access to the SEP for formerly incarcerated individuals.
Second, we propose to reorganize paragraphs (d)(1) and (d)(2) to
establish the rules for eligibility for and the duration of the SEP for
releases from incarceration during the periods between (1) January 1,
2023, through December 31, 2024, and (2) on and after January 1, 2025.
We propose to revise paragraphs Sec. Sec. 406.27(d)(1) and
407.23(d)(1) to state the current parameters and duration for the SEP
that are applicable to releases after January 1, 2023, and before
January 1, 2025. The current eligibility requirements are proposed to
be redesignated as paragraph (d)(1)(i) and the current duration of the
SEP (from current Sec. Sec. 406.27(d)(2) and 407.23(d)(2)) are
proposed to be redesignated paragraph (d)(1)(ii), with clarifications
that the date of release is used as part of the eligibility criteria.
At Sec. Sec. 406.27(d)(2) and 407.23(d)(2) we propose to establish new
parameters and duration for the SEP that would be applicable beginning
January 1, 2025. Specifically, we propose at new Sec. Sec.
406.27(d)(2)(i) and 407.23(d)(2)(i) that an individual released for
releases that occur on and after January 1, 2025, from confinement in a
jail, prison, or other penal institution or correctional facility would
be eligible for the SEP. The existing parameters (currently at
Sec. Sec. 406.27(d)(1) and 407.23(d)(1)) that the individual must
demonstrate that they are eligible for Medicare and failed to enroll or
reenroll due to being incarcerated and there is a record of release
either through discharge documents or data available to SSA would
continue to be applicable and are therefore included in proposed
Sec. Sec. 406.27(d)(2)(i) and 407.23(d)(2)(i). At new Sec. Sec.
406.27(d)(2)(ii) and 407.23(d)(2)(ii), we propose that beginning
January 1, 2025, the SEP starts the day an individual is released from
incarceration as determined by SSA and ends the last day of the 12th
month after the month in which the individual is released. As noted
above, individuals who use this SEP are able to enroll in Medicare
Premium Part A and Part B without LEPs and this would continue to be
the case whether individual uses this SEP before or after January 1,
2025.
Under this proposal, as originally intended with the SEP,
individuals will have a clearer understanding for how to access this
enrollment opportunity to ensure they do not have any gaps in coverage
or any LEPs as they leave incarceration.
3. Technical Corrections
In the November 2022 final rule that established the SEP for
formerly incarcerated individuals, we provided at Sec. Sec.
406.27(d)(3) and 407.23(d)(3) that generally entitlement would begin
the first day of the month following the month of enrollment. We also
provided that an individual had the option to choose a retroactive
entitlement date for a period not to exceed 6 months, provided that the
individual pays the monthly premiums for the period of coverage. Upon
further examination of the regulations, we have identified a number of
technical errors in Sec. Sec. 406.27(d)(3) and 407.23(d)(3) that we
are taking this opportunity to propose to correct.
First, the language in Sec. 407.23(d)(3)(ii) states that the
individual has the option to request entitlement retroactive to the
date of release from incarceration and this implies that coverage could
start in the middle of the month. Entitlement for Medicare, regardless
of the enrollment period being used or whether entitlement is
prospective or retrospective, always begins on the first day of a
month. As such, we propose to revise the language above to state that
coverage could begin retroactive to the beginning of the month of
release from incarceration. We note that the payment exclusion in Sec.
411.4(b) may continue to apply to any items and services furnished
during the period between the first of that month and the actual date
of release, provided that the individual or other person has no legal
obligation to pay for such services as articulated in Sec. 411.4(a).
Second, in Sec. Sec. 406.27(d)(3)(ii) and 407.23(d)(3)(ii), we
erroneously cited Sec. 406.31 when referencing the requirement for
individuals to pay monthly premiums for all periods of coverage. We
propose to correct the reference to Sec. 406.31 in Sec.
406.27(d)(3)(ii) with Sec. 406.32(f) and the reference in Sec.
407.23(d)(3)(ii) to Sec. 408.4.
Third, we also stated at Sec. 407.23(d)(3)(ii) that if the
individual requests retroactive enrollment and the application is filed
within the first 6 months of the SEP, the effective date could be
retroactive to the release from incarceration. If the individual
requests retroactive enrollment and the application is filed in the
last 6 months of the SEP, the coverage effective date could be
retroactive to 6 months after the date of release from incarceration.
This provision results in the same coverage effective date regardless
of when the individual applies during the last six months of the SEP,
which we do not think is consistent with our policy goal of providing
formerly incarcerated individuals the ability to make the healthcare
decisions best suited to their needs and provide them the opportunity
to avoid or minimize gaps of coverage (87 FR 66463). We believe the
best way to remedy this situation is to link the retroactive period of
coverage to the date when the individual applies for Medicare coverage,
not when they are released from incarceration. As such, we propose to
revise Sec. 407.23(d)(3)(ii) to state that if the individual requests
retroactive enrollment and the application is filed in the last 6
months of the SEP, the coverage effective date is retroactive to the
6th month before the month of enrollment. We believe this proposed
approach strikes an appropriate balance of reducing gaps in coverage
without creating excessive (and potentially costly) retroactive periods
of coverage. We also propose to make similar changes at
[[Page 59509]]
Sec. 406.27(d)(3)(ii) for the sake of consistency and clarity.
XXIV. Overall Hospital Quality Star Rating Modification To Emphasize
the Safety of Care Measure Group: Request for Information (RFI)
A. Summary
We seek public input on potential methodologic modifications
regarding the Safety of Care measure group within the Overall Hospital
Quality Star Rating published on the provider comparison tool on
Medicare.gov (https://www.medicare.gov/care-compare/). Patient safety
constitutes a fundamental component of the CMS National Quality
Strategy, representing a sustained commitment to fostering optimal
health outcomes and ensuring the safest possible care for all
patients.\518\ This Request for Information (RFI) is aimed at gathering
broad public input on increasing the Safety of Care measure group's
contribution to the Overall Hospital Quality Star Rating. We also note
our intention to potentially issue additional RFIs or undertake
rulemaking on this topic in the future.
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\518\ https://www.cms.gov/files/document/cms-national-quality-strategy-handout.pdf.
_____________________________________-
B. Background
The Overall Hospital Quality Star Rating provides a summary of
certain existing hospital quality information on Medicare.gov based on
publicly available quality measure results reported through CMS'
hospital quality measurement programs, by assigning hospitals between
one and five stars, a way that is simple and easy for patients to
understand (85 FR 86193). The Overall Hospital Quality Star Rating
methodology was developed and is maintained according to the guiding
principles of scientific validity, maximizing inclusion of hospitals
and measure information, accounting for heterogeneity of available
measures and hospital reporting, accommodating changes in the
underlying measures, aligning with CMS hospital quality measure
programs to the extent feasible, transparency of the methodology, and
responsiveness to input from interested parties. The Overall Hospital
Quality Star Rating was first introduced and reported on our Hospital
Compare website in July 2016 (now reported on Medicare.gov) and has
been refreshed multiple times, with the most current refresh planned
for July 2024.\519\
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\519\ Placeholder for 2024 Stars QUS.
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In the CY 2021 OPPS/ASC final rule (85 FR 86193), we codified the
Overall Hospital Quality Star Rating methodology, including several
methodology refinements, intended to improve the simplicity and
predictability of measure emphasis within the methodology over time,
and comparability of ratings among hospitals. We also finalized the
inclusion of Veterans Health Administration (VHA) hospitals and
Critical Access Hospitals (CAHs) in the Overall Hospital Quality Star
Rating. In the CY 2023 OPPS/ASC final rule (87 FR 72233), we provided
additional information on the previously finalized policy to
incorporate VHA hospitals and finalized a proposal to amend 42 CFR
412.190 to revise how we would refresh the Overall Hospital Quality
Star Rating annually.
C. Current Overall Hospital Quality Star Rating Methodology
Measures reported on the provider comparison tool on Medicare.gov
(https://www.medicare.gov/care-compare/) that meet the criteria for
inclusion in the Overall Hospital Quality Star Rating are organized
into five conceptually coherent measure groups: Safety of Care,
Mortality, Readmission, and Patient Experience (all of which include
outcome measures), and Timely and Effective Care (which includes a
selection of process measures).
The current Overall Hospital Quality Star Rating methodology
includes seven general steps. First, the direction of all included
measures that indicate better performance with a lower score are
reversed to uniformly indicate that a higher score indicates better
performance for all the measures, and all measure scores are
standardized to a single, common scale to account for differences in
measure score units. Second, measures are arranged into measure groups.
Each measure group contains a number of publicly reported measures to
produce a robust measure group score, which are reflective of
differences in hospital quality. Third, the measure group scores are
calculated as a simple average of measure scores. Measure group scores
are then standardized to a common scale making varying scores
comparable. Fourth, the hospital summary score is calculated as a
weighted average of measure group scores. Specifically, each measure
group score is multiplied by the assigned weight for that group. The
weighted measure group scores are then summated to generate the
hospital summary score. If a hospital has no measure scores in a group
(for example, by not achieving sufficient sample size in any of the
measures), the weight is redistributed proportionally across the
remaining groups. Fifth, minimum reporting thresholds are applied. To
receive a Star Rating, hospitals must report at least three measures in
at least three measure groups, one of which must be either the
Mortality or Safety of Care measure groups. Sixth, peer grouping is
applied. Hospitals are grouped into one of three peer groups based on
the number of measure groups for which they report at least three
measures: a 3-measure peer group, a 4-measure peer group, and a 5-
measure peer group. Seventh, a clustering algorithm is applied within
each peer group to assign hospital summary scores to star ratings so
that one star is the lowest and five stars is the highest.
For additional details regarding the methodology, we refer readers
to Sec. 412.190(d) and the Overall Hospital Quality Star Rating
Methodology Reports, available at https://qualitynet.cms.gov/inpatient/public-reporting/overall-ratings/resources.
D. Safety of Care in Star Ratings
A foundational commitment of providing healthcare services is to
ensure safety, as embedded in the centuries-old Hippocratic Oath,
``First, do no harm.'' Yet, the landmark reports To Err is Human and
Crossing the Quality Chasm surfaced major deficits in healthcare
quality and safety.520 521 These reports resulted in
widespread awareness of the alarming prevalence of patient harm and,
over the past two decades, healthcare facilities implemented various
interventions and strategies to improve patient safety, with some
documented successes.\522\ Furthermore, the COVID-19 public health
emergency (PHE) strained the healthcare system substantially,
introducing new safety risks and negatively impacting patient safety in
the normal delivery of care.523 524
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\520\ Institute of Medicine (US) Committee on Quality of Health
Care in America, Kohn, L.T., Corrigan, J.M., & Donaldson, M.S.
(Eds.). (2000). To Err is Human: Building a Safer Health System.
National Academies Press (US).
\521\ Institute of Medicine (US) Committee on Quality of Health
Care in America. (2001). Crossing the Quality Chasm: A New Health
System for the 21st Century. National Academies Press (US).
\522\ Agency for Healthcare Research and Quality. (February
2021). National Healthcare Quality and Disparities Report chartbook
on patient safety. Rockville, MD. Available at: https://www.ahrq.gov/sites/default/files/wysiwyg/research/findings/nhqrdr/chartbooks/patientsafety/2019qdr-patient-safety-chartbook.pdf.
\523\ Lastinger LM, Alvarez CR, Kofman A, Konnor RY, Kuhar DT,
Nkwata A, Patel PR, Pattabiraman V, Xu SY, Dudeck MA. Continued
increases in the incidence of healthcare-associated infection (HAI)
during the second year of the coronavirus disease 2019 (COVID-19)
pandemic. Infect Control Hosp Epidemiol. 2023 Jun;44(6):997-1001.
doi: 10.1017/ice.2022.116. Epub 2022 May 20. PMID: 35591782; PMCID:
PMC9237489.
\524\ Patel, PR, Weiner-Lastinger, LM, Dudeck, MA, et al. Impact
of COVID-19 pandemic on central-line-associated bloodstream
infections during the early months of 2020, National Healthcare
Safety Network. Infect Control Hosp Epidemiol 2021. doi: 10.1017/
ice.2021.108.
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[[Page 59510]]
Safety gaps and further risks in healthcare delivery were
illuminated as a result of the COVID-19 PHE, revealing a lack of
resiliency in the healthcare system.525 526 527 Therefore,
we are increasing efforts to emphasize the importance of patient safety
for both patients and healthcare workers. To accomplish these goals,
the federal government is taking a multi-pronged inter-Agency approach
to improve safety. The Agency for Healthcare Research and Quality
(AHRQ) on behalf of the Department of Health & Human Services (HHS)
established the National Action Alliance to Advance Patient and
Workforce Safety as a public-private collaboration to improve both
patient and workforce safety and move towards zero harm in
healthcare.\528\ In September 2023, the President's Council of Advisors
on Science and Technology (PCAST) published the ``Report to the
President: A Transformational Effort on Patient Safety,'' with a call
to action to renew ``our nation's commitment to improving patient
safety.'' \529\ The report put forth a recommendation as part of the
call to action to ``establish and maintain federal leadership for the
improvement of patient safety as a national priority.'' We also
acknowledged a noticeable decline in patient safety measure scores
during the COVID-19 PHE which reinforces the emphasis on patient safety
established in several CMS initiatives, including the National Quality
Strategy and Universal Foundation.530 531 Additionally,
hospitals report data on healthcare-associated infection (HAI) measures
through a number of CMS quality programs, including the Hospital-
Acquired Condition (HAC) Reduction and Hospital Value-Based Purchasing
Programs. These programs are designed to improve patient quality of
care and safety, as well as reduce complications and mortality, by
rewarding hospitals that achieve high scores on measures, including HAI
measures, and penalizing those that do not meet or exceed established
performance standards.\532\ However, it is possible in the current
Overall Star Rating methodology for a hospital to score very low in the
Safety of Care measure group yet still receive a high Star Rating due
to their high performance in other measure groups. Therefore, we seek
to explore potential adjustments to the Overall Hospital Quality Star
Ratings methodology that would greater emphasize the measures within
the Safety of Care measure group, in alignment with other CMS and HHS
efforts to improve patient safety across all programs.
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\525\ Agency for Healthcare Research and Quality. (2021). AHRQ
PSNet Annual Perspective: Impact of the COVID-19 Pandemic on Patient
Safety. https://psnet.ahrq.gov/perspective/ahrq-psnet-annual-perspective-impact-covid-19-pandemic-patient-safety.
\526\ Fleisher, L.A., Schreiber, M.D., Cardo, D., and
Srinivasan, M.D. (2022). Health care safety during the pandemic and
beyond--building a system that ensures resilience. N Engl J Med,
386: 609-611. https://www.nejm.org/doi/full/10.1056/NEJMp2118285.
\527\ Implications of the COVID-19 pandemic for patient safety:
a rapid review. Geneva: World Health Organization; 2022. Licence: CC
BY-NC-SA 3.0 IGO.
\528\ AHRQ. (2023). National Action Alliance To Advance Patient
and Workforce Safety. https://www.ahrq.gov/cpi/about/otherwebsites/action-alliance.html.
\529\ https://www.whitehouse.gov/wp-content/uploads/2023/09/PCAST_Patient-Safety-Report_Sept2023.pdf.
\530\ Fleisher, L.A., Schreiber, M., Cardo, D., Srinivasan, A.
(2022). Health Care Safety during the Pandemic and Beyond--Building
a System That Ensures Resilience. The New England Journal of
Medicine, 386(7): 609-611. DOI: 10.1056/NEJMp2118285.
\531\ https://www.cms.gov/aligning-quality-measures-across-cms-universal-foundation.
\532\ https://www.cms.gov/blog/first-do-no-harm.
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There are currently eight measures in the Safety of Care measure
group, including six HAI measures (HAI-1--HAI-6), one Complications
measure after total hip or total knee replacement (Hip/Knee), and one
composite adverse event measure (Patient Safety and Adverse Events
Composite (PSI-90)). While this group of measures has been the same
since the inception of the Overall Hospital Quality Star Rating, the
specific safety measures included may be subject to change in the
future. Measures reported on the provider comparison tool on
Medicare.gov (https://www.medicare.gov/care-compare/) undergo a
rigorous development process which includes extensive measure testing,
vetting by interested parties, evaluation by the Consensus-based Entity
(currently, Battelle, which convenes the Partnership for Quality
Measurement), and undergoing rulemaking for inclusion in CMS programs
and public reporting. As such, the Overall Hospital Quality Star Rating
methodology uses the measures as required under the CMS programs, with
measure scores as reported on Medicare.gov at the time of the Overall
Hospital Quality Star Rating calculation. Thus, any measures that are
removed or suspended from one of the CMS hospital quality measure
programs and not published on Medicare.gov would no longer be included.
Similarly, any measures that are added to the CMS programs and
displayed on Medicare.gov may be included in the Overall Hospital
Quality Star Rating; for example, upcoming measures such as the Severe
Obstetric Complication (87 FR 48780), Failure-to-Rescue (89 FR 35934),
Hospital Harm-Severe Hypoglycemia (89 FR 35934) and Hospital Harm-
Opioid-related Adverse Events (87 FR 48780) measures may be considered
for inclusion in the Safety of Care measure group. The assessment
presented here is based only on the current group of eight measures as
listed above, but the Overall Hospital Quality Star Rating methodology
is designed with the flexibility to accommodate such changes in the
future.
The current methodology places the highest emphasis on the Safety
of Care and Mortality measure groups. First, the measure group weights
currently utilized in the Overall Hospital Quality Star Rating
methodology are based on CMS policy and interested party feedback.
Currently, the Safety of Care, Mortality, Readmission, and Patient
Experience measure groups are each weighted 22 percent while the Timely
and Effective Care measure group is weighted 12 percent (Table 103).
Interested parties generally agreed that outcome measures should have
more weight since they represent strong indicators of quality and are
most important to patients in making healthcare decisions. Interested
parties and stakeholders broadly considered the current weightings to
be acceptable.
The Safety of Care and Mortality groups are further emphasized in
the reporting threshold to receive a Star Rating: hospitals must report
at least three measures in each of at least three measure groups, one
of which must specifically be Safety of Care or Mortality (85 FR
86228). This decision was partially informed by interested party
feedback on the relative importance of patient safety and prevention of
mortality.
Given the current ongoing efforts to advance patient safety, we
investigated options to even further emphasize the patient safety
measures in the Overall Hospital Quality Star Rating, above and beyond
the emphasis of the current methodology.
We conducted an internal analysis utilizing data from the July 2023
refresh of the Overall Hospital Quality Star Rating to determine
correlations between the Safety of Care measure group and performance
in the Overall Hospital Quality Star Rating. There were 3,076 hospitals
that met the criteria to receive a Star Rating. Among the 3,076 rated
hospitals, 2,995 (97 percent) had at least 1 Safety of Care measure and
[[Page 59511]]
therefore received a Safety of Care group score, while 2,615 (85
percent) had at least 3 Safety of Care measures. Our analysis showed a
strong relationship between the Safety of Care measure group and the
Star Rating. Hospitals that did well in Safety of Care tended to also
do well on the Star Rating; however, there were a few hospitals that
performed in the bottom quartile (lowest performing 25 percent) of the
Safety of Care measure group that still received a 5-star rating. Of
the 3,076 hospitals that received a Star Rating, 658 hospitals with at
least three Safety of Care measures scored in the lowest quartile of
the Safety of Care measure group and 19 hospitals received a 5-star
rating, representing 0.6 percent of all rated hospitals (Table 101). An
additional 94 hospitals fell into the lowest quartile of Safety of Care
when the analysis was based on hospitals that reported just one or two
Safety of Care measures. In general, these hospitals attained 5-star
ratings despite poor Safety of Care performance by achieving high
performance scores across the other measure groups.
[GRAPHIC] [TIFF OMITTED] TP22JY24.135
We assessed reporting of individual Safety of Care measures and
performance in the Safety of Care measure group by various hospital
characteristics. We observed significant variation in the number of
Safety of Care measures reported across different types of hospitals,
typically with fewer measures for hospitals that have generally lower
volume and so are less likely to reach sufficient case volume for
individual measurements. Specifically: non-teaching hospitals, safety
net hospitals,\533\ critical access hospitals, smaller (<100 beds)
hospitals, rural hospitals, and hospitals not qualifying for Medicare
Disproportionate Share Hospital (DSH) payments were likely to report
fewer Safety of Care measures compared to teaching, non-safety net-,
non-critical access, hospitals with 100+ beds, urban, and DSH-
qualifying hospitals (Table 102). There was a broad distribution in
performance scores across hospital types; however, certain hospital
characteristics appear to be associated with performance on the Safety
of Care measure group. For example, smaller hospitals are more likely
to fall toward the extremes of the performance score distribution while
larger hospitals fall more toward the center, and safety net hospitals
tend to fall into lower quartiles than non-safety net hospitals (Table
102).
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\533\ Safety net hospitals are defined as those committed to
caring for populations without stable access to care, specifically
public hospitals or private hospitals with a Medicaid caseload
greater than one standard deviation above their respective state's
mean private hospital Medicaid caseload. https://www.cmshospitalchartbook.com/sites/default/files/Pfmc-by-Char_HW-Rdmn_2015.pdf.
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E. Potential Future Options to Greater Emphasize Patient Safety in the
Overall Hospital Quality Star Rating
As part of the national commitment to improving patient safety, we
seek feedback on whether hospitals that performed in the bottom
quartile (lowest-performing 25 percent) in the Safety of Care measure
group should be eligible to receive the highest 5-star rating. We are
considering modifying the Overall Hospital Quality Star Rating
methodology, specifically the Safety of Care measure group, to
reinforce our dedication to emphasize patient safety across CMS. In
this section we discuss three options identified to modify the Overall
Hospital Quality Star Rating methodology.
1. Reweighting the Safety of Care Measure Group
We conducted an internal analysis to explore the impact of
modifying the weighting system for measure groups in the Overall
Hospital Quality Star Rating utilizing data from the July 2023 refresh.
Specifically, we explored increasing the weight assigned to the Safety
of Care measure group from the current 22 percent to 30 percent while
proportionally reducing the weights assigned to the other measure
groups to examine the isolated effect of reweighting while otherwise
adhering to the current methodology. The exact weighting values noted
in this RFI are not prescriptive and could be adjusted based on
interested party feedback to be more easily interpretable (for example,
to 30 percent, 20 percent, and 10 percent), however, the results
reported reflect this preliminary reweighting scenario that preserves
proportionality between the remaining groups. Current and potential new
weights for each measure group are detailed in Table 103.
[[Page 59514]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.138
Our analysis showed that by modifying the weight of the Safety of
Care measure group to 30 percent, out of 3,076 hospitals, 213 hospitals
would receive a higher Star Rating than when using the current
weighting, while 233 hospitals would receive a lower Star Rating.
Specifically, among the 752 rated hospitals in the lowest quartile of
the Safety of Care measure group, 16 hospitals would achieve a higher
Star Rating, while 133 hospitals would receive a lower Star Rating;
only 3 of the 752 hospitals would receive a 5-star rating. Implementing
this option would reduce the number of hospitals that perform poorly in
Safety of Care yet still obtain the highest 5-star rating. However,
reweighting the Safety of Care measure group would slightly reduce the
influence of other measure groups on the Overall Hospital Quality Star
Rating.
2. Policy-Based 1-Star Reduction for Poor Performance on Safety of Care
We are considering a post hoc policy-based adjustment that would
reduce the Star Rating of any hospital in the lowest quartile of Safety
of Care (based on at least three measure scores) by one star. Using
2023 Overall Hospital Quality Star Ratings data, applying a 1-star
reduction for all hospitals in the lowest quartile of Safety of Care
with at least three safety measures would result in 530 hospitals, out
of 3,076 hospitals, receiving a lower Star Rating. This option would
emphasize safety through a new standard for all hospitals regardless of
their Star Rating. Since the minimum Star Rating is one star, hospitals
already getting one star would not get a further star reduction and
therefore would effectively be exempt from this policy-based
adjustment. Additionally, some hospitals that perform excellently in
all other measure groups except the Safety of Care measure group would
still receive a 1-star reduction.
3. Reweighting the Safety of Care Measure Group Combined With a Policy-
Based Star Rating Cap
We are considering increasing the weight of the Safety of Care
measure group to 30 percent (and proportionally reducing the weights
assigned to the other measure groups, as described in Table 103) while
also applying a policy that would limit hospitals in the lowest
quartile of Safety of Care (based on at least three measure scores) to
a maximum of four stars out of five. Using 2023 Overall Hospital
Quality Star Ratings data, implementing a cap of four stars in the
lowest quartile of Safety of Care with at least three safety measures
combined with the reweighting for all hospitals would result in 235
hospitals, out of 3,076 hospitals, receiving a lower Star Rating and
the reduction by 1 star for two hospitals in the lowest quartile of
Safety of Care that would otherwise still receive a 5-star rating if
only the reweighting solution was applied. This option provides a more
targeted solution to the issue of hospitals performing poorly in Safety
of Care receiving a 5-star rating and applies equally to all hospitals,
reserving the 5-star rating for hospitals achieving a minimum threshold
in Safety of Care.
We also explored alternative options for emphasizing patient
safety, such as applying only the 4-star rating maximum or combining
reweighting of the Safety of Care measure group with a policy-based 1-
star reduction, however, these options did not effectively reach our
goal of emphasizing patient safety. In our analysis, applying a 4-star
rating maximum to hospitals in the lowest quartile of Safety of Care
with at least three safety measures would have less impact, resulting
in only 19 out of 3,076 hospitals receiving a lower Star Rating from
five stars to four stars. Conversely, applying a combination of
reweighting the Safety of Care measure group with a 1-star reduction
may be considered an `over-correction', resulting in 635 out of 3,076
hospitals receiving a lower Star Rating with the greatest impact on
hospitals already receiving two, three, or four stars in the current
methodology.
Feedback solicited during fall 2023 from interested parties,
including patients, patient advocates, technical experts, and
clinicians, supported the increasing emphasis on Safety of Care in the
Overall Hospital Quality Star Rating methodology.\534\ However, there
was varying feedback from interested parties on the methods to do so,
with concerns including a decreased emphasis on the other measure
groups, particularly Mortality, and the adequacy of the Safety of Care
group measures as currently established to truly represent the
experience of patient safety at a hospital.
---------------------------------------------------------------------------
\534\ https://mmshub.cms.gov/sites/default/files/Star-Ratings-TEP-Summary-Report-Oct23.pdf.
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F. Solicitation of Public Comment
We are currently seeking comments on potential modifications to the
Safety of Care measure group in the Overall Hospital Quality Star
Rating methodology. We are requesting input from interested parties on
the following options: (1) reweighting the Safety of Care measure
group; (2) applying a policy-based adjustment that reduces the Star
Rating of any hospital in the lowest quartile of Safety of Care (based
on at least three measures in the goup) by one star; (3) reweighting
the Safety of Care measure group combined with a policy-based 4-star
rating maximum on Star Rating of any hospital in the lowest quartile of
Safety of Care (based on at least three measures in the group).
Specifically, we are requesting comment on the following questions:
Do you support re-weighting the Overall Hospital Quality
Star Rating measure groups to give greater weight to Safety of Care as
described in option 1? Do you agree with the potential new weights for
each measure group (as shown in Table 103)?
Do you support reducing the Star Rating for hospitals with
a low Safety of Care score as described in option 2? Do
[[Page 59515]]
you agree with the potential policy to apply a 1-star reduction to all
hospitals in the lowest quartile of Safety of Care?
Do you support a combination of reweighting the Safety of
Care measure group with a 4-star maximum on Star Rating as described in
option 3?
Do you have feedback or preference towards an approach of
both up-scoring high performers and down-scoring poor performers as in
options 1 and 3, or an approach of just down-scoring poor performers as
in option 2?
What are other methodological approaches that could be
used to emphasize the Safety of Care measure group?
With respect to the potential changes to the Overall
Hospital Quality Star Rating methodology, are there any special
considerations for small, rural or safety net hospitals (including
Critical Access hospitals)?
Any modification to the Overall Hospital Quality Star Rating
methodology would be addressed through future notice-and-comment
rulemaking.
XXIII. Files Available to the Public Via the Internet
The Addenda to the OPPS/ASC proposed rules and final rules with
comment period are published and available via the internet on the CMS
website. In the CY 2019 OPPS/ASC final rule with comment period (83 FR
59154), for CY 2019, we changed the format of the OPPS Addenda A, B,
and C by adding a column titled ``Copayment Capped at the Inpatient
Deductible of $1,364.00'' where we flag, through use of an asterisk,
those items and services with a copayment that is equal to or greater
than the inpatient hospital deductible amount for any given year (the
copayment amount for a procedure performed in a year cannot exceed the
amount of the inpatient hospital deductible established under section
1813(b) of the Act for that year). In the CY 2022 OPPS/ASC final rule
with comment period (85 FR 86266), we updated the format of the OPPS
Addenda A, B, and C by adding a column titled ``Drug Pass-Through
Expiration during Calendar Year'' where we flagged, through the use of
an asterisk, each drug for which pass-through payment was expiring
during the calendar year on a date other than December 31. For CY 2025
and subsequent years, we proposed to retain these columns that are
updated to reflect the drug codes for which pass-through payment is
expiring in the applicable year.
In the CY 2023 OPPS/ASC final rule with comment period (87 FR
72250) for CY 2023, we changed the format of the OPPS Addenda A, B, and
C by adding a column titled ``Drug Pass-Through Expiration during
Calendar Year'' to include devices, so that the column reads: ``Drug
and Device Pass-Through Expiration during Calendar Year'' where we
flagged, through the use of an asterisk, each drug and device for which
pass-through payment was expiring during the calendar year on a date
other than December 31.
For CY 2024 we deleted the column titled ``Copayment Capped at the
Inpatient Deductible'' and instead added a new column for ``Adjusted
Beneficiary Copayment'' to identify any copayment adjustment due to
either the inpatient deductible amount copayment cap or the inflation-
adjusted copayment of a Part B rebatable drug per section 1833(t)(8)(F)
and section 1833(i)(9) of the Act, as added by section 11101 of the
Inflation Reduction Act (IRA). We also added another column for notes.
The ``Note'' column contains multiple messages including, but not
limited to, inflation-adjusted copayment of a Part B rebatable drug,
the copayment for a code capped at the inpatient deductible, or 8
percent of the reference product add-on applied for a biosimilar.
In addition, for CY 2024, we updated the format of the OPPS Addenda
A, B, and C by adding another column for ``IRA Coinsurance Percentage''
to identify the percentage for the inflation-adjusted copayment of a
Part B rebatable drug per section 1833(t)(8)(F) and section 1833(i)(9)
of the Act, as added by section 11101 of the Inflation Reduction Act
(IRA).
For CY 2025 and subsequent years we propose to keep the same format
for the addenda A, B, and C, and we are not proposing any additional
changes for CY 2025.
To view the Addenda to this proposed rule pertaining to CY 2025
payments under the OPPS, we refer readers to the CMS website at:
https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices; select ``CMS-1809-P'' from the
list of regulations. All OPPS Addenda to this proposed rule are
contained in the zipped folder titled ``2025 NPRM OPPS Addenda'' in the
related links section at the bottom of the page. To view the Addenda to
this proposed rule pertaining to CY 2025 payments under the ASC payment
system, we refer readers to the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/ambulatory-surgical-center-asc/asc-regulations-and-notices; select ``CMS-1809-P'' from the
list of regulations. The ASC Addenda to this proposed rule are
contained in a zipped folder titled ``2025 NPRM Addendum AA, BB, DD1,
DD2, EE, and FF'' in the related links section at the bottom of the
page.
XXIV. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995, we are required to
provide 60-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval. In
order to fairly evaluate whether an information collection should be
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act
of 1995 requires that we solicit comment on the following issues:
The need for the information collection and its usefulness in
carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection burden
on the affected public, including automated collection techniques.
We are soliciting public comment on each of these issues for the
following sections of this document that contain information collection
requirements (ICRs):
If you comment on these information collection, that is, reporting,
recordkeeping or third-party disclosure requirements, please submit
your comments electronically as specified in the ADDRESSES section of
this proposed rule.
Comments must be received on/by September 9, 2024.
A. ICRs for the Hospital Outpatient Quality Reporting (OQR) Program
a. Background
In section XV of this proposed rule, we discuss the requirements
for the Hospital OQR Program. The Hospital OQR Program is generally
aligned with the CMS quality reporting program for hospital inpatient
services known as the Hospital Inpatient Quality Reporting (IQR)
Program. We refer readers to the CY 2024 OPPS/ASC final rule with
comment period (88 FR 82131 through 82140) for detailed discussions of
the previously finalized Hospital OQR Program ICRs which are currently
approved under OMB control number 0938-1109 (expiration date February
28, 2025).
[[Page 59516]]
In this proposed rule, we propose to adopt four web-based measures
that would impact previously approved burden estimates: (1) the
Hospital Commitment to Health Equity (HCHE) measure, beginning with the
CY 2025 reporting period/CY 2027 payment determination; (2) the
Screening for Social Drivers of Health (SDOH) measure, beginning with
voluntary reporting for the CY 2025 reporting period followed by
mandatory reporting beginning with the CY 2026 reporting period/CY 2028
payment determination; (3) the Screen Positive Rate for SDOH measure,
beginning with voluntary reporting for the CY 2025 reporting period and
mandatory reporting beginning with the CY 2026 reporting period/CY 2028
payment determination; and (4) the Patient Understanding of Key
Information Related to Recovery After a Facility-Based Outpatient
Procedure or Surgery, Patient Reported Outcome-Based Performance
Measure (Information Transfer PRO-PM), beginning with voluntary
reporting for the CY 2026 reporting period and mandatory reporting
beginning with the CY 2027 reporting period/CY 2029 payment
determination.
We also propose changes to the Hospital OQR Program that would not
impact the previously approved burden estimates. We propose to remove
two claims-based measures beginning with the CY 2025 reporting period/
CY 2027 payment determination: (1) Magnetic Resonance Imaging (MRI)
Lumbar Spine for Low Back Pain measure; and (2) Cardiac Imaging for
Preoperative Risk Assessment for Non-Cardiac, Low-Risk Surgery measure.
We further propose to modify the public reporting of data for the
Median Time from Emergency Department (ED) Arrival to ED Departure for
Discharged ED Patients (Median Time for Discharged ED Patients)--
Psychiatric/Mental Health Patients stratification so that it may be
published on Care Compare in addition to the data.cms.gov downloadable
files beginning in CY 2025. Lastly, we propose to require electronic
health record (EHR) technology to be certified to all eCQMs available
to report beginning with the CY 2025 reporting period/CY 2027 payment
determination.
In the CY 2024 OPPS/ASC final rule with comment period, we
calculated reporting burden estimates for the Hospital OQR Program by
utilizing the Bureau of Labor Statistics (BLS) mean hourly wage rate
for Medical Records Specialists (88 FR 82132). Specifically, we used
the ``general medical and surgical hospitals'' industry to estimate the
mean wage, as this categorization aligns the closest with the Hospital
OQR Program care setting compared to other industries, such as ``office
of physicians'' or ``nursing care facilities.'' The most recent data
from BLS' May 2023 National Occupational Employment and Wage Estimates
reflects a mean hourly wage of $27.69 per hour for medical records
specialists working in ``general medical and surgical hospitals'' (SOC
29-2072).\535\ We calculated the cost of overhead, including fringe
benefits, at 100 percent of the mean hourly wage, consistent with
previous years. This is a rough adjustment, both because fringe
benefits and overhead costs vary significantly by employer and methods
of estimating these costs vary widely in the literature. Nonetheless,
we believe that doubling the hourly wage rate ($27.69 x 2 = $55.38) to
estimate total cost is a reasonably accurate estimation method.
Accordingly, unless otherwise specified, we will calculate cost burden
to hospitals using a wage plus benefits estimate of $55.38 per hour
throughout the discussion in this section of this rule for the Hospital
OQR Program.
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\535\ U.S. Bureau of Labor Statistics. Occupational Outlook
Handbook, Medical Records Specialists. Accessed April 29, 2024.
Available at: https://www.bls.gov/oes/current/oes292072.htm.
---------------------------------------------------------------------------
In the CY 2024 OPPS/ASC final rule with comment period, our burden
estimates were based on an assumption that approximately 3,350 hospital
outpatient departments (HOPDs) would report data to the Hospital OQR
Program (88 FR 82132). For this proposed rule, based on the most recent
available data from the CY 2024 Hospital OQR Program payment
determination, we estimate that 3,200 HOPDs will report data to the
Hospital OQR Program for the CY 2025 reporting period/2027 payment
determination.
b. Information Collection Burden Estimate for the Proposed Adoption of
the Hospital Commitment to Health Equity Measure Beginning With the CY
2025 Reporting Period/CY 2027 Payment Determination
In section XIV.B.1 of this proposed rule, we propose to adopt the
web-based HCHE measure beginning with the CY 2025 reporting period/CY
2027 payment determination. For this measure, HOPDs would be required
to report on attestations of ``yes'' or ``no'' to a set of five domains
related to organizational efforts towards health equity once annually
using a CMS-designated information system, as described in section
XIV.B.1.b of this proposed rule. We estimate the reporting burden
associated with this measure to be, on average across all 3,200 HOPDs,
no more than 10 minutes per HOPD per year, as we believe the burden for
HOPDs to report this measure would be very similar to the burden for
hospital inpatient departments to report the same measure once annually
under the Hospital IQR Program. We refer readers to the currently
approved burden estimate for the HCHE measure in the Hospital IQR
Program under OMB control number 0938-1022 (expiration date January 31,
2026) and as discussed in the FY 2023 IPPS/LTCH PPS final rule (87 FR
49385).
Using an estimate of 10 minutes (or 0.167 hours) per HOPD per year,
we estimate that this measure adoption would result in a total annual
burden increase of 533 hours (0.167 hours x 3,200 HOPDs) at a cost of
$29,518 (533 hours x $55.38/hr) across program-eligible HOPDs.
c. Information Collection Burden Estimate for the Proposed Adoption of
the Screening for Social Drivers of Health (SDOH) Measure Beginning
With Voluntary Reporting for the CY 2025 Reporting Period Followed by
Mandatory Reporting Beginning With the CY 2026 Reporting Period/CY 2028
Payment Determination
In section XIV.B.2 of this proposed rule, we propose to adopt the
web-based Screening for SDOH measure beginning with voluntary reporting
for the CY 2025 reporting period followed by mandatory reporting
beginning with the CY 2026 reporting period/CY 2028 payment
determination. For this measure, HOPDs would be required to report
whether they screened patients for five Health Related Social Needs
(HRSN) domains, as described in section XIV.B.2.a of this proposed
rule.
HOPDs would be able to collect data for the measure using a self-
selected screening tool. We expect that most HOPDs would likely collect
data through a screening tool incorporated into their EHR or other
patient intake process, such as those we describe as examples in
section XIV.B.2.e of this proposed rule. We estimate the information
collection burden related to conducting patient screening associated
with this measure to be 2 minutes (0.033 hours) per patient. This is
based on the currently approved burden estimate for the Hospital IQR
Program under OMB control number 0938-1022 for the same measure with
patient screening for the same HRSN domains and the same frequency of
data reporting, as discussed in the FY 2023 IPPS/LTCH PPS final rule
(87 FR 49385 through 49386).
To provide an estimate of patient volume for the purposes of
calculating
[[Page 59517]]
the information collection burden associated with this measure, we
utilized data derived from the American Hospital Association which
estimates 2,399 outpatient visits per 1,000 population in CY 2022 \536\
and multiplied this by the estimated total U.S. population in CY 2022
\537\ to estimate the total number of outpatient visits across all U.S.
community hospitals. Then, in order to derive an estimate for only the
3,200 program-eligible HOPDs in the Hospital OQR Program, we multiplied
the total number of outpatient visits by a ratio of program-eligible
HOPDs to all U.S. community hospitals. Therefore, we estimate that each
year 498,843,518 patients (2,399 outpatient visits per 1,000 population
in CY 2022) x 333,287,557 total U.S population in 2022 x (3,200 HOPDs /
5,129 U.S community hospitals \538\) would be screened when reporting
on the measure becomes mandatory. As submission rates among facilities
may vary, we conservatively estimate that for voluntary reporting for
the CY 2025 reporting period, 50 percent of HOPDs would survey 50
percent of patients, and beginning with the first mandatory reporting
period, 100 percent of HOPDs would survey 100 percent of patients.
We determine the cost for patients (or their representative)
undertaking administrative and other tasks, such as filling out a
survey or intake form, using a post-tax wage of $24.49/hr based on the
report ``Valuing Time in U.S. Department of Health and Human Services
Regulatory Impact Analyses: Conceptual Framework and Best Practices,''
which identifies the approach for valuing time when individuals
undertake activities on their own time.\539\ To derive the costs for
patients (or their representatives), a measurement of the usual weekly
earnings of wage and salary workers of $1,139 is divided by 40 hours to
calculate an hourly pre-tax wage rate of $28.48/hr.\540\ This rate is
adjusted downwards by an estimate of the effective tax rate for median
income households of about 14 percent calculated by comparing pre-and
post-tax income,\541\ resulting in the post-tax hourly wage rate of
$24.49/hr. Unlike our state and private sector wage adjustments, we are
not adjusting patient wages for fringe benefits and other indirect
costs since the individuals' activities, if any, would occur outside
the scope of their employment.
Measure data aggregated to the hospital level as a numerator and a
denominator would be submitted via the HQR system annually. Similar to
the currently approved burden estimate for web-based measures reported
via the HQR system for the Hospital OQR Program under OMB control
number 0938-1109 (expiration date January 31, 2026), we estimate a
burden of 10 minutes per HOPD to report the measure data. Therefore, we
estimate that each HOPD would spend 10 minutes (0.167 hours) annually
to report the Screening for SDOH measure data to CMS.
For the CY 2025 voluntary reporting period, we estimate a total
burden increase for patients of 4,115,459 hours (498,843,518 patients x
50 percent response rate x 50 percent of HOPDs x 0.033 hours per
patient) at a cost of $100,787,591 (4,115,459 hours x $24.49/hr).
Beginning with the CY 2026 mandatory reporting period, we estimate an
annual total burden increase for patients of 16,461,836 hours
(498,843,518 patients x 0.033 hours per patient) at a cost of
$403,150,364 (16,461,836 hours x $24.49/hr).
For the CY 2025 voluntary reporting period, we estimate a total
collection and reporting burden increase for program-eligible HOPDs of
267 hours (3,200 HOPDs x 50 percent of HOPDs x 0.167 hours per HOPDs)
at a cost of $14,786 (267 hours x $55.38/hr). Beginning with the CY
2026 mandatory reporting period, we estimate a total collection and
reporting burden increase for program-eligible HOPDs of 533 hours
(3,200 HOPDs x 0.167 hours per HOPD) at a cost of $29,518 (533 hours x
$55.38/hr).
d. Information Collection Burden Estimate for the Proposed Adoption of
the Screen Positive Rate for Social Drivers of Health (SDOH) Measure
Beginning With Voluntary Reporting for the CY 2025 Reporting Period
Followed by Mandatory Reporting Beginning With the CY 2026 Reporting
Period/CY 2028 Payment Determination
In section XIV.B.3 of this proposed rule, we propose to adopt the
Screen Positive Rate for SDOH measure beginning with voluntary
reporting for the CY 2025 reporting period followed by mandatory
reporting beginning with the CY 2026 reporting period/CY 2028 payment
determination. We refer readers to the currently approved burden
estimate for the Screen Positive Rate for SDOH measure in the Hospital
IQR Program under OMB control number 0938-1022 for the same measure and
the same frequency of data reporting, as discussed in the FY 2023 IPPS/
LTCH PPS final rule (87 FR 49386). As discussed in section XIV.B.3.g of
this proposed rule, if a hospital participates in both the Hospital OQR
and Hospital IQR Programs, the hospital would need to submit data on
this measure separately under each program. As such, we are estimating
the burden separately under each program.
For this measure, HOPDs would be required to report on the number
of patients who screened positive for one or more of the five domains
(reported as five separate rates to reflect each of the five HRSN
domains) divided by the total number of patients screened. We
previously included the collection burden associated with screening
patients in our discussion of the Screening for SDOH measure. Thus, for
the Screen Positive Rate for SDOH measure, we estimate only the
additional burden for HOPD reporting via the HQR system since patients
would not need to provide, and HOPDs would not need to collect, any
additional information for this measure. We continue to estimate that,
for voluntary reporting for the CY 2025 reporting period, 50 percent of
HOPDs would submit data, and beginning with the first mandatory
reporting period, 100 percent of HOPDs would submit data.
Measure data aggregated to the hospital level as a numerator and a
denominator would be submitted via the HQR system annually. Similar to
the currently approved burden estimate for web-based measures reported
via the HQR system for the Hospital OQR Program under OMB control
number 0938-1109, we estimate a burden of 10 minutes per HOPD to report
the measure data. Therefore, we estimate that each HOPD would spend 10
minutes (0.167 hours) annually to report the Screen Positive Rate for
SDOH measure data to CMS.
For the CY 2025 voluntary reporting period, we estimate a total
collection and reporting burden increase of 267 hours (0.167 hours x
3,200 HOPDs x 50 percent of HOPDs) at a cost of $14,786 (267 hours x
$55.38), and beginning with the CY 2026 reporting period, we estimate a
total annual collection and reporting burden increase for hospitals of
533 hours (0.167 hours x 3,200 HOPDs) at a cost of $29,518 (533 hours x
$55.38/hr) across all program-eligible HOPDs.
[[Page 59518]]
e. Information Collection Burden Estimate for the Proposed Adoption of
the Patient Understanding of Key Information Related to Recovery After
a Facility-Based Outpatient Procedure or Surgery, Patient Reported
Outcome-Based Performance Measure (Information Transfer PRO-PM),
Beginning With Voluntary Reporting for the CY 2026 Reporting Period and
Mandatory Reporting Beginning With the CY 2027 Reporting Period/CY 2029
Payment Determination
In section XV.C.1.b of this proposed rule, we propose to adopt the
Information Transfer PRO-PM beginning with voluntary reporting for the
CY 2026 reporting period and mandatory reporting beginning with the CY
2027 reporting period/CY 2029 payment determination.
The Information Transfer PRO-PM would use PRO data regarding
recovery instructions, collected by HOPDs through a nine-item survey
instrument administered to patients post-operatively. The modes of PRO
data collection can include completion of the post-operative surveys
electronically.
To provide an estimate of patient volume for the purposes of
calculating the information collection burden associated with this
measure, we utilized data derived from the American Hospital
Association related to hospital outpatient visits to estimate that each
year 498,843,518 patients (2,399 outpatient visits per person in CY
2022 \542\ x 333,287,557 total U.S population in 2022 \543\ x (3,200
HOPDs / 5,129 U.S community hospitals \544\)) would be screened if the
measure became mandatory. As submission rates among facilities may
vary, we conservatively estimate that for voluntary reporting for the
CY 2025 reporting period, 50 percent of HOPDs would survey 50 percent
of patients, and beginning with the first mandatory reporting period,
100 percent of HOPDs would survey 100 percent of patients. While we
have also proposed to allow HOPDs to report a sample of at least 300
completed patient surveys, we propose to require all patients to be
surveyed for this measure once mandatory reporting begins.
We estimate each patient would require an average of 6 minutes
\545\ (0.1 hours) to complete the survey. As described in section
XXIV.B.c of this proposed rule, for purposes of calculating patient
burden, we determine the cost for patients (or their representatives)
undertaking administrative and other tasks, such as filling out a
survey or intake form, using a post-tax wage of $24.49/hr based on the
report ``Valuing Time in U.S. Department of Health and Human Services
Regulatory Impact Analyses: Conceptual Framework and Best Practices,''
which identifies the approach for valuing time when individuals
undertake activities on their own time.\546\ Unlike our state and
private sector wage adjustments, we are not adjusting patient wages for
fringe benefits and other indirect costs since the individuals'
activities, if any, would occur outside the scope of their employment.
Measure data would be submitted via the HQR system annually.
Similar to the currently approved burden estimate for web-based
measures reported via the HQR system for the Hospital OQR Program under
OMB control number 0938-1109, we estimate a burden of 10 minutes per
HOPD to report the measure data. Therefore, we estimate that each HOPD
would spend 10 minutes (0.167 hours) annually to report the Information
Transfer PRO-PM data to CMS.
For the CY 2025 voluntary reporting period, we estimate a total
burden for patients of 12,471,088 hours (498,843,518 patients x 50
percent response rate x 50 percent of HOPDs x 0.1 hours per patient
surveyed) at a cost of $305,416,945 (12,471,088 hours x $24.49/hr).
Beginning with the CY 2026 mandatory reporting period, we estimate an
annual total burden for patients of 49,884,352 hours (498,843,518
patients x 0.1 hours per patient) at a cost of $1,221,667,780
(49,884,352 hours x $24.49/hr).
For the CY 2025 voluntary reporting period, we estimate a total
collection and reporting burden for program-eligible HOPDs of 267 hours
(3,200 HOPDs x 50 percent of HOPDs x 0.167 hours per HOPDs) at a cost
of $14,786 (267 hours x $55.38/hr). Beginning with the CY 2026
mandatory reporting period, we estimate a total collection and
reporting burden for program-eligible HOPDs of 533 hours (3,200 HOPDs x
0.167 hours per HOPD) at a cost of $29,518 (533 hours x $55.38/hr).
f. Information Collection Burden for the Proposed Removal of Two
Claims-Based Measures
In sections XV.C.2.a and XV.C.2.b of this proposed rule, we propose
to remove two claims-based measures beginning with the CY 2025
reporting period/CY 2027 payment determination: (1) MRI Lumbar Spine
for Low Back Pain measure; and (2) Cardiac Imaging for Preoperative
Risk Assessment for Non-Cardiac, Low-Risk Surgery measure. Because
these measures are calculated using Medicare fee-for-service (FFS)
claims that are already reported to the Medicare program for payment
purposes, removing these measures would not result in a change in
burden associated with OMB control number 0938-1109.
g. Information Collection Burden for the Proposal to Publicly Report
Data for the Median Time for Discharged ED Patients--Psychiatric/Mental
Health Patients Stratification on Care Compare Beginning in CY 2025
In section XV.F.2 of this proposed rule, we propose to publicly
report data for the Median Time for Discharged ED Patients--
Psychiatric/Mental Health Patients stratification on Care Compare
beginning in CY 2025. Because we are not proposing to require HOPDs to
collect or submit any additional data for purposes of this public
reporting, this proposal would not result in a change in burden
associated with OMB control number 0938-1109.
h. Information Collection Burden for the Proposal To Require EHR
Technology To Be Certified to All eCQMs Available To Report Beginning
With the CY 2025 Reporting Period/CY 2027 Payment Determination
In section XV.E.2.b of this proposed rule, we propose to require
EHR technology to be certified to all eCQMs (electronic clinical
quality measures) available to report beginning with the CY 2025
reporting period/CY 2027 payment determination. We do not expect HOPDs
would experience an increase in information collection burden
associated with this proposal because the use of EHR technology that is
certified to all available eCQMs is already required for the Promoting
Interoperability Program (83 FR 41672) and the Hospital IQR Program (84
FR 42604).
g. Summary of Proposed Information Collection Burden Estimates for the
Hospital OQR Program
In summary, we estimate that the proposals in this proposed rule
would result in a total HOPD burden increase of 66,348,321 hours at a
cost of $1,624,936,216 annually for all 3,200 program-eligible HOPDs
from the CY 2025 reporting period/CY 2027 payment determination through
the CY 2027 reporting period/CY 2029 payment determination. We will
submit the revised information collection estimates to OMB for approval
under OMB control number 0938-1109 (expiration date February 28, 2025).
(See Tables 104, 105 and 106.)
[[Page 59519]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.139
[[Page 59520]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.140
[[Page 59521]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.141
We request comment on how we can reduce burden on HOPDs for both
these new information collections as well as recommendations for the
removal of other existing information collections to offset these new
burdens.
B. ICRs for the Rural Emergency Hospitals Quality Reporting (REHQR)
Program
a. Background
In section XVI of this proposed rule, we discuss the requirements
for the REHQR Program. The REHQR Program is generally aligned with the
CMS quality reporting program for HOPDs known as the Hospital OQR
Program. We refer readers to the CY 2024 OPPS/ASC final rule with
comment period (88 FR 82148 through 82149) for detailed discussions of
the previously finalized REHQR Program ICRs, which are currently
approved under OMB control number 0938-1454 (expiration date April 30,
2027).
In this proposed rule, we propose to adopt three web-based measures
that would impact previously approved burden estimates: (1) the
Hospital Commitment to Health Equity (HCHE)
[[Page 59522]]
measure, beginning with the CY 2025 reporting period/CY 2027 program
determination; (2) the Screening for Social Drivers of Health (SDOH)
measure, beginning with voluntary reporting for the CY 2025 reporting
period followed by mandatory reporting beginning with the CY 2026
reporting period/CY 2028 program determination; and (3) the Screen
Positive Rate for SDOH measure, beginning with voluntary reporting for
the CY 2025 reporting period followed by mandatory reporting beginning
with the CY 2026 reporting period/CY 2028 program determination.
We also propose to extend the reporting period for the previously
adopted Risk-Standardized Hospital Visits Within 7 Days After Hospital
Outpatient Surgery measure beginning with the CY 2027 program
determination. We believe this proposal would not impact the previously
approved burden estimates if finalized.
In the CY 2024 OPPS/ASC final rule with comment period, we
calculated reporting burden estimates for the REHQR Program by
utilizing the BLS mean hourly wage rate for Medical Records Specialists
(88 FR 82148). Specifically, we used the ``general medical and surgical
hospitals'' industry to estimate the mean wage, as this categorization
aligns the closest with the REHQR Program care setting compared to
other medical record specialist related industries, such as ``office of
physicians'' or ``nursing care facilities.'' The most recent data from
BLS' May 2023 National Occupational Employment and Wage Estimates
reflects a mean hourly wage of $27.69 per hour for medical records
specialists working in ``general medical and surgical hospitals'' (SOC
29-2072).\547\ We calculated the cost of overhead, including fringe
benefits, at 100 percent of the mean hourly wage, consistent with
previous years. This is necessarily a rough adjustment, both because
fringe benefits and overhead costs vary significantly by employer and
methods of estimating these costs vary widely in the literature.
Nonetheless, we believe that doubling the hourly wage rate ($27.69 x 2
= $55.38) to estimate total cost is a reasonably accurate estimation
method. Accordingly, unless otherwise specified, we will calculate cost
burden to REHs.
In the CY 2024 OPPS/ASC final rule with comment period, our burden
estimates were based on an assumption that approximately 746 hospitals
could transition to REH status assuming that all eligible hospitals in
states which have passed or amended necessary legislation enabling
transition to occur as of March 2023 choose to do so and we stated that
we would update our estimates once more information was made available
(88 FR 82148). For this proposed rule, based on the actual number of
acute care and critical access hospital conversions to REH status as of
April 22, 2024, we estimate that 25 REHs would report data to the REHQR
Program during the CY 2025 reporting period unless otherwise noted.
While the exact number of REHs required to submit data may vary due to
status changes to and from an REH, as reiterated in section XVI.A of
this proposed rule, REHs are required by statute to submit quality
data. Therefore, for purposes of estimating burden, we assume that all
25 REHs would submit data under the REHQR Program beginning with the CY
2025 reporting period.
b. Information Collection Burden for the Proposed Adoption of the
Hospital Commitment to Health Equity (HCHE) Measure Beginning With the
CY 2025 Reporting Period/CY 2027 Program Determination
In section XIV.B.1 of this proposed rule, we propose to adopt the
web-based HCHE measure beginning with the CY 2025 reporting period/CY
2027 program determination. For this measure, REHs would be required to
report on attestations of ``yes'' or ``no'' to a set of five domains
related to organizational efforts towards health equity, as described
in section XIV.B.1.b of this proposed rule.
We estimate the reporting burden associated with this measure to
be, on average across all 25 REHs, no more than 10 minutes per REH per
year, as we believe the burden that is annually reported by hospital
inpatient departments under the Hospital IQR Program would be very
similar to annual reporting by REHs on the same measure. We refer
readers to the currently approved burden for the HCHE measure in the
Hospital IQR Program under OMB control number 0938-1022 (expiration
date January 31, 2026) and as discussed in the FY 2023 IPPS/LTCH PPS
final rule (87 FR 49385).
Using an estimate of 10 minutes (or 0.167 hours) per REH per year,
we estimate that this measure adoption would result in a total annual
burden increase of 4 hours (0.167 hours x 25 REHs) at a cost of $222 (4
hours x $55.38/hr) across all REHs.
c. Information Collection Burden for the Proposed Adoption of the
Screening for Social Drivers of Health (SDOH) Measure Beginning With
Voluntary Reporting for the CY 2025 Reporting Period Followed by
Mandatory Reporting Beginning With the CY 2026 Reporting Period/CY 2028
Program Determination
In section XIV.B.2 of this proposed rule, we propose to adopt the
Screening for SDOH measure beginning with voluntary reporting for the
CY 2025 reporting period followed by mandatory reporting beginning with
the CY 2026 reporting period/CY 2028 program determination. We refer
readers to the currently approved burden for the Screening for SDOH
measure for the Hospital IQR Program under OMB control number 0938-1022
(expiration date January 31, 2026). For this measure, REHs would be
required to report whether they screened patients for five Health
Related Social Needs (HRSNs) domains as described in section XIV.B.2.a
of this proposed rule.
REHs would be able to collect data for the measure using a self-
selected screening tool. We expect that most REHs would likely collect
data through a screening tool incorporated into their EHR or other
patient intake process, such as those we describe as examples in
section XIV.B.2.e of this proposed rule. We estimate the information
collection burden related to conducting patient screening associated
with this measure to be 2 minutes (0.033 hours) per patient. This is
based on the currently approved burden estimate for the Hospital IQR
Program for the same measure with patient screening for the same HRSN
domains and the same frequency of data reporting, as discussed in the
FY 2023 IPPS/LTCH PPS final rule (87 FR 49385 through 49386).
To provide an estimate of patient volume for the purposes of
calculating the information collection burden associated with this
measure we utilized data derived from a Definitive Healthcare survey
which calculated that Medicare FFS patients account for 35.6 percent of
hospital payer mix and a MedPAC report that determined hospitals which
have converted to REH status average 4,200 outpatient visits for
Medicare FFS beneficiaries to estimate that each year 11,798 (4,200 /
35.6 percent) patients would be screened per REH when reporting on the
measure becomes mandatory.548 549 We therefore estimate a
total of approximately 295,000 patients (11,798 patients x 25 REHs)
would be screened across all 25 REHs. As submission rates among
[[Page 59523]]
facilities may vary, we conservatively estimate that for voluntary
reporting for the CY 2025 reporting period, 50 percent of REHs would
survey 50 percent of patients, and beginning with the first mandatory
reporting period, REHs would survey 100 percent of patients.
We determine the cost for patients (or their representative)
undertaking administrative and other tasks, such as filling out a
survey or intake form, using a post-tax wage of $24.49/hr based on the
report ``Valuing Time in U.S. Department of Health and Human Services
Regulatory Impact Analyses: Conceptual Framework and Best Practices,''
which identifies the approach for valuing time when individuals
undertake activities on their own time.\550\ To derive the costs for
patients (or their representatives), a measurement of the usual weekly
earnings of wage and salary workers of $1,139 is divided by 40 hours to
calculate an hourly pre-tax wage rate of $28.48/hr.\551\ This rate is
adjusted downwards by an estimate of the effective tax rate for median
income households of about 14 percent calculated by comparing pre- and
post-tax income,\552\ resulting in the post-tax hourly wage rate of
$24.49/hr. Unlike our state and private sector wage adjustments, we are
not adjusting beneficiary wages for fringe benefits and other indirect
costs since the individuals' activities, if any, would occur outside
the scope of their employment.
Measure data aggregated to the hospital level as a numerator and a
denominator would be submitted via the HQR system annually. Similar to
the currently approved burden estimate for web-based measures reported
via the HQR system for the Hospital OQR Program under OMB control
number 0938-1109 (expiration date February 28, 2025), which REHs would
have been eligible to report under prior to conversion to REH status,
we estimate a burden of 10 minutes per REH to report the measure data.
Therefore, we estimate that each REH would spend 10 minutes (0.167
hours) annually to report the Screening for SDOH measure data to CMS.
For the CY 2025 voluntary reporting period, we estimate a total
collection and reporting burden increase for patients of 2,434 hours
(295,000 patients x 50 percent response rate x 50 percent of REHs x
0.033 hours per patient) at a cost of $59,609 (9,735 hours x $24.49/
hr). Beginning with the CY 2026 reporting period, we estimate a total
collection and reporting burden increase for patients of 9,735 hours
(295,000 patients x 0.033 hours per patient) at a cost of $238,410
(9,735 hours x $24.49/hr).
For the CY 2025 voluntary reporting period, we estimate a total
collection and reporting burden increase for REHs of 2 hours (25 REHs x
50 percent of REHs x 0.167 hours) at a cost of $111 (2 hours x $55.38/
hr). Beginning with the CY 2026 reporting period, we estimate a total
collection and reporting burden increase for REHs of 4 hours (25 REHs x
0.167 hours) at a cost of $222 (4 hours x $55.38/hr).
d. Information Collection Burden for the Proposed Adoption of the
Screen Positive Rate for Social Drivers of Health (SDOH) Measure
Beginning With Voluntary Reporting for the CY 2025 Reporting Period
Followed by Mandatory Reporting Beginning With the CY 2026 Reporting
Period/CY 2028 Program Determination
In section XIV.B.3 of this proposed rule, we propose to adopt the
Screen Positive Rate for SDOH measure beginning with voluntary
reporting for the CY 2025 reporting period followed by mandatory
reporting beginning with the CY 2026 reporting period/CY 2028 program
determination. We refer readers to the currently approved burden
estimate for the Screen Positive Rate for SDOH measure in the Hospital
IQR Program under OMB control number 0938-1022 for the same measure and
the same frequency of data reporting, as discussed in the FY 2023 IPPS/
LTCH PPS final rule (87 FR 49386).
For this measure, REHs would be required to report on an annual
basis the number of patients who screened positive for one or more of
the five domains (reported as five separate rates to reflect each of
the five HRSN domains) divided by the total number of patients
screened. We previously included the burden associated with screening
patients in our discussion of the Screening for SDOH measure. Thus, for
the Screen Positive Rate for SODH measure, we estimate only the
additional burden for a REH reporting via the HQR system since patients
would not need to provide, and REHs would not need to collect, any
additional information for this measure. We continue to estimate that,
for voluntary reporting for the CY 2025 reporting period, 50 percent of
REHs would survey 50 percent of patients, and beginning with the first
mandatory period, REHs would survey 100 percent of patients.
Measure data aggregated to the hospital level as a numerator and a
denominator would be submitted via the HQR system annually. Similar to
the currently approved burden estimate for web-based measures reported
via the HQR system for the Hospital OQR Program under OMB control
number 0938-1109 (expiration date February 28, 2025), which REHs would
have been eligible to report under prior to conversion to REH status,
we estimate a burden of 10 minutes per REH to report the measure data.
Therefore, we estimate that each REH would spend 10 minutes (0.167
hours) annually to report the Screen Positive Rate for SDOH measure
data to CMS.
For the CY 2025 voluntary reporting period, we estimate a total
collection and reporting burden increase of two hours (0.167 hours x 25
REHs x 50 percent of REHs) at a cost of $111 (2 hours x $55.38/hr), and
beginning with the CY 2026 reporting period, we estimate a total annual
collection and reporting burden increase for REHs of 4 hours (0.167
hours x 25 REHs) at a cost of $222 (4 hours x $55.38/hr) across all
REHs.
e. Information Collection Requirements for the Proposal To Extend the
Reporting Period From for the Risk-Standardized Hospital Visits Within
7 Days After Hospital Outpatient Surgery Measure Beginning With the CY
2027 Program Determination
In section XVI.C.2 of this proposed rule, we propose to extend the
reporting period from 1 year to 2 years for the Risk-Standardized
Hospital Visits within 7 Days after Hospital Outpatient Surgery
measure, beginning with the CY 2027 program determination. We refer
readers to a similar proposal which was finalized for the claims-based
Facility 7-Day Risk-Standardized Hospital Visit Rate After Outpatient
Colonoscopy measure under the Hospital OQR Program in the CY 2019 OPPS/
ASC final rule (83 FR 59106).
Because this claims-based measure is calculated using data that are
already reported to the Medicare program for payment purposes, there is
no burden associated with the collection and submission of data for
this measure. Accordingly, our proposal to extend the reporting period
from 1 to 2 years would not result in additional burden for REHs.
f. Summary of Proposed Information Collection Burden Estimates for the
REHQR Program
In summary, we estimate that the proposals in this proposed rule,
if finalized as proposed, would result in an increase of 9,747 hours at
a cost of $239,076 for 25 REHs annually from the CY 2025 reporting
period through the CY 2026 reporting period. We will
[[Page 59524]]
submit these information collection estimates to OMB for approval under
OMB control number 0938-1454 (expiration date April 30, 2027). (See
Tables 107 and 108.)
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[[Page 59525]]
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We request comment on how we can reduce burden on REHs for both
these new information collection as well as recommendations for the
removal of other existing information collections to offset these new
burdens.
C. ICRs for the Ambulatory Surgical Center Quality Reporting (ASCQR)
Program
a. Background
In section XVII of this proposed rule, we discuss the requirements
for the ASCQR Program. We refer readers to the CY 2024 OPPS/ASC final
rule (88 FR 82140 through 82148) for detail regarding the previously
finalized ASCQR Program ICRs which are currently approved under OMB
control number 0938-1270 (expiration date August 31, 2025).
In section XIV.B of this proposed rule, we propose to adopt three
measures that would impact previously approved burden estimates: (1)
the Facility Commitment to Health Equity (FCHE) measure, beginning with
the CY 2025 reporting period/CY 2027 payment determination; (2) the
Screening for Social Drivers of Health (SDOH) measure, beginning with
voluntary reporting for the CY 2025 reporting period followed by
mandatory reporting beginning with the CY 2026 reporting period/CY 2028
payment determination; and (3) the Screen Positive Rate for SDOH
measure, beginning with voluntary reporting for the CY 2025 reporting
period followed by mandatory reporting beginning with the CY 2026
reporting period/CY 2028 payment determination. In section XVII.E.2.a
of this proposed rule, we propose that ASCs would submit data annually
for these measures using the CMS-designated information system
(currently, the Hospital Quality Reporting [HQR] system).
In the CY 2024 OPPS/ASC final rule with comment period, we
calculated reporting burden estimates for the ASCQR Program by
utilizing the BLS mean hourly wage rate for Medical
[[Page 59526]]
Records Specialists (88 FR 82140). Specifically, we used the ``general
medical and surgical hospitals'' industry to estimate the mean wage, as
this categorization aligns the closest with the ASCQR Program care
setting compared to other medical record specialist related industries,
such as ``office of physicians'' or ``nursing care facilities.'' The
most recent data from BLS' May 2023 National Occupational Employment
and Wage Estimates reflects a mean hourly wage of $27.69 per hour for
medical records specialists working in ``general medical and surgical
hospitals'' (SOC 29-2072).\553\ We calculated the cost of overhead,
including fringe benefits, at 100 percent of the mean hourly wage,
consistent with previous years. This is necessarily a rough adjustment,
both because fringe benefits and overhead costs vary significantly by
employer and methods of estimating these costs vary widely in the
literature. Nonetheless, we believe that doubling the hourly wage rate
($27.69 x 2 = $55.38) to estimate total cost is a reasonably accurate
estimation method. Accordingly, unless otherwise specified, we would
calculate cost burden to ASCs using a wage plus benefits estimate of
$55.38 per hour throughout the discussion in this section of this rule
for the ASCQR Program.
Based on the most recent analysis of the CY 2024 payment
determination data, we found that, of the 5,536 ASCs that were actively
billing Medicare, 4,196 were required to participate in the ASCQR
Program. Of the 1,340 ASCs not required to participate in the program,
279 ASCs did so and met full requirements. On this basis, we estimate
that 4,475 ASCs (4,196 + 279) would submit data for the ASCQR Program
for the CY 2025 reporting period/CY 2027 payment determination.
b. Information Collection Burden for the Proposed Adoption of the
Facility Commitment to Health Equity (FCHE) Measure Beginning With the
CY 2025 Reporting Period/CY 2027 Payment Determination
In section XIV.B.1 of this proposed rule, we propose to adopt the
FCHE measure for the ASCQR Program beginning with the CY 2025 reporting
period/CY 2027 payment determination. For this measure, ASCs would be
required to report an attestation of ``yes'' or ``no'' to a set of five
domains related to organizational efforts towards health equity, as
described in section XIV.B.1.b of this proposed rule.
We estimate the reporting burden associated with this measure to
be, on average across all 4,475 ASCQR Program eligible facilities, no
more than 10 minutes per ASC per year, based on the currently approved
burden for the same measure under the Hospital IQR Program under OMB
control number 0938-1022 (expiration date January 31, 2026). This also
aligns with our estimated burden per providers for HOPDs and REHs,
discussed above.
Using an estimate of 10 minutes (0.167 hours) per ASC per year, we
estimate that this measure adoption would result in a total annual
collection and reporting burden increase of 746 hours (0.167 hours x
4,475 ASCs) at a cost of $41,313 (746 hours x $55.38/hr) across
program-eligible ASCs.
c. Information Collection Burden for the Proposed Adoption of the
Screening for Social Drivers of Health (SDOH) Measure, Beginning With
Voluntary Reporting for the CY 2025 Reporting Period Followed by
Mandatory Reporting Beginning With the CY 2026 Reporting Period/CY 2028
Payment Determination
In section XIV.B.2 of this proposed rule, we propose to adopt the
Screening for SDOH measure for the ASCQR Program beginning with
voluntary reporting for the CY 2025 reporting period followed by
mandatory reporting beginning with the CY 2026 reporting period/CY 2028
payment determination. For this measure, ASCs would be required to
report whether they screened patients for five Health Related Social
Needs (HSRN) domains as described in section XIV.B.2.a of this proposed
rule.
As described in section XIV.B.2.e of this proposed rule, ASCs would
be able to collect data for this measure using a self-selected
screening tool. We expect that most ASCs would collect data through a
screening tool incorporated into their EHR or other patient intake
process, such as those we describe as examples in section XIV.B.2.e of
this proposed rule. We estimate the information collection burden
related to conducting patient screening associated with this measure
would be 2 minutes (0.033 hours) per patient. This estimate is based on
the currently approved burden for the Hospital IQR Program for the same
measure, requiring the reporting of patient screening for the same HRSN
domains and the same frequency of data reporting, as discussed in the
FY 2023 IPPS/LTCH PPS final rule (87 FR 49385 through 49386).
To provide an estimate of patient volume for the purposes of
calculating the information collection burden associated with this
measure, we utilized data derived from the ASC Quality Collaborative
(ASCQC) related to ASC patient fall benchmarking data as this metric
applies to all patients rather than a subset. We estimate that each
year approximately 2,330 patients (10,427,619 admissions \554\ / 4,475
ASCs) would be screened per ASC annually once reporting on the measure
becomes mandatory. As submission rates among facilities may vary, we
conservatively estimate that, for voluntary reporting for the CY 2025
reporting period, 50 percent of ASCs would survey 50 percent of
patients, and beginning with the first mandatory reporting period, ASCs
would survey and report on 100 percent of patients.
We determine the cost for patients (or their representative)
undertaking administrative and other tasks, such as filling out a
survey or intake form, using a post-tax wage of $24.49/hr based on the
report ``Valuing Time in U.S. Department of Health and Human Services
Regulatory Impact Analyses: Conceptual Framework and Best Practices,''
which identifies the approach for valuing time when individuals
undertake activities on their own time.\555\ To derive the costs for
patients (or their representatives), a measurement of the usual weekly
earnings of wage and salary workers of $1,139 is divided by 40 hours to
calculate an hourly pre-tax wage rate of $28.48/hr.\556\ This rate is
adjusted downwards by an estimate of the effective tax rate for median
income households of about 14 percent calculated by comparing pre- and
post-tax income,\557\ resulting in the post-tax hourly wage rate of
$24.49/hr. Unlike our state and private sector wage adjustments, we are
not adjusting beneficiary wages for fringe benefits and other indirect
costs because the individuals' activities, if any, would occur outside
the scope of their employment.
Measure data aggregated to the ASC level as a numerator and a
denominator would be submitted via the HQR system annually. Similar to
the currently approved burden estimate for web-based measures reported
via the HQR system for the ASCQR Program under OMB control number 0938-
1270 (expiration date August 31, 2025), we estimate a burden of 10
minutes per ASC to report the measure data. Therefore, we estimate that
each ASC would spend 10 minutes (0.167 hours) annually to report the
Screening for SDOH measure data to CMS.
For the CY 2025 voluntary reporting period, we estimate a total
collection and reporting burden increase for patients of 86,028 hours
(10,427,619 patients x 50 percent response rate x 50
[[Page 59527]]
percent of ASCs x 0.033 hours per patient) at a cost of $2,106,826
(86,028 hours x $24.49/hr). Beginning with the CY 2026 reporting
period, we estimate a total collection and reporting burden increase
for patients of 344,111 hours (10,427,619 patients x 0.033 hours per
patient) at a cost of $8,427,278 (344,111 hours x $24.49/hr).
For the CY 2025 voluntary reporting period, we estimate a total
collection and reporting burden increase for program-eligible ASCs of
373 hours (4,475 ASCs x 50 percent of ASCs x 0.167 hours) at a cost of
$20,657 (373 hours x $55.38/hr). Beginning with the CY 2026 reporting
period, we estimate a total collection and reporting burden increase
for program-eligible ASCs of 746 hours (4,475 ASCs x 0.167 hours) at a
cost of $41,313 (746 hours x $55.38/hr).
d. Information Collection Burden for the Proposed Adoption of the
Screen Positive Rate for Social Drivers of Health (SDOH) Measure
Beginning With Voluntary Reporting for the CY 2025 Reporting Period
Followed by Mandatory Reporting Beginning With the CY 2026 Reporting
Period/CY 2028 Payment Determination
In section XIV.B.3 of this proposed rule, we propose to adopt the
Screen Positive Rate for SDOH measure beginning with voluntary
reporting for the CY 2025 reporting period followed by mandatory
reporting beginning with the CY 2026 reporting period/CY 2028 payment
determination. We refer readers to the currently approved burden for
the Screen Positive Rate for SDOH measure in the Hospital IQR Program
under OMB control number 0938-1022 for the same measure and the same
frequency of data reporting, as discussed in the FY 2023 IPPS/LTCH PPS
final rule (87 FR 49386). For this measure, we propose that ASCs would
be required to report annually the number of patients who screened
positive for one or more of the five domains (reported as five separate
rates to reflect each of the five HRSN domains) divided by the total
number of patients screened.
We previously included the burden associated with screening
patients in our discussion of the Screening for SDOH measure. Thus, for
the Screen Positive Rate for SDOH measure, we estimate only the
additional burden for an ASC reporting via the HQR system since
patients would not need to provide, and ASCs would not need to collect,
any additional information for this measure. We continue to estimate
that, for voluntary reporting for the CY 2025 reporting period, 50
percent of ASCs would survey 50 percent of patients, and beginning with
the first mandatory reporting period, 100 percent of ASCs would submit
data.
Measure data aggregated to the hospital level as a numerator and a
denominator would be submitted via the HQR system annually. Similar to
the currently approved burden estimate for web-based measures reported
via the HQR system for the ASCQR Program under OMB control number 0938-
1270 (expiration date August 31, 2025), we estimate a burden of 10
minutes per ASC to report the measure data. Therefore, we estimate that
each ASC would spend 10 minutes (0.167 hours) annually to report the
Screen Positive Rate for SDOH measure data to CMS.
For the CY 2025 voluntary reporting period, we estimate a total
collection and reporting burden increase of 373 hours (0.167 hours x
4,475 ASCs x 50 percent of ASCs) at a cost of $20,657 (373 hours x
$55.38). Beginning with the CY 2026 reporting period, we estimate a
total annual collection and reporting burden increase for ASCs of 746
hours (0.167 hours x 4,475 ASCs) at a cost of $41,313 (746 hours x
$55.38/hr) across program-eligible ASCs.
e. Summary of Proposed Information Collection Burden Estimates for the
ASCQR Program
In summary, we estimate that the proposals in this proposed rule
would result in an increase of 346,349 hours at a cost of $8,551,217
for 4,475 program-eligible ASCs from the CY 2025 reporting period/CY
2027 payment determination through the CY 2026 reporting period/CY 2028
payment determination. We will submit the revised information
collection estimates to OMB for approval under OMB control number 0938-
1270 (expiration date August 31, 2025). (See Tables 109 and 110.)
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BILLING CODE 4120-01-C
D. ICRs Related to Medicaid Clinic Services Four Walls Exceptions
As discussed in section XVII of this proposed rule, we propose
three additional exceptions to the four walls requirement under the
Medicaid clinic services benefit at 42 CFR 440.90. Specifically, we
propose to add a mandatory four walls exception for IHS/Tribal clinics
at Sec. 440.90(c) and optional exceptions for behavioral health
clinics and clinics located in rural areas at Sec. 440.90(d) and (e).
To attest to compliance with proposed Sec. 440.90(c) and to effectuate
the options at proposed Sec. 440.90(d) and (e), States that cover the
clinic services benefit would have to submit one or more Medicaid State
plan amendments (SPAs).
The PRA burden associated with submitting the SPAs implementing the
proposed Medicaid clinic services four walls exceptions will be
addressed as part of an associated SPA preprint being developed by CMS
and submitted to OMB for approval under OMB control number 0938-1188
(CMS-10398).
E. ICRs for Changes to the Review Timeframes for Hospital Outpatient
Department (OPD) Prior Authorization Process
In the CY 2020 OPPS/ASC final rule with comment period, we
established a prior authorization process for certain hospital OPD
services using our authority under section 1833(t)(2)(F) of the Act,
which allows the Secretary to develop a method for controlling
unnecessary increases in the volume of covered OPD services (84 FR
61142, 61446 through 61456).\558\ As part of the CY 2021 OPPS/ASC final
rule with comment period, we added additional service categories to the
prior authorization process (85 FR 85866, 86236 through 86248). Through
the CY 2023 OPPS/ASC final rule with comment period, we added an eighth
service category to the prior authorization process for certain
hospital OPD services (87 FR 71748, 72224 through 72233). The
regulations governing the prior authorization process are located in
subpart I of 42 CFR part 419, specifically at Sec. Sec. 419.80 through
419.89.
---------------------------------------------------------------------------
\558\ See also Correction Notice issued January 3, 2020 (85 FR
224).
---------------------------------------------------------------------------
In alignment with the CMS Interoperability and Prior Authorization
final rule (87 FR 76238), we propose to change the current review
timeframes for provisionally affirmed or non-affirmed requests from 10
business days to 7 calendar days for standard reviews after receiving
the prior authorization request for OPD services under Medicare FFS.
The ICR associated with prior authorization requests for these covered
outpatient department services is the required documentation submitted
by providers. The prior authorization request must include all relevant
documentation necessary to
[[Page 59530]]
show that the service meets applicable Medicare coverage, coding, and
payment rules, and the request must be submitted before the service is
provided to the beneficiary and before the claim is submitted for
processing.
The burden associated with the changes in review timeframes for the
OPD prior authorization process will be the time and effort necessary
for the submitter to locate and obtain the relevant supporting
documentation to show that the service meets applicable coverage,
coding, and payment rules. The submitter will then forward the
information to CMS or its contractor (MAC) for review and determination
of a provisional affirmation. We expect that this information will
generally be maintained by providers within the normal course of
business and that this information will be readily available. We
estimate that the average time for office clerical activities
associated with this task will be 30 minutes, equivalent to normal
prepayment or postpayment medical review. We anticipate that most prior
authorization requests will be sent by means other than mail, such as
electronically or by fax. However, we estimate a cost of $5 per request
for mailing medical records. Based on data from 2019-2022, we estimate
that there will be 127,397 initial requests mailed per year. In
addition, we estimate there will be 41,806 resubmissions of a request
mailed following a non-affirmed decision. Therefore, the total mailing
cost is estimated to be $846,015 (169,203 mailed requests x $5). We
also estimate that an additional 3 hours per provider will be required
for attending educational meetings and reviewing training documents.
The average labor costs (including 100 percent fringe benefits)
used to estimate the costs were calculated using data from the Bureau
of Labor Statistics (BLS) and based on the 2022 median rate for
Miscellaneous Healthcare Support Occupations.\559\ Based on the BLS
information, we estimate an average clerical hourly rate of $18.53 with
a loaded rate of $37.06. The prior authorization program does not
create any new documentation or administrative requirements. Instead,
it will just require the same documents needed to support claim
payments to be submitted earlier in the claim process. We use the
clerical rate since we do not believe that clinical staff will need to
spend more time completing the documentation than they will need in the
absence of the prior authorization policy. The hourly rate reflects the
time needed for the additional clerical work of submitting the prior
authorization request itself. We estimate that the total annual number
of submissions will be 564,010 (394,808 submissions through fax or
electronic means + 169,203 mailed submissions). Therefore, we estimate
that the annual burden hours allotted across all providers will be
316,412 hours (.5 hours x 564,010 submissions plus 3 hours x 11,469
providers for education). The annual burden cost is $12,572,244
(316,412 hours x $37.06 plus $846,015 for mailing costs). CMS estimates
the annual burden to be 316,412 hours and $12,572,244 million. The ICR
approved under OMB control number 0938-1368 will be revised and
submitted to OMB for approval of this extension.
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\559\ https://www.bls.gov/oes/current/oes_nat.htm.
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Table 111 below is a chart reflecting the total burden and
associated costs for the provisions included in this proposed rule with
the comment period. The previously approved Paperwork Reduction Act
package (CMS-10711) is currently undergoing the renewal process. CMS
did not make any changes to the information collection, such as the
number of respondents, responses, or other information collection
requirements. However, there is a one-hour change in the burden hours,
from 316,413 to 316,412, likely due to rounding up in the previous
year's calculations. The burden costs have increased from $11,561,950
to $12,572,244 due to an increase in the average clerical hourly rate
from $17.13 in 2019 to $18.53 in 2022.
[GRAPHIC] [TIFF OMITTED] TP22JY24.146
F. ICRs for the Hospital Inpatient Quality Reporting (IQR) Program
In section XXII.B.2 of this proposed rule, we propose that for the
FY 2026 payment determination, the submission of CCDEs and linking
variables associated with the Hybrid Hospital-Wide Readmission (HWR)
measure and the Hybrid Hospital-Wide All-Cause Risk Standardized
Mortality (HWM) measure would remain voluntary. We are not proposing
any other modifications to either measure.
In the FY 2020 IPPS/LTCH PPS final rule and the FY 2022 IPPS/LTCH
PPS final rule, we estimated the burden for voluntary reporting for the
Hybrid HWR (84 FR 42603 and 42604) and Hybrid HWM measures (86 FR
45508), respectively. In both final rules, we stated that we encourage
all hospitals to submit data for the Hybrid HWR and Hybrid HWM measures
during the voluntary reporting period. Our previously finalized burden
estimates assume that all hospitals will participate during the
voluntary reporting period in order to not underestimate the burden on
participating hospitals. Therefore, we do not anticipate any changes to
the burden currently approved for the Hospital IQR Program under OMB
control number 0938-1022 (expiration date January 31, 2026).
G. ICRs for Continuous Eligibility (42 CFR 435.926 and 457.342)
In section XX of this proposed rule, we propose to align the
Medicaid and CHIP regulations with the continuous eligibility
requirements under section 5112 of Title V, subtitle B (hereafter,
``section 5112'') of the CAA, 2023. To comply with section 5112 of the
CAA, 2023, States must submit a CHIP SPA and a Medicaid SPA to provide
continuous eligibility for children if they do not already do so in
their CHIP or Medicaid State plans, or if their
[[Page 59531]]
current continuous eligibility SPAs do not comply with the CAA, 2023
requirements. CMS has already received approval for the burden
estimates for the CHIP continuous eligibility SPA under OMB control
number 0938-1148 (CMS-10398) and for the Medicaid continuous
eligibility SPA under OMB control number 0938-1188 (CMS-10434). We do
not anticipate any changes to the approved burden estimates.
H. ICRs Regarding Organization, Staffing and Delivery of Services for
Hospitals (Sec. 482.59 a and b) and CAHs (Sec. 485.649 a Through b)
We calculated the estimated hourly rates based upon the national
mean salary for that particular position increased by 100 percent to
account for overhead costs and fringe benefits (using the May 2023
National Occupational Employment and Wage Estimates, Bureau of Labor
Statistics (BLS) at https://www.bls.gov/oes/current/oes_nat.htm. The
wage and salary data from the BLS do not include health, retirement,
and other fringe benefits, or the rent, utilities, information
technology, administrative, and other types of overhead costs
supporting each employee. The HHS-wide guidance on preparation of
regulatory and paperwork burden estimates states that doubling salary
costs is a good approximation for including these overhead and fringe
benefit costs.
Table 112 presents the BLS occupation code and title, the facility
provider position, the estimated average or mean hourly wage, and the
adjusted hourly wage (with a 100 percent markup of the salary to
include fringe benefits and overhead costs).
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[[Page 59532]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.148
BILLING CODE 4120-01-C
We propose new requirements for hospitals and CAHs that provide
obstetrical (OB) services. We propose that if a hospital or Critical
Access Hospital (CAH) provides OB services, such services must be well-
organized and in accordance with nationally recognized acceptable
standards of practices for physical and behavioral health of pregnant,
birthing, and postpartum patients. We also propose that any outpatient
OB services would be consistent in quality with inpatient OB services
in accordance with the complexity of services offered. In addition, we
propose that the organization of the OB service be appropriate to the
scope of services offered by the facility and integrated with other
departments of the facility. We further propose that the OB patient
care units be supervised by an individual with the necessary education
and training, and specify that person should be an experienced
registered nurse, certified nurse midwife, nurse practitioner,
physician assistant, or a doctor of medicine or osteopathy. In
addition, hospitals and CAHs must delineate and document obstetrical
privileges for all practitioners providing obstetrical care in
accordance with the competencies of each practitioner.
For delivery of services, we propose that OB services must be
consistent with the needs and resources of the facility. Policies
governing OB care must be designed to assure the achievement and
maintenance of high standards of medical practice and patient care and
safety. We additionally propose that labor & delivery room suites have
certain basic resuscitation equipment readily available, including a
call-in-system, cardiac monitor, and fetal doppler or monitor.
Furthermore, the service must ensure that it has adequate provisions
and protocols, consistent with nationally recognized and evidence-based
guidelines for OB emergencies, complications, immediate post-delivery
care, and other patient health and safety events as identified as part
of the facility's QAPI program.
To identify the number of hospitals and CAHs that would be subject
to the proposed provisions, we utilized the Center for Medicare and
Medicaid Services' Provider of Services File--Hospital and Non-Hospital
Facilities. We excluded hospitals and CAHs that do not provide
obstetric services, as
[[Page 59533]]
well as Rural Emergency Hospitals that are not subject to these CoPs.
Using this methodology, we obtained a total of 513 CAHs and 4,415
hospitals that provide obstetric services.\560\
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\560\ Provider of Services File--Hospital & Non-Hospital
Facilities. Available at https://data.cms.gov/provider-characteristics/hospitals-and-other-facilities/provider-of-services-file-hospital-non-hospital-facilities/data. Accessed April 10, 2024.
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We believe that most hospitals and CAHs that provide OB services
already have internal standards and protocols to ensure that OB
services are well organized and to provide high-quality care that is
appropriate to the level of services provided and integrated with other
departments of the facility. We also expect that they have internal
standards and protocols to ensure compliance with nationally accepted
guidelines for OB emergencies, complications, immediate post-delivery
care, and other patient health and safety events. Many hospital
accrediting organizations also have specific requirements governing
care for pregnant and postpartum patients that would meet the proposed
requirements. For example, The Joint Commission (TJC) has wide-ranging
requirements for hospitals that provide perinatal care, covering
everything from providing information to families in a way that is easy
to understand to providing initial care for complications such as
hemorrhage, hypertensive disorders, fetal heart rate
abnormalities.\561\ We expect, however, that some hospitals and CAHs
may need to spend time ensuring that these standards and their sources
are well-documented.
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\561\ The Joint Commission Edition. Program: Perinatal Care,
``Chapter: Provision of Care, Treatment, and Services.'' Available
at https://e-dition.jcrinc.com/MainContent.aspx. Accessed April 10,
2024.
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As outlined in 84 FR 51732, writing new policies related to patient
care is estimated to take eight hours for each member of the staff
involved in the care policy. We have estimated wages as indicated in
Table 112 and included the involvement of a physician at $2,029.60 (8 x
$253.70), a lawyer at $1357.44 (8 x $169.68), a registered nurse at
$726.72 (8 x $90.84), a medical secretary at $333.6 (8 x $41.70), and a
medical and health services manager at $1,034.24 (8 x $129.28) for a
total estimated cost of $5,481.60 per policy. This estimate leads to an
average hourly cost of $137.04 ($5481.60 / 40) per staff member
involved in ensuring that these standards and their sources are well-
documented. We assume that documentation would consist of one
comprehensive policy per facility.
We do not expect that all facilities would need to spend 40 hours
to meet these requirements. We expect that there will be no burden for
TJC-accredited facilities since the organization has wide-ranging
requirements for hospitals and CAHs, with the requirements increasing
as the complexity of OB care offered increases. To account for this
reduction in the overall burden, we used CMS' CASPER (Certification and
Survey Provider Enhanced Reports) \562\ to identify TJC-accredited
hospitals and CAHs. According to CASPER, approximately 72.2 percent of
Medicare and Medicaid approved hospitals are accredited by The Joint
Commission (TJC), as well as 25 percent of Critical Access Hospitals
(CAHs).
---------------------------------------------------------------------------
\562\ Quality, Certification & Oversight Reports (QCOR). CASPER
(4/16/2024). qcor.cms.gov.
---------------------------------------------------------------------------
To calculate the hourly burden for this proposed requirement, in
Table 113 we multiply the number of facilities by the number of
responses per facility, applying the discount for hospitals and CAHs
that are accredited by TJC, by the hourly burden estimate. To determine
the associated cost, we multiply the revised hourly burden estimate by
the average hourly labor cost. Using this formula, in Table 113 we
estimate a total burden of 79,853 hours at a cost of $10,943,006.
Table 114 provides the annual burden estimate over a 10-year
period. We do not estimate a burden for updating these policies and
procedures after their initial development in year 1 since regularly
reviewing and updating policies is a standard business practice for
healthcare facilities that must comply with applicable federal, state,
and local laws, regulations and ordinances that periodically change. As
such, the total estimate over 10 years is 79,853 hours at a cost of
$10,943,006.
For the requirement that facilities delineate and document
obstetrical privileges for all practitioners providing obstetrical
care, we expect that most hospitals and CAHs already have knowledge
regarding their practitioners' competencies. We expect, however, that
they would need to spend time to build a roster of practitioners
specifying each practitioner's privileges and to update this roster
annually. We estimate that building and ensuring that this roster is up
to date would take 8 hours of work annually by a medical secretary at
$333.6 (8 x $41.70). As shown in Tables 115 and 116, we estimate that
this provision would cost $2,180,736 annually and $21,807,360 over 10
years.
For the requirements that the OB patient care units be supervised
by an individual with the necessary education and training, as well as
ensuring that labor and delivery room suites have certain basic
resuscitation equipment readily available, and that the facility has
adequate provisions for obstetrical emergencies, we provide the
estimated cost in the regulatory impact analysis section below.
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[[Page 59534]]
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I. ICRs Regarding OB Staff Training for Hospitals (Sec. 482.59(c) and
CAHs (Sec. 485.649(c))
We propose that hospitals and CAHs that provide OB services must
develop policies and procedures to ensure that staff are trained on
select topics related to improving the delivery of maternal care. The
training must reflect the scope and complexity of services offered and
must include, but is not limited to, facility-identified evidence-based
best practices and protocols to improve the delivery of maternal care
within the facility. They would also need to be trained in any
additional topics as identified by the facility's QAPI program. We also
propose that the governing body must identify and document which staff
must complete annual training on these topics. The facility must
further document that training was successfully completed and must be
able to demonstrate staff knowledge on these topics. Lastly, we propose
that the efficacy of the training must be reviewed and assessed on an
ongoing basis, based on the results of data, measures, and quality
indicators from its QAPI program.
As outlined in 84 FR 51732, writing new policies related to patient
care is estimated to take eight hours for each member of the staff
involved in the care policy. We have estimated wages as indicated in
Table 112 and included the involvement of a physician at $2,029.60 (8 x
$253.70), a lawyer at $1,357.44 (8 x $169.68), a registered nurse at
$726.72 (8 x $90.84), a medical secretary at $333.6 (8 x $41.70), and a
medical and health services manager at $1,034.24 (8 x $129.28) for a
total estimated cost of $5,481.60 per policy. This estimate leads to an
average hourly cost of $137.04 ($5,481.60 / 40) per staff member
involved in ensuring that these standards and their sources are well-
documented. We assume that documentation would consist of one
comprehensive policy per facility. We do not estimate a burden for
reviewing and assessing the efficacy of these efforts since we address
this below in the section, ``Revisions to QAPI (Sec. 482.21) Standards
for OB Services''. We also do not estimate a burden for documentation
that training was completed as updating employee records is also a
customary business practice. As indicated in Table 117 and Table 118,
we estimate that the development of the proposed OB staff training
policies and procedures will
[[Page 59535]]
take 252,400 hours to complete and cost $34,588,896.
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[GRAPHIC] [TIFF OMITTED] TP22JY24.154
J. ICRs Regarding Revisions to QAPI (Sec. 482.21) Standards for OB
Services
We propose that hospitals and CAHs with OB services must use their
QAPI program to address health disparities among OB patients on an
ongoing basis. They must also measure and monitor for health
disparities among OB patients and develop and implement actions to
address these disparities and monitor subsequent results. Moreover, on
an annual basis, they must conduct at least one performance improvement
project focused on reducing maternal health disparities. In addition to
the proposed QAPI requirements, we propose that OB leadership be
engaged in the facility's QAPI requirement. We further propose that if
a Maternal Mortality Review Committee (MMRC) is available at the state
or local jurisdiction in which the facility is located, the facility
must and have a process for incorporating MMRC data and recommendations
into the facility's QAPI program.
The costs associated with data collection would include the cost
for facilities to modify their information technology infrastructure to
ensure that they capture all features relevant for the diverse
subpopulations that the facility identifies. Given that many facilities
already collect some of these patient characteristics, such as race and
ethnicity, we estimate that planning, programming, and performing
quality checks would take 8 hours in the first year and 4 hours in all
subsequent years. We anticipate a mixture of staff from computer and
mathematical occupations would oversee these changes at an average
hourly cost of $108.78. This leads to an average cost of $870.24 (8 x
$108.78) per provider in the first year and $435.12 (4 x $108.78) per
provider in subsequent years. As indicated in Table 119 we estimate
that in the first year, updating infrastructure would cost a total of
$5,491,214. In Table 120, we provide the estimated total 10-year cost
which we estimate at $30,201,679.
Based on our experience working with healthcare data, we anticipate
that stratification of data and quality indicators, together with
monitoring the results after actions are taken to address these
disparities would take 8 hours annually. We anticipate that data
scientists would oversee these efforts at an average hourly cost of
$114.46. This leads to an average cost of $915.68 (8 x $114.46) per
provider annually. Table 121 provides the estimated cost in year 1 and
Table 122 provides the estimated cost over 10 years. We estimate an
annual cost of $5,777,941 with a total cost of $57,779,408 over 10
years.
The final collection of information costs related to this
requirement come from the proposed provision of information to MMRCs.
We estimate that for each maternal death, collection of information to
be submitted to the MMRC would take 4 hours of work by a physician at
$1,014.80 (4 x $253.70) and 4 hours of work by a medical records
specialist $206.48 (4 x $51.62) for a total estimated cost of $1,221.28
per maternal death. This estimate leads to an average hourly cost of
$152.66 (8 / $1,221.28) per staff member involved in providing
information to the MMRC.
[[Page 59536]]
The number of maternal deaths has varied widely in recent years. In
2021, there was a spike in maternal deaths with the number of deaths
increasing to 1,205, compared to 861 deaths in 2020 and 754 deaths in
2019. Preliminary data from 2022 suggests that the number of maternal
deaths is declining and beginning to return to pre-2021 levels with 818
recorded deaths. Given uncertainty about how many deaths will occur in
future years, we assume that an average of 850 deaths annually. A
review of public sources suggests that most states have MMRCs and, as
such, most hospitals and CAHs would be subject to this provision. While
many hospitals and CAHs are already providing information to MMRCs, we
are not able to estimate the exact number of deaths that are already
being reviewed. As such, we continue to assume that 850 deaths would be
subject to this proposed provision annually. We also assume that
facilities would provide the information to only one MMRC even if they
are located in a jurisdiction that has both a state and local MMRC.
Since we are unable to divide deaths that occur in hospitals and CAHs,
we provide a single cost estimate for both facility types. Table 119
provides the estimated annual cost for the proposed MMRC reporting
provisions and Table 120 provides the estimated cost over 10 years.
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[[Page 59537]]
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K. ICRS Regarding Emergency Services Readiness in Emergency Services
(Sec. 482.55) for Hospitals
We propose a new standard for emergency services readiness and to
improve staff readiness for providing emergency services to all
hospital patients, including pregnant and postpartum patients. The
first proposed standard would require hospitals with emergency services
to have adequate provisions and protocols, consistent with nationally
accepted guidelines, for the care of patients with emergency conditions
(including but not limited to patients with OB emergencies,
complications, immediate post-delivery care). Applicable staff would be
required to be trained on these protocols and provisions. We also
propose that equipment, supplies, and medication used in treating
emergency cases are kept at the hospital and are readily available for
treating emergency cases.
As outlined in 84 FR 51732, writing new policies related to patient
care is estimated to take eight hours for each member of the staff
involved in the care policy. Since the proposed standard for emergency
services involves adding a new standard to an existing policy, we
estimate that it would take half the amount of time as writing a new
policy, or 4 hours for each staff member involved. We have estimated
wages as indicated in Table 112 and included the involvement of a
physician at $1,014.80 (4 x $253.70), a lawyer at $678.72 (4 x
$169.68), a registered nurse at $363.36 (4 x $90.84), a medical
secretary at
[[Page 59538]]
$166.80 (4 x $41.70), and a health services manager at $517.12 (4 x
$129.28) for a total estimated cost of $2,740.80 per policy. This
estimate leads to an average hourly cost of $137.04 ($2,740.80 / 20)
per staff member involved in developing this standard. We do not
estimate a burden for updating standards since reviewing and updating
policies and procedures is a customary business practice. As indicated
in Table 125 and Table 126, we estimate that creating this standard
would cost hospitals $15,888,418 with a total hourly burden of 115,940
hours.
[GRAPHIC] [TIFF OMITTED] TP22JY24.161
[GRAPHIC] [TIFF OMITTED] TP22JY24.162
L. Transfer Protocols in Discharge Planning (Sec. 482.43) for
Hospitals
We propose transfer protocol requirements for hospitals
transferring patients under their care to the appropriate level of
care, including to another hospital, as necessary to meet the needs of
the patient and stabilize any emergency conditions (including but not
limited to patients with OB emergencies, complications, immediate post-
delivery care). 87 FR 40350 estimated that for rural emergency
hospitals (REHs), developing a transfer agreement with at least one
hospital would require 2 hours of work from an administrator and a
clerical person. We believe that hospitals would face a similar burden
for this requirement. Using estimated wages as indicated in Table 112,
we estimate that this requirement would include the involvement of a
medical secretary at $83.40 (2 x 41.70) and a medical and health
services manager at $258.56 (2 x 129.28) for a total estimate cost of
$341.96 per hospital. This estimate leads to an average hourly cost of
$85.49 ($341.96 / 4) per staff member involved in developing this
standard. We do not estimate a burden for updating transfer protocols
since reviewing and updating policies and procedures is a customary
business practice. As indicated in Table 126 and Table 127, we estimate
that creating these protocols would cost hospitals $1,982,342 with a
total hourly burden of 23,188 hours.
[GRAPHIC] [TIFF OMITTED] TP22JY24.163
[[Page 59539]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.164
M. Total Costs for All ICRs Related to Maternal Health
In Tables 129 and 130, we provide the total hourly burden estimate
and cost for all proposed collection of information requirements
related to maternal health as outlined in Tables 114, 116, 118, 120,
122, 124, 126, and 128. Overall, we estimate that the proposed
requirements would have a total burden of 1,826,621 hours over 10 years
at a cost of $183,571,989.
We would note that our estimates rely on two key assumptions.
First, our estimates are not able to take into account maternal deaths
that hospitals and CAHs are already reporting to MMRCs. We seek
comments on ways to identify the number of deaths already being
reported to avoid overestimating the cost of this requirement. Second,
we assume that facilities located in a jurisdiction with more than one
MMRC would only report deaths to a single MMRC. Some facilities could,
however, report this information to more than one MMRCs. We seek
comments on both these assumptions.
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[[Page 59540]]
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BILLING CODE 4120[dash]01-C
XXV. Response to Comments
Because of the large number of public comments we normally receive
on Federal Register documents, we are not able to acknowledge or
respond to them individually. We will consider all comments we receive
by the date and time specified in the DATES section of this preamble;
and, when we proceed with a subsequent document, we will respond to the
comments in the preamble to that document.
XXVI. Economic Analyses
A. Statement of Need
This proposed rule is necessary to make updates to the Medicare
hospital OPPS rates. It is also necessary to make changes to the
payment policies and rates for outpatient services furnished by
hospitals and CMHCs in CY 2025. We are required under section
1833(t)(3)(C)(ii) of the Act to update annually the OPPS conversion
factor used to determine the payment rates for APCs. We also are
required under section 1833(t)(9)(A) of the Act to review, not less
often than annually, and revise the groups, the relative payment
weights, and the wage and other adjustments described in section
1833(t)(2) of the Act. We must review the clinical integrity of payment
groups and relative payment weights at least annually. We are proposing
to revise the APC relative payment weights using claims data for
services furnished on and after January 1, 2023, through and including
December 31, 2023, and processed through June 30, 2024, and updated
HCRIS cost report information.
This proposed rule is also necessary to make updates to the ASC
payment rates for CY 2025, enabling CMS to make changes to payment
policies and payment rates for covered surgical procedures and covered
ancillary services that are performed in ASCs in CY 2025. Because ASC
payment rates are based on the OPPS relative payment weights for most
of the procedures performed in ASCs, the ASC payment rates are updated
annually to reflect annual changes to the OPPS relative payment
weights. In addition, we are required under section 1833(i)(1) of the
Act to review and update the list of surgical procedures that can be
performed in an ASC, not less frequently than every 2 years.
In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59075
through 59079), we finalized a policy to
[[Page 59541]]
update the ASC payment system rates using the hospital market basket
update instead of the CPI-U for CY 2019 through 2023. In the CY 2024
OPPS/ASC final rule, we finalized a policy to extend the 5-year interim
period by an additional 2 years, through CY 2024 and CY 2025, to enable
us to more accurately analyze whether the application of the hospital
market basket update to the ASC payment system resulted in a migration
of services from the hospital setting to the ASC setting (88 FR 81960).
This proposed rule is also necessary to create three additional
exceptions to the four walls requirement under the Medicaid clinic
services benefit at 42 CFR 440.90. Specifically, we propose to add a
mandatory four walls exception for IHS/Tribal clinics at 42 CFR
440.90(c) and optional exceptions for behavioral health clinics and
clinics located in rural areas at 42 CFR 440.90(d) and (e). As
discussed in section XVII.A of this proposed rule, our current
regulation at 42 CFR 440.90(b) allows for an exception to the four
walls requirement only for certain clinic services furnished to
individuals who are unhoused.
This proposed rule is also necessary to improve the quality of
obstetrical services in hospitals and Critical Access Hospitals (CAHs).
The United States has the highest maternal mortality rate among OECD
countries.\563\ This mortality rate has increased sharply in recent
years rising from 17.4 deaths per 100 thousand live births in 2018, to
32.9 deaths per 100 thousand live births in 2021,\564\ with most of the
increased deaths in 2020 and 2021 being Covid-19 related deaths.\565\
The causes of pregnancy-related deaths has shifted in recent years with
a decline in traditional causes, such as hemorrhage, hypertensive
disorders of pregnancy, and thromboembolism, and an increase in
cardiovascular problems and other medical conditions.566 567
Nearly a third of all pregnancy-related deaths occur between the day of
delivery and the 6 days that follow, with another 20 percent of deaths
occurring 7 to 42 days postpartum.\568\
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\563\ Tikkanen, R., et al., Maternal Mortality and Maternity
Care in the United States Compared to 10 Other Developed Countries.
2020, Commonwealth Fund.
\564\ Hoyert, D.L., Maternal Mortality Rates in the United
States, 2021. 2023, NCHS Health E-Stats.
\565\ United States Government Accountability Office, MATERNAL
HEALTH: Outcomes Worsened and Disparities Persisted During the
Pandemic. 2022.
\566\ Creanga, A.A., et al., Pregnancy-Related Mortality in the
United States, 2011-2013. Obstetrics & Gynecology, 2017. 130(2):
366-373.
\567\ Wang, S., et al., Maternal Mortality in the United States:
Trends and Opportunities for Prevention. Annual Review of Medicine,
2023. 74(1): 199-216.
\568\ Peterson, E.E., et al., Vital Signs: Pregnancy-Related
Deaths, United States, 2011-2015, and Strategies for Prevention, 13
States, 2013-2017. Morbidity and Mortality Weekly Report, 2019.
68(18): 423-429.
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Within the United States, there are widespread differences in
maternal mortality rates based on age, race, and geographical location.
According to the National Center for Health Statistics, the maternal
mortality rates for women in the United States over 40 years of age in
2021 was nearly 8 times greater than for women under 25 years of age,
with mortality rates for non-Hispanic black women over 40 years of age
more than 21 times higher than the rate for Hispanic women under 25
years of age.\569\ Similarly, pregnancy-related mortality rates are
higher in rural areas vis-[agrave]-vis urban areas.\570\ Beyond deaths,
maternal morbidity, defined as ``any health condition attributed to
and/or aggravated by pregnancy and childbirth that has a negative
impact on the woman's wellbeing'',\571\ remains a common occurrence,
with rates also varying by age and race.572 573
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\569\ Hoyert, D.L., Maternal Mortality Rates in the United
States, 2021. 2023, NCHS Health E-Stats.
\570\ Merkt, P.T., et al., Urban-rural differences in pregnancy-
related deaths, United States, 2011-2016. American Journal of
Obstetrics and Gynecology, 2021. 225(2): 183.e1-183.e16.
\571\ Firoz, T., et al., Measuring maternal health: focus on
maternal morbidity. Bull World Health Organ, 2013. 91(10): 794-796.
\572\ Liese, K.L., et al., Racial and Ethnic Disparities in
Severe Maternal Morbidity in the United States. Journal of Racial
and Ethnic Health Disparities, 2019. 6(4): p. 790-798.
\573\ Leonard, S.A., et al., Racial and ethnic disparities in
severe maternal morbidity prevalence and trends. Annals of
Epidemiology, 2019. 33: 30-36.
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Pregnancy-related mortality and morbidity have large health and
economic costs. One study estimates that between 2018 and 2020,
pregnancy-related mortalities lead to the loss of nearly 114,000 years
of potential life lost (YPLL) and cost more than $27.4 billion based on
the value of statistical life (VSL).\574\ Another study finds that
severe maternal morbidity, as measured by 21 ICD-10 codes that the
Centers for Disease Control and Prevention (CDC) identified, is
associated with a 75 percent increase in costs for Medicaid patients
and a more than doubling in costs for commercially insured patients
during the prenatal to 30 days post-partum period.\575\ Focusing
specifically on nine maternal morbidities among the 2019 US birth
cohort from birth to 5-years postpartum, researchers estimated they had
a cost of $32.3 billion for birthing parents and their children, with
$18.7 billion due to medical costs and $13.6 billion coming from non-
medical costs.\576\
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\574\ White Robert, S., et al., Economic burden of maternal
mortality in the USA, 2018-2020. Journal of Comparative
Effectiveness Research, 2022. 11(13): 927-933.
\575\ Black, C.M., et al., Costs of Severe Maternal Morbidity in
U.S. Commercially Insured and Medicaid Populations: An Updated
Analysis. Women's Health Reports, 2021. 2(1): 443-451.
\576\ O'Neil, S.S., et al., Societal cost of nine selected
maternal morbidities in the United States. PLOS ONE, 2022. 17(10):
e0275656.
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Although studies vary in their methodology, time period pre-post
birth analyzed, medical conditions analyzed, and cost estimates, they
overall suggest that maternal morbidity and mortality impose a high
health and safety, as well as economic costs on birth parents,
children, and society.\577\ Given these costs, we are implementing
conditions of participation (COPs) that are designed to help reduce
maternal mortality and morbidity.
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\577\ Moran, P.S., et al., Economic burden of maternal
morbidity--A systematic review of cost-of-illness studies. PLOS ONE,
2020. 15(1): e0227377.
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We propose requirements that hospital and CAH OB patient care units
be supervised by an individual with the necessary education and
training and have certain basic resuscitation equipment readily
available. We also propose that staff involved with OB services be
trained on key topics related to improving the delivery of maternal
care. Hospitals and CAHs would also be required to utilize data from
their QAPI program to implement one quality improvement project to
address disparities in maternal care and to engage with MMRCs and
integrate information from MMRCs into their QAPI program. We also
propose that hospitals and CAHs have basic resuscitation equipment
available and train their staff on emergency procedures for all
patients. Finally, we propose that all hospital staff receive annual
training on proper transfer protocols.
B. Overall Impact of Provisions of This Proposed Rule
We have examined the impacts of this rule, as required by Executive
Order 12866, as amended, on Regulatory Planning and Review (September
30, 1993), Executive Order 13563 on Improving Regulation and Regulatory
Review (January 18, 2011), Executive Order 14094 entitled ``Modernizing
Regulatory Review'' (April 6, 2023), the Regulatory Flexibility Act
(RFA) (September 19, 1980, Pub. L. 96-354), section 1102(b) of the
Social Security Act, section 202 of the Unfunded Mandates Reform Act of
1995 (March 22, 1995, Pub. L. 104-4), and Executive
[[Page 59542]]
Order 13132 on Federalism (August 4, 1999).
Executive Orders 12866, as amended, and 13563 direct agencies to
assess all costs and benefits of available regulatory alternatives and,
if regulation is necessary, to select regulatory approaches that
maximize net benefits (including potential economic, environmental,
public health and safety effects, distributive impacts, and equity).
Executive Order 14094 titled ``Modernizing Regulatory Review''
(hereinafter, the Modernizing E.O.) amends section 3(f) of Executive
Order 12866 (Regulatory Planning and Review). The amended section 3(f)
of Executive Order 12866 defines a ``significant regulatory action'' as
an action that is likely to result in a rule: (1) having an annual
effect on the economy of $200 million or more in any 1 year (adjusted
every 3 years by the Administrator of OIRA for changes in gross
domestic product), or adversely affect in a material way the economy, a
sector of the economy, productivity, competition, jobs, the
environment, public health or safety, or State, local, territorial, or
tribal governments or communities; (2) creating a serious inconsistency
or otherwise interfering with an action taken or planned by another
agency; (3) materially altering the budgetary impacts of entitlement
grants, user fees, or loan programs or the rights and obligations of
recipients thereof; or (4) raise legal or policy issues for which
centralized review would meaningfully further the President's
priorities or the principles set forth in this Executive order, as
specifically authorized in a timely manner by the Administrator of OIRA
in each case.
A regulatory impact analysis (RIA) must be prepared for major rules
with significant regulatory action/s and/or with significant effects as
per section 3(f)(1) ($200 million or more in any 1 year). Based on our
estimates, OMB's Office of Information and Regulatory Affairs has
determined this rulemaking is significant per section 3(f)(1)) as
measured by an effect on the economy of $200 million or more in any 1
year. Accordingly, we have prepared a Regulatory Impact Analysis that
to the best of our ability presents the costs and benefits of the
rulemaking. Based on our estimates, OMB's Office of Information and
Regulatory Affairs has determined that this rulemaking is
``significant''. Therefore, OMB has reviewed these proposed
regulations, and the Departments have provided the following assessment
of their impact.
We estimate that the total increase in Federal Government
expenditures under the OPPS for CY 2025, compared to CY 2024, due to
the changes to the OPPS in this proposed rule, would be approximately
$1.78 billion. Taking into account our estimated changes in enrollment,
utilization, and case-mix for CY 2025 we estimate that the OPPS
expenditures, including beneficiary cost-sharing, for CY 2025 would be
approximately $88.2 billion, which is approximately $5.2 billion higher
than estimated OPPS expenditures in CY 2024. Table 131 of this proposed
rule displays the distributional impact of the proposed CY 2025 changes
in OPPS payment to various groups of hospitals and for CMHCs.
We note that under our proposed CY 2025 policy, drugs and
biologicals are generally paid at ASP plus 6 percent, WAC plus 6
percent, or 95 percent of AWP, as applicable.
We estimate that the proposed update to the conversion factor would
increase total OPPS payments by 2.6 percent in CY 2025. The proposed
changes to the APC relative payment weights, the proposed changes to
the wage indexes, the proposed continuation of a payment adjustment for
rural SCHs, including EACHs, and the proposed payment adjustment for
cancer hospitals would not increase total OPPS payments because these
changes to the OPPS are budget neutral. However, these updates would
change the distribution of payments within the budget neutral system.
We estimate that the total change in payments between CY 2024 and CY
2025, considering all budget-neutral payment adjustments, changes in
estimated total outlier payments, the application of the frontier State
wage adjustment, in addition to the application of the OPD fee schedule
increase factor after all adjustments required by sections
1833(t)(3)(F), 1833(t)(3)(G), and 1833(t)(17) of the Act would increase
total estimated OPPS payments by 2.3 percent.
We estimate the total increase (from changes to the ASC provisions
in this proposed rule, as well as from enrollment, utilization, and
case-mix changes) in Medicare expenditures (not including beneficiary
cost-sharing) under the ASC payment system for CY 2025 compared to CY
2024, to be approximately $202 million. Tables 132 and 133 of this
proposed rule display the redistributive impact of the CY 2025 changes
regarding ASC payments, grouped by specialty area and then grouped by
procedures with the greatest ASC expenditures, respectively.
We estimate that under our proposal to create three additional
exceptions to the Medicaid clinic services benefit four walls
requirement for IHS/Tribal clinics, behavioral health clinics, and
clinics located in rural areas that total Medicaid transfers would
increase by $1.18 billion for fiscal years 2025 through 2029. This
includes a Federal impact of $1.15 billion and State impact of $30
million.
For the OB services provisions of this proposed rule, in Tables 160
and 161, we provide the total estimated cost and hourly burden of these
proposed requirements both annually and over 10 years, excluding
collection of information costs that we have already estimated above.
Overall, we estimate that these proposed requirements would cost an
average of approximately $428 million and take 2.8 million hours to
complete. Over 10 years, we estimate that the total cost would be
approximately $4.28 billion and take 28.3 million hours to complete.
Below, we provide the cost estimates for each of the proposed
requirements.
C. Detailed Economic Analyses
1. Estimated Effects of OPPS Changes in This Proposed Rule
a. Limitations of Our Analysis
The distributional impacts presented here are the projected effects
of the proposed CY 2025 policy changes on various hospital groups. We
post our hospital-specific estimated payments for CY 2025 on the CMS
website with the other supporting documentation for this final rule
with comment period. To view the hospital-specific estimates, we refer
readers to the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient. On the website, select
``Regulations and Notices'' from the left side of the page and then
select ``CMS-1809-P'' from the list of regulations and notices. The
hospital-specific file layout and the hospital-specific file are listed
with the other supporting documentation for this proposed rule. We show
hospital-specific data only for hospitals whose claims were used for
modeling the impacts shown in Table 131 of this proposed rule. We do
not show hospital-specific impacts for hospitals whose claims we were
unable to use. We refer readers to section II.A of this proposed rule
for a discussion of the hospitals whose claims we do not use for
ratesetting or impact purposes.
We estimate the effects of the individual policy changes by
estimating payments per service, while holding all other payment
policies constant. We use the best data available but do not attempt to
predict behavioral responses to our policy changes in order to isolate
the effects associated with specific policies or updates, but any
policy that
[[Page 59543]]
changes payment could have a behavioral response. In addition, we have
not made any adjustments for future changes in variables, such as
service volume, service-mix, or number of encounters.
b. Estimated Effects of OPPS Changes on Hospitals
Table 131 shows the estimated impact of this proposed rule on
hospitals. Historically, the first line of the impact table, which
estimates the change in payments to all facilities, has always included
cancer and children's hospitals, which are held harmless to their pre-
Balanced Budget Act (BBA) amount. We also include CMHCs in the first
line that includes all providers. We include a second line for all
hospitals, excluding permanently held harmless hospitals and CMHCs.
We present separate impacts for CMHCs in Table 131, and we discuss
them separately below, because CMHCs have historically been paid only
for partial hospitalization services under the OPPS and are a different
provider type from hospitals. In the CY 2024 OPPS/ASC final rule (88 FR
81833), we finalized paying CMHCs for partial hospitalization services
and intensive outpatient services under APCs 5851 through 5854. For CY
2025, we propose to maintain the same APC structure and update each APC
payment rate to reflect the most recent available cost data.
The estimated increase in the total payments made under the OPPS is
determined largely by the increase to the conversion factor under the
statutory methodology. The distributional impacts presented do not
include assumptions about changes in volume and service-mix. The
conversion factor is updated annually by the OPD fee schedule increase
factor, as discussed in detail in section II.B of this proposed rule.
Section 1833(t)(3)(C)(iv) of the Act provides that the OPD fee
schedule increase factor is equal to the market basket percentage
increase applicable under section 1886(b)(3)(B)(iii) of the Act, which
we refer to as the IPPS market basket percentage increase. The proposed
IPPS market basket percentage increase applicable to the OPD fee
schedule for CY 2025 is 3.0 percent. Section 1833(t)(3)(F)(i) of the
Act reduces that 3.0 percent by the productivity adjustment described
in section 1886(b)(3)(B)(xi)(II) of the Act, which is 0.4 percentage
point for CY 2025 (which is also the productivity adjustment for FY
2025 in the FY 2025 IPPS/LTCH PPS proposed rule (89 FR 36205))
resulting in the proposed CY 2025 OPD fee schedule increase factor of
2.6 percent. We are using the OPD fee schedule increase factor of 2.6
percent in the calculation of the proposed CY 2025 OPPS conversion
factor. Section 10324 of the Affordable Care Act, as amended by HCERA,
further authorized additional expenditures outside budget neutrality
for hospitals in certain frontier States that have a wage index less
than 1.0000. The amounts attributable to this frontier State wage index
adjustment are incorporated in the estimates in Table 131 of this
proposed rule.
To illustrate the impact of the CY 2025 changes, our analysis
begins with a baseline simulation model that uses the CY 2024 relative
payment weights, the FY 2024 final IPPS wage indexes that include
reclassifications, and the final CY 2024 conversion factor. Table 131
shows the estimated redistribution of the increase or decrease in
payments for CY 2025 over CY 2024 payments to hospitals and CMHCs as a
result of the following factors: the impact of the APC reconfiguration
and recalibration changes between CY 2024 and CY 2025 (Column 2); the
wage indexes and the provider adjustments (Column 3); the combined
impact of all of the changes described in the preceding columns plus
the 2.6 percent OPD fee schedule increase factor update to the
conversion factor (Column 4); the estimated impact taking into account
all payments for CY 2025 relative to all payments for CY 2024,
including the impact of changes in estimated outlier payments and
changes to the pass-through payment estimate (Column 5).
We did not model an explicit budget neutrality adjustment for the
rural adjustment for SCHs because we proposed to maintain the current
adjustment percentage for CY 2025. Because the proposed updates to the
conversion factor (including the update of the OPD fee schedule
increase factor), the estimated cost of the rural adjustment, and the
estimated cost of projected pass-through payment for CY 2025 are
applied uniformly across services, observed redistributions of payments
in the impact table for hospitals largely depend on the mix of services
furnished by a hospital (for example, how the APCs for the hospital's
most frequently furnished services would change), and the impact of the
wage index changes on the hospital. However, total payments made under
this system and the extent to which this proposed rule would
redistribute money during implementation also will depend on changes in
volume, practice patterns, and the mix of services billed between CY
2024 and CY 2025 by various groups of hospitals, which CMS cannot
forecast.
Overall, we estimate that the proposed rates for CY 2025 would
increase Medicare OPPS payments by an estimated 2.3 percent. Removing
payments to cancer and children's hospitals because their payments are
held harmless to the pre-OPPS ratio between payment and cost and
removing payments to CMHCs results in an estimated 2.4 percent increase
in Medicare payments to all other hospitals. These estimated payments
would not significantly impact other providers.
Column 1: Total Number of Hospitals
The first line in Column 1 in Table 131 shows the total number of
facilities (3,511), including designated cancer and children's
hospitals and CMHCs, for which we were able to use CY 2023 hospital
outpatient and CMHC claims data to model CY 2024 and CY 2025 payments,
by classes of hospitals, for CMHCs and for dedicated cancer hospitals.
We excluded all hospitals and CMHCs for which we could not plausibly
estimate CY 2024 or CY 2025 payment and entities that are not paid
under the OPPS. The latter entities include CAHs, IHS and tribal
hospitals, and hospitals located in Guam, the U.S. Virgin Islands,
Northern Mariana Islands, American Samoa, and the State of Maryland.
This process is discussed in greater detail in section II.A of this
proposed rule. At this time, we are unable to calculate a DSH variable
for hospitals that are not also paid under the IPPS because DSH
payments are only made to hospitals paid under the IPPS. Hospitals for
which we do not have a DSH variable are grouped separately and
generally include freestanding psychiatric hospitals, rehabilitation
hospitals, and long-term care hospitals. We show the total number of
OPPS hospitals (3,413), excluding the hold harmless cancer and
children's hospitals and CMHCs, on the second line of the table. We
excluded cancer and children's hospitals because section 1833(t)(7)(D)
of the Act permanently holds harmless cancer hospitals and children's
hospitals to their ``pre-BBA amount'' as specified under the terms of
the statute, and therefore, we removed them from our impact analyses.
We show the isolated impact on the 32 CMHCs at the bottom of the impact
table (Table 131and discuss that impact separately below.
Column 2: APC Recalibration--All Changes
Column 2 shows the estimated effect of APC recalibration. Column 2
also
[[Page 59544]]
reflects any changes in multiple procedure discount patterns or
conditional packaging that occur as a result of the changes in the
relative magnitude of payment weights. As a result of APC
recalibration, we estimate that urban hospitals would experience a 0.1
increase, with the impact ranging from a decrease of 0.1 percent to an
increase of 0.3, depending on the number of beds. Rural hospitals will
experience an estimated decrease of 0.1 overall. Major teaching
hospitals will experience an estimated decrease of 0.1 percent.
Column 3: Wage Indexes and the Effect of the Provider Adjustments
Column 3 demonstrates the combined budget neutral impact of the APC
recalibration, the updates for the wage indexes with the FY 2025 IPPS
post-reclassification wage indexes, the rural adjustment, the frontier
adjustment, and the cancer hospital payment adjustment. We modeled the
independent effect of the budget neutrality adjustments and the OPD fee
schedule increase factor by using the relative payment weights and wage
indexes for each year and using a CY 2024 conversion factor that
included the OPD fee schedule increase and a budget neutrality
adjustment for differences in wage indexes.
Column 3 reflects the independent effects of the updated wage
indexes, including the application of budget neutrality for the rural
floor policy on a nationwide basis, as well as the proposed CY 2025
changes in wage index policy, discussed in section II.C of this
proposed rule. We did not model a budget neutrality adjustment for the
rural adjustment for SCHs because we propose to continue the rural
payment adjustment of 7.1 percent to rural SCHs for CY 2025, as
described in section II.E of this proposed rule. We modeled a budget
neutrality adjustment for the proposed cancer hospital payment
adjustment because the proposed payment-to-cost ratio target for the
cancer hospital payment adjustment in CY 2025 is 0.87, which is
different from the 0.88 PCR target adopted in the CY 2024 OPPS/ASC
final rule with comment period (88 FR 81589). We note that, in
accordance with section 16002 of the 21st Century Cures Act, we are
applying a budget neutrality factor calculated as if the cancer
hospital adjustment target payment-to-cost ratio was 0.88, not the 0.87
target payment-to-cost ratio we propose in section II.F of this
proposed rule.
We modeled the independent effect of updating the wage indexes by
varying only the wage indexes, holding APC relative payment weights,
service-mix, and the rural adjustment constant and using the CY 2025
scaled weights and a CY 2024 conversion factor that included a budget
neutrality adjustment for the effect of the changes to the wage indexes
between CY 2024 and CY 2025.
Column 4: All Budget Neutrality Changes Combined With the Market Basket
Update
Column 4 demonstrates the combined impact of all the proposed
changes previously described and the update to the conversion factor of
2.6 percent. Overall, these changes would increase payments to urban
hospitals by 2.8 percent and to rural hospitals by 3.5 percent. Rural
sole community hospitals would receive an estimated increase of 3.4
percent while other rural hospitals would receive an estimated increase
of 3.6 percent.
Column 5: All Changes for CY 2025
Column 5 depicts the full impact of the proposed CY 2025 policies
on each hospital group by including the effect of all changes for CY
2025 and comparing them to all estimated payments in CY 2024. Column 5
shows the combined budget neutral effects of Columns 2 and 3; the OPD
fee schedule increase; the impact of estimated OPPS outlier payments,
as discussed in section II.G of proposed rule; the change in the
Hospital OQR Program payment reduction for the small number of
hospitals in our impact model that failed to meet the reporting
requirements (discussed in section XIV of this proposed rule); and
other proposed rule adjustments to the CY 2025 OPPS payments.
Of those hospitals that failed to meet the Hospital OQR Program
reporting requirements for the full CY 2024 update (and assumed, for
modeling purposes, to be the same number for CY 2025), we included 106
hospitals in our model because they had both CY 2023 claims data and
recent cost report data. We estimate that the cumulative effect of all
changes for CY 2025 would increase payments to all facilities by 2.3
percent for CY 2024. We modeled the independent effect of all changes
in Column 5 using the final relative payment weights for CY 2024 and
the proposed relative payment weights for CY 2025. We used the final
conversion factor for CY 2024 of $87.382 and the proposed CY 2025
conversion factor of $89.379 discussed in section II.B of this proposed
rule.
Column 5 contains simulated outlier payments for each year. We used
the 1-year charge inflation factor used in the FY 2025 IPPS/LTCH PPS
proposed rule (89 FR 36572) of 4.1 percent (1.04142) to increase
charges on the CY 2023 claims, and we used the overall CCR in the April
2024 Outpatient Provider-Specific File (OPSF) to estimate outlier
payments for CY 2024. Using the CY 2023 claims and a 4.1 percent charge
inflation factor, we currently estimate that outlier payments for CY
2024, using a multiple threshold of 1.75 and a fixed-dollar threshold
of $7,750, would be approximately 0.85 percent of total payments. The
estimated current outlier payments of 0.85 percent are incorporated in
the comparison in Column 5. We used the same set of claims and a charge
inflation factor of 8.5 percent (1.084555) and the CCRs in the April
2024 OPSF, with an adjustment of 1.03331 (89 FR 36573), to reflect
relative changes in cost and charge inflation between CY 2023 and CY
2025, to model the proposed CY 2025 outliers at 1.0 percent of
estimated total payments using a multiple threshold of 1.75 and a fixed
dollar threshold of $8,000. The charge inflation and CCR inflation
factors are discussed in detail in the FY 2025 IPPS/LTCH PPS proposed
rule (89 FR 36572 through 36573).
Overall, we estimate that facilities will experience an increase of
2.3 percent under this proposed rule in CY 2025 relative to total
spending in CY 2024. This projected increase (shown in Column 5) of
Table 131 of this proposed rule reflects the proposed 2.6 percent OPD
fee schedule increase factor, adding the 0.15 difference in estimated
outlier payments between CY 2024 (0.85 percent) and CY 2025 (1.0
percent), minus 0.44 percent for the change in the pass-through payment
estimate between CY 2024 and CY 2025. We estimate that the combined
effect of all changes for CY 2025 would increase payments to urban
hospitals by 2.4 percent. Overall, we estimate that rural hospitals
would experience a 2.8 percent increase as a result of the combined
effects of all the changes for CY 2025.
Among hospitals, by teaching status, we estimate that the impacts
resulting from the combined effects of all changes would include an
increase of 2.1 percent for major teaching hospitals and an increase of
2.5 percent for nonteaching hospitals. Minor teaching hospitals would
experience an estimated increase of 2.6 percent.
In our analysis, we also have categorized hospitals by type of
ownership. Based on this analysis, we estimate that voluntary hospitals
would experience an increase of 2.3 percent, proprietary hospitals
would experience an increase of 3.5 percent, and governmental hospitals
will experience an increase of 2.4 percent.
[[Page 59545]]
c. Estimated Effects of OPPS Changes on CMHCs
The last line of Table 131 demonstrates the isolated impact on
CMHCs, which historically have only furnished partial hospitalization
services under the OPPS. As discussed in section VIII.C of this
proposed rule, we propose for CY 2025 to continue paying CMHCs using
APCs 5851 through 5854. We modeled the impact of this APC policy,
assuming CMHCs will continue to provide the same PHP care as seen in
the CY 2023 claims used for ratesetting in this proposed rule. We note
that the CY 2023 claims used for this CY 2025 proposed rule do not
include any provision of IOP services. We did not exclude days with one
or two services from our modeling for CY 2025, because our proposed
rule policy would pay the per diem rate for APC 5853 for such days
beginning in CY 2025. As a result of the final PHP APC changes for
CMHCs, we estimate that CMHCs would experience a 7.2 percent increase
in CY 2025 payments relative to their CY 2024 payments (shown in Column
5). For a detailed discussion of our proposed PHP policies, please see
section VIII of this proposed rule.
Column 3 shows the estimated impact of adopting the proposed FY
2025 wage index values, which result in an estimated change of 0.7
percent to CMHCs. Column 4 shows that combining the OPD fee schedule
increase factor, along with the proposed changes in APC policy for CY
2025 and the proposed FY 2025 wage index updates, would result in an
estimated increase of 7.7 percent.
BILLING CODE 4120-01-P
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[GRAPHIC] [TIFF OMITTED] TP22JY24.167
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[GRAPHIC] [TIFF OMITTED] TP22JY24.168
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BILLING CODE 4120-01-C
d. Estimated Effect of OPPS Changes on Beneficiaries
For services for which the beneficiary pays a copayment of 20
percent of the payment rate, the beneficiary's payment would increase
for services for which the OPPS payments would rise and decrease for
services for which the OPPS payments would fall. For further discussion
of the calculation of the national unadjusted copayments and minimum
unadjusted copayments, we refer readers to section II.H of this
proposed rule. In all cases, section 1833(t)(8)(C)(i) of the Act limits
beneficiary liability for copayment for a procedure performed in a year
to the hospital inpatient deductible for the applicable year.
We estimate that the aggregate beneficiary coinsurance percentage
would be approximately 17.8 percent for all services paid under the
OPPS in CY 2025. The estimated aggregate beneficiary coinsurance
reflects general system adjustments, including the proposed CY 2025
comprehensive APC payment policy discussed in section II.A.2.b of this
proposed rule. We note that the individual payments, and therefore
copayments, associated with services may differ based on the setting in
which they are furnished. However, at the aggregate system level, we do
not currently observe significant impact on beneficiary coinsurance as
a result of those policies.
e. Estimated Effects of OPPS Changes on Other Providers
The relative payment weights and payment amounts established under
the OPPS affect the payments made to ASCs, as discussed in section XIII
of this final rule. Hospitals, CMHCs, and ASCs would be affected by the
changes in this proposed rule. Additionally, as discussed in section
VIII.A.2 of this proposed rule, we established payment for IOP
furnished by RHCs, FQHCs, and Opioid Treatment Programs. These
providers of IOP are not paid under the OPPS and are not included in
the impact analysis shown in Table 131. However, the proposed payment
amount for OPPS APC 5861 would affect payments to RHCs and FQHCs since
under sections 1834(o)(5)(A) and 1834(y)(3)(A) of the Act payment for
IOP services in these settings is required to be equal to the payment
determined for IOP services in the hospital outpatient department.
f. Estimated Effects of OPPS Changes on the Medicare and Medicaid
Programs
The effect of the update on the Medicare program is expected to be
an increase of $1.78 billion in program payments for OPPS services
furnished in CY 2025. The effect on the Medicaid program is expected to
be limited to copayments that Medicaid may make on behalf of Medicaid
recipients who are also Medicare beneficiaries. We estimate that the
changes in this proposed rule would increase these Medicaid beneficiary
payments by approximately $155 million in CY 2025. Currently, there are
approximately 11.5 million dual-eligible beneficiaries, which represent
approximately 40 percent of Medicare Part B fee-for-service
beneficiaries. The impact on Medicaid was determined by taking 40
percent of the beneficiary cost-sharing impact. The national average
split of Medicaid payments is 58 percent Federal payments and 42
percent State payments. Therefore, for the estimated $155 million
Medicaid increase, approximately $90 million would be from the Federal
government and $65 million would be from State governments.
g. Alternative OPPS Policies Considered
Alternatives to the OPPS changes we proposed and the reasons for
our selected alternatives are discussed throughout this proposed rule.
h. Proposed Add-On Payment for High-Cost Drugs to the Indian Health
Service (IHS) All-Inclusive Rate (AIR)
For CY 2025, we propose to pay Indian Health Service (IHS) and
tribal hospitals separately for high-cost drugs (Part B drugs with
daily costs over $1,334) furnished in hospital outpatient departments
through an add-on payment, in addition to the All-Inclusive Rate (AIR),
using the IHS authority \578\ under which the annual AIR is calculated.
This policy is projected to increase Medicare program expenditures by
approximately $30 million in CY 2025. We refer readers to section X.C
of this proposed rule for further discussion of this policy.
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\578\ Sections 321(a) and 322(b) of the Public Health Service
Act (42 U.S.C. 248), Public Law 83-568 (42 U.S.C. 2001(a)), and the
Indian Health Care Improvement Act (25 U.S.C. 1601 et seq.).
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2. Estimated Effects of CY 2024 ASC Payment System Changes
Most ASC payment rates are calculated by multiplying the ASC
conversion factor by the ASC relative payment weight. As discussed
fully in section XIII of this proposed rule, we are setting the CY 2025
ASC relative payment weights by scaling the proposed CY 2025 OPPS
relative payment weights by the proposed CY 2025 ASC scalar of 0.873.
The estimated effects of the updated relative payment weights on
payment rates are varied and are reflected in the estimated payments
displayed in Tables 132 and 133.
Beginning in CY 2011, section 3401 of the Affordable Care Act
requires that the annual update to the ASC payment system after
application of any quality reporting reduction be reduced by a
productivity adjustment. In CY 2019, we adopted a policy for the annual
update to the ASC payment system to be the hospital market basket
update for CY 2019 through CY 2023. In the CY 2024 OPPS/ASC final rule
with comment period, we extended this 5-year interim period an
additional 2 years through CYs 2024 and 2025. Section
1886(b)(3)(B)(xi)(II) of the Act defines the productivity adjustment to
be equal to the 10-year moving average of changes in annual economy-
wide private nonfarm business multifactor productivity (as projected by
the Secretary for the 10-year period, ending with the applicable fiscal
year, year, cost reporting period, or other annual period). For ASCs
that fail to meet their quality reporting requirements, the CY 2025
payment determinations would be based on the application of a 2.0
percentage point reduction to the annual update factor, which is the
hospital market basket update for CY 2025. We calculated the proposed
CY 2025 ASC conversion factor by adjusting the CY 2024 ASC conversion
factor by 0.9958 to account for changes in the pre-floor and pre-
reclassified hospital wage indexes between CY 2024 and CY 2025, which
is includes our proposed limit on wage index declines of greater than 5
percent, and by applying the CY 2025 productivity-adjusted hospital
market basket update factor of 2.6 percent (which is equal to the
proposed inpatient hospital market basket percentage increase of 3.0
percent reduced by a productivity adjustment of 0.4 percentage point).
The proposed CY 2025 ASC conversion factor is $54.675 for ASCs that
successfully meet the quality reporting requirements.
a. Limitations of Our Analysis
Presented here are the projected effects of the proposed changes
for CY 2025 on Medicare payment to ASCs. A key limitation of our
analysis is our inability to predict changes in ASC service-mix between
CY 2023 and CY 2025 with precision. We believe the net effect on
Medicare expenditures resulting from the proposed CY 2025
[[Page 59549]]
changes would be small in the aggregate for all ASCs. However, such
changes may have differential effects across surgical specialty groups,
as ASCs continue to adjust to the payment rates based on the policies
of the revised ASC payment system. We are unable to accurately project
such changes at a disaggregated level. Clearly, individual ASCs would
experience changes in payment that differ from the aggregated estimated
impacts presented below.
b. Estimated Effects of ASC Payment System Policies on ASCs
Some ASCs are multispecialty facilities that perform a wide range
of surgical procedures from excision of lesions to hernia repair to
cataract extraction; others focus on a single specialty and perform
only a limited range of surgical procedures, such as eye, digestive
system, or orthopedic procedures. The combined effect of the proposed
update to the CY 2025 payments on an individual ASC would depend on a
number of factors, including, but not limited to, the mix of services
the ASC provides, the volume of specific services provided by the ASC,
the percentage of its patients who are Medicare beneficiaries, and the
extent to which an ASC provides different services in the coming year.
The following discussion includes tables that display estimates of the
impact of the proposed CY 2025 updates to the ASC payment system on
Medicare payments to ASCs, assuming the same mix of services, as
reflected in our CY 2023 claims data. Table 132 depicts the estimated
aggregate percent change in payment by surgical specialty or ancillary
items and services group by comparing estimated CY 2024 payments to
estimated CY 2025 payments, and Table 133 shows a comparison of
estimated CY 2024 payments to estimated CY 2025 payments for procedures
that we estimate would receive the most Medicare payment in CY 2024.
In Table 132, we have aggregated the surgical HCPCS codes by
specialty group, grouped all HCPCS codes for covered ancillary items
and services into a single group, and then estimated the effect on
aggregated payment for surgical specialty and ancillary items and
services groups. The groups are sorted for display in descending order
by estimated Medicare program payment to ASCs. The following is an
explanation of the information presented in Table 132.
Column 1--Surgical Specialty or Ancillary Items and
Services Group indicates the surgical specialty into which ASC
procedures are grouped and the ancillary items and services group,
which includes all HCPCS codes for covered ancillary items and
services. To group surgical procedures by surgical specialty, we used
the CPT code range definitions and Level II HCPCS codes and Category
III CPT codes, as appropriate, to account for all surgical procedures
to which the Medicare program payments are attributed.
Column 2--Estimated CY 2024 ASC Payments were calculated
using CY 2023 ASC utilization data (the most recent full year of ASC
utilization) and CY 2024 ASC payment rates. The surgical specialty
groups are displayed in descending order based on estimated CY 2024 ASC
payments.
Column 3--Estimated CY 2025 Percent Change is the
aggregate percentage increase or decrease in Medicare program payment
to ASCs for each surgical specialty or ancillary items and services
group that is attributable to proposed updates to ASC payment rates for
CY 2025 compared to CY 2024.
As shown in Table 132, for the six specialty groups that account
for the most ASC utilization and spending, we estimate that the
proposed update to ASC payment rates for CY 2025 would result in a 2
percent increase in aggregate payment amounts for eye and ocular adnexa
procedures, a 2 percent increase in aggregate payment amounts for
musculoskeletal system procedures, a 2 percent increase in aggregate
payment amounts for nervous system procedures, a 3 percent increase in
aggregate payment amounts for digestive system procedures, a 2 percent
increase in aggregate payment amounts for cardiovascular system
procedures, and a 2 percent increase in aggregate payment amounts for
genitourinary system procedures. We note that these changes can be a
result of different factors, including updated data, payment weight
changes, and changes in policy. In general, spending in each of these
categories of services is increasing due to the 2.6 percent payment
rate update which is offset by roughly 0.4 percentage points as a
result of the proposed CY 2025 ASC wage indexes and the proposed ASC
wage index scalar of 0.9958, resulting in a net 2.2 percent payment
rate update. After the payment rate update is accounted for, aggregate
payment increases or decreases for a category of services can be higher
or lower than a 2.2 percent increase, depending on if payment weights
in the OPPS APCs that correspond to the applicable services increased
or decreased or if the most recent data show an increase or a decrease
in the volume of services performed in an ASC for a category. For
example, we estimate a 3 percent increase in gastrointestinal procedure
payments. The increase in payment rates for gastrointestinal procedures
is a result of relative increase in the OPPS relative weights for the
Upper GI Procedures and Lower GI Procedures clinical families. These
changes are further increased by the 2.2 percent ASC overall rate
increase for these procedures. For estimated changes for selected
procedures, we refer readers to Table 132 provided later in this
section.
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Table 133 shows the estimated impact of the updates to the revised
ASC payment system on aggregate ASC payments for selected surgical
procedures during CY 2025. The table displays 30 of the procedures
receiving the greatest estimated CY 2024 aggregate Medicare payments to
ASCs. The HCPCS codes are sorted in descending order by estimated CY
2024 program payment.
Column 1--CPT/HCPCS code.
Column 2--Short Descriptor of the HCPCS code.
Column 3--Estimated CY 2024 ASC Payments were calculated
using CY 2023 ASC utilization (the most recent full year of ASC
utilization) and the CY 2024 ASC payment rates. The estimated CY 2024
payments are expressed in millions of dollars.
Column 4--Estimated CY 2025 Percent Change reflects the
percent differences between the estimated ASC payment for CY 2024 and
the estimated payment for CY 2025 based on the proposed update.
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c. Estimated Effects of ASC Payment System Policies on Beneficiaries
We estimate that the CY 2025 update to the ASC payment system would
be generally positive (that is, result in lower cost-sharing) for
beneficiaries with respect to the new procedures to be designated as
office-based for CY 2025. First, other than certain preventive services
where coinsurance and the Part B deductible is waived to comply with
sections 1833(a)(1) and (b) of the Act, the ASC coinsurance rate for
all procedures is 20 percent. This contrasts with procedures performed
in HOPDs under the OPPS, where the beneficiary is responsible for
copayments that range from 20 percent to 40 percent of the procedure
payment (other than for certain preventive services), although the
majority of HOPD procedures have a 20-percent copayment. Second, in
almost all cases, the ASC payment rates under the ASC payment system
are lower than payment rates for the same procedures under the OPPS.
Therefore, the beneficiary coinsurance amount under the ASC payment
system will usually be less than the OPPS copayment amount for the same
services. (The only exceptions will be if the ASC coinsurance amount
exceeds the hospital inpatient deductible since the statute requires
that OPPS copayment amounts not exceed the hospital inpatient
deductible. Therefore, in limited circumstances, the ASC coinsurance
amount may exceed the hospital inpatient deductible and, therefore, the
OPPS copayment amount for similar services.) Beneficiary coinsurance
for services migrating from physicians' offices to ASCs may decrease or
increase under the ASC payment system, depending on the particular
service and the relative payment amounts under the MPFS compared to the
ASC. While the ASC payment system bases most of its payment rates on
hospital cost data used to set OPPS relative payment weights, services
that are performed a majority of the time in a physician office are
generally paid the lesser of the ASC amount according to the standard
ASC ratesetting methodology or at the nonfacility practice expense-
based amount payable under the PFS. For
[[Page 59552]]
those additional procedures that we propose to designate as office-
based in CY 2025, the beneficiary coinsurance amount under the ASC
payment system generally will be no greater than the beneficiary
coinsurance under the PFS because the coinsurance under both payment
systems generally is 20 percent (except for certain preventive services
where the coinsurance is waived under both payment systems).
Accounting Statements and Tables for OPPS and ASC Payment System
As required by OMB Circular A-4 (available on the Office of
Management and Budget website at: https://www.whitehouse.gov/wp-content/uploads/2023/11/CircularA-4.pdf), we have prepared accounting
statements to illustrate the impacts of the OPPS and ASC changes in
this proposed rule. The first accounting statement, Table 134,
illustrates the classification of expenditures for the CY 2025
estimated hospital OPPS incurred benefit impacts associated with the
final CY 2024 OPD fee schedule increase. The second accounting
statement, Table 135, illustrates the classification of expenditures
associated with the 3.1 percent CY 2025 update to the ASC payment
system, based on the provisions of this proposed rule and the baseline
spending estimates for ASCs. Both tables classify most estimated
impacts as transfers. The third accounting statement, Table 136
contains the classification of the costs associated with the proposed
health and safety standards for obstetrical services in hospitals and
critical access hospitals. This includes the total cost, benefits and
transfers as outlined in the collection of information section in Table
130, and the regulatory impact analysis as provided in Table 161. Since
there are no transfers and we are not able to quantify the benefits of
these provisions, we do not include them in the table. This statement
provides our best estimate for the proposed health and safety standards
for obstetrical services in hospitals and critical access hospitals
provisions.
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3. Effects of Changes in Requirements for the Hospital Outpatient
Quality Reporting (OQR) Program
a. Background
We refer readers to the CY 2024 OPPS/ASC final rule with comment
period (88 FR 81961 through 82012) for the previously estimated effects
of changes to the Hospital OQR Program for the CY 2026 payment
determination and subsequent years. Of the 3,062 hospital outpatient
departments (HOPDs) that met eligibility requirements for the CY 2024
payment determination for the Hospital OQR Program, we determined that
117 HOPDs did not meet the requirements to receive the full annual
Outpatient Department (OPD) fee schedule increase factor while an
additional 58 HOPDs elected not to participate.
b. Impact of CY 2025 OPPS/ASC Proposed Rule Proposals
In this proposed rule, we propose to adopt four measures: (1) the
Hospital Commitment to Health Equity (HCHE) measure, beginning with the
CY 2025 reporting period/CY 2027 payment determination; (2) the
Screening for Social Drivers of Health (SDOH) measure, beginning with
voluntary reporting for the CY 2025 reporting period followed by
mandatory reporting beginning with the CY 2026 reporting period/CY 2028
payment determination; (3) the Screen Positive Rate for SDOH measure,
beginning with voluntary reporting for the CY 2025 reporting period and
mandatory reporting beginning with the CY 2026 reporting period/CY 2028
payment determination; and (4) the Patient Understanding of Key
Information Related to Recovery After a Facility-Based Outpatient
Procedure or Surgery, Patient Reported Outcome-Based Performance
Measure (Information Transfer PRO-PM), beginning with voluntary
reporting for the CY 2026 reporting period and mandatory reporting
beginning with the CY 2027 reporting period/CY 2029 payment
determination.
In addition, we propose to remove two claims-based measures
beginning with the CY 2025 reporting period/CY 2027 payment
determination: (1) the MRI Lumbar Spine for Low Back Pain measure; and
(2) the Cardiac Imaging for Preoperative Risk Assessment for Non-
Cardiac, Low-Risk Surgery measure. We further propose to require
electronic health record (EHR) technology to be certified to all
electronic clinical quality measures (eCQMs) available to report for
the CY 2025 reporting period/CY 2027 payment determination and
subsequent years.
Lastly, we propose to modify the public reporting of data for the
Median Time from Emergency Department (ED) Arrival to ED Departure for
Discharged ED Patients (Median Time for Discharged ED Patients)--
Psychiatric/Mental Health Patients stratification so that it may be
published on Care Compare in addition to the data.cms.gov downloadable
files beginning in CY 2025.
We refer readers to section XXIV.B (Collection of Information) of
this proposed rule for a detailed discussion of the calculations
estimating the changes to the information collection and reporting
burden for proposed data requirements under the Hospital OQR Program
for the estimated 3,200 program-eligible HOPDs. A summary table (see
Table 106) shows an estimated total information collection and
reporting burden increase of 66,348,321 hours at a cost of
$1,624,936,216 annually associated with our proposals for the CY 2027
reporting period/CY 2029 payment determination and subsequent years
compared to our currently approved information collection burden
estimates.
In section XIV.B.1 of this proposed rule, we propose to adopt the
HCHE measure. For HOPDs to receive a point for each of the domains in
the measure, affirmative attestations are required for each of the
elements within a domain. To attest affirmatively to all of the domains
in the measure, HOPDs may incur costs associated with activities such
as updating facility policies, engaging senior leadership,
participating in new quality improvement activities, performing
additional data analysis, and training staff. The extent of these costs
would vary depending on what activities the HOPD is already performing,
HOPD size, and the choices each HOPD makes in order to meet the
criteria necessary to attest affirmatively.
In section XIV.B.2 of this proposed rule, we propose to adopt the
Screening for SDOH measure. HOPDs that are not currently administering
some screening mechanism and elect to begin doing so as a result of
this measure adoption proposal would likely incur some non-recurring
costs associated with changes in workflow and information systems to
collect the data. The extent of these costs is difficult to quantify as
different HOPDs may utilize different modes of data collection (for
example paper-based, electronically patient-directed, clinician-
facilitated, etc.). In addition, depending on the method of data
collection utilized, the time required to complete the screening may
add a negligible amount of time to patient visits.
In section XIV.B.3 of this proposed rule, we propose to adopt the
Screen Positive Rate for SDOH measure, which would not result in any
additional economic impacts beyond those discussed for the associated
Screening for SDOH measure or in section XXIV.B
[[Page 59554]]
(Collection of Information) of this proposed rule.
In section XV.C.1.b of this proposed rule, we propose to adopt the
Patient Understanding of Key Information Related to Recovery After a
Facility-Based Outpatient Procedure or Surgery, Patient Reported
Outcome-Based Performance Measure (Information Transfer PRO-PM). For
HOPDs that are not currently collecting these data and elect to begin
doing so as a result of this measure there would be some costs
associated with changes in workflow and information systems to collect
the data. The extent of these costs is difficult to quantify as HOPDs
may utilize different modes of data collection (collected by facilities
or authorized third-party vendors post-discharge through a web-based
survey instrument, distributed electronically) and have differing
response rates influencing data volume. While we assume the majority of
hospitals will report data for this measure directly to CMS, we assume
some hospitals may elect to submit measure data via a third-party
survey vendor, for which there are associated costs. Under OMB control
number 0938-1240 for the Outpatient and Ambulatory Surgery Consumer
Assessment of Healthcare Providers and Systems (OAS CAHPS) Survey
(expiration date November 30, 2024), an estimate of approximately
$4,000 per hospital is used to account for these costs.
In section XV.E.2.b of this proposed rule, we propose to require
EHR technology to be certified to all eCQMs available to report. We do
not expect HOPDs would experience an increase in information collection
burden for the Hospital OQR Program as discussed in section XXIV.B
(Collection of Information) of this proposed rule, because this
proposal does not require HOPDs to submit new data to CMS and the use
of EHR technology that is certified to all available eCQMs has been
required for the Medicare Promoting Interoperability Program (83 FR
41672) and the Hospital IQR Program (84 FR 42604). In addition, due to
the differences in the build of respective CEHRT deployed in HOPDs, the
mapping required to capture required data for measure calculation, and
the range of HOPD participation in the development, implementation, and
testing of new CEHRT functionality, an estimated cost impact of the
policy is not quantifiable as it will vary by CEHRT and HOPD. For
certifying a new eCQM in the eCQM measure set specifically, we expect
some costs for HOPDs so that HOPDs have the option to report it.
In section XV.F.2 of this proposed rule, we propose to publicly
report data for the Median Time for Discharged ED Patients--
Psychiatric/Mental Health Patients stratification on Care Compare,
which would not result in any additional economic impacts beyond those
discussed in section XXIV.B (Collection of Information) of this
proposed rule.
4. Effects of Changes in Requirements for the Rural Emergency Hospital
Quality Reporting (REHQR) Program
a. Background
We refer readers to the CY 2024 OPPS/ASC final rule with comment
period (88 FR 82149) for the previously estimated effects of changes to
the REHQR Program for the CY 2024 reporting period and subsequent
years. For the CY 2025 reporting period, we have estimated there would
be 25 REHs mandated to report under the REHQR Program based on hospital
conversations as of April 22, 2024. We use this number of REHs for our
impact analyses knowing that more jurisdictions will pass or amend
necessary legislation enabling transitions, acknowledging that the
number of conversions could be less than or significantly greater than
this estimate with time.
b. Impact of CY 2025 OPPS/ASC Proposed Rule Proposals
In this proposed rule, we propose to adopt three measures: (1) the
Hospital Commitment to Health Equity (HCHE) measure beginning with the
CY 2025 reporting period; (2) the Screening for Social Drivers of
Health (SDOH) measure beginning with voluntary reporting for the CY
2025 reporting period followed by mandatory reporting beginning with
the CY 2026 reporting period; and (3) the Screen Positive Rate for SDOH
measure beginning with voluntary reporting for the CY 2025 reporting
period followed by mandatory reporting beginning with the CY 2026
reporting period. We also propose to extend the reporting period for
the Risk-Standardized Hospital Visits Within 7 Days After Hospital
Outpatient Surgery measure beginning with the CY 2025 reporting period.
We refer readers to section XXIV.C (Collection of Information) of
this proposed rule for a detailed discussion of the calculations
estimating the changes to the information collection and reporting
burden for proposed data requirements under the REHQR Program for the
estimated 25 REHs. A summary table (see Table 108)) demonstrates an
estimated total information collection and reporting burden for 25 REHs
of 9,747 hours at a cost of $239,076 annually associated with our
proposals for the CY 2026 reporting period/CY 2028 program
determination and subsequent years.
In section XIV.B.1 of this proposed rule, we propose to adopt the
HCHE measure. For REHs to receive a point for each of the domains in
the measure, affirmative attestations are required for each of the
statements within a domain. To attest affirmatively to all of the
domains in the measure, REHs may incur costs associated with activities
such as updating facility policies, engaging senior leadership,
participating in new quality improvement activities, performing
additional data analysis, and training staff. The extent of these costs
would vary depending on what activities the REH is already performing,
and the individual choices each REH makes in order to meet the criteria
necessary to attest affirmatively.
In section XIV.B.2 of this proposed rule, we propose to adopt the
Screening for SDOH measure. REHs that are not currently administering
some screening mechanism and elect to begin doing so as a result of
this measure adoption proposal would likely incur some costs associated
with changes in workflow and information systems to collect the data.
The extent of these costs is difficult to quantify as different REHs
may utilize different modes of data collection (for example paper-
based, electronically patient-directed, clinician-facilitated, etc.).
In addition, depending on the method of data collection utilized, the
time required to complete the screening may add a negligible amount of
time to patient visits.
In section XIV.B.3 of this proposed rule, we propose to adopt the
Screen Positive Rate for SDOH measure, which would not result in any
additional economic impacts beyond those discussed for the associated
Screening for SDOH measure or in section XXIV.C (Collection of
Information) of this proposed rule.
In section XVI.C.2 of this proposed rule, we propose to extend the
reporting period for the Risk-Standardized Hospital Visits Within 7
Days After Hospital Outpatient Surgery measure from 1 to 2 years and to
establish when an REH would be required to submit data under the REHQR
Program after converting to an REH, which, if finalized as proposed,
would not result in any additional economic impacts beyond those
discussed in section XXIV.C (Collection of Information) of this
proposed rule.
[[Page 59555]]
5. Effects of Changes in Requirements for the Ambulatory Surgical
Center Quality Reporting (ASCQR) Program
a. Background
We refer readers to the CY 2024 OPPS/ASC final rule with comment
period (88 FR 82143) for the previously estimated effects of changes to
the ASCQR Program for the CY 2027 payment determination. In section
XVII of this proposed rule, we discuss our proposals affecting the
ASCQR Program. Based on the most recent analysis of the CY 2024 payment
determination data, we found that, of the 5,536 ambulatory surgical
centers (ASCs) that were actively billing Medicare, 4,196 were required
to participate in the ASCQR Program. Of the 1,340 ASCs not required to
participate in the program, 279 ASCs did so and met full requirements.
On this basis, we estimate that 4,475 ASCs (4,196 + 279) would submit
data for the ASCQR Program for the CY 2025 reporting period unless
otherwise noted. We note that this estimate is a decrease of 334 ASCs
from our estimate of 4,809 provided in the CY 2024 OPPS/ASC final rule
with comment period (88 FR 82143) due to results from more recent data
analysis regarding numbers of eligible ASCs.
b. Impact of CY 2025 OPPS/ASC Proposed Rule Proposals
In section XIV.B of this proposed rule, we propose to adopt three
measures: (1) the Facility Commitment to Health Equity (FCHE) measure
beginning with the CY 2025 reporting period/CY 2027 payment
determination; (2) the Screening for Social Drivers of Health (SDOH)
measure beginning with voluntary reporting for the CY 2025 reporting
period followed by mandatory reporting beginning with the CY 2026
reporting period/CY 2028 payment determination; and (3) the Screen
Positive Rate for SDOH measure beginning with voluntary reporting for
the CY 2025 reporting period followed by mandatory reporting beginning
with the CY 2026 reporting period/CY 2028 payment determination.
We refer readers to section XXIV.D (Collection of Information) of
this proposed rule for a detailed discussion of the calculations
estimating the changes to the information collection and reporting
burden for proposed data requirements under the ASCQR Program for the
estimated 4,475 program-eligible ASCs. A summary table (see Table 110))
demonstrates an estimated total information collection and reporting
burden increase for 4,475 ASCs of 346,349 hours at a cost of $8,551,217
annually associated with our proposals for the CY 2026 reporting
period/CY 2028 payment determination and subsequent years, compared to
our currently approved information collection burden estimates.
In section XIV.B.1 of this proposed rule, we propose to adopt the
FCHE measure. For ASCs to receive a point for each of the domains in
the measure, affirmative attestations are required for each of the
statements within a domain. To attest affirmatively to all of the
domains in the measure, ASCs may incur costs associated with activities
such as updating facility policies, engaging senior leadership,
participating in new quality improvement activities, performing
additional data analysis, and training staff. The extent of these costs
would vary depending on what activities the ASC is already performing,
ASC size, and the individual choices each ASC makes in order to meet
the criteria necessary to attest affirmatively.
In section XIV.B.2 of this proposed rule, we propose to adopt the
Screening for SDOH measure. ASCs that are not currently administering
some screening mechanism and elect to begin doing so as a result of
this measure adoption proposal would likely incur some non-recurring
costs associated with changes in workflow and information systems to
collect the data. The extent of these costs is difficult to quantify as
different ASCs may utilize different modes of data collection (for
example paper-based, electronically patient-directed, clinician-
facilitated, etc.). In addition, depending on the method of data
collection utilized, the time required to complete the screening may
add a negligible amount of time to patient visits.
In section XIV.B.3 of this proposed rule, we propose to adopt the
Screen Positive Rate for SDOH measure, which would not result in any
additional economic impacts beyond those discussed for the associated
Screening for SDOH measure or in section XXIV.D (Collection of
Information) of this proposed rule.
6. Effects of Changes in Requirements for the Hospital Inpatient
Quality Reporting (IQR) Program
In section XXII of this proposed rule, we propose that for the FY
2026 payment determination, the submission of core clinical data
elements and linking variables associated with the Hybrid Hospital-Wide
Readmission (HWR) measure and the Hybrid Hospital-Wide All-Cause Risk
Standardized Mortality (HWM) measure would remain voluntary. This
proposal would have no impact on participating hospitals because we are
not modifying either measure.
7. Effects of Proposed Changes for Individuals Currently or Formerly in
the Custody of Penal Authorities
a. Medicare FFS No Legal Obligation To Pay Payment Exclusion and
Incarceration (Revisions to 42 CFR 411.4)
The individuals currently or formerly in the custody of penal
authorities provisions are discussed in section XXIII of this proposed
rule. Section XXIII of this proposed rule describes our proposals to
revise the regulations to clarify the ``no legal obligation to pay''
payment exclusion codified in regulation at Sec. 411.4. Specifically,
we propose to narrow the description of custody in Sec. 411.4(b)
because we no longer believe that certain classes of individuals should
be presumed to be in custody for purposes of the no legal obligation to
pay payment exclusion, reorganize and renumber the regulation at Sec.
411.4(b), make certain non-substantive edits to Sec. 411.4(a) to align
the regulatory text with the statutory no legal obligation to pay
payment exclusion, and define ``penal authority.''
We expect that our proposal to narrow the description of
``custody'' will reduce burden for individuals on bail, parole,
probation, or home detention and those providers and suppliers that
treat them, because it will no longer be necessary to rebut the
presumption that such individuals do not have a legal obligation to pay
for their own healthcare in order for Medicare to pay for their health
care items or services. We anticipate that our proposed revisions will
ensure that Medicare properly pays for services for individuals who are
on bail, parole, probation, or home detention. We also anticipate that
this proposal will have a negligible impact on Medicare costs, as it
does not add new covered services or benefits; rather, the proposed
revisions merely remove a real or perceived barrier so that individuals
on bail, parole, probation, or home detention can more easily access
the Medicare benefits for which they are legally entitled.
b. Revision to Medicare Special Enrollment Period for Formerly
Incarcerated Individuals
We propose to revise, the eligibility criteria for the Medicare
special enrollment period (SEP) for formerly incarcerated individuals
at Sec. Sec. 406.27(d)(1) and 407.23(d)(1). Specifically, for releases
on and after January 1, 2025, we propose to base the
[[Page 59556]]
determination of when an individual is no longer incarcerated on SSA's
data collected in its systems for determining OASDI benefit suspensions
in section 202(x)(1)(A) of the Act and any additional documentation
provided by individuals to demonstrate that they have been released
from incarceration. Our proposal would limit the current eligibility
criteria for this SEP, which reference to the Medicare payment
exclusion at Sec. 411.4(b), to releases between January 1, 2023, and
December 31, 2024.
The SEP for formerly incarcerated individuals at Sec. Sec.
406.27(d)(1) (for Premium Part A) and 407.23(d)(1) (for Part B)
starting in 2023 provides eligible individuals an opportunity to enroll
in Medicare upon release from incarceration without waiting for the
General Enrollment Period (GEP) and facing penalties for delayed
enrollment. We anticipate that the proposed revisions to the SEP for
formerly incarcerated individuals will provide clarity and make
accessing this SEP easier upon release from incarceration, especially
for a population facing many challenges reintegrating into society.
However, we do not anticipate a significant impact on utilization of
the SEP since there is no evidence that the current requirements have
created barriers to those who want to use the SEP. As a result of this
assumption, we expect a negligible impact on Medicare costs.
8. Estimated Effects of Medicaid Clinic Services Four Walls Exceptions
a. Background
As discussed in more detail in section XVIII, we propose to add
exceptions to the four walls requirement under the Medicaid clinic
services benefit for IHS/Tribal clinics, behavioral health clinics, and
clinics located in rural areas. The exception for IHS/Tribal clinics
would be mandatory for States that cover the clinic services benefit
while the exceptions for behavioral health clinics and clinics located
in rural areas would be at State option. We believe that this proposal
will help States strengthen and improve access to Medicaid clinic
services for the populations served by IHS/Tribal clinics, behavioral
health clinics, and clinics located in rural areas, and that it is
responsive to the concerns we have heard from Tribes, the TTAG, the
STAC, States, and other interested parties. In addition, we believe
this proposal will advance health equity and improve health care access
for the populations served by IHS/Tribal clinics, behavioral health
clinics, and clinics located in rural areas.
b. Overall Estimated Effects of Medicaid Clinic Services Four Walls
Exceptions
The aggregate economic impact of this proposed regulation is
estimated to be $1.18 billion in transfers for fiscal years 2025-2029.
This includes a Federal impact of $1.15 billion and impacts to States
of $30 million. For the purposes of this analysis, we estimated the
impacts separately for Medicaid clinic services furnished outside of
the four walls for IHS/Tribal clinics, behavioral health clinics, and
clinics located in rural areas. Uncertainties in the estimate result in
an estimated range of $554 million to $1.82 billion in the Federal
impact and a range of $7 million to $95 million in the State impact.
Current Medicaid clinic services expenditures were estimated using
financial reporting for 2022. Estimated expenditures for IHS/Tribal
Medicaid clinic services represent those expenditures not attributable
to the following Medicaid services: inpatient hospital, outpatient
hospital, prescription drugs, FQHC, and RHCs; in 2022, these
expenditures included expenditures for IHS/Tribal Medicaid clinic
services provided outside of the four walls (due to the grace period
discussed below). We assumed that 15 percent of expenditures for
Medicaid clinic services were related to behavioral health based on
general behavioral health utilization and spending patterns. We assumed
that 17 percent of remaining Medicaid clinic services expenditures were
attributable to clinics in rural areas based on 17 percent of the
Medicaid population residing in rural areas. Estimated baseline Federal
Medicaid expenditures for Medicaid clinic services in 2025 are $934
million at IHS/Tribal clinics, $530 million for behavioral health
services provided at Medicaid clinics, and $495 million for Medicaid
clinic services provided in rural areas. The estimates for behavioral
health services provided at Medicaid clinics and Medicaid clinic
services provided in rural areas do not include Medicaid clinic
services expenditures from IHS/Tribal clinics.
It is important to note that IHS/Tribal clinic services provided
outside of the clinic's four walls are currently being paid for by
Medicaid programs, under a CMS ``grace period'' that currently extends
through February 11, 2025. For a more detailed discussion on this grace
period please see section XVIII.A of this proposed rule. Unless the
proposed exception for IHS/Tribal clinics is finalized, States will not
be permitted to pay for Medicaid clinic services provided outside of
the four walls of an IHS/Tribal clinic after February 11, 2025, when
the grace period ends.
Table 138 demonstrates our estimates for the economic impact of an
exception to the Medicaid clinic services four walls requirement for
IHS/Tribal clinics. For the proposed IHS/Tribal clinic exception at 42
CFR 440.90(c), we assumed that 19 percent of current total IHS/Tribal
clinic services expenditures were for services provided outside of
clinics, based on information provided by the Tribes. Allowing current
claiming practices to continue, trended for changes in expected cost,
utilization, and enrollment each year, we estimate that Federal
expenditures for services provided outside of clinics will be $1.09
billion for fiscal years 2025 through 2029. State expenditures on
Medicaid clinic services provided to AI/AN Medicaid beneficiaries by
IHS/Tribal clinics are Federally matched at 100 percent. State
expenditures on Medicaid clinic services provided to Medicaid
beneficiaries who are not AI/AN are matched at the otherwise applicable
Federal matching percentage, which is generally less than 100 percent.
The estimate assumes 100 percent Federal share for all IHS/Tribal
clinic services expenditures, but we acknowledge that a very small
portion of these IHS/Tribal clinic services expenditures may be
attributed to Medicaid beneficiaries who are not AI/AN, resulting in
State expenditures. Data from which to estimate these State
expenditures were unavailable for this analysis. Note that this impact
estimate does reflect or account for the grace period only through
February 11, 2025, the baseline for the impact estimate does not
reflect or account for the grace period for dates after the expiration
of the grace period. From February 12, 2025 forward, the estimate
compares projections under current law, which does not allow States to
pay for Medicaid clinic services provided outside of clinics against
projections under the proposed regulation, which would permit States to
pay for IHS/Tribal clinic services provided outside of clinics. When
the grace period is factored into the analysis for dates after the
expiration of the grace period and spending under the proposed
regulation is compared to expenditures under current practice, which
allows payment for clinic services provided outside of IHS/Tribal
clinics due to the grace period, we estimate little to no impact.
[[Page 59557]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.175
Tables 139 and 140 demonstrate our estimates for the economic
impact of exceptions to the four walls requirement under the Medicaid
clinic services benefit for behavioral health clinics and clinics
located in rural areas that are not IHS/Tribal clinics. We acknowledge
that we have not included a definition of ``rural'' in proposed rule
text, but are considering defining that term in the final rule and are
considering various approaches to doing so, on which we seek comment.
For purposes of our estimates of the economic impact of our proposed
exception to the four walls requirement for clinics located in rural
areas, our analysis defines rural areas using the RUCA classifications.
We also acknowledge that for our proposed exception to the four walls
requirement for behavioral health clinics would include any clinic
services furnished outside of the four walls by a behavioral health
clinic, including non-behavioral clinic services such as physical
health services. However, for purposes of our economic impact we are
unable to quantify the cost of non-behavioral clinic services. For our
proposed behavioral health clinic exception at 42 CFR 440.90(d) and
clinics located in rural areas exception at 42 CFR 440.90(e), we
assumed a 5 percent increase in current spending in each category due
to increased payment for clinic services performed outside of the four
walls. Growth in utilization and expenditures for clinic services
provided both by behavioral health clinics and clinics in rural areas
is expected to be limited by provider shortages in these areas of
practice. Because the proposed exceptions at 42 CFR 440.90(d) and (e)
are at State option, we assume that States representing 25 percent of
States providing coverage of the Medicaid clinic services benefit will
implement one or both of the optional exceptions. Estimated
expenditures are trended each year for changes in expected cost,
utilization, and enrollment. We estimate that Federal expenditures will
be $35 million for fiscal years 2025 through 2029 for clinic services
furnished by behavioral health clinics, and $30 million for fiscal
years 2025 through 2029 for clinic services furnished by clinics in
rural areas.
[GRAPHIC] [TIFF OMITTED] TP22JY24.176
[[Page 59558]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.177
Projected Medicaid clinic services expenditures may differ from our
current estimates, including the amounts broken out for IHS/Tribal
clinics, clinic services provided by behavioral health clinics, and
clinic services provided by clinics in rural areas. There is
uncertainty in how much current and projected IHS/Tribal Medicaid
clinic services spending is attributable to Medicaid clinic services
provided outside of the four walls. The IHS/Tribal clinic impact may
range from $544 million to $1.63 billion over 5 years due to
uncertainty in the level of spending for Medicaid clinic services
provided outside of IHS/Tribal clinics. Uncertainty in provider
availability and beneficiary demand result in uncertainty in the
potential for changes in utilization and costs. The Federal impact for
Medicaid clinic services furnished by behavioral health clinics may
range from $5 million to $90 million and the Federal impact for clinic
services furnished by clinics in rural areas may range from $5 million
to $100 million over five years. State impacts over five years may
range from $5 million to $45 million for clinic services furnished by
behavioral health clinics and $2 million to $50 million for clinic
services furnished by clinics in rural areas.
Table 141 demonstrates the total economic impact for our proposed
regulation to include exceptions to the four walls requirement under
the Medicaid clinic services benefit for IHS/Tribal clinics, behavioral
health clinics, and clinics located in rural areas. The total estimated
impact of this proposed regulation over five years is $1.18 billion,
including Federal impact of $1.15 billion and State impact of $30
million. The impact may range from a low of $561 million to a high of
$1.92 billion, including a range in the Federal estimate of $554
million to $1.82 billion and a range in the State impact of $7 million
to $95 million.
[GRAPHIC] [TIFF OMITTED] TP22JY24.178
c. Benefits of Medicaid Clinic Services Four Walls Exceptions
The proposed changes to the Medicaid clinic services benefit are
expected to benefit Medicaid beneficiaries, Tribes, and States by
improving access to care for the populations served by IHS/Tribal
clinics, behavioral health clinics, and clinics in rural areas. The
proposed exceptions to the four walls requirement under the Medicaid
clinic services benefit for IHS/Tribal clinics, behavioral health
clinics, and clinics located in rural areas would help improve access
to care for these clinics' patient populations by allowing services to
be furnished where the beneficiary is located. We refer readers to
section XVIII.B of this proposed rule for more robust discussions on
how the populations served by these clinics might benefit from
exceptions to the Medicaid clinic services benefit four walls
requirement and how these exceptions would improve access to
[[Page 59559]]
care. These potential benefits cannot be monetarily quantified at this
time.
d. Alternative Medicaid Clinic Services Four Walls Exceptions
Considered
We considered a few different alternatives in determining the best
way to address the concerns we heard from Tribes, the TTAG, the STAC,
States, and other interested parties about the four walls requirement
under the Medicaid clinic services benefit. We considered including an
exception to the four walls requirement only for the population served
by IHS/Tribal clinics, but we viewed that alternative as too limited.
As we discuss in detail in section XVIII.B of this proposed rule, we
concluded that the patient populations served by behavioral health
clinics and clinics in rural areas might also benefit from exceptions
to the four walls requirement for those clinics. We also considered
proposing an exception, in addition to the three exceptions we propose
in this rule, for any other populations that are identified by States
as likely to meet the four criteria described in this proposed rule as
warranting an exception to the four walls requirement and that have no
alternative access to services through Medicaid benefits that are not
subject to a four walls requirement under Federal Medicaid law.
Ultimately, it is our understanding that other populations are better
able to access services through Medicaid benefits to which a four walls
requirement does not apply under Federal Medicaid law (for example,
FQHC services, RHC services, outpatient hospital services, etc.) than
the populations targeted by the proposed exceptions. As we indicate in
section XVIII.B of this proposed rule, we invite comment on our
assumptions about other populations that may benefit from an exception
to the four walls requirement under the Medicaid clinic services
benefit. We also considered making the exceptions to the four walls
requirement mandatory for behavioral health clinics and clinics located
in rural areas, but, as we discuss in more detail in section XVIII.B of
this proposed rule, it is our understanding that there is greater State
variability in the degree to which the populations targeted by the
behavioral health and rural exceptions meet the four criteria we
identified than the population served by IHS/Tribal clinics. We note
for readers that we also invited public comment on these assumptions in
section XVIII.B of this proposed rule. Finally, as we discuss in
section XVIII.B of this proposed rule, we have not proposed a specific
definition of rural for our exception for clinics located in rural
areas and invite public comment on the alternatives we are considering
and describe in that section of the proposed rule.
9. Effects of Continuous Eligibility in Medicaid and CHIP
As discussed in section XX of this proposed rule, we propose to
codify the requirement of the CAA, 2023 for States to provide 12 months
of continuous eligibility for children under age 19 enrolled in
Medicaid and CHIP, with limited exceptions. In addition, we propose to
remove the option to disenroll children from CHIP during a continuous
eligibility period due to failure to pay premiums. These regulation
changes implement the statutory requirement in section 5112 of Title V,
subtitle B of the Consolidated Appropriations Act, 2023.
The proposed regulation to require 12-month continuous eligibility
in Medicaid and CHIP is estimated to increase annual average enrollment
in Medicaid and CHIP by approximately 124,000 by 2028 (75,000 in
Medicaid and 49,000 in CHIP). The total estimated impact of this
proposed regulation over 5 years is $2,466 million, including Federal
impact of $1,592 million and state impact of $874 million. Enrollment
may range from an increase of around 92,000 to an increase of around
159,000 by 2028. The total impact may range from a low of $1,837
million to a high of $3,154 million, including a range in the Federal
estimate of $1,185 million to $2,039 million and a range in the state
impact of $652 million to $1,115 million. (See Table 142.)
[GRAPHIC] [TIFF OMITTED] TP22JY24.179
[[Page 59560]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.180
10. Effects of Proposed Requirements for Obstetrical Services in
Hospitals and Critical Access Hospitals (CAHs)
a. Organization, Staffing and Delivery of Services for Hospitals (Sec.
482.59a Through b) and CAHs (Sec. 482.649a Through b)
In section XXIV, we have estimated the cost for hospitals and CAHs
to develop internal standards and protocols to ensure that services are
well organized and to provide high-quality care that is appropriate to
the level of services provided and integrated with other departments of
the facility, as well as to ensure compliance with nationally
recognized and evidence-based guidelines for OB emergencies,
complications, immediate post-delivery care, and other patient health
and safety events. We have also estimated the cost for hospitals and
CAHs to delineate and document obstetrical privileges for all
practitioners providing obstetrical services in accordance with the
competencies of each practitioner. Below, we estimate the cost for
ensuring that OB patient care units (i.e., labor rooms, delivery rooms,
including rooms for operative delivery, and post-partum/recovery rooms
whether combined or separate) be supervised by an individual with the
necessary education and training, and specify that person should be an
experienced registered nurse, certified nurse midwife, nurse
practitioner, physician assistant, or a doctor of medicine or
osteopathy. We also estimate the cost for the proposal that are also
proposing that labor and delivery room suites have certain basic
resuscitation equipment readily available, including a call-in-system,
cardiac monitor, and a fetal doppler or monitor.
While hospitals and CAHs already likely to already have an
individual supervising OB patient care unit, there is variation across
facilities regarding whether they have the necessary education and
training related to OB patient care. Many facilities, especially larger
hospitals that have large birth volumes, are likely to already have an
experienced individual with the necessary education and training.
Smaller facilities with lower birth volumes, in contrast, may be less
likely to have an individual and need to recruit a new individual to
meet the proposed requirement. Given uncertainty about the number of
facilities that already have an experienced individual who would meet
the requirement, we assume that each facility would need to hire one
individual, who we assume would be a registered nurse, to meet the
requirement. To estimate the cost of hiring this individual, we
reviewed research related to the cost of registered nurse turnover. A
review of academic literature found that each RN turnover cost
employers between $21,514 and $88,000.\579\ We take the midpoint of
these two estimates, or $54,757 per individual hired. As shown, in
Tables 144 and 145, we estimate that this requirement will cost
facilities $345,516,670 in both year 1 and over 10 years. We seek
comments on data sources to estimate the number of facilities that are
likely to already have an individual who meets the proposed
requirements. We also seek comments on other sources of data to
estimate the cost for hiring an individual with the necessary education
and training to meet this requirement.
---------------------------------------------------------------------------
\579\ Bae, S.H., Noneconomic and economic impacts of nurse
turnover in hospitals: A systematic review. Int Nurs Rev, 2022.
69(3): 392-404.
[GRAPHIC] [TIFF OMITTED] TP22JY24.181
[[Page 59561]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.182
To estimate the cost for having certain basic resuscitation
equipment readily available, we reviewed public data sources to
estimate the cost of purchasing a call-in system, cardiac monitor, and
a fetal doppler or monitor. While we were not able to identify public
estimates for the price of call-in systems, based on our experience we
estimate that they would cost $2,500 to $3,500 per system. Reviewing
the web pages of various online suppliers, we found that fetal dopplers
and fetal monitors cost between $502 and $8,995 580 581 and
cardiac monitors cost between $1,071 and $10,246.\582\ For each of
these systems, we use the mid-point of the price estimate and assume
that each call-in system would cost $3,000, each fetal monitor or fetal
doppler would cost $4,749, and each cardiac monitor would cost $5,659.
---------------------------------------------------------------------------
\580\ Medical, U. FETAL DOPPLERS. 2024 May 8, 2024 [cited 2024
May 8]; Available from: https://www.usamedicalsurgical.com/fetal-dopplers/.
\581\ CardiacDirect. Fetal Monitors. 2024 [cited 2024 May 8];
Available from: https://www.cardiacdirect.com/product-category/fetal-monitors/?utm_source=google&utm_
medium=cpc&utm_term=fetal%20heart%20monitor&utm_content=!acq!v3!11636
26993_kwd-
295102856827__607346518010_g_c__&utm_campaign=FetalMonitor&gad_source
=1&gclid=EAIaIQobChMIsLqpo8f-hQMVLyetBh3deAZuEAAYASAAEgIcx_D_BwE.
\582\ CardiacDirect. Patient Monitors. 2024 May 8, 2024 [cited
2024 May 8]; Available from: https://www.cardiacdirect.com/product-category/patient-monitors/?min_price=0&max_price=10250&page=1.
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According to the Centers for Disease Control and Prevention there
were a total of 3,667,758 births in 2022.\583\ With a total of 6,310
hospitals and CAHs with obstetrical units, this leads to an average of
581 (3,667,758 / 6,310) births per hospital and CAH or an average of
1.59 births per facility per day. We estimate that each birth will take
1 day on average. To account for variation in birth volumes throughout
the year, we assume that each facility would need to prepare for double
the number of average births per day, or 3.18 patients. Since equipment
cannot be divided, we assume that facilities will need to have
equipment available for 4 patients daily. We assume that each facility
already has one fetal monitor and cardiac monitor but do not assume
that they will have a call-in system.
---------------------------------------------------------------------------
\583\ Osterman, M.J.K.H., Brady E., Martin, Joyce A.; Driscoll,
Anne K.; Valenzuela, Claudia P., Births: Final Data for 2022, in
National Vital Statistics Reports, U.S.D.o.H.a.H. Services, Editor.
2024, Centers for Disease Control and Prevention.
---------------------------------------------------------------------------
Based on our experience working in obstetrical units, we estimate a
fetal doppler or monitor would be needed for each room/suite, a call-in
system would be needed for each room/suite, and cardiac monitors would
be needed for half the rooms/suites. As such, we estimate that each
facility would need to purchase 3 fetal monitors or fetal dopplers at
$14,247 ($4,749 x 3), 1 cardiac monitor at $5,659 ($5,659 x 1), and 4
call-in systems at $12,000 ($3,000 x 4) for an average per facility
cost of $31,906. As indicate in tables 146 and 147, we estimate that
this requirement would cost a total of $201,326,860 over 10 years.
[GRAPHIC] [TIFF OMITTED] TP22JY24.183
[[Page 59562]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.184
b. OB Staff Training for Hospitals (Sec. 482.59(c)) and CAHs (Sec.
485.649(c))
We propose that hospitals and CAHs with OB services must develop
policies and procedures to ensure that staff are trained on key topics
related to improving the delivery of maternal care. The training must
reflect the scope and complexity of services offered, including, but
not limited to, evidence-based best practices and protocols to improve
the delivery of maternal care within the facility. We also propose that
they use findings from their QAPI to inform staff training needs and
any additions, revisions, or updates to training topics on an ongoing
basis. We also propose that the governing body must identify and
document which staff must complete annual training on these topics. The
facility must further document that training was successfully completed
and must be able to demonstrate staff knowledge on these topics. In the
collection of information section, we have already estimated the costs
for developing policies and procedures to ensure that staff are trained
on key topics related to improving the delivery of maternal care, as
well as documentation that training was completed and staff knowledge
on these topics. We estimate that staff training on evidence-based best
practices and protocols would take 2 hours per employee and that each
facility would spend 1 hour training staff on additional topics
identified by the facility's QAPI program. This leads to a total hourly
burden of 3 hours per employee trained.
While hospitals and CAHs have flexibility regarding which OB staff
will receive training, we expect that they would likely to focus their
training on medical staff who are working directly with OB patients.
This includes surgeons, physicians, physician assistants, nurse
practitioners, nurse midwives, nurse anesthetists, registered nurses
(RNs), and Licensed Practical Nurses/Licensed Vocational Nurses (LPNs/
LVNs).
To estimate the number of employees in CAHs and hospitals that
would likely receive training, we first obtained data from the Bureau
of Labor Statistics (BLS) on the number of surgeons, physicians,
physician assistants, nurse practitioners, nurse midwives, nurse
anesthetists, RNs, and LPNs/LVNs working in hospitals (NAICS 622000).
Since the BLS does not provide separate employment statistics for CAHs
and hospitals, we assume that the number of employees needing training
and, henceforth, the costs would be in proportion to the size of
facilities, specifically the number of certified beds. We obtained
information on the number of certified beds in hospitals and CAHs from
CMS' Q1 2024 Provider of Services File--Hospital & Non-Hospital
Facilities.\584\ Using this database, we estimate that 98.88 percent of
certified beds for hospitals with OB services are in hospitals with the
remaining 1.12 percent in CAHs.
---------------------------------------------------------------------------
\584\ Centers for Medicare and Medicaid Services. Provider of
Services File--Hospital & Non-Hospital Facilities, Q1 2024. https://data.cms.gov/provider-characteristics/hospitals-and-other-facilities/provider-of-services-file-hospital-non-hospital-facilities/data (Accessed April 30, 2024).
---------------------------------------------------------------------------
In hospitals, which have a larger number of beds, there is likely
to be a greater division of staff among units, with medical staff
specifically designated to work in OB units and with pregnant patients,
while other medical staff members will not work with pregnant patients.
In contrast, critical access hospitals (CAHs), which are smaller in
size, are likely to have medical staff that work across units given
their small size. Based on our experience, we estimate that between 10
and 30 percent of medical staff in hospitals and 60 to 100 percent of
medical staff in CAHs would receive the training. Given the variation
for hospitals, we take the midpoint of the two estimates and assume
that 20 percent of hospital medical staff and 80 percent of medical
staff in CAHs would receive training. We also assume that each facility
would require staff to be trained on these topics annually. As
indicated in Table 148 and Table 149, we estimate that the proposed
requirements would have an annual cost of approximately $150 million
with an average per facility cost of $24,719 for hospitals and $12,601
for CAHs. Over 10 years, the proposed requirements are estimated to
take 14.2 million hours to complete and cost approximately $1.50
billion.
We seek comments on whether hospitals and CAHs would require more
or fewer groups of medical staff or other facility staff to receive
this training. We are also seeking comments regarding data sources with
other ways to measure share of staff who are likely to receive training
in each facility type.
[[Page 59563]]
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[GRAPHIC] [TIFF OMITTED] TP22JY24.186
c. Quality Assessment and Performance Improvement Program (QAPI) for
Hospitals (Sec. 482.21(b)(4)) and CAHs (Sec. 485.641(e)(1))
At Sec. 482.21(b)(4) and Sec. 485.641(e) we are proposing
modification to the QAPI program for hospitals and CAHs with OB
services, respectively. Specifically, for obstetrical patients,
facilities would have four new requirements: (1) analyzing data and
quality indicators collected for the QAPI program by diverse
subpopulations, as identified by the facility among obstetrical
patients; (2) measuring, analyzing and tracking data, measures, and
quality indicators on patient outcomes and disparities in processes of
care, and services and operations, among obstetrical patients; (3)
analyzing and prioritizing patient health outcomes and disparities,
developing and implementing actions to improve patient health outcomes
and disparities, measuring results, and tracking performance to ensure
improvements are sustained when disparities exist among obstetrical
patients; and (4) conducting at least one performance improvement
project focused on improving health outcomes and disparities among the
hospital's population(s) of obstetrical patients annually.
In the ICR, we have already discussed the expected burden for
collecting data and quality indicators for obstetric patients and their
outcomes and disparities in processes of care and services and
operations. We believe that these data would serve as the foundation to
allow facilities to develop and implement actions to improve outcomes
and reduce disparities when they exist. We would expect that these data
would likely be the focus of the required performance improvement
project focused on improving health outcomes and reducing disparities
among obstetrical patients.
To estimate the cost of tracking and implementing at least one
quality improvement project, we utilized estimates from existing
regulations governing QAPI program. Specifically, 81 FR 68688 estimates
that collecting and analyzing data for all a long-term care facilities'
improvement projects will take 20 hours, with another 20 years annually
spent on implementing and documenting improvement projects. Given that
the requirement we are proposing involves only a single improvement
project and we have already accounted for the costs of collecting the
data in the ICR, we anticipate that the ongoing annual burden for each
facility to analyze the data and implement and document their
improvement project(s) will be 30 hours. Using loaded hourly wage rates
from Table 112, we anticipate that this will include the participation
of a hospital executive at $1,861.28 ($232.66 x 8 hours), an RN at
$931.00 ($93.10 x
[[Page 59564]]
10 hours), a physician at $1,729.64 ($216.08 x 8 hours), and a data
scientist at $368.96 ($92.24 x 4 hours) for a total per facility cost
of $4,889.88 annually and an average hourly cost of $163. As indicated
in tables 150 and 151, we estimate that this requirement will cost
$30,855,143 annually and $308,551,428 over 10 years.
[GRAPHIC] [TIFF OMITTED] TP22JY24.187
[GRAPHIC] [TIFF OMITTED] TP22JY24.188
d. Maternal Health QAPI Activities for Hospitals (Sec. 482.21(e)) and
CAHs (Sec. 485.641(d)(4))
Using loaded hourly wage rates from Table 112, we expect that when
the MMRC provides information to hospitals and CAHs, incorporating this
information into the facility's QAPI program would include the
participation of a physician at $864.32 ($216.08 x 4 hours) and an RN
at $372.40 ($93.10 x 4 hours) for a total cost of $1,236.72 per
facility. Altogether, we estimate that annually it would take 8 hours
to complete at an average hourly cost of $154.59 ($1,236.72 / 8 hours)
per facility. As indicated in tables 152 and 153, we estimate that
total annual cost will be $7,803,703 and the 10-year total cost will be
$7,803,703.
[GRAPHIC] [TIFF OMITTED] TP22JY24.189
[[Page 59565]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.190
e. Emergency Services Readiness for Hospitals (Sec. 482.55(c)) and
CAHs (Sec. 485.618(e))
The proposed standard for emergency services readiness aims to
improve staff readiness for providing emergency services to all
hospital and CAH patients, including pregnant and postpartum patients.
It would require hospitals and CAHs with emergency services to have
adequate provisions and protocols, consistent with nationally
recognized and evidence-based guidelines, for the care of patients with
emergency conditions. Hospitals and CAHs would be required to train
applicable emergency services personnel, as determined by the facility,
on these protocols and provisions on an annual basis and document that
applicable staff have successfully completed the training and
demonstrate their knowledge on these topics. For hospitals only,
provisions must include equipment, supplies, and medication used in
treating emergency cases. Provisions must include: (1) Drugs, blood and
blood products, and biologicals commonly used in emergency procedures;
(2) Equipment and supplies commonly used in emergency procedures; and
(3) a call-in-system for each patient in each emergency services
treatment area.
In section XXIV, we have already discussed the cost for hospitals
to ensure that they have adequate protocols in place for emergency
services, as well as to document that applicable staff have
successfully completed the training and demonstrate their knowledge on
these topics. The proposed training requirement for hospitals and CAHs
provides flexibility regarding which staff will receive training. We
expect, however, that they would likely focus their training on medical
staff within emergency departments. This staff includes surgeons,
physicians, physician assistants, nurse practitioners, nurse midwives,
nurse anesthetists, registered nurses, and LPNs/LVNs.
To estimate the number of employees in CAHs and REHs that would
likely receive training, we first obtained data from the Bureau of
Labor Statistics (BLS) on the number of surgeons, physicians, physician
assistants, nurse practitioners, nurse midwives, nurse anesthetists,
registered nurses, and LPNs/LVNs working in hospitals (NAICS 622000).
Since the BLS does not provide separate employment statistics for CAHs
and hospitals, we assume that the number of employees needing training
and, henceforth, the costs would be in proportion to the size of
facilities, specifically the number of certified beds. We obtained
information on the number of certified beds in hospitals and CAHs from
CMS' Q1 2024 Provider of Services File--Hospital & Non-Hospital
Facilities.\585\ Using this database, we estimate that 98.88 percent of
certified beds for hospitals are in hospitals with the remaining 1.12
percent in CAHs.
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\585\ Centers for Medicare and Medicaid Services. Provider of
Services File--Hospital & Non-Hospital Facilities, Q1 2024. https://data.cms.gov/provider-characteristics/hospitals-and-other-facilities/provider-of-services-file-hospital-non-hospital-facilities/data (Accessed April 30, 2024).
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Based on our experience, we expect that initial staff training
would take approximately 3 hours per employee. Using data from Table
112 on loaded wage rates for each employee type, we estimated the cost
for training all medical staff in hospitals and CAHs in year 1 using
the following formula: loaded wage rate for medical staff (surgeons,
physicians, physician assistants, nurse practitioners, nurse midwives,
nurse anesthetists, registered nurses, and LPNs/LVNs) x total number of
each medical staff type working in hospitals and CAHs x 3 hours per
employee. Using this formula, we estimate that training all medical
staff would cost $724,555,386.
In hospitals, which have a larger number of beds, there is likely
to be a greater division of staff among units, with medical staff
specifically designated to work in emergency departments. In contrast,
CAHs, which are smaller in size, are likely to have medical staff that
work across units given their small size. We assume, therefore, that 20
percent of medical staff in hospitals and all medical staff in CAHs
would receive the training. To calculate the year 1 cost for hospitals
and CAHs, therefore, we use the following formula: Total cost for
training all hospital/CAH medical staff x % hospital(CAH) medical staff
receiving training x Share of all Hospital and CAH Certified Beds. As
indicated in Table 154, we expect that the proposed requirement would
cost approximately $8 million for CAHs and $143 million for hospitals
in year 1.
For subsequent years, we expect that refresher training for medical
staff, who received the full training in previous years, would take 1
hour to complete. In addition, new staff would need to receive the full
3-hour training. With an annual hospital turnover rate of
[[Page 59566]]
approximately 21 percent,\586\ we would expect 21 percent of employees
each year to be new employees who would need 3 hours of training and 79
percent of employees would need 1 hour of training. To calculate the
burden for years 2 to 10, therefore, we use the following formula:
(Total cost for training all hospital/CAH medical staff x %
hospital(CAH) medical staff needing initial training x Share of all
Hospital and CAH Certified Beds) + (Total cost for training all
hospital/CAH medical staff x % hospital(CAH) medical staff receiving
needing initial training x Share of all Hospital and CAH Certified
Beds). As indicated in Table 155 using this formula, we estimate that
the rule would cost approximately $72 million in years 2 to 10. Table
156 provides the total cost over 10 years which we estimate at
$796,234,077.
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\586\ Nursing Solutions Incorporated, 2024 NSI National Health
Care Retention & RN Staffing Report. 2024.
[GRAPHIC] [TIFF OMITTED] TP22JY24.191
[GRAPHIC] [TIFF OMITTED] TP22JY24.192
[[Page 59567]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.193
To estimate the cost for having certain basic resuscitation
equipment readily available, we consulted with medical experts on the
requirements. Based on their experience, we expect that the most
hospitals with emergency services will already have drugs, blood and
blood products, and biologicals commonly used in emergency procedures,
as well as equipment and supplies commonly used in emergency
procedures. As such, we do not estimate a burden for these
requirements. There is likely, however, to be wide variation in
hospitals for the call-in systems. Based on our experience, we estimate
that 50 percent of hospitals will already have call-in systems while 50
percent will need to install them in their emergency departments.
As we noted above in estimating the cost for call-in system for
obstetrical rooms/suites, while we were not able to identify public
estimates for the price of call-in systems, based on our experience we
estimate that they would cost $2,500 to $3,500 per system, and we
utilize the mid-point of the price estimate and assume each call-in
system will cost $3,000. We assume that 20 percent of hospital beds are
allocated for emergency services and assume that there will need to be
a call-in system for each bed. As indicated in Tables 157 and 158, we
estimate that this requirement would cost a total of $334,629,300 in
year 1 and over 10 years. We seek comments on data sources that we can
use to estimate the number of hospitals that already have call-in
systems as well as the share of hospital beds that are devoted to
emergency care.
[GRAPHIC] [TIFF OMITTED] TP22JY24.194
[[Page 59568]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.195
f. Transfer Protocols in Discharge Planning for Hospitals (Sec.
482.43(c))
We propose that hospitals have written policies and procedures for
transferring patients under their care to the appropriate level of
care, promptly and without undue delay to meet patients' needs. Since
hospital inpatients are included in those who may need to be
transferred, we believe that medical staff across hospitals, and not
just those in emergency departments, would need to receive training on
transfer protocols. Specifically, we expect that all surgeons,
physicians, physician assistants, nurse practitioners, nurse midwives,
nurse anesthetists in hospitals would receive this training. We do not
expect, however, that LPNs would receive this training and similarly
expect that most RNs would not receive this training. Rather, we expect
that among RNs, only experienced RNs who serve as transfer coordinators
would receive it and estimate that this is only 5 percent of RNs
nationwide. We estimate that each employee would require 1 hour of
training annually and assume that that this training would occur on an
annual basis. As indicated in tables 159 and 160, we expect that this
requirement to cost $71,246,104 annually and $710,461,040 over 10
years.
[GRAPHIC] [TIFF OMITTED] TP22JY24.196
[GRAPHIC] [TIFF OMITTED] TP22JY24.197
[[Page 59569]]
g. Summary of Regulatory Impact Analysis for Obstetrical and Emergency
Services
In Tables 160 and 161 we provide an estimate of the total annual
and 10-year financial and hourly burden for the proposed requirements
related to obstetrical and emergency services that include: (1)
organization, staffing, and delivery of services for hospitals and CAHs
as outlined in Table 145 and Table 147; (2) obstetrical services staff
training for hospitals and CAHs as outlined in Table 149; (3) quality
assessment and performance improvement program requirements for
hospitals and CAHs as outlined in Table 151; (4) maternal health QAPI
activity requirements for hospitals and CAHs as outlined in Table 153;
(5) emergency services readiness requirements for hospitals and CAHs in
Table 156 and Table 158; and (6) transfer protocols training for
hospitals as outlined in Table 160. These estimates exclude the cost
for collection of information requirements that we have estimated above
in Table 129 and 130 to cost $174,597,139 million over 10 years and
take 1,768,881 hours to complete. Overall, we estimate the total
financial cost of the requirements would be approximately $4.27 billion
and take 28.3 million hours to complete over 10 years.
We are seeking comments on several issues related to the regulatory
impact analysis, including the following:
Are there additional data sources that estimate the number
of medical staff, who work with obstetrical patients?
Are there additional data sources to estimate the number
of hospital and CAH obstetrical rooms/suites?
Are there any additional data sources to estimate the cost
for the provisions of cardiac monitors, call-in systems, and fetal
doppler or monitors?
Are there additional data sources to estimate the number
of medical staff who work with emergency care units?
Are there data sources to estimate the number of hospital
room/suites that are allocated for emergency services?
Are there any additional staff members who are likely to
receive training for emergency services and obstetrical services?
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TP22JY24.198
[[Page 59570]]
[GRAPHIC] [TIFF OMITTED] TP22JY24.199
BILLING CODE 4120-01-C
h. Benefits
There are a wide variety of benefits associated with the proposed
requirements for obstetrical services in hospitals and CAHs.
First, there are the financial benefits. As we noted above in the
statement of need, research suggests that maternal mortality and
morbidity have widespread negative effects on pregnant and postpartum
patients and their families and high financial costs for payors. One
study found that pregnancy-related mortality cost in the United States
more than $27.4 billion and resulted in the loss of 114,000 years of
potential life between 2018 and 2020.\587\ Another study showed that
from birth to 5 years postpartum, nine maternal morbidities among the
2019 US birth cohort cost birthing parents and their children $32.3
billion, with $18.7 billion due to medical costs and $13.6 billion
related to non-medical costs.588 589 A third study found
that severe maternal morbidity during the prenatal to 30 day postpartum
period was associated with a 75 percent increase in medical costs for
patients utilizing Medicaid and a more than doubling in medical costs
for commercially insured patients.\590\ While these studies vary in
their methodology, the pre-post birth time period analyzed, medical
conditions analyzed, and cost estimates, they suggest that maternal
morbidity and mortality impose high health and safety, as well as
economic costs on birth parents, children, payors, and society.\591\
---------------------------------------------------------------------------
\587\ White Robert, S., et al., Economic burden of maternal
mortality in the USA, 2018-2020. Journal of Comparative
Effectiveness Research, 2022. 11(13): 927-933.
\588\ O'Neil, S.S., et al., Societal cost of nine selected
maternal morbidities in the United States. PLOS ONE, 2022. 17(10):
e0275656.
\589\ These nine conditions included the following: amniotic
fluid embolism, cardiac arrest, gestational diabetes mellitus,
hemorrhage, hypertensive disorders, mental health conditions, renal
disease, sepsis, and venous thromboembolism.
\590\ Black, C.M., et al., Costs of Severe Maternal Morbidity in
U.S. Commercially Insured and Medicaid Populations: An Updated
Analysis. Women's Health Reports, 2021. 2(1): 443-451.
\591\ Moran, P.S., et al., Economic burden of maternal
morbidity--A systematic review of cost-of-illness studies. PLOS ONE,
2020. 15(1): e0227377.
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We believe that the policies we are proposing will help reduce
maternal morbidity and mortality and their associated costs for
pregnant and postpartum patients and their families, as well as payors.
Specifically, the proposed requirements that OB services are well-
organized and in accordance with acceptable standards of practices,
have adequate provisions and protocols for OB emergencies,
complications, immediate post-delivery care and other patient health
and safety events as identified as part of the facility's QAPI program,
and that OB patient care units are supervised by an individual with the
necessary education and training will provide the foundation for
ensuring uniform high-quality OB services. Similarly, requiring
hospitals and CAHs to delineate and document obstetrical privileges for
all practitioners will benefit patients by helping ensure that
practitioners have the necessary education, training, and experience to
provide safe, effective care and safely perform specific procedures.
Finally, the requirement that labor and delivery room suites have
certain basic resuscitation equipment readily available will help
ensure efficient and effective care that can help reduce patient
morbidity and mortality.
Similarly, OB staff training and appropriate transfer protocols can
also help avert avoidable maternal complications and deaths.\592\
Finally, engagement with recommendations from MMRCs and QAPI
stratification of data can help facilities better identify unfavorable
patient health and safety outcomes, which can allow them to better
tailor policies to address these issues.
---------------------------------------------------------------------------
\592\ https://saferbirth.org/aim-obstetric-emergency-readiness-resource-kit/.
---------------------------------------------------------------------------
Beyond reductions in maternal morbidity and mortality and their
associated financial benefits, the proposed policies are likely also to
reduce inequality among pregnant and postpartum women from different
groups. For example, research shows that among women with any form of
disability, there is a heightened risk for labor and delivery
complications, as well as severe maternal morbidity and mortality. If
hospitals and CAHs include training that helps health care
practitioners better understand these risks and be more comfortable
providing care to women with a disability, they may be able to better
provide safe, high quality obstetric care, reducing obstetrical
complications. Research also suggests that due to insufficient patient
education by staff, women with limited English proficiency (LEP)
experience
[[Page 59571]]
disparities in obstetric care and are at risk for mental health
conditions, including post-partum depression and substandard newborn
care following neonatal ICU discharge.\593\ If facilities engage in
increasing language-concordant care and awareness among providers
regarding the use of medical interpreters and materials in diverse
languages, they may be able to improve patient satisfaction, decrease
medical errors, and improve patient safety.594 595
Similarly, stratification of patient data can produce insights into
health disparities that allow facilities to develop interventions to
reduce them, with research showing that data collection and analysis by
patient subgroup within health care facilities has an important impact
on improving patient care consistently across patient
populations.596 597 598 599 600
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\593\ Togioka, Brandon & Seligman, Katherine & Delgado Upegui,
Carlos. (2022). Limited English proficiency in the labor and
delivery unit. Current Opinion in Anesthesiology. 35. 285-291.
\594\ Sentell, Tetine & Chang, Ann & Ahn, Hyeong Jun & Miyamura,
Jill. (2015). Maternal Language and Adverse Birth Outcomes in a
Statewide Analysis. Women & health. 56. 10.1080/
03630242.2015.1088114.
\595\ https://www.ahrq.gov/sites/default/files/publications/files/lepguide.pdf).
\596\ Weinick, R.M. and R. Hasnain-Wynia, Quality Improvement
Efforts Under Health Reform: How To Ensure That They Help Reduce
Disparities--Not Increase Them. Health Affairs, 2011. 30(10): p.
1837-1843.
\597\ Bardach, N.S. and M.D. Cabana, The unintended consequences
of quality improvement. Curr Opin Pediatr, 2009. 21(6): p. 777-82.
\598\ Perzynski, A.T., et al., Patient portals and broadband
internet inequality. J Am Med Inform Assoc, 2017. 24(5): p. 927-932.
\599\ Antonio, M.G., O. Petrovskaya, and F. Lau, Is research on
patient portals attuned to health equity? A scoping review. J Am Med
Inform Assoc, 2019. 26(8-9): p. 871-883.
\600\ Sequist, T.D., et al., Effect of quality improvement on
racial disparities in diabetes care. Arch Intern Med, 2006. 166(6):
p. 675-81.
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Beyond the benefits for obstetrical patients, our proposed
requirements are likely to have positive effects on the health and
safety for patients generally. Our proposed requirements for hospitals
to have written policies and procedures for transferring patients under
their care and train medical staff regarding transfer protocols can
support hospitals in expediting transfers when necessary. Efficient
transfers to hospitals that can treat complex conditions and provide
higher levels of care for all patients as needed. Similarly, our
proposed requirement that hospitals with emergency services must have
adequate provisions and protocols for the care of patients with
emergency conditions and train applicable staff on these protocols and
provisions, is also likely to improve patient health and safety.
Additional obstetric training for emergency department staff improves
staff competencies (i.e., skills, knowledge, comfort, confidence, and
effectiveness) in managing obstetric emergencies, supporting improved
maternal health and safety,601 602 603 604 605 606 while
training in pediatric readiness,607 608 and geriatric
readiness 609 610 611 612 613 improves staff capabilities in
caring for these populations.
---------------------------------------------------------------------------
\601\ Burke SM, Schmitt T, Kennedy P, et al. Emergency Medicine
Obstetrics and Gynecology: A Case-Based Curriculum for Residents.
MedEdPORTAL. 2023;19:11330.
\602\ Espey E, Baty G, Rask J, Chungtuyco M, Pereda B, Leeman L.
Emergency in the clinic: a simulation curriculum to improve
outpatient safety. Am J Obstet Gynecol. Dec 2017;217(6):699.e1-
699.e13.
\603\ Cooper MI, Papanagnou D, Meguerdichian M, Bajaj K.
Emergency Obstetrics for the Emergency Medicine Provider.
MedEdPORTAL. Oct 13 2016;12:10481.
\604\ Jacobs PJ. Using High-Fidelity Simulation and Video-
Assisted Debriefing to Enhance Obstetrical Hemorrhage Mock Code
Training. J Nurses Prof Dev. Sep/Oct 2017;33(5):234-239.
\605\ Hopmann P, Varre JS, Duncan G, Devoe WB, Gable BD.
Multidisciplinary Simulation of Trauma in Pregnancy with
Resuscitative Endovascular Balloon Occlusion of the Aorta (REBOA)
Utilization. Cureus. Dec 2022;14(12):e32820.
\606\ Harrington J, Duncan G, D. Angelo K G. Multidisciplinary
Simulation Improves Resident Confidence for Pregnant Patients
Requiring Surgical Intervention. Cureus. Mar 2022;14(3):e23454.
\607\ Ames, S.G., et al., Emergency Department Pediatric
Readiness and Mortality in Critically Ill Children. Pediatrics,
2019. 144(3).
\608\ Newgard, C.D., et al., Emergency Department Pediatric
Readiness and Short-term and Long-term Mortality Among Children
Receiving Emergency Care. JAMA Network Open, 2023. 6(1): p.
e2250941-e2250941.
\609\ Keyes, DC, et al., Impact of a New Senior Emergency
Department on Emergency Department Recidivism, Rate of Hospital
Admission, and Hospital Length of Stay. Annals of Emergency
Medicine, 2014. 63(5): p. 517-524.
\610\ Dresden, S.M., et al., Geriatric Emergency Department
Innovations: The Impact of Transitional Care Nurses on 30-day
Readmissions for Older Adults. Acad Emerg Med, 2020. 27(1): p. 43-
53.
\611\ Foo, C.L., et al., Geriatric assessment and intervention
in an emergency department observation unit reduced re-attendance
and hospitalisation rates. Australas J Ageing, 2012. 31(1): p. 40-6.
\612\ Chong, E., et al., Emergency Department Interventions for
Frailty (EDIFY): Front-Door Geriatric Care Can Reduce Acute
Admissions. Journal of the American Medical Directors Association,
2021. 22(4): p. 923-928.e5.
\613\ Gettel, C.J., et al., An Outcome Comparison Between
Geriatric and Nongeriatric Emergency Departments. Ann Emerg Med,
2023. 82(6): p. 681-689.
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We seek comments on additional benefits from our proposed
requirements, as well as ways to quantify the health, safety, and
financial benefits we have identified above.
i. Alternatives Considered
We considered a variety of approaches when developing the proposed
obstetrical services requirements for hospitals and CAHs. One approach
was to leave the development of policies to improve obstetrical
services to accrediting agencies or individual States. We decided
against this approach, however, since there is likely to be wide
variation across States and accrediting agencies in their requirements,
leading to variation in obstetrical services for patients depending on
the facility or State where they are located.
We also considered requiring specific topics for the proposed OB
services training requirement as well as for the requirement to train
staff on the protocols for the care of patients with emergency
conditions. We ultimately decided, however, to provide facilities with
flexibility in how they approach these trainings so that they could
provide it in a way that leads to the best improvements in and highest
quality of care for pregnant and postpartum women. Similarly, we
considered defining specific subpopulations that facilities must
analyze when using their QAPI program to identify inequalities in
health outcomes. Ultimately, however, we decided to provide facilities
with flexibility regarding which subpopulations they analyze since
features of patient populations are likely to vary greatly across
different facilities.
D. Regulatory Review Cost Estimation
If regulations impose administrative costs on private entities,
such as the time needed to read and interpret this proposed or final
rule, we should estimate the cost associated with regulatory review.
Due to the uncertainty involved with accurately quantifying the number
of entities that will review the rule, we assume that the total number
of unique commenters on last year's proposed rule will be the number of
reviewers of this proposed rule. We acknowledge that this assumption
may understate or overstate the costs of reviewing this rule. It is
possible that not all commenters reviewed last year's rule in detail,
and it is also possible that some reviewers chose not to comment on the
proposed rule. For these reasons we thought that the number of past
commenters would be a fair estimate of the number of reviewers of this
rule. We welcome any comments on the approach in estimating the number
of entities that will review this proposed rule. We also recognize that
different types of entities are in many cases affected by mutually
exclusive sections of this proposed rule, and therefore for the
purposes of our estimate we assume that each reviewer reads
approximately 50 percent of the rule. We seek comments on this
assumption.
[[Page 59572]]
Using the wage information from the BLS for medical and health
service managers (Code 11-9111), we estimate that the cost of reviewing
this rule is $115.22 per hour, including overhead and fringe benefits
https://www.bls.gov/oes/current/oes_nat.htm. Assuming an average
reading speed, we estimate that it would take approximately 8 hours for
the staff to review half of this proposed or final rule. For each
entity that reviews the rule, the estimated cost is $921.76 (8 hours x
$115.22). Therefore, we estimate that the total cost of reviewing this
regulation is $3,481,487.52 ($921.76 x 3,777).
D. Regulatory Review Cost Estimation
If regulations impose administrative costs on private entities,
such as the time needed to read and interpret this proposed or final
rule, we should estimate the cost associated with regulatory review.
Due to the uncertainty involved with accurately quantifying the number
of entities that will review the rule, we assume that the total number
of unique commenters on last year's proposed rule will be the number of
reviewers of this proposed rule. We acknowledge that this assumption
may understate or overstate the costs of reviewing this rule. It is
possible that not all commenters reviewed last year's rule in detail,
and it is also possible that some reviewers chose not to comment on the
proposed rule. For these reasons we thought that the number of past
commenters would be a fair estimate of the number of reviewers of this
rule. We welcome any comments on the approach in estimating the number
of entities that will review this proposed rule. We also recognize that
different types of entities are in many cases affected by mutually
exclusive sections of this proposed rule, and therefore for the
purposes of our estimate we assume that each reviewer reads
approximately 50 percent of the rule. We seek comments on this
assumption.
Using the wage information from the BLS for medical and health
service managers (Code 11-9111), we estimate that the cost of reviewing
this rule is $129.28 per hour, including overhead and fringe benefits
https://www.bls.gov/oes/current/oes_nat.htm. Assuming an average
reading speed, we estimate that it would take approximately 8 hours for
the staff to review half of this proposed or final rule. For each
entity that reviews the rule, the estimated cost is $1,034.24 (8 hours
x $129.28). Therefore, we estimate that the total cost of reviewing
this regulation is $3,903,221.76 ($1,034.24 x 3,777).
E. Regulatory Flexibility Act (RFA) Analysis
The RFA requires agencies to analyze options for regulatory relief
of small entities, if a rule has a significant impact on a substantial
number of small entities. For purposes of the RFA, we estimate that
many hospitals are considered small businesses either by the Small
Business Administration's size standards with total revenues of $41.5
million or less in any single year or by the hospital's not-for-profit
status. Most ASCs and most CMHCs are considered small businesses with
total revenues of $16.5 million or less in any single year. For
details, we refer readers to the Small Business Administration's
``Table of Size Standards'' at http://www.sba.gov/content/table-small-business-sizestandards.
Individuals and states are not included in the definition of a
small entity. As its measure of significant economic impact on a
substantial number of small entities, HHS uses a change in revenue of
more than 3 to 5 percent. We believe that this threshold would be
reached by the requirements proposed in this proposed rule. As a
result, the Secretary has determined that this proposed rule may have a
significant impact on a substantial number of small entities.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 603 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a metropolitan
statistical area and has 100 or fewer beds. We estimate that this
proposed rule would increase payments to small rural hospitals by
approximately 3 percent; therefore, it should have a negligible impact
on approximately 533 small rural hospitals. We note that the estimated
payment impact for any category of small entity will depend on both the
services that they provide as well as the payment policies and/or
payment systems that may apply to them. Therefore, the most applicable
estimated impact may be based on the specialty, provider type, or
payment system.
The analysis above, together with the remainder of this preamble,
provides a regulatory flexibility analysis and a regulatory impact
analysis.
F. Unfunded Mandates Reform Act Analysis
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. In 2024, that
threshold is approximately $183 million. This proposed rule does not
mandate any requirements for State, local, or tribal governments, or
for the private sector. This proposed rule would not impose a mandate
that would result in the expenditure by State, local, and Tribal
Governments, in the aggregate, or by the private sector, of more than
$183 million in any 1 year.
G. Federalism
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on state
and local governments, preempts state law, or otherwise has Federalism
implications. We have examined the OPPS and ASC provisions included in
this proposed rule in accordance with Executive Order 13132,
Federalism, and have determined that they would not have a substantial
direct effect on State, local, or tribal governments, preempt State
law, or otherwise have a Federalism implication. As reflected in Table
131 of this proposed rule, we estimate that OPPS payments to
governmental hospitals (including State and local governmental
hospitals) would increase by 2.4 percent under this proposed rule.
While we do not know the number of ASCs or CMHCs with government
ownership, we anticipate that it is small. The analyses we have
provided in this section of this proposed rule, in conjunction with the
remainder of this document, demonstrate that this proposed rule is
consistent with the regulatory philosophy and principles identified in
Executive Order 12866, the RFA, and section 1102(b) of the Act.
This proposed rule would affect payments to a substantial number of
small rural hospitals and a small number of rural ASCs, as well as
other classes of hospitals, CMHCs, and ASCs, and some effects may be
significant. However, as noted in section XXIII of this proposed rule,
this rule should not have a significant effect on small rural
hospitals.
[[Page 59573]]
H. Conclusion
The changes we are finalizing in this proposed rule would affect
all classes of hospitals paid under the OPPS as well as both CMHCs and
ASCs. We estimate that most classes of hospitals paid under the OPPS
would experience a modest increase or a minimal decrease in payment for
services furnished under the OPPS in CY 2025. Table U168 demonstrates
the estimated distributional impact of the OPPS budget neutrality
requirements that would result in a 2.3 percent increase in payments
for all services paid under the OPPS in CY 2025, after considering all
of the changes to APC reconfiguration and recalibration, as well as the
OPD fee schedule increase factor, wage index changes, including the
frontier State wage index adjustment, and estimated payment for
outliers, changes to the pass-through payment estimate, and changes to
outlier payments. However, some classes of providers that are paid
under the OPPS would experience more significant gains or losses in
OPPS payments in CY 2025.
The updates we are making to the ASC payment system for CY 2025
would affect each of the approximately 6,100 ASCs currently approved
for participation in the Medicare program. The effect on an individual
ASC would depend on its mix of patients, the proportion of the ASC's
patients who are Medicare beneficiaries, the degree to which the
payments for the procedures offered by the ASC are changed under the
ASC payment system, and the extent to which the ASC provides a
different set of procedures in the coming year than in previous years.
Table U169 demonstrates the estimated distributional impact among ASC
surgical specialties of the productivity-adjusted hospital market
basket update factor of 2.6 percent for CY 2025.
Finally, our proposal to include additional exceptions to the four
walls requirement under the Medicaid clinic services for IHS/Tribal
clinics, behavioral health clinics, and clinics located in rural areas
is estimated to have an $1.18 billion impact in transfers for fiscal
years 2025-2029. Table 110 demonstrates the Federal and State share
impacts on IHS/Tribal clinics, behavioral health clinics, clinics
located in rural areas, and in aggregate. As explained earlier in this
section of the proposed rule, there is uncertainty in the potential for
changes in utilization and costs of clinic services because of
uncertainty in provider availability and beneficiary demand.
Chiquita Brooks-LaSure, Administrator of the Centers for Medicare &
Medicaid Services, approved this document on June 21, 2024.
List of Subjects
42 CFR Part 406
Diseases, Health facilities, Medicare.
42 CFR Part 407
Medicare.
42 CFR Part 410
Diseases, Health facilities, Health professions, Laboratories,
Medicare, Reporting and recordkeeping requirements, Rural areas, X-
rays.
42 CFR Part 411
Diseases, Medicare, Reporting and recordkeeping requirements.
42 CFR Part 416
Health facilities, Health professions, Medicare, Reporting and
recordkeeping requirements.
42 CFR Part 419
Hospitals, Medicare, Reporting and recordkeeping requirements.
42 CFR Part 435
Aid to Families with Dependent Children, Grant programs--health,
Medicaid, Reporting and recordkeeping requirements, Supplemental
Security Income (SSI), Wages.
42 CFR Part 440
Grant programs--health, Medicaid.
42 CFR Part 457
Administrative practice and procedure, Grant programs--health,
Health insurance, Reporting and recordkeeping requirements.
42 CFR Part 482
Grant programs--health, Hospitals, Medicaid, Medicare, Reporting
and recordkeeping requirements.
42 CFR Part 485
Grant programs--health, Health facilities, Incorporation by
Reference, Medicaid, Privacy, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, the Centers for Medicare
and Medicaid Services proposes to amend 42 CFR chapter IV as set forth
below:
PART 406--HOSPITAL INSURANCE ELIGIBILITY AND ENTITLEMENT
0
1. The authority citation for part 406 continues to read as follows:
Authority: 42 U.S.C. 1302, 1395i-2, 1395i-2a, 1395p, 1395q and
1395hh.
0
2. Section 406.27 is amended by revising paragraph (d) to read as
follows:
Sec. 406.27 Special enrollment periods for exceptional conditions.
* * * * *
(d) SEP for formerly incarcerated individuals. An SEP exists for
Medicare eligible individuals who are no longer incarcerated on or
after January 1, 2023.
(1) SEP parameters and duration before January 1, 2025--(i)
Eligibility. An individual is eligible for this SEP if they are
released from the custody of penal authorities between January 1, 2023,
and December 31, 2024, as described in Sec. 411.4(b) of this
subchapter. The individual must demonstrate that they are eligible for
Medicare and failed to enroll or reenroll in Medicare premium Part A
due to being in custody of penal authorities and there is a record of
release either through discharge documents or data available to SSA.
(ii) SEP duration. The SEP starts the day of the individual's
release from the custody of penal authorities and ends the last day of
the 12th month after the month in which the individual is released from
the custody of penal authorities.
(2) SEP parameters and duration beginning January 1, 2025--(i)
Eligibility. An individual is eligible for this SEP if they are
released from confinement in a jail, prison, or other penal institution
or correctional facility on or after January 1, 2025, and demonstrate
that they are eligible for Medicare and failed to enroll or reenroll in
Medicare premium Part A due to being so confined, and there is a record
of release, either through discharge documents or data available to
SSA.
(ii) SEP duration. The SEP starts the day an individual is released
from confinement as determined by SSA and ends the last day of the 12th
month after the month in which the individual is released from
confinement in a jail, prison, or other penal institution or
correctional facility.
(3) Entitlement--(i) General rule. Entitlement begins the first day
of the month following the month of enrollment, so long as the date is
on or after January 1, 2023.
(ii) Special rule. An individual has the option of requesting
entitlement for a retroactive period of up to 6 months provided the
date does not precede the month of their release from incarceration,
the date is on or after January 1, 2023, and the individual pays the
monthly premiums for the period of coverage (as required under Sec.
406.32(f)). If retroactive enrollment is requested
[[Page 59574]]
and the application is filed within the first 6 months of the SEP, the
effective date is retroactive to the beginning of the month of their
release from incarceration. If retroactive enrollment is requested and
the application is filed in the last 6 months of the SEP, the coverage
effective date is retroactive to the 6th month before the month of
enrollment.
* * * * *
PART 407--SUPPLEMENTARY MEDICAL INSURANCE (SMI) ENROLLMENT AND
ENTITLEMENT
0
3. The authority citation for part 407 continues to read as follows:
Authority: 42 U.S.C. 1302, 1395p, 1395q, and 1395hh.
0
4. Section 407.23 is amended by revising paragraph (d) to read as
follows:
Sec. 407.23 Special enrollment periods for exceptional conditions.
* * * * *
(d) SEP for formerly incarcerated individuals. An SEP exists for
Medicare eligible individuals who are no longer incarcerated on or
after January 1, 2023.
(1) SEP parameters and duration before January 1, 2025--(i)
Eligibility. An individual is eligible for this SEP if they are
released from the custody of penal authorities between January 1, 2023,
and December 31, 2024, as described in Sec. 411.4(b) of this
subchapter. The individual must demonstrate that they are eligible for
Medicare and failed to enroll or reenroll in SMI due to being in the
custody of penal authorities and there is a record of release either
through discharge documents or data available to SSA.
(ii) SEP duration. The SEP starts the day of the individual's
release from the custody of penal authorities and ends the last day of
the 12th month after the month in which the individual is released from
the custody of penal authorities.
(2) SEP parameters and duration beginning January 1, 2025--(i)
Eligibility. An individual is eligible for this SEP if they are
released from confinement in a jail, prison, or other penal institution
or correctional facility on or after January 1, 2025, and demonstrate
that they are eligible for Medicare and failed to enroll or reenroll in
SMI due to being so confined, and there is a record of release, either
through discharge documents or data available to SSA.
(ii) SEP duration. The SEP starts the day an individual is released
from confinement as determined by SSA and ends the last day of the 12th
month after the month in which the individual is released from
confinement in a jail, prison, or other penal institution or
correctional facility.
(3) Entitlement--(i) General rule. Entitlement begins the first day
of the month following the month of enrollment, so long as the date is
on after January 1, 2023.
(ii) Special rule. An individual has the option of requesting
entitlement for a retroactive period of up to 6 months provided the
date does not precede the month of their release from incarceration,
the date is on or after January 1, 2023, and the individual pays the
monthly premiums for the period of coverage (as required under Sec.
408.4). If retroactive enrollment is requested and the application is
filed within the first 6 months of the SEP, the effective date is
retroactive to the beginning of the month of their release from
incarceration. If retroactive enrollment is requested and the
application is filed in the last 6 months of the SEP, the coverage
effective date is retroactive to the 6th month before the month of
enrollment.
* * * * *
PART 410--SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS
0
5. The authority citation for part 410 continues to read as follows:
Authority: 42 U.S.C. 1302, 1395m, 1395hh, 1395rr, and 1395ddd.
0
6. Section 410.27 is amended by revising paragraph (a)(1)(iv)(B)(1) to
read as follows:
Sec. 410.27 Therapeutic outpatient hospital or CAH services and
supplies incident to a physician's or nonphysician practitioner's
service: Conditions.
(a) * * *
(1) * * *
(iv) * * *
(B) * * *
(1) For purposes of this section, direct supervision means that the
physician or nonphysician practitioner must be immediately available to
furnish assistance and direction throughout the performance of the
procedure. It does not mean that the physician or nonphysician
practitioner must be present in the room when the procedure is
performed. For pulmonary rehabilitation, cardiac rehabilitation, and
intensive cardiac rehabilitation services, direct supervision must be
furnished as specified in Sec. Sec. 410.47 and 410.49, respectively.
Through December 31, 2025, the presence of the physician or
nonphysician practitioner for the purpose of the supervision of
pulmonary rehabilitation, cardiac rehabilitation, and intensive cardiac
rehabilitation services includes virtual presence through audio/video
real-time communications technology (excluding audio-only); and
* * * * *
0
7. Section 410.28 is amended by revising paragraph (e)(2)(iii) to read
as follows:
Sec. 410.28 Hospital or CAH diagnostic services furnished to
outpatients: Conditions.
* * * * *
(e) * * *
(2) * * *
(iii) Through December 31, 2025, the presence of the physician or
nonphysician practitioner under paragraphs (e)(2)(i) and (ii) of this
section includes virtual presence through audio/video real-time
communications technology (excluding audio-only).
* * * * *
PART 411--EXCLUSIONS FROM MEDICARE AND LIMITATIONS ON MEDICARE
PAYMENT
0
8. The authority citation for part 411 continues to read as follows:
Authority: 42 U.S.C. 1302, 1395w-101 through 1395w-152, 1395hh,
and 1395nn.
0
9. Section 411.4 is revised to read as follows:
Sec. 411.4 Items and services for which neither the beneficiary nor
any other person is legally obligated to pay.
(a) General rule. Except in the case of Federally qualified health
center services and as provided in Sec. 411.8(b) (for services paid by
a governmental entity), Medicare may not pay for an item or service
under part A or part B if--
(1) The individual has no legal obligation to pay for the item or
service; and
(2) No other person (by reason of such individual's membership in a
prepayment plan or otherwise) has a legal obligation to provide or pay
for the item or service.
(b) Special conditions for payment for items or services furnished
to an individual in the custody of a penal authority. (1) An individual
in the custody of a penal authority is considered to have a legal
obligation to pay for items or services furnished to the individual
only if the following conditions are met:
(i) State or local law requires the individual to pay the cost of
items and services that the individual receives ;
(ii) The penal authority enforces the requirement to pay for items
or services
[[Page 59575]]
by billing all individuals who receive such items or services, whether
or not covered by Medicare or any other health insurance; and
(iii) The penal authority pursues collection of amounts owed for
items or services received in the same way and with the same vigor that
it pursues the collection of other debts.
(2) For purposes of this paragraph, a penal authority means a
police department or other law enforcement agency, a government agency
operating under a penal statute, or a State, local or Federal jail,
prison, penitentiary, or similar institution.
(3) For purposes of this paragraph, an individual is considered to
be in the custody of a penal authority if the individual is:
(i) Under arrest;
(ii) Incarcerated in a jail, prison, penitentiary, or similar
institution;
(iii) Temporarily outside of a jail, prison, penitentiary, or
similar institution on medical furlough or similar arrangement;
(iv) Escaped from confinement by a penal authority;
(v) Required to reside in a mental health facility under a penal
statute or rule; or
(vi) Required to reside in a halfway house under any of the
following conditions:
(A) Residents are precluded from working outside the facility in
employment that is available to individuals who are not under penal
authority supervision;
(B) Residents may not use community resources (for example,
libraries, grocery stores, recreation, or educational institutions) at
will; or
(C) Residents may not seek health care items and services in the
broader community to the same or similar extent as individuals who are
not under penal authority supervision.
PART 416--AMBULATORY SURGICAL SERVICES
0
10. The authority citation for part 416 continues to read as follows:
Authority: 42 U.S.C. 1302 and 1395hh.11. Section 416.164 is
amended by revising paragraphs (a)(4) and (b)(6) to read as follows:
Sec. 416.164 Scope of ASC Services.
(a) * * *
(4) Drugs and biologicals for which separate payment is not allowed
under the hospital outpatient prospective payment system (OPPS);
* * * * *
(b) * * *
(6) Non-opioid pain management drugs, biologicals, and medical
devices as determined by CMS under Sec. 416.174;
* * * * *
0
12. Section 416.171 is amended by revising paragraph (b)(1) to read as
follows:
Sec. 416.171 Determination of payment rates for ASC services.
* * * * *
(b) * * *
(1) Covered ancillary services specified in Sec. 416.164(b), with
the exception of radiology services and certain diagnostic tests as
provided in Sec. 416.164(b)(5) and non-opioid pain management drugs,
biologicals, and medical devices as determined by CMS under Sec.
416.174.
* * * * *
0
13. Revise Sec. 416.174 to read as follows:
Sec. 416.174 Payment for non-opioid pain management drugs,
biologicals, and medical devices.
(a) Eligibility for separate payment for non-opioid pain management
drugs and biologicals. From January 1, 2025 through December 31, 2027,
a non-opioid drug or biological is eligible for separate payment for an
applicable calendar year if CMS determines it meets the following
requirements through that year's rulemaking:
(1) The drug is approved under a new drug application under section
505(c) of the Federal Food, Drug, and Cosmetic Act (FDCA), under an
abbreviated new drug application under section 505(j), or, in the case
of a biological product, is licensed under section 351 of the Public
Health Service Act. The product also has a label indication approved by
the Food and Drug Administration to reduce postoperative pain, or
produce postsurgical or regional analgesia, without acting upon the
body's opioid receptors.
(2) The drug or biological does not have transitional pass-through
payment status under Sec. 419.64 of this subchapter. In the case where
a drug or biological otherwise meets the requirements under this
section and has transitional pass-through payment status that expires
during the calendar year, the drug or biological will qualify for
separate payment as specified in this paragraph (a) during such
calendar year on the first day of the next quarter following the
expiration of its pass-through status.
(3) The drug or biological has payment that is packaged into a
payment for a covered OPD service (or group of services) under a policy
in this part.
(b) Eligibility for separate payment for non-opioid medical
devices. From January 1, 2025, through December 31, 2027, a medical
device is eligible for separate payment for an applicable calendar year
if CMS determines it meets all of the following requirements through
that year's rulemaking:
(1) The medical device is used to deliver a therapy to reduce
postoperative pain, or produce postsurgical or regional analgesia, and
has an application under section 515 of the Federal Food, Drug, and
Cosmetic Act that has been approved with respect to the device, has
been cleared for market under section 510(k) of such Act, or is exempt
from the requirements of section 510(k) of such Act pursuant to
subsection (l) or (m) or section 510 of such Act or section 520(g) of
such Act.
(2) The medical device has demonstrated the ability to replace,
reduce, or avoid intraoperative or postoperative opioid use or the
quantity of opioids prescribed in a clinical trial or through data
published in a peer-reviewed journal.
(3) The medical device does not have transitional pass-through
payment status under Sec. 419.66 of this subchapter. In the case where
a medical device otherwise meets the requirements under this section
and has transitional pass-through payment status that expires during
the calendar year, the medical device will qualify for separate payment
as specified in this paragraph (b) during such calendar year on the
first day of the next calendar year quarter following the expiration of
its pass-through status.
(4) The medical device has payment that is packaged into a payment
for a covered OPD service (or group of services) under a policy in this
part.
(c) Payment Amount. From January 1, 2025 through December 31, 2027,
the amount of payment for a qualifying non-opioid treatment for pain
relief is as follows:
(1) For a qualifying drug or biological as defined in paragraph (a)
of this section, the amount of payment is the amount determined under
section 1847A of the Act for the drug or biological that exceeds the
portion of the otherwise applicable Medicare OPD fee schedule amount,
which is determined to be zero dollars for calendar year 2025, subject
to paragraph (c)(3) of this section.
(2) For a qualifying medical device as defined in paragraph (b) of
this section, the amount of payment is the amount of the hospital's
charges for the device, adjusted to cost, that exceeds the portion of
the otherwise applicable Medicare OPD fee schedule amount, which is
determined to be zero dollars
[[Page 59576]]
for calendar year 2025, subject to paragraph (c)(3) of this section.
(3) Payment limitation. The payment amounts in paragraphs (c)(1)
and (2) of this section shall not exceed the estimated average of 18
percent of the OPD fee schedule amount of the volume weighted average
of the five OPD services with which the non-opioid treatment for pain
relief is furnished most frequently.
0
14. Section 416.320 is amended by revising paragraph (b) to read as
follows:
Sec. 416.320 Retention and removal of quality measures under the
ASCQR Program.
* * * * *
(b) Immediate measure suspension. If CMS determines that the
collection and reporting activities related to a measure potentially
raise patient safety concerns, CMS will immediately suspend the measure
from the ASCQR Program and will promptly notify ASCs and the public of
the suspension of the measure. CMS will address the suspension and
propose to retain, modify, or remove the measure in the next feasible
rulemaking cycle.
* * * * *
PART 419--PROSPECTIVE PAYMENT SYSTEM FOR HOSPITAL OUTPATIENT
DEPARTMENT SERVICES
0
15. The authority citation for part 419 continues to read as follows:
Authority: 42 U.S.C. 1302, 1395l(t), and 1395hh.
0
16. Section 419.2 is amended by revising paragraph (b)(15) to read as
follows:
Sec. 419.2 Basis of payment.
* * * * *
(b) * * *
(15) Drugs, biologicals, and radiopharmaceuticals that function as
supplies when used in a diagnostic test or procedure (including but not
limited to, diagnostic radiopharmaceuticals below the per-day
diagnostic radiopharmaceutical packaging threshold for the applicable
year, contrast agents, and pharmacologic stress agents);
* * * * *
0
17. Section 419.41 is amended by adding paragraphs (h) and (i) to read
as follows:
Sec. 419.41 Calculation of national beneficiary copayment amounts and
national Medicare program payment amounts.
* * * * *
(h) Payment for non-passthrough therapeutic radiopharmaceuticals.
For a therapeutic radiopharmaceutical for which payment is not packaged
into a payment for a covered outpatient department (OPD) service (or
group of services) and that does have on transitional pass-through
payment status as described in Sec. 419.64, to calculate the program
payment and copayment amounts CMS does the following:
(1) Determines the Average Sales Price (ASP) for the therapeutic
radiopharmaceutical for the quarter established under the methodology
described by section 1847A of the Act. If that amount is not available,
then CMS calculates the mean unit cost (MUC) using the most recently
available claims data for that therapeutic radiopharmaceutical.
(2) Subtracts from the amount determined under paragraph (h)(1) of
this section the amount of the applicable Part B deductible provided
under Sec. 410.160 of this chapter.
(3) Multiplies the amount determined under paragraph (h)(1) of this
section (less any applicable deductible under paragraph (h)(2) of this
section) by 20 percent. This is the beneficiary's copayment amount for
the drug or biological.
(4) Subtracts the amount determined under paragraph (h)(3) of this
section from the amount determined under paragraph (h)(1) of this
section (less any applicable deductible determined under paragraph
(h)(2) of this section). This amount is the preliminary program amount.
(5) Adds to the preliminary program amount determined under
paragraph (h)(4) of this section the amount by which the copayment
amount would have exceeded the inpatient hospital deductible for that
year. This amount is the final Medicare program payment amount.
(i) Payment for non-passthrough diagnostic radiopharmaceuticals.
For a diagnostic radiopharmaceutical for which payment is not packaged
into a payment for a covered outpatient department (OPD) service (or
group of services) and that does not have transitional pass-through
payment status as described in Sec. 419.64, to calculate the program
payment and copayment amounts CMS does the following:
(1) Calculates the mean unit cost (MUC) using the most recently
available claims data for that diagnostic radiopharmaceutical.
(2) Subtracts from the amount determined under paragraph (i)(1) of
this section the amount of the applicable Part B deductible provided
under Sec. 410.160 of this chapter.
(3) Multiplies the amount determined under paragraph (i)(1) of this
section (less any applicable deductible under paragraph (h)(2) of this
section) by 20 percent. This is the beneficiary's copayment amount for
the drug or biological.
(4) Subtracts the amount determined under paragraph (i)(3) of this
section from the amount determined under paragraph (i)(1) of this
section (less any applicable deductible determined under paragraph
(i)(2) of this section). This amount is the preliminary program amount.
(5) Adds to the preliminary program amount determined under
paragraph (i)(4) of this section the amount by which the copayment
amount would have exceeded the inpatient hospital deductible for that
year. This amount is the final Medicare program payment amount.
0
18. Section 419.43 is amended by adding paragraph (k) to read as
follows:
Sec. 419.43 Adjustments to national program payment and beneficiary
copayment amounts.
* * * * *
(k) Payment for non-opioid pain management drugs and biologicals.
(1) Eligibility for separate payment for non-opioid pain management
drugs and biologicals. From January 1, 2025, through December 31, 2027,
a drug or biological is eligible for separate payment for an applicable
calendar year if CMS determines it meets the following requirements
through that year's rulemaking:
(i) The drug is approved under a new drug application under section
505(c) of the Federal Food, Drug, and Cosmetic Act (FDCA), under an
abbreviated new drug application under section 505(j), or, in the case
of a biological product, is licensed under section 351 of the Public
Health Service Act. The product has a label indication approved by the
Food and Drug Administration to reduce postoperative pain, or produce
postsurgical or regional analgesia, without acting upon the body's
opioid receptors.
(ii) The drug or biological does not have transitional pass-through
payment status under Sec. 419.64 of this subchapter. In the case where
a drug or biological otherwise meets the requirements under this
section and has transitional pass-through payment status that expires
during the calendar year, the drug or biological will qualify for
separate payment as specified in this paragraph (k) during such
calendar year on the first day of the next calendar year quarter
following the expiration of its pass-through status.
[[Page 59577]]
(iii) The drug or biological has payment that is packaged into a
payment for a covered OPD service (or group of services) under a policy
in this section.
(2) Eligibility for separate payment for non-opioid medical
devices. From January 1, 2025, through December 31, 2027, a medical
device is eligible for separate payment for an applicable calendar year
if CMS determines it meets the following requirements through that
year's rulemaking:
(i) The medical device, is used to deliver a therapy to reduce
postoperative pain, or produce postsurgical or regional analgesia, and
has an application under section 515 of the Federal Food, Drug, and
Cosmetic Act that has been approved with respect to the device, been
cleared for market under section 510(k) of such Act, or is exempt from
the requirements of 510(k) of such Act pursuant to subsection (l) or
(m) or section 510 of such Act or section 520(g) of such Act.
(ii) The medical device has demonstrated the ability to replace,
reduce, or avoid intraoperative or postoperative opioid use or the
quantity of opioids prescribed in a clinical trial or through data
published in a peer-reviewed journal.
(iii) The medical device does not have transitional pass-through
payment status under Sec. 419.66. In the case where a medical device
otherwise meets the requirements under this section and has
transitional pass-through payment status that expires during the
calendar year, the medical device will qualify for separate payment as
specified in paragraph (k)(2) of this section during such calendar year
on the first day of the next calendar year quarter following the
expiration of its pass-through status.
(iv) The medical device has payment that is packaged into a payment
for a covered OPD service (or group of services) under a policy in this
section.
(3) Payment Amount. From January 1, 2025, through December 31,
2027, the amount of payment for a qualifying non-opioid treatment for
pain relief is as follows:
(i) For a qualifying drug or biological as defined in paragraph
(k)(1) of this section, the amount of payment is the amount determined
under section 1847A for the drug or biological that exceeds the portion
of the otherwise applicable Medicare OPD fee schedule that the
Secretary determines is associated with the drug or biological, subject
to paragraph (k)(3)(iii) of this section.
(ii) For a qualifying medical device as defined in paragraph (k)(2)
of this section, the amount of payment is the amount of the hospital's
charges for the device, adjusted to cost, that exceeds the portion of
the otherwise applicable Medicare OPD fee schedule that the Secretary
determines is associated with the device, subject to paragraph
(k)(3)(iii) of this section.
(iii) Payment limitation. The payment amounts in paragraph
(k)(3)(i) and (ii) of this section shall not exceed the estimated
average of 18 percent of the OPD fee schedule amount of the volume
weighted average of the five OPD services with which the non-opioid
treatment for pain relief is furnished most frequently.
0
19. Section 419.46 is amended by revising paragraph (i)(2) and adding
paragraph (j) to read as follows:
Sec. 419.46 Requirements under the Hospital Outpatient Quality
Reporting (OQR) Program.
* * * * *
(i) * * *
(2) Immediate measure suspension. If CMS determines that the
collection and reporting activities related to a measure potentially
raise patient safety concerns, CMS will immediately suspend the measure
from the Hospital OQR Program and will promptly notify hospitals and
the public of the suspension of the measure. CMS will address the
suspension and propose to retain, modify, or remove the measure in the
next feasible rulemaking cycle.
* * * * *
(j) Requirements for submission of electronic clinical quality
measures (eCQMs) under the Hospital OQR Program
(1) Hospitals must utilize certified technology updated to be
consistent with the Office of the National Coordinator for Health IT's
(ONC) health IT certification criteria, as adopted and updated in 45
CFR 170.315.
(2) Hospitals must use electronic health record (EHR) technology
certified to all eCQMs that are available to report under the Hospital
OQR Program.
(3) Hospitals must use the most recent version of the eCQM
electronic measure specifications for the applicable reporting period
available on the Electronic Clinical Quality Improvement (eCQI)
Resource Center website at: https://ecqi.healthit.gov/ or another
website as designated by CMS.
0
20. Section 419.47 is amended by--
0
a. Revising the section heading;
0
b. Revising paragraph (a); and
0
c. Adding paragraphs (c) and (d).
The revisions and additions read as follows:
Sec. 419.47 Coding and Payment for Category B Investigational Device
Exemption (IDE) Studies and Devices/Drugs Studied in a Clinical Trial
with a Medicare Coverage with Evidence Development (CED) Designation.
(a) Creation of a new HCPCS code for Category B IDE Studies that
have a treatment arm and a placebo control arm. CMS will create a new
HCPCS code, or revise an existing HCPCS code, to describe a Category B
IDE study, which will include both the treatment and placebo control
arms, related device(s) of the study, as well as routine care items and
services, as specified under Sec. 405.201 of this chapter, when CMS
determines that:
* * * * *
(c) Creation of a new HCPCS code for devices/drugs and controls
studied in clinical trials with the Medicare CED designation that have
a study device/drug and a control arm. CMS will create a new HCPCS
code, or revise an existing HCPCS code, to describe a device/drug and a
control arm studied in a clinical trial with the Medicare CED
designation, which will include the study device/drug and control arm,
when CMS determines that:
(1) The Medicare National Coverage Determination process determines
that a coverage with evidence development is required to study a
device/drug in a clinical trial; and
(2) A new or revised code is necessary to preserve the scientific
validity of such a study, such as by preventing the unblinding of the
study.
(d) Payment for devices/drugs studied in clinical trials with the
Medicare CED designation. Where CMS creates a new HCPCS code or revises
an existing HCPCS code under paragraph (c) of this section, CMS will:
(1) Make a single packaged payment for the HCPCS code that includes
payment for the study device/drug and any control; and
(2) Calculate the single packaged payment rate for the HCPCS code
based on an adjusted payment level representing the study device/drug
and any control based on available pricing data and frequency of
utilization of the study device/drug and any control in the study
population.
0
21. Section 419.82 is amended by revising paragraph (d)(1)(iii) to read
as follows:
Sec. 419.82 Prior authorization for certain covered hospital
outpatient department services.
* * * * *
(d) * * *
(1) * * *
(iii) The provisional affirmation or non-affirmation will be issued
within 7
[[Page 59578]]
calendar days of receipt of the prior authorization request.
* * * * *
PART 435--ELIGIBILITY IN THE STATES, DISTRICT OF COLUMBIA, THE
NORTHERN MARIANA ISLANDS, AND AMERICAN SAMOA
0
22. The authority citation for part 435 continues to read as follows:
Authority: 42 U.S.C. 1302.
0
23. Section 435.926 is amended by revising paragraphs (b) introductory
text, (b)(1), (c)(1); and (d)(1) to read as follows:
Sec. 435.926 Continuous eligibility for children.
* * * * *
(b) Eligibility. The agency must provide continuous eligibility for
the period specified in paragraph (c) of this section for an individual
who is:
(1) Under age 19; and
* * * * *
(c) * * *
(1) The length of the continuous eligibility period is 12 months.
* * * * *
(d) * * *
(1) The child attains age 19;
* * * * *
PART 440--SERVICES: GENERAL PROVISIONS
0
24. The authority citation for part 440 continues to read as follows:
Authority: 42 U.S.C. 1302.
0
25. Section 440.90 is revised to read as follows:
Sec. 440.90 Clinic services.
Clinic services means preventive, diagnostic, therapeutic,
rehabilitative, or palliative services that are furnished by a facility
that is not part of a hospital but is organized and operated to provide
medical care to outpatients. The term includes the following services
furnished to outpatients (services in paragraphs (a), (b), and (c) of
this section are a mandatory part of clinic services, while services in
paragraphs (d) and (e) of this section are optional):
(a) Services furnished at the clinic by or under the direction of a
physician or dentist.
(b) Services furnished outside the clinic, by clinic personnel
under the direction of a physician, to an individual who does not
reside in a permanent dwelling or does not have a fixed home or mailing
address.
(c) Services furnished outside a clinic that is a facility of the
Indian Health Service, whether operated by the Indian Health Service or
by a Tribe or Tribal organization (as authorized by the Indian Self-
Determination and Education Assistance Act (ISDEAA), Pub. L. 93-638),
by clinic personnel under the direction of a physician.
(d) Services furnished outside of a clinic that is primarily
organized for the care and treatment of outpatients with behavioral
health disorders, including mental health and substance use disorders,
by clinic personnel under the direction of a physician.
(e) Services furnished outside of a clinic that is located in a
rural area and is not a rural health clinic (as referenced in section
1905(a)(2)(B) of the Social Security Act and 440.20(b) of this subpart)
by clinic personnel under the direction of a physician.
PART 457--ALLOTMENTS AND GRANTS TO STATES
0
26. The authority citation for part 457 continues to read as follows:
Authority: 42 U.S.C. 1302.
0
27. Revise Sec. 457.342to read as follows:
Sec. 457.342 Continuous eligibility for children.
(a) A State must provide continuous eligibility for children under
a separate CHIP in accordance with the terms of Sec. 435.926 of this
chapter, and subject to a child remaining ineligible for Medicaid, as
required by section 2110(b)(1) of the Act and Sec. 457.310 (related to
the definition and standards for being a targeted low-income child) and
the requirements of section 2102(b)(3) of the Act and Sec. 457.350
(related to eligibility screening and enrollment).
(b) [Reserved]
PART 482--CONDITIONS OF PARTICIPATION FOR HOSPITALS
0
28. The authority citation for part 482 continues to read as follows:
Authority: 42 U.S.C. 1302, 1395hh, and 1395rr, unless otherwise
noted.
0
29. Section 482.21 is amended by--
0
a. Adding paragraph (b)(4);
0
b. Redesignating paragraph (e) and (f) as (f) and (g), respectively;
and
0
c. Adding new paragraph (e).
The additions read as follows:
Sec. 482.21 Condition of participation: Quality assessment and
performance improvement program.
* * * * *
(b) * * *
(4) For hospitals that offer obstetrical services, the hospital
must utilize its QAPI program to assess and improve health outcomes and
disparities among obstetrical patients on an ongoing basis. At a
minimum, the hospital must:
(i) Analyze data and quality indicators collected for the QAPI
program by diverse subpopulations as identified by the hospital among
obstetrical patients.
(ii) Measure, analyze, and track data, measures, and quality
indicators on patient outcomes and disparities in processes of care,
services and operations among obstetrical patients.
(iii) Analyze and prioritize patient health outcomes and
disparities, develop and implement actions to improve patient health
outcomes and disparities, measure results, and track performance to
ensure improvements are sustained among obstetrical patients.
(iv) Conduct at least one measurable performance improvement
project focused on improving health outcomes and disparities among the
hospital's population(s) of obstetrical patients annually.
* * * * *
(e) Standard: Maternal Health QAPI activities. For hospitals that
offer obstetrical services, the following additional QAPI requirements
apply:
(1) Obstetrical services leadership must engage in QAPI as
specified in Sec. 482.21 for obstetrical services, including but not
limited to participating in data collection and monitoring as specified
in Sec. 482.21(b).
(2) If a maternal mortality review committee (MMRC) is available at
the state or local jurisdiction in which the hospital is located, the
facility leadership, obstetrical services leadership, or their
designate(s) must further have a process for incorporating MMRC(s) data
and recommendations into the hospital QAPI program as specified in
Sec. 482.21(b).
* * * * *
0
30. Section 482.43 is amended by revising paragraphs (c) and adding
paragraph (d) to read as follows:
Sec. 482.43 Condition of participation: Discharge planning.
* * * * *
(c) Standard: Transfer protocols. The hospital must have written
policies and procedures for transferring patients under its care
(inclusive of inpatient services) to the appropriate level of care
(including to another hospital) as needed to meet the needs of the
patient. The hospital must also provide training to relevant staff
regarding the hospital policies and procedures for transferring
patients under its care.
(d) Standard: Requirements related to post-acute care services. For
those patients discharged home and referred for HHA services, or for
those patients transferred to a SNF for post-hospital
[[Page 59579]]
extended care services, or transferred to an IRF or LTCH for
specialized hospital services, the following requirements apply, in
addition to those set out at paragraphs (a) and (b) of this section:
(1) The hospital must include in the discharge plan a list of HHAs,
SNFs, IRFs, or LTCHs that are available to the patient, that are
participating in the Medicare program, and that serve the geographic
area (as defined by the HHA) in which the patient resides, or in the
case of a SNF, IRF, or LTCH, in the geographic area requested by the
patient. HHAs must request to be listed by the hospital as available.
(i) This list must only be presented to patients for whom home
health care post-hospital extended care services, SNF, IRF, or LTCH
services are indicated and appropriate as determined by the discharge
planning evaluation.
(ii) For patients enrolled in managed care organizations, the
hospital must make the patient aware of the need to verify with their
managed care organization which practitioners, providers or certified
suppliers are in the managed care organization's network. If the
hospital has information on which practitioners, providers or certified
supplies are in the network of the patient's managed care organization,
it must share this with the patient or the patient's representative.
(iii) The hospital must document in the patient's medical record
that the list was presented to the patient or to the patient's
representative.
(2) The hospital, as part of the discharge planning process, must
inform the patient or the patient's representative of their freedom to
choose among participating Medicare providers and suppliers of post-
discharge services and must, when possible, respect the patient's or
the patient's representative's goals of care and treatment preferences,
as well as other preferences they express. The hospital must not
specify or otherwise limit the qualified providers or suppliers that
are available to the patient.
(3) The discharge plan must identify any HHA or SNF to which the
patient is referred in which the hospital has a disclosable financial
interest, as specified by the Secretary, and any HHA or SNF that has a
disclosable financial interest in a hospital under Medicare. Financial
interests that are disclosable under Medicare are determined in
accordance with the provisions of part 420, subpart C, of this chapter.
0
31. Section 482.55 is amended by adding paragraph (c) to read as
follows:
Sec. 482.55 Condition of participation: Emergency services.
* * * * *
(c) Standard: Emergency services readiness. In accordance with the
complexity and scope of services offered, there must be adequate
provisions and protocols to meet the emergency needs of patients.
(1) Protocols. Protocols must be consistent with nationally
recognized and evidence-based guidelines for the care of patients with
emergency conditions, including but not limited to patients with
obstetrical emergencies, complications, and immediate post-delivery
care.
(2) Provisions. Provisions include equipment, supplies, and
medication used in treating emergency cases. Such provisions must be
kept at the hospital and be readily available for treating emergency
cases to meet the needs of patients. The available provisions must
include the following:
(i) Drugs, blood and blood products, and biologicals commonly used
in life-saving procedures;
(ii) Equipment and supplies commonly used in life-saving
procedures; and
(iii) Each emergency services treatment area must have a call-in-
system for each patient.
(3) Staff training. Applicable staff, as identified by the
hospital, must be trained annually on the protocols and provisions
implemented pursuant to this section.
(i) The governing body must identify and document which staff must
complete such training.
(ii) The hospital must document in the staff personnel records that
the training was successfully completed.
(iii) The hospital must be able to demonstrate staff knowledge on
the topics implemented pursuant to this section.
(iv) The hospital must use findings from its quality assessment and
performance improvement (QAPI) program, as required at Sec. 482.21, to
inform staff training needs and any additions, revisions, or updates to
training topics on an ongoing basis.
0
32. Section 482.59 is added to subpart D to read as follows:
Sec. 482.59 Condition of participation: Obstetrical services.
If the hospital offers obstetrical services, the services must be
well organized and provided in accordance with nationally recognized
acceptable standards of practice for the health care (including
physical and behavioral health) of pregnant, birthing, and postpartum
patients. If outpatient obstetrical services are offered, the services
must be consistent in quality with inpatient care in accordance with
the complexity of services offered.
(a) Standard: Organization and staffing. The organization of the
obstetrical services must be appropriate to the scope of the services
offered. As applicable, the services must be integrated with other
departments of the hospital.
(1) Labor and Delivery rooms/suites (including labor rooms,
delivery rooms (including rooms for operative delivery), and post-
partum/recovery rooms whether combined or separate) must be supervised
by an experienced registered nurse, certified nurse midwife, nurse
practitioner, physician assistant, or a doctor of medicine or
osteopathy.
(2) Obstetrical privileges must be delineated for all practitioners
providing obstetrical care in accordance with the competencies of each
practitioner. The obstetrical service must maintain a roster of
practitioners specifying the privileges of each practitioner.
(b) Standard: Delivery of service. Obstetrical services must be
consistent with needs and resources of the facility. Policies governing
obstetrical care must be designed to assure the achievement and
maintenance of high standards of medical practice and patient care and
safety.
(1) The following equipment must be available to the labor and
delivery room suites: call-in-system, cardiac monitor, and fetal
doppler or monitor.
(2) There must be adequate provisions and protocols, consistent
with nationally recognized and evidence-based guidelines, for
obstetrical emergencies, complications, immediate post-delivery care,
and other patient health and safety events as identified as part of the
QAPI program (Sec. 482.21). Provisions include equipment (in addition
to the equipment required under (b)(1)), supplies, and medication used
in treating emergency cases. Such provisions must be kept on the
hospital and be readily available for treating emergency cases.
(c) Standard: Staff training. The hospital must develop policies
and procedures to ensure to ensure that relevant staff are trained on
select topics for improving the delivery of maternal care.
(1) Training concepts must reflect the scope and complexity of
services offered within the facility, including but not limited to:
(i) Facility-identified evidence-based best practices and protocols
to improve the delivery of maternal care within the facility; and
[[Page 59580]]
(ii) The hospital must use findings from its quality assessment and
performance improvement (QAPI) program, as required at Sec. 482.21, to
inform staff training needs and any additions, revisions, or updates to
training topics on an ongoing basis.
(2) The governing body must identify and document which staff must
complete annual training on the topics identified at Sec.
482.59(c)(1).
(3) The hospital must document in the staff personnel records that
the training was successfully completed.
(4) The hospital must be able to demonstrate staff knowledge on the
topics identified at Sec. 482.59(c)(1).
PART 485--CONDITIONS OF PARTICIPATION: SPECIALIZED PROVIDERS
0
33. The authority citation for part 485 continues to read as follows:
Authority: 42 U.S.C. 1302 and 1395(hh).
0
34. Section 485.618 is amended by--
0
a. Revising paragraph (e); and
0
b. Adding paragraph (f).
The revision and addition reads as follows:
Sec. 485.618 Condition of participation: Emergency Services.
* * * * *
(e) Standard: Emergency services readiness. In accordance with the
complexity and scope of services offered, there must be adequate
provisions (as required under paragraphs (b) and (c) of this section)
and protocols to meet the emergency needs of patients.
(1) Protocols- Protocols must be consistent with nationally
recognized and evidence-based guidelines for the care of patients with
emergency conditions, including but not limited to patients with
obstetrical emergencies, complications, and immediate post-delivery
care.
(2) Staff training- Applicable staff, as identified by the CAH,
must be trained annually on the protocols and provisions implemented
pursuant to this section.
(i) The governing body must identify and document which staff must
complete such training.
(ii) The CAH must document in the staff personnel records that the
training was successfully completed.
(iii) The CAH must be able to demonstrate staff knowledge on such
training.
(iv) The CAH must use findings from its quality assessment and
performance improvement (QAPI) program, as required at Sec. 485.641,
to inform staff training needs and any additions, revisions, or updates
to training topics on an ongoing basis.
(f) Standard: Coordination with emergency response systems. The CAH
must, in coordination with emergency response systems in the area,
establish procedures under which a doctor of medicine or osteopathy is
immediately available by telephone or radio contact on a 24-hours a day
basis to receive emergency calls, provide information on treatment of
emergency patients, and refer patients to the CAH or other appropriate
locations for treatment.
0
35. Section 485.641 is amended by--
0
a. Adding paragraph (d)(4); and
0
b. Revising paragraph (e).
The addition and revision reads as follows:
Sec. 485.641 Condition of participation: Quality assessment and
performance improvement program.
* * * * *
(d) * * *
(4) For CAHs that offer obstetrical services, the following
additional QAPI requirements apply:
(i) Obstetrical services leadership must engage in QAPI as
specified in this section for obstetrical services, including but not
limited to participating in data collection and monitoring as specified
in paragraphs (d) and (e) of this section.
(ii) If a maternal mortality review committee (MMRC) is available
at the state or local jurisdiction in which the CAH is located, the
facility leadership, obstetrical services leadership, or their
designate(s) must further have a process for incorporating MMRC(s) data
and recommendations into the CAH QAPI program as specified in this
section.
(e) Standard: Program data collection and analysis. The program
must incorporate quality indicator data including patient care data, in
order to achieve the goals of the QAPI program. For CAHs that offer
obstetrical services, the CAH must utilize its QAPI program to assess
and improve health outcomes and disparities among obstetrical patients
on an ongoing basis. At a minimum, the CAH must:
(1) Analyze data and quality indicators collected for the QAPI
program by diverse subpopulations as identified by the CAH among
obstetrical patients.
(2) Measure, analyze, and track health equity data, measures, and
quality indicators on patient outcomes and disparities in processes of
care, services and operations, and outcomes among obstetrical patients.
(3) Analyze and prioritize identified patient health outcomes and
disparities, develop and implement actions to improve patient health
outcomes and disparities, measure results, and track performance to
ensure improvements are sustained when disparities exist among
obstetrical patients.
(4) Conduct at least one measurable performance improvement project
focused on improving health outcomes and disparities among the CAH's
population(s) of obstetrical patients annually.
* * * * *
0
36. Section 485.649 is added to subpart S to read as follows:
Sec. 485.649 Condition of participation: Obstetrical Services.
If the CAH offers obstetrical services, the services must be well
organized and provided in accordance with nationally recognized
acceptable standards of practice for the health care (including
physical and behavioral health) of pregnant, birthing, postpartum
patients. If outpatient obstetrical services are offered, the services
must be consistent in quality with inpatient care in accordance with
the complexity of services offered.
(a) Standard: Organization and staffing. The organization of the
obstetrical services must be appropriate to the scope of the services
offered. As applicable, the services must be integrated with other
departments of the CAH.
(1) Labor and Delivery rooms/suites (including labor rooms,
delivery rooms (including rooms for operative delivery), and post-
partum/recovery rooms whether combined or separate) must be supervised
by an experienced registered nurse, certified nurse midwife, nurse
practitioner, physician assistant, or a Doctor of Medicine or a Doctor
of Osteopathy (MD/DO).
(2) Obstetrical privileges must be delineated for all practitioners
providing obstetrical care in accordance with the competencies of each
practitioner. The obstetrical service must maintain a roster of
practitioners specifying the privileges of each practitioner.
(b) Standard: Delivery of service. Obstetrical services must be
consistent with needs and resources of the CAH. Policies governing
obstetrical care must be designed to assure the achievement and
maintenance of high standards of medical practice and patient care and
safety.
(1) The following equipment must be available to the labor and
delivery room suites: call-in-system, cardiac monitor, and fetal
doppler or monitor.
(2) There must be adequate provisions and protocols, consistent
with nationally recognized and evidence-
[[Page 59581]]
based guidelines, for obstetrical emergencies, complications, immediate
post-delivery care, and other patient health and safety events as
identified as part of the QAPI program (Sec. 485.641). Provisions
include equipment (in addition to the equipment required under (b)(1)
of this section), supplies, and medication used in treating emergency
cases. Such provisions must be kept on the CAH and be readily available
for treating emergency cases.
(c) Standard: Staff training. The CAH must develop policies and
procedures to ensure to ensure that relevant staff are trained on
select topics for improving the delivery of maternal care.
(1) Training concepts must reflect the scope and complexity of
services offered within the facility, including but not limited to:
(i) Facility-identified evidence-based best practices and protocols
to improve the delivery of maternal care within the facility; and
(ii) The CAH must use findings from its quality assessment and
performance improvement (QAPI) program, as required at Sec. 485.641,
to inform staff training needs and any additions, revisions, or updates
to training topics on an ongoing basis.
(2) The governing body must identify and document which staff must
complete annual training on the topics identified at paragraph (c)(1)
of this section.
(3) The CAH must document in the staff personnel records that the
training was successfully completed.
(4) The CAH must be able to demonstrate staff knowledge on the
topics identified at paragraph (c)(1) of this section.
Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2024-15087 Filed 7-10-24; 8:45 am]
BILLING CODE 4120-01-P